Philippines factory activity slowest in 3 months

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April 2, 2026 | 12:00am

In March

MANILA, Philippines — The Philippine manufacturing sector expanded in March at its weakest pace in three months amid slower demand and higher costs due to the Middle East conflict. In a statement, S&P Global said  the Philippines’ purchasing managers’ index (PMI) went down to a three-month low of 51.3 in March from 54.6 in February.

Used to track the health of the manufacturing sector, an above 50 PMI reading indicates expansion from the previous month, while below 50 denotes a decline.

It is generated from a survey of around 400 manufacturers on business conditions like new orders, output, employment, suppliers’ delivery times and stocks of purchases or inputs.

“The war in the Middle East weighed on the performance of the Philippines manufacturing sector,” S&P Global Market Intelligence economist Maryam Baluch said.

Both manufacturing output and new orders slowed in March due to the uncertainty triggered by the war in the Middle East.

As the conflict led to weaker demand from foreign clients, manufacturing firms adjusted their production levels and paused purchasing activity.

“With the vast majority of the country’s oil supply coming from the Gulf countries now under threat, the President has declared a national energy emergency,” Baluch said.

She said Filipino manufacturers are affected by the rising fuel prices rippling through global markets.

Apart from higher energy prices that pushed up costs, manufacturers also faced delays in input deliveries, which affected work completion.

Job creation in the sector continued in March, although at a marginal pace.

Despite challenges, S&P Global said Filipino manufacturers are optimistic that production levels will pick up over the next 12 months as demand improves.

“The duration and intensity of the war will directly impact the sector’s trajectory in the coming months, as inflationary pressures constrain sales and pricing power,” Baluch said.