An electronics manufacturing line in a factory in Biñan, Laguna. The Philippines’ S&P Global Manufacturing Purchasing Managers Index for October 2025 improved to 50.1 points, from month-ago’s 49.9 points, and an economist forecast sustained expansion until the end of the year, driven by last quarter demand, the consumer-driven characteristic of the domestic economy, and the impact of the series of rate cuts by the Bangko Sentral ng Pilipinas. (PNA file photo)
The Philippines’ manufacturing sector continued to show resilience in October despite global trade pressures, buoyed by strong domestic demand and monetary easing by the Bangko Sentral ng Pilipinas (BSP).
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said he remains optimistic that the country’s manufacturing momentum will carry through the rest of 2025, even as the United States’ tariff policy poses challenges to global supply chains.
According to the latest S&P Global Manufacturing Purchasing Managers Index (PMI), the Philippines posted a modest improvement to 50.1 points in October, up from 49.9 in September. A PMI above 50 signals growth in the sector, while readings below that mark indicate contraction.
Ricafort attributed the uptick to improved weather conditions, steady consumer demand, and the impact of BSP’s series of rate cuts that lowered borrowing costs for manufacturers. “The Philippines’ consumer-driven economy, where household spending makes up about 75 percent of GDP, continues to serve as a strong buffer against external shocks,” he said.
Although the latest index remains below last year’s 52.9 points, Ricafort noted that the country’s limited dependence on exports compared to its regional peers helps insulate the local economy from global trade disruptions.
The BSP’s cumulative 100-basis-point rate reduction this year has further supported production and investment, while manufacturing capacity utilization remains above 77 percent—one of the highest levels since before the pandemic. Ricafort added that the upcoming holiday season, which traditionally brings a surge in consumer spending, will likely boost manufacturing activity through the fourth quarter.
Looking ahead, Ricafort expects the full-year PMI to stay above the 50 mark, reflecting continued expansion. He also noted that potential rate cuts by the US Federal Reserve, which recently reduced its benchmark rate to between 3.75 and 4 percent, could be mirrored locally to sustain economic activity.
“Barring major external shocks, the local manufacturing sector should continue its gradual recovery toward the end of the year, supported by easing inflation, lower interest rates, and resilient domestic consumption,” Ricafort said.
