Manufacturing growth up 10.2% in May, easing from April pace

By Justine Irish D. Tabile, Reporter

FACTORY OUTPUT expanded in May, though it eased from the previous month’s growth trajectory, with analysts noting a normalization in manufacturing activity in the face of resilient demand.

According to preliminary results of the Philippine Statistics Authority’s (PSA) Monthly Integrated Survey of Selected Industries, manufacturing output, as measured by the volume of production index (VoPI), grew by 10.2% year on year in May.

This was a turnaround from the revised 0.3% decline in May 2025 but lagged the pace of the revised 11.7% expansion in April. It was the weakest reading since the 3.5% posted in February, though it matched the 10.2% reported in March.

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) improved to 50.8 in May from 48.3 in April.

PMIs are an indicator of future manufacturing activity, reflecting raw-material orders placed for processing into manufactured goods a few months down the line.

A reading above 50 signals expansion, while a reading below 50 indicates deterioration.

Factory output expanded 6% year on year in the first five months, the PSA said.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said that while output growth cooled slightly in May, the manufacturing sector is still growing at a healthy double-digit pace.

“I would characterize this as a normalization after a strong April rather than the beginning of a slowdown. The underlying trend remains positive,” Mr. Ravelas said via Viber.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the easing rate of growth does not indicate a weakening in manufacturing conditions.

“While transport equipment, food, and chemicals weighed on the headline figure, strength in petroleum products, electronics, and basic metals suggests that underlying manufacturing activity remains supportive of economic growth,” Mr. Asuncion added.

The PSA attributed the easing growth primarily to weaker output of transport equipment, food products, and chemicals.

Output of chemicals and chemical products contracted by 14.8% in May, against the revised 2.1% contraction in April.

In May, the manufacture of transport equipment declined 1.4% year on year after posting 9.8% growth in April, while the manufacture of food products slowed to 1.7% from the revised 4.5% a month earlier.

The PSA said food manufacturing slowed due to weaker output in dairy products, prepared animal feeds and processed meat.

The top three industry segments driving overall growth were coke and refined petroleum products, which grew 73.3% in May from 52.6% in April; computer, electronic and optical products (15.8% vs. 14.8%) and basic metals (21.6% vs. 23.4%).

“Of the remaining 19 industry divisions, 12 posted annual increases in May. Meanwhile, seven industry divisions exhibited annual decreases in their VoPI for manufacturing during the period,” the PSA said.

Capacity utilization averaged 78.8% in May, against  the 77.1% posted a year earlier and 78.5% in April.

In the coming months, Mr. Asuncion said manufacturing is expected to continue benefitting from strong domestic demand, lower interest rates, and a gradual improvement in external demand.

However, he said global trade and geopolitical risks remain potential obstacles to growth.

The manufacturing PMI edged up to 50.9 in June from 50.8 in May, reflecting sustained growth in output and new orders.