After a six-month low in factory output expansion, S&P Global projected that the upcoming local elections will boost manufacturing activity, leading to stronger growth this year than in 2024.

Data from the latest S&P Global’s Purchasing Managers’ Index (PMI), released on Feb 2., revealed that although the Philippines’ manufacturing sector continued expanding in January, it moved at a slower pace compared to December. 

“New orders and output continued to rise, albeit the rates of growth moderating from December’s recent highs,” the report said. 

January 2025 only reached a PMI reading of 52.3, declining from December’s nearly three-year high of 54.3—a record replicating April 2022’s post. Despite the slower rate in January, it still marked the 17 straight month the local manufacturing remained above 50, signaling continued growth in the manufacturing sector.

In a statement, S&P Global market intelligence economist Maryam Baluch said the upcoming elections are “likely to provide a general boost to the manufacturing sector. We could see 2025 shaping up to be another strong year of growth for the sector.”

She forecasted the full-year factory production to expand at 3.9 percent, markedly faster than 2024’s 2.4 percent growth rate.  

“In fact, the anticipation of greater demand has already prompted goods producers to increase their inventory levels,” Baluch noted.

Baluch also said that local employment could also accelerate further this year, recovering from its stagnation in both December and January. 

“While growth in new sales encouraged some firms to hire more staff, this was offset by reports of resignations,” the report showed. 

S&P Global also reported that both costs and selling prices increase but slower than usual hike rates. In particular, “cost burdens rise at [the] weakest rate in five months.”

Looking ahead, factory firms are looking at a brighter side for the direction of the manufacturing sector this year, citing improved market demand due to the upcoming election period.