The country’s umbrella group of manufacturers and producers expects 2026 to be a strong year for domestic manufacturing with the full implementation of the Tatak Pinoy Act, which aims to further diversify the sector beyond major export commodities.

In a statement, the Federation of Philippine Industries (FPI) said the manufacturing sector is on track to grow this year, buoyed by the upward momentum reflected in the purchasing managers’ index (PMI) in December 2025.

S&P Global earlier reported that the country’s manufacturing PMI rose to 50.2 last month from a four-year low of 47.4 in November.

PMI is a barometer of manufacturing activity, with readings below 50 indicating contraction and those above 50 signaling expansion.

FPI said the improvement was driven by a return to normal operations following a string of typhoons in the previous month, as well as the resumption of purchasing activity among companies preparing for future output growth.

“Importantly, the rebound was domestically led, as export orders remained subdued at the close of 2025,” the group said.

FPI expects that export growth this year—particularly in electronic products—will help sustain PMI readings above 50.

The Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI) projects that electronic exports this year will post five-percent growth from last year’s levels.

FPI Chairperson Elizabeth Lee, however, stressed that overreliance on electronics could pose risks to the sector’s growth amid shifting trade policies affecting these highly sought-after products.

Lee said the focus should instead be on diversifying manufacturing, as embodied in the Tatak Pinoy Act, which seeks to foster the creation of high-value goods and services that are competitive in both global and domestic markets.

“By investing in innovation, skills, and industrial upgrading, Tatak Pinoy can elevate the country’s manufacturing complexity and competitiveness—ensuring that growth is not only cyclical but enduring, inclusive, and proudly Filipino,” she said.

While the law was signed in February 2024, the government only launched the Tatak Pinoy Strategy last month, outlining a multiyear roadmap to realize the law’s objectives.

Lee noted that full implementation of the law would help address the country’s longstanding underperformance in manufacturing’s contribution to gross domestic product (GDP).

Based on industry estimates, she said the local manufacturing sector contributes 15.7 percent to GDP, well below the 22- to 27-percent range recorded by neighboring Southeast Asian countries.

Sustaining growth momentum this year would also hinge on building resilience against climate-related disruptions and supply chain shocks. Lee recalled that the sharp PMI decline in November was caused by a string of typhoons that hampered production and deliveries.

Moreover, she urged the government to strengthen mid-complexity industries—such as machinery, chemicals, and wood products—to reduce volatility and broaden employment opportunities.

“For policymakers, the message is clear: December’s rebound is a welcome sign of resilience and a foundation to build upon,” Lee said.