The Philippines’ production sector recovered in June 2025 from a slowdown in the previous month, with stronger expansion noted for new business, S&P Global reported Tuesday.

S&P Global Philippines Manufacturing PMI (Purchasing Managers' Index) increased to 50.7 percent from 50.1 percent in May “to indicate a stronger, albeit still modest, improvement in the health of the Philippines manufacturing sector,” the report said.

An index of above 50 indicates expansion, while a level below 50 shows otherwise.

“This improved demand picture and renewed growth in production requirements prompted firms to increase their purchasing activity to stronger degree. Moreover, June data marked a return to job creation. Payroll numbers rose for the first time in four months,” it said.

The report noted that June figures were “slightly stronger” than in the previous month, but “it remained below the long-run survey average.”

“Anecdotal evidence attributed this latest uptick to successful customer acquisitions, improvement underlying demand trends, and effective promotional efforts,” it said.

S&P Global Market Intelligence economist Maryam Baluch, in a commentary, noted that although the country’s first half manufacturing sector performance “remained relatively subdued” the PMI “masked some pockets of strength”, citing gains in employment.

She said expansion in orders is still moderate, partly due to supply-side challenges.

"The next couple of months will be important to gauge if the sector is able to return to growth rates seen in much of last year. Lower inflationary pressures and sustained demand will in part help Filipino manufacturers to achieve this through scope for improved pricing power. However, historically muted business confidence suggests a more subdued path for the year ahead,” she added.

The Marcos administration has been strongly encouraging foreign investors to explore business opportunities in the country, promoting the Philippines as an ideal option for smart and sustainable manufacturing. 

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