Manufacturing ends 2025 on firmer ground but growth remains uneven

December output and sales rebounded, but full-year data show gains concentrated in a few industries.

Manufacturing activity showed clear signs of improvement at the end of 2025, with factories producing and selling more in December after a weak November. A closer look at the data, however, shows the rebound was uneven. Full-year growth remained modest, sales outpaced actual production, and gains were driven by a small number of industries rather than a broad recovery across the sector.

Data from the Philippine Statistics Authority (PSA) show that December’s pickup snapped a short contraction streak in manufacturing activity, setting the stage for a steadier year-end finish even as underlying pressures on production persisted.

December rebound lifts output and sales

Data from the PSA’s Monthly Integrated Survey of Selected Industries showed that manufacturing activity picked up in December after a weak November. The Value of Production Index (VaPI), which measures the peso value of goods produced by factories, rose by 1.9%, reversing a 1.0% contraction in the previous month. The Volume of Production Index (VoPI), which tracks the actual quantity of goods produced regardless of price, expanded by 1.0%, snapping a 1.1% decline in November.

Sales followed a similar trend. The Value of Net Sales Index (VaNSI) climbed by 3.7%, faster than the 1.4 % recorded a month earlier, while the Volume of Net Sales Index (VoNSI) grew by 2.7%, up from 1.3% in November. Gains in both value and volume suggested that December’s improvement reflected higher activity, not just price effects.

Factories, however, did not significantly ramp up operations. As the PSA said, “factories had a capacity utilization of 77.5% in December compared to 77.4% in November,” indicating that higher output was achieved without major changes in plant usage.

Full-year numbers show mixed performance

Despite the December pickup, full-year data pointed to a restrained recovery. The VaPI expanded by just 0.4% for the year, reversing a 0.02% contraction in 2024. Production volume remained weak, with the VoPI slipping by 0.02%, a turnaround from the 0.7% expansion recorded the year before.

Sales growth was stronger over the same period. The VaNSI rose by 5.2%, more than four times the 1.2% growth posted in 2024, while the VoNSI expanded by 4.8%, accelerating from 1.9% the previous year. The widening gap between sales and production suggests manufacturers leaned more on improved selling conditions than on sustained increases in output.

Growth concentrated in a few industries

Sector-level data showed that December’s rebound was driven largely by construction-linked materials and transport equipment. The manufacture of other non-metallic mineral products, which includes cement and glass, posted a 29.5% increase in production value and a 31.4% rise in volume, making it the biggest contributor to the month’s production growth. The industry also carries one of the heaviest weights in the manufacturing index, amplifying its impact on overall performance.

Food manufacturing recorded stronger output as well, with its VaPI rising by 10.2% and production volume increasing by 10.4%, led by a 45% surge in dairy production. That strength did not fully translate to sales. Food manufacturing sales slipped in December, with value down 0.3% and volume falling 0.2%, reflecting softer demand for certain food products.

On the sales side, the manufacture of transport equipment stood out, driving much of the growth in net sales. The sector’s VaNSI rose by 17.7%, while sales volume expanded by 16.4%, pointing to stronger year-end demand for vehicles and related products.

Taken together, the data show manufacturing closing the year on firmer ground, but with gains clustered in specific industries rather than spread evenly across the sector. The December rebound provided relief, yet the full-year figures point to stabilization rather than a broad-based recovery.

 

 

Manufacturers produced and sold more in December, snapping a short contraction streak and closing the year on a steadier note. 

 

 

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