Philippine manufacturing activity posted slower growth at the start of 2026, as weak domestic demand and stalled investments weighed on factory output.
Data from the Philippine Statistics Authority (PSA) showed the Volume of Production Index (VoPI) rose 1.2% in January, down from 2% in December 2025 and 3.2% in January 2025.
While still in expansion territory, the pace of growth lost momentum after a brief recovery in December from November’s contraction.
Labor economist Leonardo Lanzona of Ateneo de Manila University attributed the slowdown to multiple factors, including sluggish demand, fallout from the infrastructure corruption scandal, and external economic pressures.
“The infrastructure corruption scandal continued to stall both public and private investments. Capital outlays were cut, and foreign direct investment dropped sharply as investors adopted a ‘wait-and-see’ attitude,” Lanzona explained.
“In addition, manufacturing activity was dampened by reduced demand for domestically produced goods. This was particularly evident in basic metals and chemical products, with softer consumer sentiment further weighing on production during the period.”
The PSA noted weaker performance in key sectors drove the slowdown. Food product manufacturing contracted by 0.5%, reversing December’s 14.9% growth.
Growth in non-metallic mineral products slowed to 6.8% from 32.4%, while transport equipment output fell 1.9%, compared with 5.8% growth the previous month.