The Federation of Philippine Industries (FPI) said the country’s manufacturing sector remains on a recovery path despite the newly approved wage hike in Metro Manila, but warned that sustaining the momentum will require policies that protect both workers and business competitiveness.
The latest S&P Global Philippines Manufacturing Purchasing Managers’ Index rose to 50.9 in June from 50.8 in May, marking a second straight month of expansion after April’s contraction. The improvement was fueled by stronger new orders and factory output, easing weakness in export demand and slower input cost inflation.
FPI also pointed to the sector’s 12 percent year-on-year production growth in April as evidence that manufacturers continue to weather a challenging business environment.
“We now have two months of expansion, and we are optimistic that this will develop into a stronger growth trend as production volumes remain resilient,” FPI Chairperson Elizabeth H. Lee said.
The encouraging data came as the Regional Tripartite Wages and Productivity Board approved an P85 daily minimum wage increase in the National Capital Region, to be implemented in two stages with a P60 increase this month and another P25 in January next year.
Lee said manufacturers recognize the need to improve workers’ incomes amid rising living costs but stressed that businesses are also grappling with higher electricity and logistics costs, tighter financing conditions and lingering uncertainty in global trade.
“We welcome the staggered implementation as it allows businesses, particularly MSMEs, to adjust more gradually,” she said. “The challenge is ensuring that wage policies are considered alongside the broader cost environment.”
FPI said preserving the manufacturing recovery will require close coordination among government, labor and industry to ensure wage increases are matched by reforms that improve productivity, lower operating costs and strengthen the country’s competitiveness as a regional manufacturing hub.
