Global trade tensions pose risks to Philippine manufacturing sector

THE Philippine manufacturing sector may face headwinds from increasing global trade tensions that could weaken overseas demand this year, S&P Global said.

- By Aubrey Rose A. Inosante Reporter

"The key headwind for the Philippine manufacturing sector remains external uncertainties," Jingyi Pan, economics associate director at S&P Global Market Intelligence, told BusinessWorld in an emailed statement on Monday.

Ms. Pan said she expects elevated global trade tensions to continue dampening overseas demand in the manufacturing sector in 2026.

The full impact of elevated US tariffs is expected to be felt by most Southeast Asian countries this year. In August 2025, the US began imposing a 19% reciprocal tariff on many goods from the Philippines, Cambodia, Malaysia, Thailand and Indonesia.

Ms. Pan noted that the Philippine purchasing managers’ index (PMI) readings from December indicated “worsening external demand compared with rising new orders from the domestic market.”