The auto market in the Philippines showed a marked rebound in May, with member and affiliate companies of the national manufacturers’ association reporting sales of 33,352 vehicles. Unofficial estimates that include non‑affiliated retailers place total new‑vehicle deliveries at roughly 35,200 units, representing a 24% increase from April.
Compared with the previous month, the overall market grew by almost 7% when using a consistent reporting base. This month‑to‑month improvement highlights a recovery after the sharp slowdown experienced in April.
Despite the overall gain, sales of electrified vehicles (xEVs) fell sharply, declining by 36% to an estimated 7,700 units in May. The drop reversed a steady month‑on‑month rise that had taken xEV sales from 4,000 units in January to 12,000 in April.
Plug‑in hybrid electric vehicle (PHEV) sales led the decline, plunging 53%, while hybrid electric vehicles (HEVs) slipped 32%. Battery electric vehicles (BEVs) were the exception, posting a modest 9% increase.
Analysts attribute the xEV downturn to a combination of depleted dealer inventories following a surge in demand earlier in the year and lingering market fatigue. Ongoing dealer reservation queues suggest that demand remains, and supply is expected to improve from July onward.
Sales of internal‑combustion‑engine (ICE) vehicles surged 32% in May, reaching approximately 27,500 units. The rebound aligns with easing geopolitical tensions that had previously suppressed demand for conventional models.
The composition of vehicle sales shifted noticeably: ICE vehicles accounted for 78% of the market in May, while NEVs represented 22%, a reversal from the 86% ICE share recorded in February. These fluctuations likely reflect temporary supply constraints rather than a lasting change in consumer preference.
Year‑on‑year figures show a 16% decline in total May sales compared with the same month last year. Adjusting for a large pickup‑tax‑driven surge in May 2025 reduces the decline to roughly 9%, indicating that the base year was unusually strong.
Economic conditions have softened, with first‑quarter GDP growth falling to 2.8% from 5.4% the previous year, inflation rising to 2.8% from 1.8%, and household consumption growth slipping to 3% from over 5%. These trends have contributed to the reduced vehicle demand.
Infrastructure spending, a key driver of high‑value purchases, contracted by 43.5% year‑over‑year, dropping to P147.8 billion in the first quarter. The reduction in public‑sector capital outlays has further dampened automotive sales.
Despite the challenges, the industry’s performance in May demonstrates resilience amid a series of economic and geopolitical disruptions. Continued stabilization of supply chains and improved macroeconomic indicators could support a sustained recovery in the coming months.
