Internet of Things (IoT) had been one of the applications of industry 4.0 that played a vital role in changing the industrial and business processes by integrating various systems and processes independently. Thus, applying IoT help improved the manufacturing industry and helped gain a competitive advantage among our neighboring countries. This study focused on identifying the driving and restraining forces and the readiness of the Philippine manufacturing SMEs in adopting IoT. The researchers conducted a survey among Philippine manufacturing SMEs about their perception regarding IoT driving and restraining forces and their willingness to adopt IoT. The study utilized Structural Equation Modelling, Kurt Lewin’s Force Field Analysis, and readiness model. The result showed that Philippine manufacturing SMEs are likely to adopt IoT, however, were neutral about applying full blast IoT technologies such as sensors for full operating conditions, and cloud systems, and big data analytics. In conclusion, ease of management and initial investment showed significance in adopting IoT. This study suggests future researchers dig deeper into how manufacturing SMEs can gain competitive advantage by applying IoT in their operations to (1) minimize cost, (2) improve quality control, and (3) minimize waste after prompting the willingness of the manufacturing SMEs in adopting IoT.