Factory output expands at fastest pace in 8 years

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March 3, 2026 | 12:00am

In February

MANILA, Philippines — The Philippine manufacturing sector continued to expand in February, posting its best performance in over eight years, supported by strong demand and higher output.

S&P Global said in a statement yesterday that the Philippines’ purchasing managers’ index (PMI) – which tracks the performance of the manufacturing sector – rose to 54.6 in February from 52.9 in January.

The latest PMI reading is also the strongest expansion since November 2017.

The PMI is generated from a survey of around 400 manufacturers and takes into account new orders, output, employment, suppliers’ delivery times and stocks of purchases.

An above 50 PMI reading indicates an expansion from the previous month, while below 50 denotes a contraction.

“The Philippines manufacturing sector has had a solid start to 2026, with February marking its strongest performance since late 2017. A sharp influx of new orders underpinned robust growth of output and in both cases, the expansions were historically pronounced and reached multi-year highs,” S&P Global Market Intelligence economist Maryam Baluch said.

Manufacturers’ output increased at its highest pace since November 2018 amid sustained growth in new orders, driven by improved domestic and international demand.

“Businesses, in turn, continued to expand their purchasing activity, which rose at a faster pace,” Baluch said.

Expectations of increased demand in the coming months also encouraged manufacturers in the country to raise stock levels.

In terms of employment, the sector’s staffing numbers rose for a second straight month in February.

“With backlogs rising, manufacturers have further scope to increase their staffing numbers in the coming months,” Baluch said.

Average delivery times for inputs lengthened for a third successive month due to increased purchasing activity, poor weather conditions and congestion issues.

When it comes to pricing, declining operating expenses allowed Filipino manufacturers to reduce their own charges.

S&P Global said manufacturers’ outlook on output for the next 12 months improved on expectations of strong demand for goods.

“The sector’s positive performance was accompanied by a surge in business confidence. Firms were hopeful that demand conditions would continue to improve and drive further expansions in production volumes,” Baluch said.