Factory growth accelerates to near 10-year high

MANILA, Philippines — Buoyed by higher output and strong demand, Philippine manufacturing activity in August expanded at its strongest pace in nearly a decade, according to S&P Global.

In a statement yesterday, S&P Global said that the Philippines’ Purchasing Managers’ Index (PMI) rose for the fourth consecutive month in August to 54.9 from the previous month’s 51.8.

This marked the strongest growth by the sector since December 2016, when the PMI reading was at 55.7.

Used to measure the manufacturing sector’s health and performance, the PMI comes from a survey of around 400 manufacturers and covers new orders, output, employment, suppliers’ delivery times and stocks of purchases.

A PMI reading above 50 indicates an overall increase compared to the previous month, while below 50 denotes a decline.

“The Filipino manufacturing sector continued to build momentum in August, moving on from the flat performance seen in the previous quarter, when activity was affected by the conflict in the Middle East,” S&P Global Market Intelligence economist Maryam Baluch said.

She said that output rose at its fastest pace since 2016, driven by stronger demand.

New orders posted robust growth in August, supported by new product and model launches, as well as higher repeat business and a wider customer base.

The growth was also driven by the improvement in international sales, as new export orders rose for the first time in six months.

“Firms responded by increasing both purchasing and hiring to keep up with greater production needs,” Baluch said.

Manufacturers’ input purchases rose to a six-month high in August.

When it comes to employment, manufacturers’ workforce numbers climbed for the first time in five months. Job creation growth was also the strongest in 21 months.

In terms of prices, input costs went up at a softer pace in August compared to the previous month, with manufacturers saying they paid more for energy, raw materials and logistics.

While output charges picked up, inflation was modest and the weakest in the current six-month sequence.

As cost pressures eased, business confidence for the year ahead surged to its highest level since November 2024.

Manufacturers that expect higher output in the coming months cited expansion plans, new product lines and new customers.