Philippines factory growth strongest since 2016
Its manufacturing PMI jumped to 54.9 in August.
The Philippine manufacturing sector strengthened considerably in the middle of the third quarter, building on a run of improvement after a flat spell over the previous three months, the latest S&P Global survey data showed.
The Philippines Manufacturing Purchasing Managers' Index (PMI) rose for a fourth consecutive month in August, climbing to 54.9 from 51.8 in July. The reading marked a notable acceleration in growth and pointed to the sector's health improving to its greatest extent since December 2016.
Output rose substantially, buoyed by a faster inflow of new work and a modest return to growth in new export orders — the first rise in overseas demand in six months.
New orders overall grew at their fastest pace in six months, with firms citing new product and model launches, stronger repeat business and a broadening customer base.
Improved underlying demand and greater production efficiency helped drive the fastest rate of output growth since December 2016, manufacturers said.
Firms responded to the fuller order books by stepping up purchasing activity, with input buying rising at its quickest pace in six months as producers adapted to the surge in new orders. Despite a marked slowdown in supplier delivery times, firms still managed to build stocks of purchases, which rose for the first time since February, albeit only moderately.
Finished goods inventories fell for a second straight month, with some manufacturers drawing down existing stock to meet production needs after supplier delays, though the rate of depletion remained marginal.
Employment rose for the first time in five months. The increase was modest, but the pace of job creation was the strongest recorded in 21 months.
On prices, input cost inflation eased notably from July, though firms that did face higher costs pointed to energy, raw materials and logistics. Output prices rose only modestly, with the rate of inflation the weakest in the current six-month run of increases.
Business confidence surged to its highest level since November 2024, with manufacturers pointing to expansion plans, new product lines and expectations of stronger new work and fresh customer wins as reasons for optimism.
Maryam Baluch, economist at S&P Global Market Intelligence, said the Filipino manufacturing sector had "continued to build momentum in August", moving on from the flat performance seen the previous quarter, when activity had been affected by the conflict in the Middle East.
She added that production had risen at its fastest pace since 2016, helped by stronger demand, prompting firms to step up both hiring and purchasing, while easing cost pressures had lifted confidence about the year ahead to a 21-month high.
