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The Philippine manufacturing sector strengthened further in August 2026, with production growing at its fastest pace since 2016, helped by stronger demand conditions
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The Philippine manufacturing sector’s purchasing managers’ index rose for the fourth consecutive month in August 2026, climbing to 54.9 from 51.8 in July 2026
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New orders rose robustly in August, supported by new product and model launches, higher repeat business and a broader customer base, according to anecdotal evidence
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Overall new business also received a modest lift from a renewed improvement in international sales, as new export orders for Filipino manufactured goods rose for the first time in six months
The Philippine manufacturing sector strengthened further in August 2026, with production growing at its fastest pace since 2016, helped by stronger demand conditions, according to the latest purchasing managers’ index (PMI) survey by S&P Global.
The Philippine manufacturing sector’s PMI – a composite single-figure indicator of manufacturing performance – rose for the fourth consecutive month in August, climbing to 54.9 from 51.8 in July 2026.
A reading above 50 indicates an overall increase compared to the previous month, and below 50 an overall decrease.
The latest reading signaled a notable acceleration in growth from July 2026, with the health of the sector improving to its greatest extent since December 2016.
“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 in a statement.
READ: PH manufacturing rises to 5-month high in July 2026
New orders rose robustly in August, supported by new product and model launches, higher repeat business and a broader customer base, according to anecdotal evidence. The rate of growth was the fastest in six months.
Overall new business also received a modest lift from a renewed improvement in international sales, as new export orders for Filipino manufactured goods rose for the first time in six months.
Improved underlying demand and greater production efficiency were cited by survey respondents as key factors behind a substantial rise in manufacturing output during August. The pace of growth accelerated noticeably from July and was the fastest rate since December 2016.
August data also indicated a further upturn in input purchases. Moreover, the rate of expansion quickened from July to a six-month high, as firms adapted to a spike in new orders.
Despite a solid decline in vendor performance, firms were able to accumulate stocks of purchases in August. Inventories rose for the first time since February, although the rate of accumulation was only moderate.
Finished goods inventories declined for a second consecutive month as supplier delays led some firms to draw on existing stocks to meet production requirements, although the rate of depletion remained only marginal.
Employment conditions improved in August, with staffing levels rising for the first time in five months. Although modest, the pace of job creation was the strongest in 21 months.
Turning to prices, input costs rose at a notably softer pace than in July. That said, where expenses increased, firms reported paying more for energy, raw materials and logistics.
Likewise, output charges rose, but the rate of inflation was modest and the weakest in the current six-month sequence of inflation.
Business confidence surged to its highest level since November 2024. Goods producers that forecasted an expansion in output in the year ahead cited expansion plans, the introduction of new product lines, and expectations of stronger inflows of new work and new customer wins.
