PSA: Factory output growth surged in August

Philippine factory output growth hit its fastest pace so far this year in August, fueled by a sharp acceleration in electronics production alongside stronger output across most industry divisions.

The latest monthly survey of selected industries showed the volume of production index (VoPI), a measure of manufacturing output, grew by 11.8 percent in August, the Philippine Statistics Authority (PSA) reported on Wednesday.

This was a sharp increase from the 6.7-percent growth recorded in July and the 1.3-percent expansion in August 2025.

Driving the acceleration was the manufacture of computer, electronic and optical products, which posted a 32.1-percent annual increase in August from 9.2 percent in the previous month.

Annual hikes

The manufacture of transport equipment also posted double-digit growth, accelerating to 11.4 percent from 2.1 percent, while basic metals grew by 29 percent from 17.4 percent.

Aside from these three industry divisions, 15 others posted annual increases in August, tempering declines in four industries, which include fabricated metal products; other nonmetallic mineral products; chemicals and chemical products; and machinery and equipment.

But for Leonardo Lanzona, an economist at Ateneo de Manila University, the robust factory output was not yet a signal of a sustained stabilization in the manufacturing sector.

“Growth leans on one export sector (electronics), while food manufacturing, a much bigger part of the sector, grew only 2.3%. Factories are also producing faster than they are selling: net sales volume rose 6.5% against 11.8% for output,” he said.

Meanwhile, the average capacity utilization rate of manufacturers was nearly unchanged at 78.7 percent in August from 78.8 percent in July, although it was higher than the 77.6-percent recorded a year earlier.

The PSA’s factory output data also aligned with S&P Global’s purchasing managers’ index (PMI), another closely watched gauge of manufacturing activity.

In August, PMI climbed to a near-decade high of 54.9 from 51.8 in July as easing inflationary pressures boosted new orders and renewed business confidence.