Strong demand pushed Feb PH manufacturing activity to 8-year high
Improved domestic and foreign demand lifted Philippine manufacturing to its strongest performance in over eight years in February, with factories ramping up production.
In its latest survey of around 400 Philippine firms, S&P Global said the country’s purchasing managers’ index (PMI) climbed to 54.6 in February from 52.9 in January, marking its highest level since November 2017.
The February reading extended the manufacturing sector’s recovery, with operating conditions improving for three consecutive months since December’s rebound.
S&P Global said improvements in domestic and international demand led to stronger new factory orders, which in turn boosted output and productivity.
“Driving the rise in the headline index was a stronger expansion in output in February. Manufacturing companies in the Philippines noted that sustained growth in new orders led them to increase their production levels,” S&P said in its report, noting that the uptick in output was the fastest in seven years.
John Paolo Rivera, senior research fellow at the Philippine Institute of Development Studies (PIDS), said the firm demand, which mostly came from transport, hospitality and retail, is likely due to a stable economic outlook despite the slowdown last year.
“This reflects firmer demand from services, stronger manufacturing orders tied to inventory restocking, and gradual improvements in business confidence as economic data through late 2025 signaled stabilization,” Rivera said.
“Even in a slower-growth environment, firms may be clearing backlogs, tapping into pent-up demand, and responding to better mobility and consumer spending early in the year,” he added, explaining that electronics and services exports will continue to support the manufacturing sector if external demand remains strong.
Input buying rose at its strongest and fastest pace since January 2025, as firms stepped up stock-building efforts amid improved business sentiment and expectations of higher demand in the coming months.
Firms also turned more upbeat about the year ahead, reversing the decline in business confidence seen in January. According to S&P, companies foresee sustained growth in production supported by stronger demand.
“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,” Maryam Baluch, S&P Global Market Intelligence economist, said in the report.
Notably, however, recent major global developments—including US President Donald Trump’s tariff measures and the unfolding US–Israel conflict with Iran—are expected to affect the momentum of the Philippine PMI.
“Conversely, global risk factors like oil price volatility, geopolitical tensions, and trade policy shifts can temper demand, raise input costs, and feed through into domestic activity,” Rivera said.
”Key will be whether export markets stay resilient and whether supply-side pressures are contained, so that the strong PMI reading translates into sustained growth rather than a short-lived rebound,” he added.
