The Filipino goods-producing sector recorded a strong improvement in operating conditions in February 2026 as manufacturers registered accelerated increases in production volumes and new orders.
The Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 54.6 in February from 52.9 in January.
“The Philippines manufacturing sector has had a solid start to 2026, with February marking its strongest performance since late 2017,” said S&P Global Market Intelligence economist Maryam Baluch.
“A sharp influx of new orders underpinned robust growth of output, and in both cases, the expansions were historically pronounced and reached multi-year highs. Businesses, in turn, continued to expand their purchasing activity, which rose at a faster pace. However, jobs growth remained steady and was relatively modest overall,” she said.
“With backlogs rising, manufacturers have further scope to increase their staffing numbers in the coming months. 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,” said Baluch.
The latest data signaled a strong improvement in the health of the Filipino manufacturing sector, marking the most marked improvement since November 2017. Operating conditions have now improved in three consecutive months.
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, according to S&P Globa.
Output increased for a second month running, with the latest uptick the fastest since November 2018.
Similar to production, the latest rise in order book volumes across the Filipino manufacturing sector was strong, with the pace of increase accelerating on the month.
The respective seasonally adjusted index hit the highest level in just over 8 years. The acquisition of new clients and bulk buying activity among customers pushed up new sales, S&P Global said.
It said the latest data hinted that growth in new factory orders was led by improvements in domestic and international demand, as the rise in new export orders remained modest. Foreign sales increased for the second consecutive month, but the pace of expansion held steady in February.
To support higher production requirements, manufacturers across the Philippines raised their purchasing activity further and at a faster pace.
Increased production meant that input buying rose at an accelerated rate in February. The pace of expansion was strong and the fastest since January 2025. Firms, in turn, stepped up their stock building initiatives. The rates at which inventories of purchases and finished goods were accumulated were stronger than seen in the month prior. Firms often noted that expectations of increased demand in the coming months encouraged companies to raise their stock levels.
Employment growth across the Philippines manufacturing sector was sustained in February, with staffing numbers rising for a second straight month. The pace of job creation was only modest overall and therefore insufficient to prevent a fresh build-up in backlogs of work. The pace of accumulation was the fastest in three months.
Increased purchasing activity, along with poor weather conditions and congestion issues at ports meant that supply chains came under further duress in February. Average delivery times for inputs lengthened for a third successive month. The incidence of delay was sharp overall and the most pronounced in 14 months.
Turning to prices, Filipino manufacturers reported falling operating expenses, which in turn allowed them to reduce their own charges. In both cases, the rates of decrease were fractional overall.
Sentiment on the 12-month outlook for output improved in February. The degree of confidence lifted notably from the recent low observed at the turn of the year.
