PHILIPPINE manufacturing conditions saw a marked improvement in February as production and new orders accelerated and business confidence also rebounded, S&P Global said on Monday.
The purchasing managers’ index (PMI) for the sector rose for a third straight month to 54.6, up from January’s 52.9 and the highest since November 2017’s 54.8. PMI readings above 50.0 point to growth, while those below are a sign of a contraction.
“Manufacturers registered accelerated increases in production volumes and new orders midway through the first quarter of 2026,” S&P Global said.
“The sharp expansions across these two measures were accompanied by an uplift in business confidence, which rebounded notably from the recent low recorded in the month prior,” it added.
The expansion in output — the second month in a row and the fastest since November 2018 — was said to have driven the PMI rise.
Order book volumes accelerated to their highest in over eight months and new clients and bulk buying activity by customers boosted new sales.
“The latest data hinted that growth in new factory orders was driven by improvements in domestic and international demand, as the rise in new export orders remained modest,” S&P Global said.
Foreign sales were positive for a second straight month but growth steadied, it added.
Raw material purchases grew at the fastest pace since January last year and companies also built up stocks, including those of finished goods, at a faster pace.
“Firms often noted that expectations of increased demand in the coming months encouraged companies to raise their stock levels,” S&P Global said.
Employment in the sector continued to expand for a second straight month, but the pace of job creation was modest and was not enough to prevent a buildup of backlogs.
Increased purchasing, coupled with bad weather, led to logistics issues with average delivery times rising for a third consecutive month.
“The incidence of delay was sharp overall and the most pronounced in 14 months,” S&P Global said.
Lower operating costs allowed manufacturers to lower prices, albeit fractionally.
Sentiment for the year ahead turned positive and respondents said this was due to hopes of further gains in demand trends.
“The Philippines manufacturing sector has had a solid start to 2026...,” S&P Global economist Maryam Baluch said.
“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,” she added.
With backlogs rising, Baluch also said that there was scope to increase hiring in the coming months.
