Manufacturing activity in the Philippines gathered momentum in February, posting its strongest performance in more than eight years as rising orders pushed factories to ramp up production, according to the latest survey by S&P Global Market Intelligence.

The Philippines’ Purchasing Managers’ Index climbed to 54.6 in February from 52.9 in January, well above the 50-point mark that separates expansion from contraction. The reading reflects the sharpest improvement in operating conditions since November 2017 and extends the sector’s growth streak to three straight months.

Production grew at its fastest pace since November 2018, fueled by a surge in new orders. The seasonally adjusted index for new business reached its highest level in over eight years, supported by new client wins and bulk purchases from customers. Gains were recorded in both domestic and export markets, although foreign demand expanded at a modest pace.

Solid start

“The Philippines’ manufacturing sector has had a solid start to 2026, with February marking its strongest performance since late 2017. 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,” said S&P Global Market Intelligence economist Maryam Baluch.

To keep up with stronger output, manufacturers increased purchasing activity at the fastest rate since January 2025. Firms also built up inventories of raw materials and finished goods in anticipation of sustained demand in the months ahead.

Employment rose for a second consecutive month, but hiring remained measured. As new businesses expanded faster than workforce growth, backlogs of work accumulated at the quickest pace in three months.

Continued purchasing activity by businesses

“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. With backlogs rising, manufacturers have further scope to increase their staffing numbers in the coming months,” Baluch said.

Despite the upbeat demand picture, supply chains continued to face strain. Delivery times lengthened for a third straight month due to poor weather conditions and port congestion, marking the most pronounced delays in over a year.

On the cost front, manufacturers reported slight declines in operating expenses, which allowed them to trim selling prices marginally.

Confidence in 2026 strengthens

Confidence about the year ahead strengthened in February, rebounding from the low seen at the start of 2026.

“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,” Baluch added.