Philippine Factory Output Grows Fastest in Over Four Years in August

Philippine factory output increased by 11.8% year on year in August, marking the fastest growth in over four years, driven by higher production in electronics, transport equipment and basic metals, the Philippine Statistics Authority (PSA) reported.

Electronics Lead Industrial Production Growth

The PSA’s Monthly Integrated Survey of Selected Industries showed that the volume of production index (VoPI) accelerated from a revised 6.7% growth in July and 1.3% in August 2025. The August increase was the fastest since the 346% expansion recorded in March 2022.

On a seasonally adjusted basis, VoPI rose by 2.9% month on month in August, reversing the 2.3% contraction in July. For the first eight months of the year, factory output grew by 7.1% compared to the same period last year.

The PSA attributed the faster growth primarily to the manufacturing of computer, electronic and optical products, which increased by 32.1% year on year in August, up from 9.2% in July. Production of transport equipment rose by 11.4% from 2.1%, while basic metals output expanded by 29%, up from 17.4%.

Among 19 industry divisions surveyed, 15 showed annual increases in output, with the largest contributions coming from computer, electronic and optical products, coke and refined petroleum products, and basic metals. Average capacity utilisation was recorded at 78.7%, slightly below July’s 78.8% but higher than the 77.6% a year earlier.

Outlook Signals Moderation in Manufacturing Growth

Ser Percival K. Peña-Reyes, senior research fellow at the Ateneo Center for Economic Research and Development, noted that August’s strong performance was mainly driven by electronics, benefiting the country’s export-oriented manufacturing base. He cautioned against extrapolating the growth rate due to its concentration in a few sectors.

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) reached 54.9 in August, its highest in nearly a decade, indicating improved manufacturing conditions. However, the PMI fell to 49.6 in September, signaling contraction for the first time in five months and a potential slowdown in production momentum.

Mr Peña-Reyes highlighted that the September PMI pointed to softer orders and heightened export competition, warning that continued manufacturing growth might persist but at a slower rate compared to August’s level. Electronics remains a robust segment, but demand and external competition present risks to sustaining the high output.