Philippine manufacturing output climbed for the third-straight month in August, marking its fastest growth in four months.

The latest S&P Global Philippines manufacturing purchasing managers’ index (PMI) survey released on Monday, Sept. 1, showed that Philippine PMI—a composite measure of manufacturing performance—stood at 50.8 in August, slightly below July’s 50.9 and broadly in line with levels recorded since June.

“The headline figure indicated a further improvement in health of the Filipino manufacturing sector, but one that was historically subdued and only marginal overall,” it noted.

The S&P Global report showed that domestic manufacturing continued to grow last month, as the pace of new order expansion remained steady from the previous month.

Amid stronger production demand, S&P Global said that “purchasing activity was expanded further.”

“However, the sector’s overall performance continued to be subdued when compared to historical standards,” it added.

Philippine manufacturers also reported stronger foreign demand for goods, with the pace of growth accelerating to its fastest level in seven months.

With August figures pointing to the strongest improvement in four months, “the rise in production requirements encouraged firms to purchase inputs at a faster pace,” S&P Global said.

It noted that manufacturing employment in the Philippines remained stable in August, ending a two-month streak of job growth.

The rise in production needs, coupled with unchanged employment, led to a further increase in work backlogs, which grew at the fastest pace in six months, S&P Global added.

It also reported that inflationary pressures stayed fairly moderate.

However, S&P Global noted that many manufacturers opted to stay competitive, leading to a slowdown in selling price inflation, which eased to its weakest pace in four months.

“Companies across the Philippines noted greater confidence towards the year ahead outlook for output during August,” it said. “The respective index ticked up for the fourth month running to the highest since November 2024.”

“The latest PMI data for the Philippines manufacturing sector once again indicated a subdued performance, with growth rates for output and new orders remaining below their historical averages. Furthermore, while overall sentiment in the year-ahead outlook remained optimistic and even strengthened compared to the previous month, confidence fell short of the long-run average,” S&P Global Market Intelligence economist Maryam Baluch said in a statement.

“Additionally, job creation came to a halt in August, ending a period of two consecutive months of marginal increases in employment,” Baluch said.

“However, subdued cost pressures, coupled with manufacturers' efforts to control their pricing in a bid to remain competitive, could provide the boost firms need to regain sales momentum,” she added.

(Ricardo M. Austria)