PH Manufacturing Growth Decelerates in May Amidst Slower Output in Key Sectors

The Philippine manufacturing sector posted slower growth in May, particularly due to the deceleration in production of transport equipment, food, and chemicals during the month, data released by the Philippine Statistics Authority (PSA) on Tuesday showed. Preliminary results of the Monthly Integrated Survey of Selected Industries (MISSI) showed that the volume of production index (VoPI) grew by 10.2% in May, slower than the 11.7% in April, but faster than the 0.3% decline the same month last year. Manufacturing of transport equipment declined by 1.4%, while growth in the manufacture of food products slowed to 1.7% from 4.5% in the previous month. The manufacture of chemicals contracted by 14.8%, a sharper drop than the 2.1% in April. The value of production index (VaPI) grew by 13.5% in May, slower than the 14.6% in April, but faster than the 0.5% contraction the same month last year. “The slowdown in the annual growth rate of VaPI for manufacturing in May 2026 was mainly attributed by the slower annual increase posted by the manufacture of transport equipment,” the PSA said in a news release. Manufacturing of transport equipment posted a 0.9% growth in May, slower than the 12.6% increase in the previous month. This contributed 42.0% to the slower annual growth rate of the VaPI. Other contributors to the decline include the manufacture of food products at 3.1% (from 6.1% in April), and the manufacture of chemicals and chemical products which declined by 11.5% versus the 1.0% growth the previous month. Average capacity utilization for the month was reported at 78.8%, higher than the 78.5% in April, and the 77.1% a year ago. All industry divisions reported utilization rates of over 65.0%, with the top three being manufacture of leather and related products (84.5%), coke and refined petroleum products (82.5%), and computer, electronic, and optical products (81.2%). More than a third or 36.1% of establishments operated at full capacity or 90% to 100% during the month, while 40.6% operated at 70% to 89% capacity. Some 23.3% operated at below 70% capacity. The manufacturing sector plays a crucial role in the Philippine economy, directly impacting employment and exports. This slowdown in growth could be influenced by a combination of global supply chain fluctuations, domestic demand trends, and inflationary pressures. The government will need to continue implementing policies aimed at enhancing the competitiveness and sustainable growth of the manufacturing industry.