Factory output in the Philippines expanded in January 2026, but at a decelerated rate compared to the previous month, according to the latest data released by the Philippine Statistics Authority (PSA) on Friday, March 6, 2026.
Slower Growth in Production Indices
The Monthly Integrated Survey of Selected Industries (MISSI) revealed that the value of production index (VaPI) increased by 2.7 percent in January, a marginal slowdown from the 2.8 percent growth recorded in December 2025. This marks a notable decline from the 4.1 percent rise observed in January 2025, indicating a broader trend of easing manufacturing momentum.
Key Factors Behind the Slowdown
The PSA attributed the reduced growth primarily to weaker performance in several critical sectors. The manufacture of food products saw a significant deceleration, expanding by only 0.8 percent in January, down sharply from 14.8 percent in December. Additionally, the manufacture of other non-metallic mineral products grew by 5.4 percent, a substantial drop from 30.2 percent in the prior month. Transport equipment manufacturing also eased, posting a growth of 0.7 percent compared to 7.1 percent in December, collectively pulling down the overall VaPI.
Volume of Production Index Trends
Similarly, the volume of production index (VoPI) slowed to 1.2 percent in January from 2 percent in December 2025. This represents a further decline from the 3.2 percent growth rate recorded in January 2025, underscoring a consistent pattern of moderated expansion across production metrics.
Capacity Utilization Shows Slight Improvement
Despite the slowdown in output growth, the average capacity utilization rate for the manufacturing sector experienced a modest increase, rising to 77.8 percent in January from 77.6 percent in December. All industry divisions maintained capacity utilization rates above 60 percent during the month, reflecting sustained operational activity.
Top Performing Divisions
The highest capacity utilization rates were observed in the following key sectors:
- Manufacture of coke and refined petroleum products at 84.5 percent
- Manufacture of computer, electronic and optical products at 82.5 percent
- Manufacture of machinery and equipment except electrical at 81.4 percent
Importance of MISSI Data
The MISSI survey collects comprehensive monthly data on employment, compensation, production, net sales, inventories, and capacity utilization from manufacturing establishments across the Philippines. According to the PSA, this survey provides timely and critical indicators to monitor the performance of growth-oriented industries within the manufacturing sector, offering valuable insights for economic analysis and policy-making.
