The Philippine Statistics Authority (PSA) reported on Tuesday, July 7, 2026, that the country's factory output continued to expand in May, but growth in both production volume and value slowed compared to the previous month.
Value of Production Index (VaPI) Slows
The value of production index (VaPI) grew by 13.5 percent in May, a reversal from the -0.5 percent recorded in May 2025. However, this was a slowdown from the 14.8 percent growth in April 2026.
According to the PSA, “The slowdown in the annual growth rate of VaPI for manufacturing in May 2026 was mainly attributed to the slower annual increase posted by the manufacture of transport equipment at 0.9 percent during the month from 12.6 percent in the previous month.”
Other contributors to the deceleration included slower growth in food manufacturing, which eased to 3.1 percent in May from 6.1 percent in April, and a contraction in the manufacture of chemicals and chemical products, which fell 11.5 percent after a one-percent increase in the previous month.
Volume of Production Index (VoPI) Also Eases
The volume of production index (VoPI) rose by 10.2 percent in May, slower than the 11.7 percent growth seen in April. In May 2025, the VoPI had contracted by 0.3 percent.
The slower growth in VoPI was attributed to a 1.4-percent contraction in the manufacture of transport equipment, deceleration in food manufacturing, and a steeper decline in the manufacture of chemicals and chemical products.
Capacity Utilization Rate Improves Slightly
Based on responding establishments, the average capacity utilization rate for manufacturing increased to 78.8 percent in May from 78.5 percent in April 2026. All industry divisions reported a capacity utilization rate above 65 percent.
The top three industry divisions in terms of capacity utilization rate were: manufacture of leather and related products (including footwear) at 84.5 percent; manufacture of coke and refined petroleum products at 82.5 percent; and manufacture of computer, electronic and optical products at 81.2 percent.
