Philippine factory output expanded at a faster pace in September, driven by increased production of petroleum products, basic metals, and transport equipment, according to the Philippine Statistics Authority (PSA).

Results from the PSA's latest Monthly Integrated Survey of Selected Industries (MISSI) showed that factory output, as measured by the volume of production index (VoPI), rose by 9% year on year in September. The reading reversed the 1.1% contraction recorded in September 2025 and marked an acceleration from the revised 6.6% growth posted in August. As a monthly gauge of factory volumes, the VoPI serves as one of the timelier barometers of the industrial side of the economy between the PSA's quarterly national accounts releases.

The statistics agency also downwardly revised August's output growth to 6.6% from the 11.8% initially reported. September's expansion was likewise the fastest since the revised 11.3% growth recorded in June. The August revision illustrates the preliminary nature of the survey, whose monthly figures are subject to updates as more complete data come in.

The PSA attributed the quicker growth mainly to higher production of coke and refined petroleum products, basic metals, and transport equipment.

Production of coke and refined petroleum products expanded by 31% in September, a turnaround from the 1.2% decline a year earlier and an acceleration from August's 20.4% growth. Basic metals output climbed 30.9%, reversing the 23.3% contraction in September 2025 and picking up from 18.1% in August. Transport equipment production grew by 12.7%, faster than the 10.3% expansion in September 2025 and the 6.2% rise in August.

Of the remaining 19 industry divisions, 10 posted annual increases in production volume, while nine recorded declines. Coke and refined petroleum products; computer, electronic and optical products; and basic metals contributed the most to overall manufacturing output growth, meaning the headline figure leaned heavily on the performance of those industrial lines.

Food production, meanwhile, contracted by 4.5% in September, a reversal from the 14.9% growth posted in September 2025 and a steeper decline than the 1.3% drop recorded in August. The pullback set the staples-linked division apart from the industrial categories powering the headline gain.

"The faster annual decline of VoPI for manufacture of food products was brought about by the downtrend in the annual growth rates of VoPI in six out of the eight industry groups," the PSA said.

"This was led by the deceleration in the annual growth rate of the manufacture of prepared animal feeds at 3.6% during the period from 16.0% in August 2026," it added.

Average capacity utilization, which measures the extent to which industry resources are used in producing goods, stood at 78.4% in September, up from 77.4% a year earlier but slightly below the 78.7% posted in August. The gauge offers a read on how much spare room producers retain before further volume growth would require additional capacity. All industry divisions reported capacity utilization rates of more than 65% during the month.

The highest rates were recorded in tobacco products at 99.5%, followed by coke and refined petroleum products at 85.6%, and other manufacturing and repair and installation of machinery and equipment at 83.3%.

The PSA releases MISSI results monthly, and the October round will show whether September's acceleration carried into the final quarter and how the food division's downturn evolves.

Source: BusinessWorld | Reporting by Justine Irish D. Tabile