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The Philippine economy slowed to a 4% year-on-year growth in the third quarter of 2025, the slowest rate in about four years as concerns over government infrastructure projects and weather disturbances affected construction and consumer spending
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The third quarter gross domestic product was lower than the 5.5% growth recorded in the second quarter of 2025 and 5.2% expansion in the third quarter of last year
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The latest GDP growth brings the year-to-date average to 5%, below the government’s target range of 5.5-6.5%
The Philippine economy slowed to a 4% year-on-year growth in the third quarter of 2025, the slowest rate in about four years as concerns over government infrastructure projects and weather disturbances affected construction and consumer spending.
The third-quarter gross domestic product (GDP) was lower than the 5.5% growth recorded in the second quarter of 2025 and 5.2% expansion in the third quarter of last year. It was also the lowest recorded growth since the 12% in the second quarter of 2021, which followed contractions since 2020 due to the COVID-19 pandemic.
The latest GDP growth brings the year-to-date average to 5%, below the government’s target range of 5.5-6.5%.
“The Philippine economy continues to grow, but the third quarter’s performance reminds us of the urgent need to address key challenges and strengthen our foundations for rapid, sustained and inclusive growth,” Socioeconomic planning secretary Arsenio Balisacan said in a statement during a press conference on November 7.
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On the supply side, Balisacan said services and industry posted weaker growth with a sharp contraction in public construction due to stricter validation measures for the Department of Public Works and Highways’ civil works as well as the implementation of stricter requirements that delayed billings and disbursement of government projects.
Private construction remained “respectable,” Balisacan said, but investment in durable equipment was subdued.
On the demand side, household, consumption growth slowed to 4.1%.
Widespread cancelation of school, work, and travels activities due to typhoons likely dampened spending. Moreover, consumer confidence may have been affected by the ongoing discussions on government infrastructure spending, prompting many households to postpone purchases, especially durable goods.
A lower disbursement of conditional cash transfers during the third quarter was also recorded, contributing to weaker consumption.
The main contributors to the third quarter GDP were wholesale and retail trade; repair of motor vehicles and motorcycles, 5%; financial and insurance activities, 5.5%; and professional and business services, 6.2%.
All major economic sectors – agriculture, forestry, and fishing; industry; and services – posted year-on-year growths during the period in review.
Agriculture, forestry, and fishing increased by 2.8% in the third quarter, a rebound from the 2.7% decline recorded in the same quarter of 2024.
The industry sector grew 0.7%, the slowest growth recorded since the first quarter of 2021. Services rose 5.5%, albeit slower than the 6.3% recorded in the same period of 2024.
Exports of goods and services expanded 7% in the third quarter of 2025, a reversal from the 1.3% decline recorded in the same quarter in 2024. Imports of goods and services also saw a 2.6% increment, slower compared with the 6.5% growth in the same quarter last year.
“While we may not be able to fully recover the economic losses within the year, we believe these are temporary setbacks. With sustained interventions and improved resilience, we expect the economy to rebound in 2026,” Balisacan said. “For the medium to long term, we are increasing our investments in disaster preparedness and adaptation to minimize disruptions in school, work, and other economic activities, and more importantly, to protect the lives and livelihoods of the Filipino people.”
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