-
The Philippine economy slackened to a 2.1% growth in the third quarter of 2026, the slowest since the COVID-19 pandemic in 2020 until the first quarter of 2021
-
The third quarter gross domestic product figure was lower than the revised 2.4% growth in the second quarter of the year and 4% expansion in the third quarter of last year
-
High food and energy prices, contraction in agriculture production, and subdued investment brought the weakness during the third quarter
-
Growth needs to reach 6.3% in the fourth quarter to achieve the lower end of the government’s annual growth target of 3.5% to 4.5%
The Philippine economy slackened further to a 2.1% growth in the third quarter of 2026, the slowest since the contractions recorded during the COVID-19 pandemic in 2020 until the first quarter of 2021.
The third quarter gross domestic product (GDP) figure was lower than the revised 2.4% growth in the second quarter of the year and 4% expansion in the third quarter of last year, according to data from the Philippine Statistics Authority.
For the first three quarters of the year, GDP growth stood at 2.5%.
READ: Philippine GDP growth slows to 2.3% in Q2
High food and energy prices, contraction in agriculture production, and subdued investment brought the weakness during the third quarter, according to Department of Economy, Planning, and Development secretary Arsenio Balisacan in a media briefing on November 9.
High food and energy prices constrained household spending, which grew by 2.4%, down from 2.9% from the previous quarter. The Middle East conflict raised fuel costs, affecting transport, electricity, and production, while inflation of 7.8% in October underscores the continuing pressure on purchasing power. Tighter financing conditions also weighed on investment.
Agriculture contracted by 4.8% as tropical cyclones and enhanced southwest monsoons disrupted production. Rice (palay) and corn output fell by more than 70%, reducing rural incomes and adding to food supply pressures.
Investments, construction slow down
Investment remained subdued during the quarter. Public construction declined for the sixth consecutive quarter, while private construction barely expanded. Investment in durable equipment also fell by 7.8%. Weather disruptions and delays in project validations and payments constrained infrastructure delivery, affecting contractors’ capacity to pay workers, purchase materials, and undertake further work. Governance concerns and uncertainty also weighed on confidence.
For other major economic sectors aside from agriculture, industry declined year-on-year 0.003%, while services slowed to a 3.7% growth.
The main contributors to the third quarter 2026 year-on-year growth were wholesale and retail trade; repair of motor vehicles and motorcycles, 3.54%; public administration and defense; compulsory social security, 9.9%; and financial and insurance activities, 3.47%.
Picking up in Q4?
Balisacan said easing contraction in investment, faster project implementation and lower fuel prices, if sustained and reflected in domestic costs, could support a fourth quarter pick up.
Growth would nevertheless have to reach 6.3% in the fourth quarter to achieve the lower end of the government’s annual growth target of 3.5% to 4.5%.
Recovery towards a 5.6% annual growth in 2027 also remains possible but requires stronger investment, easing price pressures, and renewed confidence, Balisacan added. Energy shocks, El Niño, and implementation delays, however, remain as risks.
