PH economic growth slows to 2.1% in Q3 2026

The Philippine economy grew by 2.1% in the third quarter of 2026, slower than the revised 2.4% expansion recorded in the previous quarter, the Philippine Statistics Authority (PSA) said Monday.

The second-quarter growth figure was initially reported at 2.3% before being revised upward to 2.4%.

“Ang Gross Domestic Product o GDP ng Pilipinas ay nagtala ng pagtaas na nasa 2.1% sa ikatlong quarter ng taong 2026,” PSA chief Undersecretary Claire Dennis Mapa said at a press briefing.

In a statement, Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan attributed the slowdown to three major factors: high food and energy prices, agricultural disruptions, and weak investment.

“The Philippine economy grew by 2.1 percent year-on-year in the third quarter of 2026, slowing further from the revised 2.4 percent in the second quarter and 4.0 percent a year earlier. Growth for the first nine months stood at 2.5 percent,” Balisacan said.

“Three factors explain the weakness,” he added.

Balisacan said high food and energy prices constrained household spending, which grew by 2.4% in the third quarter, slower than the 2.9% expansion in the previous quarter.

The Middle East conflict drove up fuel costs, affecting transportation, electricity and production, while inflation reached 7.8% in October, further squeezing household purchasing power. Tighter financing conditions also weighed on investment, he said.

Agriculture contracted by 4.8% as tropical cyclones and the enhanced southwest monsoon disrupted production, Balisacan said.

“Palay and corn output fell by more than 17 percent, reducing rural incomes and adding to food supply pressures,” he added.

Investment also remained subdued, with public construction declining for the sixth consecutive quarter, although its contraction eased to 15.1% from 33.4% in the previous quarter.

Private construction barely expanded, while investment in durable equipment fell by 7.8%.

Balisacan said weather disruptions and delays in project validation and payments hampered infrastructure delivery, affecting contractors' ability to pay workers, purchase materials and undertake additional projects.

“Governance concerns and uncertainty also weighed on confidence. Together, these pressures help explain why industry recorded no growth and services slowed to 3.7 percent,” he said.

Despite the slowdown, Balisacan cited stronger exports as a bright spot, with overall exports growing by 8.6% and electronics exports increasing by 19.4% amid demand for artificial intelligence-related products.

Business services exports also gained momentum, while government consumption provided support to economic activity, he added.— MCG, GMA News

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