THE PHILIPPINES’ gross domestic product (GDP) grew 2.1 percent in the third quarter of 2026, official data showed, dragged down by contractions in agriculture and industry despite steady gains in the services sector.
This was slower than the second-quarter GDP growth rate, which was revised to 2.4 percent from an initial 2.3 percent.
National Statistician Claire Dennis Mapa said the 2.1 percent growth in the July to September period this year was the slowest since the first quarter of 2021 during the pandemic when the economy posted a negative growth of 3.8 percent.
Missed target, but no stagflation yet
With the slower-than-expected growth, the Department of Economy, Planning and Development said the country was likely to miss its already lowered target of 3.5 to 4.5 percent growth for the year.
DEPDev Secretary Arsenio Balisacan said that for the Philippines to hit even the lower end of the target range, GDP would need to grow at least 6.3 percent in the fourth quarter.
But even as the country posts low growth, high inflation and rising unemployment, Balisacan said the Philippines was not yet in a state of stagflation.
The Philippine Statistics Authority said services provided the primary pillar of economic growth, expanding 3.7 percent compared with the same period last year. However, the agriculture, forestry, and fishing sector shrank by 4.8 percent, while industrial output dipped slightly by 0.003 percent.
DEPDev also noted that public construction, which is a major driver of public spending, declined for the sixth consecutive quarter.
Top contributors to third-quarter expansion included public administration and defense, which surged 9.9 percent, alongside wholesale and retail trade up 3.54 percent, and financial and insurance activities up 3.47 percent.
On the demand side, household final consumption expenditure rose 2.4 percent year-on-year, while government consumption expanded by 6.8 percent. Foreign trade also showed solid momentum, with exports of goods and services climbing 8.6 percent and imports growing 7.7 percent. In contrast, gross capital formation fell by 0.2 percent during the period.
Meanwhile, Gross National Income posted a year-on-year increase of 2.7 percent over the three-month period, bolstered by net primary income from the rest of the world, which jumped 6.6 percent over the same timeframe.
Economic growth has been severely impacted by the US and Israeli war against Iran, which choked off world oil supplies and sent inflation skyrocketing.
The Philippines used to be one of the fastest-growing economies in Asia, but economic growth slowed significantly last year in the wake of extreme weather events and a massive government corruption scandal, which put the brakes on public spending. (ABS-CBN News)
