GDP growth skids to 2.1 percent in third quarter

MANILA — The Philippines posted a gross domestic product growth of 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, which was revised to 2.4 percent from an initial 2.3 percent.

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.

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.

According to the Bangko Sentral ng Pilipinas, business confidence has been largely negative this year as firms faced high fuel and energy costs, rising commodity inflation, geopolitical tension in the Middle East, peso depreciation, and weather disruptions. Consumer confidence has also been largely negative for the same reasons.

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.