ANC: PH GDP growth slows to 2.1% in Q3 2026 as inflation squeezes spending, construction stays subdued
The Philippine economy grew at its slowest pace outside the pandemic in nearly two decades in the third quarter of 2026, weighed down by rising inflation, weather disturbances, and weak government spending.
The Philippine Statistics Authority (PSA) reported on Monday that gross domestic product (GDP) grew by just 2.1% in the July-to-September period, slower than the 2.4% expansion in the second quarter and the 4% growth recorded in the same period last year.
It was the weakest economic performance since the first quarter of 2021, when the economy contracted by 3.8%. Excluding the pandemic years, the latest figure marked the slowest growth since the fourth quarter of 2009.
Economy, Planning, and Development Secretary Arsenio Balisacan attributed the slowdown to accelerating inflation, particularly in September and October, which dampened business and consumer sentiment.
He also cited the impact of heavy rains and flooding on agricultural production, as well as the continued contraction in public construction spending, which fell by around 15%.
By sector, agriculture, forestry, and fishing contracted by 4.8%, while industry also posted negative growth.
Agriculture Secretary Francisco Tiu Laurel Jr. acknowledged the various challenges confronting the sector, including the southwest monsoon, high fuel costs, and rising fertilizer prices.
Household consumption, a key driver of the Philippine economy, also showed signs of weakness as inflation continued to erode consumers’ purchasing power.
National Statistician Undersecretary Claire Dennis Mapa said the growth in household spending on food and non-alcoholic beverages slowed during the quarter. Some components of household expenditure, particularly transportation, also recorded negative growth.
Various business groups expressed concern over the country’s economic performance, which has slowed for three consecutive quarters.
The Management Association of the Philippines said weaker growth could translate into fewer investments and job opportunities, putting additional pressure on Filipino households.
Its president, Donald Patrick Lim, urged the government to make restoring business confidence an urgent priority, citing uncertainties surrounding public spending and the proposed 2027 national budget.
The Philippine Chamber of Commerce and Industry, meanwhile, described the latest GDP figures as a sign of continuing economic challenges, noting the country’s dependence on imported inputs despite strong exports from the semiconductor, electronics, and business process outsourcing sectors.
IBON Foundation also criticized the government for failing to revive economic growth, particularly as other Southeast Asian economies have begun recovering.
Its executive director, Sonny Africa, called for increased government spending on agriculture, particularly irrigation and assistance for farmers and fisherfolk. He also urged authorities to expand financial aid to affected sectors and ordinary Filipinos to help boost purchasing power, while ensuring that political interests do not interfere with the distribution of assistance.
In response, Senate President Sherwin Gatchalian said the Senate would prioritize policy interventions through its RISE ad hoc committee to help stimulate economic activity.
He called on the government to accelerate public spending, particularly on infrastructure projects, and strengthen social protection programs for vulnerable sectors.
Balisacan, for his part, said the Development Budget Coordination Committee would meet soon to discuss whether the government needs to revise its economic growth targets anew. – ANC, The World Tonight, November 9, 2026