New post-pandemic low: Philippine GDP Q1 growth slows to 2.8%
MANILA, Philippines — The local economy grew at a slower pace of 2.8 percent in the first quarter as the oil shock from the Middle East war added to pressures from a major infrastructure graft scandal.
The first-quarter gross domestic product (GDP) growth, which the Philippine Statistics Authority (PSA) reported on Thursday, further weakened from 3-percent expansion in the fourth quarter of 2025.
READ: Philippine GDP growth slumps to post-pandemic low of 3% in Q4 2025
The figure landed below the government’s 5 percent to 6 percent target for 2026 and also slumped from the 5.4 percent GDP expansion seen in the same period a year earlier.
It likewise missed the 3.4 percent median estimate of 14 economists polled by the Inquirer.
The main contributors to the first quarter 2026 year-on-year growth were:
- Wholesale and retail trade; repair of motor vehicles and motorcycles, 4.6 percent;
- Financial and insurance activities, 3.4 percent; and
- Public administration and defense; compulsory social security, 8.6 percent.
Among the major economic sectors, services grew by 4.5 percent in the first quarter. On the other hand, the agriculture and industry sectors declined by 0.2 percent and 0.1 percent, respectively.
READ: Q1 growth rebounded to 3.4%; recovery fragile
This outcome has now dragged the Philippines economy deeper into one of its weakest runs in 16 years outside the COVID-19 pandemic period.
The country had still been trying to rebound from weak growth in 2025, when infrastructure spending contracted sharply amid the fallout from the flood control corruption scandal, which weighed on both government disbursements and business sentiment.
But in March—the last month of the quarter and the first month of the ongoing Middle East war—an energy shock began to bite, driving up fuel costs and pressuring household purchasing power and business confidence. /dda
