Philippine Economy Grows 2.1% in Third Quarter of 2026

The Philippine Statistics Authority reported that the Philippine economy grew by 2.1% year-on-year in the third quarter of 2026. This figure marks the slowest growth pace since the COVID-era recession and fell short of the 3.0% expectation, representing a decline from the 2.3% to 2.4% growth recorded in the second quarter.

Sectoral performance was mixed, with the services sector expanding by 3.7%. In contrast, agriculture contracted by 4.8% and industry remained nearly flat with a marginal decline of 0.003%. The slowdown was driven by high oil prices resulting from conflict in the Middle East and inflation, which reached 7.8% in October.

In response to these inflationary pressures, the Bangko Sentral ng Pilipinas raised interest rates to 5% in August. Economic Planning Secretary Arsenio Balisacan stated that these tighter financing conditions weighed on investment during the quarter.

Overall investment was further hampered by a contraction in public construction for a sixth consecutive quarter. This decline stems from ongoing investigations into alleged substandard or nonexistent flood-control projects, which have delayed fiscal spending.