Tovic Salvador

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<div><br/></div><p>MANILA – The Philippines may already be drifting into stagflation territory as economic growth slows sharply while inflation remains stubbornly high, an economist warned.</p><p>UP School of Economics professor JC Punongbayan told ANC’s Market Edge that the country is facing a dangerous combination of stagnant growth and elevated prices. He pointed out that gross domestic product (GDP) growth slowed to 2.8 percent in the first quarter—the lowest level since the global financial crisis.</p><p>Meanwhile, April inflation hit 7.2 percent, driven by global oil shocks and food supply pressures. Punongbayan warned the situation could worsen, noting that &quot;inflation could be as high as double digits in the coming months based on economists’ forecasts.&quot;</p><p>This economic squeeze leaves the Bangko Sentral ng Pilipinas (BSP) caught in a structural policy trap. &quot;The BSP is really caught in a bind… they need to manage inflation and inflation expectations, but they also need to prop up growth,&quot; Punongbayan said.</p><p>The economist emphasized that the Philippines is currently lagging behind its regional peers, citing stronger first-quarter growth rates in Vietnam (7.8 percent), Singapore (6 percent), and Indonesia (5.6 percent). He argued this divergence signals internal structural weaknesses rather than just external shocks.</p><p>To reverse the trend, Punongbayan urged policymakers to restore credibility in anti-corruption efforts to unlock investment, fix infrastructure spending bottlenecks, protect household consumption, and aggressively reduce the country&#x27;s oil dependency. </p><p>&quot;Our overdependence on fossil fuels… has really made us rather vulnerable,&quot; he said.</p><div><span class="fr-video fr-deletable fr-fvc fr-dvb fr-draggable" contenteditable="false" draggable="true"><iframe width="640" height="360" src="https://www.youtube.com/embed/CqpSxWo3F4E?&amp;t=1s&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe></span><br/></div>

<p>The Philippines may already be drifting into stagflation territory as economic growth slows sharply while inflation remains stubbornly high, an economist warned.</p>

The Philippines may already be drifting into stagflation territory as economic growth slows sharply while inflation remains stubbornly high, an economist warned.

UP economist says PH may be sliding into stagflation

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UP economist says PH may be sliding into stagflation

Raine Musñgi,

ABS-CBN News Channel

Published May 28, 2026 03:09 PM PHT

Read More:

stagflation

high inflation

low growth

economy

JC Punongbayan

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