Arthur Fuentes

The Makati-Taguig skyline in this photo taken on April 12, 2024.   Gigie Cruz, ABS-CBN News

Article (news)

PH ECONOMY

Benise Balaoing

Jekki Pascual

ABS-CBN News

MANILA — The Philippine economy grew 2.8 percent in the first quarter of 2026, the Philippine Statistics Authority said on Thursday.This was slower than the 3 percent growth in the fourth quarter of 2025, and much lower than the 5.4 percent growth rate posted in the first quarter of last year. <div><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/1778121939806GDP Q1 2026.png" style="width:960px" class="fr-fic fr-dib" width="960"/></div>PSA Undersecretary and National Statistician Claire Dennis Mapa said that among the major economic sectors, Services posted a year-on-year growth of 4.5 percent in the first quarter. Agriculture, forestry, and fishing, meanwhile, declined by 0.2 percent; and industry declined  0.1 percent.The PSA said the 2.8 percent growth is the slowest since the first quarter of 2021 which hit -3.8 percent GDP amid a pandemic. If the pandemic period is removed, the latest economic growth rate is the lowest since the fourth quarter of 2009 which recorded a 1.8 percent growth.The Department of Economy Planning and Development said the country’s slow growth was due to the lingering effects of the flood control controversy, delays in the passage of the national budget and in the release of funds for infrastructure spending, and the impact of the war in the Middle East, which sent oil prices surging.<div><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/1778123016100GDP industries.png" style="width:960px" class="fr-fic fr-dib" width="960"/></div>Economic Planning Secretary Arsenio Balisacan said the government is looking to address these issues by taming corruption, stepping up the implementation of high impact infrastructure projects, and through UPLIFT or the Unified Package for Livelihoods, Industry, Food, and Transport amid the oil shock caused by the Middle East conflict.But even as the government works on these issues, Balisacan said they are also preparing for the impact of El Niño.“In anticipation of this risk, we support the reactivation of the El Niño Task Force to ensure a coordinated national response aimed at minimizing economic losses and protecting livelihoods,” Balisacan said. “Our focus will be on sound water and irrigation management, ensuring the reliability of critical infrastructure, and strengthening climate risk mapping and weather forecasting to support timely and science-based interventions,” he continued. GDP growth was already seen as anemic at 4.4 percent in 2025 as the country was hit by several typhoons, tariff chaos was unleashed by US President Donald Trump, and as the government cut spending in the wake of the massive flood control scandal. Economic managers had been hoping that the country could bounce back to at least 5 percent growth this year, but this was before the US-Israel attack on Iran in late February sent world oil prices skyrocketing. Inflation, meanwhile, has already quickened above the government’s target range in March and April. The Bangko Sentral has also begun raising interest rates again, which can further dampen growth.Balisacan admitted that the government will have to revise its growth targets.“Definitely. We&#x27;ll move our growth targets lower, because given the situations, especially the global uncertainty remaining highly elevated, our Middle East conflict assumptions no longer hold,” he said.“Even as the Middle East conflict ends today, the lingering effects of the oil prices and supply chain disruptions will persists in the coming months. There are continuing challenges ahead,” Balisacan said.However, he brushed off suggestions that the country is now suffering from stagflation.“Stagflation, [in a] standard textbook is usually thought of as the presence of three things. One is high inflation, where prices keep rising, the other one is slow or stagnant economic growth. And third is high unemployment,” he explained.He said the government had successfully brought down inflation from 8 percent highs in 2023 to within targets, until the Middle East conflict erupted. Unemployment has also been stable, he said.

This was slower than the 3 percent gross domestic product growth in the fourth quarter of 2025 and the 5.4 percent growth posted in the first quarter of last year.

This was slower than the 3 percent gross domestic product growth in the fourth quarter of 2025 and the 5.4 percent growth posted in the first quarter of last year.

GDP growth skids to 2.8 percent in first quarter of 2026

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GDP growth skids to 2.8 percent in first quarter of 2026

Arthur Fuentes,

Benise Balaoing,

Jekki Pascual,

ABS-CBN News

Published May 07, 2026 10:07 AM PHT

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Updated May 07, 2026 04:39 PM PHT

Read More:

GDP

Philippine economy

economic growth

inflation

interest rates

PSA

DepDEV

Balisacan

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