Philippine economy slows to 2.8% in Q1, weakest in 5 years

MANILA, Philippines — The Philippine economy grew by only 2.8% in the first quarter of 2026, putting the country well below the pace needed to meet full-year forecasts by multilateral and private-sector analysts.

The first-quarter gross domestic product growth was slower than the 3% recorded in the fourth quarter of 2025 and 4% in the same period last year, based on Philippine Statistics Authority data released Thursday, May 4.

The quarterly GDP is the lowest recorded since the first quarter of 2021, a year after the global COVID-19 pandemic broke out and shut down markets.

Philippines' quarterly growth trend

Grouped by year, 2019 to 2026 | Figures in % | Chart adopted from PSA

15 10 5 0 -5 -10 -15 -20 5.9 5.6 6.3 6.6 -0.7 -16.9 -11.6 -8.2 -3.8 12.0 7.0 7.9 8.1 7.5 7.7 7.1 6.4 4.3 6.0 5.5 5.9 6.5 5.3 5.3 5.4 5.4 4.0 3.0 2.8 2019 2020 2021 2022 2023 2024 2025 2026

The figure also fell short of the growth implied by earlier forecasts. The Asian Development Bank projected Philippine GDP growth of 4.4% for 2026, while private firms' analysis expected the economy to expand by about 5.2% this year.

BMI, a Fitch Solutions unit, said in February that it expected Philippine growth to accelerate to 5.2% in 2026. But this was before the global oil shock following the United States' attacks and subsequent actions on Iran.

Services carry growth

The government's data agency said the main contributors to first-quarter growth were wholesale and retail trade and repair of motor vehicles and motorcycles, which grew 4.6%; financial and insurance activities, 3.4%; and public administration and defense and compulsory social security, 8.6%.

Among major sectors, services grew 4.5% year-on-year.

Agriculture, forestry and fishing declined by 0.2%, while industry contracted by 0.1%.

On the demand side, household final consumption expenditure grew 3%, while government final consumption expenditure rose 4.8%.

Exports of goods and services increased 7.8%, while imports of goods and services grew 6.1%.

Gross capital formation, however, fell 3.3%, pointing to weaker investment activity during the quarter.