Philippine economy slows to weakest pace since 2009 as growth target slips away

The Philippine economy grew by only 2.1 percent in the third quarter of 2026, down from 2.4 percent in the previous quarter and 4 percent a year earlier. The reading marks the fifth consecutive quarter of slowing growth and the weakest pace since 2009, excluding the pandemic period.

President Ferdinand Marcos Jr.'s administration is on track to miss its annual economic growth target for the fourth straight year. The government had already cut its full-year target from 5 percent to 6 percent down to 3.5 percent to 4.5 percent after a weak first half.

“It sure doesn't make much sense to slam hard on the brakes if we're driving uphill on rocky terrain.”

Even the reduced target now appears out of reach. With growth at 2.5 percent for the year so far, the economy would need to expand by about 6.3 percent in the fourth quarter just to reach the lower end of the annual target.

Economic Planning Secretary Arsenio Balisacan acknowledged that hitting the target will be very challenging given the current environment. He said achieving even 3 percent full-year growth would be a remarkable achievement and would require fourth-quarter growth of around 4 percent to 4.5 percent.

The Philippines also fell well behind its Southeast Asian neighbors. Vietnam grew by 9.95 percent, Indonesia by 5.47 percent, Singapore by 5.4 percent, and Malaysia by 5.3 percent in the third quarter, while Taiwan expanded by 14.36 percent.

Economists called for the central bank to pause interest rate hikes and for more state aid to revive growth. Household spending remained tepid, weighing on industries from retail to real estate, while El Nino threatens further damage to the agriculture sector.