Gross domestic product (GDP) growth slumped in the third quarter of 2025, according to the Philippine Statistics Authority (PSA). The agency reported that the country posted a 4.0 percent year-on-year growth rate from July to September, marking a 1.5 percentage-point drop from the previous quarter.

This slowdown places the economy well below the Bangko Sentral ng Pilipinas’ (BSP) full-year target of 5.5 percent to 6.5 percent. The deceleration can be attributed to the ongoing flood control project scandal, which came to light after President Ferdinand R. Marcos Jr. publicly called out alleged corruption in these projects during his State of the Nation Address on 28 July 2025.

Gross national income (GNI) also recorded a sharp decline, dropping 2.4 percentage points from the previous quarter to a 5.6 percent year-on-year growth rate. Net primary income from the rest of the world fell to 16.9 percent year-on-year, significantly lower than the 30.3 percent posted in the second quarter.

The PSA said the main contributors to third-quarter growth were wholesale and retail trade, including repair of motor vehicles and motorcycles (5.0%); financial and insurance activities (5.5%); and professional and business services (6.2%).

On the demand side, household final consumption expenditure rose by 4.1 percent year-on-year, while government final consumption expenditure increased by 5.8 percent. Exports of goods and services expanded by 7.0 percent, and imports of goods and services by 2.6 percent. Meanwhile, gross capital formation contracted by 2.8 percent.