The Philippines posted one of the weakest economic performances among Southeast Asia’s major economies in the first quarter of 2026, highlighting the growing challenges faced by fuel-importing nations as tensions in the Middle East continue to ripple through the regional economy.

According to an economic update released by the Makati Business Club (MBC), the Philippine economy expanded by just 2.8 percent during the quarter, matching Thailand as the slowest-growing economy among the ASEAN-6.

The figure was lower than the country’s 3.0-percent growth in the previous quarter and lagged behind regional peers that managed to sustain stronger momentum despite heightened geopolitical uncertainty.

Vietnam emerged as the region’s top performer with gross domestic product growth of 7.83 percent, supported by robust manufacturing activity, record tourism arrivals and strong foreign direct investment inflows. Indonesia followed with 5.61 percent growth, while Malaysia and Singapore expanded by 5.3 percent and 4.6 percent, respectively.

The MBC report noted that the widening gap in economic performance reflects the differing ability of ASEAN economies to absorb the impact of rising energy costs and global supply chain disruptions triggered by the Middle East conflict.

Among the region’s major economies, the Philippines was identified as one of the most vulnerable to higher oil prices because of its dependence on imported fuel. Rising energy costs placed pressure on the peso and contributed to faster inflation, weighing on domestic economic activity.

To cushion the impact, the government declared a State of National Energy Emergency, introduced fuel-related subsidies and accelerated infrastructure spending to support economic activity.

Thailand, which also faced energy-related challenges, adopted a more aggressive fiscal response through a 400-billion-baht stimulus package aimed at easing living costs and supporting the country’s energy transition efforts.

Singapore, whose economy relies heavily on trade and global supply chains, focused on managing risks as manufacturing activity showed signs of slowing amid supply disruptions.

In contrast, Vietnam and Indonesia were able to rely more heavily on domestic consumption, public spending, manufacturing growth, tourism and investment inflows to sustain economic expansion despite global uncertainties.