BUSINESS

PH economy slows to 2.3% in Q2

Mico Virata · Aug 7, 2026, 3:19 PM

PHILIPPINE economic growth has substantially slowed since the corruption controversy involving massive flood control projects blew up last year. That, coupled with the adverse effects of the US-Iran war on the country’s dependence on expensive imported fuel has pulled down the economy to its lowest since 2009. — Philippine News Agency

The Philippine economy slowed to 2.3 percent growth in the second quarter of 2026, prompting government economic managers to push for faster investments, stronger domestic production and improved competitiveness to sustain the country’s recovery momentum.

The latest expansion was weaker than the 2.8 percent growth in the first quarter of 2026 and the 5.4 percent growth recorded in the same period last year, as the government moved to address economic headwinds and boost productivity.

Department of Economy, Planning, and Development (DepDev) Secretary Arsenio Balisacan said the country’s targets remain achievable but would require urgent and coordinated action across government.

“This will be demanding, but the targets remain within reach if you act with urgency, discipline and close coordination across government,” Balisacan said.

Data from the Philippine Statistics Authority (PSA) showed that growth in the April-to-June period was supported by wholesale and retail trade; repair of motor vehicles and motorcycles, which expanded 4.6 percent, education at 12.7 percent, and manufacturing at 2.6 percent.

Among major sectors, services grew 4.5 percent, while agriculture, forestry and fishing increased 2.7 percent. The industry sector, however, declined 2.4 percent, pulling down overall economic performance.

On the demand side, household consumption rose 2.8 percent, government spending increased 8.3 percent, and exports of goods and services climbed 12.2 percent. Meanwhile, gross capital formation dropped 9.2 percent, reflecting weaker investment activity during the quarter.

Balisacan said the government will prioritize accelerating infrastructure projects, improving governance, and restoring investor confidence to strengthen growth prospects.

“We will accelerate the implementation of high impact infrastructure projects,” he said, adding that agencies will pursue catch-up plans with clear milestones and accountability measures.

The DepDev chief also highlighted efforts to protect purchasing power, strengthen food and energy security, expand trade opportunities and prepare Filipino workers for emerging industries such as artificial intelligence.

“We remain mindful of the risks ahead—uncertainties surrounding the Middle East conflict, elevated oil prices, tighter financial conditions, and the prospect of El Niño and further typhoons,” Balisacan said.

He added that the government’s focus moving forward is to “accelerate investment, protect purchasing power, strengthen domestic production, and raise the competitiveness and productivity of our firms and workers” to translate economic recovery into more jobs and higher incomes for Filipinos.