Research group IBON said that 3rd quarter economic growth is the slowest in 17 years and combines with the worst inflation and unemployment in the region to make the Philippines the economic laggard of Southeast Asia. The group warned that the country is rapidly heading towards stagflation unless the Marcos Jr administration substantially increases spending to increase agricultural production, support small enterprises, and boost household purchasing power. The government’s business-as-usual approach is worsening joblessness, eroding incomes and making the cost of living soar for millions of Filipinos.<\/p>\n\n\n\n
Gross domestic product (GDP) grew by just 2.1% in Q3 2026, which is the slowest quarterly growth in 17 years, excluding the pandemic lockdown period. This is down from the 4% growth in Q3 2025. Growth has largely been slowing since the start of the Marcos Jr administration, with the five consecutive quarters of slowdown since Q3 2025 being the most sustained and biggest decline so far.<\/p>\n\n\n\n
Average growth in the first three quarters plunged to 2.5% from 4.9% in the same period in 2025, putting government\u2019s 3.5%-4.5% full-year target out of reach.<\/p>\n\n\n\n
The country\u2019s economic performance is the poorest among its Southeast Asian neighbors. Based on latest available data, the Philippines has among the lowest GDP growth in the region at 2.1% compared to Brunei (0.02%), Thailand (1.9%), Malaysia (5.3%), Singapore (5.4%), Indonesia (5.5%) and Vietnam (10%).<\/p>\n\n\n\n
The Philippines has the highest unemployment rate at 5.4% compared to Indonesia (4.8%), Malaysia (2.9%), Vietnam (2.2%), Singapore (2%), and Thailand (0.9%); and the fastest inflation rate at 7.8% compared to Lao PDR (7.7%), Cambodia (5.3%), Vietnam (5.1%), Thailand (3.9%), Indonesia (3.2%), Singapore (2.2%) and Malaysia (1.8%).<\/p>\n\n\n\n
IBON stressed that the slowdown reflects longstanding structural weaknesses, not merely recent external shocks such as soaring global oil prices and Super El Ni\u00f1o. The economy has actually been on a trajectory of slowing growth since 2017, declining from a 7.1% peak in 2016, to 4.4% in 2025 and currently to 2.5% in the first three quarters of 2026.<\/p>\n\n\n\n
The group said this is because the economy is consumption-driven and services-heavy. The government’s economic policies are over-reliant on overseas remittances and BPOs, on real estate and utilities, and on foreign investment enclaves. Yet it neglects more important fundamental drivers like strong domestic agriculture and Filipino manufacturing, on the production side, and robust household spending from higher wages and other family incomes.<\/p>\n\n\n\n
Household consumption accounted for a substantial 73% of the GDP in Q3 2026, highlighting how heavily economic growth depends on Filipino families, most of whom have low and unstable incomes. Household consumption growth slowed to 2.4%, from 4.0% in the same quarter last year. It has been consistently slowing since Q1 2025 at 5.3%, down to 3.0% in Q1 and 2.9% in Q2 of 2026.<\/p>\n\n\n\n
Agriculture contracted by 4.8% from the 2.9% growth in Q3 2025, resulting in a 0.7% contraction in the first nine months. Its share of GDP has shrunk to 6.9% which is the smallest in history. Manufacturing, meanwhile, crawled to just 0.7% growth from 1.3% last year and 2.6% in Q2 this year. Its share of GDP was just 14.4%, the smallest at least since the 1950s. <\/p>\n\n\n\n
IBON said that stagflation can be averted and the distress of millions of Filipinos alleviated with an immediate stimulus program sustained into 2027. It is urgent to substantially increase public investment in agriculture, irrigation, post-harvest facilities and rural infrastructure. Filipino manufacturing capacity in food, basic goods and essential industries have to be provided affordable credit, technology and other support. Household spending must be boosted with higher wages and emergency assistance protected from politicians and their self-serving patronage.<\/p>", "protected": false }, "excerpt": { "rendered": "
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