Financial News: Philippine Economy Logs Slowest Growth In 5 Years

Philippine Economy Logs Slowest Growth In 5 Years

(RTTNews) - The Philippine economy expanded at the slowest pace in five years in the first quarter amid declining investment, weaker household spending and exports.

Gross domestic product grew 2.8 percent on a yearly basis in the first quarter, the Philippine Statistics Authority said Thursday. This followed a 3.0 percent expansion seen in the fourth quarter and marked the weakest expansion since the first quarter of 2021.

On a quarterly basis, the economy registered a moderate growth of 0.9 percent in the first quarter.

On the expenditure-side, household consumption climbed at a slower pace of 3.0 percent as higher inflation weighed on consumer spending. Meanwhile, growth in government consumption advanced to 4.8 percent from 0.7 percent.

Gross capital formation posted an annual decline of 3.3 percent but slower than the 9.4 percent decrease in the prior quarter. Exports and imports of goods and services climbed 7.8 percent and 6.1 percent, respectively.

ING economist Deepali Bhargava said the data reinforce downside risks to the 2026 growth outlook, even as the central bank remains focused on inflation rather than growth support.

Last month, the central bank raised its key interest rates by 25 basis points to 4.5 percent as inflation outlook deteriorated amid the ongoing conflict in the Middle East.

In April, inflation accelerated to 7.2 percent from 4.1 percent in March, reflecting the impact of higher international fuel prices on food and energy cost. Core inflation rose to 3.9 percent from 3.2 percent in March.

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