Gross domestic product (GDP) of the Philippines expanded by a meager 2.8% in the opening quarter of 2026. This stands as the slowest growth rate in the post-pandemic era and the third consecutive quarter wherein the economy expanded at a rate below 4%. More importantly, the three most recent data points strongly suggest that economic growth is trending downward.
The sectoral decomposition of national accounts data indicates that first quarter 2026 economic growth is driven solely by the services sector; however, recent numbers strongly suggest at sustained deceleration in the services sector. The industrial sector, which accounts for roughly a third of economic activity, did not contribute to economic expansion for the second straight quarter. Meanwhile, the agricultural sector constituted a minor drag to economic growth with its slight contraction and a reversal of positive trends observed in preceding quarters.
The adverse effects of the severe oil supply shock cannot be considered as the root cause of the deceleration as the emergence of the downward trend preceded the crisis. Instead, the shock can be viewed to have hastened the decline in the growth rate.
If analysis is restricted to the forecasts, the CPBRD estimates that the second quarter GDP growth is likely to settle around the median and mean estimates (i.e., 2.5% to 3.0%). It is important to emphasize, however, that the latest available data points do not reflect the full extent of the energy crisis. A full quarter of severely elevated fuel, fertilizer, and other key commodity prices could be expected to exert an even larger adverse effect on growth.