Philippines misses growth targets anew as economy grows just 3% in Q4 2025

2026-01-29 - 06:51

MANILA, Philippines – The Philippines missed its economic growth targets for the third consecutive year as the country’s gross domestic product (GDP) grew by just 3% in the fourth quarter of 2025, the Philippine Statistics Authority reported on Thursday, January 29. This places the average GDP growth rate for 2025 at only 4.4%, below the Marcos administration’s goal of 5.5% to 6.5% and also missing analysts’ expectations. Excluding the COVID-19 pandemic years, the 3% growth is the lowest quarterly growth since the third quarter of 2011, noted Rappler resident economist and columnist JC Punongbayan. He added that the full-year figure of 4.4% is also the lowest since 2011. On the production side, National Statistician Dennis Mapa said the agriculture and services sectors grew by 3.1% and 5.9%, respectively, for the entire year. However, the industry sector grew just 1.5% as the ongoing investigation into flood control corruption hampered growth in the construction sector. Government spending in construction continued to contract by 41.9% in the fourth quarter. On the demand side, growth in goods exports (14.1%) outpaced growth in the import of goods (4.7%) and services (6.1%). Image from Philippine Statistics Authority Mapa also noted that both government and household consumption slowed down in the fourth quarter to just 3.7% and 3.8%, respectively. “The top three positive contributors are food and non-alcoholic beverages. It grew by 3.8%, miscellaneous goods and services, 3.9%, and restaurants and hotels, 7.5%,” he explained. Investments or gross capital formation also declined by 10.9% in the fourth quarter and 2.1% for the entire year. Economy, Planning, and Development Secretary Arsenio Balisacan admitted he was surprised by the latest GDP print. But he considers the slowdown a necessary consequence as the government implements key reforms to prevent public works corruption. “As the President mentioned, it cannot be business as usual, because otherwise we may have growth this year, or last year growth may be higher, but with corruption all over the place and in infrastructure, that would not be expected to last,” Balisacan said. “And so we would better have a slowdown, correct the problems, build the trust of our people in their institutions, in their government.” Balisacan noted that the government resumed and is hoping to accelerate the completion of key infrastructure projects while enforcing stricter safeguards to prevent corruption. He also said the Marcos administration aims to prioritize key legislative reforms such as the newly enacted New Government Procurement Act, the proposed anti-dynasty bill, amendments to the party-list system, and proposed revisions to the Anti-Money Laundering Act. Despite the sharp slowdown, Balisacan is optimistic that the economy can recover by the second quarter of 2026, describing the year as the government’s “rally point.” “We don’t expect that growth will recover to its peak in the first quarter, but we expect some still lingering effects of those measures, especially that the budget for this year was released or was approved late,” the country’s chief economist said. The Development Budget Coordination Committee has lowered the government’s economic growth target to within 5% to 6% for 2026. – Rappler.com