Philippine GDP growth slows to 2.1% in Q3, weakest outside the pandemic since 2009

what happened

According to Update, the Philippine economy grew 2.1% in July–September from a year earlier, slowing from a revised 2.4% in the second quarter. That missed the 2.7% projection in a Wall Street Journal poll and marked the weakest expansion outside the pandemic years since 2009.

On a seasonally adjusted quarter-on-quarter basis, output rose only 0.1%, against 0.6% in the prior quarter. Growth for the first nine months stood at 2.5%. Inflation linked to the energy shock from the U.S.-Iran war, a weaker peso and a corruption scandal that curbed public infrastructure spending have all weighed on the economy.

Arsenio Balisacan, who heads the Department of Economy, Planning, and Development, called for urgent steps to remove obstacles to investment. "We must get investment moving again," he said at a Monday press conference, stressing predictable policy, fiscal discipline and credible institutions. Investment fell for a sixth consecutive quarter, but he called the smaller contraction "a passable starting point for recovery."

why it matters

The peso's weakness raises import costs and erodes household spending power, while exports of electronics and AI-related goods provide support. To reach the bottom of the official 3.5%–4.5% target range, growth would need to hit roughly 6.3% in the fourth quarter.

market impact

Peso and Philippine stocks: weak growth and falling investment add pressure on local assets

• ▼Philippine stocks pressure down — weak growth and falling investment cut earnings expectations for companies

tags

instruments