Q1 growth rebounded to 3.4%; recovery fragile
The Philippine economy likely regained some momentum in the first quarter, though growth remained below its potential and the Marcos administration’s target, as a fragile rebound was disrupted by a global energy shock linked to the conflict in the Middle East.
Gross domestic product (GDP)—the value of all goods and services produced in the country—may have expanded 3.4 percent from a year earlier in the three months through March, according to the median estimate of 14 economists polled by the Inquirer.
If realized, that would mark a pickup from the 3-percent growth recorded in the fourth quarter of 2025. Still, the pace would fall short of the government’s 5-percent to 6-percent goal and the economy’s estimated 6-percent potential.
The Philippine Statistics Authority is set to release the official first-quarter data on May 7.
“Growth remains subdued as households attempt to manage debt levels and contend with rising prices,” Nicholas Mapa, chief economist at Metropolitan Bank & Trust Co., said. He expected last quarter’s growth to have settled at 3.4 percent.
“Meanwhile, government spending is likewise expected to disappoint given recent disbursement reports,” Mapa added.
The weak fourth-quarter expansion—the slowest in 16 years outside the pandemic—followed a major corruption scandal that implicated lawmakers, Cabinet members and state engineers, rattling business and consumer confidence and stalling public spending. That slowdown dragged full-year growth in 2025 to 4.4 percent, the weakest in five years.
Exposed to external headwinds
Sarah Tan, economist at Moody’s, said the Philippine economy has been increasingly exposed to external headwinds, especially the spillovers from Middle East.
She expected first-quarter growth to have hit 3.9 percent.
“These would have taken a toll on consumers’ purchasing power, business sentiments and exports in the first quarter,” Tan said.
Meanwhile, economists at Capital Economics in London said recovery was expected to be sluggish. “GDP figures from the Philippines are likely to show that economic growth picked up in the first quarter, but the effects of the Iran war will hold back the recovery over the coming quarters,” they said.
