CPBRD expects GDP print to remain anemic this Q3
Philippine economic growth could fall below 2.5 percent in the third quarter as high inflation, elevated borrowing costs and weak private demand continue to constrain the country’s recovery.
This is according to the Congressional Policy and Budget Research Department (CPBRD), which said the sobering third-quarter outlook makes it highly unlikely for the Marcos administration to reach even the lower end of its 3.5 percent to 4.5 percent growth target for 2026.
To hit the 3.5-percent floor, the economy will need to grow by around 4.5 percent in the second half.
“For context, this figure implies that the Philippine economy will register significantly faster growth than what has been observed in the past four quarters—amidst a notably unfavorable macroeconomic environment,” CPBRD said in its latest discussion paper.
“More pointedly, the economy has to accelerate within a context defined by anemic private sector demand, severe inflation, elevated interest rates and record-setting public indebtedness,” it added.
The economy has been slowing for four straight quarters, with first-half growth at only 2.6 percent amid the lingering fallout from the flood control scandal and the impact of the Middle East conflict.
CPBRD said inflation remains “remarkably high” and is unlikely to ease in the remaining months of the year given the lack of resolution in the Middle East conflict and the severe climatic events during the third quarter.
“As private demand is already flagging from persistently high inflation, further declines in the appetite for both consumption and investment would push the economy deeper into the doldrum,” it said.
The think tank also pointed to high interest rates, which could weigh on household borrowing and private investment.
As it is, the central bank raised its benchmark policy rate anew to 5 percent last August.
