Philippine economy slows to 2.3% in Q2 2026, weakest since 2009

HAZARDOUS AIR. Haze blankets the skyline of Metro Cebu and nearby areas before sunset on April 19, 2026. Jacqueline Hernandez/Rappler The latest figure is lower than the 2.8% growth recorded in the first quarter of 2026 MANILA, Philippines – The Philippine economy grew by only 2.3% in the second quarter of 2026, slowing further as weak investment and elevated prices weighed on economic activity, the Philippine Statistics Authority reported on Friday, August 7. The latest figure was lower than the 2.8% growth recorded in the first quarter of 2026 and the 5.4% expansion in the second quarter of 2025. It brought economic growth in the first half of 2026 to 2.6%. The 2.3% expansion in Q2 2026 was the weakest since Q4 2009, excluding the COVID-19 pandemic, when the economy grew by 1.8%. The government has already slashed its growth target range to 3.5% to 4.5% for the full year, amid weaker investment, elevated inflation, and domestic and external uncertainties. The World Bank expects the Philippine economy to grow by 3.7% in 2026. The World Bank had earlier warned that investment was slowing amid heightened scrutiny of infrastructure spending following alleged corruption in flood control projects, as well as a surge in global energy prices that compounded the country’s already high power costs. (READ: Cheaper PH electricity? Go beyond system loss; fix costly power contracts) Ahead of the announcement, Bank of the Philippine Islands (BPI) lead economist Emilio Neri Jr. forecast second-quarter growth at 1.9%. He cited another steep contraction in public infrastructure spending, softer private investment, and slower household consumption as high transport and electricity costs eroded purchasing power. BPI estimated that public infrastructure spending contracted by 43.4% year-on-year during the quarter. Relatively solid exports, particularly AI-related electronics, and demand connected to electric vehicles and solar energy may have provided some support to manufacturing. Neri expects a modest improvement in the third quarter as the comparison with the previous year becomes more favorable and any easing of tensions in the Middle East may help reduce production costs and improve business confidence. – Rappler.com How does this make you feel? Loading