Metro Manila, Philippines – Economic growth dipped to a five-year low at 2.8 percent in the first quarter, the government said, reflecting global tensions, issues on the national budget, and corruption scandals.
In a briefing on Thursday, May 7, the Philippine Statistics Authority (PSA) said the first quarter gross domestic product (GDP) – which measures economic performance – was slower than the previous quarter’s 3 percent and just half of the output year-on-year at 5.4 percent.
This is a new post-COVID-19-pandemic low since the 3.8 percent contraction in the first quarter of 2021.
The GDP settled way below the government’s 5 percent floor target for 2026.
The PSA said the main contributors to growth were wholesale and retail trade; repair of motor vehicles and motorcycles (4.6 percent), financial and insurance activities (3.4 percent), and public administration and defense; compulsory social security (8.6 percent).
Among the major economic sectors, services grew by 4.5 percent. On the other hand, the agriculture and industry sectors declined to just 0.2 percent and 0.1 percent, respectively.
“We recognize that this outcome reflects the combined impact of significant domestic and global challenges,” Economic Secretary Arsenio Balisacan said.
He said the economy grappled with pressures from lingering effects of the flood control controversy, citing lower consumer sentiment and business confidence.
Balisacan further said the delayed passage of the national budget “slowed the rollout of critical government programs and infrastructure projects.”
The secretary also cited the Middle East crisis that triggered high oil prices and added to the supply chain pressure.
The PSA earlier said inflation accelerated to 7.2% in April, or a 3.1-percentage-point jump from March driven by record-high food and fuel prices.
The agency also reported that the purchasing power of the peso dropped to just 73 centavos, the lowest since 2018.
