The Philippine economy grew by just 2.3 percent in the second quarter of 2026, its slowest pace in five years, as high inflation, rising joblessness, and lower overseas worker remittances pinched household spending. Data from the Philippine Statistics Authority shows first-half growth averaging 2.6 percent, falling short of the government’s 3.5 percent to 4.5 percent full-year target. A drop in public construction also dragged down overall investment.
Government spending provided a key cushion through expanded cash aid, while farming, manufacturing, and AI-driven semiconductor exports showed resilience. Department of Economy, Planning and Development Secretary Arsenio Balisacan noted that despite the slump, “there were also clear areas of strength.”
To hit the annual target, the economy must grow by at least 4.4 percent in the second half. Officials plan to boost growth by speeding up infrastructure projects, lowering business hurdles, securing new trade deals, and softening price hikes through the UPLIFT assistance program. However, risks remain from Middle East tensions, high oil prices, and upcoming typhoons.
With fresh infrastructure funds now rolling out and business sentiment turning positive, Balisacan expressed confidence in an upcoming turnaround.
“As a result, we expect public construction and infrastructure spending to begin picking up in the third quarter and gain further momentum in the months ahead,” he said.
“As we move into the second half of the year, our direction is clear: accelerate investment, protect purchasing power, strengthen domestic production, and raise the competitiveness and productivity of our firms and workers,” Balisacan added. “The latest indicators tell us that the foundations for a recovery are taking shape. Our task now is to sustain this momentum and translate it into more jobs, higher incomes, and better opportunities for every Filipino.”