Losing confidence, losing steam

PHILIPPINES - Report 12 Nov 2025 by Diwa Guinigundo and Wilhelmina Manalac

The Philippine economy slowed sharply in the third quarter of 2025, expanding only 4.0% year-on-year—the weakest growth since 2011 outside the pandemic years—due to weak industrial performance, falling investment, and eroding business confidence amid governance scandals. Services remained the main growth driver, while industry and agriculture lagged. On the demand side, capital formation contracted, especially public construction, as stricter anti-corruption measures delayed projects. Although exports and government spending rose moderately, household consumption was constrained by high prices and reduced cash transfers. Without decisive reforms to restore confidence, accelerate infrastructure, and strengthen social support, the Philippine economy risks stagnation and missing its growth targets.

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