Philippine economy decelerates sharply in Q3, threatening annual growth goals

The Philippine Statistics Authority reported the slowdown on Wednesday, with third-quarter gross domestic product growth of 2.1% falling short of economist expectations and marking the second consecutive quarter of deceleration. The prior quarter's growth had been revised upward to 2.4%, making the latest figure a particularly sharp drop that signals headwinds facing Southeast Asia's second-largest economy.

The deceleration came amid persistent challenges including weak consumer spending, subdued business investment, and global trade uncertainties that have weighed on the export-dependent economy. Rising inflation and tight monetary conditions have also constrained domestic demand, while infrastructure projects have proceeded more slowly than anticipated.

Economists said the Q3 result casts doubt on whether the Philippines can achieve its full-year growth target, which had been set in the range of 6% to 7% at the start of the year. Achieving such targets would require a substantial acceleration in the final quarter, a prospect many analysts view as increasingly unlikely given current economic momentum.

Policy makers are expected to face mounting pressure to consider stimulus measures or monetary policy adjustments to revive growth. The central bank had held its benchmark interest rate steady in recent meetings, but may need to reassess its stance in light of the weaker growth data.