GDP growth slows to 4.4% in 2025

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January 30, 2026 | 12:00am

Amid corruption scandal, weather woes

MANILA, Philippines — The Philippine economy closed 2025 with 4.4 percent growth, missing the government’s growth target for the third straight year, weighed down by a flood control corruption controversy and unfavorable weather conditions.

National Statistician Dennis Mapa said in a press conference yesterday that the country’s full-year 2025 gross domestic product (GDP) growth slowed from the 5.7 percent expansion in 2024.

Last year’s GDP growth also fell below the government’s 5.5 to 6.5 percent growth target.

GDP growth in the fourth quarter of last year slowed to three percent, the lowest expansion seen since the third quarter of 2011 when economic growth was at the same rate, excluding the pandemic.

The fourth quarter 2025 GDP print was also lower than the previous quarter’s 3.9 percent expansion and the 5.3 percent growth in the same quarter in 2024.

Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan said the latest growth outcome was slower than expected.

He attributed the growth outturn to the adverse economic effects of weather-related disruptions, the flood control controversy and global economic uncertainties.

“Admittedly, the flood control corruption scandal also weighed on business and consumer confidence,” he said.

Household consumption growth slowed to 3.8 percent in the fourth quarter of 2025, from 4.1 percent in the previous quarter and 4.7 percent a year earlier.

For full-year 2025, household consumption growth also eased to 4.6 percent from 4.9 percent in 2024.

Gross capital formation (GCF), which tracks investments, posted a 10.9-percent drop in the fourth quarter of 2025 from the 2.8 percent decline in the previous quarter and 5.5 percent growth in the fourth quarter of 2024.

For full-year 2025, the GCF registered a 2.1-percent decline from a 7.7-percent growth in 2024.

Government consumption also increased at a slower pace of 3.7 percent in the fourth quarter from the previous quarter’s 5.8 percent expansion and nine percent growth in the same quarter in 2024.

The agriculture, forestry and fishing sector expanded by one percent in the fourth quarter of 2025, slower than the previous quarter’s 2.9 percent growth, but an improvement from the 1.6 percent decline in the fourth quarter of 2024.

In 2025, the sector expanded by 3.1 percent from a 1.5-percent dip in 2024.

Industry declined by 0.9 percent in the fourth quarter of 2025 from the previous quarter’s 0.7 percent growth, bringing the sector’s full-year 2025 growth to 1.5 percent.

Growth in the services sector also eased to 5.2 percent in the fourth quarter of 2025, from 5.4 percent in the previous quarter, leading to a full-year 2025 growth of 5.9 percent.

‘2026: Rally point’

Looking ahead, Balisacan said 2026 is seen as a rally point to accelerate efforts to restore public trust through improvements in governance and public services.

The government is aiming for five to six percent economic growth for this year.

Balisacan said he is hopeful the Philippine economy could return to five percent or higher growth by the second quarter of this year.

“To be able to grow by five to six percent, we should be growing by five percent by Q2 (second quarter),” he said.

As the government aims to accelerate efforts to restore public trust and implement the overall development blueprint, Balisacan said the DEPDev has prepared an executive report outlining strategies to address governance challenges and chart our path forward.

The report would be released by mid-February.

While recent reforms including efforts to ensure only the right infrastructure projects move forward have affected growth performance, Balisacan said these are necessary to protect public funds, strengthen institutions and build a more resilient and inclusive economy.

“With discipline, better governance and sustained reforms, we are decisively moving to ensure that growth in 2026 and beyond is stronger, more inclusive, more resilient—and truly felt by all Filipinos,” he said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said a catch-up government spending plan this quarter, to make up for last year’s underspending, along with other reforms, would improve investor confidence and help boost growth.

“If anti-corruption measures and other related priority reforms that further level up governance standards would be taken seriously, these would be the missing and remaining important catalyst that would help improve investor confidence/sentiment that, in turn, would also lead to more investments, both foreign and local, into the country,” he said.

For Federation of Philippine Industries (FPI) chair Elizabeth Lee, the below target GDP growth shows the need to take urgent action by accelerating infrastructure programs, strengthening manufacturing competitiveness through innovation and export diversification, enhancing energy resilience with stable and affordable power and institutionalizing industrial policy reforms.

“The Federation stands ready to work with the government and partners to rebuild and fortify the country’s industrial base as the Philippines hosts ASEAN (Association of Southeast Asian Nations) 2026,” Lee said.

Roberto Batungbacal, FPI director for policy said the latest GDP results highlight the need to deepen the manufacturing base beyond consumption-led segments.

“A deliberate, well-sequenced, state-backed industrial strategy that effectively uses these policies can help reduce import dependence, strengthen domestic supply chains and support more resilient long-term growth,” he said.

The Philippine Chamber of Commerce and Indus try (PCCI) said in a statement it is optimistic that the Philippine economy would regain momentum in the first quarter this year after government fell short of its growth target last year.

“Recovery is now imperative. We must focus on ensuring that corrective and preventive measures to ensure that this kind of disruption will not happen again,” PCCI president Ferdinand Ferrer said.