Slower economic growth seen in Q1

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April 30, 2026 | 12:00am

MANILA, Philippines — Philippine economic growth likely slowed further in the first quarter due to the impact of the Middle East conflict, according to the Department of Economy, Planning and Development (DEPDev).

“It is understandable that we can’t expect to be better than what we had in previous quarters,” DEPDev Secretary Arsenio Balisacan told reporters yesterday on the sidelines of the 2026 National Innovation Day event when asked about the first quarter economic performance.

He said the economy is still trying to recover from the flood control scandal that unraveled last year.

Corruption issues in the government’s flood control projects weighed on both consumer and investor sentiment last year, dragging fourth quarter economic growth to three percent.

Balisacan said the conflict involving the United States, Israel and Iran is also posing a more serious problem for the economy.

“No country was spared from that…But as you already know, most of our fuel needs, whether in raw or refined fuel, come from the Middle East, directly or indirectly. So we were affected by the shocks,” he said.

The Middle East conflict has translated to higher costs of fuel, transport and other commodities in the country.

To avert a severe economic slowdown, Balisacan said the government is implementing measures including providing financial support to protect the most vulnerable members of the population.

“The most important thing is that we will be able to recover as soon as this shock is over,” he said.

He said that the Development Budget Coordination Committee is set to meet to review the government’s gross domestic product (GDP) growth targets after the first quarter economic growth data is released.

The Philippine Statistics Authority is set to release  first quarter GDP data on May 7.

For this year, the government is aiming to achieve a five to six percent GDP growth.

Earlier, Balisacan said that economic growth may fall below target this year, citing the impact of the Middle East crisis.

Meanwhile, University of Asia and the Pacific senior economist Victor Abola said during the university’s Business Economics Club forum yesterday that he is forecasting full-year 2026 economic growth at 4.2 percent, below the government’s target.

He said inflation is expected to peak in July at 6.5 percent and average 5.8 percent for the year.

Inflation accelerated to 4.1 percent in March, its highest level in 20 months, as the Middle East conflict pushed up prices of fuel and other commodities.

Average inflation from January to March stood at 2.8 percent.