The Philippine economy has entered a challenging phase, with its gross domestic product (GDP) growth slowing to 2.1% in the third quarter of 2026, the lowest since 2009. This downturn is accompanied by rising inflation, which reached 7.8%, and an uptick in unemployment to 5.4%.
Business Perspectives Amid Economic Slowdown
Despite these troubling indicators, some business executives remain optimistic about consumer behavior. Key players from retail and aviation sectors report stable demand, suggesting a nuanced reaction to the economic conditions.
Travel remains resilient regardless of the economic data that’s coming out.
Xander Lao, President, Cebu Pacific
- Inflation surged to 7.8% in October, up from 7.2% in September.
- Unemployment increased to 5.4%, affecting approximately 2.86 million Filipinos.
- GDP growth for Q3 2026 fell to 2.1%, down from 2.4% in Q2.
Executives from SM Group, a leading retail conglomerate, noted that mall traffic remains stable, with food-and-beverage sales even reporting double-digit growth in October. However, they acknowledged a decline in residential demand.
SM Prime's President, Jeffrey Lim, stated, "We’re not putting our expansion plans on hold. We are simply being more deliberate about how we spend." This indicates a strategic pivot rather than a halt in growth initiatives.
Companies are also facing challenges in consumer spending recovery. The Department of Economy, Planning, and Development Secretary Arsenio Balisacan cautioned that a swift rebound in consumer spending is unlikely, highlighting the persistent effects of inflation.
Additionally, net foreign direct investment (FDI) inflows fell by 23.9% in the first seven months of 2026, underscoring the urgency for increased foreign investment to foster economic growth and innovation.
In this context, opportunities for investment may arise. Joel Consing, President of Maharlika Investment Corporation, noted that lower economic growth could lead to asset repricing, thereby attracting investors looking for long-term gains.