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Investing.com -- The Philippine economy grew at its slowest pace in almost five years during the fourth quarter of 2025, with full-year growth falling significantly short of government targets, official data showed on Thursday.
Gross domestic product expanded by just 3.0% in the fourth quarter compared to a year earlier, marking the weakest growth rate since the first quarter of 2021. This figure came in well below the 4.0% median forecast and brought the full-year growth to 4.4%, far below the government’s target range of 5.5% to 6.5%.
The economic slowdown was partly attributed to a corruption scandal linked to infrastructure projects, which hampered public spending and damaged both consumer and investor confidence.
Household consumption grew 3.8% year-on-year in the fourth quarter, down from 4.1% in the previous quarter. Government spending also slowed, rising 3.7% compared to 5.8% in the third quarter. Gross capital formation contracted sharply by 10.9%, worsening from a 2.8% decline in the prior quarter.
Bangko Sentral ng Pilipinas Governor Eli Remolona had previously stated that a weaker-than-expected fourth quarter GDP would influence the central bank’s decision at its February 19 policy meeting.
The central bank has already reduced its benchmark rate by a total of 200 basis points to a three-year low of 4.5% in the current easing cycle, which Remolona has indicated was approaching its conclusion.
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