‘Weak jobs data, Middle East crisis cut Q1 GDP growth to 3.1%’

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March 26, 2026 | 12:00am

MANILA, Philippines — The Philippine economy is expected to remain weak and post 3.1 percent growth in the first quarter, amid sluggish jobs data and risks from the Middle East conflict, according to the University of Asia and the Pacific (UA&P).

In  a report, UA&P said that it now expects first quarter gross domestic product (GDP) growth at 3.1 percent.

This is slightly higher than the three percent growth posted in the fourth quarter last year.

However, the new forecast is lower than UA&P’s first quarter GDP forecast of 3.3 percent provided last month.

“The latest economic figures, especially the decline in the number of employed people in January — even before the Iran conflict— suggest that GDP growt h for the first quarter of  2026 will remain weak,” UA&P said.

The country’s unemployment rate rose to 5.8 percent in January, the highest since June 2022 when it reached six percent.

Despite this, UA&P said it expects a rebound in economic growth in the following quarters, particularly in the second half, with GDP projected to grow by more than five percent as infrastructure spending picks up.

However, UA&P flagged risks to growth stemming from the ongoing conflict in the Middle East.

It said inflation is expected to rise sharply to 4.2 percent in March from the previous month’s 2.4 percent.

It also expects inflation to continue climbing until crude oil prices stabilize or decrease as producers are expected to respond and raise their prices.

UA&P expects exports to remain a bright spot and post double-digit growth.

Philippine exports of goods rose by eight percent to $7.09 billion in January from $6.57 billion in the same month last year.

This was the highest exports value seen since October last year when it reached $7.45 billion.

While exports are expected to remain strong, UA&P said it expects the peso-dollar exchange rate to stay above P59:$1 due to rising local inflation and higher demand for foreign currency assets as investors and businesses hedge.