Gross domestic product expanded 2.8% for the three months to March, sharply down from the 5.4% in the same period last year, the Philippine Statistics Authority said.

It was also a dip from the 3.0% growth registered in the final quarter of 2025, the agency said.

“Our growth performance trails Vietnam, Indonesia and China, among others in the region,” Economic planning secretary Arsenio Balisacan told a news conference.

“We definitely will move our growth targets lower… given the situation, especially the global uncertainty remaining highly elevated,” he said.

Balisacan blamed the weak growth on the Middle East conflict, a scandal involving billions of dollars in fraudulent state-funded flood control projects, and the delayed approval of the national budget, which hampered infrastructure projects.

The bogus flood control projects, believed to have cost taxpayers billions of dollars, sparked protests and arrests across the storm-battered archipelago this year.

Consumer prices also spiked to a three-year high of 7.2% for the quarter, which Balisacan called a “major factor” leading to the lowered GDP growth.

“Addressing corruption firmly and transparently is essential to rebuilding confidence among businesses, investors, and consumers alike,” he said.

Excluding the pandemic years, economic growth in the first quarter was the lowest since the first three months of 2021, National Statistician Dennis Mapa said Thursday.

Manila’s economic managers will meet next week to review their targets, Balisacan said.

The government in December revised downward its 2026 GDP target to 5-6% – from 6-7%.