Services slowdown tempers Iloilo City’s growth in 2025

ILOILO CITY — A slowdown in the services sector, which accounted for 88.2 percent of Iloilo City’s economy in 2025, appears to have tempered overall growth, even as wholesale and retail trade, health care, and construction helped drive economic activity, according to the Philippine Statistics Authority (PSA).

Based on the Provincial Product Accounts (PPA) presented by PSA Iloilo on Tuesday, the city’s gross domestic product (GDP) grew by 6.1 percent in 2025, slower than the 7.1 percent in 2024 and 10.4 percent in 2023.

It was the second consecutive year of slower growth.

But the economy still expanded in size, reaching PHP 181.99 billion at constant 2018 prices, from PHP 171.59 billion in 2024. Constant-price figures adjust for inflation.

PSA data point to slower growth in services as a key factor in the deceleration, logging 6 percent growth in 2025, compared with 7.9 percent in 2024.

Meanwhile, industry growth accelerated to 7 percent from 4.4 percent, while agriculture, forestry, and fishing (AFF) rebounded to 5.1 percent growth after contracting by 9.1 percent in 2024.

Despite the slowdown in percentage terms, all three major sectors increased in value.

Services grew to PHP 160.50 billion in 2025 from PHP 151.44 billion in 2024, industry to PHP 17.76 billion from PHP 16.59 billion, and AFF to PHP 3.74 billion from PHP 3.56 billion.

The slowdown came despite strong performances in several individual industries.

Human health and social work activities grew by 14.2 percent, construction by 12.6 percent, and other services by 9.4 percent.

Real estate and ownership of dwellings expanded by 8.6 percent, while accommodation and food services grew by 7.9 percent.

By contribution to growth, wholesale and retail trade, including the repair of motor vehicles and motorcycles, remained the largest contributor, adding 1.3 percentage points to the city’s GDP expansion.

The sector grew by 4.5 percent and accounted for 28.8 percent of the city’s economy.

Financial and insurance activities contributed another 0.7 percentage point to GDP growth, with a 6.1 percent expansion.

Human health and social work activities added 0.61 percentage point, while education contributed 0.57 percentage point after growing by 7.7 percent.

However, some industries recorded markedly slower growth than in 2024.

Professional and business services expanded by 4.2 percent in 2025, slower than the 14.6 percent the previous year, while electricity, steam, water, and waste management grew by only 1.5 percent compared with 13.1 percent in 2024.

The PSA’s figures do not identify a single event or policy as the cause of the slowdown.

But the sectoral data show that moderation in services, the dominant component of the city’s economy, coincided with continued growth in trade and faster expansion in industry.

Despite the slower pace, Iloilo City recorded a per capita GDP of PHP 394,755 in 2025, up 5.8 percent from the previous year.

It was the highest among the six economies in Western Visayas and the only one above the regional average of PHP 140,068. The city’s figure was about 2.8 times that average.

Per capita GDP measures economic output per person and does not represent individual income.

Concrete action plan

Velma Jane Lao, head of Iloilo City’s Local Economic Development and Investment Promotion (LEDIP) Office, said the PPA answers the question of whether the city government’s programs and projects contribute to the city’s economic and employment growth, development, and residents’ well-being.

She said the 2025 PPA was the result of the city government’s faithful observance of the RISE TO ACTION strategy roadmap.

She cited efforts that include in-chain and enterprise development; the reopening of the city’s public markets; empowerment of micro, small, medium, and nano enterprises and other market access initiatives; gastronomy and meetings, incentives, conferences, and exhibitions (MICE) tourism programs; and strengthening of the information technology and business process management (IT-BPM) and start-up ecosystem, among others.

“Our latest PPA results provide us with an opportunity to see how these efforts are reflected in the performance of our local economy. […] Services remain the backbone of our city’s economy, […] reflecting continued expansion in investments in commerce, tourism, hospitality, education, healthcare, real estate, and business services,” Lao said.

The roadmap has three core pillars: Rising Health and Social Services, Rising Economy, and Rising Liveability.

The city has laid out 45 programs under its ACTION roadmap, which include Access to quality education, Comprehensive health and wellness, Trabaho at Negosyo, Immersive tourism and culture, Orderly and safe communities, and Nature-based resilience and sustainability.

“This emphasizes that we are not working in silos through fragmented efforts. Rather, our initiatives are guided by a common roadmap that provides a clear direction and framework for intentional and targeted initiatives,” she said.