Notes · English

Philippine GDP vs GNI in 2026: why national income stopped outgrowing output, and the terms of trade

Philippine real GNI grew 2.2% in Q2 2026, slightly below GDP growth of 2.3%. A year earlier GNI was 2.7 points ahead. What GDP, GNI and GDI measure, why overseas workers' income used to lift GNI, what the oil shock means for the terms of trade, and how this compares with Korea's chip-driven income gain.

CapsWindowPublished: October 29, 2026

Economic growthGNITerms of tradeOilRemittances

Key takeaways

In the second quarter of 2026, Philippine real gross national income (GNI) grew 2.2% year on year and real GDP 2.3%, according to PSA figures reported on 7 August 2026. GNI, which usually runs well ahead of GDP in the Philippines, was slightly behind for the first time in the six quarters shown here.
The usual lift comes from net primary income from abroad, which includes pay earned by Filipino workers abroad who are still counted as residents. Its growth slowed from 32.8% in Q2 2025 to 1.0% in Q2 2026, so the GNI-minus-GDP gap fell from +2.7 to −0.1 points (CapsWindow calculation).
The PSA's GNI does not include a terms-of-trade adjustment, and CapsWindow could not find an official trading gain or loss series for the Philippines. The available substitutes point toward a loss: the country is a large net energy importer, and imports grew 18.9% against 12.9% for exports in January–July 2026. The size of any loss is not measured here.
Korea is the opposite case: real GDI grew 18.8% in Q3 2026 against GDP growth of 3.4%, because chip export prices rose faster than import prices. The Philippines exports electronics too, but the World Bank calls it 'the outlier in East Asia' because energy costs hurt it more and it is less tied to AI supply chains.

Two economies can grow at the same pace and still end up with very different amounts to spend. GDP measures output. What a country can actually buy with that output also depends on income flowing in from abroad and on the prices of its exports compared with its imports. In 2026 the Philippines saw both of those turn less favourable.

What is the difference between GDP, GNI and GDI?

GDP counts production inside the country. GNI adds net primary income from the rest of the world, which the Philippine Statistics Authority (PSA) reports as NPI. Real GDI, or real GNI in the broader international definition, also adjusts for the terms of trade: the price of exports relative to the price of imports. Statistical agencies call that adjustment a trading gain or trading loss.

A simple illustration, not real data: suppose a shipment of electronics used to pay for 100 barrels of imported oil. If oil prices jump and the same shipment now pays for 80 barrels, the factories produced exactly as much, so real GDP is unchanged, but the country can buy less with it. That difference is a trading loss. If chip prices jump instead, the same shipment buys more oil, and that is a trading gain.

For the Philippines, the two adjustments pull in different ways. NPI has historically been a large plus, because many Filipino workers abroad are still counted as residents and their pay counts as Philippine income. The terms-of-trade adjustment is not part of the PSA’s published GNI.

What do the latest Philippine numbers show?

Real GNI grew 2.2% and real GDP 2.3% in the second quarter of 2026, year on year at constant 2018 prices, according to PSA data reported by Philstar and PortCalls. NPI grew just 1.0%.

2.2% vs 2.3%

Real GNI growth vs real GDP growth, Philippines, Q2 2026, year on year. GNI fell behind GDP for the first time in the six quarters below. PSA data as reported on 7 August 2026.

Visual guide

What do the latest Philippine numbers show?

Real GDP

Q1 20255.4%
Q2 20255.5%
Q3 20254.0%
Q4 20253.0%
Q1 20262.8%
Q2 20262.3%

Shared linear scale from zero. Selected entries from the table below. Its dates, units, definitions and limitations still apply.

Sources ↓

Quarter	Real GDP	Real GNI	Net primary income (NPI)	GNI minus GDP (calculated)
Q1 2025	5.4%	7.5%	24.6%	+2.1 points
Q2 2025	5.5%	8.2%	32.8%	+2.7 points
Q3 2025	4.0%	5.6%	16.9%	+1.6 points
Q4 2025	3.0%	3.9%	10.9%	+0.9 points
Q1 2026	2.8%	2.9%	3.5%	+0.1 points
Q2 2026	2.3%	2.2%	1.0%	−0.1 points

Year-on-year growth at constant 2018 prices. Figures are as first published by the PSA and reported by SunStar, Daily Tribune and DZRH, except Q1 2026, which uses the revision published on 7 August 2026 (InsideASEAN; first estimates were GNI 3.0% and NPI 4.5%). The last column is a CapsWindow calculation.

For 2025 as a whole, GDP grew 4.4% and GNI 6.1%, a gap of +1.7 points (calculated). The gap then shrank quarter by quarter. GDP slowed, but NPI slowed much faster, from growth of 32.8% to 1.0% in a year. The reports CapsWindow could access do not break down why NPI slowed, so this note does not assign a cause.

Did the Philippines gain or lose from its terms of trade?

Probably lost, but the size is not measured. CapsWindow could not find an official Philippine trading gain or loss series, or a 2026 export and import price index from the PSA. The PSA’s statistics pages could not be opened for this note. So the answer below rests on substitutes, and each has a gap.

The longest available series is the World Bank’s net barter terms of trade index, which stops in 2024.

Year	Net barter terms of trade (2015 = 100)
2019	99.3
2020	101.6
2021	95.4
2022	88.1
2023	93.9
2024	98.2

Source: World Bank, TT.PRI.MRCH.XD.WD; no 2025 value yet. The index fell to its lowest point in this table in 2022, the last year of an oil price spike, and recovered by 2024. That fits an energy importer, but the index alone does not prove the cause, and it says nothing about 2026.

For 2026, the trade figures show the shape of the problem rather than its size.

PSA merchandise trade, 2026	Value	Year-on-year change
Exports, January–July	US$54.92 billion	+12.9%
Imports, January–July	US$92.26 billion	+18.9%
Trade deficit, January–July (calculated)	US$37.34 billion	—
Electronic product exports, July	US$4.79 billion (58.8% of exports)	not reported
Mineral fuels and lubricants imports, July	US$1.95 billion (13.8% of imports)	not reported

Source: PSA data reported by The Manila Times, 29 August 2026.

Imports grew faster than exports, but these are values, which mix prices and quantities, so they cannot separate a price effect from a volume effect. The context is clearer. ISEAS reports that about 98% of Philippine crude imports come from the Middle East and that Brent passed US$107 a barrel in late March 2026. The IMF expects the current-account deficit to widen to 4.8% of GDP in 2026 because of a “higher oil import bill” (IMF, 25 September 2026).

How does this compare with Korea and other chip exporters?

Korea sits on the other side. Its real GDI grew 18.8% year on year in the third quarter of 2026, against real GDP growth of 3.4%, the highest GDI growth since the fourth quarter of 1977. The trading gain from terms-of-trade changes swung from −10.9 trillion won in Q3 2025 to +77.5 trillion won in Q3 2026 (Bank of Korea ECOS, table 200Y106). Memory chip prices rose much faster than oil.

	Korea	Philippines
Latest quarter	Q3 2026	Q2 2026
Real GDP growth	3.4%	2.3%
Income measure	Real GDI: 18.8%	Real GNI: 2.2%
Income minus GDP (calculated)	+15.4 points	−0.1 points
Includes terms-of-trade adjustment?	Yes	No (not in PSA GNI)
Main driver of the gap	Chip export prices	Slowing income from abroad

The two income measures are not identical and the quarters differ, so this table compares direction, not size. The Philippines also exports electronics, which were 58.8% of goods exports in July 2026. But the World Bank’s chief economist for Asia called the Philippines “the outlier in East Asia” on 6 October, saying it has been hurt more by high energy prices and is “less integrated in these global AI-related value chains than countries like Vietnam and Malaysia” (Philstar).

Where does the gap show up for households?

In slower spending and higher prices. Household consumption grew 2.8% in Q2 2026, down from 5.2% a year earlier, while government consumption grew 8.3% (GMA News). Inflation reached 7.2% in September 2026, and unemployment was 6% in July, the highest in over four years (Philstar).

Remittances, the other link between Filipinos abroad and spending at home, are still growing but slowly. BSP data show personal remittances of US$22.7 billion in January–July 2026, up 2.3% (BSP). Only part of that is in GNI: pay of workers who remain Philippine residents is primary income, while transfers from Filipinos who are residents abroad are secondary income. A weaker peso raises the peso value of each remitted dollar, but higher prices take part of that back.

The PSA data in this note do not show how national income was split between wages, company profits and government, so that question stays open here.

Check what higher prices did to a peso amount — the past money calculator compares a peso sum from an earlier year with today using official inflation data.

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What are the limits of this comparison?

The Philippine growth rates are preliminary and are revised: Q1 2026 GNI was cut from 3.0% to 2.9% and NPI from 4.5% to 3.5% within three months, and some 2025 quarters were also revised. This note uses first-published figures except where stated. The PSA website could not be opened, so every PSA number here comes from press reports of PSA releases. CapsWindow could not find a Philippine real GDI or trading gain/loss series, so the terms-of-trade discussion uses the World Bank index to 2024 and 2026 trade values, which mix prices and volumes. Korea's GDI and the PSA's GNI are different measures for different quarters. Nothing here shows that oil prices or overseas income caused a particular quarter's result.

Questions & answers

What is the difference between Philippine GDP and GNI?

GDP counts what is produced inside the Philippines. GNI adds net primary income from abroad: income residents earn from the rest of the world, including pay of Filipino workers abroad who are still counted as residents, minus income paid to foreigners. For years this made Philippine GNI grow faster than GDP, by 2.7 points in Q2 2025. In Q2 2026 GNI grew 2.2% and GDP 2.3% (PSA, as reported).

Did the Philippines gain or lose from the terms of trade in 2026?

The evidence points to a loss, but its size is not measured. The PSA does not publish a trading gain or loss series that CapsWindow could find. The Philippines is a large net energy importer, the World Bank says high fuel prices hurt it more than its neighbours, and imports grew 18.9% against 12.9% for exports in January–July 2026. Trade values mix prices and volumes, so they cannot show the terms-of-trade effect on their own.

Are OFW remittances included in GNI?

Partly. Pay earned by Filipino workers abroad who are still counted as residents is primary income and enters GNI. Transfers from Filipinos who are residents of other countries are secondary income and do not. Personal remittances as reported by the BSP combine both, and grew 2.3% in January–July 2026.

Why does Korea's GDI grow much faster than its GDP?

Because the price of what Korea exports, especially memory chips, rose much faster than the price of what it imports. Bank of Korea data show real GDI growth of 18.8% in Q3 2026 against GDP growth of 3.4%, with a trading gain of 77.5 trillion won. The Philippines has no equivalent official series, and its import bill is weighed down by oil.

Source

Calculators

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