The Philippines has recalibrated its economic ambitions, adjusting growth forecasts for the remainder of President Marcos Jr.’s term. A recent assessment indicates a likely slowdown in growth to between 4.8% and 5% for the current year, prompting a reassessment of previously held targets.
The Development Budget Coordination Committee has revised its gross domestic product (GDP) growth projections downward. Targets now stand at 5%-6% for 2026, 5.5%-6.5% for 2027, and 6%-7% for 2028 – a shift from the earlier goal of 6%-8% annual growth.
This adjustment follows an anticipated growth rate of 4.8-5% for 2025, a noticeable deceleration from the 5.7% achieved in 2024. Despite this slowdown, officials maintain a cautiously optimistic outlook, suggesting the Philippines could still rank among Asia’s fastest-growing economies.
The economic slowdown in the third quarter, hitting a four-year low of 4%, played a significant role in this revision. A recent scandal involving flood control projects negatively impacted government spending, eroding both business and consumer confidence.
Lingering effects from these past challenges are expected to continue influencing economic performance in the near term. The first half of the year may see continued subdued growth, though a gradual recovery is anticipated as the year progresses.
Despite substantial budget cuts to infrastructure, particularly flood control initiatives, the economic team anticipates continued strength in domestic consumption. Employment growth, remittances from overseas workers, and a potential rebound in consumer confidence are expected to fuel this demand.
Officials believe that a sufficiently strong economic performance is still achievable, particularly in the latter half of the year. The focus remains on bolstering consumption as a key driver of growth, even amidst fiscal constraints.
