Key facts
- World Bank maintained its 2026 Philippine growth forecast at 3.7%.
- Growth is expected to decelerate in 2026 due to weak investment and consumption.
- The World Bank projects growth to rebound to 5.2% in 2027.
- Inflation is forecast to average 5.8% for the year.
- The peso's depreciation is contributing to inflation.
The World Bank has maintained its 2026 growth forecast for the Philippines at 3.7%, anticipating a slower economic recovery next year due to weak investment and consumption. The bank's division director for the Philippines, Malaysia, and Brunei, Zafer Mustafaoglu, stated that growth is set to decelerate in 2026. This forecast is slightly below the average growth expected for developing economies in East Asia and the Pacific.
The World Bank expects growth to rebound to 5.2% in 2027 and reach 5.5% in 2028, as public investment gradually recovers and economic conditions improve. This is a downward revision from previous projections.
The Philippine government's economic managers forecast growth of 3.5% to 4.5% for the current year, a reduction attributed to the Middle East crisis and a corruption scandal that slowed government spending. The economy had previously grown by 2.8% in the first quarter, below expectations.
Regarding inflation, Mustafaoglu indicated it is seen averaging 5.8% for the year, which is below the 6% to 7% projection by Philippine economic managers. Average inflation is projected to ease to 5.2% in 2027 as governance conditions stabilize and the central bank potentially resumes monetary easing. The World Bank noted that the peso's depreciation has fueled inflation by increasing import costs and delaying a slowdown in price increases. Earlier statements from the government's economic managers indicated an expectation for the peso to trade between 60 and 62 per dollar from 2026 to 2030.