Recently the World Bank (WB) revised its 2026 economy growth for the Philippines forecasting gross domestic product (GDP) growth of only 3.7%, according to a news report by BusinessWorld.
To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…
THE WORLD BANK slashed its growth forecast for the Philippines to 3.7% this year, well below the government’s target, as the war in the Middle East weighs on economic activity.
The World Bank on Wednesday said it sees Philippine gross domestic product (GDP) growth at 3.7% for 2026, significantly slower than the previous projection of 5.3%
If realized, it will also be slower than the post-pandemic low of 4.4% in 2025 and below the Philippine government’s 5-6% GDP target range for 2026.
“Our main projection is that overall growth in the East Asia and Pacific region is going to decline in 2026,” Aaditya Mattoo, director of research of the World Bank Group, said in an online briefing on the World Bank’s East Asia and Pacific Economic Update.
“Most countries in the region are going to see slower growth in 2026 than they have in 2025. That is our projection,” he added, citing the impact of the conflict in the Middle East as well as trade disruptions.
“The good news is we are likely to see a bounce back in 2027,” Mr. Mattoo said.
The World Bank raised its GDP growth projection for the Philippines to 5.6% in 2027 from 5.4% previously. It is within the government’s 5.5-6.5% target for 2027.
However, Mr. Mattoo said the Middle East war will have an impact on remittances in the East Asia and Pacific region, particularly the Philippines.
“Countries like the Philippines, which depend strongly on remittances, will see remittances from the Gulf… diminish,” he said.
Ergys Islamaj, a senior economist at the World Bank, said the Philippine economy is mainly exposed to the Middle East conflict through remittances as well as energy and fertilizer imports.
“Eighteen percent of remittances to the Philippines in 2025 came from the Gulf. Longer conflict will hurt the economy further,” he said.
In 2025, cash remittances soared to an all-time high of $35.634 billion, accounting for 7.3% of the country’s GDP. Remittances from Saudi Arabia accounted for 6.6% of the total, while the United Arab Emirates made up 4.6% and Qatar made up 2.9%.
The Philippines is a net importer of crude oil and sources most of its supply from the Middle East, making the country vulnerable to global crude price swings.
Mr. Mattoo said that global oil prices are expected to be as much as $20 higher even a year from now compared to the prices before the war broke out.
Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines will grow slower this year? Do you think the Philippines is highly vulnerable as it depends on the Middle East for a great majority of its oil imports? Do you think the Philippines will eventually make new deals with Communist China and the Islamic terrorist regime of Iran for economic needs?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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