It looks like there is no end yet for the ongoing economic disappointment for the Philippines as S&P Global Ratings and the Asian Development Bank (ADB) sharply downgraded their respective 2026 growth forecasts for the country, according to a news report by BusinessWorld.
To put things in perspective, posted below is an excerpt from the news report of BusinessWorld. Some parts in boldface…
S&P GLOBAL RATINGS and the Asian Development Bank (ADB) sharply downgraded their Philippine growth forecasts for this year as a weaker-than-expected first half and persistent economic headwinds threaten to stall the country’s recovery.
Based on its latest Economic Outlook for Asia-Pacific published on Wednesday, S&P cut its Philippine gross domestic product (GDP) growth projection for this year to 2.9% from 4.1%.
“We have lowered our growth forecast for 2026, reflecting the weaker-than-expected first-half growth and a more gradual recovery trajectory,” S&P Global Ratings Asia-Pacific Senior Economist Vishrut Rana said in an e-mailed response to questions. “It will take some time for the economy to recover its footing.”
At the same time, ADB trimmed its 2026 Philippine GDP growth projection to 3.3% from the 3.8% forecast it made in July.
“In the Philippines, weak public investment contributed to the 2026 downgrade from 3.8% to 3.3%, although a rebound is expected to support growth of 5.1% in 2027,” the Manila-based multilateral lender said in its Asian Development Outlook report released on Wednesday.
The ADB said that household consumption remained subdued amid high inflation and weak consumer confidence.
According to the ADB report, the Philippines is expected to be one of the slowest-growing economies in developing Southeast Asia this year, ahead only of Brunei Darussalam (1.2%), Thailand (2%) and Myanmar (2.2%). Vietnam is expected to post the fastest growth this year with 7.8%, followed by Indonesia (5.2%), Malaysia (4.9%), the Lao People’s Democratic Republic (4%), Timor-Leste (4%) and Cambodia (3.9%).
The lower growth projections from S&P and ADB come after the Philippine economy grew by 2.3% — a new post-pandemic low — in the second quarter, bringing first-half growth to 2.6%.
If S&P and ADB’s estimates hold, GDP growth will be slower than 4.4% in 2025, when a massive flood control corruption mess dampened the country’s spending and investments.
This year could also mark the fourth straight year that the government will miss its full-year growth goal. For this year, the Development Budget Coordination Committee (DBCC) is targeting 3.5%-4.5% GDP growth.
“The economy is facing a sharp pullback in public capital expenditure, a steep energy price shock, and elevated food prices, partly due to El Niño conditions,” S&P’s Mr. Rana said.
Let me end this post by asking you readers: What is your reaction to this recent development? Did you notice how the national economy got weaker as the government of the Philippines focused more on foreign affairs and the hosting of the Association of Southeast Asian Nations (ASEAN) Summit? Are you convinced there is simply no room for economic improvement for the Philippines this year? Do you think the Philippines is on its way to falling into a recession in 2027?
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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