In the latest economic analysis of Bank of America (BofA), the Philippines may end up behind its Association of Southeast Asian Nations (ASEAN) neighbors in terms of economic growth, and it could also mark another year of failing to hits is growth target, according to a report by BusinessWorld.
This is not surprising as the Philippines did not benefit economically from hosting the ASEAN Summit while it endured high inflation, weak gross domestic product (GDP) growth and lower foreign direct investment (FDI) inflows this year.
To put things in perspective, posted below is an excerpt from the news report of BusinessWorld. Some parts in boldface…
THE PHILIPPINE ECONOMY may be among the slowest growing in Southeast Asia this year, as weak domestic demand keeps growth below its potential, Bank of America (BofA) said.
In a report dated Sept. 8, BofA Global Research kept its gross domestic product (GDP) forecasts for the Philippines at 2.5% in 2026 and 3.5% in 2027.
For 2026, this projection puts the Philippines on par with Thailand as the slowest-growing economies among the Association of Southeast Asian Nations (ASEAN) members included in the report.
The two countries are expected to trail Vietnam (8.2%), Indonesia (5.3%), Malaysia (5.2%), and Singapore (5.1%) this year. If BofA’s forecasts hold, the Philippines will miss its growth target for five straight years. Economic managers are targeting 3.5%-4.5% GDP growth this year and 5%-6% in 2027-2030.
“In second half of 2026, we see GDP growing 2.5% with gentle gains in consumption and the bottoming of investment spending,” BofA China & Asia Economist Helen Qiao and Asia Economist Ting Him Ho said.
“Government spending may help mitigate the effects of the oil shock by aiming subsidies at consumer and transport groups most affected,” they added.
The Philippine economic growth slumped to a post-pandemic low of 2.3% in the second quarter, bringing first-half growth to 2.6%. Economic managers said that last year’s flood control corruption scandal continued to weigh on public construction and investments, while the Middle East war-driven energy shocks dampened household spending.
“Domestic demand grew only 0.9% in 2Q26 with net trade providing the lift to overall GDP,” the BofA economists also noted. “Within domestic demand, private consumption slowed, investments shrunk, and government spending was unable to fully cushion.”
Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the Philippines will continue to be the economic weakling of ASEAN this year? Has the weak economic growth of the Philippines affected you in many ways?
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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