It seems that economic disappointment lack of breakthroughs will keep hounding the Philippines in the short term as ANZ Research slashed its economic growth forecasts for 2026 and 2027, according to a BusinessWorld news report.
To put things in perspective, posted below is an excerpt from the report of BusinessWorld. Some parts in boldface…
THE PHILIPPINE ECONOMY could see its weakest post-pandemic growth this year as last year’s corruption controversies continue to weigh on confidence, compounded by accelerating inflation and rising interest rates amid the Middle East conflict, ANZ Research said.
In its latest outlook for the third quarter, the New Zealand-based think tank slashed its 2026 gross domestic product (GDP) growth forecast for the Philippines to 3.9% from 4.7%.
It likewise cut its growth outlook for 2027 to 5% from 5.6% previously.
“The Philippines’ outlook is more constrained by weak household and business confidence, elevated inflation, and higher interest rates,” ANZ Research Chief Economist for Southeast Asia and India Sanjay Mathur said on Tuesday.
Economy, Planning, and Development Secretary Arsenio M. Balisacan said on Monday that the economy may grow by 3.5-4.5% this year, due to underspending and the fallout from the US-Iran war.
ANZ’s projections are below the government’s original targets of 5-6% for this year and 5.5%-6.5% next year. The Development Budget Coordination Committee has yet to release revised macroeconomic assumptions.
For 2028, ANZ sees the Philippine economy expanding by 5.5%, still below the government’s 6%-7% goal for the year.
Mr. Mathur noted that the weaker outlook also reflects expectations that lingering governance issues from last year’s flood control mess will prevent any significant rebound in public spending.
“Public spending likely bottomed in (the first quarter of) 2026, but a material recovery is unlikely until governance issues surrounding infrastructure projects are fully resolved,” he said.
In the first quarter, government spending grew by 3.22% year on year to P1.491 trillion from P1.444 trillion. It slightly improved at end-April after rising by 5.12% to P1.996.2 trillion from P1.899 trillion a year ago.
In late 2025, a flood control corruption scandal involving Public Works officials, private contractors and lawmakers took a major toll on public and business sentiment and dampened investments and government spending. This dragged the economy to its weakest growth since the COVID-19 pandemic at 4.4% last year from 5.7% in 2024.
“The Philippines stands out with negligible fiscal support, reflecting tight fiscal constraints and legal rigidities in fuel and utility pricing,” Mr. Mathur said.
Let me end this post by asking you readers: What is your reaction to this recent development? Are you convinced that the national economy will not achieve 6% growth rate during the final years of the Marcos administration? Do you think the administration’s hosting of the ASEAN Summit and participation in a big meeting with Vladimir Putin in Russia will not result in economic breakthroughs for the Philippines?
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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