PHILIPPINE GOVERNMENT slow down its economic growth targets for this year and 2027, the impact of corruption is still expected to be felt in the first half, according to Economic Secretary Arsenio M. Balisacan.
In Monday’s forum, Mr. Balisacan said the Development Budget Coordination Committee (DBCC) lowered its gross domestic product (GDP) growth targets to 5%-6% in 2026 and 5.5%-6.5% in 2027, following the December meeting.
These new targets are slightly lower than the previous target of 6-7% growth for 2026 to 2028.
However, the DBCC has maintained a 6-7% GDP growth target for 2028. The term of President Ferdinand R. Marcos, Jr. will end in mid-2028.
“The emerging number, the growth scenario for 2025, is something like 4.8-5%,” said Mr. Balisacan. “But if you gain 5% for the whole year, because the average for the first three quarters is already 5%, that still puts the economy in one of the fastest growing economies in Asia.”
If possible, 2025 GDP growth will be slower than the 5.7% GDP growth in 2024 and below the government’s GDP target of 5.5-6.5%.
This will also mark the fourth consecutive year that the Philippines will miss its GDP growth target.
Economic growth fell to a more than four-year low of 4% in the third quarter, as the flood control scandal hit government spending and hurt business and consumer confidence.
“The progress of last year will still be felt this year, although it is slowing down, so we expect to grow maybe in the first quarter or at least in the first half. [not quite] as sweetly as we can I want it to be like that,” said Mr. Balisacan.
A corruption scandal involving flood control projects has hit government spending and household spending following revelations by Mr. Marcos in his fourth State of the Nation address last July.
Mr. Balisacan said the economic team still expects to be used to drive the economy despite the reduction of the large budget for infrastructure projects, especially in flood control.
“Usage, that will probably be quiet, supported by employment, growth… and capital outflows. But we will also expect a return of consumer confidence… We expect the broader economy to grow strongly enough especially in the second quarter,” he said.
Mr. Balisacan said economic activity should accelerate later in 2026 as governance reforms and the development of public sector programs begin to take effect, as seen in the national budget.
He said the decline in the revision of the targets reflects global and domestic uncertainty and follows similar assessments by international institutions such as the International Monetary Fund (IMF), the World Bank and the Asian Development Bank (ADB).
The IMF last month cut its 2026 growth forecast for the Philippines to 5.6% from 5.7% previously. ADB sees the Philippines growing at 5.7%, while the World Bank expects GDP growth at 5.4%.
Mr. Balisacan said that the revision of the growth targets will not affect the financial planning, as the authorities are still focused on improving the growth rate.
He cited increased budget allocation for health, education, social protection and job creation as key to making growth more inclusive and accelerating poverty reduction.
Jonathan L. Ravelas, senior consultant at Reyes Tacandong & Co., said the lowered targets reflected “reality” but also emphasized that structural changes are moving too slowly.
“It shows that we are under pressure to raise productivity and attract investment. Without bold action – in infrastructure, ease of doing business, and FDI (foreign direct investment) – we are in danger of solving the growth ceiling of 5-6% instead of breaking the previous 7%,” he said of Viber.
“The message is clear: execution is more important than ever.”
Sir Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said that lowering the official growth targets can strengthen the credibility of the policy by bringing expectations closer to the current economic conditions and reductions. the risk of missing a repeated prediction.
“However, if it is not accompanied by visible, credible reform action, it also risks showing structural weakness in the economy and governance under the current administration,” he said of Viber.
“Ultimately, how the targets are set and what policy measures accompany them will determine whether the cuts boost credibility or fuel concerns about economic weakness.es.” – Chloe Mari A. Hufana
