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Manila Bulletin devider Business devider Banking & Finance devider Gov't lowers economic growth forecast as external risks intensify

Gov't lowers economic growth forecast as external risks intensify

Published Jun 26, 2025 05:57 pm

At A Glance

  • Economic managers have tweaked downwards the gross domestic product (GDP) target to 5.5 percent from 6.5 percent previously as increased external uncertainties, especially the ongoing Middle East conflict and the slapping of United States (US) tariffs.
In photo (from left to right): Finance Assistant Secretary Karlo Fermin S. Adriano, Economy, Planning, and Development Secretary Arsenio M. Balisacan, Budget Secretary Amenah F. Pangandaman, Special Assistant to the President for Investment and Economic Affairs Secretary Frederick D. Go, and Bangko Sentral ng Pilipinas Deputy Governor Zeno Ronald R. Abenoja
In photo (from left to right): Finance Assistant Secretary Karlo Fermin S. Adriano, Economy, Planning, and Development Secretary Arsenio M. Balisacan, Budget Secretary Amenah F. Pangandaman, Special Assistant to the President for Investment and Economic Affairs Secretary Frederick D. Go, and Bangko Sentral ng Pilipinas Deputy Governor Zeno Ronald R. Abenoja
Economic managers have tweaked downwards the gross domestic product (GDP) target to 5.5 to 6.5 percent from six to 6.5 percent previously, citing the increased external uncertainties, especially the ongoing Middle East conflict and the imposition of United States (US) tariffs.
Cabinet-level Development Budget Coordination Committee (DBCC) Chairperson and Budget Secretary Amenah F. Pangandaman said during a June 26 press briefing that the revisions considered the “heightened global uncertainties, such as the unforeseen escalation of tensions in the Middle East and the imposition of U.S. tariffs.”
It was also “in line with the forecasts of private sector analysts and international financial institutions.”
DBCC has also narrowed the growth target range for 2026 to 2028 to six percent to seven percent, from the previously more ambitious six percent to eight percent. This reflects “a more measured and resilient outlook amid global headwinds.”
“To sustain this economic momentum, the government is focused on maintaining price stability while expanding trade partnerships and enhancing the productivity of domestic industries. Accelerated implementation of government programs and projects also remains a key priority, alongside seizing growth opportunities in the services sector,” Pangandaman said.
DBCC has not revised the inflation target range at two to four percent from 2026 to 2028, but its assumption was that the consumer price hike would fall within the two to three percent, narrower than the two to four percent previously.
Maintaining the government’s inflation target is “consistent with the latest outlook that inflation will remain within the target range over the policy horizon.”
With global demand cooling and oil supplies projected to increase, Dubai crude prices are expected to average $60 to $70 per barrel from 2025 to 2028, despite escalating geopolitical tensions.
Following recent fluctuations in the value of the Philippine peso, the local currency is still expected to stay stable, averaging ₱56 to ₱58 against the US dollar from this year until 2028, supported by lower domestic inflation and influenced by global financial trends and trade performance.
From a six-percent projection previously, goods exports are expected to shrink by two percent in 2025 due to slower global demand. It is then expected to gradually recover with two percent annual growth from 2026 to 2028, mainly due to weak global demand.
Also from a high of five percent, goods imports are projected to grow slower by 3.5 percent in 2025 on the back of strong domestic activity. It is seen to increase by four percent in the following years, driven by stable consumption and continued infrastructure spending.
Pangandanman assured that the DBCC “remains vigilant and ready to deploy timely and targeted measures to mitigate their potential impact on the Philippine economy” in spite of the external shocks.
“Moreover, international reserves remain ample, providing an adequate buffer to help absorb these external shocks,” she added.

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Development Budget Coordination Committee (DBCC)
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