The Manila-based Asian Development Bank (ADB) is signaling a slowdown in its host country, the Philippines, by lowering its economic growth forecasts for both 2025 and 2026.

While not disclosing the actual figures, “It is trending down from what we had earlier released,” ADB country director for the Philippines Andrew Jeffries told reporters on the sidelines of the European Chamber of Commerce of the Philippines’ (ECCP) 2026 Philippine Economic Outlook forum last week.

To recall, the latest ADB Asian Development Outlook (ADO) in September projected the Philippines’ 2025 gross domestic product (GDP) growth at 5.6 percent, unchanged from the July forecast, while the 2026 growth outlook was revised downward to 5.7 percent from 5.8 percent previously.

It is notable that the September ADO forecast falls within the government’s target range of 5.5 to 6.5 percent for this year but is below the target of six to seven percent for 2026.

Jeffries stressed that the upcoming December ADO would reflect a downgrade in the outlook, noting that it is “revising downward” and is “likely” to come in below the government’s growth targets for this year.

On restoring investor confidence amid infrastructure corruption issues, Jeffries said this depends on the type of investor, including local investors in different sectors. He highlighted the need for more foreign direct investment (FDI) and noted that while sentiment has dipped, “the bank lending to businesses is over nine percent higher year-on-year through September as compared to a year ago. So I guess it’s not necessarily... all a consistent story on sentiment.”

“What can the government do about it, I think, is just take the concerns seriously and push forward with some of the changes and reforms and improvements that have been talked about,” he said. “I think just following through on that would be the most important thing to... reverse the segments of investors where sentiment has gone down.”

He also underscored the importance of accountability, noting that “accountability is part of any kind of any legal system.”

During the forum, Jeffries characterized 2025 as “generally rosy,” saying the first half of the year is “upbeat” before giving way to a “rougher” second half. He added that the onset of the flood-control corruption scandal “kind of wedged in between those two.”

Jeffries emphasized that the sharp decline in public infrastructure spending was the biggest “drag” on the economy this year, adding that “the recovery will happen; it’s just a matter of when and how quickly.”

He added that external shocks and major natural disasters also affect the economy, emphasizing the importance of disaster risk management.

“But again, just looking at all the fundamentals, I would say the No. 1 driver for next year is getting the infrastructure spending back on track,” he said.

On reforms that would have the biggest impact on inclusive growth and job creation over the next few years, Jeffries said: “I think public financial management (PFM) and getting increased transparency into the processes around procurement and implementation of infrastructure projects would be one.”

He also highlighted the broader push for digitalization, “which again contributes to that overall efficiency and also transparency of information and openness of information.”

“Digitalization, in general, is important for government services as well as private services,” Jeffries said.

Lastly, he emphasized the importance of further improving the ease of doing business.

(Ricardo M. Austria)