Malacañang has brushed aside recent downgrades by international financial institutions, saying the Philippine economy remains on a stable medium-term path and is expected to rebound gradually starting in 2026 as reforms take hold.

Presidential Communications Office (PCO) Undersecretary Claire Castro said this following lowered growth forecasts by institutions such as the Asian Development Bank, World Bank, S&P Global, and the ASEAN+3 Macroeconomic Research Office ahead of the release of the full-year 2025 gross domestic product (GDP) figures.

In a press briefing on Wednesday, Jan. 28, Castro said the revisions reflect “lingering global uncertainties, tighter financial conditions, and the moderation in domestic activity observed in the third quarter,” but stressed that the economy still posted 5.0 percent growth in the first three quarters of 2025.

She added that the administration expects economic expansion to “rebound gradually starting in 2026 and strengthen further over the medium term as growth-enhancing reforms take effect.”

According to Castro, the Palace remains confident in the country’s macroeconomic fundamentals, citing controlled inflation as a key buffer amid slower growth.

She said President Marcos has repeatedly instructed economic managers to closely monitor prices to ensure inflation remains low and manageable.

“Gusto ng Pangulo ay dumami ang investments, para magkaroon ng maraming (The President wants more investments so we can have more) quality jobs and higher employment to reduce poverty,” she said, citing Department of Finance (DOF) Secretary Frederick Go.

She added that inflation remains a key concern for the administration.

“Inflation is well controlled at pinapaalala ng Pangulo na bantayan ng gobyerno para po it will remain low (Inflation is well controlled, and the President has reminded the government to ensure it remains low),” she said.

She said this price stability provides room for economic recovery once global and domestic headwinds ease.

Castro acknowledged that growth was also affected by more cautious government spending following the investigation into allegedly anomalous flood control projects.

“We acknowledge that more prudent government expenditures, especially on infrastructure, due to the flood control scandal, affected growth in the fourth quarter,” she said.

Castro stressed that President Marcos made a deliberate decision to allow the probe to proceed despite its economic impact and has no intention of halting the investigation, even if it continues to affect growth in the short term.

“Pinili po niya na magkaroon ng pag-iimbestiga tungkol po sa maanomalyang flood control projects (He chose to have an investigation into anomalous flood control projects),” she said.

“Hindi pa rin niya ipahihinto ang pag-iimbestiga tungkol sa maanomalyang flood control project (He will not stop the investigation into anomalous flood control projects),” she added.

The Palace Press Officer also noted that natural disasters, particularly the successive typhoons and earthquakes, weighed on last year’s economic activity.