The country’s economic growth is expected to accelerate in 2026, with full potential projected to be realized in 2027, driven by a renewed focus on infrastructure, with corruption no longer seen as a major obstacle.

According to University of Asia and the Pacific (UA&P) economist Bernardo M. Villegas, known as the “prophet of boom” in the local business community, the country’s gross domestic product (GDP) is projected to grow 5.6 percent for the entire year, with a five-percent expansion expected in the first quarter of 2026.

For 2027, he stressed that GDP growth could reach the six-percent mark representing the local economy’s potential. If realized, Villegas’ outlook for 2026 and 2027 would align with the government’s revised targets of five- to six-percent growth for 2026 and 5.5 to 6.5 percent for 2027.

“The corruption problem is not going to be obstructing anymore,” Villegas told reporters on the sidelines of UA&P’s Second Forum on Local Governance and Development on Wednesday, Feb. 11.

“And then you see foreign direct investors not really being discouraged by the corruption. You see announcements of $1 billion from the Thai people investing in agribusiness,” Villegas said, referring to the local unit of Thailand-based food conglomerate Charoen Pokphand Foods PLC, whose forthcoming investment forms part of its five-year expansion plan aimed at increasing hog production in the Philippines.

Despite growth slowing to 4.4 percent in 2025—the weakest full-year expansion since the height of the Covid-19 lockdowns—Villegas said the Philippines’ ambition to achieve upper-middle-income country (UMIC) status is still achievable this year.

“Yes, $4,500 this year is a given,” he said, referring to the World Bank’s (WB) classification that a country must have a gross national income (GNI) per capita of $4,496 and above to be considered an UMIC.

The driver, he noted, was past growth. “We’ve been moving toward $4,500 very closely. We were at $4,300 already, so it’s just a little more,” he said, stressing that the growth rate in 2025 makes it possible to reach the threshold in the third quarter of this year.

While tensions with the United States (US) over tariffs persist, Villegas stressed that the Philippines is unlikely to be significantly affected amid the global slowdown.

“Globally, there will be a slowdown definitely because of the tariffs being imposed on all the exporting countries. But we’re not really affected because we’re an exporting country,” he said.

He added that the peso is unlikely to exceed ₱60 per US dollar, noting that the central bank is effectively managing the currency.

“I don’t see the peso ever going beyond ₱60. The central bank is very skillful in controlling that, and our reserves are very large,” he said, adding that the peso is expected to stay within the ₱58-to-₱59:$1 range.

On inflation, Villegas projected that consumer prices will remain between two and three percent for the whole year, keeping them within the government’s target.

Villegas’ outlook aligns with that of Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan, who said last month that “the potential of the economy is a growth rate of six percent,” noting that this would require good governance and sound economic management.

He added that investments in human capital—particularly education, health, and infrastructure—could raise the economy’s potential further to 6.5 or even seven percent.

Balisacan also stressed the importance of maintaining strong economic fundamentals. “We must not be distracted by political noise. Otherwise, you sacrifice sound fundamentals for short-term gains, and that’s not good for long-term growth,” he said.

Even with the subpar GDP growth in 2025, Balisacan noted that “we’d still be able to reach UMIC status,” adding that growth is only one of several contributing factors.