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Manila Bulletin devider Business devider The Economy devider UN flags slower Philippine growth, recovery seen from 2026

UN flags slower Philippine growth, recovery seen from 2026

Published Jan 9, 2026 02:00 am  |  Updated Jan 8, 2026 12:33 pm

The weaker-than-expected four-percent growth in the third quarter last year, compounded by a corruption scandal, is likely to weigh on the economy, with the Philippines once again seen missing its target in 2025 before picking up in the succeeding years, according to the United Nations (UN).

In its World Economic Situation and Prospects 2026 published on Thursday, Jan. 8, the UN’s Department of Economic and Social Affairs (DESA) projected the country’s gross domestic product (GDP) to grow five percent in 2025, 5.7 percent in 2026, and 6.1 percent in 2027.

The government’s downscaled target of 5.5- to 6.5-percent growth for 2025 is therefore out of reach, as already conceded by the country’s chief economist last December. GDP performance during the fourth quarter and full-year 2025 will be reported on Jan. 29.

Early this week, Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan announced that the Cabinet-level, interagency Development Budget Coordination Committee (DBCC) revised the country’s GDP growth targets for the next two years downward, projecting five to six percent for 2026, 5.5 to 6.5 percent for 2027, and six to seven percent for 2028.

To recall, the government last year set the Philippines’ annual GDP growth targets at six to seven percent for 2026 to 2028.

According to Balisacan, “The emerging growth scenario for 2025 is something like 4.8 to five percent.” He added that achieving a below-target five percent for the full year, given that the first three quarters already averaged five percent, would still place the Philippines among the fastest-growing economies in Asia.

Balisacan also said that the ₱6.793-trillion 2026 national budget is expected to bolster economic growth this year.

As for inflation, the UN projects it at 2.3 percent in 2026 and 2.8 percent in 2027, falling within the government’s medium-term target of two to four percent.

The Philippine Statistics Authority (PSA) this week reported that full-year inflation for 2025 settled at 1.7 percent, marking a nine-year low, despite ticking up to 1.8 percent in December.

“In the Philippines, low inflation, robust labor market conditions, and steady remittance inflows have buoyed consumer spending, while government spending and investment have further supported growth,” the UN said.

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