Philippine growth seen trailing four Asian peers in 2026
Inflation highest in region
By Derco Rosal
Published May 13, 2026 06:15 pm
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Updated May 13, 2026 03:41 pm
At A Glance
- Four Asian economies—Taiwan, Indonesia, Vietnam, and Thailand—are expected to outpace Philippine economic growth this year, as the country's expansion remains muted amid pressures from overheating inflation, rising unemployment, and slowing remittances.
Four Asian economies—India, Indonesia, Taiwan, and Vietnam—are expected to outpace Philippine economic growth this year, as the country’s expansion remains muted amid pressures from overheating inflation, rising unemployment, and slowing remittances.
American financial giant Goldman Sachs Group Inc. said in a May 7 commentary obtained by Manila Bulletin that it sees private consumption—a major growth driver in the Philippines—remaining weak throughout the year after gross domestic product (GDP) expansion slumped to a five-year low of 2.8 percent in the first quarter of 2026.
“Looking ahead, we expect the outlook for private consumption to remain soft through 2026, weighed down by rising consumer prices, a cooling labor market, and moderating remittance inflows,” Goldman Sachs Economics Research economists Chris Poh and Danny Suwanapruti said.
Goldman Sachs Economics Research noted that first-quarter private consumption growth slowed quarter-on-quarter while government spending rebounded from the previous quarter’s flat performance.
“Notably, public construction expanded for the first time after four consecutive quarters of decline. However, private investment remained weak. We expect the outlook to remain cautious, as construction costs are likely to come under pressure from higher wages, logistics costs, and other input price increases,” Goldman Sachs Economics Research said.
Singapore-based DBS Bank Ltd. reinforced this outlook with a regional forecast showing the Philippines as among the laggards for the year.
Even as DBS believes Philippine economic growth would modestly recover to 4.7 percent from the post-pandemic low of 4.4 percent in 2025, Ma Tieying, the Singaporean lender’s senior economist, projected that this expansion would still be overtaken by several Asian economies.
According to Ma, Philippine growth this year would lag behind Taiwan’s 9.4 percent, India’s and Vietnam’s 6.5 percent, as well as Indonesia’s 5.1 percent. It would nonetheless match DBS’ growth forecast for Malaysia.
On the wealth tier in terms of per capita GDP, the Philippines is positioned near the bottom of the group at $4,000, only slightly ahead of India at $3,000.
Among the 12 economies covered by DBS’ report, the Philippines’ per capita GDP stood in 11th place, trailing China’s and Malaysia’s $15,000, Thailand’s $8,000, and Indonesia’s and Vietnam’s $5,000.
Far ahead are Singapore at $108,000, Hong Kong at $60,000, Taiwan at $45,000, South Korea at $37,000, and Japan at $36,000.
In nominal terms, Ma projected the Philippine economy’s total output to reach $500 billion, on par with Hong Kong, Malaysia, and Vietnam, but still behind Singapore’s $700 billion and Thailand’s $600 billion.
Further, the Philippines would be dwarfed by Indonesia at $1.5 trillion and Taiwan breaching $1 trillion. Far ahead are China at $20.9 trillion, Japan at $4.4 trillion, India at $4.2 trillion, and South Korea at $1.9 trillion.
Compounding this lackluster economic performance is rapid price growth, which DBS projects to accelerate to 6.5 percent in 2026 from the nine-year low of 1.7 percent in 2025. If realized, this would not only overshoot the Bangko Sentral ng Pilipinas’ (BSP) four-percent ceiling but also exceed the central bank’s own 6.3-percent forecast, which, if attained, would be an 18-year high since the 8.2 percent recorded in 2008 during the global financial crisis (GFC).
Based on DBS’ assumptions, the Philippines is seen posting the highest inflation rate among the 12 Asian economies. Inflation is expected to ease back to four percent afterward, at the upper limit of the government’s target band.
Private-sector economists earlier flagged the Philippines’ risk of slipping into a period of stagflation, which the government has shrugged off. Inflation stood at an over three-year high of 7.2 percent in April.
Despite the anticipated growth slowdown, DBS believes the BSP would move to further tighten monetary policy.
As such, Ma pencilled in another quarter-point hike in the second quarter to 4.75 percent, and a jumbo 50-basis-point (bp) hike to a terminal rate of 5.25 percent by the third quarter, a move that could signal inflation as the main priority of monetary authorities.