ADB slashes Philippine growth forecasts for 2025, 2026

By Aubrey Rose A. Inosante, Reporter

The Asian Development Bank (ADB) sharply cut its growth forecasts for the Philippines for this year and 2026, amid weak infrastructure spending due to corruption probe and natural disasters.

In its December Asian Development Outlook, the multilateral lender slashed its Philippine gross domestic product (GDP) growth forecast to 5% from 5.6% in September.

For 2026, the ADB trimmed its Philippine growth forecast to 5.3% from 5.7% previously.

These latest projections are below the government’s 5.5-6.5% target for this year, and the 6-7% growth goal for 2026 to 2028.

In its report released on Wednesday, the ADB said the lower growth prospects for the Philippines was “due to weak infrastructure spending amid investigations of publicly funded projects, and natural hazards.”

The Philippine economy expanded by a weaker-than-expected 4% in the third quarter, bringing nine-month growth to 5%, due to lower government spending on flood control projects amid investigations and stricter controls.

Data from the Department of Budget and Management showed expenditure on infrastructure and other capital outlays for the January-to-September period, declined by 10.7% to P877.1 billion from P982.4 billion a year ago.

“Low inflation and ongoing monetary easing should sustain domestic demand, supporting stronger growth in 2026,” the ADB said.

“However, uncertainties arising out of investigations of publicly funded infrastructure projects and weather-related disruptions pose downside risks,” it added.

The multilateral lender expects headline inflation to average 1.8% this year and 3% in 2026, unchanged from its September forecast.

This is slightly higher than the Bangko Sentral ng Pilipinas’ (BSP) 1.7% average forecast for this year, but lower than the 3.3% average forecast for 2026.