World Bank cuts Philippine growth forecasts until 2027

The World Bank on Tuesday trimmed its growth forecasts for the Philippines for this year through 2027, mainly due to slower construction activity, muted consumption and a sharper drag from US tariff policy.

In its latest Philippines Economic Update (PEU), the multilateral lender cut its Philippine gross domestic product (GDP) growth forecast to 5.1% for this year from 5.3% in its June report.

For 2026, it lowered its Philippine GDP growth forecast to 5.3% from 5.4% previously.

The World Bank also cut its Philippine GDP growth projection for 2027 to 5.4% from 5.5% previously.

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

“We project that average growth over 2025 to 2027 will be lower than 2024,” World Bank Senior Economist Jaffar Al-Rikabi said during a briefing.

The Philippine economy grew by 5.7% in 2024.

“For 2025… the growth is largely weighed down by domestic factors. In particular, lower construction activity and weaker consumption growth,” he said.

The Philippine economy expanded by a weaker-than-expected 4% in the third quarter, bringing nine-month growth to 5%. This, as household final consumption expenditure and government spending slowed amid the corruption mess.

“But for 2026 to 2027, we think that it’s likely that external factors will weigh in more heavily on growth, largely slower export demand,” Mr. Al-Rikabi said.

The US imposed a 19% tariff on most goods from the Philippines starting August.

“The Philippines can leverage its strong economic foundation to implement bolder reforms that can unlock faster, more inclusive growth,” Zafer Mustafaoğlu, country director for the Philippines, Malaysia, and Brunei said.

“Removing barriers that limit investment and productivity and strengthening competitiveness can create more and better-paying jobs, expand opportunities, and reinforce economic resilience.” — Aubrey Rose A. Inosante