Nomura and BMI lower Philippine growth forecasts for 2026
Both projections are below the government’s 3.5 to 4.5 per cent target, while BMI has also reduced its estimate for 2027.
Nomura and BMI have reduced their Philippine economic growth projections for 2026 amid inflation pressures, subdued household demand and infrastructure delays. Nomura now forecasts GDP growth of 3 per cent, against its previous 3.8 per cent estimate. BMI, part of Fitch Solutions, lowered its estimate from 3 per cent to 2.6 per cent.
The downgrades follow third-quarter GDP growth of 2.1 per cent, down from a revised 2.4 per cent for the previous quarter. That was the slowest expansion since early 2021. Growth for the first nine months averaged 2.5 per cent.
October inflation reached 7.8 per cent, eroding household purchasing power. Consumer spending expanded by 2.4 per cent during the third quarter, compared with 2.9 per cent previously. BMI said high inflation, borrowing costs and weak consumer confidence would continue to constrain demand.
BMI reduced its 2027 growth projection from 4.5 per cent to 4 per cent. It expects infrastructure spending to support a stronger recovery in 2027, but warned that investigations into questionable flood-control projects could extend delays. It also identified adverse weather and El Niño as risks to agriculture.
Nomura offered a more positive near-term assessment, projecting growth above 4 per cent in the fourth quarter as public spending picks up and the year-earlier comparison base remains low. It pointed to a smaller contraction in fixed investment: 4.4 per cent in the third quarter versus 13.7 per cent in the second.
BMI expects demand linked to artificial intelligence to support technology exports through 2027. Both firms identified inflation and the pace of infrastructure spending as important to the recovery.
