Philippine growth forecast held at 3.4 per cent for 2026

The International Monetary Fund has left its forecast for Philippine economic growth in 2026 unchanged at 3.4 per cent, with costly food and energy expected to constrain activity. Its October World Economic Outlook projects growth of 5.1 per cent in 2027.

The Philippines’ 2026 projection is below those for Vietnam at 8.4 per cent, Malaysia at 5.2 per cent, Indonesia at 5.1 per cent and Singapore at five per cent. Among those economies, only Thailand has a lower forecast, at 2.1 per cent. The IMF expects the ASEAN-5 group to expand by 4.4 per cent in 2026 and 4.3 per cent in 2027.

For the Philippines, the IMF expects investment to recover gradually as confidence strengthens and the energy shock’s effects diminish. A spokesperson said the projected rebound would still fall short of the economy’s growth potential.

The Fund forecasts Philippine inflation of 5.6 per cent in 2026, higher than in the other economies cited. It attributed the country’s exposure to food and fuel shocks to dependence on imported fuel and households’ spending patterns. Rice represents about 10 per cent of the consumer basket overall, with a considerably larger share for poorer households, its spokesperson said.

The IMF said increased energy costs had rapidly pushed up electricity and transport expenses, while more expensive rice and weather disruptions had raised food inflation. With inflation expectations broadly anchored and substantial unused economic capacity, it said further monetary tightening should hinge on persistent price pressures or stronger second-round effects.