Philippine infrastructure investment projected at 4.2 per cent of GDP in 2026

Japan Credit Rating Agency (JCR) forecasts Philippine infrastructure investment will account for 4.2 per cent of gross domestic product in 2026 and four per cent in 2027, despite an expected resumption of delayed public works.

Both projections are below the 2025 level of 4.7 per cent, or ₱1.32 trillion. Investment represented 5.8 per cent of GDP in each of 2023 and 2024, according to the agency.

JCR linked the slowdown to closer checks on projects and payment processes at the Department of Public Works and Highways after irregularities involving flood control works. The government has tightened procedures covering planning, budget allocation, procurement, construction checks and payments.

The agency expects public infrastructure spending to pick up in the second half as departments draw on existing budget allocations and restart projects that have undergone review. It said slower public works and weaker consumption associated with higher crude oil prices were weighing on the economy.

GDP growth fell to 4.4 per cent in 2025 and 2.6 per cent in the first half of 2026. JCR projects full-year growth in the mid-three-per-cent range, followed by an improvement over the medium term.

The assessment also explained JCR’s Aug. 28 decision to maintain the Philippines’ A- investment-grade rating and stable outlook. The agency identified higher per capita income, industrial upgrading, domestic job expansion and continued infrastructure investment as potential support for the rating, while warning that reversing fiscal reforms would count against it.