Philippine Economic Growth May Miss 2026 Target, MBC Warns

MANILA, Philippines — Philippine economic growth may fall below the government’s goal for 2026, but accelerated government spending could help support growth, the Makati Business Club (MBC) said. “It could be (slower than the government’s target),” MBC chairman Edgar Chua told reporters when asked if the business group shares the government’s latest growth projection for the year. The Development Budget Coordination Committee (DBCC) has downscaled its gross domestic product (GDP) growth target to 3.5-4.5 percent this year from its earlier goal of five to six percent. In the second quarter, the economy grew by 2.3 percent, its slowest performance in five years. This brought average economic growth in the first half to 2.6 percent. “We hope the DBCC is correct,” Chua said, noting that the business sector also wants the economy to post higher growth. He said the economy is facing many headwinds that are unlikely to be addressed quickly. The Middle East conflict has led to higher energy prices that also pushed up prices of other commodities. Flood control corruption issues that were exposed last year, have also led to slower government spending and affected investor sentiment. Chua said the government is one of the engines driving the economy. “Hopefully, these next four months, the government is able to catch up with their spending, which will then pump prime the economy,” Chua said. While this year’s economic growth may miss the government’s target, he said that MBC expects better economic performance next year. For 2027, the government is aiming for five to six percent growth. In order to lift many Filipinos out of poverty, Chua said the economy needs to grow at a faster rate of seven percent. To achieve higher growth, he said the economy needs to continue spending for infrastructure and improving education to attract investments. While the Filipino workforce is a driving factor for investments in the country, he said this is currently at risk due to the low quality of education and high level of stunting. Chua also emphasized the importance of bringing back confidence in the government to encourage investments. To restore public confidence, he said the passage of three legislative measures such as the Freedom of Information Act, Bank Secrecy Law amendments and a genuine Anti-Political Dynasty Law would be needed. He also said the government could do more to encourage greater participation in the Public-Private Partnership (PPP) program. In particular, Chua said the government should not make revenue generation from PPP projects a priority. “The consideration of the government would be not who will pay the highest share. It would be who can provide the project at the lowest cost and the best possible service to the public. That’s how it should be,” he said. Chua said the government should remain focused on its role of providing public service. Rizal Commercial Banking Corp. chief economist Michael Ricafort said the “possible catch up government spending especially infrastructure hinged on better governance standards to make up for the underspending since the latter part of 2025 would still support a possible average GDP growth of three to four percent levels for 2026.” He said the passage of priority reform measures focused on better governance would also help improve investor confidence and support growth.