DBS Bets on Strong PH Growth Rebound, Flags Energy Risk

MANILA, Philippines — The Philippines has the potential to grow by an average of 5.8 percent a year from 2026 through 2035, according to DBS Bank Ltd., though it warned that the country’s heavy reliance on imported energy could weigh on that expansion. In a report copublished with Bain & Company and Vriens & Partners, The assessment was outlined in a report co-published with Bain & Company and Vriens & Partners, which underscored the critical need for energy supply stability and diversification to ensure the Philippines' sustained economic development. The Philippine economy has been on a recovery path in recent years, supported by robust domestic consumption and remittances from overseas. The expansion of the Business Process Outsourcing (BPO) sector and increased infrastructure investments are expected to drive growth. However, the current situation, where a significant portion of the country's energy supply depends on imported fossil fuels, presents a vulnerability to global energy price fluctuations and geopolitical risks, potentially impacting the entire economy. This energy risk could dampen the pace of economic growth by increasing inflationary pressures and raising production costs for businesses. DBS Bank recommends policy measures such as promoting investment in renewable energy and improving energy efficiency as crucial for achieving sustained economic growth in the Philippines. The Philippine government recognizes the urgency of strengthening energy security and is pursuing initiatives to promote renewable energy development and explore domestic energy resources. The extent to which these efforts will contribute to reducing import dependency will depend on the speed and effectiveness of future policy implementation.