IMF cuts Philippines 2026 growth outlook to 3.4% amid oil price shock and weak spending

After a recent mission, the International Monetary Fund trimmed its 2026 growth estimate for the Philippines to 3.4%, revising down from an earlier 3.9% outlook. The adjustment mirrors weaker-than-expected performance in the second quarter, where GDP rose only 2.3%, and a first-half average of 2.6% amid escalating Middle-East tensions. Government spending faltered, with infrastructure outlays contracting 32.4% and household consumption growth easing to 2.8%.

The fund projects inflation to run at 5.6% this year, far above the Bangko Sentral ng Pilipinas’s 3% goal, and anticipates a possible additional 0.25-point rate increase. While a rebound to 5.1% growth is still forecast for the following year, that figure was also cut from 5.5%. The IMF warns that persistent oil price shocks and a potential wage-price spiral could further strain the economy.