Philippines GDP growth expected below 3% as demand stalls and inflation rises

Bank of America predicts the Philippines will grow at a pace under 3% in 2026, well below the administration’s 3.5-4.5% goal and far from the economy’s 6% potential. Weak consumer momentum, especially in the first half of the year, is offset only by stable remittances, higher minimum wages, and modest rises in public spending on health and education. The central bank, Bangko Sentral ng Pilipinas, has raised its benchmark rate three times since April, now standing at 5%, and is likely to keep focusing on curbing inflation, which the bank expects to stay above target through 2027.

Energy price rebounds add further strain on household spending. While a stronger fiscal stance could boost growth in 2027, one outlet policy trade-off between price stability and economic expansion remains challenging.