THE PHILIPPINE ECONOMY may expand slower until next 12 months as global uncertainties and the local corruption controversy proceed to pull growth, the International Monetary Fund (IMF) said.
In its latest World Economic Outlook (WEO) released on Monday, the IMF said it expects Philippine gross domestic product (GDP) to grow by 5.6% this 12 months, inside the federal government’s 5%-6% goal.
This is identical projection given following its Article IV Consultation with the country last December, but barely lower than its 5.7% estimate within the previous WEO.
At the identical time, the IMF cut its Philippine GDP growth forecast for 2027 to five.8% from its 6% projection in October. This also falls inside the federal government’s 5.5%-6.5% goal.
“The downward revision in GDP growth projections for 2026 and 2027 reflects the carryover impact from a downward revision within the IMF’s growth forecast for 2025 — from 5.4% to five.1% — and a slower pace of capital accumulation,” an IMF spokesperson said in an e-mail.
For 2025, the multilateral lender expected Philippine GDP to grow by 5.1%, unchanged from December forecast. Nonetheless, that is below its 5.4% forecast given in October.
This got here after the flood control corruption mess led to slower economic growth and government spending. Within the third quarter, GDP grew by 4% — the weakest growth in over 4 years. This brought year-to-date GDP growth to five%.
The IMF said that climate shocks within the latter half of the 12 months also contributed to the economic slowdown.
“The downward revision for 2025 in turn reflects a sharper-than-expected slowdown in Q3 amid recent corruption allegations and climate shocks impacting economic activity within the second half of the 12 months,” it said.
In 2025, the Philippines encountered 23 tropical cyclones, affecting tens of millions of Filipinos and leaving billions of pesos in damages nationwide, in keeping with data from the state weather bureau.
The IMF earlier said that weather disruptions have trimmed the country’s GDP by 0.2%-0.3% yearly and accelerated inflation by as much as 0.6 percentage point annually.
The multilateral lender said that lingering uncertainty over tighter trade restrictions, geopolitical tensions, and disruptive financial market corrections could dampen the country’s economic growth.
“On the upside, accelerated implementation of structural and governance reforms can boost investment and FDI (foreign direct investment), increase fiscal multipliers and boost potential growth,” it added.
Meanwhile, the IMF forecasts 6% GDP growth for the Philippines in 2028, on the low end of the federal government’s 6%-7% goal.
“Economic growth will probably be driven by robust consumption and better investment, supported by monetary policy easing and the authorities’ recent policy initiatives to support private investment,” the IMF said.
The Bangko Sentral ng Pilipinas (BSP) has been on an easing path since August 2024, having delivered a complete of 200 basis points (bps) in cuts.
In October and December last 12 months, it slashed the important thing policy rate by 25 bps each in a move to spur domestic demand amid waning consumer and investor sentiment as a result of the flood control mess.
The benchmark rate of interest now stands at an over three-year low of 4.5%, which the central bank said is already near their ideal rate, signaling an end to its current easing cycle.
BSP Governor Eli M. Remolona, Jr. has left the door open to a different 25-bp cut at their Feb. 19 review but said that further easing could also be unlikely considering current economic data.
Still, he noted that a weaker-than-expected growth may prompt them to deliver two rate cuts this 12 months to assist stimulate the economy. — Katherine K. Chan