THE PHILIPPINE ECONOMY could return to around 6% growth by 2027 if private and non-private investments rebound, based on Asian Development Bank (ADB) Country Director for the Philippines Andrew Jeffries.
“I feel (the drivers are a) form of a bit of of every part, but return to high investment, private and non-private, I feel could be, to me, the important thing driver,” he told reporters on the sidelines of an event on Jan. 23.
Last December, the ADB slashed its Philippine gross domestic product (GDP) growth forecast to five% for 2025, from 5.6% previously. For 2026, the ADB trimmed its GDP projection to five.3% from 5.7% previously.
This comes after a corruption scandal dampened government spending, household consumption, investor confidence and economic activity last 12 months.
The ADB will release its updated economic outlook in April, which is able to include a 2027 growth forecast.
Mr. Jeffries warned that the cut in Department of Public Works and Highways’ (DPWH) budget this 12 months, could trigger a “big slowdown” in locally funded projects.
“I suppose the predominant variable for 2026 was how briskly does the general public investment get better? We were considering possibly two quarters, so it’ll start reviving,” he said.
In a gathering with Public Works Secretary Vivencio “Vince” B. Dizon in December, Mr. Jeffries said they raised concerns about “paralysis,” where key projects risked getting stuck.
“What we’ve heard is that they’re attempting to be sure the priority projects will not be stuck and keep moving forward quickly. I feel it’s a twofold exercise,” he said. “It’s cleansing up the issue while full steam ahead on among the other projects that weren’t an issue.”
Mr. Dizon earlier said the DPWH goals to spice up spending while ensuring funds are used properly and concentrate on prioritizing the “basics” corresponding to road and bridge maintenance and unfinished projects. The agency’s goal spend is about between P200 billion and P250 billion for the primary quarter, he added.
Meanwhile, Mr. Jeffries said the Philippines must raise the share of exports within the economy to support long-term growth, in addition to diversify its base, and boost resilience.
“It’s not something that happens overnight. It’ll be a mixture of policies and attracting investment and improving the business environment and all of those things combined,” Mr. Jeffries said. “But neighbors have done it and the Philippines can do this.”
He noted the Philippines was shielded from external shocks, largely because exports remain a comparatively small a part of the economy.
“I feel it’s still very essential that over time that (exports) grow for the Philippines,” he said.
Nevertheless, Mr. Jeffries added that ambitions for the export industry face logistical challenges.
“The connectivity here is just mechanically costlier and more of a challenge than certain neighbors,” he said.
REFORMS NEEDED
The Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) said the National Government must pursue reforms to spice up confidence because the economy may remain sluggish this 12 months.
In an announcement, FFCCCII President Victor R. Lim said the administration should incentivize technology adoption and food security efforts within the manufacturing and agriculture sector, implement anti-corruption measures, improve protection and ease of doing business for local and foreign investors, in addition to construct world-class infrastructure to revamp tourism.
It also urged the federal government to ramp up investments in education, skills and universal healthcare, enhance ports, hubs and broadband to spice up market linkages, and advance the country’s sustainable and digital shifts.
For his part, Rizal Business Banking Corp. Chief Economist Michael L. Ricafort said the economy’s return to the 6% growth path is feasible on account of lower base effects.
“One other factor: Increased government spending to expedite the completion of assorted projects/programs, especially months before the 2028 presidential elections,” he said in a Viber message on Monday. — Aubrey Rose A. Inosante with Katherine K. Chan