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By Justine Irish D. Tabile, <\/b>Senior Reporter <\/i><\/p>\n
THE ASIAN Development Bank <\/span>(ADB) cut its growth forecasts for <\/span>the Philippines for this 12 months and next 12 months, citing delayed investments and <\/span>weaker household consumption. <\/span><\/p>\n In its Asian Development Outlook July 2026 report, the Philippine-based multilateral lender lowered its Philippine gross domestic product (GDP) growth forecast to three.8% from the 4.4% previously.<\/p>\n The newest forecast is inside the Philippine government\u2019s recently revised 3.5-4.5% GDP goal for 2026, but is slower than the 4.4% growth posted in 2025.<\/p>\n The ADB also trimmed its 2027 growth forecast to five.3% from 5.5% previously, placing it on the lower end of the federal government\u2019s revised 5-6% goal.<\/p>\n \u201cThe Philippines saw a downward adjustment in growth projections on account of delayed investments, softer private consumption amid higher commodity prices and climate-related risks,\u201d the ADB said within the report released on Wednesday.<\/p>\n In the primary quarter, the Philippine economy unexpectedly grew by 2.8%, its weakest growth since <\/span>the coronavirus pandemic, on account of spiraling oil prices on account of the Middle <\/span>East war and the lingering effects <\/span>of <\/span>last 12 months\u2019s corruption scandal.<\/span><\/p>\n The ADB\u2019s 2026 growth forecast for the Philippines can be below its revised 4.6% outlook for developing Southeast Asia, which was trimmed from 4.7% previously. <\/span><\/p>\n \u201cThe 2026 forecast for developing Southeast Asia is trimmed following downward revisions for Cambodia and the Philippines as higher energy prices weigh on domestic demand and tourism,\u201d the multilateral lender said.<\/p>\n Based on ADB\u2019s 2026 projections, the Philippines\u2019 growth can be the fourth slowest in Southeast Asia, tied with Timor-Leste at 3.8%, and ahead of Myanmar (2.4%), Brunei Darussalam (1.8%), and Thailand (1.8%).<\/p>\n The Philippines is anticipated to trail Vietnam (7.2%), Indonesia (5.2%), Malaysia (4.6%), Cambodia (4.1%), and Laos (4%)<\/p>\n For 2027, the Philippines is anticipated to post the second-fastest growth in developing Asia, after Vietnam (7%).<\/p>\n The Philippines\u2019 heavy reliance on Middle Eastern oil imports has left the economy particularly exposed to the worldwide oil shock that began in March.<\/p>\n The ADB raised its Philippine headline inflation forecast to five.9% this 12 months from 4% previously. That is well above the Bangko Sentral ng Pilipinas\u2019 (BSP) 2-4% tolerance range but below the central bank\u2019s inflation projection of 6.4%.<\/p>\n For 2027, the ADB hiked its headline inflation forecast to three.9% from 3.5% previously. That is on the upper end of the BSP\u2019s 2-4% tolerance range but below\u00a0 <\/span>its 4.5% projection.<\/p>\n Also, the ADB has raised its inflation forecasts for developing Southeast Asia to three.9% this 12 months from 3.2% previously, and a pair of.9% for 2027 from 2.8% previously.<\/p>\n \u201cThe upward revisions reflect higher global energy and food prices linked to the Middle East crisis, in addition to exchange rate pressures which have raised import costs across the subregion,\u201d it said, citing that the most important upward revisions were recorded for the Philippines.<\/p>\n The ADB said disruptions in energy markets have pushed up fertilizer costs, leaving developing Asia and the Pacific economies with low fertilizer self-suf<\/span>f<\/span>iciency vulnerable to cost volatility and <\/span>supply-chain disruptions.<\/span><\/p>\n \u201cAbsent policy intervention, rice production could fall sharply in 2026, especially in economies reli<\/span>ant on imported fertilizer. The effect is best measured against the no-shock, business-as-usual scenario, under which output was otherwise <\/span>projected to grow,\u201d it added.<\/span><\/p>\n The ADB said Philippine rice output could decline by 14% this 12 months under essentially the most severe scenario where crude oil prices rise 75% above the baseline assumption of $69 per barrel. Under the identical scenario, farmgate prices could rise by as much as 20%.<\/p>\n ADB SUPPORT \u201cThere are not any immediate implications for ADB financing, or other types of support including technical assistance, due to the Philippines\u2019 recent classification as an upper-middle income economy,\u201d he told BusinessWorld<\/i>. <\/span><\/p>\n \u201cADB will proceed to support the federal government\u2019s development priorities, in addition to the reforms and investments needed to construct on and sustain this achievement,\u201d he added.<\/p>\n His remarks got here after the World Bank reclassified the Philippines as an upper-middle income country after its gross national income per capita rose to $4,850 from $4,470 last 12 months.<\/p>\n While no immediate changes are expected, Mr. Jeffries said the ADB\u2019s sovereign lending terms could change if the Philippines stays above the upper-middle income threshold for 3 consecutive years.<\/p>\n \u201cADB will constantly align its engagement to answer the Philippines\u2019 transition needs, and to sustain development gains,\u201d he said.<\/p>\n The Philippines was within the World Bank\u2019s lower-middle income category since 1987 before its latest reclassification.<\/span><\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" People wait in line at a mall. \u2014 PHILIPPINE STAR\/MIGUEL DE GUZMAN By Justine Irish D. Tabile, Senior Reporter THE ASIAN Development Bank (ADB) cut its growth forecasts for the Philippines for this 12 months and next 12 months, citing delayed investments and weaker household consumption. In its Asian Development Outlook July 2026 report, the […]<\/p>\n","protected":false},"author":1,"featured_media":363406,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[18356,28240,9438,18748,3431,4248,1901,7661],"class_list":["post-363405","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-adb","tag-consumption","tag-delayed","tag-drag","tag-growth","tag-investments","tag-philippine","tag-weak"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t
<\/b>Meanwhile, ADB Philippines <\/span>Country Director Andrew Jeffries said the Philippines\u2019 recent reclassification as an upper-middle income economy is unlikely to change the multilateral lender\u2019s support within the near term.<\/p>\n