PHL economy to ‘rebound’ in 2026 — BMI

THE Philippine economy is expected to grow faster this year, lifted by reduced export dependence and a rebound in public expenditures amid a flood control controversy, Fitch Solutions unit BMI said.

“We expect the Philippine economy to rebound in 2026 from a low base in 2025, aided by its lower dependence on exports, and a recovery in government spending following recent corruption allegations,” BMI Asia Country Risk Analyst Brandon Ong said in a webinar on Tuesday.

The Philippines, a domestically driven economy, has been paying a 19% reciprocal US tariff since August on many goods alongside Cambodia, Malaysia, Thailand, and Indonesia.

The corruption scandal weighing down infrastructure spending has curbed government spending and dented business and consumer confidence.

BMI projected Philippine GDP growth to accelerate to 5.2% in 2026 from an estimated 4.9% in 2025.

BMI’s forecasts are within the government’s revised 5-6% target band for 2026 but short of the 5.5-6.5% range for 2025.

Economy Secretary Arsenio M. Balisacan has said that economic growth may have slowed to between 4.8% and 5% in 2025.

The Philippine Statistics Authority (PSA) will release fourth-quarter and 2025 GDP data on Jan. 29.

Mr. Ong noted that China’s slowdown is likely to ripple across Asia due to the interconnectivity of regional economies.

“Exceptions do emerge in economies where we project firmer domestic demand in 2026, including Japan, Indonesia, the Philippines, South Korea, and Australia,” he said.

As for Japan and Indonesia, fiscal stimulus will be supportive to growth, he added.

BMI said Asia’s growth is set to slow in 2026 as the boost from export front-loading wanes and US tariffs start to bite. 

“The stronger 2025 base will further amplify the slowdown. We forecast regional growth to slow to 4.0% in 2026, from 4.3% in 2025,” it said in a report. — Aubrey Rose A. Inosante