ADB trims 2026 Philippines growth outlook to 4.4 percent

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

April 11, 2026 | 12:00am

MANILA, Philippines — The Asian Development Bank (ADB) has cut its gross domestic product (GDP) growth forecast for the Philippines for this year, amid uncertainties from the Middle East conflict. 

In its Asian Development Outlook April 2026 report, the ADB said it expects Philippine GDP growth to be at 4.4 percent this year, slower than the 5.3 percent forecast provided in December last year.

The ADB said there is also uncertainty on its loan program for the Philippines as the government reviews its borrowing priorities.

ADB Philippines senior economic officer Teresa Mendoza said in a press conference that the 4.4 percent growth forecast assumes a short-lived Middle East conflict that will last for two months or until this month.

If ADB’s forecast is realized, this year’s GDP growth would be the same as last year’s, but below the government’s five to six percent growth target for the year.

For next year, the ADB forecasts 5.5 percent GDP growth, at the lower end of the government’s 5.5 to 6.5 percent growth goal.

ADB expects growth to be driven by domestic demand and investment supported by the lagged effects of previous policy rate cuts.

“But these gains will be partly offset by recent significant inflationary pressures and heightened uncertainties, which will weigh on investment and erode household purchasing power,” Mendoza said.

Citing high global commodity prices, ADB raised its 2026 inflation projection for the Philippines to four percent from its previous forecast of three percent.

For next year, ADB expects inflation to ease to 3.5 percent.

The inflation forecasts are within the government’s annual target of two to four percent for this year and 2027.

Inflation accelerated to 4.1 percent in March from the previous month’s 2.4 percent, bringing the average for the first quarter to 2.8 percent.

“The Philippine economy, with its heavy dependence on imported fuel, will face challenges from rising external risks,” ADB Philippines country director Andrew Jeffries said.

He said a prolonged Middle East conflict would have a negative effect on overall GDP growth for the country, with the impact more pronounced for pockets of the population.

Mendoza said remittances and investments are at risk if the Middle East conflict persists for a longer period or for a year.

“Remittances have been fairly resilient in the past shocks. And even in some years, it has proven to be counter-cyclical. More remittances are being sent during the crisis. But this crisis, if it becomes really prolonged, even remittances can become highly vulnerable,” she said.

The Middle East accounts for over 17 percent of total remittances in the Philippines.

Apart from the Middle East conflict, the ADB also cited severe weather events and delays in public investment as risks that could weigh on growth.

“What the current global conditions underscore is the need for sustained reforms especially in strengthening human capital, improving investment efficiency and the business environment and protecting vulnerable households to ensure the country emerges unscathed and in a better growth position after the external shocks subside,” Jeffries said.

In the same event, Jeffries said there is some uncertainty around the ADB’s loan program for the Philippines as the government is rationalizing their public debt levels and reviewing borrowing priorities.

“Given this crisis and the fiscal strain that, we don’t know how long it’ll last, that may also affect what they borrow for and what they may need to prioritize and postpone and so on,” he said.

“It’s just there’s a lot more uncertainty around borrowing generally, including borrowing from ADB now than, say, a year ago or two years ago,” he said.

He said the government is expected to conclude its review of its borrowing priorities by next month.

He also said the ADB is ready to provide support for the Philippines to mitigate the impact of the Middle East crisis.