Government cuts growth targets through 2028

January 6, 2026 | 12:09pm

MANILA, Philippines — The government has revised its economic growth targets from 2026 through the end of President Ferdinand Marcos Jr.’s term in 2028, citing slower momentum following last year’s corruption scandal.

The government had previously targeted gross domestic product (GDP) growth of 6% to 8% annually from 2026 to 2028.

Economic planning secretary Arsenio Balisacan said on Monday, January 5, that the corruption scandal at the Department of Public Works and Highways and the resulting political noise weighed on economic activity and consumer confidence.

Speaking at a press briefing shortly after the signing of the 2026 national budget, Balisacan said the budget could support GDP growth of 5% to 6% this year.

He said growth is projected at 5.5% to 6% in 2027, with the government aiming for 6% to 7% growth in 2028.

Balisacan said the revised targets are consistent with the latest forecasts from the International Monetary Fund and the Asian Development Bank.

Inflation, rates and outlook

Despite the downgrade, the NEDA chief said the government remains optimistic about the economy’s trajectory.

“We expect to rebound this year as inflation continues to be low; for the entire 2025 inflation has been down to 1.7%, and that is expected to continue this year or actually targeting just 2% to 4% inflation,” Balisacan said.

He added that the Bangko Sentral ng Pilipinas is expected to continue cutting interest rates, while the impact of United States tariff measures has been less severe than initially feared.

While the effects of the 2025 corruption scandal are expected to linger in the first half of 2026, Balisacan said broader economic growth is likely to pick up in the second half of the year.

Focus on inclusive growth

Balisacan also said the 2026 budget places greater emphasis on inclusive growth, rather than benefits concentrated among a limited segment of the population.

“I think the focus on health, education, self-protection, job creation, that will tremendously improve inclusivity and if we can improve inclusivity we can have faster poverty reduction even without substantially raising growth,” he said.

“Because our history is that we have fast growth in some years but was not associated with fast poverty reduction because it was exclusive growth, it was oddly benefiting a small section of our population,” he added.

Trending

Recommended