‘Philippines may grow by over 5% in 2026, 2027’

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April 22, 2026 | 12:00am

MANILA, Philippines — The Philippines is expected to grow at a faster pace this year and the next, but the ongoing conflict in the Middle East poses risks, according to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

The Economic and Social Survey of Asia and the Pacific 2026 released by the ESCAP yesterday showed that the Philippines is projected to grow by 5.2 percent this year and  by 5.7 percent next year.

These forecasts are faster than the 4.4 percent growth last year and also within the government’s growth targets.

In particular, the government has set a five to six percent growth target for this year and 5.5 to 6.5 percent growth goal for 2027.

As for the inflation outlook, ESCAP expects inflation to rise to 2.5 percent this year and remain at this level next year from 1.7 percent last year.

Inflation accelerated to 4.1 percent in March, the highest in 20 months as the Middle East conflict pushed up prices.

ESCAP said its projections are as of March 17, and considered the immediate macroeconomic impacts of the Middle East conflict.

“These baseline projections assume that de-escalation over the course of 2026 will help stabilize commodity prices and restore market sentiment to some extent,” ESCAP said.

Given the highly uncertain situation, it said that the economic impacts would depend on the scale and duration of the conflict.

“Under the alternative scenario of prolonged conflict, economic growth could be notably lower than currently projected, while inflation would be higher,” it said.

If the Middle East conflict lasts for a longer period, it said higher commodity prices and freight costs, as well as supply chain disruptions would spike inflation and interest rates.

A protracted Middle East conflict would also lead to weaker global demand and dampen merchandise exports, remittances and tourism.

ESCAP said subsequent job losses and plunging market sentiment would also hurt consumer spending, business investment and economic growth.