World Bank retains Philippines growth forecasts

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June 13, 2026 | 12:00am

MANILA, Philippines — The World Bank has maintained its growth forecasts for the Philippines for this year and the next, despite spillovers from the Middle East conflict.

In its June 2026 Global Economic Prospects report, the World Bank said the Philippine economy may grow by 3.7 percent this year, unchanged from the forecast it provided in April.

However, the latest growth forecast is lower than the 4.4 percent expansion posted last year. It is also below the government’s five to six percent growth target for this year.

The World Bank also retained its 2027 GDP growth forecast for the Philippines at 5.6 percent. This is within the government’s 5.5 to 6.5 percent growth target for next year.

For 2028, the World Bank expects the Philippines to also grow by 5.6 percent, below the government’s six to seven percent growth target.

The economy grew by 2.8 percent in the first quarter, the weakest in five years.

The World Bank said it expects a recovery in public investment in the Philippines.

Government spending has slowed following last year’s revelations of corruption issues in flood control projects.

In East Asia and the Pacific (EAP), the World Bank expects economic growth to moderate to 4.2 percent this year from five percent last year, citing the impact of the Middle East conflict.

For next year, it expects EAP to grow by 4.4 percent and 4.3 percent in 2028.

The World Bank expects continued momentum in electronics exports to support regional growth.

However, economies in the region that import energy and rely on the Middle East for supplies are likely to experience greater adverse impacts from the conflict.

“Fiscal positions will come under pressure, especially for energy importers like the Philippines and Thailand and Pacific Island nations such as Fiji, Tonga and Vanuatu,” the World Bank said.

“In addition, the burden of declining remittances and higher food costs will be acutely felt by lower- income households,” it said further.

In terms of the global outlook, the World Bank expects growth to slow to its lowest rate since the onset of the COVID pandemic, amid higher energy prices, steeper inflation and increased borrowing costs from the Middle East conflict.

In particular, the World Bank expects global growth to slow to 2.5 percent this year from 2.9 percent last year.

While the World Bank expects global growth to improve to 2.8 percent next year, the rate will remain 0.4 percentage points below the average during the 2010s.

To help countries respond to the impact of the ongoing conflict, the World Bank said it is ready to provide up to $100 billion support over 15 months.

“The impact differs by country, but the basic test is the same: protect people and preserve stability today, without giving up on growth and jobs tomorrow,” World Bank Group president Ajay Banga said.

“In response to the current shock, we are providing liquidity where it is needed now — and we are ready with additional financing, guarantees and private-sector solutions if pressures deepen. Our job is to help countries steady the ship, keep reforms moving and emerge stronger on the other side,” he added.