World Bank keeps slower 3.7% 2026 growth forecast for Philipppines

Multilateral lender World Bank has kept its growth outlook for the Philippines this year.

In its Philippine Economic Update, the World Bank said the country’s gross domestic product (GDP) is expected to slow down to 3.7% in 2026, from 4.4% in 2025.

This was unchanged from its forecast under the Global Economic Prospects report issued in June.

The World Bank’s growth projection for the country this year falls within the government’s downwardly revised 3.5% to 4.5% GDP growth goal.

The slower 3.7% economic growth projection for 2026 was “driven by two compounding shocks: policy uncertainty that has reduced fixed investment, affected private sector confidence, and reduced foreign direct investment; and a surge in global energy prices that pushed domestic inflation to an average of 4.8% in the first half of 2026, weighing on consumption and jobs,” according to the World Bank.

Nevertheless, the bank cited the Philippines’ graduation to upper-middle income status in 2025.

The World Bank, in its latest income assessment in July, reported that the Philippines’ gross national income (GNI) per capita has reached $4,850, exceeding the $4,636 UMIC threshold.

To sustain its “hard-won” progress, the lender said the country must act on “three fronts.”

“First, protect the most vulnerable by expanding targeted social assistance, including temporarily broadening the 4Ps conditional cash transfer program to near-poor households,” the World Bank said,

The lender said this will help prevent the energy price shock from pushing approximately two million Filipinos into poverty.

“Second, keep inflation under control without stalling the recovery,” the World Bank said.

“Third, restore investor confidence by resolving ambiguities in infrastructure governance and lowering the cost of doing business to reignite both public and private investment,” the lender said.

The World Bank said the Philippines’ achieving UMIC status caps two decades of sustained economic growth and rising living standards.

"This is a milestone the Filipino people have earned. The World Bankis proud to have been supporting the Philippines in its continuous development," said Zafer Mustafaoglu, World Bank Division Director for the Philippines, Malaysia, and Brunei.

"Sustaining it requires going further—prioritizing reforms that lower the cost of doing business, restore investor confidence, and create more and better jobs for Filipino families. That work continues, and so does our partnership,” said Mustafaoglu. — BM, GMA News