3.8% GDP growth for PH in 2026 still possible, says ADB

The Philippine economy can still grow by 3.8% this year, but public investment must rebound after spending was hit by the flood control corruption scandal, a top official at the Asian Development Bank (ADB) said Monday.

According to ADB president Masato Kanda, the economy can still grow by 3.8% this year, a forecast the multilateral lender indicated in its July Asian Development Outlook (ADO). An updated report is scheduled for release on September 23, 2026.

“We think reaching the 3.8% forecast for 2026 is possible, achievable, but it hinges on a strong second half recovery in project execution and household consumption,” he told reporters in Mandaluyong City.

“So to meet the target, we must see a significant acceleration in public investment and execution,” he added, noting that as public spending normalizes and inflation pressures ease, growth could pick up to 5.8% in 2027.

Economic growth stood at 2.8% in the first quarter, the slowest pace since the 3.8% contraction in the first quarter of 2021, when the COVID-19 pandemic lockdowns were in place.

It decelerated further to 2.3% in the second quarter, the weakest since the fourth quarter of 2009, excluding the contraction seen during the COVID-19 pandemic years, when growth was at 1.8%.

“The second-quarter weak growth, it largely reflected the delayed pubic investment due to tighter oversight, as well as the limited household consumption driven by inflation,” Kanda said.

Latest data from the Department of Budget and Management (DBM) shows that government infrastructure spending stood at P98.0 billion in June, down from P148.0 billion the same month last year.

This brought year-to-date spending to P367.4 billion, 40.76% lower than the P620.2 billion recorded in the first six months of 2025.

Inflation, meanwhile, clocked in at a five-month low of 6.1% in August, but still above the Bangko Sentral ng Pilipinas’ (BSP) target range of 2.0% to 4.0%.

“High inflation has dampened consumption, and public inflation has been affected by the tighter oversight over infrastructure, which has led to implementation delays,” Kanda said, but reaffirmed that growth is likely to accelerate in 2027. — BM, GMA News