PH Targets 6–7% Growth, Unveils ₱6.8T 2026 Budget

The Philippine government has revised its medium-term economic targets, projecting steady growth between 2025 and 2028 despite global uncertainties, according to the Development Budget Coordination Committee (DBCC).

Real gross domestic product (GDP) growth for 2025 is now forecast at 5.5 to 6.5 percent, driven by robust domestic demand and recent structural reforms such as the CREATE MORE Act and the PPP Code.

Growth is expected to accelerate to 6.0 to 7.0 percent annually from 2026 to 2028, underpinned by infrastructure spending and human capital investment.

“We are firmly focused on strengthening the domestic economy and seizing opportunities amid an evolving global landscape,” the DBCC said in its June 26 statement.

The outlook comes amid external risks, including U.S. tariff actions and escalating tensions in the Middle East.

Despite these, the Philippines remains one of Southeast Asia’s fastest-growing economies, bolstered by ample international reserves and low inflation expectations.

The Bangko Sentral ng Pilipinas (BSP) projects inflation at 2.0 to 3.0 percent in 2025, rising slightly to 2.0 to 4.0 percent from 2026 to 2028.

These expectations allow the BSP to maintain a gradual easing of monetary policy, potentially lowering borrowing costs and stimulating consumption.

Oil prices are expected to remain between USD 60 to 70 per barrel, tempered by increased global inventories.

The peso-dollar exchange rate is projected to stay within PHP 56 to 58, supported by stable inflation and improving trade conditions.

Goods exports are projected to decline by 2.0 percent in 2025 due to softer global demand but are expected to recover by 2.0 percent annually from 2026.

Goods imports, meanwhile, are expected to grow 3.5 percent in 2025 and 4.0 percent annually thereafter, reflecting stable domestic activity.

On the fiscal front, the government will continue its consolidation strategy, aiming to reduce the budget deficit from 5.5 percent of GDP in 2025 to 4.3 percent by 2028.

Revenue collections are forecast to rise steadily, reaching PHP 5.91 trillion or 16.3 percent of GDP by 2028, fueled by tax reforms and digitalization efforts.

Public disbursements will remain a key growth driver, with infrastructure spending sustained at 5.0 to 6.0 percent of GDP.

The FY 2026 National Budget is proposed at PHP 6.793 trillion—22.0 percent of GDP—representing a 7.4 percent increase from FY 2025.

Budget priorities include education, health care, workforce development, digital transformation, and the completion of major infrastructure projects under the Philippine Development Plan 2023–2028.

The DBCC also pledged to improve transparency and bureaucratic efficiency through new legislation such as the Government Optimization Act and New Government Procurement Act.