MANILA, Aug 3 (Reuters) – The World Bank on Monday maintained its 2026 growth forecast for the Philippines at 3.7% and said the economy’s recovery next year was likely to be slower than previously expected.
• “Growth is set to decelerate in 2026 on the back of weak investment, constrained consumption and sustainability,” Zafer Mustafaoglu, the World Bank division director for the Philippines, Malaysia, and Brunei told an economic forum in Manila.
• The new forecast was slightly below the 4.1% average growth expected for developing economies in East Asia and the Pacific, Mustafaoglu said.
• The World Bank expects growth to rebound to 5.2% in 2027, below the 5.6% seen in June, and to reach 5.5% in 2028, as public investment gradually recovers and economic conditions improve.
• The Philippine government’s economic managers expect growth of 3.5% to 4.5% this year, lower than previously forecast due to the Middle East crisis and an infrastructure-related corruption scandal that slowed government spending.
• The economy grew 2.8% in the first quarter, below expectation, weighed down by the Middle East conflict and a delayed budget passage.
• Mustafaoglu said inflation was seen averaging 5.8% for the year, below the 6% to 7% projection by Philippine economic managers.
• Average inflation is projected to ease to 5.2% in 2027, as governance conditions stabilise, public investment gradually recovers and the central bank resumes monetary easing, he added.
• The World Bank said the peso’s depreciation had fuelled inflation, keeping import costs high and delaying a slowdown in price increases.
• The peso is expected to trade at 60 to 62 per dollar for the period of 2026 to 2030, the government’s economic managers earlier said.
(Reporting by Nestor Corrales; Editing by Martin Petty)
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