The economy is expected to grow more slowly this year than previously hoped, according to a new World Bank assessment bared Tuesday.
Economic growth slipped to 4.4 percent in the third quarter this year, well below the anticipated 5.5 percent and the weakest performance since early 2021. The slowdown followed an infrastructure scandal that reduced public spending and several typhoons that disrupted business activity. Household consumption, government spending, and investments all grew more slowly, while key sectors such as agriculture, industry, and services also lost momentum. Fixed investments barely increased, rising just 0.1 percent.
The World Bank now expects the Philippines’ full-year 2025 GDP growth to reach only 5.1 percent, lower than last year’s 5.7 percent expansion. Growth is projected to improve slightly to 5.3 percent in 2025 and 5.4 percent in 2027, but still below this year’s pace.
The lender attributes the slowdown to weaker private consumption and investment earlier in the year due to tariff issues, followed later by declining confidence linked to problems in public infrastructure projects. It also warns that future growth faces more risks from domestic factors, including lower construction activity as the government addresses corruption allegations and weaker public sector spending.
To restore confidence and support long-term growth, the World Bank says the Philippines must accelerate governance and institutional reforms, strengthen fiscal measures, and push structural reforms to boost investment and job creation.
