The Philippine economy is entering a pivotal year of recovery and structural strengthening, according to the 2026 Outlook released by investment house Unicapital Group through its brokerage arm Unicapital Securities, Inc. (USI).
Unicapital projects GDP growth to rebound to 5.2 percent in 2026, driven by a pickup in public infrastructure spending, improved policy execution, and ongoing governance reforms that aim to restore investor confidence. Wendy Estacio-Cruz, Head of Research at USI, highlighted that the economy’s underlying macro fundamentals remain intact, supported by fiscal measures and accommodative monetary policy.
Inflation is expected to remain manageable, giving the Bangko Sentral ng Pilipinas (BSP) room to support domestic demand. Dennis Lapid, OIC of BSP’s Monetary Policy Sub-Sector, noted that slight inflationary pressures from supply-side factors are temporary but require continued monitoring.
Household consumption, which accounts for roughly 75 percent of GDP, remains the main driver of growth, bolstered by steady remittances and resilient BPO revenues.
On the stock market front, Unicapital sees upside potential for the PSEi, targeting 6,800 points, about 12 percent above end-2025 levels. The index is currently trading at 10x price-to-earnings, well below its 10-year average and regional peers, offering an attractive entry point for investors. Estacio-Cruz emphasized a defensive yet opportunistic strategy, focusing on companies with strong balance sheets and earnings visibility while selectively investing in growth sectors.
Despite positive domestic prospects, Unicapital cautions investors to remain alert to external risks, including geopolitical tensions, trade imbalances, and global interest rate shifts. Still, the firm believes that stronger economic buffers and stabilizing macro conditions will help the Philippines navigate volatility and sustain recovery.
“With infrastructure momentum returning and policy execution improving, the Philippines is well-positioned to strengthen its fundamentals and unlock long-term growth,” Estacio-Cruz said.
