The Philippine economy may finally find firmer footing in 2026—but the path to recovery could still be fragile.
A new outlook from researchers at De La Salle University projects growth gradually accelerating through the year, though the pace may remain below the government’s official target.
The March 2026 Report of the Philippine Economy, produced by the university’s Carlos L. Tiu School of Economics, sketches a recovery that starts cautiously before gaining traction toward year-end.
Gross domestic product is expected to expand just 2.5 percent in the first quarter, reflecting lingering weakness from late 2025. Growth is forecast to rise to 3.8 percent in the second quarter, climb to 4.5 percent in the third, and peak at 5.9 percent in the fourth quarter as economic activity gathers pace.
For the full year, the economists estimate GDP growth at 4.19 percent—respectable, but still below the government’s revised target of 5 to 6 percent.
The slower start reflects a sharper-than-expected cooling in late 2025. High-frequency indicators suggest consumer activity, the backbone of the Philippine economy, lost more momentum than analysts had anticipated.
Still, the outlook improves in the second half. Household spending is projected to recover gradually as economic conditions stabilize. More importantly, government spending is expected to play a decisive role in lifting growth.
The report anticipates fiscal spending returning to double-digit growth beginning in the second quarter, particularly as delayed infrastructure projects resume.
Public investment could therefore become the primary catalyst for economic acceleration through the remainder of the year.
Yet the forecast comes with a clear warning: global shocks could easily derail the recovery.
Researchers identified the ongoing conflict in the Middle East as the biggest external risk. Rising geopolitical tensions have already driven global oil prices higher. A sharper escalation could push fuel costs up further, stoke inflation, and threaten remittance flows from overseas Filipino workers in the region.
For a consumption-driven economy, that combination could quickly sap household purchasing power, and stall the very recovery policymakers are hoping to ignite.
