The World Bank expects Philippine economic growth to slow to 3.7 percent in 2026, down from 4.4 percent in 2025, according to its East Asia and Pacific (EAP) outlook released on April 8.
The latest forecast marks a sharp downgrade from the Bank’s earlier 5.4 percent projection in October 2025, highlighting mounting external and domestic pressures on the economy.
The Philippines is also seen lagging behind the regional average, with growth across the East Asia and Pacific projected to ease to 4.2 percent from 5 percent in 2025.
The weaker outlook reflects a mix of global and regional headwinds, including energy shocks linked to the Middle East conflict, rising trade barriers, policy uncertainty, and domestic constraints.
Among six Association of Southeast Asian Nations economies tracked, the Philippines is projected to be the fifth slowest-growing, ahead only of Thailand, which is expected to expand by 1.7 percent in 2026. China, the region’s largest economy, is also forecast to slow to 4.2 percent amid weak domestic demand and ongoing property sector challenges.
Despite the softer outlook, the region is expected to remain relatively resilient.
World Bank officials said sustaining growth will require structural reforms, improved productivity, and wider adoption of digital technologies. While sectors linked to artificial intelligence present emerging opportunities, uptake across the region remains limited due to gaps in infrastructure and workforce skills.
The report also warned that prolonged geopolitical tensions—particularly in the Middle East—could further weigh on growth by driving up energy prices.
Targeted government support and renewed structural reforms, the Bank said, will be key to cushioning vulnerable sectors and unlocking future economic expansion.
