The government has lowered its medium-term economic and fiscal targets, adopting a more cautious outlook as global uncertainty, persistent inflation, and climate risks weigh on the Philippine economy, while reaffirming its commitment to long-term growth and fiscal stability.
During its 193rd meeting, the Development Budget Coordination Committee (DBCC) approved updated macroeconomic assumptions and fiscal projections for 2026 to 2030, saying the revisions reflect a realistic assessment of mounting external and domestic headwinds rather than a shift in economic strategy.
Under the revised baseline, gross domestic product is projected to grow by 3.5 percent to 4.5 percent in 2026 before recovering to 5 percent to 6 percent annually from 2027 to 2030 as global conditions improve and domestic reforms begin to gain traction.
The recalibration comes amid heightened geopolitical tensions, elevated inflation, softer consumer and business sentiment, slower remittances and tourism growth, governance concerns, and the potential effects of El Niño on food production and prices.
Inflation is now expected to average 6 percent to 7 percent in 2026 before easing to 4 percent to 5 percent in 2027 and returning to the government’s 2 percent to 4 percent target beginning in 2028. The DBCC also assumed Dubai crude oil prices of US$80 to USD100 per barrel this year, while the peso is projected to trade within the P60 to P62 range against the US dollar through 2030.
Trade assumptions were likewise adjusted, with exports forecast to gradually accelerate from 3 percent growth in 2026 to 5 percent by 2030 alongside steady import expansion.
Despite the downgrade, the DBCC said the revised targets are intended to preserve fiscal credibility and policy flexibility rather than signal weaker economic prospects.
By setting more attainable benchmarks, the government aims to sustain public investments, maintain investor confidence, and retain enough fiscal space to respond to future shocks while keeping the economy on track for a more resilient and inclusive expansion over the medium term.
