World Bank slashes Philippines 2026 GDP forecast to 3.7% amid Middle East spillovers 

Energy shocks and dwindling Gulf remittances drive a significant downgrade, though a 2027 recovery remains on the horizon.

World Bank sees Philippine growth slowing sharply this year, cutting 2026 gross domestic product (GDP) outlook to 3.7% from 5.3%. It points to spillovers from the Middle East conflict, hitting energy and fertilizer imports and even remittances, with about 18% of Philippine remittance flows coming from the Gulf last year.

At the same time, the lender is more upbeat on 2027, lifting growth forecast to 5.6% from 5.4%, signaling a rebound if global pressures ease.

World Bank officials warn that prolonged conflict could deepen the slowdown. Higher oil and gas prices, potentially around $20 above pre crisis levels, are feeding through supply chains, pushing up production costs and tightening financing conditions. That mix could weigh on investment across the region.

For the Philippines, where remittances from the Gulf account for about 1.5% of GDP, weaker flows add another pressure point. The impact will vary depending on inflation, external deficits and how much policy room governments have left.

 

 

World Bank trims PH 2026 GDP forecast to 3.7% as Middle East conflict hits energy imports and remittances. A rebound to 5.6% is projected for 2027.

 

 

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