Growth outlook cut to 3.11% as pressure builds on economy

DLSU sees a 2026 slowdown before a rebound toward 2028.

Three pressures are weighing on the Philippine economy’s near-term path: the Middle East conflict pushing energy costs higher, the possibility of tighter monetary conditions if inflation stays elevated, and rising food prices as fertilizer costs feed through supply chains.

Against this backdrop, the DLSU Caros L. Tiu School of Economics says growth is now projected at 3.11% from 3.79% in April, with first-quarter GDP at 2.81% seen as the last stretch of pre-shock conditions. The outlook points to around 2.80% before easing further to 2.3% in the third quarter as cost pressures deepen.

The triple pressure squeeze

A rebound to 4.53% is still possible, supported by government catch-up spending, seasonal inflows from OFW remittances, and early investment recovery if geopolitical tensions ease.

The report also underscores how reliance on imported fuel, fertilizer-sensitive agriculture, and a fragile investment base continues to limit how much policy can offset external shocks, even with subsidies and fuel-related interventions.

Medium-term projections improve to 3.93% in 2027 and 5.71% in 2028, driven by easing energy prices, agricultural recovery, election-related spending, the Pax Silica semiconductor push, and stronger transmission of monetary easing into demand.

 

 

The economic headwinds are stiffening. DLSU cuts the 2026 Philippine growth outlook to 3.11% as energy, food, and interest rate pressures mount.