The Philippine economy can do this If public and private investment increases again, return to growth of about 6% by 2027, According to Asian Development Bank (ADB) Philippines Country Director Andrew Jeffries.
“I think (the drivers) are a little bit of everything, but the return to higher investment, public and private, will be the main driver for me,” he told reporters on the sidelines of an event on January 23.
Last December, the ADB cut Philippine gross domestic product (GDP) growth forecast for 2025 to 5% from 5.6% previously. For 2026, ADB cut its GDP forecast to 5.3% from 5.7% previously.
This comes after government spending, household consumption, investor confidence and economic activity declined last year due to the corruption scandal.
The ADB will release its updated economic outlook in April, which will include growth forecasts to 2027.
Mr Jeffries warned that budget cuts to the Department of Public Works and Highways (DPWH) this year could lead to a “major slowdown” in locally funded projects.
“I think the key variable for 2026 was how fast does public investment recover? We were thinking maybe two quarters, so it will start to revive,” he said.
In December, Public Works Secretary Vivencio “Vince” B. In a meeting with Dizon, Mr Jeffries said he raised concerns about “paralysis”, where major projects risked stalling.
“We hear that they are trying to ensure that priority projects do not get stuck and keep moving forward at a faster pace. I think this is a dual exercise,” he said. “It's eliminating the problem and also moving forward at full speed on some other projects that weren't a problem.”
Mr. Dizon earlier said that the DPWH aims to boost spending while ensuring that funds are used wisely and focus on prioritizing “the basics” such as road and bridge maintenance and unfinished projects. He said the agency's target spending for the first quarter is set between P200 billion and P250 billion.
Meanwhile, Mr Jeffries said the Philippines should increase the share of exports in the economy to support long-term growth as well as diversify its base and boost resilience.
“This is not something that will happen overnight. It will be a combination of policies and attracting investment and improving the business environment and all these things,” Mr Jefferies said. “But neighbors have done it and the Philippines can do it.”
He said the Philippines is insulated from external shocks because exports are a relatively small part of the economy.
“I think it's still very important that (exports) for the Philippines grow over time,” he said.
However, Mr Jefferies said the export industry's ambitions face logistical challenges.
“Connectivity here is automatically more expensive and more challenging than in some neighbors,” he said.
need improvement
Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) said the national government should purify itSue reforms to boost confidence Because the economy may remain sluggish this year.
In a statement, FFCCCI President Victor R. Lim said the administration should encourage technology adoption and food safety efforts in the manufacturing and agriculture sectors, implement anti-corruption measures, improve security and ease of doing business for local and foreign investors, as well as build world-class infrastructure to revive tourism.
It also urged the government to increase investment in education, skills and universal health care, increase ports, hubs and broadband to promote market linkages, and advance the country's sustainable and digital transformation.
For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said it was possible for the economy to return to a 6% growth path due to lower base effects.
“Another factor: increased government spending to accelerate the completion of various projects/programmes, especially a few months before the 2028 presidential elections,” he said in a Viber message on Monday. — Aubrey Rose A. innocente with Katherine K. chan