The World Bank on Tuesday maintained its 5.3-percent growth forecast for the Philippine economy this year and projected a slightly higher 5.4-percent expansion in 2026.
The bank’s October East Asia and Pacific Economic Update indicated that robust domestic demand, led by easing inflation, lower interest rates and strong labor markets, would sustain growth in the Philippines.
The report also cited public infrastructure investment that is expected to exceed 5 percent of GDP and private investment spurred by reforms.
The Philippines is projected to record similar or slightly higher growth in 2026 than in 2025, with a modest global recovery offsetting the impact of higher tariffs, the report said.
The update projects regional growth for East Asia and the Pacific at 4.8 percent this year, a slight decrease from 5.0 percent in 2024. Vietnam is projected to lead regional growth at 6.6 percent, followed by Mongolia at 5.9 percent and the Philippines at 5.3 percent.
The report, however, highlighted a “jobs paradox” across the region, with relatively strong economic growth alongside insufficient creation of quality jobs.
“The region faces a jobs paradox—relatively strong economic growth alongside insufficient creation of quality jobs,” said World Bank vice president for East Asia and Pacific Carlos Felipe Jaramillo.
“Bolder reforms to remove impediments to firm entry and competition would unlock private capital and allow dynamic and productive firms to flourish and create new job opportunities,” he said.
World Bank East Asia and Pacific chief economist Aaditya Mattoo said that while the region’s export-oriented, labor-intensive growth lifted a billion people out of poverty in the last three decades, it now faces the twin challenges of trade protection and job automation.
The World Bank called for reforms and investments in human capital and digital infrastructure, greater competition in services, and policies to better match job opportunities with people’s skills.
The report also noted that recent job growth has largely been in low-productivity, often informal, service jobs and that the share of the population vulnerable to falling into poverty is now greater than the middle class in most countries in the region.
