The Philippine economy is expected to expand 5.3 percent in 2026 as the country continues its push toward upper-middle-income status despite persistent global and domestic risks, according to a study by the Philippine Institute for Development Studies (PIDS).
The PIDS discussion paper titled “Macroeconomic Prospects of the Philippines in 2025–2026” forecasts growth of 5 percent in 2025 before accelerating the following year. Researchers noted that domestic demand, infrastructure spending and a robust services sector will likely anchor this momentum.
While the outlook reflects resilience, the PIDS researchers cautioned that growth remains below official government targets.
The economy grew 5.7 percent in 2024, led by the services and industry sectors, but fell short of government goals for the second year in a row.
The country narrowly missed the threshold for upper-middle-income status in 2024, a milestone the study suggests is within reach but remains fragile.
In the first half of 2025, growth moderated to 5.4 percent due to softer investment and volatility in global trade.
PIDS researchers said the Philippine economy continues to inch closer to upper-middle-income status even as it navigates internal and external headwinds.
The study said sustaining this progress will require careful management of emerging risks to ensure the transition remains on track.
