Moody’s Analytics has lowered its economic growth forecasts for the Philippines for 2026 and 2027, citing a reassessment of domestic momentum following a weaker-than-expected performance in 2025.
The research arm of Moody’s, in a report released Monday, revised its 2026 gross domestic product (GDP) growth projection for the Philippines to 4.9 percent from its February estimate of 5.1 percent. The 2027 forecast was also adjusted downward to 5.2 percent from 5.4 percent, while the outlook for 2028 remained unchanged.
Sarah Tan, assistant director and economist at Moody’s Analytics, said the revisions were led by internal economic factors rather than significant changes in geopolitical assumptions.
She said the current projections assume the conflict in the Middle East will remain contained and conclude shortly, which would likely limit the direct impact on the Philippine economy.
Despite the downward revision, Tan said growth is still expected to pick up in 2026 compared to the 4.4 percent expansion recorded in 2025. She attributed this anticipated recovery to robust private consumption, supported by a stable labor market and consistent remittance inflows from overseas workers.
The economist, however, warned that risks to the outlook remain tilted to the downside. As a net importer of oil and various commodities, the Philippines remains highly vulnerable to energy price shocks, she said.
Tan noted the country imports more than half of its energy requirements and lacks substantial oil reserves, leaving the economy exposed to fluctuations in global fuel and food prices.
Higher import costs could drive up inflation and widen the trade deficit. Tan said this might force the Bangko Sentral ng Pilipinas (BSP) to halt its interest rate easing cycle or tighten policy if secondary inflationary effects materialize.
Persistent price increases would also likely erode household purchasing power and dampen overall consumption.
Elevated electricity rates, already among the highest in the region, could further strain business activity and weigh on total economic output.
Moody’s Analytics expects inflation to settle at 2.5 percent in 2026 and 3 percent in 2027.
