S&P raises Philippine outlook for 2026
19 April 2024
MANILA, Philippines — S&P Global Ratings slightly improved its growth outlook on the Philippines for 2026 on expectations of resurgent consumption as inflation is projected to soften beyond 2024.
The global debt watcher now forecasts the country’s gross domestic product (GDP) to expand 6.5 percent in 2026, a tad higher than its prior projection of 6.4 percent.
If realized, economic growth in 2026 would match the lower end of the Marcos administration’s target of 6.5- to 8-percent expansion for that year. While the adjustment was “minimal,” S&P expects more benign inflation to power up consumption.
“Beyond 2024, the easing inflation will help household consumption recover and likely lower interest rates towards year-end will gradually do the same for investment, helping overall growth to normalize,” Vincent Conti, senior economist at S&P, said.
READ: March inflation higher at 3.7% but still within gov’t target range
But for now, S&P expects the economy to face headwinds brought by stubbornly high inflation and expensive borrowing costs.
The Bangko Sentral ng Pilipinas (BSP) has so far kept its key rate unchanged at 6.5 percent, the tightest in nearly 17 years. What’s prompting the central bank to stay hawkish is a persistently high inflation that may breach the BSP’s 2- to 4-percent target anew.
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