MANILA: The Philippine government cut its economic growth target for this year, as it expects the fallout from the wide-scale corruption scandal to persist in the first half of 2026.
The economy is now targeted to expand 5% to 6% this year from a previous goal of 6% to 7%, Economic Planning Secretary Arsenio Balisacan said at a briefing after President Ferdinand Marcos Jr signed the 2026 budget law.
"The developments last year are likely to still be felt this year, although in a diminishing effect,” Balisacan said.
"We expect growth in the first quarter or at least in the first half to be still quite not as rosy as we would want it to be.”
The Philippine economy likely expanded between 4.8% and 5% in 2025, slowing from the prior year and below the 5.5% to 6.5% target, according to Balisacan. Economic growth goal for 2027 was also lowered to 5.5% to 6.5%, from an earlier goal of 6% to 7%.
The government tempered its targets after growth slowed sharply in the third quarter. That’s partly due to tighter infrastructure spending amid allegations that government officials and private contractors colluded to pocket funds meant for flood mitigation projects.
Investor sentiment has also soured as prospects dimmed for what was previously one of the fastest-growing economies in Asia.
Still, Balisacan said the economy will likely rebound in the second half, expecting benign inflation to boost consumption, a pillar of the Philippine economy. Meanwhile, the government expects the peso to trade within the 58 to 60 level against the US dollar, after falling to a record low 59.26 in 2025. - Bloomberg.
