UBS Philippines expects the economy to expand 5% this year, saying growth is “near its trough” and will pick up in the first half of 2026.
“We expect quarterly sequential momentum to strengthen to 1.4 percent over the next two quarters, and GDP growth to be 5 percent in 2026,” the Swiss investment bank said.
The forecast is at the lower end of the government’s 5–6% target. Growth slowed to 4.4% in 2025 after the flood control corruption controversy weighed on output in the second half.
UBS flagged resilience in private investment, noting it “was more resilient than expected.” Private construction, which makes up about 40% of construction value-added, expanded 18% year-on-year, supported by declining inventories.
Exports also accelerated. Goods shipments rose 22.8% in the fourth quarter of 2025, up from 11.6% in the third quarter, driven by “stronger electronics shipments—over half of the goods export basket, mostly in assembly, packaging, and testing.”
Services exports increased 2.5% from 1.3% in the third quarter, led by business process outsourcing, particularly IT and professional services.
Public investment is projected to post “a small uptick” in the first quarter, UBS said, with spending returning to second quarter 2025 levels by fourth quarter 2026.
