The International Monetary Fund has slashed its Philippine GDP forecasts, warning slower capital accumulation and policy gaps could weigh on the country’s investment outlook.
GDP is now projected to grow 5.1% in 2025, down from 5.4%, followed by 5.6% in 2026 (previously 5.8%) and 5.8% in 2027 (down from 6.1%).
The revision reflects a sharper-than-expected slowdown in Q3 2025, amid corruption allegations and climate shocks, with the economy expanding 4%, down from 5.5% in Q2.
“The downward revision for 2025 in turn reflects a sharper-than-expected slowdown in the third quarter amid recent corruption allegations and climate shocks impacting economic activity in the second half of the year,” the IMF said.
The IMF highlighted downside risks including trade tensions, geopolitical shocks, extreme climate events, and slower reform momentum.
On the upside, accelerated structural reforms could boost foreign direct investment and support long-term growth potential.
Globally, growth is projected at 3.3% in 2026, easing slightly to 3.2% in 2027, underpinned by strong tech investment, including AI, and accommodative fiscal and monetary policies.
Inflation is expected to moderate, with headline inflation at 3.8% in 2026 and 3.4% in 2027.
The IMF said the outlook allows some policy flexibility, but emphasized the need to rebuild fiscal buffers and advance reforms to sustain medium-term growth and attract investment.
