ADB sees Philippines returning to 6% growth by 2027

The Philippine economy could return to around 6% growth by 2027 if public and private investments rebound, according to Asian Development Bank (ADB) Country Director for the Philippines Andrew Jeffries.   

“I think (the drivers are a) kind of a little of everything, but return to high investment, public and private, I think would be, to me, the key driver,” he told reporters on the sidelines of an event on Jan. 23.

Last December, the ADB slashed its Philippine gross domestic product (GDP) growth forecast to 5% for 2025, from 5.6% previously. For 2026, the ADB trimmed its GDP projection to 5.3% from 5.7% previously.

This comes after a corruption scandal dampened government spending, household consumption, investor confidence and economic activity last year.

The ADB will release its updated economic outlook in April, which will include a 2027 growth forecast.

Mr. Jeffries warned that the cut in Department of Public Works and Highways’ (DPWH) budget this year, could trigger a “big slowdown” in locally funded projects.

“I guess the main variable for 2026 was how fast does the public investment recover? We were thinking maybe two quarters, so it’ll start reviving,” he said.

In a meeting with Public Works Secretary Vivencio “Vince” B. Dizon in December, Mr. Jeffries said they raised concerns about “paralysis,” where key projects risked getting stuck.

“What we’ve heard is they’re trying to make sure the priority projects are not stuck and keep moving forward quickly. I think it’s a twofold exercise,” he said. “It’s cleaning up the problem while full steam ahead on some of the other projects that weren’t a problem.”

Mr. Dizon earlier said the DPWH aims to boost spending while ensuring funds are used wisely and focus on prioritizing the “basics” such as road and bridge maintenance and unfinished projects. The agency’s target spend is set between PHP 200 billion and PHP 250 billion for the first quarter, he added.

Meanwhile, Mr. Jeffries said the Philippines must raise the share of exports in the economy to support long-term growth, as well as diversify its base, and boost resilience.

“It’s not something that happens overnight. It’ll be a combination of policies and attracting investment and improving the business environment and all of those things combined,” Mr. Jeffries said. “But neighbors have done it and the Philippines can do that.”

He noted the Philippines was shielded from external shocks, largely because exports remain a relatively small part of the economy.

“I think it’s still very important that over time that (exports) grow for the Philippines,” he said.

However, Mr. Jeffries added that ambitions for the export industry face logistical challenges.

“The connectivity here is just automatically more expensive and more of a challenge than certain neighbors,” he said.

Reforms needed

The Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) said the National Government must pursue reforms to boost confidence as the economy may remain sluggish this year.

In a statement, FFCCCII President Victor R. Lim said the administration should incentivize technology adoption and food security efforts in the manufacturing and agriculture sector, enforce anti-corruption measures, improve protection and ease of doing business for local and foreign investors, as well as build world-class infrastructure to revamp tourism.

It also urged the government to ramp up investments in education, skills and universal healthcare, enhance ports, hubs and broadband to boost market linkages, and advance the country’s sustainable and digital shifts.

For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the economy’s return to the 6% growth path is possible due to lower base effects.

“Another factor: Increased government spending to expedite the completion of various projects/programs, especially months before the 2028 presidential elections,” he said in a Viber message on Monday. — Aubrey Rose A. Inosante with Katherine K. Chan