ADB cuts PHL growth forecast for 2026, warns corruption is a 'heightened risk'

THE ASIAN Development Bank (ADB) has trimmed its gross domestic product (GDP) growth forecast for the Philippines for 2026, while keeping its projection this year, citing persistent external headwinds that weigh on investments.

- Aubrey Rose A. Inosante Reporter

At the same time, the ADB warned widespread corruption can impact economic growth and investor sentiment, saying it is a “heightened risk.”

In its latest Asian Development Outlook, the multilateral lender trimmed its Philippine growth forecast to 5.7% in 2026 from 5.8% in its July projection. This is below the Philippine government’s 6-7% growth goal for 2026.

For this year, the ADB kept its growth forecast unchanged at 5.6%, which is within the government’s 5.5 to 6.5% target.

“The Philippines’ growth outlook remains resilient amid a global environment of shifting trade and investment policies and heightened geopolitical uncertainties,” ADB Country Director for the Philippines Andrew Jeffries said in a statement on Tuesday.

“Though these uncertainties pose increased risk, we see strong domestic demand anchoring growth, with sustained investments and an accommodative monetary policy supporting the economy’s expansion.”

ADB Senior Country Economist for the Philippines Jacqueline Connell said the Philippine growth forecast for 2026 was downgraded mainly due to heightened uncertainty, shifting trade and investment policies, and lower growth outlook in major advanced economies.

“We see that this will weigh on trade and investment prospects, so that’s the main reason,” she said at a briefing on Tuesday.

Despite external challenges, domestic demand is expected to drive the Philippine economy's growth this year, the ADB said.

This is supported by easing monetary conditions which will help offset the impact of external uncertainties, it added.