'Phl faces tough economic outlook'

The Philippines is heading into 2026 facing a challenging economic landscape, with both Nomura Global Markets Research and DBS Group Research projecting subdued growth amid political uncertainty, soft fiscal spending and persistent external risks.

- By KEISHA TA-ASAN

A man pushes a goods cart through a crowded market in Manila

Nomura has lowered its 2026 growth forecast for the Philippines to 5.3 percent from 5.6 percent previously, cautioning that rising political uncertainty is weighing on public spending, investor sentiment and the country's near-term recovery prospects.

In its Asia 2026 outlook, the firm said intensified efforts to address corruption have slowed procurement and project approvals, resulting in delays in public disbursements at a time when the economy is already losing momentum.

"The inadvertent fiscal tightening due to the corruption scandal is substantial and will likely persist for a while, hurting gross domestic product (GDP) growth materially through the first half of 2026 before staging a recovery in the second half, as the government implements catch-up spending plans," it said.

Nomura's downgrade puts the Philippines among ASEAN economies expected to underperform next year.

"On aggregate, we forecast ASEAN-5 GDP growth of 4.3 percent in 2026," it said. "But while this is stable from 2025, it masks a stark differentiation across the region's economies. We expect Malaysia and Singapore to surpass consensus expectations, while Indonesia, the Philippines and Thailand will likely underwhelm."