UBS sees Philippine growth at low end of 5%-6% goal this year

PHILIPPINE economic growth may land at the bottom of the government's 5% to 6% goal this year as investment slowly recovers from last year’s flood control scandal, UBS Investment Bank Global Research said.

- Katherine K. Chan

“Growth is near its trough, and we expect quarterly sequential momentum to strengthen to 1.4% over the next two quarters, and GDP (gross domestic product) growth to be 5% in 2026,” it said in a note on Wednesday.

That would top last year’s 4.4% growth, which was weighed down by a corruption scandal that hit investments, household spending and government outlays.

It would also mark a return to the government's target after three consecutive years of misses. UBS expects public investment to rebound early this year before normalizing toward yearend.

“In our revised forecasts, we assume a gradual and backloaded recovery in public investment, starting with a small uptick in the first quarter of 2026, with spending returning to second-quarter 2025 levels by the fourth quarter of 2026,” it added.

Gross capital formation, the investment component of GDP, fell 2.1% last year after a 10.9% drop in the fourth quarter, the biggest in more than four years.