ADB to cut Philippine growth projection

The Asian Development Bank (ADB) is looking to cut its growth forecast for the Philippines amid risks from the escalating war in the Middle East and the lingering effects of the flood control graft mess last year.

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ADB Lead Economist for Southeast Asia James P. Villafuerte said they will likely revise their initial estimate of 5.3% Philippine gross domestic product (GDP) growth for this year to account for the impact of the Middle East war on inflation, remittances and tourism.

“We are revisiting the number because of this new Middle East conflict, which will certainly affect our growth forecast,” he told reporters at a briefing in Taguig City on Thursday. “We are also tracking the progress in terms of the corruption scandal, which has affected confidence in investment flows.”

The ADB's current 5.3% growth forecast for 2026 is still faster than the 4.4% expansion in 2025 when slow investments as well as household and government spending due to governance issues from the flood control corruption scandal took a toll on the economy.

The projection likewise falls within the Development Budget Coordination Committee’s 5%-6% target for the year.

ADB Chief Economist Albert Park said the ongoing war in the Middle East may have already trimmed 0.1% off of Southeast Asia's GDP growth.

He added that the Philippines would see a similar degree of growth impact if the war lasts only around a month.

Meanwhile, Mr. Park said oil shocks may drive inflation to pick up about half a percentage point by yearend.

“Given how important energy is in the consumer basket of many consumers in the region, even if the war ended today, I think we would see higher inflation this year by about half a percentage point relative to what it would have been without any conflict,” he said.