Hanoi (VNA) – US-based credit rating agency S&P Global Ratings has slightly raised its economic growth forecast for the Philippines in 2026, citing a gradual recovery in investment and continued momentum in technology exports, while warning of persistent external risks.
Vishrut Rana, senior economist for Asia-Pacific at S&P Global Ratings, said the credit watcher now expects the Philippine economy to grow by 5.8% in 2026, a tad higher than its previous estimate of 5.7%
The updated forecast places the Philippines below the government’s growth targets of 5-6% for 2026.
Despite the upward revision for this year, S&P trimmed its growth outlook for the succeeding years, pointing to softer domestic demand and a moderation in key sectors such as business process outsourcing.
The debt watcher lowered its gross domestic product (GDP) forecasts to 6.2% for both 2027 and 2028, from 6.5% for each year previously.
The revised figures are well within the government target of 5.5 to 6.5% for 2027 and 6-7% for 2028.
S&P flagged energy supply risks as a key vulnerability for the Philippine economy, given its heavy reliance on imports.
Energy disruption is a key risk to the economy this year. The Philippines is significantly reliant on imported energy, a notable portion of which comes from the Middle East, Rana said. Net energy imports accounted for about 3.3% of GDP in 2025.
This exposure could feed into inflation pressures, prompting a potential shift in the Bangko Sentral ng Pilipinas (BSP)’s policy stance.
S&P expects the central bank to deliver a modest rate hike later this year, reversing part of its recent easing cycle.
The rating agency also raised its inflation forecasts for the Philippines to 3.4% this year from 2.7% earlier, and 3.2% for 2027 from 3%, reflecting the expected pass-through of higher energy costs to domestic prices.
S&P’s outlook underscores the Philippines’ resilience, supported by investments and export strength, but highlights growing external risks that could test both growth and price stability in the coming years./.
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