Even as fuel prices rise and daily expenses become more noticeable for many Filipinos, the country’s growth outlook remains steady. The Philippines is projected to grow by 5.3% in 2026, positioning it as the second fastest-growing economy in ASEAN.
This outlook comes from the ASEAN+3 Macroeconomic Research Office, which maintained its forecast despite external pressures. The projection reflects improving domestic demand and continued strength in exports.
Private consumption, which accounts for over 70% of the economy, is expected to support growth as spending gradually recovers. Household spending slowed in 2025, but it remains the largest contributor to economic activity. At the same time, exports grew by 15.2% last year, reaching $84.41 billion and exceeding earlier projections.
“This makes the Philippines one of the faster-growing economies in the region – above the ASEAN average of 4.6% and the ASEAN+3 average of 4%,” AMRO Chief Economist Dong He, on regional growth comparisons.
However, external risks continue to shape the outlook, particularly from rising oil prices linked to the Middle East conflict. The Philippines imports about 98% of its oil from the region, increasing exposure to supply disruptions and price changes. As a result, inflation is projected to reach 3.9% if oil prices remain between $80 and $90 per barrel.
Meanwhile, sectors such as information technology and business process management, along with finance, continue to support economic activity. These industries generate higher-value services and contribute to overall output. However, there is growing focus on shifting toward knowledge-process outsourcing and global capability centers.
At the same time, monetary authorities have kept the policy rate at 4.25% following recent market uncertainty. The decision reflects concerns that current price pressures are driven by supply conditions rather than demand.
