World Bank cuts PH economic growth forecast to 5.1%

The World Bank has lowered its economic growth forecast for the Philippines to 5.1% for the current year, down from a previous projection of 5.3%.

This downward revision is attributed to "domestic shocks," including the impact of recent natural disasters and a decline in investor confidence, further strained by an ongoing corruption scandal.

The multilateral lender's outlook aligns with the Department of Economy, Planning, and Development's (DEPDev) assessment that the government's growth target range of 5.5% to 6.5% for 2025 is unlikely to be met.

Key factors contributing to the projected slowdown include reduced domestic investment, weak business confidence, a significant drop in foreign direct investment, and disruptions caused by natural calamities.

Additionally, slower growth in services exports, impacted by weaker business services and fewer tourist arrivals, has also influenced the revised forecast.

Despite these challenges, the World Bank anticipates a modest economic recovery in 2026 and 2027, with growth projected at 5.3% and 5.4% respectively, supported by sustained consumption and decreasing inflation.