Philippines' economy forecasted to grow 6% annually through 2026

The Philippines is forecasted to be one of the fastest-growing economies in Asia with real GDP expected to grow by 6% annually through 2026, according to Moody's Ratings.

Inflation is projected to remain within the government’s target range of 2 to 4 percent, supporting further policy rate reductions this year.

This stable economic environment will boost domestic consumption and investment, thereby stimulating the economy further.

Moody's notes that the Philippines' consumption-driven model will likely mitigate the impact of potential US tariff increases compared to other regional economies.

The credit demand is expected to increase due to strong economic growth and lower interest rates, which will help maintain loan quality and support a stable outlook for the Philippine banking system.

Banks are anticipated to see broadly stable profits with robust capitalization, driven by strong credit growth and an increasing share of higher-yielding retail and SME loans.