The World Bank has projected that the Philippine economy will continue to grow at a slower pace than the government’s target until 2027, as global uncertainties and domestic challenges weigh on key industries.
In its latest Philippine Economic Update, the World Bank expects the country’s gross domestic product (GDP) to expand by 5.3% this year, below the revised 5.7% growth in 2024 and well short of the government’s 6% to 8% target. Growth is seen to inch up slightly to 5.4% in 2026 and 5.5% in 2027, still falling short of official goals.
Jaffar Al-Rikabi, senior economist for economic policy at the World Bank, pointed to global policy uncertainty and weak export performance as key factors slowing down the economy. “All of that helps to explain why growth is not meeting our aspirational targets,” he said during a press briefing.
The first quarter figures already reflect this slowdown, with GDP growing by 5.4%, barely improving from the previous quarter’s 5.3% and lower than the 5.9% recorded in the same period last year.
Al-Rikabi emphasized the need for structural reforms to safeguard future growth. “There is a need, therefore, to really double down on reforms so that the Philippines can safeguard and accelerate its growth journey,” he said.
Key among the World Bank’s recommendations is the rebuilding of fiscal space through stronger tax policy reforms, which would allow the government to respond effectively to economic shocks. “You’re going to need much stronger tax reforms… to increase the tax-to-GDP ratio,” Al-Rikabi added.
Gonzalo Varela, the World Bank’s lead economist for the Philippines, also highlighted the urgent need to improve the business climate. He noted that registering a foreign firm in the country currently takes an average of 106 days—an obstacle that could deter investment.
“There is a lot of space to reduce that,” Varela said, adding that advancing regional trade agreements and cutting red tape could help the Philippines navigate global economic turbulence.
