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The Development Budget Coordination Committee revised downward its economic growth forecasts amid heightened domestic and external uncertainties
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The Philippine economic growth is projected to slow down to 3.5% to 4.5% in 2026 before recovering to 5% to 6% in 2027 to 2030
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Goods export growth is projected to rise by 3% in 2026, reach 4% from 2027 to 2029, and accelerate to 5% in 2030
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Goods imports are expected to grow by 5% in 2026-2027 and to gradually normalize over the medium term at around 4% to 5% in 2028-2030
The Development Budget Coordination Committee (DBCC) has revised downward its economic growth forecasts amid heightened domestic and external uncertainties.
The Philippine economy is projected to slow down to 3.5% to 4.5% in 2026, slower than the previous forecast of 5%-6%.
“Growth is expected to moderate this year amid heightened domestic and external uncertainties, including the lingering effects of governance-related issues, geopolitical tensions in the Middle East, and other global developments affecting business and consumer confidence,” DBCC said in a statement following its latest review of the medium-term macroeconomic assumptions and fiscal program for 2026 to 2030.
Moreover, the elevated inflation this year may temper household consumption and investments, while potentially slower growth in remittances and visitor arrivals may also dampen overall growth.
The looming El Niño phenomenon in the second half of the year may also reduce the agriculture sector’s output and disrupt economic activities, if not accompanied by appropriate disaster preparedness and resilience measures.
On the upside, growth in electronics exports and manufacturing may remain firm on the back of stable global demand.
Trade assumptions
After a slowdown in 2026, the economy is expected to recover to 5% to 6% in 2027 to 2030, also lower than the previous 5.5%-7% growth forecast for the period.
To align with global market developments, DBCC also revised the country’s trade assumptions.
Goods export growth is projected to rise by 3% in 2026, reach 4% from 2027 to 2029, and accelerate to 5% in 2030. These are higher than previous assumptions of 2% in 2026, 3% in 2027 and 2028, and 4% for 2029 and 2030.
Goods imports are expected to grow by 5% in 2026-2027 and to gradually normalize over the medium term at around 4% to 5% in 2028-2030. The 2026-2027 forecasted growth is likewise higher than the 2% to 4% earlier projection, while maintaining the assumptions for 2027-2030.
Inflation is projected to average 6% to 7% in 2026, higher than the 2%-4% previous target, reflecting elevated global fuel prices, persistent supply-side pressures, and the emerging second-round effects of the ongoing Middle East conflict.
Consistent with the latest forecasts and market expectations, inflation is anticipated to ease to 4% to 5% in 2027, then stabilize at 2% to 4% from 2028 to 2030.
Dubai crude oil prices are assumed to average US$80 to $100 per barrel in 2026, higher than previous forecasts and in line with international oil futures market trends. Oil prices are expected to decline further to $70 to $90 per barrel in 2027, then settle at $60 to $80 per barrel from 2028 to 2030, supported by gradual improvement in global oil supply prospects, albeit with elevated uncertainty.
The foreign exchange rate assumption has been revised upward to an average of P60 to P62 against the US dollar from 2026 to 2030, reflecting external developments and domestic headwinds. It was previously at P58-P60.
DBCC also recalibrated its fiscal targets, with revenue collections expected to increase from P4.81 trillion in 2026 to P5.21 trillion in 2027, and to P6.52 trillion by 2030. This will be supported by the full implementation of tax policy reforms, such as the value-added tax on Digital Services Act, CREATE More law, Capital Markets Efficiency Promotion Act, and the new Mining Fiscal Regime, along with continued improvements in tax administration, digitalization, and enforcement.
The proposed national budget for 2027 is set at P7.2 trillion, equivalent to 21.7% of gross domestic products and higher than the P6.793 trillion budget for 2026.
