S&P Global Ratings Upgrades Philippines Growth Outlook for 2026
MANILA, Philippines — S&P Global Ratings has slightly improved its growth outlook for the Philippines in 2026, citing expectations of a resurgence in consumption due to projected softening inflation beyond 2024.
The global debt watcher now forecasts the country’s gross domestic product (GDP) to expand by 6.5 percent in 2026, slightly higher than its previous projection of 6.4 percent. This growth rate aligns with the lower end of the Marcos administration’s target range of 6.5 to 8 percent for that year. While the adjustment is considered minimal, S&P anticipates that more favorable inflation will drive up consumption.
Vincent Conti, a senior economist at S&P, stated, “Beyond 2024, the easing inflation will help household consumption recover, and likely lower interest rates towards year-end will gradually do the same for investment, helping overall growth to normalize.”
However, S&P notes that the economy is expected to face challenges in the near term, including high inflation and expensive borrowing costs. The Bangko Sentral ng Pilipinas (BSP) has maintained its key rate at 6.5 percent, the highest level in nearly 17 years, in response to persistently high inflation that may once again breach the BSP’s 2 to 4 percent target.
S&P has kept its 2024 GDP growth forecast for the Philippines at 5.9 percent. If this projection materializes, growth this year would be faster than the 5.5 percent recorded in 2023 but below the government’s target range of 6 to 7 percent.
The credit rating agency also left its 2025 projection unchanged at 6.2 percent, falling short of the Marcos administration’s goal of 6.5 to 7.5 percent for that year.
Conti highlighted, “The lingering impacts of last year’s inflation on household savings would weigh on consumption in the coming year. The lagged impacts of higher interest rates will also continue to limit the pace of investment, particularly from the private sector.”
“In a separate commentary, Nicholas Mapa, senior economist at ING Bank in Manila, said the Philippines would have a hard time chasing a 6 percent GDP growth as long as borrowing costs remain high.”
