THE Philippines can still hit this year’s growth target, the president of the Asian Development Bank (ADB) said on Monday, but this will require a significant public investment rebound following slowdowns caused by a massive flood control project scandal.
“It is challenging, but we think reaching the 3.8 percent forecast for 2026 is possible, attainable,” ADB President Masato Kanda told reporters in a press briefing.
“But hinges on a strong second-half recovery in project execution and household consumption,” he added.
Gross domestic product (GDP) growth markedly slowed to 2.3 percent in the second quarter from 2.8 percent in the first three months of 2026, mainly due to the fallout from the war in the Middle East and the lingering effects of last year’s corruption mess.
“The second quarter growth largely reflected the delayed public investment due to tighter oversight, as well as the muted household consumption driven by high inflation,” Kanda said.
“So, to meet the target, we have to see a significant acceleration in public investment execution,” he added.
The ADB, in its July Asian Development Outlook, lowered its Philippine growth projections for this year and the next, citing delayed investments and softer private consumption and the energy shock from the US-Iran war.
The Manila-based multilateral lender now expects the country to grow by just 3.8 percent this year, down from 4.4 percent previously and slowing from 2024’s below-target expansion.
It expects a pick-up to 5.3 percent next year, also lower than the previous projection of 5.5 percent.
Both revisions fall within the government’s downwardly-revised 3.5- to 4.5-percent target for 2026 and the 5.0-6.0 percent for 2027 to 2028.
Kanda said that as “public spending normalizes and inflation pressures ease, we anticipate growth will pick up next year.”
“The primary risk stems from external shocks, particularly from the conflict in the Middle East, which is still very uncertain, unpredictable and this impacts the Philippines,” he added.
Kanda warned that these crises were threatening to “outpace countries’ ability to cope and could reverse hard-won development gains, with the poor and most vulnerable being hit the hardest.”
“Traditional approaches are no longer sufficient to achieve our goals.”
The government, the ADB chief said, “must continue to make markets investable, and the private sector finance expertise and innovation upscale.”
ADB Country Director for the Philippines Andrew Jeffries said forecasts could be revised in the Sept. 23 update of the Asian Development Outlook.
“Between early July and now, new data has come out, so there’s always some changes [outlook],” he said.
“Sometimes positive, sometimes negative. But, it’s (the forecast) still being finalized.”
