DOWNWARD revisions to the International Monetary Fund’s (IMF) Philippine growth forecasts extend to 2027, the January update to the World Economic Outlook showed.
The IMF in December had said that the country was likely to grow by just 5.1 percent in 2025, lower than the previous forecast of 5.4 percent and slowing from the 2024 result of 5.7 percent, due to domestic and external uncertainties
The outlook for 2026 was also trimmed to 5.6 percent from 5.7 percent.
In the January update, the Washington-based multilateral organization said growth next year could hit 5.8 percent, lowered from the 6.0-percent projection in October.
“The downward revision in GDP growth projections for 2026 and 2027 reflects the carryover impact from a downward revision in the IMF’s growth forecast for 2025 — from 5.4 to 5.1 percent — and a slower pace of capital accumulation,” an IMF official said on Monday.
2025 growth is expected to have missed the government’s 5.5- to 6.5-percent target — Bangko Sentral ng Pilipinas Governor Eli Remolona last week said it could slump to 4.6 percent — with a massive corruption scandal having affected investments and sentiment.
Preliminary growth data for 2025 will be released next week.
“Risks to the growth outlook are tilted to the downside,” the IMF official said, adding that “the main external downside risks include an escalation of trade restrictions and prolonged uncertainty, geopolitical tensions, and disruptive financial market corrections.”
“Extreme climate events and lower-than-expected reform momentum represent other domestic downside risks.”
The IMF’s revised forecasts previously fell below the government’s 6.0- to 7.0-percent target for 2026 to 2028, but economic managers have revised the goals to 5.0-6.0 percent for 2025 and 5.5-6.5 percent for 2027.
The target for 2028 was kept at 6.0-7.0 percent.
The IMF stressed that faster implementation of structural and governance reforms could encourage investment and foreign direct investment, strengthen fiscal multipliers and support potential growth.
It also said that an accommodative monetary policy was suitable given a favorable inflation outlook and elevated growth risks.
The Bangko Sentral ng Pilipinas (BSP) has so far reduced key policy rates by a total of 200 basis points since August 2025 — its benchmark rate currently stands at 4.5 percent — and it is widely expected to again cut later this month given the need to boost economic growth.
In its earlier 2025 Article IV Consultation report, the IMF said it expected the BSP to deliver an additional 50 basis points worth of rate cuts by the first quarter of 2026 as inflation gradually returns to the midpoint of the 2026 target range.
“Given the cyclical position of the economy, the broadly neutral fiscal stance in the 2026 budget is appropriate,” it said, adding that accelerating reforms to improve productivity and address gaps in infrastructure would be crucial.
“Reforms to enhance governance are important to raise fiscal multipliers and potential growth,” it added.