THE Philippines is emerging as an economic exception in East Asia, a World Bank official said, with high energy costs weighing more heavily and the country also remaining less integrated into artificial intelligence (AI)-related global value chains.
“The Philippines is the outlier in East Asia,” said Franziska Lieselotte Ohnsorge, World Bank chief economist for Asia, during a media briefing on Tuesday.
“It has been hurt more by the global increase in energy prices, and it is less integrated in these global AI-related value chains than countries like Vietnam and Malaysia are.”
The World Bank, in its latest East Asia and Pacific Economic Outlook, kept its 2026 growth forecast for the Philippines at a below-target 3.7 percent. The 2027 projection was trimmed to 5.2 percent from 5.6 percent.
Ohnsorge said that the country was facing two broad global trends shaping economic growth across the region: headwinds from high energy prices and tailwinds from global AI-related activity.
For the Philippines, the balance was said to be unfavorable.
“It’s not benefiting from these global tailwinds, but it’s really being hurt by the global headwinds, and that has sort of set back growth more,” Ohnsorge said.
She said this divergence also explains why the World Bank did not upgrade its growth forecast for the Philippines.
“And where countries’ individual forecast changes lie on the spectrum really depends on how much they’re exposed to these headwinds from energy and tailwinds from AI,” she added.
Pressure from high energy prices was forecast to push domestic inflation to 5.8 percent this year.
“While regional growth has not been affected as much as anticipated by high energy prices, the same cannot be said for inflation,” the World Bank said.
This could “weaken household purchasing power and raise production costs, while weak public investment and confidence will soften investment growth,” it added.
