ADB Cuts Philippines Outlook but Sees Second-Fastest Growth in Southeast Asia

The Asian Development Bank has lowered its growth outlook for the Philippines but still expects the country to be Southeast Asia’s second-fastest major economy.

The ADB now projects GDP growth of 5% this year and 5.3% in 2026, both below government targets, after a weaker-than-expected 4% expansion in the third quarter and a 10.7% drop in January–September public works spending.

The bank cited weak and corruption-hit infrastructure outlays and natural hazards as key drags.

However, low inflation, policy-rate cuts totalling 175 basis points and recovering demand are expected to support a rebound.

ADB forecasts inflation at 1.8% this year and 3% in 2026. Mastercard Economics Institute is more optimistic, projecting 5.6% growth in 2026, the fastest among ASEAN-5 economies, supported by strong borrowing, consumption and outbound travel spending.