ADB, S&P cut Philippines growth forecasts

The Asian Development Bank (ADB) and S&P Global Ratings have lowered their economic growth forecasts for the Philippines due to ongoing issues from the Middle East crisis and weaker investments. The ADB now predicts the country will grow by 3.3% this year, down from a previous estimate of 3.8%. If achieved, this would be below the government's revised target of 3.5 to 4.5% for the year.

S&P has cut its growth forecast for the Philippines to 2.9% this year, marking the largest downgrade among the Asia-Pacific economies it covers. The downgrade stems from weak government investment, high energy costs, and soaring food prices, partly due to El Niño conditions. Both organizations expect the Philippine economy to rebound next year, with the ADB forecasting 5.1% growth for 2027 and S&P projecting 5.4%.

Inflation is also projected to remain high, with ADB forecasting 5.9% this year and 4.4% in 2027. The Philippines Central Bank (BSP) is expected to continue tightening monetary policy, with interest rates expected to reach 5.25% by the end of the year.