Moody's raises Israel growth forecast
The agency cautions, however, that the rise is largely technical, and does not necessarily reflect an improvement in domestic economic performance.
MANILA, Philippines — Debt rating agency Moody’s has reduced its 2026 economic growth forecast for the Philippines to 3.3 percent, down from a previous estimate of 3.6 percent. The downgrade is due to rising energy costs and slow investment growth, which are holding back economic momentum. Moody’s projects real gross domestic product (GDP) growth at 3.3 percent this year, with a recovery to 5.1 percent by 2027 as confidence and investment improve.
Factors supporting Philippine growth include robust infrastructure spending, remittance inflows, and reforms aimed at boosting private and foreign investment. Remittances from overseas Filipino workers, equivalent to about eight percent of GDP, continue to aid household spending and serve as a dependable external financing source.
Despite ongoing challenges, the government has maintained policy stability and is pursuing structural, fiscal, and business environment reforms. The agency expects government deficit reduction to stay on track, with the general government deficit projected to fall to near four percent of GDP this year from 4.1 percent in 2025. However, implementation delays, weaker-than-expected investment, and election-related pressures could impede the deficit reduction process.
Government debt is forecast to stabilize at around 58 percent of GDP over the next two years, before gradually declining. Nevertheless, debt affordability remains the primary constraint to fiscal strength, with interest payments expected to remain above 14 percent of government revenue, compared to the roughly nine-percent median among similarly rated sovereigns.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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