{
  "id": 8799071,
  "title": "Upgraded but underperforming: Philippines’ growth lags behind",
  "url": "https://urgent.news/2026/09/21/upgraded-but-underperforming-philippines-growth-lags-behind",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-21T00:00:17.000Z",
  "source": {
    "name": "South China Morning Post",
    "slug": "south-china-morning-post",
    "url": "https://www.scmp.com/week-asia/economics/article/3368024/upgraded-underperforming-philippines-growth-lags-behind"
  },
  "original_language": "en",
  "account": "The Philippines, once on track to become a middle-income nation, is now lagging behind its Southeast Asian neighbors, according to analysts. While the country has reached upper-middle-income status, the milestone hasn't translated into higher growth, with Bank of America forecasting a sluggish 2.5% GDP growth for 2026. This places the Philippines on par with Thailand, which is experiencing a regional slowdown, as other Asean nations – Vietnam, Indonesia, and Malaysia – are posting stronger growth rates of 5% or more.\n\nThe slowdown stems from factors such as weak public spending, delayed infrastructure projects, high living costs, and investigations into irregularities in flood control initiatives. Economist Jonathan Ravelas noted that the Philippines' growth is now suffering relative to its peers, with countries like Vietnam, Indonesia, and Malaysia benefiting more from manufacturing expansion, supply-chain relocation, and stronger foreign direct investment.\n\nTo address the issues, Ricafort suggested targeted subsidies for vulnerable consumers and the transport sector to cushion the impact of energy shocks. He also argued that increased government \"catch-up spending\" on infrastructure could counter the underspending seen amid flood-control corruption investigations. This would lead to better fiscal performance, narrower budget deficits, and a lower national debt-to-GDP ratio.\n\nHowever, the lack of infrastructure spending is a major concern, as public construction projects have a strong multiplier effect on the economy. While investors are less troubled by the corruption investigations than by the delays they have caused, the challenge for policymakers is to clean up the system without slowing down execution.\n\nAnother worry is the looming threat of El Nino-driven drought conditions, which could lead to food price increases and agricultural income losses just as households are already feeling the strain of rising living costs. Ricafort called for targeted relief measures such as ayuda (aid) payments and job programs for the poorest Filipinos to ease price pressures driven largely by the Iran war.\n\nDespite the challenges, the Philippines still has room to catch up, according to Ravelas. The country's elevation to upper middle-income status reflects its progress, and the BofA outlook is more about near-term challenges. The investment case for the country remains intact, with investors attracted to the Philippines' young population, domestic market, resilient consumer base, and growing services industry. However, stronger execution, particularly in infrastructure, foreign investment attraction, and policy implementation, is needed to restore investor confidence.",
  "summary": "The Philippines’ rise to upper-middle-income status was supposed to mark a new phase for one of Southeast Asia’s most closely watched emerging economies. Instead, analysts say the milestone has done little to shield the country from short-term pressures weighing on growth: sluggish public spending, delayed infrastructure, high living costs and the fallout from investigations into alleged…",
  "key_points": [
    "Philippines now upper-middle-income but growth lags behind neighbors",
    "Bank of America forecasts 2.5% GDP growth for 2026",
    "Corruption investigations and infrastructure delays hamper progress"
  ],
  "editors_take": "The Philippines' failure to achieve higher growth despite reaching upper-middle-income status means it is losing ground to Southeast Asian neighbours Vietnam, Indonesia, and Malaysia, which are posting stronger growth rates.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}