BMI cuts Philippine growth forecast to 2.6% in 2026 as economic slowdown deepens

Floyd Brenz., Philippine Canadian Inquirer
November 13, 2026

Photo Courtesy: Pexels

The Philippine economy may face a longer period of sluggish growth after London-based research firm BMI lowered its economic forecasts for the country, citing rising inflation, weak household spending, declining agricultural output, and delays in government infrastructure projects.

BMI, a unit of Fitch Solutions, reduced its 2026 gross domestic product (GDP) growth projection to 2.6 percent from its earlier estimate of 3 percent. It also trimmed its 2027 forecast to 4 percent from 4.5 percent.

The revision followed the country’s weaker-than-expected economic performance in the third quarter, when GDP expanded by only 2.1 percent. This brought average growth during the first nine months of 2026 to 2.5 percent.

One of the major concerns is the continued increase in consumer prices. Inflation reached 7.8 percent in October, putting additional pressure on household budgets and limiting spending.

Agriculture has also become a significant drag on economic activity. The sector contracted by 4.8 percent in the third quarter, its weakest performance this millennium, as severe weather disturbances and El Niño affected farm production.

BMI also pointed to delays in government infrastructure spending, particularly as investigations into alleged corruption involving flood control projects continue to affect the implementation of public works.

Public construction contracted by 15.1 percent in the third quarter, following a deeper 33.4-percent decline in the previous quarter.

The research firm expects infrastructure spending to provide some support for economic recovery, but warned that a stronger rebound may not materialize until 2027.

Technology exports, particularly products benefiting from growing global demand linked to artificial intelligence, could offer some relief to the economy.

Despite this, BMI cautioned that persistent inflation, weak consumer confidence, and delayed public investments could continue to weigh on economic growth.

Its latest projections remain below the government’s growth targets of 3.5 to 4.5 percent for 2026 and 5 to 6 percent for 2027.