World Bank: Philippines economy to grow in ’24-26

The Philippines’ economy is projected to grow at an average rate of 6.0 per cent during the period from 2024 to 2026, supported by strong domestic consumption, robust job creation, and ongoing recovery, according to the World Bank’s Philippines Economic Update (PEU).

This positive outlook, however, is tempered by risks including geopolitical tensions and extreme weather conditions. The growth forecast for 2024 has been revised to 5.9 per cent, down from 6.0 per cent, following a weaker-than-expected Q3 performance, with typhoons disrupting key sectors like tourism and construction. The economy is expected to recover with a 6.1 per cent growth in 2025 and 6.0 per cent in 2026.

Key to the long-term growth is investing in human capital and accelerating digital transformation, the PEU notes. The World Bank stresses the importance of strengthening resilience against climate change and advancing digital technologies to boost productivity, market access, and competitiveness.

The country’s growing labour force, known as the ‘demographic dividend,’ also offers significant economic potential if supported by policies in education, health, and skills development.

Private consumption, driven by low inflation, steady remittances, and higher employment, will remain the primary growth driver. The services sector, particularly tourism and business process outsourcing, is also set for continued expansion.

However, risks such as geopolitical instability and uncertainties around trade could dampen global demand and disrupt local industries, particularly manufacturing and agriculture. The PEU emphasises the need for effective management of inflation and the protection of vulnerable populations to sustain growth.

Attribution: World Bank

Subediting: M. S. Salama