‘Philippines growth to recover to 5%’

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

March 6, 2026 | 12:00am

MANILA, Philippines — The Philippine economy is expected to rebound this year after a slower expansion in 2025, supported by resilient private investment and improving external demand, according to Swiss multinational investment bank UBS.

In a report, UBS said Philippine gross domestic product (GDP) growth may reach five percent this year, up from 4.4 percent in 2025, as the economy gains momentum from stronger investment and export activity.

“We believe growth is near its trough. We expect quarterly sequential momentum to strengthen to 1.4 percent over the next two quarters and GDP growth to be five percent in 2026,” the investment bank said.

It said domestic investment and exports helped cushion economic activity last year despite global headwinds.

Private investment indicators were “more resilient than expected,” with private construction expanding by 18 percent year-on-year, reflecting improving demand and gradually declining inventories, UBS said.

Meanwhile, export performance strengthened toward the end of 2025, particularly in the electronics sector.

The growth of merchandise  exports  accelerated sharply to 22.8 percent year-on-year in the fourth quarter of 2025, driven mainly by stronger electronics shipments. Electronics make up more than half of the Philippines’ goods export basket, largely involving assembly, packaging and testing activities.

Looking ahead, UBS expects public spending to gradually recover this year after earlier weakness.

“We assume a gradual and backloaded recovery in public investment, starting with a small uptick in the first quarter of 2026,” UBS said, adding that public spending could eventually return to its second-quarter 2025 level by the end of the year.

Nicolo Magni, head of UBS Global Banking South-East Asia and South Asia, said the region remains a strategic destination for global investors.

“Southeast Asia continues to be a strategic alternative for investors. We expect strong deal-making momentum to continue throughout 2026 and capital markets are likely to be more active in health care, real estate and consumer sectors,” he said.

UBS said the broader Association of Southeast Asian Nations (ASEAN)-6 economies are expected to post steady expansion this year.

Grace Lim, senior ASEAN and Asia economist at UBS, said the region’s combined GDP growth is projected to reach 4.9 percent in 2026. She said the region continues to benefit from its integration into global manufacturing value chains and its large domestic consumer base.

Household consumption is expected to remain a key driver of growth in Indonesia, while private investment is gaining traction in Thailand and the Philippines. Meanwhile, Singapore and Malaysia continue to benefit from resilient technology-related exports.