The Development Budget Coordination Committee has lowered the country’s 2026 economic growth target, citing persistent domestic headwinds and global uncertainties that continue to weigh on business confidence, consumer spending, and overall economic activity.
Under its revised macroeconomic assumptions, the DBCC cut the 2026 gross domestic product growth target to 3.5 to 4.5 percent, down from the previous projection of 5 to 6 percent.
The government, however, expects growth to recover to 5 to 6 percent annually from 2027 to 2030 as economic conditions gradually improve.
The DBCC said the weaker outlook reflects the lingering effects of governance-related concerns, geopolitical tensions in the Middle East, and other global developments that have dampened confidence and slowed economic momentum.
It also warned that elevated inflation could temper household consumption and private investment, while slower growth in overseas Filipino remittances and tourist arrivals may further restrain economic activity.
The anticipated El Niño phenomenon in the second half of the year also poses risks to agricultural production and overall output unless matched by effective disaster preparedness and resilience measures.
The government set its inflation forecast for 2026 at 6 to 7 percent, reflecting elevated global fuel prices, persistent supply-side pressures, and possible second-round effects from the continuing conflict in the Middle East.
Inflation is expected to ease to 4 to 5 percent in 2027, then return to the government’s 2 to 4 percent target range from 2028 to 2030.
Dubai crude oil prices are projected to average $80 to $100 per barrel in 2026, then decline to $70 to $90 per barrel in 2027, before settling at $60 to $80 per barrel from 2028 to 2030 as global oil supply conditions improve despite lingering uncertainties.
The DBCC also revised its foreign exchange assumption, projecting the peso to average ₱60-₱62 against the US dollar from 2026 to 2030. It said the adjustment reflects prevailing external developments and domestic economic challenges.
Trade assumptions were also adjusted to reflect global market conditions. Goods exports are expected to grow by 3 percent in 2026, rise to 4 percent from 2027 to 2029, and accelerate to 5 percent in 2030.
Goods imports, meanwhile, are projected to expand by 5 percent in 2026 and 2027 before moderating to around 4-5 percent over the remainder of the medium term.
The DBCC said revenue collections are projected to increase from ₱4.81 trillion in 2026 to ₱5.21 trillion in 2027, before reaching ₱6.52 trillion by 2030.
Based on the updated revenue and expenditure outlook, the government aims to narrow the fiscal deficit from 5.4 percent of GDP in 2026 to 3.5 percent by 2030, while sustaining investments in human capital and priority development programs.
The DBCC also announced that the proposed 2027 National Budget will amount to ₱7.2 trillion, equivalent to 21.7 percent of GDP.
The proposed spending plan seeks to improve efficiency by streamlining redundant programs, strengthening transparency, and ensuring that public funds are directed toward high-impact initiatives that support long-term economic resilience.