‘Economy to expand below target in 2026’

MANILA, Philippines — The Department of Finance said the Philippine economy is expected to grow anywhere from five to six percent next year, falling short of earlier targets amid slower-than-anticipated growth and lingering economic challenges.

Outgoing Finance Secretary Ralph Recto told reporters that the Cabinet-level Development Budget Coordination Committee would review all economic targets from 2026 to 2030, including revenue collection projections.

“Realistically, for next year, it will be from five to six percent. We’re coming from a low base. And then it will take some time, maybe a quarter before we can go back to a regular growth rate, right? But our fundamentals are OK,” Recto said.

He said that regaining the trust of consumers and business leaders requires demonstrating accountability, emphasizing that transparency is key to restoring confidence in institutions and governance.

Recto pointed out that the country’s deficit is on target, although the year-end growth rate remains a concern. But he expressed optimism for the future, noting that the administration has identified the issues and expects positive outcomes moving forward.

He said that by the fourth quarter, the economy is expected to settle between four and five percent, bringing the full-year gross domestic product growth at 4.7 to 4.8 percent.

“The projection would be four to five percent for the fourth quarter. But the full year (growth) next year will be higher than five percent,” he said.

Recto added that regardless of the year’s deficit target, including debt obligations, the government is not borrowing beyond the planned amount.

Data from the Bureau of the Treasury showed that the country’s outstanding debt eased for the second consecutive month in September after hitting a record high in July.

Despite the decline to P17.46 trillion, the level is above the 2025 ceiling of P17.35 trillion.

On Monday, Recto was appointed as the Executive Secretary. Frederick Go, former special assistant to the president for investment and economic affairs, will head the finance department.