The government has revised its economic growth targets downward amid increasing global uncertainty, trimming its forecasts for the next several years and tightening its inflation assumptions.
In a briefing on Thursday, Budget Secretary Amenah Pangandaman announced that the Development Budget Coordination Committee (DBCC) has lowered its gross domestic product (GDP) growth projection for 2025 to a range of 5.5 to 6.5 percent, and for 2026 to 2028 to 6 to 7 percent. These are down from the earlier 6 to 8 percent assumption set in December 2024.
The adjustment follows a 5.4 percent first-quarter GDP expansion—below the government’s previous target range.
Still, economic managers remain cautiously optimistic. Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan said the revised targets remain “attainable” despite the challenging global environment.
“The revisions take into account heightened global uncertainties, such as the unforeseen escalation of tensions in the Middle East and the imposition of US tariffs,” Pangandaman said.
She added that the DBCC stands ready to deploy “timely and targeted measures” to cushion the impact of external risks, pointing to the country’s ample international reserves as a buffer.
The DBCC also narrowed its inflation forecast to 2–3 percent for 2025, down from the earlier 2–4 percent range. However, from 2026 to 2028, inflation is still expected to remain within the 2–4 percent band.
Oil, peso projections
The government now sees Dubai crude averaging $60 to $70 per barrel from 2025 to 2028, down from its earlier assumption of $60 to $80.
The foreign exchange rate is expected to average P56 to P58 per dollar through 2028. While the 2025 estimate is unchanged, the forecast for 2026 to 2028 was adjusted to P58 from P55.
“This is supported by lower domestic inflation and will continue to be shaped by global financial conditions and external trade performance,” Pangandaman said.
Trade view weaker
Goods exports are expected to contract by 2 percent in 2025 before recovering to 2 percent growth in 2026 to 2028—down sharply from the earlier 6 percent assumption.
Imports are projected to rise by 3.5 percent next year and by 4 percent in the succeeding years, lower than the DBCC’s previous 5 to 8 percent outlook.
Deficit, budget plan
Revenues are seen reaching P4.52 trillion this year, with disbursements totaling P6.08 trillion, resulting in a P1.56 trillion deficit—equivalent to 5.5 percent of GDP.
For 2026, the DBCC approved a proposed P6.793 trillion national budget, or 22 percent of GDP, up 7.4 percent from 2025.
Pangandaman noted that initial agency requests reached P10.101 trillion, but were trimmed based on fiscal space and absorptive capacity.
“With limited resources, we focused on prioritizing programs and projects that deliver measurable impact, aligned with our national goals, and are ready for implementation,” she said.
The proposed 2026 National Expenditure Program is set to be submitted to Congress in August.
