WB sees ‘Nike-swoosh’ recovery for PH in 2026
The World Bank (WB) lowered its growth forecasts for the Philippines this year and in 2026, but said it expects a “Nike-swoosh” recovery as the country works through a slowdown brought on by a widening corruption scandal that has shaken business and consumer confidence and stalled public works.
In its Philippine Economic Update released on Tuesday, the Washington-based lender cut its 2025 growth outlook to 5.1 percent, down from an earlier estimate of 5.3 percent. If realized, the projection would mark a deceleration from the 5.7 percent average expansion in 2024 and fall short of the Marcos administration’s 5.5- to 6.5-percent growth target for this year.
The bank also trimmed its 2026 forecast to 5.3 percent, from 5.4 percent, and said it expects growth to edge up only slightly to 5.4 percent in 2027. Taken together, the projections suggest the economy may struggle to meet the government’s 6- to 7-percent annual growth target through 2028.
The WB pointed to a range of domestic and external headwinds: lower investment, weak business sentiment, a sharp drop in foreign direct investment and a series of local shocks—from typhoon-related disruptions to governance issues that have delayed public spending.
It also noted softening exports tied to weaker business-services growth and fewer tourist arrivals.
Jaffar Al-Rikabi, a senior economist at the bank, said the 2025 forecast remains “in the moderate range” compared with the projections of other institutions, some of which have lowered their outlooks for 2025 to below 5 percent.
“Some are projecting a V-shaped recovery,” Al-Rikabi said. “We are more inclined to think it’s, as I described, like a Nike-swoosh—sort of a gradual kind of recovery.”
After data showed the economy expanding just 4 percent in the third quarter—its slowest pace in over four years—President Marcos’s economic team acknowledged that the official macroeconomic targets may need adjustment to reflect the challenging realities created by the antigraft crackdown.
The widening probe has implicated lawmakers, members of the Cabinet, government engineers and some private contractors—crimping government spending at a time when the economy is counting on domestic drivers of growth to withstand mounting global headwinds.
In its new report on the Philippines, the WB said sustaining growth in the coming years would require stronger execution of public investments, credible fiscal consolidation and structural reforms to enhance competitiveness in the tradables sector like manufacturing, agriculture, information technology and tourism.
The country, the bank added, must also capitalize on high-potential urban corridors.
Meanwhile, Al-Rikabi said that, despite the more subdued outlook, the Philippines was still on track this year to reach a gross national income (GNI) per capita within the threshold for upper middle-income countries (UMIC).
But he noted that the country must maintain an above-benchmark GNI per capita for three consecutive years before it can be formally reclassified. “As long as the economy continues to grow in 2026-2027, the country would be reclassified as UMIC in 2028,” Al-Rikabi said.
