The Marcos administration announced its optimistic yet prudent economic projections for 2026 to 2028, anticipating a sustained expansion of 6.0 to 7.0 percent. This forecast underscores a resilient economic outlook, strategically navigating a dynamic global landscape.
To maintain this positive trajectory, the government’s focus remains steadfast on ensuring price stability, forging stronger international trade partnerships, and bolstering the productivity of domestic industries. A key priority also involves the accelerated implementation of critical government programs and projects, alongside capitalizing on burgeoning growth opportunities within the services sector.
Inflationary Environment and Key Economic Indicators
Inflation is projected to narrow to a target range of 2.0 to 3.0 percent in 2025, reflecting a comprehensive “whole-of-government” approach dedicated to fostering a low-inflation environment. This trend is expected to stabilize at 2.0 to 4.0 percent from 2026 to 2028, aligning with the latest outlook that inflation will remain within the target range over the policy horizon.
Key economic assumptions underpin these projections:
Crude Oil Prices: Despite escalating geopolitical tensions, Dubai crude oil prices are anticipated to average between USD 60 to 70 per barrel from 2025 to 2028, tempered by easing global demand and expected increases in global oil inventories.
Foreign Exchange Rate: The foreign exchange rate is assumed to remain stable, averaging Php 56 to Php 58 per US dollar from 2025 through 2028. This stability is supported by lower domestic inflation and will continue to be influenced by global financial conditions and external trade performance.
Trade Dynamics
Trade assumptions have been refined to reflect global market developments. Goods exports are projected to contract by 2.0 percent in 2025, primarily due to slower global demand and heightened trade policy uncertainties. However, a modest recovery to 2.0 percent growth is anticipated from 2026 to 2028. Conversely, goods imports are expected to rise by 3.5 percent in 2025, driven by resilient domestic economic activity, and further increase to 4.0 percent in the succeeding years, supported by stable domestic consumption and sustained infrastructure spending.
Medium-Term Fiscal Program: A Foundation for Sustainable Development
Fiscal consolidation remains a cornerstone of the government’s medium-term strategy. The national government is committed to prudently reducing the fiscal deficit from 5.5 percent of GDP in 2025 to 4.3 percent by 2028. This commitment is balanced with an intensified focus on investments in critical areas such as infrastructure, human capital development, and social services. This well-calibrated approach demonstrates a strong resolve to uphold fiscal discipline without compromising the nation’s goals of inclusive and sustainable development, even amidst a more challenging global landscape.
Revenue collections are anticipated to increase steadily throughout the period, reaching 16.3 percent of GDP by 2028. This growth will be driven by the implementation of recently enacted revenue reforms, including the Value-Added Tax (VAT) on non-resident digital service providers and initiatives promoting capital markets efficiency. Sustained improvements in tax administration, compliance enforcement, and digitalization efforts will also play a crucial role.
National Government disbursements will continue to be a major growth driver over the medium term, averaging 21.1 percent of GDP annually. Infrastructure spending will be sustained at 5.0 to 6.0 percent of GDP each year, ensuring continued improvements in physical connectivity across the archipelago. Furthermore, public investments will prioritize education, healthcare, agriculture, digital transformation, and social protection, reflecting the strategic objectives outlined in the Philippine Development Plan (PDP) 2023–2028.
The Philippine government remains confident in its economic strategy, committed to fostering a stable, resilient, and inclusive growth environment for all Filipinos.
