IMF raises to 5.9% its 2026 Philippine economic growth forecast

The International Monetary Fund (IMF) has revised upward its 2026 Philippine economic growth forecast.

In its recent World Economic Outlook (WEO) report, the IMF said it expects the Philippine economy to grow by 5.9 percent next year, slightly higher than its previous projection of 5.8 percent.

For this year, the IMF forecasts the country’s gross domestic product to grow by 5.5 percent, which settles within the government’s 5.5 percent to 6.5 percent target.

Earlier this year, the IMF said the Philippine economy remains resilient despite external challenges and heightened policy uncertainty.

“The Philippine economy holds significant potential with a sizable demographic dividend and abundant natural resources. The government has been undertaking reforms to reduce infrastructure, health and education gaps, promote foreign direct investment, and diversify the country’s export markets,” IMF Mission Chief Elif Saxegaard earlier said.

“These reforms should be complemented by strengthening social protection programs, promoting digitalization, and increasing resilience to climate shocks and natural disasters.”

Source: Inquirer

Q2 PH growth likely higher at 5.7% – UA&P

Philippine economic growth likely picked up in the second quarter, the University of Asia and the Pacific (UA&P) said, falling within the government’s recently reduced target for 2025.

In the July edition of its Market Call report, the UA&P forecast April-June gross domestic product (GDP) growth of 5.7 percent, up from 5.4 percent in the first three months of the year.

The first-quarter result fell below the 6.0- to 8.0-percent full-year target at that time and economic managers last month revised the 2025 goal to 5.5-6.5 percent given global headwinds.

Preliminary second quarter GDP data is scheduled to be released on Aug. 7 by the Philippine Statistics Authority.

The UA&P said that second-quarter growth was likely to have been buoyed by good weather and an improvement in employment amid a weakness in government spending in the first two months of the perid and the slightly lower consumer optimism.

It noted the threat from higher US tariffs, which were also said to be constraining faster monetary policy easing and subsequently holding back spending.

Deeper interest rate cuts and more competitive exchange rates will help give local producers some room to boost production and employment, the UA&P said, leading to faster growth.

Earlier this week, Finance Secretary Ralph Recto said that second-quarter growth likely improved on the back of household and government spending.

The full-year result, however, could fall below 6.0 percent due to tariff uncertainties but still remain within target at around 5.7-5.8 percent.

US President Donald Trump has slapped a 20-percent tariff on Philippine-made goods, up from the 17 percent announced in April.

The government has said that it would be negotiating for a lower rate in a bid to avert the imposition of the 20-percent duty beginning Aug. 1.

Source: Manila Times

Survey: 64% of MSMEs opened to support family

More than half of MSME (micro, small, and medium enterprises) owners in the Philippines started their business as a source of income for their family, as well as to increase their revenue as a short-term goal, according to a survey by US-based management firm Boston Consulting Group (BCG) and the Department of Trade and Industry (DTI).

Released this month, the study, “Heart of Hustle: What Fuels the Filipino MSME,“ involved 3,098 MSME owners.

Data showed 64 percent of startups aimed to achieve financial independence for the family; 41 percent were driven by a passion for their product or service; and 38 percent sought personal financial independence.

“These are not corporate ambitions, they are deeply personal goals. For many MSMEs, business is not the dream, it is the vehicle to achieve the dream,” the report pointed out.

For MSMEs’ growth priorities for the next 12 months, 60 percent want to increase their revenue; 53 percent desire to reach more customers; 48 percent intend to improve their product or service; and 40 percent wish to secure additional financing.

BCG said there are five access points that can trigger MSME growth, namely: financing, market, tools, government support, and labor.

The survey said 33 percent cite access to financing as the most common concern and consistent barrier for MSMEs to grow.

Meanwhile, 55 percent have never applied for a loan, 42 percent of whom are afraid of going into debt; 34 percent said high interest rates discourage them from taking out loans, 16 percent of whom are intimidated by complex application process.

“Accessibility is not the same as availability. MSMEs need financing solutions that feel safe, understandable, and tailored to their context, not just technically open to them,” the survey said.

Thus, 44 percent of MSMEs continue to depend on personal savings, while 34 percent want to learn more government programs in the future.

Government support

The respondents ranked export training, trade promotions, and access to credit as top priorities for government support.

The study found that only 36 percent believe the government is doing enough to support access to financing. “Many MSMEs are aware of public loan programs but find it difficult to access them or do not see them as applicable to their needs,” the report said.

As for awareness of DTI support programs such as Negosyo Centers, Kapatid Mentor ME, Go Lokal, and Pondo sa Pagbabago at Pag-asenso, over 70 percent of MSMEs said they are familiar with the initiatives, but actual participation is much lower at less than 20 percent.

Some respondents said they have difficulty in meeting requirements, while others are unsure of which programs to apply.

MSMEs are also eager to expand and upskill, the study said. However, they have concerns on talent readiness and government support.

Some 72 percent said they want to expand their workforce, while 82 percent want to upskill their existing employees.

Even so, only 54 percent feel they are currently providing enough training opportunities, and 53 percent believe their current workforce is skilled enough to support business growth.

Only 48 percent feel the government is doing a good job in upskilling jobseekers.

“MSMEs show a clear desire to grow and receive support. They are investing in their products, exploring new channels, hiring staff, and engaging with support systems where they can. But in many cases, the systems around don’t keep up. The barriers are not about resources, but rather fit,” the survey said.

“MSMEs need support that reflects the way they operate: fast-moving, resource-constrained, and more personal than corporate. Bridging these gaps will require more responsive programs, simpler processes, and stronger coordination across public and private sectors,” the survey added. 

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Source: Manila Times