Economic managers cut their overallAmid the “global uncertainty” caused by the Middle East conflict and U.S. tariffs, this year’s pesticide products (GDP) growth targets.
The Development Budget Coordination Committee (DBCC) said Thursday that the Philippines economy now expects a target of 5.5-6.5% this year.
It also narrowed its 2026 GDP growth target from the previous 6-8% to 6-7%, “reflecting a more measurable and resilient prospect for global headwinds.”
“Taking global uncertainty, such as the unforeseen escalation of tensions in the Middle East and the imposition of U.S. tariffs,” said Amenah F. Pangandaman, Budget Secretary of the DBCC Chairman, in a briefing.
She added: “Despite these headwinds, the DBCC remains vigilant and is ready to deploy and targeted measures in a timely manner to mitigate its potential impact on the Philippines economy.”
The Philippines’ economy grew by 5.4% in the first quarter compared with 5.9% a year ago.
Minister of Economy, Planning and Development Arsenio M. Balisacan said GDP must grow by 5.5-6.5% to reach the low end of this year.
DBCC also makes some macroeconomic assumptions based on inflation, trade, crude oil and exchange rates.
Inflation assumptions for 2025 narrowed from the previous outlook range of 2%-4% to 2%-3%. It maintains the 2-4% inflation assumption from 2026 to 2028.
In the first five months, the United Kingdomtion averaged 1.9%, slightly below the target range of 2-4% in Sentral Ng Pilipinas (BSP).
“Inflation will continue to be manageable and benign. Growth may be moderate, but remains firm,” BSP Deputy Governor Zeno RR Abenoja said in a briefing.
Oil price
DBCC expects the average water price of Dubai crude oil prices this year to be $60-70, up to 2028, until 2028, and up to 2028, and up to 2028, as a result of “growing global demand and expected global oil inventories.”
However, Mr Bariskan warned of the potential impact of the prolonged war in the Middle East.
“If these (oil prices) persist for the rest of the year, of course, the economy will be as badly hit as the rest of the world,” he told reporters.
Oil prices rose after the Israeli-Iran ceasefire was announced. Reuters reported Brent crude futures rose 0.37% to $67.93 a barrel, while US Westexas Intermediate crude oil Up 0.45% to $65.21.
On the other hand, from this year to 2028, Forex is assumed to be “stabilized”, with an average of p56 p58 per dollar.
“This is due to the support of lower domestic inflation rates and will continue to be affected by global financial conditions and external trade performance,” the DBCC said.
Trade slow
Trade is expected to be slow, reflecting the impact of the Trump administration’s tariff policy.
“Freight exports are expected to earn 2% in 2025 (previously forecast for 6% growth) largely due to slow global demand and increased uncertainty in trade policy, then recovering 2% from 2026 to 2028,” the DBCC said.
DBCC also lowered its import growth forecast for this year from 5% to 3.5%. Imports are expected to expand from 4% in 2026 from 8% before 2028, “backed by domestic consumption and ongoing infrastructure spending.”
U.S. President Donald J. Trump announced that most of the country’s trading partners have higher reciprocal tariffs, with Philippine goods facing the second lowest rate in Southeast Asia at 17%. However, reciprocity tariffs have been suspended for 90 days until July 9. The benchmark tariffs are still in place.
Frederick D. Go, President of Investment and Economic Affairs.
Deficit cap
Meanwhile, DBCC now expects the budget deficit to be a share of GDP, starting from 5.5% this year from this year Previously 5.3%. It also saw it The deficit, as a share of GDP, expanded from the previous 4.7% to 5.3% in 2026.
The projected budget gap is a percentage of GDP in 2027, up from 4.1% to 4.8%, while it was revised to 4.3% of the previous 3.7% in 2028.
“We revised the Medium-Term Financial Plan (MTFP) because when we first made MTFP, these external factors did not take these external factors into account. For example, we have launched a war in Ukraine and Russia. We have already had another war in the Middle East.
The economic manager also proposed a P679.3 million mile budget for 2026, an increase of 7.4% over 2025.
“The 2026 national budget prioritizes human capital development prioritizes investment in quality education, health care and workforce.” – With from Alai
