The Organisation for Economic Cooperation and Development (OECD) has cut its economic growth forecast for the Philippines to 3.2% in 2026, in its June Economic Outlook released on Wednesday.
The latest estimate is significantly slower than its 5.1% forecast made in December 2025.
The global organization also slashed its 2027 growth projection for the Asian nation to 5% from 5.8% previously.
The country's GDP growth slowed to 2.8% year-on-year in the first quarter of 2026, reflecting weaker domestic demand weighed down by higher inflation.
OECD also expects consumption to soften due to higher inflation and weaker labor market conditions; however, it sees public investment recovering gradually following the contraction seen in late 2025.
The report raised its Philippine inflation forecast to 6.8% in 2026 amid higher energy prices and the peso depreciation. The projected level exceeds the government's 2%-4% target range for the year.
"Monetary policy is expected to tighten in 2026 as inflation and exchange rate pressures rise. Fiscal policy will be more expansionary in the near term due to energy-related support measures, before returning to consolidation in 2027," the OECD said in its report.