Philippines Set to Outpace Regional Peers in Economic Expansion Through 2027

The Philippine economy is positioned to rank among Southeast Asia’s top performers over the next two years, with the United Nations projecting expansion rates that exceed several neighboring economies. According to the latest UN World Economic Situation and Prospects report, Manila’s GDP growth trajectory should reach 6.1% in 2027, building on anticipated 5.7% expansion in 2026.

Regional Growth Hierarchy: Where Philippines Stands

When measured against Southeast Asian counterparts, the Philippine economy’s projected performance places it firmly in second position. Vietnam leads the regional rankings at 6% growth for 2026 and 6.2% for 2027, with the Philippines following closely. The remaining regional economies show a tiered slowdown: Cambodia (5.1% and 5.5%), Indonesia (5% and 5.2%), Malaysia (4% and 4.5%), Laos (3.8% and 4%), Timor-Leste (3.3% and 3.2%), Myanmar (3% across both years), Thailand (2% and 2.6%), Singapore (1.8% and 2%), and Brunei trailing at 1.5% and 2.1% respectively.

Demand Drivers Supporting Philippine Growth

The UN’s optimistic outlook reflects several reinforcing economic factors. Consumer expenditure remains robust, underpinned by favorable labor market dynamics and steady inflows from overseas remittances. Government fiscal measures and capital formation add additional momentum to aggregate demand. These elements collectively provide cushion against external headwinds.

Critically, price pressures have moderated substantially. The UN forecasts inflation settling at 2.3% during 2026 and accelerating only slightly to 2.8% in 2027—rates that prove gentler than Bangko Sentral ng Pilipinas (BSP) projections of 3.2% and 3% respectively. December’s headline inflation reading of 1.8% underpinned a 2025 annual average of just 1.7%, establishing favorable baseline conditions for monetary policy accommodation.

Reconciling Growth Targets with Recent Headwinds

The UN projections align with Manila’s official growth aspirations of 5-6% for 2026 and 5.5-6.5% for 2027. However, 2025’s performance fell short of government targets. Preliminary estimates suggest full-year GDP growth of approximately 4.8-5%, trailing both the 5.5-6.5% government target and the prior year’s 5.7% outturn. The Philippine Statistics Authority is scheduled to release definitive fourth-quarter and full-year 2025 data on January 29.

Government officials attributed the slowdown to administrative disruptions stemming from investigation findings related to flood control infrastructure projects, which dampened public sector disbursements and eroded private sector confidence.

Outlook Beyond Regional Averages

The Philippine economy’s projected trajectory surpasses the UN’s estimated 4.4% average for the East Asia region across both forecast years, suggesting relative outperformance within the broader Asian context as recovery momentum builds.