PSA sees ‘low likelihood’ of hitting growth goal by 2028

THE PHILIPPINES has a “low likelihood” of hitting its 6-7% gross domestic product (GDP) growth target by 2028 under the Philippine Development Plan (PDP), according to the Philippine Statistics Authority (PSA).

“The latest data showed low likelihood of achieving its end-of-plan target growth rate of 6.0% to 7.0%,” the PSA said in the 2025 Statistical Indicators on Philippine Development.

The PSA defines a “low likelihood” as a low chance of attaining the target.

This comes after the Philippines’ GDP growth slowed to a five-year low of 4.4% in 2025 from 5.7% in 2024, as the flood control corruption scandal continued to weigh on government spending, investments and consumer spending. Excluding the pandemic, it was the slowest growth since the 3.9% expansion in 2011.

The 2025 growth print was also below the Development Budget Coordination Committee’s (DBCC) 5.5%-6.5% goal, marking the third straight year it missed the target.

De La Salle University economist Marites M. Tiongco said achieving 6-7% annual growth by 2028 remains possible but would require sustained and well-targeted government interventions.

“The central issue is not simply whether the government should regulate more. The more important question is whether it can intervene more effectively,” she said in a Viber message.

“The country needs interventions that remove binding constraints, crowd in private investment, raise productivity, improve resilience, and ensure that growth generates broad-based employment and income gains,” she added.

Without these improvements, Ms. Tiongco said the economy could instead track the DBCC’s revised 5-6% growth target by 2028, assuming household consumption remains resilient and external conditions improve.

“However, sustaining growth of 6-7% will require a shift from a largely consumption-driven model toward one that is increasingly investment-led, productivity-enhancing, export-competitive, institutionally credible, and inclusive,” she added.

The PSA also said the government is unlikely to meet its target of bringing down the National Government (NG) debt-to-GDP ratio to 58-61% by 2028.

In 2025, the NG’s debt stock-to-GDP ratio rose to 63.2% from 60.7% in 2024, as the government ramped up borrowings to plug the budget deficit.

The debt-to-GDP ratio rose further to 65.2% in the first quarter of 2026. This was the highest level since 2005 and remained well above the PDP’s 2026 target of 60-63%.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the PSA’s assessment should be viewed as an early warning signal rather than a definitive forecast.

“Current trends suggest that meeting the PDP’s 2028 growth and debt targets will be challenging,” he said in a Viber message.

He said the key issue is not whether the economy will hit the targets, but whether it can regain momentum while keeping fiscal consolidation on track.

“If investment activity strengthens, infrastructure spending is sustained, and macroeconomic stability is preserved, the Philippines can still improve its growth trajectory and gradually reduce its debt burden over time,” Mr. Asuncion added.

The PSA also flagged the low likelihood of achieving the target of raising the share of wage and salaried workers in private establishments to 53-55% of total employed workers by 2028, after the share slipped to 50% in 2025 from 50.1% in 2024.

However, the statistics agency said the country remains on track to meet its fiscal deficit target of 4.3% of GDP by 2028 after the deficit narrowed to 5.6% in 2025 from 5.7% in 2024.

“This reflects progress in fiscal consolidation, where the pace of improvement suggests a high likelihood of achieving the end-of-plan target of 4.3%,” it added.

The PSA also assessed a high likelihood of achieving the PDP’s end-of-plan inflation target of 2.4-4.0% by 2028.

“Headline inflation, which tracks changes in the cost of living based on movements in the prices of a specified basket of major commodities, declined further to 1.7% in 2025 from 3.2% in 2024, already surpassing the end-of-plan target range of 2.4% to 4.0%,” it added.

However, inflation has remained above the Bangko Sentral ng Pilipinas’ 2-4% tolerance range this year after oil prices surged following the Middle East conflict. Headline inflation eased to 6.4% in June from 6.8% in May.

The PSA also said that there is a high likelihood of achieving the 4-5% unemployment and 10-11% underemployment rates by 2028.

The Philippines’ unemployment rate edged up to 4.2% in 2025 from 3.8% in 2024.

The report likewise indicated a high likelihood of reducing the poverty incidence target to 8.8-9% by 2028. Poverty incidence stood at 15.5% in 2023, already below the PDP benchmark of 16-16.4%.

Under the PDP, poverty incidence is projected to decline to 12.9-13.2% in 2025 before falling further to 10-11% in 2027.

Meanwhile, the PSA gave a “medium likelihood” assessment to the country’s target of raising gross national income (GNI) per capita to $5,882-$6,081 by 2028.

GNI per capita rose 3.5% to $4,470 in 2024 from $4,320 in 2023.

A “medium likelihood” means the target may or may not be achieved, according to the PSA.

The World Bank recently reclassified the Philippines as an upper-middle income economy after its GNI per capita reached $4,850 in 2025, just above the lower threshold of the World Bank’s $4,636-$14,375 upper-middle income classification. — Justine Irish D. Tabile