Confidence in the Philippine economy is steadily regaining ground, with Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. expressing optimism that growth will normalize by the second half of 2026.
Speaking at a Management Association of the Philippines event in Taguig City, Remolona pointed to improving business sentiment and stabilizing financial indicators as early signs that the economy is finding its footing after last year’s slowdown.
Central to this renewed optimism is the BSP’s latest survey of supply chain managers. The index has climbed above the 50-percent threshold, a key benchmark that signals expansion and renewed confidence among businesses. For policymakers, that level often marks the line between contraction and growth.
Financial markets are also reflecting a shift in sentiment. Yields on government securities issued by the Bureau of the Treasury have declined, suggesting stronger demand from investors and improved confidence in the country’s fiscal and economic direction. Lower yields typically indicate that investors are more willing to hold government debt at reduced returns, a sign of perceived stability.
Meanwhile, the Philippine Stock Exchange index (PSEi) has begun to recover after months of pressure. Remolona noted that the main index started sliding in July 2025 amid governance-related concerns, but recent movements suggest that the market is regaining traction.
“So it looks like it is beginning to come back. Not as fast as we would like, but it’s coming back,” Remolona said. “In our projections, we think that we’ll be back to normal by the second half of 2026.”
The cautious tone reflects the broader context of last year’s deceleration. Economic growth lost steam in the latter half of 2025, weighed down by reduced public infrastructure spending following scrutiny over flood control projects. As a result, gross domestic product expanded by 4.4 percent in 2025, slower than the 5.7 percent recorded the previous year.
For 2026, the government is targeting growth between 5 percent and 6 percent, banking on a rebound in public spending, sustained domestic demand, and improving investor confidence.
With business sentiment crossing expansion territory, bond markets stabilizing, and equities inching higher, policymakers are signaling that the worst of the slowdown may be over. The challenge now is ensuring that renewed confidence translates into sustained, broad-based growth in the months ahead.