ANY REBOUND in Philippine investment in 2026 will depend on the government’s ability to harness public‑private partnerships (PPP), the World Bank said.
“The projected recovery in investment in 2026 hinges critically on improved execution of the government’s public investment program and a gradual pickup in private sector activity,” the World Bank said in a report on Thursday.
The lender said more efficient execution of more PPP projects, particularly those focused on connectivity, is critical to sustaining the expected investment rebound.
A corruption scandal involving flood control projects has triggered protests, slowed economic activity, and shaken investor confidence in the Philippines.
Separately, the World Bank said it expects sovereign debt to start declining after 2026.
“National Government debt is projected to peak at 62.5% of GDP (gross domestic product) in 2026 before declining to 61.4% by 2028,” the bank said.
The Bureau of the Treasury reported a debt-to-GDP ratio of 63.1% in the third quarter, up from 60.1% a year earlier.
The rule of thumb for sustainable debt levels for developing countries is 60%.
NG debt is projected to hit P17.36 trillion by the end of 2025, although the debt-to-GDP ratio is seen slipping to 61.3%.
“Gross financing needs are set to remain elevated at 10-12% of GDP over the medium term due to a sizeable primary deficit and rollover requirements, particularly for domestic securities,” the World Bank said.
Despite this, debt risks remain low, it said, with nearly two-thirds of public debt in domestic currency.
In addition, the World Bank said poverty is projected to continue declining, but at a slower pace than in the years preceding the pandemic. Poverty is estimated to fall to around 12.5% by 2027.
“Sustaining poverty reduction will require stronger job creation and real wage gains. More robust safety nets will also be needed along with targeted measures to mitigate climate and food price shocks, which have increasingly undermined household welfare in recent years,” the bank said. — Aubrey Rose A. Inosante