“The Philippines is not in a crisis,” said Alvin Arogo, First Vice President and Economist of Philippine National Bank, setting the tone for the economic outlook presented at the British business community’s latest forum in Manila.
Speaking at the event “Forecasting 2026: UK-PH Economic Perspectives” organized by the British Chamber of Commerce Philippines on Thursday (January 29), Arogo sought to calm concerns over domestic and global headwinds, including public trust issues and tariff pressures.
“There’s no need to panic, but some things must change,” he said, adding that “the shift in sentiment alone will allow the Philippines to post again a stronger growth in 2027.”
Arogo outlined a cautiously steady macroeconomic path. He noted that a corruption probe is beginning to weigh on output, with GDP growth at 3.0% in the fourth quarter of 2025. Still, he described inflation as generally benign, though a temporary uptick is likely.
Monetary policy, he said, could ease further, with the policy rate potentially declining to 4.25%. On the currency front, the peso is expected to remain relatively stable, with the US dollar exchange rate averaging around 57.5 pesos.
Together, these trends point to a period of adjustment rather than crisis, with reforms and improved sentiment seen as key to restoring stronger momentum.
PEZA underscores UK footprint in ecozones
From the investment side, Philippine Economic Zone Authority Director General Tereso Panga highlighted reforms aimed at sustaining foreign direct investment growth by lowering business costs and strengthening the country’s tradables sector.
He reported that British investments in PEZA ecozones now include 75 locator companies with cumulative investments of ₱229.297 billion since 1995. These firms generated export value of $1.407 billion as of November 2025, underscoring the UK’s long-standing presence in Philippine export-oriented industries.
Panga framed these efforts as part of a broader push to enhance investor confidence and long-term competitiveness.
UK outlines next steps through JETCO, CPTPP support
Representing the UK, Ron Yip, a senior leader in trade policy at the UK Department for Business and Trade, detailed progress under the UK-PH Joint Economic and Trade Committee (JETCO).
He said the key outcome of JETCO was to “set up a framework for regular dialogue between two trusted partners to really share views and coordinate and collaborate on actions where there’s a mutual interest,” as well as “solve issues that businesses have told us are important for them.”
Yip noted that after the first JETCO meeting, both sides worked on addressing market access barriers and other business concerns to “give immediate difference to allow business to join and invest more easily between the two countries.”
On regional trade, he added that “we (UK) very much support the expansion of the membership of the agreement… including the Philippines,” referring to Manila’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
He also pointed to the UK’s fifth anniversary as a dialogue partner of ASEAN, saying “we are in the position to renew our plan of action. So that’s something that we’re really focused on at the moment” to drive growth.
For the business community, BCCP Executive Vice Chairman Chris Nelson said, “We recognize the efforts from both the public and private sector despite domestic and global headwinds. We, at the British Chamber, will continue to push for reforms that are key in driving economic growth and reinforcing the Philippines as an investment destination in the region for British companies.”
Taken together, the forum’s message was one of guarded confidence: a Philippine economy navigating pressures but not in crisis, with UK-PH trade mechanisms, ecozone investments, and reform efforts seen as pillars for the next phase of growth.