The economy is expected to begin recovering by mid-2026, according to Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr.

Speaking to reporters at the BSP headquarters in Manila on Wednesday morning, Remolona said the central bank projects economic growth for 2025 to settle between 4 and 5 percent, with a rebound beginning the following year.

"I think we all agree that for 2025, growth will be slow. We think maybe 4%, between 4% and 5%, but the recovery should start by 2026, maybe middle of 2026, and then we should be back on track by 2027," Remolona said.

"Parang bagsak tayo sa 2025, plus kaunting recovery sa 2026… Stronger recovery by 2027," he added.

Remolona recently met with President Ferdinand R. Marcos Jr., where both acknowledged the economy’s slowdown this year, driven in part by the flood control corruption scandal that has embroiled the administration.

"One reason for part of the decline in 2025 is because the government also cut its spending in order to review the flood control projects and other projects, but the main reason is probably the loss of confidence by investors," he said.

Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio Balisacan has likewise confirmed that the Philippines will miss its full-year growth target of 5.5 to 6.5 percent — marking the third straight year the government has fallen short under Marcos.

Despite the headwinds, Remolona remains optimistic. He said his meeting with the President underscored the strength of the country’s macroeconomic fundamentals, particularly low inflation, which provides room for a possible policy rate cut.

Remolona earlier said a rate cut remains “on the table” for 2025, but clarified on Wednesday that additional easing during the Monetary Board's meeting later this month “is not assured.”

He also cited improving indicators of market sentiment, including a rebound in the stock market due to bargain hunting and S&P Global’s recent affirmation of the Philippines’ BBB+ long-term sovereign credit rating with a positive outlook.

"The stock market has recovered, so that kind of shows that confidence is coming back. S&P reaffirmed our positive outlook, which means we're still on track for an upgrade in our ratings, so the signs suggest that confidence is returning," Remolona said.

S&P also warned, however, that the slowdown in infrastructure spending resulting from the floodgate scandal poses risks to near-term growth.

Remolona’s remarks came as the Independent Committee for Infrastructure (ICI) recommended filing cases against former Senator Bong Revilla and 11 others in connection with the scandal. ICI Chairman Andres Reyes also announced the resignation of founding member Rogelio “Babes” Singson—another shake-up in the committee’s early operations.

Later in the afternoon, Remolona was summoned to Malacañang to brief newly appointed Finance Secretary Frederick Go, who will take outgoing DOF chief Ralph Recto’s seat on the Monetary Board in 2026.

Recto was named Executive Secretary following the resignation of Lucas P. Bersamin, who stepped down after being linked to alleged budget insertions in the flood control projects.