Palace upbeat on growth, poverty goals despite IMF cut

Malacañang on Wednesday said the government remains optimistic about achieving upper-middle-income status and reducing poverty within the term of Ferdinand Marcos Jr., despite weaker global growth forecasts.

The statement came after the International Monetary Fund downgraded its Philippine gross domestic product growth forecast to 4.1 percent from 5.6 percent in its latest World Economic Outlook, citing “the war shock compounding the negative base effects from a weaker-than-expected 2025 outturn related to a sharp decline in public investment and confidence.”

Separately, Moody's Ratings revised its GDP growth projection to 4.9 percent from 5.5 percent, citing rising energy costs, global tensions, and weaker domestic demand.

Moody’s, however, maintained its Baa2 stable rating for the Philippines and expects inflation to average 3.7 percent in 2026.

Presidential Communications Office Undersecretary Claire Castro said the World Bank is expected to determine by July 2026 whether the Philippines has reached the threshold for upper-middle-income status based on its 2025 performance.

She cited data from Arsenio Balisacan, who said formal classification may still require sustained results.

“Formal classification may require additional years of sustained results. We remain confident this will be achieved within the term of the Marcos administration,” Balisacan said in a statement read by Castro. “Despite geopolitical tensions and heightened uncertainty, we will stay the course in stabilizing the economy and strengthening social protection to sustain poverty reduction.”

Balisacan also noted that many Asian economies may miss their growth targets this year due to supply chain disruptions and uncertainty linked to the Middle East conflict.

To cushion the impact, the President earlier issued Executive Order No. 110 declaring a state of national energy emergency.

Among the measures implemented are a P10-per-liter diesel discount for public utility vehicles, suspension of excise taxes on liquefied petroleum gas and kerosene, cash assistance for tricycle and TNVS drivers, and toll discounts for jeepneys, buses, and trucks.

The government has also expanded the Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers program for drivers and intensified service contracting in the transport sector.

To support food security, authorities expanded the P20 rice program and provided fuel and fertilizer subsidies to farmers and fisherfolk.

Pension relief under study

Castro said the government is also studying proposals to suspend pension premium contributions and outlined existing relief measures from state-run funds.

“We are studying it now, but the SSS (Social Security System), GSIS (Government Service Insurance System) and Pag-IBIG (Home Development Mutual Fund) have already did something for our kababayan as an intervention in the Middle East war,” she said.

She noted that the Social Security System has about P60 billion in assistance for members, including loan programs and early implementation of the 2026 pension increase, as well as penalty condonation and delinquency relief.

The Government Service Insurance System is implementing the Balik Ginhawa Program, which includes a three-month loan moratorium.

“The loan will be refunded in the meantime so that members can make use of it. They will repay it without interest. To date, there are already 297,162 out of 353,667 applications qualified for the Balik Ginhawa Program,” Castro said.

Meanwhile, Pag-IBIG Fund has rolled out a special benefits package for repatriated OFWs, allowing withdrawal of up to 100 percent of savings before maturity and offering a three-month moratorium on housing loan payments without interest or penalties.