Philippine Domestic Consumption to Remain Stable in 2026, Supported by Key Economic Drivers
Domestic consumption in the Philippines is projected to maintain its stability throughout 2026, bolstered by enhanced government social protection initiatives and the sustained growth of remittances from overseas Filipino workers (OFWs) and the business process outsourcing (BPO) industry. This outlook was highlighted during an online briefing held on Tuesday, January 20, 2026, by Azril Rosli, an economist at Maybank Investment Banking Group.
Economic Rebalancing and Consumption Trends
Rosli pointed out that the Philippine economy exhibited signs of rebalancing in 2025, shifting towards high-value services, with net external demand playing an increasingly significant role in domestic growth. Despite this structural adjustment, domestic consumption continues to serve as the cornerstone of the economy, representing approximately 73 percent of the gross domestic product (GDP).
According to Maybank estimates, private consumption expanded by 4.8 percent in 2025 and is anticipated to grow at a similar rate this year. In contrast, government consumption, which saw a notable increase of 9.4 percent last year, is expected to moderate to 4.8 percent in 2026.
Growth Projections and Key Support Factors
Consumption is forecasted to remain robust, underpinning economic growth of around 4.8 percent in 2025 and 4.9 percent in 2026. However, these figures fall slightly below the revised growth target of five to six percent set by the country's economic managers for 2025.
Household consumption continues to be reinforced by two critical pillars:
- OFW Remittances: Accounting for about 10 percent of GDP, remittances provide a stable external anchor for the economy. Rosli emphasized that these inflows, particularly from the United States, Singapore, Saudi Arabia, and Japan, help mitigate tariff uncertainties and support the Philippines' external position, even amid peso weakness against the US dollar. He noted that remittances are larger and more stable than foreign direct investments (FDI) and portfolio flows, making them the most crucial external economic stabilizer.
- BPO Sector: The BPO industry contributes significantly to anchoring GDP on a positive trajectory. Rosli explained that this sector not only boosts economic output but also enhances the labor market, fostering a more favorable employment landscape and contributing to an overall optimistic economic outlook.
In summary, the interplay of government programs, OFW remittances, and BPO growth is set to sustain domestic consumption, ensuring continued economic resilience and growth in the Philippines for the coming year.
