Metrobank is projecting a more favorable macroeconomic environment for the Philippines in 2026, marked by potential policy rate cuts from the Bangko Sentral ng Pilipinas (BSP), a steepening yield curve, and a gradual recovery in overall growth momentum.
During Metrobank’s 2025 Market Movers series — an annual economic briefing for its Private Wealth and corporate clients — Chief Economist and Markets Strategist Nicholas Mapa outlined five major calls for the Philippine economy as the global landscape adjusts to what the bank describes as a “new global order” shaped by geopolitics, tariffs, and shifting monetary policies.
The series featured research and analysis developed in partnership with CreditSights and BMI, both research units under Fitch Group.
Metrobank’s Chief Economist and Markets Strategist Nicholas Mapa speaking during a CIBI event
Mapa said the economy is poised to regain traction next year as public sector construction resumes and the effects of monetary easing begin to filter through.
Below are Metrobank’s five key market forecasts for 2026:
1. GDP growth to rebound as fiscal spending normalizes
Mapa noted that the “fiscal freeze” experienced this year has weighed on growth, but improvements are expected as capital formation and investment activities recover in 2026. The normalization of government spending, particularly in public construction, is projected to re-energize economic momentum.
2. Inflation to climb but stay within BSP target
Metrobank expects inflation to rise toward the upper end of the BSP’s 2–4% target band by mid-2026, driven by base effects and potential increases in global commodity prices. Additional upward pressure may come from higher US tariffs, which could influence imported goods. Despite these risks, full-year inflation is still projected to remain within target.
3. BSP to remain dovish after expected December rate cut
Following the anticipated policy rate cut in December, Metrobank expects the BSP to maintain a dovish stance throughout 2026, even as inflation trends closer to 4%. The central bank has already lowered rates by a cumulative 175 basis points from the peak of 6.50%, bringing the policy rate down to 4.75% after its October meeting. With price stability intact, Mapa said the BSP is likely to prioritize supporting growth.
4. Yield curve seen steepening in 2026
A steeper yield curve is in the cards, according to Metrobank, as near-term yields decline in response to BSP easing. Long-term yields, however, could rise as the government continues to issue debt in the 10-year segment and as inflation gradually ticks up. Market expectations of further rate cuts may keep short-term yields suppressed.
5. Peso to face continued pressure despite weaker dollar
Although a softening US dollar could offer some relief, Metrobank expects the peso to remain under pressure due to persistent current account deficits projected for 2026 and 2027. Domestic structural factors are likely to outweigh global currency movements.
Metrobank encouraged clients to access its economic research through Metrobank Wealth Manager via Metrobank Online. More information on the Market Movers series is available through Metrobank Wealth Insights.
About Metrobank
Metropolitan Bank & Trust Co. is the Philippines’ second-largest private universal bank, serving retail and business clients with a wide portfolio of financial products. The bank operates over 960 domestic branches, more than 2,200 ATMs, and maintains over 29 international offices.
As of September 2025, Metrobank reported a total capital adequacy ratio of 17%, a CET1 ratio of 16.3%, and consolidated assets of ₱3.6 trillion, underscoring its position as one of the most stable and well-capitalized banks in the country.
