Insider Spotlight
Why it matters
The forecast reinforces the country’s position as a standout in Association of Southeast Asian Nations (Asean), with gross domestic product projected to expand 5.6 percent—outpacing peers as households benefit from easing inflation, supportive monetary policy and rising real incomes.
The big picture
Asia-Pacific is set to maintain stable growth in 2026 despite tariff shifts, geopolitical uncertainty and uneven technological gains.
MEI notes that consumers regionwide remain tech-enabled and value-conscious, gravitating toward experiences such as travel while staying sensitive to essential costs.
Driving the news
Digitization is entering its next phase as AI adoption, corporate investment and targeted government policies—including AI hubs, data centers and smart city development—gain traction across the region.
MEI finds that small and microentrepreneurs are increasingly leaning into digital tools to streamline operations and reach customers, reinforcing economic resilience.
What they’re saying
“Given its centrality to global trade, Asia-Pacific has shown remarkable resilience at a time when tariff uncertainty and shifting supply chains have threatened to upend international commerce,” David Mann, Mastercard's chief economist for Asia-Pacific, said in a press release on Dec. 10, 2025.
“The largely positive outlook for the region’s consumers highlights a defining feature of 2026: even as trade realignments and technological shifts dominate the global narrative, microeconomic conditions across much of Asia Pacific are improving.”
Travel is the standout driver
Outbound spending from the Philippines surged 28 percent in H1 2025 versus 2019 levels—one of the fastest in the region—as consumers increasingly prioritize experiences.
This mirrors a broader shift across Asia-Pacific, where intra-regional travel and experiential spending continue to strengthen the services sector.
Zoom in
Indonesia and the Philippines are projected to lead Asean-5 growth in 2026, both benefiting from strong domestic demand and expanding digital ecosystems.
However, MEI warns that global demand shifts and energy price volatility could create headwinds.
Between the lines
AI-enabled productivity and consumer digital behaviors are reshaping how businesses operate—from sourcing to customer engagement—positioning the Philippines to capture long-term gains if investments continue.
What’s next
MEI notes that adaptability will be critical: “How governments and businesses respond to these challenges will shape the next phase of growth. The ability to adapt, invest in digital readiness, and tap into evolving consumer demand will be critical for success,” Mann added. —Vanessa Hidalgo | Ed: Corrie S. Narisma
