Market & Mainstreet
IMF Puts Philippine Growth at 3.4% and Sees Unemployment Rising
The Daily Scan – October 14, 2026 (Wed)
The IMF now puts Philippine growth at 3.4% this year and 5.1% in 2027, behind most of its Southeast Asian neighbors, and expects unemployment to rise more than it forecast before. Foreign direct investment in July was a six-month high but still 44.1% below a year earlier.
Two cost items matter for owners. The ERC suspended the power reserve market starting today to curb backup power charges, and DOLE issued pay rules for Nov 1, 2 and 30, with NCR employers also facing three special non-working days on Nov 16 to 18.
Abroad, the IMF lifted world growth to 3.1% as AI offsets high oil prices, smartphone shipments fell 20% on memory chip costs, and big US banks posted higher profits but warned about rates and inflation. For owners: plan for slow demand, and work out November payroll early.
| IMF PH growth, 2026 | FDI inflows, July | Smartphone shipments, Q3 |
| 3.4%, 5.1% in 2027 |
-44.1%, $689M, year on year |
-20%, per kWh, lowest Q3 since 2012 |
SECTION 1 · Philippines
● IMF puts Philippine growth at 3.4% in 2026, behind most ASEAN peers
WHAT HAPPENED
In its latest World Economic Outlook, the IMF projects Philippine GDP growth of 3.4% this year, down from 4.4% in 2025, and a rebound to 5.1% in 2027. The Philippine Star reports that the 2026 forecast trails Vietnam at 8.4%, Malaysia at 5.2%, Indonesia at 5.1% and Singapore at 5.0%. BusinessWorld reports that the Philippines could post the fifth-slowest growth in Southeast Asia this year, and that unemployment is expected to rise more than previously forecast, easing to 5.2% in 2027 against an earlier forecast of 4.6%. The Inquirer notes that growth averaged 2.6% in the first half and remains below the Philippines’ estimated potential of about 6%. The IMF says weaker growth combined with high inflation makes the BSP’s job harder.
UNCERTAIN
Outlets differ on whether this is a cut or no change. The Inquirer reports a cut from 3.9%, while The Philippine Star reports 3.4% as unchanged, because earlier IMF figures differ. Forecasts can also be revised again.
WHY IT MATTERS
Our read: slow growth, rising unemployment and high inflation together can mean cautious customers and higher costs at the same time.
RISK / OPPORTUNITY
Risk: weaker sales while input and borrowing costs stay high. Opportunity: the IMF expects a rebound to 5.1% in 2027, so businesses that protect cash through 2026 may be better placed to grow into it. Both are our interpretation.
NEXT MOVE
Use 3.4% as a cautious planning case for your 2027 budget and test what your sales would look like if demand stays flat.
PhilStar → , Inquirer →, BusinessWorld →
● DOLE sets November holiday pay rules for Nov 1, 2 and 30
WHAT HAPPENED
DOLE issued Labor Advisory No. 18, series of 2026. Nov 1 (All Saints’ Day) and Nov 2 (All Souls’ Day) are special non-working days, and Nov 30 (Bonifacio Day) is a regular holiday. On the special days, workers who do not work get no pay unless company policy or a collective agreement says otherwise. Workers who report for the first eight hours get an extra 30% on top of basic pay, and 50% extra if the day is their rest day. On Nov 30, workers who report get 200% of the daily wage for the first eight hours, with an extra 30% on top of that rate if it is their rest day. Workers who do not report on Nov 30 still get 100% if they meet the attendance condition.
UNCERTAIN
This is DOLE’s reminder of existing pay rules, and company policy or agreements may give more. NCR employers also face the Nov 16 to 18 special non-working days under Proclamation 1447. DOLE’s pay guidance for those three days was not part of this advisory, so check for it when it is issued.
WHY IT MATTERS
Our read: holiday pay is a real cost for shops, factories and restaurants that stay open. Nov 1 falls on a Sunday and Nov 30 on a Monday, so rest-day premiums may apply for some workers.
RISK / OPPORTUNITY
Risk: November payroll runs higher than a normal month if you operate on the holidays. Opportunity: planning shifts early lets you decide which days are worth opening. Both are our interpretation.
NEXT MOVE
Work out November payroll now. For example, with a P700 daily wage, eight hours on Nov 30 costs P1,400, and eight hours on Nov 2 costs P910 if it is a normal workday.
Daily Tribune → , Inquirer→ , DOLE→
● ERC suspends the power reserve market to curb high backup power charges
WHAT HAPPENED
The ERC temporarily halted Reserve Market operations in the wholesale electricity spot market, starting today, to curb persistently high ancillary service prices, especially in the Visayas. Ancillary services are standby power capacity that keeps the grid stable, and consumers pay for them through transmission charges, which typically make up about 10% of a bill. Power Philippines reports ERC data showing 2025 reserve market costs of P19.57 billion in the Visayas against P1.69 billion for contracted reserves, and P24.53 billion in Luzon against P12.75 billion. NGCP must now buy reserves from existing contracts and submit an assessment within 30 days, and a redesigned market is due within six months. The market operator IEMOP expects the suspension to lower transmission charges.
UNCERTAIN
The effect on your bill is not yet known. The ERC calls the step temporary and says contracted reserves keep running so the grid stays reliable. The redesigned market is still to come, and its rules could change costs again.
WHY IT MATTERS
Our read: this targets one part of the transmission charge, which is a smaller slice of a power bill than generation. If it works, businesses in the Visayas may feel it most, since that is where the gap was widest.
RISK / OPPORTUNITY
Risk: the savings may be small or slow to show up. Opportunity: a possible easing in transmission charges while other power costs rise. Both are our interpretation.
NEXT MOVE
Compare the transmission line on your next two power bills to see whether charges ease.
Power Philippines → , PhilStar →
● World Bank financing of about P15B targets water security ahead of a super El Niño
WHAT HAPPENED
The Department of Finance said it secured €212.7 million, about P14.98 billion, from the World Bank’s IBRD to improve water supply, security and sanitation in underserved areas. The Accelerated Water and Sanitation Project will build a bulk water supply system, a septage treatment plant and water, sanitation and hygiene facilities in Bohol, Siargao and Sulu. DPWH and DILG will implement it. It is the first phase of a World Bank program on water security and resilience in East Asia and the Pacific. The DOF says the financing also supports the government’s plan to ease the effects of the expected super El Niño.
UNCERTAIN
The details come from a DOF news release, so the benefits and timelines are the government’s own claims. The named sites are Bohol, Siargao and Sulu, so most businesses will not see a direct effect soon.
WHY IT MATTERS
Our read: water supply is a hidden cost for food, tourism and manufacturing firms. Dry-season shortages can raise costs or stop operations, so water projects matter most in places such as Bohol and Siargao that depend on tourism.
RISK / OPPORTUNITY
Risk: construction takes time, and a super El Niño may arrive before the projects do. Opportunity: local contractors, suppliers and service firms near the project sites may find work. Both are our interpretation.
NEXT MOVE
If your business uses a lot of water, ask your supplier or local water district about dry-season supply plans.
SECTION 2 · Worth Knowing
● IMF edges world growth up to 3.1% but warns of AI, debt and war risks
WHAT HAPPENED
The IMF raised its 2026 global growth forecast to 3.1% from 3.0% in its previous update, and sees 3.4% in 2027, AP reports. Global growth was 3.5% in 2025. IMF economists say the AI boom is offsetting damage from sharply higher oil and gas prices. AP reports the IMF expects oil to average about $96 a barrel this year, lifting global inflation to 4.7%. Reuters reports that under an adverse scenario, with oil at $130 a barrel through the first quarter of 2027, growth would be 0.2 percentage point lower in 2026 and 0.5 point lower in 2027, and 2027 inflation would reach 5.2%.
UNCERTAIN
The forecast rests on assumptions about the war, oil and AI spending. Reports on the IMF’s assumptions say it expects the Strait of Hormuz to reopen by March. The IMF warns that an end to the AI investment boom, higher debt or a longer war could cut growth. Summaries differ slightly, so check the IMF report for exact figures.
WHY IT MATTERS
Our read: a world economy growing only about 3% with oil near $100 leaves little room for Philippine exporters and keeps import costs high. The Philippine forecast above comes from the same report.
RISK / OPPORTUNITY
Risk: a worse war scenario would push oil and inflation up again. Opportunity: AI-linked trade is still lifting Asian exporters, which may help electronics suppliers. Both are our interpretation.
NEXT MOVE
When you set 2027 prices, build in a fuel cost range between today’s level and the $130 oil case.
● Global smartphone shipments fall 20% as AI demand squeezes memory chips
WHAT HAPPENED
Global smartphone shipments fell 20% from a year earlier in the third quarter, the lowest for a third quarter since 2012, according to preliminary Counterpoint Research estimates reported by The Manila Times. Rising memory chip prices, as AI infrastructure projects absorb supply, have pushed up production costs. Manufacturers have raised retail prices, cut shipments and put profit ahead of volume. Apple’s share reached 22%, a third-quarter record, while Xiaomi shipments fell more than 30% as it pulled back from lower-priced devices, and OPPO and vivo fell more than 20%. Counterpoint says the outlook for the rest of 2026 remains challenging.
UNCERTAIN
These are preliminary estimates from one research firm, and other trackers use different methods. How long the memory shortage lasts is not settled.
WHY IT MATTERS
Our read: phones and other devices may cost more or come with fewer low-priced models, which matters for SMEs that buy devices for staff or sell them. The same AI demand behind chip makers’ profits is squeezing consumer devices.
RISK / OPPORTUNITY
Risk: higher device costs for your business and your customers. Opportunity: repair shops and refurbished or secondhand sellers may see more demand, and Philippine electronics firms in the memory and chip supply chain may benefit. Both are our interpretation.
NEXT MOVE
If you plan to buy phones or laptops for your team, get prices now and compare refurbished options.
The Manila Times → , Investing.com →
● Big US banks post higher profits but warn rates and inflation could bite
WHAT HAPPENED
JPMorgan, Citigroup, Wells Fargo and Goldman Sachs reported third-quarter results, and all posted higher profits than a year earlier, AP reports, as US consumers kept paying their bills and businesses kept investing in AI. JPMorgan earned $15.3 billion, or $5.57 a share, below the $5.93 analysts expected. Wells Fargo earned $5.95 billion and beat forecasts, but its shares fell 1.5%. Yahoo Finance reports Goldman’s profit rose 29% on equities trading, and CNBC reports Citigroup had its best third-quarter revenue in a decade. The banks warned about the impact of higher interest rates and about what higher prices could do to consumers if inflation is not brought under control.
UNCERTAIN
Results were mixed against forecasts, and the banks’ warnings are cautions, not forecasts. The US consumer price report due later today could change the rate outlook.
WHY IT MATTERS
Our read: strong bank profits show US credit and markets are holding up, but the warning on rates matches the pressure on borrowing costs and the peso here.
RISK / OPPORTUNITY
Risk: if US inflation stays high, rates may stay high longer and capital may stay away from emerging markets. Opportunity: steady US consumers support Philippine exports and remittances. Both are our interpretation.
NEXT MOVE
Watch the US inflation report later today, and check how much of your costs depend on the dollar.
The Washington Times →, CNBC → , Yahoo Finance →
SECTION 3 · THE OPPORTUNITY BEHIND THE NEWS
Pricier devices may create room for repair and refurbished sellers
Two stories connect. The IMF says the AI boom is offsetting the damage from high oil and gas prices. Counterpoint says that same AI demand is squeezing memory chip supply, so smartphone shipments fell 20% in the third quarter and manufacturers raised retail prices.
When new devices cost more, people tend to keep old ones longer and look for cheaper options. That may help repair shops, refurbished and secondhand sellers, and accessory sellers. For your own business, buying refurbished laptops or phones for staff may cut costs. These are ideas to test, not a market study.
The caution is that Xiaomi pulled back from lower-priced devices, so cheap new models may become scarce, and your customers may spend less on devices and related services. The shortage may last, or it may ease. Treat this as a trend to watch. This section is our interpretation of two news items, not a forecast.
SECTION 4 · FOUNDER’S LESSON
Plan for a range, not one number
Imagine you set next year’s sales target using a growth forecast you found earlier this year. By now, the forecast has moved. The IMF puts Philippine growth at 3.4% for this year, and the Inquirer reports that is down from 3.9% in the IMF’s earlier update. Economists revise because the world changes.
Your plan can work the same way. Instead of one target, write three: a base case, a slow case and a stronger case. Put a number on what each does to your sales, costs and cash. Decide in advance what you would cut or add if you land in the slow case.
The IMF still expects a rebound to 5.1% in 2027, but forecasts can change again. A plan with a range lets you act early when the numbers move, instead of rewriting everything under stress. This is our reading of the forecast, not a prediction.
SECTION 5 · ONE REAL SIGNAL
Slow growth and high inflation are pulling in opposite directions
The IMF’s Philippine numbers are the headline: 3.4% growth this year, the fifth-slowest in Southeast Asia according to BusinessWorld, with unemployment expected to rise more than forecast earlier. The IMF says the mix of weak growth and high inflation makes the BSP’s job harder. It must stop price shocks from becoming lasting without hurting activity further.
Foreign investment data point the same way. BSP figures show net foreign direct investment of $689 million in July, a six-month high but 44.1% below a year earlier. The seven-month total is $4.07 billion, down 23.9%. The Daily Tribune reports the BSP linked the decline to slower growth in major trading partners, geopolitical tensions and persistent credit tightening. Reports differ on the BSP’s full-year forecast: BusinessWorld says it still sees $7 billion, while the Inquirer says it was cut to $6.5 billion.
For a business, that leaves soft demand and costs that fall unevenly. Diesel is cheaper and gasoline is not. Power rates are being reset, with some items easing and others rising.
How to read this: the IMF numbers are forecasts, and the BSP investment data are preliminary. Use them to test your plan against slower demand, not to predict a recession.
- US inflation report, later today. A hot number could lift US yields and the dollar again, which weighs on the peso.
- Oct 16 to 23 ERC hearings. The Meralco refund amount can change after the final review.
- Oct 22 BSP decision. Whether the BSP hikes again, given weak growth and high inflation.
- NGCP reserve assessment, within 30 days. How reserve power will be bought while the spot reserve market is paused.
Summarized in our own words with links to every source. We don’t reproduce full articles or bypass paywalls. Interpretation is labeled as such and kept separate from reported fact.
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