Manila:<Text>

UBS Philippines expects domestic growth to pick up in the first half of 2026, supporting a 5-percent gross domestic product (GDP) this year.

According to Philippines News Agency, the local office of the Swiss investment bank stated it believes "growth is near its trough." The bank anticipates quarterly sequential momentum to strengthen to 1.4 percent over the next two quarters, leading to a 5 percent GDP growth in 2026. This projection sits at the lower end of the government's 5-6 percent target.

In 2025, domestic output experienced a slowdown in the second half, primarily due to the flood control corruption controversy, resulting in a full-year growth of 4.4 percent. Economic managers have assured that measures are in place to address these issues and restore investor confidence.

UBS highlighted optimism stemming from private investments, which "were more resilient than expected." Private construction, which makes up roughly 4 0 percent of construction value-added, expanded 18 percent year-on-year, aided by gradually declining inventories.

The bank also reported a 22.8-percent rise in goods exports in Q4 2025, up from 11.6 percent in Q3, attributed to "stronger electronics shipments," which comprise over half of the goods export basket, mostly in assembly, packaging, and testing. Services exports increased by 2.5 percent from 1.3 percent in Q3, driven partly by the business process outsourcing (BPO) sector, particularly in information technology and professional services.

Public investment is expected to see "a small uptick" in the first three months of the year, with spending projected to return to Q2 2025 levels by Q4 2026, according to UBS.