Global lender HongKong Shanghai Banking Corp. (HSBC) sees the Philippines growing by as much as 6.7 percent in 2026, making it one of the fastest growing economies in Southeast Asia.
In a study, HSBC said the Philippines is reaping the rewards of two decades of hard-earned reform.”
“From liberalization, fiscal, and institutional reform, we think the Philippines has one of the strongest reform narratives in Asean, giving the economy the stability it needs for take-off. While many economies in the world are seeing their public debt levels rise, the Philippines has bolstered its fiscal coffers to finance the long-term investments needed to boost its overall potential,” HSBC said.
“We believe the Philippines is set for takeoff, with the country’s hardworking people as its main source of growth. We expect the share of working age population to peak the latest in Asean, in 2035. This demographic dividend should, in turn, boost GDP per capita and increase the absolute savings available for further investment,” it added.
HSBC said until 2029, the Philippines may increase its average incremental savings by $17.7 billion each year.
“The Philippines has performed over and above the demographic benefits it enjoys. Employment is currently above what the demographic trend would suggest, with job creation concentrated in digitalization and the participation of women. A more digital and inclusive economy has paved the way for better growth in the archipelago,” it said.
HSBC noted that the Philippines has found a “niche” in exporting ‘light-asset” services.
“Digitalization has made services more tradable, presenting an economic opportunity that the country has captured, with the export of business and computer services surging by 20 percent since the COVID-19 pandemic,” it said.
Artificial intelligence, however, stokes concerns about the sustainability of this driver, the study said.
“Despite this, we think that the Philippines can look at India – an economy with similar demographics and skills – to build the resilience needed,” the bank added.
HSBC said the Philippines will likely grow to become the 28th largest economy by 2029, from the current 33rd, as cited in the International Monetary Fund’s World Economic Outlook. The economy grew by 5.6 percent in 2023.
“This presents many opportunities for investors to take part in this growth story, with the economy one of the least leveraged in Asean. Some are already ahead of the game,” it said.
“In 2018-19, the archipelago was the second largest recipient of FDIs (foreign direct investments) as a percent of GDP in Asean. This may be the case again in the next five years, with the Philippines recording the highest FDI approvals in its history. So fasten your seatbelts and get ready for take-off,” HSBC added.
On Tuesday, HSBC held its “Philippines Asean’s Rising Star” forum as part of its planned activities that coincide with the bank’s 150th anniversary in the Philippines next year, and to take a look forward at the nation’s economic future.
Sandeep Uppal, HSBC Philippines chief executive officer, noted the country’s potential as an Asean investment hub, and the role HSBC can play to link the country with FDIs and other activities to reach an economic powerhouse status.
“We’re optimistic about what we can do to collectively propel the Philippines from Asean’s rising star to Asia’s superstar,” he said.
Corrie Purisima, HSBC Philippines head of markets and securities services, said the Philippines’ services exports “continue to rise and even outpace the growth of international remittances, while FDIs maintain a promising outlook with historic levels of foreign investments approved.”
Mimi Concha, HSBC head of wholesale banking, said the bank is committed to growing further the bank’s wholesale and retail business in the country.
