Are we losing our edge?

It was unanimous. The Asian Development Bank, S&P Global Ratings and the International Monetary Fund all issued separate, but similar growth downgrade forecasts for the Philippines last week.

The ADB released its September 2026 Asian Development Outlook (ADO) wherein it projected an improved regional growth of  five percent for Developing Asia and the Pacific, attributing the slight improvement in the growth projection for the region on resilient domestic demand and strong technology exports.

The ADB report, however,  cautioned that there are downside risks.

These include worsening geopolitical tensions and energy disruptions, a worse-than-expected El Niño starting at the end of this year, tighter financial conditions and renewed trade policy uncertainty.

A more granular study  of the  ADB’s ADO, specifically for the subregion of Developing Southeast Asia – which includes Indonesia, Malaysia, the Philippines, Thailand and Vietnam – showed that the growth upgrade of the ADB only applied to Indonesia, Malaysia, Thailand and Vietnam.

The glaring outlier was the Philippines, which based on the ADB’s revised September growth projections, showed a projected growth decline to 3.3 percent for this year from the institution’s July projection of a 3.8 percent growth.

The lower  Philippine growth trajectory was also projected for next year, with a  downgrade to 5.1 percent from the July projection of a 5.3 percent growth by 2027.

On the other hand, ADB’s projection showed that Malaysia’s July growth forecast of  4.6 percent is now projected to come in at a better 4.9 percent, and for 2027, its growth is seen improving to 4.7 percent from the previous projection of 4.5 percent.

Thailand’s projected growth is seen picking up to two percent this year from the earlier July projection of 1.8 percent. Thailand posted remarkable growth of 7.5 percent in 2010 and 7.2 percent in 2012 before gradually declining over the years and tanking to a negative 6.1 percent in 2020 at the height of the COVID pandemic. It has since been able to recover, but its growth has hovered around two percent.

Vietnam, which posted an impressive eight percent growth in 2025, is now the growth leader among our subregional grouping. It is  expected to post a slightly moderated growth of 7.8 percent this year from the July outlook of 7.2 percent, and for 2027, is seen growing at 7.6 percent from the previously adjusted lower growth of seven percent.

Indonesia’s growth outlook is  maintained at  5.2 percent for this year and next year.

The main factor for the ADB’s more positive growth outlook for Malaysia, Thailand and Vietnam – which the Philippines does not seem to have, and which I specifically asked  ADB economist John Beirne to elaborate on, was that the factor for the growth of our four ASEAN neighbors is  AI-related technology exports, as well as their ability to attract more foreign investments.

And that is why I am concerned, or why more importantly, we should all be concerned.

We should all be concerned, more so for those who have children, because the educational quality and  growth of young Filipinos is severely deteriorating.

Our latest PISA or Program for the International Student Assessment scores for students aged 15 years, and who have completed their compulsory education, show a sharp decline in our ranking compared with our eight ASEAN neighbors that include Singapore, Vietnam, Brunei, Thailand, Malaysia, Indonesia and Cambodia.

Based on the 2025 results released this month, the Philippines is ranked 7, edging out Cambodia because of higher scores for math and reading. The Philippines’ score for math was 371 against Cambodia’s score of 366.

The reading score of Cambodia is lower at 347 compared with Filipinos’ reading score of 367. However, Cambodian students actually ranked higher than Filipino students in science with 382 compared with the Philippines’ 373.

The disparity is more glaring if we compare it with No. 1 Singapore and No. 2 Vietnam. Singapore is, of course, now considered a first world developed country even though it started as a developing country when it established its independence and became a sovereign nation in 1965, and that was just 61 years ago.

The Philippines has been an independent nation for 350 years and yet here we are.

In the 2025 PISA results, Singapore’s science score was 560, for math 563 and for reading, it was 535. Vietnam’s score in science is at 457, 443 for math and 392 for reading.

Even the PISA scores of Malaysia at No. 5 and Indonesia at No. 6 were better than that of 15-year old Filipino students. Malaysia’s science score is at 419, math at 397 and 393 for reading. Indonesia’s science score is at 389, math at 364 and for reading-365, which is actually lower than Filipinos’ reading score of 367.

Thus, the PISA ranking already explains the slow and slippery decline in the increasingly competitive IT-BPM sector that has already seen more competitors ready and willing to become strong competitors for outsourcing services.

While the Philippines previously had an edge because of our educated and English speaking workforce, that  edge may be disappearing as we fail to address the decline in our educational institutions’ teaching capabilities, with the migration of Filipino teachers to developed countries that are willing to pay higher salaries to educators.

We may soon lose our edge as the current No. 2 provider in the Information Technology and Business Process Management sector which the IT-Business Process Association of the Philippines projects will bring in revenues of $50.5 billion and provide full-time employment for 2.14 million Filipinos under the IT-BPM Roadmap 2028.

There is cause for concern because the 2028 IT-BPM roadmap has actually been revised from its previous roadmap drawn up in 2022 which had optimistically projected revenues to reach $59 billion.

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