AMRO sees steady growth for Philippines

The ASEAN+3 Macroeconomic Research Office (AMRO) maintained its Philippine growth projections for this year and next year, despite global trade uncertainties.

In its latest ASEAN+3 Regional Economic Outlook, AMRO said it sees the Philippine economy growing by 5.6% this year and 5.5% in 2026, unchanged from its July estimates.

If realized, the Philippines would be the second-fastest growing economy in the region until 2026, behind Vietnam which is seen to grow by 7.5% this year and 6.4% next year.

While the AMRO’s projection for 2025 was within the National Government’s 5.5-6.5% target but below the 6-7% goal for 2026.

AMRO Group Head and Lead Economist Runchana Pongsaparn said the Philippine gross domestic product (GDP) growth projection for 2025 and 2026 are slower than the 5.7% expansion in 2024.

“It’s partly because of the weaker export, just like in other countries in the region, where we expect that the impact of the US (United States) tariff is going to kick in towards the end of the year and next year,” she said in an online briefing on Thursday.

Since August, Philippine goods entering the US have been slapped with a 19% levy, the same rate imposed on the country’s neighbors Indonesia, Cambodia, Malaysia and Thailand.

Ms. Pongsaparn said they expect Philippine consumption to grow steadily on the back of slower inflation, a robust labor market and remittances.

Asked if the growing corruption scandal would have an impact on growth, Ms. Pongsaparn said the impact would be minimal if it is “short-lived.”

“In terms of the scandal, I think we would have to see to what extent it’s actually going to affect the wider economy because if the event is short-lived and then it does not severely affect the investment sentiment, then that could be contained and may not affect the growth forecast materially. So, we still wait and see the overall impact,” she said.

On the other hand, AMRO Chief Economist Dong He said public spending as well as public and private investments should shield the economy from risks surrounding climate and services exports.

“The Philippines, because of its geography, is quite exposed to climate risks,” he said. “So, infrastructure really has to be strengthened. Some of these issues with flooding have to do with the infrastructure.”

Mr. He also said that the Philippines should continue upskilling its workforce, especially in the age of artificial intelligence (AI).

“The Philippines is a very service-oriented economy… But look, in the age of AI, how do we operate these services? So, that would also require upskilling of human resources in terms of public investment and also private sector investment,” he said.

The think tank upwardly revised its growth outlook for the ASEAN+3 region to 4.1% this year from its earlier projection of 3.8%. It also raised its 2026 growth projection to 3.8% from 3.6% previously.

ASEAN+3 comprises the Association of Southeast Asian Nations (ASEAN) members plus China — including Hong Kong — Japan and South Korea.

AMRO said the better outlook came amid the region’s “robust first-half performance and stronger-than-expected export momentum.”

It also raised its GDP forecast for the ASEAN region to 4.6% this year from 4.4%; and 4.3% in 2026 from 4.2% previously.

However, AMRO noted that more protectionist policies, slower growth in major economies, more volatile global financial markets, and higher global commodity prices pose risks to the region’s economic growth.

It also said governments in the ASEAN+3 region should use a monetary-fiscal-macroprudential policy mix to support growth and be prompt in addressing potential risks from structural changes in the market.

AMRO added that it should also “deepen regional financial cooperation to help reduce vulnerabilities stemming from heavy resilience on the US dollar.”

Meanwhile, AMRO’s Philippine inflation estimates for 2025 and 2026 were also unchanged at 1.8% and 3.2%, respectively.

These are slightly higher than the Bangko Sentral ng Pilipinas’ forecast of 1.7% for this year and 3.3% for 2026.

For ASEAN+3, inflation is projected to average 1% in 2025 and 1.1% in 2026. For ASEAN alone, inflation is seen to settle at 2.5% this year and 2.8% next year.

“Well-calibrated policy mixes and strong fundamentals — including robust banking systems, deepening financial markets, ample foreign reserves, and available policy space — have provided critical buffers,” it said.

The think tank said the region’s inflation outlook provides central banks with room to be more accommodative in its monetary policy to support growth. — Katherine K. Chan