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A global slowdown and higher US tariffs have clouded the growth outlook for the Philippines, as the Asian Development Bank (ADB) and ASEAN+3 Macroeconomic Research Office (AMRO) both downgraded their Philippine growth projections for this year and in 2026.

In its latest Asian Development Outlook, the ADB slashed its gross domestic product (GDP) growth forecast for the Philippines to 5.6% for 2025 from 6% previously. For 2026, the ADB projects Philippine GDP to grow by 5.8% from 6.1% previously.

However, this would be within the government’s 5.5 to 6.5% target for this year, but below the 6-7% goal for 2026.

At the same time, AMRO cut its growth projections for the Philippines to 5.6% for this year and 5.5% for 2026 in its latest ASEAN+3 Regional Economic Outlook (AREO) report. These are lower than its previous forecast of 6.3% for both 2025 and 2026.

AMRO also cut the ASEAN+3 region’s growth outlook to 3.8% (from 4.2%) in 2025, and 3.6% (from 4.1%) in 2026, reflecting the impact of higher US tariffs that will take effect on Aug. 1.

“These (US) tariffs will likely reduce US demand, increase investment uncertainty and dampen consumer confidence. Given the broad scope of the tariffs, the associated slowdown in global growth would further weigh on the region’s outlook,” AMRO said in the report.

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

AMRO also cut the growth forecast for ASEAN to 4.4% (from 4.7%) this year, and 4.2% (from 4.7%) in 2026.

Based on the latest AREO, the Philippines is expected to be the second-fastest growing economy this year and in 2026, after Vietnam. Vietnam is projected to grow by 7% this year and 6.5% next year.

AMRO Group Head and Principal Economist Allen Ng said Philippine growth forecasts were lowered on expectations of slower global growth.

At a briefing on Wednesday, Mr. Ng said the Philippines’ weaker-than-expected 5.4% GDP expansion in the first quarter hinted that the “growth momentum is slower than initially expected.”

Mr. Ng said the country’s growth will likely remain strong, thanks to sustained private consumption, stable labor market conditions, slower inflation and “robust” remittance outlook.

He said the newly announced 19% tariff that the US will impose on Philippine goods is unlikely to change its forecasts.

“In the case of the Philippines, our assessment is that the impact will be very limited and it’s unlikely that we will materially change our forecast given the changes is actually from 20% to 19%,” he said.

However, Mr. Ng noted the impact of the higher tariffs remains smaller in the country compared with its Association of Southeast Asian Nations (ASEAN) neighbors given the Philippine economy is more focused on the domestic market.

“But there will be broader impact on global slowdown on the economy. So, this will affect both exports as well as business sentiment and investment activities in the Philippines,” he said.

For 2026, AMRO said the impact of the tariffs on ASEAN+3 is projected to be “more significant.”

“This is particularly so for regional economies which face both higher tariffs from the US and rely more on external demand. Overall, however, continued strength in domestic demand and sustained external demand for electronics and tourism is expected to continue to underpin regional growth,” it said.

More aggressive protectionist policies from the US pose a major risk to the growth outlook for the region, AMRO said, citing potential tariffs on exempted sectors, such as semiconductors and pharmaceuticals.

“As these products represent a substantial share of exports to the US for some regional economies, such measures could further dampen growth. Idiosyncratic considerations are also influencing tariff decisions, it said.

Other risks include a sharper slowdown in the US and Europe, tighter financial conditions, a spike in global commodity prices and weaker growth in China.

Meanwhile, AMRO lowered its inflation forecast for the Philippines to 1.8% from 3.3% for 2025. This is slightly higher than the Bangko Sentral ng Pilipinas’ (BSP) 1.6% average forecast for this year.

AMRO kept its projection for 2026 at 3.2%, unchanged from its April forecast. This is below the central bank’s 3.4% target forecast for 2026.

AMRO has noted that central banks in half of ASEAN+3 economies have eased monetary policy amid slowing inflation and tariff concerns.

“Headline inflation in the region is projected to remain low and stable at around 1% in 2025 and 2026. This outlook reflects stable commodity prices, including the normalization of oil prices following the temporary volatility during the brief escalation of Iran-Israel conflict,” it said.

ADB forecast

Meanwhile, the ADB still expects the Philippines to post the second-fastest growth in Southeast Asia this year and 2026, despite lowering its projections.

Vietnam is projected to grow by 6.3% this year, followed by the Philippines (5.6%), Indonesia (5%), Malaysia (4.3%), Thailand (1.8%) and Singapore (1.6%).

For 2026, Vietnam is still likely to post the fastest growth at 6%, followed by the Philippines (5.8%), Indonesia (5.1%), Malaysia (4.2%), Thailand (1.6%) and Singapore (1.5%).

In a statement, the ADB said it lowered its growth forecasts for developing Asia and the Pacific region this year and next year “driven by expectations of reduced exports amid higher US tariffs and global trade uncertainty as well as weaker domestic demand.”

It trimmed its 2025 growth forecast for the region to 4.7% from a projection of 4.9% made in April. It also cut the region’s growth outlook for 2026 to 4.6% from 4.7%.

“Asia and the Pacific has weathered an increasingly challenging external environment this year. But the economic outlook has weakened amid intensifying risks and global uncertainty,” ADB Chief Economist Albert Park said in a statement.

Southeast Asia is expected to post the slowest growth among sub-regions. ADB projects Southeast Asia growth at 4.2% in 2025 and 4.3% in 2026, lower than the earlier forecasts of 4.7% for both years.

“Economies in the region should continue strengthening their fundamentals and promoting open trade and regional integration to support investment, employment and growth,” Mr. Park said

According to the ADB, developing Asia and the Pacific comprises 46 economies ranging from China to Georgia to Samoa, and excluding countries such as Japan, Australia and New Zealand.

Remittance decline

In the same report, the ADB said the Philippines is expected to see the “largest proportional decline” in remittance inflows from the US once the US tax on remittances is implemented in 2026.

“In the rest of the region, the Philippines is projected to face the largest proportional decline, with US remittance inflows falling by the equivalent of 0.05% of GDP, followed by Vietnam and Nepal (both 0.03%),” it said.

On the other hand, India’s potential remittance loss would be the largest in absolute terms at USD 315 million, but accounting for 0.01% of its GDP.

Mr. Trump signed the “One Big Beautiful Bill” into law on July 4, imposing a 1% excise tax on cash-based remittances from the US to recipients abroad. The tax will be implemented starting Jan. 1, 2026.

The ADB said senders finding ways to circumvent the tax will curb the impact on remittances.

“However, remittance service providers may absorb part or all of the tax to remain competitive against US banks, which are exempt,” it said.

The ADB said money transfer services such as Western Union, PayPal, or MoneyGram may likely absorb part or all of the levy and negatively hit their profit margins.

It added that the US tax may also accelerate shifts toward alternative channels, including cryptocurrency transfers and informal systems, as senders seek to avoid higher fees. — Aubrey Rose A. Inosante with Reuters

A US tariff of 19% on Philippine goods will likely undermine the competitiveness of local exporters compared with those in neighboring Southeast Asian countries, analysts said.

Foreign Buyers Association of the Philippines (FOBAP) President Robert M. Young said that with the 19% tariff, it will be a “hard climb” for Philippine exports to remain competitive in the US market.

“It was just heartbreaking that despite the goodwill that we gave, that we were able to give accommodations to the military, we are not given some importance,” he said.

“Even before the reciprocal tariffs, our prices were already 15% higher than the other guys in the region — Bangladesh and Vietnam, and also China and the rest of the guys,” Mr. Young said. “Now that our tariff is more or less on the same level as theirs at 19%-20%, it will be a really, really hard climb,” he added.

The US trimmed its tariff rate to 19% from the threatened 20% following a meeting between US President Donald J. Trump and Philippine President Ferdinand R. Marcos, Jr. at the White House. However, this is still higher than the 17% “reciprocal tariff” that Mr. Trump announced in April.

“We concluded our trade deal, whereby the Philippines is going open market with the United States, and zero tariffs. The Philippines will pay a 19% tariff,” Mr. Trump said on his Truth Social platform.

The 19% US tariff on Philippine goods matches the rate for Indonesia, and slightly lower than the 20% tariff on Vietnam. However, it is still the second lowest in Southeast Asia after Singapore which faces a 10% US tariff.

FOBAP’s Mr. Young said that its members are already negotiating deals with US buyers on cost sharing. He noted they are looking at concentrating on higher-priced items, as it is where the group’s members see a competitive edge in terms of pricing.

“This is where we will have a chance, somehow, on the pricing scheme as far as competition is concerned with the other ASEAN neighbors. I think high fashion items can be a chance for us to continue dealing with the US,” he added.

Mr. Young also said that FOBAP members may also focus on other markets, including Russia, Australia, Canada and the European Union, among others.

‘Too high’

Meanwhile, Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said that the tariff is too high given that the Philippines will open up its automotive market.

“The imbalance undermines fair trade and places Philippine exporters at a competitive disadvantage. Reciprocity is key to sustainable bilateral trade,” Mr. Ravelas said in a Viber message.

Mr. Ravelas said that some sectors may benefit from the trade deal, including retail, logistics, and import-reliant sectors such as food, pharmaceuticals, and consumer goods, as “it will reduce input costs, thereby improving profit margins.”

However, zero tariffs on some US goods could potentially result in the dumping of cheaper American products in the Philippines.

“With zero tariffs on US imports, the local market may be flooded with cheaper American products, threatening domestic industries unless protective measures are introduced,” Mr. Ravelas said, adding that electronics, garments, and agricultural sectors would be the most vulnerable.

However, Mr. Marcos told reporters in Washington that the Philippines will only open its market for US automobiles.

Capital Economics Senior Asia Economist Gareth Leather said the impact of the tariff deal on the Philippines is “unlikely to be huge” as it is one of the least dependent Asian economies on US demand.

“While the economic hit to the Philippines will be modest, the deal does at least help shield it from losing ground to regional rivals,” he said in a report.

“However, it does remove at least some downside risks facing the country — the fact that the 19% tariff rate is close to what other countries in the region are likely to face means they won’t experience a loss of competitiveness vis-à-vis other countries in the region.”

The Philippines was also initially expected to be in a better position to win more concessions from the US.

“The fact that it has had to settle for tariffs of 19% suggests other countries still in negotiations with the US will have difficulty negotiating tariff rates much below 20%, which looks set to become the benchmark for the rest of the region (excluding China),” Mr. Leather said.

Former Tariff Commissioner George N. Manzano said the reduction in the tariff rate was “quite minimal and below expectations.”

“If we get only 1%, that seems to be too little for what we have given up… We were hoping to get even lower than 19%, so 1% is too little I think,” he said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the tariff’s drag on exports would also not be as significant, as the country is not export-oriented.

“The Philippine economy is less reliant on exports as a source of economic growth. Philippine merchandise exports are 3-5 times lower compared with major ASEAN countries on a yearly basis,” he said.

“However, there may have already been some frontloading of Philippine exports beforehand in anticipation of these higher US import tariffs.”

However, he noted slower global growth due to the tariff war could “indirectly weigh on the Philippine economy.”

At the same time, some analysts said the Philippine government should continue negotiations to secure a lower US tariff.

“We should still do our best to lower it because our neighbors are actively negotiating to lower theirs,” Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes said in a Viber message.

He noted the terms of the US-Philippines trade deal obviously favor the US.

“This is a one-sided arrangement that favors US exports while punishing Philippine producers despite our continued market openness,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber Message.

Mr. Rivera also noted that the country follows most-favored-nation rules and the World Trade Organization schedule, while the US has unilaterally abandoned this in favor of reciprocity based on its own trade deficit metrics, he said. — Justine Irish D. Tabile, Reporter with Luisa Maria Jacinta C. Jocson and Aubrey Rose A. Inosante

The Tourism Infrastructure and Enterprise Zone Authority (TIEZA) said it has secured PHP 192.3 million worth of investments so far this year.

“For 2025, we have secured PHP 192 million. That is January to this date,” TIEZA Chief Operating Officer Mark T. Lapid told BusinessWorld on the sidelines of the agency’s Partners and Stakeholders Appreciation Night on Monday.

Compared to last year, Mr. Lapid said the TIEZA’s aggressive information drive has been key in attracting more investments.

“We have more this year because we are being aggressive on the information drive even with the market sounding and the missions that we do with different local stakeholders in different areas.”

“If you look at it, we are still a new investment promotion agency. That’s why we are very happy that there are more investors applying and trying to get accredited with us,” he added.

Since 2021, TIEZA has secured investment commitments worth PHP 225.7 billion, which are expected to generate 131,805 jobs.

“These figures underscore the growing confidence of investors in the Philippine tourism sector and affirm TIEZA’s continued role as the key investment promotion agency (IPA) in driving high-impact tourism investments nationwide through our expanding portfolio of registered business enterprises (RBEs),” Mr. Lapid said.

On Monday, TIEZA welcomed seven registered business enterprises to its portfolio. These are Bukid Amara Davao, Fairfield by Marriott Cebu Mactan, Anjo World Conference Center, Avignon Clinic, Flow State Bouldering, Belo Medical Group – Greenhills, and Reside Siargao.

These tourism-related ventures span accommodations and meetings, incentive travel, convention and exhibition facilities, health and wellness, farm tourism, sports facilities, and recreational centers.

“Their entry into the TIEZA registry is expected to generate employment and stimulate local economies and attract fresh investments to their respective communities,” TIEZA said.

Aside from the agency’s information drive, Mr. Lapid said the increased investments are also being driven by the enactment of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.

“With CREATE MORE, the playing field became level among different investment promotion agencies like the Philippine Economic Zone Authority and the Board of Investments,” he said.

“And of course, we have infrastructure support in our mandate that will help our investors, so it is better in encouraging our campaign for investment in tourism,” he added.

Asked about what he wants to hear from President Ferdinand R. Marcos, Jr. in his State of the Nation Address next week, Mr. Lapid said he hoped TIEZA would be recognized for its efforts to digitalize the collection of travel tax.

“On Thursday, we will have a memorandum of agreement signing with the Department of Information and Communications Technology for the integration of travel tax in the eGov app so that the access to travel tax will be faster,” he added.

In 2024, Mr. Lapid said travel tax collections reached PHP 7.8 billion, which is at par with collections in 2019.

“We’re two years early from the projection that was given to us to recover by the United Nations World Tourism Organization,” he said.

“So, our recovery program is quite good, showing a strong recovery and renewed public confidence in travel,” he added.

Half of the travel tax collections goes to TIEZA, while 40% goes to the Commission on Higher Education, and 10% goes to the National Commission for Culture and the Arts. — Justine Irish D. Tabile, Reporter

The IT & Business Process Association of the Philippines (IBPAP) said US tariffs may result in disruptions to global investment flows that could ultimately affect its industry.

IBPAP President and Chief Executive Officer Jonathan R. Madrid said no direct impact is expected on the information technology and business process management (IT-BPM) industry, which is also known as the Business Process Outsourcing (BPO), because it supplies services and not goods.

“(Nevertheless), we are closely monitoring the broader economic and investment impacts this may indirectly bring,” he told BusinessWorld.

US President Donald J. Trump announced a 20% tariff on the Philippines this month, higher than the 17% reciprocal tariff he initially imposed in early April.

Mr. Madrid said the government has responded to the US tariff decisions promptly, with a diplomatic push by President Ferdinand R. Marcos, Jr., who is visiting Washington for “a strategic dialogue.”

“Their efforts reflect a strong commitment to investment promotion and economic diplomacy at a critical time,” he added.

He said sustained engagement and collaboration with the US will help “ensure that the Philippine economy remains resilient and attractive to global investors, especially with US counterparts.”

Mr. Marcos and tariff negotiators are in the US to negotiate a lower rate.

Mr. Marcos was due to meet Mr. Trump on Tuesday, Washington time, becoming the first head of state from the Association of Southeast Asian Nations to meet the US President during his second term.

IBPAP said it still expects a 5% increase in industry revenue this year and between 4% and 5% workforce growth.

“For 2025, we are going to show growth. I think we will touch USD 40 billion in revenue as an industry and should touch 1.9 million in terms of number of workers,” Mr. Madrid said. — Justine Irish D. Tabile, Reporter

Philippine President Ferdinand R. Marcos, Jr. is set to meet with top executives of US semiconductor companies this week as he seeks to further strengthen economic ties with the US, Manila’s envoy to Washington said on Sunday.

Mr. Marcos will hold talks with Semiconductor Industry Association President John Neuffer this week, Philippine Ambassador to the US Jose Manuel G. Romualdez said during a press briefing in Washington, DC. A video of the briefing was posted by Radio Television Malacañang (RTVM) on YouTube.

“We’ll be talking to the semiconductor industry, which is very important for us. [It’s] one of our biggest industries [with which we have] economic ties with the United States,” he added.

US President Donald J. Trump has imposed a 20% tariff on Philippine-made goods entering the country starting Aug. 1, higher than the 17% previously announced.

For now, semiconductors are excluded from the new reciprocal tariffs. Semiconductors and electronics are the Philippines’ top exports to the US.

Mr. Marcos is hoping to secure support from US semiconductor firms to shield the Philippine electronics sector from potential disruption. He is also set to meet with Mr. Trump to discuss the tariff issue.

Mr. Marcos met with Mr. Neuffer last December 2024, where he stressed the need to advance the Philippines’ position in the semiconductor value chain to keep pace with global technological shifts.

Manila is one of seven countries that the US is partnering with to diversify its semiconductor supply chain under the CHIPS and Science Act.

Mr. Marcos is also scheduled to meet on Monday afternoon (US time) executives of top US companies that are planning to boost investments in the Philippines.

Mr. Romualdez said the president’s meetings will include investors that are interested in the infrastructure sector.

“We also have some of those in infrastructure, which is part of the Luzon Corridor. So those… are part of his (Mr. Marcos’) business meetings that he will conduct in between important official meetings on Monday,” he said.

The Luzon Economic Corridor project is being undertaken via a trilateral commitment among the Philippines, US and Japan. The project seeks to enhance the connectivity of Luzon’s key economic areas — Subic Bay, Clark, Metro Manila and Batangas. It is widely seen to counter China’s Belt and Road Initiative.

Josue Raphael J. Cortez, diplomacy lecturer at the De La Salle-College of St. Benilde’s School of Diplomacy and Governance, said Manila can boost its semiconductor sector by ensuring fair competition and leveraging its partnership with the US under the CHIPS Act to enhance production capabilities and adopt best practices.

However, he added that to protect its broader economic interests, the country should maintain balanced trade ties with China, especially in mineral resources, agriculture, and raw materials, rather than relying solely on US investments.

“In the case of China, given that there could be a conflict of interest regarding chip production, we must strategize on how we can bolster our trade with Beijing, particularly on mineral resources, agricultural products, and raw materials, which are among our top exports to the country,” he said via Messenger chat.

China remains the Philippines’ largest trading partner, with the US coming in third. However, the territorial dispute with Beijing complicates the prospect of deeper cooperation.

Mr. Marcos’ trip to Washington could also position Manila as the potential lead during trade negotiations between the Association of Southeast Asian Nations (ASEAN) and the US, especially as Manila assumes chairmanship in the regional bloc in 2026, said Mr. Cortez.

This visit could enable Manila to drive a regional economic balancing strategy that leverages Southeast Asia’s strengths to benefit both ASEAN and the US while countering the economic impact of the US tariffs and China’s regional dominance, he added.

Meanwhile, Mr. Romualdez said Manila is not planning to pursue a free trade agreement at this time with Washington, as lowering the “reciprocal” tariffs is the current priority, in addition to defense and security matters.

“That’s still very far in the sense that we have to get over this particular discussion first on the tariff,” he said. “After that, we’re hoping that the free trade agreement will probably come into play.”

Mr. Romualdez also cited other agreements with the US, including security pacts on the Mutual Defense Treaty signed in 1951, the Visiting Forces Agreement signed in 1999, and the Enhanced Defense Cooperation Agreement signed in 2014.

“[There] will be more discussions on how we can continue to cooperate with the United States, our major ally. At the same time, also, I think President Marcos would like to see how we can work with the United States and other countries that have the same mindset as far as the West Philippines is concerned,” he added.

“We can’t negotiate on the basis of what we can get from another country. We have to focus on what is good for both countries.” — Chloe Mari A. Hufana

The Securities and Exchange Commission (SEC) expects more Filipinos to grow their retirement funds under the Personal Equity and Retirement Account (PERA) with the recent implementation of Republic Act No. 12214 or the Capital Markets Efficiency Promotion Act (CMEPA).

“The CMEPA strengthens the role of PERA by offering stronger incentives for long-term savings,” SEC Chairperson Francisco Ed. Lim said in an e-mailed statement on Monday.

“It encourages companies to support their employees’ retirement planning while simultaneously increasing the capital available in the financial system, stimulating the local stock market,” he added.

One of the CMEPA’s provisions is a 50% additional tax deduction for private employers who contribute an amount equal to or greater than their employees’ PERA contributions.

PERA, created under Republic Act No. 9505, is a voluntary retirement saving program. This is aimed at complementing the existing retirement benefits from the Social Security System, Government Service Insurance System and employer-sponsored plans.

“The program offers contributors tax benefits not available in other retirement investment products, encouraging Filipinos to save for their future,” the SEC said.

In January, DoubleDragon Corp.’s stock brokerage arm DragonFi Securities, Inc. became the first SEC-accredited PERA administrator after the corporate regulator issued guidelines on the accreditation of PERA market participants in September last year.

The SEC guidelines expanded the categories of entities eligible to register as PERA administrators to include securities brokers, investment houses, and investment company advisers or fund managers.

Under the SEC guidelines, a PERA administrator should have maintain a net worth of at least P100 million at all times, and have the adequate systems and technological capabilities, as well as the necessary technical expertise and personnel to administer all types of PERA investment products.

“Take-up of PERA is still relatively low in recent years. Hopefully, the CMEPA would further provide greater motivation to increase PERA in view of the additional incentives,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Data from the Bangko Sentral ng Pilipinas showed that PERA contributions increased by 24% to PHP 491.4 million as of end-2024 from PHP 396.3 million as of end-2023.

CMEPA took effect on July 1 after being signed by President Ferdinand R. Marcos, Jr. on May 29.

Among the law’s provisions is the reduction of the stock transaction tax to 0.1% from 0.6% as well as the decrease in the documentary stamp tax on the original issuance of shares of stock to 0.75% from 1% of par value.

The law also standardized the final withholding tax on interest income at 20% and harmonized the capital gains tax to a flat 15% on shares of foreign corporations.

“At its core, CMEPA is designed to align the Philippine capital markets more closely with regional peers by removing long-standing barriers to investor participation,” Mr. Lim said.

“This supports the commission’s mission to continue introducing reforms that will increase the local market’s competitiveness. The strict implementation of provisions under CMEPA is key toward ensuring broader public participation in the capital market and fostering a deeper investment culture among Filipinos,” he added. — Revin Mikhael D. Ochave