Philippine economic growth is expected to remain robust, with the direct impact of the 19 percent US reciprocal tariff on the Philippine economy likely to be limited, according to Allen Ng, Group Head and Principal Economist at the ASEAN+3 Macroeconomic Research Office (AMRO).
In a virtual briefing on Wednesday, Ng stated that while the direct effects of the tariff will not significantly affect the Philippine economy, AMRO anticipates a slowdown in economic growth due to a projected deceleration in the global economy.
In its July ASEAN+3 Regional Economic Outlook (AREO), AMRO projected that the Philippine economy will grow by 5.6 percent this year and 5.5 percent in 2026. These forecasts are lower than the previous projections of 6.3 percent for both 2025 and 2026.
Ng explained that the recently announced 19 percent reciprocal tariff by US President Donald Trump was not factored into the latest projections. “We have yet to incorporate this into our outlook today and we will need to study the details as they come up eventually. But for the moment, 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 change is actually from 20 percent to 19 percent and the fact that the economy of the Philippines is more domestically structured,” he said.
He attributed the lower growth forecasts primarily to the anticipated slowdown in global growth and the slower-than-expected gross domestic product (GDP) expansion during the first quarter of the year. “Now the tariff impact on the Philippines itself, the direct impact itself is not very large compared to other parts of the region, given the more domestic-centric structure of the Philippine economy, but there will be broader impacts from the global slowdown on the economy,” Ng noted.
Ng acknowledged that the reciprocal tariff would affect both exports and business sentiment, as well as investment activities in the Philippines. “I think despite the revision downwards, it’s important to emphasize that growth in the Philippines continues to be very robust, driven by strong private consumption activities, supported by multiple factors including stable labor market conditions, currently slower inflation, and expectations of robust remittances going forward,” he added.
AMRO expects inflation to be at 1.8 percent this year, a decrease from its previous forecast of 3.3 percent. For 2026, AMRO projected that inflation will likely settle at 3.2 percent.