High-rise buildings as seen from Torre de Manila on Jan. 14, 2025. Philippine economic growth is expected to reach 5.6 percent this year and 5.5 percent in 2026, making the country one of the strongest performers among Association of Southeast Asian Nations, according to a report from the ASEAN+3 Macroeconomic Research Office. (PNA photo by Yancy Lim)
The Philippines is expected to sustain its growth momentum and emerge as the second fastest-growing economy in ASEAN this year and in 2026, according to the latest ASEAN+3 Regional Economic Outlook (AREO) released by the ASEAN+3 Macroeconomic Research Office (AMRO) on Thursday.
Strong growth outlook
AMRO projects the Philippine economy to expand by 5.6 percent in 2025, outpacing most of its regional peers and trailing only Vietnam, which is forecast to post a robust 7.5 percent growth. The Philippines’ projected growth rate surpasses those of Indonesia (5.0%), Cambodia (4.9%), Malaysia (4.3%), Singapore (2.6%), and Thailand (2.2%).
“In terms of the macro level, the Philippine economy has been performing quite well. Growth has been steady,” said AMRO Chief Economist Dong He in a virtual briefing, underscoring the country’s resilience amid global headwinds.
For 2026, AMRO expects Philippine GDP to maintain a healthy 5.5 percent growth pace, sustained by strong household consumption and a robust labor market.
External headwinds
However, the regional outlook faces mounting challenges from higher U.S. tariffs, which are expected to dampen export performance across ASEAN+3 economies.
“The forecast for 2025 and 2026 shows slower growth than 2024, partly due to weaker exports. The impact of the U.S. tariff measures will likely kick in toward the end of this year and next year,” explained Runchana Pongsaparn, AMRO’s Group Head and Lead Economist.
Despite this, she noted that domestic drivers remain solid: “We still expect consumption to grow steadily, supported by the strong labor market, lower inflation, and robust remittances. Private investment and exports may moderate due to external uncertainties, but overall momentum remains intact.”
Inflation seen staying within target
AMRO’s report also offered a reassuring inflation outlook, forecasting Philippine consumer prices to average 1.8 percent this year before slightly rising to 3.2 percent in 2026—well within the Bangko Sentral ng Pilipinas’ target range.
Sustained confidence in the economy
The latest projection reinforces investor confidence in the Philippines’ macroeconomic fundamentals. With inflation cooling, remittances flowing, and consumption resilient, the country continues to stand out as one of the region’s most dynamic and promising economies—even amid a tougher global trade environment.
