AMRO predicts 5.6% economic growth for the Philippines

Philippine economic growth will continue to be robust and the direct impact of the 19 percent US reciprocal tariff to the Philippine economy will not likely be large, an economist from the ASEAN 3 Macroeconomic Research Office (AMRO) said in a report by Philippine News Agency.

In a virtual briefing Wednesday, AMRO Group Head and Principal Economist Allen Ng said the direct impact to the Philippine economy will be limited.

AMRO, however, expects slower Philippine economic growth due to the projected slowdown of the global economy.

In its July ASEAN 3 Regional Economic Outlook (AREO), AMRO said the Philippine economy will likely grow by 5.6 percent this year and 5.5 percent in 2026.

Both forecasts were lower than the 6.3 percent previous projection for 2025 and 2026.

Ng said the 19 percent reciprocal tariff recently announced by US President Donald Trump was not incorporated in 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 changes is actually from 20 percent to 19 percent and the fact that the economy of the Philippines is more domestic structured in a way," he said.

Ng attributed the lower growth forecasts mainly to the expected slower global growth and the slower than expected gross domestic product 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 impact on global slowdown on the economy," he said.

Ng said the reciprocal tariff would affect both exports as well as business sentiments and investment activities in the Philippines.

"I think despite the revision downwards, I think it's important to emphasize the growth in the Philippines continue to be very robust, and it will continue to be driven by robust private consumption activities, given multiple factors, including continued stable labor market conditions. Slower inflation currently and also expectation of robust remittances going forward," he said.

AMRO expects inflation to be at 1.8 percent this year, lower than its previous 3.3 percent forecast.

For 2026, AMRO said inflation will likely settle at 3.2 percent.