ADB sees the Philippines growing 6% in 2024

The Asian Development Bank (ADB) maintained its 6% gross domestic product (GDP) growth forecast for the Philippines this year, driven by strong household consumption and investment.

The Manila-based lender projected in its Asian Development Outlook December that the Philippine economy would grow by 6% this year and 6.2% next year.

The Philippine government targets 6% to 6.5% GDP growth this year and 6% to 8% next year. The economy grew by an average of 5.8% in the first three quarters of 2023.

Inflation is projected to reach 3.3% this year and 3.2% in 2025.

The ADB report forecast steady economic growth for Asia and the Pacific this year and next, but warned that US policy changes under the incoming Trump administration could impact the region's longer-term outlook.

Changes to US trade, fiscal, and immigration policies could dampen growth and fuel inflation in developing Asia and the Pacific. These effects are most likely to materialize from 2026, but could be seen sooner if policies are implemented rapidly or if US-based companies front-load imports.

Developing Asia and the Pacific's economies are projected to grow by 4.9% in 2024 and 4.8% in 2025. The region's inflation outlook has been trimmed to 2.7% for this year and 2.6% for next year.

"Strong domestic demand and exports continue to drive economic expansion in our region," said ADB Chief Economist Albert Park. "However, US policies could slow growth and boost inflation in China, most likely after next year, also impacting other economies in Asia and the Pacific."

Under a high-risk scenario of aggressive US policy changes, ADB projects that global economic growth could decline by a cumulative 0.5 percentage points over the next four years. Broad-based tariffs could harm international trade and investment, while leading to a shift toward more costly domestic production. Reduced immigration could tighten the US labor supply, and combined with expansionary fiscal policy, could rekindle inflationary pressures in the US.

Despite the scale of assumed US policy changes, the impacts on developing Asia and the Pacific are limited under this high-risk scenario. Even in the absence of additional policy support, China's GDP growth could slow by an average of only 0.3 percentage points per year through 2028. Negative spillover effects across the region could be offset by trade diversion and production relocation from China to other economies.