IMF keeps 2025 Philippines growth forecast at 5.5%

IMF maintains 2025 growth forecast for the Philippines at 5.5% but raises its 2026 outlook to 5.9%, citing global economic factors and risks, according to a report by Manila Standard.

The International Monetary Fund (IMF) on Tuesday maintained its 5.5 percent growth forecast for the Philippines in 2025, but expects faster expansion in 2026.

In its July 2025 World Economic Outlook (WEO) Update report, the IMF raised its 2026 growth outlook for the country to 5.9 percent from 5.8 percent projected in April.

The Philippines’ forecasts align with slight revisions in global growth projections for this year and next.

The IMF projects global growth at 3.0 percent for 2025 and 3.1 percent in 2026. The 2025 forecast is 0.2 percentage points higher than the April 2025 WEO reference forecast, while the 2026 projection is 0.1 percentage points higher.

“This reflects stronger-than-expected front-loading in anticipation of higher tariffs; lower average effective US tariff rates than announced in April; an improvement in financial conditions, including due to a weaker US dollar; and fiscal expansion in some major jurisdictions,” the IMF said.

Global headline inflation is expected to decline to 4.2 percent in 2025 and 3.6 percent in 2026, a path similar to that projected in April. The report noted that this overall picture “hides notable cross-country differences,” with inflation expected to remain above target in the United States and be more subdued in other large economies.

The IMF noted that risks to the outlook are “tilted to the downside,” similar to its April 2025 WEO. A rebound in effective tariff rates could lead to weaker growth.

“Elevated uncertainty could start weighing more heavily on activity, also as deadlines for additional tariffs expire without progress on substantial, permanent agreements,” the IMF warned.

The fund also noted that geopolitical tensions could disrupt global supply chains and drive up commodity prices. Larger fiscal deficits or increased risk aversion could raise long-term interest rates and tighten global financial conditions. Combined with fragmentation concerns, this “could reignite volatility in financial markets.” Conversely, global growth could be boosted if trade negotiations lead to a predictable framework and a decline in tariffs.

“Policies need to bring confidence, predictability, and sustainability by calming tensions, preserving price and financial stability, restoring fiscal buffers and implementing much-needed structural reforms,” the IMF said.