Philippine economy catches up with ASEAN 

The Philippine economy has nearly doubled in size over the past 15 years, enabling it to catch up with its peers in the Association of Southeast Asian Nations (ASEAN), the Department of Economy, Planning and Development (DEPDev) said in a report by Philippine News Agency.

DEPDev Secretary Arsenio Balisacan told an economic forum at the Grand Hyatt Hotel in Taguig City that despite a pandemic-induced setback in 2020, “the Philippine economy has nearly doubled in size and outpaced several of its regional peers, enabling it to catch up.”

“Amid the megatrends and global headwinds, the Philippine economy has managed to weather the storms and shown remarkable resilience,” he said.

Balisacan noted that unemployment and underemployment rates have steadily declined, indicating a robustly improving labor market.

“Poverty incidence has fallen, with a relatively sharp decrease observed in recent years. Encouragingly, income growth among the poorest households outpaces that of richer households—a sure sign of growth inclusivity,” he said.

These outcomes, Balisacan said, are partly a result of sound macroeconomic management and “hard-won reforms” that have ensured price stability, sustained fiscal health, and maintained the stability of financial markets.

He said inflation has generally been benign in recent years, with the government deploying monetary and fiscal policy tools to restore price stability during periods of elevated inflation.

“We have seen this recently when, from a peak of 8.7 percent at the beginning of 2023, we brought down inflation, with the most recent figure of 1.4 percent last April 2025 falling even lower than the government’s 2 percent to 4 percent target range,” Balisacan stated. “Slower inflation provides the Bangko Sentral ng Pilipinas ample space for further monetary easing to support growth and maintain financial stability.”

On the fiscal side, Balisacan said the debt-to-GDP ratio has stabilized between 60 percent and 61 percent, while the deficit-to-GDP ratio has been reduced to 5.7 percent.

“We expect to see improvements as we continue our fiscal consolidation efforts, improve tax administration and sustain the reform momentum,” he added.

Balisacan acknowledged that other ASEAN countries, particularly Indonesia, Vietnam, and Malaysia, continue to attract substantially larger volumes of foreign direct investment (FDI) inflows despite facing many of the same global headwinds over the last three decades.

“Over the past decade, we observe a clear and unmistakable increase in FDI inflows as the country has positioned itself as a strong contender for global investors,” he said.

The International Monetary Fund’s latest Philippine Country Report, published in 2024, estimates that with the right policy directions, the Philippine economy could potentially sustain growth rates ranging from 7 percent to 7.5 percent over the medium term, Balisacan noted.

“Sustaining economic progress and reaching higher potential growth requires broadening the foundations of our economy beyond our traditional reliance on consumption and services,” he said. “This requires attracting more investments, generating higher-quality and better-paying jobs—particularly in manufacturing and higher-value-added services—and expanding into new markets.”