Philippines seen among ASEAN’s fastest-growing economies

The Philippine economy is expected to be one of the fastest-growing in Southeast Asia over the next 15 years, according to a report by Singapore-based DBS Bank Ltd., with strong domestic drivers positioning the country for upper-middle-income status by 2040.

In a July 29 research note, DBS said the Philippines and Vietnam are projected to post average real GDP growth rates of 6 percent from 2025 to 2040, ahead of their ASEAN peers. Indonesia is expected to follow with 5.6 percent growth, while Malaysia, Singapore, and Thailand will average between 2.2 and 4.2 percent.

The six largest ASEAN economies—Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam—are collectively forecast to become the world’s fourth-largest economy by 2030, driven by rising domestic demand, investments, and export growth.

“Services are a significant part of the Philippines’ economy, besides manufacturing activity,” DBS noted. “Positive demographics and a young population are few of the country’s medium-term strengths.”

The bank also pointed to the country’s strong presence in business process outsourcing, tourism, and electronics exports. Inward remittances and a median population age under 30 are expected to fuel household savings and consumption, reinforcing the growth trajectory.

DBS projected that the Philippines will transition to upper-middle-income status by 2040, joining Indonesia and Thailand. Meanwhile, Vietnam and Malaysia are seen advancing further to high-income status, with Singapore already classified as such.

The latest World Bank data shows Vietnam’s gross national income (GNI) per capita reached $4,490 in 2024, edging past the Philippines’ $4,470. The World Bank’s threshold for upper-middle-income classification for fiscal year 2026 stands at $4,496.

To sustain its momentum, the Philippines is encouraged to invest further in its digital economy, join more free-trade agreements, and expand renewable energy investments, according to the report.

While the Philippines is coming off several years of infrastructure expansion, DBS said additional commitments will be required to close gaps and address structural challenges such as income inequality and political risk.

Despite these hurdles, DBS noted that the ASEAN-6 bloc remains energized by intra- and extra-regional trade and stronger economic ties with China, India, and other partners. The bank emphasized that the region’s long-term growth will rely on capital market development, private sector engagement, the green transition, and digital transformation.