Philippines seen growing 6.3% in 2025

The ASEAN 3 Macroeconomic Research Office (AMRO) predicted that the Philippine economy would grow 6.3 percent in 2025, faster than the estimated expansion of 5.8 percent in 2024.

It also sees inflation remaining manageable at 3.2 percent this year or at the same rate in 2024.

ASEAN 3 includes the 10 ASEAN members states, plus China, Japan and South Korea.

"The Philippines is one of the stronger, faster growing economy in the region," AMRO chief economist Hoe Ee Khor said in a briefing.

Khor said the 6.3-percent growth projection for the Philippines is among the highest in the region, and next only to Vietnam’s 6.5 percent.

It is also faster than the average growth forecast of 4.2 percent for the ASEAN 3 region.

AMRO said the region is on track to achieve a full-year growth of 4.2 percent in 2024, consistent with AMRO’s projection from October 2024.

Growth in several ASEAN economies offset marginally weaker-than-expected performance in the Plus-3 economies (China; Hong Kong, China; Japan; and Korea). Meanwhile, headline inflation in the region moderated to 1.7 percent, returning to pre-pandemic levels as global energy and transport prices eased toward the end of 2024.

“The global tech upcycle bolstered ASEAN 3’s export performance in 2024, helping to offset weaknesses in domestic consumption in some parts of the region,” said Khor.

“However, rising trade tensions, particularly the imposition of higher US tariffs, could dampen external demand for the region and other parts of the world in the coming year,” he said.

Price pressures across the ASEAN 3 region are expected to remain well-contained. Inflation—excluding Lao PDR and Myanmar—is expected to increase to 2.1 percent in 2025, driven by improving domestic demand and supply-side adjustments. However, inflation risks remain, stemming mainly from potential spikes in global commodity prices and adverse weather conditions.

The economic outlook for ASEAN 3, a region contributing to over 40 percent of global growth, is subject to significant uncertainties, AMRO said.

These include escalating trade tensions and shifting expectations for US monetary policy. Recent US economic indicators, such as a persistently tight labor market and firmer core inflation, have fueled concerns about sustained inflationary pressures and prolonged high interest rates, it said.

It said policy shifts by the new US administration, including higher tariffs and tax cuts, may further heighten inflation risks, tightening external financial conditions for the region.

"Many regional central banks have begun easing monetary policy amid declining inflationary pressures," said Khor. "However, the upward revision in US interest rate expectations could widen the divergence between US and regional interest rate paths, complicating the conduct of monetary policy for ASEAN 3 economies."