ADB keeps Philippine growth forecast for 2025

The Asian Development Bank (ADB) maintained its gross domestic product (GDP) growth forecast for the Philippines this year, while trimming its projection for 2026, amid heightened global uncertainty.

However, ADB said the country remains a “bright spot” as it is seen to be the second fastest-growing economy in Southeast Asia until 2026.

In its latest Asian Development Outlook (ADO), the multilateral lender maintained its growth forecast for the country at 5.6% this year, unchanged from its July projection.

For 2026, the ADB cut its Philippine GDP growth forecast to 5.7% from 5.8% previously.

This would still be within the Philippine government’s 5.5 to 6.5% target for this year, but below the 6-7% goal for 2026.

“The Philippines’ growth outlook remains resilient amid a global environment of shifting trade and investment policies and heightened geopolitical uncertainties,” ADB Country Director for the Philippines Andrew Jeffries said in a statement on Tuesday.

“Though these uncertainties pose increased risk, we see strong domestic demand anchoring growth, with sustained investments and an accommodative monetary policy supporting the economy’s expansion.”

The Manila-based lender said strong domestic demand amid weaker inflation will support economic growth this year and in 2026.

The ADB lowered its inflation forecast for the Philippines to 1.8% from 2.2% for 2025. This is slightly higher than the Bangko Sentral ng Pilipinas’ (BSP) 1.7% average forecast for this year.

For the first eight months, headline inflation averaged 1.7% due to an uptick in August.

The ADB kept its inflation projection for 2026 at 3.2%, unchanged from its July forecast. This is below the central bank’s 3.3% target forecast for 2026.

The subdued inflation outlook will give more room and support for an accommodative monetary policy, the ADB said. — Aubrey Rose A. Inosante