ADB projects the country’s gross domestic product (GDP) to grow by 6 percent in 2025 and 6.1 percent in 2026, outpacing the 5.6 percent growth recorded in 2024.
This positions the Philippines among the fastest-growing economies in Southeast Asia.
In contrast, growth across developing Asia and the Pacific is expected to slow, with the ADB projecting a slight dip to 4.9 percent in 2025, down from 5.0 percent in 2024.
ADB’s growth forecasts were finalized prior to the April 2 announcement of new tariffs by the US administration, so the baseline projections only reflect tariffs that were in place previously and do not account for the new US tariffs potential ripple effects.
“The Philippines remains a bright spot in the region, with robust private consumption and sustained investments, particularly in infrastructure, continuing to fuel growth,” said ADB Country Director for the Philippines Pavit Ramachandran.
The report emphasizes that modest inflation, steady job creation, and rising public expenditure will continue to support economic momentum, although emerging global risks could weigh on investor sentiment.
Stable inflation, strong job market
ADB expects Philippine inflation to average 3 percent in both 2025 and 2026, staying within the government’s target range of 2 percent to 4 percent . The forecast reflects stable global commodity prices and a slowdown in rice inflation, offering relief to consumers.
The country’s labor market is showing resilience, with the unemployment rate declining to 4.3 percent in January 2025, from 4.5 percent a year earlier—translating to 2.6 million new jobs.
Income growth is being supported by minimum wage increases, remittances from overseas Filipinos, and election-related spending ahead of the May 2025 midterm polls.
Public spending, infrastructure in focus
The Philippine government is ramping up public expenditure, with the 2025 national budget increasing by 9.7 percent. About one-third of the budget is allocated to social services, including national health insurance, education, cash transfers, and livelihood programs.
ADB is backing initiatives such as the Pantawid Pamilyang Pilipino Program (4Ps) and is preparing to support the Walang Gutom (Zero Hunger) Food Voucher Program.
Infrastructure remains a cornerstone of the growth strategy, with spending projected to stay at 5 percent to 6 percent of GDP. From 2022 to 2024, infrastructure investment averaged 5.8 percent of GDP. A newly established project management office will oversee flagship projects like the Malolos–Clark Railway, the South Commuter Railway, and the Bataan–Cavite Interlink Bridge, which is expected to be one of the world’s longest bridges.
External risks linger
While the forecast remains optimistic, the ADO warns that geopolitical tensions, weather shocks, and the recently announced U.S. tariffs could introduce uncertainties.
Nevertheless, ADB remains confident that structural reforms, foreign investment liberalization, and a robust public sector commitment to social and physical infrastructure will sustain the country’s economic momentum. — Ed: Corrie S. Narisma
