The Asian Development Bank (ADB) has revised its growth forecast for the Philippines to 5.6 percent in 2025 and 5.8 percent in 2026, down from earlier projections of 6.0 percent and 6.1 percent, respectively. The recalibration, the ADB said, reflects the impact of external headwinds and highlights the growing importance of responsive economic policy.
GDP grew by a lower-than-expected 5.4 percent in Q1 2025. While domestic demand remained robust at 6.7 percent, driven by easing inflation and supportive monetary policy, net exports weighed on overall growth as imports surged ahead of exports.
Despite a modest uptick in the manufacturing PMI to 50.7 in June and resilient consumer sentiment, business confidence dipped due to global policy uncertainty. Unemployment stood at a low 3.9 percent in May, and remittances rose by 3.0 percent, continuing to bolster household spending.
The ADB also has downgraded its growth projections for developing Asia and the Pacific, including Southeast Asia, citing weaker exports and subdued domestic demand amid escalating global trade tensions. In its Asian Development Outlook July 2025, ADB now forecasts regional growth at 4.7 percent for 2025, down 0.2 percentage points from April’s estimate. The 2026 forecast has also been trimmed to 4.6 percent.
ADB attributes the recalibration to mounting risks such as higher U.S. tariffs, geopolitical instability, and vulnerabilities in China’s property sector—all of which could further disrupt global supply chains and dampen investor confidence.
“Asia and the Pacific has weathered an increasingly challenging external environment this year,” noted ADB chief economist Albert Park. “But the economic outlook has weakened amid intensifying risks and global uncertainty.”
ADB emphasized the need for regional economies to bolster structural resilience through open trade, regional integration, and sound macroeconomic management to sustain growth momentum.
