The Asian Development Bank (ADB) has forecast that the Philippine economy will grow at a robust pace of 6.0 percent in 2025 and 6.1 percent in 2026, driven by strengthened domestic demand and sustained public investment. This growth follows a 5.6 percent expansion in 2024.
The ADB’s projections, contained in the latest Asian Development Outlook report released on Wednesday, reflect optimism about the Philippines’ economic trajectory, with inflation expected to ease to 3.0 percent this year, slower than the average 3.2 percent in 2024. The deceleration in inflation is seen as providing ample space for further monetary policy easing, which could bolster economic momentum.
Agriculture, infrastructure development, and emerging sectors like marine biotechnology are expected to continue playing key roles in driving the nation’s growth. One particularly significant opportunity is the development of the “blue” economy, which refers to the responsible use of ocean resources to support sustainable economic growth. For the Philippines, with its vast maritime resources and over 7,500 islands, the blue economy could be a game-changer in addressing poverty and food security, while also enhancing climate resilience.
Fisheries, a dominant ocean-based industry, accounted for nearly 30 percent of ocean-based industries in 2023. The Philippines is also poised to benefit from emerging industries such as offshore renewable energy, including offshore wind, solar, and tidal power, which can support the country’s renewable energy targets of 35 percent by 2030 and 50 percent by 2040. Marine tourism is another key sector expected to expand significantly, providing extensive job opportunities in coastal communities.
Private consumption is set to remain a key pillar of the economy. With the unemployment rate at a low 4.3 percent and labor force participation rising, increased household income from employment and remittances is likely to support consumer spending.
The government’s fiscal and regulatory reforms, including the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act, are enhancing the country’s attractiveness as an investment destination.
The government’s ongoing infrastructure initiatives, with P4.6 trillion in strategic projects, will further support growth. Public-private partnerships, particularly in renewable energy and food security, are expected to stimulate additional investment.
However, the ADB highlighted several downside risks, such as rising trade barriers, potential geopolitical tensions, and the evolving external environment. These risks could dampen global demand and impact growth prospects, particularly as merchandise exports face challenges from trade tensions and lower global demand.
The ADB forecasts were made before US President Donald Trump announced his “reciprocal tariff” that many economists suggest could spark a trade war which would slow global growth.
In the face of these risks, the Philippine government is focusing on continued fiscal discipline, public-private partnerships, and an aggressive infrastructure development program to ensure sustained growth and economic resilience.
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