The ASEAN+3 Macroeconomic Research Office (AMRO) downgraded its 2025 growth forecast for the Philippines to 5.6 percent from an earlier 6.3 percent.
AMRO also reduced its 2026 forecast for the Philippines to 5.5 percent from 6.3 percent.
According to the latest quarterly update of the ASEAN+3 Regional Economic Outlook (AREO), Philippine inflation is expected to average 1.8 percent in 2025 and 3.2 percent in 2026.
Despite an anticipated global economic slowdown, Allen Ng, AMRO Group head and principal economist, said the direct impact of the recently announced 19 percent reciprocal tariff from the US is likely to be limited for the Philippines.
Ng said the tariff was not factored into AMRO’s latest projections, but given the Philippines’ domestically focused economy, a significant change to their forecast due to this specific tariff is improbable.
While the immediate effect of the US tariff is expected to be minimal, AMRO revised its Philippine economic growth forecasts downward due to a projected global economic slowdown and slower-than-anticipated first-quarter GDP expansion.
Despite these revisions, Ng said private consumption would continue to drive strong growth in the Philippines, supported by a stable labor market, slower inflation and steady remittances.
Ng acknowledged that while the direct impact of the reciprocal tariff on the Philippine economy is not expected to be substantial, there could be broader effects on global trade that might indirectly influence export and investment sentiment in the Philippines.
The broader ASEAN+3 region is expected to grow 3.8 percent in 2025 and 3.6 percent in 2026. These figures are lower than previously anticipated, reflecting heightened global uncertainties, particularly the evolving US tariff measures.
These growth forecasts represent a downward revision from AMRO’s April projections of 4.2 percent in 2025 and 4.1 percent in 2026, which did not include the impact of the then-newly announced U.S. tariffs.
“Encouragingly, the ASEAN+3 region enters this period of global trade turbulence from a position of relative strength and resilience,” said Dong He, AMRO chief economist. “Most regional policymakers have acted early to cushion the impact of the trade shock, and policy space remains available for further support if needed.”
Inflation in the region continues to moderate, despite a temporary spike in oil prices driven by Middle East tensions. The region’s financial markets have also shown resilience, with regional currencies generally appreciating against the U.S. dollar amid growing market concerns over US policy uncertainty.
The economic outlook for ASEAN+3 remains clouded by significant uncertainties, with escalating US tariffs posing the most salient risk. Uneven progress in tariff negotiations and the potential expansion of tariffs to additional products could further disrupt trade activities and weigh on growth for the region.
Ongoing geopolitical tensions add an additional layer of complexity, while a sharper-than-expected economic slowdown in the U.S. and Europe, along with tighter global financial conditions from prolonged high U.S. interest rates, could further dampen growth prospects.
“In a world that is increasingly being reshaped by fragmentation, deeper regional integration is both urgent and necessary. By strengthening regional cooperation while maintaining openness to the world and standing firm on rules-based multilateralism, ASEAN+3 can build resilience against external shocks and create new growth opportunities,” He said.
