A senior economist from the University of Asia and the Pacific (UA&P) expects the Philippine economy to grow by 5.1 percent year-on-year in 2025, slightly picking up to 5.3 percent in 2026.
UA&P senior economist Victor Abola attributed the projected increase to a low inflation environment and stable employment, saying the economy’s fourth-quarter performance is anticipated to improve following a slowdown to 4 percent gross domestic product (GDP) growth in the third quarter.
Abola, speaking at the 2025 Year-End Business Economic Briefing, said the current year-to-date GDP growth of 5 percent suggests a slight fourth-quarter improvement, in line with his 5.1-percent projection.
The low inflation environment, with headline inflation averaging 1.7 percent as of October 2025—below the Bangko Sentral ng Pilipinas’ 2 percent to 4 percent target—is seen boosting consumer purchasing power. Employment levels are stable and higher than the previous year’s average.
Overseas Filipino worker (OFW) remittances continue to be a significant driver of the country’s growth, Abola said, noting their multiplier effect. He said that while the 3.7 percent increase in dollar terms was positive, the growth translates to almost 6 percent in peso terms.
Abola also said a weaker peso translates into faster economic growth due to the consistent flow of OFW remittances and the country’s dependence on dollar inflows.
“I estimate at least 70 million [people] will benefit from a weaker peso,” Abola said, citing the scale of OFW families and those benefiting from the export sector.
Abola also projects the inflation rate to settle at 1.7 percent for 2025, before slightly rising to 2.2 percent in 2026.
