The International Monetary Fund (IMF) on Wednesday cut its 2025 growth forecast for the Philippines and advised the Bangko Sentral ng Pilipinas that there is room to further ease monetary policy given a favorable inflation outlook and elevated risks to growth.
The IMF said it now expects the Southeast Asian economy to grow 5.4 percent in 2025, slower than its 5.5 percent estimate in July. It expects growth to accelerate to 5.7 percent in 2026.
The downward revision for 2025 was attributed to external risks, including prolonged global trade policy uncertainty, geopolitical tensions and disruptive financial market corrections, the multilateral lender said in a statement released after an Article IV Consultation with Manila.
“The Philippine economy has achieved successful disinflation, and growth remains resilient despite negative external spillovers,” said Elif Arbatli Saxegaard, who led the IMF team.
Inflation is projected to average 1.6 percent in 2025 and to remain around the mid-point of the central bank’s (BSP) target band in 2026.
The IMF noted that the Bangko Sentral ng Pilipinas (BSP)’s monetary policy tightening, alongside lower rice tariffs, had successfully brought inflation back within its target range.
“The BSP has room for a slightly more accommodative stance to help bring inflation back to the target faster and reduce economic slack amid elevated downside risks to growth,” the IMF said.
On fiscal policy, the IMF advised that a more gradual medium-term fiscal consolidation was appropriate. This should be supported by durable revenue mobilization and public financial management reforms to boost accountability and transparency.
The IMF team held meetings in Manila from September 18 to October 1, 2025, for its 2025 Article IV Consultation.
