The International Monetary Fund (IMF) has trimmed its growth forecast for the Philippines for this year and next, aligning with a slower outlook for the global economy.
The IMF, in its latest World Economic Outlook (WEO) released Tuesday, now expects the Philippines’ gross domestic product (GDP) to grow by 5.4 percent in 2025, a slight deceleration from its July projection of 5.5 percent.
It also projects the country’s GDP to expand at a slower pace of 5.7 percent in 2026, down from its previous July outlook of 5.9 percent. Growth is projected to pick up to 6.0 percent by 2023.
The IMF also expects inflation in the Philippines to average 1.6 percent in 2025 and 2.6 percent in 2026.
The current account balance is projected to have a deficit of 3.8 percent of the Philippine gross domestic product in 2025 and a deficit of 3.5 percent of GDP in 2026. Unemployment is seen reaching 3.9 percent in both 2025 and 2026.
The IMF said the global economy is adjusting to a landscape reshaped by new policy measures. While some extremes of higher tariffs were tempered by subsequent deals and resets, the overall environment remains volatile, and temporary factors that supported activity in the first half of 2025—such as front-loading—are fading.
As a result, global growth projections in the latest WEO are revised upward relative to the April 2025 WEO but continue to mark a downward revision relative to the pre-policy-shift forecasts.
Global growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026, with advanced economies growing around 1.5 percent and emerging market and developing economies just above 4.0 percent.
Inflation is projected to continue to decline globally, though with variation across countries: above target in the United States—with risks tilted to the upside—and subdued elsewhere.
The IMF said risks to the outlook are tilted to the downside, as they were in previous WEO reports. The IMF said that prolonged uncertainty, more protectionism and labor supply shocks could reduce growth, while fiscal vulnerabilities, potential financial market corrections and erosion of institutions could threaten stability.
It urged policymakers to restore confidence through credible, transparent, and sustainable policies. It said that trade diplomacy should be paired with macroeconomic adjustment, fiscal buffers should be rebuilt, central bank independence should be preserved and efforts on structural reforms should be redoubled.
“Global growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and to 3.1 percent in 2026. This is an improvement relative to the July WEO Update—but cumulatively 0.2 percentage point below forecasts made before the policy shifts in the October 2024 WEO, with the slowdown reflecting headwinds from uncertainty and protectionism, even though the tariff shock is smaller than originally announced,” the IMF said.
World trade volume is forecast to grow at an average rate of 2.9 percent in 2025-2026—boosted by front-loading in 2025 yet still much slower than the 3.5 percent growth rate in 2024—with persistent trade fragmentation limiting gains, it said.
