ANZ cuts Philippines growth outlook to 5% this year

MANILA, Philippines — The Philippines’ economic growth forecast for 2025 has been lowered to five percent from 5.7 percent as persistent global trade tensions and weak private investment cloud the outlook for emerging markets in Asia, according to ANZ Research.

The updated projection marked a sharper downward revision than most regional peers due to the country’s heightened vulnerability to a slowdown in growth in the United States and its own sluggish capital spending.

Growth for 2026 has also been cut to 5.5 percent from six percent. The 2025 and 2026 projections are below the six to eight percent target of the government for the next two years.

“While India and Indonesia saw more moderate downgrades, the reduction for the Philippines is comparatively larger owing to the lack of any improvement in private capital spending,” ANZ said.

The research firm also flagged that over 41 percent of inward remittances to the Philippines come from the US, making it particularly sensitive to any deceleration in the American economy.

The downgrade forms part of a broader recalibration of growth expectations across Asia (excluding China and India), where ANZ now sees regional growth at just 2.9 percent in 2025, down from 3.4 percent previously. For 2026, the forecast was lowered to 3.3 percent from 3.5 percent.

US-China trade tensions, particularly the uncertain trajectory of American tariff policy, have been a major drag on Asia’s growth prospects.

According to ANZ, exporters would struggle to front-load shipments during the current 90-day pause on reciprocal tariffs. Many economies will remain exposed to shifts in US trade policy.

For the Philippines, the external headwinds are compounded by internal structural challenges.

The report said that without a pick-up in domestic investment, the country’s growth momentum may fall short of pre-pandemic averages.

Despite the weaker outlook, ANZ expects inflation to be more subdued. Philippine inflation is projected to average 2.9 percent in 2025, below the previous forecast of 3.4 percent, helped by lower commodity prices and slowing demand.

ANZ also expects the Bangko Sentral ng Pilipinas to maintain a cautious stance on monetary policy, amid moderating inflation and a global tilt toward looser financial conditions.