IMF sees steady growth for Philippines

MANILA, Philippines — The International Monetary Fund (IMF) expects the Philippines to sustain moderate economic growth over the next two years while gradually narrowing its current account deficit, reflecting resilience despite external headwinds and weaker global trade.

In its October 2025 World Economic Outlook (WEO), the IMF projected the country’s current account deficit to narrow to 3.8 percent of gross domestic product (GDP) in 2025 and 3.5 percent in 2026 from four percent in 2024.

The improvement signals easing pressures on the balance of payments as imports normalize and remittance inflows remain steady.

The IMF said global protectionist trade measures “have had a limited impact on economic activity and prices,” adding that growth in many economies, including the Philippines, “held up in the first half.”

It noted that inflation in the Philippines, alongside India, Malaysia and Thailand, “surprised on the downside” relative to earlier forecasts.

For 2025, the IMF kept its GDP growth projection for the Philippines at 5.4 percent, before rebounding to 5.7 percent in 2026. The multilateral lender’s forecast is below the government’s targets of at least 5.5 percent this year and six percent next year.

Inflation, meanwhile, is expected to fall to 1.6 percent in 2025 from 3.2 percent in 2024, settling well below the government’s two to four percent target range, before rising to 2.6 percent in 2026.

The unemployment rate is projected to hover at 3.9 percent in both 2025 and 2026, close to the government’s current estimate of 3.8 percent for 2024.

Among the Association of Southeast Asian Nations (ASEAN)-5 economies, the Philippines is projected to remain one of the fastest-growing in the region in 2025 and 2026, outpacing its neighbors.

The IMF sees Indonesia expanding by 4.9 percent in both years, Malaysia by 4.5 percent in 2025 and 4 percent in 2026, Singapore by 2.2 percent and 1.8 percent as well as Thailand by two percent and 1.6 percent, respectively.

Based on the IMF WEO report, global growth is projected to slow to 3.2 percent in 2025 and 3.1 percent in 2026 from 3.3 percent in 2024, with advanced economies growing around 1.5 percent and emerging market and developing economies just above four percent.

“Risks are tilted to the downside. Prolonged uncertainty, more protectionism and labor supply shocks could reduce growth. Fiscal vulnerabilities, potential financial market corrections and erosion of institutions could threaten stability,” the IMF said.