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Economic growth

Philippines to Sustain Moderate Economic Growth Amid Global Challenges

Strategic Insights

— 2 min read

The International Monetary Fund (IMF) projects the Philippines to maintain a moderate economic growth pace over the next two years, despite external headwinds and weaker global trade. The country's current account deficit is expected to narrow to 3.8 percent of GDP in 2025 and 3.5 percent in 2026, reflecting resilience and easing pressures on the balance of payments. The IMF notes that growth in the Philippines held up in the first half of the year, alongside other economies, and inflation surprised on the downside relative to earlier forecasts.

Key Takeaways:

  • The IMF projects the Philippines' current account deficit to narrow to 3.8 percent of GDP in 2025 and 3.5 percent in 2026, down from 4 percent in 2024.
  • The country's GDP growth is expected to remain at 5.4 percent in 2025 and rebound to 5.7 percent in 2026, below the government's target of at least 5.5 percent this year and 6 percent next year.
  • Inflation is projected to fall to 1.6 percent in 2025 and rise to 2.6 percent in 2026, settling well below the government's target range of 2-4 percent.
  • The unemployment rate is expected to hover at 3.9 percent in both 2025 and 2026.
  • The IMF projects the Philippines to remain one of the fastest-growing economies in the ASEAN-5 region, outpacing its neighbors.
  • Global growth is expected to slow 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 growing just above 4 percent.

Statistics:

  • 3.8 percent: Expected current account deficit as a percentage of GDP in 2025
  • 3.5 percent: Expected current account deficit as a percentage of GDP in 2026
  • 5.4 percent: Projected GDP growth in 2025
  • 5.7 percent: Projected GDP growth in 2026
  • 1.6 percent: Projected inflation rate in 2025
  • 2.6 percent: Projected inflation rate in 2026
  • 3.9 percent: Expected unemployment rate in 2025 and 2026
  • 3.8 percent: Current unemployment rate in 2024 (government estimate)
  • 4.9 percent: Projected GDP growth in Indonesia in 2025 and 2026
  • 4.5 percent: Projected GDP growth in Malaysia in 2025
  • 4 percent: Projected GDP growth in Malaysia in 2026
  • 2.2 percent: Projected GDP growth in Singapore in 2025
  • 1.8 percent: Projected GDP growth in Singapore in 2026
  • 2 percent: Projected GDP growth in Thailand in 2025
  • 1.6 percent: Projected GDP growth in Thailand in 2026

Sources:

  • IMF (2025) - World Economic Outlook Report
  • IMF (2025) - Philippines: Selected Economic Indicators

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