MANILA, Sept. 30 (Xinhua) -- Robust domestic demand, coupled with subdued inflation, is expected to support Philippine economic growth this year and next, according to a report released by the Asian Development Bank (ADB) on Tuesday.
In its Asian Development Outlook (ADO) September 2025 report, the ADB forecasts the country's gross domestic product (GDP) to expand by 5.6 percent this year and 5.7 percent in 2026, steady from last year's 5.7 percent growth.
The 2025 GDP projection was maintained from the July ADO forecast, while the 2026 growth estimate was slightly lower than 5.8 percent in July. Still, the Philippines is forecast to remain a bright spot in Southeast Asia, with the second-highest GDP expansion in the region.
"The Philippines' growth outlook remains resilient amid a global environment of shifting trade and investment policies and heightened geopolitical uncertainties," said ADB Country Director for the Philippines Andrew Jeffries.
"Though these uncertainties pose increased risk, we see strong domestic demand anchoring growth, with sustained investments and an accommodative monetary policy supporting the economy's expansion," he added.
The ADB forecasts inflation to ease more this year than previously projected, slowing to 1.8 percent before rising to 3 percent in 2026, returning to the government's target range of 2 percent to 4 percent. The latest 2025 inflation forecast is lower than the July forecast of 2.2 percent.
Slower global commodity prices and muted food prices, in part due to the improved local supply of the country's rice staple, will keep inflation low. This subdued inflation outlook will support an accommodative monetary policy, the report said.
However, adverse weather conditions and climate shocks, with the country visited by at least 20 typhoons a year, could put pressure on commodity prices, the report also said.
Other downside risks to the growth outlook include external headwinds from heightened uncertainty, further shifts in global economic policies, and rising trade barriers, which could affect market sentiment and hinder economic growth. ■
