By: Sophia Pacheco
Farmers plant rice in a field in Narra, Palawan on May 23, 2025. Photo courtesy: Ted Aljibe / AFP File photo
The Philippine economy is projected to grow by 5.6% in 2025 despite global headwinds, the Asian Development Bank (ADB) said on Tuesday, Sept. 30, citing strong domestic demand, low inflation, and good investment.
According to the Asian Development Outlook September 2025 report, the ADB maintained its 2025 growth forecast and expects a slight acceleration to 5.7% in 2026.
ADB also noted that risks exist, particularly from external policy developments, increased geopolitical uncertainty, and climate shocks that could impact commodities prices.
“The Philippines’ growth outlook remains resilient amid a global environment of shifting trade and investment policies and heightened geopolitical uncertainties,” ADB country director for the Philippines Andrew Jeffries said in a statement.
“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.
On the supply side, services, which account for around 60% of Gross Domestic Product (GDP), and industrial output are likely to continue to be significant growth drivers.
"Services, which account for around 60% of GDP and employment, will continue to expand with trade, transportation, professional and business services among key contributors," the ADB said.
Meanwhile, inflation is expected to continue low, averaging 1.8% in 2025, before rising to 3.0% in 2026.
Other downside risks to the external challenges from increased uncertainty, future adjustments in global economic policy, and rising trade barriers could all have a negative impact on market sentiment and economic development.