Phl Still Asean's Fastest-Growing Economy

The Philippines is expected to remain the fastest-growing economy in the Association of Southeast Asian Nations (ASEAN) region this year, bolstered by low inflation and room for monetary easing.

- By KEISHA TA-ASAN

However, global uncertainties, weak private sector sentiment and persistent trade imbalances could temper the pace of expansion, according to two research groups.

Aris Dacanay, ASEAN economist at HSBC, said the Philippines is expected to post the fastest economic growth in Southeast Asia in 2025 at 5.4 percent, outpacing its regional peers despite a downgrade from an earlier 5.9 percent projection.

Vietnam, which is often seen as a regional growth leader, is forecast to expand by a slower 5.2 percent next year, followed by Indonesia (4.5 percent), Malaysia (4.2 percent), Singapore (1.7 percent) and Thailand (1.7 percent).

But at 5.4 percent, Philippine growth is projected to slow down from the 5.7 percent expansion recorded in 2024, as elevated tariffs and external headwinds weigh on economic activity, Dacanay said.

"Uncertainty alone can prevent foreign direct investments. For the Philippines, foreign direct investment is important, around 10 percent of capital formation is FDI-funded," Dacanay said in a briefing.

"When investors hold back, that weighs on overall investment activity," he said.