Sharper strategies, stronger governance and investment

The Philippines can move toward a more competitive and future-ready economy with sharper strategic focus, stronger governance and renewed investment momentum, according to the ASEAN+3 Macroeconomic Research Office (AMRO) 2025 Annual Consultation Report.

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According to AMRO’s 2025 ACR, the Philippines’ near-term outlook remains broadly stable, but the medium-term picture is more complex as structural bottlenecks continue to weigh on potential.

The Philippine economy, the report noted, stumbled in the third quarter, with growth weaker than expected, and the peso losing ground due to several temporary disruptions.

These include the suspension of public infrastructure projects amid corruption allegations and _ severe weather dampening household spending. Global financial volatility added pressure.

These factors, AMRO acknowledged, dampened sentiment and contributed to currency weakness. But, the ACR cited that there are also positive developments with inflation falling sharply, the labor market is still improving and private consumption — the key growth engine, remaining firm. Diversified export markets, likewise, are also helping cushion the impact of the US reciprocal tariffs.

AMRO projects Philippine GDP growth of 5.2 percent in 2025 and 5.3 percent in 2026, moderating from 5.7 percent in 2024. Importantly, the third quarter slowdown appears more cyclical than structural. Growth, it said, should regain momentum once project suspensions are resolved and confidence stabilizes.

But beneath the stable near-term outlook, AMRO warned, lies a tougher story. The Philippines faces deep-rooted constraints that limit its long-term potential, estimated at around 5.4 percent for the 2022 to 2024 period.

Infrastructure gaps remain significant, particularly in transport and logistics. Uneven oversight and implementation challenges have slowed improvements in quality and efficiency. The recent flood-control project controversies highlight governance issues that can weaken investor confidence and heighten exposure to climate-related risks.