Trade, Mideast wars top growth risks

Philippine economic growth would likely further slow in the next two years to remain below the government's more ambitious annual targets amid a global deceleration fueled by trade and geopolitical tensions, according to the Washington-based Institute of International Finance (IIF).

- BEN ARNOLD DE VERA

A June 25 report authored by IIF managing director and chief economist Marcello Estevão and senior economist Jonathan Fortun showed that the global financial industry association forecasts the Philippines' gross domestic product (GDP) to grow by 5.5 percent this year and 5.6 percent next year—both lower than last year's already weaker-than-expected 5.7 percent.

These growth projections for 2025 and 2026 are also beneath the government's goal of sixto eight-percent expansion for both years.

Despite this, IIF deputy chief economist Ashok Bhundia and associate economist Phoebe Feng cited the Philippines, alongside China and Thailand, among the few emerging markets (EMS) in Asia that had so far "delivered modest upside surprises on the back of fiscal support and resilient exports."

Amid the threat of higher United States (US) tariffs, the IIF noted that total goods exports accounted for only 15.9 percent of the Philippines' GDP—one of the smallest in emerging Asia, compared to the likes of Vietnam (87.8 percent of GDP), Malaysia (78.2 percent), Thailand (57.1 percent), Taiwan (55.2 percent), South Korea (36.6 percent), China (19.1 percent), and Indonesia (19 percent).