The Philippines is forecast to grow by 5.6 percent in 2025 and 6.0 percent in 2026, driven by resilient household consumption and a gradual investment recovery, according to the latest OECD Economic Outlook 2025.
Inflation is projected to ease to 2.0 percent in 2025, allowing for monetary easing, while fiscal policy remains mildly contractionary as the government aims to narrow its deficit.
Key details:
- Growth outlook: Domestic demand is strong, supported by remittances, while investment is expected to rebound in late 2025.
- Inflation: Declining food and energy prices are helping contain inflation, which is forecast to rise slightly to 3.1 percent in 2026.
- Monetary policy: The central bank has already cut rates from 6.5 percent to 5.5 percent, with further easing expected in 2025.
- Fiscal policy: Spending consolidation is underway, with the deficit targeted to fall to 4.6 percent of GDP by 2026.
- Risks: External risks include weaker growth in the US or China; domestic challenges centre on tax revenue and social spending pressures.
Regional comparisons
Vietnam: The OECD projects stronger growth for Vietnam (6.2 percent in 2025) compared to Indonesia (4.7 percent), though Vietnam’s outlook is more vulnerable to global trade tensions and inflationary pressures. Vietnam’s CPI is expected to rise to 3.7 percent, while Indonesia’s remains milder at 2.3 percent.
See also: Vietnam’s growth to moderate amid rising inflation and global uncertainty
Indonesia: Indonesia’s real GDP is projected to grow by 4.7 percent in 2025 and 4.8 percent in 2026, according to the OECD Economic Outlook 2025. Inflation is forecast to rise modestly to 2.3 percent in 2025 and 3 percent in 2026.
See also: Indonesia’s OECD outlook sees steady growth through 2025, 2026