Philippines growth likely 2nd fastest – World Bank

In Southeast Asia

MANILA, Philippines — The Philippines is expected to remain the second fastest-growing economy in Southeast Asia until 2026, according to the World Bank.

The multilateral lender’s Global Economic Prospects January 2025 report showed that the Philippines is expected to expand by 6.1 percent this year from an estimated 5.9 percent growth last year.

These forecasts are unchanged from those provided by the World Bank last month.

The World Bank’s gross domestic product (GDP) forecast for the Philippines for this year is within the government’s six to eight percent growth target, but its estimate last year is below the government’s growth goal of six to 6.5 percent.

If these forecasts are realized, the Philippines will have the second highest economic growth in Southeast Asia next to Vietnam, which is projected to have grown by 6.8 percent last year. For this year, Vietnam is projected to grow by 6.6 percent.

The World Bank’s 2024 GDP forecast for the Philippines is higher than the growth projection for Cambodia (5.3 percent), Indonesia (five percent), Malaysia (4.9 percent), Laos (4.1 percent), Thailand (2.6 percent) and Myanmar (-1 percent).

The growth projection for the Philippines for this year is also faster than the growth forecast for neighbors such as Cambodia (5.5 percent), Indonesia (5.1 percent), Malaysia (4.5 percent), Laos (3.7 percent), Thailand (2.9 percent) and Myanmar (two percent).

From January to September last year, the Philippine economy posted an average growth of 5.8 percent.

For next year, the World Bank expects the Philippine economy to grow by six percent, which is at the lower end of the government’s growth target of six to eight percent.

If the forecast is realized, the Philippines would still remain the second fastest-growing economy in Southeast Asia, with Vietnam projected to lead with a 6.3-percent growth in 2026.

The growth forecast for the Philippines for 2026 is ahead of Cambodia’s 5.5 percent, Indonesia’s 5.1 percent, Malaysia’s 4.3 percent, Laos’ 3.7 percent and Thailand’s 2.7 percent.

The World Bank expects growth in the East Asia and Pacific (EAP) region, which includes the Philippines, to be supported by solid domestic demand.

“Private consumption is set to remain firm, supported by low inflation and robust labor market conditions that will bolster household incomes,” the World Bank said.

However, adverse global policy shifts, especially trade policies, as well as weaker-than-expected growth in China are seen as risks to the growth outlook.

The World Bank said heightened uncertainty about trade policies around the world poses a significant threat as it may affect export-oriented activities.

It said rising conflict and more frequent climate change-related natural disasters also present downside risks.

“Prospects for US growth, global inflation and monetary policy remain uncertain and subject to both upside and downside risks, the materialization of which could boost or dampen EAP activity,” the World Bank said.