MANILA, Dec. 15 (Xinhua) -- The International Monetary Fund (IMF) has downgraded its 2025 gross domestic product (GDP) growth forecast for the Philippines to 5.1 percent from the 5.4 percent projection in October, citing heightened global trade uncertainty, governance and corruption concerns, and a sharper-than-expected economic slowdown in the third quarter of 2025.
"The Philippines' growth is expected to slow to 5.1 percent in 2025 as increasing tariffs weigh on exports and investment, before picking up moderately to 5.6 percent in 2026," the IMF said in a statement released on Monday.
It noted that the outlook represents a downward revision from earlier projections of 5.7 percent following weaker-than-anticipated economic performance in the third quarter.
Despite the softer growth outlook, the IMF said inflationary pressures have eased, supported by a restrictive monetary policy stance and government measures to lower food prices. Inflation is projected to average 1.7 percent in 2025 before rising to 2.8 percent in 2026 as negative base effects fade.
Looking ahead, the IMF underscored the importance of fiscal discipline and reforms to strengthen the country's economic prospects.
"Gradual fiscal consolidation over the medium term will help reinforce fiscal space," it said, adding that faster implementation of structural and governance reforms would bolster investor confidence and lift potential growth.
Major multilateral lenders have downgraded the Philippines' growth outlook, with the IMF, Asian Development Bank (ADB), and World Bank all cutting GDP forecasts due to weaker investment, tighter scrutiny of public projects, domestic shocks, and soft global demand.
Despite the downgraded outlook, multilateral lenders expect a modest recovery to begin in 2026, supported by resilient household consumption and easing inflation, provided investment conditions and public spending execution improve. ■
