The Asean+3 Macroeconomic Research Office (AMRO) has kept its growth forecast for the Philippines this year at 6.3 percent, as it is expected to be the fastest growing economy for 2024 in the Asean+3 region.
The latest outlook published in AMRO’s annual flagship report, the Asean+3 Regional Economic Outlook 2024, released yesterday falls within the government’s recently revised growth assumption for 2024 of six to seven percent.
AMRO’s projection for this year is the same as the outlook it made in its Asean+3 Regional Economic Outlook Update report released last January.
“I think 6.3 percent will be among the highest in the region, and the Philippines will also benefit from the upswing in terms of external demand. The manufacturing sector would benefit from that, and also there’s the recovery in tourism,” AMRO chief economist Hoe Ee Khor said in a virtual briefing yesterday.
For 2025, AMRO sees a faster growth for the Philippine economy at 6.5 percent, which places its estimate at the lower-end of the government’s projection for next year of 6.5 to 7.5 percent.
The Philippines is seen to share the top spot with Vietnam next year, in terms of AMRO’s growth outlook.
According to the report, the Philippine economic outlook is clouded by various risk factors and challenges.
“In the near term, growth prospects are relatively robust, but high inflation is a risk, especially as a result of local supply shocks in the food sector and the impacts of geopolitical conflicts on international energy prices. These will exert upward pressure on inflation which can dampen domestic demand,” it said.
AMRO expects the country’s inflation rate to average at 3.6 percent this year, and will ease to 2.9 percent in 2025.
Additionally, the report said an economic slowdown in major trading partners and volatility in the global financial market, along with tighter financial conditions that increase funding costs for the government, corporates and households, also pose risks.
“Looking at the longer term, growth potential will largely hinge on the economic scarring effects of the pandemic, the pace of infrastructure development and heightened geopolitical tensions between China and the United States,” the report said.
Meanwhile, as one of the most disaster-prone countries, AMRO said the Philippines faces increasing social and economic costs due to global climate change.
“These factors underscore an urgent need for a comprehensive strategy to foster resilient, sustainable and inclusive long-term growth,” it said.
