The Philippine economy is expected to remain one of the fastest growing economies in the region, with growth likely settling at above 6 percent for 2024 and 2025.

In his economic and market outlook, BPI senior vice president and lead economist Emilio Neri Jr. said economic growth will likely hit 6.1 percent this year and further accelerate to 6.3 percent in 2025.

“The Philippine economy has been resilient despite significant headwinds like severe El Niño and devastating typhoons, still managing to grow by 6% in the first half of 2024,” Neri said.

“Looking ahead, the Philippine economy will likely continue to outperform in the region, supported by its strong consumer base,” he added.

Neri expects headline inflation to ease to 3.2 percent in 2024 and further decelerate to 2.8 percent in 2025.

“Inflation is expected to be more manageable in the coming year given the improving prospects of food supply. With El Niño now behind us and the potential increase in production, along with tariff reductions, rice may become more affordable,” he said.

Neri said lower inflation may help boost consumption in the coming year, while election-related spending could also further stimulate economic activity.

IMF projection

In a separate report, the International Monetary Fund (IMF) said the Philippine economy could grow by over 6 percent in 2029, making the country one of the fastest growing economies in emerging and developing Asia.

In its World Economic Outlook October 2024 update, the IMF forecasts Philippine economic growth to settle at 6.3 percent in 2029.

The projected economic expansion is the third highest, next to economic growth forecast for Bhutan at 7.2 percent, and Bangladesh and India at 6.5 percent.

For 2024 and 2025, Philippine economic growth projection was maintained at 5.8 percent and 6.1 percent.

In an emailed statement, the IMF said growth in 2024 and 2025 is driven by a pickup in domestic demand, supported by gradual monetary policy easing.

“Consumption growth will be buoyed by lower food prices and the upcoming midterm elections, while investment growth is expected to pick up on the back of a sustained public investment push, and gradually declining borrowing costs,” the IMF said.

Growth over the medium term at 6.3 percent, meanwhile, is expected to be supported by investment, on the back of an acceleration in the implementation of public-private partnership projects and foreign direct investments.

Risks to the growth outlook include commodity price volatility, escalation of geopolitical tensions, tighter for longer monetary policy in advanced economies, and the weaker-than-projected pickup in private investment if reform momentum stalls or payoffs from reforms generate lower-than-expected returns.PNA