PH among fastest-growing economies in Southeast Asia – Moody's

PH among fastest-growing economies in Southeast Asia – economist

By Anna Leah Gonzales
Philippine News Agency
March 26, 2025

MANILA – The Philippines is one of the fastest-growing economies in Southeast Asia this year, an economist from Moody's Analytics said Wednesday.

"I think Philippines kind of stands out as one of the fastest growing economies in Southeast Asia. And really a lot of that is coming from the strength, from its domestic economy, given that it's, you know, highly reliant on its private consumption," economist Sarah Tan said in a virtual briefing.

Tan said Moody's Analytics expects Philippine economic growth to accelerate to 5.9 percent this year from 5.6 percent in 2024.

For next year, Moody's Analytics said the Philippine economy is projected to grow by 5.8 percent.

"While the expected growth is shy of the government’s target, it will mark the strongest expansion in three years. Private consumption and investment will be the key driver of growth in the Philippines, supported by a stable inflation and easing monetary policy," said Tan in a separate emailed statement.

Inflation is projected to continue to decelerate and stay within the government’s target range, settling at 2.8 percent in 2025 and 3 percent in 2026.

Tan, meanwhile, said the Bangko Sentral ng Pilipinas (BSP) "faces a tough balancing act to maintain price stability and economic growth."

"Progress on the inflation front supports the case for more rate cuts," she said.

Tan however noted that as US tariffs could slow global demand and the pace of interest rate normalization, the BSP will be more cautious about monetary easing to avoid significant weakening of the peso.

"In our latest baseline, we expect the BSP to bring the policy rate lower by 50 basis points to 5.25 percent by the end of 2025," said Tan.

Tan meanwhile said the main challenge would come from external conditions.

"The threat of more US tariff hikes and the potential for slower global interest rate normalization creates uncertainty in global demand. That will hurt the Philippines' exporters and industrial producers," she said. (PNA)