The International Monetary Fund (IMF) is still projecting the Philippine economy will grow by 6.1 percent this year and 6.3 percent in 2026 due to disinflation, easing monetary policy, and strong public spending.
The IMF has maintained the same growth forecast for the Philippines in two World Economic Outlook (WEO) report released in October last year and in the January 2025 update as of Jan. 17.
For 2024, the IMF likewise has not revised its forecast of a 5.8 percent GDP growth for the country. For the first three quarters of last year, the local GDP grew by 5.8 percent.
Based on the IMF Article IV Consultation with the Philippines report released last December, growth is expected to pick up to 6.1 percent this year while output growth is estimated to be between six percent to 6.3 percent over the medium term.
The IMF projections are on the lower side of the government GDP targets of six percent to eight percent for 2025 and 2026.
The IMF said the risks to the near-term growth outlook lingers, such as: recurring commodity price volatility; new supply shocks; an escalation of geopolitical tensions; monetary policy stance in advanced economies turning out to be too tight for longer; a growth slowdown in major economies; major natural disasters or extreme climate events; and stalled reform momentum or lower than expected payoffs from reforms.
In various IMF reports and assessments, it has noted that the growth momentum this year will be supported by more accommodative financial conditions and investment, including the declining costs of borrowing.
“Growth has been resilient, despite external shocks and an unprecedented tightening in global monetary conditions,” said the IMF.
For 2024 and 2025, the country's economic growth is expected to be still modest while the Bangko Sentral ng Pilipinas is seen to continue managing inflation to within its target range of two percent to four percent over the medium term.
The moderating inflation path will also allow the central bank to cut rates until monetary policy normalizes. Last year, the BSP reduced the key rate by a combined 75 basis points to 5.75 percent.
The domestic economy will continue to be supported by the growth in consumption as food prices ease and by an increase in public investment, said the IMF.