The Manila-based Asian Development Bank (ADB) and Singapore-based ASEAN+3 Macroeconomic Research Office (AMRO) have slashed their near-term Philippine economic growth forecasts to lower than six percent due to the expected global growth slowdown coupled with persistent tariff-led trade uncertainties.

AMRO decided to adjust downward its Philippine gross domestic product (GDP) growth forecast to 5.6 percent for 2025, and 5.5 percent for 2026. These are substantially slower than its previous forecast of 6.3 percent for both years.

“I think the main thing is actually the expectation of slower global growth,” Allen Ng, AMRO group head and principal economist, said during the July 23 press briefing on the quarterly update of its flagship ASEAN+3 Regional Economic Outlook (AREO).

Ng noted that while the United States’ (US) tariff on Philippine exports has a “direct impact” on the local economy, he argued that this is “not very large compared to other parts of the region, given the more domestic-centric structure of the Philippine economy.”

On Wednesday, July 23, Philippine President Ferdinand Marcos Jr. concluded tariff negotiations with US President Donald Trump, resulting in a deal where Philippine exports to the US will be subject to a 19-percent tariff—slightly lower than the previous 20 percent but higher than the initial 17 percent when reciprocal tariffs were introduced in April.

President Marcos noted that Trump requested the elimination of tariffs on American automobiles entering the Philippine market, along with increased imports of soy products, wheat, and pharmaceuticals.

AMRO has yet to incorporate this tariff development into its updated outlook for the Philippines, Ng said, but he asserted that the impact of the latest tariff rate on the Philippine economy “will be very limited and it’s unlikely that we will materially change our forecast given the change is actually from 20 percent to 19 percent and the fact that the economy of the Philippines is more domestic-centric in a way.”

More than the tariff hikes, Ng warned that the broader impact of a global slowdown will be felt by the local economy.

“Despite the downward revision, I think it’s important to emphasize that the growth in the Philippines continues to be very robust, and it will continue to be driven by robust private consumption activities, given multiple factors, including continued stable labor market conditions,” Ng said.

Also citing external headwinds, the ADB has lowered its growth projection for the Philippines to 5.6 percent for 2025 and 5.8 percent for 2026, from six percent and 6.1 percent, respectively, in its earlier projections.

On a broader scale, the multilateral bank lowered its regional growth forecast to 4.2 percent from 4.7 percent for 2025, and to 4.3 percent from 4.7 percent for 2026.

Similarly, AMRO has revised downward its earlier growth projections for the region to 3.8 percent for 2025 and 3.6 percent for 2026, from the previously forecast 4.2 percent and 4.1 percent, respectively.

These revised forecasts reflect “heightened global uncertainties, particularly the evolving US tariff measures,” AMRO said.

AMRO noted that the economic outlook for ASEAN+3 “remains clouded by significant uncertainties, with escalating US tariffs posing the most salient risk.”

“Uneven progress in tariff negotiations and the potential expansion of tariffs to additional products could further disrupt trade activities and weigh on growth for the region,” AMRO said.

ASEAN+3 is a forum for cooperation between the 10 member states of the Association of Southeast Asian Nations (ASEAN) and the three East Asian countries: China, Japan, and South Korea.

Based on the ADB’s forecast, all Southeast Asian economies are expected to grow at a sluggish pace in the next two years except for Indonesia, the largest economy in the region.

AMRO chief economist Dong He said that “deeper regional integration is both urgent and necessary,” considering the trade fragmentation that has been threatening the global economy.

“By strengthening regional cooperation while maintaining openness to the world and standing firm on rules-based multilateralism, ASEAN+3 can build resilience against external shocks and create new growth opportunities,” said He.