The Philippines is expected to post the second highest economic growth in the region amid a less restrictive monetary policy, the ASEAN+3 Macroeconomic Research Office (AMRO) said.
In a report released on Tuesday, AMRO retained its 2024-2025 Philippine economic growth projection to 5.8 percent and 6.3 percent.
The forecast is the second highest in the Association of Southeast Asian Nations (ASEAN), next to Vietnam’s 7.1 percent for 2024 and 6.5 percent for 2025 economic growth projection.
ASEAN+3 consists of the 10 ASEAN members states, plus China, Japan, and South Korea.
“The Philippines is one of the stronger, faster growing economy in the region,” AMRO chief economist Hoe Ee Khor said in a virtual briefing.
“We kept the growth forecast at 6.3% [for 2025]. So that’s among the highest in the region. And that’s partly because the BSP (Bangko Sentral ng Pilipinas) has started to also ease monetary policy,” he added.
The BSP’s Monetary Board reduced policy rates by a total of 75 basis points last year.
The latest cut brings the central bank’s target reverse repurchase rate to 5.75 percent.
The interest rates on the overnight deposit and lending facilities were also adjusted to 5.25 percent and 6.25 percent, respectively.
BSP Governor Eli Remolona Jr. earlier signaled that the central bank will continue with its easing cycle this year.
“The governor has announced that there’s scope for them to continue to ease because the real interest rate is still pretty high. And we see signs that the economy is beginning to respond,” Khor said.
“So for next year, we expect growth to be much stronger and supported by a stronger improvement in domestic demand. But also, the Philippines’ export has held quite well recently. So for those reasons, we think the Philippines will be able to register a growth of 6.3% for next year,” he added.
AMRO, meanwhile, forecast the country’s headline inflation to settle this year at 3.2 percent, which is well within the government’s 2 to 4 percent target. (PNA)
