ADB trims Philippines growth outlook to 5% in 2025

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December 11, 2025 | 12:00am

MANILA, Philippines — The Asian Development Bank (ADB) has pared down its economic growth projections for the Philippines this year and the next, following through on signals it gave just days earlier that the sharp slowdown in the country’s third quarter performance as well as the ongoing flood control corruption probe weighed on the outlook.

In its December update to the Asian Development Outlook released yesterday, the Philippines-based lender slashed its 2025 forecast to five percent from the 5.6 percent projected in September.

Its 2026 outlook was also trimmed to 5.3 percent from 5.7 percent.

“(Gross domestic product) growth slowed to four percent in the third quarter, averaging five percent for the year up to that period, mainly due to lower government spending on flood control projects amid investigations and stricter controls,” the ADB said in its report.

Despite weaker investor confidence, the ADB said that activity in the private sector has held up better than expected.

It noted that construction by private firms continued to expand, and recent business surveys showed that services and trade were still growing modestly in October.

Consumer spending also cooled but continues to provide a backbone for the economy.

The ADB pointed out that low unemployment and stable remittance inflows are helping households maintain their purchasing power.

Softer inflation and the move of the Bangko Sentral ng Pilipinas toward lower interest rates are likewise expected to keep demand afloat and support a firmer rebound in 2026, the ADB added.

However, the lender warned that the outlook remains fragile, citing that ongoing investigations into government infrastructure projects and the possibility of further weather disturbances could disrupt spending and investment, posing risks to the recovery.

While the projections for the Philippines’ were revised downward, the ADB noted that much of developing Asia is seeing an improved outlook.

It said the region’s economy is now expected to grow by 5.1 percent this year, faster than the earlier 4.8 percent estimate, thanks largely to stronger exports and easing trade uncertainty.

Growth across the region in 2026 was also nudged higher to 4.6 percent.

The ADB highlighted that major economies helped lift the regional picture, with China’s forecast for 2025 raised slightly to 4.8 percent from 4.7 percent as exports held up and government spending continued.

Projection for India also jumped to 7.2 percent from 6.5 percent after a stronger-than-anticipated third quarter.

In Southeast Asia, growth for 2025 was upgraded to 4.5 percent from 4.3 percent, reflecting better performances in Indonesia, Malaysia, Singapore and Vietnam.