IMF cuts 2025 growth outlook on Philippines to 5.5%

MANILA, Philippines — The International Monetary Fund (IMF) significantly cut its growth outlook on the Philippines, adding a strong warning to the world that the massive fallout of the US trade war would spare no one as uncertainty already hit “unprecedented levels.”

For this year, the IMF expects the Philippines’ gross domestic product (GDP) to grow by 5.5 percent, a big downgrade from its previous growth forecast of 6.1 percent, according to the latest World Economic Outlook (WEO) of the Washington-based institution.

The IMF likewise trimmed its growth outlook for the local economy in 2026 to 5.8 percent, from 6.3 percent previously.

READ: World economy should avoid recession despite tariffs, IMF chief says

Despite the cuts, a spokesperson for the IMF said growth would remain “robust,” with the Philippines poised to become the second fastest-growing economy in emerging and developing Asia behind India.

The new WEO was released as the IMF and World Bank kicked off their spring meetings, which were expected to be dominated by talks on the damage that US President Donald Trump’s sweeping tariffs are having on the global economy.

Notable markdowns

IMF Managing Director Kristalina Georgieva had said that while the Fund’s new outlook included “notable markdowns,” no global recession was expected. Still, the IMF slashed its world growth forecast for this year by 0.5 percentage point to 2.8 percent.

Zooming in, the downgraded outlook of the IMF for the Philippines could mean that the economy might not hit the government’s current medium-term growth target of 6 to 8 percent.

The IMF said the downward revision was partly triggered by the lower-than-expected GDP growth in the final quarter of 2024—a period that was marked by typhoon-induced disruptions. But the less upbeat outlook mostly reflected “recent external developments.”

In his “Liberation Day” announcement on April 2, Trump had unveiled a 17-percent “reciprocal” tariff on Filipino goods coming to America, among the lowest in Asia.

More room for easing

For the IMF, the Philippines could take a hit if the economy of its trading partners would be devastated by the steeper tariffs, as this may weaken the demand for Filipino exports.

“The downward revisions to growth for 2025 and 2026 are observed throughout the region and globally... It is also important to note that the forecast is subject to significant uncertainty,” the spokesperson for the IMF said.

Moving forward, the IMF said that while many countries are bracing for higher consumer prices due to the tariffs, the Philippines is facing the global trade turmoil with tame domestic inflation. This, the Fund explained, can give the Bangko Sentral ng Pilipinas (BSP) enough space to further cut interest rates to support the economy.

“The BSP has room to continue to reduce the policy rate and firmly move to a neutral stance,” it said.

“With inflation projected to remain around the BSP’s target of 3 percent, inflation expectations well-anchored and amid an expected widening of the output gap, there is space for a more accommodative stance,” it added.

(2025/04/23-02:12)