Manila: The ASEAN+3 Macroeconomic Research Office (AMRO) anticipates that the Philippines will emerge as the second fastest-growing economy within the Association of Southeast Asian Nations (ASEAN) this year and again in 2026.

According to Philippines News Agency, AMRO's latest ASEAN+3 Regional Economic Outlook (AREO) October Update, released Thursday, forecasts the Philippine economy to expand by an average of 5.6 percent this year. This growth rate positions the Philippines just behind Vietnam, which is expected to lead with a 7.5 percent growth rate. The Philippine economy's projected growth surpasses that of Indonesia (5 percent), Cambodia (4.9 percent), Malaysia (4.3 percent), Thailand (2.2 percent), and Singapore (2.6 percent).

"In terms of the macro level, I think the Philippine economy actually has been performing quite well. Growth has been steady," stated AMRO Chief Economist Dong He during a virtual briefing. For 2026, AMRO anticipates the Philippine economy to grow by 5.5 percent.

AMRO noted that the Philippines, along with other countries in the region, would face challenges due to higher tariffs imposed by the United States. "So actually the forecast for 2025 and 2026, there's a slower growth than 2024 partly because of the weaker export, just like any other countries in the region, where we expect that the impact of the US tariff is going to kick in towards the end of the year and next year," explained AMRO Group Head and Lead Economist Runchana Pongsaparn.

Despite these challenges, AMRO remains optimistic about steady consumption growth, driven by a strong labor market, lower inflation, and robust remittances. However, Pongsaparn cautioned that private investment sentiment and export performance might moderate growth due to external uncertainties.

Additionally, AMRO projects the country's inflation to stabilize at 1.8 percent this year, with an increase to 3.2 percent by 2026.