Manila: The Philippines is anticipated to record the second highest economic growth in the ASEAN region, driven by a less restrictive monetary policy, as reported by the ASEAN+3 Macroeconomic Research Office (AMRO). In a recently released report, AMRO has maintained its economic growth projections for the Philippines at 5.8 percent for 2024 and 6.3 percent for 2025.

According to Philippines News Agency, the forecast places the Philippines just behind Vietnam, which is expected to achieve a growth rate of 7.1 percent in 2024 and 6.5 percent in 2025. The ASEAN+3 group includes the 10 ASEAN member states, along with China, Japan, and South Korea. AMRO's chief economist, Hoe Ee Khor, emphasized in a virtual briefing that the Philippines is emerging as one of the stronger and faster-growing economies in the region.

Khor highlighted that the growth projection of 6.3% for 2025 remains among the highest in the region, partly due to the Bangko Sentral ng Pilipinas (BSP) initiating an easing of monetary policy. The Monetary Board of the BSP reduced policy rates by a total of 75 basis points in the previous year, bringing the central bank's target reverse repurchase rate to 5.75 percent. Additionally, the interest rates on the overnight deposit and lending facilities were adjusted to 5.25 percent and 6.25 percent, respectively.

BSP Governor Eli Remolona Jr. had previously indicated the continuation of the easing cycle this year. Khor noted that there is still room for further easing, given that the real interest rate remains relatively high, and signs indicate that the economy is beginning to respond positively. He expressed optimism for a stronger growth next year, supported by an improvement in domestic demand and resilient export performance.

AMRO also projected that the country's headline inflation would settle at 3.2 percent this year, aligning with the government's target range of 2 to 4 percent.