ADB trims ’25 PH growth forecast to 5%
The Asian Development Bank (ADB) trimmed its growth outlook on the Philippines, citing weak government spending amid a widening graft scandal that has implicated high-ranking officials and stalled infrastructure projects.
In its latest Asian Development Outlook published on Wednesday, the Manila-based lender cut its 2025 gross domestic product forecast for its host country to 5 percent, down from an earlier projection of 5.6 percent.
If realized, the projection would mark a deceleration from the 5.7-percent average expansion in 2024 and fall short of the Marcos administration’s 5.5- to 6.5-percent growth target for this year. Even so, the Philippines would still tie with Indonesia—also seen growing by 5 percent—as Southeast Asia’s second-fastest-growing economy in 2025, trailing only Vietnam’s 7.4 percent.
The bank expected a mild recovery to 5.3 percent in 2026, though that, too, was weaker than its previous estimate of 5.7 percent. The projection suggested the Philippine economy may struggle to meet the government’s 6- to 7-percent growth target for next year.
“Growth projections were cut for the Philippines, largely due to weak public infrastructure investment,” the ADB said. “Uncertainties arising out of investigations of publicly funded infrastructure projects and weather-related disruptions pose downside risks.”
The ADB’s pared-back forecast came a day after the World Bank also lowered its outlook for the Philippines, cutting its 2025 growth projection to 5.1 percent from 5.3 percent and trimming its 2026 estimate to 5.3 percent from 5.4 percent.
A separate projection released yesterday by payments firm Mastercard was more upbeat, penciling in 5.6-percent growth next year.
President Marcos’ economic team earlier signaled that official macro targets may need to be revised to account for the fallout from an escalating antigraft drive, after data showed the economy expanding just 4 percent in the third quarter—the slowest in more than four years.
The probe has widened to include lawmakers, Cabinet members, government engineers and private contractors, squeezing public spending at a time when the economy is counting on domestic demand to cushion against mounting global risks.
The fallout may also be weighing on consumer spending, which typically accounts for about 70 percent of the economy. Even with subdued inflation and lower borrowing costs that should have boosted household purchasing power, private consumption rose just 4.1 percent in the third quarter, its weakest pace in four years.
Looking ahead, the ADB said low inflation and rate-cutting campaign of the central bank should sustain domestic demand, supporting stronger growth in 2026. The bank retained its inflation forecasts for the Philippines at 1.8 percent in 2025 and 3 percent next year.
