The Philippines is projected to grow by over 6 percent this year and in 2025, making the country one of the fastest growing economies in the region, the ASEAN+3 Macroeconomic Research Office (AMRO) said.

In its ASEAN+3 Regional Economic Outlook 2024 report released on Monday, AMRO retained its 2024 Philippine economic growth forecast to 6.3 percent.

“I think 6.3% is a very strong growth, among the highest in the region,” AMRO chief economist Hoe Ee Khor said in a virtual briefing. “The Philippines will also benefit from the upswing in terms of the external demand.”

Khor said the growth in the manufacturing sector and the recovery in tourism will also boost economic growth.

For 2025, AMRO expects Philippine economic growth to accelerate to 6.5 percent.

AMRO’s report, however, noted that the Philippine economic outlook “is clouded by various risk factors and challenges.”

“In the near term, growth prospects are relatively robust, but high inflation is a risk, especially as a result of local supply shocks in the food sector and the impacts of geopolitical conflicts on international energy prices,” AMRO said.

AMRO said these will exert upward pressure on inflation which can dampen domestic demand.

Inflation is projected to settle at 3.6 percent for this year and decelerate to 2.9 percent in 2025.

According to AMRO, other risks to growth include an economic slowdown in major trading partners, volatility in the global financial market, and tighter financial conditions that may increase funding costs.

“Looking at the longer term, growth potential will largely hinge on the economic scarring effects of the pandemic, the pace of infrastructure development, and heightened geopolitical tensions between China and the United States,” the report said.

AMRO said the Philippines should also have a comprehensive strategy to foster resilient, sustainable, and inclusive long-term growth as the country remains one of the most disaster-prone countries in the world. (PNA)