‘ASEAN economies remain resilient’

Amid global uncertainty

MANILA, Philippines — The Association of Southeast Asian Nations (ASEAN) continues to display resilience amid mounting global challenges, supported by firm domestic demand, sound policy frameworks and improving regional cooperation, according to the Bangko Sentral ng Pilipinas and the Asian Development Bank.

Speaking at a joint seminar on the ASEAN Economic Outlook hosted by the BSP and ADB, Monetary Board member Rosalia de Leon said the region remains a bright spot in the global economy even as it faces “the aftershocks of trade fragmentation, geopolitical uncertainty and technological disruption.”

“Amidst these challenges, ASEAN stands out for its resilience and policy discipline,” De Leon said. “Responsive governance and regional cooperation remain critical in steering growth in uncertain times.”

She noted that the region’s inflationary pressures are broadly contained, creating policy space for central banks to sustain growth.

The ADB projects regional inflation to average 2.5 percent this year and rise modestly to 2.7 percent in 2026, reflecting subdued global commodity prices and “carefully calibrated policy adjustments.”

In the Philippines, De Leon said the BSP expects inflation to stay within target over the next two years.

The ADB also sees Southeast Asia’s economic growth steady at 4.3 percent in 2025, supported by firm domestic consumption, targeted fiscal measures and prudent monetary policies.

Still, De Leon cautioned that the region is not immune to global risks.

“Trade tensions and tariff measures have already tested ASEAN’s openness,” she warned. “Persistent global policy uncertainty is creating financial market volatility, posing risks to capital flows and investment in emerging markets.”

Other risks, she said, include potential currency depreciation and temporary price pressures from fiscal reforms such as subsidy rationalization and new taxes.

BSP Deputy Governor Zeno Abenoja echoed this view, emphasizing that while global conditions remain volatile, ASEAN’s economic foundations provide a cushion.

Abenoja cited discussions at the recent International Monetary Fund meetings, noting that global growth has been “more robust than initially expected” despite new tariff measures and policy uncertainty, particularly from the United States.

“For us in the Philippines, the impact of these uncertainties comes through at least three channels — trade, remittances and the business process outsourcing sector,” Abenoja said.

He explained that the country’s relatively domestic-oriented economy limits its exposure to global trade shocks, while the diversified export base further cushions external risks.

“What is important for the BSP is maintaining macro stability,” Abenoja said. “Our inflation-targeting framework and the forward-looking nature of policymaking lend credibility to monetary policy and help build more resiliency.”

Asked whether trade remains a key driver for ASEAN, Abenoja said there remains “room to grow” in intra-ASEAN commerce, which is still relatively limited.

“There could be gains from greater inter-regional trade, more diversification and taking advantage of ASEAN as one of the fastest-growing segments of the global economy,” he said.

Meanwhile, James Villafuerte, ADB’s regional lead economist for Southeast Asia, said ASEAN is now “at a very important crossroad” as it balances rapid economic expansion with goals of sustainability and inclusiveness.

Villafuerte said growth remains robust in large economies such as Vietnam, Philippines and Indonesia, each supported by improving labor markets, strong domestic demand and continued public investment.

Despite the strength of domestic demand, Villafuerte cautioned that ASEAN faces increasing headwinds.

The key risks include trade fragmentation, geopolitical tensions that could disrupt supply chains and tighter financial conditions from external volatility, he said. Climate risks are also becoming more pronounced, with more frequent and severe natural disasters.

According to Villafuerte, the region must pursue “a combination of old and new policies” to navigate these risks. He also underscored the importance of leveraging technology to create more inclusive opportunities.