Philippines seen to lead Southeast Asia growth

World Bank report

MANILA, Philippines — The Philippines is projected to be the second fastest growing economy in Southeast Asia this year and the next, according to the World Bank.

The multilateral lender’s Global Economic Prospects report for January 2026 released yesterday showed that it expects the Philippines to grow by 5.3 percent this year from the estimated 5.1 percent expansion in 2025.

Both growth forecasts are unchanged from those provided by the World Bank in December last year. 

While the World Bank’s growth forecast for the Philippines for this year is within the government’s five to six percent growth target, its estimate for last year is below the government’s growth goal of 5.5 to 6.5 percent.  

If realized, the Philippines will be the second fastest growing economy in Southeast Asia for this year and 2025.

While the World Bank expects the Philippines’ 2025 gross domestic product (GDP) growth   to be behind the projected 7.2 percent for Vietnam, it is expected to post faster growth than Indonesia (five percent), Cambodia (4.8 percent), Laos (4.2 percent), Malaysia (4.1 percent), Thailand (two percent) and Myanmar (-1.8 percent).

The World Bank’s growth projection for the Philippines for this year is also lower than the projected 6.3 percent growth for Vietnam, but higher than the growth forecasts for neighbors such as Indonesia (five percent), Cambodia (4.3 percent), Malaysia (4.1 percent), Laos (four percent), Myanmar (three percent) and Thailand (1.8 percent).

From January to September last year, the Philippine economy grew by an average of five percent.

Data on the country’s full-year 2025 economic performance will be released on Jan. 29.

For next year, the World Bank expects the Philippine economy to expand by 5.4 percent. This is below the government’s growth target of 5.5 to 6.5 percent.

If this forecast is realized, the Philippines would remain the second fastest-growing economy in Southeast Asia, with Vietnam projected to post the highest growth at 6.7 percent in 2027.

The World Bank’s projected 2027 GDP growth for the Philippines places the country ahead of Indonesia (5.2 percent), Cambodia (5.1 percent), Malaysia (four percent), Laos (3.9 percent) and Thailand (2.5 percent).

The World Bank said that the risks to the outlook in East Asia and the Pacific, which includes the Philippines, remain tilted to the downside. 

It said that a further increase in trade restrictions and policy uncertainty poses a significant risk to growth in the region.

Other downside risks include tighter global financial conditions, slower-than-expected growth in China, political uncertainty and social unrest in some economies and natural disasters. 

“The Philippines suffered powerful earthquakes late last year,” the World Bank.

On the upside, its said private sector adaptability and investments in artificial intelligence and exports could lead to higher growth prospects in the region.