Wed Apr 16 07:30:00 UTC 2025: **US Tariffs Threaten Philippines’ Economic Growth, but Impact Expected to be Limited**
MANILA, Philippines – The Philippines, poised to be the second-fastest-growing economy in Southeast Asia this year, faces a potential slowdown due to new US tariffs, according to the ASEAN+3 Macroeconomic Research Office (AMRO). While AMRO initially projected 6.3% GDP growth for the Philippines in 2024, the introduction of US tariffs could push growth below 6%.
Although the Philippines currently faces a 17% tariff – the second-lowest among ASEAN nations – AMRO downplayed the overall impact. The organization noted the Philippines’ service-oriented economy and relatively small manufacturing sector will mitigate the negative effects compared to other ASEAN countries. AMRO Chief Economist Hoe Ee Khor stated that the Philippines is expected to “emerge from this tariff war quite well.”
The forecast of 6.3% GDP growth for 2024 remains unchanged from January projections, based on data collected before the most recent tariff announcements. However, AMRO will update its forecasts to reflect the impact of the newly implemented tariffs.
Despite the potential setback, AMRO maintains a positive long-term outlook for the Philippines, projecting it to be the fastest-growing ASEAN economy by 2026 with 6.3% GDP growth. Robust domestic demand is cited as the key driver of this growth.
The broader ASEAN+3 region (including China, Japan, South Korea and Hong Kong) is also expected to experience slower growth due to the US tariffs. AMRO estimates that if fully implemented, these tariffs could reduce Asia’s growth to its weakest point since the COVID-19 pandemic, slowing to 3.8% this year and 3.4% next year. However, AMRO believes the region’s resilience, built on accumulated reserves and flexible exchange rates, will allow it to mitigate the impact through monetary policy adjustments and fiscal spending. The organization further believes that a complete decoupling of the US and Chinese economies is unlikely.
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