AMRO hands Phl steepest growth downgrades

The Philippines again suffered the steepest downward revisions to its economic growth forecasts among economies covered by the ASEAN+3 Macroeconomic Research Office (AMRO), with the regional think tank cutting its 2026 and 2027 projections anew despite maintaining a broadly positive outlook for the region.

In its October update to the ASEAN+3 Regional Economic Outlook (AREO), AMRO cut its Philippine gross domestic product (GDP) growth forecast for 2026 to 3.3 percent from 4.1 percent in the July AREO. It also lowered its 2027 projection to 4.6 percent from 5.5 percent, marking the largest downward revisions among the economies covered in the report.

AMRO maintained its 4.1 percent growth forecast for the broader ASEAN+3 region, which includes ASEAN member states as well as China, Japan and South Korea.

“AI-related exports and investment are expected to support regional growth despite continued pressure from energy costs,” the organization said.

“The unchanged regional forecast for 2026 conceals mixed country revisions, with upgrades for Korea and Malaysia alongside downgrades for the Philippines and Cambodia,” it added.

The October AREO figures also marked a downward revision from AMRO’s preliminary assessment in August, when it projected the Philippine economy to grow 3.4 percent in 2026 before rebounding to 4.8 percent in 2027.

“In terms of decline in growth rate this year, I think the Philippines is probably one of the institutions that suffered the most from this round-off. But I don’t necessarily say that it’s underperforming,” AMRO chief economist Dong He said earlier, attributing the ongoing growth slowdown to the country’s reliance on oil imports through the Strait of Hormuz, which has experienced major disruptions due to the ongoing conflict between the US and Iran.

“Growth this year will be weighed down by weaker private consumption amid higher inflation and subdued investment, although a gradual recovery in public construction in the second half of the year and resilient exports should provide some support,” AMRO Group head and lead economist Jinho Choi added.

In the October AREO, AMRO noted that upward revisions to capital expenditure forecasts for major US technology companies point to continued demand for computing capacity, which could help offset higher production and logistics costs and ease some pressure on household purchasing power.

While the October AREO did not give an explicit reason for the Philippines’ latest downgrades, AMRO said the growth outlook remains particularly sensitive to AI-related demand, which presents both upside and downside risks.

An annex in the report showed the Philippines capturing a much smaller share of ASEAN’s role in the global AI supply chain, while regional peers such as Singapore and Malaysia, as well as Plus-3 economies such as Japan and China, saw upward or unchanged revisions amid their heavier participation in the AI race.

“The Plus-3 economies remain major suppliers of chipmaking inputs, equipment and core computing products, while rising demand for optical interconnects, storage, circuit boards, controller chips and networking equipment is drawing increasingly on ASEAN’s established electronics base,” AMRO said.