## IMF Staff Completes 2025 Article IV Consultation with the Philippines

_IMF News, October 1, 2025_

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## Bibliographic details
- Published: October 1, 2025

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### Economic outlook and key projections
- Growth is expected to be "5.4 percent in 2025" and to accelerate to "5.7 percent in 2026".
- Inflation is projected to average "1.6 percent in 2025" and to "stay around the mid-point of the BSP’s target band in 2026".
- Core inflation is expected to be "2.5 percent in 2026", consistent with a slightly negative output gap.
- The current account deficit is projected to "narrow modestly over the medium term".
- Risks to the growth outlook are described as "tilted to the downside", with main external risks including prolonged global trade policy uncertainty, geopolitical tensions, and disruptive financial market corrections.

### Monetary policy assessment and guidance
- The Bangko Sentral ng Pilipinas (BSP) monetary policy tightening and lower rice tariffs have "successfully brought back inflation within the target band."
- Staff view: "There is room to further ease monetary policy given the favorable inflation outlook and elevated growth risks."
- Policy recommendations:
  - The BSP has room for a "slightly more accommodative stance" to help bring inflation back to target faster and reduce economic slack.
  - Policy should remain "data dependent" given uncertainties around the output gap and the neutral rate, and two-sided inflation risks.
  - The exchange rate should "continue to play its role as a shock absorber amid rising global volatility."
  - Continue efforts to incorporate climate considerations in monetary policy.
  - Continue reforms to deepen capital markets and enhance monetary policy transmission.

### Fiscal policy stance and recommendations
- 2025 featured "substantial expenditure restraint"; the 2026 budget targets a "broadly neutral fiscal stance".
- Medium-term guidance: "More gradual medium-term fiscal consolidation is appropriate" to replenish fiscal buffers and support external balance.
- Policy recommendations:
  - Implement "concrete and durable tax measures" to limit the need for restraint in priority spending that disproportionately impacts the vulnerable.
  - Strengthen budget credibility by enhancing public financial management, including "strengthening investment planning, and project appraisal, selection, management, and procurement to enhance accountability."

### Financial sector and macroprudential advice
- Overall systemic financial risks remain "moderate"; the banking system has "strong capital and liquidity buffers."
- Vulnerabilities to monitor: real estate sector, strong bank interconnectedness with complex conglomerate structures, and fast-growing consumer credit.
- Recommendations:
  - Enhance the macroprudential policy framework to preempt buildup of vulnerabilities and raise buffers.
  - Continue progress to strengthen crisis management and resolution frameworks.

### Structural reforms, resilience, and other policy priorities
- Upside growth potential exists from accelerated implementation of structural and governance reforms that would support investor confidence and raise potential growth.
- Recommended reforms and priorities:
  - Continue implementation of recent measures to reduce infrastructure gaps and promote foreign direct investment; effective implementation is "key to reaping their benefits."
  - Negotiate and implement deep trade agreements and take steps to lower non-tariff barriers to enhance global value chain integration and resilience.
  - Enhance fiscal governance and the rule of law and reduce corruption vulnerabilities for inclusive and sustainable growth.
  - Complement reforms by strengthening social protection programs, promoting digitalization, and increasing resilience to climate shocks and natural disasters.
  - Continue efforts to incorporate climate considerations into policy frameworks.

### Mission and procedural details
- An IMF team led by Ms. Elif Arbatli Saxegaard met in Manila "from September 18 to October 1, 2025" for the 2025 Article IV Consultation.
- The statement reflects the "preliminary findings" of the mission; staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
- Press Release No. "25/322".

*IMF Communications Department — October 1, 2025*

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## References

- [Philippines and the IMF](http://www.imf.org/external/country/PHL/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
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_Source: https://www.imf.org/en/news/articles/2025/10/01/pr25322-philippines-imf-staff-completes-2025-aiv-consultation_