IMF Executive Board Concludes 2025 Article IV Consultation with the Philippines
IMF News, December 15, 2025
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- Published: December 15, 2025
Overview
- On November 24, 2025, the Executive Board of the International Monetary Fund (IMF) concluded the 2025 Article IV consultation with the Philippines. The authorities have consented to publication of the Staff Report prepared for this consultation.
- Press Release No. 25418; IMF Communications Department; December 14, 2025.
- Recent developments:
- Growth rose to 5.7 percent in 2024 on strong public consumption and investment.
- Growth moderated to 5.4 percent in the first half of 2025 amid strong imports and an election‑related public spending ban.
- Real GDP growth slowed sharply in 2025Q3 to 4.0 percent year-on-year, driven by weaker-than-anticipated gross fixed capital formation and private consumption.
- Headline and core inflation averaged 1.7 percent and 2.4 percent (year-on-year) in 2025 as of October, respectively.
- Current account deficit widened to 4.0 percent of GDP in 2024 on weak exports and a rise in outbound tourism.
- Domestic financial conditions eased amid a more accommodative monetary policy stance; the real policy rate has declined to the estimated natural rate, but equity prices are subdued.
Key macroeconomic projections and indicators
- Growth and output:
- Growth is expected to slow to 5.1 percent in 2025, then pick up to 5.6 percent in 2026 (downward revision relative to previous forecasts due to sharper-than-expected slowdown in 2025Q3).
- Potential growth is estimated to be around 6.0 percent over the medium term.
- Inflation:
- Inflation is projected to average 1.7 percent in 2025 then pick up to 2.8 percent in 2026 as negative base effects recede.
- External sector:
- Current account deficit is expected to narrow to 3.8 percent of GDP in 2025 and to 3.4 percent in 2026 amid lower commodity prices.
- Risks:
- Near-term growth risks are tilted to the downside.
- Main external risks: prolonged global trade policy uncertainty, geopolitical tensions, disruptive financial market corrections.
- Domestic risks: corruption allegations related to flood control projects, more frequent and intense climate shocks causing macroeconomic losses.
- Upside possibility: accelerated implementation of structural and governance reforms supporting investor confidence and raising fiscal multipliers and potential growth.
- Risks around inflation are broadly balanced.
Executive Board assessment and policy recommendations
- Directors’ overall view:
- Commended the authorities’ well calibrated macroeconomic policies and reforms supporting successful disinflation and resilient growth amid external headwinds.
- Noted that balance of risks to the growth outlook is tilted to the downside.
- Fiscal policy:
- Welcomed authorities’ plan for gradual fiscal consolidation over the medium term to reinforce fiscal space and external balance and support a growth-friendly strategy.
- Encouraged concrete and durable tax and expenditure measures to limit the need for restraint in priority spending.
- Emphasized enhancing public financial management and spending efficiency, including strengthening investment management and procurement to enhance accountability and governance.
- Several Directors suggested embedding fiscal targets in a formal fiscal rule.
- Monetary and exchange rate policy:
- Agreed monetary policy stance should remain accommodative amid elevated downside risks to growth and well-anchored inflation expectations; welcomed authorities’ data-dependent approach.
- Urged allowing the exchange rate to act as a shock absorber, with interventions used temporarily to address disorderly market conditions.
- Encouraged efforts to deepen capital markets and enhance monetary policy transmission.
- Financial sector and macroprudential policy:
- Concurred systemic financial risks remain moderate but urged close monitoring of vulnerabilities in the real estate sector, bank-conglomerate interconnectedness, and fast-growing consumer credit including through NBFIs and digital finance.
- Advised enhancing the macroprudential policy framework to preempt build-up of vulnerabilities and raise buffers.
- Welcomed the Philippines’ successful exit from the Financial Action Task Force grey list and noted advancing AML/CFT efforts should remain a priority.
- Structural and governance reforms:
- Welcomed recent reforms to improve the business environment and encouraged effective implementation.
- Recommended reducing infrastructure and energy gaps, promoting foreign direct investment and productivity, lowering non-tariff barriers, strengthening governance and the rule of law, reducing corruption vulnerabilities, and enhancing human capital and workforce skills.
- Emphasized increasing resilience to climate shocks and integrating climate risks into policy frameworks.
Selected economic indicators and statistics (as reported)
- Demographics and social:
- Population (2024): 112.9 million
- Life expectancy at birth (2023): 69.8
- Poverty: below $2.15 a day (2023): 5.3 percent; below the national poverty line (2023): 15.5 percent
- Inequality (2023, income shares): top 10 percent: 31.6; bottom 20 percent: 6.9
- IMF quota: SDR 2,042.9 million
- Main export products: electronics, mineral, agro-based products, equipments and chemicals
- Real GDP (annual percentage change):
- 2023: 5.5
- 2024: 5.7
- 2025: 5.4
- 2026: 5.8
- 2027: 6.1
- 2028: 6.0
- Consumption (annual percentage change):
- 2023: 4.7
- 2024: 5.3
- 2025: 5.0
- 2026: 5.2
- 2027: 5.6
- Gross fixed capital formation:
- 2023: 8.2
- 2024: 6.3
- 2025: 6.9
- 2026: 8.4
- 2027: 7.5
- 2028: 7.5
- Net exports (contribution to growth):
- 2023: 0.0
- 2024: -0.7
- 2025: -0.2
- 2026: -0.3
- 2027: -0.6
- Real GDP per capita (annual percentage change):
- 2023: 4.6
- 2024: 4.8
- 2025: 4.3
- Output gap (percent, +=above potential):
- 2023: 0.2
- 2024: -0.4
- 2025: -0.1
- Labor market:
- Unemployment rate (percent of labor force): 2023: 4.4; 2024: 3.8; 2025: 3.9
- Underemployment rate (percent of employed persons): 2023: 12.3; 2024: 11.9
- Employment (annual percentage change): 2023: 2.8; 2024: 1.8
- Prices:
- Consumer prices (period average): 2023: 3.2; 2024: 1.7; 2025: 3.0
- Consumer prices (end of period): 2023: 2.9
- Core consumer prices (period average): 2023: 6.6; 2024: 2.4; 2025: 2.6
- Monetary and credit:
- Overnight reverse repo rate (policy rate): 2023: 6.5
- Claims on private sector (in percent of GDP): 2023: 48.3; 2024: 49.9; 2025: 51.3; 2026: 51.4; 2027: 51.8; 2028: 52.3
- Claims on private sector (yoy growth rate): 2023: 9.1; 2024: 12.2; 2025: 10.1; 2026: 8.5; 2027: 9.7
- Monetary base (annual percentage change): 2023: 0.6; 2024: -3.1; 2025: 4.1
- Broad money (annual percentage change): 2023: 7.4; 2024: 7.7; 2025: 6.8; 2026: 7.2
- Public finances (in percent of GDP):
- National government overall balance 1/: 2023: -6.1; 2024: -5.7; 2025: -5.4; 2026: -5.2; 2027: -4.7; 2028: -4.2
- Revenue and grants: 2023: 15.7; 2024: 16.7; 2025: 16.1; 2026: 16.2; 2027: 16.3
- Total expenditure: 2023: 21.8; 2024: 22.4; 2025: 21.5; 2026: 21.4; 2027: 20.9; 2028: 20.5
- National government gross debt: 2023: 60.1; 2024: 60.7; 2025: 62.2; 2026: 62.7; 2027: 62.5; 2028: 61.8
- Balance of payments (in percent of GDP):
- Current account balance: 2023: -2.8; 2024: -4.0; 2025: -3.8; 2026: -3.4; 2027: -2.9
- Direct Investment, net: 2023: -1.2; 2024: -1.4; 2025: -1.5
- Total external debt: 2023: 28.7; 2024: 29.8; 2025: 31.9; 2026: 32.3; 2027: 32.5
- Gross reserves:
- Gross reserves (US$ billions): 2023: 103.8; 2024: 106.3; 2025: 107.3; 2026: 106.5; 2027: 105.0; 2028: 103.3
- Gross reserves (percent of short-term debt, remaining maturity): 2023: 401.5; 2024: 390.3; 2025: 382.8; 2026: 365.9; 2027: 332.4; 2028: 304.9
- Memorandum items:
- Nominal GDP (US$ billions): 2023: 437.1; 2024: 461.6; 2025: 494.3; 2026: 535.5; 2027: 582.3; 2028: 632.8
- Nominal GDP per capita (US$): 2023: 3,905; 2024: 4,089; 2025: 4,322; 2026: 4,633; 2027: 4,985; 2028: 5,360
- GDP (in billions of pesos): 2023: 24,314; 2024: 26,446; 2025: 28,320; 2026: 30,682; 2027: 33,363; 2028: 36,253
- Real effective exchange rate (2010=100): 2023: 113.1; 2024: 113.7
- Peso per U.S. dollar (period average): 2023: 55.6; 2024: 57.3
IMF Communications Department, Press Release No. 25418 (December 14, 2025).