PHILIPPINE exports are likely to face headwinds through 2026, reflecting the full impact of higher US tariffs, the ASEAN+3 Macroeconomic Research Office (AMRO) said.
“Growth will be driven mainly by robust private consumption, while private investment and exports will face challenges from US tariff policies,” AMRO Principal Economist Jinho Choi said in a statement on Thursday.
“If sustained, the tariff impact — partly offset by front-loaded export orders this year — could weigh more heavily in 2026.
The 19% tariff on Philippine goods took effect on Aug. 7, although negotiations are ongoing.
In a recent report, the United Nations Development Programme (UNDP) projected a 13% contraction in Philippine exports to the US.
AMRO said Philippine near-term growth and financial conditions remain stable but below pre-pandemic levels, propped up by “solid domestic demand.”
The Philippine economy grew 5.5% in the three months to June, supported by a rebound in agriculture production and stronger household consumption.
The government growth target is 5.5% to 6.5% for the full year, and 6% to 7% next year.
“However, sustaining momentum and lifting medium-term growth will require refinement to the country’s growth strategy, including more effective investment by both the public and private sectors to prepare for climate shocks and the upskilling of the labor force for the age of artificial intelligence (AI),” it said.
The preliminary assessment was made during AMRO’s Annual Consultation Visit to the Philippines between Sept. 2 and 19.
In addition, AMRO said inflation is expected to “remain low and stable,” settling within Bangko Sentral ng Pilipinas (BSP) target range. Inflation is projected at 3.2% in 2026 from 1.8% this year.
“Softer supply-side pressures — such as easing food and global commodity prices — alongside measures such as tariff cuts on rice and the streamlining of non-tariff barriers, are helping to contain inflation even as robust demand continues,” it added.
AMRO said the BSP should proceed cautiously with further rate adjustments, “given the near-zero output gap and potential supply shocks.”
The Philippines should accelerate fiscal consolidation in the medium to long term while investing in infrastructure upgrades and reinforcing its financial stability framework, AMRO said.
“Enhancing monetary policy transmission — by deepening liquidity, broadening the long-term bond investor base, and improving interest rate pass-through in the bank credit channel — would also strengthen policy effectiveness,” it added. — Aubrey Rose A. Inosante