MANILA - The Philippines is likely to grow 6.3 percent this year as it benefits from the rebound in the semiconductor industry, an economist from the ASEAN+3 Macroeconomic Research Office (AMRO) said on Monday.

AMRO, in its ASEAN+3 Regional Economic Outlook 2024, also kept its forecast for the Philippines' growth in 2025 at 6.5 percent in 2025.

This is slightly lower than the government's revised target range of 6.5 percent to 7.5 percent in 2024. 

“[The] electronic industry in the Philippines is expected to do well this year. I think the manufacturing sector in the Philippines is much smaller than in the other ASEAN countries. They’re expected to do well this year,” AMRO Chief Economist Hoe Ee Khor said. 

Khor said 6.3 percent growth is among the highest in the region. 

"[The] Philippines will also benefit from the upswing in external demands. We mentioned earlier that the manufacturing sector will benefit from there. And also the recovery in tourism. I saw a report that for the first time, foreign tourism is contributing more to tourism than domestic tourism,” Kho said.

While inflation in the region has been gradually moderating in the first quarter, Kho noted that the Philippines’ headline inflation remains “on the high side” and may not prompt monetary policy to ease soon. 

“Inflation is still on the high side. The (Bangko Sentral ng Pilipinas) governor expressed he is going to wait until inflation has come off more before they’re comfortable with easing. I think there’s a slight reason this year because of the synchronized upswing in the global economy that inflation impression may actually be on the upside rather than on the downside,” Kho said. 

Manufacturing and tourism industries are seen to be drivers of growth.

AMRO sees the Philippines as posting the fastest growth in 2024, followed by Cambodia at 6.3 percent, Vietnam at 6 percent, and China at 5.3 percent. 

The ASEAN+3 bloc, which includes the 10 ASEAN members as well as China, Japan and Korea, is expected to grow at a slightly faster pace this 2024 at 4.5 percent, the report said. The region grew by 4.3 percent in 2023. Khor is optimistic about strong economic growth for the region with moderating inflation.

 “The regions are expected to strengthen this year. This year, we are much more optimistic with the regional outlook and we expect growth to be sustained going forward,” Khor said.

Robust domestic demand on the back of increasing household income and recovering investment activity, improving exports, and tourism recovery will also be growth drivers this year, according to AMRO.

Despite a rosy outlook for the region, risks to the region’s growth remain such as a spike in commodity prices, weaker growth in China, spillover from the US elections, and a sharp growth slowdown in the US and Europe.

World Bank sees PH economy growing 5.8 pct in 2024 as inflation eases