The Philippine economy is expanding steadily, supported by strong domestic consumption and a resilient labour market, though growth is slower than pre-COVID levels, the ASEAN+3 Macroeconomic Research Office (AMRO) said after its September 2–19, 2025 consultation.

The mission was led by principal economist Jinho Choi, with policy discussions involving AMRO director Yasuto Watanabe and chief economist Dong He. Discussions focused on the Philippines’ recent macroeconomic developments, outlook, risks and vulnerabilities, and policy priorities for sustaining growth and maintaining financial stability.

Inflation is projected to rise moderately from 1.8 per cent in 2025 to 3.2 per cent in 2026, remaining within the BSP’s target.

The current account will remain in deficit, but net inflows in the financial account and a robust banking sector—characterised by low non-performing loans (NPL), strong profitability, and ample liquidity—support overall stability. Fiscal consolidation continues but at a slower pace to prioritise growth-enhancing measures. Monetary policy has shifted to easing, with the BSP advised to proceed cautiously given potential supply shocks and a near-zero output gap.

Downside risks include aggressive US protectionist measures, weaker demand from trading partners, tighter global financial conditions, and renewed inflationary pressures. Persistent challenges—such as pandemic scarring, weak infrastructure, and limited manufacturing capacity—are weighing on potential growth, AMRO said.

AMRO urged balancing fiscal consolidation with investments in infrastructure and human capital, upgrading the financial stability framework, and improving monetary policy transmission through deeper liquidity and bond market development. The report also highlighted the need to prepare for climate shocks, enhance competitiveness, and embrace AI through workforce upskilling and private sector investment.

The near-term outlook remains stable, driven by domestic demand, but sustaining medium-term growth will require strategic policy refinements and structural reforms.

“Despite external headwinds, the Philippine economy is expected to continue growing at 5.6 per cent in 2025 and 5.5 per cent in 2026. Growth will be driven mainly by robust private consumption, while private investment and exports will face challenges from US tariff policies. If sustained, the tariff impact—partly offset by front-loaded export orders this year—could weigh more heavily in 2026,” said Dr. Choi.

AMRO expects the Philippine economy to grow 5.6 per cent in 2025 and 5.5 per cent in 2026, driven by strong consumption despite external headwinds.
Inflation will stay within BSP’s target.
Fiscal consolidation, easing monetary policy, and reforms in infrastructure, AI-driven upskilling, and financial stability are key to sustaining medium-term growth.

Fibre2Fashion News Desk (HU)

In Ludhiana, cotton yarn prices were steady. The ongoing payment crisis is reducing the buying capacity of the consumer industry. A trader from Ludhiana told Fibre*Fashion, “The textile value chain is burdened with huge stocks, as the festival season has not absorbed large quantities of raw material. These stocks have blocked working capital, further reducing mills’ buying capacity.”

In Ludhiana, ** count cotton combed yarn was sold at ****;***–*** (~$*.**–*.**) per kg (inclusive of GST); ** and ** count combed yarn were traded at ****;***–*** (~$*.**–*.**) per kg and ****;***–*** (~$*.**–*.**) per kg, respectively; and carded yarn of ** count was noted at ****;***–*** (~$*.**–*.**) per kg today, according to trade sources.

The CEPA will significantly boost trade and investment flows between the EU and Indonesia, unlocking new opportunities across sectors, and particularly for the sporting goods industry. It will eliminate tariffs, streamline customs procedures, increase regulatory cooperation, and support more sustainable and resilient supply chains.

FESI has welcomed the EU–Indonesia CEPA, expected to unlock €300 million (~$352.4 million) annually for the sporting goods industry.
The deal eliminates tariffs, streamlines customs, and boosts trade and supply chain resilience.
Backed by Adidas, Nike, and Puma, FESI’s advocacy since 2016 helped shape the agreement, now awaiting ratification to strengthen EU–ASEAN ties.

Indonesia is a key manufacturing hub for the sporting goods industry, home to numerous production facilities that supply European and global markets. European brands will benefit from greater market access and certainty, while Indonesian suppliers, including thousands of small and medium-sized enterprises, will see expanded opportunities to connect with European consumers.

Since 2016, FESI has actively supported the EU–Indonesia CEPA through high-level engagement and advocacy. Key milestones include meetings at the EU-ASEAN Summit in 2022, a 2023 delegation to Jakarta with president Neil Narriman, a 2024 discussion with vice trade minister Dr. Jerry Sambuaga, and a pivotal 2025 meeting in Brussels before the agreement’s conclusion, FESI said in a release.

“We recognise the important role played by the European Commission in moving this agreement forward and advancing the EU’s broader trade agenda. At the same time, FESI has been a tireless advocate for this partnership from day one, and we are proud to see our industry’s united voice help shape a modern, strategic trade policy with one of ASEAN’s most dynamic economies,” said Youri Mercier Richkine, FESI deputy secretary general.

These efforts, backed by long-standing support of FESI member companies such as Adidas, Nike, and Puma, have been essential to securing a deal that delivers tangible, practical benefits for business.

As the EU–Indonesia CEPA moves into its final phase, FESI calls on the EU Member States and the European Parliament to swiftly ratify the agreement to reinforce the EU’s commitment to a progressive, open, and rules-based trade agenda.

Amid growing trade tensions and global fragmentation, the CEPA sends a clear signal that the EU remains a reliable, forward-looking partner for fast-growing Indo-Pacific economies. The agreement not only unlocks new opportunities for European companies and workers, it also advances the EU’s policy priorities, as outlined in President Ursula von der Leyen’s 2024 political guidelines, including deeper engagement in the Indo-Pacific and stronger cooperation with ASEAN.

“The EU–Indonesia CEPA is a landmark step for our industry and one of the key priorities of my mandate at FESI. Concluding this agreement as my presidency comes to an end is both symbolic and a lasting legacy for our sector. Once again, we are also strengthening our ties with the ASEAN region, further deepening mutually beneficial partnerships that open new opportunities for our industry and our partners alike,” Neil Narriman, FESI president, said.

“We extend our sincere appreciation to the Indonesian government and the European Commission for achieving this landmark agreement. This milestone not only acknowledges Indonesia’s role as a global manufacturing leader but also promotes active lifestyles across Europe by eliminating tariffs on a wide range of sporting goods. The agreement has the potential to foster sustainable growth, attract investment, and enhance supply chain resilience across both regions”, commented Manuel Pauser, vice president global government & community affairs at Adidas, vice-president of FESI and vice-chair of FESI Trade Preferences Task Force.

“The EU–Indonesia CEPA is not only an important trade agreement for our industry, workers and consumers, but also a strong signal to the rest of the world that Indonesia and the EU can champion rules-based trade in a challenging trading landscape,” said Ingrid van Laerhoven, director trade & customs EMEA, government and public affairs at Nike, and chair of the FESI Trade Committee.

Fibre2Fashion News Desk (HU)