manilatimes17d ago
ECONOMIC growth across the Asean+3 region exceeded earlier expectations in 2025, driven by resilient technology exports, strong investment in Southeast Asia and less severe tariff outcomes than initially anticipated, according to the Asean+3 Macroeconomic Research Office (AMRO).Asean+3 (Association of Southeast Asian Nations Plus Three) is a regional grouping that includes the 10 Asean member states plus China, Japan, and South Korea.In its January 2026 update of the Asean+3 Regional Economic Outlook, AMRO said regional growth is estimated at 4.3 percent in 2025 and projected to moderate to 4.0 percent in 2026, both revised up by 0.2 percentage points from the October update. Inflation remained stable and below its long-run average, reflecting subdued global energy and food prices alongside firm domestic demand.AMRO said growth in the second half of 2025 held up on the back of steady private consumption, favorable labor market conditions and low inflation across most economies. Private investment remained strong, particularly in Asean economies, supported by robust foreign direct investment commitments in advanced electronics, electric vehicles and digital services.Regional exports also surprised on the upside despite tariff headwinds, buoyed by strong technology demand. Asean+3 exports expanded by 7.7 percent in the second half of 2025, with semiconductor exports rising 21.7 percent year on year as demand for AI-related applications and cloud infrastructure remained strong.China’s economy grew 5.0 percent in 2025, matching its 2024 performance, supported by accommodative macroeconomic policies, resilient exports and robust investment in high-tech manufacturing. However, AMRO noted continued headwinds from a prolonged property sector adjustment and subdued consumer confidence that weighed on domestic demand.Across financial markets, equity prices strengthened on optimism surrounding AI-related sectors, while regional currencies remained broadly stable against the US dollar. Most central banks held policy rates steady amid subdued inflation, although Thailand cut rates further in December to support growth, while the Bank of Japan raised rates as part of its policy normalization.Looking ahead, AMRO said growth is expected to moderate in 2026 as higher US tariffs and persistent policy uncertainty weigh on external demand. Headline inflation is projected to edge up slightly to 1.2 percent in 2026, mainly due to subsidy rationalization in some economies, but is expected to remain below 2 percent across the forecast horizon.Risks to the outlook remain elevated, with key downside concerns including unpredictable US trade and macroeconomic policies, a sharper-than-expected slowdown in global technology demand, increased financial market volatility, slower growth in major economies and potential spikes in global commodity prices. AMRO also flagged longer-term structural challenges such as rising protectionism, geoeconomic fragmentation, population aging and climate-related risks that could weigh on the region’s growth prospects.For the Philippines, AMRO projected growth at 5.3 percent in 2026, slightly lower than in 2025, with inflation expected to remain contained, reflecting the broader regional trend of stable prices amid firm domestic demand.