MANILA — Focusing on climate change adaptation and managing risks from artificial intelligence (AI) can help drive the Philippine economy’s growth, an economist said Wednesday, following a slowdown in the third quarter of 2025.

In an online briefing, ASEAN+3 Macroeconomic Research Office (AMRO) Chief Economist Dong He said the economy remains on a steady growth path but has yet to return to its pre-pandemic pace.

Gross domestic product (GDP) growth slowed to 4 percent in the third quarter of 2025, down from 5.5 percent in the previous quarter and 5.2 percent a year earlier. The slowdown was partly attributed to weather-related disruptions and reduced government spending following corruption issues linked to flood control projects.

These factors led AMRO to revise its growth forecast for the Philippines, lowering the 2025 projection to 5.2 percent from 5.6 percent, and the 2026 forecast to 5.3 percent from 5.5 percent.

He said additional measures to strengthen resilience against climate change and adapt to AI are needed, as the economy has not fully regained its pre-pandemic capacity. He added that a strong policy framework and prioritized spending plans would support growth, restore investor confidence, and encourage private investment.

“Private consumption has been quite firm, and we continue to believe that private consumption will remain firm,” He said.

He also highlighted the importance of upgrading human capital to harness AI, particularly given the Philippines’ significant role in the business process outsourcing (BPO) sector, while mitigating its potential impact on jobs.

“All these require strong public investment or public-private partnerships, and that requires very strong policy frameworks, prioritized spending plans and targeted projects that would strengthen the economy’s capacity. And that would end up in higher public and private investments,” He added. (PNA)