August 11, 2025
MANILA – The Philippine economy will likely grow more slowly than previously expected over the next 18 months.
This, considering the marginal increase in the pace of growth during the first half of this year, as well as the potential adverse impact of US “reciprocal” tariffs.
Thus, analysts have either lowered or are rethinking their forecasts for the Philippine gross domestic product (GDP) for 2025 and even 2026.
READ: Philippine GDP expands by 5.5% in second quarter
Singapore-based DBS Bank has lowered its forecast for 2025 to 5.6 percent from 5.8 percent earlier, citing softer consumer and business confidence.
Radhika Rao, senior economist at DBS, said in a research note that consumer confidence indices softened for the second quarter.
Rao said this was due to a higher cost of living, moderation in income levels and job uncertainties.
She added that consumer confidence for the next quarter was “lower than trend, while 12-months ahead was relatively stable.”
“Businesses have also adopted a cautious tone into mid-2025, as the outlook is clouded by a post-election trough, trade uncertainty-led impact on US and regional growth,” Rao said. “Construction fared better but services were sluggish.”
‘More realistic’
The economist also noted that the government itself, through the Development Budget Coordination Committee, earlier revised its GDP forecast range “to a more realistic” 5.5 percent to 6.5 percent. This was lowered from 6 percent to 8 percent.
Meanwhile, BMI Country Risk & Industry Research maintained its forecast that growth will slow down to 5.4 percent this year from 5.7 percent last year.
“Despite the stronger-than-expected growth in [the first semester], we believe that growth will slow in [the second semester of] 2025,” BMI said.
“We think there will be a slowdown in remittances growth and tariff uncertainty, and this would weigh heavily on household consumption and investment,” the Fitch Solutions company added.
Japan-based Nomura Group also maintained its 2025 forecast — in their case at 5.3 percent.
“The modest improvement in [second-quarter] GDP growth [of 5.5 percent] may be difficult to sustain,” said Euben Paracuelles, economist at Nomura.
Pantheon Macroeconomics, which is based in the United Kingdom, noted that second-quarter growth was slightly higher than expected.
But this was due “largely to a misleading U-turn in net exports, masking a weakening domestically,” Pantheon’s research team said.
“We reiterate our below-consensus 5.3-percent forecast for 2025, implying a renewed slowdown in [the second semester],” they added.
Arsenio Balisacan, Secretary of Economy, Planning and Development, described the Philippine GDP print as an indication of resilience and stability, “even as global challenges persist and fuel uncertainty across many fronts.”
Balisacan said in a statement that the Philippines maintained its place among the fastest-growing economies in emerging Asia. It was behind Vietnam’s 8 percent growth, but ahead of China’s 5.2 percent and Indonesia’s 5.1 percent.
“While our growth is slower than India’s projected 6.5-percent expansion, we are expected to outpace Malaysia’s 4.3 percent and Thailand’s 2.4 percent,” he said.