go through Aubrey Rose A. Inosante, reporter
The Philippines economy may have expanded Finance Minister Ralph G.
Mr. Recto told BusinessWorld He expects a 6% increase.
If achieved, GDP growth of 6% in January-currency period will be slightly faster than the revised 5.9% expansion in the first quarter of 2024.
This will also reach the lower end of the band's growth target of the Philippines government for 6-8% this year.
The Philippine Bureau of Statistics will release its first-quarter GDP data on May 8.
When asked whether his previous 6-6.5% GDP 2025 GDP growth forecast is still viable, Mr Recto replied: “Yes.”
Last week, National Bureau of Economic and Development Director Arsenio M. Balisacan said he hopes for economic growth in the first quarter at least 6% as lowering and cooling inflation boosts domestic consumption.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in an email that GDP could grow by 6.3%.
He said he expects household spending to grow by 5% in the first three months of 2025, compared with 4.7% last year, backed by “benevolent” inflation.
In the first quarter, inflation was 2.2%, far beyond the central bank's target range of 2-4%.
Mr Ricafort said consumption could be the continued growth of “one of the strongest employment data in nearly 20 years”, with Filipino workers remittances, business process outsourcing, continued growth [and] Travel income. ”
However, some analysts expect growth to reach below 6% in January to currency period.
Sarah Tan, an analytical economist at Moody, said the economy could grow by 5.5% in the first quarter.
“Private consumption should increase by 5.2% year-on-year and be at lower borrowing costs as a mitigation of the impact of monetary policy through the economy. This will relieve the pressure on household budgets.”
Sentral Ng Pilipinas in Bangkok stopped its easy cycle in February but lowered it by 25 basis points at its April 10 meeting. This increases the target reverse repo rate from the previous 5.75% to 5.5%.
“Construction, transportation and accommodation, as well as accommodation and food service activities” could expand GDP to 5.4% in the first quarter, said Ser Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, in Viber information.
He said household consumption may have increased by 4.6% between January and summer.
Peña-Reyes was asked at the time about the reasons for the relatively slow GDP forecast, saying that elections no longer provide a significant boost to the Philippines' growth.
Mr Balisacan earlier said election spending could be “silenced” compared to previous elections as more candidates are allocating more campaign funds to social media ads.
Tariff threat
Meanwhile, the outlook for the second quarter could be clouded by the turmoil caused by U.S. President Donald J. Trump’s tariff policies.
Mr. Trump stopped the new 90-day reciprocity tariffs on April 9, although benchmark tariffs on nearly all U.S. imports remain in effect. The Philippines faces a reciprocal tariff of 17%, the second lowest tariff among Southeast Asian countries.
“The direct risks of the outlook for the rest of 2025 will slow export growth due to interest rate hikes in U.S. tariffs. These make the Philippines more expensive and less competitive to U.S. goods, which is because the United States is Philip’sPines' largest export destination. “Ms. Tan said.
She also noted that escalating tensions between the United States and its trading partners could curb external demand for the country's goods, potentially slowing production.
“We expect the Philippines to expand by 5.8% this year, but this could be reduced if the intensified U.S.-China trade war is inflicted severe damage to the global economy,” Ms. Tan said.
The Philippines exported $12.14 billion worth of goods to the United States in 2024.
Mr Ricafort said that tempering inflation trends would prove that “substantially lead to GDP will be faster than other ways”.
“However, offsetting risk factors include higher import tariffs, reciprocal tariffs and other protectionist policies by U.S. President Donald Trump, which could slightly reduce GDP growth from the second quarter of 2025,” Mr Ricafort said.
Despite the tax threat, he said growth could still reach 6% in the second quarter, driven by election spending.
Ms. TAN expects government spending to increase before the May 12 midterm elections.
Mr. Peña-Reyes said he believes the economy grew by 5.9% in the second quarter, as well as the full year.
Mr Balisacan said it might be too early to modify the full-year growth target at the Development Budget Coordination Committee meeting in May.
But, he said, a top end of the 6-8% target may be unrealistic in the global uncertainty of U.S. tariff policy.
