go through Aubrey Rose A. Inosante, reporter
Finance Minister Ralph G. Recto said that economic growth in the Philippines may have already risen in the second quarter, but the expansion for the whole year could be below 6% due to uncertainty about U.S. tariffs.
“I think the second quarter will definitely be better than the first quarter,” Mr Recto told reporters during an informal news chat on Wednesday.
Mr Recto said the second quarter forecast depends on government spending and household consumption, accounting for more than 70% of the economy.
In the first quarter, gross domestic product (GDP) grew 5.4%, weaker than expected and slower than 5.9% expansion The same quarter last year.
Mr Recto said that over the entire year, GDP could grow by about 5.7% to 5.8%.
“In fact, this year could be 5.7%, 5.8%. But it’s still possible, but it depends on a lot of uncertainty – uncertainty in trade policy. No final [tariff rate] However,” said Mr. Recto.
Last month’s economic managers lowered their full-year growth target to 5.5%-6.5% of the previous 6%-8%, “reflecting a more measured and resilient way.Watch in the global headwind. ”
Last week, U.S. President Donald J. Trump announced a 20% tariff on most Filipino goods sent to the United States, up from 17% announced before April.
Philippine trade negotiators reached a deal with the United States in Washington this week.
President Ferdinand R. Marcos (Jr.) Will be with Mr. Trump during his periodfVisiting Washington from July 20 to 22.
In a communication message BusinessWorld,,,,, Budget Secretary Amenah F. Pangandaman said she has confidence in the strong domestic demand this year and is confident about the GDP growth target this year.
“Our growth momentum will be mainly driven by strong domestic demand, especially household spending, and accelerated government investment in social services and critical infrastructure,” Ms Pangandaman said.
She also noted that a flexible labor market and ease of inflation will support growth momentum.
Inflation was 1.8% in the first six months of the year.
“In addition, lower inflation creates space for Bangkok’s Sentral Ng Pilipinas (BSP) to simplify monetary policy, which will help maintain consumption and family activities, thereby enhancing our growth trajectory,” Ms Pangandaman said.
BSP cut 25 foundation points (BPs) for the second time in a row at its June 19 meeting, with its policy rate rising to 5.25%.
BSP Governor Eli M. Remolona, Jr. It also said they can make two more layoffs this year.
Meanwhile, Domini S. Velasquez, deputy finance minister and chief economist, said that this could be badfICULT’s GDP grew by more than 6% this year tariff.
She said U.S. tariffs slowed international trade and “slashed all growth prospects in all countries, including the Philippines.”
“We do think the Philippines has the potential to reach at least 6% growth. But of course, it’s very difficult, especially with some of the challenges we’re seeing right now,” she told reporters late Tuesday.
Ruben Carlo O. Asuncion, chief economist at Union Bank of Philippines, said the government’s growth of 6% this year is becoming increasingly challenging.
“Hitting a 6% midpoint will depend on the strong demand that domestic demand can offset external risks,” he said in a Viber message.
He added: “Domestic demand is expected to remain resilient in the short term, but be cautious…Growth will be driven by daily retail channels, but wider consumption recovery may depend on stronger jobs and improved purchasing power.”
money transfer
Meanwhile, Ms Velasquez said the U.S. tax rate on remittances could affect 12.8% of the Philippines’ total annual remittances.
“In our estimates, when we use the overseas Philippines survey, 12.8% said They are receiving remittances from the north And the South America,” she told reporters Tuesday.
U.S. President Donald J. Trump signed a “big beautiful bill” on July 4 that exceeds tax rates and spending. It imposes a 1% excise tax on cash remittances from the U.S. to foreign recipients. Tax willingness Implementation will begin on January 1, 2026.
Ms Velasquez said the tax will affect US$1.9 billion in 2026.
“For example, we estimate that the remittances of $36.5 billion by 2026, and $1.9 billion will be Affected and will be taxed 1%,” she said.
exist The first fiIn the months of the year, cash remittances rose 3% to $13.77 billion, from $13.37 billion in the year-on-year period.
The United States is the main source of remittances in the five-month period, accounting for 40.2% of the total. – and Aaron Michael C.
