go through Aubrey Rose A. Inosante, reporter
Achieve over 6% total returns Analysts say the global trade situation remains uncertain due to the Trump administration's evolving tariff policies, and the gross domestic product (GDP) to achieve government targets could be “challenging.”
“For the rest of the year, achieving a growth rate of 6.2% will certainly be challenging,” Philip Arnold P. Tuaño, Dean of the Ateneo Government and Professor of the School of Economics, said in an email over the weekend. “Some downside risks to the Philippines economy remain the continued high levels of U.S. tariffs, and the continued high levels of global political and security uncertainty, especially in the Europe and the Middle East, which will impact global demand for goods and climate-related shocks.”
Rizal Commercial Banking Corp said that U.S. President Donald J. Trump's reciprocal tariffs, trade wars and other trade protectionist policies can still slow global trade, investment, employment and overall world economic growth, which could indirectly slow down Philippines GDP growth.
The government reported last week that the Philippines' economy grew 5.4% in the first quarter, a pace slightly higher than the 5.3% growth in the previous three months, but slower than the 5.9% rate in the same period last year.
That's much lower than the government's 6-8% growth target for the band that year.
As corporate expectations weaken the growth of large capital formation, growth is weak.The impact of global trade uncertainty.
Since Mr. Trump opened in January, he has formulated a series of protectionist policies, including one of the hikes import tariffs on major trading partners, including the Philippines. Now, countries are negotiating with the United States on a higher “countdown” tariff, which has been suspended until July.
Rosemarie G. Edillon, deputy minister for the Ministry of Economics, Planning and Development, said the remaining three-quarters need to be expanded at least 6.2% to reach 6% growth, which is the low-end of the government’s target – the low-end of the year.
Mr Tuaño said that in the coming months, government spending is greater and the Philippines' economic growth can be lifted, as lifting the ban on public works will allow the resumption of suspended national infrastructure projects.
In the first quarter, government spending jumped 18.7% as institutions began bans on March 28.
He said that once the Trump administration ends an expected rebound in tariff negotiations with trading partners, it could also provide an increase, as this could lead to a recovery in electronic demand.
Mr Tuaño and Mr Ricafort both said that ease of inflation could help drive consumption to support the economy.
“While consumption growth in the first quarter of 2025 was 5.3%, certain factors are necessary to ensure consumption growth in the next few quarters, including continued decline in inflation, lower interest rates and continued growth in remittances,” Tuyanho said.
“The government can support this by strengthening social protection and increasing investment, especially in rural areas, to ensure food supply and rural incomes,” he said.
Mr Ricafort added that soft GDP growth and benign inflation in the first quarter will further reduce the benchmark interest rate in Bangkok Sentral Ng Pilipinas (BSP), which will support the economy.
The Monetary Commission resumed its easy cycle last month with 25 benchmark points (BP) cuts, raising policy rates to 5.5%.
BSP Governor Eli M. Remolona, Jr. They are willing to lower 75 basis points this year due to cooling inflation, told Bloomberg last week.
Budget Secretary and Chairman of the Development Budget Coordination Committee Amenah F. Pangandaman said Friday they hope GDP growth will reach the target of 6-8% this year.
“We still hope that as domestic demand increases, full-year GDP will accelerate throughout the year and public investment is maintained. This is even amid global uncertainty as improving domestic growth prospects supported by private consumption, including government infrastructure spending, provides a buffer for external headwinds,” Ms Pangandaman said. ” Ms Pangandaman said.
“We remain optimistic that the Philippines will reach its 2025 growth target, accounting for 6-8%, especially as the government remains strongly committed to achieving our medium-term plans and long-term vision. Given that the government’s capital expenditure registered an 8.2% increase, which is a substantial growth for the government, which is a testament to the successful implementation of public infrastructure projects, we can be sure that we can maintain the dissemination information cultivated at the top.
“Lower growth path”
Meanwhile, Ibon Foundation executive director Jose Enrique “Sonny” A. Africa is less positive.
“Hopefully, the growth rate of 6.2% for the rest of the year is too optimistic and structurally blind to global and domestic reality,” Mr Africa said in a Viber message over the weekend.
“Governments mostly cannot even reach the low end of their growth targets and can only squeeze into the GDP growth range twice in the last decade. The government still refuses to accept the average growth of the economy, from 5.6% from 2010 to 2019 to 5.6% in 2020, and by 2020, the economy has shifted to an average growth rate of 6.4%, i.e. in 2020, that is 25.6% in 2020, and that number has shifted to 2020, a digit distance of 2020,” he added.
Mr Africa warned that growth will continue to change due to global disruption and “sustainable domestic structural economic weakness”, noting that both household and investment spending remained low compared to pre-pandemic levels.
“It is not impossible to achieve a 6.2% growth in the following quarter, but rather requires bold policy and structural shifts, not just optimism in statistical calculations. Economic policy must be redirected to promote redirection of domestic demand, such as more fairness and more fairness and reallocation as real wages and incomes grow, and expand the long-term Philip industry and rich Philip industry, while rich industrial attributes, which is certain, and rich Philip industry, which is certain. Unsustainable,” he said.
