go through Aubrey Rose A. Inosante, reporter
The Philippines’ economic growth is It’s unlikely to reach the upper End of the government’s 5.5-6.5% target Tariffs are higher in the United States this year Analysts say remittances slowed.
Calixto V. Chikiamco, president of the Economic Freedom Foundation, said that reaching 6.5% of the trademark is “possible but impossible.”
“More [US President Donald J.] Trump levies our major exports and the global economy slows down. ” BusinessWorld.
The economy grew by 5.5% between April and June, supported by a rebound in agricultural production and faster household consumption.
In the first half of the year, the average growth rate of GDP was 5.4%, slower than 6.2% a year ago.
Economy Minister Arsenio M. Balisacan said the economy must grow by 5.6% in the second half of the year to reach the low end of the full-year target and reach the 7.5% target to reach the upper end of the target.
“But if the government maintains the same stability as yours, the possibility of possibility is not only that the government fails to reach its lowest 6% growth target, but actually achieves less than 5.5% growth,” Mr Chikiamco said.
John Paolo R. Rivera, a senior fellow at the Philippine Development Institute, said the average increase of 7.5% required between July and December was “a stretch target, but not impossible.”
“Despite global headwinds, faster infrastructure rollouts after the election spending ban, and ongoing household and investment spending, this will require excellent export performance,” he said in a Viber message over the weekend.
Mr. Trump imposed a 19% export tax on goods in the Philippines, Cambodia, Malaysia, Thailand and Indonesia. This will take effect on August 7.
“The Philippines has the potential to lose the opportunity to increase its market share in the U.S. as the tariff rates for Filipino goods are consistent with other ASEAN (Association of Southeast Asian Countries) emerging markets,” said HSBC Aris D. Dacanay.
Mr Dakani said strong export growth It is unlikely to be maintained next semester.
“But unlike private consumption, we think this strong performance will continue. The robust performance is the preload of global import demand due to higher U.S. tariffs,” he said.
However, BMI said the Philippines is under good pressure from the “exports” of the U.S. tariffs, but if the Philippines fails to use at least 5% of its GDP for military spending, Mr. Trump may raise tariffs.
“We expect Philippine export growth to slow further if Trump threatens higher tariffs due to dissatisfaction,” BMI said.
Mr Rivera said he expects export growth to be low, especially for areas such as electronics, clothing and agriculture.
“But, as existing orders and contracts still work in the pipeline, the full effect may gradually progress,” he said.
“The degree of slowdown will depend on how fast the exporters can adjust by negotiating better terms, moving to other markets or advancing to the value chain.”
Remittances slow down
Analysts say the slowdown in remittances from Filipino workers (OFWs) overseas could hurt consumer spending in the second half of the year.
“The slowdown in remittances will increase private consumption, while the increased global uncertainty will continue to cool down,” Fitch Solutions BMI said.
Household final consumption accounts for more than 70% of the economy, up 5.5% in the second quarter. This is the fastest since the first quarter of 2023 growth of 8.1%.
BMI believes private consumption has increased by 5% in 2025.
“About 40% of remittances come from the United States, President Donald Trump imposed restrictions on immigration and imposed a 1% tax on remittances. Therefore, remittances are likely to continue to delay consumption growth in the coming months, reducing the positive impact of easier monetary policy,” BMI said.
Bangko Sentral NG Pilipinas (BSP) expects OFWS cash remittances to grow 2.8% this year and 3% in 2026.
The United States will start levied a 1% consumption tax on foreign recipients starting January 1, 2026.
BMI said it kept its GDP forecast at 5.4% this year due to slow remittances and tariff uncertainty, but lowered to 5.2% from 6.2% in 2026.
“The result is that our forecast for maintaining a relative decline in fixed investment has expanded by 4.5% in 2025, well below the 12.4% in 2015-2019,” it said.
Nomura Global Markets Research said GDP growth could slow to 5.2% in the second half of the year, but kept its full-year forecast at 5.3%.
“We believe that private investment spending will become softer due to global trade policy uncertainty and increasingly challenging operating environments,” Nomura said.
“Similarly, we expect commodity export growth to slow due to the impact of U.S. tariffs, but acknowledges the rising downside risks, especially sector tariffs on semiconductors in the coming quarters.”
Last week, Mr. Trump announced plans to impose tariffs on semiconductors shipped to the U.S. but offered exemptions from companies that are made in the U.S. or promised to do so.
Meanwhile, Chinabank Research said the external outlook is expected to remain soft due to ongoing uncertainty and rapidly changing global policies.
“Moving forward, the downside risks of growth will focus on external trade as increased policy uncertainty and pressure on global economic activity by higher tariffs,” it said in a policy note on Thursday.
On the demand side, Chinabank expects government spending to continue to accelerate for the rest of the year.
“As the government intensifies delayed projects, we can see a rebound in the coming quarters as the impact of interest rates becomes more fulfilled.”
Nomura said it expects BSP to lower its policy interest rate by 25 basis points at its August 28 meeting and cut another 25 basis points in October.
“This will raise policy rates to 4.75% this year, which we believe brings BSP’s monetary stance below neutral estimates, although we see that BSP may offer more risks in 2026 if inflation goes into effect Stay within the target range of 2-4%. ” Nomura said.
“In view of the prospect of benign inflation, we continue to believe that BSP is still on the road to a steady shift to an easier attitude.”
Meanwhile, Mr Dhakani said further currency releases may be needed to help sustain growth as government infrastructure spending and service exports perform poorly.
“Accelerating and deepening the ongoing mitigation cycle will help support both sectors. Lower interest rates can help incentivize further investments, while also helping to improve or at least maintain the competitiveness of the service export sector. Through FX (forex) channels. ” he said.
