Global bank Citi revised downward its 2025 economic growth forecast for the Philippines to 5.9 percent from 6 percent due to what it called a slightly softer momentum from 2024.
Citi said the Bangko Sentral ng Pilipinas (BSP) will still find ample room to continue its monetary easing cycle.
Citi Economist for the Philippines Nalin Chutchotitham made the forecasts during a press briefing on Thursday.
Chutchotitham said they also see inflation staying in the lower half of the BSP’s target range (of 2 to 4 percent) for the rest of the year.
Citi lowered their 2025 and 2026 inflation forecasts to 2.6 percent and 3.2 percent, respectively.
The BSP has “ample room to resume its rate-cutting cycle, especially against a backdrop of growth headwinds,” Chutchotitham said.
“With (February inflation) lower than BSP’s forecast of 2.2-3.0 percent, and our revised forecasts implying tighter monetary policy stance in real terms, we reiterate our expectation for cuts (of 25 basis points) to resume in April, August and December, respectively,” Chutchotitham said.
Inflation hit its slowest rate in five months at 2.1 percent in February from 2.9 percent in January, mainly due to milder increases in food and non-alcoholic beverage prices, the Philippine Statistics Authority (PSA) said on Wednesday.
The comparative February year-earlier inflation rate stood higher at 3.4 percent.
The movement in the consumer price index (CPI) in February was also the slowest since September 2024, when inflation reached 1.9 percent.
Chutchotitham said, “We lower our 2025 and 2026 inflation forecasts to 2.6 percent from 3.2 percent and 3.2 percent from 3.3 percent, respectively.”
She said the modest upward trajectory that they see for the rest of 2025 largely reflects base effects from sequential softening in rice and energy prices between April to December of last year.
“Inflation will stay firmly in the lower half of BSP’s target for the rest of 2025,” Chutchotitham said.
Citi also on Thursday held its annual Perspectives forum for markets. About 80 clients attended the forum, which featured, aside from Chutchotitham, speakers including Johanna Chua, Citi’s head of Emerging Market Economics and chief Asia economist, and Blake Herzinger, director for Policy, Strategy and Advocacy, Government Affairs for Japan, Asia North Australia and Asia South.
Paul Favila, Citi Philippines CEO and banking head, said during the event economic prospects in the country remain strong for investors amid a changing global market.
“The Philippines is a key market for Citi, and we can leverage our local knowledge and longstanding presence in the country with our global insights to enable clients to grow globally,” Favila said. “Citi is in a unique position to help clients navigate these geo-political shifts.”
“(We) encourage offshore investors to participate in the Philippines’ growth opportunities and at the same time assist local clients who want to expand into global markets,” he added.
Citi conducts business in more than 180 countries and jurisdictions, including the Philippines.
