An academic institute has revised its gross domestic product (GDP) growth forecast for the country this year to 5.33 percent from an earlier projection of 5.8 percent.
The Dela Salle University (DLSU)–Angelo King Institute for Economic and Business Studies (DLSU-AKI) released its Philippine Economy Monthly Report after the government reported first-quarter GDP growth of 5.4 percent, well below its target range for the year of 6-8 percent.
The DLSU-AKI report was authored by Jesus Felipe, Mariel Monica Sauler, Gerome Vedeja, and Clarence Gabriel Fernandez.
The report also revised the agriculture sector’s growth estimate upward to 2.09 percent from 1.4 percent; the industry sector downward to 5 percent from 6.5 percent; and the services sector upward to 5.89 percent from 5.2 percent.
Despite the downward revisions, the DLSU-AKI report explained the basis for the still healthy 5.33 percent growth for the year.
“Current (GDP) growth prospects are supported by a five-year-low inflation rate of 1.4 percent and an increase in election-related spending,” the report said.
“These forecasts show that private consumption and government spending remain critical in stimulating short- term economic growth for the Philippines,” the report added.
Slow growth
The authors, meanwhile, said that they are pegging the second quarter growth at an “even lower” 4.77 percent.
“But growth will pick up significantly in the second half of the year, especially during the last quarter at 6.11 percent “when the economy will grow at its potential,” the authors said.
“Overall, domestic demand drives short-term economic growth. Private consumption is projected to increase by 5.91 percent in the second quarter, with slight dips towards the end of the year before settling at 5.39 percent for the whole 2025,” they said.
Rising govt spending
The authors said that government spending will rise by 14.77 percent in the second quarter.
Gross capital formation will grow by 3.1 percent, in comparison to 4.6 percent in the first quarter, but will average at 4.92 percent for 2025.
“Our export growth forecast for the second quarter is 4.34 percent. This figure is lower than the first quarter and is anticipated to further increase at a slower pace in the remaining quarters before closing at 4.4 percent for the whole 2025,” they said.
“Such a trend may be attributed to the growing global trade uncertainties due to the reciprocal tariffs imposed by the United States,” the authors added.
Meanwhile, import growth will likely hit 7.13 percent for the second quarter, and average the year at 6.93 percent, widening the current Philippine trade deficit.
