Down from yr-earlier, below forecasts
The Philippine economy grew 5.4 percent in the first quarter of 2025, slowing from the year-earlier rate of 5.9 percent, the Philippine Statistics Authority (PSA) reported today, Thursday.
The new rate of growth in gross domestic product (GDP) is lower than the 5.7 percent median estimate made by analysts for the first three months of 2025 in a poll conducted by Malaya Business Insight last Friday.
The latest pace of expansion also fell below the government’s GDP rate assumption of 6 to 8 percent for full-year 2025.
Department of Economy, Planning, and Development (DEPDev) Undersecretary for Policy and Planning Rosemarie Edillon said in a news conference in Quezon City on Thursday the first quarter performance of the Philippine economy is “not quite a disappointment,” adding that it actually shows signs of steady growth.
“There’s really many layers to it. A lot of it is born out of the uncertainty we saw that businesses have also anticipated, (as they) have also employed strategies in anticipation of more uncertainty. But there are things that also provide us optimism,” Edillon said.
Also reading out DEPDev Secretary Arsenio Balisacan’s statement during the briefing, Edillon said, “While this pace falls short of our initial expectations, it reflects developments from the broader global context of tempered economic activity amid persistent uncertainties.”
Balisacan said in the statement the Philippine economy’s first quarter performance ranked second among the economic results for the period released by Asian peers.
Vietnam saw a faster expansion of 6.9 percent. Meanwhile, China also saw a year-on-year increase of 5.4 percent, while the Philippines’ growth outpaced that of Indonesia (4.9 percent) and Malaysia (4.4 percent). Philippine GDP is likewise expected to grow faster than that of Thailand, which Balisacan said was forecast to grow 2.8 percent.
“This performance underscores the relative resilience of our economy in the face of global volatility,” Balisacan said.
PSA data showed the main contributors to the first quarter 2025 year-on-year growth were wholesale and retail trade; repair of motor vehicles and motorcycles, 6.4 percent; financial and insurance activities, 7.2 percent; and manufacturing, 4.1 percent.
All major economic sectors, namely agriculture, forestry, and fishing, industry, and services posted year-on-year improvements in the first quarter of 2025, up 2.2 percent, 4.5 percent, and 6.3 percent, respectively.
Edillon said for the rest of the year, the economy will have to grow an average 6.2 percent to achieve the lower end of the government’s current full-year GDP outlook of between 6 percent and 8 percent.
“Of course, we know that in terms of previous experience, this is actually within the range of possibilities. But whether or not this is still achievable on the basis of what we think would likely happen for the rest of the year is something that we will have to discuss with our counterparts, with our colleagues in the DBCC (Development Budget Coordination Committee),” Edillon said.
“We remain optimistic, because as the numbers have shown us, there are actually signs that the economy is still very resilient, domestic demand is still strong. But of course, global demand is in a period of volatility and how we place in this period of volatility is again something that we will also need to discuss,” she added.
