Balisacan sees better H2 local factors, but warns of global semicon risk
Philippine economic growth slowed to a still healthy 5.5 percent in the second quarter of 2025 and could remain on track toward the full-year target barring any sharp plunge in semiconductor demand from its global markets.
The country’s gross domestic product (GDP) lost some steam from its year-earlier expansion of 6.5 percent, official data released on Thursday showed.
While the pace eased year-on-year, the rate inched up slightly from the 5.4 percent recorded in the first quarter. This brings first-half growth to an average of 5.4 percent.
National Statistician Claire Dennis Mapa said gross national income (GNI) expanded by 8.2 percent, lifted by a 32.8 percent jump in net primary income from the rest of world. On a seasonally adjusted basis, GNI grew 2.3 percent.
Per capita gains
Per capita GNI rose 7.3 percent in the second quarter, marginally higher than the 7.2 percent increase a year earlier. Per capita household final consumption expenditure (HFCE) climbed 4.5 percent, faster than 3.9 percent in the year-earlier period.
The Philippine Statistics Authority (PSA) noted that each Filipino generated P61,302 in economic output in the second quarter, driving per capita GDP up by 4.6 percent — though slower than the 5.5 percent growth recorded in the same period last year.
By sector, agriculture expanded by 7 percent, services grew 6.9 percent, while industry posted a modest 2.1 percent increase.
Seasonally adjusted, services led with 2 percent growth, followed by agriculture with 1.7 percent, and industry with 0.5 percent.
Mapa said the total value of the economy stood at P6.96 trillion as of end-June.
Optimism for the 5.5-6.5% target
Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan said the government remains optimistic even if the economy grows just 5.6 percent this year, as long as it stays within the 5.5 to 6.5 percent annual target range.
Balisacan said he expects better growth in the second half as inflation continues to ease and private sector activity regains momentum.
He downplayed the threat of a potential 100 percent US tariff on the local semiconductor industry, saying the direct impact on the Philippines would be limited.
However, he acknowledged that “if the demand for semiconductors and electronics by countries outside of the US declines substantially, the effect on our exports could ripple beyond the US market.”
Consumer spending strength
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., attributed second-quarter growth to robust consumer spending, supported by easing inflation and cumulative policy rate cuts totaling 125 basis points since August 2024.
He said bank lending surged in response, with consumer loans rising nearly five times faster than GDP — a sign of strong demographic-driven demand.
Still, Ricafort flagged external drags, including ongoing impacts from the Trump administration’s renewed trade war and the sectoral effects of the 2024 exit of Philippine Offshore Gaming Operators (POGOs).
Among Asia’s fastest
In his prepared remarks, Balisacan said the Philippines remains among the fastest-growing economies in emerging Asia — behind Vietnam’s 8.0 percent, but ahead of China’s 5.2 percent and Indonesia’s 5.1 percent.
He also pointed out that the country is expected to outpace Malaysia (4.3 percent) and Thailand (2.4 percent) this year.
Balisacan reaffirmed the government’s commitment to channeling growth toward an improved quality of life for Filipinos.
He said the administration is working to diversify the country’s export markets, particularly toward India and other economies, to cushion the country from trade disruptions tied to the evolving US-China dynamics.
