Avg growth seen at 5.78%; Recto says rate within full-year govt estimate
GROWTH in the Philippine economy likely quickened to an average 5.78 percent in the second quarter of 2025 on sustained domestic demand, reflecting strong household spending, easing inflation, and steady remittance flows, analysts said.
Finance Secretary Ralph Recto said the economy likely grew within the government’s latest full-year projection.
“Growth will come from household consumption and government consumption and investment,” Recto said.
If confirmed, the second-quarter performance would mark an improvement from the 5.4 percent growth posted in the first three months of the year, keeping the country within its updated full-year target range of 5.5 to 6.5 percent.
‘Inflation manageable’
John Paolo Rivera, senior research fellow at the Philippine Institute for Development Studies (PIDS), estimates Q2 growth between 5.6 and 5.8 percent.
He said demand was lifted by seasonal spending and mid-year consumption, while inflation remained manageable.
Solid drivers
“Services and non-discretionary goods performed well. Government spending also picked up after a slow start, while tourism and remittances supported incomes,” Rivera said. “But exports remained weak and global uncertainty still weighed on investor sentiment.”
He added that high underemployment and elevated interest rates continued to limit gains, particularly in investment-heavy sectors such as real estate and construction.
“Sustaining momentum will require better public spending efficiency and policy that supports key industries without tightening too fast,” Rivera said.
Reinielle Matt Erece, economist at Oikonomia Advisory & Research, sees Q2 growth at around 5.6 to 5.7 percent, citing “a more stable price environment and improving business confidence” as drivers of the modest pickup.
Lingering risk
“Domestic demand remains the backbone,” Erece said. “But global trade tensions and weak investment appetite continue to act as brakes.”
University of Asia and the Pacific economist Cid Terosa said growth likely stayed within target as consumption held firm, supported by lower inflation and remittances. But external headwinds, he added, remained a drag.
“Global market uncertainty, persistent trade tensions, and investor caution are still major hurdles,” Terosa said.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., gave one of the more upbeat estimates at 6 percent, citing the broad recovery of services, small enterprises, and tourism-related industries.
“Increased infrastructure and pre-election spending also helped lift activity,” Ricafort said.
The government is set to release official second-quarter GDP figures in August.
