Standard Chartered Bank remains optimistic about the Philippines’ economic outlook, projecting a six percent growth in 2025—right in the middle of the government’s official 5.5 to 6.5 percent target.
Jonathan Koh, an economist and FX analyst at the British bank, said in a virtual briefing that this growth will likely be driven by steady private consumption, which could contribute up to four percentage points to the gross domestic product (GDP).
“Growth at six percent is still possible for the year as the base effect is actually low,” Koh noted, adding that the second-quarter GDP could reach 5.9 percent—higher than the 5.4 percent recorded in the first quarter—even with easing import activity following the election season.
Koh also highlighted that even modest Q2 numbers would still support stronger growth in the latter half of the year, thanks to base effects.
On the monetary policy front, StanChart forecasts a full-year inflation average of just 1.8 percent, below the Bangko Sentral ng Pilipinas’ (BSP) two to four percent target range. This, Koh said, opens the door for the central bank to reduce interest rates more aggressively.
“I’m a little bit more aggressive than consensus. Growth is below potential and inflation is easing. That gives BSP space to cut,” he explained.
The bank sees a total of 75 basis points in rate cuts this year, spread across three separate 25-basis-point reductions in August, October, and December—bringing the benchmark rate down from 5.25 to 4.5 percent.
Koh also noted that cooling food, oil, rental, and dining costs, along with declining global rice prices, are likely to ease inflation further. However, he flagged risks from a potential peso depreciation, which could stir imported inflation and prompt the BSP to act more cautiously.
Additional inflationary risks include electricity rate hikes and legislated wage increases, though Koh said these currently appear unlikely.
As for the peso, the bank expects it to recover after a third-quarter dip, ending 2025 at ₱57.50 against the dollar. Remittance inflows and improved bond supply are seen as supporting factors, although structural challenges—such as the country’s persistent trade deficit and underperforming services exports—may continue to weigh on the currency.
