The Philippine economy likely picked up steam in the second quarter of 2025, buoyed by lower inflation and resilient household spending, even as government expenditures were held back by the election-related spending ban.
Economists polled by the Inquirer estimated gross domestic product (GDP) grew by 5.6% year-on-year from April to June, outpacing the 5.4% posted in the first quarter. While an improvement, it would still mark a slowdown from the 6.5% expansion in the same period last year.
A modest rebound would reflect stronger consumer demand, thanks in part to easing prices—especially for rice—and steady access to credit. Bank of the Philippine Islands lead economist Emilio Neri Jr. expects an even stronger performance, projecting a 5.8% increase.
“Household consumption likely remained the main growth driver,” Neri said, citing contributions from election spending and continued consumer lending. But he warned that “slower headline government spending and infrastructure expenditures,” curbed by the election spending ban, may have limited growth.
The Marcos administration earlier trimmed its full-year growth forecast to a range of 5.5% to 6.5%, making the second-quarter estimate land near the lower end of the target.
External demand also played a mixed role. HSBC economist Aris Dacanay said stronger exports—particularly in electronics and agriculture—may have benefited from buyers rushing orders ahead of new U.S. tariffs. He likewise placed his forecast at 5.6%.
Still, global challenges continue to cast a shadow. Capital Economics’ Gareth Leather offered a more cautious view, estimating growth at just 5%, citing sluggish international demand.
“Exports will continue to struggle,” Leather warned. “But consumption should fare better as the boost from low inflation and the lagged impact of looser monetary policy continues to feed through.”
The Philippine Statistics Authority is set to release official GDP figures on August 7.
