Economic growth forecast lowered due to global uncertainties

Philippine economic officials have reduced their growth forecasts for 2025 due to increased global uncertainties such as heightened geopolitical tensions in the Middle East and the imposition of US tariffs.

The Development Budget Coordination Committee (DBCC) now projects economic growth to average between 5.5% to 6.5% for the current year, a decrease from the earlier target of 6.0% to 8.0%.

This new minimum outlook is higher than the first quarter economic growth of 5.4%.

For the period 2026 to 2028, the DBCC has lowered its growth target range to 6.0% to 7.0%, down from the previous forecast of 6.0% to 8.0%.

DBCC sees weaker trade in goods, projecting that imported goods will increase by 3.5% this year, while exports are expected to contract by 2% due to the Trump administration's 17% tariff on Philippine goods.

Factory output declined in May, placing it near the neutral level of 50.1 from a clear expansionary level of 53 in April based on the S&P Global Purchasing Managers' Index.

Despite these challenges, the DBCC affirmed its commitment to implementing timely measures to cushion the impact on the Philippine economy and highlighted the sufficiency of international reserves to absorb external shocks.