PH economy grows 5.4% in Q1, below target

The Philippine economy grew by 5.4% in the first quarter of 2025, falling below the government's target range of 6% to 8% for the year but remaining one of Asia's fastest-growing economies.

Department of Economy, Planning and Development Undersecretary Rosemarie Edillon attributed the slower pace to global uncertainties and reciprocal tariffs imposed by the United States.

The 5.4% growth is a slight increase from the previous quarter's 5.3% but slower than the 5.9% recorded in the same period last year.

Household final consumption expenditure accelerated to 5.3%, aided by easing inflation, and BMI expects inflation to ease to an eight-year low of 2.2% in 2025.

Government spending is also expected to climb as the Philippines prepares for Halalan 2025.

Fitch Solutions unit BMI is keeping its 5.4 percent full-year economic growth outlook for the Philippines this year and noted that interest rate cuts by the Bangko Sentral ng Pilipinas seem to have encouraged investment activity.

The contribution to GDP from fixed capital formation went up to 1.3 percentage points from January to March, from 1.1 percentage points in the last quarter of 2024.

However, weak global demand may cause Philippine exports growth to slow sharply.