Philippine economy grows 5.4% Q1 2025, slower than Q1 2024 but beats regional peers

The Philippine economy expanded by 5.4% in the first quarter of 2025, according to the Philippine Statistics Authority (PSA), surpassing other major economies in the region.

This marks a slowdown from the 5.9% GDP growth recorded in the first quarter of 2024 but outpaces regional peers like Indonesia at 4.9%, Malaysia at 4.4%, and Thailand forecasted to grow at 2.8%. Vietnam leads with 6.9%.

Despite the slowdown, services sector remained the top contributor to GDP growth, accounting for 3.9 percentage points of the total 5.4% increase, followed by industry and agriculture, forestry, and fishing sectors posting year-on-year growths at 4.5%, and 2.2%, respectively.

Government final consumption expenditure expanded significantly to 18.7 percent, reflecting front-loaded public programs in anticipation of election restrictions, while household spending accelerated to 5.3 percent from 4.7 percent in the previous year.

Department of Economy, Planning, and Development (DepDev) Secretary Arsenio Balisacan emphasized that while the Philippines remains one of the fastest-growing economies in the region, strategic reforms are needed to sustain this growth.