Economist sees PH growth at up to 6% this year

A local economist projects the Philippine economy could expand by as much as 6 percent in 2025, driven by domestic consumption, easing inflation, and additional monetary policy support, despite rising external risks such as higher US tariffs.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said Thursday that growth could range between 5.5 and 6 percent this year, supported by election-related spending, further cuts in the Bangko Sentral ng Pilipinas’ (BSP) policy rates, and a continued downward trend in inflation.

“Drag on Philippine GDP could be limited, as the Philippine economy is less reliant on exports as a source of economic growth,” Ricafort said on a report in PNA, noting that merchandise exports are three to five times lower compared to major ASEAN peers.

The US accounted for 17 percent of Philippine exports in 2024. Ricafort noted that diversification into markets in the Middle East, Europe, and other parts of Asia could reduce exposure to the 19 percent reciprocal tariff on Philippine goods set to take effect August 1, 2025.

Data from the Philippine Statistics Authority showed exports rose by 26.1 percent in June, faster than the 15.5 percent increase recorded in May. Ricafort attributed the growth to front-loading by US firms ahead of the tariff implementation.

Meanwhile, gross domestic product (GDP) grew 5.4 percent in the first quarter of 2025, slightly higher than the previous quarter’s 5.3 percent. Ricafort said growth in the second quarter may reach 6 percent, citing pre-election spending as a key factor.

He added that inflation is on track to remain below the central bank’s 2 to 4 percent target range, with the average rate at 1.8 percent in the first half of the year. The inflation rate stood at 1.4 percent in June.

“Easing inflation would also fundamentally lead to more disposable income that could support consumer spending, which accounted for nearly 75 percent of the Philippine economy,” Ricafort said.

The BSP has already cut its benchmark interest rate by a total of 50 basis points this year, bringing the reserve repurchase (RRP) rate to 5.25 percent. Monetary officials have signaled that additional rate reductions remain on the table to support domestic expansion.