Economist forecasts 5.6% Q2 GDP on modest rebound

An economist expects the Philippine economy to have grown by 5.6 percent in the second quarter of 2025, slightly higher than the previous quarter, but still within the government’s full-year GDP target range of 5.5 to 6.5 percent.

Business strategist Jonathan Ravelas said the expected acceleration reflects gains in labor market indicators and steady domestic demand, though he flagged internal challenges in key sectors like construction and manufacturing.

The Philippine Statistics Authority (PSA) recently retained the first-quarter GDP at 5.4 percent and reported improved month-on-month labor figures for June. Employment rose to 96.3 percent, while unemployment and underemployment dropped to 3.7 and 11.4 percent, respectively.

However, year-on-year comparisons showed a drop in employment levels, particularly in construction and manufacturing. Ravelas noted that these declines were due to internal pressures rather than external risks such as new U.S. tariffs.

“The U.S. tariffs haven’t hit us head-on yet,” Ravelas said. “But yes, there’s a risk ahead. If those tariffs start biting into electronics and manufacturing exports, particularly components we ship to the U.S., we could see more layoffs in export zones.”

He warned that falling construction employment could signal stalled infrastructure rollouts. “Construction is a key growth engine. When it stalls, it pulls down overall momentum,” he added.

While Ravelas sees the economy tracking toward the 5.8 percent mark for the full year, he urged close monitoring of infrastructure spending and support for vulnerable sectors to mitigate downside risks.