Economy likely grew faster in second quarter of 2025

The Philippine economy likely picked up speed in the second quarter, posting faster growth than the previous quarter, driven by consumer spending and exports, according to economists’ estimates based on a report by Philippine Star.

Jonathan Ravelas, senior adviser at professional services firm Reyes, Tacandong & Co. said in a Viber message that he expects the Philippine economy to have grown by 5.6 percent in the second quarter.

This forecast is faster than the previous quarter’s 5.4 percent growth, but slower than the 6.5 percent expansion in the second quarter of 2024.

Ravelas said gross domestic product (GDP) growth in the second quarter was likely driven by “recovery of consumer spending aided by election spending.”

Filipino voters went to the polls on May 12 to elect local officials, senators and members of the House of Representatives.

Emmanuel Lopez, professorial lecturer at the University of Santo Tomas Graduate School, said in an email that he is also forecasting a 5.6-percent growth for the second quarter.

For Lopez, the modest improvement is due to a slowdown in investment amid weak investor confidence in relation to political concerns.

He said the impending US tariff on Philippine exports is also a concern.

US President Donald Trump signed an executive order last week that lists the reciprocal tariffs for countries, including those set as part of trade agreements. The order also pushes back the date of implementation of the new tariff rates to Aug. 7 from Aug. 1.

For Philippine exports to the US, the new tariff rate is at 19 percent, slightly lower than the 20 percent announced in July, but higher than the 17 percent planned back in April.

With the starting date for the new tariffs moved to Aug. 7, Philippine goods entering the US are currently subject to a baseline 10 percent tariff imposed by Trump while negotiations with trade partners are ongoing.

Oikonomia Advisory & Research Inc. economist Reinielle Matt Erece said in an email that their second quarter GDP growth forecast is at 5.7 percent, citing better export numbers and stronger employment.

“Stronger employment may be a sign of a strong domestic economy, which shielded the country from global headwinds. Stronger employment also results in even faster consumer spending, which remains to be the biggest component of the country’s GDP,” he said.

Despite Trump’s tariffs, he said the country had stronger export orders during the period, which may be due to the frontloading before the levies take full effect.

For Rizal Commercial Banking Corp. chief economist Michael Ricafort, the economy likely posted a six percent growth in the second quarter.

While the impact of the US tariffs may have slightly reduced second quarter growth, he said a six percent growth is still possible “due to midterm election-related spending, which could also support consumer spending.”

Meanwhile, Pantheon Macroeconomics chief emerging Asia economist Miguel Chanco said he expects GDP growth to have slipped marginally to 5.3 percent in the second quarter from the previous quarter.

“Most of this slowdown should come from softer domestic demand, but a lot of this weakness will also be offset by exports, which have remained sturdy,” he said.

Earlier, Department of Economy, Planning and Development Secretary Arsenio Balisacan said he expects second quarter GDP growth to be “a little faster” than the first quarter, noting that the lag effects of interest rate cuts and inflation should have already been felt.

He also said domestic demand is saving the Philippine economy.

Amid external risks including those stemming from the US reciprocal tariffs, the Philippine government trimmed its growth target for the year to 5.5 to 6.5 percent from six to eight percent, previously.

For Bank of the Philippine Islands lead economist Jun Neri, the economy grew by 5.8 percent in the second quarter, citing strong household consumption aided by election-related spending, lower inflation and resilient consumer lending.

“Stronger food exports may have been bolstered by improved weather just as foreign sales of electronics were booked ahead of the implementation of higher US tariffs,” he said.

However, he flagged downside risks, including slower government and infrastructure spending due to the election ban as well as weak electricity sales pointing to subdued industrial and commercial activity.

Meanwhile, HSBC ASEAN economist Dacanay projected a 5.6 percent second-quarter growth, led by consumption and goods exports. “Seasonality was likely at play, with election spending from the May mid-term elections lifting both household and government consumption,” he said.