PH economy seen expanding 5.4% this year — BMI

BMI, a unit of Fitch Solutions, has kept its 2025 growth projection for the Philippine economy at 5.4 percent, underscoring resilience in the face of global trade uncertainties and new tariff measures from the United States.

In a commentary released on Aug. 25, BMI noted that the country’s external sector continues to withstand global pressures. Exports rose 15.1 percent year-on-year in May, the strongest performance so far this year, ahead of the US imposing a new tariff on Philippine goods. Originally set at 20 percent, the tariff was negotiated down to 19 percent following President Ferdinand Marcos Jr.’s state visit to Washington in July.

BMI said the revised rate would trim growth by 0.4 percentage points in the medium term, less severe than the 1.4 percentage point impact it had projected earlier in April. The delay in implementing the new rate — moved from Aug. 1 to Aug. 7 — also allowed exporters to front-load shipments.

Still, the agency warned of a possible slowdown in the months ahead once the tariff takes full effect. Despite this, it said the Philippines’ largely domestic-driven economy provides a cushion against external headwinds.

“While interest rates have eased considerably from their peak, erratic US trade policies will weigh on global investor sentiment and limit foreign direct investment inflows. As such, we see little prospect for a meaningful investment recovery in the near term,” BMI said.

Economic managers in June lowered the government’s 2025 growth target to 5.5 to 6.5 percent, citing geopolitical uncertainties and tariff risks. This was down from the previous 6 to 8 percent range.

For the first half of 2025, the economy expanded by 5.4 percent, with second-quarter growth inching up to 5.5 percent from 5.4 percent in the first quarter.