Philippine economy sustained growth in second quarter

Finance Secretary Ralph Recto said the Philippine economy likely saw improved performance in the second quarter of this year compared to the first, driven largely by increased government spending and consistent household consumption across major sectors.

Despite this positive outlook for the second quarter, Recto believes that the full-year economic growth might not reach six percent. The Philippine Statistics Authority (PSA) reported a 5.4 percent Gross Domestic Product (GDP) growth in the first quarter, a slight increase from the 5.3 percent in the fourth quarter of 2024 but slower than the 5.9 percent in the first quarter of the same year.

Recto realistically projects a full-year growth rate of around 5.7 percent or 5.8 percent. He attributes the potential for slower growth to ongoing uncertainties in global trade policies. Reflecting these global uncertainties, the Development Budget Coordination Committee has already lowered its 2025 growth target to 5.5 to 6.5 percent, a decrease from its earlier projection of six to eight percent.

One factor contributing to trade policy uncertainty is the recent 20-percent tariff imposed by the United States on goods from the Philippines, although this is still lower than tariffs faced by other Southeast Asian nations. This and other economic cooperation topics are expected to be on the agenda during President Marcos' upcoming visit to Washington from July 20 to 22.

The official second-quarter GDP data from the PSA is scheduled for release on August 7.