Q2 GDP seen rising as consumption, exports firm up

The Philippine economy likely expanded at a faster pace in the second quarter of 2025, supported by household consumption, easing inflation, and election-related spending, according to a report released Friday by an economist from the Bank of the Philippine Islands (BPI).

BPI lead economist Jun Neri said second-quarter gross domestic product (GDP) growth may have reached 5.8 percent, up from 5.4 percent in the previous quarter.

“On the demand side, household consumption likely remained the main growth driver, supported by election-related spending, easing inflation—particularly the sustained decline in rice prices—and continued strength in consumer lending,” Neri said.

He added that food exports may have improved due to favorable weather conditions, while electronics exports could have been front-loaded ahead of the implementation of higher US tariffs.

However, Neri noted that the ban on infrastructure spending during the election period may have weighed on government expenditures, slightly offsetting overall gains.

On the production side, subdued electricity sales may have indicated slower activity in the industrial and commercial sectors.

Despite these mixed indicators, Neri said the government’s full-year growth target of 5.5 to 6.5 percent remains within reach.

“While risks remain, achieving the government’s revised growth target of 5.5 percent to 6.5 percent remains feasible, especially if the second-quarter print surprises on the upside,” he said.

BPI maintained its 2025 growth forecast at 5.8 percent but cautioned that downside risks—including storm-related disruptions and potential expansions of US tariffs—could prompt revisions later in the year.