PH economy grew faster by 5.4% in Q1 2025 — PSA
GMA Integrated News
08 May 2025
The Philippine economy expanded faster in the first three months of 2025 —described as a “measured start”— amid the growth seen in services, industry, and agriculture sectors, according to the Philippine Statistics Authority (PSA).
The country’s gross domestic product (GDP) —the value of goods and services produced in a period— grew faster by 5.4% in the first quarter of 2025, higher than the upwardly revised growth rate of 5.3% in the last quarter of 2024, PSA chief and National Statistician Claire Dennis Mapa reported at a press conference in Quezon City on Thursday.
This was also the fastest GDP growth rate seen since the third quarter of 2024, albeit slower than the 5.9% growth recorded in the first quarter of 2024.
At constant prices, the economy reached a value of P5.477 trillion during the period, up 5.4% from P5.196-trillion GDP seen in the same quarter last year.
Department of Economy, Planning and Development Undersecretary Rosemarie Edillon said the country’s GDP needs to increase by 6.2% in the remaining quarters of 2025 to hit at least the lower-end of the. government’s growth target of 6% to 7% for the year.
“Our concise description of the first quarter economic performance is a ‘measured start,’” Edillon said.
The Philippines, so far, ranked second among its Asian peers that have already released their first quarter figures.
The country fell behind Vietnam, which grew by 6.9% and tied up with China with the same growth rate of 5.4%.
Nonetheless, the Philippines outpaced Indonesia, Malaysia, and Thailand, which grew by 4.9%, 4.4%, and 2.8%, respectively, according to the DEPDev official.
“This performance underscores the relative resilience of our economy in the face of global volatility,” she said.
“The Philippine economy continues to show signs of a steady growth,” the DEPDev official said.
Major sectors
The economic performance was on the back of the year-on-year growths posted by all of the country’s major economic sectors.
In particular, the Agriculture, Forestry, and Fishing expanded by 2.2%; while Industry and Services sectors grew by 4.5% and 6.3%, respectively.
“Sa naitalang pagtaas ng GDP na 5.4% sa unang quarter ng taong 2025, ang Services ay nagtala ng pinakamataas na kontribusyon na mayroong 3.9 percentage points. Ito ay sinundan ng Industry na nagtala ng kontribusyon na 1.3 percentage points; at Agriculture, Forestry, and Fishing na nakapag-ambag ng 0.2 percentage point,” Mapa said.
(With the 5.4% GDP growth rate seen in the first quarter of 2025, the Services sector accounted for the biggest contribution of 3.9 percentage points. This was followed by Industry with a share of 1.3 percentage points; and Agriculture, Forestry, and Fishing which contributed 0.2 percentage point.)
The main activities that contributed to the January to March 2025 GDP growth were Wholesale and Retail Trade; Repair of Motorcycles Vehicles and Motorcycles; Financial and Insurance Activities; and Manufacturing with annual growth rates of 6.4%, 7.2%, and 4.1%, respectively.
On the demand side, Household Financial Consumption Expenditure posted a growth of 5.3%.
“Easing food inflation supported household final consumption, which grew by 5.3%, year on year, faster than the 4.7% growth recorded in the fourth quarter 2024,” Edillon said.
Government Final Consumption Expenditure also grew by 18.7%, while Gross Capital Formation posted rose by 4%.
The DEPDev official said the growth in state spending has reflected “the front-loading of public programs in anticipation also of the election ban.”
Moreover, exports of goods and services recorded a surge of 6.2%, while imports of goods and services posted a 9.9% growth rate.
Strategic imperatives
Edillon highlighted the government’s “strategic imperatives” for sustained growth.
“We should note that amid the ongoing trade war, multilateral institutions such as the International Monetary Fund and the World Bank consistently project the country to remain one of the fastest-growing economies in the region this year. However, this is no reason for complacency,” she said.
“On the contrary, the first quarter's performance reinforces the urgency of strategic policymaking, accelerated structural reforms toward economic diversification, and efficient and effective delivery of programs and projects as we near the mid-term of the Marcos Administration,” she added.
The DEPDev official said that managing inflation remains a top priority to ensure that consumer prices remain affordable.
“The April 2025 inflation rate of 1.4% indicates that our interventions are working,” Edillon said.
The Economic Department official said the government must accelerate its efforts to expand trade partnerships with key economies such as the European Union, United Arab Emirates, United States, and other potential markets amid the global realignment of trade and investments.
“Such engagements will allow us to diversify our export markets, secure broader market access, ensure our businesses (particularly our micro, small, and medium enterprises) to become part of global value chains, and ensure food availability and affordability,” Edillon said.
“On the supply side, we can and must support and capitalize on higher value-added activities in the services sector, a sector in which we have found comparative advantage, especially as digital technologies, including artificial intelligence, gain greater momentum for adoption and industries undergo workforce transition periods,” she added.
Continued strength
Finance Secretary Ralph Recto said that the first quarter performance highlights the continued strength and resilience of the Philippine economy, even amid rising global uncertainties.
“Our growth is strong, inflation continues to ease, private consumption is rising, and our job market remains vibrant. These are clear signals of accelerating domestic demand ahead, which is our strongest shield against external headwinds and trade wars,” he said.
The Finance chief expressed confidence that the government will hit its 6% growth goal for 2025, citing steady fiscal consolidation, easing inflation, and progress in trade negotiations with key partners, among other initiatives.
“The national government’s revenue collections for the first quarter 2025 remain on track due to the strong performance of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), which drove tax collections to PHP 931.5 billion, a double-digit increase of 13.55% compared to the same period last year,” Recto said.
He added that as inflation continues to cool down, private spending is expected to further improve.
The lower-than-expected inflation rate of 1.4% in April 2025 also provides more room for the BSP to further cut policy interest rates to help boost the spending power of Filipinos, drive in more investments, and grow the economy, according to Recto.
Recto added that private investments are expected to increase with the implementation of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.
Likewise, Trade Secretary Cristina Roque said the administration’s focus remains on attracting high-quality investments in key sectors, ensuring consumer protection and empowering micro, small, and medium enterprises and local industries.
Global uncertainties
Both the Finance and Trade chiefs raised the ongoing global economic uncertainties, especially the reciprocal tariff policy of US President Donald Trump.
“We recognize the current global economic complexities, and we are responding with strategic focus and a commitment to open communication. The DTI will continue to monitor trends, engage stakeholders, and adapt policies to ensure sustained growth that leaves no one behind,” Roque said.
“On the other hand, significant progress has been achieved by the government in its trade negotiations with the United States. The Philippine government also continues to actively pursue new and expanded free trade agreements with economies like the United Arab Emirates, the European Union, Chile, and Canada to diversify export markets,” Recto said.
Trump, last month, announced a sweeping reciprocal tariff policy on its trading partners, including the Philippines which would be facing a 17% tariff on its imports to the US.
Although it is lowest among its Southeast Asian peers, still the Philippine government was prompted to send a delegation to Washington to seek dialogue with US officials while a 90-day pause in implementing the trade policy was ongoing.
On May 2, Roque, along with Economic Affairs adviser Frederick Go and Philippine Ambassador to the United States Jose Manuel Romualdez, met with US Trade Representative Jamieson Greer and tackled “mutually beneficial ways to strengthen the bilateral relations” amid the 17% tariff rate imposed by the US on Manila.
A series of meetings would follow after Philippine trade and economic officials met with the Office of the United States Trade Representative (USTR) in Washington, D.C. earlier this month for a trade dialogue concerning the planned 17% tariff to be slapped on the country’s goods entering the US.— RSJ/VAL/BM GMA Integrated News
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