PH economy expanded by 5.5% in Q2 2025 — PSA
GMA Integrated News
07 August 2025
The Philippine economy grew marginally quarter-on-quarter in the second quarter of 2025 amid the growth seen in services, agriculture, and industry sectors, and posted a deceleration from the same period last year, 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 slightly faster by 5.5% in the April to June 2025 compared to the 5.4% growth seen in the January to March 2025 period, PSA chief and National Statistician Claire Dennis Mapa reported at a press conference in Quezon City on Thursday.
The second quarter GDP growth was the fastest in four quarters, however, it was still slower than the 6.5% growth rate in the same period in 2024.
All major economic sectors posted annual growth during the quarter — agriculture, forestry, and fishing with 7.0%, industry with 2.1%, and services with 6.9%.
The PSA attributed the year-on-year growth to wholesale and retail trade, repair of motor vehicles and motorcycles with 5.1%; public administration and defense, and compulsory social security with 12.8%; and financial and insurance activities with 5.6%.
Fixed capital investments climbed 2.6%, led by private construction which grew 11.2%, and investments in durable equipment up 10.6%.
Government spending posted an 8.7% growth rate during the quarter, slower than the 18.7% seen in the first quarter, which Department of Economy, Planning, and Development (DepDev) Secretary Arsenio Balisacan attributed to the election spending ban.
“We expect to maintain that momentum in the spending side. I think that the next half, the second half of the year, you should see improvements in the construction, public construction spending,” he said in a briefing.
While the election spending ban hit government spending, officials said the campaigns boosted household spending which grew by 9.5%, faster than the 5.29% in the previous quarter, and the 5.4% in the second quarter of 2024.
Exports increased by 4.4%, outpacing import growth of 2.9%. Merchandise exports rose by 13.6%, driven by semiconductors which posted a 10.8% increase.
Services exports, however, declined by 4.2%, which Balisacan attributed to the global uncertainties.
“Possibly following the overall state of the global economy in the recent months, we saw deceleration. That uncertainty that people have been talking about, uncertainty in the trade sector, including trade and services,” he said.
The country’s economic team has set a 5.5% to 6.5% target for the full-year 2025, which Balisacan said is just around the corner for the lower band, and still feasible for the upper band.
“What we need to achieve for the rest of the year is 5.6% to achieve the lower limit of the range of 5.5%. That’s already just around the corner, so to speak, but I think we’ll do better in the second half. I’m confident that inflation has gone down quite substantially and the past reductions in the policy rates are beginning to be felt,” Balisacan said.
Inflation eased to 0.9% in July, the slowest in nearly six years, mainly due to the slower increases in prices of housing, water, electricity, gas, and other fuels.
Analysts believe this will give the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) room for more policy rate cuts. BSP Governor Eli Remolona Jr. has hinted at two more cuts this year, following the 25-basis-point rate cut in June.
For the upper end of 6.5%, the Philippine economy will have to grow by 7.5% in the second half, which Balisacan said would still be feasible.
“7.5% is high, but it’s not impossible. I think that if we see continuing, for example, improvement in the confidence of our consumers and our domestic investors and the economy, we should see a greater growth, higher growth in both consumption and investment, and the services,” he said. — RSJ, GMA Integrated News
