Philippines forecast to be second fastest-growing economy in SE Asia through 2035

Philippines projected to be second fastest-growing economy in SE Asia until 2035

BusinessWorld
September 17, 2026

THE PHILIPPINES could emerge as Southeast Asia’s second fastest-growing major economy over the next decade, with growth averaging 5.8% through 2035, according to a report by Bain & Company, DBS Group Holdings, and Vriens & Partners. 

In the Southeast Asia Outlook 2026-2035 report released on Wednesday, the Philippine economy is projected to grow at an average annual rate of 5.8% from 2026 to 2035 under the baseline scenario.

“The Philippines, which has a favorable demographic tailwind, could grow at a 5.8% average annual rate as consumption, infrastructure, and governance reforms unlock investment,” the report said.

This would make the Philippines’ gross domestic product (GDP) growth the second-fastest among the six major Southeast Asian economies covered by the report, behind only Vietnam, which is projected to expand by an average of 6.2% annually until 2035.

The Philippine economy is expected to outpace Indonesia (5.4%), Malaysia (4.3%), Singapore (2.7%), and Thailand (2.2%).

Philippine GDP growth over the 10-year horizon is also above the 4.8% average for the six Southeast Asian economies.

The latest regional forecast for Southeast Asia is slower than the earlier average expansion of 5.1% for the 2024-2034 period, reflecting a more complex and volatile global environment.

However, the Philippine economy is experiencing a sharp slowdown this year, averaging 2.6% in the first half. The government is targeting 3.5%-4.5% GDP growth for 2026, and 5%-6% annually from 2027 to 2030.

Despite its relatively strong baseline forecast, the Philippines is also among the Southeast Asian economies facing the greatest downside exposure, according to the report.

The report noted that Indonesia, the Philippines, and Thailand would be the most exposed under a downside scenario because of their “capital-flow sensitivities, energy dependence, political uncertainty, and weaker structural momentum.”

Under more favorable global conditions, the Philippines could also capture less upside than Malaysia, Singapore, and Vietnam, which are better positioned to benefit from their roles in capital intermediation and global manufacturing supply chains. 

“Indonesia, Thailand, and the Philippines see more limited benefit, as persistent structural constraints limit their ability to translate an improved external environment into stronger growth,” the report said.

The Philippines’ favorable demographics, steady remittance inflows, and consumption-led  economic model provide some insulation from disruptions to global trade, it added.

However, it warned that the country’s dependence on imported energy, weaknesses in policy implementation and artificial intelligence (AI)-driven disruption to the outsourcing industry could prevent the economy from reaching its full potential.

The report also pointed to longer-term risks from AI-driven automation to the country’s business process outsourcing industry.

“Without stronger energy security and governance consistency, growth could be capped below the Philippines’ potential,” it said.

The report said that one of the Philippines’ immediate challenges is managing the transition to AI.

“The next few years will be critical; the Philippines must move into higher-value services while sustaining reform momentum through its next leadership transition,” it said.

The country also needs to strengthen its energy system, as gains in Philippine technology services have been constrained partly by limitations in the power grid. 

Across Southeast Asia, the report said growth over the next decade will increasingly depend on stronger institutions, more reliable energy systems and the ability to use AI to raise productivity.

“Dependence on imported energy quickly turns external price shocks into household inflation, while weak policy implementation hinders the conversion of investment commitment into actual deployment,” the report said.

It said grid capacity and reliability will be increasingly important in determining whether economies can expand their industrial bases and support power-intensive AI infrastructure.

The Philippines has already fallen short of the report’s earlier growth expectations. From 2024 to 2025, the economy grew by an average of 5.1%, compared with the 6.1% average assumed in their previous 2024-2034 forecast.

“The Philippines saw growth impeded by weaker investment and public sector execution,” the report said. — Justine Irish D. Tabile

Four positive economic developments in the Philippines today

Four positive economic developments

Opinion by Tony Lopez
Philstar Global 
27 August 2026

Amid a seemingly clouded if unpredictable economic environment, four good things have stood out lately:

UPPER MIDDLE-INCOME COUNTRY

One, the Philippines has achieved, after nearly 40 years of trying, an Upper Middle-Income Country (UMIC) status, with per capita income of $4,850, capping, says the World Bank, “two decades of sustained economic growth and rising living standards (and) reforms that stabilized the macroeconomy.”

“Sustaining and deepening that achievement will require the right reforms to navigate current headwinds, unlock stronger, more inclusive growth and better jobs and continue reducing poverty and inequality,” says the bank.

The World Bank wants electricity costs – among the highest in ASEAN – brought down, as “a powerful lever to boost firm competitiveness and household living standards.”

The bank’s report sees a scenario in which renewable energy reaches 35 percent of the energy mix by 2030, consistent with government targets. “This path, if undertaken alongside investments in transmission, storage and grid flexibility and market competition reforms, could reduce residential electricity prices by as much as 28 percent in the near term, create approximately 161,000 new jobs and lift around 730,000 Filipinos out of poverty.”

LOWEST POVERTY INCIDENCE EVER

Two, poverty incidence or ratio has declined to its lowest level ever – 9.7 percent, in 2025, “bringing Filipinos living below the official poverty threshold into single-digit territory for the first time in history,” according to the Philippine Statistics Authority (PSA). The 9.7 percent means only 11.08 million Filipinos are deemed poor, down from 15.5 percent or 17.5 million in 2023. More than 6.42 million Filipinos were rescued from poverty under the Bongbong Marcos Jr. presidency. The single digit poverty incidence was achieved three years ahead of schedule.

INVESTMENT GRADE RETAINED

Three, the Philippines has retained its investment grade credit ratings, making borrowing cheap.

On Aug. 21, 2026, Rating and Investment Information Inc. (R&I) affirmed the Philippines’ “A−” investment-grade with a stable outlook. An “A−” rating means the government has a strong capacity to repay its debts. R&I had previously raised the Philippines to the “A” level under the Marcos administration in 2024. Moody’s followed on Aug. 24, with a “Baa2” investment-grade rating with a stable outlook. A “Baa2” rating means moderate credit risk.

AGGRESSIVE CAMPAIGN AGAINST CORRUPTION

Four, the campaign against large-scale corruption and abuse while in office, especially from the notorious flood control scam that has meant the loss of P1 trillion in taxpayers’ money, and mass killings during the Duterte regime, remains rigorous and unrelenting.

Vice President Sara Z. Duterte is facing trial before the Senate impeachment court.

Two incumbent senators, Jinggoy Estrada and Rodante Marcoleta, are in jail for alleged plunder. A third, Ronald “Bato” dela Rosa, is a fugitive from justice for crime against humanity. A former congressman and Cabinet member, Mike Defensor, is in jail for plunder. Former president Rodrigo Roa Duterte has been in jail for 17 months in The Hague facing trial for crimes against humanity.

Highlights from the unprecedented anti-corruption drive under the Marcos Jr presidency:

• The ongoing impeachment trial of the now twice impeached VP Duterte is in high gear after 18 trial days, with the House of Representatives prosecution panel at a steady pace to prove the guilt of the first Philippine vice president ever impeached, not once but twice, and the first VP to face trial before the Senate convened as an impeachment court.

Sara Duterte is accused of four major charges where guilt means removal from office:

One, misuse of confidential funds and wastage of P612.5 million of taxpayers’ money that allegedly went to nearly 5,000 recipients, at least two-thirds of whom never existed on earth;

Two, bribery – she regularly handed out cash envelops to subalterns to make them malleable to her wishes;

Three, unexplained wealth (P6.77 billion in money transactions took place in her bank accounts jointly with her husband in 20 years despite her earning only P24 million in legitimate salaries as a public official during the same period);

Four, grave threats. She repeatedly threatened publicly to kill President Ferdinand R. Marcos Jr., First Lady Louise Araneta Marcos and former speaker Martin Romualdez and announced she hired assassins for the purpose.

Alleged recipients of Sara’s P612.5-million missing confidential funds sport names like camote, mango, cheese, animals like turtle and cats. At least two had names that mean vagina and another two whose names mean darkness. Three names reek of bad odor. The implication: the hard-earned taxpayers’ money was pocketed and not delivered to claimed recipients who do not exist.

P16 million went to rental of alleged safe houses at the rate of P1.4 million per day. At that rate, you can build 11 houses instead of renting them for a day.

• Abroad, former president Rodrigo Duterte has been in jail in The Hague, the Netherlands since his arrest on March 11, 2025 to face trial for crimes against humanity, the killing of from 6,200 to 30,000 innocent civilians in the largest state-sponsored mass killings during his presidency and years as long-time Davao City mayor. His co-accused, former national police chief and incumbent senator Ronald dela Rosa, has been declared a fugitive from justice.

With less money stolen, more money can go to poverty alleviation.

The Marcos administration will boost protection for the 6.5 million Filipinos lifted out of poverty during the last two years, while creating more jobs, raising incomes and lowering living costs of the middle class.

“That is the marching order of the President: support the middle class and prevent 6.5 million Filipinos from sliding back into the zone of poverty,” Executive Secretary Ralph Recto said.

“But this is not the time to rest. That goal is not the finish line. The work goes on,” Recto said.

Philippines hits upper-middle income status - World Bank

Philippines achieves upper-middle-income ambition

Ben Arnold de Vera
Manila Bulletin
July 1, 2026

The Philippines achieved its long-standing goal of attaining upper-middle-income-country (UMIC) status with a record-high gross national income (GNI) per capita in 2025, even as neighboring Vietnam made a bigger stride toward the same World Bank classification.

The World Bank announced on Wednesday night, July 1 (Manila time), that the Philippines, Jordan, Micronesia, Sri Lanka, and Vietnam had joined the ranks of UMICs, with their respective GNI per capita ranging from $4,636 to $14,375 in 2025. This is the income range for UMICs for fiscal year (FY) 2027, covering the period from July 1, 2026, to June 30, 2027.

Manila Bulletin reported earlier that the Philippines’ GNI per capita rose to a record $4,850 in 2025 from $4,470 in 2024, based on World Bank documents published earlier this week.

GNI measures the total income earned by a country’s residents, both domestically and abroad, making it a broader measure of economic performance than gross domestic product (GDP), which accounts only for domestic output.

Based on separate World Bank Group (WBG) DataBank figures seen by Manila Bulletin, the Philippines’ GNI, using the Atlas method, rose to $566.8 billion in 2025 from over $518 billion in 2024.

The country had been stuck in lower-middle-income-country (LMIC) status since at least FY 1989.

“The Philippines achieved its reclassification through broad-based expansion. GDP grew at an average of 5.8 percent per year over five years, reflecting gains across all major industries, not a single sector boom, but an economy-wide shift,” the World Bank said in a blog post.

However, the Philippines’ 2025 GNI per capita remained below Vietnam’s, which climbed to $4,970 from $4,490 a year ago. As a result, the income gap between the two countries widened sixfold—from just $20 in 2024 to $120 in 2025.

“Vietnam tells a story of growth. Powered by an export-led model, the country saw exports surge by more than 15 percent in both 2024 and 2025, with its GDP growing at seven percent and eight percent, respectively. GNI expanded at an average of 10 percent annually between 2021 and 2025—one of the strongest sustained runs in the region,” the World Bank said.

Based on the June 18 World Bank board report seen by Manila Bulletin, Vietnam’s GDP per capita grew by a faster 7.4 percent in 2025, compared with the Philippines’ 3.6 percent.

To recall, Philippine economic growth slowed to a post-pandemic low of 4.4 percent last year in the aftermath of the multibillion-peso flood-control infrastructure corruption scandal, which tempered investor appetite as well as public and private consumption.

Among the other new UMICs, documents showed that Jordan posted a 2025 GNI per capita of $5,260, Micronesia recorded $4,760, and Sri Lanka reached $4,670.

Meanwhile, Togo moved up from low-income to LMIC status, with a 2025 GNI per capita of $1,350, documents showed.

For FY 2027, the LMIC income range covers economies with a 2025 GNI per capita of $1,176 to $4,635.

With its newly attained UMIC status, the Philippines will eventually lose access to the most concessional official development assistance (ODA), or low-interest loans, extended by bilateral development partners as well as multilateral lenders such as the World Bank, the Manila-based Asian Development Bank (ADB), and the China-led Asian Infrastructure Investment Bank (AIIB).

In his inaugural State of the Nation Address (SONA) in 2022, President Ferdinand R. Marcos Jr. said the Philippines aspired to attain UMIC status by 2024—a target that was postponed multiple times as economic growth fell short of expectations in recent years.

During the previous Duterte administration, its economic team had targeted UMIC status by 2020, a goal that was derailed by the socioeconomic crises inflicted by the Covid-19 pandemic.

Philippines climbs four places in a global competitiveness ranking 2026

PH climbs four spots in competitiveness list

Niña Myka Pauline Arceo
The Manila Times

19 June 2026

THE Philippines has gained four places in a global competitiveness ranking, reflecting improved perceptions of the country’s ability to foster a business-friendly environment despite lingering concerns over supply chain disruptions and exchange-rate volatility.

The country ranked 47th out of 70 economies this year, up from 51st in 2025, according to the latest World Competitiveness Yearbook released by the Switzerland-based International Institute for Management Development (IMD).

The improvement allowed the Philippines to retain its position as the 10th most competitive economy among countries with gross domestic product (GDP) per capita below $20,000.

The annual ranking assesses economies based on their capacity to create and maintain an environment that sustains the competitiveness of enterprises. It evaluates countries using four broad factors: economic performance, government efficiency, business efficiency, and infrastructure.

“I’ve seen improvements in institutional quality of the country based both on government and business efficiency,” World Competitiveness Center Director Arturo Bris told The Manila Times late on Wednesday.

“The country’s performance in the economic performance factor is the one that marks the country’s performance in the overall ranking,” he added.

Singapore returned to the top of the competitiveness rankings in 2026 after placing second last year, helped by a sharp improvement in business efficiency that propelled it to first place globally.

Hong Kong climbed to second place, extending its steady rise over the past three years and reinforcing the strong presence of Asian economies at the top of the list.

Switzerland slipped to third from first in 2025 after a decline in economic performance, one of the ranking’s four key factors, falling 24 spots to 37th.

Meanwhile, Taiwan rose two places to fourth, continuing its upward trend from eighth in 2024 and sixth in 2025. The United Arab Emirates remained in fifth place.

The Philippines, meanwhile, remained 13th out of 15 economies in Asia-Pacific region.

The country’s improved standing came against the backdrop of an increasingly fragmented global economy marked by geopolitical tensions, supply chain realignments and heightened uncertainty.

The IMD said competitiveness in today’s environment extends beyond traditional indicators such as market size, low labor costs and growth prospects.

Instead, institutional credibility, regulatory predictability and governments’ ability to respond to shocks have become increasingly important determinants of investor confidence.

“I think the good news for the Philippines is that institutional quality keeps on improving, that tends to be in the long term the best predictor of the competitiveness ranking,” Bris said.

“Because of the turmoil in the world economy last year and the stability created by tariffs and other geopolitical events, the country has suffered, in which I would say it’s only a temporary event,” he added.

But despite the country’s improved ranking, Filipino executives continued to identify several risks that could undermine confidence and future competitiveness gains.

About 67.4 percent of the executives surveyed cited supply chain disruptions as a major factor affecting business confidence. Meanwhile, 69.8 percent pointed to exchange-rate volatility as a significant concern, underscoring the vulnerability of businesses to external shocks and fluctuations in global financial markets.

The IMD identified several challenges the Philippines needed to address this year, including sustaining economic growth while keeping inflation in check amid external shocks.

It also stressed the need to improve government efficiency and reduce corruption risks, ensure quick responses to energy and food supply disruptions, address issues affecting access to and the quality of basic education and encourage investments in renewable energy and climate resilience.

Philippine economy now at a ‘sweet spot’ — BSP

Philippine economy now at a ‘sweet spot’ — BSP

BusinessWorld
02 September 2025

THE PHILIPPINE ECONOMY now sits at a “sweet spot” as inflation remains benign while the country’s banking sector and external position are strong, the Bangko Sentral ng Pilipinas (BSP) said.

“Amid the swirling controversies over corruption, I am pleased to report a piece of good news. We think the economy is in good shape,” BSP Governor Eli M. Remolona, Jr. said during a briefing at the Senate on Monday.

“Indeed, our economy is in what I would call a ‘sweet spot,’ and I think this would help our fiscal strategy (to) make it more effective,” he added.

For the first half, gross domestic product (GDP) growth averaged 5.4%, slower than the 6.2% a year ago.

Inflation averaged 1.7% in the January-July period, below the BSP’s 2-4% annual target.

Mr. Remolona said the central bank tamed inflation with its aggressive rate hikes.

Last week, it cut its key policy rate by 25 basis points (bps) to 5%. The central bank has so far lowered borrowing costs by a total of 150 bps since it began its easing cycle in August 2024.

“This lowering of the policy rate stimulates demand, it helps the economy grow, and because we did it in a very measured approach, it hasn’t led to inflation,” Mr. Remolona said.

He said inflation looks like it will stay within BSP’s 2-4% target range.

The BSP projected inflation to average 1.7% this year, before picking up to 3.3% in 2026 and 3.4% in 2027.

At the same time, Mr. Remolona also attributed the economy’s current state to the “sound” performance of the local banking system.

“The banks have solid balance sheets, assets are growing, deposits are growing, (and) income of banks is growing,” he said.

Mr. Remolona added that banks have maintained enough capital and liquidity.

“Looking at liquidity standards, international liquidity standards, our banks also hold liquidity that far exceeds the international standard,” he said. “At the same time, the loans are not so risky.”

Mr. Remolona also said digitalization and financial inclusion can help increase consumers’ savings, especially in a country where “savings rate tends to be quite low.”

Meanwhile, the BSP chief said the country has “more than enough” international reserves.

At end-July, the country’s gross international reserves slipped to $105.4 billion from $106 billion in June. — K.K.Chan

Philippine GDP grows 5.5% in 2nd Quarter of 2025

 PH economy expanded by 5.5% in Q2 2025 — PSA

Ted Cordero
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

PH economy doubled since 2010 - World bank

Philippine economy doubled since 2010, created over 11 million jobs

Thony Rose Lesaca

Manila Standard

15 July 2025

Rapid gross domestic product (GDP) growth has doubled the Philippine economy since 2010 and created over 11 million jobs, according to a World Bank report released Tuesday.

“Since 2010, the Philippines has forged ahead, achieving record low unemployment and doubling its GDP. Rapid growth put the country in the top quartile of fastest growing middle-income countries [MICs], while the 11.7 million jobs created led to a record low 3.8 percent unemployment rate in 2024,” the World Bank said in its Growth and Jobs report.

Data showed that employment grew 0.4 percentage points annually faster than the working-age population, with a shift towards wage-earning jobs in more productive sectors. Economic growth was propelled by a “spatial catch-up,” leading to relatively rapid income growth for the poor.

“At the historical growth rate from 1990 to 2010, the economy would have taken 19 years to double. Instead, GDP growth since 2010 has been consistent with the economy doubling every 13.5 years,” the report noted.

“Faster GDP growth came with employment outpacing working-age population [WAP] growth by 0.4 percentage points per year,” it said.

The report also said that the newly created jobs were of higher quality, with an increase in waged positions rather than self-employment, and a move towards more productive sectors.

Growth was fueled by pro-investment reforms, macroeconomic stability, and a surge in public and private investment.

Foundational infrastructure spending, structural reforms, and private capital mobilization were key drivers.

Capital accumulation accounted for over 90 percent of growth, reflecting high investment returns. Lagging regions contributed significantly, with most new jobs in non-tradable sectors, though IT and IT-enabled services also boomed.

Post-pandemic, economic growth has been among the highest in Asia and globally among emerging economies.

Poverty incidence declined to 15.5 percent in 2023 from 18.1 percent in 2021 and below the pre-pandemic level of 16.7 percent in 2018.

The labor market also improved, with the unemployment rate falling to 4.3 percent in 2024, surpassing the government’s target of 4.4 percent to 4.7 percent.

“Nevertheless, significant structural challenges persist,” the report cautioned. “Capital deepening and labor force expansion have primarily driven economic growth, while gains in total factor productivity remain limited.”

Regions outside the National Capital Region (NCR) experienced faster labor productivity growth over the past 15 years. Low-income regions (LIRs) and medium-income regions (MIRs) saw 3.2 percent and 2.5 percent annual productivity growth, respectively during the post-global financial crisis (GFC) period, a significant improvement from 2.3 percent and 2.1 percent between 2001 and 2009.

The National Capital Region experienced a decline in annual growth in value added per worker, from 3.1% to 1.5%.

The accelerated labor productivity growth in LIRs and MIRs was attributed to an increased number of formal firms, with LIRs achieving 3.8 percent growth and MIRs 2.7 percent growth post-GFC.

Many of these firms capitalized on non-tradable activities like construction, real estate, commerce, and hospitality services, driven by local demand. The rise in formal firms also led to improved wage employment, increasing from 60 percent to 67 percent in LIRs and 77 percent to 84 percent in MIRs.

“Growth was also more spatially balanced than it had been [with low- and medium-income regions contributing significantly to overall GDP growth], and the real incomes of the bottom 40 percent grew at a faster rate than the incomes of the wealthiest 20 percent,” the World Bank said.

“Underpinning this progress were improved labor outcomes, including a shift from self-employment (primarily in agriculture) to wage employment (mainly in services), driven by higher public investment (mainly in connectivity infrastructure) and reforms that helped increase private investment,” it said.

New Manila airport to propel economic growth

New Manila International Airport positions Philippines for long-term growth

Sharon Joy Roset-Saclolo

Inquirer.net

12 July 2025

A brighter chapter is set to open for Philippine aviation.

With the New Manila International Airport (NMIA) now under development in Bulakan, Bulacan, the country is building on the momentum of aviation reforms and infrastructure upgrades—setting the stage for stronger economic growth, improved connectivity, and a better travel experience for millions.

Designed to be one of the most modern airports in the world, NMIA is expected to offer more efficient movement of passengers and cargo, complement the ongoing rehabilitation of Ninoy Aquino International Airport (NAIA), and support a new wave of regional development.

A next generation gateway

The development of NMIA is led by San Miguel Aerocity Inc. through a 50-year concession agreement with the national government.

The first phase is scheduled to begin construction in January 2026. This will include two runways, a modern terminal, and key facilities designed to serve up to 35 million passengers annually, and is expected to be completed by the end of 2028.

Once fully completed, the airport aims to handle up to 100 million passengers each year.

Complementing, easing pressure on NAIA

NMIA is being built to work alongside NAIA, which is now undergoing a P170.6-billion upgrade to improve its capacity and passenger experience.

Once the rehabilitation is done, NAIA will be able to handle up to 62 million passengers a year and manage 48 flights per hour. With both airports operating, the country will have a stronger, more reliable aviation system that can keep up with growing travel demand.

Infrastructure and connectivity

With the new airport located only 18 km from SM North Edsa and 15 km from Balintawak, it’s almost part of Metro Manila.

Good transportation access is a big part of NMIA’s design. New roads and terminals will connect the airport to Metro Manila and nearby provinces. A six-lane highway will link it to the North Luzon Expressway (NLEx), and a transport terminal will be built to serve provincial buses and other types of public transportation.

There are also proposals to extend the MRT-7 line—currently under construction between Quezon City and San Jose del Monte in Bulacan—so that it could eventually connect to the NMIA site.

If approved, this extension would make it easier for travelers from northern Metro Manila and nearby areas to reach the airport. For now, the plan remains under review and has not yet been finalized.

How air travel powers broader progress

NMIA is expected to do more than enhance air travel—it will also contribute to economic growth and the development of surrounding areas.

The project is projected to generate over one million jobs and pave the way for an airport city with dedicated spaces for businesses, residential communities, and industrial facilities.

This bigger plan highlights how the airport can help guide how land is used, bring in new investments, and make the country more competitive in tourism and trade. As more roads and facilities are built, and travel becomes easier, businesses in different industries—such as logistics, hotels, real estate, and manufacturing—are likely to look at Bulacan and nearby areas for new opportunities.

Rebuilding global confidence, reigniting tourism

For years, the country’s aviation system has carried growing demand with very limited capacity.

NAIA, which for decades is the lone international gateway for Metro Manila, is now being upgraded to meet higher standards and improve service.

The addition of NMIA—designed with modern facilities, future-ready technologies, and world-class design—marks a turning point in how the Philippines is seen by the world. It’s a major step toward restoring confidence, improving the traveler experience, and presenting the Philippines as a premier destination in the region.

Positioning for the future

Recognizing how these major infrastructure changes influence property values, development prospects, and long term investment strategies will be essential for those looking to take part in this rapidly evolving growth corridor.

As the country builds toward a more connected future, the New Manila International Airport will play a central role in driving local progress and shaping the next wave of regional development.

NMIA is not just a new dot on the map—it’s the Philippines’ runway for growth to take off. It will propel Bulacan into a prime growth area of Metro Manila, while ushering in business to nearby provinces.

Large scale investors will be drawn in with its world-class connectivity, fueling growth in years to come.

The author is the associate director and head of Research at Leechiu Property Consultants Inc.

PH has 12,800 millionaires - Henley & Partners

Philippines now has 12,800 dollar millionaires - report

JON VIKTOR D. CABUENAS
GMA Integrated News 
24 June 2025

The number of millionaires in the Philippines has grown by 32% in the past decade, outpacing regional peers and major economies, a report by Henley & Partners—a global consultancy firm on residence and citizenship by investment—released on Tuesday showed.

According to Henley & Partners managing director Scott Moore, the Philippines now has an estimated 12,800 high-net-worth individuals (HNWIs) or millionaires with at least $1 million. This includes 70 centi-millionaires or individuals with liquid investable wealth of at least $100 million, and 12 billionaires.

“This consistent growth reflects the country’s emerging entrepreneurial class, its maturing financial markets, and its expanding real estate and services sectors,” he said.

“While it is not yet among the top destinations for incoming millionaires globally, the Philippines’ stability and growing wealth base stand out and create a strong foundation for future investment migration,” he added.

Compared with the top 10 countries in the world ranked by the number of resident millionaires or W10, the Philippines’ 32% growth has outpaced the average, and came in third behind the United States of America (78%), and China (74%).

“The Philippines is actually growing the amount of high-net-worth individuals at a very good pace and definitely above average if you’re comparing with W10 countries,” Moore said.

The report shows that the USA has the biggest concentration of millionaires, with 6.041 million, followed by China with 827,900, Germany with 781,900, Japan with 714,000, and the United Kingdom (UK) with 578,400.

France followed with 490,800; Australia with 391,000; Switzerland with 384,500; Canada with 378,600; and Italy with 318,200.

Net outflow

For 2025, Moore said the Philippines is expected to post a net outflow of 50 millionaires, most of whom are expected to move to the top 10 countries for net millionaire inflows, led by the United Arab Emirates (UAE) and the USA, as well as nearby countries such as Singapore.

“When any families are looking to relocate to other countries, generally they’re looking to have optionality for their families, for their children, for their businesses,” he said.

“Perhaps they’re looking to expand their businesses overseas, perhaps they see better work opportunities for themselves or their children in other countries, but again, the loss of 50 is very insignificant,” he added.

There are a total of 142,000 millionaires expected to migrate this year, with the top 10 destinations being the United Arab Emirates (UAE), USA, Italy, Switzerland, Saudi Arabia, Singapore, Portugal, Greece, Canada, and Australia, all of which have investment migration programs.

The biggest outflow is expected in the UK, with 16,500 millionaires this year. If realized, this would be the biggest single-year outflow after the implementation of major changes to its tax regime in 2024 and its decision to leave the European Union in 2020.

The biggest net outflow of millionaires within Asia is expected in China, with 7,800 exits; Vietnam, with 300; Indonesia, with 250; Lebanon and Iran, with 200 each; and Taiwan and Pakistan, with 100 each.

“The loss of 50 is very insignificant, but we’re comparing it to other countries in the region. I would say it’s much more worrying in Vietnam that’s losing 300 millionaires, Indonesia's 250,” Moore said.  — VBL, GMA Integrated News

Philippines maintains A credit rating by Japan Credit Rating Agency

Japan Credit Rating Agency affirms Philippines' A– credit rating

JonViktor D. Cabuenas
GMA Integrated News 
06 June 2025

Japan Credit Rating Agency Ltd. (JCR) has affirmed its long-term issuer rating on the Philippines as it cited the country’s sustained economic growth.

However, the JCR said steps needed to be taken to address income disparity.

In a dispatch released on Thursday, JCR affirmed the Philippines’ foreign currency long-term issuer and local currency long-term issuer at “A-,” with a stable outlook. The Philippines first scored the rating in June 2020.

An “A” rating indicates the country has “high creditworthiness supported by a few excellent factors,” while a minus (–) indicates the relative standing within the rating category.

A higher credit rating is generally seen as more favorable, as this would entail lower borrowing costs for the country.

“The ratings mainly reflect the Philippines’ high and sustained economic growth supported by solid domestic demand, low-level external debt, and resilience to external shocks supported by accumulated foreign exchange reserves,” JCR said.

“However, reducing income disparity through rural development and infrastructure development remain important tasks to be addressed,” it added.

Philippine economic growth clocked in at 5.4% in the first quarter of 2025, the fastest in three quarters, but slower than the 5.9% growth in the first three months of 2024.

Government debt stood at a record P16.752 trillion as of end-April 2025, 0.41% higher than the P16.68-trillion debt stock as of end-March. Gross international reserves amounted to $104.6 billion as of end-April, down from $106.7 billion as of end-March.

“Despite increased uncertainty due to changes in US tariff policies, the Philippines’ foreign exchange liquidity position remains solid, and JCR expects the economy to retain high resilience to external shocks going forward,” it added.

JCR’s affirmation of the Philippines’ issuer rating was welcomed by Finance Secretary Ralph Recto, who said this reflects the continued confidence of rating agencies and investors in the country.

“We remain committed to securing more ‘A’ ratings by staying faithful to our fiscal consolidation plan and Road-to-A strategy,” Recto said in a separate statement.

“We have already passed key game-changing reforms, such as the CREATE MORE Act and the Capital Markets Efficiency Promotion Act, and will continue to work on creating an investment-enabling environment to increase the country’s economic growth potential,” he added. –NB, GMA Integrated News

PH GDP grows 5.1% in first quarter

PH economy grew faster by 5.4% in Q1 2025 — PSA

Story by TED CORDERO
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

S & P optimistic on credit rating upgrade

S&P optimistic on Philippines credit rating upgrade

Louise Maureen Simeon 
The Philippine Star
May 7, 2025

Despite US tariffs

MANILA, Philippines — S&P Global Ratings is optimistic on the Philippines’ credit rating upgrade despite the impacts of the reciprocal tariffs imposed by the United States, as the country remains among the least affected in the region.

In a webinar yesterday, the New York-based rating agency maintained that it continued to have a positive outlook on the Philippines even after US President Donald Trump imposed reciprocal tariffs during its Liberation Day last month.

S&P Sovereign and International Public Finance Ratings for Asia director Rain Yin said that the Philippines is going to be less affected than other countries in the region considering that it has one of the lower initial reciprocal tariff of 17 percent.

The country also does not have very large bilateral trade supplies with the US, as a substantial portion of its exports is in services.

“With the current positive outlook, we are expecting that the constructive trends that we are seeing in the Philippines, namely its strong growth trajectory, narrowing current account deficits and fiscal consolidation, will enable us to raise the rating in the next one or two years,” Yin said.

Last November, S&P raised the Philippines’ credit rating outlook to positive from stable, increasing the possibility of an upgrade in the next 12 to 24 months.

“However, if downside risks are very significant and derail our expectations on those constructive trends, then the outlook can possibly go back to stable,” Yin said.

Nonetheless, S&P noted that economic growth would still be affected by Washington’s protectionist policies as it penciled in a 0.3-percentage point decline in gross domestic product.

“What will it take to remove the positive outlook? It really comes down to a judgment of the size of the negative tariff impact on growth, fiscal, debt and external positions,” Yin said.

According to S&P, the US tariffs could affect sovereign ratings of emerging Asian economies, including the Philippines, through economic growth outcome, fiscal stimulus that could worsen fiscal and debt metrics and trade slowdown that could weaken external positions and strain reserves.

On fiscal stimulus, the debt watcher said no large ones have been rolled out by economies as many governments are still negotiating with the US for tariff relief.

Following the large stimulus during the pandemic, it added that many governments are also in a fiscal consolidation phase and may not easily roll out new measures.

However, S&P warned that a few sovereigns such as Indonesia, Malaysia and the Philippines are having more elevated interest burdens.

“A combination of higher debt and potentially higher interest rates could increase this ratio further, which would increase the downside risk to the rating,” Yin said.

“But it’s also likely for monetary policies to ease further due to a combination of debt growth and disinflationary pressures. So, this could help to alleviate the interest burden, even if debt levels would increase,” she said.

PH among fastest-growing economies in Southeast Asia – Moody's

PH among fastest-growing economies in Southeast Asia – economist

By Anna Leah Gonzales
Philippine News Agency
March 26, 2025

MANILA – The Philippines is one of the fastest-growing economies in Southeast Asia this year, an economist from Moody's Analytics said Wednesday.

"I think Philippines kind of stands out as one of the fastest growing economies in Southeast Asia. And really a lot of that is coming from the strength, from its domestic economy, given that it's, you know, highly reliant on its private consumption," economist Sarah Tan said in a virtual briefing.

Tan said Moody's Analytics expects Philippine economic growth to accelerate to 5.9 percent this year from 5.6 percent in 2024.

For next year, Moody's Analytics said the Philippine economy is projected to grow by 5.8 percent.

"While the expected growth is shy of the government’s target, it will mark the strongest expansion in three years. Private consumption and investment will be the key driver of growth in the Philippines, supported by a stable inflation and easing monetary policy," said Tan in a separate emailed statement.

Inflation is projected to continue to decelerate and stay within the government’s target range, settling at 2.8 percent in 2025 and 3 percent in 2026.

Tan, meanwhile, said the Bangko Sentral ng Pilipinas (BSP) "faces a tough balancing act to maintain price stability and economic growth."

"Progress on the inflation front supports the case for more rate cuts," she said.

Tan however noted that as US tariffs could slow global demand and the pace of interest rate normalization, the BSP will be more cautious about monetary easing to avoid significant weakening of the peso.

"In our latest baseline, we expect the BSP to bring the policy rate lower by 50 basis points to 5.25 percent by the end of 2025," said Tan.

Tan meanwhile said the main challenge would come from external conditions.

"The threat of more US tariff hikes and the potential for slower global interest rate normalization creates uncertainty in global demand. That will hurt the Philippines' exporters and industrial producers," she said. (PNA)

Philippines is expected to be among global leaders in terms of trade growth over the next five years

PH tipped to be world’s 15th fastest-growing trader by 2029

Alden M. Monzon
Inquirer.net
15 March 2025

MANILA, Philippines – The Philippines is expected to be among global leaders in terms of trade growth over the next five years, both in terms of speed and volume, according to a report from logistics firm DHL Express.

Issued jointly with the New York University Stern School of Business, the 292-page report titled DHL Trade Atlas 2025 covers data from the past five years up to January 2025.

The report forecasts that the Philippines will rank 15th in terms of growth rate in the five-year period up to end-2029.

This would mean an improvement of 114 notches as the Philippines ranked 129th based on growth rate in the 2019-2024 period.

According to the report, the Philippines’ trading activities grew by a mere one percent in volume during 2019-2014. For the next five years, Philippine trade is expected to grow by 7 percent.

Also, the Philippines is tipped to rise to 30th globally in terms of absolute growth in volume, from 68th in the previous five years.

The country is grouped with Vietnam, Indonesia, and India, which are expected to be the new entrants in the top 30 for both rankings—speed and scale.

“As we look toward the future of trade in Asia, it’s clear how trade growth has proven surprisingly resilient in the face of recent disruptions. With the ongoing diversification of supply chains that continues to reshape the commerce landscape, Asia has steadfastly emerged as a key player in the global market,” said Ken Lee, DHL Express CEO for the Asia-Pacific region. INQ

Ilocos Norte eyed as economic hub in Southeast Asia

Ilocos Norte eyed as economic hub in Southeast Asia

Louella Desiderio 
The Philippine Star 
March 9, 2025

MANILA, Philippines — The Public-Private Partnership (PPP) Center and the provincial government of Ilocos Norte have teamed up to promote the province as a key economic hub in Southeast Asia through the implementation of PPP projects.

In a statement, the National Economic and Development Authority (NEDA) said a memorandum of agreement (MOA) was signed on Feb. 28 at the PPP Center office in Quezon City.

The event was led by PPP Center executive director Ma. Cynthia Hernandez and Ilocos Norte Gov. Matthew Marcos-Manotoc, with NEDA Secretary Arsenio Balisacan and PPP Center deputy executive director Jeffrey Manalo in attendance.

The MOA aims to improve infrastructure development and spur economic growth in Ilocos Norte by focusing on a robust pipeline of PPP projects.

The parties will be working together in the various stages of the PPP implementation process, including project review, approval, procurement, implementation and monitoring.

To transform the province into an economic hub in the region, there are plans to revive international flights to China, Hong Kong and Taiwan from the Laoag International Airport.

This would boost tourism and increase connectivity between Ilocos Norte and major international markets.

In addition, the partnership will push for policies to support the agriculture sector through the organization of cooperatives to promote sustainable agricultural practices.

The parties will also work together in promoting innovations in renewable energy, data centers and manufacturing to encourage both local and global investments and create high-quality jobs.

“By leveraging the strengths of both the public and private sectors, we can mobilize resources, enhance efficiency and ensure long-term sustainability in our development efforts,” Balisacan said.

He said PPPs play a crucial role in accelerating economic growth and the PPP Center can facilitate the implementation of such projects.

The government is pushing for PPPs to address the country’s infrastructure gaps and tap into the private sector’s expertise.

“I hope the activities outlined in the MOA and the lineup of proposed projects by the provincial government inspire other local government units and implementing agencies to explore PPPs as a means for rapid and sustainable economic transformation,” Balisacan said.

PH economy may grow faster in 2025

PH economy expected to grow faster in 2025

Ian Nicolas P. Cigaral, Meg Adonis

Cebu Daily News

27 February 2025

MANILA, Philippines — The country’s economy may grow faster this year than in 2024, boosted by election-related spending. However, a global trade war could slow growth below the government’s target.

Angelo Taningco, chief economist at Security Bank Corp., told reporters on Wednesday that GDP could expand by 6.1% in 2025, mainly driven by election spending.

If Taningco’s prediction comes to pass, GDP growth this year would be faster than the 5.6-percent clip in 2024, which fell short of both market consensus and the Marcos administration’s target of 6 to 6.5 percent.

At the same time, a 6.1-percent growth this year would settle within the 6 to 8 percent target band of the government for 2025 until the end of President Marcos’ term in 2028.

Apart from the usual boost from elections, lower borrowing costs could also translate to stronger consumption, a traditional growth driver.

That said, Taningco projected the Bangko Sentral ng Pilipinas (BSP) to further cut the policy by a half-percentage point this year, which would be split into two quarter-point cuts each at the June and October meetings of the Monetary Board.

But while there are “so many upsides” to growth this year, the Security Bank economist warned that a full-blown global trade war could be damaging to the domestic economy.

“But it depends on the magnitude of the trade war,” Taningco said.

Defensive market

Meanwhile, Swiss banking giant UBS Investment Bank Global Research was not as optimistic as Taningco.

At a press briefing, Grace Lim, UBS Asean and Asia senior economist, said improving domestic demand and consumption despite aggressive tariff policies abroad will likely speed up growth this year to 5.9 percent. This suggested that the Philippine would outperform the 5-percent average growth that UBS projected for Asean-6 this year.

But if realized, GDP expansion in 2025 would miss the Philippine government’s target for the third straight year.

“Consumption should be aided by the tailwinds of solid labor income growth and gradually easing food inflation, which has already played out in the second half of 2024,” Lim said.

Lim likewise expected both investments, which account for 23 percent of Philippine GDP, and consumption, which accounts for 73 percent, to accelerate this year.

While the threat of US President Donald Trump’s latest import tariff policies looms, Lim pointed out that the Philippines was “a rather defensive market in the event of potential trade tariff escalation.”

This is especially because the Philippines was domestically oriented, she said.

Potential volatility

According to the Philippine Statistics Authority, the below-target growth last year was due mainly to the onslaught of typhoons in the latter half of the year, thus muting economic activity.

Food price inflation was also among the main culprits.

Lim recognized that there was “potential volatility” in inflation, “stemming from food supply shocks.”

“In the first two months of the year, we did see potential risk from food prices, particularly vegetables,” Lim said.

“That might have weighed a bit on consumer sentiment, so that is a risk, but not one we can always predict with certainty due to weather-related factors.”

At the same time, however, she pointed out that overall inflation “has come back to target,” and this was a crucial tailwind that could push economic growth toward the target.

The services sector, along with the business process outsourcing industry, also had the potential to propel growth.

Lim likewise noted that despite the recent pause, the BSP had room to cut the benchmark rate for overnight borrowing in April and September, for a total of 50 basis points.

“The pause on rate cuts was warranted due to trade policy uncertainties and given that past easing was working its way through the economy. There was room to reassess the situation first,” she said.