The Philippine economy is projected to grow by 6.3 percent in 2025, picking up slightly from this year’s forecast, on the back of an anticipated recovery in domestic activity.
This is according to the report released on Monday by BMI Research, a unit of diversified financial information company Fitch Group, which said that resilience in domestic demand will edge up growth.
“A renewed acceleration in private consumption will also be sustained. For one, inflation retreated from a recent peak of 4.4 percent in July to 2.3 percent in October, which will support real household incomes,” the report said.
The report noted that the Philippines’ strong import performance suggests that household spending is recovering.
Additionally, it said that local labor market conditions remain tight relative to historical standards.
“The latest data show the unemployment rate dipping from 4.0 percent in August to 3.7 percent in September despite an increase in the participation rate by around 0.1 percentage point from 64.8 percent in August,” the report noted.
“This essentially means that around 20 percent of the people who entered the labor force were able to find a job,” it read further.
Despite the optimistic outlook, the BMI Research report noted significant downside risks, citing first and foremost the expected policy decisions from the newly elected US President Donald Trump.
“Throughout his campaign, Trump consistently stated his plan to impose tariffs of up to 20 percent on all goods entering the United States. As one of the Philippines’ largest trading partners, it will not be able to shy away from the impact of these protectionist policies,” the report said. —Alden M. Monzon