Philippines records 5.4% economic growth in Q1 of the year
A Peek at the Philippine Economy's Q1 2025 Outlook
The Philippine economy demonstrated a measured start this year, registering a 5.4% year-on-year growth in Q1 2025. Although a slight improvement from Q4 2024's 5.3%, it fell below the government's expectations and last year's 5.9% expansion.
Placing the Philippines second among major Asian economies reporting their first quarter GDP figures, the country tied with China and trailed behind only Vietnam (6.9%), while surpassing Indonesia (4.9%), Malaysia (4.4%), and Thailand (forecasted at 2.8%). This performance underscores the robust resilience of the Philippine economy amid global uncertainties.
According to Undersecretary Rosemarie Edillon, this growth pattern could be attributed to the strong performance of sectors like wholesale and retail trade, financial and insurance activities, and manufacturing. The agriculture sector also saw a rebound, growing by 2.2%, while industry growth remained steady at 4.5%, and services experienced a slight slowdown at 6.3%.
However, the growth rate comes with a mixed picture, as the report indicated a significant drawdown in inventories and a surge in imports, particularly for transport equipment, industrial machinery, and electrical machinery. This surge caused a sharp contraction in net exports.
Inflation remains relatively stable at 1.4%, with the government focusing on stabilizing pork supply through African Swine Fever vaccine rollout and implementing strategic supply-side interventions.
To sustain growth and meet its targets, the government aims to expand trade partnerships with key economies like the EU, UAE, and the US, diversify export markets, and integrate small and medium enterprises into global value chains. The government is also investing in upskilling and reskilling initiatives, strategically investing in human capital development through the Trabaho Para sa Bayan Plan.
Steven Yu, a Cebuano businessman, suggests that the Bangko Sentral ng Pilipinas (BSP) could have more reason to cut interest rates due to the current growth figure and low inflation rate. He believes this would provide "the BSP with room to implement three quarter-point cuts (0.75 percent) this year," urging for a quicker implementation before any potential long-term damages set in.
In summary, while the Philippine economy has shown resilience in the face of global uncertainties, the government must continue to focus on investment in key sectors, strategic economic policies, and addressing global trade uncertainties to ensure sustained growth in the coming quarters.
- The government aims to integrate small and medium enterprises into global value chains to sustain growth and meet its targets.
- Inflation remains relatively stable at 1.4%, with the government focusing on stabilizing pork supply through African Swine Fever vaccine rollout.
- Undersecretary Rosemararie Edillon attributes the growth pattern to strong performances in sectors like wholesale and retail trade, financial and insurance activities, and manufacturing.
- The Philippines, tied with China, trails only Vietnam in terms of Q1 2025 GDP growth, registering at 5.4%, while surpassing Indonesia, Malaysia, and Thailand.
- Steven Yu, a Cebuano businessman, urges the Bangko Sentral ng Pilipinas (BSP) to consider cutting interest rates due to the current growth figure and low inflation rate.
- The government is investing in upskilling and reskilling initiatives, strategically investing in human capital development through the Trabaho Para sa Bayan Plan.
- To ensure sustained growth in the coming quarters, the government must continue to focus on investment in key sectors, strategic economic policies, and addressing global trade uncertainties.
