BMI maintains Philippines growth outlook for this year

August 9, 2025 | 12:00am

MANILA, Philippines — Research and analysis firm BMI is sticking with its growth outlook for the Philippines for this year, but it expects the economy to expand at a slower pace next year amid uncertainties coming from the US reciprocal tariffs.

“Despite the stronger-than-expected growth in the first half, we believe that growth will slow in the second semester and have thus maintained our GDP (gross domestic product) growth forecast at 5.4 percent for 2025,” the Fitch Solutions unit said in a report.

The forecast is below the 5.5 to 6.5 percent growth the government is aiming to achieve this year.

Data released by the Philippine Statistics Authority showed that the economy grew by 5.5 percent in the second quarter, slightly faster than the 5.4 percent in the previous quarter, but slower than the 6.5-percent expansion in the same quarter last year.

This brought GDP growth in the first semester to 5.4 percent.

“Further acceleration in the second half remains unlikely: a slowdown in remittances will weigh on private consumption while heightened global uncertainty will continue to chill investment,” BMI said.

For next year, BMI trimmed its growth forecast to 5.2 percent from 6.2 percent as it expects the slowdown in remittance growth and tariff uncertainty to persist.

BMI’s growth forecast is below the government’s six to seven percent growth target for 2026.

While it is difficult to identify the reasons for the fall in remittances, BMI said a rebound is unlikely in the coming quarters.

It said remittances fell by three percent year-on-year in peso terms in the second quarter.

With about 40 percent of remittances coming from the US, US President Donald Trump’s move to clamp down on immigration and impose a one percent tax on remittances, money sent by overseas Filipinos are likely to weigh on consumption growth in the coming months.

“Overall, we still forecast private consumption to grow by five percent in 2025,” BMI said.

While Trump appears to have finalized the reciprocal tariff rate for most major economies in the world, including the Philippines at 19 percent, BMI said no decision has been made yet on possible tariffs on pharmaceuticals and even secondary tariffs for countries buying Russian oil.

Trump recently announced a plan to impose a 100 percent tariff on imports of semiconductors, but noted it would not apply to those manufacturing in the US or have plans to do so. It is not clear when the levy on chip imports will take effect.

For BMI, this means tariff uncertainty is expected to remain high.

Meanwhile, “the bilateral trade deals Trump has struck around the world typically include promises by his interlocutors to invest in the US. Unless firms make the unlikely decision to expand overall capital spending in this uncertain environment, that means less capital allocation for the rest of the world, including the Philippines,” BMI said.

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