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Louise Maureen Simeon - The Philippine Star
June 25, 2025 | 12:00am
“We think GDP (gross domestic product) will accelerate to 5.6 percent year-on-year in Q2 from 5.4 percent in the prior quarter,” UA&P said in its latest The Market Call report.
Miguel de Guzman
“We think GDP will accelerate to 5.6 percent year-on-year in Q2 from 5.4 percent in the prior quarter.”
MANILA, Philippines — The Philippine economy likely grew at a faster pace of 5.6 percent in the second quarter compared to the previous quarter, amid low inflation and higher employment figures, according to the University of Asia and the Pacific (UA&P).
“We think GDP (gross domestic product) will accelerate to 5.6 percent year-on-year in Q2 from 5.4 percent in the prior quarter,” UA&P said in its latest The Market Call report.
While the growth forecast for the second quarter is higher than the first quarter growth turnout, it is lower than what UA&P projected earlier.
Last month, UA&P said it expects the Philippine economy to post at least six percent growth in the second quarter.
UA&P said growth in the second quarter is expected to be supported by below target inflation and higher employment that would enable consumers to spend more.
Headline inflation eased for the fourth straight month to 1.3 percent in May as utility costs posted slower increases.
Inflation averaged 1.9 percent from January to May, below the government’s two to four percent target range for the year.
Despite a likely transitory surge in crude oil prices in June due to heightened Israel-Iran conflict, UA&P said it expects full-year inflation at 2.2 percent, within the government’s target.
Earlier, economists said that escalating conflict in the Middle East could disrupt global oil supply and drive up prices, and as a result, reverse the country’s gains in price stability through higher prices of goods and services.
In terms of employment, latest data from the Philippine Statistics Authority showed that the number of employed Filipinos rose to 48.67 million in April from 48.02 million in March.
UA&P said infrastructure spending is also expected to support growth in the second quarter.
“We think NG (national government) will ramp up spending once again starting June as the election stoppages would have ended,” UA&P said.
It also said the performance of the external sector is expected to improve mildly and help lift domestic demand growth.
Following the move of the Bangko Sentral ng Pilipinas (BSP) to reduce the key policy rate by 25 basis points to 5.25 percent at its June 19 meeting, UA&P said it expects another rate cut in the third quarter “if crude oil prices prove transitory or moderate.”
In a separate report, GlobalSource Partners country analyst Diwa Guinigundo said that the relatively weak economic growth performance in the first quarter could be supported by dovish or loose monetary policy.
“With its nimble performance in terms of assessment and appropriate action, the BSP is expected to deliver another rate cut in the second half of 2025, actual data permitting,” Guinigundo said.
The Philippine government has set a six to eight percent GDP growth target for the year.
To attain the lower end of the growth target, the economy will need to grow by 6.2 percent in the remaining three quarters.
