‘GDP growth slows, misses 2025 target’

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January 6, 2026 | 12:00am

‘But Philippines still one of fastest growing Asian economies’

MANILA, Philippines — The Philippine economy likely grew by 4.8 to five percent last year, below the government’s 5.5 to 6.5 percent growth target for 2025, Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan said yesterday.

For this year and the next, the government also lowered its growth targets amid global and domestic uncertainties and a slower economic performance last year.

While the country is likely to miss its 5.5 to 6.5 percent growth target for 2025, the Philippines remains one of the fastest growing economies in Asia, Balisacan said.

“If you achieve five percent for the entire (year), because the first three quarters’ average is already five, that still puts us, puts the economy (as) one of the fastest growing economies in Asia. In ASEAN, that will put us next to Vietnam with Indonesia close by,” Balisacan said at a Palace briefing.

If realized, a 4.8 to five percent growth for 2025 would also be lower than the 5.7 percent full-year growth posted in 2024.

Balisacan said the interagency Development Budget Coordination Committee (DBCC) met last month and revised this year’s gross domestic product (GDP) growth target to five to six percent, down from six to seven percent previously.

For 2027, he said the new growth target is from 5.5 to 6.5 percent, also lower than the previous six to seven percent growth goal.

As for 2028, he said the government is aiming for six to seven percent growth. This is unchanged from the target the DBCC announced in June last year.

In December last year, Balisacan said it was very unlikely for the government to achieve its 5.5 to 6.5 percent growth goal for 2025 amid challenges, including governance issues that have affected economic activity.

After posting 5.4 percent growth in the first quarter last year and expanding by 5.5 percent in the second quarter, economic growth slowed to a four-year low of four percent in the third quarter amid a flood control controversy that led to a contraction in public construction and dampened consumer and investor sentiment.

From January to September last year, the economy grew by an average of five percent.

Balisacan said the government revised the growth targets amid global and domestic uncertainties.

“While the global economic climate has improved a bit in the second half of the year (2025), we haven’t really gone back to the kind of growth expected before April of last year,” he said.

It was in April last year when the US announced the imposition of tariffs on trade partners including the Philippines, triggering global uncertainty.

“There is still that uncertainty faced globally and that is impacting a lot and impacting on us as well,” Balisacan said.

He said other developments last year, including governance issues, are still expected to impact economic growth until the first half of this year, albeit with a diminishing effect.

“With the governance, improvements in systems we are putting in place as reflected in the budget and various offices, we expect to see faster growth toward the second half and the succeeding years,” he said.

He said consumption, a key driver of economic growth, is expected to rebound this year supported by employment growth, remittances, low inflation and interest rates.

Average inflation from January to November last year stood at 1.6 percent, below the government’s two to four percent target.

At its policy meeting last month, the Monetary Board lowered the benchmark interest rate by 25 basis points to 4.50 percent.

“There are favorable forces that we are seeing moving forward. And so we do expect that the broad economy will grow sufficiently strong especially toward the second half of the year,” Balisacan said.

He also said the US strikes on Venezuela would hardly affect the economy.

“I don’t think there’s going to be perceptible effects on us unless that will have some duplication elsewhere,” he said. — Helen Flores