2025 continues to look rough for the Philippines. A lot of people are angry over government corruption and the flood control projects scandal investigation is only adding fuel to the fire. When it comes to economic growth, S&P Global Ratings says the economy of the Philippines will grow by only 5.6% this year, according to a Philippine Star news report.
To put things in perspective, posted below is an excerpt from the Philippine Star news report. Some parts in boldface…
S&P Global Ratings has trimmed its growth forecast for the Philippines to 5.6 percent this year from its earlier 5.9 percent estimate, citing subdued private consumption and investment alongside persistent global uncertainties.
The downgrade reflects weaker-than-expected momentum in the first half, when Philippine gross domestic product (GDP) grew by 5.4 percent. This was faster than many economies in Asia, but still below trend and short of expectations.
“Private consumption growth, investment and household confidence are still relatively subdued,” S&P economist Vince Conti told The STAR.
“We expect that both global and domestic uncertainty would continue to weigh on investment growth in the near term,” Conti said.
S&P’s latest projections show the country’s GDP growth will hit the government’s 5.5 to 6.5 percent target for 2025.
The credit watcher also sees growth picking up to 5.8 percent in 2026, though this remains below the government’s more ambitious six to seven percent goal for next year.
Conti noted, however, that the country’s reliance on external demand comes more from services rather than goods trade, which provides a degree of resilience against heightened global trade frictions.
“This will partially mitigate the impact of the elevated trade tensions,” he said. “On the positive side, with inflation low and likely to remain under control in the next few years, the Bangko Sentral ng Pilipinas (BSP) has room to continue its easing path to support growth.”
S&P expects Philippine inflation to average 1.8 percent in 2025, sharply down from 3.2 percent last year, before rising moderately to three percent in 2026 and 3.3 percent in 2027.
The credit watcher is penciling in around 100 basis points of further policy rate cuts by the BSP between now and end-2026, which could help shore up domestic activity.
Let me end this post by asking you readers: What is your reaction to this development? Do you think the economy of the Philippines does not have enough momentum to achieve 6% growth this year? Do you think that any rise of inflation will hamper economic growth?
You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.
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