GDP growth – Author Carlo Carrasco

Philippines 2025 GDP Growth Lands At 4.4%

January 30, 2026January 29, 2026carlocarrasco

After much anticipation, the full gross domestic product (GDP) growth of the Philippines registered final pace of 4.4% for the whole year of 2025, according to a Manila Standard business news report.

For insight, the 4.4% 2025 GDP growth is even lower than what others anticipated (click here and here). It should be recalled that GDP growth in the 3^rd and 4^th quarters of last year showed clear signs of economic weakness. The said weakness is connected with the flood control corruption scandal that rocked the nation.

To put things in perspective, posted below is an excerpt from the news report of Manila Standard. Some parts in boldface…

The Philippine economy expanded 4.4 percent in 2025 as a sharp slowdown in the final three months of the year dragged down the annual performance, government data showed on Thursday.

The gross domestic product grew 3.0 percent in the fourth quarter, marking the weakest quarterly expansion in five years. The Philippine Statistics Authority (PSA) said the industrial sector contracted by 0.9 percent during the period, while gross capital formation, a measure of investment, tumbled 10.9 percent.

Wholesale and retail trade, financial activities and public administration remained the primary drivers of growth during the October to December period.

Public administration and defense led the gains with a 7.9 percent increase, followed by financial and insurance activities at 5.6 percent and trade at 4.6 percent.

For the full year, the services sector led the economy with a 5.9-percent expansion, while agriculture, forestry and fishing grew 3.1 percent. The industrial sector recorded a modest 1.5 percent increase for all of 2025.

Consumer spending, which traditionally anchors the Philippine economy, rose 3.8 percent in the fourth quarter and 4.6 percent for the full year. Government spending saw a significant annual jump of 9.1 percent despite the year-end cooling.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines will be able to bounce back strongly this year and achieve 5% growth later? Do you think the reforms being implemented by the national government will create positive economic results soon? Are you convinced that the flood control corruption scandal turned off a lot of foreign investors?

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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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

Trump Delivers Largest Tax Refund Season in American History

January 28, 2026January 27, 2026carlocarrasco

While it is true that the economy of the United States is indeed growing, there are still a lot of Americans struggling financially. As such, the promised tax relief by US President Donald J. Trump is crucial for millions as the new tax season has started. The White House officially announced the largest tax refund in the nation’s history and there is professional feedback to support it.

To put things in perspective, posted below is an excerpt from the White House announcement. Some parts in boldface…

As tax season kicks off, millions of Americans are poised to receive significantly larger tax refunds thanks to President Donald J. Trump’s landmark Working Families Tax Cuts Act — which every Democrat in Congress opposed.

The historic legislation is delivering the biggest tax refund season ever, with average refunds projected to rise by $1,000 or more this year due to its transformative policies.

*Reference from the White House announcement.*

Economists and financial experts agree — 2026 will mark an unprecedented year for tax refunds:

USA TODAY: “The average refund in 2025 was $2,939, IRS data showed. This year, refunds could be as much as 30% more due to new provisions from President Donald Trump’s mega tax and spending bill, according to James Knightley, chief international economist at Dutch bank ING.”

CBS News: “Many Americans could see heftier tax refunds next year when they file their 2025 tax returns, largely due to new provisions enacted through the Republicans’ ‘one big, beautiful bill’ act that are retroactive to the start of the current year, according to an analysis from Oxford Economics. Total taxpayer savings could amount to an additional $50 billion through bigger tax refunds or a cut in their 2026 taxes…A $50 billion boost in tax refunds would represent an 18% increase from the $275 billion in refunds the IRS sent this year to nearly 94 million taxpayers who overpaid on their 2024 federal tax returns.”

The Wall Street Journal: “Refunds on average are expected to come in $1,000 higher than usual this year, according to a study by investment firm Piper Sandler.”

Business Insider: “The Tax Foundation estimates that the average tax refund will grow from $3,052 in 2024 to $3,800 for tax year 2025. Depending on your income and circumstances, you might get even more back.”

CNBC: “Tax experts and analysts have agreed that many filers will see bigger refunds… ‘Overall, we’re expecting these changes to increase refunds by 15% to 20% on average,’ Heather Berger, a U.S. economist with Morgan Stanley said…”

President Trump’s Working Families Tax Cuts Act provides broad-based tax relief for hardworking Americans, with the average taxpayer expected to see nearly $4,000 in total tax savings in 2026. Key provisions of the bill include No Tax on Tips, No Tax on Overtime, No Tax on Social Security, a deduction for auto loan interest on Made-in-America vehicles, and much more — putting more money back in the pockets of families, workers, and seniors.

For details about the One Big Beautiful Bill (OBBB) and the Working Families Tax Cuts, click here and here.

Let me end this piece by asking you readers: What is your reaction to this development? Do you think this new tax refund season will be very helpful to Americans who are struggling with making ends meet? Have you paid close attention to the details within the Working Families Tax Cuts and the One Big Beautiful Bill already? How many families in your local community have been anticipating the new tax refunds from the Trump administration? Do you think the new tax refunds will be able to boost gross domestic product (GDP) growth to 5% this year?

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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World Bank Sees Philippine Economy Gradually Recovering In 2026 And 2027

December 11, 2025December 10, 2025carlocarrasco

The World Bank (WB) sees the economy of the Philippines making a gradual recovery in 2026 and 2027 fueled by strong domestic demand, according to a news report by BusinessWorld. The WB also stressed that corruption is unacceptable.

To put things in perspective, posted below is an excerpt from the report of BusinessWorld. Some parts in boldface…

THE WORLD BANK (WB) sees a gradual recovery for the Philippines in 2026 and 2027, after growth slowed this year due to weaker investment and sluggish consumption, compounded by a corruption scandal and a string of natural disasters.

In its latest Philippines Economic Update released on Tuesday, the multilateral lender trimmed its Philippine gross domestic product (GDP) growth forecast to 5.1% for this year from 5.3% in its June report. For 2026, it lowered its Philippine GDP growth forecast to 5.3% from 5.4% previously.

The World Bank also cut its Philippine GDP growth projection for 2027 to 5.4% from 5.5% previously.

These latest projections are below the government’s 5.5-6.5% growth goal for this year and the 6-7% target for 2026 to 2028.

“To borrow from Torsten Slok, chief economist at Apollo (Management), it’s a Nike swoosh pattern. He describes the US economy, and I’m describing our forecast for the Philippines as a kind of Nike swoosh. We have a dip in 2025, and then we have a gradual recovery in 2026 to 2027,” World Bank Senior Economist Jaffar Al-Rikabi said during a briefing.

He noted the average growth of the Philippines over 2025 to 2027 will be lower than 2024 when GDP expanded by 5.7%.

“For 2025… the growth is largely weighed down by domestic factors. In particular, lower construction activity and weaker consumption growth,” he said.

The Philippine economy expanded by a weaker-than-expected 4% in the third quarter, bringing nine-month growth to 5%, as the pace of household final consumption expenditure and government spending slowed amid a corruption scandal.

Mr. Al-Rikabi also noted the deceleration in fixed investment and private consumption due to higher-than-expected number of natural disasters that hit the Philippines this year.

“But for 2026 to 2027, we think that it’s likely that external factors will weigh more heavily on growth, largely slower export demand,” Mr. Al-Rikabi said.

The US imposed a 19% tariff on most goods from the Philippines starting August, dampening export demand.

The World Bank said the Philippine economy’s growth will pick up in 2026 and 2027, fueled by strong domestic demand.

“Private consumption is projected to strengthen as inflation stays low, employment remains robust, and monetary easing lowers interest rates, making it easier for businesses and households to borrow,” it said in the report.

According to the World Bank, private consumption, which accounts for more than 70% of the economy, is projected to expand by 4.8% this year, slowing from 4.9% in 2024. This is expected to pick up to 5.3% in 2026 and 5.4% in 2027.

The World Bank said investment is likely to recover as public infrastructure projects regain momentum, while recent liberalization reforms in telecommunications, transport, logistics and renewable energy improve the business climate.

The multilateral lender also expects headline inflation to average 1.8% this year, describing the pace as “very moderate” and a key source of resilience. This forecast is slightly above the Bangko Sentral ng Pilipinas’ (BSP) 1.7% projection for 2025 and the 1.6% average recorded in the first 11 months.

‘CORRUPTION IS UNACCEPTABLE’ – Even as the Philippine economy will see a gradual recovery in the next two years, Mr. Al-Rikabi noted risks are tilted to the downside, with “more prominent” domestic drivers.

“There is a continued challenge of heightened perceptions around governance risks. This could, if it continues, erode investor confidence. It could delay public investment execution, and it could weaken growth,” he said.

The World Bank economist also noted there may be delays in fiscal and structural reforms amid the current domestic environment, “which could slow consolidation and weigh on growth over the medium term.”

A corruption scandal involving anomalous flood control projects has already triggered protests, slowed economic activity, and shaken investor confidence in the country.

“From the World Bank perspective, corruption is unacceptable,” World Bank Country Director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu said during the same briefing.

“The World Bank considers it detrimental to any country and has been fighting against corruption in all the member countries that we operate in,” he added.

Mr. Mustafaoğlu said the Philippine government could take this opportunity to increase transparency and modernize its budget execution system “that could actually support longer-term growth and can increase investment confidence (and) can increase long-term potential growth,” he said.

Let me end this post by asking you readers: What is your reaction to this recent development? Did you think the national economy will recover gradually in 2026 and 2027 as the World Bank predicted? With inflation being low, do you feel confident about spending for your needs and wants in the short term?

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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Philippines At Risk Of Falling Behind Southeast Asian Neighbors Economically

November 26, 2025November 19, 2025carlocarrasco

The 3^rd quarter growth of only 4% the Philippines achieved has been on people’s minds a lot lately. As such, the country is at risk of falling behind its neighbors in Southeast Asia in terms of economic growth and gross domestic product (GDP) per capita, according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the news report of BusinessWorld. Some parts in boldface…

The Philippine economy is at risk of further falling behind its Southeast Asian neighbors, an economist said, noting it may take two years to catch up with Vietnam and up to 70 years to catch up with Singapore.

“(T)he Philippines could find itself lagging behind if alleged public spending issues continue to divert attention and resources away from the structural reforms needed to accelerate economic development,” Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said in a commentary on Wednesday.

In the third quarter, Philippine gross domestic product (GDP) grew by 4%, its slowest pace in over four years amid slower household and public infrastructure spending as the flood control scandal dampened investor and con-sumer sentiment.

In the nine months to September, GDP growth averaged 5%, putting the government’s 5.5%-6.5% full-year growth target further out of reach.

“The Philippine economy is growing, but not enough to close the economic gap with other countries,” Mr. Neri said.

He noted the Philippine GDP per capita is lower compared with other economies in the region. Citing International Monetary Fund (IMF) data, he said the Philippines’ GDP per capita stood at $4,078 in 2024.

“At the current growth rate, it would take the Philippines two years to catch up with the GDP per capita of Vietnam, 4 years with Indonesia, 14 years with Thailand, 26 years with Malaysia, and 70 years with Singapore, assuming their incomes remain stagnant. In reality, their GDP per capita continues to grow, which means the gap could persist or even widen,” Mr. Neri said.

The Philippines lagged behind Singapore which had a GDP per capita of $90,674 in 2024, followed by South Korea ($36,128), Japan ($32,498), China ($13,312), Malaysia ($12,540), Thailand ($7,491), Indonesia ($4,958) and Vietnam ($4,535).

“Before the pandemic, the Philippines had a higher GDP per capita than Vietnam, but has since been overtaken. At current trends, it would take the Philippines two years to catch up with Vietnam, but that gap could increase to 13 years by 2044,” Mr. Neri said.

The BPI economist said the Philippines needs structural reforms to accelerate growth in order to close the widening gap with its neighbors.

“The current economic model of the country is not enough, as shown by the country’s inability to grow faster than 6% in recent years,” he said.

Mr. Neri said the economy has been “too reliant” on consumer spending, driven by overseas Filipino worker (OFW) remittances and the business process outsourcing industry.

“There is a need to diversify its sources of growth. The economy must improve in terms of production, especially in agriculture and manufacturing, as they will allow the economy to be more self-sufficient and to reach foreign markets. These industries have been critical to Vietnam’s success and could play a similar role for the Philippines,” he said.

However, Mr. Neri said implementing these reforms will be hard if the government lacks focus.

“Public spending issues divert fiscal resources and policymaking focus away from long-term development priorities. Efforts to strengthen safeguards against potential issues in government spending are essential, enabling the country to work on structural reforms that could improve the economy,” he said.

Let me end this post by asking you readers: What is your reaction to this recent development? What do you think should the government do to accelerate 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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Approved Foreign Investment Pledges Fall Down 48.7% In 3rd Quarter

November 21, 2025November 14, 2025carlocarrasco

The flood control corruption scandals connected with the weaker investor sentiment resulted in a 48.7% fall in foreign investment pledges during the 3^rd quarter this year, according a news report by BusinessWorld. It should be noted that Philippines GDP growth for the same quarter slowed down a lot.

To put things in perspective, posted below is an excerpt from the news report of BusinessWorld. Some parts in boldface…

APPROVED foreign investment pledges plunged nearly 50% in the third quarter as investor sentiment soured due to the corruption scandal involving government infrastructure projects, the local statistics agency said.

Preliminary data from the Philippine Statistics Authority (PSA) showed the value of foreign commitments approved by investment promotion agencies (IPAs) fell by 48.7% to P73.68 billion in the July-to-September period from P143.74 billion in same period last year.

However, this was the highest amount of investment pledges since the third quarter of 2024.

Ser Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said the decline in approved investments can be attributed to the weaker investor sentiment.

“Tingin ko. Wala pang nakukulong eh (I think so. No one has been imprisoned yet),” he said in a Viber message, when asked if this sharp slump in approved investments will likely persist in the fourth quarter until 2026.

Quarter on quarter, the approved pledges rose by 9.34% from P67.38 billion in the second quarter.

Singapore was the top source of foreign investment pledges in the third quarter with P20.26 billion (27.5%), followed by Japan with P13.59 billion (18.4%) and Cayman Islands with P13.14 billion (17.8%).

Investment commitments from South Korea stood at P5.57 billion (7.6%), while those from China stood at P4.51 billion (6.1%)

PSA data showed the investment pledges were approved by seven IPAs — the Authority of the Freeport Area of Bataan, Bases Conversion and Development Authority (BCDA), Board of Investments (BoI), Clark Development Corp., Clark International Airport Corp., Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority.

Let me end this post by asking you readers: What is your reaction to this recent development? What do you think the government must do to convince foreign investors to become more confident about investing in the Philippines? Do you think the investigation and pace of justice related to the flood control corruption scandal is moving too slowly?

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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Meralco Preparing Bid For Nuclear Power License

November 18, 2025November 10, 2025carlocarrasco

The Manila Electric Company (Meralco) announced recently that it is getting ready with its bid for a nuclear power license which is needed I order to operate power facilities with nuclear energy, according to a BusinessWorld news report. This development is a part of the collective effort to make nuclear Philippines a reality.

To put things in perspective, posted below is an excerpt from the news report of BusinessWorld. Some parts in boldface…

MANILA ELECTRIC CO. (Meralco) said it is preparing to apply for a license to operate nuclear power facilities in time for the opening up of the application process next year.

“We’ve been very aggressive on this, (but) we have to comply with the timeline set by the Department of Energy,” Meralco Executive Vice-President and Chief Operating Officer Ronnie L. Aperocho told reporters late last month.

Energy Secretary Sharon S. Garin has said that applications will be opened up for nuclear energy projects by 2026, overseen by the Philippine Atomic Energy Regulatory Authority (PhilATOM).

Under Republic Act No. 12305, or the Philippine National Nuclear Energy Safety Act, PhilATOM will have sole jurisdiction over the regulation of nuclear energy and radiation sources.

The Philippines is hoping to integrate nuclear energy into the power mix with at least 1,200 megawatts (MW) of capacity by 2032, increasing to 2,400 MW by 2045 and 4,800 MW by 2050.

Ms. Garin has said that several companies have expressed interest in submitting nuclear energy project proposals.

Meralco is looking at small modular reactors (SMRs) when it enters the market. SMRs, each capable of generating up to 300 MW, can be constructed more quickly than traditional nuclear power plants.

Mr. Aperocho said that Meralco is awaiting details of the incentives and the liability profile for proponents, which will influence funding available for nuclear.

The company is expecting a $2.7-million grant from the US Trade and Development Agency to fund a feasibility study on SMRs.

“Both sides have fulfilled the required conditions. It’s just a matter of formality now…we’re hoping it gets sorted out soon so the grant can start running,” Mr. Aperocho said.

Let me end this post by asking you readers: What is your reaction to this recent development? Are you aware that nuclear power plants can create abundant energy that solar and wind power cannot achieve?

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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Philippines 3rd Quarter GDP Growth Lands At 4%

November 8, 2025November 8, 2025carlocarrasco

The official economic numbers have been unveiled at last by the Philippine Statistics Authority (PSA) and the results are disappointing as the gross domestic product (GDP) growth of the Philippines for the 3^rd quarter of 2025 landed at a disappointing 4%, according to a Malaya Business Insight new report. The results could mean that the Philippine economy could fall short of the 5.5% to 6.5% GDP growth range by the end of this year.

To put things in perspective, posted below is an excerpt from the news report of Malaya Business Insight. Some parts in boldface…

The Philippine economy expanded by 4 percent in the third quarter of 2025, a sharp slowdown from the second quarter and the year earlier as public construction spending eased amid stricter validation measures for government projects.

The third-quarter growth rate in gross domestic product (GDP) marks a deceleration from a 5.49 percent rise in the second quarter.

Data released on Friday by the Philippine Statistics Authority (PSA) also showed growth in the third quarter this year lost some momentum from 5.2 percent in the third quarter of 2024.

For the first nine months to September 2025, GDP grew by an average of 5 percent, easing from a rise of 5.8 percent in the year-earlier period.

Department of Economic Planning and Development (DEPDev) Secretary Arsenio Balisacan said services and industry, on the supply side, posted weaker growth. He pointed out that Department of Public Works and Highways (DPWH) civil works went through stricter validation measures.

Q3 growth drivers – National Statistician and PSA Undersecretary Claire Dennis Mapa said the main contributors to growth during the July-to-September period were wholesale and retail trade, including the repair of motor vehicles and motorcycles (up 5.0 percent); financial and insurance activities (5.5 percent); and professional and business services (6.2 percent).

“All major economic sectors — agriculture, forestry, and fishing; industry; and services — posted year-on-year growths in the third quarter,” Mapa said, citing respective increases of 2.8 percent, 0.7 percent, and 5.5 percent.

On the demand side, household final consumption expenditure grew by 4.1 percent year-on-year, while government spending rose 5.8 percent. Exports of goods and services climbed 7.0 percent, and imports expanded 2.6 percent. In contrast, gross capital formation — the measure of investment in fixed assets — fell 2.8 percent, reflecting caution among businesses and slower project rollouts.

Weaker services and industry – In a separate statement, DEPDev Secretary Balisacan, referring to the easing of the supply side, particularly in the services and industry performance in the nine-month period, cited “a sharp contraction in public construction due to stricter validation measures for DPWH civil works, as well as the implementation of new requirements that delayed billings and disbursements for government projects.”

Despite the slowdown, Balisacan pointed out that private construction “remained respectable,” though investment in durable equipment “was subdued.”

Indeed, the latest GDP growth statistics are disappointing. The national government plans to spend more than P1.3 trillion to boost the economy in the 4^th quarter and we will only find out the results of that in early January 2026.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines does not have enough momentum to achieve the national government’s GDP growth range for 2025? Do you think the ongoing flood control corruption scandal developments have turned away lots of foreign investors?

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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BMI Sees Philippines GDP Growth Slowing Down To 5.2% In 2026

November 3, 2025October 25, 2025carlocarrasco

BMI, a unit of Fitch Solutions, officially lowered its 2026 gross domestic product (GDP) for the Philippines at 5.2% pointing a series of factors such as remittances slowdown, weaker investor sentiment, US tariffs on Philippine goods and the effects of the flood control corruption scandals, according to a Manila Bulletin news report.

To put things in perspective, posted below is an excerpt from the news report of the Manila Bulletin. Some parts in boldface…

Fitch Solutions’ unit BMI has sharply lowered its 2026 Philippine growth forecast to well below the government’s six- to seven-percent target, citing an expected slowdown in remittances, a weaker trade balance, muted investment sentiment, and downside risks to government spending stemming from the flood control fiasco.

“We expect remittance growth to slow due to tighter US [United States] immigration policy and a one-percent remittance tax on transfers from the US starting in 2026,” BMI said in a commentary published on Thursday, Oct. 23.

“A slowdown in remittances will weigh on domestic consumption, which will have an outsized impact on growth given the domestically driven economy,” BMI explained.

Against this backdrop, BMI has slashed its 2026 gross domestic product (GDP) growth forecast for the Philippines to 5.2 percent, one-percentage-point (ppt) lower than the 6.2 percent it projected previously.

If realized, this would also fall below this year’s growth goal of 5.5 to 6.5 percent, and 2024’s actual pace of 5.7 percent.

Another policy by US President Donald Trump that could drag down the local economy is the 19-percent tariff on Philippine exports, but zero tariffs imposed on select American imports.

This US-Philippines trade setup, according to BMI, “will weigh on the trade balance in 2026.”

Goods exports growth in August was the slowest in 2025 as US tariffs took effect and exporters’ front-loading of outbound shipments ended.

The latest Philippine Statistics Authority (PSA) data showed that goods exports grew by 4.6 percent year-on-year in August, marking the slowest increase since the 1.9-percent decline in December 2024

BMI also believes investor sentiment will “likely” remain muted next year as “erratic US trade policies will weigh on global investor sentiment and limit foreign direct investment inflows [FDIs].”

Domestically, government spending could bear the impact of a scenario where the ongoing flood control probe leads to the unearthing of more corruption cases tied to infrastructure projects beyond flood control.

“It could lead to even tighter scrutiny on government spending and reduce spending substantially below fiscally programmed levels,” BMI said. Capital outlays had dropped by 10 percent to ₱112.9 billion as of August, according to the Department of Budget and Management (DBM).

Infrastructure spending is expected to hit ₱1.51 trillion in 2025, ₱1.56 trillion in 2026, ₱1.69 trillion in 2027, ₱1.9 trillion in 2028, ₱2.03 trillion in 2029, and ₱2.2 trillion in 2030.

Meanwhile, BMI retained its 5.4-percent Philippine growth forecast for this year, still below the lowered full-year target.

Let me end this post by asking you readers: What is your reaction to this development? Are you convinced that due to several internal and external factors, economic growth of the Philippines will be slower this year and next year? Do you agree with BMI’s findings about the Philippine economy?

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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Moody’s Predicts 5.7% Growth for Philippine Economy in 2025

September 7, 2025September 1, 2025carlocarrasco

Based on its latest economy research, Moody’s Ratings announced that the economy of the Philippines will achieve 5.7% growth for the year 2025, according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the news report of the BusinessWorld. Some parts in boldface…

THE PHILIPPINE ECONOMY is on track to grow by 5.7% this year on the back of strong household spending, steady remittances and sustained public investments, Moody’s Ratings said.

“We expect the Philippines to maintain strong economic growth relative to regional and rating peers,” Moody’s said after the completion of a periodic review of Philippines’ credit rating.

“Growth will be supported by resilient household consumption, stable remittance inflows from overseas workers, and public investment spending, and ongoing structural reforms,” it said in a report.

Moody’s forecast is within the government’s revised 5.5-6.5% gross domestic product (GDP) growth target for this year.

In the second quarter, GDP expanded by an annual 5.5%, up from 5.4% in the first quarter but slower than the 6.5% in the same period last year. For the first half, GDP growth averaged 5.4%, slower than the 6.2% a year ago.

Moody’s flagged downside risks to the outlook arising from the US tariff policies.

“Although the Philippines’ exposure to trade and global value chains is relatively low, uncertainty around US trade policy and tariffs presents some downside risks to domestic consumption and investment,” it said.

Since Aug. 7, the United States has been imposing a 19% tariff on Philippine goods entering the US. The US is one of the top destinations for Philippine-made goods.

Growth will also be supported by its fiscal consolidation efforts, but Moody’s flagged the government’s high debt stock and interest burden.

“Fiscal consolidation efforts are on track to meet the government’s revised Medium-Term Fiscal Framework of reducing the deficit to 4.3% of GDP by 2028, supported by the implementation of reform measures at enhancing revenue collection and spending efficiency,” Moody’s said.

While this will help temper Philippines’ debt burden, Moody’s said debt will remain “above pre-pandemic levels.”

As of June, the Philippines’ sovereign debt hit a fresh high of P17.27 trillion, up 11.5% from P15.48 trillion in the same month in 2024.

This brought the debt-to-GDP ratio to 63.1% at the end of June, the highest ratio since 2005. This is above the 60% debt-to-GDP threshold considered by multilateral lenders to be manageable for developing economies.

“Debt affordability, measured by the ratio of interest payments to revenue, is expected to weaken over the next two years, before gradually normalizing as global refinancing rates decline and economic growth returns to its long-term trend,” the debt watcher said.

“Despite rate cuts by the central bank since the second half of 2024, elevated government funding costs and a lag in the monetary policy transmission will keep interest burden higher,” it added.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think Moody’s Ratings of a 5.7% economic growth for 2025 will turn out true? What do you think it will take for the Philippine economy to reach 6% growth this year?

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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UA&P Sees Stronger Q3 Economic Growth for the Philippines Despite Trump Tariffs

September 1, 2025August 25, 2025carlocarrasco

As far as the University of Asia and the Pacific (UA&P) is concerned, the economy of the Philippines will still grow stronger in the 3^rd quarter by 5.8% despite the 19% Trump tariffs, according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the news report of BusinessWorld. Some parts in boldface…

PHILIPPINE economic growth may pick up in the third quarter despite higher US tariffs and “milder” typhoons, the University of Asia and the Pacific (UA&P) said.

“Despite the Trump tariffs, milder typhoon season will help accelerate GDP expansion in Q3 to 5.8%, given a low base in 2024,” it said in its latest The Market Call released on Friday.

If realized, this would be faster than 5.2% in the third quarter of 2024 and 5.5% print in the second quarter. This forecast is also within the government’s revised 5.5% to 6.5% target this year.

“Consumer spending remains strong, aided by low inflation but limited by new US taxes on OFW (overseas Filipino Worker) remittances,” UA&P said.

Inflation cooled to a near six-year low of 0.9% in July as utilities and food costs continued to ease. This brought the seven-month average to 1.7%, slightly below the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target band.

UA&P said government infrastructure spending may also regain momentum in the third quarter. This was after state spending slumped due to the 45-day election ban on public works spending from March 28 to May 12.

UA&P said residential construction will remain subdued due to elevated policy and interest rates.

The Bangko Sentral ng Pilipinas (BSP) has so far lowered borrowing costs by a total of 125 basis points (bps) since it began its easing cycle in August last year. The policy rate now stands at 5.25%.

UA&P said the US dollar rate will “move either way” depending on rate cuts by the BSP and the US Federal Reserve.

“The peso-dollar rate has a fundamental depreciation bias although it will depend much on extent and timing of policy rate cuts by BSP and the Fed,” it said.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines will be able to grow stronger in the 3^rd quarter even though the 19% Trump tariffs are already in effect? Do you see any signs of Philippine exports to America slowing down already?

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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