Economists at the University of Asia and the Pacific (UA&P) see the Philippine economy’s growth to slow in the third quarter of 2025 following the recent typhoons and negative public sentiment stemming from a flood control corruption controversy.
The UA&P, in its October Market Call report, said the country’s gross domestic product (GDP) growth would likely to moderate to 5.2 percent year-on-year in the third quarter from 5.5 percent in the second quarter, before picking up to 5.7 percent in the fourth quarter.
“We project a GDP slowdown to a 5.2 percent [year-on-year] pace in Q3 due to more weather disturbances and the popular uproar over the flood control corruption controversy. However, we expect faster Q4 growth at 5.7 percent [year-on-year] given positive signs of recovery,” the report said.
The UA&P expects full-year GDP growth to average 5.5 percent, which is the lower end of the government’s projections. The Philippine Statistics Authority is scheduled to release the third-quarter economic performance data on Nov. 7, 2025.
Constructive factors cited for the rebound outlook include an improvement in employment figures in August, with the economy generating 4.1 million new jobs month-on-month.
This brought the unemployment rate down to 3.9 percent in August, lower than the 5.3 percent in the previous month and the 4.0 percent figure a year earlier.
The services sector added 1.9 million employees, followed by the agriculture sector with 1.7 million and the industry sector with 477,000 new hires.
Other positive signs include solid growth in personal remittances from overseas Filipino workers, which rose 3.2 percent to $3.3 billion in August. Export growth was also positive, albeit slower, at 4.6 percent amid higher US tariffs.
The economists also noted a slight uptick in headline inflation, which edged up from 1.5 percent to 1.7 percent in September.
This figure, attributed to higher costs in transport and food and non-alcoholic beverages, remained below the Bangko Sentral ng Pilipinas’ 2 percent to 4 percent target.
The economists project average inflation to settle at 1.6 percent in the fourth quarter of 2025.
