The Philippine economy remains stable, but achieving the country’s 2025 growth target of 5.5 percent to 6.5 percent might no longer be possible, according to the Department of Economy, Planning, and Development (DEPDev)
DEPDev Secretary Arsenio Balisacan said in a news briefing Monday the gross domestic product (GDP) would need to expand by at least 7 percent in the fourth quarter to hit even the lower-end of the full-year target, a figure he called “very unlikely.”
“Honestly, that’s very unlikely now. We need to grow roughly 7 percent in the fourth quarter to achieve a 5.5-percent growth for the year. And given the situations and the data that are coming out, that’s quite unlikely,” Balisacan said.
The revision follows a recent downturn in Philippine economic growth, which hit a five-year low of 4.0 percent in the third quarter due to the impact of typhoons and a controversy surrounding a flood control project. As of the third quarter figure, the cumulative gross domestic product growth for the country stands at 5.0 percent.
If the target is missed, it will be the third consecutive year the Philippines has fallen short of its growth goal. The economy grew 5.6 percent in 2024 and 5.5 percent in 2023, both below the target ranges of 6.0 percent to 6.5 percent and 6.0 percent to 7.0 percent respectively.
“At the moment, the first three quarters have delivered 5 percent. And if we can sustain that 5 percent for the year, that’s still, to me, quite respectable. That places us something like in the middle or the back of our neighbors. But hopefully, the intention is to move back to the top tier of these Asian countries next year,” Balisacan said.
Despite the dimmed outlook, DEPDev highlighted the economy’s strong fundamentals.
Balisacan said the economy’s expansion averaged 5.0 percent in the first three quarters of the year, headline inflation averaged 1.7 percent, comfortably within the 2 percent to 4 percent target range, supported by decisive measures to stabilize rice prices and ease commodity pressures.
Labor market conditions remain robust, with unemployment averaging 4.5 percent, while underemployment was at 14.2 percent.
The banking system remains healthy, facilitating continued consumption and investment growth. The fiscal deficit narrowed to 5.0 percent of GDP, consistent with the government’s fiscal consolidation roadmap.
The peso exchange rate stayed broadly stable, backed by strong remittances and prudent monetary policy, he said.
“These solid fundamentals provide critical buffers for policymakers allowing them to respond decisively and flexibly to emerging risks during times of uncertainty,” said Balisacan.
