Financial service provide Unicapital Group is bullish on the Philippine economy, expecting the gross domestic product (GDP) to expand by 6.3 percent in 2025.
It also sees inflation easing to 3.1 percent, driven by expectations of lower global oil prices. This will provide relief for households and fuel consumer spending, it said.
“We are confident that there are opportunities for the Philippines despite the risks. We have seen similar circumstances in the past but with the government stepping up to ensure measures are in place to boost the equity market, everything will fall into place and yield positive results,” said Unicapital chief executive and president Jaime Martirez.
Martirez said the signing of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating Economy (CREATE MORE) would help boost the domestic economy by providing incentives to investors.
The law’s incentives including tax reductions and increased foreign ownership limits are expected to drive both domestic and foreign capital inflows, particularly into sectors poised for growth.
Under the CREATE MORE law, the corporate income tax (CIT) rate will drop to 20 percent from 25 percent, while export-oriented consumer companies are positioned to gain from VAT zero-rating on local purchases and essential services.
“This reduction in tax burden will create more allowance for companies to open more jobs and fuel economic activities,” Unicapital said.
Unicapital also sees the overall vacancy rate in the office segment rising to 20.5 percent following the ban on Philippine offshore gaming operators by end-2024. This should start to moderate in 2025, with less new supply in the pipeline, it said.
It said that in the residential segment, inventory levels are expected to slightly decline from 12 months to 11 months of sales as demand recovers and supply slows.
It also sees developers taking a more cautious stance and temper new launches for 2025. However, take-up will grow by 9 percent next year on easing mortgage in response to lower policy rates and attractive payment terms which should also drive demand.
