The Philippine economy is expected to maintain its growth momentum this year despite political uncertainties, geopolitical tensions, and trade disputes, according to an economist.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), said that former President Rodrigo Duterte’s recent arrest has had minimal impact on the country’s economic landscape.
“So far, the political developments remain manageable. On March 11, 2025, the orderly process sends positive signals regarding the country’s adherence to the rule of law and institutional stability, locally and internationally,” Ricafort stated.
He emphasized that economic fundamentals remain strong, as reflected in the country’s stable credit ratings, which remain 1-3 notches above the minimum investment grade despite ongoing political issues and geopolitical tensions, particularly between the Philippines and China.
Strong economic fundamentals
Ricafort pointed out that the Philippine economy continues to be one of the fastest-growing in the region, supported by favorable demographics and robust business fundamentals.
“As long as economic conditions remain stable and foreign investors find the market profitable, the government’s efforts to attract investments are unlikely to be significantly affected,” he added.
However, he warned that U.S. President Donald Trump’s protectionist policies are a bigger threat to economic growth. Stricter immigration regulations could impact remittances from overseas Filipino workers (OFWs), potentially slowing down global trade, investments, and employment.
Growth outlook is still positive
Despite these risks, Ricafort remains optimistic that the government’s lower-end economic growth target of 6 percent for 2025 is achievable.
“Given the country’s favorable demographics and the continued recovery of various business sectors, sustaining GDP growth near 6 percent in the coming quarters is possible,” he noted.
He also highlighted that increased government spending ahead of the May 2025 elections, along with ramped-up infrastructure projects, will further support economic expansion.
While challenges persist, the Philippine economy remains resilient, driven by strong fundamentals and ongoing investment activities. The country is well-positioned to sustain its growth trajectory as long as the government maintains its economic policies and investor confidence stays intact.