The skyline and business district of Bonifacio Global City in Taguig City on Oct. 4, 2024. The Philippines’ economic growth is expected to grow by more than 6 percent in 2025, Sun Life Investment Management and Trust Corporation and Standard Chartered said. (PNA photo by Joan Bondoc)
The Philippine economy is on track to expand by more than 6 percent this year, with inflation expected to remain within the government’s target range, according to projections from an investment management firm and a UK-based bank.
During a briefing in Makati City on Friday, Ritchie Teo, Chief Investment Officer of Sun Life Investment Management and Trust Corp., forecasted a 6.2% economic growth for the Philippines in 2025, up from 5.6% in 2024.
Teo attributed this positive outlook to a recovery in consumer spending, driven by moderating inflation.
“The Philippines remains a consumption-driven economy. With inflation slowing down, we anticipate a rebound in consumer spending, which will continue to be the primary growth driver,” he said.
Meanwhile, Standard Chartered economist and foreign exchange analyst for Asia, Jonathan Koh, projected Philippine economic growth to hit 6%, at the lower end of the government’s target range of 6 to 8%.
“While this is slightly below the country’s potential, the Philippines is still among the fastest-growing economies in the region,” Koh noted in a separate briefing in Makati City.
Koh echoed Teo’s sentiment, stating that easing inflation would support household consumption, along with steady remittance inflows.
“Remittances remain stable and are expected to continue bolstering household spending,” he added.
Inflation outlook
Both Teo and Koh forecasted inflation to average 3.1% in 2025, well within the Bangko Sentral ng Pilipinas’ (BSP) target range of 2 to 4%.
Headline inflation stood at 2.9% in January, while the BSP expects February inflation to range between 2.2 and 3%. The official data for February will be released on March 5.
With inflation cooling, Teo and Koh believe the BSP has room to implement monetary policy easing this year.
“Given the low inflation environment, we anticipate the BSP to cut rates two to three times this year,” Teo stated, adding that the first rate cut could happen as early as April.
Koh projected a more gradual approach, estimating a total reduction of 75 basis points throughout the year.
“If economic growth remains stable and inflation stays benign, there is room for further easing. Our base case scenario suggests the first rate cut in June, followed by additional cuts in August and the fourth quarter,” he explained.
With both consumption and monetary policy set to provide a favorable backdrop, the Philippine economy appears well-positioned to sustain its robust growth trajectory in 2025.