Philippines Lowers Growth Targets Amid Global Uncertainties

By Mikhail Flores and Karen Lema

MANILA (Reuters) – The Philippines has revised its growth targets for 2025 and 2026-2028 due to global uncertainties, according to Budget Secretary Amenah Pangandaman.

Revised Growth Projections

The government now anticipates growth for 2025 to be 5.5%-6.5%, down from the previous 6%-8% forecast. The targets for 2026 to 2028 have also been narrowed to 6%-7% from 6%-8%.

> “The revisions take into account heightened global uncertainties such as unforeseen escalation of tensions in the Middle East and the imposition of U.S. tariffs,” Pangandaman noted at a press conference.

Inflation Assumptions

The government has adjusted its inflation assumption for 2025 to 2%-3% from 2%-4%, while keeping the outlook for 2026-2028 at 2%-4%.

Fiscal Program Adjustments

The fiscal program has been updated, with the budget deficit as a share of GDP expected to rise to 5.5% this year and 5.2% in 2026, compared to earlier projections of 5.3% and 4.7%.

Economic Growth in 2025

The GDP grew by 5.4% in Q1 2025, consistent with the previous quarter’s growth of 5.3%.

Central Bank Measures

In response to the changing economic landscape, the Bangko Sentral ng Pilipinas lowered interest rates for the second consecutive meeting on June 19, with the possibility of more reductions within the year. Deputy Governor Zeno Abenoja indicated that the updated outlook aligned broadly with the central bank’s expectations for manageable inflation and resilient growth, as inflation averaged 1.9% in the first five months of the year, remaining below the target range of 2%-4%.