Philippine Q1 GDP Grows 5.4%, Misses Forecasts

The Philippine economy expanded by 5.4 percent in the first quarter of 2025 from a year earlier, slightly below economists’ expectations, official data showed Thursday.

The growth was in line with the previous quarter’s 5.3 percent expansion but fell short of the 5.7 percent median forecast in a Reuters poll of analysts.

On a seasonally adjusted basis, the economy grew 1.2 percent quarter-on-quarter, also lower than the 1.6 percent forecast in the same poll.

Socioeconomic Planning Secretary Arsenio Balisacan said the government remains confident in achieving its 6 to 7 percent full-year growth target despite global and domestic headwinds.

“We need to sustain and even accelerate our efforts in improving the investment climate, reducing the cost of doing business, and ensuring peace and order,” Balisacan said during a press briefing.

The main drivers of growth in the January to March period were wholesale and retail trade, which grew by 6.4 percent; financial and insurance activities, up 7.2 percent; and manufacturing, which expanded 4.1 percent.

All three major economic sectors—agriculture, industry, and services—posted positive year-on-year growth.

Agriculture, forestry, and fishing rose by 2.2 percent, while industry expanded by 4.5 percent, and services led with a 6.3 percent increase.

On the expenditure side, household final consumption, a key growth engine, grew by 5.3 percent, supported by eased inflation and a relatively stable job market.

Government final consumption expenditure surged by 18.7 percent, reflecting continued public spending on infrastructure and social services.

Gross capital formation, a measure of investment, grew by 4.0 percent, indicating moderate business confidence amid external uncertainties.

Exports and imports also recorded robust growths at 6.2 percent and 9.9 percent respectively, showing resilience in trade activity despite global headwinds.

The country’s Gross National Income, which includes income from abroad, expanded by 7.5 percent year-on-year, boosted by a 24.6 percent rise in Net Primary Income from the Rest of the World.

National Statistician Dennis Mapa noted that while the Q1 figures were below projections, underlying indicators suggest a stable growth trajectory.

“We are seeing consistent performances in key sectors, particularly services and remittances, which remain pillars of domestic demand,” Mapa said.

Despite the lower-than-expected GDP figures, economists said the Philippines’ outlook remains broadly positive given strong household spending and improving fiscal space.

The Bangko Sentral ng Pilipinas is expected to monitor these developments closely, especially ahead of its upcoming policy meeting, where interest rate adjustments remain on the table amid a mixed global outlook.