StanChart projects 6% GDP growth in Philippines in 2025

The forecast is at the midpoint of the government’s 5.5-6.5-per cent target.

The second-quarter (Q2 2025) GDP growth is seen at 5.9 per cent, faster than Q1’s 5.4 per cent, despite some normalisation in import activity after an election-related surge, StanChart economist and foreign exchange analyst Jonathan Koh told a virtual press briefing recently.

“Growth at 6 per cent is still possible for the year as the base effect is actually low,” he said, noting private consumption will remain steady and could contribute to around four percentage points to GDP.

StanChart projected headline inflation to ease further and average 1.8 per cent for the year, well below the central bank’s 2-4-per cent target band. This benign inflation outlook should give the central bank enough policy space to further unwind its tight monetary stance, according to a domestic media ooutlet.

StanChart foresees a total of 75 basis points in additional rate cuts this year, to be delivered in three 25-basis-point reductions in August, October and December. This would bring the key policy rate down to 4.5 per cent from 5.25 per cent now.

However, Koh said that concerns over imported inflation, especially if the peso weakens against the dollar, could prompt the BSP to be more cautious in its easing cycle.

Upside risks include potential electricity rate adjustments and any legislated minimum wage hike, although the chances for both appear limited for now.

ALCHEMPro News Desk (DS)