Department of Economy, Planning, and Development (DepDev) ARSENIO M. Balisacan said the Philippine economic growth will reach the bottom of the plateau this year, despite the contraction in the third quarter.
“The growth we expect to be 2025 is now 5.5 to 6.5% which is the lower range is still very much happening,” he told reporters on the sidelines of the event on Oct. 16.
Economists will meet next week to assess whether a revision to this year’s growth outlook is necessary, he added.
Budgeted Budget Coordinating Committee Secretary (DBCC) Amenah F. Pangandaman on Wednesday told the profession that the Gross Domestic Product (GDP) target is achievable 2025 “Times available.”
Finance Secretary Ralph G. Recto earlier said a slowdown was flagged for the third quarter and possibly as early as early 2026 as corruption takes a toll on public spending.
Despite the slow spending, Mr. Balisacan said that weather disturbances may have affected economic activity in the July-September period.
“There may be a little bit (in the third quarter) because of this supply launch that we’ve seen. There’s a lot of headwinds that we’ve seen in the quarter, so economic activity is definitely affected,” he said.
Asking whether the growth in the third quarter could fall below the annual growth of 5.5% in the second quarter, Mr. Balisacan said: “I hope not.”
However, he noted growth in the third quarter could be slower than expected at the start of the year.
Mr Balisacan said fourth quarter growth is usually good as consumers spend more during the holidays.
The depDev official said that the investment component of GDP may have been subdued in the third quarter and may continue to be muted in the coming months amid higher rates.
Mr. Balisacan also warned that the recent corruption scandals could affect investor and consumer confidence, but the impact may be short-lived.
Despite these headlines, Mr. Balisacan said he sees signs of relief, with lower inflation and lower interest rates.
“The effects of falling currencies a few months earlier are already starting to be felt now because there are often adverse effects of changes in interest rates and investment and spending decisions,” he said.
The Bangko Sentral Ng Pilipinas cut policy rates by 175 basis points since the start of the August 2024 cycle
In 2026, Mr. Balisacan said the target of 6% to 7% GDP growth remains in place but “things are evolving very quickly.”
“We hope there will be greater clarity and less uncertainty in the coming years,” he said, adding US policy is a major source of uncertainty.
In the same interview, Mr. Balisacan warned lawmakers to reject proposals to get tax holidays and reduce value added tax (VAT), finding that any proposed measures should be ‘avoided.’
“What we have to do is strengthen and improve the strengthening, the implementation of our tax systems to ensure that we will get a central financial framework,” he said.
“Because … not only credit rating agencies but investors, domestic and international, are watching.”
Several bills have been filed in Congress that want to scratch or reduce the VAT rate, and give a tax break of one month, in the middle of the flood control of the flood of the Peso. – Aubrey rose a. with a baby
