towards Heather Caitlin p. Mañago
The Philippine economy It’s likely to cool off in the third quarter as soft government spending, headwinds and corruption scandals weigh on growth momentum, economists say.
However, official spending supported by central bank rate cuts may have helped the economic activity of the anchor, he added.
The Philippine Gross Domestic Product (GDP) probably grew by 5.3% in the third quarter, based on forecasts from 18 economists and analysts polled by A businessman.
This is slower than the 5.5% expansion in the second quarter, but faster than the 5.2% expansion in the 2024 period.
If realized, this would bring average GDP growth to 5.4%, slowing to 5.5%-6.5% in the full year.
The Philippine Statistics Authority is scheduled to release the third quarter GDP data on November 7.
In a research note, Chinabank research said government spending may have declined due to the one-time reporting period Slow release of some programs.
“Capital formation is likely to be weighed down by cuts in public infrastructure spending due to the ongoing boom in infrastructure projects,” it said.
HSBC Investment Research Economist of the economy of the Southeast of Aris D. Dacanay said that this is the creation of 5-6% of GDP through the use of public infrastructure in July and August.
Public expenditure or final government expenditure accounts for approximately 18% of the country’s GDP.
Angelo B. Taningco, President of Research and Cwation Division Head Security Bank Corp.
“[This is] Disrupted by TEPID Public infrastructure is working fraudulently on flood control projects,” the e-mail said.
Data from the Bureau of the Treasury actually also shows the national government removed P1.46 trillion in the third quarter, P141.73 billion Supy more than its P1.6-Trillion plan for the period. This is due to poor spending by the Department of Public Works and Highways, which is in a state of corruption involving flood control projects.
Sir Percive K. Peña-Reña-Reiyes, Director of the Ateneo Center for Economic Research and Development, said corruption charges involving infrastructure projects were the biggest domestic threat in the third quarter.
“Investor confidence has been shaken. Foreign investors are pulling back…
Mr. Peña-Reña-Reña
Bad weather
It is possible that several cosmetics may attract economic activity in time, said the analyst.
Bank of Philippine Islands head Emilio S. Neri, JR. GDP growth is estimated at 4.9%, mainly due to a series of storms and disasters combined with a major breakdown in infrastructure use.
In the third quarter, a total of 14 tropical storms formed or entered the Philippine zone of responsibility as reported by the Philippine Atmospheric, Geophysical and Astronomical Services Administration.
According to the National Disaster and Management Council, Typhoon Being and the Southwest Monsoon caused P12 million worth of infrastructure damage in July. In August, the combined effects of the monsoon and tropical storms that broke, Dante, and Emonge resulted in the loss of P21 of infrastructure in the loss of infrastructure throughout the country.
“Furthermore, agricultural output has also declined due to hurricanes. This may also have a negative effect on domestic spending due to limited movement,” Reinielle Matt M. Erece, Economist Advisory and Research, Inc., said in an email.
The agricultural sector accounts for about a tenth of the country’s GDP and provides a quarter of all jobs. The third agricultural data will be released on November 6.
Use of the house
Maybank Investment Bank economist Azril Rosli, said private consumption continues to be recognized as economic activity, supported by the Bangko Sentral NG Pipipinas’ (BSP) CUSTS.
“The BSP’s monetary adjustment cycle, which started in mid-2024, is gradually supplying households and businesses, helping to support the momentum in domestic demand,” Mr Rosli said.
He added that private consumption remains fundamentally sound, protected by strong wage growth and strong labor market conditions.
Household final consumption expenditures, which account for 68% of the economy, rose 5.5% in the second quarter, faster than 4.8% in the same period last year.
The BSP has now raised borrowing costs by 175 basis points since the start of its cycle in August 2024. This brought the policy rate to 4.75%, the lowest in three years.
BSP Governor Eli M. Remolona, Jr. and signed another proposed measure that is on the table at the next policy meeting in December.
Meanwhile, Moody’s Analytics analyst Sarah Tan expects the economy to grow by 5.9%, faster than 5.5% in the previous quarter.
“The improvement reflects strong household spending as monetary policy ease feeds into borrowing costs and credit growth,” the email said.
He added that “softer inflation has improved the purchasing power of households and given the middle ground to the bank to maintain housing conditions.”
In September, inflation accelerated to a six-month quarter of 1.7% in September from 1.5% in August. In the nine-month period, inflation reached 1.7%, lower than 3.4% in the same period in 2024.
For Nicholas Antonio T., chief economist at Metropolitan Bank & Trust Co, household consumption can make a significant contribution to growth even though the quarter’s increase may not be the same as the previous quarter.
“Without a slight increase; price levels remain elevated while households rely more on credit,” he said in a Viber message.
Chinabank research noted that household consumption remains a key driver of GDP growth, SUPmarked by low inflation.
“Furthermore, trade tensions eased during the quarter, helped by pre-loading by early US importers and student strength requirements,” it added.
MOORY APAYTICS’ NS Tan also noted that on the foreign side, exports went well in July and August, which should support overall apparel performance in the third quarter.
However, Mr. Erece said that the export growth may slow down as the front loading with the price of 19% US in the Philippine stores to take the result in Aug. 7.
What is to come
Currently, economists expect Philippine GDP growth to accelerate in the remaining months of 2025.
“We expect growth of 5.6% for the full year of 2025, settling within the range of the government’s growth target of 5.5% to 6.5%,” Analytics’ Ms Tan.
He added that the tightening of currency, a strong labor market, and strong output will help boost growth.
“These things will correct consumption, while foreign trade, on average for the whole year, should continue to contribute well despite the soft global backrop,” he said.
Ruben Carlo O. Asuncion, chief economist at Union Bank of The Philippines, said modest growth is expected in the fourth quarter as cash flow is struggling.
For Miguel Chanco, the main ESIA economist at Pantheon Macronomics, “there should be something hitting in the fourth quarter.”
“For the most part, we stick to our lower view—allowing that growth in 2025 will come in at 5.3%, below the government’s ambitions.”
Mr. Erece said that apart from spending money in the community, the sin that has just been committed may have negatively affected foreign currency, given its impact on trust.
Still, he expects holiday spending to drive fourth-quarter GDP growth.
“However, global jitters and public spending could continue to drag down,” he said.
Mr. Maybank’s Rosli said he expects growth to remain strong at 5.5-5.9% in the fourth quarter, driven by year-on-year consumption, driven by annual sectors. The net effect of reducing BSP funding is likely to support consumption and reinvestment.
“Overall, our 3025 GDP forecast of 5.6% represents strong and stable growth, given the initial strength of the economy,” said Mr Rosli.
