While the Marcos administration’s economic team has widened its full-year growth target for 2025, it stated that the worst-case scenario for the Philippine economy next year is a slowdown to six percent.
The Development Budget Coordination Committee (DBCC) revised its macroeconomic assumptions for this year to a range of 6.0 percent to 6.5 percent, following a 5.2 percent economic expansion in the third quarter, the slowest growth since the second quarter of 2023.
Although the first three quarters of 2024 averaged a growth rate of 5.8 percent, the Department of Finance (DOF) reported that the country remains among the “fastest-growing economies in Asia.”
This year’s target assumption was revised down from 6.0 to 6.7 percent. DOF Secretary Ralph G. Recto stated at a press briefing that six percent is the most realistic target, given that the country is unlikely to reach seven percent this year.
For 2025, the DBCC’s assumptions consider various domestic and external factors, providing a wider range from a low of 6.0 percent to a high of 8.0 percent.
Recto emphasized that achieving growth is feasible with the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act in place.
“Probably you can go seven or maybe even higher. But what we’re saying is that the worst case for the Philippines for next year is roughly six percent,” he said.
Meanwhile, National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan cited similar reasons for the wider projection.
“We are moving into a more uncertain world. There’s many, both domestic and external. Domestic because of all these natural calamities,” Balisacan noted.
External uncertainties affecting development include shifts in the global economy. Balisacan mentioned the rise of the Trump administration as a significant event that could influence these changes.
“If, on one hand, it [the Republican party] pursues what it said it would do during the campaign, that would mean high tariffs everywhere, right?” Balisacan remarked.
In the longer term, the NEDA chief stated that such policies could reduce growth not only in the US but globally, as “we’re all part of the supply chain.”
However, he noted that Trump’s policies could either benefit or disrupt the global economy, depending on the direction taken by the Trump administration amidst a decade of global economic uncertainties.
Locally, ongoing developments regarding the move to impeach the country’s vice president, Sara Duterte-Carpio, may not significantly affect household consumption and public spending, Recto said, adding that these expenditures are likely to “continuously increase anyway.”
“So for business, would that make more sales or reduce their sales? Maybe not. If they think that there will still be more consumption, then businesses will invest,” he added.