Despite the dismal first-quarter growth mostly weighed down by world trade uncertainties, the Economist Intelligence Unit (EIU) sees the Philippine economy outperforming the region in 2025.

"We will maintain our forecast of 6.1-percent growth this year, accelerating from 5.7 percent in 2024, making the Philippines the only ASEAN [Association of Southeast Asian Nations] economy with faster growth in 2025," EIU Asia analyst Kalyani Honrao and Asia-Pacific regional director Alex Holmes said in a May 8 report obtained by Manila Bulletin.

"We are still cautiously optimistic that the Philippines will be a relative bright spot this year amid global trade tensions," EIU said.

While it conceded that the below-expectation first-quarter growth outturn of 5.4 percent is a downside risk, EIU expects the domestic economy to weather the uncertainties wrought by external trade hiccups.

The government targets gross domestic product (GDP) growth of six to eight percent in 2025, which would entail an average of at least 6.2-percent expansion over the next three quarters to hit the goal's lower end.

"The relatively small size of goods and service exports in the economy means that the negative effects from the global tariff shock on the Philippines will be minor, and domestic trends will be the main drivers of growth," EIU said.

"Government spending, low inflation, and monetary easing will provide positive tailwinds in this area," it added.

EIU noted that while private consumption "[failed] to gain much extra traction" in the first quarter, a "large surge" in expenditures on public goods and services—ahead of the May 12 midterm polls—drove economic growth.

"That boost is likely to have continued in the second quarter," EIU said, especially in the month of April and in early May, as politicians ramped up their election campaigns.

Also, "government spending will provide some more impetus to household spending, which accounts for 70 percent of GDP and remained at a middling rate of growth in early 2025," EIU added, citing that the Marcos administration's huge subsidies to lower rice prices would "boost households' real spending power, especially among low-income groups."

The government has earmarked up to ₱12 billion to subsidize the pilot of its ₱20-per-kilo rice program—a campaign promise made by President Marcos before he won the presidency in 2022.

"Even as government spending fades after the election, there are other factors that should sustain private consumption throughout 2025. Inflation has decelerated significantly—1.4 percent in April—and will fall further owing to declines in food and fuel prices (independent of government support)," EIU said.

For EIU, "the sanguine economic background—particularly recent falls in food and fuel prices—will help support for candidates aligned with the current President, Ferdinand 'Bongbong' Marcos Jr., in the midterm elections."

"Despite some weaker popularity ratings recently, we still expect the President to retain a solid support base after the midterm vote," it added.

However, amid world trade disruptions jump-started by United States (US) President Donald Trump's tariff spree, EIU is less optimistic about Philippine exports sustaining their over one-year-high growth pace recorded at the start of 2025.

"We do not believe that this rebound will continue. The Philippines is more weighted towards service exports than most of its Asian peers—trade flows that, for now, are not subject to US tariff rises. However, those exports, particularly of the important business process outsourcing (BPO) sector, are still exposed to a slowdown in US demand—we expect the US economy to contract this year," EIU explained.