Trailing behind the Southeast Asian region’s best performer, Vietnam’s eight-percent growth, the Philippine economy expanded by 5.5 percent in the second quarter of 2025, one percentage point (ppt) slower than the 6.5 percent recorded in the same period last year.

Data from the Philippine Statistics Authority (PSA) showed that while this pace was significantly slower than last year’s, it remains faster than the first quarter’s 5.4-percent growth. This four-quarter high economic growth also hit the lower end of the lowered government’s growth target of 5.5 percent to 6.5 percent.

By hitting the lower limit of the goal, National Socioeconomic Planner Arsenio M. Balisacan said reaching the full-year target has now become more attainable.

“That’s already around the corner. But I think that we’ll do better in the second half. I’m confident that the inflation has gone down quite substantially and the past reduction in the policy rates is now beginning to be felt,” Baliscan said during an Aug. 7 press briefing.

Meanwhile, to reach the 6.5 percent gross domestic product (GDP) expansion this year, National Statistician and PSA Undersecretary Claire Dennis S. Mapa said the local economy must grow by at least 7.5 percent for the remaining quarters.

“Of course, 7.5 is high, but it’s not impossible,” Balisacan said. “I think 7.5 percent is within reach. Of course, the likelihood of landing in the middle is higher because of the global environment and the continuing uncertainty.” Six percent is the midpoint of the downscaled target.

“I think that if you continue to see improvement in the confidence of our consumers and domestic investors in the economy, we should see higher growth in both consumption and investment,” Balisacan said.

“We don’t see any major disruptions coming from negative events like floods, serious floods that could destroy our production base,” he added.

On rice policy, Balisacan said suspending imports during the harvest season would not likely lead to price increases, citing falling global prices and adequate domestic supply.

He noted that world prices have fallen to about $450–$490 per metric ton from nearly $600 when the 35-percent tariff was lowered to 15 percent. However, he stressed the need to stay vigilant, as global market conditions can shift quickly, requiring flexible policy responses.

In particular, wholesale and retail trade, and repair of motor vehicles and motorcycles (with a 5.1-percent growth); public administration and defense and compulsory social security (12.8 percent); and financial and insurance activities (5.6 percent) were the main contributors to growth during the April-to-June period.

On the demand side, household spending grew year-on-year by 5.5 percent in the second quarter, higher than 4.8 percent in the same quarter last year.

On the other hand, government spending slowed to 8.7 percent from 18.7 percent growth in the previous quarter and 11.9 percent last year. It also posted the slowest pace in three quarters since the five percent in the third quarter last year.

Gross capital formation slowed significantly to 0.6 percent from 11.5 percent a year earlier.

Growth in the imports of goods and services slowed to 2.9 percent from 5.3 percent. Meanwhile, growth in exports of goods and services accelerated to 4.4 percent from 3.9 percent a year ago.

With the second quarter performance, Baliscan noted the Philippines remains one of the fastest-growing economies in emerging Asia, with its growth placing behind Vietnam’s eight percent and India’s projected 6.5 percent, but ahead of China (5.2 percent), Indonesia (5.1 percent), Malaysia (4.3 percent), and Thailand (2.4 percent).