While the Marcos Jr. administration’s economic managers expect the Philippine economy to stall at around four-percent growth in the fourth quarter and for the entire year of 2025, the country is still expected to cross the threshold into upper-middle-income country (UMIC) status this year.

In separate interviews, Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan and outgoing Finance Secretary Ralph G. Recto told reporters that the economy might struggle to accelerate to the lower bound of this year’s economic growth target of 5.5 to 6.5 percent.

Balisacan said the Cabinet-level Development Budget Coordination Committee (DBCC) will meet next week to discuss possible adjustments, noting it is “quite likely” that the 2025 gross domestic product (GDP) growth target will be revised upon triangulating all the macroeconomic numbers.

While Balisacan estimated output growth could accelerate to at least five percent this year, Recto priced it around 4.7 to 4.8 percent for full-year GDP expansion.

Balisacan said the government will maintain its six- to seven-percent growth goal for fiscal years (FY) 2026 and 2027, noting that the range “should be doable next year.” Recto sees six percent as the “realistic” upper range for growth next year, with five percent as the lower end.

Despite the lackluster economic performance in the third quarter, Balisacan remains upbeat about the Philippines rising to UMIC status by year-end.

“Even if the economy grows only at five percent for the entire year, there’s still quite a lot of growth. You can become an upper-middle-income country within this year,” Balisacan told reporters. The Washington-based World Bank will update its record in July 2026.

Balisacan explained that the economy’s potential expansion is around six to seven percent. “If you are growing below that, you are underutilizing your capacity,” he said.

The DEPDev chief said he is willing to accept a short-term slowdown if it strengthens the economy in the medium term, emphasizing that improving the quality of growth is priority.

He added that the economy needs to return to its growth potential quickly, warning that failing to do so could derail the country’s long-term goals for 2040.

Balisacan earlier conceded that climbing to the high-income-status target 15 years from now could be impossible.

On the fiscal consolidation front, Recto admitted revenues will be slightly affected, but the government has already managed the impact for the year, adding that the budget deficit will remain on target even if economic growth falls short.

“We are on target to lower the outstanding debt... Whatever our deficit target is for the year, including the debt, we’re not borrowing more than that,” Recto said.