The country’s economic growth rate is expected to reach 5.1 percent in 2025 and 5.3 percent in 2026, while the recent reshuffling of the Marcos Jr. administration’s economic team is viewed as a good move, according to University of Asia and the Pacific (UA&P) senior economist Victor A. Abola.

“We’re already five percent year-to-date. So it’s just we expect a little bit of a bump,” Abola said on the sidelines of the UA&P School of Economics’ 2025 Year-End Business Economics Briefing on Wednesday, Nov. 19.

“I do expect the fourth quarter to be a little bit of an improvement, so that’s why I put it at 5.1 percent. But for next year, the improvement is not that much. It’s still 5.3 percent, but that’s mainly, also partly, because if you have a low base in the previous year, it helps you bring up your growth rate,” he added.

Abola’s growth forecasts for this year and next year are below the government’s full-year targets of 5.5 to 6.5 percent for 2025 and six to seven percent for 2026 to 2028.

He attributed the expected improvement in the fourth quarter to low inflation, which is now below the Bangko Sentral ng Pilipinas’ (BSP) two- to four-percent target, noting that year-to-date inflation stands at 1.7 percent. He pointed out that lower prices translate to greater purchasing power for consumers.

Among other factors, Abola said that employment has been stable and remains within a favorable threshold, while overseas Filipino workers’ (OFW) remittances continue to play an important role in supporting consumption, emphasizing that these remittances have a multiplier effect.

“So, these are important factors for me to have a slightly faster GDP [gross domestic product growth] for the fourth quarter,” he said.

Abola also emphasized that a “weaker peso is faster growth,” saying this is largely due to the country’s dependence on OFW remittances and dollar inflows.

“In terms of population, you have 10 million OFWs. Multiply that by five, that’s already 50 million. Then you have the export sector plus the ones that supply them. So, I estimate at least 70 million people benefit from a weaker peso,” Abola explained.

Meanwhile, the recent economic team reshuffle is “actually good,” Abola said, noting that it places “somebody more knowledgeable about the economy, like Secretary [Ralph G.] Recto,” in a key position. To recall, President Ferdinand R. Marcos Jr. has appointed the former Department of Finance (DOF) Secretary as the new Executive Secretary, replacing Lucas Bersamin.

“Frederick [D. Go] didn’t have a budget,” Abola added, referring to the official’s stint as Special Assistant to the President for Investment and Economic Affairs (SAPIEA). Go assumed the role of DOF chief. “Now, at least he’s still the economic czar, because in the economic cluster, the Finance Secretary is the head,” he noted.

“I think it’s okay—it’s a good move,” Abola said. “The rest, I don’t know. But among these two critical ones, they’re okay.”

(Ricardo M. Austria)