Philippines' GDP Growth Rises to 5.5% in Second Quarter of 2025

• Philippine GDP growth accelerates to 5.5% in Q2 2025, led by strong agricultural rebound.

• Household spending rises to 5.5%; exports slow amid tariffs; 2025 growth forecast steady at 5.5%.

The Philippine economy expanded at a marginally faster pace in the second quarter of 2025, with GDP growing 5.5% year-on-year. This marks an improvement from the 5.4% growth recorded in the first quarter and surpasses analysts' expectations of 5.4%.

On a quarter-to-quarter basis, growth also picked up, rising from 1.2% to 1.5%, according to data released on Thursday. Agriculture stood out as the leading sector in output terms, demonstrating a sharp recovery relative to the previous quarter.

This rebound helped to balance out ongoing weaknesses in industrial activities—especially construction—and a deceleration in the services sector.

On the expenditure front, consumer spending edged up slightly, with household consumption increasing from 5.3% to 5.5%, thanks in part to easing inflation and recent interest rate reductions.

Government expenditure slowed down following a strong start to the year but continued to contribute positively to overall economic growth. 

However, planned fiscal tightening could dampen government support in the second half of 2025.

Meanwhile, export growth decelerated in Q2 and is expected to weaken further due to ongoing trade tensions from Trump-era tariffs and softer global demand.

These latest figures support Capital Economics’ forecast of 5.5% growth for the full year 2025, aligning with consensus projections and falling within the government’s target range of 5.5% to 6.5%.