The Philippine economy expanded by 5.4% year-on-year in the first quarter of 2025, sustaining a steady growth trajectory despite global economic headwinds. The latest GDP figures, slightly up from 5.3% in the previous quarter, reflect a stable domestic environment, resilient consumption, and strategic government spending, placing the Philippines among the top-performing economies in Asia.
The country ranked second among Asian peers with released Q1 data, trailing only Vietnam (6.9%) and tying with China (5.4%), while outperforming Indonesia (4.9%), Malaysia (4.4%), and Thailand (forecasted at 2.8%).
“This performance underscores the relative resilience of the Philippine economy in the face of global volatility and heightened external uncertainties,” said DEPDev Undersecretary Rosemarie G. Edillon.
Investment, Trade, and Domestic Demand: A Mixed But Encouraging Picture
Fixed capital formation rose to 5.9% in Q1, up from 5.0% in Q4 2024, showing strong growth in durable equipment investments despite a moderation in private construction. A significant inventory drawdown offset some of this gain, following a notable buildup in late 2024.
The external trade picture remains mixed. While exports grew 6.2% (up from 3.2%), a surge in imports (9.1%)—particularly of transport and industrial machinery—led to a sharp 19.9% contraction in net exports.
Domestic demand, however, remains a bright spot, rising 6.7%. Household consumption accelerated to 5.3%, driven by easing food inflation, while government spending soared to 18.7%, attributed to pre-election frontloading of public programs.
Sectoral Growth and Inflation Management
All major sectors contributed to growth, with agriculture up 2.2%, industry steady at 4.5%, and services growing robustly at 6.3%. The government’s continued efforts to curb inflation have borne fruit, with April’s inflation rate recorded at just 1.4%. Key interventions include the rollout of African Swine Fever vaccines to stabilize the pork supply.
Strategic Imperatives for Sustained Growth
Despite positive momentum, economic managers stress the need for vigilance and decisive action. “Now is not the time for complacency. The first quarter’s results reinforce the urgency of structural reforms, sound policy execution, and accelerated infrastructure development,” said the statement.
Key strategic directions include:
- Advancing economic reforms in the water, electricity, and telecoms sectors
- Expanding trade partnerships with the EU, UAE, and the U.S.
- Strengthening MSME participation in global value chains
- Investing in digital skills and education through the newly launched Trabaho Para sa Bayan Plan
- Enhancing regional tourism, transport, and connectivity
Toward a Long-Term Vision
With its sights set on long-term, inclusive, and resilient growth, the Marcos Administration remains committed to enabling innovation, enhancing social protection, and ensuring that every peso spent delivers maximum impact. Efforts are underway to strengthen fiscal management, align planning with budgeting, and institutionalize strong monitoring and evaluation systems.
“As one of the fastest-growing middle-income economies, the Philippines is well-positioned to sustain its upward trajectory. We move forward with purpose and clarity, focused on translating plans into results that directly benefit the Filipino people,” said Undersecretary Edillon.
