Philippine economy grows 5.4% in Q1
MANILA, Philippines — The Philippine economy expanded by 5.4% in the first quarter of 2025, according to the Philippine Statistics Authority (PSA) in a report released on Thursday, May 5.
This marks a slowdown from the 5.9% GDP growth recorded in the first quarter of 2024. The 5.4% figure also falls short of the government’s full-year growth target of 6% to 8% for 2025.
The PSA said that the main drivers of growth were wholesale and retail trade; repair of motor vehicles and motorcycles(6.4%), financial and insurance activities (7.2%) and manufacturing (4.1%).
In its report, the PSA said the agriculture, forestry, and fishing (AFF) sector posted the highest growth among all industries, recording a 2.2% expansion in the first quarter of 2025, up from 0.5% in the same period last year.
Both the industry and services sectors posted slight year-on-year declines. Industry growth slowed to 4.5% in the first quarter of 2025 from 5.2% in 2024, while services dipped to 6.3% from 7.0%.
Despite the slowdown, the services sector remained the top contributor to the country’s GDP, accounting for 3.9% points of the total 5.4% growth. The industry contributed 1.3 percentage points, while agriculture, forestry, and fishing (AFF) added 0.2% point.
The Department of Economy, Planning and Development (DepDev), which was formerly known as the National Economic and Development Authority, said that this was still a sign of steady growth as it was a slight increase from the 5.3% recorded in the last quarter of 2024.
“While this pace falls short of our initial expectations, it reflects the developments from the broader global context of tempered economic activity amid persistent uncertainties,” DepDev Undersecretary Rosemarie Edillon said.
The Philippines ties with China for second place as the fastest-growing economy in Asia, trailing behind Vietnam.
Edillon said the domestic demand remained strong, making the country more resilient against global uncertainties.
“But of course, the global demand is not really… well, it’s in a period of volatility, and how we place in this period of volatility is something we will need to discuss with our economic team that went to the US,” Edillon said.
The global economy experienced shockwaves following US President Donald Trump’s sweeping tariffs on all its trade partners, including the Philippines. The World Bank slashed its growth projections for the Philippines in 2025 following the shakeup in trade, going from 6.1% to 5.3%.
- Latest
- Trending
