THE Philippine economy expanded by 5.4 percent in the first quarter of 2025, according to the Philippine Statistics Authority (PSA).
While this represents an improvement over the 5.3 percent growth recorded in the fourth quarter of 2024, it falls short of the government’s target of 6 to 8 percent growth for the entire year and also underperformed the 5.8 percent median forecast from a Manila Times poll of economists.
The PSA attributed the growth primarily to strong performances in several key sectors.
Wholesale and retail trade, repair of motor vehicles and motorcycles contributed 6.4 percent, financial and insurance activities added 7.2 percent, and manufacturing contributed 4.1 percent to overall growth. All major economic sectors registered expansion, with agriculture, forestry, and fishing growing by 2.2 percent, industry by 4.5 percent, and services by 6.3 percent.
Further contributing to the positive economic figures, household final consumption expenditure (HFCE) increased by 5.3 percent.
Government final consumption expenditure saw a significant rise of 18.7 percent, while gross capital formation grew by 4.0 percent. Exports of goods and services expanded by 6.2 percent, and imports of goods and services increased by 9.9 percent. Gross National Income (GNI) expanded by 7.5 percent, and net primary income (NPI) from the rest of the world surged by a considerable 24.6 percent.
Despite the positive overall growth, the shortfall against the government’s target highlights the challenges facing the Philippine economy.
Analysts will be closely monitoring economic performance in the coming quarters to assess whether the country is on track to meet its full-year growth projections.
The disparity between the actual growth rate and the government’s target, as well as the economists’ predictions, underscores the need for further analysis to understand the contributing factors and potential adjustments to economic policies.
