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The growth forecast for the Philippine economy has been lowered to 5.5% to 6.5% in 2025 from 6% to 8% previously
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The Development Budget Coordination Committee said the revision takes into account heightened global uncertainties such as escalation of tensions in the Middle East and the imposition of US reciprocal tariffs
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Goods exports are projected to contract by 2% this year while goods imports are expected to rise by 3.5%
The growth forecast for the Philippine economy has been lowered to 5.5% to 6.5% in 2025 from 6% to 8% previously. The Development Budget Coordination Committee (DBCC) said the revision takes into account heightened global uncertainties such as escalation of tensions in the Middle East and the imposition of US reciprocal tariffs.
In the first quarter of the year, the Philippine economy rose 5.4%, driven by accelerated government spending and faster growth in household spending.
The 2025 growth is in line with the forecast of private sector analysts and international financial institutions, DBCC said in a statement, and follows its latest review of the medium-term macroeconomic assumptions and fiscal program for 2025 to 2028.
Despite global headwinds, DBCC said it “remains vigilant and ready to deploy timely and targeted measures to mitigate their potential impact on the Philippine economy.”
It added, “Moreover, international reserves remain ample providing adequate buffer to help absorb these external shocks.”
From 2026 to 2028, the Philippine economy is projected to expand by 6% to 7%, a narrower band than the previous 6%-8%, reflecting a more measured and resilient outlook amid global headwinds. Trade assumptions were also “refined to align with global market developments.”
Goods exports are expected to drop by 2% in 2025 through 2028 in contrast to the previous assumption of 6% growth for those years, largely due to slower global demand and heightened trade policy uncertainties.
Meanwhile, goods imports are seen rising by 3.5% in 2025 as a result of resilient domestic economic activity though the new projection is lower than the previous 5%.
From 2026 to 2028, goods imports are expected to perform slightly better with growth of 4% (from 8% previously), supported by stable domestic consumption and sustained infrastructure spending.
DBCC said the “whole-of-government approach… (supporting) a low inflation environment in 2025” is projected to narrow inflation to 2% to 3% from 2% to 4% in 2025. Inflation is expected at 2% to 4% from 2026 to 2028, consistent with the latest outlook that inflation will remain within the target range over the policy horizon.
Tempered by easing global demand and expected increases in global oil inventories, Dubai crude oil prices are seen at between $60 and $70 per barrel from 2025 to 2028 despite escalating geopolitical tensions.
The foreign exchange rate is assumed to remain stable, at P56 to P58 to the US dollar from 2025 through 2028. This is supported by lower domestic inflation and will continue to be shaped by global financial conditions and external trade performance.
Revenue collections are seen to increase steadily throughout the period, reaching 16.3% of gross domestic product by 2028, slightly lower than the previous 16.5% assumption. Key drivers include the implementation of recently enacted revenue reforms, such as the value-added tax on non-resident digital service providers and capital markets efficiency promotion as well as sustained improvements in tax administration, compliance enforcement, and digitalization initiatives.
For 2026, the proposed national budget is set at P6.793 trillion, equivalent to 22% of GDP.
