News Details

PH Growth Outlook Steady at 5.4% Despite US Tariff Pressures – BMI

NPO

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August 26, 2025

MANILA – BMI, a unit of Fitch Solutions, is keeping its 5.4 percent growth forecast for the Philippines in 2025, showing confidence in the country’s economic resilience despite new tariff challenges from the United States.

In its Aug. 25 commentary released Tuesday, BMI said “monthly data show that the external sector has remained resilient amid global trade uncertainty.”

Exports surged by 15.1 percent year-on-year in May—the strongest growth so far this year—helped by businesses front-loading shipments ahead of the US tariff implementation on August 1.

Originally set at 20 percent, the tariff was reduced to 19 percent after President Ferdinand R. Marcos Jr.’s official visit to Washington in July, where he successfully negotiated for a lower rate while strengthening bilateral ties.

According to BMI, the adjustment translates to a smaller medium-term output decline of 0.4 percentage point, compared to the 1.4 percentage point contraction initially estimated in April. The delayed enforcement of the tariff, pushed from August 1 to August 7, also allowed exporters extra time to ship goods.

Still, the commentary warned: “Unless another delay is announced, we expect a sharp slowdown in the coming months.”

Despite these headwinds, BMI maintained its 2025 projection, noting that the country’s economy remains “largely domestically driven.” Growth, however, remains below the government’s revised 5.5–6.5 percent target, which was adjusted downward from the earlier 6–8 percent range due to global economic and geopolitical risks.

Economic performance in the first half of the year averaged 5.4 percent, with second-quarter growth inching up to 5.5 percent from 5.4 percent in the previous quarter.

BMI added that while interest rates have eased significantly, “erratic US trade policies will weigh on global investor sentiment and limit foreign direct investment inflows. As such, we see little prospect for a meaningful investment recovery in the near term.”

— NPO News Team | PNA-PR