Philippines cuts 2025 GDP growth goal, trims inflation view

[MANILA] The Philippine government has cut its economic growth target for this year as the conflict in the Middle East added to risks from the impact of the Trump administration’s trade war.

The economy is now targeted to expand 5.5 per cent-6.5 per cent this year from a previous goal of 6 per cent-8 per cent, Finance Secretary Ralph Recto said in a mobile-phone message on Thursday (Jun 26). 

The downward revision underscores the mounting challenges to the Philippine economy, which expanded slower than expected last quarter, partly as the Trump administration’s tariff threats hurt global sentiment. The South-east Asian nation that’s reliant on fuel imports is also vulnerable to oil price shocks due to Israel-Iran tensions.

Recto said the government’s inflation assumption for 2025 has also been narrowed to 2 per cent-3 per cent from a previous outlook of 2 per cent-4 per cent.

The revised outlook supports the case for further monetary policy easing from the central bank, especially as traders and governments worldwide remain on edge due to the Middle East conflict, and as Trump continues to wage a trade war.

Although the Philippines is less trade-dependent than neighbouring countries, its exports to the US are now subject to a 10 per cent tariff, which could rise to 17 per cent if the country fails to get Washington to agree to a reduction. BLOOMBERG