Slower than expected: Philippine GDP grows by 5.4% in Q1

The Makati Central Business District —File photo By Ted Aljibce | Agence France-Presse

Updated at 10:59 am on May 8, 2025

MANILA, Philippines — The Philippine economy grew below market expectations in the first quarter, which the Marcos administration described as a “measured start” amid tariff-induced global headwinds.

Gross domestic product (GDP), or the sum of all products and services created within an economy, grew by 5.4 percent in the three months ending in March, the Philippine Statistics Authority (PSA) reported on Thursday.

That was slightly faster than the 5.3 percent expansion in the fourth quarter of 2024. But it was weaker than the 5.9-percent growth recorded in the same period in 2024.

The latest growth figure fell below consensus. An Inquirer poll of economists last week had pegged the first quarter growth to have settled at 5.9 percent.

READ: Poll: Faster 5.9% Philippines GDP growth seen in Q1

Overall, economic growth in the first three months of the year fell short of the government’s 6 to 8 percent target.

Nonetheless, all major economic sectors, posted annual growth in the first three months: namely:

• Agriculture, forestry and fishing, 2.2 percent
• Industry, 4.5 percent; and
• Services, 6.3 percent.

READ: Gov’t missed 2024 GDP growth target

The main contributors to the first quarter 2025 year-on-year growth were:

• wholesale and retail trade; repair of motor vehicles and motorcycles, up 6.4 percent
• financial and insurance activities, up 7.2 percent; and
• manufacturing, up 4.1 percent.

On the demand side, consumer spending grew at a faster rate of 5.3 percent in the first quarter, from 4.7 percent in the fourth quarter of 2024 amid easing inflation.

Ahead of the midterm polls, government spending expanded by 18.7 percent, from 9 percent before.

Gross capital formation, the investment component of the economy, slowed to 4 percent, from 5.5 percent previously, amid elevated interest rates.

READ: Balisacan says Philippine economy can reach $2-trillion size by 2050