UK think tanks slash PH growth forecasts

Two United Kingdom (UK)-based think tanks have slashed their 2025 gross domestic product (GDP) growth forecasts for the Philippines to well below the government’s target range, following a 4.5-year low economic expansion in the third quarter.

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Capital Economics cut its full-year Philippine growth forecast to five percent from 5.5 percent previously, the think tank’s Asia economist Shivaan Tandon said in a report on Friday, Nov. 7.

“Risks to the outlook remain skewed firmly to the downside with the most immediate risk stemming from the fallout from the anti-corruption protests” in the country, Capital Economics said.

Following the Philippine Statistics Authority (PSA) report showing GDP expansion slowed to four percent in the third quarter, Capital Economics highlighted that domestic demand was the main drag on growth.

It noted that consumer spending growth slowed to 0.5 percent quarter-on-quarter in the third quarter, down from 1.5 percent in the second quarter, while both fixed investment and public consumption contracted for the second consecutive quarter.

Despite this slowdown, Capital Economics emphasized that domestic demand is expected to strengthen in the coming quarters. “GDP growth in the Philippines slowed sharply in the third quarter but we doubt this weakness will persist. Economic activity is set to pick up in the near term as domestic demand strengthens,” the think tank said.