Economists cut PH growth forecasts

Private sector economists have slashed their gross domestic product (GDP) growth forecasts for the Philippines to as low as five percent, citing the drag from shrinking exports and the broader impact of a global trade slowdown.

- BY DERCO ROSAL

Singapore-based UOB has substantially shaved its full-year growth projection for the local economy from six percent to five percent.

This came after the first quarter of the year grew only by 5.4 percent, slightly higher than the 5.3 percent recorded in the last quarter of 2024. It was also far slower than the 5.9 percent in the same period last year.

If realized, besides falling far below the target of six percent to eight percent, UOB's revised forecast could also mark the weakest annual expansion, excluding the 9.5-percent contraction during the pandemic, since the 3.9 percent growth recorded in 2011.

Also, UOB's forecast would notably mark the weakest pace of Philippine economic growth in 14 years, or since 2011, during Benigno Aquino III's second year in office. That year's growth was blamed on the government's underspending on infrastructure, and a continued drop in fishing, alongside global drag.

Meanwhile, the government put the blame on the escalating global trade tensions for the first-quarter growth rate that disappointed the market expectations.

Netherlands-based financial giant ING said the strong growth in consumer and government spending prior to the midterm election was expected. But the "disappointment was net export and investment growth," said Deepali Bhargava, regional head of research for ING Asia-Pacific.

Bhargava noted that this reflects the "uncertainty around business confidence amid tariff escalations and a slowdown in trade."