Philippines revises medium term growth targets to reflect global uncertainties

By Mikhail Flores and Karen Lema

MANILA (Reuters) -The Philippines lowered its growth target for this year and narrowed its growth goals for 2026 to 2028 to reflect global uncertainties stemming from tensions in the Middle East and shifts in U.S. trade policies, its budget secretary said on Thursday.

Growth for 2025 is now projected at 5.5%-6.5%, down from the government’s earlier forecast of 6%-8%, while the targets for 2026 to 2028 were narrowed to 6%-7%, from the previous range of 6%-8%.

"The revisions take into account heightened global uncertainties such as unforeseen escalation of tensions in the Middle East and the imposition of U.S. tariffs," Budget Secretary Amenah Pangandaman told a press conference.

The government was prepared to "deploy timely and targeted measures to mitigate their potential impact on the Philippine economy," she added.

The government also trimmed its inflation assumption for 2025, lowering it to 2%-3% from 2%-4%, but maintained its outlook for 2026 to 2028 at 2%-4%, Pangandaman said.

It also revised its fiscal program with the budget deficit as a share of GDP now expected to widen to 5.5% this year and 5.2% in 2026, from previous projections of 5.3% and 4.7%, respectively.

Gross domestic product grew by an annual 5.4% in the first quarter of 2025, in line with the previous quarter's 5.3% growth.

Citing the need to support growth amid global uncertainties, the Bangko Sentral ng Pilipinas cut rates for a second meeting in a row on June 19 and left the door open for at least one more reduction this year.

Central bank deputy governor Zeno Abenoja said the updated economic outlook was "broadly consistent" with the central bank's expectations that inflation would remain manageable and that growth would moderate but stay resilient.

Inflation has averaged 1.9% in the first five months of the year, below the central bank's 2%-4% target range.

(Reporting by Karen Lema and Mikhail Flores; Editing by John Mair)

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