The GDP of the Philippines grew by 5.5% year-on-year in Q2 2025.

The Philippine economy grew at a quicker pace in the second quarter (Q2) of the year, supported by domestic demand and reflected across all main sectors.

Gross domestic product (GDP) expanded by 5.5% year-on-year (YoY) in Q2, slightly faster than the 5.4% YoY growth in Q1.

Slow inflation opens the door for monetary authorities to continue providing support to the economy.

The Philippines’ strong GDP growth in 2025 highlights improving domestic conditions and steady external demand. Policymakers and investors alike are closely watching how easing inflation and supportive monetary measures can sustain this momentum.

• Here are the main drivers of growth:
• Domestic demand supported growth in Q2, led by household consumption. External demand, meanwhile, also slightly supported growth as trade deficit narrowed for the first time since Q1 2024.
• On the sectoral side, services remained the main contributor to growth, led by an expansion in wholesale and retail services. The agricultural sector also expanded for the second consecutive quarter post-El Nino, after three periods of contraction in 2024.

• A muted inflation environment so far strengthens the case for continued policy easing by the Bangko Sentral ng Pilipinas (BSP) to boost GDP growth in the Philippines further.
• Metrobank Research forecasts that the BSP will reduce its policy rate by 25 bps at the next Monetary Board meeting (August 28), to be followed by another 25-bp cut toward the end of the year. This would bring the BSP’s reverse repurchase rate (RRP) to 4.75% by end-2025.

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