July 2025 Philippine economy update and outlook

Here are the key economic events in July 2025 and what to look out for ahead.

In 2025, the Philippine economy continues to see the US Fed (Fed) and the Bangko Sentral ng Pilipinas (BSP) taking the path toward rate cuts this year.

Key points

The current state of the Philippine economy in 2025 reflects both resilience and caution. While growth remains on track, global uncertainties and policy shifts are shaping expectations. Analysts are closely watching how consumption and government spending will support momentum as the year progresses, especially after the trends seen in the 2nd quarter of the Philippine economy.

• The ADB and AMRO have revised their full year 2025 and 2026 growth forecasts for the Philippines, trimming their projections due to global economic uncertainties.
• Meanwhile, Finance Secretary Ralph Recto expects accelerated growth in the second half of 2025, fueled by government and household consumption, projecting a full-year GDP of 5.7-5.8%.
• The US Federal Reserve held its key interest rate at 4.25%-4.50% for the sixth consecutive time, with Chair Jerome Powell indicating no clear signals for future monetary policy.
• Philippine headline inflation edged up to 1.4% year-on-year in June, marking the first monthly acceleration since January.

What now?

• We have revised our 2025 GDP forecast for the Philippines to 5.5% from 5.7%. We expect economic growth to bounce back to 6.1% in 2026 and 6.0% in 2027.
• We have revised our full-year average inflation forecast for 2025 downward to 2.0%. We expect inflation to accelerate in 2026 and 2027 to 3.7% and 3.0% respectively.
• We see the US Federal Reserve implementing a cumulative 50 basis points (bps) of rate cuts in each in 2025 and 2026, bringing its target range to 3.25%-3.50% by the end of 2026. Similarly, we expect the Bangko Sentral ng Pilipinas (BSP) to cut its policy rate by an additional 50 bps this year and another 50 bps in 2026, bringing the target RRP to 4.25% by end-2026. This trajectory supports continued monetary easing in 2025, a key driver for growth stability.

(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)

Economic Updates 

Monthly Economic Update: Two more BSP cuts  

The US Fed and the BSP are still expected to cut rates within the year

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