GDP Update: Underwhelming growth to prompt more rate cuts

Consistently tepid economic growth may need a push from the central bank as investment spending remains wanting.

Economic policy uncertainty and a still relatively high-interest rate environment weighed down net exports and capital formation in the first quarter of 2025, causing gross domestic product (GDP) to fall under market estimates.

As inflation continues to cool, the latest economic growth figure further solidifies the need for the Bangko Sentral ng Pilipinas (BSP) to cut rates further this year.

Key points 

• GDP grew 5.4% year-on-year (YoY) in the first quarter of 2025.
• The services sector remained the largest contributor to GDP, followed by the industry sector.  Meanwhile, the agriculture, forestry, and fisheries sector saw growth after 3 straight quarters of contractions.
• On the