Philippine growth projections revised down for 2025, 2026

The Bangko Sentral ng Pilipinas (BSP) has lowered its growth expectations for the Philippine economy for 2025 and 2026. High global commodity prices are seen as a major factor that could reduce economic activity. The BSP says growth will likely be at the lower end of the government's target range under President Marcos. In its latest report, the BSP warned that the economy might not grow as much as previously thought. A slower economic expansion is expected due to problems like lower-than-anticipated growth in late 2024, which was affected by severe typhoons. These natural disasters hurt farm production and services, leading to concerns about future growth. The BSP pointed out that challenges such as rising global commodity prices and potential tariff issues in the United States could impact the Philippines' economic outlook. However, the central bank's monetary policy adjustments might help offset some of these challenges. Data from the government showed that GDP growth averaged 5.6% in 2024. While this was slightly better than the 5.5% growth in 2023, it still fell short of the revised target of 6 to 6.5% set by the administration. The BSP recently decided to keep the benchmark interest rate steady at 5.75% to protect the economy amid uncertainties. On a positive note, inflation eased more than expected in February. This could give the central bank more flexibility to lower borrowing costs in the future. The BSP noted that current economic conditions suggest limited inflation pressures driven by demand.