S&P Global Ratings Raises Philippine Economic Growth Forecast to 5.9%

The Philippine economy is expected to grow 5.9 percent this year, according to S&P Global Ratings, citing reduced global trade uncertainty and benign inflation. The upgraded forecast comes as the Bangko Sentral ng Pilipinas (BSP) gains space to resume monetary easing. S&P expects the BSP to cut interest rates further, with the policy rate reaching 5 percent by year-end. Economies with lower export dependence, like the Philippines, are better equipped to withstand external headwinds. Domestic demand resilience will continue to support growth in the country.

Key Takeaways:

S&P Global Ratings has raised its economic growth forecast for the Philippines to 5.9 percent in 2025, up from its earlier projection of 5.7 percent.
The forecast upgrade was driven by reduced global trade uncertainty, particularly the easing of US-China tariffs.
S&P expects consumer activity in the Philippines to remain healthy, supported by easing inflation and monetary policy accommodation.
The credit watcher forecasts inflation to settle at 2.3 percent this year, within the BSP's two to four percent target range.
S&P projects one more 25-basis-point rate cut by the BSP, taking the policy rate to 5 percent by year-end.
The BSP is expected to resume easing in the second half of the year, with growth risks taking precedence over inflation concerns.
S&P sees Philippine GDP growth picking up further to six percent in 2026 and 6.6 percent in 2027, with growth hitting 6.5 percent in 2028.

Statistics:

Philippine economic growth forecast: 5.9 percent (2025), up from 5.7 percent (previously)
BSP's policy rate: expected to reach 5 percent by year-end
Inflation rate: 2.3 percent (2025)
Rate cuts: 1 more 25-basis-point cut expected
GDP growth projections:

+ 2026: 6 percent

+ 2027: 6.6 percent

+ 2028: 6.5 percent

Sources:

S&P Global Ratings, Asia-Pacific Economic Outlook
Vincent Conti, senior lead economist at S&P Global Ratings
Bangko Sentral ng Pilipinas (BSP)