PH Economy to Slow Down-Pantheon Macroeconomics Report
Pantheon Macroeconomics economists dismiss PH government’s claim of GDP growth.
A report by UK-based think tank Pantheon Macroeconomics says it is sticking to its Gross Domestic Product (GDP) forecast for the Philippines for the remaining half of 2025 as it expects the country’s economy to slow down.
According to Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco and Asia Economist Meekita Gupta, they are reinforcing their below-consensus forecast for the country of 5.3 % for the second half of 2025.
This is in response to the Philippine government’s latest claims regarding the country’s economic growth, which is contrary to Pantheon Macroeconomics’ latest report. The government’s expected second quarter growth was slower than the forecasted 6.5% growth targeted for the end of the year.
In a statement made on August 7, 2025, Department of Economy, Planning, and Development Secretary Arsenio Balisacan said that the Philippine economy is forecasted to perform better in the second half of 2025 due to strong domestic consumption, concerted efforts to manage inflation, and the expected recovery in the public construction sector.
Moreover, the Philippine Statistic Authority posted 5.5% economic growth in the second quarter of 2025, compared to the first quarter of the year.
Pantheon Macroeconomics economists say they expect the recovery in year-over-year consumption growth to improve at a slow pace all the way into 2026. The process to repair these risks are skewed downward.
They do predict the average annual inflation to slip to just 1.8% in 2025 with household spending increasing.
Meanwhile, the PSA disclosed that the household spending increased in the second quarter of 2025 by 5.5%, higher than the 4.8% posted in the same quarter in 2024.
Food and non-alcoholic beverages (5.7%); Transport (11.2%); Miscellaneous goods and service (4.3%); Education (9.7 %); and Restaurants and hotels (7.4%) are the top five contributors to the House Final Consumption Expenditure (HFCE) year-on-year in the second quarter of 2025.
For the economists, the damages caused by the Covid-19 pandemic and the cost-of-living crisis on household balance sheets remain severe, with repair efforts still underway.
Regarding investment growth in the country, expectations for material recovery should commence next year as capacity utilization remains below average.
This was attested by the PSA in its second quarter report where Gross Capital Formation (GCF) rose year-on-year by 0.6%. This, however, was a deceleration compared to the 11.5% growth recorded in the same period the previous year.
According to the Pantheon economists, government spending has slowed down due to the mid-term election period, and this could continue in the coming quarters. The Organization for Economic Cooperation and Development (OECD) notes that the country’s growth will slow down further in 2025, marking three consecutive years of missed targets for the government. In 2024, a disappointing 5.7% GDP growth was recorded.
Read more:
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Why the World Bank Lowered the Philippines’ GDP Growth Projection
