BSP: PH economic growth seen moderate at lower end of 6-8% target

The Bangko Sentral ng Pilipinas (BSP) is expecting the country's economic performance this year and next to be moderate amid tempered consumption activities resulting from high commodity prices and global uncertainties.

In its latest Monetary Policy Report, the BSP said its "outlook for domestic economic activity remains firm, though growth is anticipated to moderate compared to previous assessments."

The central bank said the Philippines' gross domestic product (GDP) growth is projected "to settle near the lower bound of the Development Budget Coordination Committee's (DBCC) 6% to 8% target range for 2025 and 2026."

The BSP cited the following factors for its moderate outlook on the Philippine economy:

• The lower-than-expected fourth quarter 2024 growth outturn, driven by a slowdown in services and contraction in agriculture
• Higher global commodity prices, which are expected to dampen economic activity

In the last quarter of 2024, GDP growth rate clocked in at 5.2%, bringing the full-year economic growth to 5.6% — falling short of the government's trimmed target range of 6.0% to 6.5%.

This is also the second straight year that the Philippines missed its economic target after hitting 5.5% in 2023, which was below the 6.0% to 7.0% target for the year.

The central bank said the "headwinds" resulting from high prices "are partially offset by the BSP's monetary policy easing."

"Nonetheless, uncertainty surrounding global economic policies, particularly the potential impact from proposed US tariffs, pose additional risks to domestic growth," it said. — VDV, GMA Integrated News