The Philippine Statistics Authority (PSA) announced on Thursday that the national economy grew by 5.5% in the second quarter of 2025, driven by strong expansion in the services, agriculture, and industry sectors.

During a press conference, PSA chief and National Statistician Claire Dennis Mapa noted that the growth recorded from April to June marks the fastest in four quarters, up from 5.4% in Q1 2025. However, it remains slower than the 6.5% growth recorded in the same period last year (Q2 2024).

According to the PSA’s official statement, the major economic sectors posted annual growth this quarter:

• Agriculture, forestry, and fishing grew by 7.0%,

• Industry expanded by 2.1%,

• Services rose by 6.9%.

The agency attributed the annual growth to robust performance in:

• Wholesale and retail trade (up 5.1%),

• Public administration, defense, and compulsory social security (up 12.8%),

• Financial and insurance activities (up 5.6%).

Election Spending Slowdown & Household Consumption Boost
During the briefing, Economic Planning Secretary Arsenio Balisacan explained that slower government spending growth (just 8.7% in Q2 vs. 18.7% in Q1) was due to election-related spending restrictions. However, he expects public spending to recover in the second half of the year, particularly in infrastructure projects.

He added that election campaigns boosted household consumption, which grew by 9.5%—up from 5.3% in Q1 2025 and 5.4% in Q2 2024.

Trade Performance: Exports Outpace Imports

• Exports rose by 4.4%, surpassing import growth of 2.9%.

• Goods exports surged by 13.6%, led by semiconductors (up 10.8%).

• Services exports, however, declined by 4.2%, reflecting global economic uncertainty.

2025 Growth Target: 5.5%-6.5% Still Achievable
Balisacan stated that the government’s economic team maintains its 2025 GDP growth target of 5.5%-6.5%. Achieving the lower end (5.5%) is now within reach, while the upper range remains possible if the economy sustains its momentum in H2.

To hit the minimum target, the economy needs to grow by 5.6% in the remaining months—a feasible goal, he said. He also noted that inflation dropped to 0.9% in July, the lowest in nearly six years, driven by declining prices in housing, utilities, and fuel.