1 day Ago By N/A (Derco Rosal)
The Philippines’ chief economist has conceded that the country may not be able to achieve the eight-percent upper end of its 2025 growth target due to lingering global uncertainties, including the reciprocal tariffs United States (US) President Donald Trump slapped on its imports. “The eight percent may not be a realistic assumption,” National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said during a press conference on Monday, April 4, even as he maintained that this target remains a consideration. Balisacan argued that the only reason behind the wider range of six- to eight-percent growth target was the economic team’s “realization that the global economy is more uncertain than it used to be.
” “So we wanted to have some flexibility in the way we could respond. But as things will solidify in the coming months, we hope, a firmer and more realistic trajectory.” Balisacan, however, assured that the government is “still quite confident that we may hit at least the low-end part.
” He argued that although multilateral lenders’ projections were below six percent, these remain “very close” to the target. For the first three months of 2025, Balisacan is optimistic that the gross domestic product (GDP) growth will be faster compared to the previous quarter’s 5.3-percent expansion, and hitting the same rate as 5.
9 percent in the first quarter of 2024 will be within reach. “Our target is to move the economy faster than it used to so that we can catch up with our neighbors,” he said. Domestic consumption will most likely drive the first quarter’s growth.
“You won’t expect that exports will be a driver in the first quarter or even for the year, because of these disruptions in the trade. But then again, this does not mean that we should not pay attention to exports.” “Moving forward, we should be paying even more attention to exports, together with investment, so that we can have these two other pillars of growth, and not just on consumption,” Balisacan said.
He also said softer inflation data remains a major accelerator of growth but noted that business decisions are still being delayed due to lingering uncertainty, even with lower interest rates. Balisacan stressed that the country has to be more prepared because the “uncertainty is quite pervasive, and that’s what’s going to impact global trade and the overall economy—the economies of all countries, including the Philippines. This obviously affects our investments and the investment decisions of companies.
” Trump tariff on exports Balisacan, meanwhile, said that the impact of Trump’s 90-day tariff pause on the economy would be positive overall due to trade diversion, but he asserted that it would be “very minimal.” Specifically, the Philippine exports could grow by 1.5 percent, which accounts for less than half of the one-percent increase in GDP.
This is an improvement from the agency’s previous “less-than-0.5 percent” projection. He said the minimal benefits from trade diversion would be because the new tariffs apply to both the Philippines and its competitors.
Considering the three-month tariff pause, “the overall gains in exports and GDP are better under the new setup than with reciprocal tariffs,” he said, but added that the move from the largest economy adds to the global trade uncertainty. “I think the trick is for us to also ensure that our economy is not too vulnerable to any particular country. So we should, even at this point, also be developing other markets,” pointing towards the fast-growing economies as potential markets.
“We can and we should take this as a push to expand the diversity of our exports, the diversity of our export destinations, so that we don't become very vulnerable to any particular shock,” he said..
