BMI, a Fitch Solutions unit has kept its 5.4 percent full-year economic growth outlook for the Philippines in 2025.

BMI said it is keeping its forecast for the Philippine economy a day after the state statistics bureau said gross domestic product (GDP) grew by 5.4 percent in the first three months of 2025.

In a statement, BMI noted that private consumption went up in the first quarter, contributing 3.9 percentage points to the GDP.

“With inflation expected to ease to an eight-year low of 2.2% in 2025, this will provide some support to real incomes and, in turn, household spending,” BMI said.

It also noted that government spending is expected to climb as the Philippines prepares for 2025 mid-term elections.

The Fitch also pointed out that interest rate cuts by the Bangko Sentral ng Pilipinas seems to have encouraged investment activity.

The contribution to GDP from fixed capital formation went up to 1.3 percentage points from January to March, from 1.1 percentage points in the last quarter of 2024.

“With the Bank likely to cut by another 75bps on our forecast, this renewed acceleration would be sustained,” BMI said.

However, that weak global demand may cause Philippine exports growth to slow sharply.