MANILA, Philippines — Global credit rater S&P Global Ratings has raised its 2025 gross domestic product (GDP) growth forecast for the Philippines to 6.1 percent, up from 5.9 percent in May, citing strong domestic demand and economic resilience amid lingering global trade uncertainties.

In a report released Tuesday, S&P senior lead economist Vincent Conti said the revision was supported by a recent easing in tensions between the United States and China, particularly the reduction in bilateral tariffs following the US pause on country-specific “reciprocal” duties.

“These somewhat reduced the uncertainty around global trade and growth,” Conti said. “We nevertheless expect global trade uncertainty to be substantially higher than before January, and that would in turn provide a key headwind for investment in the Philippines.”

The Philippine economy posted a 5.4 percent GDP growth in the first quarter of 2024, slightly up from 5.3 percent in the previous quarter, but still lower than the 5.9 percent recorded a year ago.

In April, the US imposed new tariff hikes, with some rates on Chinese goods exceeding 100 percent. These were partially rolled back in May after talks between the two economic giants, reducing global trade tension to some extent.

S&P warned, however, that uncertainty in global trade remains and could weigh on economic prospects, especially on investor sentiment and capital flows.

Inflation and monetary policy are also in focus, with S&P projecting Philippine inflation to stay within the government’s 2–4 percent target range through 2026. For 2024, inflation is forecast to average 2.3 percent, rising slightly to 3.2 percent in 2025.

As for the Bangko Sentral ng Pilipinas’ (BSP) policy stance, S&P expects the benchmark Reverse Repurchase (RRP) rate to end 2025 at 5 percent, before declining to 4 percent by 2028. The current RRP stands at 5.25 percent, with a possible 25-basis point cut anticipated in the near term amid easing inflation.

Despite global headwinds, S&P sees the Philippines on a solid recovery path, with strong consumer spending, domestic demand, and policy stability helping shield the economy from external shocks.