MANILA— An economist expressed optimism on Wednesday over the Philippine economy’s performance in the second quarter of the year, projecting a 5.6 percent gross domestic product (GDP) growth and a full-year expansion of 5.8 percent.

Business strategist Jonathan Ravelas said the forecasts fall within the government’s GDP assumption range of 5.5 percent to 6.5 percent for 2025.

The Philippine Statistics Authority (PSA) retained the country’s first-quarter GDP growth at 5.4 percent and reported month-on-month improvements in the labor market. In June, the labor force participation rate stood at 65.7 percent, employment rate rose to 96.3 percent from 96.1 percent, underemployment rate dropped to 11.4 percent from 13.1 percent, and unemployment rate fell to 3.7 percent from 3.9 percent.

However, the year-on-year employment rate was lower than the 96.9 percent recorded in June 2024, mainly due to job losses in construction and manufacturing sectors.

Ravelas said these job losses were largely driven by internal factors and not yet by external trade policies such as new U.S. tariffs.

“The U.S. tariffs haven’t hit us head-on yet. But yes, there’s a risk ahead. If those tariffs start biting into electronics and manufacturing exports—especially components we ship to the U.S.—we could see more layoffs, particularly in export-driven zones. So, we need to stay ahead with smarter trade strategies and support for vulnerable sectors,” he said.

He also raised concern over the decline in construction jobs, calling it a potential drag on growth.

“While we don’t have a clear split between public and private infra(structure) spending, this kind of drop usually signals slower project rollouts or delays, especially in big-ticket builds,” he said.

“Construction is a key growth engine. When it stalls, it pulls down overall momentum. So yes, this is one of the factors behind the slower GDP outlook this year. We need to watch infra spending closely—and push for faster execution and better workforce matching to turn things around,” he added. (PNA)