• Key policy rate: 5.75% (February 2025)
• GDP growth rate: 5.6% (2024)
• 2025 GDP growth target: 6.5-7.5%
• Manufacturing Purchasing Managers’ Index reading: 49.0 (February 2025)
• Inflation rate: 2.1% (February 2025)

The Philippines benefits greatly from a young demographic, with nearly two-thirds of its population within the working age bracket of 15 to 64. Filipinos are generally good English speakers and are tech-savvy, which bodes well for jobs in the service sector. The country is a favoured location of companies in the global outsourcing industry and has overtaken India as the call centre capital of the world. Economic growth has been robust after the COVID-19 pandemic, with quarterly expansion averaging above 6 per cent over the last three years. Two-thirds of the domestic economy is driven by the services sector, which is also the fastest-growing segment. Services grew by 6.7 per cent in 2024, dominated by wholesale and retail trade with a 30 per cent share. Meanwhile, the accommodation and food service industry has been leading the charge with double-digit increases since 2022. The industrial sector contributes about 28 per cent of the national output, while the share of agriculture is less than a tenth of GDP. In terms of expenditure, consumer spending is the biggest growth driver at over 70 per cent of GDP. A big chunk of household spending is supported by millions of Filipinos working abroad that send cash remittances back home. Capital investments follow at one-fourth of economic activity, while public spending accounts for about 15 per cent of the local economy. As a small, open economy, the Philippines is exposed to risks in the global supply chains, global financial markets, as well as geopolitical tensions.

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House view: Lundgreen’s is optimistic that the Philippines’ growth story will remain robust alongside its peers in Southeast Asia. Greater investments that will plug domestic infrastructure gaps, combined with sustained fiscal prudence by government, will allow the Philippine economy to attract more private capital and sustainably grow in the coming years. Updated as of 7 March 2025