IMF cuts PHL growth outlook from 6.1% to 5.5%
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HE Philippine economy is seen to expand below the government’s expectations this year, as the direct impact of higher tariffs on the country’s exports to the United States and other external developments could drag economic growth, according to the International Monetary Fund (IMF). In its latest World Economic Outlook, the IMF projects the Philippine economy to grow by 5.5 percent in 2025. This is a significant downward revision from its earlier forecast of 6.1 percent in January 2025.
IMF’s outlook of a 5.5-percent economic growth is at the bottom of the government’s target of 6 to 8 percent this year. The recent external developments, higher uncertainties, financial tightening and the lower-than-expected growth outturn in the fourth quarter of 2024 triggered the lowering of the IMF’s growth projections for the Philippines. The Philippine economy grew by 5.3 percent in the fourth quarter of 2024, while full-year GDP growth settled at 5.7 percent, still below the government’s tar-
get of 6 to 8 percent. The lower GDP forecast also considered the direct impact of higher tariffs on the Philippines’ goods exports to the United States, as well as the downward revisions to its trading partners’ growth, according to the IMF. “Uncertainty, especially that regarding trade policy, has surged to unprecedented levels,” the IMF said in its WEO. To boost the Philippines’ economic growth, the IMF said the recent legislative reforms could facilitate an accelerated implementation of domestic infra-
structure projects, including through public-private partnerships, which could result in higher foreign direct investments. Domestic consumption remains the key driver for growth and is expected to be supported by lower inflation and low unemployment, the IMF added. “Major policy shifts are resetting the global trade system and giving rise to uncertainty that is once again testing the resilience of the global economy,” the IMF said in its WEO. As such, the IMF lowered its See “IMF,” A2
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Wednesday, April 23, 2025 Vol. 20 No. 192
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PHL reviving luggage making, footwear and apparel–Peza
By Reine Juvierre S. Alberto @reine_alberto
HE Philippines may again miss its goal of growing its economy by at least 6 percent this year as electronics, which accounts for a chunk of its export earnings, will bear the brunt of the new trade policy of the United States. BMI, a unit of Fitch Solutions, said the 17-percent reciprocal tariffs slapped by the US on its ally in Southeast Asia will cut real GDP growth of the Philippines by 1.1 percentage points. BMI revised its projection for Philippine GDP growth to 5.4 percent this year, from its initial forecast of 6.3 percent, due to the trade war. “Although the US tariff rate on the Philippines is comparatively lower than that on its peers, almost 4 percent of its value-added output serves US final demand,” BMI Country Risk Analyst Low Shi Cheng explained at a webinar
By Andrea E. San Juan
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on Tuesday. Cheng said the Philippines’s top export to the United States is electronics, such as office machine parts, insulated wires and cables, which account for about 22 percent of total outbound shipments. Meanwhile, the Philippines’s largest import from the United States is integrated circuits and assemblies. Despite this, Cheng said the impact of tariffs on the Philippines will be “softer” compared to other Asian countries. However, given the Philippines’s balanced trade exposure to China See “US,” A2
UN BODY FLAGS ASIA’S CITIES AS VULNERABLE GROWTH ENGINES By Bless Aubrey Ogerio
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@blessogerio
HE United Nations on Monday warned that many cities in Asia-Pacific are unprepared for climate shocks, social inequality and inadequate services, as urban areas are set to absorb 1.2 billion more people by 2050, roughly double the current Asean population. Opening the 81st session of the UN Economic and Social Commission for Asia and the Pacific (ESCAP), officials emphasized the need for stronger regional efforts to build cities that are resilient, inclusive and capable of supporting sustainable growth. “Urbanization is more than just managing growth—it’s about transforming cities into hubs of innovation, resilience, and equity,” said Armida Salsiah Alisjahbana, UN under-secretary-general and ESCAP executive secretary.
Escap’s latest report revealed that one in three urban residents still lack access to basic services. Meanwhile, cities are grappling with escalating climate risks, including extreme floods, heatwaves and rising sea levels. In the Philippines, the 2023 UN-Habitat report noted that 70 percent of urban centers are coastal, with 3.7 million informal settler families, including 500,000 in high-risk areas, living in slums. “This is the paradox we face. Our cities are engines of opportunity, but also centers of vulnerability. But there is hope,” Alisjahbana added. With 2.2 billion urban dwellers in the region, including seven of the world’s largest megacities, UN deputy secretary-general Amina Mohamed emphasized that Asia-Pacific is well-positioned to lead global urban sustainability efforts, provided it addresses inequality, climate impacts, and gender disparities. See “UN,” A2
ATE GUY REMEMBERED: A CULTURAL SALUTE TO NORA AUNOR AT THE MET The National Commission for Culture and the Arts (NCCA) and the Cultural Center of the Philippines (CCP) held a solemn tribute to National Artist for Film and Broadcast Arts Nora Aunor (Nora Cabaltera Villamayor) at the Metropolitan Theatre in Arroceros, Manila, on Tuesday morning, hours before she was buried at the Libingan ng mga Bayani. The ceremony honored the legacy of “Ate Guy,” whose groundbreaking performances and cultural contributions shaped Philippine cinema and inspired generations of artists and fans. Story on page 2. BERNARD TESTA
@andreasanjuan
HE Philippines is hoping to revive its apparel, footwear and luggage manufacturing industries after Washington imposed one of the lower additional tariff rates on the Philippines—a development that most local business leaders believe places the country in a competitive position compared to its peers in Asia whose goods are slapped with higher tariffs to the US. Philippine Economic Zone Authority (Peza) Director General Tereso O. Panga said in a statement on Tuesday that the investment promotion agency has been receiving “serious” inquiries from several investors with manufacturing facilities in the US, China, Taiwan and Vietnam after the recent tariff policy measures implemented by Washington. “Apparel, footwear, and luggage manufacturing are the industries that we lost to China, Vietnam and Cambodia. With the reciprocal tariffs, we hope to revive these industries in the Philippines,” Panga said in a statement on Tuesday. The Peza chief said, “We have received serious inquiries from several investors with manufacturing facilities in the US, China, Taiwan and even Vietnam.” “When you’ve got American, Chinese, Taiwanese, and even Vietnamese manufacturers knocking on your door, you know something’s shifting, and it’s shifting towards our direction,” Panga said. The head of the investment promotion agency tasked to promote and establish economic zones in the Philippines further underscored: “The Philippines is back in the conversation.” In fact, the Peza chief divulged that PLG Prime Global Co. Ltd., a Taiwanese locator which operated in the Philippines from 2018 to 2022 is returning to the Philippines in hopes of being able to export to the US. PLG Prime Global Co. Ltd., one of the leading luggage manufacturers, transferred their luggage manufacturing to China after pulling out from the Philippines in 2022. See “PHL,” A2
PESO EXCHANGE RATES n US 56.5730 n JAPAN 0.4018 n UK 75.7286 n HK 7.2913 n CHINA 7.7577 n SINGAPORE 43.3676 n AUSTRALIA 36.2746 n EU 65.1438 n KOREA 0.0398 n SAUDI ARABIA 15.0793 Source: BSP (April 22, 2025)