The Philippine economy is set to have “mildly faster” expansion in the first quarter — but only because consumption is expected to pick up just enough to offset persistent weaknesses, according to the University of Asia and the Pacific (UA&P) and its Business Economics Club (BEC).
In the latest issue of The Market Call, UA&P and BEC project first-quarter growth at 3.3 percent — barely ahead of the sluggish 3 percent gross domestic product (GDP) expansion recorded in the fourth quarter of 2025.
Even the report concedes the fragility of the situation, admitting that uncertainty over any meaningful recovery remains, though there are “some bits of light emerging.”
“With inflation remaining in the lowest quarter of BSP (Bangko Sentral ng Pilipinas) target range, policy and interest rates declining, and the peso depreciating, consumer spending, residential property sales, car sales, equipment leasing and other interest-sensitive spending should provide better consumption expenditures in Q1 (first quarter),” the report said.
The optimism hinges heavily on favorable inflation trends and looser monetary conditions under the Bangko Sentral ng Pilipinas — factors that analysts hope will jolt spending back to life.
“Thus, we expect a mildly faster Q1 GDP growth of 3.3 percent yoy (year-on-year) from 3 percent since the government still needs to ramp up its spending.”
In other words, without a stronger fiscal push, even this modest uptick could falter.
UA&P and BEC also expect inflation to stay within the government’s target for the year, though they are already warning of a possible acceleration in the coming months — a reminder that the recovery narrative remains on shaky ground.
PNA PHOTO