In recent months, the Philippines has experienced a dramatic shift in political stability. The most headline-grabbing event was the detention of former President Rodrigo Duterte, who is now in The Hague facing charges related to his controversial “war on drugs.” This unprecedented situation has led to political uncertainty and questions about the country’s institutional integrity. But in a surprising twist, while politics may be messy, the Philippine economy is telling a very different story — one of resilience and growth.
Growth Numbers That Speak for Themselves
In the first quarter of 2025, the Philippine economy posted a solid growth rate of 5.4%. While some critics may point out that this is lower than the 5.9% recorded in Q1 of 2024 or the 6.4% in Q1 2023, the context matters. Compared to its neighbors, the Philippines remains a standout. Among Southeast Asia’s major economies, it was the second-fastest growing, just behind Vietnam.
And this isn’t just a quarterly blip. For the entire year of 2024, the Philippines recorded 5.6% growth, once again positioning itself as one of the top performers in the region — even surpassing China’s growth rate and outperforming other fast-growing nations like Bangladesh, Brazil, and Turkey.
The IMF’s Optimism: A Fast-Growing Powerhouse
Looking ahead, the International Monetary Fund (IMF) projects a 5.5% GDP growth rate for the Philippines in 2025, making it the fastest-growing economy in Southeast Asia, ahead of Vietnam (5.2%) and far above China (4.0%). This isn’t a one-off spike. According to IMF data, the Philippines is expected to sustain annual growth rates of around 6% to 6.3% through 2030. If those numbers hold, the country’s nominal GDP will rise from $461 billion in 2024 to over $757 billion by 2030 — a stunning expansion in just six years.
By the end of the decade, the Philippines is projected to become the second-largest economy in Southeast Asia, surpassing Vietnam, Thailand, Malaysia, and Singapore — trailing only Indonesia.
All of this economic momentum is happening during the administration of President Ferdinand “Bongbong” Marcos Jr., whose term runs until 2028.
What’s Driving the Growth?
So why is the economy surging, despite political uncertainties? The answer lies in a mix of strategic policies, strong fundamentals, and global demand.
1. Tax Reforms: The CREATE MORE Act
A major reform introduced under Marcos is the CREATE MORE Act, aimed at making the Philippine investment environment more attractive and competitive. This law reduced the corporate income tax for registered business enterprises from 25% to 20%, and introduced generous deductions — including a 100% additional deduction for power expenses, crucial for energy-intensive industries.
The full effects of this act will take time to materialize, but early signs are promising. According to the Board of Investments, over ₱3.5 trillion in investments were approved from July 2022 to April 2025, with record-breaking annual figures of ₱1.26 trillion in 2023 and ₱1.62 trillion in 2024.
The law also provides up to 27 years of tax perks for strategic investments, and allows up to 50% of employees in RBEs to work from home while maintaining tax benefits — a big plus in the post-pandemic world.
2. Infrastructure: Build Better More
Infrastructure is another cornerstone of growth. Marcos continued the momentum of past administrations with his Build Better More program, a ₱9.14 trillion initiative that includes 185 flagship projects ranging from railways to airports and telecommunications.
For 2025, the government is allocating over ₱1.6 trillion toward infrastructure, with ₱1 trillion going directly into public works. This investment will reduce logistical costs, improve connectivity, and help develop previously underdeveloped regions — laying the groundwork for long-term economic expansion.
3. Fiscal Responsibility Amid Big Budgets
Despite these massive spending plans, the Marcos government has kept the fiscal house in order. The fiscal deficit is expected to decline to 5.2% of GDP in 2025, down from 5.6% in 2024, with projections showing further decreases in the years ahead. This indicates that the Philippines is not just spending more — it’s spending wisely, aligning its expenditures with rising revenues and measured borrowing.
4. Inflation Under Control
Inflation, once a major concern, is now back within manageable levels. From a peak of 8% in 2022, inflation has dropped to between 1–2% in 2025, well within the Bangko Sentral ng Pilipinas’ target of 2–4%. With inflation tamed, interest rates may be lowered by late 2025, which would make loans more affordable and give a further boost to investment and household spending.
Key Sectors Powering the Economy
Beyond policies, several traditional and emerging sectors continue to drive growth.
Electronics Exports
After two years of contraction, electronics exports — a cornerstone of Philippine trade — are expected to rebound in 2025. The Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI) forecasts increased investment in the sector, although the full impact may take a year or two to materialize. SEIPI President Dan Lachica noted that such investment will eventually strengthen the local supply chain and manufacturing base.
Remittances
Overseas remittances continue to be a pillar of economic stability. With the U.S. dollar remaining strong relative to the peso, every dollar sent home by Filipino workers abroad translates to greater purchasing power for families — bolstering consumer spending on food, education, healthcare, and even property.
BPO Industry
The Business Process Outsourcing (BPO) sector remains a major engine of job creation and foreign earnings. The industry is projected to earn over $40 billion in 2025 and add 80,000 to 100,000 new jobs. While some industry leaders express concern about AI and automation, the Philippines’ English-speaking workforce and cost advantages continue to make it an attractive destination for outsourcing services.
Risks on the Horizon
Of course, all projections come with risks. A major wildcard is U.S. politics, especially if Donald Trump wins a second term and pushes through new tariffs on imports from Asia. That could impact electronics and BPO services, two key Philippine export areas.
Geopolitical tensions in the South China Sea, potential domestic unrest due to Duterte’s trial, and the possibility of fiscal missteps are also concerns that could change the narrative.
Conclusion
Despite the political noise, the Philippine economy is thriving — and not by accident. Through a combination of smart policy choices, infrastructure investment, sectoral resilience, and international demand, the country is positioned as one of the top growth engines of Asia through 2030.
The numbers are promising. The strategy is sound. And unless there’s a dramatic global shock, the Philippines may very well emerge as a regional economic powerhouse by the end of this decade.
Let us know what you think about the Philippines’ economic outlook. Is this sustainable growth or just a temporary spike? Drop your thoughts below.