PHILIPPINES Trends and Developments Contributed by: Patricia A. O. Bunye and Christianne Grace F. Salonga, Cruz Marcelo & Tenefrancia
Cruz Marcelo & Tenefrancia 9th, 10th, 11th and 12th Floors, One Orion 11th Avenue corner University Parkway Bonifacio Global City
Taguig 1634 Metro Manila Philippines
Tel: +632 8810 5858 Fax: +632 8810 3838
Email: info@cruzmarcelo.com Web: www.cruzmarcelo.com
Overview of the Political, Economic and Legal Landscape in the Philippines (2025): Economic Growth and Challenges In the 2025 IMD World Competitiveness Ranking, the Philippines rose to 51st out of 69 economies, though it remained 13th out of 14 in Asia-Pacif - ic for the eighth straight year, which highlights ongoing regional competitiveness challenges, particularly in business efficiency. The country improved in two of four pillars: eco - nomic performance climbed to 33rd from 40th, while infrastructure rose slightly to 60th. How - ever, it declined in business efficiency (46th) and government efficiency (51st). The modest overall improvement reflects grow - ing competitiveness, but sustaining progress will require reforms in digital and physical infrastruc - ture, bureaucratic efficiency, human capital, pro - ductivity in key sectors, energy costs and ease of doing business – areas critical to both national development and investment strategy. Meanwhile, the Philippine economy grew by 5.4% year-on-year in the first quarter of 2025, driven by strong gains in wholesale and retail
trade (6.4%), financial and insurance activities (7.2%), and manufacturing (4.1%). All major sec - tors expanded: services (6.3%), industry (4.5%) and agriculture (2.2%). On the demand side, household consumption rose by 5.3%, government spending by 18.7%, capital formation by 4.0%, exports by 6.2% and imports by 9.9%. Gross National Income (GNI) increased by 7.5%, bolstered by a 24.6% rise in net primary income from abroad. Despite recent economic improvements, in July 2025 the World Bank continued to classify the Philippines as a lower middle-income country, with a GNI per capita of USD4,470, just USD26 short of the USD4,496 threshold required for upper middle-income status. GNI reflects the total income earned by a country’s residents, both within the country and from abroad. The USA remained the Philippines’ top export destination, accounting for USD12.12 billion or 16.6% of total exports in 2024. Imports from the US totalled USD8.1 billion, yielding a USD4 bil - lion trade deficit. In February 2025 alone, exports
671 CHAMBERS.COM
Powered by FlippingBook