Research group IBON said that the Marcos administration’s top priority post elections of hitting its 6.0% economic growth target for 2025 by achieving 6.2% growth rate for the remaining quarters of the year is absurd. The government must abandon its hyper-optimism and blinders to global and domestic realities, the group said. The economy is in a slump, the group added, and faster growth can only be attained through bold measures that address structural weaknesses and are informed of current global uncertainties.
IBON noted that there is a concerning shift to lower growth, with the economy declining from the average 6.4% in the 2010-2019 decade prior to the pandemic to just 5.6% in 2023-2024, considering the 2020-2022 period of lockdown and rebound as an anomaly. This decline underscores the failure of neoliberal policies and decades of overly relying on foreign investments and prioritizing corporate profits for so-called development.
IBON noted that the government mostly fails to achieve even the low end of its growth targets. Household spending, accounting for over 70% of the gross domestic product (GDP), slowed drastically to 1% in Q1 2025 from 2.2% in the two previous quarters. This strongly indicates dwindling real incomes and worsening purchasing power for families suffering low earnings, jobs informality and uncertainty, despite slow inflation and high employment rates. Meanwhile, gross capital formation, or total investment in the economy, rose slightly to 1.7% but remains below the 2.9% average the decade before the pandemic.
The group said that the government is failing to shield the Philippine economy from global shocks, particularly the ongoing repercussions of the Trump administration’s economic policy. Its insistence on remaining open amid rising protectionism, destabilizing global capital flows and rising geopolitical tensions pose significant risks. Since the 2008-2009 global financial crisis, global trade and investment have been slowing, further disrupted by the pandemic and supply chain issues. Heightened US economic aggressiveness is likely to exacerbate these challenges, negatively impacting overseas remittances and exports from both foreign and Filipino firms in the country.
IBON said that attaining meaningful growth – the kind that truly benefits poor Filipinos – is possible but requires bold policy and structural changes. These include boosting domestic demand through real wage and income growth, more equity and redistribution, and expanded public services. Long-term strategies must focus on strengthening domestic agriculture and Filipino industrial capacity to ensure sustainable and inclusive growth. ###
