<\/p>\n
THE PHILIPPINE ECONOMY is probably going <\/span>to expand by 4.7% this 12 months, amid sluggish government spending and oil supply disruptions arising from the continuing war within the Middle East, Fitch Solutions unit BMI said.<\/p>\n In a report dated March 31, BMI said Philippine gross domestic product (GDP) growth could have recovered in the primary quarter, expanding by 3.6% on account of strong exports and factory activity.<\/p>\n If realized, this could be faster than the post-pandemic low of three% within the fourth quarter of 2025, but much slower than 5.4% in the primary quarter of 2025.<\/p>\n At the identical time, BMI said it cut its full-year Philippine GDP growth projection to 4.7% from 5.1%, reflecting its shift to a scenario <\/span>where oil prices remain higher for longer.<\/p>\n \u201cSubdued government capex (capital expenditures) continued to weigh on overall activity. Moreover, the US-Iran conflict darkens our outlook for the remaining of the 12 months,\u201d BMI said.<\/p>\n Latest data from the Bureau of the Treasury showed that government spending fell 12 months on 12 months for a sixth straight month in January. State spending slumped by 23.9% to P303.5 billion from the P398.8 billion logged in the identical month last 12 months.<\/p>\n The Fitch unit also noted that elevated energy prices amid the war will likely weaken consumers\u2019 purchasing power, eventually taking a toll on the consumption-driven economy.<\/p>\n \u201cAlready, this has fed through to higher domestic energy prices, with diesel and gasoline prices rising by around 80% and 50% respectively, compared with pre-conflict levels,\u201d BMI said.<\/p>\n \u201cHigher fuel costs will erode household purchasing power and weigh on growth, while government measures to curb energy consumption \u2014 including a four-day workweek for public sector employees \u2014 will add further to this drag,\u201d it added.<\/p>\n The month-long Middle East conflict sent oil prices soaring after the closure of the Strait of Hormuz disrupted crude oil shipments.<\/p>\n The Philippines, a net importer of oil, sources most of its supply from the Middle East, making the country vulnerable to swings in global oil prices.<\/p>\n Last month, President Ferdinand R. Marcos, Jr. placed the Philippines under a state of national energy emergency for a 12 months amid concerns over the country\u2019s energy supply.<\/p>\n Mr. Marcos also signed into law a measure temporarily authorizing the Executive department to suspend or reduce the excise tax on petroleum products.<\/p>\n Because the US and Israel began its war on Iran in late February, local pump prices have jumped up by P43.50 a liter for gasoline, P67.35 per liter for diesel and P70.90 per liter for kerosene.<\/p>\n Nonetheless, the Department of Foreign Affairs said last week that it has secured a cope with Iran, allowing Philippine-flagged vessels shipments and seafarers secure passage through the Strait of Hormuz.<\/p>\n BMI sees consumer prices soaring in the approaching months, raising its full-year inflation forecast to three.6% from 3.2% previously.<\/p>\n \u201cEven so, we’re revising up our inflation forecast by 0.4 (percentage point) to three.6%, with implications for monetary policy,\u201d it said.<\/p>\n This also got here after the Bangko Sentral ng Pilipinas (BSP) stood pat in an off-cycle meeting last month because it noted that inflation may breach its 2%-4% goal at 5.1% this 12 months. <\/span><\/p>\n The central bank\u2019s benchmark rate currently stands at an over three-year low of 4.25%, following 225 basis points (bps) in total cuts since August 2024.<\/p>\n For BMI, the BSP\u2019s easing cycle has now hit a dead end, with no room for any further reductions no less than until yearend.<\/p>\n \u201cThis decision suggests that the BSP is willing to look past short-term supply-shock inflation spikes and signals the bar for a rate hike stays high,\u201d it said. \u201cTaken together, this meeting reinforces our revised call for no additional easing in 2026.\u201d<\/p>\n The Monetary Board is scheduled to carry a policy meeting on April 23. \u2014 Katherine K. Chan<\/b><\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" A transparent view of the setting sun is seen above the skyline of Taguig, March 13, 2026. \u2014 PHILIPPINE STAR\/RYAN BALDEMOR THE PHILIPPINE ECONOMY is probably going to expand by 4.7% this 12 months, amid sluggish government spending and oil supply disruptions arising from the continuing war within the Middle East, Fitch Solutions unit BMI […]<\/p>\n","protected":false},"author":1,"featured_media":314245,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[21651,30601,17667,5456,4595,3340,1901,571],"class_list":["post-314244","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-bmi","tag-darkens","tag-east","tag-economy","tag-middle","tag-outlook","tag-philippine","tag-war"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/314244","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/comments?post=314244"}],"version-history":[{"count":2,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/314244\/revisions"}],"predecessor-version":[{"id":314247,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/314244\/revisions\/314247"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media\/314245"}],"wp:attachment":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media?parent=314244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/categories?post=314244"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/tags?post=314244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}