The Philippine economy continues to stand out globally, driven by strong domestic consumption and a favorable demographic profile. Despite facing global economic headwinds, the nation remains resilient, showcasing significant growth potential.

Dante Tinga Jr., Senior Vice President at BDO Unibank’s Investor Relations Group, shared this optimistic view during an exclusive economic briefing for BDO’s Japanese clients.

Speaking to over 80 executives from Japanese companies, Tinga emphasized the critical role of the country’s young and growing population and robust consumer spending in propelling economic performance. He pointed out that the Philippines is well-positioned to sustain its growth despite the uncertainties in the global economy.

With half of the country’s population aged 25 or younger and an annual population growth rate of 1.6%, the Philippines’ young demographic plays a vital role in the nation’s economic resilience. Domestic consumption has remained strong, surpassing pre-pandemic levels, thanks in part to the resurgence of overseas labor deployment, which now exceeds pre-pandemic numbers, and a steady inflow of remittances from Filipinos abroad. These factors continue to boost the purchasing power of Filipino families, contributing to consumption-driven growth.

Inflation in the Philippines has returned to the Bangko Sentral ng Pilipinas’ (BSP) target range, paving the way for potential monetary easing. Stabilized rice prices, supported by government measures such as reduced import tariffs, have helped maintain price stability. Consequently, the BSP is expected to cautiously lower interest rates, which could foster a favorable environment for business investments and improve consumer confidence.

On the global front, easing monetary policies, including the U.S. Federal Reserve’s efforts to lower interest rates, align with local conditions and further support economic recovery. These adjustments are anticipated to stimulate private sector investment, boost business sentiment, and potentially accelerate the Philippine economy back to its pre-pandemic growth trajectory.

However, the Philippines must also navigate potential challenges on the international stage, including the effects of U.S. fiscal policies under the upcoming Trump administration and the impact of a stronger dollar, which could increase import costs and pressure the peso. Additionally, while the Philippines continues to excel in services exports and benefits from significant remittance inflows, Tinga stressed the importance of upskilling the workforce to remain competitive in the increasingly digital global economy.

Although private capital expenditures have been subdued due to previous high interest rates, the improving outlook for inflation and declining rates is expected to bolster private sector investment moving forward.

Tinga concluded that the Philippines is well-positioned for accelerated growth, underpinned by resilient domestic consumption, strong household balance sheets, and prudent monetary policies. He also emphasized the importance of understanding the needs of international investors, especially as BDO’s Japan Desk plays a pivotal role in strengthening economic ties between Japan and the Philippines. By offering tailored insights and solutions, the Desk supports mutual growth and fosters greater opportunities for businesses in both countries.