2025 in Review. The Events That Shaped the Philippine Economy

Updated: December 22, 2025

For many Filipinos, 2025 was a year of mixed signals. News reports talked about growth and recovery. Daily life still felt tight. Prices stayed high. Loans were expensive. Floods kept coming back. The disconnect between economic headlines and lived experience defined the year.

This is my take on a year-end financial review and how the Philippine economy and markets moved in 2025.

A Growing Economy That Still Felt Heavy

On paper, the Philippine economy continued to grow in 2025. Consumption remained strong. Services stayed resilient. Government spending supported activity. Data from the Philippine Statistics Authority showed growth that compared well with many regional peers. But growth was uneven.

Urban service sectors benefited more. Agriculture and manufacturing struggled. This unevenness explains why many households felt left behind despite positive GDP numbers.

Growth existed. Relief was limited.

Inflation, Interest Rates, and the Cost of Living

Inflation cooled compared to earlier years, but food prices remained stubborn. Rice, vegetables, and meat continued to strain household budgets.

The Bangko Sentral ng Pilipinas kept interest rates high for most of the year. This helped anchor inflation expectations. It also made borrowing painful.

• Housing loans stayed expensive.
• Credit card balances became harder to manage.
• Savings rates improved, but not enough to offset years of price increases.

The result was stability without comfort. Less panic. Continued pressure.

Jobs Improved. Security Did Not

Employment numbers improved in 2025. More Filipinos had work. Underemployment remained a concern.

Wage growth struggled to catch up with cumulative inflation. OFWs benefited from a relatively stable peso. Local workers felt the squeeze more sharply. Economic data repeatedly showed the same pattern.

Flood Control Scandals and the Cost of Poor Governance

One of the most damaging local issues in 2025 was repeated flooding, along with the controversies surrounding flood control projects.

Despite billions of pesos allocated over the years, floods disrupted Metro Manila and key provinces again. Businesses shut down temporarily. Transport stalled. Farmers lost crops.

Findings from the Commission on Audit flagged delayed projects, substandard materials, and procurement issues. These were not abstract governance problems. They had direct economic effects.

• Food supply disruptions worsened inflation.
• Small businesses lost income and inventory.
• Government funds were spent on repairs instead of prevention.

Flood-control failures showed how corruption and poor execution slow growth. Infrastructure spending only helps when it works.

Fiscal Pressure and Tighter Trade-Offs

Government spending continued to support the economy. Infrastructure remained a priority. Debt servicing costs also rose. The Department of Finance faced tighter trade-offs. Every peso mattered more. Interest payments limited flexibility.

Planning agencies, such as the National Economic and Development Authority, emphasized long-term reforms. Execution and efficiency became just as important as spending size.

Markets Reflected Caution, Not Fear

The Philippine Stock Exchange delivered mixed results. Banks, utilities, and infrastructure-linked firms performed better. The property and discretionary sectors felt pressure from high interest rates.

Retail Treasury Bonds attracted conservative investors. Elevated yields made fixed income once again appealing. The peso traded within a manageable range. Remittances supported stability. Global uncertainty capped upside.

Markets did not collapse. They stayed selective.

Global Forces That Reached Filipino Households

Several global events shaped local outcomes.

The Federal Reserve delayed aggressive rate cuts. This kept the dollar strong and limited the BSP’s ability to ease. China’s slower growth softened regional sentiment.

Export optimism cooled. Geopolitical tensions added uncertainty to energy and food prices. Climate events globally increased import costs.

These external factors fed directly into local inflation and market volatility.

Changing Consumer Behavior

Filipinos adjusted. Spending became more intentional. Travel and dining returned. Big purchases were delayed. Credit usage increased. Awareness of debt risks also grew. Households prioritized liquidity. Emergency funds mattered more than chasing returns.

What 2025 Ultimately Taught Us

2025 was not a crisis year. It was a stress test.

It tested institutions through failures in flood control. It tested households through high prices and high rates. It tested investors through uncertainty and uneven returns.

The economy grew. It did not solve personal financial problems on its own.

A Grounded Outlook Heading Into 2026

The lesson from 2025 is clear. Growth headlines are not enough.

Good governance matters. Food security matters. Interest rates matter. Preparation matters more than optimism.

For Filipino households and investors, the past year reinforced a simple truth. You cannot control the global economy. You can control how prepared you are for it.

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