Philippine economic growth is expected to accelerate this year, driven by the continued expansion of household consumption.

"We expect the Philippine economy to expand by 6.3% in 2025, outpacing the previous year’s performance, with household consumption remaining its biggest driver," BPI lead economist Jun Neri said in a commentary released late Wednesday.

Neri earlier forecast a 6.1-percent economic growth for 2024.

He said factors sustaining household consumption growth such as remittance inflows, remained in place despite the economic slowdown in major economies.

"With aging populations abroad driving the demand for labor, the impact of headwinds on remittances like trade barriers and anti-immigration sentiment will likely be limited. Remittances also have a strong track record of stability and growth even in times of crisis, as seen during the pandemic," he said.

Neri said the country's low unemployment rate is also expected to support consumption.

"This should continue to drive the growth of household income and the expansion of the middle class," he said.

Latest data from the Philippine Statistics Authority showed that the unemployment rate further went down to 3.2 percent in November last year from 3.6 percent in November 2023.

Consumer spending, meanwhile, is expected to grow at a faster pace this year as inflation remains at a manageable level.

"This improvement will likely be most apparent in discretionary spending after a period of slower growth caused by high inflation, as consumers focused more on essentials," said Neri.

Inflation will likely settle at 3.5 percent this year, well within the government's 2 to 4 percent target, Neri said.

PNA PHOTO