Unicapital Securities, Inc. launched its 2025 Mid-Year Briefing series with Turning the Corner, a data-driven forecast into where the Philippine economy and markets are headed next. With inflation on a downtrend and the market sentiment bouncing back, experts agree that the country is moving past early-year headwinds towards a steadier and more confident path forward.
Tamer inflation and supportive policies
Filipinos are feeling a lot more optimistic as inflation averaged just 1.8% in the first half of 2025, the lowest first-half average in over a decade, well below earlier expectations.
This prompted Unicapital to lower its year-end forecast from 3.1% to 2.0%. The drop, driven by lower rice and oil prices, has given the Bangko Sentral ng Pilipinas (BSP) room to consider further interest rate cuts — possibly another 25–50 basis points (bps) after the 50 bps reduction earlier this year. This creates a more favorable environment for businesses to invest and for consumers to access affordable loans.
While GDP growth expectations have been adjusted to 5.5%, this remains ahead of the projected Southeast Asia (SEA) average of 4.2%. Key growth drivers like household spending, major infrastructure projects, tourism recovery, and steady cash remittances from Filipinos abroad continue to keep the Philippines among Southeast Asia’s more resilient performers.
Stock market performance has also turned a corner. After falling 3% in the first half of the year, the Philippine Stock Exchange Index (PSEi) recovered to around 6,350 in July, boosted by calmer inflation and growth-supportive policies. Unicapital expects the PSEi to potentially reach 7,100 by year-end, influenced by strong corporate earnings and attractive share prices.
“The PSEi’s rebound to 6,350 is more than just a market correction. It reflects an 8% earnings growth outlook and sector resilience in areas like Consumer, REITs, and Utilities,” said Marlyne Fernandez, President of Unicapital Securities, Inc.
“Our role is to translate these numbers into actionable strategies for investors, so they can position ahead of the curve and benefit from the industries shaping the Philippines’ growth story. We believe the Philippines is not just turning the corner but is positioning to lead SEA’s growth race in 2025,” Fernandez affirmed.
Managing trade shifts
Meanwhile, international trade is showing both positives and challenges. One bright spot is that semiconductors, a major Philippine export, were excluded from the higher tariff, presenting an opportunity for the Philippines to diversify and move up the value chain in its exports to strengthen its position in the global market.
However, the latest U.S. tariff policy under President Donald Trump set a 19% tax on many Philippine exports, with only a few exceptions. This rate is higher than those given to some Southeast Asian neighbors such as Vietnam and Thailand, which means Philippine products could become more expensive and less competitive in the U.S. market.
As 2025 moves into its second half, Unicapital sees the Philippines ready to seize opportunities and tackle global challenges head-on. If current momentum holds, the challenge, and opportunity, lies in translating stability into sustained growth that investors, businesses, and everyday Filipinos can feel.
