The Philippine economy continues to demonstrate resilience in 2025, navigating global uncertainties with robust domestic demand and a young workforce fueling expansion.
As of the third quarter, gross domestic product growth is estimated at around 5.5 percent, slightly below initial projections but still positioning the country as one of Southeast Asia’s stronger performers.
Inflation remains subdued at 1.7 percent, providing relief to households, while unemployment edged down to 3.8 percent in September, reflecting increased hiring in agriculture and construction sectors.
However, experts warn that structural challenges could cap long-term potential, with forecasts for 2025-2026 holding steady at 5.5-6.0 percent growth amid risks from trade tensions and climate vulnerabilities
In global terms, the Philippines ranks as the 32nd largest economy by nominal GDP, valued at approximately $497.5 billion, with per capita GDP at about $3,984. Within ASEAN, it trails leaders Singapore and Indonesia but outperforms Cambodia and Laos in total GDP, securing a fourth-place spot regionally.
Trends indicate upward momentum: GDP has rebounded from pandemic lows, averaging 5-6 percent annual growth since 2022, driven by services, at 60 percent of GDP and $38.3 billion in remittances from overseas Filipinos. Yet, this progress masks disparities, with 15-16 percent underemployment affecting a significant portion of the workforce.
One of the nation’s most promising yet underexplored avenues for wealth creation lies in unexploited natural resources. The Philippines has an estimated $1 trillion in untapped mineral reserves, including copper, gold, nickel, and zinc, with only 5 percent currently developed. High mineral potential spans 790,592 hectares, positioning the country as a key player in global supplies of nickel and cobalt, essential for electric vehicles and renewable energy technology.
Hydrocarbon reserves in the West Philippine Sea could add trillions more, though geopolitical tensions stall exploration. Additionally, blue and green economies hold vast potential, with mangroves, seagrasses, and forests offering opportunities in carbon credits and sustainable fisheries, potentially leading Southeast Asia in “blue carbon” projects by leveraging nature reporting frameworks.
Beyond resources, untapped human and digital potentials could propel the economy forward. The demographic dividend — a youthful, English-proficient population of over 110 million —supports booming sectors like business process outsourcing, generating $26 billion annually and employing 1.3 million.
Yet, skills gaps in AI and digital technologies limit shifts to high-value roles, with internet penetration at only 68 percent hindering financial technology and e-commerce expansion.
Private sector reforms, including tax reductions for foreign investors under the CREATE Act, have boosted foreign direct investment to $10.5 billion, but small and medium enterprises, which employ 63 percent of workers, contribute only 36 percent to value added due to financing barriers. Infrastructure investments, such as the National Fiber Backbone to provide internet services to the provinces, aim to bridge these gaps, fostering inclusive growth.
Despite these assets, significant hindrances impede acceleration. Infrastructure deficits inflate costs and deter investors, while vulnerability to climate shocks—frequent typhoons and floods—disrupts supply chains and diverts funds to recovery.
High public debt at 63 percent of GDP constrains fiscal space, slowing investments in education and health. Governance issues, including corruption and political uncertainty, exacerbate a weak business environment dominated by conglomerates, stifling competition.
External risks, such as U.S. protectionism and global slowdowns, threaten exports and remittances, with fiscal consolidation progressing slowly post-pandemic. Inequality remains a core barrier, with regional disparities leaving rural areas behind.
Zooming in on Catanduanes Province, the island’s economy grew by 5.4 percent in 2024, driven by services and industry, but this masks vulnerabilities in its agriculture and fishery sectors, which declined by 1.6 percent in 2023 due to limited irrigable land, typhoons and agricultural pests.
Untapped resources abound: Wave energy potential of 10-20 kW/m, or kilowatts per meter, along coasts could power renewable energy projects, while pristine beaches and biodiverse forests offer ecotourism and sustainable forestry opportunities, including herbal products and carbon offsets. Low-grade mineral deposits of gold and copper sit idle due to a mining ban from 2013.
However, hindrances in Catanduanes are pronounced. Frequent typhoons cause economic volatility, destroying crops and infrastructure, while the island’s geographic isolation raises logistics costs and limits market access. High underemployment drives out-migration, exacerbating skills shortages. Poor governance under the previous provincial administration and insufficient infrastructure hinder innovation, leaving small businesses struggling.
Looking ahead, the Philippine and Catanduanes economies hinge on addressing these bottlenecks. Policy shifts toward sustainable resource use, digital upskilling, and resilient infrastructure could elevate growth to 6-7 percent, reducing inequality and harnessing untapped potentials.
For provinces like Catanduanes, targeted investments in disaster-resilient agriculture and eco-tourism could serve as models for inclusive development.
As the Asian Development Bank emphasizes, robust labor markets and low inflation provide a foundation, but external headwinds demand vigilant reforms. In 2025, the glass remains half-full, but filling it will require bold action to convert potential into prosperity.
Bryce McIntyre, PhD, resides San Andres. He holds a doctoral degree from Stanford University, Palo Alto, California, USA.