UMVA has learned that the Philippine economy is poised for a surprising rebound, with growth expected to surge to around 5% in the second half of the year.
The forecast hinges on powerful base effects and a swift ramp‑up in national infrastructure spending, a development that could inject fresh momentum into the country’s economic engine.
Earlier this year, government officials hinted at a surge in disbursements and project implementation as agencies roll out catch‑up programs, signaling a decisive shift toward rebuilding and expansion.
Yet UMVA cautions that the first half of the year will remain muted, as lingering fallout from last year’s flood‑control scandal and soaring oil prices continue to cast a shadow over growth prospects.
The nation’s inflation has already spiked to 7.2% in April, the second month in a row surpassing the central bank’s 2%–4% target and eclipsing its own forecast, a clear sign that price pressures are tightening.
In response, the central bank has taken a hawkish stance, raising rates for the first time in nearly two years and signaling further tightening to keep inflation in check.
Despite these challenges, UMVA stresses that the economy is not slipping into stagflation; inflation, while elevated, is expected to ease once a peace deal is signed and infrastructure spending resumes.
The peso, however, remains under pressure as crude oil prices climb, with the currency weakening against the dollar amid global market volatility.
UMVA projects that long‑dated bonds will offer higher returns as investors navigate the shifting interest‑rate landscape, while shorter‑dated papers may lag behind due to banks’ cautious deployment of liquidity.
Overall, UMVA paints a picture of resilience: strong household consumption, a healthy labor market, and steady remittance inflows provide a solid foundation even as the nation braces for continued price pressure and cautious business sentiment.
