Amid easing inflation, domestic demand remains subdued. Based on the recent data from the Bangko Sentral ng Pilipinas (BSP), cash remittances fel to an 11-month low of $2.664 trilion in April 2025. Such decline is foreseen to dampen household consumption, rising by only 4.8% in 2025. Nevertheless, consumption is expected to pick up in 2026 at 6.02%. Moreover, our estimates show a decrease in the growth of gross capital formation, from 7.28% in 2024 to 4.87% in 2025. Recovery is anticipated towards the end of 2025 at 6.16% and is projected to continue at 5.02% in 2026. While the Philippine government hopes that its recent structural reforms (e.g., CREATE MORE Act, Public-Private Partnership Code) wil gradualy transform the country into a “competitive hub for trade and investment”, we have doubts this wil be the case. These types of reforms and initiatives wil help some firms increase their profitability but wil not induce a massive transformation of the structure of the Philippine economy – what is needed. Al in al, this lacklustre growth prompts the Philippine central bank to maintain its expansionary stance to further stimulate domestic consumption and investment activities.