In John 5:25, is Christ referring to those physically or spiritually dead?

This text is from a letter written by David Gooding.

You ask about John 5:25:

Verily, verily, I say unto you, The hour is coming, and now is, when the dead shall hear the voice of the Son of God: and they that hear shall live.

It seems to me that our Lord must be referring to the spiritually dead, who hear his voice and by that means receive eternal life. If verse 25 referred to the physically dead, then, according to Christ, 'the hour comes, and now is, when the dead shall hear the voice of the Son of God, and they that have heard shall live' would mean that in this present time, in the hour that now is, we should see the dead rising out of their graves and being brought back to life.

That is obviously and manifestly not so, and that for me clinches the argument, that John 5:25 must refer to the spiritually dead.

With warmest greetings,