Slated on July 11 at the Smart Araneta Coliseum, OPM Con Generations has consistently shaped up to be a much-anticipated annual music event. Now on its third year, OPM Con will feature SB19, Ben&Ben, Alamat, Flow G, Skusta Clee, Sunkissed Lola, G22, KAIA, and Xonara, bringing together a diverse mix of artists and genres that continue to define the Philippines’ music scene.

Participating Puregold stores included branches in Taytay, Rizal; Biñan, Laguna; Anabu-Imus, Cavite; Valenzuela; QI Central, QC; Cubao, QC; Fairview Terraces, QC; Tayuman, Manila; Parañaque; Kalentong, Manila; Cainta, Rizal; and San Pedro, Laguna.

Among the first to secure a ticket was Beverly Jane, an A’TIN who camped out at Puregold QI Central with fellow fans the night before ticket selling’s opening day.

“Super excited na for the concert kasi pinila talaga namin ito. Nandito na kami since 7 last night,” she shared. Despite the long wait, she noted that attendees were well taken care of, with food, drinks, and a well-ventilated waiting area for those in line. Expressing her appreciation for Puregold’s continued support of Filipino music, Beverly said, “Thank you so much sa Puregold dahil malaking platform ito para sa OPM at sobrang supportive nito hindi lang sa SB19 kundi sa buong P-pop community.”

The opening day of ticket sales showcased the spirit and broad appeal of Puregold’s OPM Con Generations. Fans from different generations were drawn by a lineup that resonates with a wide range of musical tastes and backgrounds. Over the years, OPM Con served as a platform that brings together artists, audiences, and fandoms in a celebration of Filipino talent and the communities built around it.

At age 62, Suzette Santiago proudly counts herself among SB19’s fans. An avid supporter of the group since 2024, she shared how fangirling over the P-pop group and attending events like OPM Con Generations continue to make her feel young.

“Whenever I listen to their music, may message talaga, and that’s what draws me to them,” she said. “It’s so nice that Puregold is doing this because it’s really encouraging to see our OPM music and industry continue to rise. Hopefully tuloy-tuloy lang because I really enjoy going to these events.”

Meanwhile, Arnel Lamber, who also came the night before to secure his place in the queue, said he was thankful for initiatives that give fans the opportunity to see their favorite artists live. On top of his regular grocery purchases, he was able to secure a ticket to OPM Con Generations and now looks forward to attending the concert.

“Thankful ako sa Puregold kasi nakaka-experience kami ng ganito. Kahit puyat, okay lang kasi masaya naman,” he said.

Puregold likewise expressed its appreciation for the enthusiastic turnout on opening day. “The response we’ve seen so far has been overwhelming,” said Ivy Hayagan-Piedad, Senior Marketing Manager of Puregold Price Club, Inc. “It’s remarkable to see so many customers excited not only about the concert, but also about being part of the experience through Puregold. We eagerly welcome even more concert goers as ticket-selling continues.”

For many customers, the chance to snag sought-after concert tickets alongside their Puregold purchases makes the experience even more rewarding. And as the concert draws near, anticipation continues to build up for what promises to be an unforgettable night of Filipino music and live entertainment.

For updates, like @puregold.shopping on Facebook, subscribe to Puregold Channel on YouTube, and follow @puregold_ph on Instagram and X, and @puregoldph on TikTok.

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Mr. Gatchalian got 13 votes during a special session, replacing Senator Alan Peter S. Cayetano, who conceded the contest before the vote after acknowledging that the opposing bloc had gathered enough support to take control of the chamber.

“After speaking with Senator Joel Villanueva, it appears our colleagues on the other side will soon have the numbers to elect a new Senate President,” Mr. Cayetano said in a statement posted on his Facebook page. “I will not stand in the way of that vote.”

Senator Juan Miguel F. Zubiri nominated Mr. Gatchalian for the Senate’s top post, citing his leadership of several key committees, including the finance committee.

“He has ably led some of our most demanding and time-consuming committees,” Mr. Zubiri said. “He led the finance committee with great resolve, spearheading unprecedented initiatives to ensure accountability and transparency in the national budget.”

After Mr. Gatchalian’s election, Senator Vicente C. Sotto III was elected Senate President Pro Tempore, while Mr. Zubiri became majority leader.

Mr. Cayetano earlier said he would voluntarily step aside if the opposing bloc secured the 13 votes required to replace him.

In his statement, he said he would support measures aimed at helping communities affected by the recent earthquake in Mindanao.

“I will be among the first to back the measures before us to help Mindanao rise from the earthquake — to fund the relief and the rebuilding of broken communities is exactly what a Senate is for, and it has my vote without hesitation,” he said.

Mr. Villanueva had expressed openness to attending the special session, fueling speculation that he would join the bloc backing Mr. Gatchalian.

Several senators aligned with Mr. Cayetano were absent from the special session, although the chamber proceeded with the leadership vote after the Gatchalian bloc secured the support needed to reorganize the Senate leadership.

The change in leadership comes as the Senate faces pressure to tackle priority legislation and preparations for the impeachment proceedings against Ms. Duterte. — Kaela Patricia B. Gabriel

PAGASA weather specialist Ms. Chenel Dominguez said the LPA has two possible tracks. Under the first scenario, it could enter the northern boundary of the PAR but may not move any closer to the country. Under the second scenario, it may only approach the PAR before recurving away from the area.

“So, it will not have a direct effect on any part of the country and will not trigger the hoisting of any tropical cyclone wind signal,” Ms. Dominguez said during PAGASA’s 5 a.m. press briefing in Filipino, describing the effects if the first scenario occurs.

“But whatever happens, whether it enters the PAR or not, it is expected to pull and enhance the southwest monsoon,” she added.

Ms. Dominguez also said the LPA has a medium chance of developing into a tropical cyclone within the next 24 hours, although the likelihood may increase in the coming days.

The LPA was last located 2,900 kilometers east of Eastern Visayas, based on PAGASA’s 10 a.m. Tropical Cyclone Formation Outlook.

As for the effects of the enhanced southwest monsoon, Ms. Dominguez said it may bring widespread rains over Palawan, the Visayas, and Mindanao starting this weekend.

Meanwhile, easterlies and localized thunderstorms are expected to be the country’s prevailing weather systems over the next 24 hours, PAGASA said in its 4am weather advisory.

The easterlies are expected to bring isolated rain showers or thunderstorms over Eastern Visayas, Dinagat Islands, Surigao del Norte, Surigao del Sur, and Davao Oriental, while localized thunderstorms are expected over Metro Manila and the rest of the country.

PAGASA warned of possible flash floods and landslides in the said affected areas.— Edg Adrian A. Eva

In a statement, Mynt said the planned offering would be equivalent to 12% of its total outstanding capital stock after the IPO.

The company said the shares to be offered would consist of both primary and secondary shares, with each common share carrying a par value of three centavos.

The disclosure marks the first formal step toward a long-anticipated stock market debut by the operator of the country’s largest digital finance platform.

“The authorization of our board and shareholders allows us to work toward a potential public listing as the next step in Mynt’s growth journey, while continuing to focus on the priorities that have brought us to this point: serving customers, supporting merchants, strengthening our platform offering, and building the business for the long term,” Mynt President and Chief Executive Officer Martha M. Sazon said.

Any potential offering remains subject to market conditions, the company also said.

Mynt has grown into one of the country’s largest fintech companies through GCash, which began as a mobile money remittance service in 2004 before evolving into a digital finance platform offering payments, lending, and other financial services.— ALB

Obesity, a condition that increases the risk of severe chronic diseases such as diabetes, is estimated to have cost the Philippines around P1.9 trillion in 2025, according to the Epidemiological Burden and Cost of Obesity in the Philippines (EpiCOb-PH) study led by Dr. Madeleine de Rosas-Valera and funded by Novo Nordisk Pharmaceutical (Philippines) Inc. released in March this year.

“We designed the study to answer two fundamental questions. First, how large is the burden of overweight and obesity in the Philippines? Second, what does the burden cost? So, not only in healthcare expenditures, but also in the loss of productivity, disability, and premature mortality,” Ms. Valera said during the forum.

According to the EpiCOb-Ph study, around 29 million adult Filipinos or 41% of Filipino adults are affected by obesity. These numbers are projected to rise by 44.8 million in 2040.

These numbers costs P551 billion direct medical cost, P1.17 trillion productivity losses, and P1.9 trillion total economic burden equivalent to 7.3% of last year’s gross domestic product (GDP).

“The greatest cost of obesity may not be reflected solely in health care expenditures or even in health insurance. It may be reflected in productivity losses that occur quietly and relatively over time. This is why obesity should no longer be viewed solely as a wellness issue,” Ms. Valera said.

Health economist John Paul Cesar Delos Trinos said that when looking at the Philippine economy, sometimes the bigger cost would be the productivity losses.

During the discussion, Department of Labor and Employment (DOLE) Bureau of Working Conditions medical officer IV Marco Antonio S. Valeros said that from DOLE’s perspective, there are no policies yet on addressing obesity in the workplace.

“From the DOLE’s perspective, of course, to be honest, there’s still no specific policy towards obesity. However, we have Department Order 184, Series of 2017. That’s the one on prolonged sitting because we want to combat the incidental lifestyle.” Mr. Valeros said in mixed English and Filipino during the discussion.

“There should be behavioral change communication to accompany our policies… Because sometimes, we’ll go there, of course, there’s evidence, there’s documentary. But, as soon as we leave the company, we don’t know what’s going to happen… the DOLE cannot be 24/7 in all of our establishments.” He added.

Mr. Valeros noted that implementation of these policies will fall upon human resources departments.

Endocrinologist Queenie Villegas-Florencio said during the panel discussion that it is important to make the workplace a healthy environment as preventive measures for obesity.

“A while ago, I mentioned it’s because of the obesogenic environment that led to the weight gain. So, maybe in our workplace, let’s try to make our workplace a healthy environment wherein our employees have a space to exercise, walk, and maybe have some sports activities and regular activities so that they will be—it should be a part of everyday life,” Ms. Florencio said.

“We have to help them and screen them early and refer them to specialists so that they can be managed well to prevent the other comorbidities,” she added.

“From all the studies that we have done, and these are already experiences, also in other countries, if the local government will combine support with the Universal Health Care and PhilHealth—I see that the focus is more on curative than preventive,” Ms. Valera said during the discussion.

“We have not really reached universal health coverage, which has a support value of 65 to 70%. Meaning PhilHealth should be paying 65 to 70% of your hospital care… Under the Universal Health Care Law, it’s the role of the local government,” she said.— Kaizzer Angela V. Manuba

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StreamZone199 comes with 11 gigabytes (GB) of streaming data for popular video streaming apps such as Netflix, iWant, and Prime Video, along with a separate 11 GB of all-access data.

It also includes unlimited calls and texts to all networks, as well as data rollover benefits.

All inclusions are valid for 30 days. The new offer also comes with free 30-day access to Prime Video Mobile, iWant, and BLAST TV.

Adel A. Tamano, chief commercial officer (CCO) of DITO Telecommunity, said the launch of StreamZone199 is a response to Filipinos’ evolving streaming habits but with the same love for connecting through stories.

“We see ourselves in digital not as a data-providing company. We’re not just a utility,” Mr. Tamano said during the launch event.

“We are here to provide not just data, but, together with our partners iWant, BLAST TV, and Prime Video, provide the content and ecosystem that Filipinos really need and want.”

DITO said in a statement that the launch of StreamZone199 continues the expansion of its lifestyle-focused portfolio. — Edg Adrian A. Eva

“We are at the valuation stage, but we know we will really land 45:55 in their favor,” MPTC Chairman Manuel V. Pangilinan told reporters on the sidelines of PLDT, Inc.’s annual stockholders meeting on Tuesday. “I am sure San Miguel will flex to arrive at that.”

The proposed transaction will combine the country’s two biggest toll road operators, creating a dominant player in the domestic tollway sector.

Mr. Pangilinan said discussions are progressing and that the latest structure covers only Philippine assets.

“[We are just waiting] for the valuation. This does not include our Indonesian assets. This will only include our domestic [assets],” he added.

The exclusion of overseas operations means MPTC’s investments in Indonesia and Vietnam will remain outside the merger.

MPTC, the tollway unit of Metro Pacific Investments Corp. (MPIC), resumed merger discussions with San Miguel last year after earlier postponing talks while focusing on debt reduction.

In November 2025, MPIC said it was reviewing several options for MPTC, including the sale of up to a 30% stake in the tollway company, as part of efforts to lower debt and prepare for both the merger and a potential initial public offering.

MPIC has said it is considering two private placement transactions to help cut MPTC’s debt burden, which stood at about P200 billion as of 2025.

MPTC’s international operations include tollway investments in Indonesia and Vietnam. Its Vietnam business is held through affiliate CII Bridges and Roads Investment JSC.

In Indonesia, MPTC and its units, together with Singapore sovereign wealth fund GIC Pte. Ltd., completed a $1-billion investment in 2024 to acquire a 35% stake in PT Jasamarga Transjawa Tol, one of the country’s biggest toll road operators.

PT Jasamarga Transjawa Tol operates a 676-kilometer section of the Trans-Java Toll Road, which serves about 700,000 to 800,000 vehicles daily.

San Miguel stocks rose 20 centavos to close at P67.50 each.

MPTC is the tollway arm of Metro Pacific Investments Corp., one of the Philippine units of Hong Kong-based First Pacific Co. Ltd., alongside Philex Mining Corp. and PLDT.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., holds a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — A.E.O. Jose

THE BUREAU of Internal Revenue (BIR) is preparing for the implementation of a proposed global minimum tax (GMT) regime aimed at ensuring that large multinational companies pay a minimum level of tax on income earned in the Philippines.

“As global tax rules evolve, we have to make sure that income earned in the Philippines remains taxable in the Philippines,” said BIR Commissioner Charlito Martin R. Mendoza in a statement on Thursday.

“At this stage, our immediate priority is to build the capability of our personnel and prepare the systems, processes, and organizational structures needed to administer the proposed regime effectively,” he added.

The Philippines joined the Organisation for Economic Co-operation and Development’s (OECD) Inclusive Framework in 2023, with a commitment to adhere to the two-pillar solution that seeks to reform global corporate taxation and prevent multinational firms from moving their profits into low-tax jurisdictions.

Under Pillar Two, multinational enterprises with annual revenues of at least €750 million that operate in multiple jurisdictions are subject to a 15% minimum effective tax rate.

The Department of Finance proposed the qualified domestic minimum top-up tax (QDMTT) which is targeted to take effect on Jan. 1, 2027, according to Deloitte Philippines.

The BIR met with the DoF’s QDMTT team and the Fiscal Incentives Review Board to discuss the draft bill to be submitted to Congress. They discussed the tax administration considerations for its implementation, including compliance, reporting, audit readiness, and institutional capacity.

To ensure its proper implementation, the BIR is looking at conducting specialized training programs for BIR personnel, developing new tax forms and compliance mechanisms, and establishing organizational arrangements.

Finance Assistant Secretary Euvimil Nina R. Asuncion said it received feedback from multinational enterprises operating in the Philippines, who are prepared to comply with the measure.

“We have been informed that many of our multinationals would rather comply with the GMT domestically rather than comply with unfamiliar rules of other jurisdictions or pay top-up taxes abroad,” she said.

“The primary considerations are simplifying domestic compliance and ensuring that implementation is strictly in accordance with the international standards,” she added.

Raymond A. Abrea, founding chairman and chief executive officer of Asian Consulting Group, said the QDMTT would help the Philippines protect its taxing rights.

“Under the OECD GMT framework, if large multinational enterprises pay below the 15% minimum effective tax rate in the Philippines, another jurisdiction may collect the top-up tax,” he told BusinessWorld.

“The choice is simple: either the Philippines collects the revenue, or another country does,” he added.

Mr. Abrea said the country already lost P162.9 billion in foregone revenues from 2021 to 2023 due to the absence of the GMT regime.

“Delay poses a greater risk than implementation,” he added. “Proper implementation could generate substantial additional revenues without increasing taxes on ordinary Filipinos, micro, small and medium enterprises, or domestic businesses.”

However, he warned that the government must tackle challenges related to administering the QDMTT.

“The most important step today is for the government, particularly the BIR, to be brutally frank about its readiness, limitations, and resource requirements,” he said.

Mr. Abrea said the country could tap the OECD as well as the private sector in building capacity, strengthening compliance systems, and maximizing potential revenue collections.

“The objective is to implement it correctly, maximize revenues that rightfully belong to the Philippines, and create fiscal space for broader reforms — including increasing the take-home pay of the Filipino middle class and improving public services,” he added.

Asked about the impact of the reform on investors, Mr. Abrea said that he does not see it reducing the country’s competitiveness in attracting foreign investments.

“The global competition for investments is no longer based solely on low tax rates. Investors today prioritize policy stability, talent, infrastructure, energy security, ease of doing business, and regulatory certainty,” he said.

“The real opportunity is to shift from competing on tax incentives to competing on competitiveness.”

The overall electricity rate is set to increase by P0.1488 per kilowatt-hour (kWh) to P14.4833 per kWh this month from P14.3345 per kWh in May, Meralco said in a statement on Thursday.

For households consuming 200 kWh, the adjustment translates to an increase of about P30 in monthly electricity bills. Those consuming 300 kWh, 400 kWh, and 500 kWh will pay an additional P45, P60, and P74, respectively.

Meralco Spokesperson Joe R. Zaldarriaga attributed the rate hike to higher generation charges, which increased by P0.2762 per kWh month on month to P9.0704 per kWh.

The upward adjustment in generation charge was driven by the increase in Wholesale Electricity Spot Market (WESM) prices to P7.0281 per kWh.

This was offset by lower line rental and other charges following the lifting of the suspension of WESM operations on May 1. 

“There was a limitation in generation following the tripping of several transmission lines. That is the reason for the spike in prices in the WESM,” Mr. Zaldarriaga said in Filipino.

Last month, the Luzon grid was placed under a series of red and yellow alerts due to the unavailability of some power plants and tripping of transmission lines, triggering power interruptions in some areas.

Meanwhile, charges from power supply agreements (PSAs) increased by P0.0941 per kWh, mainly due to peso deprecation that affected 54% of the costs and higher world market prices for coal and liquefied natural gas.

On May 29, the peso lost 10.5 centavos to close at P61.59 against the dollar, from P61.485 on April 30, according to data from the Bankers Association of the Philippines.

Meralco said that charges from the supply procured from major gas-fired power plants in Batangas declined by P0.1569 per kWh due to improved average dispatch, offsetting the impact of higher fuel costs.

The overall rate hike this month was tempered by the transmission charge, which decreased by P0.1525 per kWh.

Taxes and other charges, meanwhile, had a net increase of P0.0251 per kWh.

Mr. Zaldarriaga said customers continue to benefit from Meralco’s ongoing refund equivalent to P0.4278 per kWh for residential customers.

“Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively; while taxes, universal charges, and feed-in tariff allowance are all remitted to the government,” Meralco said.

The distribution utility’s charge, on the other hand, remained unchanged since the P0.0360 per kWh reduction for a typical residential customer beginning August 2022.

Meralco said that the “significantly higher consumption” of customers in May due to extreme heat will have an impact on their June billing statement.

“While there is an increase in electricity rates this month, elevated consumption patterns observed in May is also a major factor that could drive higher power bills of customers,” Mr. Zaldarriaga said.

As the onset of the rainy season has been declared, the Meralco official said that consumption may decrease due to cooler temperatures.

“We can already feel that the weather is improving somewhat, at least in terms of temperature levels. There is a possibility that, because of lower consumption, customers’ bills for the July billing period may be lower. However, that will still depend on their actual consumption,” Mr. Zaldarriaga said.

Meralco is the country’s largest private electric distribution utility, serving more than 8.2 million customers in Metro Manila and nearby provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga, and Quezon.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

PHILIPPINE BANKS and trust entities’ exposure to the property sector inched up in the first quarter amid improving market sentiment, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Banks’ real estate exposure ratio climbed to 19.07% in the first quarter from the seven-year low of 18.93% at end-December.

Year on year, however, it slipped from 19.41% seen at end-March last year.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said banks’ exposure to the property industry went up on a quarterly basis as sentiment began to recover and real estate projects resumed.

However, lending to other industries may have outpaced those extended to the property sector, which could explain the year-on-year drop in banks’ real estate exposure, he noted.

“The slight year-on-year decline in banks’ real estate exposure reflects faster expansion in non-property lending alongside more measured credit allocation to the sector amid tighter financial conditions last year,” Mr. Asuncion said in a Viber message.

“The quarter-on-quarter uptick likely indicates a modest rebound in lending activity at the start of 2026, supported by improving sentiment and project resumption,” he added.

Sustained lending for ongoing development projects and the slightly higher demand for property-related loans may have also led to the quarterly improvement in banks’ real estate exposure, said Dino M. Palanca, director for marketing and research at real estate firm Savills Philippines.

“While overall market conditions remain selective, developers continue to draw on committed credit facilities for projects already in the pipeline, particularly in the residential, industrial, and logistics sectors,” he told BusinessWorld via Viber.

“The increase, however, remains relatively measured, suggesting that banks continue to maintain prudent underwriting standards amid a still-evolving market environment,” he added.

Meanwhile, Mr. Palanca noted that the annual decline was likely driven by market normalization rather than weaker sentiment in the property sector, with developers becoming “more disciplined” and banks practicing selective lending.

“While softer property market sentiment over parts of 2025 likely contributed to more cautious borrowing and investment decisions. The decline should not necessarily be interpreted as a sign of broad weakness in the property sector,” he said. “Rather, it reflects a market that has been undergoing a period of normalization following several years of adjustment.”

Mr. Palanca said developers are now more disciplined in launching new projects, focusing on absorption rates, project completion, and inventory management.

“Banks, likewise, have remained selective in extending credit, particularly toward projects with strong fundamentals and demonstrated demand,” he said.

The BSP monitors lenders’ exposure to the real estate industry as part of its mandate to maintain financial stability.

In the first quarter, Philippine banks and trust departments granted P3.556 trillion worth of loans and investments to the real estate sector. This was 6.48% higher than the P3.34 trillion it extended a year ago.

Of the total, P3.204 trillion was real estate loans, rising by 7.97% from P2.968 trillion the industry lent a year earlier.

This came as residential real estate loans grew by 8.48% to P1.229 trillion from P1.133 trillion last year, while commercial real estate loans were up by an annual 7.91% to P1.975 trillion from P1.83 trillion a year ago.

Based on central bank data, past due real estate loans amounted to P164.072 billion in the January-to-March period, climbing by 9.73% from P149.518 billion in the previous year.

Broken down, past due residential real estate loans inched up by 0.87% year on year to P108.555 billion, while past due commercial real estate loans jumped by 32.51% to P55.517 billion.

This brought the past due real estate loan ratio to 5.12%, higher than 4.79% at end-December and 5.04% in the first quarter of last year.

Meanwhile, gross nonperforming real estate loans reached P119.819 billion in the first quarter, up by 7.68% from the P111.272 billion recorded as of end-March 2025.

The increase was driven by gross nonperforming residential real estate loans, which rose 4.22% year on year to P75.309 billion, and gross nonperforming commercial real estate loans, which climbed 14.09% to P44.51 billion.

With this, the gross nonperforming real estate loan ratio went up to 3.74% in the first quarter from 3.53% a quarter ago but slightly eased from 3.75% in the prior year.

On the other hand, the sector’s real estate investments amounted to P352.184 billion as of end-March, down by 2.54% year on year from P361.37 billion.

Debt securities fell by 7.94% annually to P235.712 billion, while equity securities nudged 0.1% higher to P116.473 billion.

The annual decline of banks’ real estate exposure signals “strategic caution,” according to Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co.

“Until we see clearer signs of sustained demand recovery, stable rates, and improving occupancy, real estate will likely stay range-bound in bank portfolios, not a major growth driver,” he added in a Viber message.

Meanwhile, Mr. Asuncion expects lending and investment to the real estate sector to be sustained in the coming months as banks step up property-related lending.

“Moving forward, we expect real estate exposure to remain elevated but broadly stable, as a gradual pickup in property-related lending is balanced by banks’ efforts to diversify portfolios,” he said. “Importantly, institutions are likely to continue managing exposures prudently to stay within regulatory ceilings.”

For Mr. Palanca, financing demand from the real estate sector in the months ahead will likely be driven by projects in industrial and logistics, data centers, as well as developments in selected residential segments and offices.

Potential interest rate cuts and increased liquidity could also support developers and property buyers, he said.

“However, banks are expected to continue prioritizing asset quality and risk management, which means capital will likely flow toward projects with clear demand drivers, strong sponsorship, and sustainable cash flow prospects,” Mr. Palanca added.

THE PHILIPPINES risks losing part of its recent human development gains as the Middle East conflict weighs on the economy, with the impact expected to be more significant as the crisis continues, according to the United Nations Development Programme (UNDP).

In a policy brief, the UNDP said the country is among the hardest hit in the region, as it depends on the Middle East for most of its crude oil supply and is a net importer of food and fertilizer.

“The shock has reached households through three reinforcing channels: energy imports, agricultural inputs, and labor migration and remittances. These channels converge on the country’s development trajectory: The UNDP estimates that the immediate impact of the crisis could set back the Philippines’ human development progress by the equivalent of 0.01 to 0.05 years, with losses compounding the longer the disruption persists,” it said.

The policy brief titled “Socioeconomic Impact of the Middle East Conflict on the Philippines” was prepared by Mohamed Shahudh, country economist for UNDP Philippines.

Since the Iran war began on Feb. 28, the Philippines’ macroeconomic conditions have weakened, as seen in the spike in inflation due to soaring pump prices, the peso depreciation, and a slowdown in economic growth.

“UNDP estimates that more than 35,000 Filipinos could fall below the lower middle-income poverty line of $4.20 a day from the initial effects of the war, with this figure rising significantly under a prolonged conflict,” it said.

The UNDP said this could raise the country’s post-crisis poverty rate to 17% from 16.9%, leaving about 20.146 million Filipinos living in poverty.

The estimate assumes a 28-day disruption followed by an eight-month adjustment period. If the adjustment period is limited to four months, the UNDP projects 14,408 Filipinos to be pushed into poverty.

Among the most exposed groups are informal workers, public-transport drivers, farmers, households dependent on remittances, women in low-paid service and care work, and young workers.

“The setback would run through all three dimensions of the Human Development Index, which combines a country’s income, health and education outcomes into a single measure: income first, as inflation and slower growth erode real household incomes, and health and education more gradually, as households under pressure cut back on food, postpone medical care and, if the strain persists, withdraw children from school,” the UNDP said.

According to the policy brief, a prolonged Middle East conflict could sharply reduce household incomes by disrupting remittance flows that account for about 20% of the Philippines’ total remittances.

“The UNDP notes that while short-term shocks may be absorbed, prolonged disruptions to Gulf labor markets can rapidly translate into income shocks for migrant-dependent families, potentially impacting household food security and educational continuity,” it added.

FERTILIZER PRICES
The UNDP also noted that food security can be undermined as food prices rise due to higher costs of fuel, freight, and fertilizer.

“One of the most distinctive second-round price effects for the Philippines runs through fertilizer prices. The country is a net importer, and the nitrogen grades on which rice and corn depend are particularly exposed to a Middle East supply shock,” it said.

The UNDP said average granular urea prices rose by about 37% to P2,255 per 50-kilogram (/kg) bag in March-April from P1,650/kg bag in January-February.

“The burden of this price surge largely falls on the grades that rice and corn farmers use the most, making them the most vulnerable to a prolonged shock,” it added.

Rice-farming households derive about two-thirds of their income from agriculture, making them particularly vulnerable to higher input costs and supply-chain disruptions.

In March, President Ferdinand R. Marcos, Jr. placed the country under a one-year state of national energy emergency due to the impact of the Middle East conflict.

As part of its efforts, the Department of Agriculture set up a quick-response fund for fertilizer and subsidized rice programs.

“I think the government has responded well for the first round, with a really targeted, time-bound approach,” Mr. Shahudh told BusinessWorld.

“As the crisis progresses, a more comprehensive set of measures may be needed, particularly at the subnational level, starting in areas where fertilizer prices are increasing and where states of calamity have been declared,” Mr. Shahudh added.

As the next planting season looms, protecting access to affordable inputs should be the government’s time-sensitive priority “to prevent current financial pressures from translating into longer-term human development setbacks.”

PRIORITIES FOR THE GOV’T
The UNDP said the Philippine government should mitigate the impact of the crisis and ensure this temporary oil shock does not become a lasting setback for development.

“(It should) protect price stability for fuel and food staples through supply-side measures and careful sequencing of the relief measures that expire in mid-July, rather than broad price controls, helping to cushion the purchasing power of the households most exposed to price increases,” it said.

The government should also secure energy supplies through diversification of sources of refined products and accelerate the medium-to-longer term investment in renewable energy.

In the near term, however, it said that the government should require “higher buffer stocks for refined oil products and ensure inventory levels are monitored against safety minimums.” 

The UNDP also urged the government to protect livelihoods by addressing rising fertilizer prices, supporting micro and small enterprises and informal workers, and strengthening support for returning overseas workers.

It also called for the expansion of targeted cash transfers, giving priority to high-exposure, low-development regions.

“An initial public offering (IPO) gives us the chance to increase our stake,” PLDT Chairman Manuel V. Pangilinan told reporters on the sidelines of the company’s stockholders’ meeting on Tuesday. “We are in talks with KKR but there are just some issues right now. We are endorsing and supporting the IPO, we just have to overcome some issues.”

Mr. Pangilinan said PLDT is still evaluating its approach, including whether to raise its holding in Maya or proceed with a public listing structure that allows investor exit.

“Either way — a trade sale or an IPO — we will support. It depends on how much, it depends on what percentage,” he added.

Maya said in February it is targeting an IPO in the second half, with plans to list first in the US before a Philippine Stock Exchange debut.

The listing is intended to raise capital and give early investors an exit route while enabling PLDT to maintain exposure to the digital fintech business.

Maya’s shareholders include PLDT and First Pacific Co. Ltd., which together hold 39.6%, alongside KKR & Co. Inc., Tencent Holdings Ltd. and International Finance Corp.

PLDT posted a 1.77% decline in first-quarter attributable net income to P8.87 billion as higher expenses outweighed modest revenue growth.

Maya Innovations Holdings contributed P285 million to PLDT’s core earnings during the period.

Shares of PLDT Inc. closed P52 lower at P1,085 each.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., holds a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

Energy Secretary Sharon S. Garin said the department is currently developing a fuel transition plan focusing on the transport sector given its heavy reliance on petroleum products.

“With one sector having one dominant fuel source, this concentration is exactly where the country’s vulnerability lies,” Ms. Garin said during the Management Association of the Philippines’ general membership meeting on Wednesday.

The DoE is considering targeting EVs to account for 60% of the country’s vehicle fleet by 2040 and 80% by 2050 under an aggressive adoption scenario, exceeding the Philippine Energy Plan (PEP) 2023-2050’s target of 50% EV penetration by 2040.

The DoE is also looking at raising the target biodiesel blend to 50% (B50), far above the PEP target of 5% (B5).

Republic Act No. 9367 or the Biofuels Act of 2006 mandates that all liquid fuels for motors and engines contain a fixed percentage of biofuel such as bioethanol and biodiesel in a bid to promote cleaner energy, cut dependence on imported oil, and support agricultural industries.

Ms. Garin said the government is also aiming to fast-track the adoption of sustainable aviation fuels and explore the use of hydrogen technologies for heavy-duty transport.

The transport sector accounts for 67% of the country’s total oil demand, based on DoE data.

Oil demand increased sharply from 140,000 barrels in 2015 to 180,000 barrels last year, with diesel continuously accounting for the largest share.

For non-transport sectors, the DoE plans to push fuel switching, improving energy efficiency initiatives, and adoption of cleaner technologies across households, industry, services, agriculture, and off-grid power generation.

“The diversification of our energy sources is one of the actions that will sustain and ensure energy security. We are keen on developing our indigenous oil, gas and coal resources,” Ms. Garin said.

The US-Israel war with Iran has exposed the Philippines’ energy vulnerabilities, as around 90% of its crude oil imports are sourced from the Middle East.

“The DoE has been swift in its actions, employing a whole-of-government approach in securing fuel supply, monitoring and cushioning the impact of prices to consumers, preventing hoarding and profiteering, enforcing energy efficiency and conservation measures, and setting up support measures for the transport and agriculture sectors,” Ms. Garin said. — Sheldeen Joy Talavera

POWER SUPPLY STRAINS in the Visayas worsened after a major earthquake triggered widespread outages in Mindanao, leading to a supply shortfall that prompted grid alerts across both island groups on Wednesday.

In an advisory, the National Grid Corp. of the Philippines (NGCP) placed the Visayas grid under red alert from 1 p.m. to 7 p.m. and yellow alert from 7 p.m. to 9 p.m.

During the period, available capacity stood at 2,556 megawatts (MW), while peak demand hit 2,423 MW.

NGCP said the decline in the power supply imported by the Visayas grid from Mindanao grid was one of the factors that contributed to the declaration of a red alert.

The Visayas is a net importer of power from Luzon and Mindanao, making it vulnerable to power supply constraints when the interconnection from the two island grids is limited.

A red alert, the highest alert level, is issued when power supply is insufficient to meet consumer demand. A yellow alert is declared when power buffer is not enough to meet the transmission grid’s contingency requirement.

NGCP declared a yellow alert over the Mindanao grid from 12 p.m. to 3 p.m. due to unavailability of several power plants and high forecast demand. The grid alert was lifted at 3:50 p.m.

A magnitude 7.8 earthquake struck off the coast of Sarangani province on Monday, causing outages of some power plants that led to power interruptions affecting around 850,000 households in Mindanao.

Mindanao was operating at 2,731-MW capacity against a peak demand of 2,611 MW, NGCP said.

Mindanao was placed under yellow alert for the first time this year, while the Visayas has recorded 29 yellow alerts so far.

Energy Secretary Sharon S. Garin on Wednesday said restoration efforts are still ongoing, with affected power plants targeted to gradually return online.

“We’re trying to be as fast as we can, but we have to be very careful because if you bring it (power plant) too fast, the blackout could last even longer in the long term. So, we’re asking for patience. Within the week, Mindanao should return to normal,” she told reporters on the sidelines of an event organized by the Management Association of the Philippines.

Alexander D. Ablaza, president of the Philippine Energy Efficiency Alliance, said the increase in demand was due to the overlapping demand of commercial, industrial and residential customers.

“Creating sufficient power reserves for the Visayas grid will need a supply-side solution of enabling adequate submarine cable transmission capacities between islands especially to import more power from Leyte and the Mindanao grid,” Mr. Ablaza told BusinessWorld.

He said that local government units, distribution utilities and electric cooperatives should implement more aggressive demand-side measures. These include load-shifting interventions and energy efficiency programs that could shave off more than 2,000 megawatts of peak demand, which continues to rise due to high heat indices and increased economic activities.

Meanwhile, Ms. Garin said the department will issue within the first half its assessment on power plants in the Visayas that are still on forced shutdown before deciding on the potential penalty that might lead to their closure.

“We need to be prepared before imposing any penalties. If there might be closures, if, for example, we cancel a license, we have to make sure that we have replacement power,” she said.

Ms. Garin said that President Ferdinand R. Marcos, Jr. directed agencies to find immediate and long-term solutions to power supply issues.

“The power supply outlook for Luzon and Mindanao is okay. Visayas is problematic. Today and next year, if we do not do anything, Visayas will still have these red and yellow alerts,” she said.

Sharon Ocampo-Montañer, director of the market operations service at the Energy Regulatory Commission (ERC), said the agency and the Department of Energy are closely monitoring the plants in the Visayas through joint inspections of the affected facilities.

“We’re continuously working to help those plants get restored and we’re closely monitoring their recovery so they can return to operation as soon as possible,” she told reporters.

Ms. Ocampo-Montañer said “definitely there are several plants that are exceeding the outage allowance.”

The ERC is implementing a reliability index, which sets the maximum days of planned and unplanned outages per year, varying by generating plant technology.

She said penalties that may be imposed on concerned plants would depend on the impact of the lost capacity on the grid.

In an interview on Money Talks with Cathy Yang on One News on Wednesday, Chinabank Chief Economist Domini S. Velasquez said the central bank has no room to be as aggressive in monetary policy tightening given the weak state of the economy.

“We think the BSP will be hawkish throughout the year as long as inflation remains elevated, and we don’t see signs of it returning back to within target,” she said.

“But I think given that we have 2.8% GDP (gross domestic product) growth, one of the slowest in the region, the BSP cannot hike the same way it did in the 2022-2023 hiking cycle. They don’t have that much room,” Ms. Velasquez added.

The central bank began its previous tightening cycle in May 2022 as soaring fuel prices following Russia’s invasion of Ukraine stoked inflation.

Inflation accelerated from 3% before the crisis to as much as 8.7% in January 2023.

During that cycle, the BSP hiked rates by a total of 450 basis points (bps), bringing the key policy rate to 6.5% by October 2023.

The Philippine economy grew by 7.6% in 2022 and 5.5% in 2023.

Now, the economy is grappling with a new wave of oil shocks compounded by the lingering effects of last year’s flood control corruption scandal. In the first quarter, GDP grew by 2.8% — the weakest pace since the pandemic.

Ms. Velasquez said that if the BSP were to tighten aggressively against this backdrop, the economy may soon fall into a recession.

“If you hike as much as you did before, you’ll see the economy going down or possibly entering into a recession,” she said. “They need to manage it in terms of hiking prudently but not hiking too much also.”

A recession refers to a significant decline in economic activity spread across the economy, often seen as two consecutive quarters of contraction.

Still, Ms. Velasquez noted that the BSP can deliver another 25-bp rate increase at its June 18 meeting as inflation is expected to remain elevated throughout the year.

If realized, this would mark the central bank’s second straight hike, following its 25-bp hike to 4.5% in April to temper inflationary pressures amid threats of broadening spillover effects and disanchoring inflation expectations.

Inflation has settled above the BSP’s 2%-4% target in the last three months but unexpectedly eased for the first time in six months to 6.8% in May from the over three-year high print of 7.2% in April.

The central bank told Reuters last week it may consider taking stronger measures to steer inflation back to its 3% target if elevated inflation expectations become entrenched.

This followed BSP Governor Eli M. Remolona, Jr.’s statement in May that the Monetary Board was considering an off-cycle hike before their scheduled June review.

Based on Chinabank’s forecast, headline inflation could stay below 7% in the coming months to average 5.7% by yearend and will likely cool further to return to the BSP’s target at 3.8% in 2027.

These are slower than the BSP’s 6.3% and 3.8% estimates for 2026 and 2027.

Ms. Velasquez said elevated inflation this year will be driven by higher rice costs amid the looming El Niño season, though offset by gradually declining oil prices.

Ms. Velasquez also noted that the peso’s weakness against the dollar is benefiting the country’s exports and business process outsourcing industry, though she warned against sharp depreciation.

“But in the short term, these industries will not adjust, right? So, it’s going to take like a medium-term trend,” she said. “What we don’t want is sudden depreciation of the peso which I think the BSP has actually been monitoring.”

The Chinabank economist said they are “very positive” on the peso’s performance in the months ahead, but their “best worst-case scenario” sees the local unit hitting P63 to the dollar.

Since the war erupted on Feb. 28, the peso has moved to the P61-per-dollar range.

It averaged P61.441 against the greenback in May, about 1.91% or P1.1497 weaker than P60.2913 in April, according to central bank data.

The BSP has repeatedly said it steps in the foreign exchange market to smoothen out sharp inflationary swings, but not to maintain a specific exchange rate level. — Katherine K. Chan

NET INFLOWS of foreign direct investments (FDI) into the Philippines grew year on year for the first time in three months in March as investor confidence stood firm, the Bangko Sentral ng Pilipinas (BSP) said.

Based on preliminary BSP data released on Wednesday, FDI net inflows climbed by 26.1% to $611 million in March from $485 million a year earlier.

This was the first time since December last year that FDI net inflows posted annual growth.

“FDI net inflows posted a year-on-year increase in March primarily due to base effects and some improvement in investment sentiment, particularly in equity and intercompany funding flows,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said via Viber.

Month on month, net inflows declined by 4.2% from the revised $638 million in February.

March saw the lowest level of inflows in two months or since $469 million in January, which Mr. Asuncion attributed to cautious investor sentiment amid volatile global conditions.

Central bank data showed investments in equity and investment fund shares surged by 48.2% to $243 million in March from $164 million in the same month a year ago.

Nonresidents’ investments in net equity capital other than reinvestment of earnings also soared by 62.1% to $166 million in March from $102 million a year ago.

This came amid the 25.7% annual rise in equity capital placements to $186 million, and a 56.5% decline in withdrawals to $20 million.

Meanwhile, reinvestment of earnings stood at $78 million, 26% higher than $62 million recorded in the previous year.

Net investments in debt instruments likewise increased by 14.6% to $368 million from $321 million a year prior.

FIRST-QUARTER SLUMP
In the first quarter, total FDI net inflows fell by 16.97% to $1.717 billion from $2.068 billion in the same period last year.

SM Investments Corp. Group Economist Robert Dan J. Roces said this slide was not driven by weaker investor sentiment but likely reflected caution stemming from global uncertainty.

“The softer FDI numbers in March and in the first quarter (of 2026) suggest that investors have become more cautious amid global uncertainty, rather than signaling a sharp deterioration in sentiment toward the Philippines,” he said in a Viber message.

The US-Israeli war on Iran, which started on Feb. 28, roiled global oil markets and disrupted trade flows after access to the Strait of Hormuz was restricted.

The BSP also noted that stable foreign equity and reinvested earnings during the period showed foreign investors remained confident in the Philippines.

“From January to March 2026, foreign equity and reinvested earnings remained broadly steady, indicating continued investor confidence in the country,” the central bank said in a statement on Wednesday.

According to the BSP, foreign investments in equity capital other than reinvestment of earnings dipped by 1.1% year on year to $543 million as of March from $549 million previously.

On the other hand, net foreign investments in equity capital, excluding reinvestment of earnings, grew by 13.1% to $337 million in the first quarter from $298 million in the comparable year-ago period.

This came even as equity placements slipped by 1.8% to $390 million, while withdrawals fell by 46.5% to $53 million.

“Equity capital placements were sourced primarily from Japan, the United States, and Singapore, and were channeled largely into the manufacturing, financial and insurance, and real estate industries,” the central bank said.

Meanwhile, reinvestment of earnings amounted to $206 million in the three months to March, down 17.9% annually from $251 million.

BSP data also showed net investments in debt instruments declined by 22.7% to $1.175 billion in the first quarter from $1.52 billion a year ago.

Over the coming months, FDI inflows into the country will hinge on external factors like global interest rates, geopolitical developments, and risk sentiment, as well as on domestic growth and policy execution, Mr. Asuncion said.

“While near-term inflows may remain uneven, structural drivers such as manufacturing, infrastructure, and supply chain diversification should support a gradual recovery over the medium term,” he added.

On the other hand, Mr. Roces noted that better financing conditions will allow FDI inflows to gradually rise in the months ahead.

“Moving forward, inflows may gradually pick up if and when financing conditions improve, but competition for investment remains strong, making execution, policy stability, and infrastructure delivery increasingly important in turning interest into actual investments,” he said.

FDIs refer to cross-border investments in which a nonresident investor holds at least 10% equity in a resident enterprise. These may take the form of equity capital, reinvestment of earnings and intercompany borrowings.

The BSP’s FDI data reflect actual investment flows. This differs from the Philippine Statistics Authority’s approved foreign investment data, which represent investment commitments that may not necessarily be realized within the reference period.

The central bank expects FDI net inflows to reach $7.5 billion this year.

The aftershocks occurred across 538 areas, 48 of which were felt, based on PHIVOLCS’ aftershock count as of 8 a.m.

These aftershocks ranged from magnitude 1.2 to 6.4.

In the past few hours, a magnitude 5.2 earthquake was recorded and felt in two areas, with Intensity III reported in Malapatan, Sarangani, and General Santos City.

PHIVOLCS earlier said that aftershocks following the 7.8-magnitude earthquake on Monday may continue for weeks or even months.— Edg Adrian A. Eva

WHOLESALE and retail prices of construction materials in Metro Manila accelerated to nearly three-year highs in May, driven by strong demand and persistent cost pressures, analysts said.

Preliminary data from the Philippine Statistics Authority (PSA) showed the construction materials wholesale price index (CMWPI) in the National Capital Region (NCR) rose to 2.8% in May from 0.2% a year earlier and 1.9% in April.

This was the strongest reading in nearly three years or since the 5.6% growth posted in August 2023.

From January to May, CMWPI growth averaged 1.6% from 0.2% in the same period in 2025.

In a separate report, the PSA said year-on-year growth in the construction materials retail price index (CMRPI) in the NCR picked up to 1.8% in May from 1% in the same month in 2025 and 1.7% in April.

This was also the strongest reading in almost three years or since the 1.9% in June 2023.

In the five months to May, CMRPI growth averaged 1.5%, higher than the 1.1% in the same period last year.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., attributed the faster rise in construction materials prices to “a mix of firm demand and lingering cost pressures.”

“You’ve got ongoing infrastructure and construction activity supporting demand, while input costs — like cement, steel, and fuel — along with logistics, are still filtering through the system,” he said in a Viber message.

Despite easing inflation in May, Mr. Ravelas noted that construction costs are “sticky” and are slow to decline.

Inflation quickened to 6.8% in May, faster than the 1.3% print a year ago but slowed from 7.2% in April.

Ateneo Center for Economic Research and Development Senior Research Fellow Ser Percival K. Peña-Reyes said the combined effects of “cost-push factors, supply-chain conditions, and demand-side pressures” contributed to the uptick in building prices in May.

He said the acceleration of prices at both the wholesale and retail levels suggests broad-based pressure across the construction supply chain.

“The most likely explanation is a combination of higher energy and logistics costs, some pickup or normalization in construction activity, lagged pass-through of earlier cost increases, and possible supply constraints in key materials,” he said in a Viber message.

Mr. Peña-Reyes said easing inflation in May “likely helped prevent a sharper acceleration in construction materials prices, but it did not reverse or significantly reduce cost pressures.”

According to the PSA, the CMWPI growth was driven by a faster annual increase in concrete products at 4.5% in May from 0.3% a year ago and 3.4% in April.

Quicker price growth was logged in lumber (1.1% in May from 0.7% in April), reinforcing steel (2.1% from 0.5%), structural steel (1.6% from 1.2%), tileworks (1.9% from 0.7%), doors, jambs, and steel casement (0.5% from 0.4%), electrical works (1.9% from 1.5%), plumbing fixtures and accessories/waterworks (0.5% from 0.4%), and painting works (3.8% from 1.9%).

Meanwhile, year-on-year growth was recorded in cement at 0.2% in May, a turnaround from the 1.5% decline a year ago and the 0.6% drop in April.

Price growth slowed in sand and gravel (3.1% in May from 3.2% in April), hardware (0.1% from 0.3%), and fuels and lubricants (7.8% from 13.6%).

On the other hand, declines were recorded in plywood at -0.1% from a 0.2% growth in April and metal products at -0.1%, a reversal from the 0.1% increase in the previous month.

PVC pipes declined further to 0.2% in May from 0.1% in the previous month.

RETAIL PRICES
Meanwhile, the PSA said the uptrend in the annual growth of the CMRPI was due to painting materials and related compounds index, which rose to 2.9% in May from 2.1% a year earlier and 2.2% in April.

Faster yearly increases were also noted in electrical materials (2% in May from 1.9% in April), masonry materials (2% from 1.9%), plumbing materials (0.8% from 0.5%), tinsmithry materials (2.9% from 2.5%), and miscellaneous construction materials (1.6% from 1.5%).

The growth in carpentry materials remained steady at 0.6%.

“What we’re seeing in concrete and paint materials reflects where we are in the build cycle — strong infra demand for concrete, and finishing activity driving paint prices, with added pressure from oil-linked chemical inputs,” Mr. Ravelas said.

In the coming months, Mr. Ravelas said price increases in construction materials are expected to be “steady but moderate.”

“The key drivers to watch are energy prices and overall inflation trends. For now, the environment calls for careful cost management and timing of projects, because while pressures are no longer surging, they’re definitely not going away,” he said.

Mr. Peña-Reyes said construction material inflation will face “moderate but uneven upward pressure.”

“The outlook depends less on headline inflation and more on a few construction-specific drivers: energy costs, infrastructure activity, exchange rates, and supply conditions,” he added.

The CMRPI is based on 2012 constant prices, while the CMWPI is based on 2018 constant prices.

THE ASIAN Development Bank (ADB) is working with the Philippine government to build a pipeline of energy projects to accelerate renewable energy (RE) deployment, improve energy efficiency, and reduce diesel dependence in off-grid areas.

“ADB is continuing to support the Philippines in scaling up RE by providing sovereign and non-sovereign financing, in addition to transaction advisory services,” ADB Country Director for the Philippines Andrew Jeffries told BusinessWorld, adding that the lender is working with the government to identify priority projects for future financing.

The proposed projects include support for a government energy management plan, a geothermal resource derisking facility to spur greenfield development, and initiatives to reduce diesel consumption in off-grid areas.

The planned projects come as the Philippines seeks to accelerate its energy transition and boost the share of RE in the power generation mix to 35% by 2030 from the current 26%.

ADB is also supporting the government through policy-based lending aimed at strengthening policies and regulations to scale up RE, diversify energy sources, and expand access to electricity.

Mr. Jeffries said the Philippines is well-positioned to attract the private capital needed to support its energy transition because of its largely privatized power sector and established regulatory framework.

“Its energy sector has been broadly privatized, and this is accompanied by a highly developed policy and regulatory framework. This has led to substantial levels of private sector investment,” he said, pointing to strong investor participation in the government’s Green Energy Auction (GEA) program.

The Department of Energy completed the fourth round of the GEA in November last year, awarding contracts to 123 winning bidders.

The government is also planning to offer at least 25 gigawatts (GW) of additional RE capacity through annual competitive auctions beginning this year.

“The successful implementation of a green energy auction program is evidence that the country is able to attract much needed investment in clean energy,” Mr. Jeffries said.

“The Philippines is likely to continue to be seen as an attractive destination for private sector investment — a prerequisite if it is to meet the unprecedented demand for electricity currently experienced across Asia and the Pacific region,” he added.

Mr. Jeffries’ comments came as ADB officials pushed for greater regional cooperation and private sector participation to address mounting energy challenges across Asia and the Pacific.

ADB President Masato Kanda warned that geopolitical tensions and rapidly rising electricity demand are exposing vulnerabilities in the region’s energy systems, underscoring the need for greater cross-border connectivity.

“If we attempt to operate our national energy systems in total isolation from one another, we will fail… To survive and thrive, we must build deeply connected, highly intelligent networks,” he said at the opening plenary of the Asia Clean Energy Forum on Tuesday.

ADB has recently launched the Pan-Asia Power Grid Initiative (PAGI) which aims to connect national and regional power systems and allow energy to flow across borders.

Under PAGI, ADB plans to commit $25 billion from its own balance sheet to help connect 22,000 circuit-kilometers of transmission lines, integrate 20 GW of RE into a regional system, reduce power sector emissions by 15%, and create 840,000 jobs.

However, Mr. Kanda said public resources alone would not be enough to finance the initiative, citing tightening fiscal space, rising debt burdens, and shifting aid priorities.

“The large pools of capital required for this transition exist right now in the private sector. The problem isn’t a lack of global capital; it is a lack of an enabling environment and the absence of real de-risking mechanisms,” he said.

To help mobilize private investment, ADB plans to quadruple its annual private sector financing to $13 billion by 2030 through blended finance, first-loss capital, and expanded guarantee instruments.

“We will do the hard work upstream to make these massive regional public goods genuinely bankable,” Mr. Jeffries added.

Pantheon Macroeconomics said the central bank might just deliver a second straight 25-basis-point (bp) hike next week before standing pat for the remainder of the year.

“Arguably, the door is now even ajar for the (Monetary) Board to stand pat next week,” Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco and Asia Economist Meekita Gupta said in a report on Tuesday.

The Monetary Board will hold its next policy review on June 18.

“We’ve loudly been on the dovish side of this debate from the get-go, but we now expect a final 25-bp increase next week, even though the CPI (consumer price index) result was good,” they added.

This followed the weaker-than-expected inflation reading in May, which cooled to 6.8% from 7.2% in April.

“This is the first deceleration in six months — suggesting that the worst is over — also undershooting the BSP’s 7.1-to-7.9% estimate,” Mr. Chanco and Ms. Gupta said.

For Mr. Chanco and Ms. Gupta, this means that any aggressive monetary policy action, including an off-cycle move and a 50-bp hike in a single meeting, is likely off the table.

The Monetary Board began a fresh tightening cycle in April as it delivered a 25-bp rate hike to 4.5%, which it said was meant to prevent broader spillover effects and keep inflation expectations anchored.

BSP Governor Eli M. Remolona, Jr. has remained hawkish since their April meeting, even saying last month that the Board is considering an off-cycle rate hike.

The central bank likewise maintained its inflation-targeting stance as it reaffirmed last week that it will take all necessary measures to bring inflation back to its 3% target.

Pantheon Macroeconomics now sees Philippine inflation averaging 5.5% this year and 3.2% next year. These are slower than its previous estimate of 5.9% and 3.6%, respectively.

However, Mr. Chanco and Ms. Gupta noted that raising the key policy rate above 4.75% could harm an economy already grappling with energy shocks and still recovering from last year’s flood control mess fallout.

“We continue to believe that any additional tightening would be rash, not least because the country’s core measure still includes a lot of food and oil-sensitive components that cloud the picture. But the economy is in no shape to swallow arguably unnecessary hikes; recall the abysmal Q1 GDP (gross domestic product) result,” the Pantheon economists said.

Mr. Remolona earlier noted that they are hopeful the government’s fiscal measures will help the economy rebound as they focus on taming inflation. 

His remark came after oil shocks and the lingering effects of the flood control controversy led the economy to slump anew in the first quarter, with GDP growth easing to 2.8% from 3% in the fourth quarter and 5.4% a year ago.

TERMS-OF-TRADE SHOCK
Meanwhile, Fitch Ratings said large net oil importers like the Philippines continue to bear the brunt of the Middle East conflict, which are facing an adverse terms-of-trade shock.

“Some of the largest net oil importing countries (as a share of GDP) are in south and south-east Asia, including Korea, Pakistan, the Philippines and Thailand,” Fitch Ratings Chief Economist Brian Coulton and Director for Economics Group Alex Muscatelli said in a June 4 report.

“Large net oil importers will suffer the biggest adverse terms-of-trade shock, and there has been a close correlation between the size of net oil imports and currency depreciation since the oil crisis began,” they added.

The Philippines imports over 90% of its oil from the Middle East, which made the war’s impact on oil trade and prices more severe for the economy.

Since Feb. 28, the country saw local oil prices soar, with its reserves dwindling as trade disruptions dragged on.

In the same report, Fitch Ratings cut its growth forecast for emerging markets, excluding China, to 3.2% from 3.4% for this year.

This, as Mr. Coulton and Mr. Muscatelli noted that emerging economies such as the Philippines will encounter major inflationary pressures from the oil crisis amid the US-Israel war on Iran.

“Again, emerging markets seem most at risk given the larger inflationary impact and monetary policy has already been tightened in several Asian economies, including Indonesia, the Philippines and Sri Lanka,” they said.

Still, Fitch expects emerging economies to slightly recover with a 3.4% growth from 2027 to 2028. — Katherine K. Chan

THE PHILIPPINES’ underemployment rate climbed to a near three-year high in April, even as the joblessness fell to its lowest level in four months, according to the Philippine Statistics Authority (PSA).

The latest Labor Force Survey by the PSA showed that the underemployment rate surged to 15.2% in April 2026, up from 14.6% in the same month a year ago and the 12.3% in March 2026.

National Statistician Claire Dennis S. Mapa said the underemployment rate of 15.2% was the highest since July 2023.

The ranks of underemployed Filipinos — those who want longer work hours or an additional job — increased to 7.41 million in April from 7.081 million in the same month a year ago and from 6.031 million in March.

Mr. Mapa said underemployment was evident in the transportation and storage sector, particularly among drivers of jeepneys, taxis, buses, and ride-hailing services. Drivers may have been forced to cut their work hours due to soaring pump prices since the start of the US-Iran war in late February.

The underemployment rate averaged 13.12% in the first four months, up from 12.85% in the same period year ago.

The average weekly hours worked by an employed person rose to 40.2 hours in April from 39.9 hours in April 2025 but fell from 40.7 in March.

“Filipinos sought additional work to cope with the rising cost of living. Some jobseekers may have also accepted part-time or lower-paying roles to secure income. At the same time, firms may have reduced working hours to manage higher operating costs, prompting workers to look for supplementary employment to offset lost earnings,” Chinabank Research said in a separate report.

Meanwhile, the jobless rate rose to 4.7% in April from the 4.1% in the same month last year but easing from the 5% in March. This was the lowest jobless rate in four months or since the 4.4% in December 2025.

The number of unemployed Filipinos was estimated at 2.41 million in April, 351,000 higher than the 2.06 million recorded a year ago.

PSA data showed wholesale and retail trade; repair of motor vehicles and motorcycles posted the biggest annual decline in jobs in April with 450,000, followed by agriculture and forestry with 392,000.

Mr. Mapa noted that the year-on-year rise in unemployment was driven largely by job seekers in the 15-24 and 25-34 age groups.

“The reason for the year-on-year increase in the unemployed is that they were truly looking for work but could not find any,” Mr. Mapa told a news briefing in Filipino, adding that many were also waiting for results from job applications.

For the first four months of the year, the jobless rate averaged 5.15%, higher than the 4.02% a year ago.

The labor force participation rate (LFPR) fell to 62.7% in April from 63.7% a year ago and 63.3% in March. This was equivalent to 51.3 million Filipinos aged 15 years and over who were part of the labor force, slightly higher than the 50.74 million a year ago.

For youth aged 15 to 24, the LFPR stood at 31.8% in April, unchanged from last year.

The number of youths not in education, employment, or training rose to 2.64 million in April, making up 12.2% of the youth population compared with 10.6% a year ago.

CHALLENGES
In a statement, Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan said that the government is working to broaden market access and attract investments in emerging industries.

“The latest labor market indicators reflect both the challenges confronting the economy and the resilience of Filipino workers and businesses,” he said

Mr. Balisacan said the government is monitoring the employment impact of the Middle East crisis, the El Niño weather phenomenon, and the recent 7.8-magnitude earthquake in Mindanao.

“We remain committed to providing timely support to affected workers and households,” he said.

The employment rate in April stood at 95.3%, lower than the 95.9% posted in April 2025 but higher than the 95% in March.

The total number of employed Filipinos increased to 48.89 million in April from 48.67 million a year earlier. However, this number is lower than the 49.07 million employed in March. 

The average employment rate in the first four months fell to 94.85% from 95.97% a year ago.

Industries with the largest year-on-year increase in jobs were accommodation and food service activities with 510,000, manufacturing with 259,000, transportation and storage with 189,000, mining and quarrying with 158,000, and education with 107,000.

Regional data also showed that the Davao Region posted the highest employment rate at 97.5% in April, while the Bicol Region had the lowest at 93.2%.

Chinabank Research said the Philippines’ labor market remained resilient despite the impact of the Middle East war and slow government infrastructure spending but added that underemployment may continue to remain high.

“Looking ahead, underemployment may stay elevated in the near term as households and businesses continue to contend with high inflation,” it said, adding that underemployment rates usually increase during periods of high inflation.

Aside from the transportation sector, Chinabank Research said underemployment also rose in manufacturing and accommodation and food services.

“Notably, these sectors were key drivers of overall employment growth, suggesting that many of the jobs generated in April may offer insufficient or unstable income. The construction sector also saw an increase in underemployed workers, possibly reflecting delays in public infrastructure projects,” it said.

Chinabank Research also noted that jobs in the wholesale and retail trade sector dropped for a 10^th straight month, reflecting sluggish consumer confidence.

It said the agriculture sector saw a sixth straight month of jobs decline in April, amid limited fertilizer supply and elevated fuel costs, and may face challenges from El Niño.

University of the Philippines Diliman School of Labor and Industrial Relations Assistant Professor Benjamin B. Velasco said high unemployment rate reflects a labor market that cannot adjust to the economic headwinds.

“Our economy is not being resilient as shown by big job losses in wholesale and retail trade, which easily absorbs surplus labor since this sector requires low skills and education and thus wages are cheap and jobs are insecure,” Mr. Velasco told BusinessWorld in a Facebook chat.

He noted the underemployment rate in the Philippines is around three times that of the jobless rate, since many Filipinos are unable to find steady jobs and settle for part-time work.

IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa said job insecurity is worsening amid the impact of severe oil shocks.

In its June 9 situational report, the National Disaster Risk Reduction and Management Council (NDRRMC) reported 487 people were injured while 17 remain missing, as of Tuesday, 6 p.m., with figures still subject to ongoing validation.

The earthquake also affected a total of 149,372 persons across four regions, including Zamboanga Peninsula, Northern Mindanao, Davao Region, and Soccsksargen.

It added that approximately 32,464 people are currently taking shelter in 57 evacuation centers, while another 8,973 are staying with relatives or friends.

The tectonic earthquake, attributed to subduction along the Cotabato Trench, occurred on June 8 at 7:37 a.m. with its epicenter near Maasim, Sarangani, at a depth of 33 kilometers.

As of Wednesday, state seismologists recorded 1,738 aftershocks, with magnitudes ranging from 1.3 to 6.4.

Authorities have also suspended classes in 210 cities and municipalities, with the Education department deploying engineers to evaluate the safety of school structures before any resumption of learning is allowed.

The report also noted that 2,994 houses were damaged, of which 495 were totally destroyed.

Infrastructure damage is estimated at P15 million, with 238 structures reported damaged across the impacted areas.

Power was interrupted in 13 cities and municipalities, with restoration completed in seven of those areas as of Wednesday.

The earthquake also induced 10 reported landslides, primarily in Davao Occidental and Sarangani.

Search, rescue, and retrieval operations remain active, involving 3,773 personnel and 110 assets from the military, police, coast guard, and fire bureau.

Government agencies and local units have provided approximately P18.4 million in food and non-food assistance to affected families. Work stoppages remain in 124 affected localities as safety inspections proceed. — Erika Mae P. Sinaking

Data from the Philippine Statistics Authority (PSA) showed the jobless rate stood at 4.7% in April, higher than the 4.1% in the same month last year.

PSA data showed that the jobless rate stood at 4.7% in April, higher than the 4.1% in the same month last year.

However, the unemployment rate eased from 5% in March.

The number of unemployed Filipinos was estimated at 2.41 million in April, 351,000 higher than the 2.06 million recorded a year ago.

National Statistician Claire Dennis S. Mapa noted that the year-on-year rise in unemployment was driven largely by job seekers in the 25-34 and 15-24 age groups.

“The reason for the year-on-year increase in the unemployed is that they were truly looking for work but could not find any; this accounted for about 276,000 individuals,” Mr. Mapa said told a news briefing in Filipino, adding that many were also waiting for results from job applications.

Meanwhile, rising underemployment emerged as a growing concern, with the rate climbing to 15.2% in April 2026, up from 14.6% year-on-year and higher than the 12.3% recorded in March 2026.

Mr. Mapa said the underemployment rate of 15.2% was the highest since July 2023.

The ranks of underemployed Filipinos — those who want longer work hours or an additional job – increased to 7.41 million in April, from the 7.081 million in the same month a year ago and from 6.031 million in March.

Mr. Mapa pointed to the transportation and storage sector as a major contributor to this trend, specifically among jeepney, taxi, and bus drivers.

“While in a way, the status of being employed was not necessarily affected in terms of hours and income, that was what was affected as reflected by the underemployment numbers in transportation and storage,” he said, linking the shift to higher costs such as fuel.

In a statement, Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan said that the government is working to broaden market access and attract investments in emerging industries.

“The latest labor market indicators reflect both the challenges confronting the economy and the resilience of Filipino workers and businesses,” he said

“The government is strengthening partnerships with the private sector to expand apprenticeship opportunities, improve certification systems, and support worker mobility toward high-value industries such as advanced electronics, renewable energy, and digital services,” Mr. Balisacan said. – Erika Mae P. Sinaking

ANOTHER LACKLUSTER YEAR for initial public offerings (IPOs) could further dampen investor sentiment and reinforce concerns about the Philippine stock market’s appeal, analysts said, as the first five months of 2026 passed without a single IPO.

The weak IPO activity reflects concerns from both issuers and investors over valuations and post-listing performance, Jarrod Leighton M. Tin, an equity research analyst at DragonFi Securities, told BusinessWorld.

“It sends a clear message from both sides: companies do not want to list because they are unlikely to get a decent valuation, and investors do not want to participate because they are afraid newly listed stocks will just fall below the offer price,” he said via Viber.

“One feeds the other, and without a real change in market conditions, that pattern is unlikely to stop.”

The Philippine Stock Exchange (PSE) missed its listing target for the second straight year in 2025. It recorded only two IPOs last year, below its target of six and down from three in 2024.

For this year, the PSE is targeting four listings, including the much-awaited debut of GCash’s parent company Mynt as well as PNB Holdings Corp. (PHC), which plans to list by introduction.

Mr. Tin said delays involving major planned offerings could also affect the broader IPO pipeline.

“If a high-profile listing like Mynt gets delayed or canceled, other companies will take notice and pull back their own IPO plans,” he said.

According to Reuters’ latest report, Mynt is planning to file for a domestic listing as early as July and is seeking a valuation of at least $8 billion, citing two people familiar with the matter.

In May, LT Group, Inc. said it may delay PHC’s planned listing by introduction amid market volatility.

Financial technology firm Maya earlier said it plans to list in the United States before pursuing a PSE listing in the second half of the year as part of efforts to raise capital, provide liquidity to existing investors, and allow PLDT Inc. to retain its stake.

Weak listing activity could also reduce the number of investment opportunities available in the market, particularly if delistings outpace new offerings, according to Mr. Tin.

“In the worst case, the market ends the year with no new listings at all — which is already bad enough on its own. But what makes it worse is that delistings may actually outnumber IPOs this year,” he said. “That means fewer stocks to invest in and a weaker exchange overall, which is not a good look for the PSE.”

Delisting activity on the PSE this year is approaching last year’s level, with three companies either having left or in the process of exiting the market.

Asian Terminals, Inc. delisted on April 3, while Robinsons Retail Holdings, Inc. is scheduled to exit the bourse on July 28 and MerryMart Consumer Corp. is undergoing a voluntary delisting after DoubleDragon Corp. moved to fully absorb the retailer.

In 2025, Keppel Philippines Holdings, Inc., Philab Holdings Corp., and 8990 Holdings, Inc. were delisted from the exchange.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said that if the PSE falls short of its new listing targets for a second consecutive year, “the consequences for investor participation and market sentiment could be compounding rather than merely additive.”

“A single year of underperformance can be attributed to cyclical or external factors, but a second consecutive miss would more credibly signal a structural problem,” he said in a Viber message.

Mr. Arce said subdued trading volumes and investor hesitation could make it more difficult for the market to attract capital, particularly when other regional exchanges are seeing stronger listing activity.

“A thin IPO calendar reinforces a perception that the (Philippine stock) exchange lacks the dynamism to generate new investment opportunities,” Mr. Arce noted.

Regulators have introduced several reforms to encourage more listings, including changes to public float requirements and proposed adjustments to listing rules.

Mr. Arce said these measures are a positive step, but their impact will ultimately depend on whether they result in actual listings.

“The regulatory reforms underway are a constructive signal, but their credibility depends on whether they translate into actual listings,” he noted.

In February, the Securities and Exchange Commission eased the minimum public float requirements for large IPOs, which may pave the way for mega-IPOs in the Philippines such as Mynt.

According to Mr. Arce, the recent reforms were intended to encourage large companies to pursue domestic listing.

“If those same companies still do not list despite the accommodations, it would suggest that the barriers are not purely regulatory — and that deeper issues around market liquidity, valuation expectations, and investor appetite remain unresolved,” he added.

Meanwhile, Investment & Capital Corporation of the Philippines President and Chief Operating Officer Jesus Mariano P. Ocampo said the current environment remains challenging for companies seeking to go public, with weak valuations and limited investor demand weighing on new listings.

“I guess under current conditions, it really is very challenging to launch an IPO in the Philippines,” he said in a Viber message.

“As things stand, investors will likely look at existing listed companies that are trading at all-time lows before looking at any new ones.”

Mr. Ocampo said regulators could consider temporary measures to reduce listing costs and ease access to the market as a way to encourage more listing.

“I am also hoping that the PSE would take a more proactive stance in talking to institutional investors to re-visit listed equities. Doing very public roadshows for audience impact is not the same as talking to a few but big volume buyers that could move markets,” he said.

Despite global market uncertainties linked to the conflict in the Middle East, the PSE said it remains firm on its P170-billion capital-raising target this year.

In March, PSE President and Chief Executive Officer Ramon S. Monzon said that reforms such as the new real estate investment trust (REIT) law are expected to spur more REIT listings and follow-on offerings, although he noted these are unlikely in the near term given prevailing market conditions.

At the same time, the FSCC flagged potential foreign exchange (FX) risks from conglomerates that are facing around P1.6-trillion debt maturing between 2027 and 2029.

In its Financial Stability Report for 2025 released on Monday, the FSCC said Philippine banks have been shielded from risks by strong capital positions, prudent regulation, sufficient loan loss provisions and an effective payment system.

The economy likewise “maintained positive growth momentum” in 2025. The country’s gross domestic product (GDP) growth slowed to 4.4% last year from 5.7% in 2024.

The FSCC report said the well-capitalized financial system helped the country weather global shocks, with its external position “broadly stable” last year due to robust remittances inflows and better current account dynamics.

However, the report flagged potential systemic threats stemming from valuation pressures, rising leverage in the nonfinancial sector, growing ties between banks and nonbanks, as well as funding and liquidity risks.

“Vulnerabilities are being monitored — particularly in property valuations, unsecured household credit, and corporate leverage — and tighter linkages across institutions mean that shocks, if they materialize, can transmit more rapidly and broadly than in the past,” the report said. “This calls for deliberate and forward-looking policy action.”

FX RISKS
Meanwhile, the FSCC noted that nonfinancial corporations’ (NFCs) leveraged exposures continued to expand, with heavier exposure seen among big companies from key sectors like real estate, power, energy and oil as well as information, communication and technology.

Leveraged exposures refer to listed NFCs’ aggregate amount of debt exhibiting heightened leverage coupled with debt-servicing or liquidity vulnerabilities.

“Large conglomerates face a sizeable wall of upcoming maturities and FX obligations. About P1.6 trillion — or 22.7% of conglomerate debt — is scheduled to mature between 2027 and 2029, alongside sizable foreign-currency exposures, with US dollar-denominated debt averaging 37.6% of conglomerate debt over the next five years,” the report said.

While corporations have so far met its financing needs, the report said that FX-related risks and refinancing “warrant close monitoring given the scale and currency composition of upcoming maturities.”

MIDDLE EAST WAR
At the same time, the FSCC noted that cyberthreats and geopolitical tensions, such as the Middle East war, could likewise imperil the sector’s stability.

“While these risks are assessed to be manageable under current conditions, they could potentially intensify if shocks materialize,” it said.

“Global developments, shifts in market sentiment, and emerging risks — such as cybersecurity threats and Middle East tensions — are expected to influence domestic conditions, underscoring the need for ongoing monitoring and coordinated oversight,” it added.

According to the report, risk-off sentiment due to uncertainties over the Middle East war could take a toll on the Philippine financial system, with risks increasing as the conflict drags on.

It noted that the country is mainly vulnerable to risks of higher crude prices driving up imported inflation and currency pressures further widening its current account deficit.

“The key uncertainty for financial stability is how macro financial pressures — compressed real incomes, tighter external balances, and heightened uncertainty — ultimately transmit to the balance sheets of banks, corporates, and households,” the FSCC said.

The report likewise noted that domestic firms in the utilities, industrials, information technology, consumer staples, and financial sectors may face operational risks if their Middle Eastern counterparts are disrupted by the regional conflict.

“If these firms experience prolonged financial stress, their loan obligations become a transmission channel to the banking system,” the report said.

Still, the FSCC said Philippine banks still have insignificant direct financial exposure to the Middle East, with the conflict posing “a material but manageable risk to Philippine financial stability.”

In a separate statement, FSCC Chair and Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said financial regulators will further tighten their coordination to address emerging risks.

“We will sharpen our coordination by defining when to escalate issues and by clearly communicating our assessment of our respective regulated entities,” he said.

Based on the report, the interagency body is likewise implementing stricter measures to mitigate these threats and ensure economic stability. 

These include shifting to a positive neutral Countercyclical Capital Buffer, where banks must now set aside extra capital during stable periods; strengthening supervision of nonfinancial firms, particularly complex conglomerates; broadening data coverage for nonbanks; and creating a crisis management framework.

The FSCC is composed of the BSP, Department of Finance, Securities and Exchange Commission, Insurance Commission, and Philippine Deposit Insurance Corp. — Katherine K. Chan

In a commentary on Monday, Deutsche Bank Research economist Junjie Huang said a larger rate increase may be warranted as last month’s easing inflation is likely short-lived, with renewed price pressures looming from electricity, food and other basic goods. 

“Our view of BSP hiking by 50 bps in the June MB (Monetary Board) meeting is unchanged as we think the lower print may only be temporary — and it is still materially above BSP’s 2-4% target — as broad price pressures are still building up in the economy, and our outlook for global inflation dynamics is still elevated,” he said.

However, HSBC Senior ASEAN Economist Aris D. Dacanay said the BSP might not be compelled to tighten earlier than scheduled, contrary to prior expectations following the central bank chief’s off-cycle hint last month.    

“We think this outcome removes the urgency of doing an off-cycle rate hike,” he said in a separate commentary on Monday. “As of this writing, May CPI (consumer price index) has provided some relief to the peso, minimizing the need to tighten monetary policy now to mitigate the risk of FX (foreign exchange)-induced inflation.”

Still, Mr. Dacanay anticipates a 50-bp rate hike at the Monetary Board’s meeting next week, though noted that the downward surprise from May inflation has raised the odds of a 25-bp move.

BSP Governor Eli M. Remolona, Jr. said last month that they are considering an off-cycle tightening, citing risks of the central bank falling behind the curve amid broadening second-order price effects. He added, however, that they may also wait until their June 18 meeting to assess the May inflation data.

The May inflation reading bucked projections, with the headline print cooling to 6.8% from the over three-year high of 7.2% in April, undershooting the 7.9% median estimate in a BusinessWorld poll of 16 economists and the BSP’s 7.1%-7.9% forecast.

However, core inflation, which discounts volatile food and energy prices, breached the central bank’s target for the first time in two-and-a-half years. It hit 4.1% in May, the quickest core inflation since the 4.4% recorded in December 2023.

For Maybank analysts Azril Rosli and Suhaimi Ilias, this means the second-order effects of oil shocks are widening and becoming more persistent.

“While the BSP has consistently highlighted the limited effectiveness of monetary policy in addressing supply-driven shocks, the continued rise in core inflation suggests that second-round effects are gaining traction, particularly across transport, housing, utilities, and services-related sectors,” they said in a commentary dated June 5.

In April, the Monetary Board reversed its easing cycle by raising the key policy rate by 25 bps to 4.5%, as it sought to contain broadening spillover effects and anchor inflation expectations.

Prior to the MB’s April 23 meeting, Mr. Remolona also noted that they were trying to focus more on controlling the core print and inflation for the bottom 30% of income households.

Patrick M. Ella, a portfolio manager and an economist at Sun Life Investment Management and Trust Corp., said headline inflation still risks breaching the double-digit mark by July or August. 

“But the important point there is (that) the core inflation (is) still climbing,” he told Money Talks with Cathy Yang on One News on Monday. “So that tells you that the second-round effects that the BSP is looking at will definitely carry over in the succeeding months.”

Mr. Ella did not rule out a 50-bp increase at the June 18 review, but noted that a smaller 25-bp hike may be more definite.

Meanwhile, Nomura Global Markets Research now sees Philippine inflation averaging 5.5% by yearend, slower than its 6.1% earlier estimate, if Brent crude oil trades at an average $98.4 per barrel this year.

“Taking into account the lower-than-expected outturn (in May), we reduce our 2026 headline CPI forecast to 5.5% after raising it to 6.1% only last month, in part reflecting the fluctuations in global crude oil prices and the quick pass-through to domestic retail fuel prices in the absence of subsidies,” Nomura research analysts Euben Paracuelles and Nabila Amani said in a report.

However, Mr. Paracuelles and Ms. Amani said the impact of the expected El Niño season later this year risks stoking inflation, particularly food prices.

They expect the central bank to continue tightening this year before easing anew by the second half of 2027.

“We think BSP will view any further increase in core inflation as a sign of second-round effects that require vigilance,” the Nomura analysts said. “Nonetheless, we expect no off-cycle meeting by BSP and only measured 25-bp hikes in each of the next three meetings starting on June 18, consistent with peaking headline inflation.”

Last week, the BSP reaffirmed its commitment to bring inflation back to its 3% target using all necessary monetary policy measures as part of its price stability mandate.

The Monetary Board still has four regular meetings left this year, scheduled for June 18, Aug. 27, Oct. 22 and Dec. 17. — Katherine K. Chan

In a statement, the British retailer said MAP will take over M&S operations in the Philippines and relaunch the brand later this year with the opening of its first store at Glorietta.

The relaunch will feature M&S Fashion, Home & Beauty, and Food ranges.

This comes after the SSI Group Inc closed all M&S stores in the Philippines last May 2.

M&S said it has an over 26-year relationship with MAP in Indonesia and Vietnam.

M&S International Managing Director Mark Lemming said the partnership builds on MAP’s proven track record in supporting the brand’s regional growth.

“We are delighted to expand our partnership with MAP into the Philippines. Having played a pivotal role in driving our growth in Indonesia, MAP’s deep local expertise gives us confidence as we accelerate our growth plans in Southeast Asia. We know there is strong demand for the M&S brand in the Philippines, and we’re excited to reopen our stores and online channels later this year,” Mr. Lemming said in a statement.

MAP Fashion Chief Executive Officer Sameer Prasad described the Philippines as a “fast-growing market” and said the company aims to strengthen the brand’s footprint while enhancing the retail experience for Filipino customers.

“Taking over the M&S business in the Philippines marks an important milestone for MAP Fashion and reflects our commitment to growing iconic global brands across Southeast Asia,” Mr. Prasad said.

MAP operates more than 150 international brands in its portfolio, including Zara, Sephora, Foot Locker, Starbucks, Subway, and M&S.

As of March 2026, the company had more than 4,000 stores in over 80 cities across Indonesia.

M&S is a British retailer operating across food, clothing, home, and beauty categories through a network of stores, franchise partners, and e-commerce platforms in multiple markets.

The brand has been present in the Philippines since 1984. M&S operations in the Philippines were previously handled by Rustan Marketing Specialists, Inc., a subsidiary of the Tantoco-led specialty retailer SSI Group. — Alexandria Grace C. Magno

The pre-funded card launched this month has functions allowing businesses to have full control over their expenses and make digital payments to their suppliers and teams, it said in a statement on Monday.

Under the partnership, global card processing company Paymentology and Mastercard extend their license to PayMongo, providing the infrastructure to let PayMongo issue pre-funded business payment cards without holding a banking license themselves.

Merchants can onboard through PayMongo and fund their card through their PayMongo wallet. Once onboarded, a business can issue a card to use for their transactions.

“Unlike corporate credit cards, which require a bank-approved credit line and can take weeks to process, this is a pre-funded prepaid card. Businesses can load funds through their PayMongo wallet -— which takes under five minutes to set up — and spend directly from their own balance, giving them full control without taking on credit,” it said.

Business owners can set spending limits per card, track transactions in real time, and issue separate cards for different teams or purposes.

Existing PayMongo merchants do not need to switch platforms as the card is built into the same system already used to run their business.

The card runs on Paymentology’s globally licensed infrastructure, as well as Mastercard and financial technology company APATA’s guardrails, keeping fraud controls, transaction monitoring, and compliance up to enterprise standards.

PayMongo said the product aims to help Filipino SMEs in their shift towards digital commerce amid the lack of business-grade financial tools.

“We are giving Filipino entrepreneurs a real, honest shot at growing their business. We’re giving SMEs a financial tool they can control – one that enforces the discipline to spend only on what moves the business forward, and nothing else. The biggest motivation for any business owner is seeing their business actually grow. This is the tool that lets them see it, and build on it,” says PayMongo President and Chief Executive Office Elmer M. Malolos said.

“SMEs are operating in an increasingly digital economy, but access to modern payment tools has not always kept pace. Through our collaboration with PayMongo and Paymentology, Mastercard is helping expand access to secure and accessible virtual payment capabilities, enabling businesses to participate more fully in a more connected economy through the scale and reach of our global network,” Mastercard Philippines Country Manager Jason Crasto said.

“The Philippines is a market where small businesses power the majority of employment but have had almost no access to the card infrastructure that large enterprises do. Through our collaboration with PayMongo and Mastercard, we are changing that by bringing global-grade card issuance to every Philippine business, regardless of size,” Paymentology Head of Growth in APAC Minh Hua Truong said. — Aaron Michael C. Sy

THE PHILIPPINE property sector is expected to slow in the second half as the Iran war, elevated oil prices and persistent inflation raise costs and weaken demand, prompting developers to delay projects and adopt a more cautious approach.

Analysts said higher fuel and construction costs, elevated borrowing rates and weaker consumer purchasing power are likely to weigh on residential, retail and hospitality segments through the rest of 2026, although industrial and outsourcing-related property demand might provide some support.

Joey Roi Bondoc, director for research at Colliers Philippines, said the impact of the war on fuel and supply chains could continue to pressure developers and buyers.

Developers have started delaying construction and marketing some projects in anticipation of weaker demand, he told BusinessWorld in a video call.

“The Middle East covered about 18% of total remittances to the Philippines in 2025, so that is pretty significant,” he added.

Claro dG. Cordero, Jr., director for research at Cushman & Wakefield Philippines, said prolonged war in the Middle East would continue to affect oil markets even if tensions ease.

“Even if de-escalation occurs, oil production and trade through the Strait of Hormuz will take time to normalize,” he said in an e-mailed reply to questions.

He said higher oil prices would eventually filter through to transportation, utilities and consumer expenses, squeezing household purchasing power in a country heavily dependent on imports.

Cushman & Wakefield also said inflation risks could spur the Bangko Sentral ng Pilipinas (BSP) to keep benchmark interest rates elevated.

Mr. Bondoc said the BSP’s cumulative 200-basis-point policy easing has yet to translate into substantially lower mortgage rates.

“Until we see a significant reduction in mortgage rate, I think we won’t see a substantial spike in condominium take-up in the Metro Manila pre-selling market,” he said, noting that five-year mortgage rates remain at about 7.7% to 7.8%.

The condominium segment in Metro Manila continues to face a large supply overhang, with about seven years’ worth of unsold inventory, according to Colliers.

As a result, developers are increasingly shifting toward horizontal housing projects in provincial growth areas such as Cavite, Laguna and Batangas, where demand is driven more by end-users than speculative buyers.

“It doesn’t make economic sense at this point to start building more vertical projects in Metro Manila,” Mr. Bondoc said.

Colliers added that provincial house-and-lot projects continue to post strong average take-up rates of about 90%, partly because overseas Filipino workers are less likely to stop paying for homes occupied by their families.

Despite the challenges, analysts said some property segments are expected to continue performing well.

Mr. Cordero said logistics and industrial developments, information technology and business process management (IT-BPM) office spaces and the high-end residential market are likely to outperform.

“Logistics and industrial benefit directly from supply chain restructuring, as occupiers seek larger, strategically located warehousing near major transport nodes to guard against disruption,” he said.

He added that tighter budgets among global companies could still support Philippine outsourcing demand because firms continue to seek lower-cost operating locations.

John Corpus, executive director for tenant representation at Savills Philippines, said a weaker peso could further improve the country’s competitiveness for export-oriented industries and outsourcing firms.

However, he noted that many business process outsourcing firms and global capability centers remain cautious about expansion because of economic uncertainty and rapid technological change.

“As a result, occupiers are expected to remain selective and strategic in their expansion decisions,” Mr. Corpus said via Viber.

Savills also cited geopolitical risks involving Taiwan and domestic political uncertainty ahead of the 2028 election cycle as factors that could affect investor sentiment.

“Investors generally prefer stability, policy continuity, and a strong focus on economic priorities,” Mr. Corpus said.

Analysts said developers should prioritize operational efficiency and carefully phase projects instead of pursuing aggressive expansion.

They also recommended locking in material costs early and investing in energy-efficient infrastructure and renewable energy systems to reduce operating costs for tenants.

THE National Government’s (NG) debt service bill increased by over 12% in April amid higher interest and amortization payments, the Bureau of the Treasury (BTr) said.

The latest Treasury data showed payments made by the government for its obligations went up by 12.1% to P314.89 billion in April from P280.9 billion in the same month a year ago.

Month on month, debt service surged by 86.2% from the P169.09 billion in March.

Debt service refers to payments made by the NG for its domestic and foreign debt.

The bulk or 79.8% of debt payments consisted of amortization payments, while the rest were interest payments.

The government’s repayment of its loan principal increased by 7.2% to P251.36 billion in April from P234.45 billion a year ago.

This came as amortization on domestic debt jumped by 43.5% to P243.63 billion in April from P169.83 billion in the same month last year.

Principal payments for foreign obligations slumped by 88% to P7.73 billion in April from P64.63 billion a year prior.

On the other hand, NG’s interest payments rose by 36.8% to P63.53 billion in April from P46.45 billion in the same month a year earlier.

Interest payments for domestic debt stood at P42.89 billion in April, up by 40.8% from P30.47 billion in the same month in 2025.

Of this total, P33.11 billion went to interest payments for fixed-rate Treasury bonds, P4.36 billion for Treasury bills, and P3.56 billion for retail Treasury bonds.

Meanwhile, interest payments for foreign borrowings went up by 29.1% to P20.63 billion in April from P15.98 billion a year prior.

FOUR-MONTH BILL
For the first four months, the government’s debt service bill surged by 68.9% to P1.05 trillion from P622.92 billion in the same period last year.

Amortization payments in the January-to-April period jumped by 113.3% to P715.63 billion from P335.47 billion a year ago.

Broken down, principal payments for domestic debt soared by 269.9% to P630.37 billion, while payments for external borrowings declined by 48.3% to P85.27 billion.

Meanwhile, interest payments stood at P336.66 billion in the four months ending April, up 17.1% from P287.45 billion in the same period a year ago.

Interest payments on domestic debt jumped by 21.6% year on year to P254.29 billion in the first four months from P209.03 billion a year ago.

This consisted of P185.33 billion for fixed-rate Treasury bonds, P47.32 billion for retail Treasury bonds, P17.09 billion for Treasury bills, and P4.55 billion in interest payments for other domestic borrowings.

Interest payments on foreign obligations increased by 5% year on year to P82.37 billion in the January-to-April period from P78.42 billion a year ago.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion attributed the higher debt service bill to heavier principal payments, reflecting “clustered debt maturities rather than a broad deterioration in fiscal conditions.”

“The elevated P1.05-trillion year-to-date figure similarly points to front-loaded repayments and a larger debt stock, with interest costs remaining relatively stable,” he told BusinessWorld.

“For the rest of the year, the trajectory is unlikely to move in a straight line — debt service tends to be lumpy, with spikes driven by the maturity schedule. That said, the overall level should remain elevated given the still-high debt base and upcoming repayments,” he added.

The NG’s debt stock dipped by 0.09% to P18.47 trillion as of end-April from P18.49 trillion at end-March, the latest BTr data showed.

Year on year, outstanding debt went up by 10.25% from P16.75 trillion at end-April 2025.

Jose Enrique “Sonny” A. Africa, executive director of think tank IBON Foundation, flagged the government’s rising debt service burden from 2020.

“Debt service is volatile month to month but the general trend for the sixth-year running is more of scarce fiscal resources going to service debt obligations than development,” he told BusinessWorld.

“This is even more critical given the urgent need for social assistance today amid the US attack on Iran-driven oil price shocks,” he added.

Mr. Africa also noted the total debt service in the first four months is already half of the P2.1-trillion debt service bill in 2025.

Based on preliminary central bank data, the total outstanding loans of universal and commercial banks, net of reverse repurchase agreements, rose by 11.4% year on year in April to P14.755 trillion from P13.249 trillion.

April marked the fastest loan growth seen in nine months or since 11.8% in July 2025.

On a seasonally adjusted basis, bank lending climbed by 2% month on month, which the BSP said reflected banks’ expectations of steady loan demand from businesses and households this quarter.

According to the BSP’s first-quarter Senior Bank Loan Officers’ Survey, 53.8% of banks polled saw steady loan demand from businesses for the second quarter of the year, while 52.9% anticipated steady credit demand from households.

“Resident loans account for the bulk of total outstanding loans, while a small portion constitutes loans to nonresidents,” the central bank said in a statement.

Lending to residents grew by 11.8% to P14.462 trillion from P12.931 trillion a year ago. This was an improvement from the 11.1% rise seen in March.

Meanwhile, loans extended to nonresidents contracted by an annual 7.9% to P293.112 billion in April from P318.366 billion, steeper than the 5.9% decline logged in the prior month.

In April, banks lent out a total of P12.463 trillion for residents’ production activities, 10.7% higher than the P11.26 trillion it granted last year. This accounted for the bulk of banks’ loans to residents during the period and was faster than the 9.7% growth posted in March.

According to the BSP, this was driven by the 25.8% year-on-year expansion in lending for the electricity, gas, steam, and air-conditioning supply sector. Loans for repair of motor vehicles and motorcycles also rose by 11.8%, real estate activities by 8.1%, financial and insurance activities by 6.7%, and manufacturing by 1%.

On the other hand, consumer loans to residents jumped by 19.6% to P1.999 trillion from P1.671 trillion a year earlier. However, this eased from the 20.5% climb seen in March, which the BSP said followed slower lending in the credit card and motor vehicle segments.

Credit card loans increased by an annual 26.6% to P1.247 trillion in April, easing from the 27.9% rise recorded in the prior month.

Lending for motor vehicles grew by 11.6% to P539.824 billion in April, slightly easing from 12.5% in March.

However, loans for general-purpose salaries rose by 6.1% year on year to P170.236 billion in April, picking up from 4.2% in March.

The central bank monitors banks’ lending activities to track the transmission of monetary policy.

LIQUIDITY RISES FURTHER
Meanwhile, the country’s money supply rose further in April as banks continued to extend loans to nonfinancial private corporations and households.

Separate preliminary BSP data showed domestic liquidity (M3) rose by 12.2% to P20.348 trillion in April from P18.128 trillion in the same month last year.

Month on month, the country’s liquidity nudged 0.7% higher on a seasonally adjusted basis.

“Domestic liquidity growth was driven primarily by the continued expansion in borrowings to nonfinancial private corporations and households,” the central bank said in a statement on Friday.

M3 is a measure of the amount of money in the economy that includes currencies in circulation, bank deposits, and other financial assets that are easily convertible to cash.

April’s expansion was slightly faster than 12.1% in March. It also matched the liquidity growth seen in September 2020 and was the fastest pace in over five years or since 13.7% in August 2020.

Domestic claims, which include those from private and government sectors, came in 12.7% higher to P23.366 trillion in April from P20.735 trillion a year ago.

Broken down, claims on the private sector grew by 12.6% year on year to P15.021 trillion.

“Meanwhile, net claims on the central government increased by 15.1% in April, driven mainly by higher outstanding government securities (GS) and lower deposits with the BSP and banks,” the central bank said.

Net claims on the central government climbed to P6.328 trillion in April.

Claims on a sector refer to that sector’s liabilities to depository corporations such as banks and the central bank.

BSP data also showed that net foreign assets (NFA) in peso terms stood at P7.275 trillion in April, up 8.9% annually.

This as banks’ larger holdings of foreign currency-denominated debt securities boosted their NFA position to P875.709 billion, climbing by 17.2%.

The central bank’s NFAs were likewise higher year on year by 7.9% to P6.399 trillion.

NFAs reflect the difference between depository corporations’ claims and liabilities to nonresidents.

“The BSP will continue to ensure that domestic liquidity conditions remain consistent with its price and financial stability objectives,” the central bank said. — Katherine K. Chan

The country’s gross international reserves (GIR) stood at $103.974 billion at end-May, down 1.14% from the $105.177 billion it held a year ago, preliminary BSP data showed.

Month on month, it fell by 0.34% from the $104.328 billion at end-April.

This was the lowest GIR level seen since January 2025, when it stood at $103.271 billion.

In a statement released late on Friday, the central bank said the National Government had external debt payments due during the period, which led to fewer foreign currency deposits and reduced its dollar reserves.

The month on month decline also reflected valuation losses on the BSP’s gold holdings amid lower global gold prices, as well as its recent net foreign exchange operations, it added.

The decline in dollar reserves comes as the central bank said it moved to support the peso amid volatility triggered by the ongoing Middle East war.

This came as safe-haven demand for the greenback dragged the peso to a new historic low level of P61 to the dollar from the P58 range before the war broke out in late February.

On May 29, the peso lost 10.50 centavos to finish at P61.59 versus the dollar from its P61.485 close on April 30. It sank to a record low of P61.75 on May 18 and 19. 

Still, the BSP noted that the country’s current foreign reserves level continues to provide a “robust external liquidity buffer.”

“Despite the decline, this level still provides a robust external liquidity buffer, equivalent to 6.9 months’ worth of imports of goods and payments of services and primary income,” it added. 

This stands well above the three-month standard and could still cover about 3.6 times the country’s short-term external debt based on residual maturity.

Dollar reserves are the central bank’s foreign assets held mostly as investments in foreign-issued securities, foreign exchange and monetary gold, among others.

These are supplemented by claims to the International Monetary Fund (IMF) in the form of reserve position in the fund and special drawing rights (SDRs).

Based on BSP data, its foreign currency and deposits jumped by 24.31% to $583 million from $469 million at end-April but declined by 18.13% year on year from $712.1 million.

Meanwhile, the BSP’s foreign investments dipped by 0.19% to $79.247 billion at end-May from $79.395 billion a month prior and by 7.99% from $86.128 billion in the same period last year.

Its gold holdings also slid by 1.51% to $19.48 billion from $19.78 billion as of end-April. Annually, it climbed by 41.93% from $13.725 billion a year ago.

The Philippines’ reserve position in the IMF stood at $712.2 million as of May, lower by 1.58% from the $723.6 million recorded at end-April and by 0.5% from $715.8 million a year earlier.

Meanwhile, the country’s SDRs — or the amount the Philippines can tap from the IMF’s reserve currency basket — slid to $3.952 billion at end-May, down 0.24% from $3.961 billion in the previous month. Year on year, it increased by 1.46% from $3.895 billion.

Ample foreign exchange buffers protect the country from market volatility and ensure that it is capable of paying its debts in the event of an economic downturn.

By the end of this year, the BSP expects the country’s foreign reserves to settle at $111 billion, exceeding last year’s $110.8 billion. — Katherine K. Chan

INVESTMENT PLEDGES approved by the Philippine Economic Zone Authority (PEZA) surged in May, driven by an increase in export-oriented manufacturing and information technology-business process management (IT-BPM) projects.

The PEZA Board approved 31 projects valued at P15.41 billion, a 446.89% jump from the P2.82-billion approved in May 2025.

The projects are expected to generate $364.73 million in exports.

Of the total, 16 projects were export manufacturing enterprises, seven are IT-BPM projects; two are domestic market enterprises; two are economic zone (ecozone) developments; two are logistics enterprises; one is a facilities enterprise; and one is a tourism enterprise.

Most of the projects will be located in the Calabarzon Region (16 projects), followed by the National Capital Region (six projects), and Central Luzon (two projects).

PEZA said Cebu, Cagayan de Oro, Davao del Sur, and South Cotabato will each have three projects, while one project is located in Iloilo.

In the first five months of the year, PEZA approved 135 new and expansion projects worth P124.84 billion, up 88% from the P66.34-billion approved last year.

As of end-May, the agency’s investment approvals have reached 41.61% of its P300-billion target for 2026.

Approvals in the January-May period are expected to generate $2.97 billion in exports and 20,012 jobs, the agency said.

Fifty-eight of the approved projects during the period were in manufacturing, while the other projects were on ecozone development (21), IT-BPM (19), facilities (13), logistics (12), domestic market (six), tourism (four), and utilities (two).

In the five-month period, 110 of the PEZA-approved projects are located in Luzon, 19 in the Visayas, and six are in Mindanao.

The investment pledges came from investors based mainly in the Netherlands, South Korea, Indonesia, Germany, and Japan, the agency said.

In a statement on Sunday, PEZA Director-General Tereso O. Panga noted sustained investor confidence in the Philippines despite global economic uncertainties.

“Our robust investment growth and the near tripling of projected exports demonstrate that investors continue to see the Philippines as a strategic location for business expansion,” he said.

Mr. Panga also noted that PEZA has received interest from Middle Eastern companies considering the Philippines as a potential oil distribution hub. On the upside, we have received some interest from the Middle East in making the Philippines their hub for oil distribution in the ASEAN (Association of Southeast Asian Nations),” he told BusinessWorld in a Viber message. “This is a de-risking strategy from their end, and one that may meet our objective of creating a strategic oil reserve for the country.”

Mr. Panga said the PEZA is “cautiously optimistic” of reaching its P300-billion target of investment proposals, citing risks like geopolitical tensions in the Middle East and local political concerns.

“If these global headwinds are solved as well as some internal political problems, we will achieve the target by yearend,” he noted.

At the same time, Mr. Panga noted that the recent approval of the 2026 Strategic Investment Priorities Plan (SIPP) aligns with PEZA’s aim to attract projects that support export growth and industrial upgrading.

“The 2026 SIPP is a significant step forward in positioning the Philippines as a destination for high-value, technology-driven, and sustainable industries,” he said.

“Its stronger focus on advanced manufacturing, innovation, and Industry 4.0 technologies aligns closely with PEZA’s investment promotion strategy and our efforts to attract projects that generate higher-value exports, strengthen local industries, and deepen the country’s participation in global value chains,” Mr. Panga also said. 

President Ferdinand R. Marcos, Jr. approved on May 21 the 2026 SIPP under Memorandum Order No. 47.

The SIPP identifies economic activities that may qualify for incentives under Republic Act No. 12066 or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act.

Tier I activities under the latest SIPP include modern agriculture, state-of-the-art construction, mobile healthcare, ecological zones, and climate-related initiatives such as carbon capture, waste-to-value, and circular economy projects, and forest management for carbon credits.

Under Tier II, activities that may be incentivized include defense services, desalination, electric vehicle infrastructure, sustainable aviation fuel, and processing of critical minerals.

Tier III activities under the SIPP include artificial intelligence (AI), quantum computing, cybersecurity, hydrogen and nuclear energy, and advanced research and design.

Mr. Panga said that the updated SIPP may help deepen the country’s trade relationships with its ASEAN neighbors, particularly in AI supply chains.

Looking ahead, PEZA is aiming to attract projects that seek to leverage advanced technologies, strengthen local industries, boost export capability, and help the Philippines climb global value chains, Mr. Panga said.

June 08, 2026

The Annual Meeting of the Stockholders of Bank of Commerce (the Bank) will be held on Tuesday, June 30, 2026 at 11:00 A.M. As permitted by its By-laws, the Bank will conduct the annual meeting via remote communication using Pro Version License Zoom Application and livestreaming as authorized by the Board of Directors on April 15, 2026.

The Agenda of the Meeting is as follows:

1. Call to Order 
2. Certification of Notice and Quorum
3. Approval of the Minutes of Annual Stockholders’ Meeting held on 27 May 2025 
4. Presentation of the Annual Report
5. Ratification of Acts and Proceedings of the Board of Directors and Corporate Officers 
6. Confirmation of Bank’s Significant Transactions with its DOSRI and Related Parties 
7. Approval of Directors’ Fees for 2025 
8. Election of the Board of Directors 
9. Appointment of External Auditor 
10. Adjournment

Stockholders who would like to attend the meeting must advise the Bank on or before Wednesday, June 24, 2026, by sending the following information to stockholders@bankcom.com.ph: (1) Name; (2) E- mail address; (3) Contact number; (4) Postal address; and (5) scanned copy of any valid government-issued ID with photo of the stockholder, to obtain the link for the 2026 Annual Stockholders’ Meeting.

Stockholders may visit the Bank’s website at https://www.bankcom.com.ph/disclosure to download copies of (a) the Minutes of the Annual Stockholders’ Meeting held on 27 May 2025 and (b) the proxy form/ballot.

Electronic copies of the Information Statement and Management Report shall be available on the Company’s website and the PSE Edge.

Ballots and proxies may be submitted via email to stockholders@bankcom.com.ph, which submission shall be duly acknowledged and validated by the Bank’s stock transfer agent, SMC Stock Transfer Service Corporation. For an individual, the submission must be accompanied by a copy of a government-issued ID with photo, as proof of identification. For a corporation, the submission must be accompanied by a certification from its Corporate Secretary stating the corporate officer’s authority to represent the corporation in the meeting. In case of an event that restricts the movement of persons and makes submission of the originally signed ballots, proxies, and notarized Secretary’s Certificate difficult, these documents shall be submitted to the SMC Stock Transfer Service Corporation within a reasonable time after the Annual Stockholders’ Meeting.

During the meeting, the Bank shall entertain questions and comments from the stockholders after the presentation of the Annual Report. Questions and comments must be submitted either in advance by email to stockholders@bankcom.com.ph or during the meeting by posting the questions and comments in the feedback box that will be made available. Priority will be given to questions sent in advance. Questions which are not answered during the meeting shall be forwarded to the Office of the Corporate Secretary for the appropriate response.

The deadline for submission of the proxy and ballot is on June 24, 2026. Validation of proxies and ballots will be on June 25, 2026 at 10:00AM at the SMC Stock Transfer Service Corporation Office, 2nd Floor, SMC Head Office Complex, No. 40 San Miguel Ave., Mandaluyong City, Philippines. Only stockholders who have notified the Bank of their intention to participate through remote communication as above described and have been validated by the Office of the Corporate Secretary to be stockholders of record of the Bank as of June 10, 2026 will be considered in computing stockholder attendance at the meeting together with the stockholders attending through proxies.

  (Original Signed)

EVITA C. CABALLA

Corporate Secretary

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2026 ANNUAL STOCKHOLDERS’ MEETING

NOTICE IS HEREBY GIVEN that the Annual Stockholders’ Meeting (“ASM”) of BENEFICIAL LIFE INSURANCE COMPANY, INC. (the “Company”) will be held through remote communication via https://www.benlife.com.ph/benlife-2026-ASM/ on June 30, 2026, Tuesday, at 3:00 o’ clock in the afternoon with the following:

A G E N D A¹

1. Call to Order
2. Certification of Notice of Meeting and Quorum
3. Approval of the Minutes of the Previous ASM Held on 30 June 2025
4. Presentation of Annual Report and Approval of the Audited Financial Statements ( “AFS”)
5. Ratification and Confirmation of all Acts and Resolutions of the Board of Directors and its Committees,Officersand Management Since the 2025 ASM
6. Election of Members of the Board (including the Independent Directors)
7. Election of External Auditor
8. Consideration of Such Other Matters as May Properly Come Before the Meeting
9. Adjournment

Only stockholders of record at the close of business hours on June 08, 2026 are entitled to notice of, and vote at, this ASM.

In view of current circumstances and pursuant to and in accordance with the Company’s Amended By-Laws, the Board of Directors during its Regular Meeting held on April 08, 2026, resolved that the Annual Stockholders’ Meeting be held in a fully virtual format, thus, stockholders may only attend the ASM by remote communication, by voting in absentia, or by appointing a proxy.

Stockholders intending to participate in the meeting by remote communication must register at https://form.jotform.com/benlifemis.com.ph/2026-ASM-registration on or before 5:00 o’clock in the afternoon of 29 June 2026. Stockholders may vote by remote communication, or in absentia subject to validation procedures. The procedures for participation in the meeting through remote communication and for casting of votes in absentia are explained in the Information Statement.

Stockholders who intend to vote by proxy shall submit the duly accomplished proxy to, and must be received by, the Office of the Corporate Secretary, 7th/F Beneficial Life Building, 166 Salcedo Street, Legaspi Village, Makati City or via email to corpsec@benlife.com.ph not later than 5:00 P.M. of June 23, 2026. Validation of proxies shall be held on June 24, 2026 at 3:00 p.m. WE ARE NOT SOLICITING PROXIES.

All email communications should be sent to corpsec@benlife.com.ph on or before the designated deadlines.

Given this 2nd day of June 2026.

FOR THE BOARD OF DIRECTORS:

(Sgd.) MA. SIGRID R. PINLAC

Corporate Secretary

—————————- 

¹ See https://www.benlife.com.ph/investor-relations-2/ for the explanation/rationale for each item in the Agenda; and Proxy template 

2 See https://www.benlife.com.ph/disclosures/ for the Information Statement

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“This could cause huge risks. Children get sick from dirty water, and young girls miss school every month because they don’t have privacy,” SATO Philippines Leader Akhito Shimojo told BusinessWorld in a virtual interview.

“We need to close this infrastructure gap immediately to protect our learners,” he added.

Data from the Philippine Institute for Development Studies (PIDS) in 2024 showed that about two-thirds of the poorest Filipinos still lack access to basic water, sanitation, and hygiene (WASH) facilities.

It added that up to 50% of the population, including children under five, drinks “surface water” or unsafe water in some municipalities of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) and Region IV-B.

With poor WASH conditions and practices, children are at risk of waterborne diseases, such as diarrhea. The local statistics agency noted that diarrhea and gastroenteritis of presumed infectious origin ranked as the 26th leading cause of death last year, accounting for over 2,000 deaths nationwide.

In 2019, PIDS noted that poor WASH practices cause 86% of diarrhea-related deaths in the country. Of these fatalities, 35% were children under the age of five.

According to Mr. Shimojo, gaps in sanitation and hygiene infrastructures are directly linked to students’ academic performances.

“Schools in crowded cities or remote villages have the worst toilet and water,” Mr. Shimojo said. “The kids who need learning recovery the most are the ones getting sick.”

“We cannot solve the learning crisis without solving the school health crisis, even with the best textbooks,” he added.

Based on the Comprehensive Rapid Literacy Assessment (CRLA), EDCOM 2 earlier reported that 41.47% of students nationwide are struggling readers. Of these, 2,243,059 students are under Key Stage 1, or learners from Kindergarten to Grade 3.

“We talk a lot about catching up on reading in the mass, but the reality is very simple – you cannot teach on empty chairs,” he said.

“When a student misses school because of a stomach illness or UTI, they fall behind,” he added. “If kids are too sick to sit at their desks, we cannot achieve our goals.”

The SATO Philippines executive underscored that better facilities lead to higher classroom attendance and performance. “When children spend more consecutive days in class, their grades naturally go up.”

“With safe private toilets, girls don’t miss crucial lessons or exams during their periods,” he added. “When attendance is stable, teachers can finally finish their catch-up program successfully.”

SATO Philippines has partnered with the Department of Education (DepEd) and deployed over 11,700 handwashing devices across 587 schools, benefiting about 117,000 students in Luzon and Visayas. It also aims to expand into Mindanao to serve learners better.

“Any place is a place we can work with, because if there is a need, we would like to work with local segments,” Mr. Shimojo said. “We are ready to expand our product nationwide.” — Almira Louise S. Martinez

Megawide Construction Corporation (“Megawide” or “the Company”), through its core engineering, procurement and construction services, recently completed the First Concrete Pouring for Megaworld Corporation’s (“Megaworld”) latest high-end residential project in Pasay City.

This milestone symbolizes the start of the building’s main structural works, signaling the transition from foundation preparation to vertical construction, laying the groundworks for the structure’s strength, durability, and long-term integrity.

The project — One Portwood Residences — is a 14-storey, 73,561-square-meter residential development. The contract cost is estimated at Php3.67 billion and forms part of the Company’s healthy order book of P48.7 billion as of end-March 2026.

The Company will be utilizing its integrated engineering and construction approach, leveraging First-World engineering standards and strict quality control systems. These ensure efficiency in execution while maintaining the highest levels of safety, structural reliability, and build quality expected in a premium residential development.

Megawide Construction Chief Operating Officer (COO) Frederick Tan emphasized the company’s commitment to delivering value-driven construction execution.

“Milestones, like this, are an opportunity for us to add greater value to the project through disciplined execution, engineering expertise, and a strong working relationship with Megaworld. Having worked withthem since 2016 and now spans 15 projects, we continue to deliver developments that combine both quality and efficiency at every stage of construction,” shared Tan.

Megaworld SVP Ar. Jennifer Romualdez also expressed her confidence and enthusiasm for the project’s progress.

“We are excited to see this development take shape and are confident in Megawide’s capability to deliver with both quality and timeliness. This project is part of our vision of creating premium residential spaces, and we look forward to its successful completion,” shared Romualdez.

Megawide and Megaworld drive the development of high-quality residential projects that raise urban living standards in key growth areas such as Pasay City. One Portwood Residences is targeted for completion in 2028, signaling another step forward in delivering world-class residential infrastructure in the Philippines.

Aside from Tan and Romualdez, other key executives from both companies who graced the event last May 29, 2026, were Group Head for Operations Jules Ronquillo and members of the Megawide Construction Management Committee. Megaworld, on the other, were also joined by First Vice-President Ar. Astrid Cruz, Construction Manager Engr. Leslie Habla Santos, along with their respective sales and project teams.

Megawide reported strong financial results in the first three months of the year — recording a 25% growth in net income to Php265 million amid the onset of the Middle East War and a healthier balance sheet of 1.1x debt-to-equity (D-E) ratio  and 0.8x net D-E ratio from 1.5x and 1.1x, respectively, as of end-December 2025. The Company is expecting another robust, back-ended performance this year anchored on its construction and real estate segments.

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In a statement released Thursday, Lenovo said the platform is designed to support ultra-low-latency IPTV delivery alongside traditional cable and satellite broadcast, intelligent content delivery, and mission-critical decision-making across the event ecosystem and operations.

Lenovo said servers will be deployed at the International Broadcast Center in Dallas, Texas, to provide computing power for ingesting, processing, and distributing live match content across FIFA venues.

The company said the platform will help reduce IPTV latency to under five seconds, enabling near real-time access to live match action.

Lenovo added that its ThinkSystem SR635 V3 servers will manage large volumes of live video data from stadiums across North America and support FIFA’s IPTV workflow by ingesting, processing, and distributing match content through multiple channels to more than 1,000 screens across official FIFA venues.

The 2026 FIFA World Cup will take place from June 11 to July 19, 2026, to be jointly hosted by Canada, Mexico, and the United States. — Edg Adrian A. Eva

MADRID — As Pope Leo XIV begins his apostolic visit to Spain on Saturday, Filipino migrants in the country are looking to the trip as more than a major Catholic event, seeing in it a message of dignity and recognition for people living far from home.

The pontiff’s June 6-12 visit will take him to Madrid, Barcelona, Tenerife, and Gran Canaria. The inclusion of the Canary Islands, one of Europe’s main entry points for migrants crossing from Africa, has given the visit particular significance amid continuing debates over migration in Spain and across the continent.

For Cardinal Pablo Virgilio S. David, the pope’s decision to include the Canary Islands in his itinerary sends a clear signal.

“The fact that his itinerary includes the Canary Islands — Spain’s front line for migrants crossing from Africa — tells us that this is not merely a ceremonial visit,” Cardinal David told BusinessWorld.

“The Pope is going to where the pain is. He is showing that the Church does not look away.”

The visit comes as migration remains a major issue in Spain.

Reuters reported in May that the Spanish government’s migrant regularization program could benefit hundreds of thousands of undocumented migrants. The report, citing Funcas, a Spanish think tank, said roughly 840,000 undocumented migrants are currently part of Spain’s workforce.

Cardinal David said the pope’s presence would resonate with Filipinos who left the Philippines in search of better opportunities.

“For our Filipino kababayan in Spain, I believe the Holy Father’s presence is a powerful reminder that they are not invisible,” he said.

“They came seeking a better life, and they have given Spain their labor, their faith, and their families.”

The cardinal said Pope Leo’s motto for the visit, Alzad la mirada (“Lift your gaze”), speaks directly to migrants.

“The Pope is saying: you have dignity, you have a future, lift your eyes.”

Cardinal David also drew attention to the historical connection between Spain and the Philippines. “Spain once sent missionaries to the Philippines to plant the Gospel,” he said.

“Today, hundreds of thousands of Filipinos are living witnesses of that same faith — right here in Spain. They are not just recipients of charity. They are the Church, present and active, in the heart of Europe.”

Among those looking forward to the visit is Mariel, a 33-year-old Filipino from Bohol who has lived in Madrid for four years and works as an interna, or live-in domestic worker.

Mariel said she considers it a privilege to have the opportunity to see Pope Leo in Spain.

“When we learned that he was coming here, I thought maybe it would be good to go, or even just to see him,” she said.

Mariel said she does not regularly attend Mass because of work demands. She added that several Filipinos she lives with are planning to attend events related to the papal visit.

Another Filipino worker, Marjorie, 26, from Tarlac, said fellow Filipinos encouraged her to join them. “It is a privilege that he is coming here,” she said. “It is an opportunity to see him and hear his words of wisdom.”

Fr. Ferdi Q. Bajao, SVD, said Filipino migrants are likely to welcome Pope Leo not only as the leader of the Catholic Church, but also as a familiar presence.

“Hospitality runs deep in our national psyche, so a visit of a loved one, or an anticipated figure would surely generate a familiar and familial warmth — a heightened sense of presence,” he told BusinessWorld.

“The Filipino migrants definitely will look forward to the presence of a friend, father, pastor, brother — a panauhin who deserves the best of welcome, and who belongs to us, di iba sa amin.”

He said the pope’s visit would hold particular significance for Filipinos living away from their families.

“It would be enough to see the Pope as a tangible icon of the Lord, who is dear to a Catholic nation in exile in a foreign land,” he said.

“The Filipinos will be edified that Christ comes to them in their loneliness, helplessness, and in their chains — work, sending money back home, separation from loved ones.”

“The person of the Pope is a powerful anchorage of confidence that all shall be well, that each one is precious, and most important: not forgotten.”

He also pointed to the historical ties between Spain and the Philippines.

“This will be a full circle for Filipinos who in 1521 first received the Faith from Spain, and now are ‘missionaries of Faith’ as well to Spain,” he said.

For Cardinal David, the broader significance of the pope’s visit lies in how migrants are viewed.
“Migrants are not a problem to be managed,” he said.

“They are people to be welcomed — as the Gospel demands and as our common humanity requires.”

“This ensures that decisions are tailored strictly to affected classrooms or specific grade levels, doing away with the usual generic, division-wide ‘no classes for all’ cancellations,” the agency said in a news release on Friday.

Data from the Second Congressional Commission on Education (EDCOM 2) showed that nearly 30% of class days in School Year 2023-2024 were lost due to suspensions.

Of these, 32 days were accounted for calamities, such as typhoons, earthquakes, and high heat indices, during April and May. 12 days were also lost to non-teaching tasks, followed by four local holiday suspensions, four days off-class activities, and one day of closure due to a conflict.

Under the Department of Education Order No. 14 s. 2026, principals, SDS, and Division Alternative Learning System Focal Points are provided with a clearer decision-making framework for addressing classes disrupted by natural disasters and other emergencies.

“If there is a calamity or crisis, our first question should be: is it safe for children and teachers, and can they teach and learn?” Education Secretary Edgardo “Sonny” M. Angara said in Filipino in a news release.

“We cannot expect the same from them during normal times and when they are facing danger, fear, or loss,” he added.

The new guideline introduces a levels-based Learning Continuity Framework to guide schools in selecting appropriate learning responses based on the safety, readiness, and condition of learners and teachers. The four levels are Hayo (or Continue), Hinay (or Ease-in), Hinga (or Check-in), and Hinto (or Stop).

Continue signals that stakeholders are safe and regular in-person learning can proceed. Meanwhile, Ease-in is applicable during slower, more flexible learning resulting from mild disruptions.

Check-in is used when well-being is prioritized and academic demands are reduced. The Stop level is for halted academic learning due to safety and basic needs risks.

The guidelines also set standards for emergency learning resources and experiences to sustain learning without placing unnecessary pressure on learners and teachers, including learning packets, print or digital modules, broadcast materials, family kits, check-in guides, home learning support, and emergency learning kits.

“The real essence of learning continuity is compassion—it knows when to continue, when to slow down, when to check in, and when to pause in order to prioritize safety,” Mr. Angara said.

DepEd said the new policy applies to public elementary and secondary schools, DepEd-operated Community Learning Centers (CLCs), and DepEd-recognized ALS Providers.

However, private schools, ALS providers, and basic education units of state or local universities and colleges (SUCs and LUCs) may likewise adopt it. — Almira Louise S. Martinez

Ester developed into a tropical depression around 3:00 a.m., the Philippine Atmospheric Geophysical and Astronomical Services Administration (PAGASA) said in a 5:00 a.m. press briefing.

This prompted the hoisting of Storm Signal No. 1 over Batanes and Luzon, where strong and up to minor life threatening winds are expected.

Tropical depression Ester was last located offshore 225 kilometers West of Itbayat Batanes, packing 45 kilometers per hour (kph) of maximum sustained winds and 55 kph of gustiness, PAGASA said.

It is moving 20 kph northwestward heading Taiwan.

Apart from storm signal, rainfall warning was raised in nine areas due to the combined effects of the tropical depression and southwest monsoon, PAGASA said.

Orange rainfall warning was hoisted in La Union and Ilocos Sur where torrential rains, or 100 to 200 millimeters (mm) of rainfall are expected.

PAGASA warned of numerous flood events in urbanized areas and flood prone areas under the rainfall warning.

Yellow rainfall warning, meanwhile, is raised over Batanes, Ilocos Norte, Abra, Benguet, Pangasinan, and Zambales.

At this warning, strong rains, or 50 to 100 mm of rainfall is expected.

Tropical depression Ester is expected to exit the Philippine Area of Responsibility by tomorrow, Saturday.— Edg Adrian A. Eva

NEARLY THREE in 10 Filipinos remain at risk of slipping into poverty, while an oil price spike linked to the Middle East conflict could push almost two million more below the poverty line, according to a World Bank report.

In its Philippines Poverty and Equity Assessment released on Thursday, the bank said that the poverty rate in the country has declined steadily, at an average of 7.7% per year since 2012, excluding the pandemic. It fell to 15.5% in 2023 based on the latest available data.

The World Bank expects this to decline further to around 12.3% by 2028 if the pre-pandemic relationship between growth and poverty reduction holds. Even so, this would remain above the 8-9% target set under the Midterm Update of the Philippine Development Plan 2023-2028.

Despite the gains, the World Bank said 27.7% of Filipinos remain vulnerable to falling into poverty. With a median income of only 28% above the poverty line, these families are highly exposed to shocks such as higher food and fuel prices, according to the report.

“The rise of global fuel prices associated with the 2026 Middle East conflict illustrates precisely this risk: higher transport and energy costs ripple into food prices and household budgets, with the potential to push nearly 2 million Filipinos into poverty,” it added.

World Bank Senior Economist Liliana D. Sousa, however, said the estimate was based on a modeled scenario and may no longer materialize given government measures.

Elevated oil prices and dwindling reserves have pushed the government to place the country under a one-year state of national energy emergency, suspend excise taxes on liquefied petroleum gas and kerosene, and roll out targeted subsidies to the most vulnerable sectors.

Ms. Sousa said that helping the poor and vulnerable households is critical as three out of five children live within these households.

“What our analysis shows is really it is the poor and vulnerable that are getting hit hardest with these price shocks. And the reason is that they do not have that cushion, they are not able to absorb the income shock,” she said.

“That is why it makes sense to target interventions in moments of shocks to those households that are especially vulnerable to these shocks,” she added.

The multilateral lender also cited the country’s exposure to climate-related hazards as a major challenge to poverty eradication efforts. According to the report, 61% of the population is at high risk from tropical cyclones.

“Cyclone losses amount to about 1.2% of gross domestic product each year and could rise sharply without adaptation,” the World Bank said. “Disasters disrupt schooling and work, damage assets, and worsen nutrition.”

Meanwhile, 32.9% of Filipinos belong to the emerging middle class, which still faces a 10% risk of slipping back into poverty. These are Filipinos living on $6.50-$11.70 per day at 2021 international prices.

About a quarter of Filipinos, or 23.8%, are securely middle class or high income, defined as those living on more than $11.70 a day.

“The real barrier here moving from the emerging middle class to the secure (middle class) is a question of more higher-paying jobs,” said Ms. Sousa.

Despite its expected transition to upper middle-income status, the Philippines continues to lag regional peers on poverty reduction.

Using the upper middle-income country (UMIC) poverty line of $8.30 a day at 2021 international prices, 58.7% of Filipinos are considered poor, compared with 33.8% in regional peers and 29.4% across upper middle-income economies.

“This poverty rate remains high relative to countries with similar levels of per capita output, both lower middle-income and UMIC,” it said.

The Philippines is seeking to attain UMIC status in 2026. The World Bank classifies the Philippines as a lower middle-income country with a gross national income per capita of $4,470, just $26 below the UMIC classification of $4,496-$13,935.

REFORMS NEEDED TO END POVERTY BY 2040
Despite recent gains, the World Bank said urgent reforms are needed if the Philippines wants to achieve its Ambisyon Natin 2040 goal of eradicating poverty.

“The Philippines is crossing into upper middle-income status… And this report shows that the country’s own vision — Ambisyon Natin 2040, a prosperous, predominantly middle-class society where no one is poor — is well within reach,” said World Bank Division Director for the Philippines Zafer Mustafaoğlu.

According to the World Bank report, the poverty incidence would decline to 6% and the secure middle class would increase to 43% under a business as usual scenario where current policies continue and growth and employment follow existing trends.

Under a comprehensive reform scenario where growth and job creation policies are paired with a focused equity and resilience agenda, the poverty rate could drop to 2.9% while the secure middle class could increase to 55%.

“Given the high concentration of people just above the poverty line and the country’s high prevalence of shocks, progress can be easily reversed,” the World Bank said.

“Achieving the poverty target requires faster income growth for the poorest and improved resilience,” it added.

The report said labor market gains slowed in 2025 and 2026 amid last year’s corruption scandal and elevated oil prices stemming from the Middle East conflict.

“Gains slowed due to job losses in manufacturing and construction linked to disruptions in public infrastructure spending following the investigation of flood control irregularities and, more recently, the 2026 oil price shock,” it said.

In 2025, the unemployment rate averaged 4.2%, equivalent to 2.14 million Filipinos, the highest annual average since 2023. Meanwhile, the unemployment rate rose to 5% in March from 3.9% in the same month a year ago.

Mr. Mustafaoğlu said that the difference between the Philippines of today and the Philippines of 2040 comes down to creating more quality jobs, strengthening social protection and resilience against shocks, and improving frontline public services.

“These are specific, evidence-based reforms that the Philippines has both the capacity and the track record to pursue,” he added.

THE PHILIPPINES continued to see short-term foreign investments exiting the country for a second straight month in April as investors remained cautious amid heightened global uncertainty, preliminary central bank data showed.

Transactions on foreign investments registered with the Bangko Sentral ng Pilipinas (BSP) through authorized agent banks yielded a net outflow of $1.601 billion in April, a reversal of the $857.12-million net inflow a year earlier.

However, this was lower than the $1.957-billion net outflow posted in March.

Foreign portfolio investments (FPI) are also referred to as “hot money” due to the ease with which these flows enter or leave the country.

Based on central bank data posted on its website, gross outflows of hot money ballooned by 89.63% year on year to $3.108 billion in April from $1.639 billion. However, it was 17.78% lower than the $3.78-billion outflows in the previous month.

On the other hand, total hot money inflows amounted to $1.507 billion during the month, down by 39.62% from $2.496 billion a year prior and by 17.33% from $1.823 billion in March.

Most or $1.056 billion of the outflows were recorded in investments in peso-denominated government securities, reversing from the $1.142-billion net inflow in April last year.

Meanwhile, investments in Philippine Stock Exchange (PSE)-listed securities saw a net outflow of $545 million, larger than the $284-million outflow a year ago.

More short-term foreign investments left the country in April as uncertainties stemming from global geopolitical tensions prompted investors to be more cautious, analysts said.

“April’s net outflow came as investors turned more cautious amid geopolitical tensions, a strong dollar, and uncertainty over global interest rates,” SM Investments Corp. (SMIC) Group Economist Robert Dan J. Roces said in a Viber message.

“Foreign funds tend to move quickly when risk sentiment shifts, and that’s what we saw,” he added.

The ongoing war in the Middle East, which erupted in late February, also continued to jolt domestic and global markets, which likely led to two straight months of hot money outflows, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted.   

“This is largely due to the second full month of the war on Iran/Middle East since Feb. 28 that increased global and local market volatility amid the sharp increase in global crude oil, fuel, and petroleum prices, higher inflation, and possible further central bank rate hikes,” he said via Viber.

Uncertainties surrounding the over three-month conflict between the United States and Iran continue to fuel market volatility, pushing up inflation for major oil importers and weighing on currencies like the Philippine peso as the US dollar strengthens on safe-haven demand.

In April, Philippine inflation quickened to its fastest pace in over three years at 7.2% from 4.1% in March as still high oil prices spilled over to costs of food and utilities.

Meanwhile, the peso touched the P61 mark for the first time in April, plunging by 73.7 centavos to close at P61.485 against the greenback on April 30 from its P60.748 finish on March 31.

The BSP has since shifted to a hawkish stance, with growing calls for further rate hikes to temper spiraling prices.

The Monetary Board tightened for the first time in two-and-a-half years at its April meeting, raising the key policy rate by 25 basis points (bps) to 4.5%.

BSP Governor Eli M. Remolona, Jr. has said that they may keep using monetary policy to bring inflation back to their 2%-4% target, with an off-cycle hike being considered before the Board’s next review on June 18.

April’s net outflow brought the country’s four-month hot money tally to a $4.407-billion net outflow. This likewise marked a reversal from the $923-million short-term foreign investments that entered the country in the same period last year.

Broken down, foreign investments in government securities posted a net outflow of $3.072 billion in the January-to-April period, reversing the $1.68-billion inflows seen a year prior.

Meanwhile, hot money outflows in PSE-listed securities stood at $1.34 billion as of April, much higher than the $755-million outflows recorded in the previous year.

“In the coming months, flows may remain choppy, with periods of both inflows and outflows, depending on how global markets, the Fed, and the peso evolve,” said SMIC’s Mr. Roces.

The BSP projects FPIs to end this year at a net inflow of $3.7 billion, unchanged from the total estimated net inflows in 2025.

MADRID — Artificial intelligence (AI) may be dominating conversations across the technology sector, but Silicon Valley investor and entrepreneur Kim Perell said startup investors continue to focus on the same fundamentals that have long guided investment decisions.

At a media roundtable on Wednesday at South Summit Madrid 2026, co-organized by IE University, Ms. Perell said investors still look closely at market opportunity, management teams, differentiation, and scalability when evaluating startups.

“I look at how big the market is. I also look at the team,” she said. “Then I think about what you’re building and whether it has unique differentiation and scale.”

Ms. Perell, who has founded nine companies and invested in more than 100 startups through investment and brand-building company 100.co, said entrepreneurs should not lose sight of business fundamentals.

Asked what advice she would give founders in emerging startup ecosystems such as the Philippines, she said entrepreneurs should be willing to adapt as markets evolve.

“I think the advice for every founder is to start,” she said. “And be okay to pivot.”

She cited examples of successful technology companies that achieved growth only after changing direction from their original concepts. YouTube, for instance, began as a video-dating platform before becoming the world’s largest video-sharing website. Social media platform X, formerly Twitter, emerged from Odeo, a podcasting startup that pivoted after Apple entered the podcasting market.

“As a founder, you believe it should be X, but if the market dictates you should do something differently, you should be flexible and agile to move with the market,” she said.

Ms. Perell also stressed the importance of mentorship, describing the lack of guidance as one of the biggest mistakes she made during her early years as an entrepreneur.

“I made the mistake of thinking I could do it alone, and I couldn’t,” she said.

She encouraged founders to seek advice from experienced entrepreneurs and investors, saying mentors can help startups avoid common pitfalls and accelerate growth.

“It doesn’t matter what country you’re in. Finding great mentors is key to your success,” she said.

Her remarks come as entrepreneurs from emerging markets seek greater visibility in the global startup ecosystem.

South Summit founder and President María Benjumea said Asia remains one of the world’s strongest innovation regions and continues to produce increasingly sophisticated technologies and startups.

“Asia is incredibly strong. The technology coming out of the region is impressive, and many Asian countries have vibrant innovation ecosystems,” she said in an interview.

She said startups from the region should continue expanding beyond their domestic markets and strengthen links with international investors, corporations and entrepreneurial networks.

“What is important is helping startups expand internationally, gain visibility, connect with investors, and become part of the global ecosystem,” she added.

Four startups from Asia were selected among the Top 100 finalists in this year’s South Summit Startup Competition: South Korea’s HISTRANGER and Singapore-based Omnishelf, Ailytics and Peris.ai. The broader Middle East was represented by Turkey’s OneNewOne and Israel’s Tissue Dynamics.

For governments seeking to strengthen startup ecosystems, Spain’s Minister for Digital Transformation and Public Service Óscar López said policy support remains essential.

Asked what advice he would give countries looking to replicate Spain’s rise as one of Europe’s leading startup hubs, Mr. López pointed to three key areas: startup-friendly taxation, supportive regulation, and public investment.

“First of all, taxation,” he said. “Second, we created a good regulatory framework.”

Mr. López said Spain’s startup law helped create a more favorable environment for entrepreneurs and investors, while government support has helped accelerate the growth of new businesses.

“Then, public investment,” he said. “We have made huge efforts investing in new startups and helping new startups.”

However, he said governments should not rely solely on tax incentives to stimulate entrepreneurship.

“All the discussion is what you do it for,” Mr. López said. “If you reduce taxes to generate more investment, then, at the end of the day, that’s going to generate more growth.”

Looking ahead, he said Spain’s digital transformation strategy extends beyond startup policies and includes investments in education and digital infrastructure.

“It is not only a question” of attracting startups, he said, adding that Spain’s future competitiveness depends on innovation and education.

“We’ve invested hundreds of millions of euros in infrastructure,” Mr. López said. “There are many things there. Not only taxation.”

MADRID — Traditional university degrees may become less important as artificial intelligence (AI) reshapes how people learn and how employers evaluate talent, according to Udacity founder Sebastian Thrun.

At a media roundtable on Wednesday at South Summit Madrid 2026, co-organized by IE University, Mr. Thrun said the growing accessibility of online learning platforms and AI-powered tools is making skills and demonstrated capabilities more valuable than formal academic credentials alone.

“Formal education is secondary to what you actually know and can do,” he said.

Mr. Thrun founded online learning platform Udacity after teaching a pioneering massive open online course at Stanford University that attracted more than 160,000 students.

He said technology is increasingly democratizing access to knowledge, allowing individuals to acquire marketable skills outside traditional educational institutions.

Mr. Thrun, a former Google vice-president, also said that employers are becoming more interested in whether candidates can perform a job than in where they obtained their education.

“The degree is a false belief that it is a necessary step in society,” he said.

SHIFT IN LEARNING
Mr. Thrun’s comments come as AI tools rapidly change how people acquire knowledge and perform tasks across industries.

He identified Google and YouTube as among the world’s largest education platforms, saying individuals today have unprecedented access to information and training resources.

The emergence of generative AI has accelerated that trend by enabling learners to receive personalized explanations, tutoring, and feedback on demand.

As a result, workers can increasingly develop specialized skills without necessarily enrolling in traditional degree programs, Mr. Thrun said.

He added that technological barriers that once limited access to advanced education are steadily disappearing.

A motivated learner in a remote area can now acquire expertise in fields such as machine learning and software development and compete globally, he said.

Mr. Thrun previously founded Google’s X research lab and led the company’s self-driving car project, which later became Waymo.

LABOR
The shift toward skills-based hiring may become more pronounced as AI transforms workplace structures.

Mr. Thrun described a transition from the traditional “pyramid” model, in which senior professionals supervise large numbers of junior employees, to a “diamond” model, where experienced workers use AI tools to perform tasks that previously required teams of analysts or associates.

Under such a structure, employers may place greater emphasis on practical capabilities and adaptability than on formal qualifications, he said.

“Young people have a bit of a problem,” Mr. Thrun said, noting that AI is increasing the productivity of senior employees and potentially reducing demand for some entry-level functions.

To remain competitive, workers should actively experiment with AI tools and integrate them into their daily work, he said.

“You should be on top of AI,” he said. “Play with it on a daily basis.”

PHILIPPINE CONTEXT
Philippine organizations continue to grapple with a shortage of AI-related talent, according to Philippine AI Report 2025.

The report said 57% of organizations cited a lack of AI-skilled personnel as a major obstacle to broader adoption of the technology.

The report, which surveyed 175 organizations across multiple industries, also found that while 92% of Philippine organizations used AI in some form last year, most remain in the pilot stage of deployment.

The findings suggest that demand for AI-related skills is growing faster than the available talent pool.

It recommended that organizations invest heavily in workforce development and upskilling initiatives to address the gap.

FUTURE OF UNIVERSITIES
Despite his criticism of the traditional emphasis on degrees, Mr. Thrun did not predict the disappearance of universities.

Instead, he said institutions that fail to adapt to changing labor market demands could face increasing pressure as alternative forms of education gain credibility.

Universities that remain focused on credentials rather than practical skills may struggle to justify their value proposition, particularly as employers become more open to nontraditional learning pathways, he said.

The rise of AI could further accelerate that shift by making high-quality educational content widely accessible at little or no cost, he said.

For workers, the implication is that learning may become a continuous process rather than something confined to a four-year degree program.

“The more leveraged we are as people with tools, the more we will be asked to make impactful decisions,” Mr. Thrun said.

As AI automates routine tasks, workers will increasingly be judged by their ability to solve problems, exercise judgment, and apply knowledge effectively, regardless of where they acquired those skills, he added.

HEADLINE inflation came in slower than expected in May as pressures from transport costs eased following several pump price rollbacks during the month, the Philippine Statistics Authority (PSA) reported.

Inflation settled at 6.8% in May, easing from 7.2% in April but quickened from 1.3% in the same month last year, according to PSA data.

This marked the first time in half a year or since November 2025 that the headline print cooled month on month, and was the slowest pace in two months or since the 4.1% in March.

The May reading also came in as a surprise for economic managers and the market, as a BusinessWorld poll of 16 economists conducted last week yielded a median estimate of 7.9% for the month.

Meanwhile, the Bangko Sentral ng Pilipinas (BSP) earlier said last month’s headline clip was likely between 7.1% and 7.9%.

Still, May marks the third month in a row that the headline inflation has topped the central bank’s 2%-4% target, bringing the year-to-date average inflation to 4.5%.

However, core inflation, which excludes volatile food and energy prices, bucked the headline print’s trajectory as it quickened to 4.1% in May from 3.9% a month ago and 2.2% in May 2025.

This was the fastest pace seen since the 4.4% recorded in December 2023.

In its report “Building the Filipino Middle Class: Towards Resilient Futures and Poverty Eradication,” the World Bank projected the national poverty rate to drop to around 12.3% by 2028 “if the pre COVID growth-poverty relationship holds.”

Under the Midterm Update of the Philippine Development Plan 2023-2028, the government projects poverty incidence to decline to 8-9% by 2028.

“The report projects poverty to 2028 and it does find that it will be above the (government’s) goal,” said World Bank Senior Economist Liliana D. Sousa in a media briefing on Thursday. “As of this moment we are not projecting poverty in single digits by 2028.”

The poverty rate fell to 15.5% in 2023 from 23.5% in 2015, while income inequality reached its lowest level in four decades, according to the World Bank.

Despite the gains, about 28% of Filipinos remain vulnerable to falling back into poverty, underscoring the fragility of recent progress.

“The typical Filipino family earns just enough to stay above the poverty line – but not enough to feel economically secure,” it added.

However, the World Bank said poverty incidence could fall to 2.9% by 2040, in line with the government’s long-term target, if authorities implement policies that boost growth, create jobs and strengthen resilience.

Under a business-as-usual scenario or without government intervention, however, poverty incidence would decline only to 6% by 2040.

The government seeks to make the country a predominantly middle-class society where no one is poor by 2040.

World Bank Division Director for the Philippines Zafer Mustafaoğlu said the country could nearly eliminate poverty by 2040 with reforms that boost productivity, job creation, equity and resilience.

“The goal is ambitious, but it is achievable with strong commitment to reforms. The World Bank stands ready to support the government of the Philippines in this journey,” he added. – Justine Irish D. Tabile

PRESIDENT Ferdinand R. Marcos, Jr. on Wednesday said the government is considering a supplemental budget and legislative amendments to cushion the impact of the Iran war.

The government needs to move quickly to respond to the energy emergency triggered by the US-Israel war on Iran, including measures that might require congressional action, Mr. Marcos told reporters in Manila.

Mr. Marcos said the Executive is studying the possibility of proposing a supplemental budget and amendments to existing laws to support sectors affected by rising fuel prices.

“We were thinking that maybe we could have a supplemental budget,” the President said, without specifying an amount.

“This is necessary so that we can assist the people because of the oil crisis,” he added, citing discussions in a committee tasked with crafting measures to ease the effects of the Iran war.

A supplemental budget is an additional spending plan approved through legislation to address unforeseen needs or fund programs not covered by the national budget.

In March, the President placed the country under a year-long energy emergency following volatility in global oil markets linked to the war in the Middle East.

The Department of Economy, Planning, and Development in April estimated that the National Government may need P429 billion to fund its ongoing response measures should the Iran war stretch until December.

On Wednesday, Mr. Marcos also questioned why the Legislature had effectively halted work while the Executive and Judiciary continued normal operations during the crisis.

He said the government needs to provide stability and assurance to Filipinos as global uncertainties threaten fuel prices and economic activity.

Mr. Marcos said the Executive is now looking at the law and Constitution to see how they “can remedy the situation.”

“But it requires the cooperation and the commitment of the Senate leadership to continue with their work… And they haven’t been doing much of a good job right now,” he added.

The Senate had not convened since Monday and only briefly resumed session on Wednesday. With 12 senators present, it elected Senator Sherwin T. Gatchalian as Senate president pro tempore before adjourning sine die.

Congress will convene its second regular session on July 27.

Zy-za Nadine N. Suzara, a public finance specialist of the People’s Budget Coalition, said a supplemental budget could help cushion the impact of the energy crisis, but the government must first identify and disclose credible funding sources, whether from additional revenues or other financing options.

Any spending package should be carefully targeted and designed in consultation with affected sectors to ensure limited resources deliver the greatest impact, she said in a Viber message.

Ms. Suzara said delays in congressional approval would undermine the timeliness and effectiveness of the measures, arguing that preparations should have begun months earlier as ordinary Filipinos were affected by the crisis.

BIGGER DEFICIT
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the supplemental budget would further widen the budget deficit and require more National Government borrowings.

Latest Treasury data showed the country’s budget gap stood at P324.1 billion as of April, 14.44% narrower than the P378.7-billion deficit posted in the same period last year. This represented 20.1% of the P1.61-trillion deficit ceiling for this year.

Meanwhile, Oxford Economics said emerging economies in Southeast Asia could see their budget deficits widen this year as the fiscal cost of the Middle East war bites, with the Philippines projected as the laggard among its peers.

In a report published late on Tuesday, Oxford Economics assistant economist Artie Lam said the fiscal deficits of emerging markets in the Association of Southeast Asian Nations (ASEAN), or Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, could widen by as much as 1.5 percentage points (ppts) this year.

“We project fiscal deficits to widen by up to 1.5 ppts in emerging market ASEAN this year because of higher government spending on fuel subsidies and lower revenues stemming from weaker economic activity,” Mr. Lam said. “Higher yields in the region have also constrained fiscal space, especially in Indonesia and the Philippines.”

According to the United Kingdom-based think tank, the Philippines had the largest fiscal deficit within emerging ASEAN last year.

Mr. Lam said this will force the Philippines, as well as Indonesia, to face the most market pressure to limit its spending.

The National Government may continue to feel the fiscal pressure over the medium term as Oxford Economics said the Philippines will likely have the largest fiscal deficit-to-gross domestic product share until 2029, followed by Malaysia, Thailand, Indonesia and Vietnam.

Mr. Lam warned that higher borrowing costs will likely dampen government spending and public investments, further widening the country’s budget deficit.

“A marked increase in borrowing costs would limit its ability to respond, and persistently high yields may even force the government to rein in future spending, weighing on government consumption and public investment,” he said.

Mr. Lam expects interest rates to rise further this year as heated inflation prompts the Bangko Sentral ng Pilipinas (BSP) to tighten monetary policy.

He said the BSP may deliver 75 basis points (bps) more in rate hikes until yearend.

“We also expect the Philippines to be the most affected by inflation in the region, likely triggering a total of 100 bps in policy rate hikes this year by a historically inflation-focused central bank, 25 bps of which have already been delivered,” he said.

In April, the central bank raised the key policy rate by 25 bps to 4.5%, marking its first tightening move since October 2023, as it sought to temper second-round price effects and keep inflation expectations anchored.

The BSP has said that they stand ready to implement all necessary monetary policy actions to bring inflation back to their 2%-4% target, as they expect it to average 6.3% this year and 4.3% in 2027.

Still, Oxford Economics’ Mr. Lam noted that they are not yet concerned about emerging ASEAN’s current fiscal deficits as they are banking on the potential relief from the countries’ fiscal consolidation once the conflict ends.

“In the medium term, the current fiscal deficits aren’t a major reason for concern as we expect fiscal consolidation to resume after the conflict, bringing us back to the pre-war trajectory by 2028, but abrupt market movements may prompt governments to change course more rapidly than expected,” he said.

In its latest Economic Outlook released on June 3, the OECD said it expects the Philippine economy to expand by 3.2% in 2026, significantly slower than its 5.1% forecast in December. If realized, this will be slower than the 4.4% gross domestic product growth in 2025.  

The Paris-based organization also cut its 2027 growth projection to 5% from 5.8% previously.

“We project growth to be weak at 3.2% in 2026, before recovering to 5% in 2027 as inflation dissipates and public investment gradually recovers,” said OECD economist Cyrille Schwellnus in an online media briefing on Wednesday.

Both forecasts are below the government’s 5%-6% growth target for 2026 and 5.5%-6.5% target for 2027. The Palace earlier said the Development Budget Coordination Committee revised its macroeconomic assumptions, but new figures have yet to be released.

Meanwhile, inflation is projected to exceed the government’s 2%-4% target range in 2026 before easing to the upper end of the band in 2027.

The OECD raised its Philippine inflation forecast to 6.8% in 2026 from 2.6%, as well as its 2027 projection to 4% from 3% previously.

The inflation forecast for 2026 is above the Bangko Sentral ng Pilipinas’ (BSP) revised estimate of 6.3%, while its 2027 forecast of 4% is below the BSP’s 4.3% estimate.

Asked whether the Philippines faces a greater risk of stagflation, Mr. Schwellnus said the shock is expected to be temporary.

“In 2026 we see growth slowing quite sharply and inflation increasing quite a bit and that would go in the direction of a stagflationary shock,” he said.

“But we also highlight in our note that we currently expect this to be temporary. So, growth will recover in 2027 to 5% and inflation is projected to return to the central bank’s target band in 2027,” he added.

However, Mr. Schwellnus said the Philippines’ recovery would depend on a rebound in public investment, easing inflationary pressures, developments in the Middle East, and a vigilant, data-dependent monetary policy.

“The Philippines entered the energy crisis with growth already slow,” he said, citing the sharp contraction in public investment following corruption investigations in 2025, as well as softer private consumption amid a weakening labor market.

The OECD expects private consumption to grow by 2.7% in 2026 and 3.8% in 2027. These are sharply below its December projections of 5.1% and 5.9%, respectively.

Meanwhile, it projects public investment to recover gradually in the second half of 2026.

It expects gross fixed capital formation, the investment component of the economy, to grow by 1.2% in 2026 and 8.2% in 2027 from earlier projections of 2.4% and 5.3%, respectively.

“Going forward, we think that high inflation will further weigh on real incomes and private consumption while the recovery in public investment is expected to remain subdued in the near term in 2026,” Mr. Schwellnus said.

As a net oil importer, the Philippines is highly exposed to the oil shock.

“The central bank has already raised the policy rate by 25 basis points (bps), and we expect further tightening as inflation and exchange rate pressures rise,” Mr. Schwellnus said.

“But despite this monetary tightening, inflation is projected to average 6.8% in 2026, well above the central bank’s target band, before gradually easing as energy pressures dissipate,” he added.

The OECD expects the BSP to raise its policy rate by another 100 bps in 2026 before easing to 5% in 2027.  — Justine Irish D. Tabile

THE PHILIPPINES is facing the prospect of additional US tariffs, after a US Trade Representative (USTR) investigation found it and 59 other economies had not done enough to curb the importation of goods that were made with forced labor.   

In its report on the Section 301 investigation, the USTR proposed additional duties on imports from the 60 economies, citing what it described as inadequate measures to restrict imports that were produced with forced labor.

“The results of this investigation indicate that the acts, policies and practices of the Philippines related to the failure to impose and effectively enforce a forced labor import prohibition are unreasonable and burden or restrict US commerce,” it said.

Last March, the USTR began a forced labor probe on 60 economies under Section 301 of the US Trade Act of 1974.

“The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable,” USTR Ambassador Jamieson Greer said in a statement. “This creates a dynamic where American workers are forced to compete globally on an unlevel playing field. We will no longer tolerate this disparity.”

Under the proposal, the USTR said that economies that do not have any measures against forced labor imports will face an additional tariff of 12.5%.

The USTR identified 54 economies, including the Philippines, Australia, Cambodia, China, Japan, Malaysia, Singapore, South Korea, Taiwan, Thailand and Vietnam, as having failed to prohibit the import of goods that were produced with forced labor.

For the rest of the economies, it said these would face an additional tariff of 10%.

It identified six economies: Canada, Ecuador, the European Union, Indonesia, Mexico, and Pakistan as having “failed to effectively enforce a prohibition on the importation of goods produced with forced labor.”

“Some trading partners have taken initial steps to prevent the importation of forced labor goods, including through USMCA (US-Mexico-Canada Agreement) and commitments in Agreements on Reciprocal Trade. However, each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally,” Mr. Greer said.

It said the 60 economies’ failure to impose and enforce a forced labor import prohibition is “unreasonable” as it undermines the aim to curb forced labor globally; allows companies to practice forced labor to produce goods at a lower cost and distorts market conditions for firms that do not use forced labor; and undermines profitability of companies that do not use forced labor.

The USTR said it also was proposing a textile mechanism that would allow for a certain volume of apparel and textile imports to enter the US at a reduced tariff rate, though the duties and volumes were not disclosed.

The announcement comes ahead of the July 24 expiration of a 10% temporary tariff imposed by the Trump administration on Feb. 20, the day the Supreme Court struck down US President Donald J. Trump’s tariffs under the International Emergency Economic Powers Act.

In the forced labor findings, the USTR said it would exempt from the tariffs a number of products including energy, rare earths and certain other metals, beef, coffee, certain fruits and vegetables, pharmaceuticals, organic chemicals and aircraft parts.

The USTR said it would accept public comments on the proposed tariffs and other remedies through July 6, with a public hearing scheduled for July 7.

‘NAIL IN THE COFFIN’
A new tariff on Philippine exports could be the final “nail in the coffin” for exporters already burdened by rising costs amid geopolitical tensions, said Foreign Buyers Association of the Philippines (FOBAP) President Robert M. Young.

“Right now, we are already struggling to be competitive, as far as pricing and costing is concerned,” he said via telephone.

“So, [the tariffs] will add to the cost [of doing business] and buyers might get turned off. The Philippines might be erased from their (American firms’) buying program radar already.”

He noted that most FOBAP members are located in export zones, such as free trade zones and special economic zones, which operate under state authorities that oversee compliance with labor laws.

Mr. Young said the group’s members sign a contract agreement with its American buyers for every purchase order to ensure that its manufacturing practices comply with international laws and regulations. 

Jose Sonny G. Matula, president of the Federation of Free Workers, said the USTR’s findings serve as a “wake-up call” for the Philippine government to strengthen labor inspection and due diligence mechanisms.

“The key issue is not only whether forced labor exists, but whether government agencies are effectively detecting, investigating, and preventing it in high-risk sectors and supply chains,” he said in a Viber message. — Beatriz Marie D. Cruz with Reuters  

The House voted 215 to 208, as four Republicans voted with Democrats in favor of the war powers resolution, which directs Mr. Trump to withdraw US troops from Iran unless Congress declares war or authorizes the use of military force.

It was the latest setback for Mr. Trump in Congress despite his party’s slim majorities in both the House and Senate.

For now, the vote is largely symbolic, as legislation must pass the Senate as well as the House to become effective, and there is debate over whether war powers resolutions would be constitutional even if they are approved by Congress.

The vote, nonetheless, reflects unease among some Republicans over Mr. Trump’s handling of the conflict and marks a rare bipartisan effort to curb presidential war powers as the war has entered a fourth month. Three previous war powers resolutions had failed in the House by increasingly slim margins and the chamber’s Republican leaders abruptly postponed a vote on this one last month when it looked likely to pass.

The Senate advanced a separate, but similar resolution last month in a procedural vote, after seven previous attempts had failed. Further votes on the Senate measure have not yet been scheduled.

The four House Republicans who voted for the war powers resolution were Representatives Tom Barrett of Michigan, Warren Davidson of Ohio, Brian Fitzpatrick of Pennsylvania and Thomas Massie of Kentucky.

No Democrats voted against it. Seven House members did not vote.

RECENT PUSHBACK AGAINST TRUMP
Mr. Trump recently has faced some opposition from members of his party in Congress, after months in which very few Republicans pushed back against his policy initiatives.

Separately on Wednesday, the House approved a procedural motion that clears the way for a vote on the Ukraine Support Act, which would provide security aid to Ukraine as it fights a Russian invasion. The act reached the floor only after a petition reached a 218-signature threshold last month to move ahead.

Six Republicans and one independent who normally votes with Republicans voted in favor of the Ukraine measure.

Republicans recently have revolted against Mr. Trump’s plans to create a “weaponization” fund to pay his political allies who said they had been the subject of government abuse.

Republican lawmakers on Wednesday also criticized Mr. Trump’s pick of loyalist Bill Pulte – a mortgage regulator with no national security experience – to serve as acting director of national intelligence.

SEPARATION OF POWERS
Democrats have called on Mr. Trump to come to Congress for authorization to use military force in the Iran conflict, noting that the US Constitution says only the legislature, not the president, can declare war.

They warned that Mr. Trump may have pulled the country into a long conflict without setting out a clear strategy and also railed against higher prices for gasoline, food and other products since the joint US-Israeli air strikes on Iran began on February 28.

“The passage of this WPR today signals a significant turning point: more and more Republicans are listening to their constituents who do not want another open-ended war in the Middle East,” Representative Gregory Meeks, who sponsored the war powers resolution and serves as ranking member of the Foreign Affairs Committee, said in a statement after the vote.

Democrats have made affordability a central theme of their economic message ahead of midterm elections in November that will decide whether Republicans keep control of Congress.

US producer prices posted their biggest increase in four years in April, boosted by soaring costs for goods and services since the war began.

The Trump administration insists that the war on Iran is necessary for US national security, citing an urgent need to prevent the Islamic republic from developing a nuclear weapon.

Republican critics of the war powers resolutions call them political grandstanding by Democrats who want to weaken the United States and score points against Mr. Trump.— Reuters

Based on the final vote tally announced during the livestreamed UNGA, Kyrgyzstan won the sole Asia-Pacific seat with 142 votes, surpassing the required two-thirds majority of 128 votes from the 191 member states present and voting. The Philippines received 49 votes.

The Philippines garnered 85 votes in the first round, followed by 81 and 68 votes in the second and third rounds, respectively. This is against Kyrgyzstan’s 105 votes in the first round, 110 in the second, and 123 in the third before clinching victory in the fourth round.

The outcome ended Manila’s multi-year campaign for a seat on the 15-member Security Council.

President Ferdinand R. Marcos, Jr. formally launched the country’s bid during his maiden address before the 77th Session of the UN General Assembly in September 2022, where he appealed for support from member states and highlighted the Philippines’ contributions to peacebuilding and international cooperation.

In March, Mr. Marcos traveled to UN headquarters in New York for a final diplomatic push, addressing a special plenary session and hosting a luncheon for permanent representatives of member states as part of efforts to secure support for the Philippine candidacy.

In a statement issued after the vote, Foreign Affairs Secretary Ma. Theresa P. Lazaro said the Philippines respected the outcome of the election and congratulated Kyrgyzstan on its victory.

“We thank the international community for the support and goodwill extended to the Philippines throughout our candidacy,” Ms. Lazaro said.

She added that the country’s campaign was anchored on its “longstanding commitment to peace, dialogue, international law, and cooperation among nations.”

“The Philippines remains committed to working with all nations in pursuing peace, stability, sustainable development, and a rules-based international order,” she said.

Kyrgyzstan’s election marks the first time the Central Asian nation will serve on the Security Council since gaining independence in 1991.

The five countries elected to serve as non-permanent members for the 2027-2028 term were Kyrgyzstan, Zimbabwe, Trinidad and Tobago, Portugal, and Austria. They will assume their seats on Jan. 1, 2027, replacing Pakistan, Somalia, Greece, Denmark, and Panama. — Erika Mae P. Sinaking

The initiative will showcase Globe’s consistent and reliable network and digitally enable an ecosystem of sectors to bring the Intelligent City vision to life. This includes advancements in mobility, retail, energy, and connectivity, alongside the development of intelligent city platforms that integrate data and harness AI solutions.

“Ayala Corp. has always believed in building communities that uplift lives. Through this initiative, we are reimagining Makati CBS as a hub of innovation, where technology and human connection converge to create a city that truly serves its people,” said President and CEO Cezar Consing.

The partnership will also utilize technologies like the Internet of Things that will incorporate artificial intelligence in practical, everyday use. Together, these focus areas form the foundation for building more intelligent, more sustainable, and more resilient urban communities.

Globe President and CEO Carl Cruz highlighted the role of connectivity in digital inclusion and nation‑building:  “Connectivity has become the lifeblood of progress, the Fifth Utility that empowers nations to grow and thrive. Globe is excited to showcase its consistent and reliable network to transform our cities, ensuring that every Filipino has access to the tools, opportunities, and digital experiences they need to keep moving forward in an increasingly connected world.”

This collaboration marks a milestone in nation‑building, setting the stage for a new era of urban development in the Philippines. By combining innovation, sustainability, and connectivity, the Intelligent City project will not only redefine Makati’s business district but also serve as a model for future developments nationwide.

“The launch of the Intelligent City initiative in Makati CBD is a powerful step toward shaping the future of Philippine commerce and industry. By harnessing advanced connectivity, AI, and sustainable technologies, we are creating an environment where businesses can innovate and opportunities become more inclusive. At the Department of Trade and Industry, we see this as a catalyst for economic resilience and competitiveness, ensuring that Filipino enterprises and entrepreneurs are equipped to succeed in the digital age,” said DTI Secretary Cristina Roque.

Through this strategic partnership, millions of Filipinos will experience safer, more intelligent, and more connected communities, proving that when industry leaders unite, technology becomes a powerful force for transformation. By harnessing innovation and collaboration to modernize cities and empower communities, truly uplifting the lives of Filipinos.

For more information, visit www.globe.com.ph.

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In its foreign exchange outlook for June, the Japan-based think tank said a re-escalation of the Iran conflict and a fresh spike in oil prices could bring the peso above P62 to as high as P64.50 per dollar.

“On the global front as well, the Philippine peso will also be sensitive if there is a ‘Super El Niño’ event and if the Fed turns more hawkish moving forward — arguably more so than other G10 and lower-yielding Asia currencies given its status as a current account deficit economy,” MUFG analysts also said in their report published late on Monday.

Based on MUFG’s forecast, the local unit will likely touch the P62 mark this quarter, before strengthening versus the dollar to P61.50 by the third quarter and P61 by the last quarter.

Its baseline also sees the local currency recovering to trade below P61 as the conflict eases and the greenback weakens.   

By the first quarter of 2027, the peso-dollar exchange rate could be back to P60.50, MUFG said.

Since the onset of the Middle East conflict on Feb. 28, the peso has been on a steady decline. It has moved to the P61-a-dollar level from the P58 range before the war.

Month on month, the local unit lost 10.5 centavos to close at P61.59 against the greenback on May 29 from its P61.485 per dollar finish on April 30. It plunged to an all-time low close of P61.75 on May 18 and 19.   

The Bangko Sentral ng Pilipinas (BSP) told Reuters on Monday that its foreign exchange market intervention remains limited to smoothening out sharp swings that could stoke inflation and potentially de-anchor inflation expectations.

Meanwhile, MUFG said heated inflation and signs of broadening spillover effects may still prompt the central bank to keep tightening monetary policy.

For the Japanese think tank, the key policy rate could be raised to at least 5.25% from 4.5%.

“From a local perspective, with the sharp surge in domestic CPI (consumer price index) pressures coupled with some initial signs of second-round effects, we see BSP hiking rates by at least 75 bps (basis points) more, bringing the policy rate to 5.25%, and more so if risks materialize,” it said.

The Monetary Board hiked benchmark interest rates by 25 bps to 4.5% in April, marking its first tightening in over two years as the Middle East war led to spiraling domestic prices.

BSP Governor Eli M. Remolona, Jr. said last month that they are considering an off-cycle hike before their June 18 meeting amid growing concerns over inflation expectations. 

The central bank also said it will take all necessary actions, including stronger measures, to temper inflation and steer it back to their 2%-4% tolerance range. 

However, Pantheon Macroeconomics said an aggressive policy stance may be unnecessary if the May inflation print meets the central bank’s projections.

This came after two straight months of misses, as the faster-than-expected transmission of oil shocks on the prices of key commodities pushed the headline print past the BSP’s target and forecasts.

“No such surprise this time will likely mean the most aggressive rate options — an off-cycle hike or 50 bp move — are off the table,” Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said in a separate note on Tuesday.

The central bank said inflation could come in between 7.1% and 7.9% in May, driven by a weaker peso and costlier rice, vegetables, and meat.   

The lower end of the forecast means inflation will be slower than the over three-year high of 7.2% in April, while the upper end brings inflation to its fastest since February 2023.

For Mr. Chanco, the headline clip will likely settle at 7.5% as the lingering effects of elevated global oil prices continue to weigh on housing and utilities inflation.

A BusinessWorld poll of 16 economists conducted last week yielded a median estimate of 7.9% for May inflation.

The Philippine Statistics Authority is set to release the May inflation report on Friday, June 5.

Still, the BSP’s tightening cycle may be short lived as MUFG analysts expect the central bank to start cutting rates again next year to bolster the economy as oil prices ease.

This as MUFG noted that emerging signs of the government’s catch-up spending may have limited impact on the country’s growth.

In April, government spending climbed by 11.14% year on year to P505.4 billion from P454.8 billion, latest data from the Bureau of the Treasury showed.

“(T)his improvement seems to be driven more by transfers to regional governments rather than spending on projects and so the actual growth impact maybe more limited for now,” it said. “Net-net, we see BSP likely reversing rate hikes in 2027 assuming oil prices decline and given the soft starting point of the economy. — Katherine K. Chan

In its Interim Update of the ASEAN+3 Regional Economic Outlook released on Tuesday,  AMRO slashed its 2026 growth forecast for the Philippines to 4.1% from 5.3% previously.

“The Philippines’ GDP growth is expected to slow further to 4.1% in 2026 from 4.4% in 2025, facing headwinds from the Middle East conflict,” AMRO Group Head and Lead Economist Jinho Choi told BusinessWorld.

“Private consumption — which has already slowed for four consecutive quarters through the first quarter of 2026 — is expected to weaken further due to the energy shock, while the recovery in public construction is expected to be gradual,” he added.

AMRO also cut its gross domestic product (GDP) growth projection for the Philippines to 5.5% for 2027, from 5.8% previously.

While AMRO’s 2026 growth forecast falls short of the government’s 5%-6% target, its 2027 projection is within the official 5.5%-6.5% goal.

The Palace earlier said the Development Budget Coordination Committee revised its macroeconomic assumptions, but new figures have yet to be released.

The Philippine economy grew by a weaker-than-expected 2.8% in the first quarter, the slowest pace since the pandemic, as the fallout from a corruption scandal and soaring oil prices triggered by the Middle East conflict hurt economic activity.

“ASEAN growth has been downgraded in some economies, including the Philippines and Vietnam, where stronger inflation passthrough is expected to weigh on domestic demand,” AMRO said.

AMRO had trimmed Vietnam’s growth outlook to 7.2% for 2026 and 7% for 2027, from 7.4% and 7.1%, respectively.

AMRO’s interim report reflected the impact of the conflict in the Middle East on ASEAN economies, as disruptions proved to be more prolonged than initially expected.

Despite the downgrades for some economies, AMRO maintained its ASEAN growth outlook at 4.6% in 2026 and 4.8% in 2027. Its ASEAN+3 projection was unchanged at 4% for both years.

“ASEAN+3 growth has remained resilient, supported by firm domestic demand and technology exports. But incipient signs of stress are emerging,” AMRO Chief Economist Dong He said in a statement on Tuesday.

He said higher energy and transport costs are feeding into inflation and adding pressure on industrial supply chains amid prolonged disruptions caused by the Middle East conflict.

“If the conflict persists, these pressures could broaden and weigh on regional growth,” Mr. He said.

At the same time, AMRO raised its 2026 inflation forecast for the Philippines to 6% from 3.9%. It also hiked the Philippine inflation outlook to 4.1% for 2027, from 3.6%.

If realized, inflation would exceed the government’s 2%-4% target range.

“Consumer price index is projected to rise to 6% in 2026 from 1.7% in 2025, reflecting the upside inflation surprise in April (7.2%) and revised expectations of higher-for-longer global oil prices,” said Mr. Choi.

AMRO expects inflation in ASEAN to accelerate to 4% in 2026 and 3.2% in 2027, amid rising energy and transport costs.

Inflation in ASEAN+3 is projected to settle at 1.8% in 2026 and 1.5% in 2027.

“Higher energy and industrial input costs, alongside continued tariff uncertainty, are expected to impact the region unevenly, with net energy importers and economies exposed to affected inputs facing stronger headwinds,” AMRO said. 

AMRO said the duration and severity of the Middle East conflict are the biggest near-term risks to the regional outlook.

It said that if oil prices average $125 per barrel in 2026, compared with its baseline assumption of $95, ASEAN+3 growth could slow to 2.5% while inflation could accelerate to 3.5%.

“Excluding the COVID-19 pandemic years, this would mark the highest regional inflation in more than a decade and the slowest growth since the Asian Financial Crisis,” it added. — Justine Irish D. Tabile

NATIONAL GOVERNMENT (NG) debt dipped month on month in April as domestic debt repayments outweighed the impact of a weaker peso on external obligations, the Bureau of the Treasury (BTr) said.

Latest data from the Treasury showed that the debt slipped by 0.09% to P18.47 trillion from the P18.49 trillion end-March level.

“The decline in debt was primarily driven by the government’s repayment of domestic securities, which more than offset the impact of peso depreciation against the US dollar on foreign currency-denominated obligations,” the BTr said on Tuesday.

Year on year, outstanding debt went up by 10.25% from P16.75 trillion at end-April 2025.

NG debt is the total amount owed by the Philippine government to creditors such as international financial institutions, development partner-countries, banks, global bondholders and other investors.

The bulk or 67.22% of the total debt stock came from domestic sources, while the rest were from external sources.

Domestic debt, which was composed of government securities, slid by 0.95% to P12.42 trillion at end-April from P12.53 trillion at end-March.

According to the BTr, the month-on-month decline in domestic debt was “mainly due to the P121.64-billion net redemption for the month, as P283.24 billion in debt issuance was offset by maturities of P404.88 billion.”

“A P2.46-billion valuation increase in the peso equivalent of foreign currency-denominated domestic securities from peso depreciation partially tempered the decline,” it added.

According to the Treasury, the peso had weakened to P61.54 as of end-April versus the dollar from P60.678 as of end-March.

Year on year, domestic debt jumped by 7.12% from P11.59 trillion in the same period.

Meanwhile, external debt rose by 1.71% to P6.06 trillion as of end-April from P5.95 trillion at end-March.

Year on year, it jumped by 17.3% from P5.16 trillion in the same period.

The Treasury said the increase was mainly due to the depreciation of the peso as the value of foreign currency-denominated obligations increased by P101.72 billion. Net redemptions amounted to P80 million.

External debt was composed of P3.06 trillion in global bonds and P3 trillion in loans.

The NG’s guaranteed obligations inched up by 0.48% to P383.23 billion as of end-April from P381.41 billion in the previous month.

“The increase was driven by the effect of peso depreciation and third-currency movements on the valuation of external guarantees amounting to P1.25 billion and P620 million, respectively,” the BTr said.

“Meanwhile, repayments made by National Home Mortgage Finance Corp. and National Power Corp. reduced domestic guaranteed operations by P0.05 billion.”

Year on year, guaranteed obligations jumped by 13.53% from P337.54 billion.

The NG’s outstanding debt is projected to reach P19.06 trillion by end-2026 under the Budget of Expenditures and Sources of Financing 2026.

Under the Philippine Development Plan 2023-2028 Midterm Update Results Matrices posted on May 20, the government expects the debt-to-gross domestic product (GDP) ratio at 60-63% in 2026.

In the first quarter, the debt-to-GDP ratio climbed to 65.2%, the highest annual level since 65.7% in 2005.

OUTLOOK
However, the month-on-month decline in outstanding debt may prove temporary as slower economic growth could make it harder for the government to improve revenue collection, according to a former central banker.

“It would be a big challenge for NG to sustain the decline because economic growth is not exactly spectacular. With the slowdown, higher revenue generation would be a tall order,” GlobalSource Partners Principal Advisor Diwa C. Guinigundo told BusinessWorld.

He added that the government should continue exercising fiscal discipline and improve budget utilization to prevent leakages that could widen the fiscal deficit and add to debt.

Mr. Guinigundo also cautioned against reading too much into the April decline, noting that monthly debt movements are often driven by scheduled repayments and valuation effects.

“For April, it was reported that there was some net repayment on debt securities as scheduled. The dip, however, was undoubtedly small although higher than the impact of the peso depreciation on the external component of the NG debt,” he added.

PHILIPPINE LENDERS’ nonperforming loan (NPL) ratio worsened to its highest level in eight months in April as borrowers faced tighter economic conditions amid the Middle East war, latest Bangko Sentral ng Pilipinas (BSP) data showed.

The banking industry’s gross NPL ratio rose to 3.37% from 3.29% in March but slightly eased from 3.39% a year earlier, based on data posted on the central bank’s website.

April had the highest bad loan ratio since the 3.5% in August last year.

This came as soured loans reached P579.885 billion during the month, climbing by 11.68% year on year from P519.234 billion. It likewise edged about 2% higher from P568.554 billion in March.

Loans are considered nonperforming once they are unpaid for at least 90 days after the due date and deemed to be risky assets since borrowers are unlikely to pay.

Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., said the increase in nonperforming loans is “not a crisis,” but likely an early sign that the Middle East war is tightening financial conditions for households and businesses in the country. 

“The uptick in NPLs to 3.37% tells us that higher inflation and global uncertainties — especially elevated oil prices linked to Middle East tensions — are starting to strain households and businesses,” he said in a Viber message. “It’s an early warning sign of tighter cash flows, not a crisis.”

The higher NPL ratio also means borrowers’ repayment capacity is now challenged by faster inflation, higher operating costs and a weakening economy, Philippine Institute for Development Studies senior research fellow John Paolo R. Rivera said.

“The Middle East conflict may not be the sole driver but it has contributed through higher fuel prices, transport costs, and broader economic uncertainty,” he added.

In April, inflation heated up to an over three-year high of 7.2% as elevated oil costs amid the Middle East war continued to spill over to prices of food and utilities. This was faster than 4.1% in March and 1.4% in the same month last year.

Meanwhile, BSP data showed that the industry’s total loan portfolio stood at P17.198 trillion at end-April, slipping by 0.38% from P17.263 trillion a month ago but up 12.12% from P15.339 trillion last year.

Banks’ past due loans rose by 3.72% to P763.591 billion in April from P736.181 billion in March. Year on year, it jumped by 16.89% from P653.259 billion.

This brought the latest past due loan ratio to 4.44% from 4.26% in the prior month and April 2025.

Restructured loans likewise edged up by 1.34% month on month to P342.924 billion from P338.39 billion. It also grew by 10.03% from P311.665 billion in April last year.

These loans accounted for 1.99% of the sector’s total loan book in April, exceeding the 1.96% ratio in March but below the 2.03% in the same month last year.

Meanwhile, lenders’ loan loss reserves reached P526.849 billion during the month, inching up by 1.42% from P519.46 billion a month earlier and by 6.69% annually from P493.793 billion.

With this, domestic banks’ loan loss reserve ratio stood at 3.06%, higher than 3.01% in March but eased from 3.22% in the same year-ago period.

On the other hand, lenders’ NPL coverage ratio, which gauges the allowance for potential losses due to bad loans, fell to 90.85% in April from 91.37% the previous month and 95.1% a year prior.

Mr. Rivera said a prolonged conflict in the Middle East could translate to continued pressure for banks and borrowers.

“If the conflict drags on and keeps oil prices elevated, NPL ratios could remain under pressure in the coming months,” he said. “Higher inflation reduces household purchasing power, while businesses face tighter margins and weaker demand, making debt servicing more difficult.”

Meanwhile, Mr. Ravelas said banks’ bad loan ratio could range from 3.3%-3.8% in the coming months, though noted banks can likely weather such elevated NPL levels given their strong capital and buffers.

“At current levels, NPLs are above the ideal 2%-3% range but still manageable,” he said. “The key is to watch the trend — gradual increases are tolerable, but any sharp spike would be a bigger concern.”

“This LPA, based on our data, is likely to enter the PAR between Thursday and Friday,” PAGASA weather specialist Aldczar D. Aurelio said during a 5 a.m. press briefing in Filipino.

“On those days, it will be located west of Extreme Northern Luzon,” he added.

The LPA was last located 475 kilometers northwest of Pag-asa Island in Kalayaan, Palawan, as of 8 a.m.

It has a low chance of developing into a tropical depression within the next 24 hours.

Meanwhile, a heavy rainfall warning remains in effect in nearly a dozen areas due to the Southwest monsoon, based on PAGASA’s 5am weather advisory.

The affected areas are Metro Manila, Zambales, Bataan, Pangasinan, Bulacan, Tarlac, Pampanga, Cavite, Batangas, Occidental Mindoro and Palawan, where 50 to 100 millimeters of rainfall are expected.

A similar rainfall warning is in effect on Thursday over Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Abra, Benguet, Zambales and Bataan.

On Friday, the warning remains in effect over Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Abra, Benguet, Zambales and Bataan.

With 50 to 100 mm of rainfall expected, PAGASA warned of possible flooding in urbanized, low-lying and near-river areas.— Edg Adrian A. Eva

By integrating world-class technology, DigiPlus ensures that every aspect of the user journey — from seamless gameplay to rigorous account security — remains paramount. Recognizing that a premium customer experience demands a high-performance platform, DigiPlus announced last May 21, 2026, that it has tapped Altenar, a leading global turnkey sportsbook provider to power ArenaPlus. By transitioning its operations to Altenar’s advanced, fully-managed solution, ArenaPlus now delivers faster odds updates, custom localized betting options, and comprehensive player props. This technical integration effectively elevates local sports entertainment to global benchmarks, ensuring Filipino users enjoy a seamless, highly-engaging gameplay experience that is world-class and at par with international sportsbook standards.

True customer care requires a demonstrably safe environment, which is why ArenaPlus officially also joined the Sportradar Integrity Exchange (SIE) back in March 2026. This global intelligence-sharing network combats match-fixing by reporting suspicious betting activity in real-time. By tapping into Sportradar’s AI-powered fraud detection, ArenaPlus adds robust layers of protection, building a secure ecosystem where players can engage with complete confidence.

“We are committed to continuously improving our platform to bring the best possible sportsbook experience to Filipinos, and securing top-shelf, world-class partnerships is central to that,” said ArenaPlus Head Erick Su. “Altenar provides the kind of technical strength and reliability that we need to elevate the ArenaPlus experience, while our collaboration with Sportradar ensures a safer space for our users. By combining top-tier digital entertainment with operational integrity, we are actively protecting the sports we support while also making sure our platform is sustainable.”

Echoing this unwavering commitment to the end-user, Sportradar Executive Vice-President of Integrity Services Andreas Krannich said the collaboration aims to “foster a safer and more secure environment for sport and its stakeholders.”

Altenar COO Dinos Stranomitis added that their localized sportsbook solutions “deliver the performance, stability, and compliance required” for the highly engaged Philippine market.

Ultimately, these infrastructure upgrades translate DigiPlus’ commitment to responsible gaming into practical platform safeguards. Through embedding risk controls and real-time fraud detection directly into its backend, ArenaPlus ensures a transparent environment where player protection is built straight into its platform.

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In a disclosure to the stock exchange on Monday, the company said it had submitted a registration statement and preliminary prospectus to the Securities and Exchange Commission covering as many as 400 million Series 2 preferred shares.

The offer includes a base tranche of 266.67 million shares and an oversubscription option of as many as 133.33 million additional shares, according to the preliminary prospectus.

The shares will be priced at P75 each and issued in three subseries: 2-V, 2-W and 2-X.

San Miguel expects to raise nearly P20 billion from the base offer, with total gross proceeds potentially reaching P30 billion if the oversubscription option is fully exercised.

The group said proceeds would partly refinance short-term borrowings used to redeem its Series 2-I preferred shares in March 2026 and settle Series C and Series J bonds maturing in March 2027.

Funds will also support further investments in infrastructure projects, including the Manila International Airport and related airport developments in Bulakan, Bulacan.

The offer period is scheduled from July 15 to 23, while the preferred shares are targeted to list on the Philippine Stock Exchange’s main board on July 31.

San Miguel tapped Bank of Commerce, BDO Capital & Investment Corp. and China Bank Capital Corp. as joint issue managers.

Joint lead underwriters and bookrunners include Bank of Commerce, BDO Capital, BPI Capital Corp., China Bank Capital, Land Bank of the Philippines, Philippine Commercial Capital, Inc., PNB Capital and Investment Corp., RCBC Capital Corp. and Security Bank Capital Investment Corp.

San Miguel shares fell 5.35% to P67.20 each on the local bourse. — Alexandria Grace C. Magno

GlobalSource Partners Principal Advisor Diwa C. Guinigundo said issues surrounding the country’s political institutions, particularly the Senate, may now pose a greater risk to the economy than external shocks such as the oil crisis and artificial intelligence.

“With respect to external shocks, we have very little control. But with respect to domestic issues, particularly political issues, I think we have better latitude in terms of control and management,” he told Money Talks with Cathy Yang on One News on Monday.

Asked what is the bigger economic threat between the two, Mr. Guinigundo said: “It’s (the) institutional issues and credibility of our political institutions.”

This came after the chaos that ensued in the Senate last month following a leadership shake-up allegedly orchestrated in time for Vice-President Sara Duterte-Carpio’s impeachment trial and Senator Ronald M. dela Rosa’s impending arrest linked to his alleged role in former President Rodrigo R. Duterte’s anti-drug campaign.

The former Bangko Sentral ng Pilipinas (BSP) deputy governor noted that governance issues arising from the recent controversies surrounding lawmakers create uncertainties about the country’s capacity to provide stability and long-term viability to investors.

This, he added, could eventually impact investor confidence and social cohesion.

“When the Senate is perceived to be inconsistent with certain principles of the Constitution, issues about credibility would actually crop up,” Mr. Guinigundo said. “So, credibility as well as loss of confidence may be an issue, and it is becoming an issue.”

“And that could also extend to the Philippine economy in terms of issues about governance,” he added.

Investor confidence, alongside consumer and business sentiment, has already taken a hit from last year’s corruption scandal.

In April, businesses’ confidence index worsened to -35.8% from -24.3% in March, a recent survey from the BSP showed.

While none of the reasons pointed to political instability, the survey indicated that local firms remain pessimistic due to the economic implications of the ongoing Middle East conflict.

Still, Mr. Guinigundo said investor confidence can still be saved if the government restores its credibility, but noted that the opportunity to do so is “fast closing in.”

Among the reforms the government can pursue include reaffirming its constitutional autonomy, ensuring transparent leadership, and refraining from taking any action that could provoke further instability.

Meanwhile, the former BSP official said the current systemic issues present a fresh challenge for the central bank, which is under mounting pressure to tackle inflation amid an energy crisis straining the economy.

Mr. Guinigundo noted that the central bank could have tightened policy rates as early as last year amid emerging external risks at the time.

“The work of the central bank is even harder today because while the BSP can provide very decisive forward guidance with respect to interest rate as well as the exchange rate, the other factors pulling it apart is the political noise that we hear from the Senate,” he said.

Although the Senate situation lies beyond the BSP’s direct authority, monetary authorities still have the tools to control its economic fallout, according to Mr. Guinigundo.

Fiscal policy should also go hand in hand with monetary policy, with the latter centered on keeping inflation expectations anchored to help strengthen public trust on government measures, he added.

“It (BSP) has little control over what the Philippine Senate is doing at this point,” he said. “But if the BSP will just continue anchoring expectations and trying to increase public confidence in public policy, particularly on monetary policy, I think it can do its share in helping stabilize the situation.”

For Mr. Guinigundo, this means the BSP should continue taking decisive action to bring inflation back to its 3% target.

The Monetary Board began tightening in April as it sought to temper the spillover effects of rising oil prices and keep inflation expectations anchored amid the Middle East war.

It raised the benchmark policy rate by 25 basis points to 4.5% for the first time since October 2023.

Since then, the central bank has been vocal about maximizing its monetary policy tools to steer inflation back to its 2%-4% tolerance range within a reasonable time. — Katherine K. Chan

At a briefing on Monday, Energy Secretary  Sharon S. Garin said there will be a major rollback this week, with gasoline prices set to decrease by at least P4.76 per liter, diesel by P9.26 per liter, and kerosene by P10.86 per liter.

The decline in fuel prices came after five consecutive weeks of hike in gasoline prices and a second week for diesel.

With the downward adjustments, the prevailing fuel prices in the National Capital Region will reach as high as P84.74 per liter for gasoline, P82.54 per liter for diesel, and P102.94 per liter for kerosene.

While the Iran war remains unresolved, Ms. Garin said the fuel prices are now moving closer to the “pre-war prices” of around P50 to P60 per liter.

“Hopefully, with no more surprises in the events that are happening in the Middle East, especially with Iran, Israel, and US hopefully it goes steady and we go back to the previous prices, or at least not as high as before,” she said.

The Philippines is increasingly vulnerable to the Middle East conflict as it depends heavily on the region for its oil imports, raising concerns over energy security and higher fuel costs.

As of May 29, the country’s fuel inventory is equivalent to 45.97 days, slightly higher than the 44.82 days last week.

The average inventory for gasoline is 47.10 days, while diesel has an average inventory of 44.36 days. Kerosene has an average inventory of 143.64 days; 65.03 days for jet fuel; 41.30 days for fuel oil; and 42.13 days for liquefied petroleum gas.

Ms. Garin said the government is working on the establishment of a strategic petroleum reserve program, which includes building new stockpiling facilities.

“This will be a more systematic and a more organized system, one that won’t be reactive, as we will have our own reserves in the Philippines, sufficient enough to weather any effects or disruptions in the other parts of the world or in the countries where we get our oil,” she said.

The Energy chief said the DoE is working with state-run firms Philippine National Oil Co. (PNOC) and Maharlika Investment Corp. (MIC) to explore options to build at least 30 days’ worth of additional reserves.

PNOC, which is mandated to ensure a stable, adequate, and sustainable supply of energy for the country, will take the lead in this effort to secure reserves.

Funding for the program will be managed by MIC, which oversees the country’s sovereign wealth fund.

“We will start with an initial inventory and then later over the years, we can keep on improving and improving and have more and more every year,” Ms. Garin said.

The planned strategic petroleum reserve program was among the matters discussed by President Ferdinand R. Marcos, Jr. with the Japanese government during his state visit to Japan last week.

Ms. Garin said Japan will support the initiative by conducting necessary feasibility studies and providing capacity building in the development of a stockpiling system.

This program will involve collaboration with the Economic Research Institute for ASEAN and East Asia, Japan Organization for Metals and Energy Security, Japan Bank for International Cooperation, and Japanese trading and engineering companies with relevant technical expertise.

“Both sides will explore the possibility of Japanese government institutions and private companies participating in EPC (engineering, procurement, and construction) and financing for relevant projects,” Ms. Garin said.

Beyond strengthening national petroleum reserves, the Philippines has also committed to participate in the establishment of an ASEAN-wide joint stockpiling to strengthen regional energy security and resilience.

“We are also presenting ourselves as the venue for the regional stockpiling because we have possible areas where we can host regional stockpiling,” she said. — Sheldeen Joy Talavera

“If the data and our assessment of evolving risks point to higher inflation expectations becoming entrenched, then we may consider a stronger response,” the Bangko Sentral ng Pilipinas (BSP) said in an e-mailed response to a Reuters query.

The BSP raised its key policy rate by 25 basis points to 4.50% in April.

Here are more details and context of the central bank’s responses:

The BSP said it does not target a specific exchange rate level and intervenes only when excessive volatility poses a serious risk to inflation expectations. The peso has risen 6.1% vs. the dollar in the last three months, according to LSEG data.

The Philippines is sensitive to oil price shocks due to its high dependence on oil imports and current account deficits, but a weaker peso cushions the impact by supporting exports, remittances and revenues from business process outsourcing, the BSP said.

BSP Governor Eli M. Remolona, Jr. said in May the central bank was considering an off-cycle rate hike ahead of a scheduled meeting on June 18.

‘SLOWFLATION’
Meanwhile, the Philippines is experiencing “slowflation,” with slowing growth and accelerating inflation amid oil shocks from the Middle East war, putting the central bank in a difficult policy setting, Metropolitan and Bank Trust Co. (Metrobank) said.

In a commentary on Friday, Metrobank research officer Marian Monette Florendo Obias noted that the economy has not reached stagflation as domestic growth is only weak but not stagnant, while the unemployment rate is seen holding steady.

“The domestic economy remains fragile and highly sensitive to geopolitical developments, with ongoing local political squabbles weighing on overall sentiment,” she said. “For now, while stagflation risks are rising, the Philippines remains in the early phase of ‘slowflation.’”

According to Ms. Obias, ‘slowflation’ refers to an economic condition with fast inflation, weak but still positive growth, and still stable employment.

Economic growth has been sluggish since the second half of 2025, easing to a new post-pandemic low of 2.8% in the first three months of the year.

The country’s latest jobless rate softened to 5% in March from 5.1% in February but worsened from 3.9% a year earlier.

Inflation, on the other hand, has settled above the BSP’s target as it quickened to 7.2% in April from 4.1% in March.

In a separate Viber message on Monday, Metrobank Chief Economist Nicholas Antonio T. Mapa said they expect headline inflation to slightly quicken to 7.3% in May. 

Analysts at Nomura Global Markets Research also project the May print to settle at 7.3%, as slightly lower fuel prices offset still high rice prices and electricity rates. 

Meanwhile, Deutsche Bank Research sees last month’s inflation coming in at 8.1%.

However, Metrobank’s Ms. Obias noted that even the ongoing suspension of excise taxes on kerosene and liquefied petroleum gas (LPG), which was imposed in April, may not be enough to temper energy inflation.

“The suspension of excise taxes on kerosene and LPG may alleviate the impact, but these fuels represent only a small share of overall consumption,” she said. “Diesel and gasoline, which are more widely used, are still subject to excise taxes and continue to lead to second-round effects, limiting the overall effect on inflation.”

A BusinessWorld poll of 16 economists conducted last week yielded a median estimate of 7.9% for headline inflation in May, which is faster than the 7.2% clip in April and 1.3% last year.

It likewise sits right at the upper bound of the central bank’s 7.1%-7.9% forecast for the month, but well above its 2%-4% tolerance range.

The BSP expects inflation to stay above 5% for most of the year to bring the full-year print to 6.3% before cooling to 4.3% in 2027.

HAWKISH BSP
Although the continued acceleration of consumer prices remains largely driven by supply shocks, the central bank is still expected to remain hawkish, Metrobank’s Mr. Mapa noted.   

“Despite the sharp uptick in inflation due mainly to supply side shocks, BSP will still likely resort to tightening of policy,” he said. “We caution against aggressive tightening however given the moderating growth outlook.”

However, Ms. Obias said the “slowflation” scenario is challenging local monetary and fiscal authorities, with the central bank seen to eventually return to easing as high borrowing costs risk hurting the economy further.

“This “slowflation” has made the policy environment for both monetary and fiscal authorities increasingly complex,” she said. “Although the BSP is expected to tighten monetary policy this year, it may eventually reverse course, as a prolonged high-interest-rate environment could further dampen already weak economic growth.”

The Philippine Statistics Authority will release the May inflation data on Friday, June 5, around two weeks before the Monetary Board’s third policy meeting this year on June 18. — Reuters with Katherine K. Chan

The Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 50.8 in May from 48.3 in April. A PMI reading above 50 indicates an improvement in operating conditions from the previous month, while a reading below 50 signals deterioration.

“The overall expansion was driven by a fresh rise in new orders, which followed a sharp reduction in April. Improved client demand and new customer wins were said to have driven growth,” S&P Global said.

However, last month’s rebound was “only modest and historically subdued,” it said:

Maryam Baluch, an economist at S&P Global Market Intelligence, said despite the renewed growth, “supply-chain disruption and cost pressures worsened as the Middle East conflict entered its third month.” — Justine Irish DP. Tabile

RIGHT-OF-WAY (RoW) challenges continue to delay major transport projects and push back completion timelines, the Asian Development Bank (ADB) said, highlighting the risk to the Philippines’ infrastructure investment momentum.

“One significant problem (in securing funding and completing projects) I would say, is right-of-way acquisition, particularly in densely populated areas,” ADB Country Director for the Philippines Andrew Jeffries told BusinessWorld in a recent interview.

“Land valuation disputes are inevitable and the resettlement of people can be very complex and involves many different local government units,” he added.

RoW challenges are not unique to the Philippines, as many projects in developing countries face similar issues, Mr. Jeffries said.

He noted that major infrastructure projects have also been hit by supply chain disruptions triggered by events such as the pandemic and the ongoing Middle East war.

“All of a sudden, work had to stop. Input costs rose dramatically, and there were supply chain issues, like what we are facing right now with the Middle East crisis. All of a sudden fuel costs translate into other costs and become much higher. These are all big challenges faced by large transport projects,” he said.

The Department of Transportation (DoTr) has revised timelines for key transport projects, particularly rail systems, with many now targeted for partial operations following delays mainly due to RoW issues.

In particular, the Transportation department cited RoW as the reason for delays in the construction of the North-South Commuter Railway (NSCR), particularly in the northern section of the project.

NSCR, a 147-kilometer line, is one of the DoTr’s flagship projects and is seen to boost mobility and economic activity in Luzon.

The NSCR’s northern section is expected to be operational by 2028, while the southern section is targeted for completion by 2031. The entire NSCR is expected to be fully operational by late 2031 or early 2032, later than the original target completion date of 2027. 

The P488-billion Metro Manila Subway project’s RoW is now at 90.8%, with the project expected to be completed by 2032 from the initial target of 2025.

At the same time, the DoTr is still addressing issues that arose after the Department of Justice (DoJ) issued a legal opinion on RoW acquisition rules for big-ticket projects. The DoJ’s legal opinion held that compensation rules set by development partners for persons displaced by foreign-funded projects apply only if the loan agreement was signed prior to the effectivity of the Right-of-Way Act (Republic Act No. 10752).

Workarounds to the legal opinion will be necessary to ensure that big-ticket railway projects are not delayed beyond 2028, the DoTr has said.

The DoJ also said that DoTr must fully comply with the RoW Act, which requires payment to landowners only after properties are cleared of structures. This contrasts with multilateral development banks’ rules, which mandate that borrowers fully compensate landowners before displacement.

“RoW remains as one of the main challenges in completing projects, more particularly with transport projects, or even in the process of securing funding thereof,” Nigel Paul C. Villarete, senior adviser on public-private partnerships (PPPs) at Libra Konsult, Inc., said in a Viber message to BusinessWorld.

The government should address the issue by factoring in added costs from delays caused by RoW challenges into project design, development, and cost estimates, Mr. Villarete said.

“Our problem sometimes is that we just see RoW issues as problems but not as costs, when in fact, it is one of the major causes of cost overruns which eventually results in delays and thus, further costs in terms of missed opportunities,” Mr. Villarete said.

“A road project delayed for two years will actually redound to economic costs brought about by my unrealized economic benefits which were contributory to the overall national economic growth. So, we need to realize that RoW problems and delays will redound to lower national economic growth.”

For Rene S. Santiago, an international consultant on transport development and former president of the Transportation Science Society of the Philippines, the government should start and replicate efforts done by countries like Japan and Canada to address its RoW challenges.

Japan, for instance, has implemented innovative solutions by integrating urban planning legislation and aligning transport planning with zoning and land use, according to information from Japan International Cooperation Agency.

Meanwhile, ADB’s Mr. Jeffries said transport projects continue to face challenges beyond RoW issues, including funding constraints, as the government recalibrates its strategy toward greater reliance on PPP investments rather than loans.

“There are also budget constraints and fiscal pressures, you know. The government is keeping a very close eye on public debt levels and how to bring the private sector into some of these investments as opposed to just borrowing,” he said.

At present, ADB’s portfolio of projects under construction and for implementation in the Philippines stood at $12.5 billion, majority of these or about $7 billion is for transport projects.

Mr. Jeffries said the ADB is willing to fund one of the government’s flagship projects, the Mindanao Railway Project, which is still in limbo after lack of funding.

The ADB is ready to provide official development assistance loans or provide PPP advisory services for the Mindanao rail project, he said.

THE NATIONAL GOVERNMENT’S (NG) gross borrowings declined by over 66% in April amid significantly lower domestic debt, the Bureau of the Treasury said.

In its latest cash operations report, the Treasury said that gross borrowings fell by 66.62% to P130.19 billion in April from P390.06 billion a year ago.

The bulk or 93.92% of April’s gross borrowings came from domestic sources.

Gross domestic debt totaled P122.28 billion in April, down by 68.22% from P384.71 billion a year earlier.

This included the issuance of P125.02 billion in fixed-rate Treasury bonds and a net redemption of P2.74 billion in Treasury bills.

On the other hand, external debt only accounted for 6.08% of the total gross borrowings for the month.

In April, gross external borrowings stood at P7.91 billion, 47.83% higher than P5.35 billion in the same month in 2025.

External borrowings during the month consisted of P7.76 billion in new project loans and P151 million in program loans. There were no global bonds issued during the month.

“The decline in April borrowings… likely reflects timing and still-challenging global market conditions rather than a clear policy shift,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

“The government appears to be staying opportunistic offshore while leaning more on domestic funding to manage costs and foreign exchange risks,” he added.

The peso closed at P61.485 against the greenback on April 30, weakening by 73.7 centavos from its March 30 finish of P60.748.

4-MONTH BORROWINGS
In the four months to April, NG gross borrowings were almost flat at P1.134 trillion from P1.135 trillion in the same period a year earlier.

This represented 42.28% of the P2.68-trillion gross borrowing program for the year under the Budget of Expenditures and Sources of Financing 2026.

Domestic debt, which accounted for 75.26% of the total, rose by 2.14% to P853.37 billion at end-April from P835.51 billion a year prior.

This consisted of P769.77 billion in fixed-rate Treasury bonds and P83.59 billion in Treasury bills.

External borrowings in the first four months slid by 6.41% to P280.47 billion from P299.69 billion year on year. This was composed of P161.29 billion in global bonds, P79.93 billion in program loans, and P39.26 billion in new project loans.

Mr. Asuncion said that he expects borrowing activity to pick up in the coming months as spending accelerates. However, he noted the pace of borrowings “will remain sensitive to global rates and risk sentiment.”

Meanwhile, Mr. Asuncion said that a stronger peso could support an increase in external borrowings in the coming months.

“A stronger peso would generally help at the margin, but it is not the primary driver. A firmer currency reduces foreign exchange risk and expected debt servicing costs, which can make external borrowing more attractive,” he said.

“It can also signal improved macro stability, which tends to support offshore investor appetite,” he added.

On Friday, the peso inched up by half a centavo to close at P61.59 against the greenback, from its P61.595 close on Thursday. Month on month, the local currency weakened by 10.5 centavos from its P61.485 finish on April 30.

However, Mr. Asuncion said that external borrowings will depend on global interest rates, market volatility, and timing of issuance windows.

“So, even with a stronger peso, external borrowing will likely remain opportunistic rather than automatic, depending on how favorable global funding conditions are,” he added.

PHILIPPINE INFLATION likely hit its fastest pace in over three years as elevated oil prices amid the ongoing Middle East war drove up food costs and kept the peso weak against the dollar, analysts said.

The headline print may have accelerated to 7.9% last month from 7.2% in April and 1.3% a year earlier, according to a median estimate of 16 economists polled by BusinessWorld.

If realized, this would be the fastest inflation recorded in over three years or since the 8.6% in February 2023.

The median estimate likewise matches the upper bound of the Bangko Sentral ng Pilipinas’ (BSP) 7.1%-7.9% forecast for the month.

It would also make May the third month in a row that the headline inflation settled above the central bank’s 2%-4% target.

May inflation data will be released on June 5.

“We anticipate faster inflation in May mainly due to still-elevated crude oil prices, pricier food items, base effects, as well as spillovers into tertiary sectors,” University of Asia and the Pacific economist Marco Antonio C. Agonia said in an e-mail.

“While global crude oil prices did wind down from April to May this year, pump and bunker fuel prices are still much higher compared to last year, continuing to exert upward pressure on inflation readings,” he added.

In May, global oil prices continued to trade around $100 per barrel, higher than the average $60-$70 per barrel price seen earlier this year.

Meanwhile, pump price adjustments in the domestic market saw a net increase of P5.49 per liter for gasoline during the month but posted a net decrease of P2.13 per liter for diesel and P17.59 per liter for kerosene.

The temporary suspension of the excise tax on kerosene remained in place in May.

In its month-ahead forecast released on Saturday, the BSP said the May inflation print was likely driven by a weaker peso as well as costlier rice, vegetables, and meat, although lower pump prices and electricity rates offered consumers some relief.

The Manila Electric Co. ended its three-month streak of rate hikes in May as it cut the overall monthly bill by P0.0151 per kilowatt-hour (kWh) to P14.3345 per kWh from P14.3496 per kWh in April.

However, higher year-on-year rice prices continued to strain households’ budgets, a factor analysts said was likely behind the faster inflation last month.

“Despite the fall in pump prices, increases in rice and other major food items were more than able to outweigh it,” Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said in a Viber message.

The average cost of local regular milled rice jumped by 17.52% to P50.91 a kilo in the second half of May from P43.32 in the same period last year, based on Philippine Statistics Authority data.

Meanwhile, the per-kilo price of well-milled rice rose by 15.55% to P57.88 from P50.09 a year earlier, while special rice was 10.51% higher year on year to P65.69 from P59.44 previously.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the peso’s persistent weakness against the dollar compounded price pressures in May.

“Seasonal supply constraints and the lagged effects of earlier peso depreciation also contributed to upward price pressures,” he said in an e-mail.

The peso closed at P61.59 against the greenback on May 29, declining by 10.50 centavos from its P61.485-per-dollar finish on April 30. It plunged to an all-time low close of P61.75 on May 18 and 19.

“While some commodities have begun to ease and base effects offer slight relief, overall inflation remains significantly above target,” Mr. Asuncion added.

In a separate report on Friday, analysts at MUFG Bank, Ltd. noted that the upcoming May inflation report on June 5 will prove significant for the foreign exchange (FX) market.

“A high print would strengthen the case for a larger June hike or even off-cycle action, but PHP (Philippine peso) may still struggle to rally sustainably unless oil prices ease and broader USD (US dollar) sentiment improves,” they added.

JUNE HIKE ‘DONE DEAL’
Meanwhile, analysts are now more convinced that the BSP will tighten for a second straight time this month, as sticky inflation and broader price pressures call for higher-for-longer interest rates.

China Banking Corp. Chief Economist Domini S. Velasquez said core inflation, which discounts volatile fuel and food prices, may have breached the BSP’s tolerance range in May.

“(C)ore inflation likely picked up from 3.9% to 4.2% in May, breaching the BSP’s target range for the first time since 2023,” she said in an e-mail.

BSP Governor Eli M. Remolona, Jr. earlier said they are closely monitoring core inflation to guide their monetary policy action amid the crisis.

For Kausani Basak, FX analyst and economist at ANZ Research, the BSP will likely deliver another 25-basis-point (bp) hike at its upcoming meeting this month, with a larger 50-bp hike or off-cycle move also on the table.

“We expect the BSP to maintain its hawkish stance going forward and hike the policy rate by 25 bp in the monetary policy meeting in June,” she said in a report on Friday. “However, the chance of a 50-bp or off-cycle hike has increased in recent weeks following BSP’s recent communications.”

In April, the Monetary Board raised its policy rate for the first time in nearly two years by 25 bps to 4.5%. Mr. Remolona has left the door open to extending their tightening cycle, noting that they want to bring inflation back to their 2%-4% tolerance range.

Mr. Remolona had also said they are considering an off-cycle rate hike but may also wait until their regular meeting on June 18 before announcing their next decision as they await the May inflation data.

However, some analysts remain unsure about an off-cycle increase, noting that an aggressive monetary policy might “do more harm than good” amid lingering growth woes.

“(W)e believe that there is no need for the BSP to implement an off-cycle hike,” Alvin Joseph A. Arogo, chief economist and head of research division at the Philippine National Bank, said in an e-mail. “Addressing second-round effects through more expensive borrowings may do more harm than good since both consumer and business confidence are already impaired as the first-quarter GDP (gross domestic product) data has shown.”

Oil shocks from the Middle East war hit the economy in the first quarter, as GDP growth slowed to 2.8% from 3% in the previous quarter and 5.4% a year ago.

For Sarah Tan, an assistant director and economist at Moody’s Analytics, waiting until the Monetary Board’s next scheduled policy review will also give them ample time to evaluate the May inflation report and factor it into their decision.

“We expect the BSP to raise its policy rate by 25 bps at the June meeting as it prioritizes containing inflation and preventing inflation expectations from becoming unanchored,” she said in an e-mail.

“However, we do not expect an off-cycle move. With the May inflation print due just roughly two weeks before the scheduled policy meeting, the BSP will be able to assess the latest data and respond through its regular policy-setting process,” Ms. Tan added.

Security Bank Corp. Chief Economist Angelo B. Taningco likewise said an intermeeting hike is “less likely” but noted that a faster-than-expected May inflation could prompt such a move.

More than just a grand music production, Puregold’s OPM Con has evolved into the company’s signature retailtainment platform, reinforcing its role as a pioneer in merging retail, entertainment, and Pinoy fan culture in epic events. Through the years, Filipinos found their voices in music — in songs they grew up with, lyrics they quote online, anthems they scream during concerts, and fandoms that become families, built around artists they love.

After Puregold’s two straight years of sold-out concert crowds and viral fan moments—and amid nationwide anticipation — the much-celebrated music event of the year returns. Dubbed “OPM Con Generations,” it is set to gather today’s biggest talents for a night that revels in the evolving sound of Filipino music, and the communities that have formed around it.

To begin with, acclaimed folk-pop Ben&Ben and rising P-Pop group Alamat will charm the audience not only as performers, but also as two of Puregold’s newest brand ambassadors—a major moment for the devoted fan communities they proudly call “Liwanag” and “Magiliw.”

This year’s lineup is the concert’s strongest yet, featuring the most sought-after names shaping the local music landscape, led by P-Pop kings SB19, rap heavyweight Flow G, crowd-favorite rapper Skusta Clee, well-loved rock band SunKissed Lola, and breakout all-female P-Pop acts G22, KAIA, and Xonara.

From arena-shaking P-pop performances and rap anthems to emotional sing-alongs and viral chart-toppers, “OPM Con Generations” promises an unforgettable celebration of Filipino music across genres, generations, and fandoms.

Since launching in 2024, OPM Con has quickly become one of the country’s most anticipated live music events, sparking nationwide fan frenzy through Puregold’s signature ticket redemption mechanics, where grocery shopping transforms into a full-scale fan experience.

“Music has a unique way of bringing people together, no matter the generation or genre,” said Ivy Hayagan-Piedad, Senior Marketing Manager of Puregold Price Club Inc. “Through OPM Con Generations, Puregold hopes to create a space where loyal Puregold customers and fans can proudly gather, interact, and celebrate Philippine artistry and culture.”

Ticket-selling for OPM Con Generations officially begins on June 12 across 12 participating Puregold stores nationwide: Taytay, Rizal; Biñan, Laguna; Anabu-Imus, Cavite; Valenzuela; QI Central, Quezon City; Cubao, Quezon City; Fairview Terraces, Quezon City; Tayuman, Tondo, Manila; Sucat, Parañaque; Kalentong, San Andres, Manila; Sto. Domingo Cainta Junction, Rizal; and San Pedro, Laguna.

Aling Puring and Perks members may redeem free concert tickets through qualified single-receipt grocery purchases made at participating stores. Ticket tiers include VIP Standing for a minimum purchase of P8,500, Patron for P7,000, Lower Box for P5,500, Upper Box for P4,000, General Admission for P2,500, and Obstructed Upper Box and Obstructed General Admission for P1,500.

For customers in the provinces, Puregold is also rolling out a limited Regional Fan Pass initiative, giving more fans outside Metro Manila the opportunity to sign up and avail of tickets while supplies last.

For updates, like @puregold.shopping on Facebook, subscribe to Puregold Channel on YouTube, and follow @puregold_ph on Instagram and X, and @puregoldph on TikTok.

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As a global sports and media organization, the NBA has established a major international presence with games and programming available in 214 countries and territories and has created one of the largest social media communities in the world, with more than 2.5 billion likes and followers globally across all leagues, team and player platforms. In the Philippines, where basketball is deeply embedded into everyday culture, the NBA continues to inspire one of its most passionate fan bases worldwide.

Through this collaboration, ArenaPlus will integrate NBA marks across its online gaming platforms, execute local activations, and be featured across the NBA’s localized social and digital platforms in the Philippines. In addition, ArenaPlus and the NBA will promote responsible gambling and best-in-class practices to protect the integrity of NBA games.

ArenaPlus will further engage fans in the Philippines through NBA-themed free-to-play games and promotions that will offer participants the opportunity to win special prizes, culminating each season with an NBA Playoffs bracket game. This includes ArenaPlus’ “Playoffs MVP: Battle for the Most Valuable Predictor”, a free-to-play contest launched on March 21, 2026 that allows participants to submit their picks for the 2026 NBA Playoffs.

“Becoming the Official Betting Partner of the NBA in the Philippines is a landmark moment for ArenaPlus,” said Erick Su, Head of ArenaPlus. “The NBA represents the highest standard in global sports, and its connection with Filipino fans is unmatched. Through our collaboration, we aim to elevate how fans experience basketball–bringing them closer to the action in ways that are more immersive and engaging and built around how they follow the game today.”

“Sport continues to be a driving force in the Philippines’ rapidly evolving digital entertainment landscape, and our collaboration with ArenaPlus reflects our commitment to engaging fans across the country in new and creative ways,” said Kuljeet Sindhar, NBA Head of International Gaming and Data Distribution. “We look forward to working together to deliver an authentic gaming experience that responsibly channels the passion of Filipino fans and deepens their connection to the league.”

As ArenaPlus expands its presence in the Philippine sports ecosystem, the collaboration ushers in a new chapter in local basketball fandom, bridging the NBA’s global reach with an innovative digital experience built for today’s Filipino fan.

Fans can download the ArenaPlus app or visit http://www.arenaplus.ph for more information.

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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“We grew last year. We’re aiming for the same growth this year. We’re looking at maybe 8% to 12%,” Redin Aliling, commercial lead for professional business at Signify Philippines, said during a media roundtable lunch on Thursday.

The company has various ongoing lighting projects with the government, including partnerships with the local governments of Baguio, Ormoc, and Manila, as well as an ongoing railway project. These mainly cover solar lighting, street lighting, office lighting, and façade beautification, Mr. Aliling said.

He added that Signify has more P2P projects in the pipeline and is actively expanding partnerships with more local government units (LGUs) with strong financial capacity, as part of efforts to increase the government’s share in its total project portfolio from around 10% to up to 15%.

“We’re still low. That’s the area where we want to go. We can grow to around 15% yearly. Then I think we will call it an accomplishment,” Mr. Aliling said.

The manufacturing sector is also seen as a key growth driver for the company this year, citing its continued expansion.

“There’s a boom in manufacturing recently,” Mr. Aliling said. “Now, if manufacturing is growing, all industries associated with it will also have strong potential, such as warehousing and transportation. All related sectors will benefit from that.”

Signify Philippines’ growth is also expected to be supported by new technologies and products currently in development.

On a national scale, the Philippines’ LED (light-emitting diode) lighting market was valued at US$692.95 million in 2025 and is projected to reach US$2.415 billion by 2035, with a compound annual growth rate (CAGR) of around 13.3%, according to global market research firm Claight.

It noted that the country’s growth will be driven by increased government infrastructure spending, declining LED hardware costs, rising commercial and residential retrofits, and the expansion of smart lighting deployments.

Despite an optimistic growth outlook, Mr. Aliling said that a lack of awareness regarding regulations and upfront costs for adopting more advanced lighting technologies remains a likely bottleneck to the company’s growth.

Signify Philippines is addressing this by continuing its education initiatives and engaging both public and private sector stakeholders on the importance of investing in more advanced and sustainable lighting technologies, he said. — Edg Adrian A. Eva

“We are thankful to President Marcos and the Department of Budget and Management (DBM) because this is a big help in easing the administrative works of our teachers,” Education Secretary Juan Edgardo “Sonny” M. Angara said in Filipino in a news release.

“With these new positions, our teachers can better focus on teaching and improving the education quality of our country,” he added.

The Alliance of Concerned Teachers (ACT) Philippines earlier warned that teachers may be affected by the additional workload that comes with the implementation of the three-term calendar.

“This is not just about changing the calendar, we have seen a lot changes,” ACT Chairperson Ruby Bernardo said in Filipino during a House committee hearing.

She noted that the academic shift entails changes to the Budget of Work, the grading system, and school forms. “I know there are birth pains in all changes, but our teachers have always carried the burden of these changes. We need support from you, DepEd.”

The 22,268 new non-teaching posts approved by DBM will be distributed across various regions, allocating 6,000 School Principal I, 11,268 Administrative Officer II, and 5,000 Project Development Officer I positions at the elementary and secondary levels.

Regional offices will directly issue the corresponding Notice of Organization, Staffing, and Compensation Actions to expedite deployment.

“With this manpower boost, DepEd reinforces its commitment to fostering a more efficient and supportive environment for Filipino educators and learners alike,” the agency said in a news release.

The DBM also previously approved 32,916 new teaching positions for Kindergarten, Elementary, Junior High School (JHS), Senior High School (SHS), and the Alternative Learning System (ALS).

Teacher I positions will receive an allocation of 32,047; 369 to Teacher III positions as Special Science Teacher I; and 500 to Teacher IV positions for Special Needs Education (SNED).

Zamboanga Peninsula will receive the highest deployment allocation, with 3,361 posts, including 1,467 Teacher I positions for the Division of Sulu to bridge critical instructional gaps.

Central Luzon will also receive 2,722 items, followed by CALABARZON with 2,644, Central Visayas with 2,586, and Northern Mindanao with 2,541.

DepEd said the funding for these newly filled positions will be charged against the agency’s built-in appropriations under the FY 2026 General Appropriations Act.— Almira Louise S. Martinez

Preliminary data from the Philippine Statistics Authority (PSA) showed the country’s trade-in-goods deficit reached $5.97 billion in April, widening by almost half from the $3.98-billion gap in April last year. The gap also rose from the $5.03-billion deficit in March.

It was the largest trade deficit in almost four years or since the revised $5.99-billion gap in August 2022.

The country’s trade balance has been in deficit for more than a decade or since the $64.95-million surplus recorded in May 2015.

In a research note, Chinabank Research (Chinabank) said that the country’s trade performance “continued to reflect spillovers from the Middle East conflict, with elevated oil prices inflating the import bill, disrupting supply chains, and weighing on consumer sentiment.”

However, Chinabank noted that a potential easing in US–Iran tensions, which could likely to lower oil prices, along with weak domestic demand curbing imports, could narrow the trade gap later this year.

In April, US President Donald J. Trump began the month saying that his military forces will leave Iran “pretty quickly,” as he discussed the timeline for the conflict’s end, Reuters reported.

Two weeks into April, Iran ramped up control over the Strait of Hormuz — reverting its position to reopen the trade-concentrated waterway just a day earlier — citing the US blockade of imports as a violation of the ceasefire.

Mr. Trump closed the month “unhappy” with the latest negotiation development that month, as the Tehran-sent proposal did not delve into its nuclear program, the US president’s primary point of concern.

Cid L. Terosa, senior economist at the University of Asia and the Pacific, said that the import surge reflects a weaker peso which raised import costs.

“The weakening of the peso made imports expensive, undermining any increase in exports due to cheaper prices,” he said in an e-mail.

In April, the peso logged its worst finish that month at P61.567 against the dollar on April 29. The following day it touched the record weakest intraday low of P61.75. To date, the local currency’s record weakest close was at P61.75 per dollar on May 19.

Merchandise imports climbed by 22.4% year on year in April to $13.17 billion, a turnaround from the 2.4% drop in the same month last year. It was also faster than the 17% expansion in March.

April marked its third straight month of growth. It was the largest imports expansion in nearly four years or since the 26.4% surge recorded in August 2022.

On the other hand, total outbound sales of Philippine-made goods grew by 6.3% year on year in April to $7.21 billion, slower than the 7.6% increase in April 2025 and the 20.8% expansion a month earlier.

The value of export sales in April was the lowest in three months or since the $7.14 billion in January.

April saw the weakest export growth in eight months or since the 5.5% gain in August 2025.

In the January to April period, the trade-in-goods deficit widened to $19.28 billion from the $16.44-billion gap in the same period last year.

Exports expanded by 11.2% to $29.93 billion in the first four months of 2026, while imports jumped by 13.5% to $49.22 billion.

That month, the country surpassed the 2% growth targets for both imports and exports set by the Development Budget Coordination Committee (DBCC) this year.

For Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, the outperformance of import growth over exports has been driven by higher commodity prices, particularly imports of commodities, minerals and fuels, as well as raw materials and intermediate goods.

“The concerning thing is that this is masking quite a big deterioration in ‘real’ import demand, with capital and consumer goods import growth weakening further last month,” he said in an e-mail.

PSA data showed that imports of raw materials and intermediate goods for that month jumped by 31.1% to $5.03 billion. These accounted for 38.2% of the country’s total imports in April.

Capital goods grew by 8.2% to $3.68 billion and accounted for 27.9% of the country’s total import bill.

Imports of mineral fuels, lubricants and related materials jumped by 105.6% year on year to $2.55 billion.

Mr. Terosa said that mineral fuel import significantly contributed to the import bill that month as “the Middle East crisis raised their prices as demand for them surged amidst limited supply.”

Meanwhile, the imports of consumer goods declined by 16.7% to $1.88 billion in April, in which Chinabank said elevated fuel costs tightened household spending, especially for non-essentials.

“With consumption — the main engine of economic growth — still weak, we could continue to see soft GDP (gross domestic product) print for this quarter,” Chinabank said.

In April, China was the top source of imported goods with a 29.7% share worth $3.92 billion. It was followed by South Korea with $1.55 billion (11.8% share) and Japan with $4.03 billion (7.3% share).

Electronic products, which cornered 47.7% of the total exports, grew by 1.2% year on year to $3.44 billion in April.

Semiconductors, which accounted for the bulk of electronic products and 33.8% of the total exports, declined by 4.7% year on year to $2.43 billion.

“Semiconductor exports, the country’s largest segment, contracted after 11 months of strong growth, likely manifesting the impact of previous reports of order cancelations due to air cargo disruptions caused by elevated jet fuel prices,” Chinabank said.

It added that decline likely reflected supply chain disruptions for specialty gases and petrochemical inputs, which have slowed production.

The United States was the main destination of locally made goods in April as exports to the country amounted to $1.30 billion, accounting for 18% share of the total outbound goods.

It was followed by China with $926.66 million (12.9% share), Japan with $914.64 million (12.7% share), Hong Kong with $914.59 million (12.7% share) and Singapore with $332.75 million (4.6% share).

For Mr. Chanco, ease in export growth may be attributed to the unwinding favorable base effects as exports have been losing momentum caused mainly by demand from Hong Kong weakening quite substantially albeit from what was a relatively strong start to the year.

OUTLOOK
Sergio Ortiz-Luis, Jr., president of Philippine Exporters Confederation, Inc., said that the country’s trade performance may remain within manageable levels barring any shocks and sudden disruptions in the Middle East conflict.

For Mr. Terosa, the remaining months of the second quarter will be the most challenging for the country’s trade performance as high oil prices, inflating food imports, and rate hikes loom.

He added that for the second half of the year, the country’s trade performance will depend on the developments surrounding the Middle East crisis.

“If the crisis ends or is tamed, the second semester could be a pivot point. If the crisis continues, the second semester will witness a more urgent defensive posture for trade,” Mr. Terosa said.

He cautioned that meeting the DBCC’s 2% growth targets for imports and exports in 2026 may be difficult if the conflict rages on.

“The government can de-risk imports by diversifying sources of oil and petroleum products and set up import financing or foreign exchange risk programs for major exports and imports,” he said.

He also noted that the country may take advantage of global product trends in electronic vehicles and batteries by empowering mineral exports.

For Mr. Chanco, import growth will likely continue running faster than exports due to the lift from commodity prices, which may exert more downward pressure on the peso.

He said that exports, on the other hand, have lost some momentum lately and leading indicators are deteriorating.

“This suggests to us that this quarter and next, at the very least, will be very challenging, given the indirect impact of the war on global trade,” he added. — Matthew Miguel L. Castillo

GLOBAL TECH BRAND Xiaomi just unveiled its Xiaomi 17T Series phones, the 17T and 17T Pro, updating its T Series line after less than a year. The series sits in that middle ground between midrange and high-end flagships, promising strong performance at a relatively accessible price point.

And the base model Xiaomi 17T, which we’ve been testing for a few weeks now, encapsulates that philosophy perfectly. Call it what you will: premium midrange, almost flagship, flagship killer. With the global memory chip crunch already driving up device prices (and expected to continue doing so within the next year or so), the Xiaomi 17T hits that sweet spot between price and performance.

CAMERA SYSTEM

First is the Xiaomi 17T Series’ key selling point: the triple camera system co-engineered with Leica Camera AG. The two brands’ long-running imaging partnership has entered its fifth year, and for this T Series refresh, they brought Leica’s 5x telephoto camera to all models in the lineup.

Aside from the 50-megapixel Leica 5x periscope telephoto lens with telemacro capabilities, rounding out the triple rear camera array are the 50MP main lens and a 12MP ultra-wide camera.

Even as someone who loves cameras, I prefer testing smartphones using basic shooting modes as this lets me assess ease of use. Smartphones positioned as imaging-first devices should not need extensive tinkering with settings to show what they’re made of.

The Xiaomi 17T does just that and more. The main camera is a 50MP lens with a Light Fusion 800 image sensor, and is great for all-around, point-and-shoot photography. It captures great and crisp detail, especially during daytime and in good lighting, and the phone renders colors well — just enough contrast for that pop without feeling artificial. The built-in Leica color modes, Leica Vibrant and Leica Authentic, also bring that distinct aesthetic to shots.

Leica Live Moment, a feature introduced in this series, is a great addition, bringing stills to motion without sacrificing image quality.

Where this phone really shines is the 50MP Leica 5x telephoto camera. Few phones at this price range offer 5x optical zoom, and with the rapid development of smartphone imaging technology, I personally feel that the ability to zoom in without having to sacrifice quality becoming more of a must-have and less of a nice-to-have.

Using the 5x periscope telephoto, the Xiaomi 17T shoots photos with stellar clarity and minimal vignetting. The telemacro lens delivers excellent subject-background separation for those who want that bokeh but can also capably handle deeper depth of field. Optical image stabilization also helps with the usual shake when shooting telephoto. These are true even up to 10x digital zoom, but beyond that, details understandably soften.

For all three rear lenses, there is a bit of drop-off when shooting in low light or less ideal conditions, especially when snapping moving subjects. The phone’s imaging technology compensates for these by smoothing out textures, but I saw noticed chromatic aberration at times when I channeled my inner pixel peeper (which one really shouldn’t do with phones, but I digress).

Those who want to maximize these Leica cameras can also shoot with Pro Mode, which offers extensive setting controls. The Camera app also has various Scene shooting modes like Stage and Silhouette with tuned settings.

BATTERY AND PERFORMANCE

The Xiaomi 17T sports 6,500mAh silicon-carbon battery that supports 67-watt HyperCharge wired charging. The adapter is included in-box and can get the phone to a full charge in less than an hour.

Battery life is excellent on this phone. Even while trying out the camera and using mobile data to watch videos, doomscroll, and for some light gaming, it has enough juice for a day and more. With usual use, I suspect that you’d be able to squeeze out more than 24 hours’ worth of power if you aren’t really trying to get these batteries to run out like I was during testing.

The phone’s MediaTek Dimensity 8500-Ultra chip coupled with the 12GB RAM make for a very smooth and speedy performance. It’s able to handle multitasking well, including light gaming. It also doesn’t heat up that much (yes, even in this weather).

It runs on HyperOS 3 based on Android 16 with Google Gemini and their Circle to Search feature, and also comes with other AI features.

Bloatware is also minimal — and that’s always a plus in my book.

DISPLAY AND BUILD

For the first time in the T Series, Xiaomi is offering two phone sizes. The base model Xiaomi 17T is the compact version and comes with a 6.59-inch AMOLED display with a refresh rate of up to 120Hz.

With 3,500 nits peak brightness, HDR10+ Dolby Vision, and DCI-P3 color gamut, the screen offers vibrant and sharp details with accurate color rendition, even under bright daylight. Navigating between apps and through menus is smooth and snappy, even if not all apps support 120Hz.

The Xiaomi 17T also features eye-care technology via the Xiaomi Eye Care Shield with various TÜV Rheinland certifications, making the user experience (literally) easy on the eyes.

The phone itself is very easy on the eyes. The test unit came in the Violet colorway, which to me leans more toward lilac. It features a smooth, matte finish and thin bezels.

It also weighs just 200 grams and is 8.17-millimeter thin without a case, making it easy to hold with just one hand, and slip into pockets or most reasonable bag sizes. The in-hand feel is great — just enough weight for stability, but light enough to minimize strain. With the smooth frame, it can get a bit slippery, but the slightly rounded edges help with the grip.

The Xiaomi 17T still comes with the square camera island in the top-left corner, which protrudes a little when used without a case.

The stereo speakers’ placement helps with the audio quality on this phone. It delivers punchy and clear sound, even with the volume turned up.

So, should you buy the Xiaomi 17T? Priced at P33,999 for the 12GB+256GB variant and at P37,999 for the 12GB+512GB model, this is a smartphone worth looking into if you’re looking for a device with stellar cameras, strong performance, and large battery life. It can hold its own even against higher-end, more expensive flagships, delivering great value for money.

The Xiaomi 17T is now available in the Philippines, with the brand offering various promos and deals.

Long known for its distinctly suburban character defined by tree-lined roads, expansive open spaces, and accessible daily essentials, Acacia Estates is now entering a new stage of growth with the introduction of additional commercial, recreational, and community spaces.

These planned enhancements form part of DMCI Homes’ continuing efforts to strengthen the township’s functionality while supporting its long-term value.

At the center of this initiative is the upscaling of the Town Center at Acacia Estates, which will introduce new destinations for shopping, recreation, and community gatherings. The project, which includes the construction of a new supermarket, is designed to create more spaces where residents can connect while making daily routines more convenient.

The upscaling works will be carried out in three phases, with development slated to be in full swing by 2028. The new supermarket is currently projected within a 2030 timeframe, subject to planning and regulatory approvals.

Here’s what residents can look forward to from the Town Center Redevelopment.

The first phase of the Town Center Redevelopment will focus on preparing the site for new developments. This includes the dismantling of The Tent and the existing Commercial Promenade to make way for the construction of a new supermarket and modernized commercial spaces that will anchor the revitalized Town Center.

More Commercial Spaces

Beyond the new supermarket, residents will enjoy added convenience at the upgraded commercial strip—a curated row of shops and services tailored to everyday needs. From quick errands to casual meetups, this refreshed retail zone brings essential destinations within easy reach.

Al-Fresco Dining Spaces

Open-air dining areas surrounded by landscaped greenery will add energy and vibrancy to the Town Center. These spaces create opportunities for casual meals, family celebrations, or simply unwinding after a long day in a relaxed outdoor setting.

Central Plaza and Activity Park

At the center of the development, the planned Central Plaza will serve as a dynamic gathering space for community events, seasonal celebrations, and everyday interactions. Designed to become a natural meeting point, it will encourage stronger connections and shared experiences among residents.

Nearby, the Activity Park will provide dedicated spaces for recreation and organized programs, supporting active lifestyles and meaningful engagement across all age groups.

A Township That Grows With Its Residents

Since its establishment in 2007, Acacia Estates has grown into a thriving 130-hectare community home to around 25,000 residents.

With over 63 hectares of undeveloped land—more than 30 hectares being considered for future projects and the remaining area envisioned for shared community spaces—the township is well-positioned for sustained, carefully planned growth.

Notably, approximately 60 percent of the estate is dedicated to open and green spaces, preserving the signature suburban character that residents value.

The Acacia Estates upscaling project demonstrates a long-term commitment to enhancing everyday living—bringing together upgraded amenities, accessible outdoor spaces, and thoughtfully planned residential developments.

Through these enhancements, Acacia Estates continues to evolve into a township where convenience, wellness, and community come together, creating a living environment that truly grows with its residents.

DMCI Homes is the country’s first Quadruple A real estate developer, with projects in Mega Manila, Baguio City, Tuba in Benguet, San Juan in  Batangas, Boracay, Cebu City, and Davao City. Each of its properties is built with world-standard craftsmanship borne from D.M. Consunji Inc.’s over 70 years of expertise in the construction and development industry.

To learn more about DMCI Homes’ pre-selling and ready for occupancy projects, units for lease, and special promos, call (632) 5324-8888. You can also visit leasing.dmcihomes.com to know more about opportunities in leasing and rent-to-own programs of DMCI Homes. News and other updates are also posted on the company’s official website and social media accounts on Facebook, X, Instagram, and YouTube.

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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The phones were unveiled globally on May 28. For the first time in the T Series, which is the brand’s accessible flagship lineup, the Xiaomi 17T Series phones come in dual sizes meant to cater to different consumer preferences.

Those who want a more compact device can go for the base model Xiaomi 17T, which has a 6.59-inch AMOLED display with up to 120Hz refresh rate. Meanwhile, the Xiaomi 17T Pro has a bigger 6.83-inch screen size with up to 144Hz refresh rate.

The new smartphones are marketed as imaging flagship devices for modern users as they combine Leica’s optics with Xiaomi’s imaging technology. Both have a triple rear camera system tuned by Leica with a 50-megapixel (MP) main lens, a 12MP ultra-wide camera, and a 50MP 5x telephoto lens.

“Inside lies an ultra-large 1/1.31-inch sensor in Xiaomi 17T Pro and a 1/1.55-inch sensor in Xiaomi 17T. Both combine Leica UltraPure optical design with a 1G + 6P hybrid Leica Summilux lens structure, renowned for rendering fine detail with exceptional clarity. The large aperture across the series delivers superior dynamic range and beautifully rendered depth of field,” the brand said.

“For the first time, Xiaomi 17T Series brings the Leica 5x telephoto camera to both models in the T series, redefining versatility across the lineup. It delivers 50MP images with OIS (optical image stabilization) and exceptional range, from intricate details captured via 30cm macro photography to 10x optical-grade zoom and up to 120x AI Ultra Zoom.”

The Xiaomi 17T Pro also has 4K 60fps (frames per second) cinematic video recording.

Both phones feature specialized shooting modes for both photo and video.

The Xiaomi 17T Series also introduces Leica Live Moment, which brings motion to still photos. The feature is supported across all rear camera focal lengths, as well as in Portrait mode via Leica Live Portrait.

POWER AND PERFORMANCE
Both models in the lineup also feature next-generation silicon-carbon battery technology.

Xiaomi 17T Pro’s 7,000mAh battery is the largest on a Xiaomi Series smartphone in the international markets, the brand said. it supports 100-watt (W) wired HyperCharge and 50W wireless HyperCharge.

For its part, the Xiaomi 17T is equipped with a 6,500mAh battery paired with 67W HyperCharge.

The Pro model is powered by the MediaTek Dimensity 9500 chipset built on a 3nm process, while Xiaomi 17T comes with the MediaTek Dimensity 8500-Ultra on a 4nm architecture. They run on Xiaomi HyperOS.

“Both deliver major upgrades in CPU, GPU, and AI performance, enabling smooth responsiveness across demanding multitasking and next-generation gaming. To maintain this peak output, the Xiaomi 3D IceLoop System provides advanced thermal management through efficient vapor–liquid separation.”

The phones have an IP68 water and dust resistance rating.

The Xiaomi 17T Series’ displays, protected by Corning Gorilla Glass 7i, also integrate eye-care technology via Xiaomi Vision Care.

“Guided by medical research with precise engineering, this display automatically adapts to ambient light conditions, and effectively manages blue light, flicker, and motion blur to ensure all-day comfort,” Xiaomi said.

“Thanks to these innovations, Xiaomi 17T Series is the first to receive the TÜV Rheinland quadruple eye-care certification, and has earned Xiaomi’s first TÜV Rheinland Intelligent Eye Care certification.”

More features shared by the two models are the 1.5K AMOLED display with 3,500-nit peak brightness, a 32MP front camera, and dual stereo speakers with Dolby Atmos Hi-Res and Hi-Res Wireless certification, among others.

PRICING
The Xiaomi 17T Pro is available in three colors: Deep Blue, Deep Violet, and Black. The suggested retail price for the 12GB memory + 512GB storage model is P47,999, while the 12GB+256GB model is a Shopee exclusive and has an SRP of P45,999.

For its part, the Xiaomi 17T comes in Violet, Opal White, Blue, and Black. The 12GB+512GB model has an SRP of P37,999, while the 12GB+256GB variant is priced at P33,999.

The brand is offering various pre-order (May 29 to June 18) deals, freebies, and promotions online and offline, as well as platform rebates. — Bettina V. Roc

First Gen President and Chief Operating Officer Francis Giles B. Puno said the company is making a long-term investment in pumped-storage hydropower assets, which he said are expected to become “one of the most critical segments of the future energy system.”

“As renewables continue to scale, one of the central challenges facing power systems is no longer simply generation, but operational flexibility — the ability to store energy when supply is abundant, and deliver it when the system needs it most,” he said at the company’s annual stockholders’ meeting on Thursday.

First Gen invested P62 billion for a 33% stake in Prime Infra’s 2,000-megawatt (MW) pumped-storage hydropower portfolio.

Mr. Puno said the facilities are projected to make a significant contribution to the company’s earnings through a 20-year contracted agreement under the government’s green energy auction program.

The projects are expected to generate three times the historical average contribution from the 60% stake in natural gas assets sold to Prime Infra, based on performance from 2018 to 2024, he said.

“While these projects require significant upfront capital and several years for construction before meaningful cash flow generation, the long-term economics remain compelling,” Mr. Puno said.

As of end-2025, First Gen had an installed renewable energy capacity of 1,764.2 MW from hydro, geothermal, solar, and wind facilities nationwide.

The company operates the Pantabangan-Masiway complex and the Casecnan hydroelectric facility in Nueva Ecija. The facilities generated 1,074.8 gigawatt-hours last year, more than double the output recorded in 2024.

First Gen is also preparing for the development of the 120-MW Aya Pumped Storage Project adjacent to the Pantabangan facility.

Separately, First Gen Chief Executive Officer Federico “Piki” R. Lopez said he hopes for “an amicable, fair, and lasting resolution of the rift” involving the Lopez family.

“I remain fully prepared for any outcome that will follow this peace overture and I will continue to fulfill my fiduciary duties to all shareholders in the companies of the Lopez Group,” Mr. Lopez said.

His statement came after the majority bloc of Lopez family holding company Lopez, Inc. withdrew a Feb. 27 board resolution removing Mr. Lopez as president and chief executive officer.

The Lopez majority earlier removed Mr. Lopez from the company, citing loss of trust and confidence over the P125-billion hydropower and gas deals, which they alleged were entered into without their knowledge.

Mr. Puno told shareholders that the hydropower deal received “unanimous approval following several questions, clarifications, deliberations, and analysis among the directors.”

Shares in First Gen fell 2.38% to P15.60 each on Thursday. — Sheldeen Joy Talavera

THE PLANNED shift to a market value-based property valuation system could boost government revenues and improve investor confidence, though analysts warned it could also lead to higher property-related taxes and infrastructure costs.

Their comments came as the Bureau of Internal Revenue (BIR) prepares to implement a market-based valuation system by 2028, replacing outdated zonal and assessed values used in taxation and property transactions.

According to the BIR, the reform aims to make property taxes fairer by shifting to a system that values properties based on market prices through mass appraisal, standardized valuation methods, and stronger coordination between national and local governments.

Benedicta Du-Baladad, founding partner and chief executive officer of BDB Law, said the proposal falls under the National Land Valuation Reform included in Package 3 of the Comprehensive Tax Reform Program.

“The main implication is that valuation would be professionally managed by a single office under the Department of Finance, making it more objective and market-based,” she told BusinessWorld in a Viber message.

“It will insulate the process of valuation from the influence of politics in the case of local government units (LGUs) and conflicts of interest in the case of BIR. This valuation will be uniformly applied to all real property transactions, whether by LGU or BIR,” she added.

Ms. Du-Baladad said that the impact on government revenues would depend on property valuations.

“Some may increase, but others may decrease since revenue is a function of the value of the property,” she added. “What is important, though, is to be paying taxes based on the correct value of the property.”

However, Ms. Du-Baladad said the government could face challenges in setting up the office and hiring valuation experts.

She also warned of possible “resistance from local politicians who may be using lower property valuation for votes.”

Meanwhile, Jose Enrique “Sonny” A. Africa, executive director of the think tank IBON Foundation, described the proposed change as a “very sound” principle, noting that property taxes are generally less distortionary than indirect consumption taxes.

“A functioning real property valuation system is among the potentially most productive and least distortionary taxes available, compared to regressive indirect consumption taxes,” he told BusinessWorld via Viber.

Mr. Africa said property taxation could generate additional revenues by targeting accumulated wealth and landholdings.

“Property taxation soundly targets accumulated wealth and landholdings and could potentially generate additional tens of billions of pesos annually, although we have not tried making more rigorous estimates,” he added.

However, Mr. Africa warned that weak enforcement could disproportionately burden middle-class and small property owners.

“The problem will be in the practice where large corporations, real estate developers, politicians, and politically connected families might find ways to subvert enforcement,” he said.

“Unfortunately, persistent unresolved corruption reaching up to the highest levels of government does not give confidence in just and fair implementation,” he added.

HIGHER PRICES
Meanwhile, analysts warned that aligning property values with market prices could raise transaction taxes and increase costs for buyers, developers, and infrastructure projects.

Nigel Paul C. Villarete, a senior adviser on public-private partnerships at Libra Konsult, Inc., said the reform is likely to increase infrastructure project costs.

“There will be both positive and negative effects but mostly leaning on the negative side as prevailing prices almost always are higher than recorded ones,” he said in a Viber message.

However, Mr. Villarete said the reform could improve the assessment of actual rates of return and make public-private partnership projects more reliable.

“In actuality, it would provide a better assessment tool on the actual rates of return and will thus make public-private partnership projects more reliable than before and thus will improve the decision-making process, making it faster and more accurate,” he added.

Savills Philippines said while the reform addresses a structural gap in valuation, it may negatively affect market liquidity as “both investors and end users absorb higher costs in an already challenging economic environment.”

“The immediate impact is quite clear, which will bring higher transaction-related taxes,” Savills Philippines’ Chief Operating Officer Rosario “Cha” P. Carbonell and Research and Marketing Head Dino Mari G. Palanca told BusinessWorld.

“With capital gains tax and documentary stamp tax now based on higher values, both buyers and sellers will feel the increase in costs,” they added.

Savills Philippines also said the reform could affect investors operating on tighter margins.

“In the near term, this is likely to slow transaction activity, as higher taxes increase the overall cost of buying and selling,” the company executives said, citing more cautious buyers.

“It also raises the barrier to entry, particularly for first-time buyers and smaller investors who are already navigating elevated interest rates and broader cost pressures.”

Savills Philippines said the country’s buyer base largely consists of investors and regular Filipino homebuyers.

“Both segments are already facing headwinds from inflation impacting disposable income, to higher borrowing costs due to rising interest rates. Adding high transaction taxes on top of these conditions does little to support market liquidity,” the executives said.

“Instead, it may further discourage discretionary purchases, delay investment decisions, and reduce overall market participation.”

In the long term, however, Savills Philippines said the reformed valuation system could support a more transparent and credible property sector, leveling the playing field for local and institutional investors.

“However, the transition will need to be managed carefully. A more phased and well-communicated rollout, alongside measures that support affordability and investment activity, will be important to ensure the policy does not unintentionally dampen market momentum,” Savills Philippines said.

THE TOURISM industry’s contribution to the Philippine economy fell to its lowest level in three years in 2025, weighed down by weaker tourism spending by foreign visitors, according to data from the statistics agency.

Preliminary data from the Philippine Statistics Authority (PSA) showed tourism’s direct gross value added (TDGVA) accounted for 8.1% of the gross domestic product (GDP) in 2025, down from 8.7% of GDP in 2024.

This was tourism’s lowest contribution to the national output in at least three years or since 2022 when it contributed 6.3% to the country’s GDP.

The country’s TDGVA was estimated at P2.27 trillion last year, down by 1.4% from the revised P2.3 trillion in 2024.

The TDGVA measures the value generated from various tourism-related activities and is based on the results of the Philippine Tourism Satellite Accounts report, which the PSA compiles from the Department of Tourism.

Tourism Congress of the Philippines President James M. Montenegro said the drop reflected external pressures, structural constraints and a weaker recovery in international tourism relative to the rest of the Philippine economy.

“While domestic tourism remained resilient, inbound tourism weakened significantly in 2025, which pulled down overall tourism value creation,” Mr. Montenegro said in a Viber message.

He said a major factor was the slower-than-expected recovery of inbound tourism from key Asian markets such as China and India even after the Philippine government eased visa requirement for Chinese and Indian nationals.

Mr. Montenegro said another challenge is the Philippine tourism industry’s ability to remain competitive in attracting foreign tourists. He said the Philippines should prioritize making key destinations more accessible to major regional markets.

“Many neighboring countries accelerated aggressive tourism recovery programs, including visa-free access, expanded airline incentives, stronger destination marketing, and airport infrastructure improvements. The Philippines continued to face challenges in air connectivity, airport capacity, inter-island transport efficiency, and tourist friction points,” Mr. Montenegro said.

He said that while the Philippines’ tourism sector has one of the highest contributions to GDP in Southeast Asia, it continues to lag behind regional peers in attracting tourists.

In 2025, the Philippines attracted 6.48 million international tourist arrivals, compared with Malaysia’s 42 million, Thailand’s 33 million and Vietnam’s 19 million.

PSA data showed shopping accounted for 24.7% of the total TDGVA with P560.3 billion, followed by various tourism services, which include the health and wellness sector (22.6% share or P512.94 billion) and accommodation services for visitors (17.4% share or P394.14 billion).

Mr. Montenegro said the decline in the TDGVA was mainly driven by “softer inbound tourism receipts, weaker discretionary spending among travelers, and operational pressures across the industry.”

Domestic tourism expenditure, which includes resident visitors’ spending within the country on a domestic trip or as part of an international trip, rose by 3% to P3.26 trillion last year.

Outbound tourism spending, which refers to money spent by Filipinos traveling abroad, reached P357.93 billion last year, 3.5% higher than the P345.68 billion posted in 2024.

“This indicates that while travel demand remains strong, a growing portion of tourism spending is leaving the country instead of circulating within the domestic tourism economy,” Mr. Montenegro said.

Inbound tourism expenditure amounted to P698.46 billion in 2025, falling by 6.4% from P745.99 billion in 2024.

Mr. Montenegro said the decline in inbound tourism expenditure “is significant because foreign tourists typically spend more per capita and generate higher value across accommodations, food and beverage, transportation, retail, and recreation.”

“A reduction in high-yield foreign travelers directly impacts tourism value added,” he added.

Tourism-related spending by foreign visitors in the accommodation services accounted for 28% of the total with P195.66 billion. This was followed by transport services (25.1% share or P175.1 billion) and food and beverage serving services (17.8% share or P124.43 billion).

Workers employed by the industry totaled 7.7 million last year, 2.5% higher than the 7.51 million a year earlier. Tourism accounted for 15.7% of the total workforce in the country in 2025.

Accommodation and food and beverage made up the bulk of the tourism-related jobs, accounting for 38% share with 2.93 million workers. The health and wellness sector employed 1.95 million workers (25.4% share) while retail trade on tourism-characteristic goods employed 1.67 million workers (21.7% share).

Metropolitan Bank & Trust Co. Chief Economist Nicholas Antonio T. Mapa expects tourism to remain a steady source of economic output and employment in 2026.

“However, there may be a need to temper expectations given the likely challenging outlook due to the global increase in airfare costs due to the ongoing conflict in the Middle East,” he said in an e-mail.

For his part, Mr. Montenegro said his outlook for the tourism industry is “cautiously optimistic,” with domestic tourism expected to remain stable.

He said the industry still has significant growth potential, particularly in international tourism.

“To expand tourism’s contribution to national output, the focus should shift toward long-term structural improvements rather than short-term visitor growth alone. Key priorities include improving airport efficiency, expanding direct international and regional flights, strengthening inter-island connectivity, modernizing tourism infrastructure, and reducing travel friction across destinations,” Mr. Montenegro said.

The Tourism department is aiming for 6.7 million visitors this year.

LONG-TERM INFLATION expectations remain anchored despite persistent price pressures driven by oil shocks stemming from the Middle East war, a study by the Bangko Sentral ng Pilipinas (BSP) Research Academy showed.

According to a discussion paper penned by BSP researchers, long-run inflation expectations are “relatively stable,” hovering between 3.5% and 4.5% or around the upper bound of the central bank’s target. 

“Although long-run expectations fell at the start of the sample, they have consistently stayed near the upper end of the BSP’s current inflation target of 2%-4%,” BSP researchers Joan Christine S. Allon-Pineda, Carl Francis F. Maliwat and Cymon Kayle Lubangco said in the report.

The researchers noted that the recent oil supply shocks driving long-term inflation expectations toward the upper limit of the BSP’s target was similar to the trend seen during the COVID-19 pandemic.

“In general, the stable contribution of long-run expectations to predicted inflation suggests that in the long-term forecasting horizon, inflation expectations are relatively anchored,” they added. 

Germany-based think tank Deutsche Bank Research earlier said inflation expectations may be unanchoring following BSP Governor Eli M. Remolona, Jr.’s move to open the door for an off-cycle rate hike before the Monetary Board’s June 18 meeting.

At its April 23 meeting, the Monetary Board began its new tightening cycle as it lifted the key policy rate by 25 basis points to 4.5% for the first time in over two years. 

The BSP said the decision came as monetary authorities sought to curb second-order price effects and ensure inflation expectations are anchored amid mounting risks from the ongoing energy crisis.

Since the war in Iran erupted in late February, inflation has moved past the BSP’s target, even missing most forecasts as oil price spikes spilled over to other key commodities faster than anticipated.

In April, the headline clip quickened to an over three-year high of 7.2% from 4.1% in March and 1.4% a year ago.

The BSP has repeatedly said that it is ready to take all necessary monetary policy actions to bring inflation back to their tolerance range, as their projections show that inflation could average 6.3% this year and 4.4% in 2027. 

“Overall, the BSP’s policy actions do not appear to be mechanical reactions to inflation alone, but rather responses to persistent or broad-based inflationary pressures, largely consistent with the standard principles of optimal monetary policy,” the researchers said. 

The study sought to analyze underlying inflation and monetary policy dynamics using the Hemisphere Neural Network (HNN) model through two frameworks.

Supply-driven inflationary pressures stemming from the Middle East war continue to challenge central banks’ monetary policy frameworks, the BSP researchers noted.

“The recent surge in inflation has drawn increased attention to how central banks monitor economic conditions and calibrate policy responses,” they said. “However, inflation is inherently a complex and multifaceted phenomenon, and sound policy decisions require a broad and integrated perspective on economic conditions.”

“The HNN offers a promising solution for disentangling underlying inflation and policy dynamics under the NKPC (New Keynesian Phillips Curve) and Taylor rule frameworks,” they added.

According to the researchers, inflation expectations captured through the HNN model reflected factors such as real activity, inflation expectations, oil commodity prices, nonfuel commodity prices, credit conditions, central bank balance sheet and international conditions.

The study also found that estimates were accurate relative to the BSP’s business and consumer expectations survey as well as the survey of private sector forecasts.

This means the same expectations may be used to show the short- to medium-term of businesses and external forecasters when existing survey data prove limited, the researchers said.

The BSP’s latest expectations survey for March showed businesses expect inflation to average 3.3% in the next 12 months, while households see inflation settling at 2.7% in the year-ahead.

PHILIPPINE President Ferdinand R. Marcos, Jr. secured around P260 billion in investment pledges from top Japanese companies during meetings in Tokyo, as Manila seeks to attract supply-chain relocation and shield the economy from geopolitical tensions and rising energy risks.

“The Philippines is pursuing a clear national direction: building an economy where infrastructure, industry, finance, human capital and connectivity move together as one system of growth,” Mr. Marcos told executives from Japanese conglomerates and financial institutions on Wednesday.

“And increasingly, we recognize that trade and tourism will be among the most important engines of that growth,” he added.

Of the amount, $3.4 billion or around P210 billion are expected to support manufacturing, tourism infrastructure, renewable energy and supply-chain development.

Mr. Marcos on Thursday secured another P53.6 billion in potential investments from Japanese firms that are planning to expand operations in the country. These investments are expected to generate around 10,300 additional direct and indirect jobs for Filipinos.

In a Facebook post, Mr. Marcos said MinebeaMitsumi, Inc.  is planning to expand its investments in the Philippines, with P25 billion to be allocated for its projects in Cebu, Batangas and Bataan. MinebeaMitsumi is involved in the manufacturing of semiconductors, battery protection modules for hyperscale data centers, among others.

The President said he met with the executives of Furukawa Electric Co. Ltd. to discuss the firm’s P17-billion expansion project in the Philippines. The project involves the production of advanced heat sink modules and thermal management products used in global electronics and digital infrastructure applications.

Mr. Marcos said Sumitomo Electric Industries, Ltd. pledged a P4.3-billion investment to expand their advanced electronics manufacturing operations in Laguna.  This will involve the construction of a new facility run by their Philippine unit First Sumiden Circuits, Inc., the country’s only manufacturer of flexible printed circuits.

“Their new facility will help position the Philippines deeper into global supply chains for electric vehicles, AI (artificial intelligence)-related electronics, and advanced telecommunications,” he said.

The President also had a meeting with executives of Tsuneishi Group Corp. to discuss the company’s planned expansion of shipyard facilities in Balamban, Cebu, as well as the continued development of environmentally sustainable next-generation vessels.

Once the expansion is completed, the Philippines is expected to become the world’s fourth-largest shipbuilding nation, after China, Japan, and South Korea. The commitments come as the Marcos administration pushes to sustain economic growth despite elevated oil prices, supply disruptions and trade uncertainty linked partly to the war in the Middle East.

Mr. Marcos used the roundtable meeting to position the Philippines as a long-term investment destination for Japanese firms seeking to diversify operations across Southeast Asia, particularly as companies reassess regional supply chains amid global tensions.

The Palace said the investments are expected to create thousands of jobs while supporting technology transfer and industrial expansion.

Mr. Marcos assured Japanese partners of his administration’s move to improve institutional bottlenecks and long-term investment stability.

“To all our Japanese partners, you know the Philippines not from reports, but from experience,” he said. “You know our workforce: skilled, adaptable, and globally competitive… resilient in adversity, ambitious in opportunity, and increasingly connected to global trade and tourism flows.”

Mr. Marcos is in Tokyo for a state visit, the first for a Philippine leader after 11 years. His visit coincided with the 70^th year of the normalization of Manila and Tokyo’s diplomatic ties.

Trade Secretary Maria Cristina A. Roque said the Philippines is targeting more high-technology and green manufacturing investments as Japanese companies boost regional production networks.

“Our message is clear: the Philippines is open, ready, and highly capable of supporting the rapid expansion and resilience of Japanese global value chains,” she said in the same statement.

“We are aggressively positioning the Philippines as your strategic hub in ASEAN (Association of Southeast Asian Nations) for smart manufacturing, green metals, and renewable energy,” she added.

Tourism Secretary Maria Bernardita Angara-Mathay said the government is also looking to attract investments in eco-tourism, hospitality development and aviation connectivity, sectors expected to benefit from a recovery in regional travel demand.

“Tourism is a massive engine for infrastructure and commercial investment,” she said in the same statement. “By synergizing with our trade initiatives, we are opening up high-value opportunities in hospitality facilities, eco-tourism development, and aviation connectivity, ensuring that investments in Philippine tourism yield robust, long-term returns.”

SMART CITIES, FINTECH
Meanwhile, Philippine and Japanese companies have signed three key agreements that seek to boost smart cities development, digital connectivity, and financial technology (fintech) in the Philippines, the Presidential Communications Office (PCO) said.

In a statement on Thursday, the PCO said Ayala Corp. (AC), the Philippines’ oldest conglomerate, signed three memoranda of understanding (MoUs) with major Japanese companies during Mr. Marcos’ four-day visit in Japan.

The PCO said that AC and Ayala-led Globe Telecom, Inc. signed an MoU with Japan’s Mitsubishi Corp. and KDDI Corp. to establish “Intelligent City” initiatives in Makati City, which could be expanded to other urban areas.

Mitsubishi Corp. is a multinational conglomerate with operations across machinery, energy, and automotive, while KDDI Corp. is a Japanese telecommunications firm ranked among the Fortune Global 500 Companies.

According to the PCO, the “Intelligent City” project will leverage AI, Internet of Things, urban data integration platforms, and advanced telecommunications solutions to improve transportation, retail and commercial services, energy management, and digital city services.

AC and Globe Fintech Innovations, Inc. (Mynt) inked a separate MoU with Mitsubishi to develop “Smart Life” digital services. The initiative, which aims to make Filipinos’ digital transactions more convenient, is expected to generate around P7 billion in revenues.

The partnership will cover rewards programs, ticketing services, online payment platforms, and digital marketing solutions, PCO said.

AC and Mynt, the parent firm of digital wallet GCash, also inked a separate MoU with Mitsubishi and Japanese bank holding company Mitsubishi UFJ Financial Group (MUFG) to expand GCash’s services in the Philippines and overseas.

The partnership is expected to help integrate GCash into AC and Mitsubishi’s business ecosystems across retail, real estate, energy, mobility, and digital services, the PCO said.

The initiative would focus on developing better digital payment systems, lending services, investment products, and stronger online security, it added.

AC President and Chief Executive Officer Cezar P. Consing said its partnerships with Japanese firms align with its push to build more inclusive financial systems while helping more Filipinos participate in the digital economy.

“These partnerships reflect our shared commitment to nation-building, leveraging innovation, infrastructure, and technology to support the Philippines’ long-term growth,” he said in a separate statement.

Angelito “Lito” M. Villanueva, chairman of FinTech Alliance PH, said the Philippines’ recent partnerships with Japan would help boost the economy’s competitiveness.

“The future of economic competitiveness will belong to nations that can connect finance, infrastructure, and technology and the Philippines is now firmly entering that conversation alongside Japan,” he said in a Viber message.

“The buyer, whose order is among the largest recorded during the pre-order period, signals growing excitement not only among individual consumers but also within businesses and communities,” said HONOR Philippines Vice-President Stephen Cheng.

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THE Securities and Exchange Commission’s (SEC) new 10-year term limit for broker directors could strengthen governance standards at exchange boards by encouraging leadership renewal and broader market representation, analysts said.

The SEC is imposing a cumulative 10-year term limit on broker directors serving on exchange boards, a rule opposed by some market participants.

Analysts said the policy could help reduce over-reliance on long-serving directors while opening leadership opportunities to individuals with different backgrounds and expertise.

“The term limit and cooling-off rule may cause some initial disruption as experienced directors rotate out, but over time they reduce over-reliance on a few individuals and promote more balanced, credible board decision-making,” BDO Securities Corp. President John Tristan D. Reyes said in a Viber message on Friday last week.

He said the rules would encourage exchanges to regularly refresh their boards and strengthen succession planning, creating opportunities for new entrants and supporting a more dynamic and balanced board composition.

Under SEC Memorandum Circular No. 17, a broker director may serve a maximum cumulative period of 10 years in the same exchange, whether cumulative or intermittent.

A broker director that has served for five cumulative years will be required to undergo a one-year cooling-off period before becoming eligible for reelection.

The five-year term and 10-year maximum period will be reckoned up to the date of the next annual stockholders’ meeting following the fifth or 10^th cumulative annual election.

A broker director’s service of more than six months in a year will be counted as one full year for purposes of computing the five-year term and 10-year maximum cumulative service under the circular.

Following the cooling-off period, a reelected broker director may serve a fresh term of up to five cumulative years.

The new directive would affect several long-serving broker directors at the Philippine Stock Exchange (PSE), including Ma. Vivian Yuchengco, who has served for 28 years, Eddie T. Gobing, who has served for 25 years, and Wilson L. Sy, who has served for 12 years.

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said the term limit strikes a balance between preserving continuity and allowing leadership renewal.

“The 10-year cumulative term limit enables seasoned directors to serve long enough to ensure an exchange benefits from their experience, while also opening the doors for competent candidates to bring new backgrounds and perspectives,” he said in a Viber message on Tuesday.

The SEC circular also provides for a two-year transition period for incumbent broker directors, allowing them to complete their current terms and remain eligible for the next two annual elections.

During the transition period, exchanges are expected to progressively restructure their boards by adding independent directors, foreign brokerage representatives, and members with capital markets or investment banking expertise to strengthen corporate governance and minority shareholder protection.

Mr. Colet said the phased reconstitution of exchange boards could diversify leadership and introduce new expertise into the sector.

He added that the inclusion of foreign independent directors may provide greater objectivity, while investment bankers and other industry practitioners could help exchanges become more responsive to developments in the capital markets.

“I’m optimistic that with faithful implementation and collaboration by regulators and stakeholders, the changes will improve our capital markets and protect the investing public,” he said.

The SEC’s proposal on term limits had earlier faced criticism from some individuals, including Ms. Yuchengco, who described the measure as “wrong,” noting that brokers are also shareholders of the PSE.

Meanwhile, some business groups have expressed support for the reforms. They also pledged to collaborate with regulators and stakeholders in refining policies to promote a fair and efficient capital market.

Covered exchanges that exceed the maximum cumulative term limit for broker directors will face penalties, including a P1-million fine per broker director per year and a P30,000 monthly penalty for continuing violations.

A third or subsequent offense may result in the suspension or revocation of an exchange’s secondary or primary license.

The SEC circular will take effect 15 days after its complete publication in the Official Gazette or in at least two newspapers of general circulation.

BIR Commissioner Charlito Martin R. Mendoza warned that electronic marketplace (e-marketplace) and gambling operators must strictly comply with withholding tax rules or face immediate penalties.

Under Revenue Memorandum Circular (RMC) No. 57-2026, the agency said jackpot prizes from casinos and other gambling activities are considered “winnings” and therefore subject to final withholding tax.

The circular was issued to address queries on the scope of “winnings” under the Tax Code.

“There is a compelling need to clarify the tax treatment of jackpot prizes to ensure consistent application of existing laws, promote equity and uniformity in taxation, and safeguard government revenue — without expanding or modifying the scope of the law,” it said.

The circular covers jackpot prizes, or the highest prize, derived by individuals from participation in casino gaming and other gambling activities.

“The tax base for computing the final withholding tax shall be the gross amount of the jackpot prize or winnings, without any deduction for service charges, administrative fees, commissions, or other similar charges,” the BIR said.

Winnings will be subject to a 20% final withholding tax or 25% if derived by nonresident aliens not engaged in trade or business in the Philippines.

“Failure of the withholding agent or gaming operator to withhold and remit the correct amount of final tax on jackpot prizes or winnings shall render such party liable for the corresponding surcharge, interest, and compromise penalties without prejudice to the filing of appropriate criminal actions,” the circular read.

Meanwhile, RMC No. 55-2026 requires operators and digital financial services providers (DFSP) to submit alphabetical lists of employees or payees from whom taxes were withheld (alphalists) as attachments to tax returns.

Monthly withholding tax returns for value-added tax and percentage tax are due on the 10^th day of the following month, while quarterly alphalists for creditable and final withholding tax returns are due on the last day of the month following the quarter.

Annual alphalists for compensation and final withholding tax are due on Jan. 31, and those for creditable withholding tax on March 1 of the succeeding year.

“Since the alphalist is an attachment and therefore a part of the withholding tax return, the submission of the alphalist is likewise an obligation of the withholding agent,” it said. 

“Failure to submit the alphalist constitutes a violation of BIR regulations and is subject to the corresponding penalty,” it added.

According to the BIR, e-marketplace operators and DFSPs are identified as withholding agents which require them to remit 0.5% of their gross remittances to sellers of goods and services.

“However, BIR records show that many of these entities have not complied with this requirement,” it said.

“This circular is hereby issued as a reminder to all withholding agents particularly e-marketplace operators and DFSPs, to strictly comply with the submission of the alphalist through the BIR eSubmission facility… to avoid unnecessary penalties,” it added.

MANDATORY ACCREDITATION
Meanwhile, business-to-business (B2B) gaming providers have until May 31 to secure mandatory accreditation or face an immediate ban, the Philippine Amusement and Gaming Corp. (PAGCOR) said.

In a May 21 memorandum, PAGCOR warned that companies failing to file applications will be barred from servicing gaming system administrators (GSA).

“Any request for evaluation of gaming systems, platforms, games, and equipment shall be returned,” it said, adding that services may only resume once accreditation is secured.

GSAs found themselves availing of services from noncompliant providers will also face sanctions.

Contracted B2B providers that submit applications by May 31 may continue operating until July 31, pending approval. However, they must complete payment of fees, documentary requirements, ocular inspection, and posting of a performance cash deposit.

“Failure to comply… shall result in the decommissioning of the concerned companies’ electronic gaming systems, online platforms, games, and equipment effective Aug. 1,” PAGCOR said.

HOTLINE FOR GAMBLING ADDICTION
In a separate release, PAGCOR launched a 24/7 hotline to address gambling problems and promote responsible gaming.

The agency announced that the National Problem Gambling Helpline is now ready to connect trained counselors for confidential support and counseling for those experiencing gaming-related issues, including family members of those affected.

“PAGCOR is aware that for many, gaming is just a form of leisure and recreation,” said PAGCOR Chairman and Chief Executive Officer Alejandro H. Tengco. “But for some, what may start as entertainment can gradually lead to financial strain and ruin, emotional distress, damaged relationships, and isolation.”

The program will be implemented in partnership with the Seagulls Flock Organization, Inc. — Justine Irish D. Tabile

THE PHILIPPINES should diversify fertilizer sources and boost domestic capacity to reduce exposure to China and global supply shocks, according to a congressional policy paper, as imports declined but dependence on a single supplier deepened.

In a report released this month, the Congressional Policy and Budget Research Department (CPBRD) of the House of Representatives warned that the country’s fertilizer import structure remains highly concentrated among a small number of suppliers, exposing the agriculture sector to external supply disruptions and geopolitical risks.

“This heavy reliance poses a serious supply chain risk, with Chinese imports alone accounting for 53.6% of the country’s total supply in 2025,” the House think tank said.

The CPBRD said the Iran war and the crisis involving the closure of the Strait of Hormuz, aside from China’s export controls, could continue to raise fertilizer costs in the coming months, adding pressure on agricultural production and food prices.

“The Philippines has seen a significant decline in its reliance on imported fertilizers to sustain rice and maize yields,” the CPBRD said, adding that import trends also point to a concentration risk in supply.

Fertilizer imports fell 6.8% to 2.37 million metric tons (MT) in 2025 from 2.54 million MT in 2023, based on Bureau of Customs data cited in the report, reflecting lower fertilizer application rates and easing demand.

Fertilizer use also dropped, with application declining by 30.1% to 199.4 kilograms per hectare in 2023 from a year earlier, the CPBRD said, citing data from the Food and Agriculture Organization.

Nitrogenous fertilizer, mostly urea, accounted for 61.3% of total imports over 2023-2025, followed by mixed fertilizer at 28.7% and potassic fertilizer at 9.6%, it said.

China increased its share of Philippine fertilizer supply despite the fall in overall volumes. Imports from China rose to 1.27 million MT in 2025, equivalent to 53.6% of total shipments.

Other suppliers lagged far behind. Indonesia held an 8.2% share, followed by Canada at 5.8%, Brunei Darussalam at 5.2%, and Malaysia at 5.1%, while the remaining 22.1% came from 45 countries combined.

China’s role is more pronounced in key product segments. It supplied 39.1% of nitrogenous fertilizer and 79.1% of mixed fertilizer imports, backed by its coal-based ammonia production and large phosphate reserves.

Canada dominated potassic fertilizer supply with a 51.2% share, while India accounted for 50.6% of organic fertilizer imports.

The CPBRD said the concentration of suppliers exposes the country to supply chain risks, including export restrictions and geopolitical disruptions.

The Philippines gets almost half of its inorganic fertilizers from China, and relatively large volumes also from Indonesia and Malaysia, Federation of Free Farmers Board Chairman and former Agriculture Secretary Leonardo Q. Montemayor told BusinessWorld.

“All these countries are inherently dependent on oil-based inputs from the Middle East, or are affected indirectly by what is happening there,” he said in a Viber message, adding that exporting countries would prioritize domestic supply before meeting demand from buyers like the Philippines.

Mr. Montemayor said reliance on China also carries strategic risks. “With China, the added concern is it may use our dependence on them as leverage in our conflict over the West Philippine Sea,” he said, noting that developing alternative sources would take time and might not be realistic in the near term.

Global fertilizer prices rebounded in 2025 after easing in the previous two years, reflecting tighter supply and higher input costs.

Conflicts in key regions raised costs for inputs such as natural gas and sulfur, which are critical to nitrogen and phosphate fertilizer production.

China’s export caps on phosphates and output adjustments by major producers also tightened supply conditions, the CPBRD said.

Policy support for farm inputs remains in place. Fertilizers intended for agricultural use are exempt from tariffs under Republic Act (RA) No. 8435 or the Agriculture and Fisheries Modernization Act, and from value-added tax under RA 10963 or the Tax Reform for Acceleration and Inclusion law.

Nonagricultural fertilizer imports are subject to tariffs of 1%, 3%, or 7% plus a 12% value-added tax, although rates remain relatively low under regional and most-favored-nation commitments.

Revenue from nonagricultural fertilizer imports declined 5.2% to P307.1 million in 2025 from a year earlier. Nitrogenous and potassic products accounted for 75.6% of the total.

Collections rose in early 2026 as costs increased. Import revenues reached P106.72 million from January to April, with nitrogenous fertilizer contributing P56.14 million, mixed fertilizer at P28.25 million, and potassic fertilizer at P21.18 million.

The CPBRD said risks from higher input costs and export controls are likely to persist, pointing to the need for diversified sourcing, supply buffer measures and support for alternative inputs to stabilize farm production and prices.

Mr. Montemayor said lower fertilizer use likely reflects rising prices rather than efficiency gains. Reduced application without substitutes could cut farm output, he pointed out.

He said alternative inputs remain limited, with organic fertilizer accounting for about 10% of total demand.

“The government will need to actively and sustainably promote the use of such inputs,” he said, warning that farmers tend to revert to chemical fertilizers once prices stabilize unless incentives are sustained.

He said soil testing should also be expanded to improve efficiency. Fertilizer misuse remains common, with farmers applying nutrients that may not match actual soil requirements, he added.

Jayson H. Cainglet, executive director of the Samahang Industriya ng Agrikultura, said field conditions show a broader strain on farm activity as higher fertilizer costs weigh on planting decisions.

“This is not simply a supply issue; it is a profitability crisis,” he said in a Viber message, noting that farmers are being squeezed by rising input costs and continued inflows of cheaper imports.

He said many farmers have cut fertilizer use, shifted to lower-input crops or skipped planting altogether when prices surged to as high as P3,000 per bag before easing to about P2,000.

He added that delayed subsidy releases and skepticism over alternative inputs have limited uptake, reinforcing a cycle of lower planting, weaker domestic output and rising reliance on imports.

THE PHILIPPINE ECONOMY could grow by around 5% in the second half of the year, driven by base effects and an expected acceleration in government infrastructure spending, according to the University of Asia and the Pacific (UA&P).

“Growth could recover to around 5% in the second half on base effects and a ramp-up in National Government infrastructure spending,” UA&P said in its The Market Call report this month.

Government officials earlier signaled a pickup in disbursements and project implementation as agencies roll out catch-up programs.

UA&P cautioned, however, that growth will remain subdued in the first half amid unresolved issues surrounding last year’s flood control scandal and elevated oil prices.

“Weak gross domestic product growth and faster inflation will weigh on the economy in the first half amid the unresolved flood control scandal and high oil prices from the Middle East conflict,” it said.

“Flip-flopping US-Iran talks may keep fuel prices elevated, hitting the Philippines harder than its ASEAN (Association of Southeast Asian Nations) peers,” it added.

The Philippine economy expanded by a slower-than-expected 2.8% in the first quarter. This was below the government’s target range of 5-6% for the year.

For the entire year of 2026, UA&P said growth will be slow “but pose some resilience in the face of near-term global and local headwinds that will likely moderate activity in the first half of the year.”

“While cautious business sentiment and lingering geopolitical uncertainties may weigh on household and investment spending, the domestic economy continues to benefit from strong structural drivers such as steady household consumption, a healthy labor market, and sustained remittance inflows,” it added.

Meanwhile, UA&P said that it expects inflation to accelerate further amid second-round effects from the oil shock, “but likely not to (reach) double digits year on year.”

Inflation accelerated to 7.2% in April, marking the second consecutive month that it settled above the Bangko Sentral ng Pilipinas’ (BSP) 2%-4% target. It also breached the BSP’s 5.6%-6.4% forecast for the month.

“The BSP took on a more hawkish tone because of above-estimate inflation, raising rates and its inflation forecast to 6.3% for 2026,” it said.

“We likewise see above-target inflation for the rest of 2026, with the possibility of double-digit inflation rates due to base and second-round effects creeping into succeeding readings,” it added.

As inflation is expected to settle above the target for the rest of the year, UA&P expects the BSP to further tighten.

“Our outlook pencils in 75 basis points (bps) more of rate hikes for this year, bringing the policy rate to 5.25%, especially as the April inflation reading trumped even the BSP’s upper inflation bound,” it said.

The central bank last month raised rates for the first time in nearly two years by 25 bps to 4.5%, with BSP Governor Eli M. Remolona, Jr. saying the Monetary Board remains open to extending the tightening cycle to anchor inflation expectations.

NO STAGFLATION
Despite weaker growth and high inflation, UA&P said the country is not experiencing stagflation.

“Despite inflation negative commentary from some analysts, the Philippine economy is not in stagflation mode,” it said.

“Inflation, while elevated, will continually trek downwards after a peace deal gets signed, and growth will return when infrastructure spending resumes along with consumer and business confidence,” it added.

Meanwhile, the peso remains under pressure as crude oil prices surge.

“The peso-dollar rate remained under pressure amid the rebound in crude oil prices (i.e., close to $100/barrel for West Texas Intermediate, and $110/barrel for Brent) in April,” it said.

On Tuesday, the local currency closed P61.56 versus the greenback, weakening by 9.5 centavos from its P61.465 finish on Monday. 

UA&P said it expects bonds with longer tenors to deliver higher returns amid elevated interest rates, after investors cautiously returned to the local bond market in April. 

Real 10-year yields showed only a 0.9% return based on the earlier 6.2% inflation forecast of the BSP, just half of the 1.8% 10-year average over the past decade.

“That would fall further once BSP updates its inflation forecast to above 6.5% for 2026,” it said.

Smaller yield gains are expected for shorter-dated papers as banks deploy excess liquidity to earn at least some returns.

“However, they may come too far behind with likely BSP policy rate (presently at 4.5%) hikes, which we expect will total 75 bps for the rest of the year,” it added.

THE BANGKO SENTRAL ng Pilipinas (BSP) could hike its key policy rate to as high as 5.5% by end-2026 as inflation pressures intensify amid the Philippines’ high exposure to the energy crisis, Fitch Solutions unit BMI said.

Based on its latest forecasts obtained by BusinessWorld, BMI now expects the Philippine central bank to deliver an additional 100 basis points (bps) in rate hikes at its remaining policy meetings this year.

The research firm earlier said the BSP will likely cap its tightening cycle once the benchmark interest rate hits 5%, as the country’s weak growth prospects hinder further hikes.

The revision came as BMI now sees the country’s headline inflation averaging 6.1% in 2026, higher than its 5.6% estimate earlier this month and 3.1% projection before the Middle East war erupted in late February.

If realized, inflation will settle above the central bank’s 2%-4% target but below its 6.3% projection for the year.

Yen Nee Lee, senior Asia country risk analyst at BMI, noted that the rapid transmission of oil shocks to the Philippine economy led the research firm to make its biggest forecast revisions for the country versus other Asian countries.

“Growth was already weak coming into the crisis, but inflation has shot up and forced the hands of the central bank,” she said on Tuesday. “And this also explains why our forecast revisions for the Philippines are our biggest across the region.”

Prior to the Iran war, the Philippine economy posted its weakest growth since the COVID-19 pandemic at 4.4% in 2025 as the flood control mess fallout dampened local investments and spending.

Growth continued to soften for a third straight quarter as the gross domestic product (GDP) expanded by 2.8% in the January-to-March period from 3% in the previous quarter and 5.4% in the first quarter of 2025.   

The economy is expected to remain weak as red-hot inflation amid the energy crisis tightens household spending.

In April, inflation accelerated to its fastest pace in three years at 7.2% as elevated oil prices continued to feed into the costs of major commodities such as food, transport and utilities. This marked the second month in a row that the headline clip breached the BSP’s target.

Economic managers have warned that the spillover effects of the energy crisis could still spread in the coming months, keeping inflation elevated throughout the year.

For BMI, this could also mean that Philippine GDP growth will come in at a full-year clip of 3.9%, the worst in the post-pandemic era and below the government’s 5%-6% goal.

Ms. Lee noted that the Philippines’ constrained fiscal space leaves it no choice but to allow domestic fuel prices to reflect soaring global prices.

She said she was surprised how quickly the Philippine economy has been hit by the oil shocks.

On the Monetary Board’s decision to stand pat in an off-cycle meeting in late March, Ms. Lee said this likely signaled that the BSP prioritized economic growth over inflation at the time.

“But one month later, when growth concerns became arguably more pronounced, the central bank ended up hiking rates, essentially deciding that it cannot ignore the feed-through of higher energy prices to inflation,” Ms. Lee said. “So, this shows how quickly things can change and how an emerging market can get caught in a very tough spot.”

At its April 23 meeting, the Monetary Board raised its policy rate by 25 bps to 4.5%, marking its first hike since October 2023, as it sought to temper second-round price effects and keep inflation expectations anchored amid mounting risks from the Middle East war.

BSP Governor Eli M. Remolona, Jr. left the door open to additional hikes as they aim to bring inflation back to the 3% target, even hinting at a possible off-cycle tightening before their June policy review.

Meanwhile, Nomura Global Markets Research still expects the central bank to lift the policy rate by an additional 75 bps, starting with a second straight 25-bp hike on June 18.

If realized, this would bring the benchmark rate to 5.25% by yearend.

“We think BSP will remain measured and a hike off-cycle is unlikely as the output gap remains negative and political uncertainty is rising, which could still affect the fiscal outlook,” Nomura Chief ASEAN Economist Euben Paracuelles and economist Nabila Amani said in a note dated May 26.

Nomura kept its growth forecast for the Philippines at 4.6% this year, with recovery to start by the second half, after latest government data showed an uptick in noninterest spending.

According to the Bureau of the Treasury, the country’s budget balance swung to a P31.4-billion surplus in April from the P349.7-billion gap seen in March. This was also narrower than the P67.3-billion surfeit recorded last year.

The government’s noninterest spending, or primary expenditure net of interest payments, climbed 8.22% to P441.9 billion from P408.3 billion a year ago.

“This improvement tracks the previous episode of severe fiscal contraction in 2011, which we called the ‘bad scenario’ to which today’s episode will be comparable,” the Nomura analysts said. “Using the same playbook, the rise in noninterest expenditure growth is likely to continue, helped in part by the government’s catch-up spending plans.”

Mr. Paracuelles and Ms. Amani said the economy’s expected rebound later this year will allow the BSP to use its monetary policy tools mainly to curb inflation.

The Monetary Board is scheduled to hold four more regular policy meetings this year on June 18,  Aug. 27, Oct. 22 and Dec. 17.

Jozsef Acabo, vice-president at ESGpedia, said operators in the Philippines must prioritize “operational readiness,” particularly stable access to electricity and water resources needed to support large-scale digital infrastructure operations.

“I should say two fronts. First is disclosure,” he said in an online interview on Tuesday. “And then the second front would be operational readiness. How do you ensure data center operations or your operations have a sufficient source of energy as well as water?”

“So, those two categories, right? And you can have as much disclosure and certifications as you have, but you cannot really ignore, specifically in the Philippines, operational readiness,” he added.

Data centers are among the most energy-intensive infrastructure assets because servers, storage systems, networking equipment, and cooling systems operate continuously. Water is also critical for many cooling systems used in large-scale data center facilities to dissipate heat generated by high-density computing equipment.

Mr. Acabo described electricity as the primary operational requirement for data centers, while water remains an important secondary resource.

“When you say operational readiness, it covers risks and, of course, opportunities as well, particularly the main source of your operations, which again, bulk of it is energy,” he said. “The secondary would be water.”

The comments come as Southeast Asian countries compete to attract hyperscalers, cloud providers, and AI-related infrastructure investments amid growing demand for computing capacity across the region.

Mr. Acabo said the Philippines retains advantages because of its strategic location and English-speaking workforce but warned that infrastructure limitations could affect its competitiveness relative to neighboring markets.

“The sources of energy and water and the infrastructure might not be as agile and weatherproof, I should say, or ready for more use compared to, say, Vietnam or Malaysia, right, where data centers have been popping up really recently,” he said.

“And so, you have competitors across other neighboring countries that have more, I should say, more established infrastructure so that data center operations will thrive,” he added.

SUSTAINABILITY REPORTING
Beyond securing reliable power and water supply, Philippine data center operators are also facing increasing pressure to improve emissions transparency and sustainability reporting as global investors and hyperscalers increasingly prioritize renewable energy sourcing and climate disclosures.

“When you are in a data center operation, intensity levels of your disclosure are very important, not just for local compliance, but also for global or international investors,” Mr. Acabo said.

He said sustainability reporting is becoming increasingly important for operators seeking to attract overseas clients as Southeast Asian countries adopt carbon pricing mechanisms and stricter environmental requirements.

“One particular example is that if you are operating a data center service in the Philippines, you definitely would like to get not just local Philippine clients, which is your priority, but also attract clients outside the Philippines,” he said.

“And when you do that, that means the first obvious prospects and clients would be Southeast Asian countries,” including Singapore, Malaysia, Thailand, Indonesia, and Vietnam, he added.

Singapore currently imposes a carbon tax, while other countries in the region are considering similar pricing mechanisms, according to Mr. Acabo.

“If you are trading your services for Singapore, you must report your carbon footprint,” he said. “The government put a tax on per ton of your carbon footprint.”

“And so if you have your carbon footprint done without some assurance, or you haven’t double checked that data, then you might be losing some of those dollars that you earn towards carbon tax,” he added.

Mr. Acabo said accurate and verifiable emissions reporting is becoming increasingly important as regional clients and investors place greater scrutiny on sustainability compliance and operational efficiency.

He also cited the implementation of the Philippine Financial Reporting Standards (PFRS) S1 and S2 sustainability disclosure frameworks as an emerging compliance requirement for large corporations and their subsidiaries.

“The upcoming PFRS S2, which is implemented now, and top tier companies will start to report by submission in April 2027, is the, I guess, the new and pressing matter,” he said.

“Most, if not all, data center operators in the Philippines right now are connected to a tier one listed parent company or group,” he added. “And so, they are not just pressured, but they must adopt and report and disclose to their parent company their material topics and climate impact.”

The Securities and Exchange Commission earlier adopted PFRS S1 and S2 sustainability disclosure standards, with phased implementation for large, listed firms beginning in 2027.

Despite the challenges, Mr. Acabo said the Philippines remains well positioned to benefit from the continued expansion of digital infrastructure investments across Southeast Asia as companies diversify operations amid geopolitical uncertainty.

“We are strategically located. We are a nation of English-speaking people. So those are to our advantage,” he said.

“There are also some areas we need to improve as well.”

ESGpedia is a sustainability data and technology platform that helps companies manage environmental, social, and governance (ESG) disclosures, sustainability reporting, and carbon accounting across supply chains and investment networks. — Juliana Chloe A. Gonzales

Finance Secretary Frederick D. Go said on Tuesday the DoF met with BIR officials to discuss streamlining the tax collection agency’s processes.

“We were talking about completely overhauling or reintegrating all the multiple systems that the BIR uses,” he said in his keynote speech at the launch of the Taxpayer Portal on Tuesday.

“This is meant to simplify not just for taxpayers but especially for officials of BIR to make your work easier and more efficient,” he added.

The BIR launched the portal, which will initially be implemented for taxpayers registered under its Large Taxpayer Service (LTS).

“For many years, our taxpayers, especially our large taxpayers, needed to navigate complexity, multiple systems, fragmented records, and repeated follow-ups just to complete what should be straightforward obligations,” Mr. Go said.

“This is what we are changing today. The Taxpayer Portal is built on a simple but powerful idea. If compliance is clear, simple, and accessible, people will comply better,” he added.

The portal aims to provide taxpayers with a single-view online access to their tax information, including registration details, status of filed tax returns, tracker of tax payments, and reminders for filing and payment obligations.

“With the said features, the need for manual follow-ups and in-person visits to BIR offices will be reduced,” the BIR said in Revenue Memorandum Circular No. 053-2026.

“The pilot implementation of the Taxpayer Portal to taxpayers registered under the LTS is intended to support the gradual rollout of the system to other types of taxpayers by ensuring its operational readiness prior to wider deployment,” it added.

BIR Commissioner Charlito Martin R. Mendoza said the portal is the latest in a series of digital initiatives rolled out by the agency so far this year.

Other initiatives include the Interactive Digital Tax Calendar, Letter of Authority Verifier, QR Code Verification System for Certificates of Registration, Digital Taxpayer Identification Number  via the eGovPH App, and the QR-enabled Registration Seal Badge for online businesses.

“Over the past several months, we have been delivering on that commitment. We accelerated the rollout of digital initiatives designed to improve taxpayer experience, strengthen efficiency, and promote voluntary compliance,” Mr. Mendoza said.

The portal is also part of the bureau’s modernization efforts under BIR DARES, a five-point priority reform and legacy agenda launched in January.

DARES stands for Digital and Data Transformation, Audit Reform and Accountability, Revenue Collection and Base Protection, Employee Empowerment and Welfare Promotion, Service Excellence, and Stakeholder Engagement.

“BIR DARES is about having the courage to move reforms forward in 2026 with an improve-as-we-go mindset instead of waiting for systems to become perfect before implementation. That is how we intend to move forward with the Taxpayer Portal,” Mr. Mendoza said. — Justine Irish D. Tabile

In a report on Tuesday, MUFG Senior Currency Analyst Michael Wan flagged three risks for the Philippine economy including the potentially worst El Niño episode this year, an impending Fed rate hike and growing local policy uncertainty.

“For Asia FX (foreign exchange) and rates markets, we think there are at least three key risks which will have to be monitored closely, and will be a potential source of differentiation in asset prices moving forward,” Mr. Wan said.

“Certainly in Asia, India, Indonesia, and the Philippines could be more vulnerable when you look at the totality of all three risks combined…” he added.

The Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) first raised an El Niño alert on April 22, which means “conditions are increasingly favorable for the development of El Niño in the coming months.”

The state weather bureau later reported that the probability of a moderate to severe dry spell casting the country from June until early next year is now at 92%. This is higher than the 79% chance it raised in late April.

Under El Niño conditions, the Philippines will experience drier-than-usual weather conditions, with increased risks of droughts, likely straining the already-struggling agricultural sector.

For Mr. Wan, the looming “super” El Niño could drive inflation even faster as it compounds the impact of high oil prices amid the Middle East war on the cost of local commodities.

Inflation hit an over three-year high of 7.2% in April, as elevated fuel prices made food and utilities costlier. This comes two months since the United States and Israel’s initial attack on Iran devastated major energy infrastructure and disrupted global oil trade via the closure of the Strait of Hormuz.

Meanwhile, Mr. Wan warned against the impact of potential rate increase by the Fed and higher US yields on the peso, though noted that a “hawkish” Fed is not their base case. 

In former Fed Chair Jerome H. Powell’s last policy meeting last month, the central bank kept its benchmark interest rates steady at the 3.5% to 3.75% range.

However, the Fed, now led by its Chair Kevin Warsh, is expected to steer towards the tightening path as markets priced in the US’ hotter-than-expected inflation print in April.

In theory, a Fed hike would strengthen the dollar and, in turn, cause the peso to weaken. 

At the same time, growing uncertainty surrounding domestic policy, which could result in larger capital outflows or lower inflows, may also weigh on the local currency and constrain future policy options, Mr. Wan noted.

The peso has been under pressure since the onset of the Middle conflict on Feb. 28, trading above the P61-a-dollar level from the P58 handle before the war. On May 18 and 19, it plummeted to a historic low finish of P61.75.

As of May 25, the local unit has declined by P3.80 or 6.59% since ending at P57.665 on Feb. 27, according to Bankers Association of the Philippines data. — Katherine K. Chan

THE DEPARTMENT of Energy (DoE) is planning to resume the coal auction, which includes Semirara island operated by the country’s largest coal producer, by the middle of this year, the Energy chief said.

“We have postponed the Semirara bidding, but it may resume around the middle of this year as we still have several things to fix,” Energy Secretary Sharon S. Garin told reporters late on Monday.

Last month, the DoE announced it will push back the deadline for the submission and opening of bid documents for the coal auction originally scheduled for April 28.

The auction was postponed until further notice to ensure that all issues raised during the pre-submission conferences are “fully considered and addressed” before announcing the revised deadline, it said.

Launched in February, the bid round is offering three coal areas, which is estimated to hold around 207 million metric tons of coal reserves.

The auction covers the Semirara blocks in Antique, which carries about 160 million metric tons of reserves. The site is currently operated by Consunji-led Semirara Mining and Power Corp. (SMPC), which failed to renew its 50-year coal operating contract.

SMPC is the country’s largest coal producer, accounting for 97% of domestic output, gaining its strong foothold in the sector through its flagship asset.

“This is the first time for us to bid out an already existing coal mine. And it’s also the biggest in the country,” Ms. Garin said. “So, we’re trying to make the best offer that we can get, and the best offer that’s for the country.”

With the auction yet to take place, there are concerns floated by potential bidders such as the duration of the contract resulting from the bidding, expected production volume, and the handling of existing equipment or facilities.

“We are also studying to compel them to ensure that a certain minimum percentage should be sold to the Philippines, not exported,” Ms. Garin said.

Asked to comment, Michael T. Toledo, chairman of the Chamber of Mines of the Philippines, said the government’s planned resumption of coal auction is “a pragmatic step for near-term energy security.”

“While the global shift is toward critical minerals and renewables, coal remains a critical baseload anchor for the grid right now,” he told BusinessWorld.

Mr. Toledo said established domestic players and specific regional investors will likely show strong interest because these are proven, high-yield assets.

“Done transparently, this auction signals to investors that the government is taking a realistic, dual-track approach to securing power while transitioning,” he said.

While coal dominates the Philippines’ power generation mix, the country imports more than 90% of its requirements.

The country, however, is trying to move away from fossil fuels by aiming to increase the utilization of renewable energy to reduce exposure to volatile global prices and reduce carbon emissions.

THE NATIONAL Government’s (NG) budget surplus narrowed sharply in April to P31.4 billion amid muted revenue growth as the deadline for filing annual income tax returns was moved to May, the Bureau of the Treasury (BTr) said.     

In a statement on Tuesday, the Treasury said the April surplus was 53.29% lower compared with the P67.3-billion surplus a year ago.

Month on month, the budget balance swung to a surplus from the P349.7-billion deficit in March.

“The turnout was underpinned by an 11.14% year-over-year increase in expenditures, which outpaced the modest 2.83% growth in government receipts as the deadline for the 2025 annual income tax returns (AITR) was extended from April 15 to May 15,” the BTr said.

President Ferdinand R. Marcos, Jr. had extended the deadline by one month to give taxpayers more time to file their tax returns amid the declaration of the state of national energy emergency.

BTr data showed total revenue collections increased by 2.83% to P536.8 billion in April from P522.1 billion in the same month a year ago.

Tax revenues, which accounted for the bulk or 95.19% of total collections, rose by 2.62% to P511 billion in April from P498 billion in the same month in 2025.

The Bureau of Internal Revenue’s (BIR) collections inched up by 0.41% to P422.2 billion in April from P420.5 billion a year ago, which was partly due to the extension of the filing and payment deadline for AITRs.

The Bureau of Customs’ (BoC) revenues jumped by 15.52% to P86.3 billion last month from P74.7 billion a year earlier.

“BoC’s revenue performance was anchored by its strengthened valuation and monitoring systems and continued digitalization of customs processes, anchored by its Integrity, Accountability, and Modernization Program,” the BTr said.

Nontax revenues went up by 7.32% to P25.8 billion in April, as revenues from other offices jumped by 26.7% to P13 billion, which offset the 7.02% drop in BTr revenues to P12.9 billion.

The BTr attributed the increase in nontax revenues to the “P160 million in restitution funds recovered from flood control projects and P623.9 million in privatization proceeds.”

Meanwhile, NG expenditures went up by 11.14% to P505.4 billion in April from P454.8 billion in the same month a year ago.

The Treasury said the increase was due to the higher National Tax Allotment (NTA) of local government units (LGUs) and the Annual Block Grant to the Bangsamoro Autonomous Region in Muslim Mindanao.

It also attributed the rise in expenditures to the “releases for the Local Government Support Fund and increased budgetary support for government-owned and -controlled corporations (GOCCs).”

The Treasury said that the budgetary support includes the return of P60 billion in excess funds to Philippine Health Insurance Corp.

“Likewise, disbursements from the direct payments made by development partners to the suppliers or contractors of various foreign-assisted railway projects of the Department of Transportation contributed to the higher April disbursements,” it added.

Primary expenditure (net of interest payments) went up by 8.22% to P441.9 billion in April from P408.3 billion in the same month last year.

Interest payments increased by 36.77% to P63.5 billion in April from P46.4 billion a year ago due to “deficit spending and shifts in the timing of coupon payments.”

In April, NG recorded a primary surplus of P95 billion, narrowing by 16.51% from the P113.7-billion surplus a year ago.

Marco Antonio C. Agonia, an economist at the University of Asia and the Pacific (UA&P), said that the narrower budget surplus in April is mainly attributed to expenditure growth outpacing revenues.

“BTr data and release show that LGU allotments, NG subsidies, and interest payments materially increased on a yearly basis,” he told BusinessWorld via e-mail.

“On the revenue side, the growth of BIR’s tax take slowed to a crawl after the April tax season was extended due to the ongoing energy crisis,” he added.

China Banking Corp. Chief Economist Domini S. Velasquez said the April fiscal performance partly reflects “one-off factors such as the extension of tax filing deadlines into May.”

“BoC collections remained strong, likely benefiting from higher oil prices and the weaker peso,” she said in a Viber message.

The peso closed at P61.485 per dollar on April 30, weakening by 73.7 centavos from its P60.748 finish on March 31.

“Meanwhile, spending growth was still largely driven by interest payments, indicating cautious disbursement activity,” said Ms. Velasquez. “Still, the slight pickup in April spending excluding interest payments could be positive, especially if directed toward infrastructure, education, and health.”

FOUR-MONTH DEFICIT
Data from the Treasury also showed the fiscal gap narrowed by 14.44% to P324.1 billion in the January-to-April period from the P378.7-billion deficit last year, amid a nearly 10% growth in overall collections and muted spending.

This represented 20.1% of the P1.61-trillion program approved by the Development Budget Coordination Committee (DBCC) in its 192^nd meeting in December.

For the four-month period, total revenue collections rose by 9.99% to P1.67 trillion from P1.52 trillion recorded in the same period a year ago. This made up 34.66% of the P4.82-trillion program for the year.

As of end-April, tax revenues inched up by 3.54% to P1.48 trillion, as BIR collections went up by 2.74% to P1.14 trillion and Customs collections increased by 6.41% to P325.7 billion.

Nontax revenues surged by 111.59% to P192 billion as of end-April, as BTr income jumped by 209.34% to P142.8 billion and other offices’ income increased by 10.25% to P49.1 billion.

The Treasury said nontax revenues were lifted by “early dividend remittances from some GOCCs.”

For the four-month period, expenditures increased by 5.12% to P1.996 trillion from P1.89 trillion a year ago. This was already 31% of the P6.43-trillion disbursement program based on the DBCC meeting in December.

The primary budget balance swung to a surplus of P12.6 billion in the first four months from a P91.3-billion primary deficit a year earlier.

“The deficit slimmed (amid) NG infrastructure underspending in the first quarter of 2026, along with base effects from last year’s election season. But as we’ve seen from the first quarter reading, underspending severely dents economic growth,” Mr. Agonia said.

“For now, we see economic headwinds from the Middle East war, especially with higher borrowing rates, closing the gap to last year’s deficit in the coming months. The return of NG infrastructure spending by the second half of the year may also encourage larger fiscal deficits,” he added.

Government officials earlier said that they expect a pickup in spending amid agencies’ catch-up plans after the economy expanded by a slower-than-expected 2.8% in the first quarter. This was below the government’s target range of 5-6% for the year.

However, Mr. Agonia said that “the latest budget turnout does give NG some breathing room to commence spending, especially with around P1.3-trillion in programmed deficits left for the rest of the year.”

“The ball is now in NG’s court to mobilize public spending to rebuild economic momentum and weather the current energy crisis,” he added.

Ms. Velasquez said that the January-to-April performance shows the government has space to accelerate spending while remaining within fiscal targets.

“Faster rollout of priority programs and infrastructure projects could help support stronger economic growth in the second half of the year, though additional nontax revenue sources may still be needed to keep the deficit within target,” she added.

In its Global EV Outlook 2026, the IEA said EVs could account for as much as 45% of car sales in the Philippines by 2035 under its Stated Policies Scenario (STEPS), up from an estimated 10% market share in 2025.

“In the Philippines, continued reliance on import duty and excise tax exemptions supports adoption in the near term,” the organization said.

The STEPS scenario assumes that governments will fully implement announced energy and transport policies and targets. Under this outlook, the Philippines would significantly outperform the Current Policies Scenario (CPS), which only factors in policies already in place and projects EVs accounting for around 15% of car sales by 2035.

“Despite limited affordability constraining wider adoption in the CPS, electric cars could reach around 45% of sales in the STEPS by 2035,” the IEA said.

Globally, EV sales are projected to reach 23 million units this year and account for nearly 30% of all cars sold worldwide, according to the report.

“Electric car sales set new records in close to 100 countries last year. The growing popularity of EVs has marked a major shift for car markets and the energy system as a whole,” IEA Executive Director Fatih Birol said in a statement.

“Looking ahead, the falls we have seen in battery prices and the potential policy responses to the current global energy crisis are set to provide further momentum in EV markets,” he added.

The IEA said Southeast Asia posted one of the fastest growth rates in EV deployment last year, with sales more than doubling to over one million units. However, the Philippines and Malaysia remained behind regional peers despite recording rapid growth.

EV sales in the Philippines reached nearly 10% of new car sales in 2025, supported by excise tax relief and import duty exemptions for electric vehicles.

The country has also rolled out the Electric Vehicle Incentive Strategy, which provides fiscal and non-fiscal incentives aimed at supporting domestic production of EVs, batteries, parts, charging infrastructure, and testing facilities.

While EV adoption is expected to continue rising across Southeast Asia, the IEA noted that incentives in several countries may gradually weaken as tariff exemptions expire.

“The Philippines is a notable exception, as its import duty exemptions are expected to remain in place through 2028 based on current policies,” the agency said.

Since the enactment of the Electric Vehicle Industry Development Act in 2022, the Philippines has pushed for wider EV adoption by requiring a higher share of EVs in corporate and government fleets.

Under the Comprehensive Roadmap for the Electric Vehicle Industry, the government targets a 10% EV fleet share by 2040 under its business-as-usual scenario, while its clean energy scenario targets at least 50%.

Patrick T. Aquino, director of the Department of Energy’s (DoE) Energy Utilization Management Bureau, earlier told BusinessWorld that EV sales are expected to grow by double digits to more than 40,000 units this year.

He said higher fuel prices linked to developments in the Middle East are expected to support stronger EV demand as consumers look for alternatives to conventional fuel-powered vehicles. — Sheldeen Joy Talavera

DOMESTIC TRADE in goods declined by 20% year on year in the first quarter, amid slower economic growth and supply-chain disruptions, analysts said.

Preliminary data from the Philippine Statistic Authority’s Commodity Flow Survey showed the value of total domestic trade fell by 19.8% to P820.81 billion in the January-to-March period from P1.02 trillion in the same period in 2025.

By volume, domestic trade dropped by 35.3% to 10.17 million tons in the first quarter from 15.72 million tons a year earlier.

The value of commodities transported by road reached P526.11 billion, accounting for 64.1% of the total. Goods transported by water were valued at P294.12 billion (35.8% share), while those transported by air were valued at P567.9 million (0.1% share).

“The sharp decline in domestic trade in goods in the first quarter appears to have been driven by a combination of weaker economic activity, lower agricultural and fisheries output, and supply-chain disruptions,” Ateneo Center for Economic Research and Development Senior Research Fellow Ser Percival K. Peña-Reyes said in a Viber message.

The Philippine economy grew by 2.8% in the first quarter of 2026, sharply slowing from the 5.4% expansion a year earlier and the 3% growth in the fourth quarter of 2025.

Marco Antonio C. Agonia, an economist at the University of Asia and the Pacific, also attributed the year-on-year decline in the value and volume of domestic trade to the subdued economic environment in the first three months of the year.

“From the downbeat Q1 2026 GDP reading, we can piece together lower spending appetite from both consumers and businesses resulting in lower domestic trade flows. The local economy bore the brunt of the aftermath of the flood control scandal along with the Middle East war, dampening local trade flows,” Mr. Agonia said in an e-mail.

Domestic trade by value is the outflow value of commodities transported from the place of origin to the destination.

Machinery and mechanical appliances posted the highest outflow value at P200.96 billion or 24.5% share to the total value of domestic trade.

This was followed by optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments with P118.7 billion (14.5% share) and prepared foodstuffs with P117.36 billion (14.3% share).

“The large outflow for machinery and mechanical appliances reflects beginning-of-the-year capex (capital expenditure) spending that firms initially rode on,” Mr. Agonia said, adding that firms sought to focus expansion efforts this year.

Mr. Peña-Reyes said the high outflow value of machinery and mechanical appliances were due to “strong manufacturing and industrial activity in major regions, infrastructure and construction projects, expansion of logistics and transport sectors, electronics and machinery trade linkages, high unit value of machinery products, and road transport dominance.”

During the first quarter, Calabarzon accounted for 40.4% of the total domestic trade value with P331.62 billion, followed by Central Visayas with P100.5 billion (12.2% share) and Davao Region with P98.41 billion (12% share).

Meanwhile, the National Capital Region recorded the largest inflow value at P357.73 billion (43.6% share), followed by Soccsksargen (P93.3 billion or 11.4%) and Negros Island Region (P85.33 billion or 10.4%).

Calabarzon posted the largest trade balance — the difference between outflow value and inflow value — with a P247.82-billion surplus. This was followed by Central Visayas with a P74.37-billion surplus and Davao Region with a P72.11-billion surplus.

“The Q1 2026 domestic trade pattern suggests a stronger concentration of economic activity in a few highly industrialized and logistics-connected regions, especially Calabarzon,” Mr. Peña-Reyes said.

Mr. Peña-Reyes said domestic trade is seeing a more integrated but uneven structure where “industrial corridors in Luzon are becoming even more dominant, while Cebu and Davao are reinforcing their roles as secondary national trade hubs.”

For Mr. Agonia, the latest domestic trade print “highlights the role of new economic centers apart from Metro Manila, capable of producing value-added goods.”

Moving forward, Mr. Peña-Reyes said domestic trade may grow at a slower pace due to “weaker household demand, high transport costs, and softer industrial activity.”

Mr. Agonia expects domestic trade to weaken in the first half of the year given the impact of the Middle East conflict on the Philippine economy.

“This may turn more sanguine in the second half, as the widely expected return of public infrastructure spending stimulates the economy,” he added.

At end-February, the country’s external debt service burden stood at $2.127 billion, increasing by 31.54% from the $1.617 billion posted in the comparable year-ago period.

This was the second consecutive month of increase in the external debt service bill.

Based on data posted on the central bank’s website, principal payments more than doubled (129.02%) to $884 million at end-February from $386 million a year earlier.

Interest payments, on the other hand, inched up by 0.89% year on year to $1.243 billion at end-February from $1.232 billion.   

However, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., noted that while the external debt service bill rose sharply, it merely reflects “timing and structure” rather than a sudden deterioration.

“The big story is the 129% surge in principal payments — this tells us maturities are clustering, meaning we’re repaying more obligations that simply fell due, rather than borrowing improperly,” he added in a Viber message.

“Interest payments, in contrast, are relatively flat, which suggests borrowing costs are stabilizing despite the high global rate environment.

The debt service bill represents principal and interest payments after rescheduling, according to the BSP.

This includes principal and interest payments on fixed medium- and long-term credits, including International Monetary Fund credits, loans covered by the Paris Club and commercial bank rescheduling, and New Money Facilities.

It also covers interest payments on fixed and revolving short-term liabilities of banks and nonbanks.

However, the debt service data exclude prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities of banks and nonbanks.

Mr. Ravelas said that the latest foreign debt service bill remains manageable, although debt maturities must be extended, alongside diversified funding sources and stronger dollar inflows, to prevent future cost issues from mismanagement.

“From a macro perspective, this is manageable — but it’s a signal to stay disciplined,” he said. “The Philippines still needs to ensure strong foreign exchange earnings, particularly from exports and remittances, to comfortably service these obligations. The key risk to watch is liquidity — if global financial conditions tighten again, refinancing could become more expensive.”

Latest BSP data showed the external debt service burden as a share of gross domestic product  stood at 2.7% at end-2025, lower than the 3.7% logged in the prior year.

Meanwhile, the Philippines’ debt stock climbed 7.3% to $147.651 billion by the end of 2025 from $137.628 billion at end-2024.

Of the total, $94.867 billion came from the public sector while $52.784 billion was from the private sector.

The BSP’s external debt data cover borrowings of Philippine residents from nonresident creditors, regardless of sector, maturity, creditor type, debt instruments or currency denomination.

The central bank gathers data on external debt through reports submitted by borrowers, banks, and major foreign creditors. — Katherine K. Chan

THE BANGKO SENTRAL ng Pilipinas (BSP) could raise its policy rate by 50 basis points (bps) in its next tightening move, as analysts at Deutsche Bank (DB) Research warned that inflation expectations are becoming unanchored.

Deutsche Bank Research said the central bank will likely be more aggressive in tightening monetary policy following BSP Governor Eli M. Remolona, Jr.’s latest hint of an off-cycle rate hike.

“We read its announcement for an off-cycle hike as a signal that inflation expectations are unanchoring, which thus calls for more decisive action to be taken, given that April’s 7.2% year-on-year inflation,” Deutsche Bank Research said in a report published on Monday.

This came after Mr. Remolona’s interview aired on Money Talks with Cathy Yang last Friday where he said the Monetary Board is considering delivering its second straight interest rate hike before their scheduled June 18 policy meeting.

For Deutsche Bank Research, this could mean that the policy rate will be raised to 5% on or before the Board’s next policy review.

“We expect BSP to now hike by 50 bps at its next meeting, whether off-cycle or its scheduled one on 18 June, as it takes a stronger stance in managing inflation expectations,” it said.

The central bank first hiked by 25 bps in April, after one-and-a-half years of easing, to raise the benchmark borrowing cost to 4.5%.

BSP officials said the latest move came as a preemptive measure to control broader second-order price effects and keep inflation expectations anchored amid growing risks from the Middle East war.

Mr. Remolona has left the door open to further tightening, noting that the central bank seeks to uphold its price stability mandate and bring the headline print back to its 3% target.

It can be recalled that inflation settled past the BSP’s 2%-4% tolerance band for a second consecutive month after accelerating to 7.2% in April from 4.1% in March.

Deutsche Bank Research likewise expects the BSP to continue tightening in August, with a projected 25-bp hike to bring the key interest rate to 5.25%.

“We also expect BSP to continue tightening in August by 25 bps (for now), which effectively brings 75 bps more in policy rate increases to 5.25% by August, against our initial 50-bp expectation,” it said.

PALACE MEETING
Meanwhile, Malacañang said the government is working closely with the BSP to preserve economic stability and protect consumers from rising prices.

“The economic team and the BSP are working in sync in maintaining macroeconomic stability and safeguarding the purchasing power of Filipinos,” Palace Press Officer Clarissa A. Castro told a news briefing in Filipino on Monday.  

Her remarks came after Mr. Remolona signaled that a gradual peso depreciation could still be manageable amid external pressures, including rising global oil prices, shifts in US interest rates and market sentiment.

President Ferdinand R. Marcos, Jr. met with BSP officials and the Development Budget Coordination Committee in Malacañang on Monday to discuss economic concerns, although the Palace did not disclose the agenda.

Ms. Castro said the Executive and the BSP “will do everything to prevent the depreciation of the peso.”

“We know what we are facing; this is not just a local problem. If we are not facing global oil prices, there is the interference of other groups in our government,” she added.

An analyst said Mr. Remolona’s stance on limiting the central bank’s foreign exchange (FX) market intervention to smoothening out sharp inflationary swings rather than preventing a specific level proves “realistic and transparent” considering its primary mandate.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., noted that the BSP chief’s signal of allowing a gradual peso depreciation, even potentially to the P63.50-a-dollar level, aligns with the central bank’s duty to manage FX volatility that could trigger inflation.

“The Philippines runs a flexible exchange rate system, meaning the BSP does not defend a specific level of the peso. Its job is to manage volatility, not dictate prices,” he said in a post on Facebook. “Trying to fix the currency at an arbitrary level would be costly and ultimately ineffective given global market forces.”

Meanwhile, a trader told BusinessWorld that the central bank can only prevent excessive volatility in the FX market but not counter trends that are behind the peso’s recent decline.

“(The) BSP maintains presence in the FX market to smooth out volatility or sharp swings and does not target a specific exchange rate,” the trader said in a Viber message. “Thus, it cannot break or counter a market trend but rather the central bank aims to limit outsized and excessive day-to-day volatility.”

Since the United States and Israel’s initial attack on Iran on Feb. 28, the peso’s movements have been largely driven by global factors such as the dollar’s strength, investors’ risk-off sentiment and still elevated oil prices, according to Mr. Ravelas.

Japan-based MUFG Bank Ltd. earlier noted that the peso, as of May 18, has fallen by 6.6% against the greenback since the war erupted, the worst seen among several Asian currencies.

The local unit continued to sink to new record lows this month as uncertainties surrounding the Middle East war sustained safe-haven demand for the US dollar. It closed at a fresh low of P61.75 versus the greenback on May 18 and 19.

However, Mr. Ravelas said it is more important to monitor the peso’s spillover effects on consumer prices rather than the mere exchange rate.

“The key question is not whether the peso is at P60 or P63, but whether that movement is feeding into higher prices,” he said. “If it does, the BSP will act — through rates or liquidity tools. If it doesn’t, some flexibility is actually healthy for the economy.”

Meanwhile, Lloyd Chan, a senior currency analyst at MUFG Global Markets Research, noted that the local currency will remain vulnerable to global oil prices and higher US yields.

“(Philippine peso) appears particularly vulnerable, given the sharp rise in inflation and a BSP policy rate of just 4.5% that is insufficient to compensate for the rising risk premium,” he added in a report on Monday.

The BSP chief had noted that a weak peso could also boost the country’s exports, which could help narrow the country’s current account deficit.

For the trader, the BSP will likely keep its intervention minimal to “balance keeping exports competitive while at the same time ensuring imported inflation is mitigated.”

“In fact, a weaker peso is not purely negative,” Mr. Ravelas also said. “It can support exports, boost remittances, and help narrow the country’s external deficit — so it’s always a balance.”

“So, from a market standpoint, I would say the Governor was simply being realistic and transparent,” he added. “Investors actually prefer that kind of clarity.”

Meanwhile, MUFG’s Mr. Chan noted that a peso recovery would require a concrete peace deal between Iran and the US to reopen the Strait of Hormuz, as this would signal that global oil trade could finally renormalize. — with Chloe Mari A. Hufana

In a statement following its latest quarterly meeting held last week, the interagency council noted that the local banking sector remains strong, but risks are emerging from the prolonged war in the Middle East. 

“Geopolitical risks remain a key source of uncertainty,” Bangko Sentral ng Pilipinas (BSP) Governor and FSCC Chair Eli M. Remolona, Jr. said on Monday.

The FSCC said the country may face higher oil prices, weaker market sentiment, tighter financial conditions, and slower economic growth if the Middle East conflict remains unresolved.

In its latest semestral report on the Philippine financial system, the BSP noted that the Middle East war is expected to have limited direct impact on domestic banks, with the brunt likely felt in the industry’s operating environment.

This is because the banking system ended 2025 with enough buffers to cushion the threats emerging from the energy crisis, it said.

However, the war could still push borrowing costs up and lead to higher household and corporate debt levels, the FSCC noted.

The FSCC said corporates, particularly those exposed to energy and interest rate-sensitive sectors, could face higher debt servicing costs and narrower profit margins as energy prices rise, and financial conditions tighten. 

This, according to the council, could weigh on banks’ asset quality. 

“The Council also noted that rising bond yields could lead to valuation losses on banks’ securities holdings,” it added. “If market pressures persist, this may affect capital buffers.” 

Meanwhile, the FSCC told banks to keep watch of household borrowers’ loan repayment capacity amid the ongoing crisis.

“We see pockets of vulnerability in energy- and interest rate-sensitive sectors and in valuation pressures from higher bond yields,” Mr. Remolona said. “Nonetheless, the financial system remains on solid footing. Banks have adequate capital

and liquidity buffers to absorb shocks and keep lending to households and firms.”

WEAKER PROFITABILITY
On the other hand, Moody’s Ratings said banks in the Asia-Pacific, particularly the Philippines, could see weaker profitability due to higher credit costs if the Strait of Hormuz remains disrupted into the third quarter.

“Sustained high energy prices due to a prolonged Middle East conflict will impact Asia-Pacific (APAC) banks’ credit profiles, via their loan portfolios and financial channels,” it said in a separate report on Monday.

This is based on the credit rater’s new central scenario wherein oil trade disruptions in the Strait of Hormuz hold until the third quarter of the year, with global oil prices at an average of $90-$110 per barrel. 

Moody’s Ratings noted that the Philippines heavy reliance on imported oil from the Middle East makes its banking sector more exposed to vulnerabilities.    

“Banks in South and Southeast Asia — especially Bangladesh, the Philippines, Vietnam, Thailand, Indonesia and India — face heightened challenges due to either their economies’ high energy import dependence from the Middle East, or thinner external buffers and oil reserves, or both,” it said. 

The Philippines sources over 90% of its oil from the Middle East, which led domestic pump prices to shoot up when the war disrupted trade in the region.

This has also fueled inflation in the country, with the April headline print at an over three-year high of 7.2%, a situation Moody’s said is squeezing household budgets and increasing debt servicing pressures for consumers and small businesses.

“This will translate into increased but gradual credit strain on such loans,” the debt watcher added. “However, given the absence of a macroeconomic hard landing, any deterioration in these portfolios is likely to be moderate.”

Moody’s also warned that Philippine banks where retail and SME loans account for a large portion of their portfolio could see a drop in their profits.

“Banks with large retail and SME (small and medium enterprises) books — such as in Thailand, Indonesia and the Philippines — could see weaker profitability due to growing impairment charges,” Moody’s Ratings added. “However, core preprovision earnings will remain broadly sufficient to absorb these costs without threatening solvency.”

Moody’s Ratings also noted that tighter labor conditions in the Middle East due to a prolonged conflict risk dampening remittances flows to the Philippines. 

“Remittance flows from Gulf Cooperation Council economies are another risk channel for banks in the Philippines and Bangladesh, given the significant share of remittances originating from nationals working in the Middle East,” it said. “A prolonged conflict introduces uncertainty if labor conditions in the Middle East are significantly disrupted, leading to softer remittance flows.”

However, latest central bank data showed remittances from the region climbed by about 20% to $565.91 million in March from $471.836 million in February, which Moody’s said helped sustain bank deposits during the period. 

“Nonetheless, any material slowdown in remittances would have a negative impact on banking system liquidity and local consumption,” it added.

Mr. Remolona said the FSCC, composed of the BSP, Department of Finance, Securities and Exchange Commission, Insurance Commission, and Philippine Deposit Insurance Corp., is closely monitoring developments surrounding the Middle East conflict and other external factors to identify and address potential vulnerabilities in the local financial sector. 

The council is likewise enforcing stricter oversight of nonbank financial institutions including quasi-banks, investment houses, nonstock savings and loan associations, pawnshops, and trust corporations.

“The Council is also working to improve how it monitors system-wide risks and interlinkages,” FSCC added. — Katherine K. Chan

Quirino Teo, executive director for investment services at Savills Philippines, said international MICE demand, particularly large-scale global conferences, incentive travel groups from North Asia, and multinational product launches, remains under pressure.

“What’s compensating, and this is the more interesting story, is domestic MICE,” he said in a Viber message on Friday.

He identified Philippine corporations, government agencies, and the information technology and business process management (IT-BPM) sector as the main drivers of domestic MICE demand, with the IT-BPM industry accounting for about 58% of MICE space utilization for town halls, offsite leadership meetings, client events, and compliance training.

The healthcare and financial technology sectors are also emerging as steady sources of demand, he added.

Visitor arrivals reached 6.48 million in 2025, according to Bureau of Immigration data, while the Department of Tourism (DoT) is targeting 6.7 million arrivals this year.

Arrivals in the 11 months to November 2025 fell 2.16% year on year to 5.24 million, weighed by weaker inflows from South Korea and China. This compares with significantly higher volumes in neighboring markets such as Malaysia (38.2 million), Thailand (32.9 million), and Vietnam (21.1 million).

On the supply side, hotels in Makati’s central business district and the Bay Area continue to lead the market, with around 21,000 hotel room keys in operation, based on Savills data.

The firm also noted that hotels in Bonifacio Global City (BGC), Taguig, are posting the highest occupancy rates.

Asked about corporate preferences for township-integrated hotels versus standalone MICE-oriented properties, Mr. Teo said integrated developments have a competitive advantage.

“A hotel inside a township with a credible convention center benefits from base-load MICE bookings that fill shoulder periods when leisure and transient corporate demand softens,” he said.

He added that the combination of Grade A office stock, retail components, and convention infrastructure creates a self-reinforcing demand ecosystem that standalone hotels are unable to replicate.

However, Mr. Teo cautioned that the influx of new hotel developments in provincial markets could create supply-side risks, particularly in areas where supporting infrastructure remains underdeveloped.

“That’s a classic supply moving ahead of demand scenario, and it carries real risk,” he said.

Metro Manila remains the country’s primary hub for large-format MICE events because of the significant infrastructure gap between the capital and regional markets, he added.

Mr. Teo cited the Bay Area convention cluster, which includes the SMX Convention Center, World Trade Center Metro Manila, and the Philippine International Convention Center (PICC), as having decades of accumulated capacity and supplier ecosystems that other regions cannot quickly replicate.

The PICC reopened in September 2025 after undergoing a six-month renovation.

Asked whether the Visayas and Mindanao regions are emerging as alternative MICE hubs to Metro Manila, Mr. Teo said Cebu remains the exception, while most other regional markets are still in the “MICE-aspirational phase rather than MICE-ready.”

“Cebu is a genuine and growing exception. It has the hotel stock and a convention center that can credibly host regional association conferences and incentive groups,” he said.

“Developers are taking note, and the MICE pipeline there is more demand-anchored than in most other regional markets.”

“For the rest of Visayas and Mindanao, the honest assessment is that most markets are still in the MICE-aspirational phase rather than MICE-ready,” he added.

“What we are watching closely is whether infrastructure investments, particularly in road and port connectivity across the Visayas and Mindanao, accelerate fast enough to justify the hotel pipelines being announced.” — Juliana Chloe A. Gonzales

THE PHILIPPINES will need an additional 20 gigawatts (GW) of renewable energy (RE) capacity to meet its goal of sourcing half of its power supply from renewables, a gap that upcoming auctions are expected to help address.

“According to our projections, the Philippines will need roughly 20 GW to reach 50% (share) by 2040,” Energy Secretary Sharon S. Garin told reporters in mixed Filipino and English last week.

The Philippines, which currently relies on coal for power generation, is targeting to increase the share of RE in the national power mix to 35% by 2030, and eventually to 50% by 2040.

To move towards this goal, Ms. Garin said the country needs to deliver several rounds of green energy auction (GEA), a government program where renewable energy developers bid for contracts to supply electricity at the lowest possible price.

Since the first round of GEA was launched in 2022, the Department of Energy (DoE) has so far completed four auctions, which are expected to deliver more than 20 GW of capacity through 2035.

The previous auctions involved solar, onshore wind, biomass, geothermal, hydropower, and energy storage systems.

The DoE is also staging the country’s first competitive auction dedicated solely to offshore wind projects this year.

“We projected that we will need to do GEA for another 20 GW,” Ms. Garin said.

In February, the DoE unveiled its 10-year GEA plan that will offer at least 25 GW of additional RE capacity, which is estimated to require P25 trillion worth of investments.

The upcoming auction rounds cover various technologies such as waste-to-energy, onshore wind, floating solar, rooftop solar, and battery energy storage systems, with project deliveries starting as early 2027 and running through 2035.

“By preparing a clear, auction-backed pipeline, we are giving developers and financial institutions the market visibility they need to plan, mobilize capital, and deliver projects on schedule,” Ms. Garin said.

Sought for comment, Jose M. Layug, an executive board member at the Philippine Energy Research & Policy Institute, said the Philippines is on track to hit its target through the auctions that are lined up.

“I believe the Philippines can hit its target through the GEAs provided that the government continues to be an enabler in developing the proposed projects and reduce bureaucracies in permitting process,” Mr. Layug told BusinessWorld.

He said that the goal can be hindered by “the long process of obtaining multiple permits from different National Government agencies and local government units.”

Mr. Layug said the Philippines should maximize its indigenous renewable energy resources to better manage energy demand amid the Middle East crisis that has disrupted global energy markets and exposed the vulnerability of fuel-importing countries.

“The recent crisis just reconfirmed the existing vulnerability of the Philippines in supply and price shocks as we are heavily dependent on imported fossil fuels,” he said. “We have known this for more than 20 years, but we have not aggressively transitioned away from this dependence.”

THE ATMOSPHERE feels more cautious than carefree under the midday heat inside Dreams & Destination Travel Services, a small travel agency in Cavite province south of Manila.

Clients no longer walk in asking about dream vacations on impulse. Instead, they quietly compare airfare prices on their smartphones while agents behind the counter repeatedly refresh airline websites, watching fuel surcharges rise almost in real time.

What used to be spontaneous travel planning has become a carefully calculated exercise in budgeting, timing and compromise.

“Some clients are booking earlier to secure lower fares, while others are delaying decisions or requesting rebooking to more affordable travel dates and destinations,” Maria Carmela Aldana, who owns and manages Dreams & Destination, told BusinessWorld.

The scene unfolding inside the travel firm reflects how the US-Israel war on Iran has begun to ripple through the Philippine economy. Beyond financial markets and news headlines, rising oil prices are feeding into transportation costs, inflation and weaker consumer spending, forcing businesses and households to rethink how they spend money.

“We’ve noticed an immediate impact on airfare pricing, with airlines adjusting fares and fuel surcharges more frequently,” Ms. Aldana said in an e-mailed reply to questions. “Because of this, we now monitor rates more closely, update quotations faster and advise clients to confirm bookings earlier when possible.”

For industries heavily exposed to fuel and foreign exchange movements, the impact has been swift.

“Oil-dependent and foreign exchange-sensitive sectors, particularly those with logistics heavily reliant on oil and dollar-denominated debt, are the most affected,” Shawn Ray R. Atienza, a stock research analyst at AP Securities, Inc., said in a Viber message.

He said airlines, property developers and consumer discretionary firms face weaker earnings as freight and fuel expenses rise while consumers pull back spending.

Marky Carunungan, an investment analyst at F. Yap Securities, said the Middle East war’s effects are reaching the Philippine market mainly through higher oil prices, inflation and peso volatility rather than direct geopolitical exposure.

“Higher oil prices are immediately pressuring transport and other fuel-intensive sectors, which could weigh on names like Cebu Air, Inc. and PAL Holdings, Inc., while logistics and manufacturing players also face margin compression,” he said via Viber.

For travel agencies, consumer behavior has already shifted.

Operating since 2012, Ms. Aldana’s company offers flight bookings, tour packages, hotel reservations, visa assistance and customized travel arrangements for both leisure and corporate clients. She said demand has not collapsed, but travelers are becoming increasingly price sensitive.

“Flights are the most sensitive because airfare responds quickly to fuel costs,” she said. “Hotel bookings have remained relatively stable so far, while tour packages are affected mainly when transportation and transfers are included.”

To adapt, the agency has begun focusing on early booking promotions, flexible payment terms and shorter, lower-cost itineraries. More clients are choosing “land-only” packages to reduce airfare expenses.

At the same time, domestic tourism demand has weakened as some Filipinos increasingly see overseas destinations as offering better value for money.

“Countries such as Vietnam, Thailand and Hong Kong remain in demand because of competitive airfare, attractive packages and a stronger overall travel experience compared with some local options,” Ms. Aldana said.

The shift highlights how inflation is changing not only what Filipinos buy, but how they evaluate spending decisions altogether.

MALL TRAFFIC
Still, some sectors continue to show resilience despite uncertainty.

Property consultancy executives said malls remain crowded, partly because they function as more than shopping destinations. For many Filipinos, they also serve as affordable spaces for comfort, leisure and escape from the heat.

Leechiu Property Consultants, Inc. Chief Executive Officer David Leechiu said malls could remain relatively resilient even during economic slowdowns because consumers continue to visit them for amenities such as free air-conditioning.

SM Supermalls President Steven T. Tan said mall traffic and sales in the first quarter exceeded expectations.

“Foot traffic is okay,” he told BusinessWorld in an interview. “We don’t see any slowdown. As a matter of fact, sales grew in the first quarter, which is good. It is more than what we expected.”

Robinsons Land Corp. Executive Vice-President Faraday Go likewise said mall traffic in the first quarter rose from a year earlier.

But while crowds remain steady, spending patterns inside malls are quietly evolving.

“People will still be in the mall, but they will not be spending the same way,” Mr. Leechiu said.

That shift is becoming visible among younger consumers trying to stretch increasingly limited budgets.

On most afternoons, Adamson University student John Ruiz Navarro heads to the nearest mall after classes. Sometimes, he window-shops. Other times, he simply sits inside to cool down from the heat.

“Most of the time, I spend my free time at the mall,” he said via Facebook Messenger. “Sometimes, when I’m bored, I just walk around or go window shopping.”

But even simple routines have become more expensive.

Mr. Navarro relies on a monthly allowance of P5,000 to cover transportation, meals and occasional leisure spending. Rising transport fares and food prices have steadily reduced what he can afford daily.

“My allowance is fixed, so my budget is really affected,” he said.

Bus fares now range from P30 to P35 per trip, while van fares can go as high as P45. Over time, his food budget has fallen from roughly P200 a day to P150, and sometimes as low as P50 depending on how much money remains.

Before, a fastfood meal often included small extras.

“If I ordered a chicken meal, I would also get a sundae on the side,” he said. “But now, I just go for the regular chicken meal.”

To reduce expenses further, he has started considering online shopping instead of traveling to malls during days without classes.

“Instead of spending on fare, I can just add that money to my savings or to whatever I want to buy,” he added.

For businesses and consumers alike, the effects of the war are no longer confined to distant headlines about oil markets or military tensions. They’re increasingly shaping daily routines, spending priorities and business strategies across the Philippines.

Inside small travel agencies, shopping malls and university budgets, the economic consequences of a war thousands of kilometers away are now being felt one fare increase, one skipped purchase and one tightened budget at a time.

FILIPINOS WORKING in the Middle East are likely to send more money home in the coming months to help their families cope with faster inflation driven by the energy crisis, while also taking advantage of the peso’s weakness to maximize the value of their remittances, analysts said.

“Overall, analysts expect remittances to remain fairly resilient, unless the war severely disrupts labor markets or triggers mass repatriations,” Ser Percival K. Peña-Reyes, a senior research fellow at Ateneo Center for Economic Research and Development, told BusinessWorld in an e-mail.

“Historically, OFW (overseas Filipino worker) remittances have proven durable during geopolitical and economic shocks because Filipino workers prioritize supporting families during uncertain periods,” he added.

Cash remittances from the Middle East bucked projections after growing nearly 20% to $565.91 million in March from $471.836 million in February.

The Manila-based Asian Development Bank and international credit rater Moody’s Ratings earlier warned that the Philippines could see a drop in remittance flows if the war in the region drags on.

However, Bangko Sentral ng Pilipinas (BSP) data also showed that overall cash remittances rose by 2.3% to $2.874 billion in March, with 19.69% coming from the Middle East.

Analysts said this may also be due to steady employment despite the conflict and the strong United States dollar and other Middle East currencies helping families of OFWs in the country receive higher remittance value.

“OFWs receiving hazard pay in the region may have also been able to send more money back home. The need for remittances likely outweighed the losses due to the Middle East war,” Marco Antonio C. Agonia, an economist at the University of Asia and the Pacific (UA&P), told BusinessWorld via e-mail.

Mr. Agonia also noted that OFWs typically take advantage of a weaker peso, as it means higher gains from dollar conversion.

The peso ended March weaker as it closed at P60.748 against the greenback on March 31, down by P3.083 or 5.35% from its P57.665 finish on Feb. 27, Bankers Association of the Philippines data showed.

Still, OFW repatriation from the region may have slightly dampened remittance growth during the first month of the war.

“(R)epatriation due to regional disruptions may have resulted in slower remittance growth. Compared to last year, the February-March flow was a tad slower,” Mr. Agonia said.

Based on government data, over 2.4 million Filipino migrants and workers are based in the Middle East.

The Department of Migrant Workers reported that as of May 22, a total of 10,012 OFWs and dependents returned to the Philippines from the Middle East since the US-Israel war on Iran broke out around three months ago.

However, the burden of higher commodity prices offset such drags, as Mr. Peña-Reyes noted that the faster March inflation print likely prompted Middle East-based OFWs to frontload their remittances.

“Inflation raises the cost of essentials, such as food, transport, electricity, and housing, which increases the financial needs of families relying on remittances,” he said. “When prices rise sharply, OFWs often respond by remitting additional funds to help relatives maintain their daily expenses and purchasing power.”

In March, consumer prices picked up faster than expected, with costlier fuel, electricity and food driving the headline print to its fastest pace in about two years at 4.1%.

Inflation continued to accelerate, hitting an over three-year high of 7.2% in April as still high oil prices continued to push up prices of basic commodities.

As commodity prices may remain elevated in the coming months, analysts said OFWs in the Middle East might keep sending more money home to support their families’ needs.

“We need to see if military escalation will continue in the region, which will more significantly affect remittance flows,” UA&P’s Mr. Agonia said. “Even then, a higher inflation outlook will likely result in households requiring more money sent back home.”

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., also attributed the larger remittance inflows from the region to OFWs’ readiness to help their families during a crisis, which could keep remittance levels strong even if the conflict prolongs.

Asked if remittances will remain high in the months ahead, he said: “Yes, most of the time during a crisis, they send extra (money home). That’s why they’re called heroes.”

Economic managers and other analysts expect inflation to stay elevated until yearend as the oil crisis has begun to feed into the prices of most basic commodities such as food, transport and utilities.

The central bank sees inflation hovering above 5% for most of the year to average 6.3% in 2026.

Meanwhile, the BSP’s latest balance of payments projections show that it expects remittances to expand slower by 3% to $36.7 billion this year from the 3.3% growth to $35.6 billion in 2025.

PHILIPPINE CAR SALES declined by 19% in April as rising oil prices linked to the Middle East war continue to dampen consumer demand for gas-powered vehicles, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA).

Electric vehicle (EV) sales emerged as a bright spot, nearly quadrupling in April amid growing demand for energy-efficient alternatives.

CAMPI-TMA data released on Sunday showed that vehicle sales fell by 18.9% to 27,225 units in April from the 33,580 units sold in the same month a year ago.

This was the steepest drop in total car sales since the 11.5% decline recorded in August 2021.

On a monthly basis, total vehicle sales dropped by 24.6% from 36,104 units sold in March.

Including other industry data, CAMPI said total vehicle sales fell by an annual 8% to 32,400 units in April.

“While the market has not fully recovered from last year’s second semester slowdown, this was further affected by the oil crisis with customers carefully considering their car purchase,” CAMPI President Jose Maria M. Atienza said in a statement.

Passenger car sales, which made up 20.49% of total sales, fell by 14.2% to 5,578 units in April from 6,498 units sold in the same month last year. It likewise dropped by 19.66% from 6,943 units sold in March.

Commercial vehicle sales, which accounted for 79.51% of industry sales, declined by 20.1% to 21,647 units in April from 27,082 units sold in the same month last year. Month on month, sales fell by 25.8% from the 29,161 units sold in March.

Sales of light commercial vehicles slumped by 16.3% to 16,885 units in April from the 20,165 units sold last year, while Asian utility vehicle sales dropped by 32% to 4,077 units from 5,992 units sold in the year-ago period.

Sales of light- and medium-duty trucks in April fell by 12.8% and 29.2% to 435 units and 206 units, respectively. Sales of heavy-duty trucks also slumped by 61.7% to 44 units in April.

In the first four months of the year, total auto sales declined by 11.8% to 132,867 units from 150,654 units sold in the same period last year.

As of end-April, passenger car sales decreased by 16.5% to 25,746 units, while commercial vehicle sales slid by 10.6% to 107,121 units.

Chinabank Capital Corp. Managing Director Juan Paolo E. Colet attributed the decline in car sales to soaring pump prices and other inflationary pressures.

“High prices for gas and other goods are impacting the budgets of potential buyers and thereby taking a toll on overall vehicle demand,” he said in a Viber message.

Headline inflation accelerated to a three-year high 7.2% in April as elevated oil prices drove up the cost of basic necessities like food and transport.

Pump prices have soared since the Iran war began on Feb. 28 amid disruptions in global oil supply.

Mr. Colet also noted that some businesses are scaling back on their vehicle purchases due to the weaker economic environment.

The outlook for gas-powered cars will “remain challenging” throughout the year, he said.

EV DEMAND
“EV demand is expected to be resilient as preference shifts to cost-efficient cars that are not dependent on fossil fuels,” Mr. Colet added.

In April, total EV (xEV) sales skyrocketed by 288% to 5,855 units from 1,509 units sold in the same month last year.

However, the segment, which includes battery EV (BEV), plug-in hybrid EV (PHEV), and hybrid EV (HEV), saw a 4.8% monthly decline in sales from the 6,148 units sold in March.

In the first four months of the year, xEV sales surged by 158.9% to 17,655 units from 6,820 units sold in the same period last year.

HEVs accounted for 70.15% of EV sales in April, which more than tripled by 242.3% to 4,107 units. This brought the end-April sales in HEVs by 115.3% higher at 12,368 units.

BEV sales in April jumped by 46.5% to 419 units in April, while PHEV sales skyrocketed by 5,678.3% to 1,329 units in April.

In the January-to-April period, BEV and PHEV sales surged by 176.9% and 2,531% to 2,708 units and 2,579 units, respectively.

“The customers are very much aware of what’s practical during these times thus the increased demand for energy efficient vehicles like xEVs and lower displacement, fuel-efficient internal combustion engine (ICE) vehicles,” CAMPI’s Mr. Atienza said.

Toyota Motor Philippines Corp. remained a market leader as of end-April with a 49.83% market share, despite an 8% decline sales to 66,206 units during the period.

This was followed by Mitsubishi Motors Philippines Corp., despite an 18.1% slump in sales to 24,371 units in the four-month period. Suzuki Phils., Inc. ranked third in market share even as sales fell by 10.2% to 6,289 units as of end-April.

Completing the top five are Nissan Philippines, Inc., despite a 34.9% drop in end-April sales to 5,323 units and Ford Motor Company Phils., Inc., despite a 27.5% fall in sales to 4,877 units.

To help users navigate concerns such as unauthorized transactions, account takeovers, scams, and “wrong send” errors, GCash provides clear and accessible reporting tools designed to enable faster resolution. By knowing exactly where to seek help, users can better protect their accounts and minimize financial risks in an increasingly cashless ecosystem.

Built-in support channels and security safeguards

GCash provides a range of official help channels designed to address different types of concerns. Inside the app, users can access in-app guides that offer step-by-step instructions for common issues. The GCash Help Center also serves as a central hub where users can find articles, submit requests, and report concerns.

For transaction-related concerns, the transaction history feature allows users to review details and identify discrepancies. Error notifications within the app also help flag failed or suspicious activities, prompting users to take action when needed.

Users seeking direct support can connect with Gigi, the chat agent in the Help Center which serves as the primary channel for account-related concerns. Through Gigi, users can report lost SIM cards or phones, request transfer of funds, and apply for wallet limit upgrades, with guided steps to help resolve these cases quickly.

For more complex concerns, live agent support is available to handle cases that require deeper investigation, such as unauthorized transactions or account takeovers. Users can get in touch with these agents by calling the official GCash Help Center hotline at 2882.

These support channels are structured based on the level of concern. Simple issues can often be resolved through guides and self-service tools, while more sensitive cases are escalated to trained support agents. This approach helps ensure that users receive the right level of assistance without unnecessary delays.

Alongside this support ecosystem are security features built into the GCash app that give users an added layer of protection. Account Secure limits account access to one device at a time. DoubleSafe adds an extra verification step that requires selfie scans to confirm the user’s identity, especially for high-risk activities such as logging in to a new device and high-value transactions. Biometrics Login and MPIN Protection confirm that only the account owner can authorize transactions, while One-Time Passwords (OTP) provide an additional check for sensitive actions.

A shared effort to keep digital financing safe

Beyond its in-app security features and help channels, GCash also works closely with regulators and law enforcement agencies such as the Cybercrime Investigation and Coordinating Center (CICC) and PH Payments Management Inc. (PPMI) to detect and act on fraud. GCash has blocked more than 4,900 fraudulent merchants linked to quishing or QR phishing schemes, reflecting the scale of its enforcement efforts.

The company continues to strengthen its customer experience by refining support tools and reducing response times. Enhancements are regularly introduced to make it easier for users to report concerns and track the status of their requests.

“Resolving a concern quickly starts with going to the right channel. We have built our support system so that users can find the help they need, whether it is a simple guide in the app or a conversation with a live agent,” said Paul Velasquez, GCash AVP and Head of Customer Service Operations.

GCash also encourages users to remain vigilant and report suspicious activity immediately through official support channels. The company advises transacting only through official GCash channels and verifying website URLs before completing any payment. No one from GCash will ever ask for an OTP, MPIN, or password.

Suspicious activity can be reported through the GCash Help Center in the app or by going to help.gcash.com and submitting a ticket. Users can also call the official hotline at 2882 to speak to a live agent.

For more information on account safety and available support, visit www.gcash.com.

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CHICAGO – Developments in artificial intelligence (AI) are accelerating at exponential rates, and companies are expected to adopt AI at a faster pace in the next few months, according to data activation company Boomi.

“I think we are going to start seeing enterprise-wide adoption of AI. I think we’ve reached a point where we understand the risks, we understand the value,” Dan McAllister, senior vice president of global alliances and channels at Boomi, told BusinessWorld on the sidelines of Boomi World here on May 13.

“We understand the cost model. And it’s matured enough where companies can actually start making real decisions based on RoI (return on investment), based on risk profile, based on tasks that they want to have accomplished,” he added.

Mr. McAllister said Boomi’s role is to help companies achieve all these things as it provides a strategic foundation for integration, application programming interfaces (API), data, automation, and agentic AI.

“I think technology has caught up to the outcomes that customers want to achieve. We’ve seen enough to now take some action. You’re going to see some people take some bets and put this out in the market. Of course, there will be those that left behind. There will be ones that go too fast. But we’re going to start seeing some real success,” he said.

As VP for global alliances and channels, Mr. McAllister’s role is to manage the company’s go-to-market partnerships and commercialized partnerships. This includes systems integrator relationships, product alliances, and OEM (original equipment manufacturer) partners that package Boomi within their own solutions.

Boomi currently has around 300 OEM partners, and around 400 active systems integration partners.

Mr. McAllister said Boomi is already a very successful company with hundreds of partners that were successful in their go-to-market strategy.

“I felt that we could leverage that as well as modify it a bit to really help the business grow… Our win rate is three times of what it is when we work alone. And so it’s when you think about what kind of an impact a partner can have, that’s pretty impressive,” he said.

In selecting partners, Mr. McAllister said Boomi is looking for companies that are “bringing value to their customers and are essentially winning on their own”.

“But we can provide value to them within their go-to-market strategy,” he added.

For systems integration partners, he said they are looking for those with technical or industry expertise.

“We look for partners who have that (expertise) because now they can apply our solution to the problem. It’s a bit like we give them the raw materials, they build the house,” he said.

Among the recent announcements at Boomi World, Mr. McAllister highlighted Boomi Companion and Boomi Connect as the most notable developments.

Boomi Companion aims to accelerate agentic engineering on the Boomi enterprise platform. Developers can now design, build, test, deploy, and diagnose integrations through natural language using their preferred AI tools.

Boomi Connect provides secure, governed connectivity between AI tools such as Claude, Copilot and Gemini, and enterprise applications through managed, Model Context Protocol (MCP)-enabled tools.

CUSTOMER EXPERIENCE
Meanwhile, Serco, a leading public services organization, has modernized its operations by leveraging Boomi AI agents and accelerating enterprise-wide integration initiatives.

Kiran Narayan, director for products and digital capabilities at Serco Australia, said the company was already using Boomi when they discovered that powerful AI capabilities were already available within the platform.

In an interview on the sidelines of Boomi World, Mr. Narayan said they were privy to the early access program for AgentStudio, and they started experimenting on the different agents.

“Boomi’s integration also has had a lot of improvements through the process. We have had significant recalibration of our processes… It created more efficiency,” he said.

With Boomi, Serco has significantly lowered integration complexity and time-to-delivery. Using Boomi Scribe, Serco said that documentation that once required 40-60 hours now takes only 6-12 hours. Individual documentation tasks dropped to 15 minutes from three hours previously.

Mr. Narayan said Boomi has a “very good support system” for customers like Serco.

“Boomi clearly differentiates itself with a very positive approach and culture in helping every customer, regardless of the size, regardless of where they are around the globe, with the best possible team equipped to support,” he said.

Mr. Narayan said he is very excited about the new innovations such as Boomi Orchestrate and Boomi Companion.

“I’m a technologist at heart. I’m seeing so many possibilities,” he said.

The newly logged cases translate to a ninefold increase from January to March compared with the same period last year, the DoH said in its latest surveillance report.

This means that about 51 new cases were diagnosed per day during the first quarter, which the report noted an 11% decline compare to the previous quarter.

The country’s total HIV cases stands at 168,079, from the first reported case in January 1984 to March 2026.

Of the total new cases, 4,381 were reported among males, comprising 95% of the cases, while 252 new cases were logged among females, accounting for 5%.

As for age demographics, nearly half of the new cases, or 2,118 (46%), were reported among individuals aged 25 to 34 years old.

This was followed by individuals aged 15 to 24 years old, with 1,443 new cases or 31% of the total.

Other age groups also recorded new cases: 845 (18%) among individuals aged 35 to 49 years old, 116 (3%) among those aged 50 years and older, and 23 (<1%) among individuals younger than 15 years old.

The DoH said this brought the country’s median age of new HIV cases to 28 years old.

Of the total recorded new cases, 24% or 1,104 were diagnosed with advanced HIV disease at the time of diagnosis.

In terms of geographic distribution, the National Capital Region logged the highest number of cases at 989 (21%), followed by Region IV-A with 808 (17%), and Region III with 551 (12%).

New cases were also reported in Region XII (277), Region XI (263), Region VII (228), Region VI (216), Region I (191), Region X (183), Region V (158), Region IX (137), the Negros Island Region (133), and Region II (108), as well as in Region IV-B and VIII (101), CARAGA (84), BARMM (42), and CAR (37).

The DoH said the mode of transmission for new HIV cases remains primarily through sexual contact, accounting for 4,214 cases (91%), including 3,095 among males who have sex with males and 567 among individuals who engaged in both male-to-male and male-to-female sexual contact.

While no definitive cure is currently available, the DoH earlier said that people living with HIV undergo antiretroviral therapy (ART), which “slows down and virtually halts the progression” of the disease. People living with HIV on ART may still live long and healthy lives.

For prevention, the DoH urged the public to practice safe sex and to use pre-exposure prophylaxis (PrEP) for individuals at high risk of infection.— Edg Adrian A. Eva

The LPA being monitored within the Philippine Area of Responsibility was located 875 kilometers east of southern Mindanao, PAGASA said in a tropical cyclone formation outlook released at 10am.

“It has a low chance of developing into a tropical cyclone,” PAGASA weather specialist Loriedin De La Cruz-Galicia said in a 5am media briefing in Filipino, attributing this to the LPA’s weak circulation.

“However, its trough or extension is expected to bring rains over large parts of the country today and in the succeeding days.”

She added that the LPA may persist within at least the next 48 hours.

PAGASA cautioned against possible flash floods or landslides due to moderate to occasional heavy rains, attributed to the LPA.

Meanwhile, the easterlies are also expected to prevail over large parts of Luzon and Visayas, bringing hot and humid weather conditions within the next 24 hours.

Dangerous-level heat index is expected in 56 out of the 78 monitoring stations of PAGASA on Friday, based on the agency’s heat index monitoring.

The highest “feels-like” temperature expected is 45 degrees Celsius, which may be experienced in seven areas.

PAGASA still reminded the public to avoid going outdoors and to use sun protection to prevent heat-related illnesses.— Edg Adrian A. Eva

“The United States is really a leader in both quality and innovative education, and the doors are very much open for Filipino students,” Jessica Simon, counselor for public affairs of the US Embassy in the Philippines, told reporters on Friday at the sidelines of an event.

According to the Open Doors 2024 Report on International Educational Exchange, the number of Filipino students enrolled in US universities and colleges increased from 3,000 to 4,500 over the past decade.

Science, technology, education, and mathematics are among the popular programs pursued by Filipinos, driven by the global rise in demand for artificial intelligence (AI).

“We’re hoping the number just goes one direction, and that’s up,” Ms. Simon said.

“With the increasing awareness of the importance of artificial intelligence, and the jobs that are going to be created in artificial intelligence fields, that’s definitely an interest,” she added.

The US Embassy official also noted that global economic uncertainties and challenges do not directly affect learners’ interest in studying abroad.

“I don’t know that we’ve seen a direct effect on the demand for student visas,” she said. “I think any kind of uncertainty, economic uncertainty, global uncertainty, causes just general uncertainty.”

She also assured that there would be no tighter regulations on student visa applications for the Philippines, following the US government’s expansion of its travel ban to 39 countries in January. “There are no restrictions; we have student visa appointments open.”

“We very much welcome Filipino and international students in the United States, and that’s why we’re holding the EducationUSA Fair today,” she added.

The EducationUSA University Fair Spring 2026, happening in Quezon City and Davao City, connects Filipino students with 17 higher education institutions overseas.

“I think this is the 1st step in pursuing an education exchange experience,” Ms. Simon said. “Even if it’s not to depart next month, next year on an exchange, the students here today can really benefit from taking this 1st step and getting this initial information.”

Arizona State University, College of Central Florida, Lewis University, Manhattan University, Middle Tennessee State University, and the University of San Francisco are among the universities at the fair.

EducationUSA is the official source of information on US tertiary education. It offers free advising services to interested applicants through its offices at the US Embassy and Fulbright Philippines.— Almira Louise S. Martinez

The hotel recently introduced the Presidential Villa, a 630.2-square-meter private retreat overlooking Taal Lake.

The villa features a grand foyer and living area, formal dining room, expansive Master Suite with veranda views of Taal Lake, and complementary King and Twin bedrooms.

The villa also includes premium bath amenities, personalized butler service, expansive balcony and deck spaces, and exclusive access features.

The development strengthens the property’s position as a lifestyle and wellness destination, offering guests a short escape from the city with direct views of Taal Lake and Volcano.

“The Presidential Villa really encapsulates who we are as a property—spacious, private, and fully oriented toward those uninterrupted views of Taal Lake and Volcano.” Taal Vista Hotel General Manager Ramon Makilan said in a written interview.

“At Taal Vista Hotel, our distinction really comes from heritage and location. There’s an authenticity to the experience that you can’t replicate. The Presidential Villa builds on that by offering a heightened level of privacy, space, and personalized service—all set against the iconic Taal Lake and Volcano backdrop,” he said.

Mr. Makilan said the hotel incorporated locally sourced materials and handcrafted elements throughout the villa’s interiors to highlight local craftsmanship and create a more authentic guest experience.

According to Mr. Makilan, while Taal Vista Hotel’s positioning is premium, its broader impact especially economically—remains inclusive and far-reaching.

“A large portion of both our team and supplier base is locally sourced, which is something we consciously prioritize,” Mr. Makilan said.

“A significant part of Taal Vista Hotel’s role is supporting the local economy—through employment, partnerships, and contributing to tourism activity in the area,” he said.— Kaizzer Angela Marie V. Manuba

In the first four months of the year, the combined value of InstaPay and PESONet transfers amounted to P10.388 trillion, up 45.38% from the P7.145 trillion seen in the year-ago period.

Meanwhile, more users turned cashless as the volume of transactions made through the two payment gateways more than tripled (225.1%) year on year to 2.721 billion as of April from 837.118 million previously.

Broken down, the value of InstaPay transactions jumped by 62.71% to P5.093 trillion from P3.13 trillion a year ago.

This came as the clearing house recorded a surge in the volume of transactions during the period, which soared by 234.95% to 2.68 billion from 799.971 million in the prior year.

On the other hand, transfers done via PESONet stood at a total value of P5.295 trillion at end-April, 31.88% higher than the P4.015 trillion posted in the same period last year.

The volume of PESONet transactions also went up by an annual 12.89% to 41.938 million in the four-month period from 37.148 million previously.

InstaPay and PESONet are automated clearing houses under the central bank’s National Retail Payment System framework.

InstaPay is a real-time, low-value electronic fund transfer facility for transactions up to P50,000 and is mostly used for remittances and e-commerce.

Meanwhile, PESONet is mainly used for high-value transactions and may be considered as an electronic alternative to paper-based checks.

As of April, there are 94 InstaPay participants, most of which are nonbank electronic money issuers. PESONet has a total of 124 participants, with the bulk being universal and commercial banks.

The BSP wants digital payments to make up 60%-70% of the total volume of retail payments by 2028 in line with the Philippine Development Plan.

In 2024, online payments made up 57.4% of the volume and 59% of the value of the country’s total monthly retail transactions, according to the BSP’s 2024 Status of Digital Payments in the Philippines report. — Katherine K. Chan

THE PHILIPPINE financial system’s total resources rose to P37.45 trillion in the first quarter of 2026 as the sector’s assets ballooned despite headwinds stemming from the Middle East war, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

As of March, banks and nonbank financial institutions’ combined resources grew by 8.61% to P37.45 trillion from P34.481 trillion in the same period last year.

Month on month, it edged up by 1.38% from P36.941 trillion previously.

These include funds and assets such as deposits, capital, and bonds or debt securities, but exclude resources from the central bank.   

Banks alone held P31.103 trillion worth of resources during the period, climbing by 9.19% from the P28.485 trillion seen a year earlier.

Broken down, universal and commercial banks’ resources rose by 8.41% year on year to P28.871 trillion at end-March from P26.631 trillion previously. This was the bulk of the sector’s resources in the first quarter. 

Resources of thrift banks also jumped by 25.17% to P1.478 trillion at end-March from P1.181 trillion in the comparable year-ago period, while digital banks had 44.82% more resources at end-March with P188.7 billion from P130.3 billion in the prior year.

Meanwhile, resources held by rural and cooperative banks stood at P565 billion as of end-December last year, 4.01% higher than the P543.2 billion seen in the first quarter of 2025. There were no data for rural and cooperative banks as of end-March this year.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the higher resources as of end-March came as banks and nonbank financial institutions’ balance sheets remained sound amid the Middle East conflict, with lending activity and deposit inflows likewise boosting their holdings.   

“The increase underscores the resilience of the domestic financial system, which remains well-positioned to intermediate funds despite external headwinds such as the ongoing Middle East conflict,” he said in a Viber message. 

Separate central bank data showed that lenders’ assets hit an all-time high of P30.336 trillion as of end-March, the first full month of the Middle East war. This was up by 9.77% year on year from P27.644 trillion.

Banks’ loan growth likewise hit its fastest pace in seven months in March, as lending to businesses and consumers climbed 10.7% to P14.603 trillion from P13.192 trillion a year ago.

Higher investment holdings and continued savings may have helped sustain the sector’s resource growth despite economic woes during the period, said John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies.

“(This) reflects continued expansion in bank lending, deposit growth, and investment holdings, indicating that the financial system remains liquid and broadly resilient despite a more challenging macroeconomic environment,” he noted.

The latest available BSP data also showed nonbanks held P6.347 trillion in resources as of end-2025. This reflects a 7.26% climb from the P5.917-trillion resources logged at end-2024.

Nonbanks include investment houses, finance companies, security dealers, pawnshops, and lending companies.

Institutions such as nonstock savings and loan associations, credit card companies, private insurance firms, the Social Security System, and the Government Service Insurance System are also considered nonbank financial firms.

In the coming months, analysts noted that tighter financial conditions amid lingering economic uncertainties could dampen the growth of the financial sector’s resources.

“Looking ahead, while resources are expected to continue expanding, the pace of growth may moderate amid tighter financial conditions, elevated inflation, and softer economic momentum,” Mr. Asuncion said.

“Key factors to watch include BSP policy direction, liquidity conditions, risk sentiment, and the strength of domestic demand, which will collectively shape the trajectory of financial system resources in the coming months,” he added.

The industry should also strive to maintain healthy asset quality and credit conditions, especially as economic risks continue to weigh on them, according to Mr. Rivera.

Under SEC Memorandum Circular No. 17, a broker director may serve a maximum cumulative period of 10 years in the same exchange, whether cumulative or intermittent.

The circular was signed by SEC Chairperson Francisco Ed. Lim on May 21.

“Strong institutions require regular renewal, independent oversight, and broader representation,” Mr. Lim said in a statement on Thursday.

“By setting reasonable term limits for broker directors, the SEC seeks to strengthen market governance, mitigate potential conflicts of interest, level the playing field among the different categories of directors in exchanges, and align our regulatory framework with internationally recognized standards, while ensuring a fair and orderly transition,” he added.

The SEC said the measure is aligned with principles of the International Organization of Securities Commissions, which promote fair representation in the governance of self-regulatory organizations such as exchanges.

Under the circular, a broker director that has served for five cumulative years will be required to undergo a one-year cooling-off period before becoming eligible for re-election.

The five-year term and 10-year term maximum period is reckoned up to the date of the next annual stockholders’ meeting, following the fifth or 10^th cumulative annual election.

A broker director’s service of more than six months in a year will be counted as one full year for purposes of computing the five-year term and 10-year maximum cumulative service under the circular.

Following the cooling-off period, the re-elected broker director can serve a fresh term of up to five cumulative years.

The SEC circular also provides for a two-year transition period for incumbent broker directors, allowing them to complete their current terms and remain eligible for the next two annual elections.

Covered exchanges that exceed the maximum cumulative term limit for broker directors will be subject to penalties, including a P1-million fine per broker director per year and a P30,000 monthly penalty for each month that the violation continues.

Third or succeeding offense for the same violation will be subject to suspension or revocation of the exchange’s secondary or primary license.

The new directive would affect several long-serving broker directors at the Philippine Stock Exchange, including Ma. Vivian Yuchengco (28 years), Eddie T. Gobing (25 years), and Wilson L. Sy (12 years).

The SEC’s term limit proposal had previously drawn opposition from individuals, including Ms. Yuchengco, who argued that it would be “wrong,” noting that brokers are also shareholders of the PSE.

Certain business groups expressed support for the changes, saying these would promote board renewal and investor confidence, and committed to working with regulators and stakeholders to help develop a fair capital market.

The SEC circular will take effect 15 days after its full publication in the Official Gazette or in at least two newspapers of general circulation. — Alexandria Grace C. Magno

GROWTH PROJECTIONS for the Philippines are likely to be revised downward again as the prolonged conflict in the Middle East continues to weigh on economic activity, according to Asian Development Bank (ADB) Country Director for the Philippines Andrew Jeffries.

“When we did the Asian Development Outlook in very early April, it had several scenarios including more downside scenarios, but the main scenario was based on what I would call an early stabilization scenario,” he told BusinessWorld in an interview.

“So that was envisioning if this crisis got resolved and things went back to normal within a few months. That obviously has not happened,” he added.

In April, the Philippine-based multilateral lender cut its Philippine gross domestic product (GDP) growth forecast to 4.4% from 5.3% previously projected in December.

The revised forecast falls below the government’s 5-6% GDP growth target for 2026 and matches the country’s growth pace last year.

For 2027, the ADB expects the Philippine economy to expand by 5.5%, at the low end of the government’s 5.5-6.5% target range.

On April 29, the ADB downgraded its growth outlook and raised inflation forecasts for developing Asia and the Pacific, reflecting the impact of the conflict. The lender now expects the region to grow by 4.7% in 2026 and 4.8% in 2027, lower than its earlier 5.1% forecast for both years.

Meanwhile, regional inflation is projected to accelerate to 5.2% this year and 4.1% next year from the earlier forecasts of 3.6% and 3.4%, respectively.

Mr. Jeffries said inflation in the region could rise as high as 7.4% this year under a severe downside scenario.

“Now, the Philippines is being disproportionately negatively affected compared to other countries. In the Philippines we just saw 7.2% (inflation) recently, so the Philippines is unfortunately experiencing that kind of much more downside quicker because of the vulnerability,” he said.

“Just given the new numbers that have come out for the quarter that showed lower figure GDP, I guess we will be anticipating lower projections in July, given current trends,” he added.

The Philippine economy expanded by 2.8% in the first quarter, slower than the previous quarter’s 3% growth, reflecting the lingering effects of last year’s corruption scandal and soaring oil prices triggered by the Middle East conflict.

Meanwhile, headline inflation accelerated to 7.2% in April, exceeding the Bangko Sentral ng Pilipinas’ (BSP) 5.6%-6.4% forecast and 2%-4% target range.

WEAKER PESO
Jesus Felipe, a professor at Carlos L. Tiu School of Economics at the De La Salle University (DLSU), said the continued depreciation of the peso will further strain the economy.

“The problem is the type of economy that we have is a very weak economy… It is an economy that has problems really sustaining production capacity,” he told Money Talks with Cathy Yang on One News on Thursday.

“In the end, what is going to happen is that in the short run, at the very least, the current account deficit is going to deteriorate,” he added.

Mr. Felipe said he expects the peso to weaken to P63.5 against the dollar by August.

The peso closed at a record low of P61.75 per dollar on Tuesday, unchanged from Monday’s finish.

While a weaker peso may benefit exporters, Mr. Felipe said this, coupled with soaring fuel prices, would mean more expensive imports which immediately feeds into inflation and lower real incomes.

He said the Philippines should use the crisis as an opportunity to diversify the economy and increase the value-added component of local manufacturing.

The DLSU May economic report projected Philippine GDP growth at 3.11% in 2026, well below the government’s 5-6% target.

It also projected growth at 3.93% in 2027 and 5.71% in 2028, both below the government’s targets of 5.5-6.5% and 6-7%, respectively.

“For the time being, it’s a question of uncertainty. This is not really a deep crisis. We’re not into that. It’s not that growth is negative,” he said.

Mr. Felipe said the uncertainty stems from a combination of peso depreciation and last year’s corruption scandal.

“Everybody’s simply waiting to see what happens. So, consumption is really subdued and investment is really subdued… The recovery will start happening in 2028. It’s very, very important to notice that even with the recovery, we will not reach the targets that the government has been, during this administration, announcing, which is to grow 6.5% to 8%,” he added.

Mr. Felipe said the government should implement reforms aimed at strengthening local firms and improving export competitiveness. He also cited the need for stronger fiscal policy support to improve productivity.

Without structural reforms, the Philippine economy will remain vulnerable to future crises, he added.

“If the government doesn’t do anything toward the long term, a couple of decades, even up to 2050, what we will see is what we call… a weak economy that will be shaken by the next crisis, be it domestic or international,” he added.

Separately, Bank of America Global Research said higher oil prices could significantly widen the country’s current account deficit.

“Oil prices around $90-$100 range would translate into roughly 1-1.3% widening of the current account deficit to 4%,” it said.

“We have previously argued that a sustainable current account deficit for the Philippines is 2-2.5% of GDP which can be financed via foreign direct investment in government funding flows,” it added.

Bank of America (BofA) said a current account deficit nearing 4% would increase reliance on the BSP’s intervention to limit depreciation pressures on the peso.

It also warned that persistently high oil prices could worsen the country’s fiscal position as the government rolls out measures to cushion the impact of inflation.

However, BofA said stronger intervention in the foreign exchange market would be difficult to sustain and could raise concerns over the adequacy of foreign exchange reserves.

The bank expects the peso to weaken to P63 per dollar in the second quarter and to P64 per dollar by yearend amid elevated oil prices.

“An oil price spike remains the key external risk for the Philippines. Domestically, political uncertainty may weigh on public spending, sentiment and growth,” it added.

THE BANGKO SENTRAL ng Pilipinas (BSP) has opened its door to a more aggressive monetary policy path to curb inflation as persistent shocks stemming from the Middle East conflict continue to feed into consumer prices.

In an exclusive interview on One News’ Money Talks with Cathy Yang on Thursday, BSP Governor Eli M. Remolona, Jr. said the Monetary Board is considering a second straight rate hike before its June 18 meeting.

Asked about the likelihood of off-cycle tightening, Mr. Remolona said: “I wouldn’t say likely. We’re considering it.”

However, the central bank chief noted that they may also wait until the May inflation report comes out on June 5 before delivering the next monetary policy decision.

“That’s very close to the next scheduled policy meeting. So, at this point, it’s a toss-up whether we do an off-cycle or we just wait for the regular meeting, which is not that far away anyway,” Mr. Remolona said.

Mr. Remolona also acknowledged the emerging stagflation risks, with slowing economic growth and accelerating inflation, but said the BSP is banking on fiscal policy to help the economy recover as it seeks to maximize its monetary policy tools for inflation-targeting.

The BSP reversed its policy path at its April 23 meeting, starting a new tightening cycle as it delivered its first 25-basis-point increase in over two years to bring the key policy rate to 4.5%.

Central bank officials have said that their latest move was aimed at preventing broader second-round effects of inflation, keeping inflation expectations anchored and steering it back to their target as the prolonged Middle East war dimmed the growth outlook. 

However, despite the preemptive rate hike last month, inflation has accelerated faster than expected, raising the risk that the BSP could fall behind the curve, according to Mr. Remolona.

“Ordinarily, a supply shock, you would look through it because it would go away and then you’re back to where you are. But now this is a big supply shock and it’s a persistent supply shock,” he said. “So, we have to react and we have to react aggressively, I think, in this kind of situation. That’s why we raised rates early.”

Inflation has breached the BSP’s 2%-4% target and monthly forecasts since the war erupted in late February.

In April, rising costs of food and utilities amid elevated oil prices drove the headline print to an over three-year high of 7.2% from 4.1% in March and 1.4% last year. This was past the BSP’s 5.6%-6.4% estimate for the month.

Asked if they are now behind the curve, Mr. Remolona said: “There’s a risk that we are. It depends on whether the supply shock persists.”

He noted that they fell short of anticipating the rapid impact of the oil supply shock on other items in the consumer basket such as fertilizer and rice, as the cost of those items typically takes time to rise.

Mr. Remolona said the BSP is closely monitoring transport fares, which he said were “adjusted very quickly,” as well as faster inflation for the bottom 30% of households.

The central bank governor also noted that the slowdown in consumer spending has helped ease inflation but added that they do not want to address increasing price pressures that way.

“The slowdown in consumer spending helps lower inflation. We don’t want to lower inflation that way. We want consumer spending to resume and then it’s our job to keep inflation low,” Mr. Remolona said, adding that they expect consumer spending to recover.

The central bank projects inflation to hover above 5% for most of the year to average 6.3%, faster than its 5.1% forecast before the war. By 2027, it expects inflation to cool down to 4.3%.

The central bank, according to Mr. Remolona, also remains “active as usual” in the foreign exchange market to smoothen out sharp swings amid recent episodes of the peso plunging to back-to-back historic lows.

The local unit closed at its historic low level of P61.75 against the dollar for two straight trading days this week as lingering market uncertainty from the still-waging war in the Middle East prompted safe-haven demand for the greenback.

However, it gained 15.90 centavos on Thursday to close at P61.581 per dollar from its P61.74 finish on Wednesday.

CHICAGO — Boomi, the data activation company, wants to help enterprises make their data ready for the artificial intelligence (AI) world.

“Only 7% of your organization’s data is AI ready today. AI-ready being things like contextual, consistent, etc. And these projects, they’re going to be abandoned unless you have your data activated and ready,” Steve Lucas, Boomi chairman and chief executive officer (CEO), said in a keynote speech during Boomi World here on May 13. “But we can help. We can do this together.”

Boomi currently moves twice the amount of data per second for its 30,000 customers than Visa does every day, he said.

“When I looked at that number, I realized we are way more about the journey for the data than the destination. At Boomi, our job is to help you move data, get information to the right place, to the right people, to the right agents… with quality and context,” Mr. Lucas said.

The Boomi CEO said data activation is critical to the success of any enterprise, as the data will be activated not just for human intelligence but for AI.

“We want to put you at the center of the center, that center of data. Automation, integration, and AI. And that’s what we’re focused on with Boomi as the data activation company,” Mr. Lucas said.

“Data is not the new oil… Data is simply sand. There are tons of it. Not all of it’s useful, but we can do amazing things with it. We can turn sand into chips, silicon. We can do these things with data, but it’s only if you put it to work. It’s only if you activate that data,” he said.

With all the hype about AI, Mr. Lucas emphasized that AI needs to translate into real return on investment (RoI).

“No matter how good AI is, if RoI doesn’t exist, it won’t matter. Who cares if it’s more creative… The RoI must exist for AI,” he said.

He noted that around 95% of AI projects miss RoI, because “it’s just too easy to start” with no planning and analysis.

“Our job is to find value in RoI. Our job is to not brag about numbers. Our job is to help you become the center of the universe where data, automation, integration, and AI, where they converge,” Mr. Lucas said.

In terms of RoI, he said they are looking at time savings and productivity boosts.

“Are we saving people time? Time equals capacity for our sellers, for our marketers, for our engineers…  I would say that we have solidly saved 100,000 or so hours per year at Boomi worth of productivity,” he said.

“We are still growing. What we’re realizing is that we can produce more products and support more customers with the same number of people that we have. So, if anything, I would say that productivity or all of this AI has led us to a greater ambition for our growth. That’s the RoI,” he added.

ENTERPRISE PLATFORM
Meanwhile, Boomi announced a major expansion of its enterprise platform to support modern, AI-driven environments.

At Boomi World, the company said it was adding new capabilities across orchestrated agentic workflows, agentic engineering, governed agent connectivity, grounded agent context, and localized agent infrastructure.

These innovations are expected to power the agentic enterprise, “where agents and humans work together to drive action and operationalize AI at scale,” it said.

“Every enterprise transformation has a platform moment. For agentic AI, that moment is now. Customers don’t need more disconnected tools; they need an active data foundation that connects data, orchestrates workflows, and governs AI for people and agents. With these new innovations, we’re extending the Boomi Enterprise Platform to make that foundation a reality,” Ed Macosky, chief product and technology officer at Boomi, said.

With an acceleration in AI adoption, many enterprises are having problems in scaling beyond initial use cases because of fragmented systems and lack of operational infrastructure.

Boomi introduced new innovations to address these issues faced by enterprises.

Boomi Connect provides secure, governed connectivity between AI tools and enterprise applications through model context protocol (MCP)-enabled tools, while Boomi AI Gateway enables built-in policy enforcement, cost controls, and observability.

The MCP Registry allows enterprises to scale AI with control and manage MCP servers across Boomi.

Boomi Orchestrate allows customers to turn business ideas into enterprise-grade agentic workflows, while Agent SIM lets organizations simulate and validate agent behavior before deployment.

Boomi Companion is touted to accelerate agentic engineering on the Boomi platform. It is a collection of open-source agent skills that allow developers to design, build, test, deploy, and diagnose integrations through natural language using AI tools that they prefer.

With Agentstudio, developers can invoke Boomi agents from any architecture or pipeline, while non-technical users can securely surface them within custom apps and portals.

Boomi Knowledge Hub provides a single, unified context layer to ensure AI agents and people always work from trusted, up-to-date information.

Boomi Meta Hub grounds AI agents and people in expert-endorsed business definitions that improve agent accuracy, eliminate fragmented interpretations, and ensure consistent business logic at scale.

Distributed Agent Runtime reduces cloud latency and controls costs by deploying agents on-premises while keeping sensitive data behind the firewall.

Agentstudio Multi-region Instances allow enterprises to scale agents globally by leaving agent metadata and runtime execution in specified regions.

“We’re entering the next phase of enterprise AI, where success won’t be defined by how many agents you deploy, but by how well they are connected, governed, and grounded in trusted data. With more than 30,000 customers and AI guided by hundreds of millions of integrations, we’re helping organizations move from connected and automated to fully agentic, and turn AI into real operational impact,” Mr. Lucas said.

Boomi recently received several analyst recognitions, such as being named a Leader for a 12^th straight year and positioned highest for Ability to Execute in the 2026 Gartner Magic Quadrant for Integration Platform as a Service (IPaaS).

It was also named a Leader in the IDC MarketScape: Worldwide API Management 2026 Vendor Assessment, and included in the 2026 Constellation ShortList for Cross-Platform Agentic AI, the 2026 Constellation ShortList for Data Integration and Transformation for Cloud-Based Analytical Data Platforms, and the 2026 Constellation ShortList for IPaaS.

Boomi was also named a Leader in the Nucleus Research iPaaS Technology Value Matrix 2026.

“We believe this wave of analyst recognition reflects the strength of our platform and the momentum we’re seeing from customers who want one strategic foundation for integration, APIs, data, automation, and agentic AI,” Mr. Lucas said.

In a statement on Wednesday, the Razon-led global port operator said the funding will support infrastructure improvements at the Manila International Container Terminal (MICT), the South Luzon Container Terminal (SLCT), which remains under development, and the Mindanao Container Terminal (MCT).

ICTSI said the transaction marks AIIB’s first non-sovereign-backed deal in the Philippines.

The company also said the investments are expected to help raise annual throughput capacity and improve berth productivity across the terminals.

Under the project, MICT’s capacity is targeted to reach 3.7 million twenty-foot equivalent units (TEUs) by 2027, while MCT and SLCT are projected to expand capacity to one million TEUs and 800,000 TEUs, respectively, by 2028.

“ICTSI welcomes this promising partnership with the AIIB, which supports our expansion and sustainability initiatives,” ICTSI Chairman and President Enrique K. Razon, Jr. said.

“We value AIIB’s shared commitment to long-term value creation, inclusive economic growth and responsible business practices, and as such, look forward to strengthening our partnership and accomplishing more together,” he added.

AIIB Chief Officer Yong Zhou said the transaction highlights the multilateral lender’s support for infrastructure development through private sector financing.

“This transaction demonstrates how AIIB can support infrastructure development by deploying innovative financing instruments and working closely with global operators who have the scale and execution capacity to deliver impact for the people we serve,” he said.

For the first quarter, ICTSI reported a 22.56% increase in attributable net income to $293.57 million, driven by higher cargo volumes and contributions from new terminals.

Gross revenues rose 28.94% to $961.11 million during the January-to-March period from $745.42 million a year earlier.

Shares in ICTSI climbed P5.50 or 0.69% to close at P800 each on Wednesday. — Ashley Erika O. Jose

Sharon O. Montañer, ERC’s director for market operations service, said the extension of the suspension will depend on the status of the GEA-All fund.

“So next month, we’re going to assess again if there are (enough) funds. If we see that there’s still difficulty in the payment of the bills, or electricity rates are quite high compared with previous months, and if there is sufficient balance in the fund to suspend, we can extend the suspension,” she told reporters on the sidelines of the BusinessWorld Economic Forum on May 18.

Earlier this month, the ERC ordered to temporarily halt the collection of GEA-All from May to June to ease the financial burden on consumers amid rising inflation and global economic pressures.

GEA-All is a uniform charge amounting to P0.0371 per kilowatt-hour (kWh) that is passed on to on-grid consumers. It is a separate line item in the bills of consumers that started in January 2026.

The amount collected is used to fund the incentives of new renewable energy (RE) projects being awarded under the green energy auction program (GEAP).

As of May 5, GEA-All Fund maintains a balance of approximately P466.49 million, which is sufficient to cover the projected payment requirements of eligible RE developers during the suspension period, according to the ERC.

“If the crisis extends again, then, definitely, the commission will look into that (extension of the suspension) as it has always been one of the tools to relieve customers,” Ms. Montañer said.

Meanwhile, Ms. Montañer said the ERC is not looking to suspend the feed-in tariff allowance (FIT-All). She noted there are no excess funds as the funds are only enough to cover payments to RE developers.

“There’s no sufficient buffer for FIT-All. It’s only enough to pay for the RE developers,” she said.

FIT-All is another RE charge amounting to P0.2011 per kWh that is separate from GEA-All which is being paid by consumers to support emerging RE technologies.

Nic Satur, Jr., chief advocate officer of consumer group Partners for Affordable and Reliable Energy, argued that GEA-All should be permanently removed, as consumers have been shouldering expensive power rates.

“I believe that GEA-All has no legal basis and it should not be collected from consumers,” Mr. Satur told BusinessWorld. “We support our move towards clean energy but not at the expense of consumers.”

Mr. Satur said that consumers have suffered “long hours of brownout, expensive electricity rate and poor service” but are continuously burdened by pass-through charges, including GEA-All and FIT-All.

The crisis in the Middle East has pushed global oil prices higher, increasing power generation costs in the Philippines and driving up electricity rates.

To provide relief to consumers, the regulator directed distribution utilities to suspend electricity service disconnections and to implement staggered or deferred payment schemes.

The suspension covers unpaid electricity bills for both residential and nonresidential consumers covering the May-to-July billing periods.

Customers with a monthly consumption not exceeding 200 kWh may defer payment of their bills and settle them on a staggered basis over three months from receipt of the bill. — Sheldeen Joy Talavera

SINGAPORE — Soaring fuel and fertilizer costs linked to the Middle East conflict, coupled with drier-than-usual conditions, are putting increasing pressure on domestic rice production and threatening the Philippines’ food security, according to the International Rice Research Institute (IRRI).

“Rising fuel and fertilizer costs driven by Middle East tensions, along with the emerging threat of El Niño, weigh heavily on agricultural production and rice farmers,” IRRI Director-General Yvonne Pinto told BusinessWorld on the sidelines of the Philanthropy Asia Summit on Tuesday.

“The prospects for food security in the Philippines in two, three years from now are going to be much worse, unless we support and enable farmers to generate income from the rice they are producing,” she said.

Filipino farmers are now grappling with rising costs and unstable supply of fuel and fertilizer, which are essential to rice production, Ms. Pinto said.

The closure of the Strait of Hormuz has affected global supply of fertilizer and caused prices to spike. The Middle East is a hub for fertilizer production. In particular, the supply of urea from the world’s largest production facility in Qatar has been stopped due to the conflict.

For instance, the cost of urea, a nitrogen-based fertilizer, is 33% higher today, she noted.

Urea (prilled) prices averaged P2,607.42 per 50-kilogram (kg) bag between May 11 and May 15, significantly higher than the P1,686.03 per 50-kg bag in the same period last year, according to data from the Fertilizer and Pesticide Authority. 

“So, these geopolitical tensions really escalate the costs,” Ms. Pinto said. “What the government may have to do is provide safety nets to farmers so that they can afford them.”

Before the Iran war, the Philippine Department of Agriculture (DA) projected palay (unmilled rice) output to reach 20.28 million metric tons (MT) this year, under favorable weather conditions. This has been lowered to 19.87 million MT due to the Middle East conflict and the looming El Niño.

Ms. Pinto said the El Niño phenomenon threatens to disrupt the country’s rice production in the next few months.

The Philippine Atmospheric, Geophysical and Astronomical Services Administration recently warned of the possibility of a moderate to severe dry spell from June until early next year.   

The DA also estimated that agricultural output could be slashed by as much as 30% under a “Super El Niño” scenario.

In 2024, total damage to agriculture due to El Niño reached P15.3 billion, affecting 333,195 farmers and fisherfolk nationwide.

Ms. Pinto said there is a need to focus on reducing labor costs for rice production through better seed distribution, mechanization, and fertilizer supply.

In the medium and long terms, she called for capacity-building for fertilizer production and nature-based solutions like composting to improve affordability for farmers.

“Our analysis tells us we only need to raise yields by one ton per hectare,” Ms. Pinto said. “From all of the strategies I mentioned, it is achievable.”

She also emphasized better coordination between national and local governments to ensure farmers benefit from agricultural policies.

The country’s rice self-sufficiency ratio, which measures the capacity of local production, dropped to 71.7% in 2024, according to the Philippine Statistics Authority. The ratio was the lowest in 37 years, or since the data series began in 1988.

With the Philippines facing another El Niño this year, farmers should have increased access to early warning systems, alternative wetting and drying solutions, and irrigation equipment, Ms. Pinto said.

“These shocks are going to continue, so we’ve got to develop architecture that supports farmers to stay in farming to enable the Philippines to be food secure,” Ms. Pinto said.   

For the past 65 years, IRRI has worked closely with the Philippine government through science-based innovations to help reduce hunger and poverty through rice. Headquartered in Laguna, the organization promotes sustainable agricultural production, improved nutrition, and stronger livelihoods for farmers.

THE PHILIPPINE government should maximize public-private partnerships (PPP) to help narrow the country’s infrastructure gap while easing fiscal pressure from rising debt levels, the Asian Development Bank (ADB) said.

Despite the government’s infrastructure catch-up programs, gaps remain as rapid urbanization and economic growth continue to drive demand, ADB Country Director for the Philippines Andrew Jeffries told BusinessWorld on Wednesday.

“There is an infrastructure gap in the Philippines… The population of Metro Manila has grown so much over a few decades, so investment in urban transport needs to catch up,” he said.

Mr. Jeffries said both the current administration’s “Build Better More” program and the previous administration’s “Build Build Build” initiative were aimed at addressing years of underinvestment.

“As the Philippines grows, population-wise, gross domestic product (GDP)-wise, transport needs to keep growing as well,” he said.

“And with what’s happening now with diesel fuel prices and all, alternatives for public transport become part of that longer-term solution,” he added.

However, Mr. Jeffries said infrastructure catch-up efforts are facing challenges from fiscal pressures and budget constraints.

“The government is keeping a very close eye on public debt levels, so how to bring the private sector into some of these investments as opposed to just government budget and borrowing, I know, is very important to this government,” he said.

The country’s debt-to-GDP ratio reached 65.2% in the first quarter, the highest level since 2005. This comes as the National Government’s outstanding debt climbed by 1.8% to P18.49 trillion as of end-March from P18.16 trillion at the end of February.

Mr. Jeffries said that bringing in private investment ensures that “public debt levels can be maintained or reduced over time as opposed to that being the only funding source.”

“There is a lot of private infrastructure already in this country. And the key is how to make sure it’s done well so that the government and the people are getting the best value for money,” he added.

According to the PPP Center, the PPP pipeline as of May 19 consists of 250 projects valued at P3.13 trillion.  The railway sector accounted for P1.97 trillion of the project pipeline, followed by land transport (P277.26 billion) and property development (P221.46 billion).

TRANSPORT PROJECTS
Meanwhile, Mr. Jeffries said transport projects will continue to account for a significant share of ADB’s financing portfolio in the Philippines in the near term.

The multilateral lender’s portfolio of projects under construction and implementation in the Philippines is valued at $12.5 billion.

“Our transport portfolio exceeds $7 billion, so that’s obviously a nice large percentage of our overall portfolio in the Philippines,” he said.

“That is really because of some extremely large projects we are funding… From a dollar point of view, transport is clearly our largest in our portfolio here in the Philippines,” he added.

These projects include the North-South Commuter Railway, Bataan-Cavite Interlink Bridge, Laguna Lakeshore Road Network Project, and Davao Public Transport Modernization Project.

Asked if ADB is considering additional transport projects, Mr. Jeffries said that “because they (the projects) are so large and it takes considerable time, we’re funding those in time-sliced tranches.”

“So, we have a robust pipeline going forward, just seeing those projects through to completion… We are focusing a lot on implementing what we already have,” he added.

Mr. Jeffries said the government is exploring ways to attract more private investment into the transport sector amid fiscal pressures stemming from the Middle East crisis.

“With the fiscal issues with this Middle East crisis and so on, the government is also looking actually at how to bring more private sector investment into this sector,” he said.

“So, we don’t have new big projects specifically in our pipeline at this time,” he added.

Mr. Jeffries said transport projects are likely to remain a major part of ADB’s Philippine portfolio over the next few years as the government prioritizes completing existing projects.

“I think that proportion will stay more or less the same for the next few years, especially now that the government is very worried about the trade-offs and the fiscal and the public debt levels,” he said.

“They want to focus on implementation and reaching completion of what is already ongoing because until they are done and in operation, they are not benefiting the people,” he added.

FINANCING GAP
The infrastructure and investment gap is not unique to the Philippines. In its Asian Transport 2035 Outlook, the Asian Transport Observatory (ATO) said annual investment demand for transport infrastructure in Asia and the Pacific is expected to more than triple over the next decade.

“Annual investment needs across all transport modes will climb from roughly $800 billion per year during 2000-2025 to approximately $2.6 trillion per year between 2025 and 2035,” the ATO said.

“That is equivalent to 2.3% of LMIC (lower- and middle-income countries’) GDP per year,” it added, referring to those in Asia and the Pacific.

However, the ATO said the projection remains conservative as it only reflects current trends and existing project pipelines.

“Actual needs, accounting for the full cost of the energy transition, the climate adaptation backlog, and the SDG (Sustainable Development Goals) access deficit, are likely to be considerably higher,” it added.

Despite this, the ATO said the region still faces a large financing gap.

“Development banks can do things commercial investors cannot — blend concessional and market-rate lending, absorb early project risk, and attach technical assistance to pipelines that would otherwise stall at the feasibility stage,” it said.

“But there is a limit to what external finance can do. The long-run answer to Asia’s transport financing gap is stronger revenue systems and public finance reform. We are not just facing an infrastructure gap, but also an investment and governance gap,” it added.

AT LEAST 74 local and foreign firms have expressed interest in the planned Metro Rail Transit Line 3 (MRT-3) public-private partnership (PPP), the Department of Transportation (DoTr) said, as the government seeks private sector support for a rail system that analysts say requires substantial upgrades and clearer commercial terms to attract serious long-term operators.

“The MRT-3 PPP is a very viable and promising project. This is an existing line, and we know that, historically, MRT-3 ridership can reach up to 620,000 to 630,000 a day,” Transportation Undersecretary for Railways Timothy John R. Batan said in a statement on Tuesday.

Data from the DoTr showed that MRT-3 passenger traffic increased in 2025 to 141.63 million, up 4.22% from 135.89 million in 2024.

The companies participated in market consultations held on May 14-15 and May 18 for the MRT-3 operations and maintenance (O&M) PPP project, according to the DoTr. The participating firms were from 14 countries, although the department did not identify them.

Mr. Batan said the strong turnout during the market sounding reflected growing private sector confidence in Philippine infrastructure projects.

The Transportation department is targeting approval of the project by the Economy and Development Council by August or September, Acting Transportation Secretary Giovanni Z. Lopez told BusinessWorld.

Based on the agency’s timeline, solicited bidding for the project may begin by October, with bid submissions expected by March 2027.

The contract is targeted for award between June and July 2027, while the winning bidder is expected to take over MRT-3 operations by October next year.

According to information posted on the PPP Center website, the contractor for the capacity expansion, operations, and maintenance contract will take over the management of the existing MRT-3 line, including operations and maintenance, fare collection, and commercial rights within station areas subject to revenue-sharing arrangements with the government.

The project also includes the introduction of Dalian trains into commercial service, additional rolling stock, and upgrades to the signaling, depot, power, and communication systems.

The Asian Development Bank (ADB), which serves as the project’s transaction adviser, supports the initiative.

“With this MRT-3 PPP Project, we’re proud and quite privileged to be a partner of the government of the Philippines in this endeavor to improve the overall connectivity for the Filipino people,” ADB Country Director for the Philippines Andrew Jeffries said during the market sounding conference.

Still, transport analysts cautioned that the project’s commercial attractiveness will depend heavily on how clearly the government defines the scope of work and long-term financial structure.

“The MRT-3 project is not very attractive. That is why it requires a very clear definition,” Rene S. Santiago, an international consultant on transport development and former president of the Transportation Science Society of the Philippines, said on the sidelines of the ADB Transport Forum on Tuesday.

He said the project consultant should clearly specify the upgrades needed for MRT-3, including increased line capacity and redesigned stations to improve accessibility.

Nigel Paul C. Villarete, senior adviser on PPPs at Libra Konsult, Inc., said the DoTr is moving in the “right direction” by pursuing a solicited bidding process instead of entertaining unsolicited proposals.

“They offer an open opportunity to all, and will attract a host of interested parties compared to the unsolicited mode, which gives a huge advantage to the original proponent being able to match any bid that may be submitted,” he said in a Viber message.

He added that transport projects with predictable ridership such as MRT-3 are generally more attractive under a competitive solicited bidding framework.

The DoTr previously rejected unsolicited proposals for the MRT-3 O&M project submitted by Metro Pacific Investments Corp. and San Miguel Corp.

Last year, Metro Pacific Chairman Manuel V. Pangilinan said the company was unlikely to resubmit its proposal without approved fare increases and amid the high cost of rail operations.

The government had initially targeted launching the MRT-3 bidding process before the expiration of its build-lease-transfer agreement with Metro Rail Transit Corp. in July 2025. Following the contract’s expiration, ownership and operations of MRT-3 reverted fully to the government.

THE IMPEACHMENT proceedings against Vice-President Sara Duterte-Carpio have raised the possibility of further instability and political violence in the country, according to an assessment by a unit of Fitch Solutions.

“Public impeachment hearings against VP Sara Duterte have sharply increased Social Polarization and Government Risks by intensifying the Marcos-Duterte power struggle, with the potential for further instability and political violence if she is removed from contention for the 2028 presidency,” GeoQuant said in a report released on Tuesday.

The Senate on Monday convened as an impeachment court for the trial of Ms. Duterte who faces charges of corruption, misuse of public funds, betrayal of public trust, and an alleged plot to assassinate President Ferdinand R. Marcos, Jr.

Ms. Duterte’s trial is expected to start by the first week of June.

GeoQuant noted that social polarization risk and government risk began to increase when the House Committee on Justice began hearings on the impeachment complaint against Ms. Duterte on March 25.

“The case pits two of the country’s most powerful political families against one another, Marcos and Duterte, who ran as a team in the 2022 general elections but have fallen out over differing constituency and policy agendas,” it said.

“With Marcos’ tenure up in May 2028, Duterte is his likely successor, but impeachment would prohibit her from running. Marcos claims not to be behind the investigation, but his allies control the House of Representatives and her removal from the field of potential candidates would allow Marcos to find an ally as successor.”

If convicted, Ms. Duterte would be barred from running for public office.

“Expect both Government and Social Polarization Risks to continue to rise as long as the process continues, with the potential for political violence rising [if] Duterte is sidelined,” GeoQuant said.

Hansley A. Juliano, a political science lecturer at the Ateneo de Manila University, said political polarization ratings typically rise when rival political camps become sharply divided, and businesses begin seeing risks to operational continuity.

“It’s bad for business because usually, shifts in regimes or non-peaceful transitions mean business continuity is compromised or insurances/preparations kick in, which impact operational costs,” he said via Facebook Messenger, adding that firms often face higher insurance and contingency costs during periods of instability.

Mr. Juliano noted the recent turmoil in the Senate likely contributed to concerns flagged by GeoQuant, pointing to leadership upheavals and controversy surrounding efforts to shield Senator Ronald “Bato” M. dela Rosa from accountability.

Mr. Juliano said the unfolding events bear similarities to the political tensions that preceded the impeachment trial of former President Joseph Ejercito Estrada and the subsequent EDSA Dos and Tres (EDSA II and III) protests.

“Whether it ends the same, we have yet to see,” he said. “But it looks unstable nonetheless.”

POLITICAL CIRCUS
Meanwhile, businesses are hoping for an end to the political turmoil hounding the Senate, saying stability is needed to help firms thrive and support faster economic growth, according to Association of Southeast Asian Nations (ASEAN) Business Advisory Council Chairman Jose Ma. “Joey” A. Concepcion III.

“The Philippines has to continue to get its GDP (gross domestic product) going higher,” he told BusinessWorld on the sidelines of the BusinessWorld Economic Forum on Monday.

“For that to happen, the business sector must be doing well. Hopefully our legislators will support this and that the circus happening there will end,” he added.

Mr. Concepcion said that as the Philippines is the chair of the ASEAN this year, there is a responsibility to present the country favorably to foreign investors.

“We have to be able to present a more pleasant picture to our foreign investors. It is very important because Philippines hosting the ASEAN only happens once every 10 to 12 years,” he said.

“So, we are putting every effort, especially from the private sector, to ensure that many investors, business owners from all over the world, will come to the Philippines,” he added.

Mr. Concepcion said the goal is to show that the Philippines is open for business.

“We need Congress and our legislators to bring things back to normal from their point,” he said. “We hope they will be able to really help create an open economy.”

“If you look at very successful countries in ASEAN, they are very focused and they are always straight to the point,” he added.

Aside from political uncertainty, Mr. Concepcion said businesses are also dealing with the impact of the Middle East conflict.

“But let us remain optimistic. One good sign is that it comes when we are the host of ASEAN and when all the leaders come here, the rest of the world will see what the Philippines is all about,” he added.

“We were able to keep food prices stable, but supplies are feeling the pinch,” Mr. Marcos said during a roundtable discussion with Japanese media in Malacañang on Monday. A video and transcript were provided to Palace reporters.

Mr. Marcos said some producers and suppliers had sought government permission to increase the prices of “non-critical” food products.

The Philippines, which relies heavily on imported fuel, has been hit hard by the ongoing Iran conflict. This has prompted the government to declare a year-long energy emergency amid threats to oil supply and rising inflation.

“To the economy, the concern that we have is the concern about stagflation… so this is what we have been trying to control,” Mr. Marcos said.

Stagflation refers to a period of weak economic growth combined with persistently high inflation.

Some analysts have earlier flagged stagflation risks after inflation quickened to a near three-year high of 7.2% in April from 4.1% in March due to soaring gas prices. This was the fastest headline print since the 7.6% seen in March 2023, and also well-above the central bank’s 5.6%-6.4% estimate for the month.   

In the first quarter, gross domestic product (GDP) grew by 2.8%, slowing from the 5.4% expansion in the same quarter last year and the revised 3% GDP growth in the fourth quarter of 2025.

The President said the government will make efforts to slow down rising food costs. Last week, he imposed a P50 price cap on rice.

Mr. Marcos added that public spending has been accelerated to support growth, following earlier delays in budget execution this year.

“Public spending has been accelerated so that the GDP (gross domestic product) growth is still being assisted. We had a delay in public spending in the beginning of this year, basically in the first quarter,” he added, according to a separate statement from his office.

Mr. Marcos remains optimistic that public spending will fuel economic growth within the next quarter and next year.

“Luckily, I suppose, or at least we are still continuing to see marked interest in investment in the Philippines,” he said.

“Perhaps this is because of the policies that we adopted, the incentives that we have put out for investors. So, slowly, we can see the way through this, where we will recover through this.”

Mr. Marcos said spending is increasingly being directed toward “direct spending” to ensure that assistance is felt more immediately by households, including subsidies and transport-related fuel discounts.

He also said the government is seeking ways to encourage investment and support for micro, small and medium enterprises.

“Let us keep the economic machine running… Let us continue to invest,” he said. “We have a total economic mandate that, as much as possible, let us find that money wherever and in other places, such as in the government’s operating expenses.”

Meanwhile, the Philippines is already in a “stagflationary episode,” according to Leonardo A. Lanzona, Jr., an economics professor at the Ateneo de Manila University.

“For a high-growth economy like the Philippines, sub-4% GDP expansion already constitutes stagflationary conditions — the Philippines is experiencing a combination of slowing, very weak/stagnant GDP growth and high and rising inflation, placing the Bangko Sentral ng Pilipinas (BSP) in an unenviable position,” he said via Facebook Messenger.

Whether this stagflationary episode is sustained would depend on “whether the oil shock proves durable (high probability) and whether fiscal catch-up (in infrastructure) materializes (uncertain, given the Department of Public Works and Highways’ track record),” Mr. Lanzona said.

He noted that downgraded growth forecasts by several firms could put Philippine economic growth on track for its weakest performance in 18 years outside of the pandemic period.

“The Marcos signal on food price relief for nonessential items is almost certainly a political pressure valve, not a structural fix — and risks entrenching expectations that the government will accommodate rather than absorb the shock,” he said. — C.M.A. Hufana

THE PHILIPPINE PESO will likely remain the weakest Asian currency despite further monetary policy tightening by the central bank as the economy remains vulnerable to volatile global oil prices amid the ongoing Middle East war, analysts said.

This as the peso on Tuesday closed at the record-low level of P61.75 versus the greenback, the same finish logged on Monday, Bankers Association of the Philippines data showed.

In a report published late on Monday, ING Think economists noted that the impact of oil price swings on the local unit could offset the expected support of additional policy rate hikes by the Bangko Sentral ng Pilipinas (BSP). (See related story)

“We continue to expect a frontloaded but measured tightening cycle, worth 75 bps (basis points) in 2026,” said ING Regional Head of Research for Asia Pacific Deepali Bhargava, Senior Economist for South Korea and Japan Min Joo Kang, and Chief Economist for Greater China Lynn Song.

“While this could provide some near-term support to the PHP (Philippine peso), the currency’s trajectory will remain closely tied to oil price dynamics,” they added.

A separate report from MUFG Bank, Ltd. on Tuesday showed that the peso suffered the sharpest depreciation among currencies in emerging markets in Asia since the Middle East war erupted on Feb. 28.

Based on the report penned by MUFG Senior Currency Analyst Michael Wan, the local unit declined by 6.6% against the dollar from Feb. 28 to May 18.

This was followed by the Indian rupee, which went down by 5.6%, Indonesian rupiah (5%), Thai baht (4.8%), South Korean won (4%), Malaysian ringgit (2.1%), Japanese yen (1.8%), Singapore dollar (1.1%), Vietnamese dong (1.1%), and Taiwan dollar (1%).

The peso has traded around the P60- to P61-a-dollar handle for about a month or since late April, even plunging to back-to-back historic lows versus the greenback.

This came even after markets anticipated some relief for the peso following the BSP’s move to lift the benchmark borrowing cost during its April 23 meeting.

The key interest rate now stands at 4.5% after the Monetary Board delivered its first 25-bp hike last month as it sought to temper second-round price effects and keep inflation expectations anchored amid rising risks from the energy crisis.

ING analysts said the BSP may deliver its second-straight hike at its June 18 review as inflation risks prove more urgent than growth concerns.

“The latest data points suggest inflation risks are now outweighing growth concerns,” they said. “In this context, we do not see the weak GDP (gross domestic product) print deterring Bangko Sentral ng Pilipinas from hiking in June.”

Inflation breached the central bank’s 2%-4% target and market projections for the second month in a row as soaring oil prices spilled over to other key commodities.

In April, high food and utility prices amid still elevated energy costs led the headline print to accelerate to an over three-year high of 7.2%.

On the other hand, the economy faltered in the first quarter, with growth easing to 2.8% from 3% in the previous quarter and 5.4% a year ago as oil shocks added to the lingering effects of last year’s flood control mess.

For ING analysts, however, the economy could remain under pressure amid growing political uncertainty surrounding Vice-President Sara Duterte-Carpio’s impeachment.

“Higher political uncertainty with the impeachment of the vice-president can further push out reforms and growth recovery,” Ms. Bhargava, Ms. Kang, and Mr. Song said.

Meanwhile, Metropolitan Bank and Trust Co. (Metrobank) also sees further BSP tightening as still elevated oil prices and uncertainties over Iran and the US’ peace talks are expected to stoke inflation in the coming months.

“Metrobank still sees elevated risk and volatility in the near term while a peace deal has not been struck,” it said in a note on Monday. “Oil prices are poised to stay high, as global supply remains constricted due to the war’s impact on Middle East oil facilities. Consequently, domestic inflation is expected to quicken in the coming months.”

However, it noted that increased demand for the US dollar will continue to drag the peso, with global dollar flows, not domestic factors, likely driving foreign exchange movements.

Still, the peso’s depreciation may be capped at P62 against the dollar, according to the bank.

“USD/PHP strategy remains range-bound with a slight USD-positive bias, as strong dollar fundamentals and steady corporate demand continue to support the pair, particularly on dips,” Metrobank said.

“However, the upside remains capped near the P61.75-P62.00 resistance zone due to strong supply and positioning. The pair is likely to remain driven by external USD flows rather than domestic catalysts, reinforcing a tactical trading approach,” it added.

On the other hand, ING said global oil prices potentially averaging around $100 per barrel in the quarter will continue to weigh on the country’s current account deficit.

The BSP earlier said the Philippines may see a wider current account gap of $20.3 billion or -4% of GDP this year as the Middle East war could strain the country’s external position.

In 2025, the country had a current account deficit of $16.291 billion or -3.3% of GDP.

STEADY INFLOWS from remittances and the services sector despite emerging external pressures helped narrow the Philippines’ balance of payments (BoP) gap to a three-month low in April, Bangko Sentral ng Pilipinas (BSP) data showed.

Based on central bank data released on Tuesday, the country’s BoP gap narrowed to $2.124 billion last month from the $2.637-billion deficit in March and $2.558-billion shortfall in April last year.

This was the narrowest deficit recorded since the $373 million seen in January. It also marked the sixth consecutive month that the country’s BoP position settled at a shortfall.

In the four months to April, the Philippines’ BoP deficit widened to $7.411 billion from $5.516 billion in the same period a year ago.

BoP refers to the country’s economic transactions with other nations. A deficit shows that the country spent more than it received, while a surplus indicates more funds entered the country.

Stable dollar inflows from remittances and business process outsourcing, slightly better capital flows and softer import bill may have helped narrow the country’s BoP deficit in April, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said via Viber.

However, Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the wider four-month deficit was likely due to lingering external pressures considering the country’s large trade gap.

“The narrower BoP deficit in April reflects some normalization after earlier outflows, but the wider year-to-date gap highlights persistent external pressures, particularly from the country’s large trade deficit amid strong import demand and softer exports,” he said in a Viber message.

“While remittances and services continue to provide support, these have not been enough to offset the current account shortfall, with capital flows remaining sensitive to global conditions,” Mr. Asuncion added.

Separate BSP data showed remittances from Filipinos abroad rose by 2.3% year on year to $2.874 billion in March, the highest in two months.

Latest available data showed the country’s trade-in-goods deficit widened to a six-month high of $4.512 billion in March from $4.015 billion in February and $4.509 billion a year ago.

DOLLAR RESERVES
Meanwhile, revised BSP data showed the Philippines’ dollar reserves fell to its lowest level in over a year, which analysts said was likely due to the central bank’s recent intervention in the foreign exchange market.

As of end-April, the country had $104.328 billion in gross international reserves (GIR), slightly higher than the $104.128 billion earlier reported.

However, it was still a 2.16% decline from the $106.636-billion foreign reserves in March and a 0.93% dip from the $105.308 billion in April 2025.

The end-April tally was the lowest GIR level in 15 months or since the $103.271 billion logged in January last year.

“The decline in GIR indicates that the BSP may have used part of its reserves to smooth peso volatility and meet external obligations,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.

The central bank earlier said it remains present in the foreign exchange market to prevent sharp swings that could stoke inflation as the Middle East war continues to weigh on the currency.

On Tuesday, the peso closed at P61.75 against the dollar, unchanged from its record-low finish on Monday, Bankers Association of the Philippines data showed.

Still, according to the BSP, the country’s latest GIR level “provides a robust external liquidity buffer.”

The end-April reserves translated to 6.9 months’ worth of imports of goods and payments of services and primary income, exceeding the three-month standard.

It can also cover about 3.8 times the country’s short-term external debt based on residual maturity.

GIR comprises foreign-denominated securities, foreign exchange, and other assets such as gold. It enables a country to finance imports and foreign debts, maintain the stability of its currency, and safeguard itself against global economic disruptions.

For Mr. Ravelas, the country’s BoP position will likely remain in a deficit in the coming months considering the economy’s heavy reliance on imports.

“The key message here is not elimination, but manageability — our external position remains ‘deficit but resilient,’ supported by strong fundamentals like remittances, services exports, and adequate reserves,” he added. “So, going forward, it’s about watching global conditions and capital flows closely, while ensuring we sustain these stable sources of FX (foreign exchange).”

SM Investments Corp. Group Economist Robert Dan J. Roces likewise projects a continued deficit in the near term as “high oil prices, elevated global uncertainty, and a still-strong dollar continue to pressure the trade balance and keep demand for dollars firm.”

However, the deficit may be “smaller and more manageable” as the country continues to hold ample GIR and due to steady flows from remittances and services exports, he added.

“The BoP may stay in deficit in the near term, though a smaller and more manageable one,” Mr. Roces said. “The good news is that the country still has ample buffers through GIR, steady remittances, and recurring inflows from services exports, which help prevent external pressures from becoming destabilizing.”

The central bank expects the country’s BoP position to end at a $7.8-billion deficit or -1.5% of its gross domestic product (GDP) this year, wider than the $5.661-billion gap or -1.2% of GDP in 2025.

It also projects the GIR level to reach $111 billion by yearend, higher than the $110.8 billion recorded last year.

GLOBE TELECOM, Inc. said it is allocating P56 billion this year for network upgrades, infrastructure expansion, and data center investments as the listed telecommunications company expands the use of artificial intelligence (AI) across its operations and enterprise services.

“This year alone, we are looking at P56 billion being invested into infrastructure, network upgrades, together with co-investments with STT GDC (ST Telemedia Global Data Centres) for data centers,” Globe Business Marketing Head Jonathan Cristobal told BusinessWorld on the sidelines of the BusinessWorld Economic Forum on Monday.

He said Globe Business, the enterprise arm of Globe Telecom, is increasing investments in AI-related capabilities and expects spending in the segment to continue over the medium term.

“Yes, I would have to say yes, at least in the context that we just had Candle, that is 2028 types of maturity. Investments are being made not in one go,” he said.

Candle Cable is an 8,000-kilometer submarine cable system linking Japan, Taiwan, Indonesia, Malaysia, Singapore, and the Philippines. The system is designed with 24 fiber pairs and a total capacity of 570 terabits per second.

The consortium behind the project includes Meta Platforms, Inc., SoftBank Corp., IPS, Inc., NEC Corp., Telekom Malaysia Bhd., and PT XLSmart Telecom Sejahtera Tbk.

Globe is participating in the consortium as both an investor and landing party, with the cable planned to land at its Nasugbu cable station in Batangas, complementing another Philippine landing point in Baler.

The cable system is expected to support growing demand for cloud services, AI workloads, and enterprise digitalization across the Asia-Pacific region.

Mr. Cristobal said Globe is deploying AI across network operations and facilities management, including applications aimed at optimizing energy consumption and improving efficiencies at cell sites.

He added that Globe Business is also expanding partnerships to provide AI-related solutions and accelerate enterprise adoption in the Philippines.

Separately, ST Telemedia Global Data Centres Philippines said it is evaluating additional sites for expansion amid rising demand for data center capacity, including AI-driven workloads.

STT GDC Philippines is a joint venture among Globe Telecom, Inc., Ayala Corp., and ST Telemedia Global Data Centres. The company operates seven data centers in the Philippines with a combined information technology load of nearly 150 megawatts.

As of end-March, Globe’s capital expenditure rose 51% to P12.74 billion as the company accelerated investments in network expansion and capacity upgrades.

The company previously said it is maintaining its full-year capital expenditure guidance at below $1 billion.

Globe posted first-quarter attributable net income of P5.55 billion, down from P6.98 billion a year earlier, as the absence of one-off gains booked in 2025 and higher financing costs offset growth in revenues and core earnings driven by stronger data demand.

Shares in Globe fell P2 or 0.11% to close at P1,803 apiece on Monday.

THE PHILIPPINES should accelerate artificial intelligence (AI) adoption by upgrading infrastructure and boosting regulation, as slow uptake could prevent the country from fully capturing productivity gains, government and industry leaders said.

Information and Communications Technology Secretary Henry Rhoel R. Aguda said AI governance should balance innovation with safeguards, stressing that trust is central to wider adoption.

“AI governance can’t be about choosing between innovation and protection,” he said at the BusinessWorld Economic Forum on Monday. “We need both. And what we really need to protect is trust. Because without trust, adoption slows down, and the benefits won’t reach the people who need them most.”

Mr. Aguda said his agency is prioritizing data protection and cybersecurity as AI tools become more embedded in business and public services, while also increasing the sophistication of cyberthreats.

“AI is not coming; it’s already here,” he said. “It’s already part of how we work, learn and deliver services.”

Deloitte Philippines Country Head Ramon Chito Ramos said AI adoption among companies is expanding, but human capability gaps are slowing effective use.

“There are big changes that need to be done on the human side,” he told the forum. “Adoption is surprisingly slow, but the pace of change is not,” he added, noting that organizations struggle most with workforce readiness.

He said the country must upgrade digital infrastructure to support AI workloads, noting that policy progress has not been matched by execution speed.

Philippine companies could unlock as much as P2.8 trillion in economic value by 2030 through generative AI adoption, according to global tech advisory firm Access Partnership.

“We’re definitely behind and it’s something we need to recognize,” Mr. Ramos said. “We have progressed around governance and policy. AI infrastructure is our focus now.”

Mr. Aguda said data center capacity in the Philippines is expected to reach about 1.5 gigawatts by 2028, supporting increased AI processing demand and cloud-based services.

UNEVEN READINESS
Jonathan Cristobal, director of Globe Business, the enterprise arm of Globe Telecom, Inc., said AI adoption among companies is broadly positive, but uneven readiness remains a key constraint.

“Adoption rates have been good, but readiness remains uneven,” he said. “Infrastructure, workforce capability remains challenged, together with governance and digital maturity. All of these continue to vary organization per organization.”

He said companies are increasingly willing to integrate AI into operations but struggle with execution and scaling strategies. He also called for stronger incentives to encourage early adoption.

“One thing really is the incentivization of companies — tax incentives where possible, especially for companies who are owning upskilling and training,” he told BusinessWorld on the forum sidelines. “The government should incentivize retraining.”

United Nations Development Programme Philippines economist Mohamed Shahudh said AI adoption challenges are compounded by high internet costs, limited digital literacy and fragmented governance.

He said the Philippines should address widening gaps between technological capability and vulnerability across people, the economy and institutions.

“AI’s benefits to humanity will be realized through a much more complex interaction of two widening gaps: capability and vulnerability; across three pillars of human development: people, economy and governance,” he said.

He added that a unified policy framework is needed to clarify institutional roles, as businesses seek clearer guidance on implementation responsibilities.

Mel Migrino, country head of software firm Gogolook Philippines, said public-private partnerships (PPP) could help accelerate adoption, especially as companies independently develop AI systems and cybersecurity frameworks.

“The technology and cybersecurity industry is oversaturated,” she said. “It is ironic to see that there are cybersecurity attacks. We are in a transition phase, but still vulnerable. There is still a lot of work to do. We’re lagging behind ASEAN-5. It’s good to infuse PPPs.”

She said AI’s impact depends on how governments, companies and workers manage risks alongside productivity gains.

Mr. Aguda said the Department of Informaiton and Communications Technology (DICT) is developing principle-based and flexible regulation to keep pace with rapid technological change.

“At the DICT, our view is simple: rules must be principle-based and flexible,” he said. “Technology moves too fast for rigid regulation.”

“That’s why we are strengthening our national AI strategy roadmap, embedding ethics, transparency, accountability, and human oversight into how AI is used in the country,” he added.

THE MIDDLE EAST WAR is rippling through Asian labor markets, cutting overseas deployments from the Philippines, weakening remittances and adding inflation pressure at home, the International Labour Organization (ILO) said.

“The Philippines illustrates the risks for labor-sending economies,” the Geneva-based agency said in a report released on Monday, after thousands of Filipino workers were repatriated from Gulf countries and overseas deployments dropped amid transport disruptions and weaker regional hiring.

It said close to 5,000 Filipino workers were repatriated from Gulf countries between early March and late April, while deployments to the region fell sharply compared with a year earlier.

Migrant worker outflows to the Gulf dropped to about 16,000 in March from more than 72,000 a year earlier, a decline of roughly 78%, according to the ILO report.

The ILO said the war is no longer confined to the Middle East, as higher oil prices, disrupted shipping routes and weaker business confidence feed inflation and labor market stress across Asia and the Pacific.

It estimated hours worked in the region could fall by 0.7% this year and 1.5% in 2027 under an oil shock scenario tied to a sharp rise in crude prices.

Real labor income in Asia and the Pacific may decline by 1.5% this year and 4.3% next year, equivalent to hundreds of billions of dollars in lost purchasing power, the ILO said.

The unemployment rate in the region could rise by 0.2 percentage point (ppt) this year and 0.8 ppt in 2027.

For the Philippines, the risks extend beyond overseas employment as remittances, a key driver of consumption, begin to soften.

The ILO said remittance inflows to the Philippines slipped from earlier months, raising concern that prolonged Gulf disruptions could weigh on household spending and growth.

Inflation accelerated to 7.2% in April from 4.1% in March, the fastest in more than three years and exceeding the central bank’s 2%-4% target, as higher energy and transport costs fed through the economy.

The ILO said higher prices increase pressure on household purchasing power as overseas income weakens.

It added that if sustained, these trends could weigh on domestic demand and labor markets in the Philippines.

The agency said Asia’s exposure is broad because many economies depend on imported fuel and Gulf-linked migration and trade.

About 22% of workers in the region are in high-exposure sectors including agriculture, manufacturing, construction and transport services.

Transport services were among the most vulnerable industries globally, with more than half of workers in high-exposure roles due to fuel reliance.

Manufacturing and construction also face rising costs and weaker demand as energy prices remain elevated.

The ILO said informal workers are likely to bear a disproportionate share of the shock due to weak income protection.

In Asia and the Pacific, about 24% of informal workers are in high-exposure activities compared with 17% of formal workers.

Labor migration is a key transmission channel for the crisis in South and Southeast Asia, the ILO said.

Early evidence from the Philippines and other South Asian countries shows sharp declines in Gulf deployments and rising repatriations.

Globally, the ILO warned that the conflict could erase the equivalent of millions of full-time jobs this year and in 2027 if oil prices stay elevated.

Real labor income worldwide could decline sharply, the ILO added, reflecting higher energy costs and weaker demand.

Benjamin B. Velasco, an assistant professor at the University of the Philippines Diliman School of Labor and Industrial Relations, said the impact might be temporary and unlikely to fundamentally alter migration patterns.

“The Gulf states are wealthy and have labor supply deficits so will be needing migrant workers in the foreseeable future,” he said via Facebook Messenger.

Migration to the Middle East has remained resilient for decades despite wars and recessions, he pointed out.

The ILO said governments across Asia are rolling out emergency measures including subsidies, tax relief and migrant worker assistance.

The Philippines has introduced repatriation support, monitoring systems and reintegration programs for returning workers.

The ILO warned fiscal constraints might limit support if the conflict persists and energy prices remain high.

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By Justine Irish D. Tabile, Senior Reporter

THE PHILIPPINES’ ambition to become Southeast Asia’s next economic growth engine depends on the private sector’s ability to invest, expand and innovate with confidence, the World Bank (WB) said.

The message today is this: better jobs and prosperity for Filipinos require better conditions for firms to invest, grow, upgrade and become ASEAN’s (Association of Southeast Asian Nations) next growth engine,” Zafer Mustafaoğlu, World Bank country director for the Philippines, told the BusinessWorld Economic Forum on Monday.

He warned that the US-Israel war on Iran, which has pushed up oil prices, is slowing economic activity and lifting inflation pressures.

The Philippine economy grew by a weaker-than-expected 2.8% in the first quarter, as surging oil prices and the lingering fallout from past domestic scandals weighed on activity.

Inflation accelerated to 7.2% in April, above the Philippine central bank’s forecast and target for a second straight month.

Mr. Mustafaoğlu in his keynote said investment weakness is the key concern because it signals fewer expansions, upgrades and productivity improvements that ultimately limit job creation.

Gross capital formation contracted 3.3% in the first quarter, reversing a 4.5% gain a year earlier but improving from the previous quarter’s decline.

BusinessWorld President and Chief Executive Officer Miguel G. Belmonte said the Philippines’ ASEAN chairmanship highlights both opportunity and the need to address domestic competitiveness gaps.

“ASEAN has no shortage of frameworks and roadmaps, from economic blueprints to sector-specific agreements,” he told the forum. “The region has outlined its vision to become one of the world’s biggest economic blocs by the end of the decade.”

He said ASEAN integration goals are well defined, but the Philippines must fix infrastructure bottlenecks and productivity constraints to benefit fully.

Jamil Paolo S. Francisco, executive director of the Asian Institute of Management – Rizalino S. Navarro Center for Competitiveness, said the Philippines has stagnated in global rankings despite earlier gains.

He said productivity gaps remain wide, with the country producing significantly less output per worker compared with regional peers such as Thailand.

“Competitiveness can be tricky because it’s a race,” he pointed out. “Development is a marathon, not a sprint. But here’s the thing — in this marathon, we are getting left behind.”

Anthony Oundjian, Boston Consulting Group Philippines managing director, said the Philippines lags behind its ASEAN peers in terms of output.

“Even though we have the demographics and the consumer market, we really lack scale in productivity per worker,” he said. “We are at around one-fourth of Thailand’s productivity per worker.”

He added that predictability in policy implementation is critical for long-term investment decisions.

Grab Philippines Managing Director Ronald Roda said fragmented local requirements slow business expansion across cities and municipalities nationwide.

Mr. Mustafaoğlu said the Philippines could still attract more foreign investment and move up the artificial intelligence (AI) value chain if reforms accelerate.

He said delays in permits, port congestion and complex paperwork continue to raise costs and discourage firms from expanding.

He urged reforms in business registration, border management and trade agreements to improve competitiveness and reduce transaction costs.

He said business registration in the Philippines takes about 78 days versus one day in Singapore and two in Malaysia.

He also said inefficient border processes act like a hidden tariff that raises costs and slows global supply chain integration.

He added that maximizing free trade agreements could boost productivity through cheaper inputs and stronger competition.

“The country already has a foothold,” Mr. Mustafaoğlu said. “Through semiconductors and intermediate inputs, the Philippines is already connected to the hardware side of AI. But the country is not yet capturing the full opportunity.”

He said the Philippines must move beyond assembly operations into higher value-added activities such as design support, testing and AI-enabled services to remain competitive in the region.

THE PHILIPPINES lost about P141 billion in government revenue to illicit tobacco trade in 2024 and 2025, with illegal vape products emerging as a major source of tax leakages, according to a report by the EU-ASEAN Business Council (EU-ABC) and Euromonitor International Ltd.

The Philippines posted the third-highest revenue loss among six Southeast Asian countries covered by the study, after Indonesia and Malaysia, according to the report released on Monday.

Philippine government revenue losses reached about $2.46 billion during the two-year period, composed of about $2.06 billion from illicit cigarettes and $400 million from illegal e-vapor products.

“The continued rise in illicit tobacco trade in ASEAN (Association of Southeast Asian Nations) and the broader Asia-Pacific region signals displacement of the legitimate market, while amplifying challenges for regulation, enforcement and diminishing fiscal contribution,” the council said in the 43-page report.

The study covered the Philippines, Indonesia, Malaysia, Singapore, Thailand and Vietnam, collectively referred to as ASEAN-6. It assessed the scale of illicit trade involving cigarettes and e-vapors, including contraband, counterfeit, illicit whites, untaxed products and unbranded tobacco.

Among the countries surveyed, the Philippines posted the highest revenue loss tied to illicit e-vapes. It also had the highest incidence of illegal vape products among markets where e-vapors are legal.

The report estimated that 85.6% of e-vapes sold in the Philippines last year were illicit products.

Meanwhile, illicit cigarettes accounted for 25.3% of the local market, significantly higher than the ASEAN-6 average of 16.1%.

Across Southeast Asia, governments were estimated to have lost a combined $13.07 billion in revenues in 2024 and 2025 due to illicit tobacco trade.

The report expects the illicit tobacco market in ASEAN-6 to expand further, with illicit trade incidence expected to rise to 27.8% by 2028 from 23.6% in 2025.

Researchers warned that the growth of illicit tobacco trade could weaken government revenues, hurt legitimate businesses and increase risks to consumers.

This affects government revenues and social welfare programs, drives down the profitability of legal businesses, supports illicit activities in the markets and poses health risks to consumers, EU-ABC said.

EU-ABC Executive Director Chris Humphrey said illicit tobacco trade diverts money away from the formal economy and reduces the region’s attractiveness to investors.

“Here in the Philippines, the National Calamity Fund could easily be funded if we could stop the illicit trade in tobacco and [collect the proper taxes] from it,” he separately told a news briefing

He added that the problem extends beyond the tobacco industry because widespread illicit trade creates unfair competition and discourages investment across sectors.

“It diminishes the region’s attractiveness for investments not just in tobacco, [but]… in other sectors as well,” he said.

‘GOOD ENFORCEMENT’
Firdaus Muhamad, head of consulting for the Asia-Pacific region at Euromonitor, said rising tobacco taxes, affordability pressures and widening price gaps between legal and illicit products continue to fuel demand for illegal products.

“The common trap in this story that we’re telling is affordability pressures,” he told the briefing. “Annual tax increases and the legal-illicit price gap create room for some illicit products to compete.”

He added that illicit operators could still raise prices while remaining cheaper than legal products, allowing illegal sellers to preserve or even expand profit margins.

The EU-ABC estimated illicit tobacco operators in the Philippines earned about $2.2 billion from illegal trade in 2024 and 2025.

To address the problem, Mr. Humphrey called for stronger regional coordination, especially among ASEAN countries with porous land borders.

He said governments should strengthen cooperation on Customs enforcement and improve digital track-and-trace systems to better monitor tobacco products across borders.

Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said stronger enforcement remains the most effective way to combat illicit trade.

“The key measure is good enforcement,” he said by telephone, noting that the Bureau of Internal Revenue, Bureau of Customs and local governments should continue intensifying anti-smuggling operations.

The report also noted that outright bans on e-cigarettes and vape products have not eliminated illicit trade in countries where such restrictions are imposed.

Mr. Sta. Ana noted that while bans could reduce legal sales, they could also expand underground markets if enforcement remains weak.

In an order dated May 15, the regulator modified portions of its Jan. 29 decision and granted parts of NGCP’s motion for reconsideration under the fifth regulatory period (5RP) rate reset covering 2023 to 2027.

The revised ruling increased NGCP’s maximum allowable revenue (MAR) by P4.04 billion to P380.45 billion from the previously approved P376.42 billion. The ERC also raised the grid operator’s adjusted annual revenue requirement (ARR) to P378.71 billion from P374.98 billion.

The adjustment followed the ERC’s recalibration of the weighted average cost of capital (WACC) to 11.92% from 11.74%. The WACC serves as the benchmark used by regulators to determine the return a utility may earn on its investments.

“This WACC is intended to establish a fair and reasonable opportunity for NGCP to recover its efficient costs of capital contemporaneously with the RP (regulatory period) to which the rates ought to apply,” the ERC said in its order.

NGCP operates, maintains, and develops the country’s state-owned power grid under a 50-year franchise granted by Congress. The company began operations in 2009 after taking over transmission functions and related facilities nationwide.

The transmission network delivers electricity from power generators to distribution utilities and directly connected customers through an interconnected system spanning more than 21,000 circuit kilometers of transmission lines, about 20,000 transmission towers, and 140 substations across Luzon, Visayas, and Mindanao.

Based on company data, the Luzon grid accounts for about 74% of the country’s total electricity demand, while the Visayas and Mindanao grids represent 14% and 12%, respectively.

Under its franchise, NGCP is authorized to operate and maintain transmission facilities and undertake the construction and expansion of transmission infrastructure, including the exercise of eminent domain when necessary for transmission projects.

As a regulated public utility, NGCP’s recoverable revenues and allowable returns are subject to periodic ERC rate reset exercises conducted every five years. Under the process, regulated entities submit forecast expenditures, operating costs, and proposed capital projects for evaluation.

The ERC then determines the MAR, or the maximum revenue NGCP may recover from consumers for transmission services, and the ARR, or the amount needed to cover operating and capital-related expenses during the regulatory period.

The regulator also moved the implementation of the 2023 MAR adjustments to October 2026 from the earlier August 2026 schedule to align with NGCP’s billing cycle. — Sheldeen Joy Talavera

THE PHILIPPINES dropped by four spots to rank 59^th out of 133 countries in a good governance index after recording low scores for key indicators like leadership and foresight, global influence, and reputation.

In the 2026 Chandler Good Government Index (CGGI) by the Chandler Institute of Governance (CIG), the Philippines scored 0.533 to place 59^th. This was slightly higher than last year’s score of 0.523, which led it to rank 55^th out of 120 countries.

Singapore topped this year’s index, followed by Norway, Denmark, Finland, and Sweden.

Among East and Southeast Asian countries, the Philippines was behind Singapore, South Korea (16^th place), Japan (17^th), China (39^th), Malaysia (40^th), Indonesia (48^th), Vietnam (49^th), and Thailand (58^th). Meanwhile, it was ahead of Mongolia (71^st), Cambodia (91^st), and Laos (98^th).

The bottom five countries were Lebanon, Sierra Leone, the Democratic Republic of Congo, Chad, and Venezuela.

The CGGI assesses a country’s governance capabilities and public sector effectiveness by using equally weighted indicators categorized into seven pillars.

Countries are scored for each pillar, with one as the highest and zero as the lowest.

The Philippines’ score for leadership and foresight improved to 0.45 from 0.41 last year, while that for robust laws and policies also went up to 0.51 from 0.49.

For the “helping people rise” pillar, it scored 0.64, edging up from 0.63 last year. The Philippines’ score for global influence and reputation also increased slightly to 0.36 from 0.35 last year.

Meanwhile, the country’s scores were unchanged for three pillars: financial stewardship (0.64), strong institutions (0.51), and attractive marketplace (0.5).

Under the leadership and foresight pillar, the Philippines scored 0.72 for adaptability, 0.63 for long-term vision, 0.33 for innovation, 0.33 for strategic prioritization, and 0.25 for ethical leadership.

For strong institutions, the Philippines scored the lowest on implementation (0.17). Meanwhile, it got 0.47 for coordination, 0.60 for quality of bureaucracy, and 0.80 for data capability.

Under global influence and reputation, the country recorded a score of 0.49 for international trade, 0.45 for nation brand, 0.29 for international diplomacy, and 0.20 for passport strength.

On robust laws and policies, the Philippines was graded 0.63 for transparency, 0.55 for regulatory governance, 0.47 for quality of judiciary, and 0.38 for rule of law.

Meanwhile, it scored 0.81 for spending efficiency, 0.74 for government debt, 0.74 for country risk premium, and 0.25 for country budget surplus under the financial stewardship pillar.

For maintaining an attractive marketplace, the Philippines’ score was at 0.56 for stable business regulations, 0.59 for attracting investments, 0.55 for logistics competence, and 0.30 for property rights.

Lastly, under the “helping people rise” pillar, it scored below one for all indicators, namely, price stability (0.97), gender gap (0.89), satisfaction with public services (0.79), employment (0.76), education (0.74), health (0.63), income distribution (0.63), personal safety (0.58), non-discrimination (0.23), and environmental performance (0.17).

The CIG said the Philippines is among the Asia-Pacific economies expected to benefit from its relatively young population, noting the need to create more jobs and boost productivity to unlock its growth potential.

Across the region, the report said climate change risks are more pronounced and threaten the growth of key sectors like agriculture, fisheries, and tourism.

The United States’ uncertain trade policies and rising protectionism also weigh on key export markets in the Asia-Pacific, including the Philippines, but this could be partly cushioned by intra-Asian trade and new agreements, it said.

Ranjit Singh Rye, an assistant professor at the University of the Philippines, said the index shows existing bottlenecks in the country’s bureaucracy.

“We have the laws and policies in place, but the gap between policy on paper and implementation on the ground remains our greatest hurdle,” he said in a Viber message.

He said the Philippines’ 0.36 score for global influence and reputation is a “red flag” for investors.

“It suggests that despite our economic potential, the international community still perceives significant risks regarding our rule of law and long-term stability.”

The decline in the Philippines’ good government ranking could also mean that state-led reforms have not translated to lasting gains for Filipinos, said Emy Ruth D. Gianan, an economics professor at the Polytechnic University of the Philippines.

She noted that the Philippines ranked low in indicators like ethical leadership (92^nd), rule of law (90^th), implementation (120^th), budget surplus (95^th), property rights (106^th), passport strength (100^th), environmental performance (114^th), and non-discrimination (102^nd).

“This could mean that over time, the reforms we planted before have been reversed, especially those after the pandemic lockdown, or have not taken full effect since they do not translate to long-term positive change,” she said in a Facebook Messenger chat.

Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said the Philippines’ latest ranking in the CGGI is “not surprising” amid last year’s corruption scandal.

“This is driven by the massive corruption that happened, the political weaponization of institutions, the policy drift and incoherence, the worsening debt, and the growth slowdown,” he said in a Viber message.

“The BSP’s imperative is to stay ‘ahead of the curve’ by keeping inflation expectations anchored and preventing spillover inflationary impacts on other core expenditure categories that would be even more damaging to medium-term growth,” Eugene Lee, associate director and economist for ASEAN and Australia at Hong Kong-based investment bank CLSA, told BusinessWorld on Friday.

Mr. Lee, also a former senior economist at the Monetary Authority of Singapore, sees Philippine inflation leveling off at around 8% under their best-case scenario, where a gradual deescalation in the conflict keeps global oil prices at an average of $100-$110 per barrel.

However, if the war drags on and tensions reignite, the headline print could surge to around 10%, he said. “The worst-case scenario sees the ceasefire failing to hold, leading to a re-escalation of the conflict and a continued blockade of traffic through the Straits of Hormuz for two to three more months. This exhausts alternative sources of oil reserves and prices could reach $120-130 per barrel.”

“Our expectation of BSP’s tightening cycle depends on how the conflict unfolds. In the best-case scenario, we expect three more rate hikes to 5.25%. In the worst-case scenario, we expect the policy rate to rise to 6%,” Mr. Lee said.

Philippine inflation has quickened rapidly since the Middle East war erupted in late February, printing at 4.1% in March to breach the BSP’s 2%-4% tolerance band. It further accelerated to an over three-year high of 7.2% in April as high global oil prices drove up costs of food and utilities in the country.

In response, the Monetary Board on April 23 delivered its first hike in over two years, raising the policy rate by 25 basis points (bps) to 4.5% as a preemptive measure to temper the spillover effects of rising oil prices and ensure inflation expectations remain anchored.

BSP Governor Eli M. Remolona, Jr. has also left the door open to further tightening via a succession of modest hikes to help combat surging prices

Mr. Lee said the central bank has room to tighten by 75 bps to 150 bps more, adding that the next rate increase could come even before the Monetary Board’s next scheduled review on June 18, depending on the developments of the Middle East conflict.

“The odds of an inter-meeting rate hike are high. During the past policy briefing, the BSP used the term ‘measured’ to reference 25-bp rate hikes and said that the impact of smaller 25-bp hikes was less detrimental to growth than a 50-bp hike. If inflation continues to surprise on the upside and the BSP sees a need for 50-bp hikes at the subsequent policy meeting in June, it could opt to break it into two 25-bp hikes in May and June,” he said.

“While the economic backdrop is weak, there is really nothing that the BSP can do to stimulate the economy in the short run. Given that the risks are skewed towards higher inflation, it is better to worry about inflation first, and growth later.”

The Philippine economy grew by just 2.8% in the first quarter versus 3% in the previous quarter and 5.4% a year ago. This is well below the government’s 5%-6% goal.

Mr. Lee added that the peso could breach the P62-a-dollar mark in the near term due to lingering risk-off sentiment as the oil crisis widens the country’s trade deficit through higher import costs.

“Tightening monetary policy strengthens the peso modestly but may not be able to offset the depreciation factors.”

The peso fell to a fresh all-time low of P61.721 against the dollar on Friday. — Katherine K. Chan

INFRASTRUCTURE SPENDING slumped by 48% year on year in March due to lower disbursements and tighter processes in the wake of a corruption scandal involving government projects.

In its latest National Government (NG) disbursement report, the Department of Budget and Management (DBM) said spending on infrastructure and other capital outlays fell to P59.1 billion in March from P113.5 billion in the same month in 2025.

Month on month, infrastructure spending also declined by 11.1% from P66.4 billion in February.

“The decline was largely attributed to the lower disbursement performance of the Department of Public Works and Highways (DPWH) amid the ongoing completion of carry-over projects and implementation of the current year’s budget,” the DBM said.

“The adoption of stricter validation process for billing claims to ensure project quality and value for money also continued to affect the department’s spending outturn.”

However, the implementation of capital outlay projects under the Revised Armed Forces of the Philippines Modernization Program of the Department of National Defense helped temper the spending decline in March, it said.

For the first quarter, infrastructure spending plunged by 43.5% to P147.8 billion from P261.8 billion a year ago. This accounted for just 11.6% of the government’s full-year program.

Under the 2026 Budget of Expenditures and Sources of Financing, NG cash disbursements for infrastructure and other capital outlays are expected to reach P1.27 trillion this year. This excludes infrastructure subsidies and equities to government-owned and -controlled corporations as well as infrastructure transfers to local government units.

The DBM attributed the first-quarter decline to base effects from the frontloading of projects ahead of the election ban seen during the same period in 2025, the ongoing completion of prior-year obligations, and stricter validation and processing of billing claims.

It said it expects infrastructure spending to pick up in the second quarter as agencies begin obligating funds from allotments released in earlier months.

“Infrastructure departments are, likewise, expected to take advantage of the summer season to expedite construction activities,” it said.

“This will hopefully build up spending momentum and help the recovery of infrastructure spending towards the second half of the year.”

CORRUPTION MESS
Slower infrastructure spending early this year reflects unresolved governance issues and the increasingly corruption-driven nature of the Philippine growth model, said Jose Enrique “Sonny” A. Africa, executive director of think tank IBON Foundation.

“The infrastructure spending slowdown is a direct result of the bureaucratic chilling effect of the flood control and pork barrel corruption scandals last year,” he said in a Viber message.

“Agencies and lawmakers, who shouldn’t even have a role in spending decisions, are much more cautious out of fear of heightened scrutiny over procurement, project quality, and contractor relationships.”

The country was embroiled in a corruption scandal last year linking government officials, lawmakers, and contractors to substandard or nonexistent flood control projects. The controversy slowed government spending and dampened investor and consumer sentiment, which was reflected in the below-target gross domestic product (GDP) growth figures recorded starting in the second half of 2025.

The slump has persisted as lingering effects of the graft mess were compounded by soaring oil prices due to the Middle East war, causing the economy to expand by just 2.8% in the first quarter. This was slower than the 5.4% growth in the same quarter last year and 3% in the fourth quarter of 2025.

Mr. Africa added that “rising political temperature” may be contributing to project implementation delays as the administration could be using its control over infrastructure budgets to paralyze its political opposition.

“This corruption- and patronage-driven distortion of the budget process is also being aggravated by fiscal pressures rapidly bubbling to the surface,” he said. “NG debt has already risen to 65.2% of GDP in the first quarter of the year, which is approaching the highest in 20 years, when it hit 65.7% in 2005.”

Still, Mr. Africa said he expects spending to rebound this second quarter.

“Nonetheless, there is little reason to expect that infrastructure spending will be strong or sustainable enough to substantially boost aggregate growth, which has been in structural slowdown since 2017.”

The government may also be forced to reallocate its resources towards fuel subsidies and other social assistance to respond to the oil shock, he added.

“If so, infrastructure spending may be squeezed not only by corruption-related paralysis but also by a reprioritization under emerging conditions of geopolitical and oil market instability.”

Ser Percival K. Peña-Reyes, a senior research fellow at the Ateneo Center for Economic Research and Development, said the sharp decline in infrastructure disbursements could be attributed to base effects, project completion timing, and implementation delays.

“The outlook for Philippine infrastructure spending in the second quarter of 2026 is for a gradual recovery, but still relatively weak overall,” he said via Facebook Messenger.

“Economists generally expect a stronger pickup in the second half of 2026, rather than an immediate rebound in the second quarter. This is because governance reforms and tighter anti-corruption controls following the flood control controversy have slowed project approvals and payments.”

However, if spending does not rebound, this could weigh on the economy’s prospects as public construction is among the country’s key growth drivers.

“Economists have warned that if infrastructure disbursements remain depressed through the second quarter, quarterly GDP growth could undershoot the government target, unless consumption and exports compensate for the weakness,” he said.

“At the same time, some analysts note that stricter project screening and anti-corruption checks may temporarily slow growth but could improve spending efficiency and project quality over the longer term.”

THE PHILIPPINE BANKING sector’s nonperforming loan (NPL) ratio declined in March, data from the Bangko Sentral ng Pilipinas (BSP) showed, reflecting borrowers’ strong repayment capacity despite the Middle East war.

Based on the latest central bank data, banks’ bad loan ratio improved to 3.29% in March from 3.33% in February.

This was the lowest ratio since 3.07% in December last year and was also down from 3.3% in March 2025.

“The slight easing in the NPL ratio to 3.29% in March likely reflects a mix of stronger loan growth, residual borrower resilience, and regulatory flexibility, rather than a fundamental improvement in asset quality — suggesting that households and firms are still broadly current on their obligations despite the Middle East conflict,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said via Viber.

Borrowers’ steady repayments despite external risks and banks’ preemptive move to tighten their credit standards and restructure loans helped protect their asset quality, said Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co.

“It’s a marginal but positive move,” he said in a Viber message. “Borrowers are still paying — helped by steady jobs and manageable cash flows. Banks’ earlier prudence (tight lending, restructuring) is also cushioning asset quality.”

“So far, resilience is holding. External shocks haven’t derailed repayment behavior yet. The domestic economy remains the anchor.”

The lower NPL ratio for the month came even as banks’ nonperforming loans edged up by 2.69% to P568.554 billion as of March from P553.678 billion in February.

Year on year, soured loans jumped by 10.16% from P516.116 billion at end-March 2025.

Loans are considered nonperforming once they are unpaid for at least 90 days after the due date and deemed to be risky assets since borrowers are unlikely to pay.

At end-March, Philippine banks had a total loan book of P17.263 trillion, growing by 3.97% from P16.603 trillion a month prior and by 10.44% from P15.631 trillion in the same period last year.

Meanwhile, their past due loans increased by 2.87% to P736.181 billion from P715.658 billion as of February and by 13.9% from P646.368 billion a year earlier.

Banks’ past due loan ratio improved month on month to 4.26% from 4.31% but worsened from 4.14% in March 2025.   

Restructured loans reached P338.39 billion as of end-March, rising by 0.89% from P335.392 billion as of February and by 8.64% from P311.485 billion in the previous year.

These accounted for just 1.96% of the sector’s total loan portfolio during the period, lower than the 2.02% seen in February and 1.99% last year.

On the other hand, banks’ loan loss reserves slipped by 0.01% month on month to P519.46 billion as of March from P519.525 billion. However, this was 5.89% higher than the P490.564 billion in the comparable year-ago period.

This was equivalent to 3.01% of their total loan book, lower than 3.13% in February and 3.14% in the same month in 2025.

BSP data also showed that banks’ NPL coverage ratio, which gauges the allowance for potential losses due to bad loans, slipped to 91.37% in March from 93.83% a month earlier and 95.05% a year ago.

Mr. Asuncion said banks’ soured loans are likely to stay manageable, but the economic fallout from the Middle East conflict could test borrowers’ ability to repay their debt.

“(T)his resilience may prove temporary, as the transmission of higher oil prices, inflation, and tighter financial conditions typically lags, which could gradually erode repayment capacity, particularly among MSMEs (micro, small, and medium enterprises) and retail borrowers,” he said.

“As such, while NPLs may remain relatively contained in the near term, risks are tilted to the upside, with a stabilization or mild uptick more likely in the coming months should external shocks persist and begin to weigh more meaningfully on incomes, consumption, and business margins.”

Mr. Ravelas also said that the NPL ratio could be steady or slightly higher in the coming months, as the US-Iran war could lead to a higher-for-longer interest rate environment, sticky inflation due to rising global oil prices, and continued peso depreciation amid the lack of a peace deal.

He added that the outlook remains fragile as risks continue to build.

The central bank last month began its tightening cycle, raising its policy rate by 25 basis points to 4.5% in a move to contain second-round price effects and keep inflation expectations anchored amid the energy crisis.

BSP Governor Eli M. Remolona, Jr. earlier said they could continue delivering modest rate hikes to steer inflation back to their 2%-4% tolerance band.

The Monetary Board will hold its next policy meeting on June 18.

The Philippines imports over 90% of its oil from the Middle East and is also a heavy net importer of food, making it highly vulnerable to global price shocks.

In April, headline inflation accelerated to 7.2% in April from 4.1% a month earlier, the fastest since March 2023, as the crisis pushed up prices of food and utilities. This is well above the central bank’s 2%-4% goal.

Gross domestic product growth also slowed to a new post-pandemic low of 2.8% in the first quarter as the fallout from a corruption scandal and soaring oil prices dampened economic activity.

The conflict has also hit financial markets, with the peso now trading at the P60-per-dollar level versus its P58.79 finish at end-2025. On Friday, it plunged to a new record low of P61.721 against the greenback.

“We humbly urge the concerned agencies to facilitate the prompt processing and release of the pending subsidies and voucher program assistance,” the Catholic Educational Association of the Philippines (CEAP) and the CBCP-Episcopal Commission on Catholic Education (ECCE) said in a joint statement on Friday.

The groups noted that among the schools affected are “small and financially vulnerable institutions”, which consider the government subsidies and voucher program assistance essential in sustaining their operations amid rising electricity prices.

“Many of these schools serve low-income communities and continue to rely heavily on government assistance programs in order to keep education accessible, maintain personnel, and meet operational obligations,” the groups said in a statement on Friday.

“The continued delay has placed serious strain on school finances at a time when institutions are already preparing for the next academic year,” they added.

The pending subsidies also impact the timely payment of salaries to teaching and non-teaching staff, the settlement of utilities and contractual obligations, and the procurement of instructional materials.

“The financial assistance of the government is a strong lifeline that enables them to continue participating in the shared national responsibility of delivering education,” the groups said.

Data from the Private Education Assistance Committee (PEAC) showed that over 3,600 institutions nationwide are ESC-participating schools.

Meanwhile, over 4,500 schools are included in the SHS-VP Alphalist.

The Department of Education (DepEd) earlier this month announced the expansion of private school subsidies under the Expanded Government Assistance to Students and Teachers in Private Education (E-GASTPE) program.

The expansion is set to benefit over 2.4 million financially challenged learners enrolled in private schools. Of which, around 990,000 junior high school students will be covered under the ESC program, while 1.47 million SHS students will benefit from the SHS-VP.— Almira Louise S. Martinez

Mallgoers and fans alike can immerse themselves in a series of interactive and visually stunning installations inspired by beloved Star Wars characters and stories. Guests can step into the story through special photo spots, including dynamic, character-inspired backdrops designed for unforgettable snapshots.

Adding to the excitement, fans can live out their own galactic adventures with themed photo opportunities, such as imagining themselves riding a speeder bike or standing alongside a towering AT-ST. These setups offer a special way to experience the thrill of Star Wars up close.

Collectors and enthusiasts can also shop limited-edition merchandise and fan-favorite items at participating retailers, including Disney Store by SM, Filbars, Geek PH, Miniso, The SM Store, and Toy Kingdom making it the perfect opportunity to bring home Star Wars-themed collectibles.

Star Wars fan cosplayers will also grace the attraction on May 16-17 and May 23-24 for fan gatherings and a lightsaber choreography tutorial to make weekends more special.

Meanwhile, the event builds anticipation for the upcoming theatrical release of Star Wars: The Mandalorian and Grogu, opening exclusively in cinemas on May 20, 2026. The film follows legendary Mandalorian bounty hunter Din Djarin and his young apprentice Grogu as they embark on their most thrilling mission yet. Set in a galaxy where the evil Empire has fallen, and Imperial warlords remain scattered, the story unfolds as the New Republic works to protect everything the Rebellion fought for.

Directed by Jon Favreau and starring Pedro Pascal and Sigourney Weaver, the film is produced by industry veterans Jon Favreau, Kathleen Kennedy, Dave Filoni, and Ian Bryce, with a score by Ludwig Göransson.

Don’t miss Star Wars Most Wanted at your most loved mall, SM North EDSA, part of SM Fandom’s exciting lineup of activities this year. Be part of an epic celebration where every shared moment lets you Gala To The Max with a maxed-out experience at SM Supermalls.

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In a statement released Friday, Google said that amid the rapid advancement of AI, the company is continuously upgrading its generative AI Search features, such as AI Mode and AI Overviews, to help users connect more easily with authentic voices and explore useful information across the web.

“Google is continuing to improve how it shows links in its AI Search features and developing new ways to help users find the sources, brands, and websites they value,” the company said.

Among the five new updates to its AI Search is a feature that suggests related articles and in-depth analyses at the end of AI-generated responses to help users further explore a topic.

Google also introduced a feature that highlights links from users’ news subscriptions in AI Mode and AI Overviews, allowing easier access to trusted and subscribed sources.

Another update includes previews of discussions from social media platforms, public forums, and other firsthand sources to help users access practical advice and experiences shared by other people. Google said these previews may also include additional context such as a creator’s name, handle, or online community to help users decide which discussions they want to explore further.

The company also said that a new update allows users to see more links directly within AI-generated responses, making it easier to immediately access relevant websites while reading Search summaries.

Google likewise introduced a website preview feature on desktop that shows information such as a webpage title or website name when users hover over inline links before clicking them.

The feature aims to help users better understand where a link leads and make them more confident in visiting helpful websites.

The tech giant said that by improving the visibility and helpfulness of links and showcasing original voices, its AI in Search helps users discover the web and connect directly to relevant sources and creators.

“Google is committed to continuing to test, learn, and improve these features based on what works best for users,” it said.— Edg Adrian A. Eva

“Employers are actually expecting that people come in ready to work, and micro-credentials help with that,” Coursera Global Head of Enterprise Anthony Salcito told reporters during a panel interview on Friday.

“A micro-credential signals that employees not only demonstrate the skill, but they’re learning throughout their life to align with the culture of work that they’re bringing in,” he added.

The demand for graduates equipped with industry-aligned micro-credentials can be seen in the platform’s Micro-Credentials Impact Report 2026.

Data from the report showed that 96% of Filipino employers hired candidates with more than three micro-credentials last year, and 89% are willing to offer higher starting salaries to micro-credentialed graduates.

Employers added that candidates with micro-credentials were also able to progress faster in hiring pipelines (77%), and performed better during their first year of employment (90%), compared to those who didn’t have them.

On the learners’ side, 85% of Filipino graduates were able to secure a role aligned to their field within 12 months of acquiring a micro-credential. While 83% said that it has helped improve their interview performance.

“Our data shows in the impact report on micro-credentials that we’re sharing is that employers are willing to pay and recognize the value of the differentiation,” Mr. Salcito said.

“Certainly this is a huge ticket for a candidate looking for jobs, not only to get a better-paying job, but obviously to differentiate themselves from other candidates,” he added.

The Philippines has the highest number of registered learners on Coursera at 3.3 million, with 20% year-over-year (YoY) growth.

Among the popular course topics among Filipinos are data, project management, cybersecurity, digital marketing, and sustainable development goals.

GenAI courses also revealed a significant demand, with 2.3 million enrollments, up from 75,000 last year. The platform noted that one enrollment happens every five minutes in GenAI courses, which is faster than one enrollment every nine minutes, a year earlier.

As of March 2026, course enrollments in the country were the highest within the region, at 6.8 million. It currently has partnerships with 15 educational institutions nationwide, including iPeople Inc., University of the Philippines, and University of Santo Tomas.— Almira Louise S. Martinez

DBP President and CEO Michael O. de Jesus said the Bank was hailed as the top performing government-owned and -controlled corporation (GOCC) during the recent Governance Commission for GOCCs (GCG) Awards and the “Top Community-Centric Company” during the Asia Corporate Excellence and Sustainability (ACES) Awards.

“It is truly humbling for DBP to be recognized for its corporate governance practices and sustainability efforts anchored with the ideals of the Marcos Administration and geared towards advancing the welfare of the Filipino people,” de Jesus said.

DBP is the ninth largest bank in the country with total assets of P1.041 trillion, primarily providing funding assistance to projects in four economic sectors — infrastructure and logistics; micro, small and medium enterprises; social services and community services; and the environment.

GCG AWARD

De Jesus said DBP was the top ranked GOCC in the GCG 2024 Corporate Governance Scorecard (CGS) which evaluates GOCCs based on international governance standards, obtaining a final CGS score of 104.17%, a sharp rise from the 102.67% it garnered from the previous CGS.

GCG is the primary central policy-making and regulatory body of GOCCs that evaluates corporate governance standards and practices. Its CGS serves as an instrument to assess the corporate governance initiatives and practices of GOCCs using a methodology benchmarked against the Corporate Governance principles of the Organization for Economic Cooperation and Development and the ASEAN Corporate Governance Scorecard.

ACES AWARD

Organized by Malaysian-based MORS Group, the ACES Awards recognized industry leaders in Asia that have successfully integrated Environmental, Social, and Governance (ESG) principles into their operations.

De Jesus noted that this is the third consecutive win of DBP in the ACES awards, this time under the Corporate Sustainability category for its reforestation program with the Mindanao State University-Buug campus and its participation in the Department of Agriculture’s Agri-Puhunan at Pantawid Program.

“These accolades are a testament to DBP’s tireless pursuit of exemplary public service, ably fulfilling its developmental mandate and supporting the National Government’s thrust of promoting progress today and in the years ahead,” de Jesus said.

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The corporate regulator in a memorandum circular deferred the “per month of delay” penalty in the submission of annual financial statements and general information sheets.

The previous system imposed escalating charges based on the length of delay, with each fraction of a month treated as a full month and penalties capped at 12 months for prolonged nonfiling.

“The suspension of the monthly penalty on a prospective basis constitutes a concrete and meaningful regulatory reform measure that directly reduces the compliance cost burden on all registered corporations, including micro, small and medium enterprises (MSME), and demonstrates the commission’s commitment to a more business-friendly regulatory environment,” it said in the circular.

The suspension will remain effective until Dec. 31 unless extended or modified by the commission.

The order covers all domestic and foreign corporations under SEC jurisdiction, including stock and nonstock and one-person corporations.

The SEC said companies must still file annual financial statements and general information sheets within prescribed deadlines under the Revised Corporation Code and existing rules, while base penalties for late or nonfiling remain in effect.

For pending monitoring cases, the SEC said monthly penalties would no longer be included in assessments, while companies that already received final assessments but have yet to pay will be issued updated billing statements excluding the monthly charge.

However, penalties that had been fully paid before the order took effect will no longer be refunded or credited.

“As we celebrate the Ease of Doing Business month this May, the SEC reaffirms its commitment to foster a robust and responsive business environment,” SEC Chairman Francisco Ed. Lim said in a statement.

“By suspending the compounding monthly penalties, we are providing corporations an opportunity to get back their good standing without the burden of mounting transaction costs, as part of our goal of pushing corporations toward full compliance and sustainable growth,” he added.

In a separate circular, the SEC also revised rules defining “qualified buyers” under the Securities Regulation Code by expanding the types of securities included in computing required investment portfolios.

Under the revised rules, individual investors must have either at least P10 million in annual gross income for two straight years or total portfolio investments of at least P10 million, including registered and exempt securities, along with relevant investment experience requirements.

For juridical entities, the threshold remains at either P100 million in gross assets or P60 million in portfolio investments. — Alexandria Grace C. Magno

With the theme “Advancing the ASEAN Agenda: Turning Regional Vision to Corporate Action,” the forum is expected to bring together policymakers, economists, top executives and business leaders from various industries for discussions on how the Philippines can use its ASEAN chairmanship to boost economic growth and strengthen its role in the region.

The opening keynote, titled “Positioning the Philippines as ASEAN’s Next Economic Engine,” will be delivered by Zafer Mustafaoğlu, division director for the Philippines, Malaysia and Brunei in the East Asia and Pacific region at the World Bank.

The first panel, focusing on “Benchmarking the Philippines’ Competitiveness: Lessons From the Region’s Best,” will feature Jestoni A. Olivo, senior economist at the Philippine Competition Commission; Anthony Oundjian, managing director and senior partner at Boston Consulting Group’s Manila office; and Jamil Paolo S. Francisco, executive director of the Asian Institute of Management-Rizalino S. Navarro Center for Competitiveness.

Technology and innovation will also be discussed in a video message from Information and Communications Technology Secretary Henry Rhoel R. Aguda, together with a panel discussion on “Beyond Adoption: Tapping AI’s Potential through Regulation and Capacity-Building,” featuring Angeline Po, vice-president for product management at Globe Business; Bennett Aquino, partner at Bain & Company; Mel T. Migriño, country head and manager of Gogolook/Whoscall; Mohamed Shahudh, country economist at the United Nations Development Programme Philippines; and Chito Ramos, country leader of Deloitte Philippines.

The focus will veer toward sector-specific priorities in the afternoon sessions. A fireside chat with Southeast Asian Regional Center for Graduate Study and Research in Agriculture Director Mercedita A. Sombilla will focus on how Philippine agriculture can become more competitive within ASEAN.

This will be followed by a panel discussion themed “Philippine Energy: Powering National Competitiveness and Regional Integration,” featuring Energy Regulatory Commission Chairperson Francis Saturnino C. Juan, Institute for Climate and Sustainable Cities Executive Director Angelo Kairos dela Cruz, and ACEN Chief Finance Officer Jonathan Paul Back.

The implications of geopolitical risks for the country will also be tackled in a fireside chat with De La Salle University Professor Don McLain Gill.

The final panel discussion, which will include Jayford Anthony Pelaez, chief commercial officer of AC Logistics; Felino James Marcelo, president and chief executive officer of Maybank Philippines; Paul E. Albano, general manager of GCash for Business; and Jude Aguilar, chairman of the Philippine Chamber of Commerce and Industry, will focus on “Bringing MSMEs to the Global Marketplace.”

The forum will conclude with a closing keynote from Jose Ma. “Joey” Concepcion III, chairman of the ASEAN Business Advisory Council and founder of Go Negosyo, who will provide a “CEO Perspective on ASEAN 2026: Business Leadership in a More Integrated Region.”

Reserve seats at https://businessworldecoforum.helixpay.ph/.

In a statement on Thursday, the agency said collections last month were 3.12% higher than its target of P409.6 billion. Gross collections also inched up by 0.13% year on year in April.

However, the April haul was below the P499.1-billion monthly projection under the 2026 Budget of Expenditures and Sources of Financing (BESF).

“This strong April performance came even with the moved deadline for filing the 2025 AITR,” the BIR said.

Last month, President Ferdinand R. Marcos, Jr. ordered the extension of the filing deadline for 2025 AITRs to May 15 from the original April 15 cutoff “to give taxpayers more time to file properly and submit the required documents without penalties.”

Meanwhile, BIR Commissioner Charlito Martin R. Mendoza attributed the performance to intensified tax campaign efforts by the national office, revenue regions, revenue district offices, and the large taxpayer service in recent months.

“Even with the extension of the AITR filing deadline, the BIR sustained solid collection performance in April, reflecting the impact of higher taxpayer confidence, better digital services, and continuing reforms under the BIR DARES reform agenda,” he said.

DARES stands for “Digital and Data Transformation, Audit Reform and Accountability, Revenue Collection and Base Protection, Employee Empowerment and Welfare Promotion, Service Excellence, and Stakeholder Engagement.”

For the January-to-April period, BIR’s total gross collections reached P1.155 trillion, exceeding its target for the first four months of the year by 0.84% or P9.631 billion. Collections also rose 3.58% from the same period a year earlier.

“The Bureau’s collection performance for the first four months shows that it remains on track to meet this year’s revenue goal while continuing to improve taxpayer service,” Mr. Mendoza said.

“The Bureau is optimistic for May collections to be positive as well, with the remaining 2025 annual income tax payments due mid-month,” he added.

This month, the BIR expects collections to reach P264.68 billion under the BESF. However, the target was increased to P279.06 billion under Revenue Memorandum Order No. 009-2026, which set the agency’s emerging collection goal for the year.

For 2026, the BIR’s revenue collection target under the BESF is set at P3.58 trillion, while its emerging collection goal stands at P3.43 trillion, 4% lower than the original target.

Separately, the Bureau posted Department of Finance (DoF) Order No. 018-2025, which outlines the guidelines for accrediting value-added tax (VAT) refund system operators in line with the VAT refund mechanism for nonresident tourists.

To qualify for pre-accreditation, operators must provide VAT refund services in at least 20 countries, have a minimum of five years’ experience, and operate digital end-to-end VAT refund services in at least two geographical regions, among other requirements.

The order also listed financial and operational requirements, including a P500,000 accreditation fee, a P5-million performance bond, service level agreements, and a “traveler-pay” model, where operating costs are deducted from VAT refunds. — Justine Irish D. Tabile

Alvin Joseph A. Arogo, head of research and chief economist at Philippine National Bank (PNB), said the events at the Senate on Wednesday would “certainly” not help an economy already grappling with weak sentiment tied to the flood control controversy, high inflation, and rising oil prices.

“If something like what you showed earlier happened, and we had strong growth, low inflation, a lot of reforms, then money managers can look through it,” he said in an interview on Money Talks with Cathy Yang on One News on Thursday.

“But when you already have very weak growth (and) very high inflation, then you have something like this, then the political risk becomes (even) more important,” he added.

Gunshots were reported inside the Senate building on Wednesday night amid tensions surrounding Senator Ronald M. dela Rosa, who is wanted by the International Criminal Court for his alleged role in former President Rodrigo R. Duterte’s anti-drug campaign.

Mr. Arogo said the latest political tensions could further dampen sentiment among money managers, businesses and consumers.

“Well, initially, it will just make it more difficult for money managers to have confidence in the economy. But what we have seen in the corruption probe is that it spilled over even to business and consumer confidence,” he said.

“So, these are indications that the political risk, on top of the Middle East crisis (and) on top of high oil prices, will definitely make it more difficult for businesses and consumers to spend confidently in the coming quarters,” he added.

Business groups also raised concerns over the latest Senate incident, warning about possible effects on investor sentiment and the country’s international reputation.

“We can say that this is the final nail in the coffin in our struggle to keep our businesses just even above water due to the various disturbances and inadequacies in the Philippine economic condition,” Foreign Buyers Association of the Philippines (FOBAP) President Robert M. Young said by telephone.

He said the Senate incident may affect the confidence of foreign buyers and investors in the country.

“Therefore, the FOBAP is very much concerned that this will be affecting our business due to the lack of comfort and the fear of the foreign buyers to come over to the Philippines and invest,” he added.

Management Association of the Philippines President Donald Patrick L. Lim said political tensions are distracting policymakers from more pressing economic concerns.

“At a time of slowing growth, rising costs, and global uncertainty, businesses want to see faster action, stability, and decisive governance rather than prolonged political maneuvering,” he said in a Viber message.

He added that investor confidence remains closely tied to political stability.

“The business community is concerned that continued political noise and public confrontations within government institutions risk distracting leaders from far more urgent economic challenges facing the country,” he said.

Meanwhile, Federation of Philippine Industries Chairman Elizabeth H. Lee said businesses are looking for assurances that institutions remain stable and the rule of law is upheld.

“For business and industry, the assurance we seek is that institutions remain resilient, laws are upheld, and governance continues to function with transparency and accountability,” she said in a statement.

HSBC Global Investment Research separately warned that stagflation risks are increasing in the Philippines after recent economic data showed slowing growth and faster inflation.

“All told, stagflation in the Philippines has taken shape. And the economic environment should get tougher moving forward,” HSBC Senior ASEAN Economist Aris D. Dacanay said in a report on Thursday.

HSBC lowered its Philippine growth forecast to 3.4% this year from 4.6% previously, while raising its inflation forecast to 6.6% from 4%.

The Philippine economy grew by 2.8% in the first quarter, the weakest pace since the pandemic, while April inflation accelerated to 7.2%, exceeding market expectations.

Mr. Arogo said the country is already facing stagflationary pressures.

“We have very high inflation. We have very slow growth. So, at the very least, the pressure of stagflation is there,” he said.

ANZ Research also flagged rising balance-of-payment (BoP) risks for the Philippines and other Southeast Asian economies as higher oil prices widen current account deficits amid weak capital inflows.

“The emerging challenge for all three economies is that their current account deficits are set to widen on the back of higher oil prices, which will compound the BoP problem on account of weak capital inflows,” ANZ said in a report.

The bank noted that the Bangko Sentral ng Pilipinas (BSP) itself expects the Philippines’ current account deficit to hit 4% of gross domestic product (GDP) this year, while the overall BoP deficit may reach 1.5% of GDP.

HSBC said the BSP may need to raise rates more aggressively to prevent inflation expectations from becoming entrenched. The bank said the central bank could increase borrowing costs by as much as 150 basis points, potentially bringing the benchmark rate to 6%.

BSP Governor Eli M. Remolona, Jr. has signaled openness to further modest rate hikes as the central bank seeks to bring inflation back to its 2%-4% target range. — Katherine K. Chan and Beatriz Marie D. Cruz

FOREIGN INVESTMENT pledges in the Philippines rose by 52.3% in the first quarter from a low base a year earlier, although commitments fell to their lowest level in four quarters as analysts cited geopolitical uncertainty, elevated costs, and weaker domestic growth as risks to investor sentiment.

Preliminary data from the Philippine Statistics Authority (PSA) showed foreign commitments approved by the country’s investment promotion agencies (IPAs) reached P42.64 billion in the January-to-March period, higher than the revised P27.99 billion logged in the same quarter in 2025.

However, this was the lowest level in four quarters, or since the P27.99 billion recorded in the first quarter of 2025. It was also lower than the P105.66 billion foreign investment pledges approved in the fourth quarter last year.

Ateneo Center for Economic Research and Development Senior Research Fellow Ser Percival K. Peña-Reyes attributed the increase in approved foreign investment pledges to “a rebound from a low base in 2025, stronger investor interest in key industries…, and improved investment momentum and export prospects despite global uncertainties.”

On the same note, Cid L. Terosa, an associate professor at the University of Asia and the Pacific, said the sharp growth in foreign investment pledges reflected “improved investor sentiment.”

He added that developments in new technology and future-ready economic zones align with the administration’s drive to revitalize the renewable energy, manufacturing, IT-business process management (IT-BPM) and logistics industries, and to streamline investment inflows through reforms such as the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy or CREATE MORE law. 

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said that despite the sharp year-on-year growth, approved foreign investments remained relatively low, reflecting cautious investor sentiment.

“The quarter was characterized by fewer large-scale, capital-intensive projects, with many firms opting to delay or phase investments amid global uncertainty. In addition, domestic investment momentum has softened, which likely weighed on overall approvals during the period,” he said in an e-mail.

GEOPOLITICAL RISKS
Analysts said the ongoing Middle East conflict weighed on investor sentiment during the quarter and prompted investors to adopt a more cautious stance.

“While total approved foreign investments rose sharply year on year, the conflict created economic uncertainty that weighed on investor sentiment in several sectors,” Mr. Peña-Reyes said in a Viber message.

For Mr. Asuncion, the conflict increased project costs and risk premiums, leading investors to take a wait-and-see approach.

“This was most evident toward the latter part of the quarter, when firms began reassessing timelines and costs in light of rising fuel prices and geopolitical risks,” he said.

Mr. Asuncion said the subdued Philippine economy in the first quarter also weakened near-term investor confidence, “particularly for projects that are closely tied to domestic demand.”

The Philippine economy expanded by 2.8% in the first quarter of 2026, slower than the 5.4% expansion a year earlier and the 3% growth in the fourth quarter of 2025.

Mr. Peña-Reyes said slower gross domestic product (GDP) growth “signals that businesses and consumers are becoming more cautious about spending and investing.”

“Investors are worried about delayed government spending and infrastructure projects, the lingering effects of corruption controversies, rising inflation and oil prices caused by Middle East tensions, and weaker domestic demand,” he said.

“The weakened confidence has also affected business expansion plans, consumer spending and stock market sentiment, as investors have become more risk-averse amid uncertainty over inflation, government policy delays and external geopolitical shocks,” he added.

In the three months to March, investment commitments were approved by seven out of 15 IPAs — Bases Conversion and Development Authority (BCDA), Board of Investments, Clark Development Corp. (CDC), Cagayan Economic Zone Authority, Clark International Airport Corp., Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority.

PEZA approved foreign pledges worth P19.96 billion, accounting for 46.8% of the total. This was followed by CDC, which approved P9.27 billion worth of commitments (21.7% share), and BCDA with P6.2 billion (14.5% share).

South Korea accounted for the bulk, or 59.5%, of total approved foreign investment pledges worth P25.37 billion.

Singapore followed with P3.18 billion in commitments or 7.5% of the total, while China accounted for P2.54 billion or 5.9%.

In the first quarter, the Authority of the Freeport Area of Bataan, Bangsamoro Economic Zone Authority, Bangsamoro Board of Investments, John Hay Management Corp., PHIVIDEC Industrial Authority, Poro Point Management Corp., Tourism Infrastructure and Enterprise Zone Authority, and Zamboanga City Special Economic Zone Authority did not report any approved foreign investment pledges during the period.

About 24.4% or P10.38 billion of the approved foreign investments were allocated to the arts, entertainment and recreation industry, while 21.3% or P9.08 billion were intended for manufacturing.

Accommodation and food service activities accounted for P9.07 billion worth of commitments, equivalent to 21.3% of total pledges during the period.

By region, Central Luzon received the highest share of total approved foreign investment pledges, accounting for 77.6% or P33.08 billion. Calabarzon followed with P3 billion (7% share) and the National Capital Region with P2.13 billion (5% share).

Approved projects with foreign interest are expected to generate 13,108 jobs, down 32.1% from the 19,318 projected jobs a year earlier.

In the first quarter, combined investment commitments from both foreign and Filipino investors fell by 30.8% to P125.95 billion from P181.97 billion in the same period in 2025.

The decline in overall approved investments indicated that the rise in foreign pledges was not enough to offset weaker domestic investment commitments.

Investment pledges by Filipinos reached P83.31 billion in the first three months of 2026, accounting for 66.1% of total approved commitments.

“Looking ahead, foreign investment pledges may remain uneven in the second quarter, as global investors continue to navigate geopolitical risks and elevated energy costs,” Mr. Asuncion said.

For full-year 2026, he expects gradual improvement in foreign investment commitments, although still below peak levels.

“Stronger prospects hinge on easing external tensions, clearer global policy signals, and a recovery in domestic growth momentum in the second half of the year,” he said.

For his part, Mr. Peña-Reyes said he expects a “moderately positive but normalization-driven rather than boom-driven” outlook for foreign investments moving forward.

“Sectoral winners are probably manufacturing, digital infrastructure, logistics, mineral processing and export-oriented ecozone projects. The main downside risks are global slowdown, geopolitical tensions, weaker FDI (foreign direct investment) appetite, and softer renewable energy investment activity,” he said.

Meanwhile, Mr. Terosa said the slower economic growth in the first three months of 2026 will likely continue to influence investor confidence in the coming quarters.

“In particular, I expect foreign investment pledges to grow mutedly as long as the Middle East conflict continues to muddle investor plans and rein in business initiatives. If the cessation of the Middle East conflict remains elusive, the growth of investment pledges and approvals in 2026 will be kept at bay,” he said.

The PSA data on foreign investment commitments differ from actual foreign direct investments tracked by the Bangko Sentral ng Pilipinas. The central bank’s monitoring goes beyond approved projects and includes reinvested earnings and lending to Philippine units through debt instruments.

TWO US-BASED satellite service providers are expected to begin operations in the Philippines this year, with their applications now in advanced stages at the National Telecommunications Commission (NTC), according to the Department of Information and Communications Technology (DICT).

“There are two US-based companies that are interested (to operate here). They are currently under application at the NTC. One of these two has already conducted testing,” DICT Secretary Henry Rhoel R. Aguda told reporters on the sidelines of a briefing on Wednesday.

He said one applicant may secure regulatory approval within the month following the completion of testing activities, while the other company is expected to launch services within the year.

“Both of them are satellites, probably GIDA (geographically isolated and disadvantaged areas) will benefit from this. But these are big companies, you already know their branding,” he said.

The entry of additional satellite operators follows the enactment of the Konektadong Pinoy Act, or the Open Access in Data Transmission Act, which liberalized participation in the data transmission sector by removing the legislative franchise requirement for qualified industry participants.

The law, which lapsed into law in August last year, aims to streamline permitting and licensing processes and promote infrastructure sharing to improve competition and connectivity services. Its implementing rules and regulations were signed in November.

Under the measure, data transmission industry participants (DTIPs) may construct, establish, maintain, lease, or operate data transmission networks and facilities without securing a congressional franchise.

Mr. Aguda said the NTC is currently processing the migration of existing license holders into the DTIP framework and is expected to begin acting on foreign applicants thereafter.

Last year, the DICT said seven foreign firms had expressed interest in entering the Philippine telecommunications market, offering mobile, fiber, and satellite services.

Separately, Mr. Aguda said the recently approved National ICT Development Agenda (NICTDA) would accelerate the rollout of the government’s National Fiber Backbone project, which is expected to reach Mindanao by July.

He said the approval of the NICTDA also unlocked grants worth $1.7 million and $2.5 million from international funding organizations, which are currently being processed. The funding will support planning and mapping activities for the fiberization of Luzon and Mindanao.

In August last year, the DICT said it had begun building the final phases of the National Fiber Backbone project. The agency had earlier secured a $287.24-million World Bank loan to accelerate phases 4 and 5 of the initiative, which is expected to improve digital connectivity in underserved areas, particularly in the Visayas and Mindanao.

“It should be very soon,” Finance Secretary Frederick D. Go told reporters on the sidelines of an event late on Monday. “The government has steps that we need to take care of. We just need to go through that process.”

Mr. Go said the Board of Investments (BoI) is still finalizing the draft program in coordination with other government agencies.

“It’s still with BoI because it needs everybody’s cooperation up to the Department of Budget and Management (DBM),” he said.

“So, it’s still with BoI working with Fiscal Incentives Review Board, working with DBM, working with the Office of the President to look for that solution,” he added.

The EVIS is expected to provide targeted fiscal and nonfiscal incentives to encourage local production of electric vehicles, batteries, charging infrastructure, parts and testing facilities.

The program is modeled after the government’s previous automotive incentive program, including the Comprehensive Automotive Resurgence Strategy (CARS).

Based on recent consultations, the government is considering fiscal support of as much as P15 billion per participant for four-wheeled EV manufacturing, with as many as four participants expected to qualify under the program.

“That is the plan of BoI and we are supporting it,” Mr. Go said. “But who knows how it will finally end… So, we need to figure out the legalities.”

“It should come out soon… Meaning, we were all determined to make it happen, but I do not know how fast. But we already presented it to the President,” he added.

Trade Secretary Ma. Cristina A. Roque earlier said the EVIS aims to attract more EV manufacturers into the country, particularly as rising fuel prices increase interest in alternative transport technologies.

She said the Board of Investments and Fiscal Incentives Review Board are refining the EVIS framework, which aims to encourage more domestic value-adding activities and speed up the growth of the country’s EV industry alongside existing government incentives.

Existing incentives include benefits under the Electric Vehicle Industry Development Act such as number coding exemptions, excise tax exemptions, lower registration fees and import duty exemptions.

Ms. Roque said the government is targeting the issuance of the executive order and implementing rules and regulations by July.

The proposed EVIS package is larger than the P9-billion allocation under the Revitalizing the Automotive Industry for Competitiveness Enhancement  program, which had been intended to succeed the recently concluded CARS initiative.

Last week, Mitsubishi Motors Philippines Corp. said it plans to invest P7 billion in a hybrid EV manufacturing facility at its Santa Rosa, Laguna plant under the proposed EVIS, making it the first confirmed participant in the program.

EV adoption in the country has continued to grow. Data from the Chamber of Automotive Manufacturers of the Philippines, Inc. showed EVs accounted for 11.17% of new vehicle sales in the first quarter.

From January to March, CAMPI members sold 11,800 EVs, consisting of 8,261 hybrid EVs, 2,289 battery EVs and 1,250 plug-in hybrid EVs. — Justine Irish D. Tabile

RESIDENTIAL CUSTOMERS of Manila Electric Co. (Meralco) will see a slight reduction in their electricity bills this month after three consecutive monthly increases, as regulatory interventions softened what could have been a bigger jump in power rates amid higher fuel prices linked to the Iran war.

At a briefing on Wednesday, Meralco said the overall electricity rate for May fell by P0.0151 per kilowatt-hour (kWh) to P14.3345 per kWh from P14.3496 per kWh in April.

For households consuming 200 kWh, the adjustment translates to a decrease of about P3 in monthly electricity bills.

Joe R. Zaldarriaga, Meralco vice-president and head of corporate communications, said the slight reduction was mainly due to mitigating measures approved by the Energy Regulatory Commission (ERC) to ease the impact of elevated global energy prices on consumers.

“We expect this to somehow help consumers, even if only slightly, because instead of a bigger increase, rates declined by around 1.5 centavos per kilowatt-hour,” he told the briefing in Filipino.

The overall decline came despite a sharp increase in generation charges, which rose to P8.7942 per kWh from P8.3864 per kWh in April.

Meralco said the higher generation charge was largely driven by increased costs from the Wholesale Electricity Spot Market (WESM), where electricity prices climbed amid stronger demand and higher fuel costs.

The average WESM prices increased to P5.63 per kWh during the April supply period from P4.31 per kWh, according to the Independent Electricity Market Operator of the Philippines (IEMOP).

Average electricity demand also rose by 7.6% month on month to 14,404 megawatts, tightening supply margins in the grid during the peak summer season.

“The increase is expected every summer,” IEMOP Vice-President for Trading Operations Isidro E. Cacho, Jr. told a separate briefing. “April to May is our peak period in the grid… because the weather in the Philippines is hot.”

Mr. Cacho also pointed to higher fuel prices caused by the Iran war as another factor behind the rise in electricity costs.

WESM lets distribution utilities and suppliers buy electricity when their contracted power supply is insufficient to meet customer demand.

Meralco said charges from WESM increased to P7.7239 per kWh during the period.

Meanwhile, costs from independent power producers (IPP) also rose by P0.1786 per kWh due to higher fuel prices and the peso’s depreciation, which affected dollar-denominated expenses.

For the billing period, power supply agreements (PSA), IPPs and WESM accounted for 73%, 20% and 7%, respectively, of Meralco’s energy requirements.

Despite the higher generation costs, several regulatory measures helped offset the increase.

One of the biggest contributors to the lower overall rate was the accelerated implementation of Meralco’s refund program.

The refund rate increased by P0.2254 per kWh to P0.4278 per kWh after the ERC ordered the utility to complete the refund of the remaining P14.2 billion within one year instead of the original two-year schedule.

Taxes and other charges also declined by P0.1482 per kWh after the ERC suspended the collection of the green energy auction allowance (GEA-All) worth P0.0371 per kWh until June.

The GEA-All is imposed on on-grid consumers to fund incentives for renewable energy projects awarded under the government’s green energy auction program.

Consumers also partially benefited from the implementation of the value-added tax exemption on electricity generated from indigenous natural gas under the Philippine Natural Gas Industry Development Act.

Transmission charges likewise fell by P0.0493 per kWh following lower transmission wheeling rates and ancillary service costs.

IEMOP data showed average transmission rates declined by 8.8% to P1.5983 per kWh from P1.7526 per kWh in March, partly due to higher energy consumption spreading transmission costs across a larger volume.

As another mitigating measure, the ERC allowed Meralco to immediately reflect line rental caps under its PSAs in this month’s billing, reducing PSA charges by P0.1793 per kWh.

Meralco reminded customers that despite the lower rates, actual electricity bills might still increase if household consumption rises during the dry season.

“While overall electricity rates have gone down, the dry season is typically marked by higher consumption, especially from cooling appliances, which can still drive bills upward,” Mr. Zaldarriaga said.

“By being more mindful of their power consumption and observing energy efficiency, customers can take better control of their electricity bills,” he added.

Meralco’s controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.

THE PHILIPPINE ECONOMY could face added pressure from a looming El Niño episode as it continues to grapple with the fallout from the flood control graft scandal and elevated energy costs linked to the Iran war, according to Nomura Holdings, Inc. Global Markets Research.

In a report dated May 12, the Japan-based think tank said the Philippines, along with Thailand, Indonesia, India and Australia, is increasingly vulnerable to mounting economic pressures tied to inflation, external imbalances and worsening weather conditions.

“Thailand, Indonesia, India, Australia and the Philippines are… under growing strain,” Nomura said, citing widening twin deficits in some economies and accelerating inflation in others, including the Philippines.

The warning comes as the Philippine Atmospheric, Geophysical and Astronomical Services Administration raised the probability of a moderate to severe dry spell to 79% from June until early next year.

The latest outlook marked a sharp increase from the 55% probability forecast issued in March.

If severe dry conditions materialize, the country’s agricultural sector could take another hit as farmers continue to face elevated fertilizer costs and supply disruptions caused by the energy crisis stemming from the Iran war.

The Department of Agriculture has warned that agricultural output could decline by as much as 30% under a “Super El Niño” scenario.

Farm production has already weakened. Government data showed agricultural output contracted by 0.3% in the first quarter after declines in crops and fisheries offset gains in other subsectors.

Nomura earlier cut its Philippine gross domestic product (GDP) growth forecast for 2026 to 4.6% from 5% after the weaker-than-expected first-quarter economic expansion.

The economy grew by just 2.8% in the January-to-March period, slower than the 3.4% median estimate in a BusinessWorld poll and marking the weakest quarterly growth since the pandemic recovery period.

The Philippines also expanded by only 4.4% in 2025, the slowest in five years, after the flood control corruption scandal dampened investment activity, government spending and consumer demand during the second half of last year.

Nomura’s revised forecast is below the government’s 5% to 6% growth target for 2026 and suggests the country could miss its official growth goal for a fourth straight year.

The think tank said weak sentiment, elevated prices and slow public spending are likely to keep economic activity subdued in the first half.

It also raised its inflation forecast for the Philippines to 6.1% this year from an earlier 4.9% estimate, well above the Bangko Sentral ng Pilipinas’ 2% to 4% target.

Inflation accelerated to 7.2% in April, driven by higher food, transport and housing costs amid elevated fuel prices and supply disruptions linked to the Iran war.

TOURISM SLOWDOWN
In a separate report, Nomura said the Iran war has also started to affect tourism flows in parts of Southeast Asia after airspace closures and flight disruptions across the Middle East reduced travel demand.

Nomura Global Markets Research Chief ASEAN Economist Euben Paracuelles and Research Analyst Yiru Chen said arrivals from the Middle East to Association of Southeast Asian Nations (ASEAN) economies dropped sharply in March and April.

Thailand posted a 49.7% year-on-year decline in tourist arrivals from the Middle East in April, worsening from a 3.7% drop in the first two months of the year.

Singapore posted a 34.2% decline in March from an 11.2% contraction in January and February, while Malaysia arrivals from the region fell 29.8% after earlier growth.

The analysts also noted weaker visitor arrivals from Europe following the outbreak of the Iran war in late February.

However, stronger tourist inflows from countries such as China partly offset the decline.

In the Philippines, tourism remained resilient despite the conflict. Government data showed international visitor arrivals had risen nearly 9% year on year to 2.24 million as of April 27.

The Department of Tourism has kept its target of attracting 6.7 million foreign visitors this year.

Still, Nomura warned that higher jet fuel prices, airfare increases, and fuel surcharges could weaken travel demand across ASEAN in the coming months.

“Unlike in 2022, there is no pent-up demand after borders reopened following the pandemic,” the analysts said. “Travel demand will likely be more price-sensitive now, and airfare price hikes, along with flight cancellations, could cause a more broad-based impact.”

The National Grid Corp. of the Philippines (NGCP) placed the Luzon and Visayas grids under red alert from 3 p.m. to 8 p.m., according to separate advisories.

Yellow alerts were also raised over the Luzon grid from 2 p.m. to 3 p.m. and from 8 p.m. to 10 p.m., while the Visayas grid was under yellow alert from 8 p.m. to 9 p.m.

A red alert is issued when available power supply becomes insufficient to meet consumer demand and reserve requirements, while a yellow alert is declared when operating reserves fall below the required contingency level.

NGCP said 4,681.6 MW of capacity was unavailable in the Luzon grid during the period, leaving available capacity at 12,447 MW against peak demand of 12,537 MW.

The Visayas grid, which imports power from Luzon, had an available capacity of 2,510 MW, only slightly above peak demand of 2,413 MW.

The grid operator said 21 power plants were offline, while 15 others were operating at derated capacities, resulting in a combined loss of 862.3 MW in the Visayas.

The Visayas alerts were also linked to the forced interruptions of coal-fired units operated by Therma Visayas, Inc. (TVI) and Panay Energy Development Corp.

Gerry C. Arances, convener of Power for People Coalition, said the grid alerts showed the risks of continued dependence on coal plants.

“If TVI and other coal plants cannot be trusted to deliver their current capacity now, their capacity to provide reliable power in the future should be put in question,” he said in a statement.

The consumer group also called on government agencies, regulators and energy companies to disclose the causes of the recurring grid alerts and outline long-term measures to address energy insecurity.

“Consumers deserve accountability, not repeated excuses every summer season,” Mr. Arances said.

In a separate statement, the coalition said the looming threat of rotating brownouts amid red and yellow alerts in the Luzon grid is yet another burden being placed on ordinary Filipino consumers who are already enduring soaring electricity rates, extreme heat, and a worsening cost of living crisis.

It said 72% of the power lost from the Luzon grid were from coal and gas, while most power plants that were on forced interruptions were fossil fuel plants, notably Ilihan gas plant units at 600 megawatts each.

“Power interruptions are not mere inconveniences,” the group said. “They disrupt livelihoods, endanger vulnerable sectors such as senior citizens, children and persons with illnesses, affect students and workers and threaten the operations of hospitals, transportation and essential services.”

The Center for Energy, Ecology and Development separately said local communities and environmental groups have urged financial institutions to review support for the expansion of the TVI coal plant amid persistent supply issues and elevated coal prices.

Energy Secretary Sharon S. Garin ordered NGCP to immediately address transmission constraints that limited the dispatch of electricity from large power plants.

The Department of Energy said the 500-kilovolt Tayabas-Ilijan and Dasmariñas-Ilijan transmission lines tripped, disconnecting several generating units from the grid.

The agency asked NGCP to provide details on the transmission failures and related incidents.

The supply shortfall prompted Manila Electric Co. (Meralco) to implement rotating brownouts lasting up to three hours in parts of Metro Manila, Batangas, Bulacan, Cavite, Laguna and Rizal.

More than 200,000 customers were affected.

Meralco said it had also activated its Interruptible Load Program, under which large commercial and industrial customers voluntarily shift to generator sets to reduce grid demand.

As of 3:40 p.m., the utility said it had secured more than 240 MW of de-loading capacity under the program.

NGCP also warned that manual load dropping could be implemented in Abra and parts of Ilocos Sur, Bataan, Pampanga, Batangas, Metro Manila, Albay, Camarines Norte and Camarines Sur to preserve grid stability.

The Luzon grid last experienced a red alert on June 1, 2024, while the country recorded nine yellow alerts last year. — Sheldeen Joy Talavera

In a regulatory filing released Tuesday, the Ayala-led energy company said attributable net income rose to P2.92 billion in the January-to-March period from P1.95 billion a year earlier.

Revenue from sale of electricity climbed 42.2% to P10.74 billion from P7.55 billion previously, driven by higher revenues from power supply contracts and power generation and trading activities.

Total attributable renewable energy output rose 32% year on year to 2,230 gigawatt-hours (GWh), while Philippine renewable energy generation increased 29% to 636 GWh due mainly to the recovery of operations in Ilocos Norte as the Pagudpud and Capa wind farms returned to near-full operations.

ACEN said year-on-year results were “significantly influenced by several material, largely non-cash, one-off items.”

Among the key contributors to earnings was the Energy Regulatory Commission’s approval of price adjustments for ACEN’s baseload and mid-merit power supply agreements with Manila Electric Co. (Meralco), allowing the recovery of incremental fuel costs linked to the 2022-2023 coal price surge.

“The approval resulted in a significant positive pre-tax impact on earnings in the period, partially reversing prior margin pressure from elevated fuel costs,” the company said.

The company also benefited from the acquisition of the remaining 50% stake in Unlimited Renewables Holdings B.V. (URH), which resulted in ACEN gaining full ownership of its India platform.

“The transaction generated a gain from remeasurement of the previously held interest and recognition of goodwill, partly offset by the write-off of uncollected guarantee fees from prior years,” ACEN said.

However, ACEN also booked a provision related to developments in Vietnam after state-owned utility Vietnam Electricity (EVN) applied revised payment practices for certain renewable energy projects.

The company said the provision “reflects management’s best estimate of the adverse financial impact based on available information as of the reporting date, and may increase or decrease depending on the final outcome of discussions with EVN.”

ACEN said it had recognized a provision of P1.19 billion to reflect the potential downside impact from reduced future cash flows arising from developments in Vietnam.

The company likewise said goodwill arising from the consolidation of Vietnam Wind Energy Limited Group “was fully impaired in the same period due to prevailing economic and regulatory conditions in Vietnam, resulting in a net negative earnings impact.”

“This volatility creates both urgency and opportunity. Our capital program remains intact, our pipeline continues to advance and our focus on execution will help ensure delivery of long-term, sustainable returns for our shareholders,” ACEN President and Chief Executive Officer Eric T. Francia said.

As of March 31, ACEN had 7,083 megawatts (MW) of attributable renewable energy capacity in operation and under construction. Of the total, 4,293 MW were operational while 2,790 MW were under construction.

The company said its India platform now includes a fully owned 1,059-megawatt direct current diversified portfolio and “a pipeline of nearly 7 GW of renewable energy projects across India,” reinforcing its long-term expansion plans in the market.

“Looking ahead, our priorities remain clear — maximizing output from operating assets, maintaining momentum across our construction pipeline, and managing costs with discipline,” ACEN Group Chief Finance Officer and Chief Strategy Officer Jonathan Back said.

In March, ACEN’s Bijapur Wind project in Karnataka, India secured a 7.517-billion Indian rupee green term loan from Mitsubishi UFJ Financial Group and Sumitomo Mitsui Banking Corp. to partially fund the construction of the project’s 100-MW Phase 1.

The company also disclosed plans to support the development of a 35-MW battery energy storage system project in Zambales through up to P850 million in short-term financing for subsidiary Palauig Solar 1, Inc.

ACEN earlier confirmed a BusinessWorld report stating that its 2026 capital expenditures (capex) could exceed P80 billion, although the quarterly filing did not disclose a final capex target for the year.

On Tuesday, shares in ACEN fell 1.47% or five centavos to close at P3.34 apiece. — Sheldeen Joy Talavera

“We are definitely bidding it out this year… We will likely bid it out in the third quarter and award it in the fourth quarter,” Transportation Undersecretary Timothy John R. Batan said on the sidelines of the Luzon Economic Corridor Reception on Monday.

Mr. Batan said the preliminary cost of the contract is P9.5 billion but added that this is still pending approval from the Investment Coordination Committee (ICC).

“Until it is approved by the ICC, we do not have the final project cost yet, but it’s around that much,” he added.

AF Payments, Inc., the consortium behind the Beep card system, is the current concessionaire for the automated fare collection system. Its contract will expire in December 2027.

Last week, the department held a market-sounding activity for the PAFCS concession under the public-private partnership program, drawing participation from over 50 major local and international firms.

“We are seeing huge interest. GCash was there, Maya was there. The big names, both local and international,” Mr. Batan said.

Aside from Philippine firms, companies from Japan, China, Singapore, South Korea, India, Indonesia, Turkey, Pakistan, the US, Germany, France, the United Kingdom, the Netherlands, Spain, Austria, Switzerland, Sweden and Finland also joined the activity.

The PAFCS project aims to establish an interoperable and secure fare collection system covering rail, bus, and future transport modes in the country.

The project includes the development, operation and maintenance of the Central Transit Acquirer System and Central Clearing House, covering existing and future rail lines as well as road-based transport systems.

Designed to support multiple fare media types, the system is also expected to encourage more financial institutions to enter the transit payments space.

“The key difference is the current concessionaire that we are bidding out is what we call an open system, so any card issuer, for example, can participate, as opposed to right now where we can only use a Beep card in the rail lines,” Mr. Batan said.

“In this new concession, it will be open standard whether you’re using Beep, Mastercard, Visa, QR code, or smart devices. All of these form factors, all of different issuers, can now work in the fare collection system,” he added.

Nigel Paul C. Villarete, a senior adviser on public-private partnerships at Libra Konsult, Inc., said it is high time for the Philippines to adopt more advanced automated payment systems that deduct the correct fare based on where commuters board and disembark, and are also interoperable.

“For years, I have been hoping we will have those systems used in Japan, Hong Kong and Singapore where a single card pay for everything including transportation,” he said in a Viber message. 

“Ultimately, we can do this for almost everything. In fact, many of us already use our credit and debit cards for many things. It is just a matter of time before we fuse all these into a single payment system for all,” he said. “I hope they will reach a stage where we can integrate this with our cellular phone network. That may be the next step, where you do not even need a card. You simply tap your phone regardless of what transaction you are doing.” — Justine Irish D. Tabile

THE LUZON Economic Corridor (LEC) will help make the Philippines more resilient to external shocks by generating more jobs and attracting greater foreign investment interest, the Finance department said.

“The LEC is about doing all the work to provide those jobs. We build the infrastructure, the private sector comes in, invests in business, gives jobs to Filipinos,” Finance Secretary Frederick D. Go said on the sidelines of the LEC Reception on Monday.

Mr. Go said creating “meaningful” jobs is key to building a sustainable and shock-resistant economy, as steady incomes would allow households to continue spending despite external headwinds.

“We need everybody to have meaningful jobs. That is how you really build a sustainable economy,” he said. “Because when everybody has meaningful jobs, it does not matter what the shocks are. Life can go on because people have a good source of income.”

The Philippine economy grew by a weaker-than-expected 2.8% in the first quarter amid lingering effects of last year’s corruption scandal and soaring fuel prices due to the Middle East conflict.

The weaker growth came as household final consumption expenditure — a key driver of the economy — slowed to 3% from 5.28% a year earlier and 3.8% in the previous quarter.

Asian Development Bank (ADB) Country Director for the Philippines Andrew Jeffries said the corridor accounts for a large share of the country’s gross domestic product (GDP).

“In general, 60% of the whole country’s GDP is more or less within this corridor… So, I guess the infrastructure needs are very large. And so, some of our ongoing projects are supporting all of that,” he told reporters.

“Of course, because it’s such a large part of the whole Philippine GDP, it’s a very important corridor to keep developing. And… there are some transportation and other bottlenecks that need to be addressed.”

The ADB is supporting several infrastructure projects in the region, including the North-South Commuter Railway and Bataan-Cavite Interlink Bridge. It also has a loan facility funding detailed engineering designs for future rail projects.

The LEC reception was held ahead of the steering committee meeting and the official launch of the LEC Partners Initiative.

Asked for his expectations, Mr. Go said the steering committee meeting will serve as an avenue to push LEC projects forward.

“The top projects will always be the infrastructure. So, it is always going to be the ports, and the railway that connects the ports, and then the airport — how the airports interconnect with those railways to create better logistics within the corridor,” he said.

Other infrastructure projects under the LEC initiative are the Subic-Clark-Manila-Batangas Railway and the modernization of ports and airports within the corridor.

“The interest in our country has never been better. So many companies are so interested in the Philippines. The LEC is one of the catalysts to our development,” Mr. Go said.

On Monday, he said the LEC partnership has been expanded to include Australia, Denmark, France, Italy, South Korea, Sweden, and the United Kingdom.

“Before we kept talking about the LEC, there were only three of us. Now, there are 10. So, interest in the country is at its peak.”

The LEC is a trilateral agreement aimed at improving connectivity across Luzon’s key economic areas, particularly Subic Bay, Clark, Metro Manila, and Batangas. Under the initiative, partner countries provide technical assistance, financing, and facilitate private sector investment.

However, US Ambassador and Department of State’s Bureau of Economic, Energy and Business Affairs Senior Advisor Heather Variava said building infrastructure within the corridor alone is not enough.

“We must streamline complex regulatory structures to make it easier for businesses both in the Philippines and internationally to invest in the Philippines with confidence,” she said.

“This initiative does not only create prosperity here in the Philippines; it opens up opportunities for American and like-minded businesses as well.”

She said the government should also continue engaging the private sector and encourage businesses to participate in the LEC initiative.

“The success of the LEC depends on partnerships like the ones we are building today, and together we can create lasting prosperity, strengthen our economic ties, and demonstrate the power of like-minded nations working towards a common goal.”

In a report published on Monday, Oxford Economics slashed its Philippine gross domestic product (GDP) growth forecast to 3.5% from its already downgraded 4.6% estimate. Before the war, it expected the economy to expand by 5.5%.

If realized, this would mark the economy’s worst performance since 2020, when it contracted by 9.5%. Counting out the pandemic, it would be the slowest growth in 17 years or since 1.4% in 2009.

This would also mean that the government will miss its GDP growth target for a fourth straight year, as it sees the economy expanding between 5% and 6% in 2026. The Philippine economy grew by 4.4% in 2025 — a post-pandemic low as a graft scandal involving government infrastructure projects dragged public spending.

“The largest downgrade since the start of the war has so far been the Philippines after the recent Q1 GDP release, which was poorer than expected,” Oxford Economics Lead Economist Maya Senussi said.

GDP growth was at 2.8% in the first quarter, slowing further from 3% in the fourth quarter and 5.4% in the same period last year. This was likewise slower than the 3.4% median estimate in a BusinessWorld poll of 21 economists.

Ms. Senussi said the weak growth was due to already subdued consumer spending and the weak investment climate in the country prior to the Middle East war.

“We expect this softness to continue, as we believe poor consumer sentiment and materially higher prices will weigh on private spending,” she added. “Limited fiscal space constraints the extent of budgetary support.”

For his part, BDO Capital and Investment Corp. President Eduardo V. Francisco said on Money Talks with Cathy Yang on One News on Tuesday that Philippine GDP growth could slow to 2.2% this year due to rising price pressures and investment woes.

“We’re seeing consumption spending go down, even for the very important day-to-day goods, with rice and corn prices I think going up 10-20%. That is bad, and we hope it won’t get worse, because that could mean that the large corporates will realign again further and push back their investments,” he said.

Compared to past crises, the economy is on fragile footing as traditional growth drivers have weakened, Metropolitan Bank & Trust Co. (Metrobank) Chief Economist Nicholas Antonio T. Mapa said via Viber.

“Vaunted household spending is sputtering, holding true to our description of a ‘tired consumer.’ After years of an unprecedented debt build, consumers grapple with debt management against a backdrop of rising prices. Government spending, a pillar of the economy that was shaken by a corruption scandal, is also absent as authorities attempt to clean up their ranks. Lastly, capital formation now suffers from years of underinvestment…,” Mr. Mapa said.

Oxford Economics raised its inflation forecast for the Philippines to 6.5% for this year from 2.5% prior to the energy crisis.

“Compared to the prewar baseline at the end of February, we’re expecting inflation to be substantially higher in the Philippines, Thailand, and Vietnam,” Ms. Senussi said.

“Unlike other emerging markets, the Philippines has no fuel subsidy in place and is hence the most exposed within the region to fuel price shocks given its high import intensity.”

Philippine headline inflation accelerated to an over three-year high of 7.2% in April from 4.1% in March and 1.4% in the same month last year.

This exceeded the Bangko Sentral ng Pilipinas’ (BSP) 5.6%-6.4% estimate for the month and the 5.5% median estimate in a BusinessWorld poll of 17 analysts.

The BSP sees inflation averaging 6.3% this year, well above its 2%-4% tolerance band, as the conflict continues to push up domestic fuel, transport, and food prices.

Ms. Senussi said the Philippines’ heavy reliance on oil imports makes more exposed to energy shocks. The country sources over 90% of its oil from the Middle East.

Moody’s Ratings also said in a May 11 report that the low energy stock of Asia-Pacific countries including the Philippines amplifies the region’s high vulnerability to the crisis.

According to the Department of Energy, the country has about 50.70 days’ worth of fuel stockpile as of May 8. This was slightly lower than the 54 days reported as of April 24.

SHALLOW TIGHTENING
But even as inflation risks grow, Metrobank’s Mr. Mapa expects the BSP’s tightening stance to remain “shallow” as it strikes a balance between controlling soaring prices and helping the economy recover.

“With the inflation path heading higher, we’ve seen renewed calls to push rates to non-normal levels to catch up supposedly with the curve,” he said. “BSP we feel, however, will look to balance signaling it is still an inflation-targeting monetary authority while also ensuring it doesn’t end up throwing out the economic baby with the bath water.”

“The central bank’s primary mandate is for price stability. Some will focus solely on this mantra without realizing that the full mandate highlights that the overarching goal of low and stable prices is chased in order to help achieve sustainable growth,” he added. “Thus, we believe BSP’s tightening cycle will come swift but remain shallow as it signals its intent to manage expectations while also ensuring it doesn’t snuff out whatever is left of fast-fading growth momentum.”

The BSP last month delivered its first hike since October 2023, lifting the policy rate by 25 basis points to 4.5% as a preemptive move to keep inflation expectations anchored and prevent broader second-order effects.

BSP Governor Eli M. Remolona, Jr. has also left the door open to tightening further through “a succession of modest rate hikes” to bring inflation back to their 2%-4% tolerance band.

BDO Capital’s Mr. Francisco added that despite faster inflation and weak growth, he does not expect a stagflation scenario as public and private spending are likely to remain resilient, supported by corporates and small businesses.

Lending growth and asset quality have also stayed robust, he added.

He said it’s mostly “business as usual” for corporates despite domestic and external uncertainties.

“What gives me confidence is the fact that we’re very resilient — at least I get my pulse from talking to the corporates. A lot of them are still optimistic. Yes, there are these headwinds, a lot of headwinds. Before it was just the Strait of Hormuz, but now we have this internal political strike. But we know how to survive,” Mr. Francisco said.

“I guess the key there is that regardless of administration, we succeeded. We know how to trudge along and get things done. So, whatever happens in politics is fine. But at least as far as day-to-day lives of the Filipino, we’re strong and I think we’ll get over that. And I’m seeing that when talking to the clients.” — Katherine K. Chan with a report from A.M.C. Sy

PHILIPPINE BANKS’ lending to businesses and consumers marked its fastest expansion in seven months in March, supported by robust liquidity in the financial system despite the Middle East conflict, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.

Outstanding loans of universal and commercial banks, net of reverse repurchase agreements, grew by 10.7% to P14.603 trillion as of March from P13.192 trillion in the same month last year.

This was faster than the revised 9.6% climb in February and was the quickest growth in loans since the 11.2% in August last year.

On a seasonally adjusted basis, big banks’ lending activities rose by 1.7% month on month.

“Loans from universal and commercial banks grew at a faster pace in March 2026, providing even stronger support for production activities of businesses and consumption of households,” the central bank said in a statement late on Monday.

Outstanding loans to residents went up by 11.1% year on year to P14.299 trillion as of March from P12.869 trillion. This was an improvement from the revised 10.2% increase in February.

Most of the loans were those meant for production activities, which climbed by 9.7% to P12.322 trillion from P11.228 trillion.

This expansion in production loans was driven by the 26.7% increase in lending to the electricity, gas, steam, and air-conditioning supply industry. Other segments that showed growth were transportation and storage (19.4%); wholesale and retail trade, repair of motor vehicles and motorcycles (9.3%); and real estate activities (8.8%).

Meanwhile, outstanding consumer loans to residents rose by 20.5% to P1.977 trillion as of March from P1.641 trillion a year ago, slightly easing from the 20.8% expansion in February. These include credit cards, motor vehicles, and general-purpose salary loans but exclude residential real estate loans.

BSP data showed that credit card loans jumped 27.9% to P1.229 trillion from P960.55 billion in the prior year, while loans for motor vehicles grew by 12.5% to P538.286 billion from P478.67 billion.

Outstanding salary loans were at P166.934 billion as of March, up 4.2% from P160.273 billion a year prior.

On the other hand, outstanding loans to nonresidents, including those disbursed by big banks’ foreign currency deposit units, declined by 5.9% to P303.993 billion in March from P323.028 billion a year earlier. This was smaller than the 13.9% drop logged in the same month in 2025.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., attributed the faster lending growth in March to demand for financing from businesses as they wanted to make their payments ahead of time in anticipation that prices and interest rates would go up further amid the Middle East conflict.

“The continued double-digit growth in bank loans… was partly due to some hedging, stockpiling, and investment activities that need to be financed before interest rates and prices go up further due to the war in the Middle East,” he said in an e-mail.

The Monetary Board last month hiked benchmark rates for the first time in over two years to rein in surging inflation due to the global oil price shock brought by the war between the United States and Iran, bringing the policy rate to 4.5%.

BSP Governor Eli M. Remolona, Jr. has also signaled more modest increases ahead as the conflict drives up price expectations. The central bank now sees headline inflation averaging 6.3% this year, well above its 2%-4% tolerance band, as the oil crisis stokes domestic costs.

Meanwhile, the pickup in both bank lending and liquidity in March reflects robust domestic demand and ample money supply despite the conflict, Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said.

“Bank lending growth accelerated to 10.7%, driven largely by business borrowing in key sectors such as energy, transport, trade, and real estate — pointing to ongoing capacity expansion, working capital buildup, and project implementation,” he said via Viber. “Meanwhile, consumer lending remained strong, with growth still above 20%, indicating that household spending continues to be supported by steady income conditions and easing inflation.”

“Importantly, the data suggest that credit and liquidity conditions remain largely domestically driven, with the Middle East conflict having limited and indirect impact on local financial intermediation so far.”

In the coming months, banks will likely maintain their lending activities, but growth may slow slightly due to base effects, global uncertainties and high borrowing costs, Mr. Asuncion said.

“The main drivers will continue to be corporate borrowing tied to infrastructure and trade activity, resilient household credit demand, and public sector financing, all of which should keep liquidity conditions adequate and sustain near-term economic momentum.”

Several banks have signaled that they could tighten their lending standards and become more prudent when granting credit due to the high level of uncertainty surrounding the Middle East conflict. Lenders have also ramped up their provisioning to protect themselves from possible asset quality risks.

The central bank monitors banks’ lending activities to track the transmission of monetary policy.

“Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives,” the BSP said.

FASTER MONEY SUPPLY GROWTH
Liquidity growth also picked up in March to 12% from 10.3% in February, according to separate central bank data.

This was the fastest expansion in five-and-a-half years or since September 2020, when it rose by 12.2%.

Domestic liquidity or M3 — a measure of the amount of money in the economy that includes currencies in circulation, bank deposits, and other financial assets easily convertible to cash — rose to P20.365 trillion as of March from P18.181 trillion in the previous year.

Month on month, M3 inched up by 1.7% on a seasonally adjusted basis.

“Domestic liquidity growth was driven primarily by the continued expansion in borrowings by nonfinancial private corporations and households,” the BSP said.

Mr. Asuncion said credit growth in the private sector, stable net foreign asset (NFA) positions, and increased government borrowings supported the growth in domestic liquidity.

Domestic claims, which include those from private and government sectors, came in higher by 11.5% to P23.068 trillion in March from P20.685 trillion in the previous year.

This as claims on the private sector stood at P14.804 trillion during the month, with growth quickening to 11.8% from 10.6% in February.

Meanwhile, the central government’s increased issuances of government securities boosted its net claims to P6.258 trillion, up 12.1% year on year from P5.581 trillion.

Claims on a sector refer to that sector’s liabilities to depository corporations such as banks and the central bank.

Preliminary BSP data also showed that NFAs in peso terms grew by 8.6% to P7.391 trillion from P6.808 trillion a year prior.

The central bank’s NFAs edged up by 4.9% to P6.445 trillion, while banks’ NFA position climbed by 4.2% to P946.141 billion amid lower foreign currency-denominated bills.

NFAs reflect the difference between depository corporations’ claims and liabilities to nonresidents.

Meanwhile, the narrower measure of money supply or M1, which is made up of currency in circulation and current account deposit liabilities, rose by 9.4% year on year in March, picking up from the 8.5% increase in February.

THE HOUSE of Representatives on Monday approved the articles of impeachment against Vice-President Sara Duterte-Carpio after 257 lawmakers voted in favor during plenary session at the Batasang Pambansa, formally sending the case to the Senate for trial.

Twenty-five lawmakers voted against the measure; nine abstained.

The vote exceeded the constitutional one-third threshold required for the articles of impeachment to be transmitted to the Senate, which will convene as an impeachment court.

Meanwhile, the defense team of Ms. Duterte said it was prepared to answer the allegations before the Senate sitting as an impeachment court.

In a statement issued after the plenary approval, Ms. Duterte’s legal team said the burden now rests on the prosecution to prove the accusations against the Vice-President.

“We are aware of the actions taken by the plenary and with that vote to transmit the articles of impeachment, the burden now rests on the accusers to substantiate their claims in accordance with the Constitution, the law, and rules on evidence,” the defense team said.

The defense team also pointed to pending constitutional issues before the Supreme Court while expressing readiness for the impeachment trial.

“While questions of constitutional significance remain pending before the Supreme Court, we are fully prepared to defend the Vice-President before the Senate sitting as an Impeachment Court, where it is incumbent upon the prosecution to discharge the burden of proof,” the statement added.

Following the vote, House officials said the approved articles of impeachment would be formally transmitted to the Senate under constitutional procedures governing impeachment proceedings.

Committee on Justice Chairperson Gerville R. Luistro defended the legality of the impeachment proceedings after allies of Ms. Duterte questioned hearings conducted by the committee during the House recess.

Party-list Rep. Paolo Henry M. Marcoleta argued that constitutional timelines governing impeachment proceedings referred to “session days” and questioned whether the Justice Committee could continue hearings while Congress was on break.

Ms. Luistro responded by citing House Resolution No. 892, which authorized the committee to continue impeachment proceedings and exercise ancillary powers during the recess from March 21 to May 3, 2026.

“It is respectfully submitted… that all the proceedings before the Justice Committee is within the ambit expressly provided by the House of Representatives in Resolution No. 892,” she said.

Party-list Rep. Sarah Jane I. Elago explained her affirmative vote, saying the impeachment proceedings were necessary to hold high-ranking officials accountable amid ongoing economic difficulties faced by Filipinos.

During the plenary session, Ms. Elago cited rising oil prices, inflation, unemployment, demolitions, disinformation, and corruption as reasons behind Gabriela’s support for the impeachment complaint.

She also linked the impeachment proceedings to allegations involving Ms. Duterte’s confidential funds, claiming the money could have instead been used for food assistance, agricultural subsidies, and educational needs.

Ms. Elago further cited allegations involving discrepancies in Ms. Duterte’s Statements of Assets, Liabilities and Net Worth (SALN), as well as Anti-Money Laundering Council records referenced during the impeachment proceedings.

“We were not born yesterday. Who would believe that he/she had not even a single peso of cash on hand or a single bank deposit from 2019 to 2024?” she said in mixed Filipino and English.

Party-list Rep. Leila M. de Lima, who also voted in favor, said the evidence presented before the House Committee on Justice warranted a Senate trial.

In explaining her affirmative vote, she said the committee reviewed documentary evidence, testimonies, audit findings, sworn statements, financial records, and certifications from government agencies before recommending impeachment to the plenary.

“We saw evidence of misuse and abuse of confidential funds amounting to hundreds of millions of pesos,” she said.

She also cited allegations involving unexplained wealth and suspicious financial transactions allegedly disproportionate to Ms. Duterte’s declared income, as well as statements she described as threats against public officials and the constitutional order.

Ms. de Lima stressed that impeachment is a constitutional accountability mechanism and not political persecution.

“Impeachment is not political persecution; it is not a partisan activity; it is a constitutional accountability mechanism,” she said.

The articles of impeachment center on the alleged misuse and irregular liquidation of P612.5 million in confidential funds under the Office of the Vice-President and the Department of Education.

The complaint also cites notices of disallowance issued by the Commission on Audit involving P73 million in confidential funds in late 2022 and another P375 million covering the first three quarters of 2023.

It also references findings by the National Bureau of Investigation involving similarities in handwriting in acknowledgement receipts, as well as certifications from the Philippine Statistics Authority stating that several names listed in confidential fund documents did not exist in the civil registry.

The articles also cite allegations involving unexplained wealth, discrepancies in Ms. Duterte’s SALN, grave threats, and incitement to sedition.

Under the Constitution, conviction in an impeachment trial requires a two-thirds vote of all senators.

If convicted, Ms. Duterte would be removed from office and disqualified from holding public office.

The Department of Energy (DoE) said diesel prices could decline by at least P9.57 per liter, while kerosene prices may fall by at least P13.30 per liter starting on Tuesday, May 12.

Gasoline prices, meanwhile, may increase by as much as P0.47 per liter.

Oil firms separately announced their respective price adjustments on Monday.

Seaoil Philippines, Inc. and Unioil Petroleum Philippines, Inc. said they would implement the same adjustments estimated by the DoE.

Jetti Petroleum, Inc., meanwhile, said it would raise gasoline prices by P0.40 per liter and cut diesel prices by P9.60 per liter.

The latest gasoline price adjustment marks the third straight week of increases, while kerosene prices have declined for five consecutive weeks.

Pump prices in Metro Manila and other highly urbanized areas reached as high as P106.97 per liter for gasoline, P94.83 per liter for diesel, and P136.70 per liter for kerosene.

The country’s fuel inventory was equivalent to 50.70 days of supply as of May 8, according to Energy Secretary Sharon S. Garin.

Gasoline inventory stood at 53.43 days of supply, while diesel inventory was equivalent to 48.85 days.

Kerosene inventory reached 165.83 days, while jet fuel stood at 73.01 days, fuel oil at 56.79 days, and liquefied petroleum gas at 35.55 days.

In a Facebook post, Ms. Garin said the Philippines has maintained a stable fuel supply despite the ongoing conflict in the Middle East.

“But despite this level of comfort, let’s continue fuel and energy saving habits,” she said. “A liter less of diesel we consume or one light less we turn on is truly a building block for a more energy resilient and sovereign nation.”

To strengthen the country’s emergency fuel supply buffer, the DoE said the Philippines has so far imported 1.12 million barrels, or 178.33 million liters, through the completed delivery of four diesel shipments from various sources.

To support continuous electricity supply in off-grid areas that rely heavily on diesel-fired generation, the DoE said it has started rolling out the sale of government-procured diesel at subsidized rates of P8 per liter.

Under the government’s Emergency Energy Security Program, the Philippine National Oil Co.-Exploration Corp. will sell up to 45 million liters of diesel over the next three months to new power providers and microgrid system providers operating in missionary areas.

The measure aims to sustain generation operations, prevent power interruptions, and cushion consumers from sharp increases in electricity rates, the DoE said.

“Providing assistance for the diesel requirements of power providers serving missionary areas is a concrete and proactive measure to help protect electricity access and the welfare of thousands of Filipinos living in remote and island communities outside the main grid,” Ms. Garin said in a statement.

The DoE said the program is intended to help sustain reliable electricity supply in island provinces such as Mindoro, Marinduque, Romblon, Palawan, Catanduanes, Masbate and Siquijor, among others, where power generation remains largely dependent on diesel. — Sheldeen Joy Talavera

THE Public-Private Partnership (PPP) Center said infrastructure commitments under existing PPP projects remain intact despite rising global cost pressures linked to the conflict in the Middle East.

“Based on available information to date, there is no significant evidence of direct impact on the implementation of awarded PPP projects,” the PPP Center said in an e-mailed reply to questions on May 4.

“Contractual commitments remain intact, and both government and private partners continue to honor their obligations under existing PPP contracts,” it added.

The latest PPP Center data showed 287 PPP projects worth P3.57 trillion are currently under implementation. Of the total, 202 are unsolicited projects, while 71 are solicited projects.

However, the center said the conflict in the Middle East could exert upward pressure on key input costs, including fuel, construction materials and logistics.

“These cost pressures can pose challenges for infrastructure projects, including those implemented through PPPs,” it said.

Inflation accelerated to 7.2% in April, exceeding the Bangko Sentral ng Pilipinas’ 5.6%-6.4% forecast for the month, amid higher fuel, electricity and food prices.

Despite these risks, the PPP Center said PPP arrangements are structured “to manage risks through clear allocation mechanisms and contractual provisions,” which help support project resilience amid external uncertainties.

“The PPP Center is committed to assisting implementing agencies and their private partners in navigating the intricacies of their PPP contracts and facilitating the continuous resolution of project issues,” it said.

“In this regard, the PPP Center plays an active advisory role to ensure that contractual mechanisms and collaborative solutions are appropriately applied and calibrated to emerging risks, including resource scarcity, so that service delivery to the public remains uninterrupted,” it added.

The PPP Center also identified bottlenecks affecting both solicited and unsolicited projects.

“For solicited projects, the most common bottleneck arises during the FS (feasibility study) phase,” it said. “Rushing the conduct and finalization of FSs leads to various issues that delay procurement, such as requiring extensive revisions and re-approvals.”

It added that rushed feasibility studies tend to prolong procurement and increase the likelihood of poor-quality bid submissions.

For unsolicited proposals, delays typically arise from prolonged negotiations when parties fail to agree on key commercial or risk-allocation terms.

“Protracted or unsuccessful negotiations can significantly slow down a project’s movement toward approval. The PPP Code remedies this by providing a maximum, non-extendable period of 150 calendar days for negotiation,” the center said.

The PPP Center said PPP Governing Board Resolution No. 2025-01-02, or the Guidelines on the Conduct of Negotiations for PPP Projects Pursuant to the Provisions of the PPP Code of the Philippines, is expected to help address such delays.

“These guidelines aim to promote more structured, transparent, and time-bound negotiations, thereby reducing avoidable delays,” it said.

The center also said that projects included in the PPP pipeline are not “locked in,” as implementing agencies retain flexibility to add, remove or reprioritize projects depending on policy priorities, fiscal space, technical readiness and market conditions.

“It is also important to note that inclusion in the pipeline does not necessarily mean that a project has already undergone extensive or detailed study,” it said.

Still, the PPP pipeline serves strategic functions for both the government and the private sector, the center said.

“For the private sector, the pipeline provides market signaling and early visibility into government priorities, allowing investors and project developers to prepare, mobilize expertise, and assess opportunities,” it said.

“For the government, the pipeline informs the private sector of projects/areas where government interest exists, potentially encouraging the submission of unsolicited proposals and helping reduce public expenditure on project development,” it added.

As of May 4, there were 252 projects worth P3.13 trillion in the PPP pipeline, consisting of 195 solicited projects and 57 unsolicited proposals.

THE HOUSE of Representatives on Monday approved the articles of impeachment against Vice-President Sara Duterte-Carpio after 257 lawmakers voted in favor during plenary session at the Batasang Pambansa, formally sending the case to the Senate for trial.

Twenty-five lawmakers voted against the measure; nine abstained.

The vote exceeded the constitutional one-third threshold required for the articles of impeachment to be transmitted to the Senate, which will convene as an impeachment court.

Meanwhile, the defense team of Ms. Duterte said it was prepared to answer the allegations before the Senate sitting as an impeachment court.

In a statement issued after the plenary approval, Ms. Duterte’s legal team said the burden now rests on the prosecution to prove the accusations against the Vice-President.

“We are aware of the actions taken by the plenary and with that vote to transmit the articles of impeachment, the burden now rests on the accusers to substantiate their claims in accordance with the Constitution, the law, and rules on evidence,” the defense team said.

The defense team also pointed to pending constitutional issues before the Supreme Court while expressing readiness for the impeachment trial.

“While questions of constitutional significance remain pending before the Supreme Court, we are fully prepared to defend the Vice-President before the Senate sitting as an Impeachment Court, where it is incumbent upon the prosecution to discharge the burden of proof,” the statement added.

Following the vote, House officials said the approved articles of impeachment would be formally transmitted to the Senate under constitutional procedures governing impeachment proceedings.

Committee on Justice Chairperson Gerville R. Luistro defended the legality of the impeachment proceedings after allies of Ms. Duterte questioned hearings conducted by the committee during the House recess.

Party-list Rep. Paolo Henry M. Marcoleta argued that constitutional timelines governing impeachment proceedings referred to “session days” and questioned whether the Justice Committee could continue hearings while Congress was on break.

Ms. Luistro responded by citing House Resolution No. 892, which authorized the committee to continue impeachment proceedings and exercise ancillary powers during the recess from March 21 to May 3, 2026.

“It is respectfully submitted… that all the proceedings before the Justice Committee is within the ambit expressly provided by the House of Representatives in Resolution No. 892,” she said.

Party-list Rep. Sarah Jane I. Elago explained her affirmative vote, saying the impeachment proceedings were necessary to hold high-ranking officials accountable amid ongoing economic difficulties faced by Filipinos.

During the plenary session, Ms. Elago cited rising oil prices, inflation, unemployment, demolitions, disinformation, and corruption as reasons behind Gabriela’s support for the impeachment complaint.

She also linked the impeachment proceedings to allegations involving Ms. Duterte’s confidential funds, claiming the money could have instead been used for food assistance, agricultural subsidies, and educational needs.

Ms. Elago further cited allegations involving discrepancies in Ms. Duterte’s Statements of Assets, Liabilities and Net Worth (SALN), as well as Anti-Money Laundering Council records referenced during the impeachment proceedings.

“We were not born yesterday. Who would believe that he/she had not even a single peso of cash on hand or a single bank deposit from 2019 to 2024?” she said in mixed Filipino and English.

Party-list Rep. Leila M. de Lima, who also voted in favor, said the evidence presented before the House Committee on Justice warranted a Senate trial.

In explaining her affirmative vote, she said the committee reviewed documentary evidence, testimonies, audit findings, sworn statements, financial records, and certifications from government agencies before recommending impeachment to the plenary.

“We saw evidence of misuse and abuse of confidential funds amounting to hundreds of millions of pesos,” she said.

She also cited allegations involving unexplained wealth and suspicious financial transactions allegedly disproportionate to Ms. Duterte’s declared income, as well as statements she described as threats against public officials and the constitutional order.

Ms. de Lima stressed that impeachment is a constitutional accountability mechanism and not political persecution.

“Impeachment is not political persecution; it is not a partisan activity; it is a constitutional accountability mechanism,” she said.

The articles of impeachment center on the alleged misuse and irregular liquidation of P612.5 million in confidential funds under the Office of the Vice-President and the Department of Education.

The complaint also cites notices of disallowance issued by the Commission on Audit involving P73 million in confidential funds in late 2022 and another P375 million covering the first three quarters of 2023.

It also references findings by the National Bureau of Investigation involving similarities in handwriting in acknowledgement receipts, as well as certifications from the Philippine Statistics Authority stating that several names listed in confidential fund documents did not exist in the civil registry.

The articles also cite allegations involving unexplained wealth, discrepancies in Ms. Duterte’s SALN, grave threats, and incitement to sedition.

Under the Constitution, conviction in an impeachment trial requires a two-thirds vote of all senators.

If convicted, Ms. Duterte would be removed from office and disqualified from holding public office.

In a report on Monday, BMI trimmed its projection for household spending growth in the Philippines to 4.4% this year from its 4.5% estimate in February.

The latest forecast also points to slightly weaker consumption growth compared with the 4.6% recorded in 2025.

“We hold a cautiously optimistic outlook for consumer spending in the Philippines over 2026,” BMI said.

“While a stable labor market will facilitate real wage growth, inflation has risen to a three-year high and elevated oil prices from the Middle East conflict can erode household purchasing power, weighing on domestic consumption,” it added.

In the first quarter, household final consumption expenditure grew by 3%, slowing from 5.3% in the same period last year and 3.8% in the fourth quarter of 2025.

Excluding the pandemic years, this marked the slowest pace of household spending growth since the 2.6% recorded in the third quarter of 2010.

Meanwhile, rising food and utility costs amid elevated oil prices pushed headline inflation to a more than three-year high of 7.2% in March from 4.1% in February and 1.4% a year earlier.

BMI said consumer sentiment could also weaken further as high inflation and adverse weather conditions compound concerns stemming from last year’s corruption scandal.

This came even as consumers turned less pessimistic in the first quarter, with the confidence index improving to -15.8% from -22.2% in the fourth quarter of 2025, based on the latest Bangko Sentral ng Pilipinas (BSP) survey.

“Nevertheless, consumer confidence weakness continues to be driven by concerns over weakening household financial situations, governmental corruption, spiking inflation and natural disasters,” the Fitch unit said.

On the other hand, BMI said private sector spending may expand at a faster pace of 4.7% this year.

Meanwhile, Nomura Global Markets Research cut its Philippine economic growth forecast for 2026 to 4.6% from 5% after the economy posted weaker-than-expected first-quarter growth.

“The weak outturn in Q1 and the continued impact of the war in Iran prompted the downward revision to our 2026 GDP (gross domestic product) growth forecast,” Nomura analysts Euben Paracuelles and Nabila Amani said in a May 8 report.

Philippine GDP growth slowed to 2.8% in the first quarter from 3% in the previous quarter and 5.4% a year earlier, marking the weakest expansion since the first quarter of 2021.

The latest GDP print also fell short of market expectations, with a BusinessWorld poll of 21 economists yielding a median estimate of 3.4%.

Mr. Paracuelles and Ms. Amani said economic growth would likely remain subdued in the first half of the year due to weak sentiment and delayed government projects, with the Middle East conflict posing additional risks.

“We expect GDP growth to remain weak through H1 2026, as limited pre-procurement activity delays projects and as private investment spending continues to be hurt by weak sentiment,” they said.

“The impact of the Iran conflict on energy prices is only adding to these headwinds and causing a surge in inflation, weakening household purchasing power.”

However, the Nomura analysts said the government’s planned catch-up spending and favorable base effects could help support economic recovery in the second half of the year.

HOT INFLATION AHEAD
BMI expects inflation to average 4.3% this year, slightly above the BSP’s 2%-4% target range.

“This is higher than the usual inflation that consumers were used to pre-COVID (2015-2019, when inflation averaged 2.8%),” it said.

“While nominal income growth will keep pace with inflation, prolonged inflation, particularly in relation to food, will mean that consumers will have to increasingly allocate more of their disposable income towards meeting necessities.”

BMI also expects the peso to depreciate only slightly to an average of P58.50 against the dollar this year from P57.50 in 2025, supported by the BSP’s ample gross international reserves.

The peso breached the P61-per-dollar level for the first time last month. On April 29, it weakened to a record low of P61.567 against the greenback, based on Bankers Association of the Philippines data.

Despite elevated prices, BMI said Filipino households’ purchasing power remains on track to improve over the medium term.

“This dynamic will be the key driver behind our consumer spending forecast for the Philippines over the year,” it said.

“The improving outlook over the medium term means that consumers will expand spending, leading to growth in consumer spending and providing tailwinds to the Philippine retail sector over 2026,” it added.

Meanwhile, Nomura expects the country’s current account deficit (CAD) to widen to 4.8% of GDP this year from its previous estimate of 4.5%.

This would be wider than the 3.3% share recorded in 2025 and the BSP’s 4% forecast for 2026.

“We raised our 2026 CPI (consumer price index) inflation forecast to 6.1% year on year, further above BSP’s 2%-4% target, reflecting our latest Brent crude oil price assumption of $98.4 per barrel from $86 previously, which is also prompting revisions to our CAD forecasts,” the Nomura analysts said.

However, the Japan-based think tank maintained its fiscal deficit forecast at 5.1% of GDP for 2026 as it expects the government to stick to targeted fuel subsidies.

“We maintain our forecast for a narrowing of the fiscal deficit to 5.1% of GDP for 2026 from 5.6% in 2025, still well above the pre-COVID average of 2.4%,” Mr. Paracuelles and Ms. Amani said.

“We believe blanket fuel subsidies are unlikely to be implemented by the government given fiscal constraints, limiting the impact of rising oil prices on the fiscal deficit.”

The latest Treasury data showed the National Government’s budget deficit widened by 2% year on year to P349.7 billion in March.

The government expects the fiscal deficit to settle at P1.611 trillion or 5.3% of GDP this year. — Katherine K. Chan

NET INFLOWS of foreign direct investments (FDIs) into the Philippines declined by nearly 31% year on year in February, the Bangko Sentral ng Pilipinas (BSP) said.

Preliminary BSP data showed FDI net inflows fell by 30.99% to $590 million in February from $855 million in the same month last year.

Month on month, however, FDI net inflows increased by 33.18% from the $443 million recorded in January, marking the highest monthly level in three months.

“Foreign direct investments into the Philippines posted net inflows of $590 million in February 2026,” the BSP said in a statement on Monday.

“The United States was the leading source of FDIs, while corporations engaged in financial and insurance activities were the biggest recipients of FDIs during the month,” it added.

The lower February figure came amid a 39.12% annual drop in net investments in debt instruments to $414 million from $680 million previously.

Investments in equity and investment fund shares, meanwhile, edged up by 1.14% to $177 million from $175 million a year earlier.

Reinvestment of earnings likewise climbed by 11.94% year on year to $75 million from $67 million.

However, foreigners’ investments in equity capital other than reinvestment of earnings stood at $101 million, 6.48% lower than the $108 million recorded in February 2025.

Equity placements declined by 24.49% year on year to $111 million from $147 million, while withdrawals plunged by 74.36% to $10 million from $39 million.

Analysts said cautious investor sentiment amid global geopolitical risks and still-elevated interest rates likely dragged FDI net inflows in February.

“The year-on-year decline reflects how global investors have become more cautious amid wars, high borrowing costs, and uncertainty abroad, while the rebound from January suggests capital has not left the Philippines but is becoming more selective and timing-sensitive,” SM Investments Corp. Group Economist Robert Dan J. Roces said in a Viber message.

Meanwhile, Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said global headwinds had taken a toll on investors’ risk appetite and pushed them to defer overseas investments.

“Domestically, moderating GDP (gross domestic product) growth and lingering inflation pressures have reduced the country’s relative attractiveness by raising operating costs and tempering return expectations,” he said via Viber.

The Philippine economy weakened for a third straight quarter in the January-to-March period, with GDP growth slowing to a new post-pandemic low of 2.8%.

Inflation, meanwhile, breached the BSP’s target for a second straight month. It stood at 4.1% in February and further accelerated to a more than three-year high of 7.2% in March.

However, beyond the amount of FDI net inflows, Mr. Roces noted that it is more crucial to track whether such investments fund long-term initiatives, including infrastructure, digital services, manufacturing and supply chain shifts.

TWO-MONTH SLUMP
For the first two months of 2026, cumulative FDI net inflows declined by 34.79% to $1.033 billion from $1.584 billion in the comparable period a year earlier.

Bulk of the equity capital placements during the period came from Japan, the United States and Singapore, and “were channeled largely into the manufacturing, financial and insurance, and real estate industries,” the BSP said.

Central bank data showed investments in equity and investment fund shares slid by 22.34% to $299 million as of end-February from $385 million a year earlier.

Net investments in equity capital other than reinvestment of earnings stood at $171 million during the period, down 12.76% from $196 million in the first two months of 2025.

Broken down, equity capital placements fell by 18.07% to $204 million from $249 million a year earlier, while withdrawals declined by 39.62% to $32 million from $53 million.

Meanwhile, nonresidents’ reinvestment of earnings dropped by 32.28% to $128 million in the two-month period from $189 million a year earlier.

Net investments in debt instruments likewise fell by 38.78% year on year to $734 million from $1.199 billion previously.

Analysts said the Philippines could start to feel the heavier impact of the Middle East conflict on foreign investment flows in the coming months amid elevated oil prices and persistent global uncertainty.

“The Middle East conflict could slow investment decisions if oil prices stay elevated and volatility persists, but unless it turns into a broader global disruption, the bigger effect may be delays in commitments rather than a complete pullback in investor interest,” Mr. Roces said.

The conflict in the Middle East, which has rattled global oil trade and damaged key energy infrastructure in the region since late February, remains unresolved.

Meanwhile, Mr. Asuncion said FDI inflows could gradually recover later this year if financial conditions improve and inflation pressures ease.

“Moving forward, FDI inflows are likely to remain subdued in the near term amid ongoing global and macroeconomic uncertainties, but could gradually stabilize in the latter part of 2026 if financial conditions ease and inflation pressures moderate,” he said.

“Over the medium term, structural strengths such as favorable demographics, a resilient services sector, and continued investment reforms should support a measured recovery in FDI, albeit not a sharp rebound,” he added.

FDIs refer to cross-border investments in which a nonresident investor holds at least 10% equity in a resident enterprise. These may take the form of equity capital, reinvestment of earnings and intercompany borrowings.

The BSP’s FDI data reflect actual investment flows. This differs from the Philippine Statistics Authority’s approved foreign investment data, which represent investment commitments that may not necessarily be realized within the reference period.

The central bank expects FDI net inflows to reach $7.5 billion this year.

“We’re still looking at positive growth this year in terms of sales… Much of the recovery will probably be realized [because of] the effects of El Niño,” Ronnie L. Aperocho, Meralco executive vice-president and chief operating officer, told reporters last week.

The revised outlook came after the Philippine Atmospheric, Geophysical, and Astronomical Services Administration (PAGASA) raised its warning status from El Niño Watch to El Niño Alert due to the higher likelihood of the climate phenomenon developing in the coming months.

PAGASA said there is a 79% chance that El Niño will emerge between July and August and persist until early 2027.

El Niño is a climate phenomenon associated with drier-than-usual conditions in parts of the country, which can lead to droughts and dry spells while increasing electricity demand because of warmer temperatures.

For the first quarter, electricity sold by Meralco within its distribution utility business fell by 2% year on year to 12,273 gigawatt-hours, which the company attributed to cooler weather conditions that dampened demand.

“Recovery toward the summer months was tempered by intensified energy conservation measures following the escalation of the Middle East conflict,” Mr. Aperocho said.

He said the company expects sales growth to recover beginning in May amid the potential effects of El Niño.

To help improve energy sales, Mr. Aperocho said Meralco is accelerating and streamlining the energization process for customers applying for new connections.

“In fact, we have energized already more than 1,000 service applications for the month of April. And we will be sustaining this momentum,” he said.

Meralco is the country’s largest private electric distribution utility, serving more than 8.1 million customers in Metro Manila and nearby provinces, including Bulacan, Cavite, Rizal, and parts of Laguna, Batangas, Pampanga and Quezon.

Its controlling shareholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

THE PHILIPPINE Economic Zone Authority (PEZA) expects the proclamation of six new economic zones (ecozones) within the second quarter in key areas like Batangas, Cavite, and Palawan.

“A total of six ecozones are for proclamation this quarter,” PEZA Director-General Tereso O. Panga told BusinessWorld in a Viber message.

Two ecozones were already endorsed by the Office of the Deputy Executive Secretary for General Administration (ODESGA) and are awaiting the release of the proclamation order from the President, he said.

These are the Suntrust Ecotown Tanza in Cavite and the Light Industry & Science Park IV – Special Economic Zone in Malvar, Batangas.

Likewise, four ecozones are still being evaluated by the ODESGA, Mr. Panga said.

These include ANFLO Industrial Estate in Panabo, Davao; West Cebu Industrial Park in Balamban, Cebu; Rio Tuba Export Processing Zone in Bataraza, Palawan; and Biz Hub at Lima Estate in Lipa City, Batangas.

Mr. Panga also noted that a mega ecozone in Pampanga is slated for approval by the PEZA Board this year.

The Palawan Mega Ecozone in Puerto Princesa City, which was cleared by the PEZA Board last year, also awaits presidential proclamation.

The President must issue a proclamation to declare a tract of land as a special economic zone or ecozone, as reviewed and endorsed by the PEZA Board.

Under Republic Act No. 7916 or the Special Economic Zone Act, ecozones are areas that are considered highly developed or may potentially be turned into an industrial, tourist, agro-industrial, banking, commercial, or investment and financial center.

The agency is looking to proclaim more ecozones in regional areas to help boost countryside development, Mr. Panga said.

“PEZA’s strategy is to spread the creation of ecozones all over the country — particularly in rural and new growth areas to be able to generate investments, jobs, livelihood, exports, increased incomes for LGUs (local government units), and other economic opportunities,” he noted.

Firms operating in a PEZA-registered ecozone can enjoy fiscal and non-fiscal incentives such as duty-free importation, tax holidays, and streamlined processes.

So far this year, President Ferdinand R. Marcos, Jr. has proclaimed three ecozones.

These are the expansion of the First Industrial Township-Special Economic Zone  in Tanauan City, Batangas; Ayala Land, Inc.’s Atria Gardens in Iloilo City; and the First Philippine Industrial Park  II expansion in Sto. Tomas City, Batangas.

For the rest of the year, Mr. Panga said 14 more ecozones are in the pipeline for presidential proclamation.

“Maybe we can hit 20 [ecozone proclamations] this year,” he added.

Earlier, PEZA said it is targeting 30 ecozone proclamations this year.

Sought for comment, former Tariff Commissioner George N. Manzano said ecozones are critical in streamlining firms’ operations as they navigate global trade volatilities.

“Ecozones become especially important during periods of global trade uncertainty because they help reduce many of the day-to-day difficulties faced by investors and exporters,” he said in a Viber message.

Mr. Manzano also cited the need to balance speed in proclaiming new ecozones with the quality of the location. He said authorizing officials must ensure that the area has enough infrastructure, power supply, and long-term economic viability.

“At the same time, it is important that the ecozones should not remain enclaves, i.e., they just import all their inputs and do not use local supplier industries,” Mr. Manzano said.

The latest Treasury data showed payments made by the government for its obligations went down by 7.78% to P169.09 billion in March from P183.36 billion in the same month a year ago.

Month on month, debt service plunged by 60.74% from the P430.64 billion in February.

Debt service refers to the government’s payments on its domestic and foreign debt obligations.

Interest payments accounted for more than half or 57% of the March debt service bill.

The NG’s interest payments rose by 9.38% to P96.38 billion in March from P88.12 billion in the same month a year earlier.

Interest payments on domestic debt stood at P79.71 billion, 24.14% higher than P64.21 billion in March 2025.

Of this total, P47.04 billion went to interest payments for fixed-rate Treasury bonds, P28.23 billion for retail Treasury bonds, and P4.41 billion for Treasury bills.

Meanwhile, interest payments on foreign borrowings declined by 30.26% to P16.68 billion in March from P23.91 billion a year prior.

On one hand, the government’s repayment of its loan principal or amortization stood at P72.71 billion in March, declining by 23.66% from P95.24 billion a year ago.

This came as amortization on external debt dropped by 23.68% to P72.58 billion in March from P95.1 billion in the same month last year.

Meanwhile, principal payments for domestic obligations declined by 7.25% to P128 million in March from P138 million a year prior.

Q1 DEBT SERVICE BILL
For the first quarter, the government’s debt service bill surged by 115.6% to P737.41 billion from P342.02 billion in the same period last year.

Amortization payments in the period jumped by 359.58% to P464.27 billion from P101.02 billion in the first quarter of 2025.

Broken down, principal payments for domestic debt surged to P386.74 billion from P576 million, while those for external borrowings declined to P77.54 billion from P100.45 billion.

Meanwhile, interest payments stood at P273.13 billion in the three-month period, up 13.3% from P241 billion in the same period a year ago.

Interest payments on domestic debt jumped by 18.38% year on year to P211.39 billion in the first quarter from P178.56 billion a year prior.

This consisted of P152.22 billion in interest payments on fixed-rate Treasury bonds, P43.76 billion for retail Treasury bonds, P12.72 billion for Treasury bills, and P2.69 billion in interest payments for other domestic borrowings.

Interest payments on foreign obligations dipped by 1.11% year on year to P61.74 billion in the first quarter from P62.44 billion a year ago.

Ser Percival K. Peña-Reyes, a senior research fellow at the Ateneo Center for Economic Research and Development, said debt service payments will likely remain elevated for the rest of the year.

“The pace may vary by quarter, depending on maturity schedules and interest rate movements (but) several indicators point in that direction,” he said, citing rising outstanding debt, frontloaded borrowing, high interest costs and a weaker peso.

The Bangko Sentral ng Pilipinas delivered a 25-basis-point (bp) rate hike last month, bringing the policy rate to 4.5%.

“If global and domestic interest rates continue easing later in 2026, the increase in interest expenses could moderate,” Mr. Peña-Reyes said.

“However, because the debt base itself is now much larger, overall debt service obligations are still expected to stay historically high for the remainder of the year,” he added.

The NG’s debt stock rose to a fresh high of P18.49 trillion as of end-March, the latest BTr data showed. This was equivalent to 65.2% of gross domestic product, the highest ratio in 21 years.

Meanwhile, the peso has been trading above P60 for over two weeks. It closed at P60.613 a dollar on Friday, declining by 19.3 centavos from its P60.42 finish on Thursday. It hit a record low of P61.567 on April 29.

“With growth slowing and interest rates still high, debt servicing is getting more expensive, and that’s where the real risk lies,” said Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., in a Viber message.

“Credibility matters: tighter fiscal discipline, faster execution, and growth-enhancing spending. The ceiling may be intact, but markets will be watching whether policy keeps debt manageable in practice, not just on paper,” he added. — Justine Irish D. Tabile

ANALYSTS and economic managers are now finding it harder to precisely measure data in their inflation forecasts as rising uncertainty and the faster-than-usual transmission of oil price shocks challenge their models.

University of Asia and the Pacific (UA&P) economist Marco Antonio C. Agonia said analysts like himself typically use historical data and assumed relationships, both of which could still be adjusting to rapid developments from the unprecedented energy crisis.

“The highly uncertain situation tends to throw off forecasts because previous assumptions about the Philippine economy may no longer be as robust,” Mr. Agonia told BusinessWorld in an e-mail.   

Meanwhile, Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said they struggled to identify which items fueled inflation during the war’s first month in March, and which emerged later in April.

“We got most of the inflation items except for the transport component,” he told this paper in a Viber message. “We could not determine which part of the increases were captured in March and which ones kicked in last April.”

Inflation accelerated to 7.2% in April, its fastest pace in more than three years, driven by higher oil prices that pushed up the cost of food — particularly rice — and utilities. This was faster than the 4.1% in March and 1.4% a year earlier.

April was the second consecutive month that inflation exceeded both analysts’ forecasts and the Bangko Sentral ng Pilipinas’ (BSP) projections.

The BSP had expected the headline print to come in between 5.6% and 6.4% last month, while a BusinessWorld poll of 17 analysts yielded a median estimate of 5.5%.

UA&P’s Mr. Agonia likewise noted that the central bank’s forecasting model may also be “encountering similar constraints.”

Since last year, the BSP has used the Policy Analysis Model for the Philippines (PAMPh) and other workhorse models for economic surveillance, forecasting and informing monetary policy decisions.

The PAMPh uses 290 equations, significantly more than the around 24 used in its older multi-equation model, and assesses more sectors and transmission channels to determine inflation drivers.

“Institutions are now likely revisiting and re-testing their forecasting models and assumptions to account for recent surprises,” Mr. Agonia added.

Under its inflation targeting framework, the central bank noted that inflation could overshoot its 2%-4% target in circumstances such as oil price volatility, where the BSP may have limited control.

Mr. Agonia also noted that oil prices rose more rapidly than during the 2022 energy crisis amid Russia’s Ukraine invasion, further disrupting projections reliant on historical patterns.

“Furthermore, when we tack on the insight that this particular oil price shock progressed much faster than the most recent previous one, namely, the Russia-Ukraine conflict, it adds further unknowns that complicate forecasting key indicators,” he said.

Meanwhile, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said traditional forecasting models have difficulty keeping up with constantly evolving price pressures from the energy crisis, with inflation drivers reinforcing each other as they emerge.  

“The challenge is this conflict isn’t a one-off shock — it’s persistent and constantly changing shape,” he told BusinessWorld via Viber. “Price pressures now come in waves through energy, food, freight, insurance, FX (foreign exchange), and even wages, and they reinforce each other.”

Since the United States and Israel’s initial attack on Iran on Feb. 28, the global per-barrel oil prices have jumped to over $100 from about $60-$70 earlier this year.

This translated to significantly higher pump prices for the Philippines, which imports over 90% of its oil from the Middle East.

As of end-April, local fuel retailers sold gasoline for about P72.53 to P104.93 per liter, diesel for P75.93 to P101.96 per liter, and kerosene for P125.39 to P147.98 a liter.

PRICE STABILITY AT RISK
Meanwhile, analysts at Singapore-based DBS Bank Ltd. said the Philippines is facing looming price instability, with stagflation risks also rising after growth slowed to a new post-pandemic low of 2.8% in the first quarter.

“Energy supply-driven inflation has already exceeded central bank targets in the Philippines and Vietnam and has reached the upper end in Thailand,” DBS Senior Economist for Eurozone, India, and Indonesia Radhika Rao and Senior Economist for ASEAN Han Teng Chua said in a May 8 note. 

“Price stability could be at risk if upside pressures broaden and trigger second-round effects, reminiscent of the 2022-23 episode,” they added.

This, they noted, should prompt the BSP to stay hawkish with at least 50 basis points (bps) in additional hikes until the third quarter, adding that an off-cycle move is “non-trivial.”

“The Bangko Sentral ng Pilipinas is expected to stay focused on containing inflationary expectations and opt to tighten policy levers,” the DBS economists said. “We expect the BSP to hike rates by at least 50 bps between 2Q-3Q26 (risk of an intermeeting hike is non-trivial).”

Analysts at MUFG Bank Ltd., on the other hand, called for 75 bps in rate increases to bring the policy rate to 5.25%.

“We expect the BSP to hike by another 75 bps in our base case, with the timing likely to be earlier rather than later and bringing the key BSP policy rate to 5.25%,” they said in a separate report.

The central bank’s policy rate now stands at 4.5%, following its first tightening move in over two years at its April 23 meeting.

BSP Governor Eli M. Remolona, Jr. has left the door open for more “modest” hikes as needed to bring inflation back to their 3% target, stressing their commitment to their price stability mandate. 

“For adverse or severe scenarios, inflation could rise to a 7.5% or even as high as 10%, and associated supply shortage would imply a much-decelerated growth, even a recession in (a) severe scenario,” MUFG analysts said. “The extreme inflation would likely make (the) BSP biased toward tightening.”

Faster inflation for imports amid the peso’s recent depreciation against the dollar could also weigh on the economy, especially if the weakness persists, DBS’ Ms. Rao and Mr. Chua also noted.

For MUFG analysts, the local unit could trade between P60.50 to P61.50 per dollar this year, with a likely P62:$1 scenario if domestic and global conditions worsen.

“The Philippines is vulnerable not only because of its high dependence on the Middle East crude oil, but also the weak starting point of growth pre-dating the Iran War,” they noted. “This is in turn driven by fiscal tightening and the flood control projects scandal — reasons unrelated to the Strait of Hormuz — but certainly exacerbated by what’s happening in the Middle East.

The peso plunged to the P61-a-dollar level for the first time last month, even closing at a new historic low of P61.567 versus the greenback on April 29.

On Friday, the local unit fell by 19.3 centavos to close at P60.613 per dollar from its P60.42 finish on Thursday, Bankers Association of the Philippines data showed.

PHILIPPINE gross domestic product (GDP) likely remained below the government’s 5-6% growth target in the second quarter as higher oil prices and tighter financial conditions continued to dampen domestic demand, analysts said. 

This as the Development Budget Coordination Committee is set to meet this week to review its macroeconomic assumptions following the weaker-than-expected first-quarter performance.

“We expect second-quarter GDP growth to grow moderately between 3% and 3.2% year on year as higher oil prices and tighter financial conditions continue to weigh on domestic demand,” Maybank Investment Bank economist Azril Rosli told BusinessWorld.

Marco Antonio C. Agonia, an economist at the University of Asia and the Pacific (UA&P), said that he expects “similar, sub-3% growth in the second quarter with traditional growth drivers still under siege.”

If realized, the second-quarter GDP would be slower than the 5.44% growth in the same period in 2025.

However, it could be slightly faster than the 2.8% GDP expansion in the first quarter of 2026, which was the slowest print in five years.

“The bulk of public infrastructure spending will likely only return by the second half of the year, which immediately drags investment formation,” said Mr. Agonia.

Government spending grew by 4.8% in the first quarter, much slower than 18.7% a year ago but faster than the 0.7% growth in the fourth quarter.

Meanwhile, gross capital formation — the investment component of the economy — contracted by 3.3% in the first quarter, a reversal of the 4.5% growth a year ago. Still, this was an improvement from the 9.4% decline in the fourth quarter.

“Household consumption is likely to stay soft as rising transport, food, and utility costs erode purchasing power, while investment activity remains constrained by elevated borrowing costs and ongoing infrastructure implementation delays,” said Mr. Rosli. 

Household final consumption expenditure — a key driver of the economy — grew by 3% in the first quarter, the slowest pace since the 4.8% contraction in the first quarter of 2021.

Excluding the pandemic, this was the slowest growth in consumption since 2.6% in the third quarter of 2010.

“Key downside risks include a further escalation in geopolitical tensions, sustained Brent crude prices above $110 per barrel, broader second-round inflation effects, and the possibility of more aggressive BSP tightening,” Mr. Rosli added.

Inflation accelerated to 7.2% in April, breaching the Bangko Sentral ng Pilipinas’ (BSP) 5.6%-6.4% forecast for the month.

The BSP has signaled more rate hikes to keep inflation in check after the April print exceeded expectations. Last month, the central bank delivered its first 25-basis-point rate hike in two and a half years, bringing the benchmark policy rate to 4.5%.

“Compounding the issue, the effects of the Middle East war will be felt harder in the second quarter, with all months within it experiencing the brunt of the oil shock and its second-round effects,” said Mr. Agonia.

“Higher inflation and supply disruptions will weigh on consumer and business confidence, dampening spending appetite,” he added.

Following the sluggish first-quarter GDP performance, Fitch Solutions unit BMI slashed its 2026 Philippine GDP growth forecast to 4.2% from 4.7%, while Capital Economics cut its projection to 3% from 3.5%. Pantheon Macroeconomics likewise lowered its estimate to 4% from 4.8%.

SILVER LINING
Finance Secretary Frederick D. Go last week said that the government will boost spending to revive the economy, and downplayed stagflation risks.

“The economic team is totally optimistic that once the war in Iran is over, the growth of our economy will resume its previous path. So, that means we’re looking at the mid 5% levels as soon as all these uncertainties are over,” Mr. Go told Bloomberg News.

Mr. Go also noted that foreign companies are still interested in setting up operations in the Philippines.

“The interest to invest in the Philippines is at an all-time high,” he said. “I don’t think we will have stagflation.”

Mr. Agonia said infrastructure spending could help drive growth in the succeeding quarters.

“The largest bright spot we see would be the resurgence of infrastructure spending by the second half of this year,” he said.

Last week, Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan said that he expects government spending and project implementation to accelerate in the coming months as agencies operationalize their catch-up programs.

A corruption scandal involving flood control projects had stalled government spending, and dampened consumer and investor confidence. Mr. Baliscan had said the lingering effects of the scandal continued to be seen in the first-quarter economic data.

For Maybank’s Mr. Rosli, services activity, remittance inflows, tourism recovery, and resilient electronic exports will continue to support the economy.

“In particular, the ongoing global artificial intelligence (AI)-driven semiconductor upcycle could become a meaningful upside driver for Philippine exports given that electronic products account for 54% of total exports,” he said.

“Export growth remained relatively strong at 7.8% year on year in the first quarter despite weaker domestic conditions, supported partly by semiconductor-related demand,” he added.

This growth was driven by a 13.3% expansion in goods exports and a 3% increase in services exports.

However, Mr. Agonia said that although exports could provide a minor favorable tilt, “downside risks in the form of logistics disruptions and a softer global demand outlook are rising.”

“We note that volatility in the peso-dollar rate is shaking exporters’ confidence, constraining solvency and raising input costs,” he said.

Still, Mr. Agonia said that AI-related semiconductor demand could be “one of the few green shoots in the Philippines’ growth picture, with robust performance despite global headwinds.” 

“This may be an opportune time for the Philippines to move up the electronic product value chain and seek out more enduring growth drivers,” he added.

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Computers connected to the Bitcoin network using a client who validates and relays the transactions are known as nodes. Each node gets a copy of the blockchain, which is automatically downloaded upon joining the network. The blockchain has all the information concerning the addresses and their respective balances right from the first block to the recently completed block.

Breaking Down Blockchain Technology

The blockchain stands as proof of all Bitcoin transactions, and that’s why it’s seen as the leading technological innovation of Bitcoin. All the recent Bitcoin transactions are recorded in the current part of a blockchain known as the block.

Once the block is completed, it goes into the blockchain as a permanent database. A new block is usually generated once the older block gets completed and the number of such blocks in the blockchain is countless.

However, you should understand that the blocks are not randomly placed in a blockchain. They are usually connected to each other like a chain, in a proper linear and chronological order. Every block usually contains a hash of the previous block.

Blockchain Vs Banking Transactions

The blockchain technology can be compared to the full history of banking transactions. Bitcoin transactions are entered in a blockchain in chronological order; the same way bank transactions are entered. The blocks, on the other hand, are quite similar to individual bank statements.

Following the Bitcoin protocol, all the nodes participating in a system share the blockchain database. One can find the records of every blockchain transaction ever completed in the full copy of the blockchain, and they can easily get an insight into the facts of a particular address at any point in the past.

Many people have hailed the blockchain as the revolutionary holder of the promise the internet did close to two decades ago. Even business figures like Richard Branson and Bill Gates have positively commented on its potential.

When the former UK Prime Minister David Cameron included a blockchain expert in his entourage during his trade mission to Asia, many were surprised. Yet, those who have been keeping tabs with blockchain technology were excited to see decision makers start embracing the undeniable potential of this technology.

Blockchain Possibilities and Applications

Financial experts say that blockchain possibilities are limitless and its applications are very wide. Some of its applications include:

• Storing the identities of clients,
• Handling cross-border payments,
• Clearing and settling bond or equity trades and
• Handling self-executing smart contracts – like a credit derivative which pays out automatically or bonds which regularly pay interest to the holders.

Other experts even argue that the technology has the capability to disrupt companies which have forged reputations as disruptors like Airbnb and Uber. Blockchain, at its core, is a network of computers, which must approve any transaction which takes place before it’s recorded in a computer node.

Like with Bitcoin, the technology’s first application which is normally applied to money, all transactions are secured through cryptography, and the costs are usually shared amongst those in the network. The transfer details are then recorded on a public ledger which can be seen by anyone on the network.

Central Lender Vs Shared Database

In the present banking system, all client information is kept in a central lender. In a blockchain, on the other hand, all the information is stored in a shared database in a transparent manner, and no one acts as a middleman during the entire process. Many agree that this creates trust amongst the parties involved, and there is no chance for abuse from any party in a dominant position.

The lack of a central authority in the blockchain is the feature which created a lot of worry amongst the traditional financial institutions. This is because most of these institutions gave central authority a wide berth. The idea that seemed to be borne out, especially when cryptocurrency was in the center of major scandals like transacting drug money to the disappearance of client assets.

However, almost every major financial institution has overcome this initial suspicion and started embracing the technology.  The technology has transformed from being labeled as a threat targeting the banks to being heralded as the back office makeover of the banks. This became a very bitter blow to those who propagated the idea of blockchain technology as a threat to the global banking system.

Banks Hiring Blockchain Specialists

Some banks have even started hiring specialists to investigate the ways in which block chain can be used to increase speed and reduce the costs in payments as well as trade finance. While some consider this as the scenario where suits are replacing hoodies and ripped jeans. Some of these experiments which were conducted secretly have already started to earnest in the past few years.

There is a huge desire to make the blockchain technology successful. It has major rewards to financial institutions: doing away with inefficient intermediaries in the banking sector can save billion for consumers and the financial sector too.

According to a recent study conducted by a Spanish bank Santander, block-chain technology will reduce banks’ infrastructure costs for cross-border payments, regulatory compliance, and securities trading by $15 billion to $20 billion in a single year.

Financial experts agree that the technology will work very well in many areas, and it is very easy to predict how it can revolutionize the financial sector. It is set to reduce the time taken for securities settlement and also reduce the amount of capital which is usually held by banks against each trade.

Blockchain and Cyber Crimes

Block-chain also presents an opportunity for the big banks which are struggling to modernize their outdated IT infrastructure. Most of these banks are facing immense pressure from cyber-criminals, digital challengers and their regulators and the technology will give them the opportunity to plan much of what they can achieve.

One of the features in the blockchain technology being eagerly explored is its ability to provide identity and the history of the individual’s transaction records which cannot be forged. Insurance companies believe that the interlinking records could be highly useful when it comes to cross-checking the actions of a particular individual.

Its distributed ledger can be used to store either an individual’s or a company’s validated data. This is something financial experts say if applied globally, can offer more security over the identity of the data and its storage location.

Some governments are also said to be investigating the potential of the technology. For example, the government of Honduras is currently handling land titles using the technology while the Isle of Man has started registering its companies using the technology. It is believed that a longer term ledger which cannot be tampered with can be used in the healthcare industry to store medical records or develop tamper-proof voting systems.

Read Also:

• How The Blockchain Can Protect Your Fintech Data
• What’s the Scope For Careers in Blockchain Technology & Cryptocurrency?
• Blockchain Development: Necessary Competencies to Master

Author Bio

Brooke loves surfing through social media, so she made it a full time job and works as a social media manager at Entrance Software Consulting Company. And loves all things Tech. When not working, she eats and sleeps, in that order.

This article is originally published on 02 May 2017.

The post How Blockchain Technology Can Transform The Finance Industry? appeared first on Fincyte.

The Philippines’ gross international reserves (GIR) fell to its lowest level in over a year as its foreign exchange holdings slumped at end-April, the Bangko Sentral ng Pilipinas (BSP) said.

Preliminary central bank data showed that the country’s GIR level stood at $104.128 billion as of end-April, down 2.35% from the $106.636 billion a month ago.

This was the lowest GIR level in 15 months or since the $103.271 billion logged in January 2025.

Year on year, the country’s dollar reserves slipped by 1.12% from $105.308 billion.

Still, the central bank noted that the end-April reserves are enough to cover about 3.8 times the country’s short-term external debt based on residual maturity.

It likewise translates to 6.9 months’ worth of imports of goods and payments of services and primary income, more than double the three-month standard.

“The latest GIR level ensures availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans,” the BSP said late on Thursday.

Dollar reserves are the central bank’s foreign assets held mostly as investments in foreign-issued securities, foreign exchange and monetary gold, among others.

These are supplemented by claims to the International Monetary Fund (IMF) in the form of reserve position in the fund and special drawing rights (SDRs).

BSP data showed that the latest decline in foreign reserves came as the country only held $464.9 billion in foreign exchange during the period, plunging by 73.38% from the $1.747 billion the prior month and by 30.85% from $672.3 million last year.

Its gold holdings were also slightly lower month on month as of end-April at $19.78 billion, down 1.97% from $20.177 billion at end-March. However, it jumped by 48.29% from $13.338 billion a year ago.

Meanwhile, its foreign investments dropped by 1.11% to $79.198 billion from $80.088 billion the previous month and by 8.63% from $86.674 billion a year earlier.

However, its reserve position in the IMF climbed by 1.3% month on month to $723.6 million as of end-April from $714.3 million previously but dipped 2.43% from $741.6 million in the same period in 2025.

The country’s SDRs — or the amount the Philippines can tap from the IMF’s reserve currency basket — also reached $3.961 billion, 1.29% higher than the $3.912 billion as of end-March and up 2.05% from $3.882 billion last year.

For 2026, the BSP sees the country’s foreign reserves ending at $111 billion.

Claire Huang, Synology Philippines country manager, said that amid the country’s advancing digital initiatives, resilience can no longer be treated as a secondary consideration.

“Government systems must be designed to handle disruptions, protect sensitive data, and keep essential services available at all times,” Ms. Huang said in a statement, noting that this is crucial to ensuring public trust as more services go online.

The Philippines is among the countries most affected by cyberattacks globally, including attacks such as ransomware, phishing, and identity theft, Synology said, citing the Microsoft Digital Defense Report 2025.

During the GOVX.0 Conference 2026 held a few days ago, Synology shared how government agencies can strengthen their systems’ resilience through reliable backup, faster data recovery, and the ability to maintain operations during unexpected events.

The tech company also offers solutions such as Synology ActiveProtect, a specialized, high-performance data protection solution.

It said that the solution helps organizations standardize recovery processes, reduce manual workloads, and respond quickly to disruptions that halt access to essential services.

Synology reiterated that data resilience will remain crucial in ensuring reliable and secure access for citizens amid the expansion of digital government services. — Edg Adrian A. Eva

“We recognize the vital roles of our schools in shaping our citizens,” CEAP Advocacy and Public Engagement Office Ina Claustro said during a press conference.

“It’s difficult to teach democracy when power continues to revolve only among few families,” she added in Filipino.

Ms. Claustro noted that schools bear the responsibility of teaching the youth that public offices are not inherited and should be used for the greater good.

“Education must produce citizens who are critical and engaged,” she said. “To our youth, do not lose hope, do not accept that this is how politics work.”

“Democracy only works when new voices are given space to lead. Leadership should be earned through competence, integrity, and service – not inherited by some people,” she added.

The D1L movement proposes a law that prohibits political families from holding more than one position each in national and local offices. The proposal includes family members up to the fourth degree of consanguinity and affinity.

The succession, replacement, or switching of position among political families is also not allowed under the proposed law, and families that had members in political positions must maintain a “one term cooling period” after reaching their term limits.

“This law will change the composition and quality of members of the Congress and the leaders in the LGUs (local government units),” the groups said in a statement.

“A genuine anti-dynasty law is critical to our rejection of the politics of patronage, ayuda, pork barrel… political education, electoral reform, budget reform, and training and formation of our public servant leaders,” it added.

Under Article VI, Section 32 of the 1987 Constitution, the public can propose a law through a people’s initiative if the petition is signed by at least 10% of the total number of registered voters nationwide, and every legislative district has at least 3% signatures from registered voters.

“We are currently mobilizing our member schools across 17 regions to support this people’s initiative guided by hope, justice, mercy, and unity,” Ms. Claustro said in mixed English and Filipino. — Almira Louise S. Martinez

“Education is the most reliable ladder out of poverty. When a disaster strikes, that ladder shouldn’t break,” Education Secretary Juan Edgardo “Sonny” M. Angara said in a news release.

“We are fulfilling President Bongbong Marcos’ mandate to use innovation not just for safety, but for stability,” he added.

The agency said Project LIGTAS+, which stands for Learning Institution Geohazard Tracking and Assessment for Safety, aims to protect students from class disruptions caused by natural disasters.

“We are moving away from guesswork and toward a future where data ensures that no child’s education is washed away by a storm,” Mr. Angara said.