“With IELTS, what we’re really proud of when it comes to the service and the test that we offer is that there is still human intervention,” Danica Tuliao, senior exams marketing manager at British Council Philippines, said in an interview during the organization’s annual exams partner gathering.

“In our speaking test, we have a live human examiner that test takers speak with because that’s actually the best measure of how you communicate with people,” she added.

Ms. Tuliao said the English language assessment landscape locally has become increasingly competitive in recent years, with providers offering specialized examinations for industries such as healthcare, as well as fully AI-based tests that do not require interaction with a human examiner.

Despite these developments, she said IELTS continues to adopt a hybrid approach by integrating AI features while preserving human assessment in key components of the examination process.

“We really feel strongly that the IELTS (approach) can definitely address the purpose of each test taker and help them achieve their dreams and goals,” Ms. Tuliao said in mixed English and Filipino.

The British Council has incorporated AI-powered tools into its IELTS Ready Premium preparation platform, allowing test takers to track their progress and receive automated support while preparing for the examination.

The global English proficiency testing market is estimated at $3.1 billion in 2025 and is projected to reach $5.5 billion by 2032, according to market research firm Metastat.

This represents a compound annual growth rate (CAGR) of 8.5% between 2025 and 2032.

Ms. Tuliao said English language assessments such as IELTS remain crucial for individuals seeking opportunities overseas, particularly for studying, working, and migrating to countries that require proof of English proficiency.

Different institutions, professions, and countries impose varying score requirements depending on the level of English language competency required. — Edg Adrian A. Eva

On Thursday, the Pasig City Regional Trial Court Branch 152 issued a 20-day temporary restraining order against the implementation of Wage Order No. 27, which granted a P85 daily minimum wage increase for private-sector workers in Metro Manila.

The order suspends the first tranche of P60, which took effect on July 25, to be followed by an additional P25 in January 2027.

Labor Secretary Francis N. Tolentino said employees who have already received the initial wage increase will not be required to refund the amount.

“The workers already have a vested right, so that should not be returned… because at the time it was received, there was no order from the National Wages and Productivity Commission that it was suspended,” Mr. Tolentino said in a statement in Filipino.

He said the Office of the Solicitor General will lead the legal efforts and represent the national wage commission in the court proceedings.

The legal challenge was initiated by two construction firms who argued that the “abrupt” mandated increase would be entirely absorbed by their budgets, leading to sustained deficits and potential job cuts.

Sarah Buena S. Mirasol, chairperson of the NCR wage board, maintained that the wage board operated within its legal mandate in issuing the wage hike.

She added that the plaintiffs should have exhausted administrative remedies by appealing to the national commission before seeking judicial intervention.

“We are confident of the fact that we followed due process, and we follow the process as provided in the guidelines for the minimum wage fixing,” Ms. Mirasol said.

She added that any request for a restraining order should demonstrate “harm to all minimum wage earners rather than a specific sector.”

The government plans to argue for the hike’s validity in the upcoming August 3 hearing. — Erika Mae P. Sinaking

LOWER oil prices and increased consumer spending as classes reopened helped Philippine business sentiment recover in June after three straight months in negative territory, a survey by the Bangko Sentral ng Pilipinas (BSP) showed.

The BSP’s monthly business expectations survey (BES) yielded a 0% current-month confidence index (CI) in June, improving from the -25.2% in May.

A neutral or zero CI shows that optimistic and pessimistic respondents are nearly equal in number. A positive CI shows that more respondents are optimistic than pessimistic, while a negative CI shows otherwise.

“Philippine business sentiment improved in June as firms expected lower oil prices and energy costs to support increased business activity during the period, results of the latest Business Expectation Survey show,” the central bank said in a statement on Friday.

“BES data also show firms anticipated a boost in consumer spending following the reopening of schools during the month.”

The survey also showed businesses were more optimistic for the third quarter and the next 12 months.

For the next three months, firms’ CI stood at 18.8%, jumping from the 0.6% recorded in May, amid optimism that was driven by expectations of higher household consumption and easing inflation pressures.

Meanwhile, their CI for the year ahead rose to 42.4% in June from 27.8% in May as they anticipate stronger demand for goods and services among consumers, as well as better local and global economic conditions amid hopes of a resolution to the Middle East war.

However, businesses surveyed still expect inflation to remain above the BSP’s 4% ceiling, with their year-ahead projection at 5.6%. Still, this was slower than their 5.9% estimate in May.

“Businesses that expect higher inflation were concerned about higher energy cost and supply constraints, the ongoing Middle East conflict, (and) peso depreciation,” the central bank said.

Inflation as of June averaged 4.8% as high oil prices and spillovers to other key commodities continued to drive the headline print past the BSP’s tolerance range.

The central bank expects inflation to average 6.4% this year.

TIGHTER FINANCIAL CONDITIONS
Meanwhile, Philippine firms see tightening financial conditions but slightly easing credit access, citing stiff domestic competition, insufficient demand, and financial concerns.

Businesses’ financial condition index, which gauges their general cash position considering the level of cash and other cash items and repayment terms on loans, worsened to -26.8% in June from -25.7% in May.

On the other hand, their credit access index improved month on month to -5.7% from -7.3%. This refers to the firm’s external environment, such as the availability of credit in the banking system and other financial institutions.

Firms’ average capacity utilization for the industry and construction sectors also climbed to 73.9% in June from 70.5% last month.

Meanwhile, Philippine businesses’ employment outlook index fell to 1.8% from 11.9% for the next three months, and to 20.2% from 20.4% for the coming year.

However, the survey showed that more firms were willing to expand, with 20.4% saying they are looking to boost operations over the next quarter from 9.7% in May. For the year ahead, 18.7% expressed their intent to expand, higher than the 11.8% a month ago.

“Overall, the favorable business outlook could support economic growth for 2027,” the central bank said.

The BSP surveyed 515 firms nationwide, with 193 coming from the National Capital Region (NCR) and 322 from areas outside NCR, from June 5-30.

Chief Commercial Officer of DITO Telecommunity Adel A. Tamano said the partnership with the multinational convenience store chain is anchored on their shared commitment to innovation, customer value, and growth.

“By combining our strengths, we aim to create more meaningful experiences for Filipino consumers while opening new opportunities that will benefit both organizations,” Mr. Tamano said in a statement released on Thursday.

“We look forward to building a partnership that reflects our shared vision of delivering greater choice, convenience, and value to the communities we serve,” he added.

Under the partnership, customers can now purchase DITO Starter Packs — which include a SIM card preloaded with up to 25 gigabytes of bonus data, among other inclusions — at more than 200 Lawson stores in Metro Manila.

The initiative makes reliable connectivity more accessible while providing greater convenience and value to Filipinos, according to Tsunaka Nakanishi, vice-president of Lawson Philippines.

DITO said the collaboration marks another milestone in the company’s continued expansion of its retail footprint while empowering Filipinos with accessible, high-quality digital connectivity. — Edg Adrian A. Eva

The campaign celebrates “self-expression and modern living by helping today’s generation build a dynamic lifestyle that fits right into their routines,” the company said in a statement released Thursday.

Reflecting the brand’s youthful character is Filipino actor Donny Pangilinan, who serves as Simplus’ ambassador.

The company said his personable and relatable personality inspires young adults to embrace independence and build comfortable, functional homes.

As part of the anniversary celebration, Simplus participated as an official sponsor of Circus Music Festival 8 in Pasig City, where it showcased its products through an interactive booth in partnership with Automatic Centre.

The company also hosted a product experience event for content creators featuring its kitchen, personal care, and home living appliances.

Separately, Simplus partnered with the National Book Store Foundation, Inc. to donate school supplies, classroom materials, and select home appliances to Capt. H. Francisco Elementary School-Annex in Taguig City to support students ahead of the new school year.

The company is also holding an online campaign in which participants can share their “Live Young” moments using Simplus products for a chance to receive anniversary gift packages. — Edg Adrian A. Eva

Following undisrupted foot traffic and positive business performance in the first half of 2026, the mall operating arm of SM Prime Holdings, Inc. has noted three key factors that maintained market interest despite scaled consumption patterns earlier in the year.

“Filipinos kept showing up for family, passions, and the moments that matter,” said Steven Tan, President of SM Supermalls. “SM remained a trusted constant, creating more ways to celebrate, connect, play, and discover, while evolving alongside how Filipinos now live. That is the heart of ‘My SM’ — evolving alongside our customers so every mall feels personal, inclusive, and built around what they love most.”

Expanded and Reinvented Spaces

In the first half of the year, SM cemented its status as the country’s largest mall-based pickleball destination, expanding its network to 86 courts across 29 malls. Driven by surging market interest in active lifestyles, SM Supermalls and the SM Active Hub continue to scale up facilities nationwide while hosting community events like the inaugural SM Active Hub Pickleball Trio Challenge, culminating in its July 2026 Grand Finals.

Additionally, customers continually sought new and exciting entertainment concepts. With the launch of the SM Seaside Cebu Arena, the Visayan market has been enhanced with a new world-class entertainment venue that can host up to 25,000 guests. Rising worldwide act and Filipino pop girl group BINI inaugurated the launch.

SM Cinemas has also captured a revitalized market of movie-goers amid back-to-back blockbuster and sleeper hits from both big-name studios and indie production houses. The launch of its exclusive ScreenX format late last year provided local movie-goers with a unique and immersive cinematic experience that hosted 2026’s anticipated movies such as Zootopia 2 and Avatar: Fire and Ash, most recent sought-after screening being Spider-Man: Brand-New Day.

Meanwhile purpose-driven concepts introduced a revolutionary approach to utilizing mall spaces. With the inaugural launch of the SM Sensory Lab done in partnership with the Department of Social Welfare and Development (DSWD) and the National Council on Disability Affairs (NCDA), SM has created a safe environment for mallgoers and visitors struggling with sensory processing challenges.

To further support the country’s pursuit of sustainable and modern transportation alternatives amid the fuel crisis, SM has also expanded its nationwide network of Electric Vehicle Charging Stations with 100% coverage across its 90 malls.

From sensory-friendly spaces to green transit, these reinvented facilities reflect how “My SM” is designed to accommodate every shopper’s unique needs and values.

Reimagined Customer Experiences

To meet growing customer appetite for first-in-market and unique food experiences, SM continually elevated its Food Hall concepts nationwide, promoting regional fare and local food businesses through high-foot traffic dining spaces.

SM also expanded market access to global and local brands through a variety of new and exclusive food and retail launches.

Madrid’s famous San Ginés Chocolatería in SM Podium, Super Matcha in SM Megamall and Candid Coffee in SM Mall of Asia captured growing market demand for cafés and confectionary offerings. Additionally, the introduction of international clothing icons icons Abercrombie & Fitch and Hollister expanded access for local fashionistas to fresh and trendy outfit options.

By bringing global brands and curated local food concepts to neighborhood hubs, SM ensures that “My SM” is as much a personalized lifestyle destination as it is a shopping center.

Enhanced Market Engagement

With the launch of its “Gala to the Max” campaign, SM sought to engage mallgoers by empowering them as storytellers, driving massive social engagement with tens of millions of video views.

Pop culture fans and enthusiasts lived out their passions with exclusive pop-ups executed across SM Malls, such as the Pokémon Center pop-up in SM Mall of Asia and Animazing North’s 6^th edition, featuring an interactive installation for Solo Leveling.

Reinforcing its role as a hub for cultural exchange, SM Mall of Asia hosted the NHCP’s HistoEx 2026 in celebration of Buwan ng Kasaysayan. The three-day exposition brought history to life through interactive exhibits, public lectures, and immersive installations celebrating the country’s maritime heritage.

SM also supported active lifestyles through its SM Active Hub exclusive events, with tens of thousands of participants filling the streets for major running events like the Galaxy Manila Marathon on EDSA and the SM2SM race in Cebu.

Whether running a marathon on EDSA, celebrating fandoms, or creating viral content, shoppers are actively shaping their own “My SM” moments and sharing them with the community.

The mall operator launched SM Zamboanga as its latest retail property in Mindanao in the first quarter and plans to cap off 2026 with the opening of its upscale mall in Nuvali, Sta. Rosa before the year’s end.

As Filipino lifestyle habits continue to move toward wellness, connection, and meaningful experiences, SM Supermalls continues to adapt — giving every Filipino a space they can truly call “My SM.”

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THE PHILIPPINES’ trade deficit in goods ballooned to $4.94 billion in June as exports and imports posted double-digit growth, the Philippine Statistics Authority (PSA) said.

Preliminary data from the PSA showed the trade-in-goods balance — the difference between exports and imports — stood at a $4.94-billion deficit in June, widening by 12.3% from $4.4 billion recorded in the same month last year.

Month on month, the trade gap narrowed from the $6.1-billion deficit posted in May.

June saw the smallest trade gap in four months or since the $4.01-billion gap in February.

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.

PSA data showed that imports jumped by 19.6% to $13.71 billion in June, faster than 15.8% increase in the same month last year but slower than the 28.2% rise in May.

On the other hand, merchandise exports jumped by 24.1% to $8.77 billion, slower than the 26.9% increase a year ago but faster than the 8.6% growth in May.

In the first half of the year, the trade-in-goods deficit ballooned by 25.85% by $30.81 billion from $24.48 billion last year.

For the January—June period, imports jumped by 17.84% to $77.53 billion from $65.79 billion.

Merchandise exports rose by 13.09% to $46.72 billion from $41.31 billion a year ago.

The Development Budget Coordination Committee projects exports and imports to grow by 3% and 5%, respectively, this year.

FIVE information technology (IT) parks and centers in Metro Manila are applying to become Philippine Economic Zone Authority (PEZA)-registered economic zones (ecozones), the Department of Trade and Industry (DTI) said.

This comes after President Ferdinand R. Marcos, Jr. lifted the seven-year moratorium for IT parks and centers in Metro Manila.

On the sidelines of the ASEAN Tech Summit Manila 2026 on Wednesday, Trade Secretary Maria Cristina A. Roque said the five projects have pending applications with PEZA.

The developments include MJ Landtrade Development Corp.’s Altaire in Makati City; Triumvirate Development Corp.’s One Trium Tower in Muntinlupa City; Ayala Land, Inc.’s ARCA South 1 in Taguig City; Aseana Holdings, Inc.’s Parqal in Parañaque City; and San Lorenzo Ruiz Investment Holdings and Services, Inc.’s The Yuchengco Centre in Makati City.

“That’s a big win for the IT-BPM (information technology-business process management) sector and also the real estate, because they can now open BPOs (business process outsourcing firms) in Metro Manila, and there’s a lot real estate (office) spaces that are vacant now,” Ms. Roque told reporters.

Under Administrative Order (AO) No. 45, the PEZA Board is directed to accept, process and evaluate all applications for IT centers and parks in Metro Manila.

However, the moratorium on new ecozone applications in the National Capital Region (NCR) continues to apply to all developments except those related to the IT-BPM industry.

The order amended AO No. 18, issued in June 2019, which suspended the processing and evaluation of applications for new ecozones in Metro Manila to encourage more investments in the countryside.

The IT and Business Process Association of the Philippines (IBPAP) said AO 45 provides global investors and existing locators with the necessary flexibility to expand their operations in the country.

“In today’s highly competitive investment environment, speed and flexibility matter,” IBPAP President and Chief Executive Officer Jonathan “Jack” R. Madrid said in a statement.

The group noted that Metro Manila remains a central location for setting up global offices and hiring digital talent.

“AO 45 gives investors greater confidence that the Philippines can respond to evolving business requirements while preserving our long-term commitment to countryside development,” he added.

Mr. Madrid noted that the moratorium lift would help attract new investments, support business expansions, and generate more high-quality jobs.

Property consultancy firm Colliers Philippines said lifting the moratorium on new IT parks and centers is expected to unlock significant office supply in secondary markets like the Bay Area, providing business process outsourcing (BPO) firms with more cost-effective alternatives to traditional business districts.

“The benefit for locators is they have more cost-effective options outside the CBDs (central business districts) for their PEZA operations to be accommodated,” Kevin Jara, director for office services in tenant representation at Colliers Philippines, told BusinessWorld on the sidelines of their market briefing on Wednesday.

He identified the Bay Area as a primary beneficiary due to its high volume of available developments that can now apply for PEZA accreditation.

Colliers noted existing developments such as Altaire, Yuchengco Center, and Filinvest Land, Inc.’s One Filinvest could pursue accreditation immediately to resolve leasing challenges.

According to Colliers, approximately 600,000 square meters in the future office pipeline could potentially apply for PEZA status.

Mr. Jara noted that the move is prompting IT-BPM firms to revisit expansion plans.

“It’s worthwhile for them to review their real estate now because there are already options in the market for them to benchmark against a potential renewal in their current situation,” he added.

THE BANGKO SENTRAL ng Pilipinas (BSP) and the Philippine Payments Management, Inc. (PPMI) have rolled out the Philippines’ first interoperable direct debit facility and introduced a real-time fund transfer facility for businesses.

“Interoperability and lower fees do more than lift transactions. They bring in more people. This is what financial inclusion looks like,” BSP Governor Eli M. Remolona, Jr. said in a statement.

“More Filipinos sending and receiving money digitally. More Filipinos making the network stronger for everyone already on it.”

Direct Debit PH is a standardized recurring payment facility under the National Retail Payment System that allows consumers to automatically pay their recurring bills from their financial accounts.

“Direct Debit PH lets you authorize automatic payments once and your recurring payments are handled for you, every cycle, across participating financial institutions,” BSP Deputy Governor Mamerto E. Tangonan said during the launch ceremony at the BSP Head Office in Manila on Wednesday. “No more manual transfers. No more late fees. No more forgetting.”

Under the direct debit arrangement, billers can directly and automatically pull out funds from payors’ bank accounts to settle recurring payments on set due dates.

Billers only have to acquire a one-time authorization from payors through a formal mandate, although the latter may opt to cancel the arrangement as long as it meets the mandate terms and the participating bank’s policies.

“Once a mandate is activated, payments can be processed automatically on agreed dates helping customers avoid missed payments while allowing businesses to manage collections more efficiently,” the central bank said. “This new use case serves as a digital alternative to traditional payments such as post-dated checks.”

This direct debit facility can facilitate transactions across different financial institutions as it allows customers to pay a biller holding an account with a different bank.

This includes settling bills such as utilities, subscriptions, loan payments, insurance premiums, among others.

Enrolled payors will be notified by their financial institution of all successful and rejected payments through e-mail, text message, or push notifications.

Direct Debit PH Interim Chair Carlo B. Nazareno said the facility was designed to be “consumer-friendly” as it provides payors the flexibility to set the mandate’s validity period and the maximum allowable amount to be debited from their accounts.

“(In) the end, you should have full control over what you agree and don’t agree with. And again, aside from the flexibility, you can put the maximum of how much can be debited. And you can give a deadline,” he said at a press briefing.

Mr. Nazareno also assured customers that the facility is safe, with participating institutions guaranteeing compliance with industry standards and the BSP’s regulations.

Since early this year, four universal banks have joined the live pilot of Direct Debit PH, namely, BDO Unibank, Inc., Bank of the Philippine Islands, China Banking Corp., and Rizal Commercial Banking Corp. (RCBC).

According to Mr. Nazareno, 16 other domestic and foreign banks, such as Metropolitan Bank and Trust Co. and Security Bank Corp., are in the developing stage, with PESONet seeking to onboard its over 120 member banks.

To qualify as a creditor or debtor bank in the direct debit facility, one must be a BSP-regulated financial institution, signatory to the Direct Debit PH Automated Clearing House Agreement, direct participant or have a sponsoring participant with PhilPass Plus Demand Deposit Account, and member of the PPMI.

Mr. Tangonan said he hopes Direct Debit PH will bring more billers into the system, including utility providers, telephone and mobile companies, as well as insurance and property firms.

INSTAPAY SERVICES
Meanwhile, automated clearing house InstaPay also launched its fund transfer facility for businesses, which allows 24/7 real-time business-to-consumer and business-to-business payment transactions.

Using InstaPay for Business, businesses and enterprises with business or corporate accounts can transfer up to P500,000 per transaction, with no daily transaction or value limit. This is higher than the P50,000 cap set for person-to-person InstaPay transfers.

“Originating financial institutions (OFIs) may impose and enforce their own transaction limits. Meanwhile, receiving financial institutions (RFIs) validate configured limits and may conduct post-validation checks, with the results relayed directly to the OFI,” the central bank said.

According to the BSP, OFIs may set their own transfer fees for InstaPay for Business.

As of July 29, InstaPay for businesses is only available through the Philippine National Bank, Wise Pilipinas Inc., DCPay Philippines, Inc., GoTyme Bank Corp., and RCBC.

Enrique C. Buenaflor, working group lead for InstaPay for Business, said 12 other financial institutions, including major industry players, have also expressed interest to offer the facility.

Additionally, InstaPay launched its own cash-in feature, which allows users to request money transfer from their OFI using their RFI’s platform.

“Unlike other fund transfer services, where the transaction is initiated through the platform or application (app) of the OFI, InstaPay Cash-In allows users to initiate the transfer request through the platform or app of the RFI,” the BSP said.

“This initiative widens the network of cash-in services beyond the existing bilateral agreements of financial institutions, consequently increasing digital payments usage and bringing down the barriers to adoption,” it added.

Meanwhile, the BSP now stands “doubly confident” that it will hit, or even potentially exceed, its digital payments target by 2028 following the launch of the new digital payment services, and the industry’s recent move to lower retail fund transfer fees.

Mr. Tangonan noted that the transaction volumes from the pilot launch of the services have boosted their confidence that the digital payment industry will grow past their target.

“And then we have the (Circular No.) 1238 that brings down the (retail fund transfer) fees and thanks to my colleagues here, their own banks, they like zeroized it. It makes me doubly confident that we will hit that target and even exceed it,” he added.

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.

TWO TAX RELIEF MEASURES proposed by President Ferdinand R. Marcos, Jr. would benefit at least 3.13 million workers and 78,000 small businesses but cost the government about P66 billion in annual foregone revenue, the Department of Finance (DoF) said.

Finance Secretary Frederick D. Go on Wednesday said raising the annual income tax exemption threshold to P350,000 from P250,000 would reduce revenues by about P60 billion a year, while exempting small businesses from the minimum corporate income tax (MCIT) would cost another P6 billion.

“The proposal will benefit at least 3.13 million workers, including an additional 1.2 million workers at the minimum who will no longer pay personal income tax, increasing the total number of tax-exempt workers from at least 5.1 million to 6.3 million,” he said.

Mr. Go noted those earning between P250,000 and P350,000 annually will enjoy up to P15,000 in additional take-home pay, while those earning more than P350,000 could receive up to P17,500 more.

“This means, of course, that there will be a bigger share of hard-earned income that can go towards everyday needs,” he said.

The DoF also said that around 78,000 businesses will benefit from the proposal to exempt micro and small enterprises from the minimum corporate income tax. This includes small bakeries, cafés, eateries, food stalls, sari-sari stores, repair shops, and other family-run businesses.

At present, qualified small corporations pay either the 2% MCIT based on gross income or the regular 20% corporate income tax based on net taxable income, whichever is higher, regardless if the businesses are operating at a loss.

Removing the MCIT would mean that covered businesses incurring losses would no longer have to pay the tax. Profitable companies would remain subject to the regular corporate income tax.

“From this particular measure, if it happens, [foregone revenue will amount to] P6 billion annually,” Mr. Go said.

To offset the revenue losses, he said the government could consider imposing more excise taxes but did not elaborate.

“All you have to do is look at the categories that are taxed with excise taxes, and normally, they would be the same industries that would be covered,” Mr. Go said.

Earlier, House Committee on Ways and Means Chair and Marikina Rep. Romero “Miro” S. Quimbo said the government plans to fully offset the revenue losses through higher excise taxes on vape products, heated tobacco, and sugar-sweetened beverages.

Deloitte Philippines Business Tax Leader Senen Quizon said removing the MCIT will allow small businesses “to be better positioned to preserve cash flow and pursue new opportunities.”

“It may entail short-term foregone revenue for the government, but the longer-term benefit lies in easing pressure on small enterprises, improving their capacity to grow and ultimately strengthening the country’s revenue base through expanded economic activity,” he told BusinessWorld via e-mail.

Asian Consulting Group Founding Chairman and Chief Tax Adviser Raymond A. Abrea said greater relief could come from expanding the coverage of the optional gross income tax regime, even if its rate is increased.

Under the Tax Reform for Acceleration and Inclusion law, qualified self-employed individuals and professionals with annual gross sales or receipts of no more than P3 million may opt to pay an 8% tax on gross sales or receipts instead of graduated income and percentage taxes.

“What we’re advocating is to increase the optional tax from 8% to 10%, but the threshold from P3 million to P20 million,” Mr. Abrea said.

A higher threshold could encourage more online sellers, self-employed workers and professionals to register, accurately declare their income and pay taxes, he added.

However, Foundation for Economic Freedom President Calixto V. Chikiamco described Mr. Marcos’ proposals as populist measures that fail to address the country’s underlying political and economic problems.

“The solutions [he] proposed are all populist — giveaways, tax reliefs, et cetera. But it doesn’t go to the root of the problem in our politics and in our economy,” he said in an interview on Money Talks with Cathy Yang on One News on Wednesday.

Mr. Chikiamco warned that granting tax relief without identifying sufficient revenue offsets could worsen fiscal risks and potentially affect the country’s credit ratings.

“This might affect even our ratings if the government is not able to identify clear sources of revenue to compensate for all of those giveaways and tax reliefs,” he said.

The National Government’s budget deficit widened by 2.8% to P786.8 billion in the first half from P765.5 billion a year earlier.

The six-month fiscal gap was equivalent to 47.4% of the government’s revised P1.659-trillion deficit ceiling for 2026, which is equivalent to 5.4% of gross domestic product.

BILLS FILED
Meanwhile, House Speaker Faustino “Bojie” G. Dy III and Ilocos Norte Rep. Ferdinand Alexander “Sandro” A. Marcos filed a bill that would raise the annual tax-free income threshold to P350,000.

House Bill No. 10345 seeks to increase the annual income tax exemption ceiling by P100,000 from the current P250,000 under the Tax Reform for Acceleration and Inclusion law, allowing more Filipino workers to keep a larger portion of their earnings.

The bill seeks to amend Section 24 of the National Internal Revenue Code by restructuring the graduated income tax rates imposed on Filipino citizens and resident aliens.

Under the bill, taxable income exceeding P350,000 but not more than P400,000 would be subject to a 15% income tax. Taxable income above P400,000 would remain subject to the existing graduated tax rates of 20%, 25%, 30%, and 35%.

Under the proposal, married taxpayers would continue to file and compute their income taxes separately, with any income that cannot be exclusively assigned to either spouse split equally between them.

The measure would also preserve the income tax exemption granted to minimum wage earners, covering their taxable income as well as holiday pay, overtime pay, night shift differential, and hazard pay.

It would likewise allow qualified self-employed individuals and professionals to continue availing of the optional 8% tax on gross sales, receipts, and non-operating income exceeding the proposed P350,000 tax-exempt threshold, in lieu of the graduated income tax rates and percentage tax.

Meanwhile, Senate President Pro Tempore Vicente C. Sotto III filed Senate Bill No. 2338 that also seeks to exempt those earning P350,000 a year from income tax.

However, Senate Finance Committee Chairperson Joseph Victor “JV” G. Ejercito filed Senate Bill No. 2341 that aims to raise the income tax exemption ceiling to P600,000.

Under the measure, taxable income exceeding P600,000 but less than P2 million will be subjected to a 15% tax rate. — with Pexcel John Bacon and Kaela Patricia B. Gabriel

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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 Department of Agriculture-Bureau of Fisheries and Aquatic Resources (DA-BFAR) is promoting the culture of siganids, or rabbitfish (Siganus spp.), locally known as samaral, as part of its efforts to diversify Philippine aquaculture and create more livelihood opportunities for Filipino fisherfolk and fish farmers.

The DA and the BFAR see samaral as a promising species for aquaculture diversification, building on available culture technologies, growing production, and an existing consumer market. Developing the species can provide fish farmers with additional livelihood options while creating opportunities across production, processing, and marketing.

“By giving fisherfolk direct access to technology and strong market support, we can boost the production of samaral nationwide,” DA-BFAR National Director Elizer S. Salilig said.

Why samaral?

Samaral, also known as danggit, kitong, malaga, padas, and other names depending on the species and locality, is already familiar to many coastal communities and Filipino consumers. Its white meat, distinct flavor, and versatility in Filipino dishes give the species an existing consumer base on which a larger aquaculture industry can build.

Unlike species that are still largely experimental for aquaculture, samaral already has established technologies covering controlled breeding, hatchery seed production, nursery, and grow-out. Researchers have demonstrated year-round seed production for Siganus guttatus, providing a technical foundation for expanding its culture.

Samaral also offers practical advantages for fish farmers. It can be raised in brackishwater ponds and other suitable culture systems, including existing aquaculture infrastructure. It can utilize natural algae and selected seaweeds alongside formulated feeds, providing flexibility in feeding and farm management. These characteristics, together with established culture protocols and consumer familiarity, make samaral a strong candidate for aquaculture diversification.

From technology to wider production

While the technology is available, developing samaral into a more significant aquaculture commodity will require bringing the different parts of the value chain together.

Production data already point to an emerging base for expansion. Data from the Philippine Statistics Authority showed samaral aquaculture production increased from 153.89 metric tons in 2021 to 361.57 metric tons in 2025. While still small compared with established aquaculture commodities, the increase shows room to further develop production and encourage wider commercial adoption.

Beyond increasing production, DA-BFAR also sees opportunities to create greater value from samaral through post-harvest innovation. Aside from the fresh fish market, samaral can be developed into dried, smoked, marinated, deboned, and ready-to-cook products.

“As we aim to improve the well-being of our fisherfolk, we see samaral as a strong opportunity to boost their livelihoods. Developing this species goes beyond simply producing more fish. We want to strengthen the entire value chain so its growth creates sustainable income for our fisherfolk and fish farmers,” Dir. Salilig added.

With available culture technologies, an emerging production base, and an established place in Filipino food culture, samaral has strong foundations to grow from a locally important fish into a major aquaculture commodity that contributes to a more food-secure Philippines.

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PRESIDENT Ferdinand R. Marcos, Jr. has exempted information technology (IT) parks and centers in Metro Manila from the ban on new Philippine Economic Zone Authority (PEZA) economic zones (ecozone) to encourage further expansion in the business process outsourcing (BPO) industry.

Administrative Order (AO) No. 45, signed by Executive Secretary Ralph G. Recto on July 23, directed the PEZA Board to accept, process and evaluate all applications for IT centers and parks in Metro Manila.

Trade Secretary Maria Cristina A. Roque said the lifting of the ecozone moratorium for Manila-based IT parks and centers would unlock opportunities in the country’s digital economy and real estate sectors.

“By reopening the NCR (National Capital Region) to new IT ecozones and targeted expansion, we are addressing long-standing investor demand, unlocking significant real estate opportunities, and revitalizing the ecosystem that drives our country’s digital economy,” she said in a statement on Tuesday.

Under the new order, the moratorium on new ecozone applications in the NCR continues to apply to all developments except those related to the information technology-business process management (IT-BPM) industry.

The order amended AO No. 18, issued in June 2019, which suspended the processing and evaluation of applications for new ecozones in Metro Manila to encourage more investments in the countryside.

While the government issued AO 11 in 2023 to allow the resubmission of ecozone applications for those with a prequalification clearance before the moratorium, many firms could not apply.

“Allowing the processing and evaluation of applications for the establishment of IT centers and parks will attract more investors, generate more employment, and strengthen Metro Manila’s position as the leading information and communications technology hub in the country,” according to AO No. 45.

Companies operating in a PEZA-registered ecozone are entitled to fiscal and non-fiscal incentives such as duty-free importation, streamlined processes, and tax holidays.

At present, PEZA hosts 1,262 IT-BPM enterprises, contributing $7.94 million (P489.27 million) in export revenues from January to May and with a workforce of 1.06 million.

PEZA Director-General Tereso O. Panga earlier said potential applicants for ecozone status include Ayala Land, Inc.’s (ALI) Arca South in Taguig and Robinsons Land Corp.’s (RLC) Bridgetowne in Quezon City.

For 2026, the agency is targeting 30 ecozone proclamations.

Lifting the moratorium on IT ecozone expansions in Metro Manila gives IT-BPM firms the flexibility to choose locations that best align with their operating needs, said Rosario P. Carbonell, chief operating officer at property consultancy firm Savills Philippines.

“The exemption expands the range of PEZA-accredited office options available to occupiers, allowing companies to relocate, expand, or consolidate operations into newer developments that are better aligned with today’s corporate standards,” she said in an e-mail.

This is also expected to boost activity in the Philippine office market, which is heavily driven by IT-BPM locators, Ms. Carbonell said.

“We expect it to support healthy flight-to-quality activity, encourage occupiers to modernize their workplace portfolios, and reinforce Metro Manila’s position as the country’s leading destination for IT-BPM, multinational corporations, and next-generation Global Capability Centers,” she added.

THE HOUSE Committee on Ways and Means will prioritize legislation implementing President Ferdinand R. Marcos, Jr.’s proposed tax relief, even as analysts questioned how the government plans to offset the estimated revenue losses of at least P50 billion.

Marikina Rep. Romero “Miro” S. Quimbo, who heads the committee, on Tuesday said lawmakers are prepared to immediately advance the administration’s tax agenda outlined during Mr. Marcos’ fifth State of the Nation Address (SONA), including raising the income tax exemption threshold, exempting micro and small businesses from the minimum corporate income tax and granting a broader tax amnesty.

“The effects of inflation over the past years have significantly reduced the purchasing power of Filipino workers. Adjusting the income tax exemption threshold recognizes these realities and ensures that hardworking taxpayers are not unfairly penalized simply because prices have increased,” he said in a statement.

Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan told reporters on Monday that the economic team had already discussed measures to offset the revenue losses from the proposed tax relief package, including possible increases in taxes on unhealthy products.

“It is a high priority. We should see it, hopefully, within the year,” Mr. Balisacan said.

At a press briefing on Tuesday, Mr. Quimbo said that the Department of Finance estimates that raising the annual personal income tax-exempt threshold to P350,000 from the current P250,000 would result in about P50 billion in foregone revenues.

However, Mr. Quimbo said the government plans to fully offset the revenue losses through higher excise taxes on vape products, heated tobacco, and sugar-sweetened beverages.

The lawmaker said the House aims to approve the measure on third and final reading by August, with implementation targeted by Jan. 1, 2027.

IMPACT ON GDP, INFLATION
Chinabank Research said the proposed increase in the annual income tax-exempt threshold could reduce government revenues by around P53 billion in 2027.

“While the fiscal cost is significant, the income tax brackets have remained unchanged since the TRAIN (Tax Reform for Acceleration and Inclusion) law took effect in 2018. The proposal could help pump-prime the economy, raising gross domestic product growth by an estimated 0.12 percentage point,” it said in a commentary on Tuesday.

Chinabank Research said the inflationary impact would likely remain minimal at around 0.05 percentage point, as the average tax savings would amount to only about P15,000 per taxpayer annually.

Based on the 5.7 million registered taxpayers as of 2024, Chinabank Research estimated that about 3.5 million Filipinos, or 62.2% of taxpayers, could benefit from the proposed tax relief.

“Qualitatively, in the short run, it will have a favorable effect of increasing the level of expenditures of households, other things being equal,” former Finance Secretary Gary B. Teves told BusinessWorld via Viber.

“But this might be very temporary if the inflation rate remains elevated, principally caused by external factors like the high oil prices and the secondary effects on food, transport and electricity prices,” he added.

GlobalSource Partners Philippine Analyst and Principal Adviser Diwa C. Guinigundo warned that although the proposal seeks to prevent the further erosion of middle-class purchasing power, the government has limited fiscal space to absorb the resulting revenue losses.

“The government has rather limited fiscal space so every peso of foregone revenue could further expand the budget deficit and if financed by borrowing, could increase debt servicing cost,” Mr. Guinigundo, who is also a former central bank deputy governor, told BusinessWorld.

“If not matched by corresponding revenue from somewhere else, that tax concession could indeed reduce spending on education and health, infrastructure, agricultural productivity and other forms of social protection,” he added.

However, Mr. Guinigundo cautioned that tax cuts would not address the supply-side factors driving inflation such as food shortages, weather disruption, and higher energy costs.

Former Finance Undersecretary Cielo D. Magno said the proposal to raise the income tax exemption threshold to P350,000 annually reflects inflation adjustments, although she said the government could have gone further.

“The adjustment of income tax exemption is due to inflation,”she told BusinessWorld in a Viber chat. “In fact, I would prefer they increase it to P500,000.”

Presidential Legislative Liaison Office (PLLO) Head Jose Maria Clemente “Joey” S. Salceda said the growth of the middle class depends on households’ ability to build wealth through savings and broad-based economic growth supported by domestic demand.

“You need higher disposable income for both,” he told BusinessWorld via Viber. “Per Secretary Frederick D. Go, the Department of Finance is coming up with a package of measures to make these proposals sustainable, and the PLLO will assist in whatever they need to get it through.”

Meanwhile, Jose Enrique “Sonny” A. Africa, executive director of IBON Foundation, said the tax relief proposals would provide welcome relief to middle-income households but raised concerns over their fiscal impact.

Mr. Africa also criticized the proposed tax amnesty, saying repeated amnesties weaken tax compliance.

“We wonder though how the government will make up the revenue losses from what’s clearly an effort to bolster popularity among the middle class and smaller businesses, especially from the apparent aversion for progressive tax reforms targeting billionaire wealth, high-income families and large corporations,” Mr. Africa said. “Those with the greatest ability to pay and benefiting the most from the economy should be returning more.”

Asian Consulting Group Founding Chairman and Chief Tax Adviser Raymond “Mon” A. Abrea said the President’s proposal acknowledges that the middle class is overtaxed and underserved.

“Through the increase of tax exemption, we can increase the take home pay or increase the money in the pocket of our ordinary Filipinos or the middle class as we say,” he told BusinessWorld in an interview late on Monday.

However, Mr. Abrea said the proposed reform should only be the beginning, arguing that the income tax-exempt threshold should eventually be raised to P1 million.

“I would want to believe that the P350,000 is the minimum and not necessarily the end of the negotiation. Because I really believe that we deserve a one million tax-free income for every Filipino,” he added.

Mr. Abrea said the foregone revenues could also be offset through a nationwide audit of unexplained wealth, greater automation of tax administration and the implementation of the Organisation for Economic Co-operation and Development’s global minimum tax.

He estimated that an unexplained wealth audit could generate more than P1 trillion in additional revenues, while the global minimum tax could yield hundreds of billions of pesos.

“We continue to lose collection not because we don’t have enough taxes, but because we are unable to collect them. The inefficiency is so significant that those who are rich and powerful continue to avoid taxes,” he added. — with Erika Mae P. Sinaking and Pexcel John Bacon

With such an ambitious tagline, it is abundantly clear that ASUS intends to set sky-high expectations with its latest flagship. Built with elite specifications engineered specifically to power AI-driven enterprise workflows—and carrying a premium price tag to match—the ASUS ExpertBook Ultra aims to be the epitome of what a modern executive laptop should be: equal parts corporate workhorse, travel companion, and status symbol all at once.

But, what does it truly mean to be the flagship laptop of the industry?

In the absence of an exact benchmark, perhaps that claim can be judged through feeling—the impact of the moment the ASUS ExpertBook Ultra is unboxed for the first time.

It is a standout design, befitting the ASUS design philosophy of “Featherlight. Built Tough.” The ASUS ExpertBook Ultra uses an arresting magnesium-aluminum frame—the same kind of material used in the aerospace industry and high-performance race cars—giving it the texture of smooth earthenware that is simply delightful to handle. The 9H Nano Ceramic finish asserts the model’s durable feel; scratches and smudges simply brush right off with a wipe.

Open the lid and the 14-inch 3K 120Hz Tandem OLED touchscreen serves as an immediate showstopper. Boasting peak brightness of up to 1,400 nits, the display delivers ultra-vivid colors and high contrast that look good from virtually every angle all thanks to a matte anti-glare finish. Meanwhile, the audio through the six-speaker Dolby Atmos system is similarly rich and immersive, offering high-quality built-in audio without needing extra devices.

Combined, these audiovisual features make the ASUS ExpertBook Ultra perfectly capable of making work seamless, whether you’re in a physical boardroom or  in an online meeting. Which is perhaps the whole point; wherever it might be, you can bring your work with you seamlessly.

To note, the inputs feel similarly premium. The keyboard with 1.5-millimeter (mm) key travel provides a comfortable and satisfying typing experience even during long sessions of typing up reports or hashing out code. The 6-sensor haptic touchpad offers a large canvas which feels smooth and precise, though its hyper-responsive tactile feedback may need some orientation for those more accustomed to traditional mechanical clickpads.

Weighing exactly 0.99 kilograms, it is incredibly thin at 10.9 mm, which in itself is impressive as it also comes equipped with a complete array of physical ports including HDMI, dual Thunderbolt 4 ports, and a legacy audio jack. The overall package makes it an elegant, yet resilient device that is ultra-portable and extremely comfortable to use anywhere, easily carried in a tote bag, briefcase, or small backpack, and easily set up on your lap, at the backseat of a car, or at the office.

Despite its minimalist aesthetic and slim profile, the ASUS ExpertBook Ultra does not in any way feel fragile—with good reason. The laptop has passed a series of 24 military-standard tests and more than 150 ASUS in-house tests to ensure the device’s durability against real-world conditions, including extreme temperature tests, high pressure, humidity, and shock, to hinge testing repeated thousands of times.

It can also handle liquid spills on the keyboard, along with extra protection around ports, making it ideal for use in informal workspaces such as coffee shops or airport lounges.

Perhaps the most striking feature of the ASUS ExpertBook Ultra is its feeling of comfort and reliability. As modern workplaces are no longer confined to cubicles and desks, ASUS recognizes the need for a laptop to be flexible, efficient, and high-spec. It is easy to imagine any always-on-the-go professional, digital creator, hybrid worker, or entrepreneur to get a lot of mileage out of this highly mobile and powerful partner.

And this can be taken literally. The ASUS ExpertBook Ultra boasts up to 26 hours of use out of its 70Wh battery, and fast charging features that can refill half the tank in 30 minutes. Given the power underneath the hood, it is a remarkable piece of tech wizardry.

The ASUS ExpertBook Ultra is powered by up to the Intel Core Ultra X9 Series 3 processor, the latest-generation platform that delivers a significant boost in computing performance and power efficiency.

Paired with Intel Arc Graphics for strong visual capability and a 50 TOPS NPU for artificial intelligence acceleration, this laptop is an ideal device for a wide range of needs: from administrative work and visual design to dynamic presentations, heavy data processing, and even offline use of generative AI applications. Perhaps, even several of those all at once.

The ExpertCool Pro cooling system is designed to maintain stable performance even under intensive workloads. With the ability to sustain performance at 50 watts, this laptop can run optimally—and quietly—even in demanding sessions such as 4K video editing, animation rendering, or operating virtual machines without the need for thermal throttling.

As the laptop is designed for a wide-range of industries and users, it comes complete with a suite of enterprise-grade security features, such as dual self-healing BIOS, Microsoft Secured-core PC, a match-on-chip fingerprint sensor, TPM 2.0, and a webcam privacy shutter. All of these features come in-built for users who might not want to handle the complexities of a manual security setup to allow them to work with peace of mind, without worrying about data leaks or advanced malware threats.

Finally, to meet modern corporate ESG mandates, the ExpertBook Ultra sports elite EPEAT Climate Gold certification and adheres to the stringent EU PEF environmental standard. The laptop utilizes eco-friendly materials and low-carbon production footprints, satisfying green procurement benchmarks without sacrificing processing power.

The ExpertBook Ultra carries a default warranty of 3 years, which could be upgraded to up to 5 years. This is coupled with a 5-year firmware and driver update support for its NIST SP 800-193-compliant BIOS, which ensures the device stays protected against emerging security threats for the full life of the device, not requiring IT intervention or additional licensing.

Overall, the ASUS ExpertBook Ultra delivers a device that not only meets the demands of the modern workplace, but also elevates every professional lifestyle. With a light and elegant design, top-tier performance, comprehensive security features, and AI technology that boosts productivity, it offers the ideal choice for professionals looking for a truly complete laptop.

ASUS claims that the ASUS ExpertBook Ultra is “The Flagship of the Industry.” Given all it offers as a symbol of the brand’s “Brilliance in Motion”, form and function as a complete and premium package, it certainly lives up to the title.

ASUS ExpertBook Ultra is now available at select ASUS-authorized technology retailers nationwide. Or learn more at the ASUS official website. For inquiries regarding volume orders, go to https://ph.asus.click/InquireNow-pr.

ASUS Business Philippines is also offering an exclusive Early Bird Bundle Promo for the ASUS ExpertBook Ultra. Purchase any unit of the ASUS ExpertBook Ultra during the promotional period on select tech stores nationwide or at ASUS Expert Stores in Lazada or Shopee, and get an ASUS 100W GaN Charger (included upon purchase) and ₱10,000 worth of SSI Gift Vouchers (for online redemption) that can be used to purchase select luxury and premium items under the SSI Group.

The Copilot+ PC features bear repeating, for the device is capable of handling advanced AI tasks and has a dedicated Copilot key. It also comes with ASUS MyExpert, a built-in AI suite that is tailor-made for productive work, such as document drafting, translation, file search functionalities, meeting transcription, summaries, and live video translations. Crucially, AI workloads on ASUS MyExpert are processed directly on-device, ensuring sensitive corporate data remains strictly secure. These built-in AI capabilities enable executives to work faster and dedicate more time to strategic decision-making.

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Speakers at the rally accused the administration of failing to address rising living costs, inadequate social services, and alleged corruption, while calling for greater government accountability.

Kabataan Party-list representative Renee Louise Co said poverty persisted because government resources were not being used to improve public services.

“We are not poor by accident. We are poor because public funds are squandered instead of being used for essential social services,” she said in Filipino during the program.

She added that more aspects of public life had been privatized while the prices of basic commodities continued to increase.

“We are poor because basic services remain underfunded while more aspects of our lives are privatized. At the same time, the prices of food, meat, and other basic necessities continue to rise,” she said in Filipino.

Ms. Co also criticized the government’s foreign policy, saying it prioritized foreign interests over those of Filipinos. “Is this really for so-called global development? No! It serves the political, economic, and military interests of the United States in Southeast Asia,” she said.

GABRIELA Party-list Rep. Sarah Jane I. Elago said the rising prices of essential goods and limited access to jobs, housing, and healthcare reflected what she described as the government’s failure to meet the needs of ordinary Filipinos.

“The prices of rice, fuel, and electricity continue to rise. There is a shortage of jobs, housing, and basic social services,” she said in Filipino.

Ms. Elago said poor families, farmers, fisherfolk, and workers continued to bear the burden of economic hardship.

“Poor families are sinking deeper into debt because they cannot even afford enough food. Farmers are burdened with debt, fisherfolk lack the capital to provide for their families, and ordinary Filipinos are driven into debt because they cannot afford hospital bills and medicines.”

She urged the government to lower the prices of basic goods, abolish the value-added tax (VAT), increase wages, and expand support for agriculture and livelihood. “We are demanding action on the people’s long-standing calls that the government has failed to address.”

ACT Teachers Party-list Rep. Antonio L. Tinio questioned the government’s assertion that funding constraints had limited investments in public services, arguing that corruption had diverted resources intended for education, healthcare, and housing.

“The government says it has no money for classrooms. The government says it has no money for hospitals, housing, and educational supplies. Do you believe that?” he asked the crowd in Filipino, to which the crowd answered “No.”

Mr. Tinio alleged that “not just billions but trillions of pesos” had been lost through flood control scams and criticized what he described as selective anti-corruption efforts.

“Any anti-corruption campaign will remain selective, unjust, and lacking in credibility if those allegedly involved in the flood control scandals are not held accountable all the way up to Malacañang,” he said.

The People’s SONA is held annually by progressive organizations as an alternative assessment of the country’s conditions. Organizers this year called for higher wages, greater public spending on education, healthcare, and housing, stronger support for farmers and fisherfolk, and accountability for alleged corruption in government. — Kaizzer Angela Marie V. Manuba

The Bangko Sentral ng Pilipinas (BSP) sees only a “small chance” of more aggressive monetary policy tightening this year, despite renewed volatility and expectations of a second-half economic recovery.

BSP Governor Eli M. Remolona, Jr. said they could be more aggressive in raising the key policy rate, potentially with a larger 50-basis-point (bp) move, amid fresh and emerging threats to inflation.

“May chance naman pero baka maliit na chance (There’s a chance but it could be small),” Mr. Remolona told reporters on the sidelines of a BSP event on Tuesday.

The central bank governor noted that the new tax reforms pushed by President Ferdinand R. Marcos, Jr. during his State of the Nation Address (SONA) on Monday may have an impact on the country’s inflation.

“We’re still estimating it,” he said in Filipino. “But there is (an impact). The major impact will be in 2027, with a smaller one in 2028.”

Mr. Marcos called on the Congress to pass several tax measures, including raising the threshold for income tax exemptions for low- and middle-income earners and tax breaks for micro, small, and medium enterprises.

PESO
Meanwhile, Mr. Remolona also noted that the peso’s recent slump to a new-record low could stoke inflation as it pushes import costs higher.

Soaring oil prices amid renewed conflict in the Middle East dragged the peso to a fresh low of P61.847 against the greenback on Friday, down 9.7 centavos to break its previous record-low of P61.75 on Thursday.

However, Mr. Remolona said the latest record low peso-dollar exchange rate is a “misleading number” as other currencies also suffered from the greenback’s strength last week.

“But that’s a misleading number because exchange rates were moving, right? You’re looking only at peso-dollar, right?” he said. “But the rest of the world has been, their currencies have been weakening against the US dollar.”

Still, Mr. Remolona noted that the BSP intervened very minimally in the foreign exchange market.

“When it’s a strong dollar, we limit intervention to just maintain orderly markets. Because if we intervene against a strong dollar, we’re just helping the rest of the world get their dollars,” Mr. Remolona said.

“Binibigyan natin sila ng dollars. So wala tayong laban sa ganon. Uubusin lang natin yung dollars natin. (We give them dollars. So we can’t compete with that. We will just use up our dollars),” he added.

The market sees the local unit testing new lows this week as rising oil costs fuel inflation concerns.

The BSP chief’s policy outlook also came as he reaffirmed their projection that the economy would rebound by the latter half of the year despite fresh inflationary threats.

In an interview with BusinessWorld, GlobalSource Partners Principal Advisor Diwa C. Guinigundo said the country should heed the “wake-up call” from the recent foreign direct investment (FDI) slump by implementing structural reforms to restore its credibility. 

“Foreign direct investment is ultimately a vote of confidence in a country’s future,” Mr. Guinigundo, a former central bank deputy governor, said. “While the latest numbers are disappointing, they should serve as a wake-up call rather than a cause for panic.”

“The Philippines still possesses broadly good economic fundamentals, but sustained investment will depend increasingly on good governance, policy predictability, infrastructure, and institutional credibility,” he added.

In April, FDI net inflows fell by 58.8% to $250 million, its lowest monthly level in nearly 10 years or since June 2016. It was also the steepest annual decline seen in over three years or when inflows fell by 76.1% in December 2022.

Mr. Guinigundo noted that declining FDI inflows signal that investors are now weighing political and business climate aside from macroeconomic trends.

“What concerns me more than the April figure is the underlying trend,” he said. “Investors today are not merely looking at macroeconomic fundamentals such as growth and inflation. They are also assessing governance quality, regulatory certainty, rule of law, ease of doing business, energy costs, logistics, labor productivity, and political stability.”

Political instability amid the issues pounding the Senate, including the ongoing impeachment trial of Vice-President Sara Duterte-Carpio, may now be affecting investor sentiment, Mr. Guinigundo noted.

“What is going on in the Philippine Senate is not helping any. This process strikes at the very issue of institutional integrity and fitness of elected public officials,” he said. 

According to Mr. Guinigundo, a lack of sustained investment threatens to stunt long-term growth by straining the country’s capital formation, labor market, technological transfers, and export capacity.

“The immediate impact on GDP (gross domestic product) may not be dramatic because household consumption remains the principal driver of our economy,” he said. “However, the long-term consequences are more serious because lower investment today translates into lower productive capacity and slower growth in the future.”

The Philippine economy already took a hit from slower investment flows as the flood control corruption scandal that broke out late last year tainted investor confidence. 

In the January-to-March period, GDP grew by 2.8%, the weakest since the COVID-19 pandemic.

Weak FDI inflows often weigh on the sectors reliant on foreign investments, such as manufacturing, infrastructure, energy, technology-driven ones including business process outsourcing, as well as real estate, and financial services.

However, Mr. Guinigundo noted that the impact hinges on whether industries will encounter delayed investment decisions.

As of April, the country’s cumulative $1.968-billion FDI net inflows went mostly to the manufacturing, financial and insurance, and real estate industries, according to central bank data.

DIM OUTLOOK
The country will likely continue to see subdued FDI inflows as prevailing uncertainty warrants caution from foreign investors, Mr. Guinigundo said.

“We should expect investment decisions to remain cautious unless the uncertainty today diminishes,” he said. “Investors dislike uncertainty more than they dislike risk. Risk can be measured and managed; uncertainty cannot.”

This comes especially as the investment climate continues to suffer from compounding global and local headwinds.

“Externally, geopolitical tensions — including the Middle East conflict, continuing trade frictions, and uncertainty over global interest rates — encourage multinational firms to delay major investments,” Mr. Guinigundo said. “Domestically, concerns over governance, institutional stability, and policy consistency also influence investor confidence.”

The GlobalSource analyst also noted that the Philippines remains a laggard in attracting FDIs relative to its regional peers.

“That said, the decline reinforces a longer-term concern: the Philippines has been underperforming in attracting foreign direct investments relative to many of our ASEAN (Association of Southeast Asian Nations) neighbors,” Mr. Guinigundo said. 

“Vietnam, Indonesia, and even Malaysia continue to attract larger and more diversified investment inflows because investors see greater policy predictability, more efficient infrastructure, and stronger manufacturing ecosystems,” he added.

In 2025, the Philippines pulled only $9 billion of Southeast Asia’s $244-billion total FDI inflows during the year, ranking sixth in the region, according to the United Nations Conference on Trade and Development’s 2026 World Investment Report.

FDIs include actual flows from 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.

To recover investor confidence, Mr. Guinigundo noted that the government must prioritize institutional integrity, strengthen its infrastructure, lower the costs of doing business, and ensure long-term stability.

“If we address these structural issues, investor confidence may recover and FDI can once again become a strong driver of inclusive and sustainable growth,” he added. — Katherine K. Chan

The combined assets of the local banking sector were valued at P31.128 trillion as of end-June, up 10.34% from P28.211 trillion in the same period last year.

It also grew by 2.25% month on month, breaking the previous all-time high of P30.442 trillion seen at end-May.

Banks’ assets are mainly supported by deposits, loans, and investments. These include cash and due from banks as well as interbank loans receivable (IBL) and reverse repurchase (RRP) net of allowances for credit losses.

For analysts, the continued expansion of the industry’s loans, deposits, and investment holdings drove its assets to a fresh high despite a challenging macroeconomic backdrop.

“The latest record-high asset level reflects healthy loan growth, steady deposit inflows, and expanding investment holdings amid resilient domestic economic activity,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

“While geopolitical tensions and higher oil prices remain key external risks, domestic liquidity conditions remain supportive; and credit demand continues to hold up,” he added.

BSP data showed the banking sector’s total net loan portfolio, inclusive of IBL and RRP, rose by 12.1% to P17.239 trillion as of June from P15.378 trillion in the comparable year-ago period.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., also attributed the sector’s asset growth to banks’ high earnings, which provided them more capital to fund loans and investments.

“This is again largely due and consistent with the… sustained net income despite a high base that added to banks’ capital, thereby leading to continued growth in banks’ total assets (and) resources by more than 10%,” he said via Viber.

BSP data showed banks’ net investments, or financial assets and equity investments in subsidiaries, grew by 8.41% to P9.089 trillion as of end-June from P8.384 trillion a year ago.

Net real and other properties acquired by banks also jumped by 24.27% to P160.784 billion as of end-June from P129.384 billion in the previous year.

The sector’s other assets jumped by 21.43% to P2.567 trillion as of end-June from P2.114 trillion last year.

Meanwhile, cash and due from banks fell by 6.07% annually to P2.071 trillion at end-June from P2.205 trillion previously.

At end-June, universal and commercial banks held most of the sector’s assets worth P29.044 trillion, up 10.02% from P26.4 trillion a year earlier.

Thrift banks’ assets also rose by 9.11% to P1.409 trillion at end-June from P1.291 trillion in the prior year.

The assets of rural and cooperative banks stood at P474.992 billion, increasing by 23.23% year on year from P385.446 billion.

Digital banks logged P199.859 billion in total assets, soaring by 48.22% from P134.836 billion recorded at end-June 2025.

On the other hand, the banking system’s liabilities rose 11.05% annually to P27.441 trillion as of June from P24.711 trillion.

Most of these were deposits, which climbed by 8.34% to P22.394 trillion from P20.671 trillion last year.

Peso-denominated deposits were valued at P18.52 trillion during the period, while foreign currency deposits amounted to P3.874 trillion.

For Mr. Ricafort, banks’ double-digit lending growth will continue to drive the rise in assets in the coming months.

The BSP earlier told BusinessWorld that lending activity may show muted growth this year amid rising borrowing costs and uncertainties over the Middle East war.

Mr. Asuncion also sees inflation, interest rates, and business sentiment shaping banks’ balance sheets throughout the rest of the year.

“We therefore expect banking sector assets to continue growing, although the pace may become more sensitive to developments affecting inflation, interest rates, and overall business sentiment,” he said.

The Monetary Board has so far raised the key policy rate by 50 basis points (bps) to 4.75%, with BSP Governor Eli M. Remolona, Jr. noting that the economy can still take another 25-bp hike.

Earlier this year, the central bank said geopolitical shocks from the ongoing Middle East war have minimal direct impact on the local banking system.

However, it also flagged potential asset quality risks in certain sectors from weaker domestic and external financial conditions. — Katherine K. Chan

THE PHILIPPINES could be Southeast Asia’s fourth slowest-growing economy this year despite limited spillovers from the Middle East conflict, as its heavy reliance on imported oil and weak investment climate continue to weigh on growth, the ASEAN+3 Macroeconomic Research Office (AMRO) said.

In its latest ASEAN+3 Regional Economic Outlook, AMRO kept its Philippine gross domestic product (GDP) growth projections unchanged at 4.1% this year and 5.5% in 2027.

Both forecasts are still within the National Government’s growth targets of 3.5%-4.5% for 2026 and 5%-6% for 2027.

“The Philippines is one of the countries in the region that has been harder hit by the oil shock so far,” AMRO Chief Economist Dong He said in a virtual news briefing on Monday. “That’s reflected in both the lower growth rates we forecast for the Philippines this year than last year, but also the significantly higher inflation than 2025.”

If realized, Philippine economic growth this year will even be slower than the post-pandemic low of 4.4% in 2025. Energy shocks from the Middle East war rippled through the country’s domestic economy rapidly, dragging its GDP growth to 2.8% in the first quarter. 

For this year, AMRO’s growth forecast for the Philippines is the fourth weakest among the Association of Southeast Asian Nations (ASEAN), ahead only of Brunei (1.9%), Thailand (2.4%) and Myanmar (2.5%). The Philippines is expected to trail Vietnam (7.5%), Indonesia (5%), Malaysia (5%), Cambodia (4.9%), Singapore (4.8%), and Laos (4.6%).

Mr. He said he is “cautiously optimistic” on the Philippines as the expected boost from artificial intelligence (AI) provides the economy some relief.

“Overall, I think the Philippine economy is benefiting from the AI cycle, but it has some specifics in terms of its oil exposures to the Middle East. It’s probably a lack of strategic reserves in terms of oil supply that’s reflected in these numbers,” he said.

For 2027, AMRO expects the Philippines to be the second fastest-growing economy in ASEAN, behind Vietnam (7.3%), and ahead of Indonesia (5.1%), Cambodia (4.9%), Laos and Malaysia (4.7%), Singapore (3.1%), Myanmar and Thailand (2.5%), and Brunei (1.7%).

According to Mr. He, the country’s investment slump, particularly in infrastructure, will continue to affect domestic activity throughout the year. For the long term, he said the Philippine government should focus on resolving key issues to attract more investments.

“That is how to strengthen private investment so that the production capacity and the infrastructure will be strong enough to support higher medium-term growth in terms of dealing with, for example, extreme weather conditions to make the Philippine economy much more robust against these natural disasters. So, some of the governance issues relating to infrastructure investment will have to be resolved,” he added.

The AI boom will also continue to propel the economy, given the country’s significant semiconductor exports, according to AMRO.

“On the growth front, it continues to benefit from the AI cycle. Actually… we think that the Philippines is very much a service-based export economy. It is very much plugged into the global AI cycle as well… (Semiconductor exports) would continue to provide support to the export growth in the Philippines,” Mr. He said.

Meanwhile, Mr. He noted that the impact of the Middle East war on the rest of the region was likewise less severe than initially expected due to strong domestic demand. 

For ASEAN — or the Philippines, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand, Timor-Leste, and Vietnam — AMRO hiked its 2026 growth forecast to 4.8% from 4.6% previously but kept it 4.8% for 2027.

Including China, Hong Kong, Japan, and South Korea (ASEAN+3), the region is seen to expand slightly faster at 4.1% by yearend from 4% as of last month, before moderating to 4% in 2027.

SLOWER INFLATION
Meanwhile, AMRO also noted that Philippine inflation this year could be slower than earlier anticipated but may still be the third fastest in ASEAN.

AMRO cut its Philippine inflation forecast for 2026 to 5.7% from 6% previously but kept it at 4.1% for 2027.

If realized, inflation this year will sharply accelerate from the 1.7% last year, marking the hottest clip in three years or since the 6% in 2023.

“As you know, the pass-through from energy prices to consumer prices in the Philippines was quite fast and that to some extent reflected the limited fiscal measures that the government took,” Mr. He said.

The AMRO economist noted that the lower inflation forecast came as their base scenario sees global oil price easing to around $80 a barrel this year and $70 next year from the over $100-per-barrel peak at the height of the war.

Both inflation projections would also put the headline print well above the Bangko Sentral ng Pilipinas’ (BSP) 3% target for two straight years, but below its 6.4% estimate for 2026 and 4.5% for 2027.

It would also be the third-fastest inflation among ASEAN+3 members this year, after Myanmar with 20% and Laos with 8.1%.

For ASEAN, AMRO lowered its average inflation estimate to 3.6% from 4% for 2026 and to 3.1% from 3.2% for 2027. For ASEAN+3, inflation is expected to average 1.6% for both years.

However, Mr. He noted that the BSP’s preemptive monetary policy tightening prevented price pressures in the country from broadening further.

Last month, the Monetary Board tightened for a second straight meeting, raising the key policy rate by 25 basis points to 4.75% as elevated oil prices continued to feed into the costs of other commodities.   

BSP Governor Eli M. Remolona, Jr. left the door open to another 25-bp hike as the central bank cited still strong inflationary pressures, adding that the economy will likely recover by the second half of the year.

PRESIDENT Ferdinand R. Marcos, Jr. on Monday asked Congress to pass a package of tax measures, including broader income tax exemptions for low- and middle-income earners and tax exemptions for micro, small, and medium enterprises, as he laid out his administration’s legislative priorities for the remainder of his term.   

In his fifth State of the Nation Address (SONA), Mr. Marcos also sought congressional approval of measures updating the country’s tax system, alongside bills that would amend the National Building Code, modernize the 25-year-old Ecological Solid Waste Management Act and establish a law to make rooftop solar panels and battery storage systems more accessible to households.

“To ensure the continued progress of the middle class amidst the lingering effects of the crisis, we will pursue tax relief measures that promote growth, generate revenue and advance equity toward socioeconomic sustainability,” he said in his speech that lasted an hour and 26 minutes.

Mr. Marcos said that the proposed tax reforms aim to protect the purchasing power of Filipinos who have felt the brunt of global economic volatility.

He called for the expansion of the current income tax framework to include more workers in the tax-exempt bracket.

“As a unique protection for them and so they can benefit more from their hard-earned income, I call on Congress to pass the law that will provide partial relief for our tax payments,” Mr. Marcos said.

“First, let us expand the exemption for income tax. Let us increase the number of workers who will be exempt from taxes on their income. We will include those earning not more than P350,000 per year,” he said.

This move would be accompanied by reduction in the income tax rates for other workers to ensure a fairer distribution of the tax burden.

He proposed a “one-time tax abatement” for microentrepreneurs to provide relief to those whose earnings have suffered during the recent period of economic hardship.

“Second, small businesses will no longer be subjected to the minimum corporate income tax,” he said.

The President pushed for a comprehensive tax amnesty covering unpaid income, estate, donor’s, and value-added taxes, including the waiver of associated penalties.

The fiscal space for these reforms is being carved out through a rigorous anti-corruption campaign, particularly within the Department of Public Works and Highways.

AMENDMENTS TO EPIRA SOUGHT
Also, Mr. Marcos called on lawmakers to approve a bill removing system loss charges from consumers’ electricity bills, saying the measure would complement the administration’s planned tax relief package by lowering electricity costs for households and businesses.

“It is not the fault of consumers why there are system losses. So, it is not right that consumers have to pay for this. Therefore, we, the people, request — no, we demand for the immediate amendment of the EPIRA (Electric Power Industry Reform Act), and to prohibit charging system loss against consumers including the value-added tax thereon,” he said in Filipino, receiving a standing ovation from the audience.

Mr. Marcos also pushed for the passage of the  “Sariling Kuryente” Act to make the installation of rooftop solar panels and battery storage systems in homes “simple, easy, and affordable.”

The President said the government would continue directing funds to education, healthcare, food security and infrastructure, citing savings from its campaign against corruption, including irregular flood control projects.

Mr. Marcos reiterated support for the Public Utility Vehicle Modernization Program, saying its implementation would be “humane, affordable and just.”

He also reaffirmed the government’s target of having electric vehicles (EV) account for half of all vehicles in the country by 2040 while supporting investments across the EV value chain, including vehicle assembly, battery manufacturing and related parts.

He also announced that the 12 stations of the Metro Rail Transit (MRT) Line 7 will open by next year. “After nearly three decades, there will be a new MRT line extending to Sacred Heart, Quezon City, from North Avenue. And someday, it will reach all the way to San Jose Del Monte, Bulacan,” he added.

Mr. Marcos also touted the planned Pax Silica industrial hub, which he says would “bring quality jobs to our people, accelerate our industrial competitiveness and revitalize our economy.”

“Let us continue the work that we have started, to make the Philippines the country that Filipinos deserve,” the President said.

‘CHALLENGE IS EXECUTION’
Meanwhile, Management Association of the Philippines President Donald Patrick L. Lim said the group is encouraged by Mr. Marcos’ strong emphasis on key priorities such as job creation, food security, affordable energy, and support for small businesses, among others

“The challenge now is execution. Businesses are looking for clear implementation timelines, policy consistency, and close collaboration between government and the private sector. We hope Congress will quickly translate these priorities into legislation where needed, while the Executive ensures that programs are implemented efficiently and their benefits are felt by ordinary Filipinos,” Mr. Lim said in a Viber message.

Ederson DT. Tapia, a political science professor at the University of Makati, told BusinessWorld that Mr. Marcos’ SONA was ambitious and clearly responsive to the immediate concerns of ordinary Filipinos.

“However, many of the commitments were presented as programs rather than measurable reforms. The major test is implementation: clear timelines, funding, accountable agencies and concrete outcomes,” Mr. Tapia said.

“The speech was also notable for what it avoided: impeachment, political dynasties, human rights, budget insertions and deeper institutional reforms. In this sense, it was strong on assistance and aspiration, but less complete on structural political change,” he added.

Federation of Philippine Industries Chairperson Elizabeth H. Lee welcomed the President’s directive to lower power costs, saying it is “essential to placing Philippine manufacturing on equal footing with our ASEAN (Association of Southeast Asian Nations) peers.”

“Paired with long-term energy security — through nuclear exploration, natural gas, hydrogen, and renewables — these reforms can build true industrial resilience,” she said in a Viber message.

Thousands of protesters from labor, teachers, youth, urban poor and other sectoral groups marched along Commonwealth Avenue for the people’s SONA, presenting what they described as the country’s “true state of the nation” ahead of the President’s speech.

The demonstrators called for higher wages, increased funding for education and social services and greater government accountability, while criticizing the administration over corruption, poverty, militarization and foreign influence. — with Beatriz Marie D. Cruz and Kaizzer Angela Marie V. Manuba

Called the Alliance of Truthful Information and Narratives on the West Philippine Sea (ATIN WPS), the effort taps Filipino fishermen in recognition of their direct connection to developments in the disputed waters, being among the most affected by Chinese incursions in the area.

BFAR launched the initiative in a ceremony that gathered over 80 fisherfolk leaders from across the country, along with leaders from BFAR, the Local Government of Zambales, the Philippine Coast Guard (PCG), the National Security Council (NSC), and other partner institutions. Together, they formed a united front to strengthen the role of coastal communities in promoting truth, maritime awareness, and responsible information sharing.

In remarks during the launch, BFAR National Director Elizer S. Salilig underscored the indispensable role of Filipino fisherfolk in asserting the country’s claim to the West Philippine Sea in the face of escalating tensions.

“Our fisherfolk navigate the West Philippine Sea every day, ensuring our food security while anchoring our nation’s presence in these tense waters. Through ATIN WPS, we recognize their role as the true frontline guardians of our sea,” said Mr. Salilig.

“By equipping them with accurate knowledge and empowering them to counter misinformation, we are transforming our fishing communities into credible voices of truth. This is a vital step in safeguarding not only our marine resources, but the integrity of our national narrative,” he added.

National Security Council Director Romeo Racadio, meanwhile, highlighted the importance of protecting the information space alongside the country’s maritime domain.

“Just as crucial as protecting our territory, we must protect the truth. Misinformation and disinformation pose significant challenges to the nation’s interests, and fact-based narratives are essential in fostering public understanding of the West Philippine Sea. This is where our fisherfolk play a key role,” said Mr. Racadio.

As part of ATIN WPS, fisherfolk underwent technical training that sought to equip them with factual, evidence-based, and legally grounded knowledge on the West Philippine Sea, enabling them to counter misinformation and disinformation as trusted sources in their respective communities.

The training included lectures on the legal and historical foundations of the West Philippine Sea, the 2016 Arbitral Award that favored the Philippines’ claims against China, maritime entitlements, responsible conduct at sea, and practical approaches to identifying and addressing misinformation and disinformation.

It highlighted the important role that fisherfolk play in ensuring that accurate and verified information reaches coastal communities across the country.

ATIN WPS is part of the Philippines’ whole-of-nation approach to protecting the West Philippine Sea by ensuring that coastal communities are active partners in advancing truthful narratives.

The initiative is supported by the United States Embassy Manila’s Fish Right Project, demonstrating a shared commitment with BFAR to strengthen community engagement, promote knowledge sharing, and encourage the responsible use of accurate information about the West Philippine Sea.

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INVESTORS will look beyond new policy promises in President Ferdinand R. Marcos, Jr.’s State of the Nation Address (SONA) on Monday, with analysts saying the stock market’s longer-term direction will hinge on whether the administration can deliver concrete, time-bound reforms during the remainder of its term.

While the address could provide a short-term boost to investor sentiment, analysts said financial markets are likely to focus on policy execution, regulatory consistency, and the government’s ability to translate commitments into legislation, budgets, and completed projects.

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said the SONA should move beyond broad economic goals and identify specific reforms that would support growth.

“The SONA presents an opportunity to articulate a clear and actionable economic agenda. Beyond setting the vision, it should identify the specific policies and reforms that will drive growth, tame inflation, and improve governance,” he said in a Viber message.

Mr. Colet said priorities should include accelerating high-impact infrastructure spending, lowering electricity costs, strengthening food production and supply chains, and building a globally competitive mining and minerals processing industry.

“Should the President deliver a strong and credible economic reform message, domestic financial markets are likely to react favorably, with the stock market potentially attempting to regain the 6,400 level in the near term,” he added.

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce echoed the view, saying investors generally distinguish between policy announcements and programs that can realistically be implemented before the end of the administration’s term.

“The SONA by itself is unlikely to trigger a lasting revaluation of the Philippine equity market. Political speeches can generate a temporary sentiment boost, particularly when they contain business-friendly announcements, but equity investors generally distinguish between policy declarations and executable programs,” he said in a Viber message.

Mr. Arce said markets could respond positively if the address lays out a clear economic direction, but any gains are likely to be short-lived unless Congress, implementing agencies, and regulators follow through.

“The more important market signal will be whether the government can maintain policy continuity, avoid disruptive regulatory changes, and show that its priority reforms have realistic legislative and financing pathways,” he said.

He said investors are expected to evaluate the SONA on a sector-by-sector basis, with infrastructure, banking, property, utilities, renewable energy, and consumer stocks likely to respond to announcements backed by credible implementation plans.

Areas expected to draw particular attention include infrastructure delivery, public-private partnerships (PPPs), energy security, food supply, fiscal discipline, capital market reforms, and regulatory consistency.

Mr. Arce said investors would also watch for measures that could negatively affect individual industries.

“The risks would also be sector-specific, particularly if the address includes price controls, new taxes, tighter industry regulation or mandates that raise operating costs without adequate transition periods,” he added.

Investment & Capital Corp. of the Philippines President and Chief Operating Officer Jesus Mariano P. Ocampo said investors are also seeking stronger signs that the administration remains committed to governance reforms, particularly its anti-corruption campaign.

“On the SONA, a ‘wish’ message from the President is really his stance on addressing the corruption issue. That was his main theme last time — and seems nothing has really happened yet,” he said in a Viber message.

“So investors want to know if this is still something he is going after.”

Mr. Ocampo also said investors want clearer plans for managing inflation risks arising from geopolitical tensions while preserving a stable policy environment.

“From an equity markets perspective — the President also has to be clear on a couple of matters — addressing inflation given the Iran situation and its impact on fuel price and exchange rates, and ensuring the rules of the game do not change,” he said.

Mr. Arce said foreign investors remain focused on policy credibility rather than headline growth targets.

“For foreign investors, the most consequential issue is likely to be policy credibility rather than headline growth targets… This indicates that international investors are not merely asking for additional incentives; they are looking for regulatory predictability, efficient institutions, and confidence that rules will be applied consistently across administrations and industries,” he said.

He said a favorable reception to the SONA could initially improve sentiment, but foreign investors are likely to wait for evidence that the reforms are being implemented.

The government’s anti-corruption campaign last year weighed on economic growth, while controversy surrounding allegedly anomalous flood control projects dampened consumer and investor sentiment, contributing to weakness in the stock market.

The Philippine Stock Exchange index (PSEi) ended 2025 at 6,052.92, down 7.29%, or 475.87 points, from its end-2024 close of 6,528.79.

“The key distinction is between announcement value and implementation value. Local equities could react positively to credible policy signals immediately after the speech, but foreign investors are more likely to wait for subsequent legislation, budget alignment and measurable agency action,” Mr. Arce said.

“The strongest outcome for the market would therefore not be the largest number of promises, but a focused and achievable agenda that demonstrates the administration can complete important economic reforms before the end of its term.”

THE PHILIPPINE BANKING sector’s bad loan ratio slipped to a six-month low in June as easing inflation made repayments more manageable, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed. 

In June, banks’ gross nonperforming loan (NPL) ratio stood at 3.29%, improving from the 3.44% in May and 3.34% a year earlier.

This was the lowest NPL ratio in six months or since 3.07% in December 2025, and matched the ratio seen in March.

Based on central bank data, soured loans fell by 2.74% to P584.943 billion from P601.41 billion in the previous month. However, it was 10.31% higher year on year from P530.292 billion.

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.

The lower NPL ratio came as inflation eased for a second straight month in June, said Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co.

“The easing of banks’ NPL ratio in June reflects the resilience of the Philippine economy, supported by easing inflation,” he said in a Viber message.

Lower oil prices helped inflation slow to a four-month low of 6.4% in June from 6.8% in May.

It marked the second straight month that inflation cooled after the Middle East war-driven energy crisis pushed up the costs of local fuel and other major commodities.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said banks’ efforts to improve their credit risk management amid the crisis have also helped lessen NPLs in June. 

“The latest improvement or easing in banks’ NPL ratio could be attributed to measures to better manage credit risks based on global best practices, given the external risk factors, especially the war (in the) Middle East,” he said via Viber, adding that lower oil prices during the period partly boosted credit conditions.

The industry’s total loan book reached P17.781 trillion, rising by 11.94% from P15.884 trillion a year prior and by 1.71% from P17.481 trillion a month ago.

At end-June, banks logged P753.398 billion in past due loans, up by an annual 12.36% from P670.499 billion but down 1.11% month on month from P761.871 billion.

This accounted for 4.24% of the sector’s loan portfolio during the period, slightly climbing from 4.22% in the same month last year but easing from 4.36% in May.

Meanwhile, banks’ restructured loans grew by 8.32% annually to P337.982 billion in June from P312.03 billion. However, it declined by 2.88% from P348.019 billion in the prior month.

Still, the restructured loan ratio improved to 1.9% from 1.96% a year ago and 1.99% in May.

Meanwhile, lenders’ loan loss reserves amounted to P541.237 billion during the month, inching up by 6.98% from P505.907 billion last year and 1.21% from P534.761 billion a month earlier.

This brought banks’ loan loss reserve ratio to 3.04%, lower than the 3.19% in the comparable year-ago period and 3.06% in May.

BSP data also showed that lenders’ NPL coverage ratio, which gauges allowances for potential losses from bad loans, edged up to 92.53% in June from 88.92% in May but slipped from 95.4% a year earlier.

For Mr. Ravelas, NPLs may still be manageable in the second half of the year, although risks remain from ongoing global geopolitical conflicts and weather disruptions.  

“Looking ahead, bad loans should remain manageable although banks must continue to watch risks from global uncertainties and weather-related disruptions,” he said.

“Overall, the banking sector remains fundamentally sound and well-positioned to manage credit risks,” he added.

However, Mr. Ricafort noted that borrowers may again struggle to repay their loans amid rising oil prices due to renewed tensions in the Middle East, compounded by cost pressures from a weaker peso, the recent wage hike, and the upcoming El Niño season.

On Friday, the peso fell by 9.7 centavos to its new historic low close of P61.847 against the dollar, breaking its previous record-low finish of P61.75 on Thursday, Bankers Association of the Philippines data showed.

Meanwhile, the first tranche of the record P85 minimum wage hike in the National Capital Region took effect on Saturday, bringing the minimum wage in the region up by P60 to P755 for nonagricultural workers and to P718 for agricultural workers and employees of retail, service, and small manufacturing establishments. 

The second tranche or the P25 increase will be imposed on Jan. 20 next year.

The central bank earlier said that inflationary pressures remain strong despite the slowing headline figure, with inflation projected to hit 6.4% this year and remain above its 3% target until 2028.

THE UNITED STATES’ new 12.5% tariff on imports from the Philippines could affect about $6.25 billion worth of Philippine-made goods, according to the Department of Trade and Industry (DTI).

“A preliminary assessment using 2025 trade data indicates that 34.28% of Philippine exports to the US, valued at approximately $6.25 billion, may be subjected to the 12.5% tariffs,” Bianca Pearl R. Sykimte, director of the DTI-Export Marketing Bureau, told reporters in a Viber message.

Last week, the US imposed a 12.5% levy on goods from the Philippines after a probe by the US Trade Representative (USTR) ruled that the country failed to restrict imports of goods made with forced labor.

Ms. Sykimte said the products most exposed to the new US tariff are Philippine-made leather and travel goods, apparel, footwear, and toys.

On the other hand, she estimated around $11.98 billion in Philippine exports are exempted from US tariffs.

Philippine exports exempted from the 12.5% tariff are electronic products like semiconductors, automatic data processing machines, integrated circuits, printers, headphones, projectors; auto parts, including ignition wiring sets, lead acid batteries; and aircraft parts including seats.

Agriculture products like coconut products (copra/crude oil, water/juice, desiccated); pineapples (preserved, juice, dried, fresh, jams); bananas (fresh, frozen, dried); mangoes (dried, preserved, purees, frozen); cocoa; frozen cassava; taro (frozen, dried); pastries and biscuits are also exempted from US tariffs, the DTI said.

The DTI also noted that minerals, such as copper ores and concentrates; nickel ores and concentrates; and cobalt ores and concentrates are not affected by the 12.5% tariff.

The new US tariff replaced the 10% baseline levy on the Philippines, which expired on July 24, after the US Supreme Court ruled in February that President Donald J. Trump exceeded his authority by imposing reciprocal tariffs under the International Emergency Economic Powers Act.

At a briefing last week, Trade Undersecretary Ceferino S. Rodolfo noted that the Philippines’ exports to the US are relatively less exposed than its competitors in the region.

“In contrast, [exports to the US from] our neighbors like Indonesia are 83% exposed, while Malaysia is at 40%,” he said. “However, we still want the best deal possible for our exporters.”

Mr. Rodolfo said the Philippine government has reassured the US that the country has no issues regarding the entry of goods tied to forced labor.

“In our submissions to the US, we’ve highlighted that, de facto, we don’t have a problem in terms of the entry of goods that have a forced labor component,” he said.

“We have also counter-checked it with respect to the US Forced Labor Protection Act. They have a website that lists companies which they have flagged to be using forced labor, and we have counter-checked it with respect to the sources of imports of the Philippines,” Mr. Rodolfo noted. 

The DTI said it is continuously engaging with the USTR on the forced labor issue, with the US agency assuring that its overall assessment of the Philippines is still ongoing.

“Nevertheless, we’d like to reassure everyone, our stakeholders, that we continue to engage the US, in particular the USTR, on the forced labor issue,” Mr. Rodolfo said.

An inter-agency committee composed of the DTI with the Department of Labor and Employment, Department of Finance, Bureau of Customs, Board of Investments, and the Philippine Economic Zone Authority was created last week to investigate imported goods produced with forced labor practices.

Meanwhile, the Philippine Chamber of Commerce and Industry (PCCI) called for a review of the basis for the US’ 12.5% tariff, saying Washington should provide evidence to support its claim that the Philippines imports goods produced through forced labor.

“We (private sector) are not clear what industry or group the US is referring to regarding forced labor. If there is such an incident, other industry sectors should not be included in the 12.5% tariff,” PCCI President Ferdinand A. Ferrer said in a Viber message.

Foreign Buyers Association of the Philippines President Robert M. Young said its members sign contracts with US buyers ensuring that its goods are produced in line with labor standards.

He noted, however, that the new tariff is an added burden to the country’s exporters as they grapple with high electricity and labor costs.

“This is another cross that we have to bear, but we are still thinking positive,” he said in a phone call.

Former Tariff Commissioner George N. Manzano said tariff exemptions for electronics exports should be maintained to mitigate the impact of the new US levies. Electronics account for the Philippines’ largest export shipments to the US.

“The more important issue is whether the Philippines can retain the exemptions that many of its electronic exports enjoyed under the previous global tariff. Keeping these exemptions would go a long way toward reducing the impact of the new tariffs,” he said in a Viber message.

Philippine exports to the US reached $13.44 billion in 2025, accounting for nearly 16% of the country’s total exports for the year. In the first five months of 2026, exports to the US grew by an annual 23.8% to $6.68 billion.

INFRASTRUCTURE SPENDING plunged by an annual 35% in May amid strengthened review and validation processes, according to the Department of Budget and Management (DBM).

At the same time, experts warned that prolonged government underspending could further weaken economic growth and urged the Marcos administration to overhaul infrastructure project implementation and prevent anti-corruption efforts from stalling public spending.

In its latest National Government disbursement report, the DBM said infrastructure and other capital outlays fell by 35.3% to P80.1 billion in May from P123.8 billion in the same month in 2025.

“The year-on-year decline primarily reflects the implementation of strengthened review, audit, and validation procedures for infrastructure payment claims, as well as documentary compliance requirements for contractors,” the DBM said in a statement.

“These enhanced safeguards have affected the timing of some infrastructure disbursements, particularly on Department of Public Works and Highways (DPWH) projects,” it added.

Month on month, infrastructure spending surged by 93.1% from P41.5 billion in April.

In the first five months of the year, infrastructure and other capital outlays slumped by 42.9% to P269.4 billion from P471.5 billion in the same period a year ago.

The DBM attributed the decline to the “implementation of enhanced governance measures and stricter review and validation procedures for infrastructure projects, following the government’s intensified efforts to strengthen accountability and ensure the prudent use of public funds.”

“These measures have affected the timing of some DPWH infrastructure disbursements while reinforcing safeguards for public spending,” it added.

Francisco Cid L. Terosa, an associate professor and former dean of the School of Economics of the University of Asia and the Pacific (UA&P), warned that weak infrastructure spending may have hurt economic growth in the second quarter.

“The continued weakness in infrastructure spending could cut second-quarter gross domestic product (GDP) growth by about 2 to 3 percentage points relative to second quarter of 2025 GDP growth,” he told BusinessWorld via Viber.

The Philippine Statistics Authority is set to release preliminary second-quarter GDP data on Aug. 7.

While spending may rebound as releases accelerate, Mr. Terosa said “elevated energy prices plus tight financial conditions and high borrowing costs… could deflate the effects of a spending rebound.”

“Infrastructure spending should grow by 10 to 15% on average for the rest of the year to meet the full-year growth target of 3.5 to 4.5%,” he added.

The Development Budget Coordination Committee projected the economy to grow by 3.5%-4.5% this year, lower than its previous projection of 5%-6%.

OVERHAUL NEEDED
“The National Government will have to overhaul its execution processes at the implementation level to minimize leakages,” UA&P economist Marco Antonio C. Agonia said in an e-mail.

“There are already regulations in place supposedly to prevent these things from happening, but if the ‘rules of the game’ that implicitly create loopholes for local bid-rigging and weak oversight persist, further high-level reforms may have limited efficacy,” he added.

Mr. Agonia said the government should consider assigning budgets based on agencies’ absorptive capacity instead of politically motivated discretionary spending.

“The sweeping pause in infrastructure spending, while done to wipe the slate clean, also harmed economic growth prospects,” Mr. Agonia said.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the government must show that its campaign against corruption does not have to undermine growth.

“What is needed is a system that quickly identifies and removes questionable projects while accelerating those that are transparent, economically sound, and ready for implementation,” he said in a Viber message.

Ser Percival K. Peña-Reyes, a senior research fellow at the Ateneo Center for Economic Research and Development, said the government should avoid treating anti-corruption and infrastructure spending as competing objectives.

He said tighter procurement oversight and investigations during the Aquino administration improved governance in some respects but also contributed to implementation delays, lower public spending and weaker economic growth during its early years.

“The lesson is not that anti-corruption efforts should be relaxed, but that they must be designed so they do not paralyze project execution,” Mr. Peña-Reyes said.

Infrastructure spending has one of the highest fiscal multipliers in the Philippine economy because it creates jobs, raises demand for domestic materials and improves long-term productivity, he said.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said accountability and infrastructure spending should go hand in hand.

“Key is to investigate anomalous projects while allowing legitimate, high-impact projects to proceed,” he said. “Good governance should improve, not delay, public investment.”

Mr. Peña-Reyes said persistent leakages despite reforms in budgeting, procurement and transparency show that the problem is no longer primarily the absence of rules but weaknesses in implementation and institutions.

He said procurement reforms have made the system more rules-based, but multiple safeguards can also create bottlenecks when officials become overly cautious about making decisions.

“The result is slower project implementation without necessarily eliminating opportunities for corruption,” he added.

Institutional capacity also remains uneven across implementing agencies and local government units, Mr. Peña-Reyes said.

Corruption risks have also evolved beyond outright procurement fraud, with leakages occurring through inflated cost estimates, excessive variation orders, weak contract supervision and poor-quality implementation, he said.

Such practices are often more difficult to detect because they may occur after contracts have been legally awarded.

Mr. Peña-Reyes said reforms should focus on professionalizing procurement and project management, expanding digital monitoring and ensuring accountability mechanisms operate quickly and predictably.

“The objective should be a system that is both clean and capable — one that prevents leakages while still delivering infrastructure on time and supporting economic growth,” he said.

‘EVERY PESO MUST WORK HARDER’
Mr. Rivera said the government should ensure “every peso must deliver the greatest public value” amid limited fiscal space.

“Priority should go to productive investments such as infrastructure, education, health, agriculture, and climate resilience while strengthening project evaluation, transparency, and monitoring to ensure value for money,” he added.

Mr. Ravelas said the government should prioritize clean and high-impact investments in infrastructure, flood control, food and energy security, logistics, and digital connectivity.

“At a time when global uncertainties, including tensions in the Middle East, are putting pressure on growth and fiscal resources, every peso must work harder. The goal is not simply to spend more or spend less, but to spend smarter, faster, and cleaner to sustain growth, create jobs, and strengthen public trust,” he added.

Mr. Agonia said the government should pursue longer-term, high-multiplier investments such as infrastructure master plans and human capital programs while making budget documents transparent and easily accessible.

He said the government could also use the public-private partnership framework to tap financially and technically capable organizations to carry out these projects.

“This is more pressing now that the Philippines may lose out on concessionary financing schemes with multilateral organizations following its ascension to upper-middle income country status,” he added.

TRANSPORT PROJECTS
The Marcos administration should also fast-track transport projects after years of delays.

“The administration cannot afford another detour. The journey must end by rediscovering the strengths we once had,” Rene S. Santiago, an international consultant on transport development and former president of the Transportation Science Society of the Philippines, said in a Viber message.

Mr. Santiago urged the government to prioritize feasible transport projects, stressing the need to seize doable solutions that directly address mobility issues, like deploying electric buses.

Transportation Acting Secretary Giovanni Z. Lopez said the government is working to fast-track its projects to ensure the timely completion of transportation projects.

“The tunnel from Valenzuela to Quirino Avenue Station (of the Metro Manila Subway project) is now complete, as well as the North Avenue to Tandang Sora station. This means that we are prioritizing big-ticket projects,” Mr. Lopez said in a Viber message.

The tunneling works for key sections of the Metro Manila Subway project has been completed, which advances its overall completion rate to 60%.

“We can expect the project’s completion by 2028. Before the end of Mr. Marcos’ term, (two) stations from Valenzuela to Quirino will have a demonstration run,” Mr. Lopez said.

Meanwhile, Institute for Climate and Sustainable Cities Urban Mobility Campaigns Officer Amber Garma said the Philippines should also focus on expanding active transport projects, and the upgrading of walkways in the country.

Ms. Garma urged the government to boost funding for active transportation, saying higher investment is needed to upgrade infrastructure and cushion commuters from rising fuel costs and price volatility. — with Ashley Erika O. Jose

Philippine inflation this year could be slower than earlier anticipated, but may still be the third fastest among the country’s regional peers, the ASEAN+3 Macroeconomic Research Office (AMRO) said.

In its latest ASEAN+3 Regional Economic Outlook, the think tank cut its inflation forecast for 2026 to 5.7% from 6% in June, but kept it at 4.1% for 2027.

If realized, inflation will sharply accelerate from the 1.7% last year, marking the hottest clip in three years or since the 6% in 2023.

Both projections would also put the headline print well above the Bangko Sentral ng Pilipinas’ (BSP) 3% target for two straight years, but slower than its 6.4% estimate for 2026 and 4.5% for 2027.

It would also be the third fastest inflation among ASEAN+3 members this year, trailing only Myanmar with 20% and Laos with 8.1%.

As of the first half of the year, inflation in the Philippines averaged 4.8%.

This came as oil shocks quickly rippled to major commodities like food, transport, and electricity, pushing the headline figure past the BSP’s target for four consecutive months or since the first full month of the Middle East war in March.

Meanwhile, AMRO maintained its growth projections for the Philippines at 4.1% this year and 5.5% in 2027.

If this holds true, the economy will slump to its worst performance since the COVID-19 pandemic. In 2025, Philippine GDP grew by a post-pandemic low of 4.4%.

However, both forecasts still fall within the National Government’s growth targets of 3.5%-4.5% for 2026 and 5%-6% for 2027.

The Singapore-based think tank’s estimates also position the Philippines as the fourth slowest growing economy in ASEAN, just surpassing Brunei (1.9%), Thailand (2.4%), and Myanmar (2.5%).

Under the agreement, DBP will gain access to GeoRiskPH, PHIVOLCS’ science-based hazard information platform, to support evidence-based credit evaluations and data-driven business decisions.

“We view this partnership with PHIVOLCS as a tangible manifestation of how government agencies can strengthen their collaboration and leverage shared expertise in advancing a safer, more resilient, and sustainable Philippines,” DBP President and Chief Executive Officer Michael O. de Jesus said in a statement released Friday.

The partnership will allow DBP to use GeoRiskPH and its HazardHunterPH Pro application to assess the potential impact of natural hazards on loan collaterals, investments, acquired assets, branch locations, and other bank facilities.

GeoRiskPH is a centralized government platform that provides real-time hazard data and risk analysis to support geohazard mapping and vulnerability assessments for disaster preparedness.

DBP and PHIVOLCS will also conduct bank-wide capacity-building training on the use of the platform and HazardHunterPH Pro. The training will cover key business areas, including lending, branch banking, special assets, and credit appraisal.

Mr. De Jesus said the initiative would strengthen the DBP’s institutional resilience and support financing for projects that generate economic activity, particularly in the countryside.

DBP is the country’s ninth-largest bank, with total assets amounting to P1.041 trillion. It provides credit support to priority sectors such as infrastructure and logistics, micro, small and medium enterprises, the environment, and social services and community development. — Edg Adrian A. Eva

Known for his passion for cars and vehicle customization, Jak Roberto embodies the adventurous and performance-driven lifestyle that Fuel Off-Road represents. The partnership reflects the brand’s commitment to inspiring truck and SUV owners to personalize their vehicles with premium aftermarket wheels built for both style and capability.

As more Filipino motorists invest in vehicles that can confidently handle both city streets and rugged terrain, aftermarket wheels have become an essential upgrade enhancing not only aesthetics but also durability and performance.

Fuel HC906 Halo

Leading Fuel Off-Road’s latest lineup is the HC906 Halo, a wheel engineered for truck owners seeking a bold yet refined appearance without compromising strength.

The Halo features a distinctive 10-spoke layout combined with high-strength cast construction, providing the durability required for both everyday driving and demanding off-road adventures. Its intricate spoke design delivers a premium look while maintaining the aggressive styling Fuel Off-Road is known for.

Adding to its premium appeal is Fuel Off-Road’s signature Floating Center Cap Technology, which keeps the brand logo upright and stationary while the wheel rotates. A covered-lug design further enhances its clean, modern appearance.

The HC906 Halo is available exclusively in 20-inch diameters, with 20×9 ET1 and 20×10 ET-18 configurations. It is designed to fit popular full-size trucks, including the Chevrolet Silverado, Ford F-150, Ram 1500, and Toyota Tundra. Blank-to-drill options are also available for specialized custom applications.

Fuel FC907 Heist

Joining the new lineup is the FC907 Heist, a wheel designed to combine dependable strength with sophisticated styling for trucks and Jeeps.

The Heist features a concave mesh design with wide-set spokes that create a clean, aggressive profile while maintaining the structural integrity needed for heavy-duty use and off-road adventures. Like the Halo, it utilizes robust cast construction to withstand demanding driving conditions.

The Heist also incorporates Fuel Off-Road’s Floating Center Cap Technology, ensuring the logo remains upright while in motion and complementing the wheel’s premium finish with its covered center cap.

Available exclusively in 20-inch diameters, the FC907 Heist offers offsets ranging from -18 mm to +1 mm, with dual-drilled 5-lug and 6-lug bolt patterns. Custom blank options provide additional flexibility, making the wheel compatible with a wide range of vehicles from Jeeps to one-ton pickup trucks.

Built for Style and Performance

Both the HC906 Halo and FC907 Heist are engineered to meet the demands of today’s truck and off-road enthusiasts. Featuring durable cast construction, premium finishes, Floating Center Cap Technology, and multiple fitment options, the new wheels deliver the perfect balance of performance, reliability, and modern styling.

Through this partnership, Fuel Off-Road and Jak Roberto aim to inspire automotive enthusiasts to build vehicles that reflect their personality while remaining ready for every journey whether on city streets or challenging off-road trails.

“As an automotive enthusiast myself, I believe every build tells a story,” said Jak Roberto. “Fuel Off-Road gives truck and SUV owners the opportunity to create a vehicle that reflects their lifestyle while delivering the performance and durability they need. I’m excited to be part of the Fuel Off-Road family and can’t wait to see more builds equipped with the new Halo and Heist wheels.”

The Fuel HC906 Halo and Fuel FC907 Heist are now available through Team Ridemax Philippines, the official distributor of Fuel Off-Road Wheels in the country.

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INVESTMENT APPROVALS by the Philippine Economic Zone Authority (PEZA) slumped by 40% to P11.21 billion in July, it said on Friday.

In a statement, PEZA said its approved 17 new and expansion projects equivalent to P11.21 billion, a 39.71% drop from the P18.6 billlion approved in the same month last year.

The projects are expected to generate $2.54 billion in exports, a 241.12% increase from the $744 million recorded last year.

The approved investments are seen to generate 2,907 jobs, it said.

“Despite the economic headwinds both locally and abroad, today’s investments are increasingly moving back toward more export-intensive and higher-value operations,” PEZA Director-General Tereso O. Panga said.

By industry, July approvals include six export manufacturing projects, four information technology-business process management (IT-BPM) enterprises, three domestic market enterprises, two ecozone development projects, and two facilities projects.

Eleven of the projects are in Region IV-A (CALABARZON), four in the National Capital Region, one in Region VII (Central Visayas), and one in Region XI (Davao Region).

The July approvals included four big-ticket projects worth P8.82 billion, which accounted for nearly 79% of approved investments for the month. These include two manufacturing projects in Batangas, an export enterprise in Davao del Norte, and an ecozone project in Cavite.

The top sources of investments in July were the Netherlands, Taiwan, Hong Kong, Indonesia, and the United States, PEZA said.

In the first seven months of the year, PEZA approved 174 new and expansion projects valued at P151.9 billion, up 66.99% from the P90.96-billion approved in the same period in 2025.

Approvals in the seven-month period accounted for half or 50.3% of PEZA’s P300-billion target for 2026.

The investments are expected to generate $5.91 billion in exports, a significant increase from the $2.003-billion export value recorded last year. These projects are expected to generate 26,047 jobs, PEZA said.

About 76 of the approved projects were in manufacturing, 28 in IT-BPM, 26 in ecozone development, while the other projects were in industries like facilities (15), logistics (13), domestic market (10), tourism (four), and utilities (two).

By location, 141 projects will be in Luzon, 22 in the Visayas, and 11 in Mindanao.

The top investment source for the period was the Netherlands, followed by South Korea, Singapore, Indonesia, and Germany.

PEZA said it is bullish on its investment prospects in the second half as companies seek to diversify their operations and boost supply chain resiliency amid geopolitical uncertainties.

In a 237-page decision promulgated on Friday, penned by Sixth Division Chairperson Associate Justice Sarah Jane T. Fernandez, the anti-graft court found Ms. Napoles and Mr. Pacturan guilty on 10 counts of malversation through falsification of public documents over the release of P50 million to 10 non-government organizations (NGOs) controlled by Ms. Napoles.

The anti-graft court also found Ms. Napoles guilty on 10 counts of violating the Anti-Graft and Corrupt Practices Act, but acquitted Mr. Pacturan of the graft charges after ruling that the prosecution failed to prove his guilt beyond reasonable doubt.

The court ordered Ms. Napoles and Mr. Pacturan to reimburse P50 million to the National Treasury.

Evelyn D. de Leon, a former staff member of Ms. Napoles and former president of the Philippine Social Development Foundation, Inc. (PSDFI), was convicted on three counts each of malversation and graft, but acquitted on the remaining seven counts after the court found the prosecution failed to prove her guilt beyond reasonable doubt. She was also ordered to reimburse P15 million.

The court found that Mr. Pacturan conspired with former DAR Finance and Management Service Director Teresita M. Panlilio, former Chief Accountant Rowena B. Agbayani and several private individuals, including Ms. Napoles and Ms. De Leon, to facilitate the release of government funds to 10 NGOs controlled by Ms. Napoles for purported farm input projects.

It said Mr. Pacturan executed the 10 memoranda of agreement with the concerned local government units and NGOs without authority and despite apparent irregularities in the agreements.

The court also found that Ms. Napoles directed the preparation of fabricated request letters, falsified the signatures of municipal mayors and notaries public on the documents and memoranda of agreement, and used these to facilitate the release of the funds.

The cases arose from the alleged diversion of P50 million in DAR regular funds earmarked for farm input assistance for 10 local government units in Luzon.

The cases against Simplicio M. Gumafelix and Eulogio B. Rodriguez were dismissed following their deaths, while Ms. Agbayani, Ronald John Lim, Jr. and John Raymund de Asis remain at large. — Mark Joseph M. Sanchez

In response to the earthquake that affected communities across Mindanao in June 2026, Nissan Philippines, Inc. (NPI) expresses its solidarity with the Filipino people by extending its support to the Philippine Red Cross and the Angat Buhay Foundation, aiding families as they recover from the disaster.

The Japanese automaker, together with its employees, donated to both the Philippine Red Cross and the Angat Buhay Foundation to support each organization’s ongoing humanitarian initiatives and help communities rebuild.

“During difficult times, it’s important for us to be there for the communities we serve,” said Yoshinori Kanazawa, President of Nissan Philippines. “We’re thankful to the Philippine Red Cross and Angat Buhay for the important work they do in supporting those affected by disasters. We hope these donations can help bring some relief to families as they recover and rebuild.”

The joint efforts with the Philippine Red Cross continue Nissan Philippines’ long-standing disaster response initiatives with the organization, helping reinforce programs that provide immediate humanitarian assistance to communities affected by natural disasters. Meanwhile, Nissan Philippines continues its partnership with the Angat Buhay Foundation in supporting outreach efforts that assist vulnerable families during times of crisis.

As communities continue their recovery, Nissan Philippines remains committed to supporting initiatives that help Filipinos rebuild and move forward together.

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 collaboration highlights a broader shift in AI adoption, with developers increasingly embedding conversational AI into physical devices used in healthcare, smart homes, education, robotics, and mobility instead of limiting the technology to chatbots and software applications.

“The smart cane is one of the earliest examples of AI moving from screens into the physical world. The technology adapts to the person, instead of expecting the person to adapt to the technology,” Agora Physical AI Product head Xiao Dong Feng said in an email interview with BusinessWorld.

The AI-powered smart cane designed to support older adults enables users to ask questions and seek assistance through natural voice conversations while walking, without having to stop and operate a smartphone or other screen-based device.

Mr. Feng said the challenge was not building an intelligent AI model, but ensuring that the device remains dependable in real-world conditions.

“An older adult doesn’t judge the product by the sophistication of the model. They judge it by whether it responds when they’re standing at a busy intersection, whether it still hears them when traffic is loud, or whether they have to repeat themselves several times before getting an answer,” he said.

Lgenie integrated Agora’s Conversational AI Engine to improve reliability, which combines speech recognition, speech activity detection, and full-duplex voice streaming to support low-latency conversations, real-time interruption handling, and stable audio performance even under changing network conditions.

According to Agora, the deployment achieved an average response latency of about 400 milliseconds, while also improving conversational stability and interruption handling during user interactions.

Mr. Feng said making conversations feel natural is equally important because users should be able to speak the way they normally do instead of adjusting their behavior for the technology.

“Good AI answers questions, but great AI reduces hesitation. When people stop wondering whether the AI will understand them and simply continue talking, that’s when technology begins to feel genuinely useful,” he said.

He added that users who initially spoke cautiously to the device eventually became comfortable interrupting the AI, asking follow-up questions, and changing topics naturally.

“People don’t consciously decide to trust technology. Trust develops when they stop thinking about the technology altogether,” Mr. Feng said.

Agora said AI-powered assistive devices could play a growing role in countries such as the Philippines, where the number of older adults is expected to increase in the coming years.

The company said the Philippines is expected to become an ageing society by 2030, with people aged 60 and above accounting for more than 10% of the population. At the same time, smartphone adoption is projected to reach 92% by 2030, while more than half of mobile connections are expected to run on 5G networks.

Mr. Feng said AI should complement rather than replace caregivers by extending assistance beyond the moments when family members are physically present.

“Family members provide empathy, judgement, and emotional support that technology cannot replace. Where AI can make a meaningful contribution is by extending care beyond the moments when a caregiver is physically present,” he said.

Looking ahead, Mr. Feng said the next phase of AI development will focus less on making models more intelligent and more on making AI dependable enough to integrate naturally into daily life.

“The best AI won’t constantly demand our attention,” he said. “It will quietly provide support at the moments when it’s genuinely useful.”

Through its partnership with Lgenie, Agora said it aims to expand the use of conversational AI across healthcare, education, smart home technologies, mobility, and other connected devices that require reliable real-time interaction. — Kaizzer Angela Marie V. Manuba

OCEAN-BASED INDUSTRIES’ contribution to the Philippine economy dropped to a four-year low in 2025, weighed down by a decline in fishery production amid softer global trade, weather disruptions and higher operating costs, analysts said.

Preliminary data from the Philippine Statistics Authority (PSA) showed the ocean economy accounted for 3.8% of the gross domestic product (GDP) at current prices in 2025, slipping from the revised 3.9% in 2024.

The sector’s share of GDP was the lowest since the 3.7% posted in 2021.

In terms of gross value added (GVA), the ocean economy grew by 5.3% to P1.08 trillion in 2025 from P1.02 trillion a year earlier. This was slower than the 6.2% expansion in 2024, and marked the weakest growth in five years, or since the 25.6% contraction in 2020 at the height of the pandemic.

“The slightly lower share of the ocean economy in GDP in 2025 can be attributed to ongoing declines in commercial fisheries and marine municipal fishery production brought about by fish stock depletion and habitat degradation,” Cid L. Terosa, an associate professor of economics at the University of Asia and the Pacific, said in an e-mail.

According to the PSA’s Fisheries Situation Report, fishery production reached 3.96 million metric tons (MT) in 2025, down 2.5% from 4.06 million MT in 2024.

“While ocean-based industries continued to grow by a healthy 5.3%, they faced headwinds from softer global trade, weather-related disruptions, and higher operating costs, which tempered growth compared with previous years,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said in a Viber message.

Among ocean-based activities, ocean fishing accounted for the biggest share of the total ocean economy at 24.1%, equivalent to P259.59 billion.

This was followed by manufacture of ocean-based products (21.3% share or P229.03 billion), sea-based transportation and storage (16.3% or P175.74 billion), and coastal accommodation and food and beverage service activities (12.1% or P130.27 billion).

Maritime safety, surveillance, and resource management posted the highest growth year on year at 31.7%, amounting to P63.87 billion in 2025 from P48.49 billion a year ago.

Marine insurance expanded by 29.6% to P16.32 billion, while sea-based transportation and storage grew by 10.8%.

Meanwhile, coastal recreation logged the biggest decline at 16.4% to P52.85 billion, a reversal of the 6.6% growth in 2024.

In 2025, the ocean economy generated 2.46 million jobs, up by 3.4% from 2.38 million in 2024. It accounted for 5% of total employment in the country last year.

By activity, ocean fishing had the largest share in the total ocean-based employment at 37.8% or 928,000 persons employed, followed by sea-based transportation and storage (23.6% or 580,000), and coastal accommodation and food and beverage service activities (21.7% or 534,000).

Mr. Terosa expects moderate overall performance for the country’s ocean economy this year.

“Fuel-dependent maritime production activities will be constrained by high energy costs due to the Middle East war. Commercial and ocean fishing will continue to underperform due to climate-related risks, weather disturbances, and resource depletion,” he said.

“Meanwhile, sea-based transportation and storage activities, coastal construction, and maritime tourism will continue to ride the wave, benefiting from a strong momentum that started in late 2025,” he added.

Mr. Ravelas said continued investments in ports, logistics, tourism, aquaculture, and other blue economy initiatives will drive growth in the sector.

PHILIPPINE VEHICLE SALES dropped by 8% in June, dragging first semester sales 11.4% lower as weak demand continued to weigh on the market, industry data showed.

A joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) showed auto sales slid to 37,231 units in June from 40,483 units sold in the same month a year ago.

However, month on month, total car sales jumped by 11% from 33,532 units sold in May.

Vehicle sales in June were the highest since December’s 42,870, but the 8% annual drop was the weakest decline since the 6.6% contraction recorded in February.

Including other industry data, CAMPI said vehicle sales reached 42,000 in June, an 18.7% increase from a month ago.

For the January-to-June period, total vehicle sales declined by 11.4% to 204,557 units from 230,912 units sold a year ago.

Passenger car sales dropped by 11.3% to 40,503 units during the six-month period. Commercial vehicle sales slipped by 11.4% to 164,054 units, as all segments showed a decline in sales.

In a statement on Thursday, CAMPI President Jose Maria M. Atienza said he expects vehicle sales to improve in the second half, following the entry of new electric vehicle (EV) and internal combustion engine (ICE) models in the market.

Passenger car sales, which accounted for 21.65% of industry sales, rose by 16.5% to 8,061 units in June from 6,922 units last year. Month on month, sales jumped by 20.5% from 6,692 units.

On the other hand, sales of commercial vehicles, which made up 78.35% of the total, declined by 13.1% to 29,170 units in June from 33,561 a year ago. On a monthly basis, commercial vehicle sales increased by 8.7% from 26,840 units.

Under the commercial vehicle segment, light commercial vehicle sales dropped by 14.9% year on year to 21,709 units in June, while sales of Asian utility vehicles (AUVs) slid by 5.4% to 6,812 units.

Sales of light-duty and medium-duty trucks in June fell by 31.8% and 20.7% to 363 units and 215 units, respectively. On the other hand, sales of heavy-duty trucks in June increased by 22.4% to 71 units.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said vehicle sales in June declined as high borrowing costs and geopolitical uncertainty have made households more selective about discretionary spending.

“The annual decline likely reflects a higher base last year, continued caution among consumers amid elevated borrowing costs and living expenses, and some uncertainty affecting big-ticket purchases,” he said in a Viber message.

Mr. Rivera noted that the month-on-month improvement in vehicle sales was likely driven by midyear promotions offered by car companies, as well as improved vehicle availability.

For the second half, he expects vehicle sales to post modest growth, but global uncertainties will likely weigh on consumer confidence and financing conditions.

“For the rest of 2026, car sales are likely to post modest growth, supported by easing inflation, a gradually improving interest rate environment, and sustained economic activity,” Mr. Rivera said.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said he expects a gradual recovery in auto sales for the rest of the year.

“Looking ahead, lower inflation, easing interest rates, and steady remittances should support a gradual recovery in auto sales during the second half, although buyers will likely remain price-sensitive amid renewed geopolitical risks,” he said in a Viber message.

EV SALES STRONG
Meanwhile, EV sales remained strong in June as supply grew more stable, Mr. Atienza said.

According to CAMPI and TMA data, total EV (xEV) sales more than doubled to 6,995 units in June from the 3,057 units sold in the same month last year.

The segment, which includes battery EV (BEV), plug-in hybrid EV (PHEV), and hybrid EV (HEV), also posted a 16% month-on-month increase from the 6,032 units sold in May.

In the January-to-June period, xEV sales surged by 132.7% to 31,381 units from 13,488 units sold in the year-ago period.

In June alone, BEVs accounted for nearly half of sales with 3,193 units, up 383.8% year on year. This brought six-month sales to 8,702 units, surging by 256.8% year on year.

PHEV sales skyrocketed by 3,902.4% to 1,681 units in June, bringing the six-month tally up by 3,356.9% to 5,531.

On the other hand, HEV sales fell by 9.9% to 2,121 units in June, but sales for the six-month period jumped by 57.5% to 17,148 units.

Toyota Motor Philippines Corp. remained the market leader as of end-June even as sales declined by 9.3% to 100,909 units.

This was followed by Mitsubishi Motors Philippines Corp., which saw a 17.5% drop in sales to 36,321 units in the six-month period.

Suzuki Phils., Inc. came in third despite a 13.7% decline in sales to 9,262 units as of end June.

Ford Motor Company Phils. Inc. placed fourth even as sales slipped by 32.1% to 7,435 units. Nissan Philippines, Inc. ranked fifth despite a 41.6% drop in sales to 6,921 units.

FILIPINO entrepreneur Wilson Lee Flores has kept Kamuning Bakery Café’s pandesal affordable through inflation spikes, supply disruptions and surging electricity bills.

As Metro Manila’s higher minimum wage takes effect on July 25, however, the owner of the 87-year-old bakery says preserving that balance between fair pay for workers and affordable prices for customers is becoming even more difficult.

“We support the goal of giving workers better wages because every employee deserves fair compensation and a better quality of life,” Mr. Flores told BusinessWorld via Viber.

“However, this latest wage increase also comes at a time when many small businesses nationwide are already struggling with rising costs of food ingredients, electricity, rent and transportation.”

His dilemma mirrors that of many micro, small, and medium enterprises (MSME) preparing for the National Capital Region’s (NCR) latest wage adjustment.

Rather than resorting to layoffs, many business owners said they would try to improve productivity, reduce waste and absorb part of the higher labor costs, while calling on the government to expand support programs for small businesses.

Under Wage Order No. 27, the daily minimum wage for nonagricultural workers in Metro Manila will increase by P60 to P755 from P695 on July 25 and rise further by P25 to P780 on Jan. 20 next year.

Agricultural workers, employees of retail and service establishments employing 15 or fewer workers, and manufacturing firms with fewer than 10 regular employees will receive corresponding increases, with their daily minimum wage rising to P718 and later to P743 from P658.

The wage increase comes as MSMEs, which account for more than 99% of registered businesses in the Philippines, continue to face higher costs for raw materials, electricity, rent and logistics.

Mr. Flores said Kamuning Bakery has little room to raise prices because its products are staples for students, senior citizens and low-income households.

“As much as possible, we will try to absorb the higher costs instead of passing them on to consumers. Our business is known for affordable and good quality breads and pastries, so we cannot increase prices,” he said.

Instead, the bakery plans to improve efficiency by training employees to perform multiple tasks, investing in energy-saving equipment, and reducing production waste through better planning.

Mr. Flores said broader government support would help businesses adapt without sacrificing jobs or raising prices.

He proposed temporary wage subsidies during the transition period, easier access to financing for equipment upgrades and digital systems, stronger tax incentives, lower electricity costs, improved transport infrastructure, skill training programs and simpler regulatory requirements.

Maria Avelaine S. Avellana, founder of CYO Charcoal Grilled Hotdog & Burgers, said small businesses recognize the need to improve workers’ incomes but are also operating on increasingly thin margins.

“As a micro business owner, I understand that the wage increase is intended to help workers cope with the rising cost of living, and I support the goal of providing fair compensation,” she told BusinessWorld through LinkedIn chat. “But from the perspective of MSMEs, this is really a major challenge.”

She said many people mistakenly equate high sales with strong profitability.

“From our daily sales, we still have to deduct the cost of ingredients, rent, utilities, government contributions, taxes, maintenance and labor costs. As a result, what is left for management to sustain the business in the long term is very small,” she said in mixed English and Filipino.

Ms. Avellana said her company operates under the Barangay Micro Business Enterprise (BMBE) Act, which exempts qualified enterprises from statutory minimum wage requirements. She said the measure has helped the business manage labor costs while maintaining employment.

“We do not want to immediately pass all of the additional costs on to our customers through price increases,” she said.

She added that the long-term solution lies in improving productivity rather than relying solely on wage adjustments. She urged the government to strengthen productivity and digitalization programs, expand financing and tax incentives, improve market access, and promote greater awareness of the BMBE law, noting that many entrepreneurs remain unfamiliar with its benefits.

Businesses outside Metro Manila echoed similar concerns even though they are not covered by the NCR wage order.

Gemma A. Berania, chief executive officer at Libro Espresso Ventures, Inc., said the company would prioritize operational efficiency before considering price adjustments.

Evianne T. Añonuevo, operations manager at Maru’s Food Lounge and Beachfront Rooms in Occidental Mindoro, said the business is reviewing cost-saving measures, product development and possible price increases.

The Foundation for Economic Freedom (FEF) earlier sought the suspension of Wage Order No. 27, arguing that the increase could worsen inflation, discourage investment and compel MSMEs to reduce hiring, shorten working hours or shut down because of higher labor costs.

‘STILL INSUFFICIENT’
Labor groups and economists rejected those arguments, saying similar predictions have repeatedly failed to materialize after previous wage increases.

“We recognize that some MSMEs face genuine financial pressures,” Federation of Free Workers National President Jose Sonny G. Matula told BusinessWorld via Viber. “However, the law already provides relief through exemptions for qualified Barangay Micro Business Enterprises and other establishments that meet the criteria under wage rules. It is therefore inaccurate to portray all MSMEs as equally burdened.”

Mr. Matula said higher wages stimulate consumer spending, benefiting small businesses because workers themselves are customers.

He urged the government to help MSMEs through easier access to credit, tax incentives, lower electricity costs, regulatory reforms, digitalization programs, productivity training and stronger enforcement against smuggling and cartels instead of restraining wage growth.

“The wage hike is welcome but still insufficient,” he said. “It provides immediate relief, but it does not fully offset the steep increases in the prices of food, transportation, rent, electricity and other essentials.”

IBON Foundation Executive Director Jose Enrique A. Africa likewise disputed claims that higher wages inevitably lead to layoffs.

“Labor costs are on average just 11% of total business costs across all enterprises of all sizes in all sectors nationwide,” he told BusinessWorld, citing government data.

He estimated that the entire P85 wage increase in Metro Manila would amount to only about 5.3% of average MSME profits.

Mr. Africa said businesses typically absorb wage increases through a combination of slightly lower profits, reduced discretionary spending or limited price adjustments rather than cutting workers.

He noted that replacing experienced employees is often more expensive than retaining them, especially for small firms already operating with lean staffing.

He added that stronger household incomes ultimately support local demand, helping MSMEs sell more goods and services.

For entrepreneurs such as Mr. Flores, the challenge now is finding enough efficiency gains to preserve both jobs and affordable prices while paying higher wages — a balance many small businesses say will depend not only on their own adjustments but also on how quickly government support reaches them.

THE NATIONAL GOVERNMENT’S (NG) budget deficit widened by 9.39% in June as spending outpaced revenue growth, although the first-half fiscal gap remained broadly in line with the government’s program, Bureau of the Treasury (BTr) data showed.

In a statement on Thursday, the Treasury said the budget gap ballooned to P264.3 billion from P241.6 billion in the same month last year.

“The 9.39% (or P22.7-billion) increase in the fiscal gap was underpinned by a 5.51% year-over-year growth in expenditures outpacing the 2.46% increase in revenue collection,” the BTr said.

Month on month, the budget balance widened from the P198.5-billion deficit in May.

Government expenditures increased by 5.51% to P578.7 billion in June from P548.5 billion a year ago. The BTr said faster spending was driven by local government units’ higher share of the National Tax Allotment, and subsidy releases to government-owned and -controlled corporations (GOCC) such as Food Terminal, Inc. for the implementation of the Rice-for-All Program.

The Treasury also attributed the increase in disbursements to direct payments made by development partners to suppliers or contractors of various foreign-assisted rail transport projects of the Department of Transportation.

Primary expenditure (net of interest payments) rose by 5.14% to P516.3 billion in June from P491.1 billion in the same month last year. This accounted for 89.22% of total disbursements.

Interest payments increased by 8.73% to P62.4 billion from P57.4 billion a year prior.

In June, NG recorded a primary deficit of P201.9 billion, widening by 9.59% from the P184.2-billion gap a year ago.

Meanwhile, total revenue collection went up by 2.46% to P314.5 billion from P306.9 billion in the same month a year ago, as higher tax revenues failed to offset a 43.53% decline in nontax revenues.

Tax revenues, which accounted for the bulk or 95.2% of total collections, rose by 6.86% to P299.3 billion from P280.1 billion a year ago.

Collections by the Bureau of Internal Revenue (BIR) increased by 5.07% to P210.7 billion in June from P200.5 billion a year prior. Bureau of Customs (BoC) collections jumped by 11.88% to P86.2 billion from P77 billion a year earlier.

The Treasury attributed the higher BIR collections to “intensified tax administration and enforcement efforts, ongoing modernization initiatives, and improved taxpayer compliance.”

On the other hand, nontax revenues plunged to P15.1 billion in June from P26.8 billion a year ago.

Broken down, the Treasury’s revenues slumped by 58.45% to P6.7 billion, while revenues from other offices slid by 21.17% to P8.5 billion.

The Treasury attributed the decline to earlier remittance of dividends this year.

SIX-MONTH BUDGET GAP
For the January-to-June period, the fiscal gap widened by 2.79% to P786.8 billion from the P765.5-billion deficit last year, BTr data showed.

This represented 47.4% of the upwardly revised P1.66-trillion program approved by the Development Budget Coordination Committee (DBCC).

Total revenue collections rose by 5.67% to P2.39 trillion in the six-month period from P2.26 trillion recorded in the same period a year ago. This was 49.68% of the P4.81 trillion program for the year.

As of end-June, tax revenues increased by 5.38% to P2.14 trillion, as BIR collections went up by 4.96% to P1.63 trillion and Customs collections rose by 7.21% to P491.9 billion.

“The year-to-date improvement in (BIR) collections was driven by higher collections from corporate income tax, personal income tax, value-added tax (VAT), other percentage taxes, and miscellaneous taxes,” the Treasury said.

It attributed the increase in BoC collections to a 10.34% rise in VAT collection, mainly due to higher oil prices.

“These gains effectively offset the 2.73% drop in excise collections, partly due to the decline in the volume of oil imports and the temporary suspension of excise tax on LPG  and kerosene,” it added.

Nontax revenues increased by 8.26% to P246.5 billion as of end-June, as a 25.79% jump in BTr income to P182.7 billion offset the 22.63% drop in other offices’ revenues to P63.8 billion.

Meanwhile, expenditures increased by 4.94% to P3.18 trillion in the January-to-June period from P3.03 trillion a year ago. This was already 49.1% of the DBCC’s P6.47-trillion disbursement program.

The primary budget deficit narrowed by 13.56% to P303.1 billion in the first six months from P350.7 billion in the same period last year.

‘ALWAYS CONFIDENT’
Finance Secretary Frederick D. Go said that he remains confident the fiscal level will remain within target for the second half of the year.

“We are always confident,” he told reporters on Thursday. “The DoF is confident about the abilities of our revenue-generating agencies to be able to meet their targets for the second half of the year.”

According to BTr, the first-half gap was P1.4 billion or 0.17% narrower than the government’s P788.2-billion program.

Total revenue collections missed the P2.388.5-trillion target by just 0.01%, after tax revenues missed the P2.16-trillion program by 0.77%. Nontax revenues exceeded the first-half program of P230.2 billion by 7.09%.

First-half expenditures were also lower by just 0.05% compared with the P3.176-trillion program for the six-month period.

The primary deficit was 2.16% higher than the P296.7-billion gap under the program.

“Looking ahead, we believe the government still has room to continue pump-priming the economy in the second half of the year while remaining within its fiscal targets,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message.

However, she warned that NG’s fiscal space is becoming increasingly constrained.

“As such, we expect public spending to be focused on high-multiplier investments, particularly infrastructure and labor-generating projects, which are likely to provide the greatest boost to growth while preserving fiscal sustainability,” she added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the war in the Middle East led to weaker economic growth which slowed down government revenues.

“Reform measures to further improve the NG’s fiscal performance and debt management, as well as priority reform measures… would help increase government revenues and reduce government expenditures,” he said in a Viber message.

However, Mr. Ricafort said the expected acceleration in second-half spending “would fundamentally widen the budget deficit in the coming months.”

The furniture brand La Likha was established in March as the furniture design arm of Licup Architects, with the goal of combining architecture, functionality, and Filipino cultural heritage through locally sourced materials, La Likha founder and architect Zion Enrico R. Licup said in an interview with BusinessWorld.

“We wanted to create contemporary furniture using Filipino textiles,” he said, adding that his interest in traditional fabrics such as Yakan weaving inspired the venture.

According to Mr. Licup, the concept first emerged from an office project in Marikina City where the firm explored integrating Filipino textiles into furniture. It later collaborated with the Department of Science and Technology–Philippine Textile Research Institute (DOST-PTRI), combining handwoven fabrics from local weaving communities with the institute’s nonwoven banana fiber.

The banana fiber serves as the furniture’s backing layer, while traditional woven textiles remain the visible upholstery.

Mr. Licup said the collaboration supports the firm’s broader commitment to sustainability, noting that the construction sector contributes significantly to global carbon emissions.

“We want our textiles to come from local materials that are biodegradable. Instead of relying on conventional materials that take many years to decompose, banana fiber has the potential to break down naturally,” he said.

Beyond its environmental benefits, banana fiber also offers greater flexibility than conventional foam, making it suitable for curved furniture designs. However, because of its coarse texture, the material is currently used only as an interior layer rather than an exposed seating surface.

“That’s why we only use it as backing,” he said, expressing hope that future innovations would make the material smoother and suitable for wider applications.

Furniture development begins with form-finding and ergonomic studies before La Likha works directly with weaving communities, including artisans in Basilan, to secure permission to incorporate their textiles into its designs.

The furniture is manufactured in Pampanga using locally sourced wood, steel, upholstery, and stitching materials, reflecting the company’s commitment to minimizing the environmental impact of imported products.

According to Mr. Licup, one challenge was preventing banana fibers from separating during production. The team addressed this by bonding the fibers to woven textiles before fabrication, creating a more stable material for furniture-making.

He added that nonwoven textiles could eventually be used beyond furniture, including in acoustic panels, partitions, lighting installations, and other interior applications.

“So far, we’ve made around 50 to 60 chairs and sofas,” he said, noting that La Likha currently offers three furniture designs for sale through its online platforms.

The architect credited DOST-PTRI’s research and development efforts for exposing designers to locally developed alternatives to conventional materials.

“If we hadn’t discovered what PTRI was doing, we would have continued using conventional foam,” he said. “It’s good that the research is becoming applicable to the furniture design industry.”

La Likha plans to showcase its products at Artifino later this month and is targeting participation in Manila FAME this year.

The architect also called for stronger government support for local designers through expanded exhibition opportunities, research initiatives, and seed funding programs.

“Exhibitions are very expensive for small businesses,” he said. “Government support through partnerships, linkages, and funding programs would help local furniture designers grow.”

He added that Filipino textiles should be recognized not only as symbols of heritage or wearable materials but also as functional materials that can drive innovation in furniture and interior design. — Kaizzer Angela Marie V. Manuba

The landmark event gathered policymakers, government officials, business leaders, and civic advocates to redefine the national approach to flood mitigation and climate adaptation.

Moving away from the typical reliance on reactionary disaster relief, the summit emphasized a paradigm shift toward proactive, watershed-based planning. Panelists tackled the urgent need to update stormwater management practices, adopt innovative approaches, and for everyone to work together to finally achieve the common goal of building resilient cities through smart water management.

Strengthening Preparedness

Honorable Secretary Christina Garcia Frasco, Presidential Adviser for Sustainable and Resilient Communities, delivered the Opening Remarks, setting a decisive tone for the event. She emphasized on the importance of strengthening preparedness to mitigate potential problems.

“The summit comes at an important time for the Philippines and the Asia Pacific region. Across our region, communities are confronting risks of increasing scale and complexity — extreme weather, rapid urbanization, and environmental pressures are placing greater demands on the systems that support everyday life. Their effect extends far beyond demands, damage to infrastructure, for they disrupt livelihoods, interrupt economic activity, and place pressure on essential services as well as affecting the daily lives of millions of Filipinos, that is why protecting communities is not only about responding after destruction, it’s about reducing risks before it becomes a crisis, strengthening preparedness, and creating conditions for sustainable development to endure despite increasingly complex challenges,” stated Secretary Frasco.

Shared Civic Responsibility

Another important point of the summit was the shift from viewing flood control strictly as a government infrastructure issue to recognizing it as a shared civic responsibility. Office of Civil Defense (OCD) Ambassador Jose Sixto “Dingdong” Dantes delivered a powerful address on the culture of prevention and everyday vigilance by sharing his experiences working with government and civilians through the years.

“Flooding has become so familiar that we’ve come to accept it in our daily lives. That when it rains, we automatically think ‘Oh no, there’ll be a flood’. How did we become so accustomed to the consequences, that we accepted it as normal, when it doesn’t have to be.” Dantes pondered.

He then shared stories of his experiences as an actor, a television host, producer, navy reservist, a volunteer, and also the former Commissioner-at-Large of the National Youth Commission. “I’ve been privileged not only to portray different lives but also meet extraordinary Filipinos from all walks of life. In times of disaster, I witnessed something extraordinary, that Filipinos don’t wait to be told to care. One of our greatest strengths as a people is our instinct to genuinely help one another. But those experiences left me with a question? What if we can show the same commitment before a disaster, and not after?” Mirroring the sentiments of Secretary Frasco, Dantes noted, “Compassion is really powerful but it becomes transformational when people organize around a shared purpose.” As the ambassador of the OCD’s Panatag Pilipinas campaign, Dantes shared that their goal is not to scare people but to make preparedness part of Filipinos’ everyday lives, “Preparedness is not living in fear but living in confidence,” Dantes said.

Call for Stronger Collaboration

DPWH Undersecretary Charles Calima, shared valuable insights into the national approach to the country’s increasing stormwater management challenges, through his keynote address titled, Innovating Against the Flood.

“Every year our country experiences heavy flooding, to address this perennial problem,  President Ferdinand Marcos, Jr. ordered us at the DPWH to ensure that flood control projects should work to the benefit of those who are most affected, living in these flood-prone areas, emphasizing that there should be no ghost or substandard projects,” shared USEC Calima.

One notable example of the DPWH’s efforts is the Oplan Kontra Baha program that aims to mitigate severe, heavy flooding in low lying areas, in partnership with local government units (LGUs) and the private sector. “We are calling for a stronger collaboration with LGUs, civil society, and the private sector. Water knows no boundaries, it follows the river basin irrespective of the river basin. This is not a problem of one agency alone. The intervention is not another structure, the intervention is coordination.”

Integrated Water Strategy

Looking beyond Philippine shores to a nation that has successfully turned its water vulnerabilities into world-class strengths, guests learned more about Singapore’s integrated water strategy that has effectively mitigated urban flooding. PUB, Consultants Pte. Ltd. Managing Director Mr. Ryan Yuen, gave a presentation titled, Building Resilience Drop by Drop: Singapore’s Stormwater Solutions and the Crucial Role of Earth Control Measures.

Expressing delight over USEC Calima’s call for a more integrated approach to stormwater management, Mr. Yuen shared that this has been their approach as well. As Singapore’s National Water Agency, PUB, ensures both a sustainable water supply and the proper management of coastal and inland flood resilience. He then shared at length Singapore’s strategies in water management, highlighting that reusing water over and over, is a key part of their strategy. He discussed several commonalities and distinct differences that the Philippines has with Singapore, like receiving intense amounts of rain and dense cities, hence, it is important to not overwhelm infrastructures, and the need for separate systems for water collection and wastewater management.

Adopting New Technologies

Focusing on the crucial role of the private sector. Infrastructure projects, when done right, are major contributors to stormwater solutions. Also from Singapore, CEO of Flexi Systems and FloodX, which also handles Dam Easy, Ms. April Yang, showcased available innovations protecting businesses, facilities, and homes through her presentation, Protecting Catchments & Waterways, Supporting Resilient Cities.

A Singapore-based engineering and water-technology company specializing in integrated environmental and digital solutions for stormwater treatment and erosion control management applications, Flexi Systems handles brands like Dam Easy and Flood X, servicing clients around the world, including the Philippines through its exclusive local distributor, Scottsdale Corporation.

During her session, Ms. Yang urged participants to explore innovative “solutions available out there,” highlighting Flexi System’s Earth Control Measures (ECM) compliant technologies. These measures represent critical site management strategies aimed at curbing soil erosion and preventing silt-contaminated runoff from entering public drainage systems and natural waterways. Key implementations of these strategies include perimeter cut-off drains, silt fences, and specialized systems for treating silty water. While progressive nations such as Singapore have successfully integrated ECM through rigorous siltation legislation, such frameworks have yet to be fully realized in the Philippines.

She showcased different products available under Dam Easy and Flood X. From Dam Easy’s adjustable flood barriers that are designed to fit securely into doorways and openings and Flood X’s various innovative flood defense solutions for coastal, industrial, public, commercial, and residential developments.

Facilitating the dialogue covering climate-resilient infrastructure, real-time monitoring, regulatory frameworks, and all-in-one integration strategies was Archipelago Media Editor in Chief, Mr. Andrew Masigan who also delivered the closing remarks.

“For a country that receives so much rain, we have not learned to manage water well. This is the great paradox of water management in the Philippines: we suffer because we have too much water, then we suffer again because we don’t have enough. Clearly something must change, and the discussions that we had today lead us in the right direction.”

By the end of the summit, organizers and attendees were able to discuss not only best practices but also the understanding that effective and sustainable stormwater management is only achievable through shared commitment and effort.

Stormwater Summit 2026 is presented by Archipelago Media and Approach Consultancy, with Media Partners BusinessWorld and The Philippine Star, supported by Dam Easy Flood Barriers, FloodX, Flexi Systems, and Craft House Enterprises. For more information on the Stormwater Summit please visit https://storm-watersolutions.com/.

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The company is expanding green and open spaces within Acacia Estates in Taguig to give residents more room to breathe, move, and unwind.

DMCI Homes plans to increase the township’s total open space to 66 hectares, based on a redevelopment plan recently presented by Landscape Architect Alexis Valiente, assistant vice-president of the Concepts and Landscape Management Department to members of the media.

“This raises the per capita open space allocation to as much as 14 square meters per resident as part of our ongoing redevelopment of Acacia Estates,” Arch. Valiente said.

Arch. Valiente said this means residents will have greater access to parks, walkways, and outdoor areas, even as the township continues to grow.

At present, Acacia Estates has about 24 hectares of open space. With an additional 42 hectares set to be developed in the coming years, the total will reach 66 hectares.

Currently, residents already enjoy an average of 12 square meters of open space per person, with some areas providing at least 10 square meters. This already exceeds the 9 square meters per person minimum recommended by the World Health Organization.

The open space expansion forms part of a broader township enhancement program that includes a comprehensive upscaling of Town Center at Acacia Estates and improved everyday conveniences within the community.

Under the plan, the Town Center will be transformed into a vibrant community hub featuring a two-storey commercial strip, a supermarket, and al fresco dining areas. These will be complemented by a central plaza, promenade, activity stage, and the new 6.8 hectares of landscaped open space collectively known as Acacia Park Central.

Acacia Park Central will introduce additional parks and nature-inspired leisure spaces, an expanded plant nursery to support greening initiatives, upgraded open fields and activity zones, as well as an Eco-Center and Rain Garden. A new multipurpose venue is likewise being developed to serve as a hub for community gatherings, celebrations, and other shared activities.

The development of Acacia Park Central will be carried out in phases. Phase 1 which includes the Acacia Community Pavilion and parking areas is targeted for completion in 2027. The Acacia Active Grove and Acacia Botanica, meanwhile, will be developed in subsequent phases.

Open Spaces as Social Infrastructure

Beyond numbers, design experts emphasize that open spaces play a deeper role in shaping everyday life.

Dr. Cathe Nadal, assistant professor at the University of the Philippines College of Architecture and a landscape architect (PALA, IFLA-APR), said that for landscape architects, open spaces go beyond greenery and environmental function.

“As landscape architects, one of the few things we always keep in mind is that open spaces are not just about plants or nature-based solutions,” Ms. Nadal said. “They also serve as our social infrastructure.”

She explained that experience is always the top priority in designing these spaces. Their true value, she said, becomes evident when people actively use them.

“When you see people going outside and spending time in these open spaces, that’s when you realize that real estate development is not just about building properties,” Ms. Nadal said. “Developments like Acacia Estates show that real estate developers are slow creators of places, spaces that our communities increasingly need in the Philippines.”

Market analysts note that this focus aligns with buyer preferences.

According to Joey Roi Bondoc, research director at Colliers Philippines, access to green and open spaces consistently ranks high in property investment considerations.

“At Colliers, we would always hold surveys among our respondents in our guest property briefings and what’s interesting is that they all said that green sustainability and open space are very important and are in fact crucial whenever they make property investment decisions,” Mr. Bondoc said.

Protecting Spaces Residents Value

A defining characteristic of Acacia Estates is how its open spaces are managed and preserved. Unlike highly commercialized districts, the township was designed with residents as its primary users.

Commercial establishments within Acacia estates are calibrated to serve the community rather than draw high volumes of visitors, helping prevent congestion.

DMCI Homes President Alfredo Austria said maintaining this balance is a conscious choice.

“Here in Acacia Estates, the open spaces are designed for residents,” Mr. Austria said. “These open spaces don’t become crowded. You see, in Metro Manila, if you have a nice open space and it’s open to everybody because of so many commercial areas around, very soon it will become crowded and it will not be as relaxing anymore.”

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 acquisition increased GSIS’ holdings to 191.71 million common shares, Megawide said in a statement on Wednesday.

“The investment of GSIS reflects another vote of confidence in our vision of engineering a First-World Philippines, particularly through our participation in various government-initiated campaigns and public-private partnerships that aim to address critical social and transport infrastructure in the country,” Megawide Chairman and Chief Executive Officer Edgar B. Saavedra said.

He said the company’s infrastructure pipeline includes the construction of socialized housing units under the government’s expanded Pambansang Pabahay para sa Pilipino (4PH) Program using precast construction technology, as well as transport-centric developments aimed at modernizing and organizing public transport systems.

Megawide did not disclose the value of the block transactions or identify the sellers of the shares.

Last September, the Home Development Mutual Fund (Pag-IBIG Fund), through the endorsement of the Department of Human Settlements and Urban Development (DHSUD), partnered with Megawide to construct more than 7,000 socialized housing units under the government’s expanded 4PH program.

Earlier this month, the company said it plans to expand its horizontal residential developments in Cavite and Bulacan and pursue additional projects under the expanded housing program in other cities and municipalities.

Megawide said it continues to execute its 4-D strategy, citing a 24% increase in first-quarter net income, lower short-term debt after reducing obligations by about P7 billion, and the continued expansion of its precast and transport-centric developments.

The company also recently declared cash dividends of P0.145 per share, payable on Aug. 7 to shareholders on record as of July 23.

The listed engineering and construction company is targeting a net income of about P1.2 billion this year, supported by lower borrowing costs following debt reduction and expected growth in its construction and real estate businesses.

For the January-to-March period, attributable net income rose 24% to P265.35 million from P214.42 million a year earlier, while gross revenue increased 16.4% to P5.04 billion from P4.33 billion.

Shares in Megawide fell seven centavos, or 1.67%, to close at P4.12 each on Wednesday. — Ashley Erika O. Jose

BUSINESS GROUPS are urging the government to prioritize measures that boost productivity and strengthen investor confidence to help firms absorb the higher labor costs from the increase in the daily minimum wage in Metro Manila.

The Financial Executives Institute of the Philippines (FINEX) said it recognizes the need to hike wages as the rising costs of food, transportation, and other basic needs weigh on household budgets.

However, the group said wage hikes are more effective when supported by a competitive business environment and policies meant to lower the business costs.

“While higher wages provide immediate relief to workers, FINEX believes that the magnitude and timing of the increase underscore the need for government to carefully assess its absorptive impact, particularly on micro, small, and medium enterprises (MSMEs) and employment-intensive industries,” it said in a statement on Wednesday.

In particular, FINEX called for measures to reduce red tape, streamline permitting processes, improve regulatory predictability, and accelerate digitalization.

The group also sought policies to lower key input costs, particularly electricity, logistics, and transportation, noting its impact on consumers and businesses.

“The challenge now is to ensure that the gains from higher wages are not diminished by higher prices, reduced hiring, lower investment, or slower economic activity,” it said.

FINEX is also seeking reforms to strengthen investor confidence and attract domestic and foreign capital.

“Greater investment expands productive capacity, creates quality jobs, introduces new technologies, and raises productivity — the most sustainable foundation for higher wages and improved living standards,” it said.

The effect of the wage hike on inflation, employment, business viability, and wage distortion should also be monitored closely, FINEX added.

The wage board last month approved a dual tranche P85 increase in the minimum wage in the National Capital Region (NCR). The NCR minimum wage will increase by P60 on July 25, while the second tranche or the P25 hike will take effect on Jan. 20, 2027.

On Tuesday, Palace Press Officer Clarissa A. Castro said the NCR wage increase will proceed as scheduled, adding the private sector has not formally sought a halt on its implementation.

Labor Secretary Francis N. Tolentino has also said there is no legal basis to suspend the wage hike for Metro Manila workers.

The Foundation for Economic Freedom (FEF) earlier called on the government to suspend the NCR wage hike, noting that it would harm MSMEs, deter investments, and threaten macroeconomic stability.

FEF President Calixto V. Chikiamco told BusinessWorld that the group is open to support a company that will formally request the government to reconsider the wage hike.

“We have no legal standing to file the appeal, because we aren’t a company,” he said in a Viber message. “However, it’s possible for us to assist any company with minimum wage workers that will file the appeal.”

Management Association of the Philippines President Donald Patrick L. Lim said its members have “no choice” but to absorb the effect of the wage hike on its operations and sales.

“We have no choice for now. For now, it eats up on our margins amidst declining sales,” he said in a Viber message.

Mr. Lim noted that a wage hike must be coupled with investments to upskill workers and boost technologies.

Jose Sonny G. Matula, labor lawyer and president of the Federation of Free Workers noted that qualified MSMEs are protected under the law in the event of a wage hike.

He noted that barangay micro business enterprises (BMBEs) are exempted from the Minimum Wage Law under Section 8 of Republic Act No. 9178 or the BMBE Act.

The law defines BMBEs as enterprises with total assets equivalent of not more than P3 million.

Mr. Matula added that retail and service establishments with up to 10 employees may apply for an exemption with the wage board.

“Our wage-fixing system has built-in safety valves for enterprises that cannot absorb a wage increase,” he said in a statement.

THE ENERGY Regulatory Commission (ERC) is eyeing to lower the price ceiling for power reserves traded in the spot market to P9 per kilowatt-hour (kWh), offering much-needed relief for consumers.

In a draft resolution, the ERC is proposing an offer price ceiling equivalent to P9,000 per megawatt-hour (MWh), or P9 per kWh, for reserves, also known as ancillary services, that are traded in the Wholesale Electricity Spot Market (WESM).

The proposed price is significantly lower than the interim price cap of P25,000 per MWh, or P25 per kWh, that was set in 2024.

Launched in January 2024, the reserve market allows the system operator to buy power reserves from the WESM — the trading floor of electricity — to meet the reserve requirements of the energy system.

These reserves are backup power capacity dispatched by the grid operator to sustain the balance in the power system when supply and demand suddenly change.

Under the proposed resolution, the ERC is also proposing to maintain the floor price in the reserve market at P0 per MWh to ensure “a fair, competitive, transparent and efficient electricity market.”

The commission said it would review the offer price floor and cap every five years, or when deemed needed.

ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan said the new cap seeks to directly lower prices in the reserve market as more generators would be encouraged to enter into supply contracts instead.

“This adjustment is intended to encourage greater participation in ancillary services procurement agreements (ASPAs), which provide a more stable and predictable alternative to reserve market procurement,” Mr. Juan told BusinessWorld.

The ERC chief said a lower ceiling price narrows the gap between market exposure and long-term contracted rates, giving generators stronger incentives to enter into ASPAs.

“Wider ASPA coverage, in turn, reduces the system’s reliance on high-priced reserve market transactions and supports more stable, lower reserve prices for consumers,” he said.

The National Grid Corp. of the Philippines, the country’s sole grid operator, earlier attributed the slight increase in transmission rates for July electricity bills to higher ancillary service charges.

Ancillary charges increased by 10.18% to P0.7955 per kWh for the June supply period from P0.7220 per kWh in the previous month.

In a report dated July 20, GlobalSource Partners Principal Advisor Diwa C. Guinigundo noted that the Philippines will face twin inflation shocks from a weakening peso amid fluctuating oil prices and the dual-tranche wage hike in the National Capital Region (NCR).

“The Philippines is facing two simultaneous inflation shocks: a larger-than-expected wage increase and renewed external pressures from volatile oil markets and a weaker peso,” Mr. Guinigundo said.

“Together, these could delay the return of inflation to target, underscoring the importance of maintaining credible monetary policy and keeping inflation expectations well anchored while addressing the structural sources of inflation through broader government action,” he added.

The BSP expects headline inflation to stay above its 3% target through 2028, with forecasts of 6.4% in 2026, 4.5% in 2027, and 3.1% in 2028.

Headline inflation has been above the central bank’s target since March or after the Middle East war began in late February.

In June, the headline print slowed to 6.4% from 6.8% in May as an interim peace deal between the US and Iran brought oil prices down from its over $100-a-barrel peak during the war.

As of the first half of the year, headline inflation stood at an average of 4.8%.

Core inflation, however, told a different story. It continued to accelerate for a sixth straight month in June to 4.4%, its fastest pace in nearly three years.

According to Mr. Guinigundo, the latest wage adjustment could directly stoke inflation by about 0.4 percentage point (ppt), with risks also arising from spillover effects.

“Wage adjustments in other regions, higher production and transport costs, and possible increases in food and service prices could generate second-round effects that become considerably more persistent,” he said.

“More importantly, if households and firms begin to expect permanently higher inflation, then wage and price adjustments may become mutually reinforcing, creating the very wage-price spiral that central banks seek to avoid,” he added.

The wage board has approved a P85 increase in the NCR daily minimum wage, with the first tranche or P60 to be implemented on July 25. The second tranche or P25 will take effect on Jan. 20, 2027.

BSP Governor Eli M. Remolona, Jr. has said that the NCR wage increase was larger than they had anticipated, which he noted could pose a significant inflationary risk.

He said the BSP is still assessing the impact of the NCR wage hike, as well as potential similar moves by other regions, on the country’s inflation.

Still, the central bank chief said the spillover effects of the wage hike is unlikely to prompt an outsized policy rate increase.

PESO CONCERNS
Higher costs of imported goods amid a weaker peso could add to price pressures already squeezing consumers’ pockets.

“While exchange rate pass-through has declined significantly since the Philippines adopted inflation targeting in 2002 — from around 0.347 ppt to approximately 0.08 ppt for every peso of depreciation — a sustained weakening of the peso would nonetheless add to domestic price pressures by raising the peso cost of imported goods, particularly fuel and food,” Mr. Guinigundo said.

From around P58 to the dollar before the war, the peso averaged over P61 versus the greenback in May and June.

The peso slipped by a half centavo to close at P61.75 against the dollar on Wednesday, matching its lowest ever finish seen on May 19, as heating tensions in the Middle East renewed inflation concerns.

“The policy challenge confronting the BSP is therefore no longer confined to a single inflation source,” Mr. Guinigundo said. “It must now manage the interaction between stronger domestic cost pressures arising from wage adjustments and imported inflation transmitted through exchange rate depreciation and higher global oil prices.”

For Mr. Guinigundo, the BSP faces the challenge of addressing persistent inflation, without further hurting the economy already facing potentially weaker consumption amid spiraling prices.

“Persistent inflation erodes real household incomes, weakens consumption, which accounts for more than three-fourths of Philippine GDP (gross domestic product), and ultimately restrains broader economic growth,” he said.

“For these reasons, monetary policy is likely to remain cautious. While the BSP will continue to weigh the risks to economic activity, preserving price stability remains its primary mandate,” he added.

Since the onset of the Middle East war, the central bank has maintained a hawkish yet cautious policy stance, maintaining a preference for “baby steps” or one 25-basis-point (bp) hike at a time.

The BSP has so far tightened by a total of 50 bps via two consecutive 25-bp hikes in April and June, bringing the benchmark interest rate to 4.75%.

“In the current environment, maintaining the credibility of monetary policy and keeping inflation expectations well anchored may prove just as important as responding to the inflation shocks themselves,” Mr. Guinigundo said.

Earlier this month, Mr. Remolona said the economy can still take another 25-bp increase, as he noted a potential growth recovery by the second half of the year.

However, Oxford Economics Lead Economist Alexandra Hermann Prasad noted that domestic growth may remain subdued as the Philippines faces one of the fastest inflation rates in the Asia-Pacific.

“A rebound in public investment and recovering remittance inflows should support spending, though elevated inflation — among the highest in the region — is keeping the near-term outlook subdued,” she said in a separate report on Tuesday.

Philippine GDP growth has slowed for three quarters in a row, hitting a post-pandemic low growth of 2.8% in the first quarter.

The National Government has since held a clouded outlook on the country’s growth, slashing its GDP growth targets to 3.5%-4.5% this year.

The Monetary Board has three more regular policy reviews scheduled for this year on Aug. 27, Oct. 22, and Dec. 17. — Katherine K. Chan

The Philippine peso closed at P61.75 against the US dollar on Wednesday, inching down by half a centavo from P61.745 on Tuesday, based on data on the Bankers Association of the Philippines’ website.

This was the peso’s worst close in more than two months. It first closed at a record low of P61.75 against the greenback on May 18.

Year to date, the local unit has depreciated by P2.96 or 4.79% from its P58.79 finish on Dec. 29, 2025.

Bloomberg reported that the Philippine central bank intervened in the foreign exchange market to support the peso.

The Bangko Sentral ng Pilipinas (BSP) sold dollars in the onshore market on Wednesday, traders familiar with the matter said, asking not to be identified because they aren’t authorized to speak publicly.   

BSP Governor Eli M. Remolona, Jr. didn’t reply to a Bloomberg query confirming the central bank’s dollar sales.

The peso opened Wednesday’s session slightly stronger at P61.73 versus the greenback, which was already its intraday best. Its worst showing was its closing value of P61.75, which it also touched on Tuesday.

Dollars exchanged surged to $1.269 billion on Wednesday from $752.5 million a day prior.

The dollar-peso closed a tad weaker on Wednesday but traded sideways due to a lack of key developments in the Middle East conflict, the first trader said by phone, noting “a bit of upside pressure due to higher global crude oil prices.”

“The peso weakened to record lows today as the US intensified its military offensives in Iran,” the second trader said in a Viber message.

The greenback was generally stronger on Wednesday as surging oil prices have heightened expectations of a rate hike by the US Federal Reserve as soon as October, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message, adding that he expects the peso to trade between P61.60 and P61.80.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas also said in a Viber message that escalating attacks between the US and Iran and increasing oil prices have renewed inflationary concerns.

Mr. Ravelas said the local currency could move between P61.60 and P61.90 levels in the near term.

“The continued weakness of the peso will certainly weigh on inflation, especially keeping inflation elevated even if oil prices retreat from prewar levels due to higher pass-on cost in food imports,” a second trader likewise said in a Viber message.

China Banking Corp. Chief Economist Domini S. Velasquez said the peso is likely to remain trading around the P61.75 level in the near term, “without a credible signal that tensions are easing or a resolution is in sight.”

“Based on our estimates, every P1 depreciation of the peso adds around 0.03 percentage point (ppt) to inflation, reflecting our assumption that roughly 15% of the CPI (consumer price index) basket is imported. A sustained depreciation could therefore add to inflationary pressures, particularly if accompanied by persistently elevated global oil prices,” she said in a Viber message.

Both the first and second traders see the peso moving between P61.60 and P61.75 against the greenback on Thursday, with the second trader noting a possible recovery due to profit taking.

“The peso will remain weak due to still net negative dollar outflows in the country despite the recent rate hikes by the BSP,” the second trader said.

The first trader said the BSP have enough reserves to defend the peso at its current level, but a total escalation in the war such as the continued closure of the Strait of Hormuz, another spike in oil prices, and attacks on key states of Iran could bring the peso to new lows.

“The BSP might consider occasional interventions in order to anchor the local currency as supported by fundamentals, but the BSP will likely bring the peso in line with any further strengthening of the greenback,” the second trader said.

Mr. Remolona earlier said the central bank does not defend a specific level for the peso but only intervenes in the foreign exchange market to prevent inflationary swings. — Aaron Michael C. Sy with Bloomberg

The Bureau of the Treasury (BTr) borrowed only P25.071 billion via the reissued seven-year bonds, below the P30-billion target, even as tenders reached P47.624 billion.

This brought the outstanding volume for this bond series to P501.7 billion, it said in a statement after the auction.

The BTr said it made a partial award to cap the increase in the average yield for the issue.

The reissued papers, which have a remaining life of four years and five days, were awarded at an average rate of 7.195%, with accepted yields from 7.1% to 7.228%.

This jumped by 37.9 basis points (bps) from the 6.816% fetched for the series’ last award on June 23 and was 82 bps above the 6.375% coupon rate for the issue.

This was also 3.3 bps higher than the 7.162% fetched for the same bond series and 13.5 bps above the 7.06% quoted for the four-year debt — the benchmark tenor closest to the remaining life of the papers on offer — at the secondary market before Tuesday’s auction, based on PHL Bloomberg Valuation Service Reference Rates data provided by the BTr

“The T-bonds were partially awarded following higher asking bids due to the Middle East conflict as of recent,” the first trader said in a phone interview.

The trader said the Treasury likely chose to make a partial award instead of a full rejection, which it made last week, as it offered a shorter tenor that would have a lower impact on banks’ books.

The central bank last month announced a relief measure allowing banks and quasi-banks to temporarily exclude unrealized or paper losses on peso government securities resulting from market volatility from the computation of their regulatory capital.

Unrealized losses are declines in the market value of securities that have not been sold but whose change in value is required to be reflected in banks’ regulatory capital. Rising bond yields decrease the market value of bonds.

“The partial awarding was due to the BTr not wanting to award at higher rates, not lack of demand,” the second trader said in a text message.

On Tuesday, global markets remained hostage to Middle East tensions, with oil prices seeing a sharp swing to near six-week highs before retreating, Reuters reported.

Yemen’s Iran-aligned Houthis declared a naval blockade on Saudi Arabia, raising threats to global energy supplies, while hopes of de-escalation persisted after Tehran received a 10-day ceasefire proposal from mediators.

The renewed hostilities have again disrupted the flow of energy supplies through the Strait of Hormuz, which handles around a fifth of the world’s oil supply.

The Philippines, which sources about 90% of its oil supply from the Middle East, has been one of the most affected by the global oil crisis.

Diesel and kerosene prices are set to climb by more than P10 per liter this week due to the conflict, with some retailers implementing the hike in tranches.

The BTr wants to raise P410 billion from the domestic market this month, or P250 billion via Treasury bills and P160 billion through T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.659 trillion or 5.4% of gross domestic product this year. — Aaron Michael C. Sy

THE NUMBER of approved building permits declined by 11.6% in May from a year earlier, the sharpest drop in eight months, amid rising construction costs and high borrowing rates.

Preliminary data from the Philippine Statistics Authority (PSA) showed building projects covered by the permits stood at 15,436 in May, slipping from 17,466 a year earlier.

The 11.6% drop was a reversal of the 8.5% growth seen in May 2025, and steeper than the 0.7% dip in April 2026.

The decline in May was the biggest drop since the 12.4% contraction in September 2025.

Construction projects during the month covered 3.37 million square meters (sq.m.) of floor area, down by 7.8% from the 3.66 million sq.m. a year earlier.

The approved projects were valued at P47.05 billion in May, slipping by 1.2% from the P47.64 billion in the same month last year.

Joey Roi Bondoc, director for research at Colliers Philippines, said in an e-mail that elevated interest rates have made it more expensive for developers to fund new projects.

The Bangko Sentral ng Pilipinas (BSP) raised the benchmark rate by 25 basis points (bps) to 4.75% at its June meeting. This was the highest rate in nearly a year or since the 5% in August 2025.

Mr. Bondoc also flagged the rising cost of construction materials, which has increased project costs and reduced profit margins.

PSA data earlier showed wholesale prices for construction materials rose 2.8% in May, picking up from 1.9% in April.

“As a result, some developers adopted a ‘wait-and-see’ approach and postponed construction plans and new project launches,” he said.

Residential project permits, which accounted for 65.8% of the total, fell by 15.5% year on year to 10,154 approvals.

These projects were valued at P24.73 billion, slightly higher than P24.4 billion last year.

Single houses, accounting for 85.5% of residential projects, also decreased by 15.6% year on year to 8,682. Permits for duplex/quadruplex homes and apartments slumped by 19.5% (to 206 permits) and 20% (to 1,166 permits), respectively.

“In our view, developer launches will likely remain conservative and tempered in 2026, especially with a lengthened remaining inventory life of nearly seven years in Metro Manila,” Mr. Bondoc said.

On the other hand, approved permits for nonresidential projects slid by 5.5% to 3,052 in May from 3,230 a year ago. The value of these projects reached P17.94 billion, 5.1% lower than P18.91 billion last year.

Approved permits for commercial developments, which account for 63.5% of total nonresidential projects, declined by 11.5% to 1,938 permits.

Permits granted for industrial projects rose by 12% to 317 in May, while those for institutional projects inched up by 2.1% to 573.

“While commercial construction has weakened, growth in industrial and institutional projects shows that investment is shifting toward sectors that are more stable and have long-term demand,” Mr. Bondoc said.

“Developers are now likely to focus more on projects they see as less risky and more essential, such as warehouses, schools, hospitals, and factories.”

PSA data also showed permits for agricultural construction projects surged by 78.4% to 182 in May.

Approved permits for additions, or construction that increases the height or area of an existing building, slid by 4.7% to 543.

Alteration and repair permits also declined by 11.5% annually to 1,073.

Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) accounted for 26.8% of the total permits approved at 4,144.

This was followed by Central Luzon (12.2% share with 1,888 permits) and Ilocos Region (9.1% with 1,408 permits).

“For the second half of 2026, investment in the residential and commercial segments may continue to slow, while industrial and institutional developments are likely to remain active. This trend suggests that future construction activity may expand at a slower pace unless economic conditions improve or financing becomes more attractive,” Mr. Bondoc said.

The PSA said construction statistics are compiled from the copies of original application forms of approved building permits as well as from demolition and fencing permits collected monthly by the agency’s field personnel from the offices of local building officials nationwide.

THE RISE of artificial intelligence (AI) is reshaping cybersecurity strategies, with Philippine organizations increasing investments to counter increasingly sophisticated cyberthreats and strengthen their resilience against attacks, experts said.

“Cyberthreats are no longer an isolated case. They are now part of the business realities that every organization must be prepared to face. The question for businesses and leaders is no longer how to prevent cyberthreats, but can our business continue to operate and recover,” Cybercrime Investigation and Coordinating Center (CICC) Executive Director Renato “Aboy” A. Paraiso said during the BusinessWorld Cybersecurity Summit at Hilton Manila Newport World Resorts on Tuesday.

For CICC, the number of cyberattacks continues to grow, with the number of cybercrime-related complaints reaching nearly 20,000 year to date.

Mr. Paraiso said over 61% of the complaints were related to scams.

“Cybersecurity is designed to prevent attacks, cyber resilience, on the other hand, ensures when an attack gets through it can minimize damage,” he said, noting that the actual number of cybercrimes are likely to be higher considering that most do not report them.

For CICC, Mr. Paraiso said the agency is proposing a budget of P1.5 billion, nearly double its P835-million allocation in the 2026 national budget amid the rising threat of cyberthreats.

The CICC noted that the financial sector is the most vulnerable to cyberattacks, amid the surge in AI use.

“Financial services are the ones that are heavily impacted by emerging technologies. It only makes sense that the BSP (Bangko Sentral ng Pilipinas) is at the forefront of developing governance frameworks, risk-based approaches,” Divina Law Managing Partner Jay-R C. Ipac said during the forum.

Mr. Ipac said the Philippines should draw lessons from neighboring countries in crafting regulations and guidelines for AI use, as well as policies to strengthen cybersecurity development.

“Geopolitics aside, we have some things to learn from Chinese regulatory frameworks. China is taking an active lead in shaping AI regulation. We have to look at this with an open and cautious mind,” Mr. Ipac said.

The Department of Information and Communications Technology (DICT) has developed a National Cyber Security Plan which is designed to protect the Philippines from digital threats, and to ensure the security of critical information infrastructure.

At the same time, the DICT is currently developing a National AI roadmap which will cover policies, and oversight mechanisms for the use and deployment of AI.

“Regulatory convergence should be our goal, and you align it to your ultimate vision, which is to ultimately maintain trust,” KPMG Philippines Technology Consulting Partner Gilbert T. Trinchera said.

In the absence of regulations governing AI, he said any future framework must align with the Data Privacy Law.

“I would say that AI is really a double-edged sword. AI is being used by adversaries to scale their attacks,” Maya Philippines, Inc. Director of Information Security Jan Martin Encina told BusinessWorld on the sidelines of the forum.

For financial technology companies like Maya, AI is being utilized to detect anomalies and cyberthreat patterns, he said, adding that the pros of leveraging AI outweighed the cons.

“We are not a company that would shy away from the use of AI because there is a massive opportunity, not just in the area of security but in the business operations,” Mr. Encina said.

Maya will continue to increase its investments to enhance the company’s cyber-defense capabilities, he said. He noted Maya is also working with the government, particularly the DICT, to share threat intelligence and advanced security measures.

GCash Chief Risk Officer Ingrid Rose Ann Beroña said the electronic wallet platform is leveraging a full suite of technologies to strengthen operational resilience and safeguard the company against threats, as financial institutions continue to face constant attacks.

“AI is part of our DNA. Everything we do is currently injected with AI. Even in a lot of our business plans. We truly believe that AI is okay for us to sustain and scale our business, and to ensure that we are able to embed security into our services,” Ms. Beroña said on the sidelines of the forum.

Globe Telecom, Inc., the parent company of GCash operator Mynt, Inc., said it is allocating P56 billion this year to expand the use of AI across its operations and enterprise services.

“In today’s interconnected world, a cyberattack on one organization can quickly affect thousands more. That is why cybersecurity has become an issue of national resilience,” Cybersecurity Council of the Philippines Chairman Donald Patrick L. Lim said.

Mr. Lim said that businesses will only thrive if their information is secure, as data become more valuable.

“People only transact when they trust. Investors only invest when they trust institutions and businesses can only innovate when customers believe their privacy is respected,” he said.

BUSINESS GROUPS urged Congress to prioritize key economic measures that would boost export competitiveness and support the digital economy.

This as the 20^th Congress is set to open its second regular session on Monday (July 27).

Philippine Exporters Confederation, Inc. (Philexport) President Sergio R. Ortiz-Luis, Jr. asked lawmakers to focus on the passage of bills that would strengthen the local supply chain and streamline cross-border trade.

“Philexport hopes that exports — one of the country’s strongest drivers of investments, jobs, foreign exchange earnings, and inclusive growth — will remain a central pillar of the government’s economic agenda,” he told BusinessWorld in a Viber message.

In particular, Philexport said the proposed International Maritime Trade Competitiveness Act would regulate excessive shipping and logistics charges, promote transparency, and foster competition. The bill has been pending at the Senate Public Services Committee since last year.

Mr. Ortiz-Luis also called for the passage of the proposed Customs Amnesty Act, which is seen to resolve customs disputes, encourage voluntary compliance, improve revenue collection, and provide certainty to legitimate exporters and importers. It has been pending at the House Ways and Means Committee since last year.

Philexport is also seeking the approval of amendments to Republic Act (RA) No. 9501 or the Magna Carta for Micro, Small, and Medium Enterprises (MSMEs). Several bills are still pending at the committee level at both the House and Senate.

Mr. Ortiz-Luis said exporters want more government support for export-oriented MSMEs “through improved access to financing, technology, innovation, capacity-building, digitalization, market intelligence, and international market development.”

He said Congress should also focus on amendments to the charters of the Civil Aviation Authority of the Philippines (CAAP) and the Philippine Ports Authority (PPA), which are pending at the House Transportation Committee.

The proposed reforms to CAAP’s charter focus on modernizing air cargo infrastructure, improving cargo handling efficiency, and strengthening the country’s air logistics competitiveness.

Proposed amendments to the PPA’s charter include the separation of its regulatory and commercial functions, improve port efficiency, and reduce logistics costs, Mr. Ortiz-Luis said.

The group also backed the proposed National Quality Infrastructure Act, which seeks to establish an institutional framework to ensure that Philippine products, services and processes comply with international standards.

The bill has been pending at the House and Senate trade committees.

DIGITAL ECONOMY
American Chamber of Commerce of the Philippines (AmCham) Executive Director Ebb Hinchliffe called for the passage of bills that seek to govern the use of artificial intelligence, boost cybersecurity, and support the digital economy.

The group also backed the proposed National Single Window System Act, which allows traders to submit related documents through a centralized digital portal.

AmCham is also pushing for amendments to the Electric Power Industry Reform Act, the National Land Use Act, the Holiday Rationalization Act, and the Blue Economy Act.

The chamber also supported the Freedom of Access to Information Act, which seeks to give the public wider access to government documents. Both the House and Senate passed their respective measures on third and final reading earlier this year.

AmCham is also pushing for the creation of the Department of Water Resources, as well as amendments to the CAAP and PPA charters.

“The successful implementation of enacted laws is equally important, while continuing to improve regulatory efficiency, streamline visa and trade processes, and review regulations that may unintentionally hinder investments,” Mr. Hinchliffe said in a Viber message.

Foundation for Economic Freedom President Calixto V. Chikiamco said Congress should approve measures to further liberalize foreign equity restrictions under the Constitution.

British Chamber of Commerce Philippines (BCCP) Executive Vice Chairman Chris J. Nelson urged Congress to approve the proposed Open Finance and Consumer Data Empowerment Act.

The bill, pending in the House banks committee, seeks to institutionalize a framework for secure data sharing among banking institutions to help develop tools that drive financial inclusion.

“The Philippines recently has moved to upper-middle income status, but there are a number of unbanked individuals,” Mr. Nelson said in a phone call. “So, [the bill, would] make financial services readily available and move more people into higher [income] brackets.”

Other measures supported by the BCCP include the proposed Digital Payments Act, Cybersecurity Act, and Blue Economy Act.

Meanwhile, Philippine Retailers Association Chairman Roberto S. Claudio asked policymakers to prioritize measures that would level the playing field for the local tourism industry.

Mr. Claudio said they are still waiting for the release of the implementing rules and regulations on the value-added tax refund scheme for tourists.

Republic Act No. 12079, also known as “Act Creating a VAT Refund Mechanism for Non-Resident Tourists,” allows tourists to claim VAT refunds on purchases worth at least P3,000 from government-accredited stores. It was signed into law in December 2024.

Congress’ opening on Monday coincides with President Ferdinand R. Marcos, Jr.’s State of the Nation Address (SONA).

“We hope the President’s SONA will lay down a clear roadmap for reducing the cost of doing business, modernizing our logistics and quality infrastructure, strengthening MSMEs, and expanding market access through trade agreements,” Mr. Ortiz-Luis said.

If you pick a bad name, you will have to explain the confusing name for years or even worse. You will have to rebrand your business as well as domain name from scratch, once the business has already gained some traction.

I have watched plenty of founders treat the domain purchase as an afterthought. That’s backwards.

Your domain name is the one part of your online presence nobody can take away from you. So, it is better to spend sometime to pick and register a domain name that is not only good but also self explanatory for your business.

In this article, I am going to guide you how to buy a domain name step by step so you can register a good name for your business.

8 Steps To Buy a Domain Name

1. Study What is Already Working

Before you brainstorm anything, spend at least 30 minutes looking at 8-10 competitor or inspiration sites in your niche. Do not copy them, just notice the patterns. Are they using?

• Invented words (Spotify or Zapier)
• Real words used literally (Buffer or Notion)
• Two words mashed together (Mailchimp or WordPress)

This tells you what your audience already expects a brand in your space to sound like, so your name feels native to the industry instead of random.

2. Brainstorm Smarter But Not Harder

You do not need to sit and stare at a blank page. Use these tools to generate and stress-test ideas fast:

• Namelix: For AI-generated business names based on keywords you feed it and it comes up with instant logo previews.
• Nameboy / Domainr: It is best for classic keyword-combination generators and still fast for quick checks.
• Thesaurus.com + a keyword list: With this tool, you can manually combine root words, slower but often produces more original results than AI tools.
• Panabee: This tool checks name + matching social handles + app store availability in one search.

Rule of thumb: At least, generate 20-30 candidates before you fall in love with one. The first idea you like is rarely the best available.

3. Keep It Short, Simple, & Say-able

If someone hears your domain name read aloud, they should be able to type it correctly on the first try. That rules out:

• Hyphens and numbers (nobody remembers if it’s “get-2-market” or “get2market”)
• Odd or “creative” spellings (Fiverr and Flickr got away with it because they were early and heavily marketed — most new sites won’t have that luxury)
• More than 2-3 syllables where possible

Look at how brands compress ideas into a single word:

• BBC (British Broadcasting Corporation)
• WPBeginner (WordPress Beginner)
• Fincyte (Future Insights)

This blending approach still works well in 2026, it just needs to sound like a real word, not a keyword stuffed name.

4. Avoid Trademarks and Look-Alikes

Run your shortlist through the USPTO Trademark Search (trademarks.justia.com is a faster free alternative) before you get attached to a name.

A domain being available doesn’t mean the name is legally yours to use and a cease-and-desist letter after you’ve built a brand around it is a expensive lesson.

5. Check the Name Everywhere, Not Just as a Domain

Before buying, check availability of the exact same name (or a close variant) on:

• Social Media Platforms: Instagram, X, LinkedIn, YouTube, TikTok
• Namechk or Knowem: Checks 100+ platforms in one search so you’re not doing this manually

Matching handles across your domain and socials makes your brand look established and trustworthy from day one, even if you’re a solo founder.

6. Still Choose .com With Two Honest Exceptions

.com remains the extension people trust and type by default, and it’s still the safest default in 2026. That said, two situations where an alternative makes sense:

• .ai: If you’re building an AI product and the .com is unavailable or absurdly priced, .ai has become an accepted, even expected, extension in that space
• .io, .co, .app: Acceptable for tech/SaaS products with a younger, developer-heavy audience, but expect slightly lower default trust from non-technical buyers or older demographics

If you’re building a mainstream consumer or local business brand, don’t compromise on .com just to get a “cooler” extension.

7. Where to Actually Buy It (And What It’ll Cost)

This is where most beginners lose money, first-year “deals” that balloon on renewal.

Here is what the registrar landscape actually looks like right now:

i. Porkbun

It is best for all-round pick. You can purchase a domain name in just $10-11 per year. And same at renewal. Along with that you can get free Free SSL, free email forwarding and no renewal price shock.

ii. Cloudflare Registrar

It is Cheapest as well as for technical users. You can buy a domain name in just $9.77-10.44 per year. Similarly, there is no markup at all, but requires a Cloudflare account and has a smaller TLD selection.

iii. Namecheap

For Beginners, Namecheap is good. You can get domain in just $10 first year and then $18 per year renewal. They have easy interface, 24/7 chat support and also sells web hosting as well as email if you want everything in one place.

iv. GoDaddy

You should avoid unless you need phone support. You can buy a domain name in just $1 first year and then $13-19 per year renewal. They charge separately for SSLs as well as for other products. They aggressively upsells at checkout and renewal prices are the highest of the major registrars.

My Honest Recommendation: Go with Porkbun

It gives you free WHOIS privacy, a free SSL certificate, and most importantly charges nearly the same price at renewal as it does on day one.

That last point matters more than any discount, because you’ll own this domain for years, not months. If you’re already inside the Cloudflare ecosystem for DNS or security, Cloudflare Registrar is the only option that’s genuinely cheaper.

Whichever you pick, always check the renewal price, not just the sign-up price, and switch off any auto-added extras (web hosting, premium DNS, extra privacy fees) at checkout.

8. Final Availability Check Before Buying a Domain Name

Once you have settled on 2-3 finalists that pass all the checks above, search them directly on your chosen registrar (Porkbun, Cloudflare, or Namecheap).

If your top choice is taken, resist the urge to just add “get,” “my,” or “the” in front of it, that usually signals a second-choice name to visitors. Go back to step 2 instead.

You May Like to Read More Articles:

• Whats in a Name – Picking a Catchy Business Name
• How to Detect the Domain Host & Why We Need It
• How To Choose A Name For Your Business: 5 Key Considerations

The post How To Buy A Domain Name? Step-By-Step Guide For Beginners appeared first on Fincyte.

Featuring a unique three-player team format, the tournament fostered strategic team play and elevates the level of competition. Teams competed in the DUPR 9 and DUPR 11 divisions, with categories determined by the combined Dynamic Universal Pickleball Rating (DUPR) of the three players of each team.  Throughout the tournament, players demonstrate exceptional skills, teamwork, strategy, and sportsmanship in every match.

The Grand Finals marked the culmination of five qualifying legs held across SM Bicutan, SM Sta. Mesa, SM Sta. Rosa, SM Marikina, and SM Center Muntinlupa. A total of 89 teams competed in the qualifying rounds, with the top 32 teams advancing to the Grand Finals.

Team Boss K, composed of Keane, Sunshine and Prince claimed the championship title in the DUPR 9 category, while Team Zone, composed of Glorie, Zacky and Renzo, emerged as DUPR 11 champions. The winning teams advanced to the Grand Finals from the SM City Sta. Mesa and SM City Marikina qualifying events, respectively. Both teams earned the distinction of becoming the first champions of the SM Active Hub Pickleball Trio Challenge.

The event also featured two Grand Parades of Finalists, one for each category, symbolizing the growing pickleball community in the country with SM Active Hub at the forefront of the sport’s development.

This milestone tournament reinforces SM Supermalls’ commitment to promoting active lifestyles and fostering a thriving pickleball community. As the largest pickleball destination in the country, your most loved mall, SM provides opportunities for Filipinos to engage in sports, embrace health and wellness, and build meaningful connections with others.

As pickleball gains popularity among Filipinos of all ages, SM Sports and Leisure Center is set to open more pickleball courts in the coming months, making the sport more accessible to many communities in the country.

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Starting Tuesday (July 21), gasoline prices will rise by up to P3.65 per liter, while diesel will jump by as much as P10.68 per liter, according to the DoE. Kerosene prices will also go up by as much as P11.77 per liter.

“We are in talks with the oil companies to appeal to them to give discounts to our public utility vehicles and also if they can stagger the increase for this week little by little so our jeepney drivers can properly plan when they will refuel so they won’t be suddenly caught off guard by a very high increase right away,” Energy Secretary Sharon S. Garin said at a briefing on Monday.

As of press time, Shell Pilipinas Corp. and Seaoil Philippines, Inc. said they will implement the price hikes for diesel and kerosene over a three-day period starting Tuesday.

Shell and Seaoil said they will hike gasoline prices by P3.60 per liter on Tuesday, while diesel prices will go up by P8.20 per liter on Tuesday, followed by a P1.20 hike each on Wednesday and Thursday.  For kerosene, prices will go up by P8.10 per liter on Tuesday, by P2.30 on Wednesday and by P1.20 on Thursday.

The latest adjustments will drive up pump prices in the National Capital Region, with gasoline prices reaching as high as P99.75 per liter, diesel at P101.43 per liter, and kerosene at P137.27 per liter.

Ms. Garin said renewed hostilities in the Middle East have disrupted the oil supply chain and sparked more uncertainty.

“Heightened tensions and developments in the Middle East are affecting global oil markets because these markets are interconnected. They are driving price adjustments up across every importing country,” she said. 

Renewed hostilities between the US and Iran have again disrupted the flow of energy supplies through the Strait of Hormuz, which handles around a fifth of the world’s oil supply. The Philippines, which sources about 90% of its oil supply from the Middle East, has been one of the most affected by the global oil crisis.

Energy Undersecretary Alessandro O. Sales said the possible closure of the Red Sea, another crucial maritime corridor between Africa and Asia, would worsen the situation.

“That was issued as a warning by Iran not to target their energy facilities. If they do, they warned they would have the Houthis shut down the exit in the Red Sea,” he said.

Ms. Garin said that while the Philippines has no control over global oil prices, the DoE is ramping up price monitoring and beefing up oil inventory.

“Prices cannot be controlled. What we can do is monitor to ensure there is no abuse, no overpricing, hoarding, and we can enforce all these laws with the help of other government agencies, including the DoE, to monitor prices — so that even if they are high, the correct and justified price is what is being charged,” she said.

To ease the impact of the latest price hikes, Ms. Garin said the government is continuing its fuel subsidy program for qualified jeepney, UV express drivers and other eligible beneficiaries.

As of July 17, the country’s fuel inventory was enough to meet average daily demand of 78.08 million liters for about 45.77 days.

The country’s inventory for gasoline was equivalent to 43.37 days of demand, 45.94 days for diesel, 139.97 days for kerosene, 82.31 days for jet fuel, 28.83 days for fuel oil, and 34.30 days for liquefied petroleum gas. — S.J. Talavera

“In the Philippines, employers are taking a more deliberate approach to compensation planning as they manage rising business costs while staying competitive for critical talent,” Chantal Querubin, rewards data intelligence practice leader for the Philippines at WTW, said in a statement on Monday.

Among Southeast Asian countries, the Philippines’ projected 5.1% salary increase for 2027 is lower than Vietnam’s 7% and Indonesia’s 6%.

However, it is still above the projected 4.7% salary hike in Malaysia, 4.6% in Thailand, and 4% in Singapore.

Ms. Querubin said companies are increasingly using data-driven compensation strategies to improve employee retention, skills, and performance.

The Salary Budget Planning report, which surveyed 408 organizations in the Philippines from March to May, found that more than half of employers said their actual 2026 salary budgets matched their original plans.

About 18.8% reported spending less than initially budgeted, while 8.9% said their salary budgets exceeded earlier projections.

WTW said compensation planning continues to be influenced by inflation, business performance, and changing labor market conditions.

Inflation averaged 4.8% in the first six months of the year. The Philippine central bank expects the headline print to settle at 6.4% this year and 4.5% in 2027.

Across the Asia-Pacific region, median salary increases are expected to stabilize at 4.9%, indicating that employers are adopting a more measured approach to compensation while continuing to compete for skilled workers.

The report also found that 71.9% of organizations plan to keep current headcount levels over the next 12 months. Only 17.5% of firms expect to increase their staff, while 10.5% anticipate workforce reductions.

“The findings reveal that workforce stability and talent retention remain a key organizational priority amid ongoing economic uncertainty,” WTW said, adding that many firms are investing in efforts to retain talent.

These include improving employees’ experience (43.9%), expanding training and development (39.5%), and enhancing health and wellness benefits (37.5%).

“With compensation budgets remaining constrained, organizations have limited ability to differentiate broadly across the workforce. As a result, pay investments are increasingly being concentrated on critical roles and key talent segments, while compensation decisions for the wider employee population become more standardized,” Patrick Marquina, senior director for work and rewards at WTW Philippines, said in the same statement.

Sought for comment, Benjamin B. Velasco, an assistant professor at the University of the Philippines Diliman School of Labor and Industrial Relations, said it is difficult to determine if a 5% salary increase is sufficient to attract talent as employees weigh hikes against inflation and migration opportunities.

“There are several factors that go into employee decisions to apply and stay. One is comparison with inflation rate, offers from other firms in the same industry and offers abroad as migration is an option,” Mr. Velasco told BusinessWorld in a Facebook Messenger chat.

He said that highly productive and profitable sectors such as business process outsourcing (BPO), finance, and power have the capacity to offer above-average increases.

On the other hand, Mr. Velasco said occupations cutting across industries, such as janitorial roles, usually offer below-par adjustments.

Mr. Velasco stressed that wage hikes and the cost of living will remain “hot button issues” through 2027, as workers deal with elevated inflation.

The wage board last month approved a dual tranche P85 increase in the minimum wage in the National Capital Region (NCR). Starting July 25, the minimum wage in the NCR will increase by P60, while the second tranche or the P25 hike will take effect in January 2027.

The Foundation for Economic Freedom (FEF) called for the suspension of the NCR wage hike, saying it could trigger severe unintended economic consequences that would harm the “most vulnerable” population.

In a statement, FEF said the wage hike could fuel an inflationary wage-price spiral, hurt small businesses, discourage companies from making investments, and threaten macroeconomic stability.

“As companies pass these sudden labor costs on to consumers, the prices of basic commodities rise, adding further upward pressure to already elevated inflation,” it said.

FEF said micro, small and medium enterprises (MSME) are facing the forced wage hike “at the worst possible time.”

“Smaller businesses are already reeling from the twin pressures of falling consumer demand and surging global oil prices, which have significantly increased operating and logistics costs,” it said, adding that MSMEs could be pushed to the brink of insolvency.

FEF called for the return to “evidence-based, tripartite wage-setting that aligns wage growth with productivity gains and macroeconomic realities.” — Erika Mae P. Sinaking

THE PHILIPPINES recorded the highest electricity rate among its Southeast Asian peers in June, as the country relied on more expensive power plants to offset supply gaps caused by plant shutdowns in the Visayas, according to the Department of Energy (DoE).

Energy Undersecretary Rowena Cristina L. Guevara said the Philippines had an average electricity rate of P12.43 per kilowatt-hour (kWh) last month, surpassing Singapore by less than a centavo.

“In ASEAN (Association of Southeast Asian Nations), we had the highest (electricity rate). We are higher than Singapore for June,” Ms. Guevara said at a briefing on Monday.

She attributed the country’s high electricity rate to insufficient power supply, particularly in the Visayas which has been placed under a series of yellow alerts due to forced outages of several power plants.

“The Visayas grid is frequently placed under yellow alert, which is driving up electricity prices,” Ms. Guevara said.

A yellow alert is declared when the power buffer is not enough to meet the transmission grid’s contingency requirement.

“Demand is also high during the summer months,” the Energy official said. “Because of this, we need to operate more expensive power plants. Instead of risking blackouts, we opt to run costlier plants.”

Among power providers in on-grid areas, Southern Leyte Electric Cooperative, Inc. had the highest residential electricity rate in June at P16.57 per kWh amid a steep increase in generation charges, according to DoE data.

Northern Samar Electric Cooperative, Inc. followed with P15.72 per kWh, Kalinga-Apayao Electric Cooperative, Inc. with P14.53 per kWh, Manila Electric Co. with P14.48 per kWh, and Leyte IV Electric Cooperative, Inc. with P14.46 per kWh.

In off-grid areas, which are heavily dependent on oil-based generating facilities, Busuanga Island Electric Cooperative had the most expensive power rate at P24.92 per kWh.

Ms. Guevara said the DoE is coordinating with the Energy Regulatory Commission to ensure that distribution utilities and electric cooperatives are charging the right prices to consumers.

The DoE official said electricity rates may increase if fuel costs continue to rise. She encouraged distribution utilities to use cheaper fuel sources first to avoid running more expensive power plants.

Energy Secretary Sharon S. Garin also urged power consumers to adopt energy conservation measures to ease the demand on the grid.

“It’s a reminder to all of us that we can also control the price of electricity depending on our consumption. If we consume less, the electric co-ops will not be forced to use the more expensive (fuel),” she said.

Gerry C. Arances, convener of consumer group Power for People Coalition, said the Philippines’ power rates reflect its high dependence on imported fossil fuels.

“The fact that the price of electricity in our country surpassed wealthier neighbors like Singapore illustrate just how heavy a burden power bills are for the ordinary Filipino consumer,” Mr. Arances told BusinessWorld. “This is in the context of rising inflation and costs of living amid the ongoing war.”

Mr. Arances said that lowering power rates requires ending the country’s dependence on coal and gas to generate power, and utilizing more renewable energy.

“Turning to expensive electricity in the spot market whenever coal plants fail is a non-solution — especially when renewable energy alternatives, particularly distributed renewables and solar power, have long been available in the Philippines,” he said.

Meanwhile, industrial stakeholders have called for collaboration among government agencies, the power sector and other stakeholders to strengthen power availability and reliability in the Visayas.

According to the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), forced outages continue to affect operations of businesses as these disrupt production schedules, increase operating costs, and reduce manufacturing efficiency.

“Energy security is a shared responsibility,” SEIPI President Dan Lachica said. “Through continued cooperation between government, the power sector, and industry, we can strengthen power reliability, support manufacturing operations, and reinforce the Philippines’ position as a competitive destination for semiconductor and electronics investments.”

THE PHILIPPINES might continue to struggle to attract foreign direct investment (FDI) for the remainder of 2026 as lingering geopolitical risks and domestic governance concerns keep investors cautious, analysts said. 

“We may have to grapple with subdued FDI growth for the rest of the year,” Marco Antonio C. Agonia, an economist at the University of Asia and the Pacific (UA&P), told BusinessWorld in an e-mail. “The domestic economy is still vulnerable to external shocks and has thus far not yet resolved its governance issues.”

Mr. Agonia noted higher borrowing costs have also stifled investment growth, which could keep the Philippines behind its neighbors with more conducive business environments and investment climates. 

In April, the Philippines saw the lowest level of FDI inflows in nearly 10 years, with central bank data showing a 58.8% year-on-year plunge to $250 million from $607 million.

This marked the lowest monthly FDI inflows since $244 million in June 2016, and the largest annual decline since 76.1% in December 2022.

The slump in FDI inflows came amid heightened uncertainty over the Middle East war, although SM Investments Corp. Group Economist Robert Dan J. Roces noted this may be mainly due to lower intercompany borrowings.   

“Still, if the slowdown persists, it could weigh on capital formation, job creation and productivity, especially in manufacturing, infrastructure, energy, property and exporting industries,” Mr. Roces told BusinessWorld via Viber.

He expects FDI inflows to remain muted and uneven throughout the year as investors continue to be wary of external and domestic headwinds.

In the first four months of the year, the Philippines posted $1.968 billion in FDI net inflows, 26.5% lower than $2.675 billion in the same period last year.

UA&P’s Mr. Agonia said this slowdown could dent economic growth momentum as fewer investments weaken aggregate demand and could eventually undermine the country’s productive capacity. 

“The newfound slump in FDI net inflows will likely hurt the country’s growth momentum,” he said.

“In the immediate term, slower investments mean softer aggregate demand. In the medium to long term, however, slower FDI formation translates into subdued improvements in the economy’s productive capacity, damaging the country’s prospects for transformative growth,” he added. 

The Philippines’ economic momentum has been weak since late last year, as a widescale flood control corruption scandal took a hit on investor sentiment, dampening investment flows to the country. Gross domestic product (GDP) growth slowed to 4.4% in 2025 from 5.7% in 2024.

Economic volatility stemming from the Middle East war dashed the Philippines’ recovery hopes, as GDP growth slowed to a new post-pandemic low of 2.8% in the first quarter. 

This prompted economic managers to slash the GDP growth target to 3.5-4.5% for this year from 5-6% previously.

Mr. Agonia said lower FDI inflows could likewise take a toll on knowledge and financial capital-intensive sectors, including transportation, infrastructure, manufacturing, renewable energy, and higher value-added agro-industry production.

“In particular, net debt instrument investment has been declining in previous months, which would likely undermine developments in infrastructure and manufacturing,” he added.

Meanwhile, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said sustained inflows of equity investments suggest that investors remain upbeat about the Philippines.

“While this could weigh on investment, jobs, and long-term growth if sustained, it is encouraging that equity investments remain positive, indicating that investors still see value in the Philippines,” he told BusinessWorld in a Viber message.

Analysts said the government should implement reforms to resolve its governance issues and enhance ease of doing business to regain lost investor confidence.

“The key now is to strengthen policy consistency, improve ease of doing business, accelerate infrastructure development, and reinforce good governance to convert investor interest into actual investments,” Mr. Ravelas noted. 

The Philippines would also need a less uncertain investment climate to attract more foreign investments in key industries, according to Mr. Roces.

“To turn this around, the country needs less uncertainty and faster execution such as consistent rules, credible governance, lower power costs, and quicker turnaround for public projects already in the pipeline,” he said. “Investors can price risk, but they struggle to price unpredictability.”

Meanwhile, Mr. Agonia said the country’s elevation to an upper-middle income country (UMIC) and good standing in the Institute of International Finance’s (IIF) investor relations ranking may also help attract more investments.    

“For now, the country’s transition to UMIC status and its favorable ranking on the IIF’s list are tangible tailwinds for the local economy’s foreign investment picture,” he said. “For this to take off in the medium to long term, however, the country will have to conduct structural reforms to address governance issues and the domestic economy’s inherent vulnerability to external shocks.”

Earlier this month, the World Bank reclassified the Philippines to upper-middle income from lower-middle income, after the country reached a gross national income per capita of $4,850, within the World Bank’s GNI per capita range for UMICs of $4,636 to $14,375.

The Philippines also scored 49.3 out of 50 in investor relations in the IIF’s 2026 Investor Relations and Debt Transparency Report, outperforming 56 other countries to earn the top spot in the category.

The central bank earlier said that the cautious global investment climate and local governance issues could bring FDI net inflows to $7 billion this year, lower than the estimated $7.8 billion in 2025.

However, it sees a gradual but uneven recovery by next year, with FDI net inflows projected to reach $8 billion by end-2027.

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 Philippines’ balance of payments (BoP) surplus widened to over $3 billion in June, which helped significantly narrow the BoP deficit in the first half of the year, central bank data showed.

Based on Bangko Sentral ng Pilipinas (BSP) data released late on Monday, the country’s BoP position remained at a surfeit for two straight months with $3.403 billion in June.

This is the largest monthly BoP surplus in nearly two years or since the $3.526 billion in September 2024.

It is also wider than the $226-million surplus a year ago and the $131-million surplus in May.

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.

June’s surplus brought the Philippines’ BoP deficit to $3.877 billion in the first half of the year, narrower than the $7.28-billion gap as of May and the $5.588-billion deficit in the same period last year.

The central bank said the country’s year-to-date BoP position remained at a deficit as it continued to post a trade-in-goods gap and hot money net outflows.

The Philippines has had a monthly trade-in-goods deficit for over a decade, with latest data showing the gap widened by 50.5% year on year to $5.48 billion in May from $3.64 billion.

Meanwhile, latest BSP data showed the country’s foreign portfolio investments, also known as hot money, reversed to a $4.17-billion net outflow as of May from the $1.52-billion net inflow seen a year earlier.

However, BSP noted that this was slightly tempered by the “sustained net inflows from personal remittances of overseas Filipinos, foreign borrowings by the NG (National Government), trade in services, and foreign direct investment.”

The central bank has noted that trade imbalances and tighter financial conditions will continue to strain the country’s external position until next year.

It expects the BoP deficit to widen to $10.7 billion or -2.1% of gross domestic product (GDP) by end-2026, from $5.7 billion or -1.2% of GDP last year.

THREE-MONTH HIGH GIR
On the other hand, the Philippines’ gross international reserves (GIR) reached $104.745 billion in the first half of 2026, according to revised BSP data.

This marks the highest dollar reserves held by the central bank in three months or since the $106.636 billion as of the first quarter.

The latest GIR level edged up by 0.73% from the $103.988 billion as of May, but fell annually for a third consecutive month by 1.18% from $105.998 billion the previous year.

The increase was driven by the NG’s net foreign currency deposits with the central bank and the BSP’s net earnings from its foreign investments.

However, the BSP also noted that these were tempered by “downward valuation adjustments, primarily driven by changes in prices of the BSP’s gold holdings and foreign currency–denominated reserve assets, and NG’s drawdowns on its foreign currency deposits with the BSP for external debt
service.”

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).

The central bank’s gold holdings jumped by 24.58% to $17.194 billion at end-June from $13.802 billion last year, but dropped by 11.74% from $19.48 billion a month ago.

Meanwhile, the country’s reserve position in the IMF amounted to $724.6 million, down 1.06% from $732.4 million the previous year but 1.46% higher than end-May’s $712.2 million.

SDRs — or the amount the Philippines can tap from the IMF’s reserve currency basket — also declined by 0.75% to $3.915 billion from $3.945 billion a year ago and by 0.93% from $3.592 billion the prior month.

The central bank’s foreign currency and deposits plunged by 48.35% to $2.298 billion in the first half from $4.449 billion in the comparable year-ago period. However, it more than doubled (176.29%) from $831.7 million as of May.

BSP data also showed its securities were valued at $72.037 billion during the period, slipping by 5.73% from $76.413 billion last year and by 0.98% from $72.75 billion a month earlier.

On the other hand, its other reserves rose by 28.97% annually to $8.587 billion from $6.658 billion and by 37.13% month on month from $6.262 billion.

The BSP said the country’s end-June GIR level remains adequate, covering about 3.7 times the country’s short-term external debt based on residual maturity.

It also translates to 6.8 months’ worth of imports of goods and payments of services and primary income, still above the three-month standard.

“These provide sufficient foreign currency to meet the country’s import needs and service its external debt obligations and serve as a buffer against external economic shocks,” the central bank said.

GIR allows a country to finance imports and foreign debts, maintain the stability of its currency, and safeguard itself against global economic disruptions.

The BSP sees its foreign reserves settling at $104 billion this year, lower than the $110.8 billion it held in 2025.

In celebration of MSME Month, GCash reinforces its commitment to being the trusted growth partner of Filipino NMSMEs, powering every stage of their entrepreneurial journey. GCash continues to champion local businesses by providing easier access to the integrated financial and digital tools they need to sustain their livelihoods, navigate uncertainty, and drive the Philippine economy.

The Wais Tindera Caravan serves as the Financial Literacy x Business Literacy (FinLit x BizLit) of GCash and Fuse Financing designed for Filipino micro-entrepreneurs. The program provides lessons on budgeting, pricing, inventory management, sales tracking, and business growth. The caravan also tackled the risks of predatory lending as many micro-retailers still rely on informal lenders, including the “5-6” system, which often carries high interest rates and can lead to cycles of debt.

Digital financial tools were also introduced, like GLoan Negosyo — a Fuse cash loan product designed to meet NMSMEs’ urgent funding needs — and GCash Pera Outlet Plus (GPO Plus), which enables store owners to earn extra income by offering cash-in, cash-out, bills payment, and other digital transactions to their communities.

“Through the Wais Tindera Caravan, we aim to equip NMSMEs with the practical financial and business skills needed to make informed decisions, manage their finances effectively, and adopt responsible borrowing practices to grow their businesses sustainably,” said Kevin Yu, Head of B2B lending at Fuse Financing.

Responsible Borrowing for NMSMEs

A key focus of the Cebu leg was responsible borrowing. Participants learned how to assess whether a loan is necessary for business growth, borrow within their capacity to repay, and use credit for productive purposes such as inventory expansion.

Sessions also covered how to understand loan terms, interest rates, and repayment obligations before borrowing. The program highlighted how formal lending solutions can support business growth when used with proper planning.

Through this campaign, entrepreneurs learned about excessive interest rates, lack of transparency, and unsustainable repayment terms.

Partner in every stage of growth

The caravan underscores the commitment of GCash to empowering Filipino MSMEs at every stage of growth. By introducing innovations like GCash SoundPay Plus and GCash EasyPOS, the platform helps small businesses seamlessly adopt digital QR and card payments, driving operational efficiency.

Beyond accessible payment solutions, GCash fosters grassroots, community-wide economic growth. Through GCash Pera Outlet Plus, neighborhood merchants can earn extra income by providing vital Cash In and Cash Out services to their localities, while accessible insurance offerings protect these grassroots businesses from unexpected financial shocks.

The caravan, in addition, addressed the digital trust gap as well among small business owners who may be hesitant to adopt digital financial services. Sessions explained how digital payments work, how to use GCash safely and securely, how responsible use of digital tools can help build a financial track record, and gain access to formal financial products and services.

The Wais Tindera Caravan supports the “Finance for All” mission of GCash. Financial literacy remains central to the program, with participants learning skills they can apply immediately and tools they can integrate easily.

For more information, please visit www.gcash.com.

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TCLV 1 is expected to emerge over the eastern boundary of the Tropical Cyclone Advisory Domain (TCAD) during Week 1, covering July 16 to 22, PAGASA said in its latest Tropical Cyclone Threat Potential Forecast.

The weather bureau said the system has a low to moderate chance of developing into a tropical cyclone during the forecast period.

In Week 2, covering July 23 to 29, PAGASA said TCLV 1 is expected to move toward the northeastern portion of the TCAD and the Philippine Area of Responsibility (PAR).

The system is expected to maintain its low to moderate chance of developing into a tropical cyclone.

During the same period, TCLV 2 is expected to emerge over the eastern portion of the TCAD and may enter the PAR. It has a low likelihood of developing into a tropical cyclone during Week 2.

“Therefore, the TC threat potential is less likely over Week 1 and likely over Week 2,” PAGASA said.

The agency added that changes in the forecast pattern will be closely monitored and updates will be issued as needed. — Edg Adrian A. Eva

The property developer will launch the 19,403-square-meter (sq.m.) CHAO Block at SM Xiamen City, its first overseas development, as it continues to invest in the province while taking a more conservative approach to its China expansion.

“Moving forward, we will just focus on Fujian province,” SM Prime President Jeffrey C. Lim told reporters during a media roundtable on Friday.

Mr. Lim said the company remains open to opportunities proposed by local governments but intends to strengthen its presence in Fujian, where the SM brand is already well established.

“China is so big. Every province is almost like a different country. The good thing for us is that the SM name is very popular and quite known in Fujian,” he said.

Despite the renewed focus, Mr. Lim said the group’s China operations remain “not material” to SM Prime’s consolidated business, adding that the company has no immediate plans to spin off its China assets until they reach greater scale.

CHAO Block is envisioned as a “neo-urban block” that extends beyond the traditional mall format by bringing together independent founders, local entrepreneurs, cultural curators, and first-to-market concepts.

The P1.5-billion project will be completed in phases, with the first phase scheduled to open in September and the second phase targeted for completion in the fourth quarter of 2027.

Tenants will also be encouraged to host workshops, product launches, exhibitions, community events, and brand collaborations.

“SM Xiamen City holds a distinct place in our company’s history. Being our first overseas investment, it has served as a long-term platform for learning, expansion and growth in China,” Mr. Lim said.

“As Xiamen continues to develop, we intend to keep strengthening the property and the local entrepreneurs so it remains an important part of the city’s commercial landscape,” he added.

Established in 2001, SM Xiamen City was developed as a one-stop shopping destination for the mainstream consumer market.

In 2009, the property expanded by 109,922 sq.m. of gross floor area (GFA) as part of its repositioning into an upscale lifestyle shopping center. In 2022, it added another 129,195 sq.m. of GFA and refreshed its tenant mix to cater to younger consumers and growing demand for social and experiential spaces.

Today, SM Xiamen City houses more than 500 stores, including international brands such as Apple Store, Sephora, Maison Le Fame, and Lululemon, as well as a Walmart and a range of restaurants and cafés.

Mr. Lim said the company also plans to apply lessons from SM Xiamen City’s evolution to its Philippine developments by introducing more experiential retail concepts.

In the Philippines, SM Prime, through SM Development Corp. (SMDC), is shifting its residential focus toward provincial economic housing to address what Mr. Lim estimated to be a national housing backlog of more than six million units.

The company is targeting the “non-vattable” P3.6-million price point for buyers in Davao, Iloilo, Mabalacat, Pampanga, and Trece Martires, Cavite.

While Metro Manila properties continue to face challenges, SM Prime plans to sell its existing inventory in the capital while expanding its recurring income business and provincial footprint. The company expects to produce about 25,000 homes annually.

Separately, Mr. Lim said sand placement for SM Prime’s Manila Bay reclamation project has been completed, with work now focused on shoreline protection, including armor rocks and revetment.

“Our commitment to the government is to turn it over mid-2028,” he said, adding that land development, including roads and utilities, is expected to be completed between 2026 and early 2027.

The company is also studying temporary uses for portions of the reclaimed land, particularly the island facing SM Mall of Asia. Interim developments, which may remain in place for five to 10 years, could include sports complexes to be operated by third-party partners rather than SM Prime. — Juliana Chloe A. Gonzales

THE PHILIPPINE financial system’s resources jumped by nearly 10% higher year on year as of May on the back of record-high assets and strong lending activity, analysts said.

Based on data from the Bangko Sentral ng Pilipinas (BSP), the combined resources of domestic banks and nonbank financial institutions (NBFIs) reached P37.638 trillion in the first five months of the year, up 9.98% from P34.224 trillion a year ago.

Resources inched up 0.88% month on month from $37.311 trillion as of end-April.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the nearly 10% rise in resources came as banks’ assets and loans have consistently posted double-digit growth despite uncertainty arising from the Middle East war.

“(This is) largely attributed to banks’ total assets and total loans growth rates of more than +10% year on year for both despite the war on Iran since Feb. 28, 2026, amid some hedging and frontloading of purchases or imports that are funded by bank loans,” he said via Viber.

Separate BSP data showed banks’ assets jumped by about 11.7% year on year to hit a new record high of P30.442 trillion at end-May, breaking the previous record of P30.336 trillion at end-March.

This as big banks’ lending expanded by 12.1% annually in May to P14.989 trillion from P13.37 trillion, marking the fastest loan growth in 15 months or since 12.2% in February 2025.

For Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., this means that the country’s banking sector held firm despite ongoing global uncertainties.

“The nearly 10% growth in the Philippine financial system’s resources as of May reflects the continued strength and resilience of the banking sector,” he said in a Viber message. “Higher deposits, sustained lending activity, and expanding investment portfolios continue to support balance sheet growth, even amid global uncertainties.”

The financial system’s resources include the funds and assets of banks and NBFIs such as deposits, capital, and bonds or debt securities, but exclude those from the central bank.

Meanwhile, central bank data also showed the 9.98% growth in total resources as of end-May eased from the 10.58% recorded at end-April.

However, Mr. Ravelas noted that this slowdown merely reflects “normalization” following strong expansion in recent months.

“The slight easing from April’s 10.58% pace to 9.98% is not a sign of weakness but rather a normalization after a period of strong expansion,” he said. “In fact, this suggests that growth is becoming more sustainable and balanced.”

As of May, banks held most of the financial system’s resources with P31.291 trillion. This was 10.85% higher than the P28.228 trillion logged a year ago.

Universal and commercial banks accounted for the bulk of resources, which climbed by 10.72% year on year to P29.011 trillion from P26.202 trillion.

Thrift banks’ resources also went up by 10.95% to P1.489 trillion as of May from P1.342 trillion in the prior year.

Meanwhile, the resources of rural and cooperative banks amounted to P587 billion during the period, up by an annual 8.06% from P543.2 billion.

Digital banks likewise saw their resources surge by 45.4% to P203.7 billion at end-May from P140.1 billion a year earlier.

On the other hand, the latest available central bank data showed nonbanks had P6.347 trillion in resources as of end-2025, 7.26% more than the P5.917 trillion it held at end-2024.

As of end-May last year, the total resources of nonbanks were P5.996 trillion.

NBFIs include investment houses, finance companies, security dealers, pawnshops and lending companies, nonstock savings and loan associations, credit card companies, private insurance firms, and authorized agent banks of foreign exchange corporations.

State-run institutions such as the Philippine Guarantee Corp., Small Business Corp., Social Security System, and Government Service Insurance System are also considered nonbank financial firms.

According to Mr. Ravelas, the latest figures suggest that the local financial system remains “liquid, well-capitalized, and capable of supporting economic activity.”

“As long as credit demand, savings accumulation, and investment activity remain healthy, the sector should continue to post steady growth moving forward,” he added.

However, Mr. Ricafort noted that rising borrowing costs and tighter economic conditions will likely dampen loan growth in the coming months, which could eventually slow the expansion of the industry’s resources.   

“However, for the coming months, total assets or resources growth could slow down amid possible higher interest rates locally and globally for the coming months, also amid more cautious lending by banks to prevent further increase in nonperforming loans amid slower global and local economy (and) higher inflation and interest rates largely brought about by the adverse effects of the war (in the) Middle East,” he said.

The central bank has been on a tightening cycle since April, delivering a total of 50 basis points (bps) in hikes to bring the key policy rate to 4.75%.

BSP Governor Eli M. Remolona, Jr. earlier said the economy can still handle another 25-bp increase amid expectations of growth recovery by the second half of the year.

The central bank has also kept the door open for further monetary policy tightening to bring inflation back to its 3% goal following four straight months of the headline print settling above its target.

BSP Circular 1238, which took effect on July 4, requires financial institutions like banks, e-wallets, and other payment service providers to adopt reasonable, fair, and market-based pricing for digital person-to-person fund transfers.

Most universal, commercial, thrift, and digital banks have already scrapped their InstaPay and PESONet fees, while several e-wallets opted to lower their applicable inter-institution charges.

Waiving these fees makes traditional banks more visible as payment conduits amid growing competition from digital banks and financial technology firms, First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message.

“It actually helps bank profitability as it improves banks’ relevance, market profile, customer retention, client relationship and overall business,” she said.

Ms. Ulang said the move is very timely as it helps ease transaction costs amid heightened inflation pressures and is also in line with the BSP and the government’s financial inclusion goals.

“Fee waivers are a modest headwind to bank profitability, particularly for institutions more reliant on transaction fees, but they could be positive for financial inclusion, digital adoption, and long-term customer acquisition,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas likewise said in a Viber message. 

Citing internal data, COL Financial Group, Inc. Chief Equity Strategist April Lynn C. Lee-Tan said in a Viber message that the move towards zero-fee retail transfers could shave off about 1% from big banks’ revenues, while the profit hit could be from 1% to 3%.

The latest BSP data showed that the Philippine banking system’s combined net profit went up by 2.87% to P104.82 billion in the first quarter from P101.9 billion.

The industry’s fee and commissions income rose by 6.8% year on year to P47.62 billion in the first quarter from P44.59 billion in the same period. This accounted for the bulk of its non-interest income.

F. Yap Securities, Inc. also said in a July 12 market note that the fee waiver poses only a “negligible” threat to listed banks’ earnings, with “resilient” net interest margins to support their profits. “Expect competition in digital banking, but this headline is largely deposit-accretive for banks,” it said.

“The impact on profitability will likely be limited for universal and commercial banks, as transfer fees account for only a small portion of total revenues relative to lending, treasury, cards, and other fee-generating businesses,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

“For these banks, the potential gain from deeper customer engagement and higher transaction volumes could partly offset foregone fee income.”

BSP Deputy Governor Mamerto E. Tangonan earlier said banks’ digital transaction volume has increased by up to 50% following their transfer fee waivers.

SMALLER BANKS
Meanwhile, the move could bite for smaller banks like thrift and rural lenders, in particular those with less diversified sources of revenue, Mr. Asuncion said.

“That said, the effect will vary depending on how much they relied on transaction-based fees and how successful they are in leveraging free transfers to attract and retain customers,” he said.

As for digital banks, Mr. Asuncion said some could lose their competitive advantage as most of them already offered free transfers even before the BSP directive as part of their customer acquisition strategy.

“With traditional banks now matching this feature, differentiation may increasingly depend on deposit rates, user experience, rewards, and product offerings.”

Mr. Asuncion added that with less friction for inter-institution transfers, this may increase deposit mobility, which would heighten competition for these funds.

“However, I do not expect a significant shift of deposits from digital banks back to traditional banks solely because transfers have become free,” he said. “Depositors will continue to be guided primarily by interest rates, convenience, platform quality, and trust in the institution.”

“I don’t think funds will shift from digital to traditional banks just because of free InstaPay. There are many other reasons for opening digital bank accounts, such as convenience, ease of opening, higher deposit rates, and easier access to credit,” Ms. Lee-Tan likewise said.

With the new BSP rules somehow leveling the playing field, financial institutions may turn their focus towards building and monetizing their relationship with their customers, Mr. Asuncion added.

“In that sense, the bigger story may not be the loss of transfer fee income, but the heightened competition for deposits, wallet share, and long-term customer engagement.”

The BSP wants digital payments to account for 60%-70% of the total volume of retail payments by 2028 in line with the Philippine Development Plan.

In 2024, digital payments made up 57.4% of the country’s total monthly retail transaction volume (from 52.8% in 2023) and 59% of the combined value (from 55.3% in 2023), according to BSP’s latest Status of Digital Payments in the Philippines report. — Aaron Michael C. Sy

RENEWED UPWARD PRESSURE on global oil prices has revived calls for the Philippine government to suspend excise taxes on petroleum products, although experts remain divided on whether such a move would be effective.

This comes as fuel retailers are expected to hike diesel prices by as much as P10.50 per liter and gasoline prices by as much as P4 per liter this week.

“At this point, I would not immediately recommend suspending the fuel excise tax,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., told BusinessWorld.

“A better approach is to focus on targeted interventions that ease the burden on vulnerable sectors while preserving much needed government revenues,” he added. 

Mr. Ravelas said the government should instead expand fuel subsidies for public transport, farmers, and fisherfolk; provide targeted cash assistance to low-income households; and accelerate energy conservation measures.

He said the government’s focus should be on reducing fuel and power consumption rather than merely absorbing higher prices, as conservation remains “the quickest and most effective response to an oil price shock.”

“Excise tax suspension should remain a contingency measure if oil prices stay elevated for a prolonged period and begin to pose a significant risk to inflation, economic growth, and consumer welfare,” he said. “Until then, targeted assistance and conservation measures offer a more sustainable solution.”

The country, a net importer of crude oil, has been under a year-long energy emergency since late March as the Middle East crisis threatens its fuel supply.

Under Republic Act No. 12316, the President has the authority to suspend or reduce excise taxes on petroleum products. A suspension of fuel excise tax collection has been estimated to lower pump prices by P6 per liter for diesel and P10 per liter for gasoline.   

President Ferdinand R. Marcos, Jr. suspended the excise tax on liquefied petroleum gas (LPG) and kerosene for three months starting April 13. This reduced LPG prices by P3.36 per kilo and kerosene prices by P5.60 per liter.

The three-month suspension of excise tax on LPG and kerosene was lifted on July 8, after the average Dubai crude oil price dropped below the $80 per barrel threshold.

“While reinstated just about a couple of weeks ago, a possible suspension may again be necessary to help cushion the potential further increases on the said socially sensitive products,” Jetti Petroleum, Inc. President Leo P. Bellas told BusinessWorld.

Based on the five-day trading at the regional benchmark Mean of Platts Singapore, pump prices of diesel are projected to increase by P10 to P10.50 per liter this week while gasoline prices are seen rising by P3.50 to P4 per liter.

The projected increases could push both gasoline and diesel prices beyond P100 per liter, well-above the prewar price levels of around P50 to P60 per liter.

“The breakdown of the US-Iran truce and tanker attacks in the Strait of Hormuz revived concerns about shipments of products from the Middle East,” Mr. Bellas said.

“With the renewed risk of supply disruptions, gasoline prices strengthened as global stock balances remain tight, with inventories falling as demand remains firm,” he added.

Adding to the risks posed by the ongoing Middle East conflict, Iran has reportedly directed its Houthi allies in Yemen to shut the Red Sea export route should the US launch attacks on its power infrastructure, Mr. Bellas said.

While tensions in the Middle East have renewed upward pressure on oil prices, it is still too early to call for a suspension of excise taxes on fuel, according to Top Line Business Development Corp. Senior Vice-President and Chief Operating Officer Brigitte Carmel C. Lim.

“However, if the increases become sustained and significantly impact consumers, temporarily suspending excise taxes may be considered to help ease the burden on motorists and households,” she said in a Viber message.

Noel M. Baga, co-convenor of the Center for Energy Research and Policy, said fuel price volatility is not the core issue.

“The Philippines remains vulnerable to sudden external supply shocks because of its heavy dependence on imported fuel, the absence of effective automatic price controls, and the lack of a Strategic Petroleum Reserve,” Mr. Baga told BusinessWorld.

“Building those buffers is what protects consumers from the next shock, not only this one,” he added.

The Philippine government is already laying down plans to build the country’s strategic petroleum reserve program, which includes putting up new stockpiling facilities.

Bureau of Internal Revenue (BIR) Commissioner Charlito Martin R. Mendoza said faster economic growth in the second half of the year will boost tax collection.

“Hopefully, our infrastructure spending will improve, and our economic activities will accelerate in the coming months,” Mr. Mendoza told reporters last week.

“We are hoping for a higher gross domestic product growth in the coming months because it really has an impact on value-added tax, percentage tax and other business taxes,” he added. 

The Philippine economy expanded by a slower-than-expected 2.8% in the first quarter, the weakest growth since the pandemic and well below the 5.37% expansion in the same quarter a year earlier.

The Department of Economy, Planning, and Development earlier said the lingering effects of last year’s corruption scandal and the escalation of the Middle East conflict may have weighed on growth in the second quarter. However, it expects a recovery in the second semester amid a pickup in public spending.

Tentative data from the BIR showed that it collected P1.65 trillion in the first six months, up 5.33% from P1.567 trillion a year earlier.

“But it is still very tentative… We are still reconciling; it is not final yet. But definitely higher (than last year). Although our growth rate for June is not as high as that of May, which was 15%,” Mr. Mendoza said.

“But you have to understand that in June last year we had the deadline for the estate tax amnesty. So, the revenues from the estate tax amnesty came in,” he added.

The BIR’s first-half collections accounted for 48.6% of the Development Budget Coordination Committee’s (DBCC) downwardly revised P3.393-trillion collection target for 2026.

Mr. Mendoza admitted the revised collection target remains a “tall order.”

“The target is around P3.4 trillion. We collected P3.1 trillion last year. That is still close to a 10% growth, so it is still a tall order, but we are doing our best to meet our target,” he said. “So far, we are still on track especially with the P38-billion reduction in our target.”

Mr. Mendoza said the agency hopes to book strong collections from nonresident digital service providers and excise taxes, among others.

HIGHER BOC TARGET
Meanwhile, Bureau of Customs (BoC) Commissioner Ariel F. Nepomuceno said the DBCC may have considered recent foreign exchange (forex) movements and other macroeconomic factors when it hiked the agency’s collection target by P7.2 billion.

The DBCC raised the BoC’s 2026 revenue target by 0.7% to P1.011 trillion from P1.003 trillion previously. This as it adjusted the peso-dollar exchange rate assumption to P60-P62 this year from P58-P60 previously.

The peso traded above P61 per dollar in July. It closed at P61.587 against the dollar on Friday, strengthening by 3.3 centavos from its P61.62 finish on Thursday.

“Primarily, it is the changes in peso-dollar exchange rate and other macroeconomic factors, plus they foresee the growth of the economy,” Mr. Nepomuceno told reporters last week.

“But we can still achieve it, but our surplus of P11.8 billion will just be used to cover for that additional P7 billion,” he added, referring to the amount by which first-half collections exceeded the agency’s target.

In the first half, BoC collections rose by 7.2% to P491.75 billion from P458.77 billion a year earlier. Collections also exceeded the P480.27-billion target for the period by 2.4%.

“There is still more room for improvement, such as the rate of assessment or the total collection over the total value of imports,” Mr. Nepomuceno said.

The Customs chief said his review of average assessment rates over the years showed that the ratios at some ports were low and could be improved without departing from the transaction value regime.

“There are specific imported items that I know if we increase the rate of assessment, we will lift the collections. But you have to do that incrementally,” he said.

“Remember, we are in a transaction value regime, meaning we have to honor what they claim, based on their documents, are the actual prices they paid for their imports. We have reference values, but we will respect their documents,” he added. — Justine Irish D. Tabile

Running from July 16, 2026 to Feb. 14, 2027 at the museum’s 3F Main Gallery, the exhibition brings together historical artifacts, paintings, devotional objects, multimedia installations, and interactive experiences that explore how the archipelago’s maritime connections influenced Filipino identity.

The exhibition grew from curator Jei Ente’s interest in examining Filipinos’ relationship with the sea and the role of maritime activity in shaping the country’s history.

“I had an idea for an exhibition in 2023 about how, as a people whose culture is built on maritime activity, Filipinos have a relationship to water which appear in ways that we don’t always notice or realize,” Ms. Ente said in an interview.

She said the Battle of Mactan in 1521 and the Battles of La Naval in 1646 were selected because “while very different, they are parallel stories on how Filipinos have long belonged to a larger network of exchanges connected through the seas”.

Rather than presenting new historical information, the exhibition aims to offer fresh ways of understanding familiar events.

“The exhibition doesn’t promise new information, rather it prompts new insights into the way we remember these accounts,” Ms. Ente said. “Half of the discussion in Turning Tides is on the worldview and ways of the people in the islands in 1521 and 1646 to help our visitors better imagine and understand what was at stake for those who went into these battles.”

The exhibition broadens the discussion beyond military encounters by examining the commercial, cultural, and religious forces behind them.

“When we think about battles and major conflicts, we often focus on their military and political dimensions. But battles are usually the culmination of deeper struggles over commerce, culture, religion, and other competing interests,” Ms. Ente said.

Among the highlights are Fernando Amorsolo’s The Traders and The First Baptism, the 19th-century image of the Virgin of the Holy Rosary known as La Japona, an ivory-and-gold rosary recovered from the San Diego shipwreck, and ceremonial vestments of Our Lady of La Naval.

The exhibition also features scale models of Spanish and precolonial Philippine vessels, a short animated film inspired by Antonio Pigafetta’s chronicles, and five interactive digital modules, including a Battle of Mactan video game.

“Most Filipinos are familiar with the significance of the Battle of Mactan, but not as many are aware of the role that Filipinos played in the Battles of La Naval, which sabotaged the quest of Dutch forces to control Southeast Asia,” Ms. Ente said. “Through these stories and fascinating character dynamics, we hope visitors reflect on how choices made hundreds of years before still impact us today.”

Ayala Foundation Senior Director for Arts and Culture Jorell M. Legaspi said the exhibition highlights the country’s historical role in regional and global exchanges.

“Turning Tides presents the Philippines as an active crossroads of trade, diplomacy, religious faith, and cultural exchange. It reflects Ayala Museum’s commitment to preserving Philippine heritage and making it accessible, relevant, and meaningful for our growing audiences,” he said.

Ms. Ente said she hopes visitors leave with a deeper appreciation of how history continues to shape the present.

“Ultimately, I hope visitors leave realizing that history becomes truly meaningful when we see it not just as a record of the past, but as a form of shared memory that continues to shape who we are today.” — Kaizzer Angela Marie V. Manuba

But according to Jonathan Cristobal, marketing head of Globe Business, the conversation is no longer about adopting AI, but about scaling it across operations, decision-making, and customer experiences.

Speaking at the recent BusinessWorld Economic Forum, Mr. Cristobal highlighted that the enterprise landscape faces a sharp, pragmatic pivot as the conversation has fundamentally shifted from a question of adoption to a challenge of impact.

“Today the question is, ‘How do we scale AI?’” Mr. Cristobal observed, pointing to a stark reality that while the barrier to entry has collapsed, the barrier to execution has never been higher.

On paper, enthusiasm for digital transformation is at an all-time high, yet the internal machinery of most organizations is stalling. As Mr. Cristobal noted, “While adoption rates have been good, readiness remains uneven.”

This unevenness exposes the illusion of corporate awareness. Knowing what AI can do is no longer a competitive advantage; knowing how to make it work reliably across an enterprise is. To move past this middle ground, organizations are deploying structured enablement programs.

To ensure AI scales effectively, Globe follows a foundation-first approach by establishing a centralized AI environment referred to as the “AI Kitchen,” which provides shared platforms, tools, and governance to keep initiatives aligned with business priorities.

Under this strategy, Globe operationalizes AI through a dual-funnel approach designed to accelerate innovation at every level of the organization.

The first funnel drives bottom-up innovation by empowering business units to identify, develop, and build AI solutions that address their most pressing operational and business challenges. Supported by shared AI platforms and reusable capabilities from the AI Kitchen, teams can rapidly move from ideas to production  while accessing the appropriate level of enablement needed for each initiative.

The second funnel focuses on top-down enterprise transformation, where AI is embedded directly into Globe’s highest-priority transformation programs.  AI capabilities will be woven into strategic initiatives to deliver organization-wide impact across customer experience, operations, and new business opportunities.

“From a private sector perspective, most organizations are not struggling with acquisition. The challenge is no longer who has access. It is about operationalizing,” Mr. Cristobal said.

This distinction is critical. While access to advanced AI is now democratized, operationalizing these tools remains a monumental hurdle, requiring companies to integrate them into legacy workflows, ensuring data pipelines are clean, and training staff to use them safely.

When properly operationalized, this transition from manual workflows to AI-driven automation delivers massive and measurable efficiency gains and backend optimizations.

Backend development has been accelerated by Globe’s shared infrastructure particularly for Field Services Management, enabling technical teams to resolve bugs 80% faster, create tests 3-4 times quicker, and build internal tools 5 times faster.

Furthermore, Globe has improved backend efficiency by using AI-driven automation to accelerate database pattern extraction for its Electronic Creditable Withholding Tax (eCWT) system, reducing the process from 3 days to 4 minutes.

The financial and technical dividends of this operational shift are substantial. Globe switched from manual quality audits to a Generative AI Quality Audit using Build Your Own AI tools, drastically cutting annual costs. Furthermore, Globe achieved 90% accuracy in fault detection while cutting the mean time to restore service by 70%.

Systemic maturity

Mr. Cristobal maps the corporate struggle with regard to AI to a failure in holistic planning. True organizational readiness is not a single metric; it is an interconnected ecosystem of capabilities.

“Infrastructure and workforce capacity remain challenged, together with governance and digital maturity,” Mr. Cristobal warned. “All of these continue to vary from organization to organization.”

When a company attempts to scale an AI initiative without a mature data infrastructure, the project produces unreliable outputs. When attempted without workforce capability, employees either reject the technology out of fear or misuse it due to unfamiliarity. And when attempted without internal governance, companies may struggle to manage risk and maintain stakeholder confidence. Strong governance frameworks provide the foundation needed to innovate responsibility and scale AI with confidence.

An actionable blueprint for this is found in Globe’s AI Governance and Principles, which establishes executive accountability under a Chief Intelligence and Trust Officer to ensure close alignment between AI innovation, data, cybersecurity, and enterprise risk management.

Furthermore, all initiatives must be grounded in core principles centered on transparency, accountability, safety and security and human-centricity. Local enterprises can translate global frameworks into practical impact by participating in international standard-setting bodies.

This operational friction is compounded by the fact that businesses are playing defense against bad actors who are already fully operationalized.

“AI is making cyber threats more sophisticated. This makes it even more important for organizations to modernize capabilities to counter these risks,” Mr. Cristobal said.

The private sector, therefore, finds itself in a high-stakes race, attempting to scale complex, secure AI systems while simultaneously relying on outdated architecture to protect itself from AI-driven threats.

With execution deeply tied to safety and public trust, the private sector’s ability to scale depends heavily on the regulatory environment. Mr. Cristobal argued that if the government implements rigid and prescriptive laws, it risks paralyzing the exact operational progress businesses are trying to make. Instead, he calls for an agile approach to oversight.

“We need to focus on outcome-based regulations rather than rigid ones,” Mr. Cristobal said. “We must focus on transparency, security, and fairness.”

An outcome-based framework defines the boundaries of acceptable risk, such as preventing algorithmic discrimination or ensuring data privacy, but leaves the specific technical pathways open. This allows businesses to iterate, adapt, and scale their infrastructure as rapidly as technology evolves.

Yet, even as companies automate and build these autonomous workflows, Mr. Cristobal maintains that the final anchor must remain human: “Human oversight should still be at the center.”

For the private sector, the directive is clear: to close the execution gap, corporate leaders must match their technological ambition with the systemic maturity required to scale safely.

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“We look forward to welcoming customers in the Philippines onboard for Delta’s nonstop service to the US,” Delta Vice President for Asia Pacific Jeff Moomaw said in a statement.

“As we continue growing across the Asia Pacific region, Manila represents an exciting opportunity to introduce more travelers to Delta’s premium experience while expanding access to our global network,” he added.

The new route, operated by Delta Air Lines’ Airbus A350-900, offers four cabin classes: Delta One, Delta Premium Select, Delta Comfort, and Delta Main. Passengers aboard will have access to onboard services, including free Wi-Fi for SkyMiles Members and seatback entertainment.

Delta One cabin, the airline’s premier business-class product, also offers flat-bed seating with sliding doors, elevated dining, and refined service. Meanwhile, Delta Premium Select has a wider seat option with deeper recline and enhanced amenities.

Service will operate three times weekly beginning March 28 and March 30 from Los Angeles International Airport (LAX) and Ninoy Aquino International Airport (NAIA), respectively, while daily flights begin on June 7.

Due to the time difference, flights departing Manila at 7:40 A.M. will arrive in Los Angeles at 6:05 A.M. on the same day, while return flights will depart Los Angeles at 11:50 P.M. and arrive in Manila at 5:30 A.M. two days after departure.

Delta previously served Manila through its Tokyo-Narita and Seoul-Incheon hubs before suspending operations in 2021. — Almira Louise S. Martinez

“(As for the) target date, I can’t really say yet. All I can say is it’s coming soon. Very, very soon… within the year,” Kimberly Dy-Tenchavez, head of brand and communications for UD, told reporters during the Hapinoy Caravan.

SSS LoanLite, officially introduced last September, is a micro-lending program for eligible SSS members that offers loan amounts between P1,000 and P20,000. Its repayment terms range from 15 to 90 days.

The program seeks to give members an accessible and convenient way to access lending, as the application and loan disbursement process is fully digitalized and will be available through the UnionDigital banking app. Funds may also be disbursed through the MySSS Card.

“The approval for that will go through the usual approval process handled by SSS and also UD,” Ms. Tenchavez said.

SSS LoanLite carries an 8% interest rate per annum and a service fee, according to the SSS website.

The upcoming launch of the micro-lending program is one of UD’s responses to the persistent challenge of MSMEs in gaining access to capital, Ms. Tenchavez said.

Access to capital remains one of the most glaring challenges faced by MSMEs, especially sundry shops, locally called sari-sari stores, said Mark Joaquin Ruiz, president and co-founder of Hapinoy, a nationwide grassroots community network of over 70,000 micro entrepreneurs, the majority of whom are sundry shop owners.

“If you ask what a sundry shop real concern is… it’s really capital,” Mr. Ruiz told BusinessWorld during the caravan.

“Because right now, many still rely on 5-6, which has extremely high interest rates,” he said, noting that the SSS LoanLite program is a game changer for MSMEs.

MSME loans accounted for only 4.73% of the banking system’s P12.143-trillion loan portfolio, net of exclusions, as of March, according to the Bangko Sentral ng Pilipinas.

This was below the 10% lending allocation previously required under the Magna Carta for MSMEs, which mandated banks to set aside 8% of their loan portfolio for micro and small enterprises and 2% for medium-sized businesses. The mandatory credit allocation expired in June 2018 and has yet to be reinstated.

Apart from the upcoming SSS LoanLite program, UD is also working with Hapinoy to launch a loan product that will be rolled out much later, Ms. Tenchavez said.

The recent Hapinoy Caravan, held in Novaliches, Quezon City, was a collaboration between Hapinoy and UD that helped nearly 300 sundry store owners become more financially and digitally literate. — Edg Adrian A. Eva

In a statement, the company said it will introduce two smart EV models as its initial lineup. Further details on the vehicles and their official launch will be announced closer to their market debut.

XPENG Philippines aims to offer premium, AI-driven smart EVs designed to provide an intelligent driving experience for Filipino motorists, the company said.

XPENG is a global artificial intelligence and technology company focused on smart EVs. It designs, develops, manufactures, and markets electric vehicles equipped with its in-house advanced driver-assistance system, intelligent in-car operating system, and other core vehicle technologies.

The company currently operates in more than 60 countries and regions across Europe, the Middle East, Southeast Asia, Oceania, and Latin America. It has more than 380 overseas stores and regional hubs in Germany, the United Kingdom, France, Australia, Thailand, and Mexico.

XPENG said it will release more information on its Philippine launch in the coming months.— Edg Adrian A. Eva

The part of our home that we come into contact with the most is the floor, and even the walls when we lean or rest against them. That’s why it is important to inspect these surfaces every once in a while. The rainy season brings many challenges, and for surfaces, it means constant exposure to moisture and dirt that can cause stains, damage, and slippery exteriors that compromise both the appearance and safety of the home.

Take extra effort to prevent severe cuts, trips, and fall-related injuries especially if you are living with elderly and young family members.

Reliable floors and walls start with choosing the right materials. Since tiles are designed to last for decades, investing in high-quality porcelain tiles from the start helps reduce maintenance, prevent premature wear, and avoid costly replacements in the future.  For floors, Arte Ceramiche’s 60×60 cm polished porcelain tiles in Onice Gold and Linieto White, and Sol Ceramica’s 60×120 cm options in Sudan Gris and Sonata Gold offer lasting durability and high slip resistance, providing better grip and safer steps in areas frequently exposed to water while maintaining their elegant appearance even with everyday use.

When renovating, pay special attention to your walls. Decorative wall tiles not only refresh a space but also provide durable surfaces when properly installed. Basel offers 30×60 cm decor wall tiles including Cirque, inspired by mid-modern geometric style, Chex with Moroccan details, Vein featuring a patchwork design, and Iceland Vitro with teal and blue brushstroke accents. These designs create striking feature walls while also delivering the durability needed for long-term use.

Those who love the warmth and timeless appeal of wood don’t also have to sacrifice durability in times like these. Polished porcelain tiles like the Apricot Natural, Crosswood Beige, and Saga replicate the elegance and marbling of natural wood while offering excellent resistance to moisture, making them a practical choice amidst weather changes.

Selecting quality tiles, however, is only half the equation. Proper installation is just as important in ensuring surfaces remain durable for years to come. Using the right tile installation equipment – including an Electric Tile Cutter, Rubber Grout Float, Levelling Wedge, and Electric Tile Vibrator – helps achieve accurate cuts, proper alignment, and stronger adhesion that minimize future problems.

Reliable grouts, waterproofing products, and installation tools further strengthen every tiled surface. Products such as Powermix Cementitious Waterproofer provide an added layer of moisture protection by helping prevent water seepage beneath tiles, while Tile Grout helps seal joints against water penetration and moisture buildup. Supporting tools like the Pro Electric Mixer, Paint Brush, Silicon Gloves, Safety Glasses, Grouting Sponge, Rubber Bucket, and Wood Finish Trowel help ensure safe and proper mixing, application, and finishing for long-lasting results.

Even the best-installed tiles require regular care — NOT with vinegar or bleach, as these can gradually damage the tile glaze and weaken grout over time. A simple maintenance routine is enough to help preserve their appearance and prevents premature wear. Dry sweeping or using a Cordless Wet-Dry Vacuum first removes dirt that may scratch the tile surface, while a Spin Mop with Bucket and Microfiber Refill or a Foam Sponge Floor Mop gently cleans without damaging the finish. For outdoor areas where moss, mud, and slippery grime accumulate, the Hills’ Aquablast High Pressure Washer provides efficient deep cleaning. A handy Microfiber Feather Duster also helps reduce indoor dust that settles on the surfaces of tiled walls.

Moisture control also extends beyond cleaning. Rubber Door Mats help prevent rainwater from entering the home through the main entrance, while the Cotton Bath Floor Mats absorb water and reduce slips outside the bathrooms. Pairing these with a Shoe Rack encourages family members to leave wet footwear at the entrance to reduce the amount of water tracked indoors.

For Filipinos, protecting floors and walls is ultimately an investment in a family’s safety, home’s appearance, and long-term comfort. Whether planning a full renovation or a simple DIY upgrade, Wilcon Depot makes it easier to find the right products with its wide selection of durable tiles, quality installation materials, reliable cleaning solutions, and other home essentials that help create lasting spaces, while reducing the risk of costly repairs and accidents.

For added convenience, customers may also take advantage of the Call, Collect, & Deliver (CCD) Program, which offers a more personalized and hassle-free shopping experience. Simply inquire about products through a branch’s Viber number or the 88-WILCON Hotline at (02) 88-945266, place your order, and have it delivered straight to your doorsteps!

For more information about Wilcon, visit www.wilcon.com.ph or follow their social media accounts on Facebook, Instagram, and TikTok, or subscribe and connect with them on Viber Community, LinkedIn, and YouTube. Or you may contact Wilcon Depot Hotline at 88-WILCON (88-945266) for inquiries.

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In a regulatory filing on Thursday, Globe said proceeds from the facility will be used to partially finance capex, debt refinancing, and general corporate funding requirements.

The company said it maintains its full-year 2026 cash capex guidance of below $1 billion (about P61 billion), reflecting what it described as a disciplined capital investment strategy while continuing to invest in network infrastructure to support rising digital demand.

For the first quarter, Globe incurred P12.7 billion in capex, up 51% from a year earlier. Capex accounted for 30% of service revenues during the period, while about 91% of capex was allocated to data-related initiatives.

“By investing strategically in resilient and future-ready digital infrastructure, Globe remains committed to enhancing the quality of its network to empower more Filipino homes and businesses with consistent, reliable connectivity and robust digital solutions,” the company said.

Globe’s attributable net income fell 20% to P5.55 billion in the first quarter from P6.98 billion a year earlier, as higher financing costs and the absence of one-off gains booked in 2025 offset revenue and core earnings growth driven by strong data demand.

For 2026, the company expects low- to mid-single-digit growth, supported by anticipated growth in service revenues.

The LANDBANK facility follows Globe’s P5-billion term loan from BDO Unibank, Inc., announced in June, which was also earmarked for capex and debt refinancing.

Shares in Globe rose P20, or 1.1%, to close at P1,824 each on Thursday. — Ashley Erika O. Jose

PHILIPPINE manufacturing activity is expected to continue expanding in the next few months amid easing oil prices, although economists warned the looming El Niño, renewed Middle East tensions and rising labor costs could slow growth momentum.

“We see further manufacturing condition improvements in the coming months as softer global oil prices allow firms to normalize operations,” University of Asia and the Pacific economist Marco Antonio C. Agonia told BusinessWorld via e-mail.

Mr. Agonia pointed to the latest S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) data showing that firms are continuing to ramp up manufacturing and purchasing activities as pre-oil crisis inventories have already been depleted.

The Philippines’ PMI reading slightly improved to 50.9 in June from 50.8 in May, marking a second straight month of expansion in factory activity. A PMI reading above 50 indicates improving operating conditions, while a reading below 50 signals contraction.

Mr. Agonia said he expects some improvement in manufacturing activity “as the expected second-half rebound stimulates business and household confidence.”

He noted that the oil refining and consumer goods manufacturing sectors will likely drive factory activity in the coming months.

“Assuming no further significant shocks to the economy, consumers will likely reorient budgets towards the usual fourth-quarter holiday rush and manufacturers can go on with raw material purchasing,” he said.

“Price effects from still-elevated domestic pump prices will also incentivize more refining activity.”

However, Mr. Agonia said headwinds in the form of renewed Middle East tensions and the looming super El Niño weather event may dampen recovery.

The Philippine Atmospheric, Geophysical and Astronomical Services Administration earlier said that the country may encounter a “strong” El Niño season from September to November, which could intensify into a “very strong” one starting October.

“The upcoming El Niño season may drag manufacturing sector growth if it proves to be severe,” said Mr. Agonia. “Extreme weather events can damage agro-industry supply chains, especially for manufacturing categories with direct inputs from the agricultural sector.”

Citing the 1998 El Niño episode, he said both the agriculture and industry sectors posted annual declines.

Meanwhile, the conflict in the Middle East, which began in late February, remains unresolved. Earlier this week, the US military began fresh strikes near the Strait of Hormuz and coastal areas in Iran.

Iran has again closed the Strait of Hormuz, where a fifth of global oil and gas shipments pass through, raising fears of further supply disruptions that will drive up prices.

The Philippines is under a one-year state of national energy emergency until March 2027, as soaring global oil prices dampen economic activity.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said manufacturing activity will remain in expansion territory in the coming months, supported by easing inflation, resilient consumer spending, infrastructure projects and improving business sentiment.

“Domestic demand should continue to be the primary growth engine, particularly for food and beverage, consumer goods, and construction-related industries,” Mr. Ravelas told BusinessWorld via Viber.

However, he said softer global demand, trade uncertainties, geopolitical tensions and volatile energy costs could moderate the pace of growth.

“Overall, the outlook is cautiously optimistic, with the sector likely to grow steadily as long as domestic demand remains healthy and policy conditions remain supportive,” he added.

However, Ateneo de Manila University economist Leonardo A. Lanzona, Jr. cautioned against reading too much into the latest PMI data, noting that the June expansion remained modest.

“Given the reading is barely above the 50 line, still-soft export orders, and cautious forward expectations, I’d treat June as tentative stabilization rather than a growth trend you can bank on for the third quarter,” he told BusinessWorld via e-mail.

Mr. Lanzona said manufacturing remains “improving but fragile,” particularly as the recently approved dual-tranche P85 wage hike in the National Capital Region (NCR) and persistent core inflation continue to pressure production costs.

The minimum daily wage in NCR will increase by P60 on July 25, and by P25 in January 2027.

In June, core inflation, which discounts volatile fuel and food prices, quickened to a 31-month high of 4.4% in June. This despite headline inflation easing to 6.4% from 6.8% in May.

Mr. Lanzona’s concerns were reflected in the slower pace of factory output growth in May. Preliminary data from the Philippine Statistics Authority showed manufacturing output, as measured by the volume of production index, grew by 10.2% year on year in May amid weaker output of transport equipment, food products and chemicals.

Although this marked a reversal from the 0.3% contraction recorded in the same month a year earlier, it was slower than the revised 11.7% growth posted in April.

THE COMBINED VALUE of InstaPay and PESONet transactions topped P16 trillion in the first half, reflecting the continued shift of Filipinos toward digital payments, central bank data showed.

Data from the Bangko Sentral ng Pilipinas (BSP) showed the combined value of InstaPay and PESONet transactions jumped by 44.61% to P16.09 trillion as of June from P11.126 trillion recorded in the first half of 2025.

The volume of transactions processed through the two payment gateways also surged by 166.5% year on year to 4.203 billion in the first half from 1.577 billion a year earlier.

InstaPay saw its transaction volume increase by nearly triple at 172.18% to 4.139 billion at end-June from 1.521 billion last year.

This brought the value of InstaPay transactions to P7.977 trillion in the first half, jumping by 60.26% from P4.978 trillion a year earlier.

On the other hand, the volume of PESONet transfers grew by 13.84% annually with 64.065 million as of June from 56.277 million in the same year-ago period.

Transfers that went through PESONet stood at a total value of P8.113 trillion at end-June, jumping by 31.94% from last year’s P6.149 trillion.

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 an electronic alternative to paper-based checks.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort noted that the sustained double-digit growth in InstaPay and PESONet transfers even before the industry’s move to zero fees is a “good sign” for the digital economy.

For Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., the sustained growth shows the increasing adoption of digital payment channels.

“The continued surge in InstaPay and PESONet transactions reflects the rapid digitalization of the Philippine economy,” he said via Viber, “Consumers and businesses are increasingly embracing cashless payments because they are faster, more convenient, and now more affordable as banks and e-wallet providers reduce (or) eliminate transfer fees.”

RCBC’s Mr. Ricafort expects InstaPay and PESONet transfers to surge further in the coming months as local financial institutions race to cut or scrap their digital fund transfer fees following the BSP’s recent order.

“Definitely, lower or zero transfer costs would lead to significantly higher growth and use of online banking transactions and e-wallets that are already integrated in the country’s online payments and electronic fund transfer ecosystem,” he said in a Viber message.

However, Mr. Ravelas noted that the value of InstaPay and PESONet transactions is unlikely to double in the months ahead despite cheaper transfer costs.

“While lower fees will help sustain strong growth, I think a doubling of transaction values in the next few months may be too ambitious given the already large base,” he said.

“What is more likely is continued robust double-digit expansion driven by higher smartphone penetration, growth in e-commerce, wider use of digital payroll and business payments, increasing financial inclusion and literacy, and ongoing BSP initiatives to promote a cash-lite economy,” Mr. Ravelas added.

BSP Deputy Governor Mamerto E. Tangonan said earlier this week that banks saw digital transaction volumes surge by as much as 50% as the transfer fee waivers encouraged more online transactions and attracted new online banking users.

BSP Circular No. 1238, which took effect on July 4, directed financial institutions like banks, e-wallets, and other payment service providers to adopt reasonable, fair, and market-based pricing for retail digital fund transfers.

The central bank said its decision to mandate lower costs for digital fund transfers was part of its broader efforts to enhance the country’s payments system and digital economy.

It wants digital payments to make up 60%-70% of the total volume of retail payments by 2028 in line with the Philippine Development Plan.

Under the new rules, fees charged for person-to-person transactions between different institutions should not materially differ from charges for transfers within the same entity, with the switch cost being the only allowable pricing difference from its intrabank transfer fees.

Switch cost refers to the fee charged by a clearing switch operator to process interbank transactions, which the BSP said is typically around P1.50.

As of July 15, 11 universal and commercial banks, including most of the country’s largest banks, are offering free person-to-person InstaPay and PESONet transfers.

Meanwhile, several digital banks and electronic money issuers lowered their transfer fees, with charges ranging between P5 and P25 for InstaPay and PESONet.

Last month, the Securities and Exchange Commission approved the merger of BancNet, Inc. and Philippine Clearing House Corp. (PCHC), with the former as the surviving company.

The merged entity, which unifies the country’s biggest payments and clearing switch operators, is now operating under the corporate name Payments Network of the Philippines, Inc.

BancNet operates InstaPay, while PCHC handles PESONet along with the Philippine Domestic Dollar Transfer System and Payment-versus-Payment.

In 2024, digital payments made up 57.4% of the country’s total monthly retail transaction volume (from 52.8% in 2023) and 59% of the combined value (from 55.3% in 2023), according to BSP’s latest Status of Digital Payments in the Philippines report.

Maybank Chief Economist Suhaimi Ilias and economist Azril Rosli said they still expect cash remittances to grow by 2.8% to $36.5 billion in 2026, noting signs of resilience in underlying remittance trends.

This is a tad faster than the central bank’s projected 2.7% climb in remittances to $36.6 billion this year. However, it will be weaker than the 3.3% growth to $35.6 billion seen last year.

“Moving forward, OFW (overseas Filipino worker) remittances are expected to remain broadly resilient over (the second half of 2026), supported by stable overseas employment conditions and continued demand for Filipino workers across key destination markets,” Mr. Ilias and Mr. Rosli said.

However, they also flagged potential risks from the over four-month long Middle East war, which they said may keep remittances growth subdued throughout the year.

“(W)e maintain our projection for 2026 remittances to grow by 2.8% year on year to $36.5 billion, although downside risks from heightened geopolitical tensions, particularly in the Middle East, remain elevated and may contribute to month-to-month volatility,” Mr. Ilias and Mr. Rosli said.

“Growth momentum is likely to remain modest amid softer global economic conditions and elevated geopolitical uncertainties,” they added.

The latest Bangko Sentral ng Pilipinas (BSP) data showed that growth in cash remittances remained at a four-year low of 2% to $2.713 billion in May. This is likewise the lowest inflows seen in a year or since the $2.658 billion in May 2025.

The United States remained the largest source of OFW remittances in May, accounting for over 39% of the total.

However, the BSP noted that this might only reflect the fact that most remitting banks are based there and that not all remittances recorded from the US were generated within the country.

Remittances from other top country sources such as the Philippines’ neighbors Japan and Taiwan, Middle Eastern nations Saudi Arabia and the United Arab Emirates, as well as Canada picked up month on month.

“Collectively, these trends point to continued resilience in remittance dynamics across key source markets,” Mr. Ilias and Mr. Rosli said.

“Although headline growth remained moderate, the broad diversification of remittance sources continues to provide an important buffer against external shocks, helping sustain overall remittance inflows amid heightened global uncertainty,” they added.

OFWs based in the Middle East sent home $447.73 million in May, 8.9% lower than the $491.569 million they remitted in April. Nearly 20% of all remittances flowing to the country are sourced from the region, which hosts over 2.4 million Filipinos.

Meanwhile, total money sent home by OFWs in the January-to-May period hit a record-high $14.11 billion, climbing by an annual 2.5% from $13.766 billion.

Mr. Ilias and Mr. Rosli said this means migrant Filipinos’ remittances have held up despite a “challenging external environment.”

This came even as the five-month remittance growth stood as the weakest since the onset of the COVID-19 pandemic in 2020, when remittances during the same period declined by 6.4%.

Meanwhile, the Maybank economists’ remittance forecast also comes on the back of its projection that the peso will settle at the P61 mark against the dollar by yearend.

Safe-haven demand for the greenback amid persistent uncertainties surrounding the ongoing Middle East war has weighed on the local unit, pushing it to test back-to-back historic lows.

From the P57- to P58-a-dollar prewar level, the peso has plunged to average over P61 versus the greenback in May and June. It hit a record-low of P61.75 to the dollar on May 18 and 19.

Maybank likewise projects the peso to finish at P61 against the dollar in 2027. — Katherine K. Chan

This after the PMO on Thursday completed the sale of state-owned properties at the Atrium of Makati. It sold 24 condominium units and 21 parking slots at the Atrium to Sanpiro Realty Development Corp. for about P1 billion.

“The successful sale of our Atrium of Makati units reflects the PMO’s continued efforts to bring idle government assets to the market through well-planned and competitive transactions,” PMO Chief Michael Peter A. Alejandro said.

“We will build on this momentum as we pursue other properties for disposition in the pipeline,” he added.

The transaction raised the PMO’s collections to P1.87 billion in the first half, matching its full-year collections in 2025. It also exceeded this year’s P753.64-million target under the 2026 Budget of Expenditures and Sources of Financing by nearly 150%.

Mr. Alejandro said the agency is targeting the sale of three more major assets before yearend, including the FTI property currently estimated to be worth about P20 billion, and the Mile Long property that is valued at around P10 billion.

The government is also preparing to dispose of its stake in South Luzon Expressway (SLEX), although its valuation is still being finalized.

Mr. Alejandro said the estimates remain preliminary because these assets have yet to undergo appraisal. The minimum bid price will also have to be approved by the Privatization Council before they can be auctioned.

“Those are rough estimates and that is based on zonal (value), roughly. As far as right now, that is kind of the valuation just to give an estimate. But again, it depends on the market,” he added.

Mr. Alejandro said that the government still has a long list of assets that it plans to dispose of, with prioritization given to bigger assets.

“But I think, what is important for PMO now is to prioritize the ones that are really idle and that would really spur economic activity,” he added.

“We are hoping for the end of the third quarter for Mile Long, and then the fourth quarter for FTI. Those are our targets, hopefully, we are able to sell it,” he said.

For the government’s stake in SLEX, Mr. Alejandro said the auction could be held in the early part of the fourth quarter.

Mr. Alejandro said the planned sale of the FTI and Mile Long properties, together with the government’s shares in SLEX, would be key to achieving the P101-billion privatization revenue target this year.

“That is our target, so we are endeavoring to hit that P101 billion. But obviously, a lot of things have to happen,” he said.

Meanwhile, Mr. Alejandro said the revised guidelines issued by the Privatization Council last year have helped spur interest in public assets.

“We have actually been getting a lot of unsolicited offers from the private sector, which is good, since there is interest,” he said. “I think that is one very positive thing, we are getting the market to actually initiate some of these offers.”

Despite priority given to the bigger assets, he said the smaller transactions would also help the government achieve its privatization revenue target.

“They do add up… The value of these transactions does not matter, we just have to make sure that it is fair for the government so that we can reach our target,” he added.

The revised guidelines, issued in March 2025, allow the government to entertain unsolicited offers from the private sector, adopt alternative modes of disposition, and accredit brokers for privatization transactions. — Justine Irish D. Tabile

LOPEZ-LED First Gen Corp. has received an unsolicited, non-binding offer worth $5 billion (about P308 billion) from Indonesia’s PT Barito Renewables Energy (BREN) to acquire its renewable energy subsidiary Energy Development Corp. (EDC), the company said on Wednesday.

In a disclosure to the stock exchange, First Gen said the proposal was “unsolicited, indicative and non-binding” and remains subject to due diligence, the execution of definitive agreements, and the receipt of regulatory and other necessary approvals.

“To date, there have been no discussions between the parties, no agreements have been signed, and First Gen has not appointed any advisors for this transaction,” the company said.

The proposed acquisition would involve the country’s largest geothermal energy producer, which accounts for about a fifth of the Philippines’ installed renewable energy capacity. EDC has a total installed capacity of 1,480.19 megawatts (MW) across its geothermal, wind, hydro, and solar assets.

EDC also accounted for 87% of First Gen’s revenues last year, contributing P48.6 billion.

BREN is the renewable energy arm of Indonesian conglomerate PT Barito Pacific Tbk. It holds a majority stake in Star Energy Geothermal, Indonesia’s largest geothermal energy producer.

Juan Paolo E. Colet, managing director at China Bank Capital Corp., said the proposal could unlock shareholder value if it materializes.

“Given First Gen’s persistent market valuation discount, such a transaction represents an opportunity to return a meaningful amount of capital to shareholders while simultaneously recycling proceeds into more profitable clean energy investments,” Mr. Colet said in a Viber message.

Based on First Gen’s 45.8% economic stake in EDC, the company could realize about $2.29 billion (about P141 billion) from the transaction, he said.

Shares in First Gen were volatile following the disclosure. The stock climbed as much as 33.37% to an intraday high of P22.30 before ending Wednesday’s session down 1.71% at P19.50 apiece from Tuesday’s close of P19.84.

EDC was established in 1976 under the state-owned Philippine National Oil Co. to develop the country’s geothermal resources. First Gen acquired a 60% voting stake in the company for P58.5 billion through privatization in 2007.

The company recently marked its 50^th anniversary as the world’s largest vertically integrated geothermal producer.

“EDC was borne out of necessity — in the midst of an oil crisis that had affected global economies, but had more severe consequences on smaller energy-import dependent countries like the Philippines,” EDC President and Chief Operating Officer Jerome H. Cainglet said during the company’s anniversary celebration.

Beyond its domestic operations, EDC has expanded into Indonesia through a partnership with PT DSSR Daya Mas Sakti to develop geothermal projects with a potential capacity of about 440 MW.

TAX PERKS granted to large multinational enterprises could become less attractive if the Philippines implements the proposed Qualified Domestic Minimum Top-up Tax (QDMTT), an expert warned.

“We provide tax incentives to foreign investors who want to locate in the Philippines. So, some of them are not paying any taxes at all to the Philippines because of the incentives that they are enjoying,” Deloitte Philippines Tax & Legal Leader Carlo Navarro told BusinessWorld.

“But because of the qualified domestic minimum tax rule, the Philippines will now impose a minimum tax of 15% on that income that is incentivized by the old framework,” he added.

Mr. Navarro said this would reduce the benefits of existing tax incentives, which could prompt some investors to reconsider investing in the Philippines.

“Once you reduce the benefits derived from those tax incentives, you can already see that investors might reconsider their investment in the Philippines and look for another jurisdiction that will provide them with better tax rates,” he said.

“And that is the main challenge that will arise because of the implementation of the QDMTT,” he added.

The QDMTT forms part of the Organisation for Economic Co-operation and Development’s  Pillar Two framework, which establishes a global minimum effective tax rate of 15% for large multinational enterprises.

The Philippines has yet to enact a QDMTT law but is targeting to implement the regime in 2027, with collections expected to begin in 2028. The Department of Finance is currently drafting the proposed legislation.

Despite the potential impact on investment incentives, Mr. Navarro said the Philippines should proceed with the QDMTT because it would allow the government to collect taxes that would otherwise go to other jurisdictions.

“If the Philippines does not implement or enact a qualified domestic minimum tax legislation, somebody else will tax the income that arises in the Philippines,” he said.

“With the implementation of the Qualified Domestic Minimum Top-up Tax legislation, it will restore the right of the Philippines to collect these taxes.”

Mr. Navarro said the Philippines has lagged its Southeast Asian neighbors in terms of implementing major and significant regulatory developments.

“That’s where we stand at the moment. We’re really behind in terms of adopting some of these international rules that will help the Philippines protect its tax base,” he added.

Mr. Navarro said the QDMTT would generate additional tax revenue for the government by allowing the Philippines to collect taxes that would otherwise go to other jurisdictions.

“Certainly, it will add additional tax revenue to our government… When we did initial estimates on this, just looking at the data from the Philippine conglomerates, we estimated back then, this was in 2023, around P20 billion of tax revenue,” he said.

“But again, these are only from seven companies. The extent of the amount of lost revenue, we don’t know. We don’t have the estimates. But I think the DoF has estimated the amount of revenue lost from the non-implementation of Pillar 2 legislation and that could run in trillions,” he added.

To remain competitive under Pillar Two, Mr. Navarro said the government should review its current incentive framework.

“There are incentives that will still work within the context of Pillar 2, except that probably we will need to enhance the benefit derived from those existing incentives. That one is the enhanced deduction regime,” he said.

Meanwhile, the Deloitte Philippines executive said the country could also look at incentive schemes being adopted by neighboring countries.

“For instance, you have Singapore adopting the qualified refundable investment credit or the qualified refundable tax credit. So, our government can probably adopt some of the features of those qualified refundable tax credit mechanisms adopted by Singapore,” Mr. Navarro said.

However, Mr. Navarro said the Philippines should not simply replicate the incentive schemes adopted by neighboring countries, as doing so would not give the country a comparative advantage.

“The latest data showed low likelihood of achieving its end-of-plan target growth rate of 6.0% to 7.0%,” the PSA said in the 2025 Statistical Indicators on Philippine Development.

The PSA defines a “low likelihood” as a low chance of attaining the target.

This comes after the Philippines’ GDP growth slowed to a five-year low of 4.4% in 2025 from 5.7% in 2024, as the flood control corruption scandal continued to weigh on government spending, investments and consumer spending. Excluding the pandemic, it was the slowest growth since the 3.9% expansion in 2011.

The 2025 growth print was also below the Development Budget Coordination Committee’s (DBCC) 5.5%-6.5% goal, marking the third straight year it missed the target.

De La Salle University economist Marites M. Tiongco said achieving 6-7% annual growth by 2028 remains possible but would require sustained and well-targeted government interventions.

“The central issue is not simply whether the government should regulate more. The more important question is whether it can intervene more effectively,” she said in a Viber message.

“The country needs interventions that remove binding constraints, crowd in private investment, raise productivity, improve resilience, and ensure that growth generates broad-based employment and income gains,” she added.

Without these improvements, Ms. Tiongco said the economy could instead track the DBCC’s revised 5-6% growth target by 2028, assuming household consumption remains resilient and external conditions improve.

“However, sustaining growth of 6-7% will require a shift from a largely consumption-driven model toward one that is increasingly investment-led, productivity-enhancing, export-competitive, institutionally credible, and inclusive,” she added.

The PSA also said the government is unlikely to meet its target of bringing down the National Government (NG) debt-to-GDP ratio to 58-61% by 2028.

In 2025, the NG’s debt stock-to-GDP ratio rose to 63.2% from 60.7% in 2024, as the government ramped up borrowings to plug the budget deficit.

The debt-to-GDP ratio rose further to 65.2% in the first quarter of 2026. This was the highest level since 2005 and remained well above the PDP’s 2026 target of 60-63%.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the PSA’s assessment should be viewed as an early warning signal rather than a definitive forecast.

“Current trends suggest that meeting the PDP’s 2028 growth and debt targets will be challenging,” he said in a Viber message.

He said the key issue is not whether the economy will hit the targets, but whether it can regain momentum while keeping fiscal consolidation on track.

“If investment activity strengthens, infrastructure spending is sustained, and macroeconomic stability is preserved, the Philippines can still improve its growth trajectory and gradually reduce its debt burden over time,” Mr. Asuncion added.

The PSA also flagged the low likelihood of achieving the target of raising the share of wage and salaried workers in private establishments to 53-55% of total employed workers by 2028, after the share slipped to 50% in 2025 from 50.1% in 2024.

However, the statistics agency said the country remains on track to meet its fiscal deficit target of 4.3% of GDP by 2028 after the deficit narrowed to 5.6% in 2025 from 5.7% in 2024.

“This reflects progress in fiscal consolidation, where the pace of improvement suggests a high likelihood of achieving the end-of-plan target of 4.3%,” it added.

The PSA also assessed a high likelihood of achieving the PDP’s end-of-plan inflation target of 2.4-4.0% by 2028.

“Headline inflation, which tracks changes in the cost of living based on movements in the prices of a specified basket of major commodities, declined further to 1.7% in 2025 from 3.2% in 2024, already surpassing the end-of-plan target range of 2.4% to 4.0%,” it added.

However, inflation has remained above the Bangko Sentral ng Pilipinas’ 2-4% tolerance range this year after oil prices surged following the Middle East conflict. Headline inflation eased to 6.4% in June from 6.8% in May.

The PSA also said that there is a high likelihood of achieving the 4-5% unemployment and 10-11% underemployment rates by 2028.

The Philippines’ unemployment rate edged up to 4.2% in 2025 from 3.8% in 2024.

The report likewise indicated a high likelihood of reducing the poverty incidence target to 8.8-9% by 2028. Poverty incidence stood at 15.5% in 2023, already below the PDP benchmark of 16-16.4%.

Under the PDP, poverty incidence is projected to decline to 12.9-13.2% in 2025 before falling further to 10-11% in 2027.

Meanwhile, the PSA gave a “medium likelihood” assessment to the country’s target of raising gross national income (GNI) per capita to $5,882-$6,081 by 2028.

GNI per capita rose 3.5% to $4,470 in 2024 from $4,320 in 2023.

A “medium likelihood” means the target may or may not be achieved, according to the PSA.

The World Bank recently reclassified the Philippines as an upper-middle income economy after its GNI per capita reached $4,850 in 2025, just above the lower threshold of the World Bank’s $4,636-$14,375 upper-middle income classification. — Justine Irish D. Tabile

THE PHILIPPINE government is studying possible measures to cushion the impact of rising fuel prices as renewed tensions in the Middle East threaten global oil supplies, Malacañang said on Wednesday.

President Ferdinand R. Marcos, Jr. has ordered concerned agencies to assess the situation and ensure assistance reaches sectors most vulnerable to higher fuel costs, Palace Press Officer Clarissa A. Castro told reporters.

The Department of Energy  earlier said developments in the Middle East continue to put upward pressure on domestic pump prices and that it has stepped up fuel price monitoring as market volatility persists.

Ms. Castro said the Department of Transportation is evaluating additional interventions, including assistance for affected sectors, but did not specify possible measures.

“As of now, we have spoken directly with [Transportation] Secretary Banoy [Giovanni Z. Lopez], and he has been tasked to study the situation, as there is a need to balance circumstances because when fare prices increase, the prices of other products will definitely increase as well,” she said in Filipino.

“So, the President’s wish is for no one to be left behind; everyone must be helped in the right way and in a balanced manner,” Ms. Castro added, but declined to say whether the administration would approve pending fare hike petitions or suspend excise taxes on gasoline and diesel, saying discussions continue.

Energy Secretary Sharon S. Garin earlier noted that renewed military strikes between the United States and Iran have reignited concerns over the security of energy shipments through the Strait of Hormuz.

Because the Philippines is a net importer of petroleum products, with a heavy reliance on Middle Eastern supplies, these geopolitical shocks translate directly to higher domestic costs.

Transport group Pasang Masda requested the President to reinstate the one-peso fare increase that was suspended in March. This request comes on the heels of this week’s price hike where diesel increased by more than P4 per liter. Ms. Castro said that this is also part of the ongoing review.

“Again, Secretary Lopez also mentioned that this is being studied simultaneously at this time to ensure that the assistance we provide to our fellow citizens in the transport sector is appropriate, so they are not left behind. Our support for our fellow citizens who are consumers also continues,” she said.

This week, major retailers like Seaoil Philippines, Inc. and Shell Pilipinas Corp. raised pump prices by P1.00 for gasoline, P4.60 for diesel, and P2.30 for kerosene.

In April, the government temporarily suspended the excise taxes on kerosene and liquefied petroleum gas (LPG) for three months to cushion the impact of higher oil prices triggered by the Middle East conflict. However, the excise tax rates on kerosene and LPG reverted to their original levels on July 8 after the average Dubai crude oil price fell below the threshold set under the law.

Ms. Castro said the government is still studying the removal of excise taxes for gasoline and diesel.

“As of now, no update has been relayed to us,” she said.

Sought for comment, Jose M. Layug, Jr., executive board member of the Philippine Energy Research and Policy Institute, said the government appears more prepared this time in responding to oil market disruptions.

“While the government is better prepared with its response and assistance programs, it is really imperative to fast-track the transition to other forms of transportation that rely less on oil,” Mr. Layug told BusinessWorld over Viber.

He said that short-term interventions will not solve the country’s long-standing vulnerability to global fuel shocks.

“We need to shift to electric vehicles, both for private and public sectors, and improve our public transportation system to ensure lesser impact to the Filipino consumers and riding public,” he added.

As of July 10, the national fuel inventory stood at approximately 47.87 days of supply, an improvement from the previous 46.50 days. This inventory is supported by an average daily demand of roughly 78.08 million liters as of March 2026.

Broken down by product, the country maintains 48.17 days of gasoline, 45.69 days of diesel, and a substantial 148.98 days of kerosene. Other critical fuels like jet fuel and fuel oil have supplies lasting 80.09 days and 33.37 days, respectively, while liquified petroleum gas (LPG) inventory is at 39.51 days.

MONEY sent home by migrant Filipinos fell to its lowest level in a year in May, with the annual growth steadying from the prior month, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.

Cash remittances from overseas Filipino workers (OFWs) rose by 2% year on year to $2.713 billion in May. This figure is the lowest amount of cash remittances since May 2025, when remittances stood at $2.658 billion.

The 2% annual growth was the same as in April, which was the slowest in nearly four years or since the 1.8% in May 2022.

“Cash remittances increased year-on-year in May 2026, reflecting sustained inflows from overseas Filipinos,” the central bank said in a statement on Wednesday.

However, the latest monthly tally was 0.18% lower than the $2.718 billion in cash remittances logged in April.

In the five months to May, migrant Filipinos sent home a total of $14.11 billion, up 2.5% from the $13.766 billion a year ago.

The BSP expects cash remittances to climb 2.7% to $36.6 billion this year, slower than the 3.3% to $35.6 billion in 2025.

“Yes, yes. We will continue to plow along until we reach that goal,” BSP Deputy Governor Mamerto E. Tangonan told Money Talks with Cathy Yang on One News when asked if the 2028 goal is still achievable.

The BSP wants digital payments to account for 60%-70% of the total volume of retail payments by 2028 in line with the Philippine Development Plan.

Mr. Tanongan noted that banks’ digital transaction volume has increased by up to 50% as existing customers do more online transactions and banks onboard new users amid the transfer fee waivers.

The BSP deputy governor said the central bank’s decision to nudge banks regarding transfer fees came as they saw flat annual growth of online payments.

“(W)e noted that the growth of digital payments year on year has more or less approached a plateau,” Mr. Tangonan said. “And so, we said that we need a breakthrough. We need a second wind in order to propel the greater usage of digital payments, especially to those who are still nonusers.”

In 2024, digital payments made up 57.4% of the country’s total monthly retail transaction volume (from 52.8% in 2023) and 59% of the combined value (from 55.3% in 2023), according to BSP’s latest Status of Digital Payments in the Philippines report.

The central bank has not released the 2025 digital payments data.

Mr. Tangonan said the latest BSP regulation is expected to encourage more people to use formal digital payment channels by reducing the transaction costs associated with digital wallets and banks.

“What we want is to bring more people into the formal economy. So, we know that digital payments can increase GDP (gross domestic product) per capita and also reduce informality. So, these are our goals,” Mr. Tangonan said.

BSP Governor Eli M. Remolona, Jr. previously said that financial institutions’ lower digital transaction costs will improve the Philippines’ payment system and broaden the digital economy. He welcomed banks and e-wallets’ recent announcements, noting that it would even be better if they could bring InstaPay and PESONet transfer fees down to zero.

BSP Circular No. 1238, issued last month, directed financial institutions like banks, e-wallets, and other payment service providers to adopt reasonable, fair, and market-based pricing for retail digital fund transfers.

Under the new rules, fees charged for person-to-person transactions between different institutions should not materially differ from charges for transfers within the same entity, with the switch cost being the only allowable pricing difference from its intrabank transfer fees.

Switch cost refers to the fee charged by a clearing switch operator to process interbank transactions, which the BSP said is typically around P1.50.

The new regulation took effect on July 4.

Mr. Tangonan also noted that increased digital payments use among consumers amid lower transfer fees may urge more merchants to adopt digital payments eventually.

“So, we bring in more and more people into not only the digital payments system, but also the formal financial services where they can access other services that will give them the tools to help them protect or increase their wealth,” he added.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the industry’s move to scrap transfer fees can help boost the country’s digital economy.

However, he noted that it could also slightly dampen the profitability of institutions reliant on transaction costs.

“Fee waivers are a modest headwind to bank profitability, particularly for institutions more reliant on transaction fees, but they could be positive for financial inclusion, digital adoption, and long-term customer acquisition,” Mr. Ravelas said via Viber.

“My view is that free transfers can accelerate usage, particularly among lower-income consumers, small businesses, and frequent fund transfer users who are very price sensitive. More importantly, it encourages habitual use of digital channels, which is what ultimately drives adoption,” he added.

For Mr. Ravelas, the BSP is now likely closer to the lower end of its digital payments target with the boost from free transfer fees, but noted that achieving 70% will require more system-wide developments.

“Infrastructure reliability, cybersecurity, internet connectivity, and user trust remain just as important as fees,” he said. — Katherine K. Chan

THE PHILIPPINE BANKING industry’s assets jumped to an all-time high as of end-May amid stable deposit inflows, continued financing for households and businesses, and higher investment holdings, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Assets held by domestic banks reached a fresh high of P30.442 trillion at end-May, climbing by 11.69% from P27.257 trillion in the same period last year.

This exceeded the previous record of P30.336 trillion in total assets logged at the end of March.

Month on month, the sector’s assets edged up by 1.07% from P30.12 trillion posted at end-April.

Union Bank of the Philippines (UnionBank) Chief Economist Ruben Carlo O. Asuncion said recovering economic conditions and steady demand allowed domestic banks to expand their balance sheets during the period.

“The record-high level of bank assets as of end-May reflects the continued expansion of economic activity and financial intermediation in the country,” Mr. Asuncion said in a Viber message.

“Sustained loan growth, steady deposit inflows, and the buildup of investment holdings have supported balance sheet expansion, underpinned by resilient domestic demand and improving financing conditions,” he added.

Banks’ assets are mainly supported by deposits, loans, and investments. These include cash and due from banks as well as interbank loans receivable (IBL) and reverse repurchase (RRP) net of allowances for credit losses.

As of end-May, the banking sector’s total net loan portfolio inclusive of IBL and RRP increased by 12.07% year on year to P16.946 trillion from P15.121 trillion.

Net investments, or financial assets and equity investments in subsidiaries, stood at P8.641 trillion, up 8.61% from P7.956 trillion logged a year prior.

Banks’ net real and other properties acquired also rose by an annual 18.79% to P143.804 billion from P121.061 billion.

Meanwhile, the industry’s other assets jumped by 20.11% to P2.497 trillion at end-May from P2.079 trillion in the previous year.

Central bank data also showed that cash and due from banks grew by 11.83% to P2.215 trillion at end-May from P1.98 trillion in the comparable year-ago period.

Universal and commercial banks continued to hold most of the sector’s assets, with P28.384 trillion at end-May.

This was followed by thrift banks, which had P1.404 trillion in assets, and digital banks with a total of P195.593 billion.

Based on the latest data available on the central bank’s website, rural and cooperative banks in the country had combined assets of P458.013 billion at end-March.

On the other hand, Philippine banks’ total liabilities reached P26.854 trillion as of the end of May, rising by 12.89% from P23.787 trillion last year.

Of this amount, around 83% were deposits, which climbed by 11.19% year on year to P22.306 trillion from P20.061 trillion previously.

Peso-denominated deposits totaled P18.395 trillion, while foreign currency deposits stood at P3.911 trillion.

UnionBank’s Mr. Asuncion said banks’ assets are likely to continue growing as monetary conditions ease, supported by ample liquidity in the financial system and steady loan demand.

However, renewed financial market volatility triggered by the re-escalation of the conflict involving the US, Israel and Iran could weigh on the banking industry’s asset growth.

“A prolonged escalation could exert pressure on global oil prices, potentially fueling inflation, affecting consumer spending and business activity, and introducing greater uncertainty into financial markets,” Mr. Asuncion said. “These developments could temper credit demand and lead banks to adopt a more cautious lending stance if risks become more pronounced.”

The impact of global geopolitical risks on local inflation, interest rates, and market sentiment will likely shape banks’ balance sheets in the coming months, he added.

“For now, domestic economic fundamentals remain supportive of balance sheet growth,” Mr. Asuncion noted.

The central bank earlier said that geopolitical shocks from the ongoing Middle East war have minimal direct impact on the local banking system.

However, the BSP also flagged potential asset quality risks in certain sectors from weaker domestic and external financial conditions.

“Last year alone, coal accounted for 57% of our total power generation mix, while renewable energy contributed only about 25%,” Mr. Marcos said during the inauguration of the project’s first phase in Gapan City, Nueva Ecija. “Such an energy mix leaves us more vulnerable to fluctuations in global fuel prices and developments in the international market.”

The President said the project’s first phase is 91% complete and is expected to begin commercial operations by August.

Meralco PowerGen Corp. (MGEN), a subsidiary of Manila Electric Co. (Meralco), has energized 1,373 megawatt-peak (MWp) of solar photovoltaic capacity and 3,300 megawatt-hour (MWh) of battery energy storage from the project’s Phase 1.

The project spans 3,500 hectares across five municipalities in the provinces of Bulacan and Nueva Ecija.

“What we inaugurated today will be the world’s largest integrated solar and battery energy storage facility located in a single site,” Meralco Chairman and Chief Executive Officer Manuel V. Pangilinan said during the event. “It (MTerra Solar) rises not in Texas, not in the Gobi Desert, but right here in Gapan, Nueva Ecija.”

Mr. Pangilinan said the MTerra Solar project will help lower electricity prices.

“The price, it’s a curve, it goes up at night. So, this is mid-merit, so we can sell it at the time to bring down the price,” he told reporters on the sidelines of the project’s inauguration.

The second phase of the project is scheduled for completion next year, which is expected to help MGEN exceed its renewable energy capacity target of 1,500 MW by 2027.

Upon full completion, the plant will deliver 3,500 MWp of solar power to the grid, supported by 4,500 MWh of battery energy storage capacity.

At present, its maximum export capacity to the Luzon grid remains at 750 MW pending completion of various works done in collaboration with the grid operator.

Following the successful completion of required grid tests, the facility is now ready to deliver 650 MW mid-merit capacity to Meralco under a power supply agreement.

Energy Secretary Sharon S. Garin said the massive power project will help the country move towards “cleaner and more sustainable energy.”

“Because of the scale of the project, it is also expected to help drive electricity prices down over time,” Ms. Garin told reporters. “So in the long run, the benefits will be a more stable power supply and lower electricity prices.”

Regarding environmental impact, Mr. Marcos said that once the project is fully operational, it is expected to reduce carbon emissions by approximately 4.3 million metric tons annually.

“These capabilities will help strengthen the stability of our power system while expanding the role of clean energy in our power generation mix,” Mr. Marcos said, noting the government’s goal to increase the renewable energy mix to 40% by 2040.

The government has accelerated the issuance of permits to meet these targets, with the Department of Energy awarding 605 renewable energy contracts between July 2022 and May. The country’s installed energy storage capacity has grown from 93 megawatts in 2022 to 845 megawatts as of May this year.

“All of this enhances the reliability of our power supply, improve the integration of renewable energy into the grid, and help ensure that Filipino consumers benefit from a more stable and efficient energy system,” Mr. Marcos said.

Over the next decade, the facility is projected to generate nearly P23 billion in financial benefits such as increased tax revenues for local government units and direct financial assistance to the host communities in Central Luzon.

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. — Erika Mae P. Sinaking and Sheldeen Joy Talavera

THE PHILIPPINE information technology-business process management (IT-BPM) industry slashed its revenue and employment targets for 2028, citing the rapid adoption of artificial intelligence (AI) and intensifying global competition.

In its revised roadmap, the Information Technology and Business Process Association of the Philippines (IBPAP) projected that under a downside scenario, the IT-BPM industry could post $43.3 billion in revenues and 1.85 million in AI-enabled workers by 2028.

Under a best-case scenario, the industry is expected to generate $50.5 billion in revenues and boost its headcount to 2.14 million by 2028.

These recalibrated targets are much lower than the IBPAP’s initial projection of $59 billion in revenues and 2.5 million in full-time employees by 2028 under its previous roadmap.     

IBPAP President and Chief Executive Officer Jack Madrid said the revised projections have factored in disruptions caused by rapid adoption of AI, changes in buyer behavior, and heightened competition in the global IT-BPM industry.   

“We reviewed some of the strategic initiatives we need to embark on to ensure that our industry continues to grow and to address any changes in the initiatives needed given all the events that have happened in the past several years. It’s not just technology and agentic AI but also addressing some of the uncertainties caused by geopolitics and our own domestic opportunities and challenges,” he said at a briefing on Tuesday.

Mr. Madrid noted that the industry roadmap, which was first started in 2022, was “refreshed” since a lot of conditions have changed.

Mr. Madrid noted that global buyers are taking longer before deciding to invest in offshore operations, citing the rise of other IT-BPM hubs in South Africa, Egypt, Poland, Vietnam, Colombia, and Costa Rica.

“We are number two in the global IT-BPM [industry,]” he said, noting that India remains the top BPO player. “The challenge before us is whether we can move fast enough to capture this next wave of opportunities.”

For the downside scenario in 2028, Mr. Madrid said the IBPAP factored in policy-related issues that could discourage investors, depth of talent, quality of infrastructure, and challenges on the ease of doing business.

This year, the industry’s revenues are projected to reach $42.3 billion from $40 billion in 2025. The total headcount is expected to rise to 1.96 million full-time employees from 1.9 million last year.

For 2027, the IBPAP expects the industry to grow to $45.3 billion in revenues and 1.99 million full-time employees.

“Success will depend on how quickly we invest in talent, embrace AI responsibly, and deepen collaboration between industry, government, and academe,” Mr. Madrid said.

IBPAP said developing an AI-enabled IT-BPM workforce will require stronger AI literacy, deeper domain expertise, and greater emphasis on human skills such as judgment, critical thinking, empathy, and leadership.

Mr. Madrid also emphasized the need to position the Philippines as a hub for global capability centers (GCC). At present, the country hosts about 200 GCCs.

“In terms of GCCs, I think the growth sectors come from banking, financial services, and healthcare,” he said.

On AI, Mr. Madrid said the IT-BPM industry has yet to see its widespread impact.

“I think AI is a real development, but I think we have not really seen it scale yet,” he said. “AI has affected some jobs… but for entry-level jobs that some of the AI trials have affected, those employees were able to be redeployed.”

Meanwhile, IBPAP Chief Operating Officer Celeste B. Ilagan said there is a need for policies to improve the ease of doing business and address insider cybercrime in the country.

“What we see would be a challenge is that the existing investors in the country, who can probably expand more but are hampered by some policy and regulatory challenges, are now having second thoughts in terms of the expansion they have earlier planned for the Philippines,” she told the same briefing.

“There is always a question from client headquarters about the growing difficulty of dealing with our local government units. That’s really among the major issues that are raised to us by our members,” Ms. Ilagan said.

Held on July 11 at the Araneta Coliseum, OPM Con knocked it out of the park once more with a remarkable gathering of OPM talent — a feat made possible only by Puregold.

The concert capped weeks of anticipation after tickets were sold out in just two days. Puregold OPM Con Generations 2026 presented a pool of established OPM icons comprising the country’s most influential music acts and a roster of emerging artists in one event. With thousands of fans filling up the cavernous venue, the evening became a tribute to the artists, songs, and communities that have shaped OPM across generations.

“The Big Dome has long been a home to some of OPM’s most iconic acts and unforgettable performances, and seeing it come alive once again for Filipino music is something Puregold will always be proud of,” said Ivy Hayagan-Piedad, senior marketing manager of Puregold Price Club, Inc. “OPM has the power to bring generations together. Puregold is deeply grateful to the artists, fans, communities, partners, and everyone who helped turn this vision into a true historical moment for OPM.”

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Headlined by SB19, Ben&Ben, Alamat, Flow G, Skusta Clee, SunKissed Lola, G22, KAIA, and XONARA, OPM Con showcased the breadth of modern Original Pilipino Music. The performers represented a wide spectrum of genres and styles, from P-pop, folk-pop, and alternative music to hip-hop and contemporary pop, highlighting the richness of today’s music scene.

The sense of community that has become synonymous with OPM Con was evident throughout the evening. Families, friends, and fandoms came together under one roof, united by a shared appreciation for Filipino music regardless of genre or generation. Their enthusiasm carried through every performance, with deafening cheers, sing-alongs, and thunderous applause, creating an atmosphere that never let up from the opening number to the final encore.

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Beyond the performances themselves, the landmark event attested to the increasing enthusiasm in Filipino music and the people who champion it. The overwhelming turnout of the audience underscored the extraordinary response to this year’s OPM Con while serving as a powerful reminder of OPM’s deep-rooted place in Pinoy culture and the passionate audiences that proudly embrace it.

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With three successful editions to its name, Puregold OPM Con continues to grow alongside the Filipino music industry it proudly supports. Over the years, it has become one of the country’s leading platforms uniting artists, fans, and music lovers through a shared love for OPM. As Filipino music evolves, Puregold remains committed to creating experiences that keep that connection alive.

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.

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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No matter how successful a man becomes, life has a way of humbling him.

This is the lesson Manuel V. Pangilinan brought home from a long-delayed, complicated orthopedic surgery in Singapore. The entire ordeal has left him feeling limited, a state in which every successful step is celebrated as a major achievement.

“Suddenly, standing up feels like winning a badminton championship. Walking across the room deserves applause. And finding a comfortable sleeping position takes more engineering than designing a power plant,” he told the room at the 45^th anniversary of First Pacific Company Ltd., one of the country’s biggest corporate empires, of which he remains chief executive.

“And you know what? This experience reminds us that no matter how successful we become, our knees remain completely unimpressed.”

It is a rare admission of vulnerability from a man who has spent five decades building things designed to outlast him: telecom networks, power grids, water systems, hospitals, highways. And the timing is peculiar, as this year, Mr. Pangilinan turns 80.

By any ordinary measure, this is the age of the victory lap, the retrospective, the quiet handover. But as anyone who has ever known him can attest, Mr. Pangilinan is far from ordinary.

From humble beginnings

There is nothing in Mr. Pangilinan’s origins that predicts a trillion-peso conglomerate. He was born on July 14, 1946 in Manila and grew up in a modest household on the edge of a squatter settlement in Little Baguio, San Juan.

His was a family that moved up through patience and hard work. His grandfather was a public school teacher from Central Luzon who rose to become a superintendent and eventually served as the Secretary of Education. His father was a messenger at the Philippine National Bank who rose through the ranks to eventually become the president of Traders Royal Bank, and whom he would later credit as the source of the work ethic that would arm the future tycoon for all his life. His mother traced her ancestry back to a Portuguese sea captain.

He earned his way through San Beda College on a scholarship, graduating cum laude in Economics from Ateneo de Manila. He landed a scholarship at the prestigious Wharton School of Finance and Commerce, where he earned his MBA as a Procter & Gamble Fellow, one of the most competitive and prestigious fellowships offered at the time.

The first training ground for his career however was in Manila, as executive assistant to the president of Philippine Investment Management Consultants, Inc. (PHINMA), where he spent six years learning industrial analysis from the inside. Having built up experience, Mr. Pangilinan moved to Hong Kong in 1976 to become executive director of Bancom International, then moved further into international capital markets at American Express International Banking Corp.

In May 1981, with the support of the Salim family of Indonesia, he co-founded First Pacific, with the whole operation comprising of six people in a 50-square-meter office. Over the years under his guidance, First Pacific grew from a small trading outfit into a multinational investment management and holding conglomerate with deep operational roots across Southeast Asia.

“If I could go back and stand again in that small 50-square-foot room and speak to my 35-year-old self, I would tell myself: Look around. There is something sacred about small beginnings that you cannot feel until they are behind you,” he reminisced during his speech.

“There was freedom in being young. We risked freely. We didn’t have much in experience and money, but we made up for it in sheer energy, in daring, in taking risks, and almost being promiscuous with it.”

Mr. Pangilinan brought his international investment strategies back to the Philippines in 1987 by establishing Metro Pacific Investments Corp. (MPIC) as First Pacific’s domestic investment arm. His most notable corporate achievement came in 1998 when First Pacific acquired a controlling stake in the Philippine Long Distance Telephone Company (PLDT). At the time, the utility was burdened by heavy debt and significant technical challenges. Under his management, PLDT underwent a sweeping structural and technological overhaul, transforming it into the country’s leading digital communications provider and one of its most profitable enterprises.

Although he initially stepped back from daily operations, he returned to the front lines as President and Chief Executive Officer (CEO) of PLDT and Smart Communications in January 2024 to oversee its long-term strategic transition.

Around that core, he assembled what now amounts to a stack of national utilities. MPIC became the platform. In June 2023, he took over as President and CEO of Meralco, and under his watch the utility moved into renewable energy at serious scale — most notably a majority stake in SP New Energy Corp. to build Terra Solar, a 3,500-megawatt facility that is now the largest single-site solar installation in the world.

As Chairman of Maynilad Water Services, he oversaw the modernization of Metro Manila’s western water concession and took the company public. He chairs Metro Pacific Tollways Corp., NLEX Corp., and Philex Mining Corp. — expressways and mineral resources both running through the same hands.

Through Metro Pacific Health, he built the country’s largest private hospital network, including the modernization of Makati Medical Center. And through MediaQuest Holdings, chair of the group that includes BusinessWorld, The Philippine STAR and TV5, he sits over media and communications as well.

Individually, these are profitable ventures that make for good assets on a portfolio. Taken altogether, the list reads as one man’s herculean effort to support an entire nation’s infrastructure, from its telecommunications to its water supply.

“What started as a pure investment company — investing in banks and trading companies, evolved in 1988 to become an investment and management company. Eventually, First Pacific’s investments began to connect the dots into something none of us had ever conjured, much less memorialized, into a coherent road map. God, after all, does not write in straight lines,” Mr. Pangilinan said.

“And what accumulated, over 45 years of being completely honest with ourselves and our governance, was a group that found itself woven into the fabric of daily Filipino life. The water people drink in the morning. The power that lights their homes at night. The roads that take them to work. The connections that keep them close to the people they love.”

Beyond the balance sheet

Indeed, Mr. Pangilinan’s commitment to nation-building extends well beyond corporate balance sheets, through his active leadership of key civic organizations. He serves as the chairman of the Philippine Business for Social Progress (PBSP), the country’s largest business-led social development alliance. He also heads corporate philanthropic foundations, including the PLDT-Smart Foundation, Inc., the One Meralco Foundation, Inc., and the Metro Pacific Foundation, Inc.

As co-chairman of the Philippine Disaster Resilience Foundation, he has helped coordinate private-sector disaster response and keep supply lines open during national emergencies. His reach extends into education — chairman of the board at San Beda, formerly at Ateneo, and a former member of Wharton’s Board of Overseers — and into foreign policy, as co-chairperson of the US-Philippine Society and the Stratbase Albert del Rosario Institute.

Then there is sports, arguably where his public affection runs deepest. He founded the Samahang Basketbol ng Pilipinas (SBP) in 2007, serving as its inaugural president for two terms until 2016, and now holds the title of Chairman Emeritus. His governance capability led to his election to the Central Board of FIBA, where he served from 2014 until August 2023. In the Philippine Basketball Association (PBA), his conglomerates operate three competitive franchises: TNT Tropang Giga, the Meralco Bolts, and the NLEX Road Warriors. Through the MVP Sports Foundation, Inc., he has provided vital financial backing to high-performance local athletes, funding training regimens that helped secure historic gold medals for the Philippines at the Asian Games and the Olympics.

“I know that it takes ambition and power to build empires, any empire. But equally, it requires passion for your work, and the love and care of your people to build a lasting legacy of an empire,” Mr. Pangilinan said.

The honors have accumulated accordingly. Management Man of the Year in 2005; the Order of Lakandula, elevated in 2010 to Grand Cross with the rank of Bayani, the country’s highest civilian recognition for economic and civic contribution; an honorary commission as Lieutenant Colonel (Res) in the Philippine Air Force in 2021; honorary doctorates from the Asian Institute of Management, Far Eastern University, Holy Angel University, Xavier University, and San Beda.

The power of doubt

It would be easy to read Mr. Pangilinan’s ninth decade as a man refusing to let go. It reads more like the opposite: a man trying to finish the handover on his own terms, while there is still time to get it right.

He said as much, in his own way. “Comfort, strength, and mobility are blessings we often take for granted until they are taken away. We may own luxury cars, but today, the vehicle that matters most for me is a 16-year-old, thrice-depreciated van — because it is the only one that can carry me, my wheelchair, and my hope for recovery,” he said.

Mr. Pangilinan admitted that the experience forced him to learn to slow down, to heal, and to notice the people who stayed close while things changed.

“The luxury cars may remain in the garage for now, but real wealth is with us here in this theater: family, friends, faith, and the determination to stand and walk again.”

It would have been a natural place to end on acceptance. But once again, Mr. Pangilinan chooses differently.

While others his age might grow anxious at the uncertainty of a major knee surgery, he encouraged his colleagues to revel in it. “We all know business abhors uncertainty and the unknown. But if all things were certain in our world, there is no need for projections or forecasts; there would be no need for CFOs or even CEOs, because there is really nothing for them to do when all forecasts become predictable. We shouldn’t dislike the mystery brought by the unknown in our lives. I know it makes life more complicated for us, but it’s also what makes living so dynamic, so alive, so interesting,” he said.

“Certainty is the enemy of tolerance, of unity, of progress — if certainty were pervasive, there would be no mystery, and therefore no need for faith.”

Leadership, he explained, is the answer to uncertainty and complexity. He urged First Pacific to develop the leaders who are able to doubt and question themselves, because the process of doubting is in itself the process of learning how to lead.

For someone who has repeatedly eschewed choosing the successor to his empire, this is as close as he gets towards suggesting one. But for now, Mr. Pangilinan says he cannot wait to go back to work, be healthy, and play badminton again.

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Silent Sanctuary adds 2^nd day to arena concert with MSO

SIX-PIECE Original Pilipino Music (OPM) band Silent Sanctuary will perform on the biggest stage of their career — the SM Mall of Asia Arena — for a solo concert, Gabi ng Lambing, on Oct. 24 and 25.

A second performance on Oct. 24 had to be added to the original one-night-only concert on Oct. 25 when tickets sold out in just five hours after their release online. Tickets for day two will go on sale on July 18 via SM Tickets.

In the 24 years since the band formed, Silent Sanctuary has cemented a reputation for songs about first love, heartbreak, longing, healing, and the quiet nostalgia of growing up.

Being a pioneering OPM band with a dedicated string section, they will play both fan favorites and deep cuts with the help of the Manila Symphony Orchestra (MSO), Viva Voce, and surprise guests.

Silent Sanctuary members Raymund “Sarkie” Sarangay (guitar and vocals), Poch Villalon (synthesizers), Ronnie Ropal (bass guitar), Allen Calixto (drums), Anjo Inacay (cello), and Kim Mirandilla-Ng (violin) spoke to the press on July 10 about the concert.

“We’ll do at least 30 songs, from back then to our most recent. There will be hits, newer songs, even B-sides with a cult following,” said Mr. Sarangay. “First time namin mag-30 songs (It will be our first time doing 30 songs)!”

Speaking on what to expect from their collaboration with MSO at the concert, he said, “Nakaka-excite kasi may ibang mga kanta na walang strings, pero may wind section. I-e-explore talaga namin kung ano pa ang babagay doon sa mga kanta (It’s exciting because there are some songs without the usual strings, but with a wind section. We’ll really explore what else could suit the songs).”

While they have performed in major venues before, it is the first time they will do so with newer members Mr. Mirandilla-Ng, Mr. Ropal, and Mr. Villalon in the lineup, who helped “usher in a refreshed chapter,” the band said.

Billed as a celebration of 24 years of songs, the show will be directed by Paolo Valenciano, with Ria Osorio as musical director in charge of the orchestra, choir, and new arrangements.

“Iba ang mangyayari sa day one at day two para walang mga spoilers (Different things will happen on day one and day two of the concert to avoid spoilers),” Mr. Sarangay said, adding that they would have preferred the second day to naturally come after the original performance, but there were no other dates available.

MIXING OPM AND CLASSICAL MUSIC
Because the concert will feature the MSO and the choir Viva Voce, fans can expect the ultimate Silent Sanctuary vision of combining OPM and classical music.

“’Yung nasa imagination namin na fusion ng classical at rock, ito ang magiging ultimate na pagtupad ng vision na ’yon through our music (What is in our imagination as the fusion of classical and rock, this will be the ultimate execution of that vision through our music),” said cellist Mr. Inacay. He and violinist Mr. Mirandilla-Ng were members of the MSO prior to joining the band.

“It’s been years since we performed some of these songs on stage. Maybe the last time would have been at a bar gig or for album promotion,” he added. “Gagalingan talaga namin (We will really do our best).”

Compared to their other shows, the concert will be different in that the arena stage allows for a bigger and more cinematic performance, with some moments allowing the orchestra and choir to shine alone.

Silent Sanctuary had been featured in the MSO’s Rockestra concerts in 2005 and 2018, appearing for about three to five songs and allowing orchestra lovers to appreciate OPM. This time, it’s the band’s show that will serve as a bridge to the orchestra.

“We have this exposure to classical music, so ’yung mga natutunan namin (what we’ve learned) over the years by playing symphonies and solo pieces, that’s where we get ideas and inspiration sa pagtatahi ng (in stitching together) classical and OPM,” Mr. Inacay explained. “In our songs, it comes out through the strings because those are the classical instruments we have. For this concert, with a 40-piece orchestra and a choir, we’ll be able to expand those ideas.”

“[Classical music] has a very healthy scene. It’s not too mainstream, so we’re happy that Silent Sanctuary is becoming a window for people to hear and see what classical music is all about,” he added. — Brontë H. Lacsamana

AT LEAST 10 COMPANIES have expressed interest in bidding for the operations and maintenance (O&M) contract for the North-South Commuter Railway (NSCR), the Department of Transportation (DoTr) said, as it extended the bid submission deadline to September.

“The bid submission deadline is now in September because we are still conducting one-on-one sessions with prospective bidders,” Transportation Undersecretary for Railways Timothy John R. Batan told reporters on Monday.

The DoTr is set to conduct another round of technical discussions with prospective bidders for the O&M contract in the coming weeks, Mr. Batan said.

The department initially set the bid submission deadline for July 29 but moved the deadline to September.

“The bidders have a lot of questions. Remember, the winning bidder will operate one of the largest metro rail systems in the region,” he said.

At present, the DoTr is in discussion with Japanese rail operators particularly Tokyo Metro Co., Ltd., the operator of Japan’s major rapid transit system; as well as the JR East and JR West, the operators of Japan’s high-speed railway network, Shinkansen.

“We also have French operators. The company that operates Paris’ metro system and other French (rail) operators are also interested in participating in the bidding,” Mr. Batan said.

In December, the RATP Group, which oversees and operates Paris Metro system, attended DoTr’s pre-bidding conference for the project.

The DoTr noted that other French transport companies like transportation and mobility networks company Keolis S.A. and rolling stock manufacturer Alstom also signified interest in the NSCR O&M contract.

“I think, overall, we have about 10 companies interested in participating. Again, we now have Japanese, French, and some Filipino companies,” Mr. Batan said.

Earlier, the DoTr said potential bidders, including San Miguel Corp. and the Lopez group’s construction company First Balfour, Inc., attended the pre-bid conference for the project.

The 147-kilometer NSCR will connect Malolos, Bulacan with Clark International Airport, and Tutuban, Manila with Calamba, Laguna. The O&M deal will cover 15 years from the signing date of the contract.

The NSCR is expected to be fully operational by January 2032, although partial operations of the Malolos to Valenzuela segment are projected by December 2027, while the Clark to West Valenzuela segment is expected to run by October 2028.

“It will attract foreign bidders, because it is very low risk to them. Aside from without skin in the game, payment is guaranteed with standby ADB (Asian Development Bank) credit,” Rene S. Santiago, an international consultant on transport development and former president of the Transportation Science Society of the Philippines said in a Viber message.

In March this year, the Philippines requested an $800-million loan from ADB to serve as a partial credit guarantee that will ensure payments to the operator of the NSCR project.

Mr. Santiago noted that domestic firms will not be able to participate in the bidding based on the criteria given by the DoTr. 

“Expect heavy foreign interest, and understandably so. The ADB credit guarantee removes virtually all downsides, while the bidding criteria effectively bar domestic participation,” he said.

According to the instructions to prospective bidders published in October last year, bidders must have a minimum net worth of P114.65 billion or its equivalent in foreign currency as of the 2024 financial year.

Bidders including consortium members or affiliates must include at least one entity with 10 years of experience in rail operations, specifically in managing a rail line that handles at least 45,000 passengers per hour in each direction.

At least one entity must have eight years of experience in maintaining railway infrastructure and systems, including the use of a computerized maintenance management system, and another must have eight years of experience in track and civil infrastructure maintenance.

PwC Philippines Chairman Roderick M. Danao said the NSCR O&M project is the largest rail operation in the region which makes it an attractive opportunity for railway operators.

“Its availability payment structure is particularly appealing because it provides more predictable revenues than a demand-risk concession, allowing operators to focus on delivering reliable services rather than assuming ridership risk,” Mr. Danao said in a Viber message.

He said the level of competition will depend on how risks will be outlined in the concession agreement, particularly the construction completion, asset handover and performance obligations.

“Investor appetite remains strongest for infrastructure projects that offer balanced risk allocation, predictable contractual arrangements, and strong government support. NSCR exhibits many of these characteristics,” Mr. Danao said.

THE BOARD of Investments (BoI) is aiming to secure P4.5 trillion in investment pledges over the next two years under its updated Strategic Investment Priority Plan (SIPP), which prioritizes frontier technologies such as artificial intelligence (AI), digital infrastructure, and renewable energy (RE).

“This new SIPP puts a focus on sectors that are innovation-driven,” Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo told reporters last week.

Priority sectors under the 2026 SIPP include mining and mineral processing; digital infrastructure like data centers, fiber optic networks, submarine cables; advanced manufacturing such as components for AI data centers; and tourism, he said.

If realized, this would be 33% higher than the P3.38 trillion in approved investments under the 2022-2025 SIPP.

Signed in May, the new SIPP expands the list of industries and economic activities eligible for incentives under Republic Act No. 12066 or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act.

A project or industry that aligns with the SIPP may apply for registration under the government’s investment promotion agencies (IPAs).

“For BoI, the focus would be on the big-ticket strategic investments like RE infrastructure,” Mr. Rodolfo said, noting that other activities like advanced manufacturing and export-oriented projects are covered by other IPAs.

The BoI launched its nationwide SIPP roadshow on July 10 with its Luzon leg. The agency will hold roadshows for Visayas- and Mindanao-based investors in the coming weeks.

Mr. Rodolfo also noted that the updated SIPP aligns with the Luzon Economic Corridor (LEC), which seeks to capture investments in sectors like logistics, logistics infrastructure, and advanced manufacturing.

The LEC is an 11-country partnership launched by the Philippines, the United States and Japan in 2024 to accelerate investments in key areas like Metro Manila, Batangas, Subic, and Clark.

Erwin Kenneth R. Peralta, vice-president of the Bases Conversion and Development Authority’s Investment Promotions and Marketing Department, said the new SIPP is expected offer a simplified incentives regime for investors to locate in New Clark City in Tarlac.

“This tier system would address [the need for] renewable energy investments in New Clark City, as well as AI, data centers, and semiconductor manufacturing — which are all in tiers determined in SIPP,” he said.

The Philippines is looking to position New Clark City as a key growth hub for AI and semiconductor manufacturing, especially with its upcoming 1,618-hectare AI-native hub under the US-led Pax Silica initiative.

The agency is also considering to align the SIPP with the six-year Philippine Development Plan, Mr. Rodolfo said.

Under the new SIPP, Tier I activities 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.

Tier II activities under the SIPP include defense services, desalination, electric vehicle infrastructure, sustainable aviation fuel, and processing of critical minerals.

Under Tier III, activities eligible for incentives include AI, quantum computing, cybersecurity, hydrogen and nuclear energy, and advanced research and design.

Sought for comment, Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said the 2026 SIPP would allow the country to focus on generating higher-value investments.

“The new SIPP shifts the country’s focus from simply attracting more investments to attracting higher-value investments in areas such as AI, digital infrastructure, renewable energy, advanced manufacturing, and other frontier technologies where global capital is increasingly moving,” he said in a Viber message.

However, the government must also accelerate regulatory approvals, lower the cost of doing business, upskill local talent, and maintain policy consistency to ensure investor confidence, Mr. Ravelas said.

“Incentives may open the door, but ease of doing business, infrastructure, human capital, and execution will determine whether investors choose to stay and expand in the Philippines,” he added.

In a report dated July 10, the Germany-based think tank said it still sees the central bank delivering a 25-basis-point (bp) rate hike at each of its next two policy meetings on Aug. 27 and Oct. 22.

In June, headline inflation eased to a three-month low of 6.4%, while core inflation, which strips out volatile food and fuel prices, quickened for a sixth straight month to a near three-year high of 4.4%.

“Measures of underlying inflation show that the process of broadening price pressures is still underway,” Deutsche Bank Research economist Junjie Huang said in a separate report released on July 7. “Our monetary policy outlook remains unchanged as we expect this process to continue in the coming months.”

If his projections hold true, the BSP’s key policy rate will climb to 5.25% by October. This will be the highest in one-and-a-half years or since the 5.5% in April last year and also match the rate set in June 2025.

The Monetary Board began its tightening cycle with a quarter-point hike in April and later delivered another 25-bp increase in June due to increasing inflationary pressures from the energy shocks triggered by the Middle East war.

This has so far brought the benchmark rate to 4.75%, with monetary officials leaving the door open for further measured hikes.

BSP Governor Eli M. Remolona, Jr. has said that they still have space for a third straight 25-bp rate hike as he sees the economy gaining some momentum by the second half of the year.

The central bank has also reiterated its hawkish signals, noting that they could continue to pursue further monetary action to bring inflation back to their 3% target.   

Deutsche Bank now sees the headline print settling at 6% this year, slower than its previous 6.2% estimate. However, it left its inflation forecast for next year unchanged at 4.1%.

“While headline inflation has come down in the past two months, second-round effects are still working their way through the economy, in our view, as seen in the measures of underlying inflation,” Mr. Huang said.

He also flagged price risks from the looming El Niño event amid lingering pressures on food inflation, as well as from the peso’s fragile standing versus the dollar. 

“Moreover, we believe that the upside risk from El Niño and food price inflation has not been fully priced in, while USD (US dollar) strength or rates repricing could keep the peso and imported cost inflation under pressure,” he added.

The Philippines may encounter “strong” El Niño conditions by September to November, with a potentially stronger phenomenon to come between October and January next year, according to the state weather bureau.

If realized, the local agricultural sector will likely take a hit from extreme hot weather, which could push food prices up nationwide.

Also, the ongoing war between the US, Israel, and Iran continues to weigh on the peso, averaging above the P61-per-dollar mark for two straight months or since May.

WAGE HIKE IMPACT
In a separate commentary, Metropolitan Bank and Trust Co. (Metrobank) noted that the upcoming minimum wage hike could also add pressures to the country’s inflation, growth and employment.

Metrobank Research Officer Marian Monette Florendo-Obias said this record-high hike could stoke inflation via second-round effects as businesses may opt to increase their prices to meet the new minimum wage.

“Higher minimum wages raise labor costs for businesses, particularly for labor-intensive firms in the services sector. As wage expenses rise, profits may be squeezed and businesses may be forced to pass on part of the costs to consumers through higher prices,” she said.

“This will result in higher inflation for goods and services heavily dependent on labor inputs. It is then reasonable to expect upward pressure on overall inflation figures,” she added.

According to Ms. Florendo-Obias, rising prices could also dampen demand and lead to a slightly weaker job market as businesses cut workers’ hours or reduce hiring to offset increasing labor costs.

“Now this could have an overall negative impact on economic growth, with the government estimating that a P100 nationwide minimum wage increase could reduce GDP (gross domestic product) growth by around 0.4 percentage point,” she added.

Philippine GDP growth slumped to a post-pandemic low of 2.8% in the first quarter of the year.

However, all these spillover effects only pose minimal threat to the economy as the wage hike is set to affect merely 2% of the country’s labor force, Ms. Florendo-Obias noted.

“Inflation may rise; employment numbers may take a hit; and growth may slow down,” she said. “However, the overall impact on the broader economy is expected to remain manageable, particularly if accompanied by complementary government policies.”

The Department of Labor and Employment announced late last month that it will implement a dual tranche P85 increase in the minimum wage in the National Capital Region (NCR).

Starting July 25, the minimum wage in the NCR will increase by P60 to P755 for nonagricultural workers and to P718 for agricultural workers and employees of retail, service, and small manufacturing establishments.

The second tranche of the wage hike or P25 will take effect in January 2027. — Katherine K. Chan

THE DEPARTMENT of Energy (DoE) is set to tighten fuel price guidance as fresh developments in the Middle East threaten to drive pump prices higher, its top official said.

Energy Secretary Sharon S. Garin said that renewed tensions in the Middle East are putting upward pressure on global oil prices amid concerns over possible supply disruptions.

“Threats to navigation through the Strait of Hormuz have underscored the vulnerability of one of the world’s most critical energy trade corridors, placing upward pressure — prices have gone up again — on international crude oil prices, and consequently, domestic pump prices are affected,” she said at a briefing on Monday.

Reuters reported oil prices surged more than 3% on Monday after renewed military strikes between the United States and Iran reignited concerns over energy shipments through the Strait of Hormuz.

“If things are still volatile, then we will no longer set a fixed range… It’s either a rollback or hike,” Ms. Garin said.

“Since the prices still seem to be very volatile, we decided here in the DoE that next week we will prescribe a specific number, no longer a range.”

For this week, the DoE still gave a range of price adjustments that will take effect on Tuesday. Fuel retailers can implement a rollback of at least P1 per liter or an increase of up to P1 per liter for gasoline. Prices of diesel and kerosene are set to increase by up to P4.62 and P4.22 per liter, respectively.

Seaoil Philippines, Inc. and Shell Pilipinas Corp. have announced they will raise the price of gasoline by P1 per liter, diesel by P4.60 per liter, and kerosene by P2.30 per liter.

Since the Philippines was placed under a national energy emergency in late March, the DoE has prescribed a range for weekly fuel price adjustments, setting a minimum rollback and a maximum increase that oil companies may implement.

However, as the international market began to stabilize, the government gave greater flexibility to fuel retailers by allowing them to adjust prices within a range.

Ms. Garin said they had earlier prescribed a range for pump price adjustments to ensure the viability of oil companies.

The Philippines is particularly vulnerable to global oil price shocks because it is a net importer of petroleum products, most of which come from the Middle East. The conflict between the US and Iran has heightened concerns over possible disruptions to shipments through the Strait of Hormuz, a critical oil transit chokepoint, raising supply risks and driving up global crude prices.

Asked to comment on DoE’s oil price outlook, Top Line Business Development Corp. Senior Vice-President and Chief Operating Officer Brigitte Carmel C. Lim said the recent escalation in the Middle East and persistent risks from the Russia-Ukraine conflict continue to cloud the outlook for the global oil market.

“These developments could make global oil prices (and consequently local pump prices) volatile in the near term,” Ms. Lim told BusinessWorld. “For now, we remain cautiously optimistic, but much will depend on how these geopolitical events evolve over the coming weeks.”

As of July 10, the country’s fuel inventory is equivalent to 47.84 days, increasing from 46.50 days previously.

The average inventory for gasoline is 48.17 days, while diesel has an average inventory of 45.69 days. Kerosene has an average inventory of 148.98 days, 80.09 days for jet fuel, 33.37 days for fuel oil, and 39.51 days for liquefied petroleum gas.

“Our subsidiary, we are focusing on socialized housing, affordable and horizontal housing (projects) such as the Southscapes. We will be launching more new projects in the southern part area like Cavite and also in the Bulacan area,” Megawide Chairman, President, and Chief Executive Officer Edgar B. Saavedra said during the company’s annual stockholders’ meeting last week.

Through its property unit, PH1 World Developers, Inc., Megawide last year earmarked P1 billion for Southscapes, a residential development in Trece Martires, Cavite.

Located in Barangay Lapidario, Trece Martires, the five-hectare (ha) project will have 343 housing units featuring modern design and energy-saving features.

Mr. Saavedra also said the company plans to develop additional projects under the government’s expanded Pambansang Pabahay para sa Pilipino (4PH) Program in other cities and municipalities.

“The priority of the company is to focus on Metro Manila. Obviously, you have the southern part, Cavite; and the northern part will be somewhere in Bulacan. This is primarily to focus on the Metro Manila market,” he said, adding that Megawide is pursuing developments near Metro Manila to help reduce travel time.

Megawide is currently building about 11,000 housing units under the expanded 4PH Program.

For 2026, the company is targeting a net income of P1.2 billion, expecting lower borrowing costs following debt reduction and continued growth in its construction and real estate businesses to support earnings.

In the first quarter, Megawide’s attributable net income rose 24% to P265.35 million, driven by stronger real estate operations and sustained performance in its construction business. — Ashley Erika O. Jose

“For now, we have a few acquisition targets in the pipeline. Hopefully, we’ll be able to announce something within the year,” AC Health Chief Strategy and Investment Officer Rafael Jaime V. Recio told reporters on the sidelines of an event last week.

“But if you’re asking whether we want to build greenfield projects, I think we’re focusing first on making sure the Cancer Hospital ramps up. Then everything else, for the foreseeable future, will be through acquisition,” he added.

Mr. Recio said the company is evaluating hospitals with at least 100 beds, Level 2 classification, and locations in densely populated urban areas.

“We look at the quality of the facility, make sure that it’s not a super fixer-upper. It’s important that there’s a good doctor base associated with it that remains even after we come in. I think those are the important building blocks,” he said.

Alongside its acquisition strategy, AC Health plans to expand its clinic network by opening three to five facilities annually over the next three to five years.

“The target is to expand to three to five clinics per year in major areas where we feel that it’s important for us to be in. I think that’s the target for the next three to five years,” Mr. Recio said.

While many of its clinics are located in shopping malls, AC Health is also considering other formats, including roadside commercial locations.

“It just so happens that the malls sometimes provide us the best location with the most foot traffic that’s most accessible,” Mr. Recio said. “It could be that at some point we have locations in commercial areas that are more roadside also. But we’ll see. It really depends on what opportunities are presented to us.”

As part of its medium-term growth strategy, AC Health aims to expand its network to 1,150 retail pharmacies, 300 clinics, and 10 hospitals through a combination of organic growth and acquisitions.

Earlier this month, HMN expanded its multi-specialty outpatient network to 18 centers nationwide with the opening of its flagship facility at One Ayala in Makati City.

Following the launch of the One Ayala facility, HMN said it plans to open a standard-sized multi-specialty center in Batangas in August and another at McKinley West in Taguig before yearend.

Separately, AC Health, through its pharmaceutical arm AC Health Pharma, entered into a partnership with Japan-based Taisho Pharmaceuticals in June to distribute healthcare products in the Philippines.

Under the agreement, AC Health Pharma will distribute Taisho products through AC Health’s network of pharmacies, clinics, medical centers, and hospitals.

Mr. Recio said the company remains on track to meet its long-term expansion targets despite industry challenges.

“I wouldn’t say we’re ahead. I’d say we’re making good progress… It looks like we’re on track. It’s been an encouraging 2026 so far, despite all the challenges we’ve seen lately,” he said. — Alexandria Grace C. Magno

As of the end of June, accumulated PERA contributions soared by 45.3% to P757.554 million from the P521.363 million recorded in the same period last year.

Of the total, the bulk or 59.33% came from employee contributions, which grew by 24.08% year on year to P449.45 million from P362.239 million.

Contributions from self-employed Filipinos also more than doubled (179.85%) to P207.901 million at end-June from P74.29 million in the prior year, while those from overseas Filipinos climbed by 18.12% annually to P100.203 million from P84.833 million.

Meanwhile, the total number of PERA contributors as of the first half ballooned by 385.31% to 30,055 from 6,193 a year ago.

Most of the enrollees during the period were self-employed Filipinos at 23,529, surging by 2,398% from the 942 logged a year earlier.

The tally of PERA-enrolled employees also went up by an annual 22.63% to 5,441 from 4,437, while Filipinos abroad with PERA rose by 33.29% to 1,085 from 814.

PERA, created under Republic Act No. 9505 in 2016, is a voluntary retirement saving program which supplements benefits from the Social Security System, Government Service Insurance System, and employer-provided plans.

Contributors aged 18 and above with a tax identification number are allowed to open a PERA. Self-employed and locally employed contributors may contribute P200,000 annually, while overseas Filipino workers may invest up to P400,000.

The PERA law also offers incentives to contributors, such as tax exemptions and credits.

BSP Deputy Governor Lyn I. Javier said they aim to expand overseas Filipino contributors through partnerships with the Department of Labor and Employment and the Overseas Workers Welfare Administration.

The central bank has likewise tapped employers to boost the share of employees in the total PERA enrollees, with other banks also seeking to offer the product in their respective platforms.

“(So, with more banks) adopting, then opening also their platforms for easy access to PERA, we hope that we could reach more Filipinos enrolling to have a PERA account,” she told reporters on the sidelines of an event last week.

This came after East West Banking Corp. began offering in May a voluntary PERA contribution program for its employees, with DragonFi Securities, Inc. as the administrator.

Ms. Javier also noted that digital banks have also signified interest to follow suit.

Under the program, private employers can contribute to the employees’ PERA as part of its compensation package, which may be reflected in the employer’s income tax return as a deductible expense from its gross income.

The Capital Markets Efficiency Promotion Act also allows private employers to acquire an additional 50% tax deduction to a total of 150% by contributing an amount equal to or greater than their employees’ PERA contributions.

Meanwhile, Ms. Javier said they are working to further boost public awareness of PERA as they hope to hit “more than double” growth in PERA accounts.

“Well, the promise, I mean, the product itself is very attractive. So, it should speak for itself. Awareness would help it,” Ms. Javier said.

“As to the pace of growth, there are several factors that would affect that, but everybody wants (double-digit growth), more than double in fact,” she added.

Last year, the BSP also launched the Open Finance for PERA Pilot to encourage more Filipinos to open accounts by streamlining the onboarding process as well as improving access to the program.

Under the framework, customers of Land Bank of the Philippines; Maya Philippines, Inc.; Metropolitan Bank & Trust Corp.; Philippine National Bank; Rizal Commercial Banking Corp.; Union Bank of the Philippines, Inc.; and G-Xchange, Inc. can open a PERA account in the respective financial institutions’ platforms.

Their investments will be managed by the PERA administrators ATRAM Trust Corp.; BDO Unibank, Inc.; and BPI Wealth – A Trust Corp. — Katherine K. Chan

THE BOARD of Investments (BoI) has approved P461.84 billion worth of investments in the first half of 2026, mainly in renewable energy and real estate sectors.

In a statement on Sunday, the BoI said approvals in the six-month period jumped by 21% from the P382.24 billion recorded last year.

As of end-June, the BoI had greenlit 124 projects, which are expected to create 14,415 local jobs.

The January-June pledges account for nearly half or 46% of the BoI’s P1-trillion investment target for 2026.

The energy sector, particularly renewable energy, accounted for the largest share of approvals at P343.47 billion or 74.25% of the total.

This was followed by investments in real estate activities (P36.55 billion); air and water transport (P36.25 billion); mining and quarrying (P14.64 billion); hotel, tourism and accommodation projects (P7.58 billion); and manufacturing (P7.22 billion).

Department of Trade and Industry (DTI) Secretary and BoI Chairman Maria Cristina A. Roque said the increase in BoI-approved projects in the January-to-June period reflects investors’ sustained confidence in the Philippines amid geopolitical uncertainties.

“The strong growth in DTI-BoI-approved investments reflects investors’ confidence in the Philippines and in the government’s reform policies,” she said.

“The country’s recent attainment of upper-middle income country status highlights the positive impact of sustained investments and sound economic reforms,” she added.

Earlier this month, the World Bank classified the Philippines as an upper-middle income country after it posted a record gross national income per capita of $4,850.

DTI Undersecretary and BoI Managing Head Ceferino S. Rodolfo noted that policy support and facilitation measures are in place to guide investments from approval to implementation.

“With the implementation of the CREATE MORE (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy), the Strategic Investment Priority Plan (SIPP), and the Green Lane for Strategic Investments, the BoI is ensuring that investors have both the policy support and facilitation mechanisms needed to bring projects from approval to operation,” he said.

Domestic investments surged by 41% to P447.32 billion as of end-June, with the Cordillera Administrative Region posting the highest level of investment pledges at P150.4 billion.

This was followed by the Ilocos Region at P144.13 billion, National Capital Region at P48.78 billion, Central Luzon (P33.55 billion), CARAGA (P16.93 billion), and Central Visayas (P13.97 billion).

Meanwhile, foreign investments stood at P14.16 billion as of end-June, with Singapore as the top foreign source at P3.15 billion.

Other foreign commitments came from China (P1.13 billion), United States (P1.06 billion), Australia (P961 million), and Japan (P873 million).

“The robust investment performance builds on the BoI’s broader efforts to strengthen the country’s investment ecosystem and position the Philippines as a preferred destination for strategic and high-impact investments,” BoI said.

Mr. Rodolfo also noted that the updated SIPP is critical in ensuring that the BoI meets its P1-trillion target in investment approvals this year.

Approved in June, the 2026 SIPP expands the scope of fiscal incentives under Republic Act No. 12066 or the CREATE MORE Act to cover frontier industries like artificial intelligence and high-value manufacturing.

The surge in the BoI’s first-half investment approvals amid geopolitical risks show that investors are prioritizing projects with long-term prospects, said Diana R. Rueda, an economics professor at the University of Asia & the Pacific.

“Most BoI-approved projects have long investment horizons, and investors tend to focus more on economic fundamentals, policy consistency, and the ease of doing business,” she said in a Viber message.

However, Ms. Rueda cited the need to intensify efforts to attract more investments in high-value manufacturing to cushion the economy against external shocks.

“Expanding the country’s manufacturing base would strengthen economic resilience, diversify sources of growth, and reduce vulnerability to external shocks,” she said.

THE BANGKO SENTRAL ng Pilipinas (BSP) could extend its tightening cycle as the widening pass-through effects of energy shocks stemming from the Middle East war are expected to keep core inflation elevated, analysts said.

Metropolitan Bank and Trust Co. (Metrobank) Chief Economist Nicholas Antonio T. Mapa said the faster pace of core inflation, despite easing headline inflation, supports the BSP’s hawkish but measured policy stance.

“With headline inflation receding and core inflation heating up, we are witnessing now what the BSP had been warning us about: second-round effects,” Mr. Mapa told BusinessWorld in a Viber message.

“Even with the initial energy shock dissipating somewhat, firms have passed on the costs for items indirectly related to the first round of price spikes. And thus, the recent uptick in core inflation represents a broadening increase in prices across the CPI (consumer price index) basket,” he added.

In June, core inflation accelerated for the sixth month in a row even after the headline print eased for a second straight month.

Core inflation, which discounts volatile food and fuel prices, quickened to 4.4% in June, the fastest pace seen in nearly three years or since the 4.7% in November 2023.

Core inflation removes the impact of temporary disruptions and shocks on price changes, independent of economic or monetary policy.

For Security Bank Chief Economist Angelo B. Taningco and University of Asia and the Pacific economist Marco Antonio C. Agonia, core inflation will likely stay sticky throughout the year.

“Core inflation is seen to remain sticky throughout the year given… that recent price hikes made by restaurants, healthcare institutions, personal care providers, and schools will not adjust downward immediately given that global energy prices have not gone (down) fully to pre-Iran war levels,” Mr. Taningco told BusinessWorld in an e-mail.

Mr. Agonia also noted that underlying price pressures may linger due to higher aggregate demand from the government’s infrastructure spending catch-up and the upcoming minimum wage hike in the National Capital Region (NCR).

“While crude oil has softened recently, pricing and wage adjustments in secondary and tertiary sectors have likely been pushing underlying price pressures,” he told BusinessWorld. “This may persist for the rest of the year, especially as the National Government’s infrastructure spending revival raises aggregate demand and the recent minimum wage adjustment feeds into prices.”

The first tranche of the P85 daily minimum wage hike in NCR, or P60, will be implemented on July 25. The second tranche of P25 will take effect in January 2027.

Second-round effects refer to the impact of initial price shocks on the costs of other commodities. This is often realized when businesses pass on the burden of higher costs to consumers by raising the prices of commodities and services, including food, utilities, and transport.

By measuring core inflation, economic managers like the BSP can determine whether prevailing consumer price movements reflect short-lived disruptions or a long-term trend.

FURTHER TIGHTENING
Metrobank’s Mr. Mapa and Security Bank’s Mr. Taningco expect the BSP to deliver a final 25-basis-point (bp) hike at its next policy review in August to cap its tightening cycle this year.

“With headline falling amidst core inflation increasing, BSP would be correct to carry on with its data-driven approach and measured pace of tightening,” Mr. Mapa said.

“We expect another 25-bp increase at their next meeting. If headline inflation continues to fade and fall quickly, the next rate hike may be BSP’s last for the year,” he added.

However, Mr. Taningco said there could potentially be more hikes if price pressures worsen due to a re-escalation of the Middle East war, the looming El Niño phenomenon, and higher minimum wage and transport fare hikes.   

Under its inflation-targeting framework, the BSP uses monetary policy tools to prevent inflation spillovers and keep inflation expectations anchored, particularly by tempering the second-order effects of price shocks on wage- and price-setting behavior.

This includes the central bank raising its key interest rate to make borrowing more expensive, which helps cool down inflation through lowering aggregate demand by dampening spending.

At its June 18 meeting, the Monetary Board lifted its benchmark rate for a second straight meeting by 25 bps to 4.75%. This brought its total hikes since April to 50 bps.

BSP Governor Eli M. Remolona, Jr. has left the door open for another 25-bp hike, with expectations of an economic rebound by the second half giving them space to tighten further.

The central bank has also remained hawkish on the back of still “strong” inflationary pressures, evidenced by the heated core inflation last month.

The BSP noted that it will continue to pursue price stability and hope to bring inflation back to their 3% target through monetary policy rate adjustments.

Meanwhile, Nomura Global Markets Research slashed its Philippine inflation forecast to 5.1% from 5.5% for 2026 and to 3.1% from 3.2% for 2027 as it noted that the headline print has likely peaked.

However, expectations of heated core inflation may still warrant an additional 50 bps in hikes to bring the key policy rate to 5.25% by yearend.

“We lowered our CPI inflation forecasts due to our latest oil price assumptions. In terms of the trajectory, we believe headline inflation has already peaked, but core inflation has not, reflecting second-round effects,” Nomura research analysts Euben Paracuelles and Nabila Amani said in a report.

EL NIÑO RISKS
The Philippines, alongside India, stands as the most vulnerable to the impact of El Niño given its position as a net food importer and the heavy weight of food in its CPI basket, according to Nomura.

“The Philippines and India are most exposed to an El Niño shock, followed by Indonesia and Thailand,” it said. “(The) Philippines is particularly vulnerable to higher rice prices: it is a net food importer (2% of gross domestic product), and rice accounts for 8.9% of its CPI basket.”

Food and nonalcoholic beverages account for 37.75% of the country’s total basket of goods, with rice making up around 9%.

The state weather bureau earlier said emerging El Niño conditions in the tropical Pacific has an 80% chance to develop into a full-fledged El Niño, with the Philippines likely to encounter a “strong” El Niño season between September and November, and a “very strong” one between October and January next year.

According to the Department of Agriculture, the looming “super El Niño” can bring high temperatures that will harm crops, livestock, fisheries and aquaculture, potentially slashing agricultural output by 20%-30%.

“Lower oil and fertilizer prices can also help keep the lid on food inflation, although with 2026 an El Niño year, medium-term risks to food inflation remain,” Nomura also said.

For Mr. Agonia’s part, the Philippines risks facing a fresh round of supply shock and from the upcoming “super El Niño,” which could weigh on the cost of other commodities.

“The looming El Niño threat may also invite another supply shock that could ripple once more through different industries,” he noted.

Mr. Agonia said the central bank may tighten by another 50 bps before standing pat in 2027, with pressures from the El Niño event and worse second-order effects to open room for more hikes.

“BSP may be more aggressive than this if second-round effects and the El Niño phenomenon prove to materially alter the inflation outlook,” he said.

“However, more rate hikes may disproportionately weaken medium-term economic growth prospects. As such, we think BSP will tighten by 50 bps more this year while going on pause for 2027.”

The Monetary Board is scheduled to hold three more regular policy reviews this year on Aug. 27, Oct. 22, and Dec. 17.

THE United States has identified its Pax Silica-related initiatives in the Philippines as one of its top priorities, with Manila looking to generate hundreds and thousands of jobs from a “generational investment,” the Department of Finance (DoF) said.

Finance Secretary Frederick D. Go, who met with US Ambassador to the Philippines Lee Lipton on July 9, noted the project’s importance to Washington.

“He expressed that on the economic side, the Pax Silica project is on top of the priority list of the Americans,” he told reporters on Friday.

Citing his talks with Mr. Lipton, the Finance chief said the US is keen to fast-track developments related to Pax Silica in the Philippines.

“If we’re going to do this, we might as well do it as fast as possible so that we can provide jobs and be a significant player in the technology of the future,” Mr. Go said.
He added that the Philippines’ inclusion in Pax Silica is expected to generate “hundreds and thousands of jobs” for Filipinos, as the country seeks to become a global hub for artificial intelligence (AI) and chips manufacturing.

“If we want to be a player in the AI industry in the future, we need to start somewhere,” he said. “This is really a great start because once you have the ecosystem, one thing leads to another.”

In April, the Philippines joined Pax Silica, a US-led initiative to secure global AI supply chains and counter China’s growing tech manufacturing sector.

As part of Pax Silica, the Manila and Washington are developing a 1,618-hectare AI-native hub in New Clark City in Tarlac, which is expected to attract AI and chip manufacturing investments.

“I think both sides are very excited to get this moving along, because I really believe this could be a generational type of project,” Mr. Go said.

The Philippines is one of 23 signatories under the Pax Silica, which includes Argentina, Australia, Chile, Costa Rica, El Salvador, the European Union, Finland, Germany, Greece, India, Israel, Japan, Kazakhstan, the Netherlands, Norway, Panama, Qatar, Republic of Korea, Singapore, Sweden, United Arab Emirates, and the United Kingdom.

Mr. Go earlier said the Philippines is hoping to sign a framework agreement under the Pax Silica initiative before the year ends.

Mr. Teodoro said that the government would need to realign its budget to support higher defense spending, noting that resources are finite.

“We definitely need to realign,” he told reporters on the sideline of the Stratbase Institute conference, “More for one means less for another.”

Asked if where the funding can get, he said, “It is up to somebody, all I’m saying is we need to increase.”

Mr. Teodoro also confirmed that the planned transfer of five Japanese warships has been accepted “in principle” and is being worked out, although he declined to provide a timeline.

He said that the vessels would be transferred at no costs, but the Philippines would shoulder expenses for transport, crew training and system integration, as well as invest in new naval facilities to support future acquisitions.

Mr. Teodoro also backed calls for a stronger response to China’s latest claims involving Batanes, saying that the country’s pushback should be firm as such assertions violate international law and Philippine sovereignty.

“Naturally, our pushback should be strong because, number one, this is not only a violation of international law… it is also a violation of the normal thinking of the people,” Mr. Teodoro said.

Former Senior Associate Justice Antonio T. Carpio, meanwhile, challenged China to bring its reported claim over the Batanes Islands before an international court, saying Beijing should prove its assertions through legal channels instead of public statements.

“My challenge to China is why don’t they bring that issue to the International Court of Justice that they own the Batanes Island,” Mr. Carpio told reporters.

“Go ahead, bring a case in the International Court of Justice. We will meet there. We will abide by the ruling,” he added.

Meanwhile, Batanes Rep. Ciriaco B. Gato Jr. rejected the claims, calling the assertions an affront to Philippine sovereignty and the identity of the Ivatan people.

“Batanes is a province of the Republic of the Philippines. The Ivatans are Filipinos,” Mr. Gato said in a statement on Friday, “We treat any insinuation that seeks to question or undermine the absolute sovereignty of the Republic of the Philippines over our islands with utmost gravity.”

Adding, “Any challenge to our statues is not merely a geopolitical provocation; it is an affront to our identity that we will not tolerate.”

The Chinese Embassy to the Philippines did not immediately reply to a Viber message seeking comments.

Meanwhile, Mr. Teodoro said that the Philippines should leverage its growing defense partnerships to deepen economic and political ties with like-minded countries, arguing that security cooperation alone would not be enough to sustain the country’s long-term strategic objectives.

“These defense alliances will not be sustainable if these are strictly defense alliances, but should be the foundations for more extensive economic and, at the end of the day, political relations,” he said at the Stratbase Institute conference marking the 10th anniversary of the 2016 arbitral ruling.

Mr. Teodoro said that the government is shifting its defense strategy from one centered on internal security and land-based operations to a multi-domain approach that includes the country’s exclusive economic zone, the Philippine Rise and other maritime areas under Philippine jurisdiction.

He said that the review of the country’s defense posture identified significant gaps in infrastructure, logistics, defense industries, and military capabilities, underscoring the need for sustained investments.

The defense secretary also called for stronger cooperation among government, businesses, and civil society in building a credible deterrence, saying that the country’s security depends not only on military spending but also on resilient supply chains, telecommunications networks, critical infrastructure, and strategic industries.

“Without that commitment, then we cannot build a credible deterrence posture, which at the end of the day is necessary for us to assert our rights,” Mr. Teodoro said.

He also described the 2016 arbitral award as a catalyst for the Philippines’ shift toward external defense, saying the ruling has strengthened international support for a rules-based order in the Indo-Pacific.

“It is not an award for the Philippines, it is an award for the world because it institutes the primacy of UNCLOS and guards it against revisionist attempts,” he said.

AFP Chief of Staff Romeo S. Brawner Jr. said that the military’s experience over the past decade has shown that the Philippines must continuously exercise the rights affirmed by the 2016 arbitral ruling.

“Rights endure only when they are exercised,” Mr. Brawner said, adding that the ruling provides a strong legal foundation that must remain meaningful “not only in legal discourse but also in our actions.”

He said that the AFP’s objective is to prevent conflict through credible deterrence posture.

“Credible deterrence is much more than military hardware,” Mr. Brawner said, “It is built through capable forces, operational readiness, trusted partnerships, resilient institutions, and above all, the national resolve to stand firm in defense of what is rightfully ours.”

He also stressed the importance of maintaining a sustained presence in the West Philippine Sea, saying every patrol, resupply mission, and joint exercise reinforce the country’s sovereign rights. — Pexcel John Bacon

“The University has a legal duty to protect and utilize its land for the UP community,” the academic institution said in a statement.

“UP can not turn a blind eye to the substandard living conditions in its own backyard – it is morally bound to help its most vulnerable community members,” it added.

Tensions sparked at Pook Malantic in Barangay UP Campus, UP Diliman, on Wednesday after residents formed a human barricade out of fear of demolition, preventing a private truck and security personnel from entering the community.

The university clarified that no house demolitions were ordered that day and that it intended only to fence the perimeter of the on-site transition housing area.

“UP is indisputably the owner of the land on which rental housing will be provided to UP staff and ISF (informal settler families),” the institution said. “The courts have affirmed many times that UP owns the land in its Diliman campus.”

UP is also committed to providing ‘secure’ and ‘dignified’ shelter to at least 26 ISFs who may be affected by the construction of its housing project. “With on-site relocation, no ISFs will be displaced from their community,” it added.

The UP Southern Diliman Gardens Rental Housing Project is a socialized rental housing project under the Expanded Pambansang Pabahay para sa Pilipino (4PH) Program. It is one of the flagship housing components envisioned for the UP Sustainable Development Goals Park.

The project comprises eight walk-up buildings totaling about 1,000 housing units, each measuring 27 square meters. It targets construction completion in 2027.

The rental housing initiative will be undertaken by Megawide Construction, the contractor for the Department of Human Settlements and Urban Development (DHSUD).

“UP’s rental housing initiative is specifically designed to provide affordable, decent, secure, and accessible shelter for UP staff and ISFs,” the university said. “Protecting them from displacement or exploitation by individuals or groups falsely claiming ownership of or control over UP land.”

“Beyond housing, UP has committed to providing livelihood training and support, sustainable communal urban farming, education and university readiness programs, and other initiatives for the welfare of community members,” it added.

UP earlier unveiled the model unit for its pilot rental housing project that is expected to benefit over 3,000 individuals. Apart from the Diliman campus, DHSUD is also implementing a rental housing project for UP-Los Baños. — Almira Louise S. Martinez

Net inflows of foreign direct investments (FDI) in the Philippines plunged to a near 10-year low of $250 million in April, as heightened global uncertainty dented investor sentiment, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Based on central bank data released on Friday, FDI net inflows declined by 58.8% to $250 million in April from $607 million in the same month last year.

April saw the lowest monthly level seen since the $244 million in June 2016, and the steepest year on year drop since the 76.1% in December 2022.

Month on month, FDI net inflows slumped by 59.1% from the $611 million in March.

“The sharp decline in FDI net inflows to $250 million in April likely reflects a combination of weaker intercompany borrowings, slower reinvestment activity, and continued investor caution amid an uncertain global environment,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said via Viber.

The latest FDI level was dragged by the 91.7% drop in net investments in debt instruments to $44 million in April from $522 million a year ago.

Reinvestment of earnings likewise slipped by 1.9% to $80 million from $81 million in April 2025.
Meanwhile, investments in equity and investment fund shares more than doubled (143.5%) to P207 million in April from $85 million the prior year.

Foreign net investments in equity capital other than reinvestment of earnings also ballooned (3,041%) annually to $127 million from $4 million previously.

Equity placements jumped by 21.4% to $136 million from $112 million a year earlier, while withdrawals plunged by 91.7% to $9 million from $108 million.

For Mr. Asuncion, the softer FDI inflows in April likely came as firms and investors deferred investments amid highly uncertain global conditions compounded by weak domestic growth.

“At the same time, heightened global uncertainty stemming from trade tensions, lingering geopolitical risks, and episodes of financial market volatility may have prompted multinational firms to defer expansion plans and adopt a more conservative stance toward capital deployment,” he said.

“Domestically, relatively subdued economic growth in the early part of the year may have also tempered investment decisions,” he added.

FOUR-MONTH FDI DOWN
In the four months to April, the country’s FDI net inflows totaled $1.968 billion, falling by 26.5% from the $2.675 billion in the same period last year.

This was the 15th consecutive month that the cumulative FDI level dropped year on year.

“The decline was driven by lower foreign net investments in debt instruments and reinvestment of earnings, which more than offset the increase in foreign net investments in equity capital (other than reinvestment of earnings),” the BSP said in a statement.

BSP data showed nonresidents’ net investments in debt instruments sank by 40.3% to $1.218 billion in the January-to-April period from $2.042 billion the previous year.

Reinvestment of earnings, on the other hand, dropped by an annual 14% to $285 million in April from $332 million a year ago.

However, net equity capital investments excluding reinvested earnings surged by 53.7% to $464 million as of April from $302 million a year ago.

This as equity capital placements edged up by 3.3% to $526 million from $509 million, with bulk of the flows coming from Japan, the United States, and Singapore.

“These were channeled largely into the manufacturing, financial and insurance, and real estate industries,” the BSP added.

At the same time, withdrawals plunged by 70.5% to $61 million in April from $207 million a year ago.

Investments in equity and investment fund shares also climbed by 18.3% to $750 million during the period from $634 million last year.

According to Mr. Asuncion, the Philippines may continue to see subdued foreign investment flows over the near term, with recovery expected as the global financial climate and domestic growth improve.

“That said, while FDI may remain soft in the near term, we do not expect a sustained collapse in inflows,” he said, noting gains from long-term investment fundamentals, enhanced infrastructure, ongoing investment liberalization measures, and growth opportunities across multiple sectors.

“As global financial conditions stabilize and domestic growth gains traction, we expect FDI inflows to gradually recover, although the pace will likely remain uneven given the lingering uncertainties in the global economy,” Mr. Asuncion 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 sees FDI net inflows falling to a total of $7 billion this year from the estimated $7.8 billion recorded in 2025.

“We are working tirelessly to ensure these classrooms are built with efficiency and transparency as this infrastructure is the bedrock of a quality learning environment,” Education Secretary Juan Edgardo “Sonny” M. Angara said in a news release.

“We will continue to hold our partners and our internal systems to the highest level of accountability to ensure these projects remain on track,” he added.

According to the agency, 72 provinces, 73 cities, and 23 municipalities have signed Supplemental Memoranda of Agreement (MOA) for the localized classroom building program.

The enhanced monitoring framework aims to ensure that local infrastructure projects align with national timelines, digital validation, and strict quality protocols. All LGU-implemented projects are ordered to strictly adhere to DepEd’s technical standards, safety protocols, and the New Government Procurement Act.

DepEd said that 130 of the 149 monitored LGUs are currently conducting pre-procurement activities, including pre-bidding, posting, opening of bids, preparation of the Program of Work (POW) and Detailed Architectural and Engineering Design (DAED), and market scoping. These activities cover construction requirements for 358 schools nationwide.

Three LGUs have also advanced to the procurement award stage for 22 school sites.

The agency noted that it continues to use INSIGHTED, a real-time digital validation and monitoring system, to track construction progress and monitor the remaining LGUs.

“Our goal is not merely to construct buildings, but to ensure that every peso spent translates into quality and safe classrooms for our learners,” Mr. Angara said in Filipino.

“Under the directive of President Marcos, we continue to strengthen monitoring to ensure that every project meets our high standards,” he added.

The localized classroom construction program complements the agency’s other infrastructure initiatives to address the current classroom gap of over 144,000.

DepEd has allocated P65.9 billion from its P1.015-trillion 2026 budget for the construction of 24,964 new classrooms, and P7.7 billion for the repair and rehabilitation of 11,886 classrooms. — Almira Louise S. Martinez

The property developer formally introduced the arena to trade, industry, and corporate partners on Thursday.

“Cebu has long been one of the country’s most dynamic markets. With this arena, we can bring more Filipino and international acts to the Visayas and strengthen the region’s place in the live entertainment circuit,” SM Prime President Jeffrey C. Lim said in a statement.

The arena has direct access to SM Seaside City Cebu and the upcoming SMX Convention Center Seaside Cebu, Park Inn by Radisson, and Radisson Hotel.

“More importantly, this investment will generate economic opportunities for local entrepreneurs and nearby communities,” Mr. Lim said.

Designed by global architecture firm Arquitectonica, the arena spans more than seven hectares (ha) of gross floor area and can accommodate up to 25,000 guests.

It features a center-hung display system for sports, concerts, and other live events.

The venue also has 30 Premier Suites above the VIP sections. Each suite can accommodate 13 to 31 guests and includes dedicated VIP lounges, a café, and an exclusive entrance.

SM Prime said the arena will open its major events calendar with the BINI Signals World Tour on July 11.

Other scheduled events include performances by IV of Spades, TJ Monterde and KZ Tandingan, Hillsong Worship, and LANY.

“This arena is part of our long-term vision for Cebu. By creating a world-class platform for live entertainment and large-scale gatherings within SRP, we give local and foreign tourists another reason to visit and stay longer,” Mr. Lim said.

SM Prime shares fell 1.74% to P18.10 apiece on Thursday. — Alexandria Grace C. Magno

In a statement on Thursday, the Finance department said the country was selected for the MCC Threshold Program, which helps countries address key policy and institutional constraints to economic growth.

“The approval of the $60-million MCC Threshold Program affirms the Philippines’ commitment to good governance, transparency, and sound economic management,” Finance Secretary Frederick D. Go said.

“It reflects the confidence of our international partners in the reforms we are pursuing to strengthen institutions, improve the ease of doing business, and create more opportunities for Filipinos,” he added.

The DoF was designated as the lead agency for engagement with the MCC and will work with relevant government agencies to develop and implement the program.

The grant will support the Energy Development Governance Efficiency project, which seeks to improve governance and operational efficiency in the country’s electricity sector.

The initiatives are expected to reduce delays in project implementation, improve the reliability of electricity supply, and encourage greater private investment in the sector.

“This grant comes at an opportune time and provides a significant boost to our efforts to strengthen the country’s energy security,” Mr. Go said.

“We thank the MCC for its continued partnership with the Philippines as we pursue reforms that deliver more reliable services, attract greater private investment, and sustain faster, more inclusive economic growth,” he added.

The MCC Board approved the program on June 24 to help the Philippine government address the high cost and unreliability of electricity.

“The approval of the Philippines Threshold Program reflects the strength of the US-Philippines partnership and our shared commitment to expanded economic opportunity and mutual prosperity,” US Deputy Secretary of State Christopher Landau said in a June 25 statement.

“By strengthening energy security, this program will help unlock US private sector investment and support lasting, broad-based growth across the Philippines,” he added.

The Philippines qualified for the Threshold Program after meeting the MCC’s scorecard standards on economic freedom, ruling justly, and investing in people.

Jose Enrique “Sonny” A. Africa, executive director of the think tank IBON Foundation, said that the grant could help improve regulatory processes but is unlikely to significantly strengthen long-term economic resilience without broader structural reforms.

“It might support incremental improvements but is unlikely to have a transformative impact on the country’s long-term economic resilience or investment climate,” he told BusinessWorld.

Mr. Africa said the country’s vulnerability to energy shocks stems more from its reliance on private investment and market incentives than from regulatory bottlenecks.

He said reforms should instead focus on making state-owned energy firms dominant in power generation, transmission and distribution, citing countries such as Vietnam, Indonesia, Thailand and Malaysia.

The MCC is an independent US foreign assistance agency that provides time-limited grants to support reforms that promote economic growth, reduce poverty, and strengthen public institutions.

Over the past two decades, the MCC has invested more than $17 billion across 76 programs in partner countries. — J.I.D.Tabile

Data from the DBCC showed it cut its overall revenue projection for 2026 by 0.33% to P4.807 trillion, equivalent to 15.78% of gross domestic product (GDP), from the P4.823 trillion or 15.8% of GDP approved during its 192^nd meeting in December.

The revised projection is also 3.5% lower than the P4.983-trillion program under the 2026 Budget of Expenditures and Sources of Financing.

Tax revenues are now expected to account for P4.442 trillion or 92.4% of total revenues this year, 0.7% lower than the P4.474 trillion projected in December.

For the BIR, its collection target for this year was lowered by 1% to P3.393 trillion from P3.43 trillion previously. However, BIR collections are still expected to account for about 76.4% of total tax revenues.

Finance Undersecretary Rolando T. Ligon, Jr. said the lower target mainly reflected the ambitious goal set last year.

“Actually, if you look at the year-on-year collection, the BIR collections have increased. Unfortunately, the set target was 25% more than the last year,” he told reporters on Wednesday.

Last year, the BIR collected P3.109 trillion in revenues, up 9% from the previous year. If the revised projection is realized, BIR’s collection will increase by 9% this year,

In the first five months, BIR collections rose by 5.5% year on year to P1.434 trillion, and 0.7% above the P1.424-trillion target for the period.

The DBCC had tweaked its revenue collection targets after it lowered the GDP growth projection to 3.5-4.5% this year from 5-6% previously.

“Growth is expected to moderate this year amid heightened domestic and external uncertainties, including the lingering effects of governance-related issues, geopolitical tensions in the Middle East, and other global developments affecting business and consumer confidence,” the DBCC earlier said.

Meanwhile, the DBCC raised the Bureau of Customs’ (BoC) revenue collection target by 0.7% to P1.011 trillion this year from P1.003 trillion previously.

Mr. Ligon said the higher BoC revenue projection reflected the agency’s efforts to boost collections, as well as the weaker peso against the US dollar.

In the first half, BoC collections rose 7.2% to P491.75 billion, and exceeded the P480.27-billion target for the period by 2.4%.

The local currency has been trading above the P61-per-dollar mark since June 22. On Thursday, the peso closed P61.605 against the greenback, weakening by 10 centavos from its P61.505 finish on Wednesday.

Mr. Ligon also said the BoC also remained on track to hit its target this year, despite the three-month suspension of excise taxes on kerosene and liquefied petroleum gas (LPG).

The government suspended excise taxes on kerosene and LPG beginning April 17 to provide relief for consumers after oil prices surged due to the conflict in the Middle East. The Department of Finance (DoF) estimated the measure reduced revenues by about P2.5 billion over the three-month period.

The government lifted the suspension this week after the Department of Energy certified that the average Dubai crude oil price in June fell to $79.45 per barrel, below the $80 threshold that triggers the temporary tax relief.

Finance Secretary Frederick D. Go said the DBCC could again recommend suspending the excise taxes should average Dubai crude prices rise above $80 per barrel.

“We can again make a recommendation (to the President) to reduce or suspend the excise taxes,” he said.

While tax revenue projections were revised downward, the DBCC raised its nontax revenue forecast by 4.3% to P365.1 billion from P349.9 billion previously. — Justine Irish D. Tabile

“The arbitral ruling was significant,” Mr. Cuaresma, who heads a fishermen’s association in Zambales province, said by phone in Filipino. “However, even though we won the case, it did not help our livelihoods.”

Defense economist Rocio Salle Gatdula said the arbitration victory remains legally significant but has produced little practical benefit for fishermen.

“However politically impactful the arbitration was, the ruling has not improved access for Filipino fishermen to traditional grounds like Scarborough Shoal, with Chinese forces continuing to harass and restrict entry despite the legal invalidation of China’s claims,” she said via Facebook Messenger.

The Philippines brought China before a United Nations-backed arbitral tribunal in 2013, challenging Beijing’s sweeping “nine-dash line” claim over most of the South China Sea.

On July 12, 2016, the Permanent Court of Arbitration in The Hague ruled that China’s expansive maritime claims had no legal basis under international law and that Beijing had violated the Philippines’ sovereign rights within its exclusive economic zone.

The ruling also found that China unlawfully prevented Filipino fishermen from accessing Scarborough Shoal, a traditional fishing ground shared by the Philippines, China and Vietnam. Beijing has consistently rejected the decision.

Known locally as Bajo de Masinloc or Panatag Shoal, Scarborough lies about 220 kilometers west of Zambales. The coral atoll has long sustained fishing communities in western Luzon with its abundant marine resources.

“Bajo de Masinloc is very important for us because in times of need, we know that there is a place where we can catch fish,” Mr. Cuaresma said. He described the shoal as so rich in fish that they appeared “like grains of unhusked rice scattered across the water.”

That abundance has become increasingly difficult to reach.

China has maintained effective control over the shoal since a 2012 standoff with Philippine government vessels. Chinese coast guard, navy and maritime militia ships have since maintained a near-continuous presence around the atoll, regularly driving away Filipino fishermen.

“They always tell us not to approach Bajo de Masinloc and drive us away,” Mr. Cuaresma said.

The Chinese Embassy in Manila did not immediately respond to a request for comment sent via Viber.

China has strengthened its presence around Scarborough despite the arbitral ruling. Chinese coast guard vessels accumulated 933 ship-days around the shoal during the first seven months of 2026, nearly matching the 1,099 ship-days recorded for all of 2025, according to a July report by the Asia Maritime Transparency Initiative (AMTI).

AMTI said several coast guard vessels coordinated patrols around a perimeter roughly 30 nautical miles from the shoal, while six to eight Chinese maritime militia vessels maintained a persistent presence closer to the lagoon.

Philippine maritime agencies have also stepped up patrols. AMTI estimated Philippine vessels averaged 43 ship-days a month near Scarborough in the first half, a 43% increase from the previous year.

‘CLOSE EYE’
The increased patrols have also resulted in more confrontations. AMTI tracked 112 days of interaction between Philippine and Chinese vessels near the shoal in the first six months, averaging 19 days each month.

The think tank also noted that China has adopted additional measures to reinforce its presence. Last year, Beijing established a 3,500-hectare marine reserve around part of the shoal, and floating buoys have since appeared near the feature, prompting Manila to file diplomatic protests.

“As Beijing pushes the boundaries of just how much control it can assert over the shoal, Manila and Washington would do well to keep a close eye on Scarborough,” AMTI said.

Ms. Gatdula said the Philippines should continue expanding joint patrols with allies such as the US and Japan while sustaining transparency efforts documenting Chinese activities in contested waters.

She also urged the government to accelerate the Armed Forces of the Philippines’ modernization program by acquiring more offshore patrol vessels, frigates, anti-submarine capabilities and maritime surveillance radars, while investing in domestic shipbuilding to strengthen long-term maritime presence.

Matteo Piasentini, a senior lecturer at the University of the Philippines and analyst for China and Indo-Pacific region at Italian think tank Geopolitica, said Manila should complement military modernization with investments in maritime infrastructure that strengthen coastal communities and economic activity.

“There are many measures that could be adopted, such as developing maritime infrastructure in the area,” he said. Such projects would improve the country’s maritime capacity without necessarily requiring large-scale development of disputed features.

Mr. Piasentini added that China tends to intensify maritime coercion when the geopolitical costs remain low, making credible deterrence essential.

He said relatively inexpensive assets such as drones, small patrol vessels and subsea monitoring systems could significantly boost Philippine maritime capabilities.

For Mr. Cuaresma, the Philippines should not stop asserting its rights even if Beijing continues to ignore the tribunal’s ruling.

“It’s important to file another case so our neighboring countries and allies will take notice,” he said. “It will show that we are not simply giving it away.”

For fishermen who once relied on Scarborough Shoal for their livelihoods, the 2016 arbitration victory remains more a legal milestone than a practical one.

Nearly a decade later, access to one of the country’s richest fishing grounds is still measured not by international law, but by the ships waiting at its entrance. — KCLB

Headline inflation could stay above the Philippine central bank’s target for longer if price pressures worsen amid the looming El Niño season, renewed Middle East conflict, and a potential de-anchoring of inflation expectations.

In its latest Monetary Policy Report following its June meeting, the Bangko Sentral ng Pilipinas (BSP) said its “high-inflation scenario” sees the headline print moving further away from its 3% target over the medium term.

“The high-inflation scenario pushes headline inflation further above the 3% target over the medium term,” it said. “This suggests the need for a tighter monetary policy stance to contain sustained cost-push shocks. The negative output gap widens further under a more restrictive monetary stance.”

Under this scenario, the central bank said risks will stem from potential oil supply shortages in the country, renewed escalation in the US-Israel war on Iran, costlier rice amid El Niño, and de-anchoring of inflation expectations.

Its low-inflation scenario, on the other hand, shows inflation will be elevated only in the near term as price pressures fade by next year.

This may be realized if global oil prices drop to a full-year average of $80 per barrel in 2026 before falling further to $70 per barrel in 2028 backed by a Middle East war de-escalation and the reopening of the Strait of Hormuz.

Expectations of sluggish consumption and investments amid weak sentiment could likewise ease price pressures, the central bank added.

“The low-inflation scenario shows elevated headline inflation in 2026, followed by a gradual decline to within the inflation target tolerance ceiling in 2027,” the BSP said.

“While weaker demand and lower oil prices help ease price pressures, some policy tightening in 2026 remains necessary. However, the required tightening is less than that implied by the central projection,” it added.

The central bank expects inflation to accelerate sharply to 6.4% this year from 1.7% last year, before easing to 4.5% in 2027 and 3.1% in 2028.

PHILIPPINE AIRLINES (PAL) announced on Wednesday that it had priced its inaugural $300-million (P18.45-billion) international bond offering after receiving more than $1.4 billion (P86.11 billion) in investor orders, about 4.5 times the amount offered.

In a statement, PAL Holdings, Inc., the listed parent of Philippine Airlines, Inc., said its wholly owned subsidiary Primero Agila Ltd. priced the fixed-rate five-year senior notes at a 7.75% coupon on July 7.

The notes, which will be unconditionally and irrevocably guaranteed by Philippine Airlines and Air Philippines Corp., are expected to settle on July 16, subject to customary closing conditions, and will be listed on the Singapore Exchange Securities Trading Ltd.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the successful pricing demonstrated the airline’s ability to access international debt capital markets after rebuilding its balance sheet following the pandemic.

“PAL’s successful pricing of its inaugural $300-million international bond is a significant milestone because it demonstrates the airline’s ability to access the global debt capital markets after years of rebuilding its balance sheet following the pandemic,” he said in a Viber message.

Mr. Arce said demand for the issuance was likely driven by high-yield and emerging-market credit investors seeking attractive returns.

“From a credit perspective, the issuance is unlikely to result in an immediate ratings upgrade on its own, but it could support a more stable or positive rating outlook if the proceeds strengthen PAL’s liquidity profile and improve its debt maturity schedule,” he said.

In June, Fitch Ratings assigned Philippine Airlines a BB issuer default rating with a stable outlook, citing the flag carrier’s position in the Philippine aviation market, diversified route network, financial flexibility, operating efficiency, and fleet expansion strategy.

PAL Holdings President Lucio C. Tan III said the transaction would allow the airline to strengthen its network and enhance the travel experience for customers.

“This landmark bond offering is a powerful affirmation of Philippine Airlines’ transformation and the confidence that global investors have in our long-term vision and growth ambitions. This allows us to strengthen our network and continue to elevate the travel experience for our customers. It reinforces Philippine Airlines’ role in promoting tourism, trade, investment and economic growth for the Philippines,” he said in a statement.

Philippine Airlines President Richard Nuttall described the transaction as a milestone for the airline.

“This inaugural international bond offering marks a defining milestone in Philippine Airlines’ ongoing transformation. We are grateful for the overwhelming support we received from investors globally, which we see as a vote of confidence in PAL’s long-term strategy, market position and growth outlook,” he said.

PAL said the transaction marked the first rated high-yield bond offering by a Philippine issuer in more than a decade, the first unsecured rated high-yield bond issued by an Asian airline, and the first rated airline bond issuance from South and Southeast Asia.

The bond offering comes as PAL continues to expand its international network and modernize its fleet.

On Tuesday, the airline announced plans to increase flight frequencies to Japan and Australia ahead of the winter and year-end travel seasons.

The carrier is also expecting the delivery of about five Airbus A350-1000 aircraft this year and is refurbishing 18 Airbus A321ceo aircraft as part of its fleet modernization program.

Mr. Arce said investors should remain mindful that the issuance increases the airline’s fixed financial obligations at a time of elevated borrowing costs, while the aviation industry remains exposed to exchange rate movements and geopolitical risks.

THE PHILIPPINES’ unemployment rate rose to 4.8% in May as job losses in agriculture, driven by bad weather, outweighed employment gains in services and other industries, the Philippine Statistics Authority (PSA) said on Wednesday.

The May unemployment rate jumped from 3.9% a year earlier and 4.7% in April, while the number of jobless Filipinos rose to 2.5 million from 2.03 million in May 2025 and 2.41 million a month earlier.

This was the highest jobless rate in two months or since the 5% in March.

“There was a significant drop in the number of employed persons in agriculture and forestry. This is likely the impact of weather conditions in May,” National Statistician Claire Dennis S. Mapa told a news briefing.

PSA data showed the agriculture sector shed 905,000 jobs from a year ago, extending its decline for a seventh month in a row.

Mr. Mapa said employment in paddy rice farming declined by 734,000 workers in May from a year earlier. The weather bureau only confirmed the start of the El Niño weather event in June.

A year-on-year drop in jobs was also seen in other service activities (-442,000), public administration and defense (-213,000), and wholesale and retail trade (-141,000).

For the first five months of 2026, the average unemployment rate rose to 5.1% from 4% a year earlier.

On the other hand, job quality improved as the underemployment rate fell to 12.2% from 13.1% a year earlier and 15.2% in April.

This was the lowest underemployment rate — or the proportion of those with jobs seeking additional work hours or having an additional job — in three months or since 11.8% in February.

Mr. Mapa attributed the improvement in job quality to fewer workers seeking additional hours, noting that average weekly hours worked increased to 41.1 hours from 39.8 hours a year earlier and 40.2 hours in April.

“More people worked more than 40 hours per week this May,” he said, adding that about 34.36 million workers logged more than 40 hours during the week.

The average underemployment rate for the January-to-May period was recorded at 12.9%, unchanged from a year ago.

Data from the PSA showed the labor force participation rate (LFPR) — the proportion of the working-age population (15 years old and over) that is part of the total labor force — stood at 63.8% or equivalent to 52.13 million Filipinos aged 15 and over.

This was lower than the 65.8% seen in the same month in 2025, and a slight uptick from the 62.7% participation rate in April.

The youth LFPR dropped to 32.3% from 33.6% a year ago, but slightly higher than the 31.8% seen in April.

In May, the employment rate slipped to 95.2% from 96.1% a year earlier and 95.3% in April. Total employment reached 49.63 million, up by 738,000 from the previous month but down 663,000 from May last year.

The average employment rate from January to May stood at 94.9%, slipping from 96% a year ago.

Services remained the country’s biggest employer, accounting for 61.8% of total employment, followed by agriculture at 19.9% and industry at 18.3%.

Administrative and support service activities posted the biggest annual employment gain in May with 329,000 jobs, mostly in call centers and private security services.

Other sub-sectors with a significant annual increase in employment in May include administrative and support services (329,000), mining and quarrying (184,000), human health and social work activities (173,000), fishing and aquaculture (170,000), and construction (168,000).

CHALLENGES
Labor Secretary Francis N. Tolentino said in a statement that the latest labor data show the need to sustain reforms to create better jobs.

“We must create quality jobs that provide decent incomes, encourage productivity, and prepare Filipinos for the jobs of tomorrow. This is the direction that the department is pursuing as we strengthen our education-to-employment pipeline and build a future-ready workforce,” he said.

In a note, Chinabank Research said the labor market remained soft but performed “better-than-expected” amid uncertainties and price pressures arising from the Middle East war.

“Improving business sentiment as global tensions ease could support stronger economic activity and hiring in the coming months. However, downside risks also remain, particularly from the potential impact of El Niño on the agricultural sector and the effects of minimum wage hikes on labor-intensive industries, such as food services and wholesale and retail trade,” it said.

Chinabank Research noted that a sustained dry spell could hurt the agriculture sector and lead to more job losses.

Josua T. Mata, secretary-general of Sentro ng mga Nagkakaisa at Progresibong Manggagawa, expressed concern over the continued loss of agricultural jobs, especially since there is no clear evidence that displaced workers are absorbed by other sectors.

“Job losses in agriculture are being driven by a combination of mechanization, worsening climate impacts, and mounting economic pressures that make farming increasingly unsustainable for many Filipinos,” he said in a Viber chat.

“The challenge is not simply to move workers out of agriculture, but to ensure they transition into stable, productive, and decent jobs. Otherwise, we are merely shifting workers from one form of insecurity to another,” he added.

The implementation of the P85 minimum wage hike in Metro Manila is also expected to cloud the outlook for the labor market in the coming months.

John Paolo R. Rivera, a senior fellow at the Philippine Institute for Development Studies noted that while the wage hike should help improve workers’ purchasing power, its impact on the labor market data will vary.

“Labor-intensive sectors such as agriculture, retail, and other services may face greater cost pressures, particularly among micro, small and medium enterprises, which could slow hiring or encourage productivity improvements,” Mr. Rivera told BusinessWorld over Viber.

He argued that higher wages are most sustainable when accompanied by measures that raise productivity and lower the cost of doing business.

“A meaningful wage increase will immediately improve the conditions of workers and their families by increasing their purchasing power. The second-round impact on businesses catering to workers spending on more goods and services is also going to be meaningful,” Jose Enrique “Sonny” A. Africa, executive director of the think tank IBON Foundation, told BusinessWorld.

Mr. Africa said higher wages are a “critical element” in solving joblessness but needs to be accompanied by a strategy for agricultural modernization and industrialization.

THE ASIAN Development Bank (ADB) cut its growth forecasts for the Philippines for this year and next year, citing delayed investments and weaker household consumption.

In its Asian Development Outlook July 2026 report, the Philippine-based multilateral lender lowered its Philippine gross domestic product (GDP) growth forecast to 3.8% from the 4.4% previously.

The latest forecast is within the Philippine government’s recently revised 3.5-4.5% GDP target for 2026, but is slower than the 4.4% growth posted in 2025.

The ADB also trimmed its 2027 growth forecast to 5.3% from 5.5% previously, placing it at the lower end of the government’s revised 5-6% target.

“The Philippines saw a downward adjustment in growth projections due to delayed investments, softer private consumption amid higher commodity prices and climate-related risks,” the ADB said in the report released on Wednesday.

In the first quarter, the Philippine economy unexpectedly grew by 2.8%, its weakest growth since the coronavirus pandemic, due to spiraling oil prices due to the Middle East war and the lingering effects of last year’s corruption scandal.

The ADB’s 2026 growth forecast for the Philippines is also below its revised 4.6% outlook for developing Southeast Asia, which was trimmed from 4.7% previously.

“The 2026 forecast for developing Southeast Asia is trimmed following downward revisions for Cambodia and the Philippines as higher energy prices weigh on domestic demand and tourism,” the multilateral lender said.

Based on ADB’s 2026 projections, the Philippines’ growth will be the fourth slowest in Southeast Asia, tied with Timor-Leste at 3.8%, and ahead of Myanmar (2.4%), Brunei Darussalam (1.8%), and Thailand (1.8%).

The Philippines is expected to trail Vietnam (7.2%), Indonesia (5.2%), Malaysia (4.6%), Cambodia (4.1%), and Laos (4%)

For 2027, the Philippines is expected to post the second-fastest growth in developing Asia, after Vietnam (7%).

The Philippines’ heavy reliance on Middle Eastern oil imports has left the economy particularly exposed to the global oil shock that began in March.

The ADB raised its Philippine headline inflation forecast to 5.9% this year from 4% previously. This is well above the Bangko Sentral ng Pilipinas’ (BSP) 2-4% tolerance range but below the central bank’s inflation projection of 6.4%.

For 2027, the ADB hiked its headline inflation forecast to 3.9% from 3.5% previously. This is at the upper end of the BSP’s 2-4% tolerance range but below  its 4.5% projection.

Also, the ADB has raised its inflation forecasts for developing Southeast Asia to 3.9% this year from 3.2% previously, and 2.9% for 2027 from 2.8% previously.

“The upward revisions reflect higher global energy and food prices linked to the Middle East crisis, as well as exchange rate pressures that have raised import costs across the subregion,” it said, citing that the largest upward revisions were recorded for the Philippines.

The ADB said disruptions in energy markets have pushed up fertilizer costs, leaving developing Asia and the Pacific economies with low fertilizer self-sufficiency vulnerable to price volatility and supply-chain disruptions.

“Absent policy intervention, rice production could fall sharply in 2026, especially in economies reliant on imported fertilizer. The effect is best measured against the no-shock, business-as-usual scenario, under which output was otherwise projected to grow,” it added.

The ADB said Philippine rice output could decline by 14% this year under the most severe scenario where crude oil prices rise 75% above the baseline assumption of $69 per barrel. Under the same scenario, farmgate prices could rise by as much as 20%.

ADB SUPPORT
Meanwhile, ADB Philippines Country Director Andrew Jeffries said the Philippines’ recent reclassification as an upper-middle income economy is unlikely to alter the multilateral lender’s support in the near term.

“There are no immediate implications for ADB financing, or other forms of support including technical assistance, because of the Philippines’ recent classification as an upper-middle income economy,” he told BusinessWorld.

“ADB will continue to support the government’s development priorities, as well as the reforms and investments needed to build on and sustain this achievement,” he added.

His remarks came after the World Bank reclassified the Philippines as an upper-middle income country after its gross national income per capita rose to $4,850 from $4,470 last year.

While no immediate changes are expected, Mr. Jeffries said the ADB’s sovereign lending terms could change if the Philippines remains above the upper-middle income threshold for three consecutive years.

“ADB will continuously align its engagement to respond to the Philippines’ transition needs, and to sustain development gains,” he said.

The Philippines was in the World Bank’s lower-middle income category since 1987 before its latest reclassification.

THE PHILIPPINE ECONOMY could post its weakest growth this year since the pandemic, as the Middle East war drives up prices and dampens economic activity, the International Monetary Fund (IMF) said.

In its latest World Economic Outlook (WEO) released on Wednesday, the IMF trimmed its 2026 gross domestic product (GDP) growth forecast for the Philippines to 3.9% from 4.1% previously. This is still within the government’s 3.5%-4.5% target.

“This reflects a weaker-than-expected outturn in the first quarter of 2026 (2.8%) alongside a larger-than-expected effect of the war in the Middle East on prices and activity in the Philippines,” an IMF spokesperson said in an e-mail.

Oil price shocks and the lingering impact of the flood control fallout dragged first-quarter Philippine GDP growth below market and government expectations at 2.8%. 

Since the United States and Israel first launched attacks on Iran on Feb. 28, spiraling oil prices fed into the costs of other key commodities and squeezed consumers’ pockets.

If the IMF’s projection holds true, the country’s full-year expansion will be weaker than the 4.4% recorded in 2025, when a massive flood control corruption scandal dampened public spending, investments, and sentiment.

It would also mark the economy’s worst performance since the 9.5% contraction during the COVID-19 pandemic in 2020.   

Excluding the pandemic, it would match the 3.9% expansion in 2011 and would be the worst in 17 years or since the 1.4% in 2009.

The multilateral lender’s Philippine growth estimate is below its projection for ASEAN-5, which it kept at 4.1% for this year. ASEAN-5 is composed of Indonesia, Malaysia, the Philippines, Singapore, and Thailand.

The Philippines is expected to lag Indonesia (5%) and Malaysia (4.7%) but outpace Thailand (1.9%) this year.

At the same time, the IMF trimmed the Philippine growth projection for 2027 to 5.5% from 5.8% previously, on the back of base effects and a potential improvement in sentiment.

This is within the government’s 5%-6% target for the year. It is also above the IMF’s 2027 growth projection of 4.3% for ASEAN-5.

“The rebound in 2027 is driven mainly by favorable base effects, alongside a gradual pickup in investment as confidence improves and supply-side effects related to the war ease,” the IMF spokesperson said.

According to the multilateral lender, risks to domestic growth may come from extreme weather disturbances, as well as a slower-than-projected normalization of public investments and reform momentum.

However, faster adoption of reforms, alongside lower oil and food prices, may provide relief to the economy.

“On the upside, accelerated implementation of structural and governance reforms can boost investment and FDI (foreign direct investment), increase fiscal multipliers and boost potential growth,” the IMF spokesperson said. “A faster decline in energy and food price provides additional upside risks.” 

INFLATION RISKS REMAIN
Meanwhile, the multilateral lender said the Philippines still faces inflationary pressures from volatile global conditions and elevated food prices, among others.

“Inflation risks are tilted to the upside, reflecting the risk of renewed geopolitical tensions in the Middle East and higher food prices, de-anchoring of inflation expectations, tighter global monetary conditions, and lower remittances,” the IMF spokesperson said.

The latest WEO does not include an update on the IMF’s inflation forecasts, but its projections as of April show it expects Philippine inflation to average 4.3% this year and 3.2% in 2027.

If realized, headline inflation will breach the Bangko Sentral ng Pilipinas’ (BSP) 3% target for two straight years, marking a sharp acceleration from the 1.7% reading in 2025.

These are, however, slower than the central bank’s projected 6.4% and 4.5% inflation for the next two years.

As of June, Philippine inflation stood at 4.8%, with the headline print remaining above target for four months in a row.

On the other hand, Pantheon Macroeconomics downgraded its inflation forecast to 5.2% from 5.5% for 2026 and to 3% from 3.2% for 2027.

This came after June inflation came in softer than market expectations at a three-month low of 6.4% amid easing pressures from food and fuel prices.

“We continue to believe that the postwar surge in the headline rate is in the rear-view mirror, and that a sustained spell of disinflation should take it back within the BSP’s 2-to-4% target range by March next year at the earliest, barring any unexpected shocks, externally or domestically,” Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco and Asia Economist Meekita Gupta said in a separate report on Wednesday.

Mr. Chanco and Ms. Gupta said the slowing inflation could prompt the BSP to cut its tightening cycle short with a likely pause in August.

The Monetary Board began to hike its policy rate in April as a preemptive measure to contain inflation risks from the energy crisis.

It delivered a second straight rate increase in June, bringing its total hikes to 50 basis points (bps). The benchmark rate now stands at 4.75%.

BSP Governor Eli M. Remolona, Jr. has said that the economy can still absorb another 25-bp rise as they expect growth to start rebounding in the second half.

“The Board is banking on fiscal policy to cushion the impact of higher rates on economic growth; specifically, a revival in public infrastructure spending, after it was hammered by last year’s anti-corruption drive,” Mr. Chanco and Ms. Gupta said.

“But our chart below highlights that such expenditure is still collapsing; it fell in April — the latest data — to its lowest level since the pandemic, after seasonal adjustment,” they added.

The latest government data showed that its spending inched up by 4.81% to P2.6 trillion as of May from P2.48 trillion a year earlier. This was slower than the 9.71% growth seen in the same period last year.

The Philippines’ unemployment rate rose to 4.8% in May as job losses in agriculture, driven by bad weather, outweighed employment gains in services and other industries, the Philippine Statistics Authority (PSA) said on Wednesday.

The unemployment rate increased from 3.9% a year earlier and 4.7% in April, while the number of jobless Filipinos rose to 2.5 million from 2.03 million in May 2025 and 2.41 million a month earlier.

“There was a significant drop in the number of employed persons in agriculture and forestry,” National Statistician Claire Dennis S. Mapa told a news briefing . “This is likely the impact of weather conditions in May.”

Mr. Mapa said employment in paddy rice farming declined by 734,000 workers from a year earlier, while corn cultivation lost 428,000 jobs.

The employment rate slipped to 95.2% from 96.1% a year earlier and 95.3% in April. Total employment reached 49.63 million, up by 738,000 from the previous month but down 663,000 from May last year.

Services remained the country’s biggest employer, accounting for 61.8% of total employment, followed by agriculture at 19.9% and industry at 18.3%.

Administrative and support service activities posted the biggest annual employment gain, adding 329,000 jobs, driven mainly by call centers and private security services.

Despite higher unemployment, job quality improved as the underemployment rate fell to 12.2% from 13.1% a year earlier and 15.2% in April.

Mr. Mapa attributed the decline to fewer workers seeking additional hours, noting that average weekly hours worked increased to 41.1 hours from 39.8 hours a year earlier and 40.2 hours in April.

“More people worked more than 40 hours per week this May,” he said, adding that about 34.36 million workers logged more than 40 hours during the week.

For the first five months of 2026, the average unemployment rate rose to 5.1% from 4% a year earlier.

“From what I understand, this is a priority. So, I hope we can get something signed within the year,” Department of Finance (DoF) Secretary Frederick D. Go said at a press briefing on Tuesday.

The Philippines joined Pax Silica in April, a US-led initiative aimed at strengthening technology supply chains and countering China’s growing technology manufacturing sector.

According to the US State Department, the Pax Silica initiative has 23 signatories, including the Philippines.

Under the initiative, the Philippines is developing a 1,618-hectare AI-native industrial hub within New Clark City in Tarlac to support the country’s bid to join the AI supply-chain ecosystem.

The facility will host the Pax Silica Coordination Office for technology firms, research institutions, and government agencies.

Mr. Go said Clark’s designation as a Pax Silica site could pave the way for the establishment of facilities that manufacture semiconductors, chips and other advanced technology products.

“I think why they want to locate in the Philippines is always because of our workforce,” he said.

Asked about private sector interest, Mr. Go said Taiwan-based Foxconn is to serve as the anchor investor for the planned technology hub.

Foxconn is one of the world’s largest electronics manufacturers and is best known as a major supplier for companies such as Apple and Sony.

Mr. Go said the Pax Silica initiative also complements the development of the Luzon Economic Corridor (LEC).

The LEC is a trilateral initiative among the Philippines, the United States and Japan aimed at improving connectivity across Luzon’s key economic areas, particularly Subic Bay, Clark, Metro Manila and Batangas. The partnership has since expanded to include Australia, Canada, Denmark, France, Italy, South Korea, Sweden and the United Kingdom.

“Eight countries have already signed up, including Canada. And then Canada also announced that they’re giving us a $2 million grant to support this whole initiative of the Luzon Economic Corridor,” Mr. Go said.

In late April, the Bases Conversion and Development Authority (BCDA) said it expects to break ground for the first phase of the development within the first two years. — Justine Irish D. Tabile

At the same time, the SEC raised the capital and disclosure requirements for financing and lending companies, as it seeks to improve the regulatory oversight of the sector and boost consumer protection.

The corporate regulator on Tuesday issued Memorandum Circular No. 20, which sets the guidelines prescribing prudential, disclosure and market conduct requirements for financing companies (FC) and lending companies (LC), as well as lifts the moratorium on new OLPs.

“The commission recognizes the need to lift the moratorium… in order to promote responsible innovation, stimulate economic activity among FCs and LCs, and ensure the operation of OLPs is aligned with consumer protection, market integrity, prudential objectives, financial inclusion, ease of market access, and alignment with the global trend of digitalization,” the SEC said.

The moratorium on new OLPs has been in place since November 2021 as the SEC developed new rules to address predatory lending and abusive debt collection practices.

“The lifting of this moratorium shall not be construed as an automatic or unconditional approval of any OLP. All FCs and LCs, whether existing or newly incorporated, shall remain subject to the disclosure, business plan, minimum paid-up capital, operational, consumer protection, data privacy, and supervisory requirements,” the SEC said.

Under the new circular, FCs and LCs seeking to operate OLPs will be required to maintain higher paid-up capital depending on the number of platforms they own, operate, control, or utilize.

An OLP is defined as any borrower-facing digital platform, app or system that is used for financing and lending activities such as loan applications, credit evaluation and loan repayment.

Financing companies with one OLP are required to have a minimum paid-up capital of P20 million, P40 million for two OLPs, P60 million for three OLPs, P80 million for four OLPs, and P100 million for five OLPs.

Lending companies with one OLP should have a paid-up capital of P10 million, P20 million for two OLPs, P30 million for three OLPs, P40 million for four OLPs, and P50 million for five OLPs.

New financing firms are required to have a minimum paid-up capital of P15 million, while new lending firms should have P5 million in paid-up capital. Existing ones are not required to adjust their capital immediately unless they expand operations.

The Lending Company Regulation Act of 2007 sets the minimum paid-in capital for lending companies at P1 million but allows the SEC to impose higher capitalization requirements when warranted.

The SEC also capped the number of OLPs that can be owned and operated by financing and lending firms to five as a “prudential limit to ensure effective supervision, adequate governance and manageable consumer risk exposure.”

Existing FCs and LCs with one or more OLPs should comply with the paid-up capital requirements corresponding to the number of platforms within 12 months.

Those that do not intend to comply with the capital requirements should reduce their OLPs and disclose only OLPs supported by their existing capital levels. If an OLP is not disclosed, it may no longer be operated.

Also, the SEC rules state that new financing and lending firms will be issued with only one certificate of authority, regardless of the number of branches or location. No separate certificates will be issued for OLPs.

The SEC is also imposing an annual licensing fee (ALF) at the entity level “to reflect the cost of continuing supervision, monitoring, and regulatory oversight of FCs and LCs, including those operating through digital or platform-based channels.” This is computed based on the total assets reflected in the latest audited financial statements.

CONSUMER PROTECTION
The SEC also tightened consumer protection standards in the industry, including preventing financing and lending firms from releasing loan proceeds without borrowers’ “explicit and informed” confirmation of final loan terms.

Under the new guidelines, companies must provide complete loan disclosures and allow borrowers reasonable time to review them before obtaining confirmation. Loan approvals and confirmations must also be properly recorded and traceable to the transaction.

“In collecting payments from borrowers, the FCs and LCs shall ensure that all collection communications… are conducted in a manner that is fair, transparent and not misleading and consistent with applicable laws, rules and regulations,” SEC said.

The borrower will have the right to disregard any collection communication that fails to reasonably identify the FC, LC or OLP.

“In no case shall any person appearing in the borrower’s contact list, character references, or similar personal information be treated, represented, or contacted as a guarantor, surety, co-maker, or person liable for the borrower’s loan obligation, unless such person has separately and expressly agreed in writing to assume such legal obligation,” the SEC said.

For unfair debt collection practices, LCs face a P60,000 fine for a first offense and P250,000 for a second offense, while FCs face a P100,000 fine for a first offense and P500,000 fine for a second offense.

For succeeding offenses, the SEC may impose a fine of not less than twice the fine for the second offense but not more than P1 million and suspend the firm for 60 days or revoke their certificate of authority. — A.G.C.Magno

PHILIPPINE headline inflation eased for a second straight month in June on lower transport and food prices, but pass-through effects pushed core inflation to its fastest pace in 31 months, the Philippine Statistics Authority (PSA) said.

Based on PSA data released on Tuesday, headline inflation slowed to 6.4% from 6.8% in May, but accelerated from 1.4% a year ago.

The June inflation print came in below the 6.6% median forecast in a BusinessWorld poll of 18 analysts, but within the Bangko Sentral ng Pilipinas’ (BSP) 6%-7% projection for the month.

This was the slowest headline inflation in three months or since 4.1% in March.

As of the first half of the year, inflation averaged 4.8%, still above the BSP’s 4% ceiling. The BSP expects the headline print to settle at 6.4% by yearend.

“Inflation slowed in June as easing oil price pressures and continued government measures to strengthen food supply helped temper price increases,” the Department of Economy, Planning, and Development  said in a separate statement, likewise noting easing tensions in the Middle East. 

National Statistician Claire Dennis S. Mapa said inflation in transport cooled to 12.8% in June from 16.2% in May, while food and nonalcoholic beverages eased to 5.2% from 5.7%.

Local fuel retailers cut the price of gasoline by as much as P7.50 per liter and diesel by as much as P21.19 per liter last month. On the other hand, kerosene climbed by P1.98 per liter.

This led inflation for gasoline to ease to 39.2% in June from 51.6% in May, and diesel slowed to 39% from 58.5%.

Food inflation cooled amid lower meat and fish prices as easing oil costs helped boost fishing activity in the country, the BSP said.

The price of meat products declined at a faster pace of -4.2% in June from the 2.5% drop a month ago. Inflation for cereals and cereal products slowed to 12.1% from 12.6%, while fish and other seafood eased to 7.8% from 8.8%.

Rice inflation likewise slowed to 15% in June from 15.6% in May as prices declined month on month, which the BSP attributed to the arrival of imports and temporary price ceiling set during the period.

The price of regular milled rice slipped by 2.67% to P49.67 a kilo in the second half of the month from P51.03 in the same period in May, while well-milled rice was nearly 3% cheaper at P56.15 a kilo from P57.88 in the prior month.

“Nonetheless, higher vegetable prices due to limited supply during the off-season tempered the slowdown in headline inflation,” the BSP added.

STICKY CORE INFLATION
Meanwhile, core inflation, which discounts volatile fuel and food prices, bucked the headline trend as it quickened for a sixth consecutive month to 4.4% in June from 4.1% in May and 2.2% last year.

This matched the December 2023 reading and was the fastest pace in 31 months or since 4.7% in November 2023.

In a separate statement, the Philippine central bank said still elevated global oil and fertilizer prices continue to feed into the cost of fuel and food in the Philippines, showing “inflationary pressures remain strong.”

“Rising core inflation indicates broadening price pressures and second-round effects, including higher inflation expectations,” the BSP said.

According to PSA’s Mr. Mapa, faster price increases in utilities, restaurants and accommodation services, and education services, among others pushed the core print to an over two-year high.

In June, inflation for housing, water, electricity, gas, and other fuels picked up to 8% from 7.8% in May, largely driven by the 12% electricity inflation from 8.8% in the prior month.

This came after Manila Electric Co. hiked its electricity rate by 14.88 centavos per kilowatt-hour (kWh) to P14.4833 per kWh last month, which meant households consuming 200 kWh monthly had to pay P30 more in their total electricity bills.

Meanwhile, inflation for restaurants and accommodation services quickened to 7% from 6.7% a month earlier, while inflation for education services accelerated to 3.9% from 2.9%.

Mr. Mapa said they will monitor price movements in the National Capital Region (NCR) in relation to the upcoming wage hike in the region this month, as the labor component also weighs on the country’s inflation.

The minimum wage in NCR is set to increase by P60 on July 19, bringing it to P755 for nonagricultural workers and to P718 for agricultural workers and employees of retail, service, and small manufacturing establishments. The second tranche of the wage hike or P25 will be implemented in January next year.

PSA data also showed inflation in NCR was slower at 4.9% in June from 5% in May, but picked up from 2.6% a year ago.

Outside NCR, it eased to 6.7% from 7.1% in the previous month, but was faster than 1.1% last year.

For the bottom 30% of income households, inflation cooled to 8% in June from 8.4% in May. However, this was significantly faster than  -0.4% recorded in June 2025.

BSP TO REMAIN HAWKISH?
The BSP said the latest local and international developments, particularly in the oil market, will guide their decision for their next monetary policy review on Aug. 27.

“The Monetary Board will continue to be guided by incoming data and is prepared to take further monetary action as needed to ensure that inflation returns to the 3% target,” it added.

The BSP has raised its benchmark rate by a total of 50 basis points (bps) since April, bringing it to 4.75%.

ING Regional Head of Research for Asia-Pacific Deepali Bhargava noted that looming inflationary risks from the recent wage hike and the upcoming El Niño season give the BSP reason to continue tightening.

“Taken together, while headline inflation has eased, we don’t believe the BSP has enough evidence yet to declare victory,” she said in a report.

“Persistent core inflation, rising wages and lingering food price risks should keep policymakers focused on ensuring inflation expectations remain anchored, supporting our expectation of further rate hikes by the BSP.”

Chinabank Research also sees a third straight BSP rate hike in August as the faster core inflation reflects that the Middle East war’s impact on energy prices is “becoming more entrenched.”

“Key upside risks to inflation remain, which could keep the BSP on a hawkish footing,” it added.

Meanwhile, HSBC Global Investment Research Senior ASEAN Economist Aris D. Dacanay expects the BSP to be more hawkish and deliver 75 bps more in hikes by end-2026.

“Due to the upside surprise in wage hikes, we expect the BSP to stay on a hiking path for the rest of 2026 despite inflation being below expectations over the past two months,” Mr. Dacanay said in a separate report.

“We expect the BSP to increase rates to 5.5% by the end of the year,” he added, noting that the central bank may reverse its path to ease borrowing costs by the second half of 2027.

In a separate commentary, Citigroup, Inc. (Citi) said moderating headline inflation and prospects of gradual economic recovery by the second half of the year signal weaker threats of stagflation for the Philippines, although risks remain.

Citi economists Wei Zheng Kit and Helmi Arman noted that the Philippine economy may slightly rebound starting in the second half of the year until 2028, but with growth to remain weaker than its performance in recent years.

“The Philippines is likely to achieve only a gradual, below-trend growth recovery in the second half of 2026 and into 2027-28,” they said. “The recovery will be uneven: Public construction resuming gradually, consumption recovering as inflation moderates, and investment cautious pending political resolution.”

Citi also noted that an August hike remains likely, with a pause in October to come only if lower oil prices prompt the BSP to materially cut its inflation and growth estimates.

Bavi entered the PAR at around 3 a.m. and was formally assigned the local name Inday, the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) said in its 5:00 a.m. briefing.

The super typhoon was last located 1,405 kilometers east of Northern Luzon. It retained its strength, packing maximum sustained winds of 185 kilometers per hour (kph) and gusts of up to 230 kph. It is moving westward at 25 kph.

Following its entry, Storm Signal No. 1 has been hoisted over several areas in Luzon.

This includes areas such as Batanes; Cagayan, including the Babuyan Islands; Apayao; and the northern and central portions of Isabela, including Santo Tomas, Aurora, Santa Maria, Quezon, San Mariano, Naguilian, Dinapigue, Roxas, Luna, Delfin Albano, Cauayan City, San Pablo, Ilagan City, Benito Soliven, Tumauini, Cabagan, Reina Mercedes, San Manuel, Palanan, Cabatuan, Quirino, Divilacan, Gamu, Mallig, Maconacon, Burgos, San Guillermo, Angadanan, Alicia, and San Mateo.

It is likewise in effect in the eastern portion of Kalinga, including Pinukpuk, Tabuk City, and Rizal; Dilasag in Aurora; and the northern and central portions of Catanduanes, including Pandan, Caramoran, Bagamanoc, Panganiban, Viga, Gigmoto, Baras, and San Miguel.

PAGASA said that under Signal No. 1, minimal to minor threats to life and property due to strong winds are possible within the next 36 hours.

The bureau also emphasized that the super typhoon has yet to directly affect the country during the forecast period.

The heavy rains that drenched Metro Manila and nearby areas early Wednesday were caused by localized thunderstorms.

“The heavy rains that we experienced in Metro Manila and nearby areas were not caused by the super typhoon… and southwest monsoon,” Chenel Dominguez, PAGASA weather specialist, said during the briefing in Filipino.

“Based on satellite images, the storm is too far from Metro Manila,” she added.

However, the super typhoon is expected to enhance the southwest monsoon by Friday, bringing scattered rains over large parts of the country, Ms. Dominguez said.

“We remind the public to take caution and be prepared for rains that will be caused by the southwest monsoon,” she said.

As for Bavi’s forecast track, it is expected to remain over the Philippine Sea and may be nearest to Extreme Northern Luzon by Friday. It is then forecast to exit the PAR by Saturday as it moves toward China.

Bavi is expected to maintain its super typhoon strength until Thursday before weakening into a typhoon by Thursday afternoon or evening. — Edg Adrian A. Eva

Philippine banks’ loan growth posted its fastest pace in over a year in May amid faster lending for residents’ business activities, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Universal and commercial banks’ total outstanding loans, net of reverse repurchase agreements, grew by 12.1% year on year in May to P14.989 trillion from P13.37 trillion.

This was faster than the 11.4% expansion in April.

It was also the quickest lending growth seen in 15 months or since the 12.2% in February 2025.

“This reflects banks’ expectations of steady loan demand from businesses and households in Q2 2026,” the central bank said in a statement late on Tuesday.

Most or 53.8% of banks polled by the BSP expected businesses to sustain steady demand for credit in the second quarter of the year, while 52.9% saw steady loan demand from households, the central bank’s latest Senior Bank Loan Officers’ Survey showed.

BSP data showed outstanding loans to residents climbed to P14.692 trillion in May from P13.046 trillion a year ago, reflecting a faster 12.6% jump versus April’s 11.8%.

This accounted for the bulk of the sector’s total outstanding loans during the period, with the remainder composed of loans to nonresidents.

For nonresidents, bank lending declined quicker by 8.3%, from 7.9% in April, to P296.887 billion in May from P323.828 billion last year. This includes loans by big banks’ foreign currency deposit units to nonresidents.

Based on BSP data, loans extended for residents’ production activities reached P12.67 trillion, up 11.7% annually from P11.347 trillion. This was an improvement from the 10.7% increase posted in April.

This came amid increased lending to major industries, the BSP said, with loans to the electricity, gas, steam, and air-conditioning supply sector surging by 32.9%.

Lending for transportation and storage also jumped by 21.4%, wholesale and retail trade, and repair of motor vehicles and motorcycles by 10.1%, real estate activities by 7.3%, and manufacturing by 6.4%.

Meanwhile, big banks disbursed a total of P2.022 trillion in consumer loans, 19% higher than the P1.699 trillion lent out a year earlier.

“This is slightly slower than the previous month’s 19.6% growth, reflecting softer expansion in credit card and motor vehicle loans,” the central bank said.

In May, credit card loans rose by 26.3% year on year to P1.269 trillion, while motor vehicle loans increased by 10.2% to P540.9 billion, and salary-based general purpose consumption loans by 6.4% to P171.79 billion.

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

MONEY SUPPLY

Meanwhile, continued growth in private and public sector borrowings drove the country’s liquidity (M3) to climb by 12.8% to P20.604 trillion in May from P18.265 trillion the prior year.

This was faster than the 12.2% increase logged in April, and marked the fastest money supply growth in nearly six years or since the 13.7% expansion in August 2020

“Domestic liquidity growth was driven mainly by the sustained expansion in borrowings by both the private and public sectors,” the BSP said in a separate statement. “The increase in domestic liquidity supports economic activity by facilitating consumption, lending, and investment.”

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.

Based on preliminary BSP data, domestic claims picked up by 13.3% from 12.7% in April as it rose to P23.672 trillion from P20.891 trillion in May last year.

Claims on the private sector, which is largely composed of loans to production sectors and households, rose faster by 13.2% in May to P15.204 trillion, improving from 12.6% in the previous month.

“Credit to production sectors and households, mainly in the form of bank loans, continued to grow and support economic activity,” the BSP said.

Net claims on the central government likewise increased by 16.2% annually to P6.41 trillion in May. This was faster than the 15.1% in April.

The central bank noted that this was driven by “the National Government’s issuance of debt securities and withdrawal of deposits from the BSP and banks to finance its spending.”

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

Meanwhile, net foreign assets (NFA) in peso terms went up by 9.1% to P7.153 trillion in May from P6.559 trillion in the same month in 2025.

Banks’ larger holdings of foreign currency-denominated debt securities boosted their NFA position by 16.4% to P776.001 billion.

The central bank’s NFAs also rose by 8.2% year on year to P6.377 trillion.

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

On the other hand, M1 — which is considered a narrower measure of money supply comprising currency in circulation and current account deposit liabilities — was 9.5% higher at P7.982 trillion from P7.287 trillion a year ago.

The BSP said it will ensure that local bank lending and domestic liquidity conditions “remain consistent with its price and financial stability objectives.”

Based on PSA data released on Tuesday, headline inflation slowed to 6.4% in June from 6.8% in May, but was still much faster than the 1.4% pace logged a year ago.

The June inflation print came in below the 6.6% median forecast in a BusinessWorld poll of 18 analysts.

National Statistician Claire Dennis S. Mapa said inflation in transport cooled to 12.8% in June from 16.2% in May, while food and nonalcoholic beverages eased to 5.2% from 5.7%.

“Inflation slowed in June as easing oil price pressures and continued government measures to strengthen food supply helped temper price increases,” the Department of Economy, Planning, and Development (DEPDev) said in a separate statement, likewise noting easing tensions in the Middle East.

As of the first half of the year, inflation averaged 4.8%, still above the Bangko Sentral ng Pilipinas’ (BSP) 4% ceiling.

Meanwhile, core inflation, which discounts volatile fuel and food prices, quickened to 4.4% from 4.1% in May and 2.2% last year.

This matched the December 2023 reading and was the fastest pace seen since the 4.7% in November 2023.

Mr. Mapa noted that faster price increases in utilities, restaurants and accommodation services and education services, among others pushed the core print to an over two-year high.

PSA data also showed inflation in the National Capital Region (NCR) was slower at 4.9% in June from 5% in May, but picked up from 2.6% a year ago.

Outside NCR, it eased to 6.7% from 7.1% the previous month, but was faster than the 1.1% last year.

For the bottom 30% of income households, inflation also cooled to 8% in June from 8.4% in May. However, this was significantly faster than the -0.4% recorded in June 2025. — Katherine K. Chan

“What we have done is we have made our platforms extremely flexible so you can customize by tweaking the products inside or you can write your own software and modify or extend the capabilities of the products… Like how you have applications in the Apple, Android ecosystem, our customers and our partners can build applications on top of our platforms, extend the capabilities, modify behavior of our products and publish it in a marketplace,” ManageEngine Chief Executive Officer Rajesh Ganesan said in a media roundtable here on Monday.

The marketplace is a symbiotic ecosystem connecting partner-developers, customers, and the ManageEngine platform teams to co-innovate and accelerate enterprise IT outcomes.

Since its launch last week, the platform has hosted over 17 partner-developer organizations who have built more than 170 turnkey extensions, driving more than 10,000 downloads so far.

The solution rapid-deploys ManageEngine’s artificial intelligence (AI) agent Zia across the company’s platforms and third-party solutions to lift enterprise workloads.

Mr. Ganesan said their customers and partners can build an AI agent using the Zia Agent studio, where they can type in prompts to manage data.

He added that they are investing heavily in the solution as it will also build a developer ecosystem around ManageEngine.

“How many partners would we have in Southeast Asia region alone? There are distributors and then resellers that run in a few hundreds — 250 just in the Southeast Asian region. That is ecosystem for us,” Mr. Ganesan said.

“Now we are entering, building the developer ecosystem for ManageEngine, where ManageEngine is not just developed by our own people. It will be developed by the ecosystem in a very controlled fashion,” he added.

Across Southeast Asia, ManageEngine has more than 7500 customers, with revenues growing by an average of 25% predominantly coming from its cloud solutions, ManageEngine Asia-Pacific Regional Vice President Arun Kumar said.

“We offer both on-premise as well as cloud applications for ManageEngine and still Southeast Asia the major revenue comes from on-premise, particularly from banking, government, public sector because of the strong regulations. But cloud is picking up a lot of momentum, our cloud growth is around 35%,”

He said growth in the region will also be driven by existing customers buying more products as well as their security solutions.

The company has over 1,000 customers each in Indonesia and Singapore, some 800 in Malaysia, more than 750 in the Philippines, about 700 from Thailand, and over 500 in Vietnam.

In terms of revenue growth, Vietnam had the fastest expansion at 35%, followed by the Philippines at 30%, Thailand and Malaysia both at 25%, Singapore at 23%, and Indonesia at 20%. — Aaron Michael C. Sy

In a regulatory filing on Monday, Unlimited Renewables Holdings B.V. (URH), ACEN’s wholly owned subsidiary, said it had entered into a securities sale and purchase agreement with DIRO covering up to a 49% stake in Diyos Renewables India Project Private Ltd.

“The transaction is expected to close in stages, with DIRO acquiring an initial 10% voting interest in Diyos,” the company said.

Diyos is developing a 100-megawatt (MW) utility-scale wind project in Karnataka, India.

The transaction follows ACEN’s agreement last month to sell up to a 49% stake in Tejorupa Renewables India Project Private Ltd. to DIRO, allowing the Dutch investor to participate in the development of a 250-MW solar project in Rajasthan.

Earlier this year, an ACEN subsidiary acquired the remaining 50% voting interest in URH from UPC India Pte. Ltd., giving the Ayala-led renewable energy company full ownership of more than 1 gigawatt (GW) of renewable energy projects in India.

URH is developing three renewable energy projects across Rajasthan and Karnataka with a combined capacity of 1,059 MW.

As of end-2025, India accounted for 26% of ACEN’s net attributable capacity from its international operations. The company operates three solar power projects in the country with a combined capacity of 1,344 MW.

ACEN had about 7 GW of attributable renewable energy capacity across operational, under-construction, and committed projects in the Philippines, Australia, Vietnam, India, Indonesia, Laos, and the United States as of end-2025.

Shares in ACEN rose 3.55%, or 11 centavos, to close at P3.21 each on Monday. — Sheldeen Joy Talavera

THE DEPARTMENT of Finance (DoF) expects government reforms and stronger economic activity in the second half to lift the Bureau of Customs’ (BoC) revenue collections for the rest of 2026.

“I am optimistic. With the reforms we have put in place and the expected strength of the economy in the second half of 2026 will drive the performance of the agency,” Finance Secretary Frederick D. Go told BusinessWorld.

His remarks came after the BoC exceeded its June revenue target despite the government’s temporary suspension of excise taxes on kerosene and liquefied petroleum gas (LPG).

The BoC collected P86.07 billion in June, surpassing its P83.22-billion target by 3.4%. The figure was also 11.7% higher than the P77.04 billion collected in the same month last year.

The June outturn marked an improvement from May, when the agency fell short of its target following the suspension of excise taxes on kerosene and LPG.

Soaring global oil prices amid the Middle East conflict prompted the government to place the country under a one-year state of national energy emergency until March 2027.

To cushion the impact of higher fuel prices, the government suspended excise taxes on kerosene and LPG for three months beginning in mid-April.

In the first half, BoC collections rose 7.2% to P491.75 billion from P458.77 billion a year earlier. The amount also exceeded the P480.27-billion target for the period by 2.4%.

The first-half collections accounted for around 49% of the BoC’s P1-trillion revenue goal for 2026.

The Development Budget Coordination Committee recently lowered its revenue projection for 2026 to P4.81 trillion from P4.82 trillion previously.

In an earlier interview with BusinessWorld, DoF Revenue Integrity Protection Service Undersecretary Rolando T. Ligon, Jr. said the BoC remains on track to meet its full-year target, with import volumes expected to pick up starting in September.

In a July 3 report, Nomura Research Analyst Harrington Zhang said the country’s core inflation may have quickened to 4.5% last month from 4.1% in May and 2.2% a year ago.

“We also expect core inflation to continue to rise further to 4.5% from (4.1%), reflecting pass-through effects from still-elevated energy prices,” Mr. Zhang said.

If realized, this would be the fastest core print in two-and-a-half years or since 4.4% in December 2023.

It would likewise mark the second straight month that core inflation breached the central bank’s 2%-4% target.

Core inflation strips out volatile oil and food prices, allowing policymakers like the Bangko Sentral ng Pilipinas (BSP) to determine whether prevailing consumer price movements reflect short-lived disruptions or a long-term trend. 

Oil prices have eased further in June, with the global oil benchmark price falling by 21%, the largest decline recorded since the onset of the COVID-19 pandemic in March 2020, to below $100 per barrel. This was also faster than the 19% drop seen in May.

Fuel retailers implemented price rollbacks, with gasoline down by as much as P7.50 per liter and diesel cut by as much as P21.19 per liter.

However, the price of kerosene climbed slightly last month, posting a net increase of P1.98 per liter.

As of the last week of June, a liter of gasoline was sold for P68 to P96.60, while diesel cost P62.60 to P79.99 per liter, and kerosene at P94.60 to P125.50 per liter.

While pump prices have recovered from the over P100-a-liter peak during the war, it still remained above the prewar range of P50 to P60 per liter. 

In terms of headline inflation, Mr. Zhang projects it to ease for a second straight month at 6.4% in June from 6.8% in May.

“We expect CPI (consumer price index) inflation to ease further to 6.4% y-o-y (year-on-year) in June from (6.8%) in May, helped by a further drop in crude oil prices as well as stable rice prices, although upward adjustments to electricity generation charges provided some offset,” he said.

This was slower than the median estimate of 6.6% in a BusinessWorld poll of 18 analysts conducted last week. 

Meanwhile, Deutsche Bank Research sees inflation at 6.8% as high electricity rates offset the expected relief from softer transport prices during the month.

“Philippines’ headline inflation is forecast to remain unchanged at 6.8% year on year in June,” Deutsche Bank analysts said in a separate report on Monday. “While private transport inflation likely eased further alongside the fall in oil prices, this is likely to be offset by higher electricity rates — 19% year on year higher in June 2026 vs 17% in May.”

In June, Manila Electric Co. hiked electricity rates by 14.88 centavos per kilowatt-hour (kWh) to P14.4833 per kWh from P14.3345 per kWh. This translated to a P30 increase in the overall monthly electricity bill of households consuming 200 kWh.

MUFG Global Markets Research also projects inflation to stay above 6% in June, which would give the BSP reason to remain hawkish.

“Meanwhile, we think inflation in the Philippines will likely remain elevated at more than 6% year on year, and with risks of El Niño and food price pressures moving forward, we see the BSP remaining hawkish for now,” MUFG Senior Currency Analyst Michael Wan said in a report on Monday.

For Mr. Wan, the BSP may raise the benchmark rate further by a total of 50 basis points (bps). 

“We are forecasting BSP to hike rates two times more, bringing the policy rate to 5.25% by the end of 2026, which should over time provide some support for the currency,” he said. 

The central bank has tightened by a total of 50 bps as it increased the key interest rate by 25 bps for a second straight meeting in June, bringing benchmark borrowing costs to 4.75%. 

BSP Governor Eli M. Remolona, Jr. told reporters on Monday that the economy can still handle another 25-bp hike as it expects domestic growth to recover by the second half of the year following three consecutive quarters of slowdown.

He also earlier said that they still have a lot of room to tighten, especially as they want to contain price risks and bring inflation back to their 3% target using monetary policy.

The Philippine Statistics Authority will release the June inflation report on Tuesday (July 7).

Meanwhile, the Monetary Board will have three more rate-setting meetings this year on Aug. 27, Oct. 22, and Dec. 17. — Katherine K. Chan

“For us to achieve the 3.5% (growth) target for the year, the average for the last three quarters must be 3.7%,” DEPDev Secretary Arsenio M. Balisacan said at a press briefing on Monday.

“And for us to achieve 4.5%, the average for the last three quarters must be 5.07%,” he added.

The Development Budget Coordination Committee recently revised its 2026 gross domestic product growth target to 3.5%-4.5% from 5%-6%, citing the possible escalation of the Middle East conflict, weak consumer and business confidence, and intensifying El Niño.

The economy expanded by just 2.8% in the first quarter, slowing from 3% in the previous quarter and 5.37% a year earlier.

“The first half of 2026 has been challenging. The economy faced a combination of domestic and external shocks that slowed growth and pushed inflation higher,” Mr. Balisacan said.

Weak public infrastructure since late 2025 and the escalation of the Middle East conflict has slowed economic activity, fueled inflation, and dampened business and consumer confidence, he said.

Despite these headwinds, Mr. Balisacan said economic conditions are expected to improve in the second half of the year, even as the second quarter likely remained weak.

“We expect much improvement in the second half. The second quarter will be a challenge because that’s the peak of the Middle East conflict,” he added.

The DEPDev chief said he expects government spending to pick up in the second half as agencies accelerate infrastructure implementation after delays earlier this year.

“We have been working closely with these agencies and we see that the second half will be a much more improved situation as far as infrastructure and government spending is concerned,” he added.

To support the recovery in the second half, Mr. Balisacan said the government is prioritizing the restoration of business confidence and accelerating growth through faster infrastructure implementation and stronger private investment.

The government will also focus on containing inflation; strengthening food and energy security; investing in education, healthcare, digital transformation and workforce development; and improving governance to sustain long-term productivity and inclusive growth.

“These priorities reinforce one another. Together, they will help us build an economy that grows faster, withstands shocks better, and creates more opportunities for every Filipino,” Mr. Balisacan said.

However, he said inflation remains a downside risk, with the Bangko Sentral ng Pilipinas expecting inflation to stay above its 2%-4% target for the rest of the year.

“So, we’ll still be challenged by inflation, but we are determined to get that inflation come down as fast as we can. But there are, of course, factors that are sometimes outside of our control, the government’s control,” the DEPDev chief said.

A BusinessWorld poll of 18 analysts yielded a median estimate of 6.6% for June inflation, easing from 6.8% in May but much faster than 1.4% a year earlier. This falls within the central bank’s 6%-7% projection for the month, but will mark the fourth consecutive month that it breached the 2%-4% tolerance range.

Mr. Balisacan also warned that weaker economic growth could put the Philippines’ newly attained upper-middle income country (UMIC) status at risk.

“As any of the countries under that list, the World Bank list, countries can go up or down depending on how they perform after the reclassification,” he said.

To maintain its upper-middle income classification, Mr. Balisacan said the government must bring inflation under control, pursue fiscal consolidation, improve competitiveness, and ensure productivity drives economic growth.

“If we are able to do that, then the risk of falling below the threshold again is much lower,” he added.

The World Bank’s latest country income classification showed the Philippines posted a record gross national income (GNI) per capita of $4,850, which is within the UMIC category for economies with GNI per capita ranging from $4,636 to $14,375.

Prior to this, the Philippines was in the World Bank’s lower-middle income bracket since 1987. — Justine Irish D. Tabile

THE PHILIPPINE ECONOMY can still absorb another rate hike as growth is expected to rebound in the second half of the year, the Bangko Sentral ng Pilipinas (BSP) said.

BSP Governor Eli M. Remolona, Jr. said he hopes the country’s gross domestic product (GDP) will grow over 3% in the latter half of 2026 as the government ramps up spending.

Speaking to reporters on the sidelines of an event on Monday, he noted that the economy can still manage if the BSP extends its tightening cycle to deliver another 25-basis-point (bp) rate hike.

Asked if the economy can still handle another rate hike, the BSP chief said in a mix of Filipino and English: “It can, because 25 bps is small. It’s nominal” 

“If you deduct inflation from that, it’s still low,” he added.

However, Mr. Remolona did not answer when asked how much space they still have for additional 25-bp increases.

In the first quarter, the Philippine GDP growth slowed to 2.8% from 3% in the previous quarter and 5.4% a year ago, amid the Middle East war-driven energy shocks and lingering effects of last year’s flood control scandal.

The Development Budget Coordination Committee (DBCC) has already lowered its growth target this year to 3.5-4.5% from 5-6% previously.

Mr. Remolona noted that the economy is still grappling with tepid public spending due to the flood control mess fallout.

“The problem this year is there was a lack of government spending.  So, we expect to recover strongly in the second half of the year. Because of the flood control (scandal) they became strict with spending. But that might be okay by the second half,” he added.

As of May, government spending grew by 4.81% year on year to P2.6 trillion from P2.48 trillion a year ago. The DBCC has set a P6.46-trillion disbursement program for this year.

Mr. Remolona said the government has to be more disciplined in spending to help the economy recover in the July-to-December period.

“The catch-up plan is to start spending what we should have been doing, what we should have been spending if not for the flood control,” he said.

The BSP chief said there should be a rebound in the government spending in the second semester.

Despite the sluggish economy, the central bank capped its easing cycle in April to raise key borrowing costs for the first time in over two years amid emerging price pressures from the energy crisis.

Mr. Remolona said the Monetary Board’s decision came as they are banking on fiscal policy to support growth while they focus on containing inflation risks.

Last month, the BSP delivered its second straight 25-bp hike to bring the benchmark rate to 4.75% as it flagged broadening spillover effects of elevated oil prices.

Mr. Remolona at that time said they still have a lot of space to tighten but will likely stick to 25-bp hikes unless second-order price effects worsen further. 

In May, headline inflation eased to 6.8% from the over three-year high of 7.2% in April, bringing the five-month average to 4.5%.

For June, a BusinessWorld poll of 18 analysts showed the headline print likely continued to breach the BSP’s 2%-4% goal as it yielded a median forecast of 6.6%.

The central bank sees inflation settling above its target over the next three years at 6.4% in 2026, 4.5% in 2027, and 3.1% in 2028.

The Monetary Board is scheduled to hold three more policy reviews this year on Aug. 27, Oct. 22, and Dec. 17.

“If the super typhoon’s movement and direction do not change,” Aldczar D. Aurelio, weather specialist at the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), said during a 5:00 a.m. briefing in Filipino.

“It is expected to enter PAR between Tuesday night and early Wednesday morning,” he added.

Upon the super typhoon’s entry into PAR, it will be assigned the local name Inday, the country’s ninth tropical cyclone this year.

As of 4:00 a.m., Bavi was located 2,365 kilometers east of Southeastern Luzon, PAGASA said.

It intensified based on the latest monitoring, packing maximum sustained winds of 215 kilometers per hour (kph) and gusts of up to 265 kph.

“There is a low chance of it making landfall in the country. The super typhoon’s center may pass near the Batanes area before making landfall in Taiwan,” Mr. Aurelio said, adding that Bavi was moving west-northwest at 15 kph toward PAR.

As for its effects, the super typhoon, along with the effects southwest monsoon, is expected to bring strong winds to large parts of the country from Tuesday to Wednesday, Mr. Aurelio said.

By Thursday, the enhanced southwest monsoon may bring scattered rain showers and thunderstorms, particularly over the western portion of the country.

Fair weather is expected across the country on Monday as the effects of Bavi and the southwest monsoon have yet to be felt. However, localized thunderstorms may develop in the afternoon or evening. — Edg Adrian A. Eva

In a statement over the weekend, APECO said it will mount an investment mission to Malaysia on July 7-9.

The mission will also gauge interest in seaport development, with APECO positioning itself as a rising port on the Philippines’ Pacific coast.

“APECO will also explore potential partnerships in the halal industry, especially in food and beverage, tourism and related services, as it positions Aurora as a strategic investment destination connected to ASEAN (Association of Southeast Asian Nations) and Pacific markets,” APECO said.

It plans to promote the Casiguran International New Port and other flagship projects at the 24^th ASEAN Ports and Logistics 2026 Conference on July 8-9 in Kuala Lumpur.

During the event, APECO President and Chief Executive Officer Gil G. Taway IV will join a forum that will discuss the future of ASEAN and global trade routes.

“The session provides APECO with a strategic platform to present Casiguran as a future Pacific-facing gateway for cargo consolidation, storage, processing and redistribution, as shipping lines, logistics firms and port developers look for new routes and resilient trade nodes in the region,” it said.

Participants are estimated at 300 business leaders from the shipping, cargo, import and export, and logistics industries.

APECO will also conduct port benchmarking activities at Port Klang, Malaysia’s primary maritime gateway, it added.

The Aurora ecozone is located 357 kilometers northeast of the Philippine capital.

The ecozone also boasts direct access to the Pacific Ocean, making it an alternative shipping hub for major Asia-Pacific and North American markets, APECO said.

Mr. Taway has said that APECO has attracted P18 billion worth of investments in renewable energy, defense, tourism, agri-processing, cold storage, and skills training. — Beatriz Marie D. Cruz

PHILIPPINE chief executive officers (CEOs) are confident in using artificial intelligence (AI) in major company decisions, but workforce readiness and infrastructure deficiencies remain key bottlenecks, according to advisory services firm Deloitte Philippines.

“The CEOs want to adopt, but the people below or the infrastructure is not ready,” Deloitte Philippines Country Manager Ramon Chito F. Ramos, Jr. said in an interview with BusinessWorld on June 25.

“People are resisting change, they’re not upskilled to know how to use AI,” he said.

Mr. Ramos also noted that many AI users in the Philippines are still in the “pilot stage,” which yield limited benefits instead of enterprise-wide efficiency.

To move beyond the experimental use of AI, companies should focus on what outcome or business problem it’s trying to solve using their AI tools, he said.

“There should be a mindset shift in the way you do it. Otherwise, everybody’s just rushing to adopt the latest tool and they don’t know what to do, Mr. Ramos noted.

Some Filipino firms do not have the necessary infrastructure to scale their AI use, and the unstable internet connectivity in several areas remain a challenge.

“Among the companies I’m working with, some big ones are not even on newer technology. They’re maybe on AS/400, those very old mainframe computers,” he noted.

Mr. Ramos cited the Philippines’ young population as an advantage over its Southeast Asian peers but called on the government to implement a national strategy for AI adoption.

The Department of Science and Technology is spearheading the National AI Strategy for the Philippines, a framework to guide the development, deployment, and governance of an AI-powered economy by 2028. The strategy focuses on four key pillars: infrastructure, workforce, technology, and policy.

Mr. Ramos said students should be trained on AI and digital literacy early to ensure that they are equipped as the workforce grows more tech-driven.

While AI is not replacing humans, the Deloitte executive said it is redefining workforce roles.

“Whoever can work with AI has an advantage. The people whose jobs will get replaced are the ones who cannot cope and do not use AI,” he said.

As an example, Mr. Ramos pointed out that computers made the role of a traditional typist obsolete, forcing it to evolve into higher-value positions such as editing and content creation.

“No longer is it enough to just have a CPA (certified public accountant) license. Now, you need to be a CPA and AI-enabled,” he said.

The AI boom has also seen the rise of new roles like prompt engineers and AI workflow designers, he added.

However, he reminded companies to establish strict policies on the responsible use of AI to avoid data leaks when using public AI models.

“TECH-ENABLED” ADVISORY
The rise of AI and automation has also pushed Deloitte Philippines beyond its tax, accounting, and auditing functions to specialize in consulting services, Mr. Ramos said.

“We’re certainly gung-ho about growing the Philippines,” he noted. “Even our own mindset shifts within Deloitte. Now, we want to be known as a tech-enabled advisory firm.”

“We will do a lot of… technology implementations, whether it’s AI or ERP (enterprise resource planning) software. We are at the forefront of that globally, and we want to bring that expertise into the Philippines as well,” Mr. Ramos said.

He added that geopolitical tensions like the Middle East war have pushed corporate clients to tap advisory services.

“Whenever there is a crisis or volatility, that’s when advisory actually grows, because more people need advisors to answer [questions like] ‘How do I get out of this crisis? How do I make sure my company continues to grow despite what is happening locally or in the Middle East or with AI?’”

In the Philippines, Deloitte’s audit services are provided by Navarro Amper & Co., while its assurance, tax and related services are provided by Landicho Abela & Co.

Deloitte’s clients span industries like consumer products, banking, financial services, telecommunications, healthcare, and energy.

At a media briefing on Saturday, PSE President and Chief Executive Officer Ramon S. Monzon said the revised forecast is backed by applications received to date for initial public offerings (IPOs), preferred share offerings, and private placements.

“Our projected capital raising for 2026, as of this date, based on the applications that we have received, is about P204 billion. So, we exceeded our optimistic target of P170 billion that we gave at the beginning of the year. And that’s a very good sign for the exchange,” Mr. Monzon said.

The PSE had earlier set a capital-raising target of P170 billion to P175 billion this year despite market turmoil arising from the Middle East conflict and flood control mess. This was higher than the P144.14 billion raised in 2025.

For the first half of 2026, Mr. Monzon said the PSE raised about P39.4 billion through two private placements and follow-on offerings of preferred shares.

“I’m happy to report that for the first half of the year, we raised about P39.4 billion from two private placements and some follow-on offerings of preferred shares,” he said.

Mr. Monzon said the exchange has so far received applications for two IPOs this year, namely, VITRO, Inc. and Mynt Inc.

VITRO, PLDT Inc.’s data center arm, has filed an application for what could become the country’s first digital infrastructure real estate investment trust (REIT). It is targeting to raise up to P24.2 billion.

Mynt, the operator of e-wallet giant GCash, filed for a proposed IPO that could raise as much as P92.3 billion. It is looking to debut on the PSE in the fourth quarter.

According to Mr. Monzon, a P30-billion preferred share follow-on offering by San Miguel Corp. (SMC) is also in the pipeline this year.

Mr. Monzon said there is also a P9-billion preferred share listing by a company whose common shares are not listed on the exchange, as well as another P4-billion private placement of preferred shares.

For 2027, Mr. Monzon said the PSE is monitoring a potential merger of the toll road businesses of SMC and Metro Pacific Investments Corp. (MPIC).

“What do I look forward to in 2027? I keep hearing — and I’m hearing this from the principals; this is not a rumor — that there are ongoing talks to merge the San Miguel and the Metro Pacific tollways. And when that happens, I think they will be going to the market to raise capital,” he said.

MPIC Chairman Manuel V. Pangilinan said in June that he expects Metro Pacific Tollways Corp.’s merger with SMC to be completed by the third quarter. SMC is likely to emerge with a majority stake in the combined tollway business.

Mr. Monzon also said four companies under the PSE’s Listing Engagement and Assistance Program (LEAP) are expected to be ready to conduct their IPOs next year.

“We have four there that we have been meeting regularly, and I think they’re ready and prepared to do an IPO next year,” he said.

LEAP is the PSE’s listing assistance program for companies considering an IPO. It provides advisory sessions, pre-listing assessment tools, and connections to IPO advisers at no cost.

PSE BOARD
Also on Saturday, the PSE Board elected three new directors, and re-elected Mr. Monzon as president and CEO and Jose T. Pardo as its chair.

Asian Institute of Management (AIM) President and Dean Jikyeong Kang and Dutch technology expert Niek Johan van Veen were elected as independent directors. Lorenzo Andres “Randy” Roxas, president of Philippine Equity Partners, Inc., was elected as regular director.

Mr. Monzon said Ms. Kang’s international expertise will bring some “good parts of governance to the Exchange,” while Mr. van Veen’s over 20 years of expertise in information technology and artificial intelligence across Southeast Asia and Europe would support the PSE’s information technology and artificial intelligence (AI) initiatives.

“We really sought out a director who could guide PSE in its IT and AI journey, and I think Niek van Veen will fill those shoes,” he said. — Alexandria Grace C. Magno

THE NATIONAL GOVERNMENT’S (NG) debt service bill jumped by over 21% in May 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 surged by 21.4% to P97.18 billion in May from P80.05 billion in the same month a year ago.

Month on month, however, debt service slumped by 69.1% from P314.89 billion in April.

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

The bulk or 87% of debt payments in May consisted of interest payments, while the rest were amortization payments.

The government’s interest payments rose by 20.9% to P84.6 billion in May from P69.95 billion in the same month a year earlier.

Interest payments for domestic debt stood at P66.51 billion in May, up by 27.1% from P52.31 billion in the same month in 2025.

Of this total, P41.68 billion went to interest payments for fixed-rate Treasury bonds, P21.09 for retail Treasury bonds, and P3.74 billion for Treasury bills.

Meanwhile, interest payments for foreign borrowings inched up by 2.5% to P18.09 billion in May from P17.64 billion a year prior.

On the other hand, NG’s repayment of its loan principal increased by 24.6% to P12.58 billion in May from P10.09 billion a year ago.

These only consisted of amortization on foreign obligations as it did not make principal payments on domestic debt in May this year and last year.

FIVE-MONTH BILL
For the first five months, the government’s debt service bill surged by 63.5% to P1.15 trillion from P702.97 billion in the same period last year.

Amortization payments in the January-to-May period jumped by 110.7% to P728.21 billion from P345.57 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 44.1% to P97.85 billion.

Meanwhile, interest payments stood at P421.26 billion in the five months ending May, up 17.9% from P357.4 billion in the same period a year ago.

Interest payments on domestic debt jumped by 22.7% year on year to P320.8 billion in the first five months from P261.34 billion a year ago.

This consisted of P227-billion fixed-rate Treasury bonds, P68.41 billion for retail Treasury bonds, P20.83 billion for Treasury bills, and P4.55 billion in interest payments for other domestic borrowings.

Interest payments on foreign obligations increased by 4.6% year on year to P100.46 billion in the January-to-May period from P96.06 billion a year ago.

“The increase in debt service in May and during the first five months of the year likely reflects a combination of higher principal repayments and larger interest payments as the government continues to service a growing debt stock,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion told BusinessWorld via Viber.

“The repayment schedule of maturing obligations can also create significant swings in monthly debt service figures, particularly when large domestic or external debt maturities fall within a given period,” he added.

In the coming months, Mr. Asuncion said debt service could remain elevated due to the government’s ongoing financing requirements and the rollover of maturing debt.

“Interest payments may also stay relatively high as portions of the debt stock continue to reflect the higher interest rate environment seen in recent years,” he said.

He added that foreign exchange rate movements could affect servicing costs for foreign currency-denominated obligations.

On Friday, the peso closed at P61.415 against the greenback, strengthening by 15 centavos from its P61.565 finish on Thursday.

University of Asia and the Pacific economist Marco Antonio C. Agonia attributed the increase in debt servicing to a larger debt stock and elevated interest payments.

“Borrowing for the government’s normal operations and its response to higher oil prices mechanically increased principal repayment,” Mr. Agonia told BusinessWorld via e-mail.

“Meanwhile, elevated interest rates from larger risk premia arising from the flood control scandal and the oil price crisis materially pushed up interest payments thus far,” he added.

The NG’s outstanding debt stood at P18.55 trillion as of end-May, inching up by 0.41% from the prior month’s level of P18.47 trillion.

Year on year, outstanding debt went up by 9.62% from P16.92 trillion at end-May 2025.

PHILIPPINE INFLATION likely eased for a second straight month to a three-month low in June as lower oil and rice prices offset higher electricity rates, analysts said.

A BusinessWorld poll of 18 analysts yielded a median estimate of 6.6% for June inflation, slower than 6.8% in May but faster than 1.4% a year ago.

This falls within the Bangko Sentral ng Pilipinas’ (BSP) 6%-7% projection for the month.

If the median estimate holds true, this would be the second month in a row that inflation cooled. It would also be the slowest headline print in three months or since the 4.1% in March.

However, June may also mark the fourth consecutive month that it breached the central bank’s 2%-4% target.

The Philippine Statistics Authority will release the June inflation report on Tuesday (July 7).

Radhika Rao, a senior economist at DBS Group Research, said the headline print likely cooled to 6.6% amid lower global and domestic energy prices as well as cheaper key food items.

“We expect Philippines’ inflation to moderate to 6.6% (year on year) in June 2026 from 6.8% in May, but stay above the 2-4% policy target,” she said. “Price pressures likely slowed on the back of a decline in global oil benchmarks (consequently domestic pump prices) and easing food (rice, meat, etc.).”

In June, global oil prices eased below the $100-per-barrel level seen during the height of the Middle East war. It dropped by 21% from 19% in May, marking the steepest monthly decline since the 55% seen in March 2020, according to Reuters.

Local fuel retailers also cut pump prices by as much as P7.50 per liter for gasoline and up to P21.19 per liter for diesel, while kerosene prices posted a net increase of P1.98 per liter during the month.

“However, the pace of disinflation is decelerating sharply: May’s outsized -19.6% (month-on-month) pump price decline narrows to an estimated -5.9% in June, as most of the rollback room may have already been realized,” Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. noted.

Rice prices, alongside other key food items, also continued to decline month on month in June, which helped ease pressure from the heavily weighted food and nonalcoholic beverage index.

“Despite El Niño conditions, rice prices also fell month on month for a second straight month, likely reflecting relief from last year’s import ban,” China Banking Corp. Chief Economist Domini S. Velasquez said. “Other key food items, including meat, fish, fruits, eggs, and sugar also posted declines.”

A kilo of regular milled rice averaged P49.67 in the second half of the month, down 2.67% from P51.03 in May but up 16.79% from P42.53 in the same period last year, while well-milled rice was also sold for an average of P56.15 per kilo, nearly 3% lower than P57.88 in the prior month but 14.29% costlier year on year from P49.13.

Meanwhile, the price of special rice fell by 1.9% month on month to P64.44 a kilo from P65.69 but climbed by 10.1% from P58.53 a kilo a year ago.

OFFSETTING FACTORS
Meanwhile, four of the 18 analysts polled by BusinessWorld expect a slightly faster headline clip in June, citing costlier electricity and vegetables as well as the lagged spillover effects of high oil prices in recent months.

For Alvin Joseph A. Arogo, chief economist and research head of the Philippine National Bank, inflation likely hit 7% last month, “mainly due to the increase in prices of electricity and vegetables.”

Last month, Manila Electric Co. raised the overall electricity rate by 14.88 centavos per kilowatt-hour (kWh) to P14.4833 per kWh from P14.3345 per kWh. This was equivalent to a P30 increase in the total monthly electricity bill of households consuming 200 kWh.

University of Asia and the Pacific economist Marco Antonio C. Agonia said the year-on-year uptick in the cost of rice and other commodities could keep inflation past the BSP’s tolerance range.

“Oil price normalization from the productive Middle East peace talks and lower food prices for select items may have contributed to the slight easing,” he said. “However, elevated rice and vegetable prices compared to a year ago, along with utilities adjustments and second-round inflation effects, will likely keep inflation above target again.”

Mr. Agonia projects headline inflation to settle at 6.5% in June.

“In addition, lagged pass-through effects from earlier shocks, including peso weakness and elevated import costs, continued to support price pressures across goods and services,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion also said.

The local unit remained above the P61-a-dollar mark for two straight months, averaging P61.2513 versus the greenback in June. However, it strengthened by 23 centavos to close at P61.36 on June 30 from its P61.59 finish on May 29.

Mr. Asuncion also noted rising inflation expectations as households turn cautious, which could keep core inflation sticky.

For Chinabank’s Ms. Velasquez, the core print may have quickened to stay above the central bank’s target for the second consecutive month.

“Meanwhile, core inflation likely rose to 4.3%, breaching the BSP’s 4% tolerance ceiling for the second month,” she said. “This reflects price pressures in services, with education costs also picking up amid the back-to-school season.”

LOOMING PRICE RISKS
Meanwhile, BSP Governor Eli M. Remolona, Jr. said they are monitoring El Niño conditions and its potential effects on consumer prices.

The central bank projected inflation to average 6.4% this year, which Mr. Remolona earlier noted has yet to account for the expected impact of the El Niño event.

He told reporters last week that the upcoming wage hike poses a “significant” inflationary pressure but is unlikely to warrant an outsized policy rate hike.

The Department of Labor and Employment announced last week a dual tranche P85 rise in the minimum wage in Metro Manila, with a P60 hike set this month and the other P25 increase to come in January 2027.

Aris D. Dacanay, senior ASEAN economist at HSBC Global Investment Research, noted that the spillover effects of energy shocks, high fertilizer prices, and the approaching El Niño season could amplify one another and likely drive food prices higher.

“Looking ahead, we expect inflation to accelerate further in the second half of the year as the energy shock feeds through into food prices,” he said. “The lagged impact of fertilizer prices on food supply will likely come into the picture in the next few months, aggravating the potential damages the El Niño season may have on global food supply.”

For Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, a softer June inflation could signal waning inflation risks, giving the BSP reason to cut its tightening cycle short.

“If we’re right about another deceleration in headline inflation, then this should give the Monetary Board more evidence that the big jump in inflation since the war started is now firmly in the rear-view mirror, potentially then opening the door for the end of its mini-tightening cycle, which is becoming more costly given the still-weak state of the economy,” he said.

However, Maybank Investment Bank economist Azril Rosli said expectations of slower inflation last month will unlikely deter the BSP from tightening further to anchor inflation expectations amid emerging price pressures.

“With inflation remaining well above target and core inflation continuing to rise, the BSP is likely to maintain a higher-for-longer monetary policy stance to ensure inflation expectations remain anchored,” Mr. Rosli said.

“We continue to expect the policy rate to reach 5% by end-2026 and 5.25% by end-2027, although future policy decisions will remain data dependent,” he added.

Last month, the Monetary Board tightened for a second straight meeting, raising the benchmark interest rate by 25 basis points to 4.75%.

Mr. Remolona has left the door open for further “measured” hikes to temper broadening second-round price effects of the energy shocks.

The Monetary Board has three more rate-setting meetings this year on Aug. 27, Oct. 22, and Dec. 17.

“A fresh takeaway from this first meeting is that each girl actually represents a province or a town, and they’re very, very knowledgeable about what is a charming feature of the town,” Tourism Secretary Maria Bernardita “Dita” Angara-Mathay told reporters on the sidelines of BINI’s courtesy visit at the Tourism office.

“I thought that input was very refreshing, and each girl member has that to bring to tourism,” she added.

The Tourism department noted that the proud representation of the country’s culture through music on the global stage has cemented the group’s role as a tourism ambassador.

“They’re ambassadors already, but it behooves the government [to recognize] what they’re doing,” Department of Tourism (DoT) Assistant Secretary Ren V. Sapitan told reporters in an interview.

“It would be remiss of the government if we don’t recognize the pride that they themselves are pushing for,” he added.

The decision comes after the girl group’s historic performance at the Coachella Valley Music and Arts Festival in California earlier this year.

“The very first statement that the Secretary made on our platforms was to congratulate BINI. We saw the traction that it generated, and we read the comments as well,” Mr. Sapitan said.

“What we want the people to take away from that experience is that the Department of Tourism, the government, is listening,” he added. “And of course, only Filipinos can say what’s best for the Philippines, and that is BINI.”

As the new tourism ambassadors, the agency plans to engage the octet in regional and provincial events to boost the local tourism economy amid the ongoing oil crisis.

“We recognize the power of BINI, the influence that they have in bringing viewers, not just within the Philippines but also from abroad,” Mr. Sapitan said. “That’s the reason why we want them to be recognized as ambassadors.”

Other Filipino talents, including P-pop boyband SB19 and professional tennis player Alex Eala, are also eyed to promote the country’s local destinations.

“We want to highlight people who’ve made marks like BINI, SB19, Alex Eala, and others that are doing it,” Ms. Angara-Mathay said. “We don’t want to exclude anybody who’s making the country proud.”

BINI, known as the “Nation’s Girl Group,” is the hitmaker behind viral songs “Pantropiko,” “Salamin, Salamin,” “Cherry On Top,” “Blink Twice,” and “Karera”. Members of the group are Aiah, Colet, Maloi, Gwen, Stacey, Mikha, Jhoanna, and Sheena. — Almira Louise S. Martinez

The Philippines could exhaust its healthcare resources if the rapid rise in chronic kidney disease (CKD) cases is left unchecked, a leading nephrologist has warned.

Speaking at the Hisgutan Ta media forum in Cebu, Dr. Juliet Chua Chong-Noel said the growing burden of kidney disease is already straining the system, particularly through the high cost of dialysis.

“If we don’t do anything about it, we’re going to deplete our resources,” said Dr. Noel, who is the treasurer of the Philippine Society of Nephrology.

In the first five months of 2025 alone, the Philippine Health Insurance Corp. (PhilHealth) paid P161 million for hemodialysis procedures at the National Kidney and Transplant Institute. In 2024, hemodialysis was the state insurer’s top paid medical procedure in the country.

Dr. Noel’s warning comes as CKD cases continue to climb nationwide. As early as 2021, data showed that more than seven million Filipinos were living with the disease, with at least one new case recorded every hour.

Beyond dialysis, government spending has also expanded to cover kidney transplantation, with PhilHealth benefit packages reaching over P2 million. And because of the continuous increase in patients, Parañaque Rep. Brian Yamsuan recently filed a bill seeking to expand CKD coverage even further.

Dr. Noel stressed that treatment alone is not sustainable.

“What we want is prevention. There should be more people going to doctors before they even get sick. We need to be proactive in getting check-ups,” she said.

CKD develops when kidneys are damaged over time, impairing their ability to filter waste and excess fluids. The disease is particularly dangerous because it often shows no symptoms in its early stages.

Who are most at risk

Dr. Noel identified diabetes and hypertension as the leading causes of CKD worldwide. She said that the moment a person is diagnosed with diabetes, they should already be having their kidneys checked.  Other risk factors include obesity, smoking, a family history of kidney disease, heart disease, older age, and being born small for gestational age.

Lifestyle factors further worsen the situation. Poor diet and lack of physical activity are contributing to the increasing number of cases — including among younger Filipinos.

Latest data from the Philippine Renal Disease Registry show that adults aged 20 to 59 now make up majority of CKD patients (57%), overtaking senior citizens (41%).

Hidden risk of supplements

Dr. Noel also warned against the widespread and often uncritical use of food supplements, which she said may pose hidden dangers to kidney health.

“The mind-set is that if it’s a supplement, it’s safe and has no side effects. That is not true,” she said. Unlike prescription medicines, supplements are not subjected to the same level of rigorous testing and regulatory scrutiny. Many are not required to prove their safety or effectiveness through clinical studies.

“A drug goes through years of research. Every component is measured. But supplements don’t go through the same process because they don’t claim to cure anything,” Noel explained.

She noted that while some natural ingredients like ampalaya may have health benefits, their effects can change when concentrated into pill form. “When you extract it into a pill, we don’t know anymore. Too much can cause toxicity; too little may not have any effect at all.” She added that potential impurities introduced during manufacturing may also harm the kidneys and liver.

Dr. Noel said the popularity of supplements has been fueled by social media influencers, often without scientific backing. “In science, testimony is the lowest form of proof. But it’s difficult when we’re up against influencers who are more popular than us doctors.”

She reminded the public to follow the eight golden rules of kidney care:

1. Control blood pressure
2. Control blood sugar
3. Have a healthy diet
4. Exercise regularly
5. Drink adequate water
6. Stop smoking
7. Don’t abuse pain relievers and supplements
8. Get regular checkups

With CKD cases continuing to rise and many patients remaining undiagnosed until they reach advanced stages, Dr. Noel emphasized that prevention — through early screening, healthier lifestyles, and informed medical decisions — remains the country’s best defense.

“The launch of RYPIC here in Ilocos Norte represents a transformative milestone, one that will undoubtedly reach far beyond the borders of this province, catalyzing regional growth and national progress,” DoST Secretary Renato U. Solidum Jr. said during the launch event in mixed English and Filipino.

The new micro-scale yarn-spinning facility processes natural textile fibers (NTFs), such as abaca, banana, pineapple, bamboo, and cotton, into high-quality NTF-blended yarns. It also has in-house dyeing and finishing capabilities and houses a basic yarn testing laboratory for product quality assurance and compliance.

The facility’s infrastructure was funded by the municipal government of Vintar, while the advanced textile technologies used to produce the yarns were provided by the DoST-Philippine Textile Research Institute (DoST-PTRI). It will be operated by a pool of textile engineers, technicians, and scientists.

Since its soft launch in November last year, the facility has already produced 1,000 kilograms of cottonized yarn, which will be distributed to local weavers in the region.

The facility, which is the largest among the four RYPICs in the country in terms of building size and production capacity, can produce around 50 to 75 kilograms of yarn per day. It is projected to generate between P25 million and P72 million in annual revenue, DoST-PTRI said.

DoST-PTRI Director Julius L. Leaño Jr. said the establishment of the facility could support at least 860 weavers and 56 handweaving communities in the Ilocos Region, the second-largest weaving hub in the country after the Cordillera.

During the launch, several key government officials from the region expressed their support for and gratitude over the construction of the RYPIC.

Vintar Mayor Richard A. Degala noted that the facility strengthens the municipality’s sustainable livelihood initiatives.

“The RYPIC is a great blessing that will help us realize our goals and aspirations,” Mr. Degala said in his keynote speech in Filipino, referring to the municipality’s sustainable livelihood initiatives.

“The RYPIC will serve as a bridge to a brighter future for our production of high-quality yarn and textiles, not only for the municipality of Vintar but also for the entire Ilocos Region and Luzon,” he added.

The RYPIC also supports Republic Act No. 9242, or the Philippine Tropical Fabrics Law, which mandates the use of natural fiber-based fabrics in government uniforms.

Following the facility’s launch, it is expected to undergo succeeding phases, including technology system validation and business incubation (Phase 2), full commercialization or licensing (Phase 3), and expansion and scaling up (Phase 4). — Edg Adrian A. Eva

“Connecting the country is a responsibility that we all share as Philippine telcos,” PLDT Chairman and CEO Manuel V. Pangilinan said in a statement.

“This agreement reflects that, even as we compete in the marketplace, we can collaborate where it matters the most: accelerating digital inclusion, helping connect every Filipino, and creating greater opportunities for our people and our nation,” he added.

The collaboration between industry rivals allows companies to cut digital infrastructure expansion costs by establishing a reciprocal resource-sharing framework.

Under the non-monetary agreement, companies will share the use of eligible tower sites, telecommunications infrastructure within commercial buildings and other indoor locations, and submarine cable capacity for existing international connectivity assets.

The companies noted that the partnership will allow them to maximize the use of existing macro sites and in-building infrastructure, expand network coverage, and avoid duplicative investments.

“This partnership that we are forging today is a modest one,” DITO Telecommunity President and Chief Executive Officer Eric Alberto said in a statement.

“This allows both companies to deliver much better services for all our respective customers,” he added. “May this partnership usher and blossom into many more things so that we can have meaningful results for our companies, and more importantly, for the betterment of services for all our respective customers.”

The Philippines currently has a total of 137 million active cellular mobile connections and 98 million internet users as of 2025, according to a report by DataReportal. — Almira Louise S. Martinez

The Small Enterprise Technology Upgrading Program (SETUP) is the agency’s flagship program for micro, small, and medium enterprises (MSMEs), providing financial and technical assistance to help them acquire appropriate technologies.

DoST Secretary Renato U. Solidum Jr. told BusinessWorld that eligible MSMEs can receive up to P5 million in assistance. The amount is repayable over three years, with repayment beginning after the first year and carrying 0% interest.

“With the SETUP program, our real goal is to help MSMEs become bigger,” Mr. Solidum said during a project site visit in Ilocos Norte on Thursday. “If they started as small, we want them to become medium.”

AutoNorte, an auto parts and accessories trading business based in Batac, Ilocos Norte, is among the beneficiaries of the SETUP program, having received P1.1 million in assistance to acquire additional equipment.

The equipment includes a four-post lifter, tire changer, wheel balancer, and high-precision computerized wheel alignment machine.

The DoST said the business has recorded productivity improvements, including cutting service time in half, increasing its number of clients by 30%, expanding its service volume by 50%, and creating three additional jobs.

“Through the equipment, they can already offer faster service while ensuring that they continue earning and expanding their product offerings on their own,” Mr. Solidum said in Filipino, citing the benefits of the program for the company.

The DoST Secretary also said that the agency is helping MSMEs expand beyond the support provided under the SETUP program through its recent partnership with the Land Bank of the Philippines, enabling qualified beneficiaries to access additional financing after undergoing the agency’s evaluation and endorsement process.

Apart from the metals and engineering sector, the DoST’s SETUP also supports MSMEs in priority industries such as food processing, agriculture and aquaculture, furniture manufacturing, textiles, health products, information and communications technology (ICT), among others.

Since the program’s inception in 2002, it has assisted more than 100,000 MSMEs, DoST said. — Edg Adrian A. Eva

AT LEAST 26 Japanese firms have expressed interest to invest in the planned Metro Rail Transit Line 3 (MRT-3) public-private partnership (PPP) project, according to the Department of Transportation (DoTr).

“The MRT-3 PPP is more than an investment opportunity — it is an invitation to potential investors to help reshape how millions of Filipinos can swiftly move every single day,” Transportation Secretary Giovanni Z. Lopez said in a statement on Thursday.

“We are committed to building a railway system our people rightfully deserve, and we look forward to partnering with the private sector to help make this vision a reality,” he added.

DoTr said several “reputable” firms made expressions of interest during the market sounding activity it conducted with the Asian Development Bank (ADB) in Tokyo, Japan last June 23. The ADB is the project’s transaction adviser.

There have been at least 74 local and foreign firms that have expressed intent by participating in market consultations for the operations and maintenance (O&M) of MRT-3.

MRT-3 is a 17-kilometer elevated passenger rail line with 13 stations that follow the alignment of Epifanio de los Santos Avenue (EDSA), a major thoroughfare in Metro Manila.

The Philippine government is seeking to privatize the O&M functions of MRT-3, with awarding of the contract targeted by early 2027.

DoTr previously said the winning bidder is expected to take over MRT-3 operations by October next year.

Nigel Paul C. Villarete, a senior adviser on PPPs at Libra Konsult, Inc., said the interest from Japanese firms is a welcome development as Japan is a leader in railway systems.

“In terms of railways, very few other countries can compare with Japan,” Mr. Villarete said in a Viber message. “They have always been the first to develop railways in Asia and remains one of the leading users of rail transportation.”

However, he noted that Japan’s trains are more expensive because they are built to a much higher standard.

“We still have our procurement procedures to follow which requires open bidding — meaning open to all suppliers, Japanese or otherwise, and they have to compete openly,” Mr. Villarete said.

Transportation Assistant Secretary for Railways Eduardo Danilo F. Macabulos said the MRT-3 PPP project represents only one part of “a growing pipeline of opportunities” that the private sector can participate in to help shape the future of the transportation sector.

“At the end of the day, our goal is actually very simple: to help people save precious time. It may sound like a simple objective, but if we can give millions of Filipinos even one or two hours back in their day, the impact on their lives can be enormous,” he said.

In the near term, the department hopes to open more O&M opportunities to private companies, such as the North-South Commuter Railway, Metro Manila Subway Project, as well as the upcoming Light Rail Transit-2  and Philippine Automated Fare Collection System PPPs.

These projects form part of the broader 30-year Railway Master Plan, which serves as the government’s long-term blueprint for building and improving the country’s train system.

THE PHILIPPINES could gain access to lower tariffs and secure a bigger role in global supply chains if it gains a seat in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

However, the government must push for reforms to boost domestic firms’ competitiveness and lower logistics costs to ensure local firms can compete globally, they said.

Former Tariff Commissioner George N. Manzano said the Philippines would gain much-needed predictability in trading rules by joining the CPTPP as geopolitical tensions stress the need for market diversification.

“A rules-based trading arrangement gives businesses more confidence to invest, build long-term supply chains, and expand production,” he told BusinessWorld in a Viber message.

Being part of the CPTPP would also help the Philippines attract more foreign direct investment and could deepen its participation in regional and global value chains, Mr. Manzano said.

The 12-country CPTPP is composed of Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the UK. The trade pact represents a combined population of over 500 million and a gross domestic product of $13.5 trillion.

The parties to the CPTPP last week agreed to begin preparatory talks for accession of the Philippines, the United Arab Emirates (UAE), and Indonesia into the trade bloc.

“We’ve strongly supported the Philippines’ application. If the Philippines completes the process and joins the agreement, businesses in our countries would benefit from lower tariffs, simpler trading rules, and stronger supply chains,” UK Deputy Trade Commissioner for Asia-Pacific (Southeast Asia) Rhiannon Harries was quoted as saying in a statement released by the British Embassy Manila on Tuesday.

The CPTPP earlier said the Philippines, the UAE, and Indonesia align with the Auckland Principles or the criteria used by the bloc to evaluate applicant countries.

The preparatory discussions seek to advance engagement and understanding between the Philippines and the CPTPP parties on the agreement’s standards. However, the talks do not guarantee accession or the launch of formal negotiations.

“The UK looks forward to working together with CPTPP Parties and the Philippines through this process,” British Ambassador to the Philippines Sarah Hulton said in a statement.

As global trade grows more uncertain, the Philippines is pursuing entry into the trade bloc to expand market access and reduce trade barriers. As part of CPTPP, the Philippines would be able to access one of the world’s most comprehensive trade networks, potentially benefiting from lower tariffs and streamlined trade rules across different markets.

Management Association of the Philippines President Donald Patrick L. Lim said the Philippines must keep up with its regional neighbors in improving cross-border trade through agreements like the CPTPP.

“As our ASEAN (Association of Southeast Asian Nations) neighbors deepen their trade integration, the Philippines must remain competitive in attracting investments and expanding export opportunities,” he said in a Viber message.

However, the Philippines must implement domestic reforms to reduce trade barriers to meet the CPTPP’s entry standards and ensure that local industries are not left behind, experts said.

“The CPTPP is a high-standard agreement that goes beyond tariff reduction and has beyond-the-border commitments. Complying with these obligations will require domestic policy reforms and stronger institutional capacity,” Mr. Manzano noted.

To ensure that domestic firms can compete in export markets, Mr. Lim cited the need to improve the ease of doing business, upgrade infrastructure, lower logistics costs, support digitalization, and upskill the local workforce.

“Trade agreements like the CPTPP create opportunities, but our businesses must be equipped to take advantage of them,” he said.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said there is a need to reduce export costs and modernize the agriculture sector to ensure that domestic firms are export-ready.

“Without stronger competitiveness — better logistics, infrastructure, and ease of doing business — we could see imports rise faster than exports, putting pressure on local industries, particularly agriculture and small and medium enterprises,” he said in a Viber message.

Philippine membership in the CPTPP could encourage more British firms to invest and trade in the Philippines and across Southeast Asia, British Chamber of Commerce Philippines Executive Director and Vice Chairman Chris Nelson said.

“If the Philippines gains access to the CPTPP, this actually broadens out opportunities for companies that we are seeking to try to come to the Philippines and in Southeast Asia,” he said via telephone.

PRESIDENT Ferdinand R. Marcos, Jr. on Thursday welcomed the Philippines’ reclassification as an upper-middle income country (UMIC) by the World Bank, but economists cautioned that slowing growth could threaten the country’s ability to retain the status.

“After nearly four decades as a lower-middle income country since 1987, this milestone affirms that the economic policies we have pursued over the past four years have been effective,” Mr. Marcos said in a video message.

“Our steady economic growth, broadly stable currency and long-term reforms have strengthened our economy even amid global uncertainties. It validates the progress we have made and the resilience of the Filipino people,” he added.

The World Bank’s latest country income classification showed the Philippines posted a record gross national income (GNI) per capita of $4,850. This lifted the country into the upper-middle income category — one with GNI per capita ranging from $4,636 to $14,375.

The World Bank computes a country’s GNI through the Atlas method, which serves as the basis of its income classifications — low, lower-middle, upper-middle and high. GNI refers to the total amount of money earned by its residents both inside and outside its borders.

“The Philippines achieved its reclassification through broad-based expansion. GDP grew at an average of 5.8% per year over five years, reflecting gains across all major industries, not a single sector boom, but an economy-wide shift,” the World Bank said in a blog post late on Wednesday.

The Department of Economy, Planning, and Development (DEPDev) said strong performance across all industries helped raise the country’s GNI per capita by 8.5% from $4,470 last year.

“This confirms the resilience of the Philippine economy,” DEPDev Secretary Arsenio M. Balisacan said, adding that the government has pursued inclusive growth despite global and domestic shocks.

Finance Secretary Frederick D. Go said the country should “continue to build on these gains so that the benefits of economic development reach more Filipinos.”

CHALLENGES
Francisco Cid L. Terosa, an associate professor and former dean of the School of Economics of the University of Asia and the Pacific, said the reclassification of the Philippines as a UMIC was largely driven by sustained moderate economic growth and slower rate of population growth.

However, he noted that the Philippines remains close to the lower end of the World Bank’s GNI per capita range for upper-middle income economies, exceeding the UMIC threshold by just $214.

“This means that it can be more easily reclassified than those close to the upper limit of the classification. Geopolitical events and related consequences from the second and remaining quarters of the year will definitely bear down on the classification of the Philippines,” Mr. Terosa told BusinessWorld.

“Although reclassification is not easily done, current rates of economic growth can jeopardize  our much-anticipated UMIC classification,” he added.

GlobalSource Partners Philippine Analyst and Principal Advisor Diwa C. Guinigundo said that the challenge now for the Philippines is to sustain its upper-middle income classification in the years ahead.

“The challenge for us, after having been reclassified, is to continue growing 5%, 6% or 7% for us to remain within that reclassification,” he said in an interview on Money Talks with Cathy Yang on One News on Thursday.

In 2025, Philippine GDP expanded by 4.4%, the weakest post-pandemic growth. Economic managers expect GDP to grow by 3.5-4.5% this year, and by 5-6% from 2027 to 2030.

“Possible negative repercussions of weather-related disturbances can also decelerate economic growth and consequently both productivity and employment. Political tensions can constrain business and investment expansion plans, derailing economic growth,” said Mr. Terosa.

Other risks to the country’s UMIC status include weaker productivity and employment, both of which affect per capita income.

Recent economic data suggest these risks are beginning to materialize. Data from the Philippine Statistics Authority showed the jobless rate rose to 4.7% in April from 4.1% in the same month last year. Labor productivity rose by 2.2% in the first quarter, easing from 4.2% in the same quarter a year ago.

Mr. Balisacan said the Philippines’ new classification does not diminish ongoing challenges.

“We acknowledge that income disparities persist, and many continue to face economic difficulties. Our priority is to ensure that growth becomes more inclusive, and that its benefits reach all Filipinos,” he said.

CONCESSIONAL FINANCING
Meanwhile, Mr. Balisacan said that while some concessional official development assistance (ODA) may decline over time, “the gains from stronger fundamentals and improved market access are expected to outweigh these adjustments.”

“Some concessional financing and grants from international development institutions like the Asian Development Bank and World Bank itself, may gradually become less available because of our reclassification to an UMIC,” said Mr. Guinigundo.

Maybank Investment Bank Economist Azril Rosli said the reclassification is likely to reduce the Philippines’ access to concessional financing over time, as eligibility for some World Bank and multilateral lending facilities is linked to income classification.

“This may gradually increase the government’s reliance on market-based financing and private capital to fund infrastructure and development projects,” he told BusinessWorld.

However, Mr. Rosli said that he does not expect the transition to materially constrain public investment in the near term.

“The Philippines has strengthened its fiscal position over recent years and continues to benefit from relatively favorable access to domestic and international capital markets,” he said.

“Moreover, stronger investor confidence associated with upper-middle income status could help offset the gradual decline in concessional financing by attracting greater private sector participation, particularly through public-private partnerships and foreign direct investment,” he added.

In the medium term, Mr. Rosli said the net impact should be positive if fiscal discipline and structural reforms will continue to be implemented consistently.

Chinabank Research said any reduction in access to concessional financing is unlikely to happen immediately.

“The eligibility for these facilities is generally phased out only when the GNI per capita exceeds $7,000,” it said in a note on Thursday.

“Lower market rates could help offset the loss of some concessional financing, helping keep the funding of the key government programs and infrastructure projects manageable,” it added. — with Erika Mae P. Sinaking

The latest data from the Treasury showed that outstanding debt stood at P18.55 trillion as of end-May, inching up by 0.41% from the previous month’s level of P18.47 trillion. 

“The increase was primarily driven by the net incurrence of domestic securities as the government continued to raise funds to support financing needs, despite the ongoing Middle Eastern conflict,” the BTr said in a statement on Thursday.

“Meanwhile, the appreciation of the peso against the US dollar and other foreign currencies helped temper the increase.”

The Treasury noted the local currency strengthened by 3.9 centavos against the dollar to P61.501 as of end-May from P61.54 as of end-April.

Year on year, outstanding debt went up by 9.62% from P16.92 trillion at end-May 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 67.37% of the total debt stock came from domestic sources, while the rest were from external sources.

“This reflects the government’s prudent debt management strategy of prioritizing domestic financing to support local capital markets, while reducing exposure to foreign exchange risks,” the Treasury said.

Domestic debt, which was composed of government securities, inched up by 0.65% to P12.5 trillion at end-May from P12.42 trillion at end-April.

According to the BTr, the month-on-month increase in domestic debt was “mainly due to P80.23-billion net issuance of government securities, while the peso appreciation trimmed P0.11 billion from onshore dollar bonds valuation.”

Year on year, domestic debt jumped by 6.07% from P11.78 trillion.

Meanwhile, external debt dipped by 0.07% to P6.051 trillion as of end-May from P6.055 trillion at end-April.

Year on year, it jumped by 17.77% from P5.14 trillion.

The BTr said the drop in the external debt is due to the significant peso appreciation against the US dollar and other foreign currencies.

“The favorable downward valuation effect of P18.91 billion outweighed the P14.9 billion in net external debt availment,” it added.

External debt was composed of P3.05 trillion in global bonds and P3 trillion in loans.

The NG’s guaranteed obligations jumped by 15.73% to P443.5 billion as of end-May from P383.23 billion in the previous month.

“This was partially offset by favorable revaluation effects on external guarantees, amounting to P60 million for local currency-denominated guarantees and P750 million for third currency-denominated guarantees,” it said.

The Treasury also cited repayments of external guarantees worth P530 million.

Year on year, guaranteed obligations surged by 29.08% from P343.58 billion.

“The increase in outstanding debt to P18.55 trillion is not surprising given the government’s ongoing financing needs for infrastructure, social programs, and economic development,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas told BusinessWorld.

He said the more important metric is whether the economy is growing fast enough to support the debt, rather than the debt’s absolute size.

“I expect debt levels to continue rising in the coming months as the government funds its budget requirements and refinances maturing obligations,” Mr. Ravelas said.

“However, markets will be watching the debt-to-gross domestic product (GDP) ratio rather than the absolute debt level,” he added.

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.

The debt-to-GDP ratio stood at 65.2% in the first quarter, up from 60.7% a year earlier and its highest level since the 65.7% recorded in 2005.

This also exceeded the government’s 2026 target range of 60% to 63% under the Philippine Development Plan 2023-2028 Midterm Update Results Matrices released in May. — Justine Irish D. Tabile

“It is possible that by Tuesday or Wednesday, it will enter PAR,” Obet Baddrina, weather specialist at the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), said in a 5:00 a.m. briefing in Filipino.

He noted that upon its entry, it will be assigned the local name Inday, the country’s ninth tropical cyclone this year.

Typhoon Bavi was last located about 3,400 kilometers east of the country’s landmass and is expected to continue moving westward toward Taiwan.

Mr. Baddrina said the storm may enhance the southwest monsoon next week, affecting large parts of Luzon and the Visayas.

It may also prompt the hoisting of tropical cyclone wind signals in some areas.

“So, it’s possible that the southwest monsoon will be enhanced next week, triggering rainy conditions from Wednesday to Friday,” he said.

PAGASA urged the public to continue monitoring updates on the potential super typhoon, which is expected to enter PAR next week. — Edg Adrian A. Eva

Citing preliminary data, the PSA said the general retail price index (GRPI) in the National Capital Region (NCR) rose by 4% year on year in May, faster than the 0.8% growth posted in the same month a year earlier. Month on month, growth slowed from 4.5% posted in April.

The May reading was the slowest in two months or since 3.3% logged in March.

In the January-to-May period, GRPI averaged 3.2%, more than double the 1.1% pace in the same period a year earlier.

“The downtrend in the annual growth rate of the GRPI in May 2026 was primarily brought about by the slower annual increment in the index of mineral fuels, lubricants, and related materials at 36.6% from 51.3% in the previous month,” the PSA said.

The subindex for mineral fuels, lubricants, and related materials accounted for 4.17% of the GRPI.

The heavily weighted food subindex, which accounted for 37.5% of the GRPI, likewise saw a softer rise of 3.1% in May compared with  3.2% posted in April.

On the other hand, commodity groups that posted stronger growth were beverages and tobacco (1.8% in May from 1.6% from April); chemicals, including animal and vegetable oils and fats (3% from 2.9%); manufactured goods classified chiefly by materials (1.9% from 1.8%); and machinery and transport equipment (3.3% from 2.8%).

Meanwhile, growth rates steadied in crude materials, inedible except fuels (4.6%); and miscellaneous manufactured articles (1.1%).

The GRPI is based on 2012 constant prices.

The PSA uses the GRPI as a deflator in the National Accounts, particularly in the retail trade sector, and serves as a basis for forecasting. — Heather Caitlin P. Mañago

APPROVED BUILDING PERMITS inched up by 0.8% year on year in 2025, as construction activity moderated amid macroeconomic headwinds and the flood control mess in the second half of the year, analysts said.

Data from the Philippine Statistics Authority showed the number of building permit approvals rose to 181,832 in 2025 from 180,341 a year earlier.

However, the uptick was slower than the 5.3% growth in 2024.

This was the weakest pace in two years or since the 1.7% decline logged in 2023.

Construction projects covered 45.24 million square meters (sq.m.) of floor area, up 5.6% from 42.84 million sq.m. in 2024.

In 2025, approved building projects were valued at P601.42 billion, 6.7% higher than the P563.89 billion logged in the previous year.

“The minimal increase in approved building permits likely reflected growth headwinds at the time. An extended condo oversupply and the graft scandal in the second half of the year weighed on developer appetite,” Marco Antonio C. Agonia, an economist at the University of Asia and the Pacific, said in an e-mail.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the building activity showed moderation rather than weakness in 2025.

“Developers and households pulled back slightly as interest rates stayed elevated, construction costs remained sticky, and demand especially for office space became more cautious after a strong 2024,” he said in a Viber message.

Residential buildings, which made up the bulk or 64.8% of the total number of projects, inched up by 1.2% last year to 117,832 from 116,427 in 2024.

The total value of residential projects reached P253.64 billion, up by 2% from P248.65 billion a year earlier.

Single-type houses, which made up 85.3% of residential construction, rose by 3.1% year on year to 100,552 in 2025 from 97,490.

On the other hand, building permits for apartments fell by 9.9% to 14,215, while permits for duplex or quadruplex homes declined by 7.8% to 2,773.

Meanwhile, nonresidential construction projects dipped by 0.6% annually to 38,991 last year from 39,238 in 2024. This accounted for 21.4% of the total number of constructions in 2025.

The value of these nonresidential projects totaled P278.65 billion, 11.1% higher than P250.86 billion in 2024.

Commercial buildings saw a 2.4% year-on-year decline to 26,395 from 27,053. These made up 67.7% of total nonresidential constructions.

Institutional building projects also declined by 2.5% annually to 6,751, while industrial permits rose 13% to 3,356.

Agricultural projects surged 17.8% to 1,375 in 2025. Other nonresidential constructions fell 1.1% to 1,114.

Building permits for addition, or any new construction that increases the height or area of an existing building, contracted by 0.7% year on year to 5,655 in 2025 from 5,694 in the previous year.

On the other hand, alteration and repair of buildings totaled 14,372, up 2.7% from 13,997 a year ago. These were valued at P43.75 billion.

By region, Calabarzon logged the highest number of approved building permits at 44,819, making up 24.6% of all permits.

Central Luzon followed with 24,889 (13.7% share) and Ilocos Region with 14,048 (7.7% share).

“Regions like Calabarzon and Central Luzon continue to lead because of improving infrastructure, proximity to Metro Manila, and the steady shift of economic activity outward, this is decentralization in action and a positive sign for more balanced growth,” Mr. Ravelas said.

For Mr. Agonia, the large share of approved building permits in Calabarzon reflected the wave of developments in areas near Metro Manila.

“These growing regions have attracted investments, urbanization efforts, and industrial parks from firms looking to set up outside of the dense urban core. Housing affordability is also better in these regions compared with the Metro,” he said.

Mr. Agonia said construction projects may see a “lift” in the second semester, “but it may take time for pre-crisis growth to return.”

“Risks to the downside include elevated borrowing rates and building material costs along with subverted economic confidence,” he added.

Mr. Ravelas also expects building projects to pick up at a modest, measured pace this year with easing rates and continued infrastructure spending.

“In short, the sector is not losing steam; it’s transitioning to a more sustainable, regionally driven growth path,” he said.

“The Philippine economy is posting early signs of recovery momentum, but the outlook remains constrained by elevated inflation and weaker domestic demand,” UA&P said in its latest The Market Call report.

“Against this backdrop, we estimate second-quarter (Q2) GDP growth at 2.6%, with consumption and investment likely weighed down by recent headwinds,” it added.

If realized, the 2.6% growth would be slower than the 5.44% expansion recorded in the second quarter of 2025 and the 2.8% growth in the first quarter this year.

It would also mark the fourth straight quarter of weaker annual economic growth.

“While inflation eased slightly in May, elevated price pressures and the peso weakness amid higher global oil prices are expected to continue weighing on private consumption and business investment, tempering the pace of overall economic growth in the near term,” UA&P said.

Headline inflation quickened to 6.8% in May, easing from the 7.2% in April but still above the Bangko Sentral ng Pilipinas’ (BSP) 2%-4% tolerance band.

The BSP on Tuesday said June inflation likely settled within the 6% to 7%. If realized, inflation would remain above the government’s target for a fourth straight month.

“Inflation is likely to stay above target for the rest of the year, keeping the BSP on a tightening path where we expect an additional 50 basis points (bps) of rate hikes,” UA&P said.

To rein in inflation, the central bank has already raised its policy rate twice this year, bringing it to 4.75% in June. A further 50 bps of tightening would bring the benchmark rate to 5.25% by yearend.

“Risks of an off-cycle hike diminished with the softer inflation reading, but the BSP remained hawkish at its latest policy conference,” it said.

“We see underlying price pressures in tertiary sectors, where inflation pass-through tends to be lagged, along with a looming Super El Niño season threatening to raise food prices,” it added.

Meanwhile, UA&P said manufacturing activity and industrial output have continued to improve, alongside a steady labor market.

“Softer export growth and moderating capital goods imports suggest external demand and investment remain cautious,” it added.

However, UA&P said continued disruptions from the Middle East conflict have exposed lingering labor market softness. While the unemployment rate eased to 4.7% in April from 5% in March, the decline was largely driven by a smaller labor force rather than stronger hiring.

“Looking ahead, steady household consumption, revamped infrastructure implementation, and softer crude prices should support job creation, particularly in services and construction,” it said.

“However, global economic uncertainty and softer domestic growth could temper the pace of hiring, suggesting that labor market conditions are likely to remain stable rather (than) accelerate significantly in the near term,” it added.

Also, remittance growth cooled in April due to headwinds from the Middle East conflict and frontloading in the first quarter, UA&P said.

Cash remittances from overseas Filipino workers rose by 2% year on year to an 11-month low of $2.718 billion in April. This was the weakest annual growth in nearly four years or since the 1.8% expansion recorded in May 2022.

“The recent Middle East peace progress could see stabilized overseas Filipino workers’ deployment, which may support remittance flows moving forward, though inflation in sender countries could temper any outsized gains,” it added.

On the foreign exchange front, UA&P said the peso is likely to remain in the P61-per-dollar range in the near term.

“Sticky domestic inflation, a still-wide trade deficit, and a more hawkish Federal Reserve are expected to sustain demand for the dollar and maintain interest rate differentials in favor of US assets,” it said.

“That said, further peso depreciation could be tempered if global oil prices continue to soften, easing pressure on the country’s import bill and inflation expectations,” it added.

On Wednesday, the peso closed at P61.621 against the greenback, weakening by 26.1 centavos from its P61.36 finish on Tuesday. — Justine Irish D. Tabile

PHILIPPINE FACTORY activity continued to expand in June amid stronger output and new orders, S&P Global said on Wednesday.

S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) inched up to 50.9 in June from 50.8 in May, signaling a second consecutive month of modest improvement in operating conditions across the country’s goods-producing sector.

A PMI reading above 50 denotes better operating conditions than in the preceding month, while a reading below 50 shows deterioration.

“Manufacturing conditions in the Philippines continued to improve in June, building on the tentative recovery observed in May as the sector regained footing following disruptions linked to the war in the Middle East,” Maryam Baluch, an economist at S&P Global Market Intelligence, said in the report.

The Philippines’ June PMI also exceeded the Association of Southeast Asian Nations’ average of 50.5, although the regional reading eased from 51.5 in May. 

The Philippines had the third best PMI reading in June, after Vietnam’s 51.8 (from 52.8) and Thailand’s 53.6 (from 52.6).

The country was ahead of Malaysia which had a PMI of 50.7 (from 49.9), Myanmar with 47.4 (from 49.3) and Indonesia with 46.9 (from 50).

S&P Global said Philippine manufacturers saw output and new orders grow for a second straight month. However, the increase in new orders strengthened slightly, while production growth eased in June.

“According to anecdotal evidence, where firms reported a rise in output, this was supported by growth in new orders, which in turn was underpinned by improved underlying demand trends and new client wins,” it said.

With the rise in new orders, S&P Global said Philippine manufacturers boosted purchases of additional raw materials and semi-finished items for the first time in four months. The increase in purchasing activity was marginal, but helped firms maintain their inventory of inputs.

Ms. Baluch also noted a more stable employment picture in the Philippines in June.

“Filipino manufacturers recorded unchanged staffing levels in June, marking a stabilization compared with job shedding seen in April and May,” she said. “Moreover, signs of renewed pressure on capacity, as indicated by a fresh rise in backlogs, suggests potential for future recruitment.”

S&P Global also noted there were signs of recovery in supply-chain disruption in June, as firms reported a “modest deterioration in vendor performance.”

Ms. Baluch said inflationary pressures started to ease in June after cost burdens increased at the weakest pace in four months. However, sharp increases in costs in April and May continued to weigh on manufacturers’ sentiment.

S&P Global said manufacturers remained optimistic, citing expectations of stronger demand, new product launches, and expansion into new markets.

However, overall business confidence fell to its lowest level since January, which Ms. Baluch said indicates that firms are cautious about the outlook.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the expansion in June reflects resilient domestic demand, gradual improvements in supply conditions and continued business activity despite a challenging external environment.

“If inflation continues to ease, it should help sustain manufacturing growth by lowering cost pressures and supporting household purchasing power. But I expect the expansion to remain modest rather than robust,” he told BusinessWorld.

Inflation eased to 6.8% in May from 7.2% in April, remaining above the central bank’s 2-4% target but closer to its 6.4% full-year forecast.

The Bangko Sentral ng Pilipinas said June inflation could ease further to as low as 6%, projecting last month’s print to settle within the 6%-7% range.

Mr. Rivera said the manufacturing sector’s outlook will still depend on external demand, oil prices, foreign exchange rate movements, financing costs, and the pace of infrastructure spending.

“Sustained improvements in these areas would provide a stronger foundation for manufacturing growth in the coming months,” he added.

Federation of Philippine Industries Chair Elizabeth H. Lee said business confidence remains subdued as firms continue to grapple with global uncertainties, supply-chain risks and higher input costs.

“We have two months of expansion, and we are looking forward to a stronger positive trend given that the production volume also was relatively resilient with a positive 12% growth in April,” she added.

However, Ms. Lee said recent cost pressures are being compounded by tighter financing conditions following recent policy rate hikes, as well as the recent P85 wage increase for Metro Manila workers.

“June’s PMI uptick shows Philippine manufacturing can still grow under pressure. However, sustaining that growth means supporting workers while preserving businesses’ ability to invest, employ, and compete. We cannot treat one factor in isolation,” she added.

The Philippines is now classified as an upper-middle income country (UMIC) by the World Bank, reflecting the economy’s broad-based expansion.

The World Bank’s latest country income classification showed the Philippines posted a record gross national income (GNI) per capita of $4,850. This was higher than the GNI per capita of $4,470 last year, when the Philippines narrowly missed the UMIC threshold by $26.

The latest increase in the Philippines’ GNI per capita prompted the World Bank to reclassify the country as an UMIC, a category for economies with GNI per capita ranging from $4,636 to $14,375.

“The Philippines achieved its reclassification through broad-based expansion. GDP grew at an average of 5.8% per year over five years, reflecting gains across all major industries, not a single sector boom, but an economy-wide shift,” the World Bank said in a blog post late Wednesday.

The Philippines was previously in the World Bank’s lower middle-income bracket, having failed to advance out of it since 1987.

The Department of Economy, Planning, and Development (DEPDev) said strong performance across all industries helped raise the country’s GNI per capita by 8.5% in 2025.

“This confirms the resilience of the Philippine economy,” said DEPDev Secretary Arsenio M. Balisacan. “Despite global and domestic shocks, we have relentlessly pursued inclusive growth, strengthened fundamentals, and remained on track with our development agenda.”

According to DEPDev, the new classification is expected to strengthen the country’s credit profile, boost investor confidence, and expand access to financing and higher-quality investments, which it said could generate better jobs for Filipinos.

The Philippines and Vietnam were among the five economies reclassified by the World Bank from lower middle-income to upper middle-income status, along with Jordan, Micronesia, and Sri Lanka. Meanwhile, Togo moved from low-income to lower middle-income status.

Vietnam moved up to UMIC status after posting a GNI per capita of $4,970.

The Philippines remained ahead of Cambodia ($2,520), Laos ($2,150), and Myanmar ($1,320), which are still classified as lower middle-income economies with a GNI per capita between $1,176 and $4,635.

Meanwhile, Malaysia ($12,380), Thailand ($7,690) and Indonesia ($5,120) remained as upper middle-income countries.

Singapore ($81,760) and Brunei ($34,790) are also still classified as high-income economies.

The World Bank computes a country’s GNI through the Atlas method, which serves as the basis of its income classifications — low, lower-middle, upper-middle and high. GNI refers to the total amount of money earned by its residents both inside and outside its borders.

MANILA ELECTRIC Co. (Meralco) expects its full-year earnings to surpass last year’s record core net income of P50.6 billion, driven by higher electricity sales, growing contributions from its power generation business, and continued expansion of its retail electricity supply (RES) operations.

“I think the full-year profits would be ahead of last year,” Meralco Chairman and Chief Executive Officer Manuel V. Pangilinan told reporters on the sidelines of the company’s annual stockholders’ meeting on Tuesday.

He said the company is optimistic about its performance as its distribution business continues to post higher energy sales volumes, while its power generation segment is benefiting from the rollout of the P200-billion MTerra Solar Project and the continued growth of its RES business.

“All three businesses are doing quite well,” he said.

Asked whether Meralco has set a formal earnings target for 2026, Mr. Pangilinan said management would provide more detailed guidance after the release of its first-half financial results.

“Let’s wait for the first half results, maybe then we can give guidance. But definitely ahead,” he said.

In 2025, Meralco’s core net income rose 14% to a record P50.6 billion from P45.1 billion a year earlier, meeting the company’s profit target.

The growth was driven by higher earnings from its power generation business and sustained contributions from its electricity distribution operations.

Consolidated revenues increased 6% to P497.3 billion, supported by higher distribution charges, stronger power generation revenues, and increased electricity sales under its RES business.

For the first quarter, Meralco reported a 2% increase in core net income to P11.4 billion, despite lower energy sales in its distribution business.

Meanwhile, Meralco Executive Vice-President and Chief Operating Officer Ronnie L. Aperocho said the company has invested a record P28.5 billion in capital expenditures in 2025 to strengthen and modernize its electricity distribution network.

The company has built four new substations, expanded seven existing substations, upgraded four sub-transmission lines, hardened facilities against storms and other calamities, and continued modernizing its distribution infrastructure, he said.

“2025 was a banner year for Meralco. But more importantly, 2025 was the year when we flipped the new chapter of our story. The road ahead is not easy but we are ready,” Mr. Aperocho added.

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.

HOUSEHOLD CONSUMPTION in the Philippines could moderate even more as remittance growth slows amid the conflict in the Middle East, according to ING Bank N.V.

ING Regional Head of Research for Asia-Pacific Deepali Bhargava said Philippine consumption is closely tied to overseas remittances, which are largely spent on daily household needs rather than savings or investment, making domestic demand heavily reliant on external income flows.

“With the Middle East accounting for roughly 17-18% of total remittance inflows, developments in the region are particularly important,” she added.

Cash remittances from overseas Filipino workers rose by 2% year on year to an 11-month low of $2.718 billion in April. This was the weakest annual growth in nearly four years, or since the 1.8% expansion recorded in May 2022.

Annual remittance growth has slowed since the start of the year, easing from 3.5% in January to 2.6% in February, 2.3% in March, and 2% in April. 

“Headline data doesn’t yet show a sharp contraction in remittances from the Middle East, but growth has moderated since February. Month-on-month flows have become more uneven in early 2026, reflecting early-stage disruptions linked to the conflict,” Ms. Bhargava said.

“As such, the recent slowdown and rising volatility could exert a more persistent drag on inward remittances as conditions in the Middle East region take time to stabilize,” she added.

Remittances from the Middle East reached $2.045 billion in the first four months, up 3.6% from the $1.973 billion recorded in the same period last year. This accounted for 17.9% of the total cash remittances during the period.

“Given the limited offset from alternative income sources, particularly for lower and middle-income households, any sustained weakening in remittance inflows is likely to weigh on private consumption with a lag,” Ms. Bhargava said.

Household spending, the main driver of the Philippine economy, has been moderating since last year. It grew by 3% year on year in the January-to-March period, slowing from 5.28% a year earlier and 3.8% in the previous quarter.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said he still expects remittance inflows to continue expanding, albeit at a more modest pace.

“We expect remittance growth to remain positive but modest in the coming months as overseas Filipinos continue to support their families despite global economic uncertainty and higher living costs abroad,” he told BusinessWorld.

“While this may temper the pace of household spending, the bigger risk to domestic demand would be if inflation stays elevated for longer, as persistent price pressures could further erode purchasing power and make consumers more cautious,” he added.

Consumer prices in the Philippines remain high even as price pressures have eased in recent months. Inflation slowed to 6.8% in May from 7.2% in April but remained above the Bangko Sentral ng Pilipinas’ (BSP) tolerance range of 2-4%.

In the first five months, inflation averaged 4.5%. The BSP recently raised its inflation forecast to 6.4% from 6.3% for this year.

However, Mr. Asuncion said remittance-dependent households would likely be among the first to feel the strain if inflation remains elevated.

He expects households to scale back discretionary spending on retail purchases, housing-related items, travel, and consumer durables before cutting back on essential expenditures.

“Overall, the likely outcome is a moderation — not a collapse — in consumption growth, with domestic demand remaining supported by employment and income conditions but facing stronger headwinds from inflation,” he added.

In its month-ahead inflation forecast, the BSP said inflation likely settled at 6% to 7% in June, faster than the 1.4% clip a year ago.

At the upper end of the forecast, June inflation would be the fastest in two months or since the 7.2% print in April.

At the bottom end, inflation would have cooled from the 6.8% print in May, marking the second consecutive month that consumer prices have eased.

June could also mark the fourth month in a row that annual inflation settled above the central bank’s 2%-4% comfort range.

June inflation is scheduled to be released on July 7.

“The decline of domestic oil prices and the lower prices of major food items, such as rice and meat, may temper inflation for the month. However, higher electricity rates and vegetable prices could partly offset these downward price pressures,” the BSP said in a statement.

Fuel prices have started to decline in June with retailers cutting pump prices by up to P9.08 a liter for gasoline, P20.03 per liter for diesel, and P2.24 per liter for kerosene.

At the same time, rice prices fell in June, with the average cost of regular milled rice declining by 1.8% to P50.12 a kilo from the P51.03 a kilo recorded in the May 15 to 17 period, but 17.3% higher than the P42.74 average recorded in the same period a year ago.

The price of well-milled rice also declined by 2.1% month on month to P56.66 a kilo, but was still 14.5% higher than the P49.50 average a year ago.

At the same time, power rates went up in June. Manila Electric Co. raised rates by P0.1488 per kilowatt-hour (kWh), bringing the overall rate to P14.4833 per kWh, citing higher generation charge linked to the peso depreciation.

The peso has also been trading above the P60-a-dollar level in June. It closed at P61.36 against the dollar on June 30, strengthening by 23 centavos from its P61.59 close on May 30.

The central bank said that it now expects inflation to average 6.4% this year and 4.5% next year.

“The BSP will remain vigilant and guided by incoming data, particularly on inflation and growth prospects. It will continue to monitor recent developments in the Middle East for their implications for inflation and economic activity,” it said.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said he expects June inflation at around 6.5% amid still-elevated price pressures.

“Food costs remain the biggest driver, especially with ongoing supply constraints, while energy and transport prices continue to feed through to the broader economy. The peso’s weakness is also adding some pressure on imports,” he said.

Mr. Ravelas said inflation is likely to stay above the 2-4% range in the near term, which would make policymakers cautious about easing too quickly.

The BSP raised its policy rate by 25 basis points to 4.75% in June, marking its second rate hike this year. Three more scheduled policy meetings remain in 2026.

However, Mr. Ravelas said he expects gradual relief toward the latter part of the year provided geopolitical concerns subside and as supply conditions improve and global prices stabilize.

“But in the meantime, households and businesses should plan for continued volatility, particularly from weather shocks and global oil movements. The key message is this: Inflation isn’t out of control, but it’s also not fully tamed yet,” he added.

Ser Percival K. Peña-Reyes, a senior research fellow at the Ateneo Center for Economic Research and Development, said faster food inflation likely pushed June inflation to the upper end of the BSP’s 6-7% estimate.

“The balance of evidence suggests that inflation is more likely to ease in the second half of 2026 than to keep accelerating, but the path is likely to be uneven and highly dependent on energy markets,” he said.

“In other words, the baseline is gradual disinflation with significant upside risks, not a return to broad-based inflation,” he added.

In the coming months, Mr. Peña-Reyes said factors that could affect inflation include Brent crude oil prices, shipping conditions through the Strait of Hormuz, core inflation, inflation expectations from consumers and financial markets, and wage growth. — Justine Irish D. Tabile

THE Philippines’ trade-in-goods deficit widened to $5.48 billion in May from a year ago, as imports grew faster than exports, according to the statistics agency.

Preliminary data from the Philippine Statistics Authority (PSA) showed the trade-in-goods balance — the difference between exports and imports — widened by 50.5% to $5.48 billion in May from $3.64 billion recorded in the same month a year ago.   

Month on month, the trade gap narrowed from the revised $6.43 billion in April.

May saw the smallest trade gap in two months or since the $5.04-billion deficit in March.

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.

Merchandise imports jumped by an annual 21.9% to $13.36 billion in May, a turnaround from the 0.9% dip in the same month a year ago but slowed from the 27.3% rise in April.

However, the import value was the lowest since $13.23 billion in March, while growth was also the slowest since 17.1% in March.

On the other hand, total outbound sales of Philippine-made goods rose by 7.6% to $7.87 billion in May, slower than the 15.5% increase a year ago but slightly faster than 7.2% growth in April.

PSA said export sales in May were the highest since $8.19 billion in March. Export growth was also the fastest in two months or since 20.8% growth in March.

Former University of Asia & the Pacific School of Economics Dean Francisco Cid L. Terosa said in an e-mail that the May trade deficit widened as buyers front-loaded imported production inputs due to geopolitical uncertainties and supply-chain disruptions.

In the January-to-May period, the trade-in-goods deficit widened by 25% to $25.24 billion from $20.08 billion a year ago.

For the five-month period, imports rose by 16.2% to $63.11 billion from $54.32 billion a year ago.

The total value of exports jumped by 10.6% to $37.87 billion in the five-month period from $34.25 billion a year ago.

PSA said these were the highest import and export values recorded since the series began in 1991.

The Development Budget Coordination Committee expects 3% growth in exports and a 5% increase in imports this year.

CAPITAL GOODS DEMAND
PSA data showed imports of raw materials and intermediate goods grew by 33.1% to $5.46 billion in May, making up 40.9% of the import bill.

Imports of capital goods increased by 22.6% to $3.73 billion, making up 28% of the total. On the other hand, imports of consumer goods declined by 4.9% to $2.37 billion, making up 17.7% of May imports.

Chinabank Research said the import growth in May was driven by the strong demand for capital goods, rather than global oil prices.

“If this trend persists, an increase in imports could be viewed as a positive development, as it portends improving business sentiment, stronger productive capacity, and support for future economic growth,” Chinabank Research said in a note.

By commodity group, electronic products posted the largest import value at $4.63 billion, surging 93.3% from the $2.39-billion value recorded in May 2025. Electronic goods accounted for 34.7% of May imports.

Imports of semiconductors, which accounted for 28.1% of imported electronic goods, rose by 125.8% to $3.75 billion in May.

Imports of mineral fuels, lubricants and related materials, which accounted for 13.1% of May imports, jumped by 35.6% to $1.75 billion.

China was the country’s top source of imported goods with $4.23 billion or 31.7% of the total import bill in May.

South Korea followed with $1.76 billion (13.2%), Indonesia with $858.79 million (6.4%), Malaysia with $813.09 million (6.1%), and Japan with $806.32 million (6%).

AI BOOM
In May, exports of electronic products jumped by 11.9% to $4.3 billion, making up 54.6% of the total exports.

Semiconductors, which accounted for the bulk of electronic products and more than 40% of total exports, rose by 11.5% to $3.21 billion.

“The AI (artificial intelligence)boom continues to support demand for Philippine semiconductors,” Chinabank Research said.

“However, logistical constraints emerged, with reported shipment delays at the Ninoy Aquino International Airport due to congestion and limited warehousing capacity — highlighting infrastructure bottlenecks that could pose near-term risks,” it added, noting that local chipmakers rely on air freight to import components for assembly, testing, and packaging before re-exporting them.

Exports of mineral products, which accounted for 5.2% of the total, climbed by 30.2% to $406.78 million in May.

The United States was the main destination of locally made goods in May with $1.35 billion in exports or 17.2% of the total.

It was followed by Hong Kong with $1.2 billion (15.2% share), Japan with $1.03 billion (13.1%), China with $905.2 million (11.5%), and Singapore with $442.55 million (5.6%).

OUTLOOK
The Philippines’ ongoing talks to revise the Japan-Philippines Economic Partnership Agreement, as well as its upcoming free trade agreement with Canada, could provide opportunities for export growth in the coming months, Chinabank said.

However, the US’ uncertain trade policies pose risks to the country’s trade deficit, it noted.

“Proposed US trade measures — including new tariffs of up to 12.5% due to forced labor concerns and 100% tariff on imports from countries imposing digital service taxes — pose potential downside risks, although implementation remains uncertain,” Chinabank said.

Philippine exports could face tariffs of up to 12.5% after it was flagged by the US Trade Representative in June for allegedly failing to prohibit the importation of goods made with forced labor.

US President Donald J. Trump last week threatened to slap a 100% tariff on goods from any country that imposes a digital service tax on American companies.

Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said export growth might lose momentum in the coming months amid softening demand.

“Momentum continues to fade… due in large part to the intensifying drag imposed by softening demand from Hong Kong and the US, while support from other key markets has also vanished,” he said in an e-mail.

THE DAILY minimum wage in Metro Manila will increase to P780 by January 2027 after the Regional Tripartite Wages and Productivity Board-National Capital Region approved an P85 increase to be implemented in two phases, Labor Secretary Francis N. Tolentino announced on Tuesday.

The wage order provides for a P60 increase effective July 19 and another P25 effective in January next year, raising the daily minimum wage for nonagricultural workers from P695 to P780.

For agricultural workers and employees of retail, service and small manufacturing establishments covered by the lower wage tier, the minimum wage will rise from P658 to P743.

The National Capital Region (NCR) wage board did not immediately release a copy of the wage order.

Mr. Tolentino said about 1.1 million minimum wage earners in Metro Manila are expected to benefit from the wage order, while about 1.9 million workers earning above the minimum wage could also receive pay adjustments because of wage distortions.

Metro Manila workers receive P658 to P695 a day following a P50 wage increase that took effect on July 18, 2025.

Angelita D. Señorin, a member of the NCR wage board representing the labor sector, told BusinessWorld that the board had officially signed and approved the new wage order on June 23.

“The decision of the board is subject for review by the National Wages and Productivity Commission (NWPC),” Ms. Señorin said in a text message. “Yesterday, I was informed that the decision of the board has been affirmed by the NWPC.”

This P85 total increase is historically significant, as it represents a larger adjustment than the P50 hike implemented in the previous year.

Minimum wage determination in the Philippines is governed by Republic Act No. 6727, where regional wage boards are mandated to periodically review and adjust minimum wages based on regional socioeconomic factors such as the cost of living, inflation, and the poverty threshold.

Data from the Philippine Statistics Authority showed the inflation rate in NCR eased to 5% in May from 5.5% in April. However, it is still much faster than 1.7% in May last year.

Meanwhile, the region’s unemployment rate was recorded at 5.2% in April, higher than the national average of 4.7%. This placed Metro Manila among the six regions with unemployment figures exceeding the national baseline.

Ms. Señorin said that while any adjustment is welcome, the P85 increase remains inadequate because it is still far below the actual cost of living in Metro Manila and only serves as a temporary measure amid continued increases in the prices of basic goods, electricity and transportation.

“Throughout the wage deliberations, my position is clear that at least the lowest petition filed before the wage board, which is P200, should be met,” she said in mixed English and Filipino.

“In my opinion, no sector will be affected by the increase because it is minimal in the first place, and micro and small enterprises have many remedies and subsidies offered by the government that they can avail themselves of,” she added.

Benjamin B. Velasco, an assistant professor at the University of the Philippines Diliman School of Labor and Industrial Relations, said the wage board appeared to have struck a balance by granting a substantial increase while implementing it in two tranches, although labor groups may criticize the staggered approach instead of a one-time adjustment.

“The impact will be felt in the formal sector which is covered by employee-employer relations,” he told BusinessWorld in a Facebook chat. “But due to the lighthouse effect, eventually even informal workers will benefit as MSMEs (micro, small and medium enterprises) adjust.”

“Even if they want to, businesses cannot always pass on wage hikes as price increases since they are subject to market competition,” he said.

George T. Barcelon, chairman emeritus of the Philippine Chamber of Commerce and Industry, said the wage increase comes at a time when businesses continue to face challenges from a weaker peso, higher interest rates, and persistent inflation risks.

He said the P85 adjustment, equivalent to roughly a 13% to 14% increase in the minimum wage, could be difficult for some companies, particularly micro, small and medium enterprises already operating on thin margins.

“The salary structure of some companies may have to be reviewed because this increase may already border a lot of company structure” where existing pay scales might overlap, he told BusinessWorld by phone.

Mr. Barcelon said companies have no choice but to pass on the cost of the wage hike, which may stoke inflation.

He said that while price increases will not be immediate, businesses will eventually feel the “pinch” of higher labor costs, warning that such a significant increase may hurt the economy.

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