Philippine industry ‘at its lowest point in recent years’ — Balisacan

The Philippines’ industry sector — including manufacturing and construction — may have slumped to its lowest level in recent years, dragging third-quarter economic growth, Economy Secretary Arsenio M. Balisacan said.

“I am not as optimistic (on growth) as I used to, given what the data that have been coming out in recent weeks, and particularly the performance of our industry,” he told reporters on the sidelines of an event on Monday.

“The industry is probably at its lowest point in recent years.”

He did not provide details on the gross domestic product (GDP)  data, which will be released by the Philippine Statistics Authority on Nov. 7.

Mr. Balisacan said the corruption scandal, weather-related disruptions and mounting global uncertainties may have weighed on GDP growth in the third quarter.

He said there was a slowdown in government spending and fixed-capital formation, as well as other areas like industry and services.

A crackdown on anomalous flood control projects alongside a corruption probe may have affected government disbursements.

The Marcos administration only disbursed P1.46 trillion in the third quarter, data from the Bureau of the Treasury showed, PHP 141.73 billion less than its PHP 1.6-trillion program for the period. This is mainly due to lower spending by the Department of Public Works and Highways, which is at the center of a corruption scandal involving flood control projects.

Mr. Balisacan also noted that adverse weather conditions that led to the suspension of work and classes may have contributed to slower growth in the July-to-September period.

However, he expects the impact on growth to be temporary, with a recovery likely in the next few quarters.

In the first six months of 2025, the economy grew by an average of 5.4%. The government is targeting 5.5-6.5% GDP growth this year.

“Our economic fundamentals have remained strong. The potentials have remained strong, our GDP growth potential is quite high, 6% and above. But reaching those potentials is another matter, and those are affected by instability, uncertainty, and we’ll see,” he said.

The country’s GDP likely grew by 5.3% in the third quarter, based on a median forecast of 18 economists and analysts polled by BusinessWorld. This is slower than the 5.5% expansion in the second quarter, but a tad faster than the 5.2% expansion in the July-to-September period of 2024.

Rice tariff review

Meanwhile, Mr. Balisacan said the Economic Development Council is scheduled to convene on Tuesday to tackle the proposal to raise rice tariffs to 35% from the current 15%.

The Department of Trade and Industry will present its recommendation on rice tariff adjustments during the meeting. This recommendation was endorsed to the Council by the Tariff-Related Matters Committee.

The Department Agriculture earlier recommended raising the rice import tariff to its original 35% rate from the current 15%.

Philippine President Ferdinand R. Marcos, Jr. on Sunday approved the extension of the country’s rice import ban until yearend.

Sought for comment, Mr. Balisacan said the government has “good enough supply” of rice to temper increases in retail prices.

“The overall goal of that is to protect farmgate prices from further falling, because in the past almost a year now, farmgate prices have dropped by more than 30%,” he said.

Farmer groups have blamed the current 15% tariff for keeping farmgate prices low by encouraging cheaper imports, undermining local producers.

However, Mr. Balisacan warned that tweaking the rice import tariff alone won’t fix the farmers’ problems.

“You have to use a combination of policy tools to address those problems, and that’s what we are going to present tomorrow,” he said noting that this approach will ensure the market will support medium-term and long-term development efforts.

Samahang Industriya ng Agrikultura spokesman Jayson H. Cainglet argued that the rice tariff cut to 15% has failed to benefit consumers, with importers and traders instead pocketing the savings.

He noted that palay production cost is P14.61 per kilo, but palay is only being bought at P8-12 per kilo, he told BusinessWorld in a Viber message on Monday.

He also noted that the reduced tariff has resulted in P25-billion foregone revenues from the imported rice as of end-August.

Separately, Mr. Balisacan led the opening of the Presidential Filipinnovation Awards that will select five winners out of 15 finalists which receive a cash grant and post-competition support package worth up to P3.5 million, including coaching and mentoring.

“Our goal here is that we can mainstream innovation in the private sector, that we can increase the success rate of our innovators,” he said during a briefing in Crowne Plaza Manila Galleria.

Economy Undersecretary Rosemarie G. Edillon said the government is targeting to raise the Philippines’ rank in the Global Innovation Index (GII) by 2028. The Philippines is currently at 50^th place out of 139 economies in the 2025 GII. — Aubrey Rose A. Inosante