BSP may cut despite Fed hold as growth disappoints

The Bangko Sentral ng Pilipinas (BSP) may deliver a sixth straight cut in February, despite the US Federal Reserve’s decision to stand pat, amid weaker-than-expected Philippine economic growth in the fourth quarter, analysts said.

“Despite the Fed standing pat, we believe BSP will be looking to domestic developments (such as) low inflation and disappointing GDP (gross domestic product) to make its call,” Metropolitan Bank & Trust Co. (Metrobank) Chief Economist Nicholas Antonio T. Mapa told BusinessWorld in a Viber message.

On Wednesday, the Fed held its benchmark rates steady at the 3.5%-3.75% range, maintaining its total cuts since September 2024 at 175 basis points (bps).

The BSP’s key policy rate stands at an over three-year low of 4.5%, bringing its interest rate differential with the Fed to 75 bps.

The Monetary Board has so far lowered benchmark borrowing costs by a cumulative 200 bps since it began its easing cycle in August 2024.

BSP Governor Eli M. Remolona, Jr. said last week that the Fed’s moves are only one of the many data points they are considering in their monetary policy decision. He added that they are now uncertain about delivering one more cut under the current easing cycle, even with a weak economy and benign inflation.

Philippine economic growth slumped to a five-year low of 3% in the fourth quarter of 2025, bringing the full-year print to 4.4%. This was below the government’s 5.5%-6.5% target for the year, as well as the BSP’s 3.8% forecast for the fourth quarter and 4.6% for the entire year.

This, Mr. Mapa said, raises the odds of deeper easing by the Monetary Board, especially as inflation remains muted.

“The disappointing (fourth-quarter) print bolsters the case for additional easing from BSP while inflation remains subdued,” he said. “(The) window for BSP to provide accommodation remains open for the time being with monetary authorities likely opting to frontload cuts while the inflation objective is still in hand.”

Metrobank sees the BSP delivering a total of 50 bps in cuts this year to bring the key interest rate to 4% by yearend.

On the other hand, John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the central bank may opt to preserve easing space at its first meeting this year as the peso remains “sensitive.”

“A possible move for the BSP is a pause with a bias to cut later if inflation stays benign and growth remains soft,” he told BusinessWorld via Viber. “It helps keep the Philippine peso and inflation expectations better-anchored, especially with the currency still sensitive, while preserving easing space.”

The peso marked a new all-time low of P59.46 against the dollar on Jan. 15.

On Thursday, the local unit lost 20.5 centavos to close at P58.945 versus the greenback from its P58.74 finish on Wednesday, Bankers Association of the Philippines data showed.

“Matching the Fed’s stand is generally healthier for the peso in the near term, while any further BSP cut should be framed as contingent on inflation staying within target and on clearer evidence that demand is weakening enough to warrant added support,” Mr. Rivera said.

The Monetary Board is set to hold its first policy review this year on Feb. 19. — Katherine K. Chan

Balisacan still confident Philippines can achieve upper middle-class status this year

The Philippines remains on track to graduate to upper middle-income country (UMIC) status this year, despite a sharp growth slowdown in 2025, the Department of Economy, Planning, and Development (DEPDev) said.

Economy Secretary Arsenio M. Balisacan said the Philippines can still achieve UMIC status this year despite the weaker-than-expected 4.4% gross domestic product (GDP) growth last year.

“We still have to redo the numbers, but with the 4.4% growth in 2025, we should still be able to reach the average income class status,” he told a briefing on Thursday.

The Philippines is still stuck in the lower middle-income bracket, having failed to advance out of it since 1987, despite posting a higher gross national income (GNI) per capita of USD 4,470 in 2024.

Under the World Bank’s latest country classification, the Philippines’ GNI per capita was only USD 26 shy of the World Bank’s adjusted GNI per capita requirement of USD 4,496 to USD 13,935 for UMIC status.

The Washington-based lender is scheduled to release its updated annual country status thresholds in July.

Last year, Mr. Balisacan said the Philippines needs to sustain 6% growth from 2025 to 2026 to ensure its GNI per capita meets the UMIC threshold.

In 2025, Philippine GDP growth sharply slowed to 4.4%, from 5.7% in 2024. This was the weakest print in five years or since 2020 when GDP contracted by 9.5% amid the pandemic. Excluding the pandemic, it was the slowest growth since the 3.9% expansion in 2011.

Mr. Balisacan said the economy’s potential growth still stands at 6%, which makes the government confident about achieving its long-term goal of building a predominantly middle-class society under AmBisyon Natin 2040.

“Actually, the investments that we are making in human capital, particularly education and health and infrastructure, these can elevate that potential to an even higher one — 6.5% or even 7%,” Mr. Balisacan said.

Analysts said the Philippines achieving UMIC status carries symbolic weight but cautioned that it is a weak measure of real development.

“Graduation to UMIC is important symbolically but its real economic value will depend on whether it comes with deeper structural shifts that raise living standards more broadly,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.

Even modest growth can lift per capita income if supported by stable employment, remittance inflows, and manageable inflation, Mr. Rivera added.

Jose Enrique “Sonny” A. Africa, executive director of IBON Foundation, said UMIC status is a “mere bureaucratic category” used by the World Bank to guide lending and grant-making.

“It’s an extremely poor indicator of real development because, for instance, any UMIC status the Philippines might get will be amid growing poverty, hunger, and volatile poor quality work,” he said in a Viber message.

Tempered targets

At the same briefing, Mr. Balisacan said the Development Budget Coordination Committee (DBCC) had tweaked the macroeconomic assumptions for foreign exchange rate and export growth, after cutting growth targets.

On external trade assumptions, the DBCC kept the goods export growth at 2% this year, unchanged from the June meeting.

It raised its goods export growth projection to 3% in 2027, from the earlier forecast of 2%.

“For the exports of services, we are assuming 5% for 2026 and the same growth for 2027,” he said.

The peso forecast range was widened to PHP 58 to PHP 60 per dollar for 2026-2027, from the earlier projection of PHP 56 to PHP 58 per dollar for 2025 until 2028, Mr. Balisacan said.

The peso has repeatedly breached the PHP 59-a-dollar mark several times since November and sank to a record low of PHP 59.46 on Jan. 15.

At its December meeting, the DBCC cut its GDP growth target to 5-6% for this year, from 6-7% previously. It set a 5.5-6.5% growth goal for 2027.

“Now, obviously, the lower growth for next year… will impact revenue collections relative to what we initially expected,” Mr. Balisacan said.

The government is targeting to collect PHP4.824 trillion this year, about 3.19% less than the PHP 4.983 trillion goal set in the June 2025 meeting.

For 2027, the revenue collection target was cut by 4.55% to PHP 5.122 trillion, while the revenue target for 2028 was also reduced by 5.86% to PHP 5.568 trillion.

Mr. Balisacan said government efforts, particularly in light of the flood control project scandal, were focused not only on expanding expenditures but also on enhancing spending quality.

“(This will make) sure that what we spend will actually end up with better services and in the case of income transfers with the intended target groups and in many cases with low-income households,” he added. — Aubrey Rose A. Inosante, Reporter

Peso sinks again on below-target economic growth

The peso fell again versus the dollar on Thursday as Philippine gross domestic product (GDP) growth missed the government’s target for a third consecutive year due to the ongoing fallout from a corruption scandal involving government infrastructure projects.

The local unit ended at PHP 58.945 against the greenback, sliding by 20.5 centavos from its PHP 58.74 finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s trading session just slightly weaker at PHP 58.78 against the dollar. Its intraday best was at PHP 58.75, while its worst showing was at PHP 58.95.

Dollars traded declined to USD 1.329 billion from USD 1.46 billion on Wednesday.

The peso sank as data released on Thursday showed that GDP growth fell below target in 2025, the first trader said in a phone interview.

“The peso weakened significantly following the weaker than expected Philippine GDP growth and the hawkish policy statements from US Federal Reserve Chair Jerome H. Powell,” the second trader said in an e-mail.

Philippine GDP growth slowed to 3% in the fourth quarter from 5.3% in the same period a year prior and the revised 3.9% print in the third quarter.

This was the slowest print in nearly five years or since the 3.8% contraction in the first quarter of 2021. Outside of the coronavirus pandemic, this was the worst since the 1.8% growth recorded in the fourth quarter of 2009, or during the Global Financial Crisis.

This brought full-year 2025 GDP growth to 4.4%, well below the government’s 5.5%-6.5% goal. This was slower than 2024’s 5.7% and was the weakest annual expansion since the 3.9% in 2011, counting out the 9.5% contraction in 2020 due to the pandemic.

Officials said tighter public spending and weak investor confidence due to the flood control scandal continued to drag growth.

Meanwhile, the Federal Reserve held interest rates steady on Wednesday amid what US Fed chief Jerome H. Powell described as a solid economy and diminished risks to both inflation and employment, an outlook that could signal a lengthy wait before any further reductions in borrowing costs, Reuters reported.

For Friday, the second trader said the peso could rebound ahead of a likely softer US producer inflation report.

The second trader sees the peso moving between PHP 58.85 and PHP 59.10 per dollar on Friday, white the first trader expects it to range from PHP 58.80 to PHP 59.10. — Aaron Michael C. Sy

PSEi down 2% as economic growth disappoints

Philippine stocks posted their biggest single-day drop since November as weak gross domestic product (GDP) data triggered a sell-off.

The Philippine Stock Exchange index (PSEi) plunged by 2.08% or 132.42 points to end at 6,223.36, while the broader all shares index fell by 1.36% or 49.01 points to close at 3,548.03.

This was the PSEi’s largest single-day decline since it lost 2.49% or 142.64 points on Nov. 14, ending at 5,584.35. This was also the index’s worst close in nearly a month or since Jan. 5’s finish of 6,164.53.

The main stock benchmark opened Thursday’s session at 6,365.46, rising from Wednesday’s finish of 6,355.78 and already its best showing for the session. After the release of the GDP report, the index slid to the 6,200 level, hitting an intraday low of 6,215.80.

“The market sank as investors sought shelter following a dismal GDP growth print, suggesting that the desired economic rebound eluded the country despite the holiday boost,” AP Securities, Inc. said in a market note.

“The PSEi ended lower amid strong, broad-based selling pressure after GDP figures came in below expectations,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “Investor sentiment weakened as the softer growth data raised concerns over the country’s near-term economic outlook.”

Philippine GDP growth slowed to 3% in the fourth quarter from 5.3% in the same period a year prior and the revised 3.9% print in the third quarter. This was the slowest print in nearly five years or since the 3.8% contraction in the first quarter of 2021. Outside of the pandemic, this was the worst since the 1.8% growth recorded in the fourth quarter of 2009, or during the Global Financial Crisis.

These were well below the 4.2% and 4.8% median estimates for fourth-quarter and full-year 2025 GDP growth in a BusinessWorld poll.

Most sectoral indices closed in the red. Financials plunged by 2.48% or 52.67 points to 2,064.05; property decreased by 2.47% or 55.59 points to 2,191.47; services went down by 1.99% or 51.88 points to 2,548.24; holding firms fell by 1.51% or 77.20 points to 5,003.71; and industrials retreated by 0.7% or 63.27 points to 8,945.36.

Mining and oil rose by 1.17% or 221.49 points to 19,149.65.

Decliners outnumbered advancers, 124 to 75, while 56 names closed unchanged.

Value turnover inched up to PHP 7.55 billion on Thursday with 1.34 billion shares traded from the PHP 7.53 billion with 1.58 million issues that changed hands on Wednesday.

Net foreign selling was at PHP 406.24 million on Thursday, a reversal of the PHP 463.37 million in net buying recorded in the previous session. — A.G.C. Magno

IBPAP cautiously optimistic for IT-BPM sector in 2026

The IT & Business Process Association of the Philippines (IBPAP) is cautiously optimistic that the industry will achieve revenue and headcount growth this year despite continued uncertainty.

IBPAP President and Chief Executive Officer Jonathan R. Madrid said there was a challenging geopolitical and macroeconomic climate in 2025, which may have affected investor confidence and appetite for expansion.

“We will continue to see some of that uncertainty as we begin 2026, but I can say that we are cautiously optimistic about another positive year of growth for the Philippine information technology and business process management (IT-BPM) industry,” Mr. Madrid told reporters on Wednesday.

In 2025, he said that the industry was able to achieve a 5% growth in export revenues to over USD 40 billion and a 4% growth in headcount to 1.9 million.

These figures, he said, are consistent with the baseline targets set under the industry’s roadmap.

While he did not share exact targets for 2026, Mr. Madrid said: “I’ll be happy if we did that (5% growth in revenues and 4% growth in headcount).”

“But you have to remember that we are coming from a bigger base and the bigger your starting base, the harder it is to maintain,” he added.

Under the roadmap, the baseline targets for 2026 are USD 42 billion in revenues and 1.97 million in headcount.

Mr. Madrid said that he expects global capability centers (GCCs), such as JPMorgan Chase, to drive the sector’s growth this year.

“I see this as a particularly positive growth because the GCCs have been amazingly successful and are growing very fast in India. They have over 1,800 GCCs there,” he said.

“Of course, India is a much bigger country with a bigger population, but we are actually positioned very well to be a very strong second to India in terms of GCCs. We have about 160 GCCs in the country now,” he added.

Mr. Madrid said growth is expected in the financial services, insurance, and healthcare sectors.

“But we will continue to see the GCC segment grow in 2026. In fact, I think it will continue to outpace the overall growth rate of the IT-BPM sector,” he added.

Challenges

Mr. Madrid said that the industry continues to struggle with the ease of doing business and the availability of employable talent.

“We have to remember that the majority of our industry is composed of foreign investors who have decided on the Philippines to set up their operations,” he said.

Mr. Madrid said investors are banking on the Philippines to deliver on its promise of a good business environment, which includes “investment incentives, a good business environment, availability of talent, good workspace, and last but not least, a competitive cost structure.”

“If we do not meet the expectations of our investors, justifying their decision to establish operations in the Philippines, then that would be a challenge,” he added.

Mr. Madrid said another challenge is to find employable talent as jobs in the IT-BPM sector continue to evolve. From simple and almost exclusively voice-based services, tasks now are more complicated and complex.

“That is why talent development and upskilling continue to be one of the biggest investments that our members make,” he said.

Before a worker in the industry becomes productive, the worker goes through a minimum of two weeks of training.

Mr. Madrid estimated the industry invests around P1.4 billion in talent development annually. This is an area where the government could also offer its support for the industry, he added.

“We have to remember that it is no longer just India and the Philippines. In the past decades, new IT-BPM destinations have emerged. And they are aiming to capture some of the market share of the Philippines,” he said.

“Countries like Egypt, Poland, South Africa, Vietnam, Malaysia, Colombia, South America, and Costa Rica are some of the destinations that global companies go to,” he added.

These destinations, he said, offer various advantages, including complementary time zones and Spanish-speaking agents, among others.

“The good news is, India and the Philippines continue to be the major players, and it should be our collective objective to protect and retain that market share,” he added. — Justine Irish D. Tabile, Reporter

Peso hits 1-month high on dollar’s slump

The peso jumped to a one-month high against the dollar on Wednesday as US President Donald J. Trump said the greenback’s value remains “great” despite its recent slide.

The local unit ended at P58.74 versus the dollar, surging by 34.5 centavos from its P59.085 finish on Tuesday, data from the Bankers Association of the Philippines showed.

This was the peso’s strongest close in more than a month or since ending at PHP 58.71 on Dec. 26.

The local currency opened Wednesday’s trading session stronger at PHP 58.85 against the dollar. Its intraday best was at PHP 58.69, while its worst showing was at just PHP 58.90 against the greenback.

Dollars traded rose to $1.46 billion from $1 billion on Tuesday.

“The dollar-peso closed lower, dragged by broad dollar weakness due to Trump’s ‘Sell America’ rhetoric and potential joint intervention by the US and Japan in the foreign exchange market [to correct the yen’s slide],” a trader said by phone.

The peso jumped as the dollar hit a four-year low on Mr. Trump’s comments, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Thursday, the trader sees the peso ranging from PHP 58.50 to PHP 58.90 per dollar, while Mr. Ricafort expects it to move between PHP 58.65 and PHP 58.85.

The dollar headed for its biggest weekly fall since last April on Wednesday after Mr. Trump brushed off this month’s slide, triggering even deeper losses against the euro, yen and pound ahead of the Federal Reserve policy decision, Reuters reported.

The dollar index, which tracks the performance of the US currency against six others, was 0.22% higher at 96.114, but it remained near four-year lows, having lost nearly 2.8% since last Wednesday, its steepest weekly decline since last April’s “Liberation Day” market turmoil.

Mr. Trump said on Tuesday the value of the dollar was “great,” when asked whether he thought it had declined too much. Traders took his comments as a signal to intensify dollar selling.

While the president’s comments were not exactly new, they came at a time when the dollar has been under pressure as traders braced for a possible coordinated currency intervention by US and Japanese authorities to stabilize the yen.

“It shows there’s a crisis of confidence in the US dollar,” said Kyle Rodda, a senior market analyst at Capital.com. “It would appear that while the Trump administration sticks with its erratic trade, foreign and economic policy, this weakness could persist.”

The dollar tumbled over 9% in 2025 and has started the year on the back foot, already down about 2.3% in January as investors grappled with Mr. Trump’s erratic approach to trade and international diplomacy, fears over the Federal Reserve’s independence and huge increases in public spending.

Investors’ focus will be on the Federal Reserve’s policy decision later in the day, where the central bank is expected to stand pat in a pause that investors see lasting beyond US central bank chief Jerome H. Powell’s final meetings in March and April. — Aaron Michael C. Sy with Reuters

Philippine stocks rise on strong peso before GDP data

Philippine shares climbed further on Wednesday amid a stronger peso and as investors took positions before the release of fourth-quarter and full-year 2025 gross domestic product (GDP) data.

The Philippine Stock Exchange index (PSEi) increased by 0.77% or 48.88 points to end at 6,355.78, while the broader all shares index rose by 0.44% or 15.96 points to close at 3,597.04.

“The local bourse moved higher as investors positioned ahead of the GDP print announcement tomorrow while seeing sustained weakness in the dollar,” AP Securities, Inc. said in a market note.

“The local market advanced, backed by the appreciation of our local currency against the US dollar,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco likewise said in a Viber message. “The bourse had its negative moments within the day, reflecting investors’ cautiousness while waiting for the Federal Reserve’s policy decision and the Philippines’ fourth quarter and full-year 2025 GDP data.”

The PSEi opened Wednesday’s trading session at 6,303.34, a tad lower than the previous day’s finish of 6,306.90. It sank to an intraday low of 6,287.04 but recouped its losses to close at its high for the session.

On Wednesday, the peso soared to a one-month high versus the greenback as US President Donald J. Trump said the dollar’s value remains “great” despite its recent slide.

The local unit surged by 34.5 centavos to end at P58.74 from its P59.085 finish on Tuesday, data from the Bankers Association of the Philippines showed.

This was the peso’s strongest close in more than a month or since it ended at P58.71 on Dec. 26.

Meanwhile, Philippine GDP likely grew by 4.2% in the fourth quarter, based on a BusinessWorld poll of 18 economists and analysts. This would put the full-year average at 4.8%, below the government’s 5.5%-6.5% target.

Most sectoral indices closed in the green on Wednesday. Services jumped by 2.53% or 64.22 points to 2,600.12; mining and oil increased by 2.22% or 412.77 points to 18,928.16; financials climbed by 0.38% or 8.12 points to 2,116.72; and industrials went up by 0.23% or 21.11 points to 9,008.63.

Meanwhile, property dropped by 0.22% or 5.01 points to 2,247.06, and holding firms declined by 0.14% or 7.49 points to 5,080.91.

“International Container Terminal Services, Inc. was the day’s index leader, climbing 4.12% to PHP 645. ACEN Corp. was the main index laggard, falling 5.1% to PHP 2.79,” Mr. Tantiangco said.

Decliners narrowly outnumbered advancers, 106 to 102, while 54 names closed unchanged.

Value turnover went down to PHP 7.53 billion on Wednesday with 1.58 million shares traded from the PHP 15.85 billion with 2.23 billion issues that changed hands on Tuesday.

Net foreign buying decreased to PHP 463.37 million from PHP 7.41 billion. — Alexandria Grace C. Magno

SEC imposes strict 9-year limit for independent directors

The Securities and and Exchange Commission (SEC) is imposing a maximum cumulative nine-year term limit for independent directors of publicly listed companies starting in February, a move that will boost board independence, analysts said.

SEC Memorandum Circular No. 7, which was signed by SEC Chairperson Francisco Ed. Lim on Jan. 26, stated that an independent director is elected for a one-year term and can only serve for a maximum cumulative term of nine years in the same listed company.

The circular will take effect on Feb. 1 after publication in two newspapers of general circulation.

Independent directors who were elected before the effectivity of the circular will also be covered by the nine-year limit, starting from calendar year 2012.

For continuous or consecutive service, the nine-year term limit will end on the date of the annual stockholders’ meeting or on another date approved by the SEC.

In cases of intermittent service, the independent director’s total tenure must still not exceed nine years.

Under the circular, if an independent director becomes a non‑independent director or an officer of the company within the nine‑year limit, that person may only be reappointed as an independent director after a two‑year cooling‑off period starting from the date they stop serving in the non‑independent role.

If an independent director serves more than six months, the term will be considered one full year.

All independent directors that have reached the nine-year limit will be “barred perpetually” from re-election as an independent director of the same company. However, the person can still serve as a non-independent director or officer of the same company without a cooling off period.

Incumbent independent directors that have served the maximum nine-year limit at the time of the circular issuance may continue to serve until the company’s 2026 annual stockholders’ meeting.

Under the previous rules, persons can serve as independent directors for up to nine years, but companies may apply for exemptive relief to extend their term.

The new SEC circular removes the flexibility of companies to seek exemptive relief.

Companies that exceed the maximum cumulative term limit for an independent director may face a basic penalty of P1 million per violation, plus P30,000 for each month that the director remains in office beyond the allowed term, in addition to other sanctions under existing laws.

A third or succeeding offense for the same violation may lead to the suspension or revocation of the company’s primary or secondary license.

Stronger governance

Meanwhile, analysts said the tighter rules on independent directors’ term limits will enhance board independence and strengthen governance over time. In the near term, however, they noted this could spark changes in boards of listed firms ahead of the annual stockholders’ meetings this year.

“The term limit for independent directors is a major step to strengthen corporate governance. It will prevent director entrenchment that could affect perceived independence. The limit will likewise open corporate boards to new members with fresh ideas and perspectives,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the cap will ensure directors are really independent and avoid issues like too much familiarity, management capture, and passive oversight.

“It also accelerates board refreshment, which can enhance diversity in skills, age, gender, and professional background,” he said in a Viber message.

Mr. Arce noted that the policy forces companies, especially large conglomerates and banks, to balance director independence with preserving institutional memory, as losing experienced independent directors risks weakening boards if succession isn’t planned ahead.

“Companies that treat this as an opportunity to redesign board composition — rather than merely comply — are likely to emerge with stronger oversight frameworks and clearer role definitions between executive, non-executive, and independent directors,” he said.

BDO Securities President John Tristan D. Reyes said the new rules will help bring in new perspectives and skills as new independent directors are appointed to boards of listed firms.

“In the short term, however, it may create challenges for companies that depend on long‑serving directors with deep knowledge of their business, especially in more complex or regulated sectors,” he said. “As companies prepare for the 2026 annual stockholders’ meetings, many will speed up succession planning, adjust board composition, and provide more detailed disclosures on their refresh plans. Some may face continuity issues if several long‑tenured directors need to step down at the same time,” he added.

Mr. Colet, however, called on the commission to go further, emphasizing that much more can be done to enhance public companies’ governance.

“For example, public shareholders should have a greater say in electing independent directors. This can be done through a requirement that an independent director must also receive a majority of the votes cast by public shareholders, or through a rule that at least one independent director should be elected solely by public shareholders,” he said.

Mr. Arce said investors will also likely scrutinize not just rule compliance but also whether replacement directors bring relevant expertise, genuine independence, and real board influence.

“Poorly executed transitions could raise red flags, while thoughtful board renewal could strengthen investor confidence,” he said. — Alexandria Grace C. Magno

Car sales may reach 503,000 in 2026, says CAMPI

Car sales are expected to breach 500,000 this year, driven by rising demand for electrified vehicles (EVs) and multi-purpose vans, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI).

“We see that there’s a big chance that the market can reach 500,000 this year. That’s around a 2% to 2.5% increase,” said Jose Maria M. Atienza on the sidelines of the CAMPI president turnover ceremony on Tuesday.

“We’re pegging it at around 503,000,” he added. “But again, it would depend on how the market grows coming from the trend.”

Auto industry data showed that 491,395 vehicles were sold in 2025, up 3.7% from 473,842 in 2024. This includes sales of CAMPI and Truck Manufacturers Association, Inc. (TMA) members which reached 463,646 in 2025, down 0.8% from 467,252 units sold in 2024.
“For CAMPI and TMA, same as our projection for industry, around 2%,” Mr. Atienza said.

Mr. Atienza said that the outlook reflects the conservative optimism of the industry after seeing a sales decline in the second half of 2025.

“Right now, we are just accepting the reality of what happened during the second half but are still positive that at least we will bottom out and then see some growth,” he said. “But we are very hopeful that the market will reach 500,000 units.”

In particular, he said that the imposition of excise tax on pickup trucks has resulted in a decline in the segment’s sales, especially in the second semester.

“There was a big reduction in our pickup sales because of the change in excise tax structure. So, there’s a big, actually, there’s a 20% drop in pickup sales in the second half compared to maybe the same period in the previous year,” he added.

Mr. Atienza said industry sales growth this year will be driven by demand for EVs as well as multi-purpose vehicles.

“EVs have improved and increased in terms of sales. We also saw some good segments, such as multi-purpose vehicles like L300s and Tamaraws. I think there was a 70% increase,” he said.

“So, there are growth areas in the market. And again, it would just depend on when it will grow. It is a very sound market, and it would depend on when the customers would again have the confidence to purchase more vehicles,” he added.

Data from CAMPI and TMA showed that 32,489 EVs were sold in 2025, accounting for 7.01% market share. Including other available industry data, CAMPI said that EV sales hit 58,905 units last year, which reflect 12% market share.

“We see this growth [continuing]. But of course, it is just a matter of customer preference and how ready we are. But I think we already saw the increase in hybrid and EV sales in 2023, and it continued into last year,” he said.

“And we are quite positive that with the introduction of additional models, this trend would still continue for EVs,” he added.

He also said that the group is expecting some improvement in the passenger car segment after CAMPI members saw a 23.1% drop in passenger car sales to 92,924 in 2025 from 120,770 in 2024.

“It would depend on how much individual brands can introduce new models. There are cycles of demand, again depending on the model introduction,” he said.

Meanwhile, Mr. Atienza said that the group is hoping the government will implement the Revitalizing the Automotive Industry for Competitiveness Enhancement program.

“We all know how important it is for automotive manufacturing. And we are always here to work with the government and concerned agencies on how to make sure that this is finally implemented,” he said.

“I am sure there are many stakeholders also, not only CAMPI, but individual members and even the parts makers and suppliers who really want to see this program through and finally implemented,” he added.

To further attract car manufacturing, he said that the government must pursue initiatives that will make the country more competitive in terms of cost.

“We have a good cost structure, but there are some areas in cost that are not as favorable. So, that is where collaboration with the agencies should come in on how to make the Philippines a good environment for investments,” he added.

On Tuesday, CAMPI held a ceremonial turnover for its new president, Mr. Atienza, who is also the executive vice-president of Toyota Motor Philippines Corp.’s marketing division. He took over from Rommel R. Gutierrez. — Justine Irish D. Tabile, Reporter

Peso falls on Trump’s Korea tariff threat

The peso dropped to the PHP 59-per-dollar level again on Tuesday as US President Donald J. Trump threatened to impose higher tariffs on South Korea.

The local unit ended at P59.085 versus the dollar, weakening by 11.4 centavos from its P58.971 finish on Monday, data from the Bankers Association of the Philippines showed.

The peso opened Tuesday’s trading session weaker at PHP 59.05 against the dollar. Its intraday best was at PHP 59.035, while its worst showing was at PHP 59.10 against the greenback.

Dollars traded went up to USD 1 billion from USD 954 million on Monday.

The peso dropped as the market reacted to Mr. Trump’s fresh tariff threats, the first trader said by phone.

South Korea scrambled on Tuesday to assure the US it remained committed to implementing a trade deal after Mr. Trump said he would hike tariffs on autos and other imports from its ally, blaming a delay in enacting the pact agreed last year, Reuters reported.

Mr. Trump said on Monday that South Korea’s parliament was not living up to its side of the deal by swiftly enacting the agreement he reached with President Lee Jae Myung to make huge investments in US business projects in return for tariff cuts.

South Korea’s presidential Blue House said it was committed to implementing the deal and would continue to take the required steps to finalize it to stave off tariff hikes.

Mr. Trump has upended global trade by imposing tariffs on imports from nearly every country since beginning his second term in office in 2025. In some cases, he has threatened tariff hikes and delayed them or not followed through.

“The peso depreciated anew from stronger than expected US durable goods report, signifying strength in US consumer spending,” the second trader said in a Viber message.

For Wednesday, the second trader said the peso could depreciate further amid expectations that the US Federal Reserve will hold borrowing costs steady at its policy meeting this week.

The first trader sees the peso moving between PHP 58.90 and PHP 59.10 per dollar on Wednesday, while the second trader expects it to range from PHP 59 to PHP 59.25. — A.M.C. Sy with Reuters

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