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The Philippines’ gross international reserves (GIR) slipped in July amid lower gold prices and as the government paid back more of its foreign debt, preliminary data from the central bank showed.

The Bangko Sentral ng Pilipinas (BSP) on Thursday reported that dollar reserves dipped by 0.3% to USD 105.7 billion as of end-July from USD 106 billion as of end-June.

Year on year, the GIR inched down by 1% from USD 106.74 billion.

The central bank said the decline was mainly due to “lower global gold prices and the National Government’s drawdowns on its foreign currency deposits with the BSP to service external debt obligations.”

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

The central bank said the latest GIR provides “a robust external liquidity buffer.”

The level of dollar reserves as of end-July is enough to cover about 3.4 times the country’s short-term external debt based on residual maturity.

It is also equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income.

“By convention, GIR is viewed to be adequate if it can finance at least three months’ worth of the country’s imports of goods and payments of services and primary income,” the BSP said.

“The latest GIR level ensures availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans.”

International reserves are foreign assets of the BSP held mostly as investments in foreign-issued securities, monetary gold, and foreign exchange.

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 BSP’s foreign exchange holdings plunged by 34.3% to USD 826.3 million as of July from USD 1.26 billion as of end-June. Year on year, it rose by 2.1% from USD 809 million.

The value of the central bank’s gold holdings edged lower by 0.1% to USD 13.78 billion from USD 13.8 billion as of June. On the other hand, it jumped by 33.7% from USD 10.31 billion a year earlier.

At end-July, spot gold was down 1.5% at USD 3,275.92 per ounce. US gold futures settled 0.8% lower at USD 3,352.8, Reuters reported.

Gold tends to perform well during economic uncertainty and a low-interest-rate environment further supports the non-yielding asset.

BSP data showed foreign investments increased by 0.2% to USD 86.42 billion as of July from USD 86.26 billion a month ago. However, it dropped by 5.1% to USD 91.1 billion from the same period in 2024.

The country’s reserve position in the IMF slipped by 0.5% to USD 729 million from USD 732.4 million in the previous month. Year on year, it went up by 1.3% from USD 719.9 million.

SDRs — or the amount which the Philippines can tap from the IMF’s reserve currency basket — was unchanged month on month at USD 3.94 billion.

Meanwhile, net international reserves decreased by 0.3% to USD 105.7 billion as of end-July from USD 106 billion as of end-June.

Net international reserves refer to the difference between the GIR and reserve liabilities, including short-term foreign debt, and credit and loans from the IMF.

“The decline in GIR may be caused by larger debt repayments to address maturing securities and other obligations,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the drop in GIR was also amid the continued “Trump risk factor that led to some market volatility worldwide.”

Markets have been in a wait-and-see mode amid the US’ flip-flopping tariff policies.

In an executive order signed on July 31, US President Donald J. Trump imposed a 19% duty on many goods from five members of the Association of Southeast Asian Nations — the Philippines, Cambodia, Malaysia, Thailand and Indonesia. This was expected to take effect on Thursday (Aug. 7).

Meanwhile, Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said that the dollar reserves could trend lower in the coming months if the BSP intervenes to support the peso.

“If the BSP intervenes to keep the US dollar from breaching P59 and P60, we should see further depletion of our GIR,” he said in a Viber message.

BSP Governor Eli M. Remolona, Jr. told Bloomberg on Tuesday that the central bank is intervening more forcefully during periods of extended peso weakness as part of a new strategy, gradually moving away from day-to-day intervention.

He said the central bank adopted a new formula that determines the magnitude of peso losses that require stronger intervention to curb price pressures, Bloomberg reported.

“They aren’t worried about breaches of these levels though since inflation is pretty low,” Mr. Neri added.

Inflation sharply eased to a near six-year low of 0.9% in July from 1.4% in June and 4.4% a year ago, marking the fifth straight month that it settled below the central bank’s 2-4% target.

For the first seven months of the year, inflation averaged 1.7%, a tad higher than the BSP’s 1.6% forecast for 2025. — Luisa Maria Jacinta C. Jocson

Agricultural output expanded by an annual 5.7% in the second quarter — the fastest pace in eight years — as better weather conditions enabled high-value crops such as rice and corn to post double-digit growth, the Philippine Statistics Authority (PSA) said on Wednesday.

Data from the PSA showed the value of production in agriculture and fisheries at constant 2018 prices increased by 5.7% to PHP 437.53 billion in the April-to-June period, faster than the 2% growth in the first quarter.

This was a reversal of the 3.2% contraction in the second quarter of 2024 when the agriculture sector was affected by drought and dry spells caused by the El Niño weather phenomenon.

This was also the fastest growth in agricultural output since 6.4% in the second quarter of 2017.

“Crops and poultry recorded expansions in the value of production, while livestock and fisheries registered declines during the period,” the PSA said.

At current prices, the value of production in agriculture and fisheries rose to PHP 606.794 billion.

For the first half, the value of farm output expanded by 3.8% to PHP 875.56 billion, a reversal of the 1.5% decline a year earlier.

“We know that we still have to do a lot more to realize the vision of President Ferdinand R. Marcos, Jr. for a modern agricultural sector, where farmers and fisherfolk reap the full benefits of their hard work. But this result — and that of the first quarter — are a clear indication that we are on the right track,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. said in a statement.

Agriculture accounts for about a tenth of gross domestic product (GDP) and about a quarter of all jobs. The PSA will release second-quarter GDP data today (Aug. 7).

Crop output, which accounted for 56% of total agricultural production, rose by 11.3% to P244.9 billion in the second quarter. Palay and corn posted double-digit growth of 13.9% and 27.3%, respectively.

“Palay and corn and poultry are expected to rebound because of good weather and high prices,” former Agriculture Undersecretary Fermin D. Adriano said in a Viber message.

Other crops that saw double-digit expansion include sugarcane (341%), onion (77.5%), coffee (14.5%), cabbage (11.7%) and cacao (11.4%).

On the other hand, declines were seen in the value of production of abaca (18.2%), tomato (16%), mongo (13.6%), mango (8.6%), sweet potato (8%), potato (5.5%), banana (2.6%), and pineapple (1.1%).

Raul Q. Montemayor of the Federation of Free Farmers said better performance of the agriculture sector this year was expected since 2024 was an “abnormal year” due to the El Niño weather phenomenon.

For the first half, crop output grew by 5.9% to PHP 494.5 billion, reversing the 4.4% contraction last year.

At the same time, poultry, which made up 17.2% of total farm output, went up by 7% to PHP 75.07 billion in the second quarter. However, this was slower than 9.8% in the first quarter, and 8.7% in the second quarter of 2024.

The value of production for chicken grew by 8.2%, while chicken eggs rose by 4.8%. However, duck production fell by 1.1%, while duck eggs dipped by 0.7%.

For the first six months of the year, poultry production jumped by 8.4% to PHP 150.57 billion. This was an improvement from the 7.3% growth in the same period in 2024.

Livestock, fisheries

Meanwhile, the value of production for livestock declined by 5.9% to PHP 59.6 billion in the April-to-June period, worsening from the 0.3% drop in the same quarter a year ago and the 2.8% decline in the first quarter. Livestock accounted for 13.6% of total agricultural output.

In the second quarter, hog output contracted by 7.5%, while carabao production also fell by 2.9%.

On the other hand, dairy production grew by 9.6%, while cattle and goat rose by 2% and 1.3%, respectively.

For the first six months, the value of livestock production declined by 4.4% to PHP 117.43 billion, worse than the 1.9% drop in the same period a year ago.

On the other hand, the value of fishery output declined by 4.2% to P57.96 billion in the second quarter, reversing the 2.4% growth in the same quarter in 2024 and the 1.5% growth in the first quarter.

Fisheries accounted for 13.2% of total farm output.

Double-digit declines were seen for skipjack (35.6%), bigeye tuna (28.8%), P. Vannamei (22.4%), bluecrab or alimasag (19.6%), Bali sardinella or tamban (15%), mudcrab or alimango (11.9%), fimbriated sardines (11.2%), and roundscad or galunggong (10.4%).

Higher production was seen for grouper or lapu-lapu (25.6%), Indian mackerel or alumahan (20.7%), slipmouth or sapsap (17.9%), yellowfin tuna or tambakol (12.5%), threadfin bream or bisugo (12.1%), and big-eyed scad or matangbaka (9.1%).

Seaweed production grew by 6.1% in the April-to-June period.

In the January-to-June period, the value of fishery output slid by 1.5% to PHP 113.05 billion, reversing the 1.1% growth a year ago.

Analysts said the agricultural and fishery production in the third quarter would likely post a contraction due to the heavy rains that caused floods around the country.

“The prospects for the third quarter are very challenging due to the presence and impact of extreme weather events like typhoons, flooding and soil erosion,” former Agriculture Secretary William Dar said in a Viber message.

The Department of Agriculture (DA) said in late July the agricultural damage due to monsoon rains and recent tropical storms reached PHP 3 billion, affecting 93,070 farmers and fishers.

“The government must continue to make the needed investments to make the agriculture sector more climate resilient,” Mr. Dar said.

Mr. Adriano expects palay production to decline in the third quarter.

“Corn will contract as it is the rainy season, and corn does not like too much water,” he said.

Mr. Adriano said livestock production will continue its “lackadaisical” performance due to the African Swine Fever (ASF).

The Food and Drug Administration has yet to approve a Vietnamese vaccine against ASF for commercial rollout.

“Poultry is expected to grow unless hit by bird flu because of higher demand as it is the cheapest source of protein particularly for the poor,” Mr. Adriano said.

“As for fishery, performance will depend on whether we will be hit by destructive typhoons or not,” he added. — KATA

President Ferdinand R. Marcos, Jr. has ordered a 60-day suspension of rice imports starting Sept. 1, in a move aimed at protecting Filipino farmers affected by low rough rice prices during the harvest season.

The President acted on the recommendation of the Department of Agriculture (DA) after consultations with his Cabinet while on a five-day state visit to India, acting Presidential Communications Secretary Dave M. Gomez told reporters on Wednesday.

“[The move is] to protect local farmers reeling from low palay prices during this current harvest season,” he said.

Mr. Gomez said there are no plans to act on the DA’s recommendation to hike the rice tariff to 25% from the current 15%.

“We will still see if we need to resort to that. Right now, the decision is to suspend all rice importation for 60 days beginning Sept. 1,” he added.

The Philippines is the world’s biggest rice importer, having brought in 2.44 million metric tons (MT) as of end-July, based on Bureau of Plant Industry data. The country imported 4.7 million MT last year and is projected to exceed that volume this year. 

In June, Agriculture Secretary Francisco P. Tiu Laurel, Jr., told the House of Representatives he had recommended gradually restoring the rice import tariff to its original 35% rate from 15%, which was set under Executive Order (EO) No. 62 signed by Mr. Marcos in June 2024.

The 35% rate, valid until 2028, is subject to review every four months.

The debate comes as Philippine inflation slowed to 0.9% in July, the lowest since October 2019, according to data released on Tuesday by the Philippine Statistics Authority.

Food prices dropped, including a 15.9% year-on-year decrease in rice prices, helping ease overall price pressures.

“The suspension is a more calibrated action — one that we can quickly reverse if needed… It gives us the flexibility to act fast to protect both our farmers and our consumers. A premature tariff hike, on the other hand, could backfire and would take much longer to undo,” Mr. Tiu Laurel said in a separate statement.

He said the two-month pause on rice imports would allow the DA to assess the impact on palay prices and the market.

“If this strategy leads to higher farmgate prices and better income for our farmers, we may no longer need to raise the tariff,” he said.

Former Agriculture Secretary William D. Dar said the temporary suspension of rice imports is expected to benefit Filipino farmers by allowing them to secure better prices during the harvest season.

Since imported rice typically arrives 60 days after ordering, the timing supports the local market without disrupting supply, he added.

“The 60-day suspension is good enough to achieve meaningful impact on our rice industry and market,” Mr. Dar said via Viber.

“Inflation will be at very low levels, [and] we are also able to manage enough supply,” he added. “It will always be necessary to pursue a balanced strategy for a win-win arrangement — the farmers getting [a] fair price [for] their produce and the consuming public for a fair price as well.”

Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet said the 60-day halt on rice imports offers little real benefit to Filipino farmers, as rice tariffs remain at 15% and unmilled rice prices are expected to stay low.

He argued that EO 62 failed to protect local producers or stabilize the market, with importers able to time shipments around the suspension. With warehouses already full, there is no urgent need for new imports.

“Given these realities, the most effective and urgent course of action is to revert rice import tariffs to their previous levels: 35% for Association of Southeast Asian Nations (ASEAN) imports [and] 50% for non-ASEAN imports,” Mr. Cainglet said via Viber.

Fermin D. Adriano, a former undersecretary at the DA, called the initiative a “political move.”

“If I am [a] trader, having huge stocks in my warehouses, I will just wait for the two months to lapse before I resume importation,” he said via Viber.

“It takes around two months for [negotiations] with Vietnamese sellers and [the] actual arrival of rice imports. This is obviously just a political move.” — Chloe Mari A. Hufana, Reporter

Headline inflation could pick up again in the remaining months after hitting a near six-year low in July but still remain within target, which would still give way to further policy easing by the Bangko Sentral ng Pilipinas (BSP).

“Looking ahead, we think July inflation is the floor of the Philippines’ inflation outlook,” HSBC Global Research economist for ASEAN Aris D. Dacanay said in a report.

“Headline inflation is likely to accelerate in the months ahead as the base effects of the rice tariff rate cut in 2024 fade,” he added.

Nomura Global Markets Research analysts Euben Paracuelles and Nabila Amani said that inflation could rise close to 2% in the coming months.

“We maintain our forecast for CPI (consumer price index) inflation to average 1.8% in 2025, penciling in a gradual climb towards 2% by yearend, in part due to low base effects and the impact of weather disruptions that are still likely to materialize in the near term,” they said in a report.

Headline inflation sharply eased to a near six-year low of 0.9% in July from 1.4% in June and 4.4% a year ago, the Philippine Statistics Authority (PSA) reported on Tuesday.

It also marked the fifth straight month that inflation settled below the central bank’s 2-4% target range.

“Still, our full-year forecast remains below BSP’s 2-4% target, reflecting a combination of factors, including a still-negative output gap and an economy facing downside risks,” Nomura said.

For the first seven months of the year, inflation averaged 1.7%. This was a tad higher than the central bank’s 1.6% forecast for 2025.

“This implies pass-through effects from easing supply-side drivers are likely to accentuate the impact; we still see low crude oil prices and the government maintaining supply-side measures to keep food prices, particularly rice prices, low,” Nomura said.

Meanwhile, Mr. Dacanay flagged risks to watch out for, including proposed changes to rice policies. 

President Ferdinand R. Marcos, Jr. announced on Wednesday a 60-day suspension of rice imports, effective Sept. 1, to protect local farmers amid declining farmgate prices. The government is also still discussing the possibility of raising tariffs on rice imports.

“We have written previously that curbing the supply of rice risks stoking inflation by 1.2 to 1.4 percentage points (ppts),” Mr. Dacanay said.

Despite the likelihood of inflation picking up in the months to come, the BSP can still continue its rate-cutting cycle.

“Will this derail the BSP’s easing cycle? We do not think so since we expect inflation to peak at around 2.9% year on year in the second quarter of 2026. This implies that inflation will still be well within the BSP’s 2-4% target range,” Mr. Dacanay said.

BSP Governor Eli M. Remolona, Jr. told Bloomberg on Tuesday that they can deliver two more 25-basis-point (bp) cuts this year and potentially continue its easing cycle until next year.

The central bank has lowered borrowing costs by a total of 125 bps since it began easing in August last year, bringing the policy rate to 5.25% when it last reduced rates in June.

“Nonetheless, the soft inflation numbers will likely give the central bank more confidence that it can proceed with its easing cycle with or without the Fed,” Mr. Dacanay said.

“Our baseline scenario is for the BSP to pause its easing cycle during the August rate-setting meeting, but the soft inflation outlook increases the risk of a rate cut,” he said.

Second-quarter gross domestic product (GDP) data, scheduled to be released today (Aug. 7), will also support further rate cuts.

“Any soft GDP figure will likely strengthen the conviction of the BSP of loosening the monetary reins without the Fed or deepening its monetary easing cycle throughout the year,” Mr. Dacanay added.

A BusinessWorld poll of 17 analysts showed that the Philippine economy likely grew 5.5% in the second quarter, slower than 6.5% a year ago.

For its part, HSBC expects the benchmark to end at 5% by yearend.

“But since the US tariff rate on the Philippines was less favorable than expected, the risk of a deeper easing cycle by the BSP is increasing,” Mr. Dacanay said.

Meanwhile, Nomura projects the Monetary Board to deliver a 25-bp cut at the Aug. 28 meeting, followed by another 25 bps in October.

“This would take the policy rate to 4.75%, which we think puts BSP’s monetary stance slightly below its estimate of neutral. BSP continues to emphasize its assessment of the inflation outlook as the main driver of policy decisions,” it added. — Luisa Maria Jacinta C. Jocson

The Philippine Statistics Authority (PSA) said on Wednesday it had kept the country’s gross domestic product (GDP) growth rate at 5.4% for the first quarter.

The gross national income — the sum of the nation’s GDP and net primary income from the rest of the world — for the first three months was revised downwards to 7.2% from the 7.5% initially reported.

Similarly, net primary income from the rest of the world for the first quarter was lowered to 22% from 24.6%.

The statistics agency also noted some changes in some components of the national accounts, particularly on the supply side.

“Downward revisions were noted in electricity, steam, water and waste management (2.7% from 3.8% initially reported), financial and insurance activities, (6.9% from 7.2%) and information and communication (4.7% from 5.6%),” the PSA said in a report.

Meanwhile, the following sectors saw upward revisions: manufacturing (4.3% from 4.1%), real estate and ownership of dwellings (3.7% from 3.3%) and professional and business services (5.2% from 5%).

On the demand side, gross capital formation growth — the investment component of the economy — was raised to 4.8% from the 4% initially reported.

Growth in exports of goods and services was revised upward to 7.1% from 6.2%, while growth in imports was raised to 10.3% from 9.9%.

Private consumption (5.3%) and state spending (18.7%) were unchanged for the January-to-March period from initial estimates.

The revision came ahead of the second-quarter GDP data that will be released on Aug. 7.

A BusinessWorld poll of 17 economists late last week showed a median estimate of 5.5% GDP growth in the April-to-June period, which would be slower than the 6.5% expansion in the same period last year.

National account revisions are based on approved revision policy, which is consistent with international standard practices, the PSA said. — Abigail Marie P. Yraola

The peso appreciated against the dollar on Wednesday after the Bangko Sentral ng Pilipinas (BSP) chief said they would actively intervene in the foreign exchange market to manage sharp swings in the currency.

The local unit closed at PHP 57.475 per dollar, strengthening by 15.5 centavos from its PHP 57.63 finish on Tuesday, Bankers Association of the Philippines data showed.

The peso opened Wednesday’s session a tad stronger at PHP 57.60 against the dollar. Its worst showing was at PHP 57.78, while its intraday best was at PHP 57.41 against the greenback.

Dollars exchanged climbed to USD 2.49 billion on Wednesday from USD 2.11 billion on Tuesday.

The local unit rebounded against the dollar after BSP Governor Eli M. Remolona, Jr. said the central bank would intervene more forcefully in the market during extended periods of peso weakness due to its effect on inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The dollar-peso closed lower as the market responded to the BSP governor’s comment saying the central bank will intervene more forcefully on peso weakness,” a trader likewise said in a phone interview.

For Thursday, the trader sees the peso moving between PHP 57.20 and PHP 57.60 per dollar, while Mr. Ricafort expects it to range from PHP 57.35 to PHP 57.65.

Mr. Remolona told Bloomberg on Tuesday that the BSP is intervening more forcefully during periods of extended peso weakness as part of a new strategy, gradually moving away from day-to-day intervention.

The BSP adopted a new formula that determines the magnitude of peso losses that require stronger intervention to curb price pressures, Mr. Remolona said in an interview Tuesday. He declined to elaborate on the formula.

The BSP used to intervene to smoothen day-to-day volatility, the BSP chief said. “We now understand there are thresholds: a depreciation of the peso doesn’t cause inflation to go up until it’s enough of a depreciation,” he said.

The governor also said “there’s a risk” of the local currency dropping again to the record low of PHP 59 per dollar given the peso’s volatility though he said authorities aren’t worried about specific levels. — A.M.C. Sy with Bloomberg