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The Bangko Sentral ng Pilipinas (BSP) said another rate cut this year is uncertain amid current economic conditions, signaling a looming end to its current easing cycle.

Asked if he sees one more cut under the current easing cycle, BSP Governor Eli M. Remolona, Jr. said: “Even that cut is still a maybe. Hindi pa sigurado. (It’s not certain).”

On the sidelines of a BSP event on Friday, the central bank chief told reporters they would consider subdued inflation and tepid growth to spur demand in deciding on their next policy move.

However, Mr. Remolona noted that a weaker-than-expected output in the fourth quarter of 2025 may not automatically warrant a reduction to the key interest rate in February.

“It would help us decide (whether) to cut (but) it’s not the only factor,” he said, adding that inflation remains the top deciding factor for the Monetary Board.

The BSP has been on an easing path since August 2024. It has lowered key borrowing costs by a total of 200 basis points (bps), bringing it to an over three-year low of 4.5%.

In 2025, it delivered five straight 25-bp cuts, including its last two cuts driven by benign inflation and dim investor and consumer sentiment amid the flood control corruption scandal.

The economy slumped in the third quarter of last year to an over four-year low of 4% as the flood mess dampened government spending and household consumption. As of September, the Philippine gross domestic product (GDP) growth stood at 5%.

The BSP expects GDP growth to settle at sub-4% in the last quarter of 2025 to bring the full-year print to 4.6%. If realized, the government would miss its 5.5%-6.5% target for the year.

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

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the governor’s tone shift implies that a sixth consecutive cut is now unlikely.

“Governor Eli’s more cautious tone signals that a February cut is no longer a base case and that the BSP is shifting toward risk management amid PHP (Philippine peso) weakness and uncertain inflation dynamics,” he said in a Viber message. “Markets may now price a shallower or earlier end to the easing cycle.”

Mr. Rivera added that the peso may gain some support if the Monetary Board decides to hold steady at its first policy review this year but noted that economic growth may get the shorter end of the stick.

“A pause at the first meeting would help anchor expectations and reduce forex (foreign exchange) pressure, but it also means less monetary support for growth, putting more weight on fiscal execution and structural reforms to carry the expansion,” he said.

The Philippine Statistics Authority will release the fourth-quarter and full-year GDP report on Thursday, Jan. 29.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said sluggish fourth-quarter growth and the peso’s volatility would call for another 25-bp cut next month.

“Two main factors for a possible (25-bp) BSP rate cut on the next BSP rate-setting meeting on Feb. 19, 2026: Delicate balancing act to further support economic/GDP growth especially if the latest data… would remain soft,” Mr. Ricafort said via Viber.

“(A)nother important consideration would be the need to stabilize the peso exchange rate versus the US dollar… (and) the expected Fed rate pause for now, as another (25-bp) BSP rate cut on Feb. 19, 2026 would narrow the interest rate differential to the lowest on record at (50 bps),” he added.

Mr. Remolona said they are considering the US Federal Reserve’s monetary policy moves but noted that “it’s one data point among many.”

The Fed has so far delivered 175 bps in cuts since September 2024, bringing its key policy rate to the 3.5%-3.75% range. It is set to have its first meeting this year on Jan. 27-28.

Mr. Remolona also on Friday said they would defend the peso during a PHP 60: USD 1 scenario depending on its movement.

Asked if the BSP would intervene once it hits PHP 60 against the dollar, he said: “Depends (on) how it gets there. Just because it’s P60 doesn’t mean we’ll defend it.”

The central bank will likely stick to minimal intervention just to prevent sharp swings in the local currency, the BSP chief added.

“We do what we’ve always done,” Mr. Remolona said. “We try to avoid sharp movements in the peso.”

The Palace earlier said that President Ferdinand R. Marcos, Jr. hopes the exchange rate will not reach the PHP 60-per-dollar level.

According to Mr. Remolona, the peso might not trade at PHP 60 versus the greenback anytime soon.

The peso fell to PHP 59.46 against the dollar on Jan. 15, marking a fresh low for the local unit after it exceeded the previous record of PHP 59.44 on Jan. 14.

It recovered to a PHP 59.09 finish on Friday, gaining seven centavos from its PHP 59.16 close on Thursday, based on data from the Bankers’ Association of the Philippines. — Katherine K. Chan, Reporter

The Marcos administration will stick to the fiscal deficit targets, Finance Secretary Frederick D. Go said, while analysts warned this may be more challenging amid expectations of weaker revenue collection.

Asked if the government tweaked its deficit ceilings, Mr. Go on Friday told reporters no changes were made to the targets.

The government set the deficit ceiling at PHP 1.65 trillion or 5.3% of gross domestic product for 2026. For 2027, the deficit ceiling was set at PHP 1.6 trillion or 4.8% of GDP, followed by PHP 1.55 trillion or 4.3% of GDP by 2028.

The Development Budget Coordination Committee has trimmed the targets of the revenue-generating agencies this year, potentially affecting fiscal consolidation efforts.

The Bureau of Internal Revenue’s (BIR) revenue collection target was cut by 4.14% to PHP 3.431 trillion this year, while the Bureau of Customs’ (BoC) target was trimmed by 1.07% to PHP 1.003 trillion.

The BTr’s cash operations report, which includes the December and full-year fiscal deficit figures, will be released on March 3.

In the first 11 months, the budget deficit widened to PHP 1.26 trillion, about 80.92% of the PHP 1.56-trillion full-year 2025 target.

Meanwhile, analysts warned that weak revenue collections from the BIR and BoC could make it more difficult for the administration to keep the 2026 deficit within target.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said cutting the BIR and BoC’s collection goals by around PHP 160 billion makes it more difficult to bring down the deficit to 5.3% of GDP.

“It basically means the government has less revenue cushion, so if spending isn’t tightened or offsetting revenues don’t materialize, the deficit will widen,” he said in a Viber message on Sunday. 

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the government’s 5.3% fiscal deficit target for 2026 will be “challenging to achieve” amid lower projected revenue collections.

Pressures such as slower economic activity, geopolitical risks, and local political noise could dampen tax receipts and widen the budget gap, he said in a Viber message over the weekend.

Privatization 

Meanwhile, Mr. Go said he has directed the Privatization and Management Office (PMO) to look at government assets based on what is more “realistic” to sell.

“I asked them to get back to me to arrange it according to what they believe is more realistic,” the Finance chief added.

Based on the 2026 Budget of Expenditures and Sources of Financing, proceeds from the government’s privatization program are expected to surge to PHP 101 billion in 2026 from PHP 5 billion last year. — Aubrey Rose A. Inosante

Rice millers have committed to raising their buying prices for both wet and dry palay (unmilled rice), while importers agreed to an initial shipment of 300,000 metric tons (MT) to arrive by the end of February, ahead of the peak harvest season, the Department of Agriculture (DA) said.

At a briefing on Thursday, Agriculture Assistant Secretary Arnel V. De Mesa said the commitment followed consultations by the DA with rice millers and importers, amid the early start of the dry-season harvest.

Mr. De Mesa said millers agreed to buy unmilled grain at a minimum of PHP 17 per kilo for wet palay and PHP 21 per kilo for dry palay, particularly in major rice-producing provinces in Northern and Central Luzon.

“The millers committed that they will buy at that price. Hopefully, it will be maintained until the end of the harvest season in April,” he said in mixed English and Filipino.

The higher farmgate price is expected to provide much-needed support to farmers, as palay prices have dropped over the past year.

Preliminary data from the Philippine Statistics Authority showed that the national average farmgate price of dry palay in 2025 was PHP 17.70 per kilo, down 24.62% from PHP 23.48 a year earlier.

Following consultations with importers, the DA also identified an initial import volume of about 300,000 MT through the end of February, subject to further review based on market conditions.

“The volume needs to arrive on or before the end of February, so that it will not coincide with peak harvest in March and April,” Mr. De Mesa said.

According to guidelines issued by the Bureau of Plant Industry, rice shipments arriving beyond the Feb. 28 deadline will be returned to the source country at the expense of the importer.

Data from the bureau showed that 178,397 MT of imported rice arrived in the country from Jan. 1 to 15, more than double the 71,772 MT initially projected for the period.

Mr. De Mesa said the DA will study whether to reimpose an import ban or further limit import volumes once the peak harvest season begins in March.

He added that the tariff rate on imported rice remains at 15%, pending an official announcement from the agency.

In a separate statement, the DA said rice tariffs will not be raised until February and that the final details will be “carefully managed to avoid unnecessary market speculation.”

Under the implementing guidelines of Executive Order No. 105, the rice tariff rate for January was scheduled to be announced by Jan. 15, based on December prices of Vietnam 5% broken rice, and will remain in effect until May 15. — Vonn Andrei E. Villamiel

The Philippine economy is likely to grow by 5.3% this year, driven by robust domestic demand, although private investment risks persist amid the graft scandal, the ASEAN+3 Macroeconomic Research Office (AMRO) said on Wednesday.

In its latest Regional Economic Outlook quarterly update, AMRO sees Philippine gross domestic product (GDP) expanding by 5.3% in 2026, unchanged from its annual consultation report released in November.

This is still within the government’s revised 5-6% GDP growth target for 2026.

“The picture for the Philippine economy is that it has been quite steady, but there are some headwinds against (this outlook) on the investment side,” AMRO Chief Economist Dong He said in a virtual news briefing on Wednesday.

“Private investment of course, needs to be supported by investor confidence, and the public investment had been affected by some of the, for example, flood control controversy,” Mr. He said.

If realized, the Philippines is expected to be the second fastest-growing economy in Southeast Asia this year, after Vietnam’s 7.6%.

The country’s growth will likely outpace Cambodia (5.1%), Indonesia (5%), Laos (4.6%), Malaysia (4.4%), Singapore (3%), Myanmar (2.5%), Thailand (1.7%), and Brunei (1.6%).

The Philippines’ GDP growth would also be above the region’s average growth of 4.6% for 2026.

For 2025, AMRO said the Philippine economy likely grew by 5.2%, falling short of the government’s 5.5-6.5% target.

Mr. He also noted that the “fairly weak” third-quarter growth in 2025 prompted a downgrade in forecasts from the October update.

A flood control corruption scandal has weighed on growth, investor confidence and consumption.

In the third quarter, GDP grew by 4%, the weakest growth in over four years, bringing the nine-month average to 5%.

Fourth-quarter and full-year 2025 GDP data will be released on Jan. 29.

Mr. He said private consumption, which accounts for over 70% of the economy, will continue to remain firm, but the corruption scandal hit the investment side, he added.

Meanwhile, AMRO kept its headline inflation forecast for the Philippines at 3.2% this year, matching the Bangko Sentral ng Pilipinas’ (BSP) full-year projection.

Inflation settled at 1.7% in 2025, the slowest pace in nine years or since 2016.

Main risks

Meanwhile, AMRO said climate-related risks and artificial intelligence (AI), which put pressure on the country’s service exports sector, are the two main risks for the Philippine economy.

Mr. He also said that while the economy has expanded “steadily,” growth remains below its pre-pandemic trajectory.

“What’s important is really to strengthen governance, strengthen investor confidence, and prioritize investments or prioritize public spending so the economy will become more resilient (against the main risks),” he said.

Last week, the government unveiled “big bold reforms” before the private sector to counter the slide in investor confidence amid a corruption scandal.

Mr. He said these risks highlight the need to upgrade human capacity and human capital to suit the AI age, as well as strengthen infrastructure to make it resilient amid natural disasters.

“In order to maintain resilience and even aim higher to go back to earlier trajectory of growth, we think that the public policies should really focus on strengthening resilience, particularly in light of the two main risks facing the Philippines in the longer term,” he added.

AMRO added that in the near term, authorities have room to ease monetary policy and deploy fiscal support to help the economy.

“I think in terms of policies, of course, in the short term if there are shocks that hit the economy, monetary policy and fiscal policy would be the first policy instruments that the government can use,” he said.

The BSP has reduced its benchmark rate by a total of 200 basis points since August 2024, bringing the policy rate to a more than three-year low of 4.5%.

Regional growth to moderate

Meanwhile, the ASEAN+3 region is projected to grow by 4% this year, moderating from the regional growth forecast of 4.3% in 2025 amid softer external demand.

ASEAN+3 includes the 10 Association of Southeast Asian Nations (ASEAN) member states plus China, Hong Kong, Japan and South Korea.

ASEAN is forecast to expand by 4.6% this year, slightly slower than 4.8% estimate in 2025.

“While domestic demand is projected to remain firm and continue supporting growth, higher US tariffs and persistent policy uncertainty are expected to weigh on external demand, leading to more moderate growth in 2026,” AMRO said.

The US began imposing a 19% reciprocal tariff on many goods from the Philippines, Cambodia, Malaysia, Thailand, and Indonesia in August 2025.

The think tank noted that overall risks to the regional outlook have become “more balanced,” though downside risks persist and uncertainty continues to rise.

AMRO also flagged five downside risks that could weigh on the region’s baseline forecast for 2025 to 2026, including heightened protectionist measures and a potential slowdown in technology demand.

It also warned that further escalation of US trade measures may dampen regional activity, amid concerns that tariffs will be imposed on sectors currently exempted, such as semiconductors.

Other factors that could undermine regional growth in the near term include potential slowdowns in major economies, surging global commodity prices, and increased financial market volatility.

AMRO said long-term risks include geoeconomic confrontation and policy uncertainty from geopolitical tensions, failure of climate change mitigation and adaptation, natural disasters, and extreme weather events.

It added that cyber insecurity, frontier technology risks, weak preparedness for infectious disease outbreaks, and inadequate planning for an aging population could further weigh on the region in the long run.

Despite these risks, the AMRO noted potential upside, such as strong global semiconductor demand and sustained foreign direct investment (FDI) commitments.

“Strong technology demand and robust FDI inflows into emerging sectors, including advanced electronics, electric vehicles, and digital services, have helped cushion growth despite ongoing tariff headwinds,” Mr. He said. — Aubrey Rose A. Inosante, Reporter

Nerissa Enriquez, 55, used to squeeze in a stop at a remittance shop near her Florida hospital after long nursing shifts, wiring small amounts several times a month to relatives in the Philippines.

These days, most of her money goes home through her phone — and she says she’s unlikely to go back to cash counters.

A 1% US tax on certain remittances, which took effect on Jan. 1 under President Donald J. Trump, is pushing overseas Filipinos like Ms. Enriquez further toward digital channels and away from cash-based transfers that fall under the levy.

The change is modest on paper, but for workers who send money frequently, it adds another cost to an already tight budget.

“I’ll probably have to cut back on the amount because of the tax,” said Ms. Enriquez, who has worked in the US for almost two decades. “I need to adjust it based on my income because that’s all I can afford.”

The tax applies to cash-based transfers such as cash payments, money orders and cashier’s checks, regardless of the sender’s citizenship. It is charged on top of the amount sent. Transfers made through US banks, US-issued debit and credit cards, electronic wallets and even hand-carrying physical cash are exempt — a carve-out that is shaping how migrants respond.

While the charge amounts to just USD 1 for every USD 100 sent, Ms. Enriquez said the added cost still stings, especially as prices of imported goods in the US remain elevated following Mr. Trump’s tariff push. If forced to rely on traditional channels, she said she may trim what she sends just to keep her usual schedule.

“They will probably end up receiving less,” she said of her family back home. “I feel sorry for them, but that’s all I can do.”

The Philippines is one of the world’s biggest recipients of remittances, with money sent by overseas Filipinos serving as a steady source of household income and a buffer for the economy during global slowdowns. Any policy that touches these flows tends to ripple quickly from migrants’ wallets to grocery bills and school fees back home.

Economists say the US tax is unlikely to derail overall remittance inflows but could shave off some spending power for Filipino households and accelerate a shift that was already under way: the move to digital transfers.

The levy could translate to about P8 billion to P9 billion in foregone spending in the Philippines each year, though the broader effect would be limited, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said.

“It could be a drag, though negligible, on remittance growth and on the local economy,” he said via Viber.

Filipinos sent home $2.91 billion in November — the lowest in two months —bringing cash remittances to USD 32.11 billion in the first 11 months of the year, according to the Bangko Sentral ng Pilipinas. The US remained the biggest source, accounting for 40% of inflows in 11 months.

The central bank’s forecast of a 3% rise in remittances to $36.6 billion this year remains within reach, Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines, told BusinessWorld. The tax’s narrow scope, he added, limits its bite.

“(The tax’s) macroeconomic impact is likely minimal, as it applies only to cash-based transfers, while digital and bank channels remain exempt,” Mr. Asuncion said in a Viber message.

Still, the policy could change how money is sent, nudging overseas Filipinos toward formal digital platforms and away from informal channels, he pointed out.

That shift is already visible. Digital wallets, banking apps and online money-transfer services have gained ground over the past decade, helped by lower fees, faster settlement and wider smartphone use. The tax exemption gives those platforms another edge.

Analysts at the Asian Development Bank said migrants might simply reroute funds through US financial institutions or cards to avoid the charge, while money-transfer firms could absorb part of the cost to stay competitive.

“Because the law exempts transfers via the banking system, many migrants may bypass the fee entirely,” ADB economists Jules Hugot and Ed Kieran Reyes said in a commentary. “Given this, providers are likely to adjust pricing to keep customers.”

‘Tighter budgets’

For some families, however, even small frictions matter.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory & Research, said the tax might discourage frequent transfers, especially among workers who remit in small amounts.

“Taxes are meant to discourage sending income generated in the US outside the country,” he said in a Viber message. “Lower remittances mean tighter budgets for Filipino families.”

He added that reduced household income could weigh on consumer spending and savings, and for families carrying debt, make repayments harder. Over time, that could show up in bank loan performance, though he noted the effects would likely be gradual.

The tax comes at a time when many overseas Filipinos are already adjusting to higher living costs abroad. In the US, food, housing and transport expenses remain well above pre-pandemic levels, while interest rates have stayed high. For workers like Ms. Enriquez, who sends money at least five times a month, every extra fee adds up quickly.

“A 1% tax is still a lot,” she said. “If you’re remitting USD 1,000 or USD 2,000, imagine how much that is. How much more if it goes higher?”

Despite the added burden, most economists don’t expect a sharp pullback in remittances. Demand for Filipino workers remains steady across healthcare, shipping, construction and services, and labor conditions in key host countries have improved since the pandemic.

Mr. Asuncion said overall inflows should remain broadly stable, even if some households adjust how often they send money or consolidate transfers to manage costs.

Remittances tend to be resilient because they support basic needs — families depend on them.

For Ms. Enriquez, the decision is less about macroeconomic forecasts and more about day-to-day convenience.

She said physical remittance centers take too much time — commuting after work, filling out forms, waiting in line. Digital platforms fit better with her schedule and feel safer.

“Online is easier,” she said. “We already know how to use it and it’s secure.”

Her experience mirrors a wider trend among overseas Filipinos, many of whom adopted digital transfers during the pandemic and never fully returned to cash counters. The US tax may simply lock in that behavior.

For the Philippines, that could bring side benefits. More money flowing through banks and licensed digital platforms improves transparency and strengthens the formal financial system. It can also make it easier for recipients to save, pay bills or access credit.

Still, the policy underscores how decisions made thousands of miles away can filter down to kitchen tables in Manila, Cebu or Davao. For families that rely on money sent from abroad, even small changes matter.

Ms. Enriquez said she would keep sending what she can, tax or no tax. But the margin for adjustment is thin.

As overseas Filipinos adapt, the dollars will keep flowing — perhaps through different channels, perhaps in slightly smaller amounts — but with the same purpose: keeping households afloat back home, one transfer at a time. — Katherine K. Chan, Reporter