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The Philippines’ unemployment rate unexpectedly rose year on year in November 2025 despite the start of the holiday hiring season, as bad weather and job losses in key industries outweighed the usual fourth-quarter lift, data from the Philippine Statistics Authority (PSA) showed.

Preliminary results of the Labor Force Survey (LFS) put the jobless rate at 4.4% in November, up from 3.2% a year earlier, though lower than 5% in October. This translated to about 2.25 million jobless Filipinos, compared with 1.66 million in November 2024 and 2.54 million in the previous month.

Labor Secretary Bienvenido E. Laguesma said the November figures were unexpected given the seasonal pattern of stronger hiring toward the yearend.

“Yes, I am surprised because, as you pointed out, ‘ber’ months are associated with increased hiring. Note, however, that the November 2025 stats are better than the October 2025 figures indicating recovery,” he told BusinessWorld.

National Statistician and PSA Undersecretary Claire Dennis S. Mapa said the year-on-year weakening in the jobs market reflected weather-related disruptions and employment declines across several major sectors.

“[There were] two major typhoons in November last year, including Tinio, and their impact was widespread,” he told a news briefing on Wednesday. He noted that the storms disrupted economic activity, transport and supply chains, affecting hiring and job retention across regions.

In the first 11 months of 2025, the unemployment rate averaged 4.19%, higher than the 3.9% average recorded in the same period in 2024.

The November employment data also showed mixed signals. The number of employed Filipinos rose to 49.26 million in November from 48.62 million in October, pointing to some seasonal recovery.

However, employment remained below the 49.54 million recorded in November 2024, underscoring the lingering effects of disruptions earlier in the year.

As a result, the employment rate slipped to 95.6% in November from 96.8% a year earlier, though slightly better than 95% in October.

Mr. Mapa said the typical hiring boost during the “ber months” was weaker than expected. He noted that there were 49.26 million employed people in November 2025, 277,000 fewer than a year earlier.

The impact was most visible in sectors sensitive to mobility, such as tourism and logistics.

The average employment rate for the first 11 months of 2025 stood at 95.8%, lower than the level recorded in the comparable period in 2024.

Uunderemployment

Data from the PSA showed underemployment rate fell to 10.4% in November from 10.8% in November 2024 and 12% in October. This was the lowest underemployment rate in nine months or since 10.1% in February.

The ranks of underemployed Filipinos — those who want longer work hours or an additional job — dropped to 5.11 million in November from 5.35 million a year earlier and 5.81 million in October.

Year to date, the average underemployment rate stood at 12.26%, inching up from 12% a year earlier.

Labor force participation rate rose to 64% in November from 63.6% in October but slipped from 64.6% a year earlier. This translated to a labor force of 51.52 million in November, higher than the 51.16 million in October and 51.2 million in No-vember 2024.

PSA data showed job losses were concentrated in industries directly affected by adverse weather conditions and weaker consumer activity in November.

Accommodation and food service activities had the largest year-on-year decline, shedding 309,000 jobs. Losses were concentrated on restaurants and mobile food service activities, which cut 191,000 positions, followed by short-term accommodation activities with a reduction of 76,000 jobs, and event catering services, which declined by 23,000.

Wholesale and retail trade, including the repair of motor vehicles and motorcycles, also saw jobs drop by 258,000 year on year.

Employment declines were also recorded in retail sales in stalls and markets dealing in food, beverages, and tobacco, as well as buyer stalls and motor vehicle sales. Other service activities shed 250,000 jobs, driven largely by cuts in personal wellness services and domestic services.

Jobs in manufacturing fell by 150,000, reflecting continued weakness in the sector. Mr. Mapa said the semiconductor and electronics sector, in particular, lost 106,000 jobs year on year in November.

He said that manufacturing of other food products and the processing and preserving of fruits and vegetables also posted notable job losses, partly due to supply-chain disruptions and reduced operating days following the typhoons.

“These sectors — accommodation and food service activities, wholesale and retail trade, other service activities, and manufacturing — contributed to the decline in the number of employed persons, which in turn pushed unemployment higher year on year,” Mr. Mapa said.

Some sectors, however, recorded employment gains. Public administration and defense, including compulsory social security, added 185,000 jobs year on year, while education employment increased by 176,000, partly reflecting continued hiring in government and public institutions.

Better in December?

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., told BusinessWorld that the relatively higher unemployment rate in November was “partly due to the series of typhoons, storms, flooding that led to weather-related disruptions that reduced business days, sales, incomes for some businesses, consumers, and other institutions.”

 

For Chinabank Research, the decline in manufacturing jobs, particularly those in the production of semiconductors and other electronic components, reflected the impact of recent typhoons on business operations.

“Looking ahead, the sector continues to face risks from the challenging external environment, though a pickup in domestic demand could help support factory activity and improve job prospects,” it said.

Chinabank Research said it expects holiday demand in December to have provided support to employment and consumption at the end of 2025.

“December might show better data with stronger holiday-driven demand, though this seasonal boost will likely wane this month. This year, we expect the labor market to remain generally robust and support a recovery in consumption growth,” it added.

Mr. Ricafort said the labor market may have improved in December 2025 amid peak seasonal demand, better weather conditions, and increased economic activity.

“Nevertheless, unemployment rate at 3%-4% levels is still considered among the best in about 20 years or since revised records started in 2005,” he said.

Mr. Ricafort also pointed to the government’s planned catch-up spending in 2026, anchored on governance reforms and anti-corruption measures, as a potential boost to investor confidence, economic growth, and employment going forward.

In a statement, the Department of Economy, Planning, and Development (DEPDev) said the latest LFS results underscore the need to strengthen workforce competitiveness and business resilience amid persistent disruptions.

“The government is prioritizing investments in skills development, lifelong learning, and social protection systems to enable workers to transition across sectors and withstand economic shocks. Strengthening workforce competitiveness is one of the key elements to attract investments that generate quality jobs,” DEPDev Secretary Arsenio M. Balisacan said in a statement.

For his part, Mr. Laguesma said the Department of Labor and Employment, in collaboration with the private sector, will ramp up efforts to come up with “better employment results” in the coming months. — Erika Mae P. Sinaking

The Philippines’ total outstanding debt inched up to a fresh high of PHP 17.65 trillion as of end-November, the Bureau of the Treasury (BTr) said.

Latest data from the Treasury showed that the National Government’s (NG) outstanding debt went up by 0.49% to P17.65 trillion in November from PHP 17.56 trillion at end-October 2025.

The debt level is already 1.7% above the projected year-end level of PHP 17.36 trillion.

November also marked the fifth month in a row that the end-2025 debt projection was breached.

Year on year, NG debt jumped by 9.94% from PHP 16.05 trillion at the end of November 2024.

“The month-on-month increase was underpinned by the net issuance of domestic and external debt, which was partly offset by significantly lower valuations of foreign currency-denominated obligations due to the peso’s appreciation,” the BTr said in a statement on Wednesday.

The peso appreciated against the US dollar from PHP 58.771 at the end of October to PHP 58.729 at the end of November 2025.

NG debt is the total amount owed by the Philippine government to creditors, including international financial institutions, development partner countries, banks, global bondholders, and other investors.

In November, the bulk or 68.66% of the debt stock came from domestic sources, while the rest came from external sources.

The BTr said it continues to borrow mainly from domestic creditors and in local currency to keep debt levels “sustainable.”

“This is because peso obligations do not fluctuate with foreign exchange rates and the payment of interest redounds to the benefit of Filipino investors, further boosting domestic income,” it said.

Domestic debt inched up by 0.6% to PHP 12.12 trillion as of end-November from PHP 12.05 trillion as of end-October. This is mainly composed of government securities.

At end-November, debt was already 0.6% higher than the PHP 12.04-trillion year-end domestic debt projection.

“This (increase) was driven by the PHP 71.85 billion in net issuance of government securities, despite a PHP 0.12-billion reduction in peso valuation on retail dollar bonds,” the BTr said.

Since the start of 2025, domestic debt jumped by 10.86% or PHP 1.19 trillion. Of this, PHP 1.18 trillion came from fresh issuances and PHP 2.52 billion “was caused by the weakening of the peso from its level at the end of 2024.”

Year on year, domestic debt rose by 10.95% from PHP 10.92 trillion recorded in November 2024.

Meanwhile, external debt stood at PHP 5.53 trillion as of end-November, up 0.26% from PHP 5.52 trillion in the previous month. This also exceeded the PHP 5.32-trillion external debt projection by 4.07%.

“This is due to the PHP 22.84 billion in net loan availment for the month, which was offset by the PHP 8.73 billion in downward valuation adjustments caused by favorable foreign exchange movements,” the Treasury said.

The BTr noted that the stronger peso against the US dollar trimmed foreign currency debt valuation by PHP 3.94 billion. At the same time, third-currency movements, such as the Japanese yen and the euro, contributed another PHP 4.79 billion to the valuation cut.

Year on year, foreign debt climbed by 7.81% from PHP 5.13 trillion in 2024.

Foreign debt was composed mainly of PHP 2.82 trillion in global bonds and PHP 2.71 trillion in loans.

External debt securities totaled PHP 2.39 trillion in US dollar bonds, PHP 258.77 billion in euro bonds, PHP 58.73 billion in Islamic certificates, PHP 57.01 billion in Japanese yen bonds, and PHP 54.77 billion in peso global bonds.

“The NG’s external financing operations remained prudent, measured, and anchored on long-term debt sustainability considerations,” the BTr said.

“External borrowings continue to be largely concessional and program-based, offering very long maturity terms and relatively lower interest costs, thereby supporting a cost-effective and resilient debt profile.”

Since the start of the year, NG external debt jumped by 8.01% or PHP 410.04 billion.

“Of the total, P276 billion was due to new loans and bonds, while P134.04 billion was net adjustments to valuation linked to peso depreciation against foreign currencies in the first eleven months of 2025,” it added.

For November, NG-guaranteed obligations increased by 3.38% to PHP 356.04 billion from the end-October level of PHP 344.41 billion.

The BTr attributed the monthly increase to the net availment of domestic guarantees by the Power Sector Assets and Liabilities Management Corp., amounting to PHP 12.71 billion.

However, external guaranteed repayments and favorable exchange rate movements tempered the increase by PHP 0.42 billion and PHP 0.66 billion, respectively, it added.

Year on year, NG-guaranteed obligations fell by 15.64% from PHP 422.03 billion.

Wake-up call

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the record-high debt is a “wake-up call.”

“The challenge now is balancing fiscal discipline with growth,” he said in a Viber message.

Mr. Ravelas also urged the government to accelerate infrastructure and investment projects that generate jobs and revenue, while keeping borrowing focused on productive spending.

“Otherwise, higher debt means higher interest costs — and less room to maneuver,” he said.

Meanwhile, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the higher debt stock in November partly reflected new government securities issued to cover the wider fiscal gap in recent months.

The budget deficit swelled to PHP 1.26 trillion as of end-November from the PHP 1.18-billion deficit in the same period in 2024.

“The weaker peso exchange rate vs. the US dollar over the past 3.5 years by about 16% effectively increased the peso equivalent of the outstanding National Government external debts when converted to pesos,” he said in a Viber message.

Asked if the government would be able to bring down debt to PHP 17.36-trillion programmed level, he said: “Already beyond the target, with possible budget deficits still in December 2025.”

Meanwhile, Mr. Ravelas said a weaker peso and failure to address the country’s issues would inflate the debt in 2026.

NG debt as a share of gross domestic product (GDP) went up to 63.1% at end-September from 60.1% in the same period last year. This is above the 60% threshold deemed sustainable for developing countries.

The Department of Finance expects the NG debt-to-GDP ratio to ease to 61.3% by end-2025 and eventually fall to 58% by 2030. — Aubrey Rose A. Inosante

Further monetary policy easing might come as early as the Monetary Board’s first meeting for 2026 amid subdued inflation and dismal economic growth last year, the Bangko Sentral ng Pilipinas (BSP) said. 

Asked about the likelihood of a February cut, BSP Governor Eli M. Remolona, Jr. said: “(It’s) on the table. Unlikely pero puwede naman (but we could deliver it).”

Mr. Remolona said that the latest December inflation print of 1.8% is a “reasonably low rate,” even as it quickened from 1.5% in November. Year on year, it slowed from 2.9% in December 2024.

Philippine economic growth in 2025 also likely fell below the government’s target, he added.

“I can say that we’re very close to where we want to be in terms of policy,” he told journalists in Mandaluyong City. “There’s a chance that we may cut some more, and there’s also a chance that we may not move at all. But there’s not a lot of probability that we will raise in 2026.”

The Monetary Board ended last year with a fifth straight 25-basis-point (bp) cut at its Dec. 11 meeting, bringing the key policy rate to its lowest in over three years at 4.5%.

It has so far delivered 200 bps in total cuts since it began its easing cycle in August 2024.

The central bank chief said the country’s gross domestic product (GDP) may have expanded by 4.6% last year as the flood control corruption scandal continued to drag consumer and investor confidence.

This would be below the government’s 5.5%-6.5% target for the year and also lower than the Development Budget Coordination Committee’s (DBCC) latest projection of 4.8%-5%.

“There was a loss of confidence of investors. So, investments came down. Consumption also came down,” Mr. Remolona said.

“When you realize that your taxes are not really going into infrastructure spending, masakit ’yon eh (that’s painful)… It’s more painful when you know it’s going to the wrong guys. So, that has a big effect,” he added.

In the third quarter, GDP growth slumped to an over four-year low of 4% amid allegations that Public Works officials, lawmakers and private contractors received kickbacks from anomalous flood control projects.

Economic managers have since conceded that the economy likely failed to meet the government’s growth target for 2025.

Meanwhile, the BSP has repeatedly said following its December meeting that further easing is now limited and would depend on economic developments in the country.

Mr. Remolona said they may only deliver two 25-bp cuts if growth slows to below 5% this year due to weak demand.

“If we cut two more times, medyo ibig sabihin nu’n, things are worse than we thought (that might mean that things are worse than we thought). So, that would require a bad surprise in the data,” Mr. Remolona said.

“If growth is much slower than we anticipated. We’re saying that for 2026, growth will be 5.4%. If it goes below 5%, then there’s ground for one more cut beyond the 25 bps,” he added.

For 2026, the central bank sees GDP growth averaging 5.4%, noting that the economy will likely remain sluggish in the first half before picking up in the second half.

“Mahaba pala ’tong impact eh ’yung loss of confidence (The impact of the loss of confidence may be prolonged)… it will continue through the first half of 2026,” Mr. Remolona said, noting that a 5.4% growth is “not bad” considering the flood control scandal.

The DBCC on Monday revised its growth target for this year to 5-6% from the 6-7% goal previously.

Economic growth may further improve to 6.2% in 2027, the BSP chief added, settling near the upper bound of the administration’s 5.5%-6.5% revised goal.

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

Manufacturing output growth fell to a seven‑month low in November, weighed down by weak domestic consumption and sluggish export demand.

Preliminary results of the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries showed factory output, as measured by the volume of production index, fell by 1.5% year on year in November, a reversal from the revised 1% growth in October.

Year on year, the decline slowed from the 4.5% drop in November 2024.

The November reading was the slowest output growth in seven months or since the 2.4% decline in April 2025.

On a monthly basis, November’s output contracted by 2.8%, reversing the 5% growth in October. Stripping out seasonality factors, it slipped by 3.5%.

Year to date, factory output fell by 0.1%, a reversal from the 0.7% growth in the same period in 2024.

PSA data showed the November manufacturing performance was mainly due to the slower month-on-month growth in food products (4.2% in November from 8.1% in October); and the decline in coke and refined petroleum products (-11.4% from -2.7%); and beverages (-2.8% from 4.9% growth).

“Manufacturing output contracted by 1.5% in November, reflecting a sharper deterioration in operating conditions as the Philippines Manufacturing Purchasing Managers’ Index (PMI) fell to 47.4 from 50.1, driven by weak domestic and export demand and typhoon‑related production disruptions,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in an e-mail.

S&P Global PMI fell to over a four-year low of 47.4 in November, a reversal from the 50.1 in October.

“Beyond these, we continue to monitor declining export orders, softer purchasing activity, thinning inventories, and early signs of labor shedding — signals consistent with a sector adjusting to both global headwinds and domestic supply constraints,” added Mr. Asuncion.

Nicholas Antonio T. Mapa, chief economist at Metropolitan Bank & Trust Co., said the manufacturing performance reflected the slowdown in economic activity in the third quarter.

“In particular, softer household consumption may have weighed on volume of production,” he said in an e-mail.

In the third quarter, GDP grew by 4%, the slowest in over four years. This brought the nine-month average growth to 5%, below the government’s 5.5%-6.5% target.

Philippine Chamber of Commerce and Industry Chairman Sergio R. Ortiz-Luis, Jr. said that the decline in November came after most orders were frontloaded in the first nine months of 2025.

“Actually, both local and export production were fast-tracked in the first three quarters of the year… There was front-loading for year-end deliveries. So, production tapered down in the fourth quarter,” said Mr. Luis-Ortiz in mixed English and Tagalog in a phone call.

Capital utilization averaged 77.4% in November, slightly lower than October’s 77.6%. All sectors have reached an average capacity utilization rate of more than 60% during the month.

Going forward, Mr. Asuncion anticipates a “modest” improvement in December and “gradual” recovery through 2026. 

“Our view is that while November’s slump reflects temporary disruptions and cyclical demand softness, forward sentiment remains constructive. Manufacturers posted their strongest optimism since November 2024, and with domestic demand expected to firm up alongside an eventual BSP (Bangko Sentral ng Pilipinas) easing cycle… consistent with medium‑term projections that see manufacturing output trending higher toward 2026,” said Mr. Asuncion.

Mr. Mapa said a gradual recovering in manufacturing is likely as “inventories decline and demand returns over the next few months.”

“Manufacturing looks like to grow especially in export, but not as fast as we would like to, it will continue to grow but still we are left behind by our neighbors due to weak demand,” said Mr. Ortiz-Luis. — Lourdes O. Pilar

The Asian Development Bank (ADB) said household consumption in the Philippines is likely to rebound in 2026 on the back of easing inflation and interest rates, after a corruption scandal and adverse weather dampened spending in recent months.

However, analysts warned that depending on tax relief to spur consumption could undermine fiscal consolidation efforts.

ADB Country Director for the Philippines Andrew Jeffries said household final consumption expenditure, which accounts for over 70% of the economy, is expected to “strengthen in 2026 amid low inflation and accommodative monetary policy.”

“More broadly, policies need to focus on raising incomes and reducing vulnerability,” he said in an e-mailed statement to BusinessWorld.

Mr. Jeffries said these measures should include expanding higher‑quality employment, boosting productivity through skills upgrading, and targeted social protection for vulnerable households.

This comes as private consumption growth moderated in the third quarter of 2025, particularly discretionary spending on recreation, hotels and restaurants, partly due to weather‑related disruptions, he said.

Data from the Philippine Statistics Authority (PSA) showed household final consumption expenditure slowed to 4.1% in the third quarter from 5.2% a year ago.

This was the slowest since the 4.8% contraction in the first quarter of 2021. Excluding pandemic years, it was the slowest growth in private spending since the 2.6% increase in the third quarter of 2010.

The PSA will release the fourth-quarter and annual 2025 preliminary gross domestic product (GDP) data, including household consumption, on Jan. 29.

Despite the slower growth in the third quarter, the ADB said spending on essentials, particularly food, remained resilient, supported by low inflation.

Inflation picked up to 1.8% in December from 1.5% in November. This brought the average to 1.7% in 2025.

For 2026, the central bank sees inflation accelerating to 3.2%, but still within the 2-4% target band.

The Bangko Sentral ng Pilipinas (BSP) has so far delivered a total of 200 bps in cuts since August 2024, after it lowered its policy rate by 25 bps to an over three-year low of 4.5% at its Dec. 11 meeting, amid subdued inflation and sluggish growth.

The Monetary Board is scheduled to hold six regular policy meetings in 2026, with the first one set on Feb. 19.

Tax relief?

To spur household demand and ease public concerns over flood control issues, a lawmaker had proposed giving tax relief to Filipinos, but analysts were divided, saying the measure could lift spending but risk undermining fiscal consolidation.

Senator Erwin T. Tulfo filed a bill in the Senate in October to provide a one-time, one-month income tax holiday for individual taxpayers receiving compensation income, effective on the first payroll month immediately following the bill’s approval.

Senate Bill No. 1446, or the One-Month Tax Holiday bill, remains pending at the committee level.

“A tax relief will only delay fiscal consolidation,” Foundation for Economic Freedom President Calixto V. Chikiamco told BusinessWorld on Tuesday.

The Marcos administration aims to bring the deficit down to PHP 1.56 trillion, or 5.5% of GDP, in 2025, and eventually to PHP 1.55 trillion, or 4.3% of GDP, in 2028.

Mr. Chikiamco noted that many factors influence consumer spending, such as unemployment, inflation, and wage growth.

“Depreciation of the peso will increase OFW (overseas Filipino worker) incomes and spur consumer spending without decreasing government revenues,” he added.

The peso has breached the PHP 59-a-dollar mark several times since November and sank to a record low of PHP 59.22 on Dec. 9.

Meanwhile, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., argued that tax relief can boost private consumption, but the program has to be “smart and targeted.”

“Tax relief can help revive spending, especially after a year of high prices and tight budgets,” he said.

“Focus on essentials like VAT (value-added tax) breaks on food and utilities, and give relief to lower- and middle-income families who are more likely to spend,” Mr. Ravelas added.

However, he said tax relief must be “time-bound,” and paired with job creation and price stability, so people feel confident to open their wallets.

“The problem on spending is due to the uncertain environment due to ‘floodgate,’ the government should fix its trust issues so confidence will come back,” Mr. Ravelas said, referring to the flood control mess.

Meanwhile, the ADB’s Mr. Jeffries said improving VAT efficiency and sustaining gains in tax administration through digitalization are key to raising government revenue.

“The proposed tax on single-use plastic bags is a notable measure, serving both revenue and environmental objectives by helping address plastic and solid-waste challenges,” he said.

BIR Commissioner Charlito Martin R. Mendoza earlier said the proposed tax measure is projected to generate between PHP 6 billion and PHP 10 billion annually, “depending on the rate and coverage.”

“Beyond taxation, sustained improvements in expenditure efficiency and public financial management are crucial, particularly to strengthen investment planning, project execution, and governance,” Mr. Jeffries said. — Aubrey Rose A. Inosante, Reporter

Philippine infrastructure spending fell for the fourth straight month in October, as disbursements for the Department of Public Works and Highways (DPWH) continued to decline amid the corruption scandal and adverse weather.

The latest data from the Department of Budget and Management (DBM) showed expenditures on infrastructure and other capital outlays dropped by 40.1% to PHP 65.9 billion in October from PHP 110 billion a year ago.

Month on month, it also fell by 16.2% from PHP 78.7 billion in September.

October marked the fourth straight month that expenditures fell on an annual basis, since the 25.3% drop in July after a corruption scandal involving flood control projects was made public.

The scandal has dampened economic activity and public spending, particularly on infrastructure.

The DBM said the year-on-year drop in infrastructure spending “resulted largely from the contraction in DPWH disbursements.”

The DBM noted that the slower budget release for public works was due to “non-submission of billions from contractors amid ongoing validation of the status of implementation and completion of flood control projects.”

The DPWH is at the center of a corruption scandal after department officials, lawmakers and contractors were accused of getting kickbacks from flood control projects that were either nonexistent or substandard.

The pending release of final payments due to delays in securing the Bureau of Internal Revenue Tax Clearance by contractors also factored in the drop in disbursements, the DBM said.

Contractors must obtain an updated tax clearance before final settlement of any government contract; otherwise, the contract may be suspended.

“(This includes) delays in the renewal of contractors’ Philippine Contractors Association Board (PCAB) licenses, which affected the submission of progress billings by contractors and subsequent processing of payments,” the Budget department said.

Adverse weather conditions also weighed on the release of the DPWH infrastructure budget, the DBM said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said political noise around infrastructure projects, particularly flood control, pulled down spending in October.

10-month period

In the first 10 months, overall infrastructure and capital outlay disbursements stood at PHP 943 billion, down 13.7% from PHP 1.09 trillion a year ago.

This accounted for 62.33% of the PHP 1.51-trillion full-year program.

“Infrastructure spending contracted since the onset of the flood control issues of the DPWH, which resulted in delays in the settlement of progress billings for its completed infrastructure projects,” the DBM said.

Data from the DBM showed that overall infrastructure disbursements, which include infrastructure components of subsidy and equity to government corporations and transfers to local government units, slipped by 11.5% to PHP 1.13 trillion in the end-October period from PHP 1.28 trillion a year ago.

For the rest of the fourth quarter, the DBM said lower infrastructure spending is expected to further weigh on overall government disbursements.

At the same time, the DPWH is ramping efforts to address corruption issues by creating a transparency portal that provides information on the agency’s projects.

The DPWH is also discontinuing defective flood control projects due to poor planning, as well as deleting duplicate projects.

In the coming months, Mr. Ricafort said infrastructure spending is expected to recover by early 2026 as part of the government’s catch-up spending plan.

“For the coming months, infrastructure spending could pick up in view of the catch-up spending plan by early 2026, hinged on the policy priority on anti-corruption measures/reforms and other reforms to further improve governance standards,” he said in a Viber message on Dec. 26.

Economic managers have insisted the spending slump is only temporary as reforms and investigations are underway.

Overall government disbursement reached PHP 4.91 trillion as of end-October, up by 3.9% from PHP 4.73 trillion in the same period last year. This represented 80.8% of the PHP 6.08-trillion full-year expenditure program. — Aubrey Rose A. Inosante, Reporter

Philippine business groups are urging lawmakers to pass a general tax amnesty and review the value‑added tax (VAT) on electricity as part of their tax wish list for 2026.

British Chamber of Commerce Philippines Executive Chair Chris Nelson said the group supports the proposal of Senate Finance Committee Chair Sherwin T. Gatchalian to pass a general tax amnesty.

“This gives the opportunity for those taxpayers who may have unpaid or outstanding liabilities to move forward amicably,” he said during a phone call with BusinessWorld.

The measure is among President Ferdinand R. Marcos, Jr.’s legislative wish list for the 20^th Congress. Bills seeking a one‑time general tax amnesty have been filed in both the Senate and the House of Representatives and are still pending at the committee level.

Senate Bill No. 60, filed in July by Mr. Gatchalian, aims to grant a one-time reprieve on unpaid internal revenue taxes for the taxable year 2024 and prior years.

The measure aims to give delinquent taxpayers a “fresh start” while broadening the government’s tax base and strengthening revenue administration.

Mr. Nelson also called for tariff adjustments, particularly a higher minimum access volume (MAV) quota for pork exports to the Philippines, to ease supply shortages and curb inflation.

He said the Philippines’ MAV quota was set in the 1990s for a population of 90 million, though it is now near 120 million, and warned that limits on food imports risk driving prices higher.

The European Chamber of Commerce of the Philippines (ECCP) also pressed lawmakers to fast-track priority measures, including “the passage of a General Tax Amnesty to broaden the tax base and encourage voluntary compliance.”

Executive Secretary Ralph G. Recto earlier said the government is preparing a tax amnesty to address provisions vetoed in 2019, when then-President Rodrigo R. Duterte struck down the general tax amnesty under Republic Act No. 11213 but retained the estate tax amnesty.

The International Monetary Fund has frowned upon the administration’s proposed general tax amnesty, saying that it could lessen regular voluntary tax compliance.

Meanwhile, the ECCP also backed priority bills endorsed by the Legislative-Executive Development Advisory Council, including amendments to the Bank Deposits Secrecy Law and the Anti-Money Laundering Act.

The amendments to the bank secrecy law allow the Bangko Sentral ng Pilipinas to examine the accounts of bank officers and employees involved in illegal financial activities. The House of Representatives has passed the measure on third and final reading.

“Ensuring the full and effective implementation of the CREATE MORE (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy) Act, the Capital Markets Efficiency Promotion Act, and the proposed Mining Fiscal Regime, to provide investors with a stable, predictable, and competitive fiscal framework,” the group said.

The ECCP said investor confidence could be boosted by expanding renewable energy incentives, creating a carbon credit facility, and ensuring a stable mining fiscal regime to position the Philippines in the global critical minerals supply chain.

Amnesty for exporters

Meanwhile, Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis called for a one-time amnesty for exporters in their cases with the Bureau of Customs.

“What we would like is an amnesty in Customs. Since its establishment, Customs has never had an amnesty unlike the BIR (Bureau of Internal Revenue),” he said in a phone call on Dec. 23.

“This would help clear cases that cannot be prosecuted and allow a one‑time amnesty to clean up records. Otherwise, these cases can be a source of graft,” Mr. Ortiz-Luis said.

He also noted the high electricity and fuel costs in the Philippines, which are significantly higher than those of its neighboring countries.

“Maybe it’s high time to remove taxes (in electricity) so our electricity costs can go down,” Mr. Ortiz-Luis said in Filipino.

Similarly, Philippine Chamber of Commerce and Industry (PCCI) President Enunina V. Mangio is calling for the government to review the VAT on electricity.

“We also recently called for the review of VAT on electricity as this directly affects inflation, household spending, and business costs,” she said in a Viber message.

Finance Undersecretary Karlo Fermin S. Adriano earlier said the government collected around PHP 44 billion to PHP 45 billion in VAT on electricity in 2024.

“For 2026, PCCI’s tax priorities center on measures that lower the cost of doing business, improve predictability, and strengthen our country’s competitiveness in the region,” Ms. Mangio said.

The group said it will continue to monitor legislative developments and, hopefully, will be signed into law as a priority legislative measure by Mr. Marcos.

Meanwhile, the German-Philippine Chamber of Commerce and Industry (GPCCI) said that enhancing and reforming tax administration is crucial, rather than introducing new incentives and laws, and should be among the government’s key priorities to strengthen the country’s investment climate in 2026.

“The necessary laws, circulars, and incentive frameworks are already in place. What investors need most is clarity, predictability, and consistent implementation,” GPCCI President Marie Antoniette E. Mariano said in a statement to BusinessWorld.

Ms. Mariano said reliable application of existing rules significantly improves investor confidence.

The Marcos administration earlier pledged not to introduce new taxes.

Digitalization

At the same time, business groups are urging for broader government digitalization as persistent delays and uncertainty continue to challenge local and foreign firms.

“Most important is accelerating full digitalization and administrative reforms that make tax compliance easier rather than introducing new revenue-raising measures that could dampen investment sentiment,” Ms. Mangio said.

The ECCP urged the government to accelerate the rollout of e‑invoicing and support the passage of the Digital Payments Act.

She said these are critical to modernizing tax administration, improving compliance, and lowering the cost of doing business.

“We are very much committed to digital transformation. In that respect, we’d like to see how the system can be further digitalized to reduce paperwork and bottlenecks. I think the government has made a commitment,” Mr. Nelson said.

He added that electronic invoicing, one of the initiatives, would capture real‑time transactions and accelerate processes.

GPCCI called for more transparent digitalization, including fewer bureaucratic requirements, faster tax rulings, and quicker dispute resolution.

“Transparent and well-managed tax audits, complemented by efficient dispute resolution mechanisms, benefit the taxpayer and the government alike, play a key role in improving the countries competitiveness,” said Dr. Marian Majer, GPCCI Policy and Advocacy Chairperson.

American Chamber of Commerce in the Philippines Executive Director Ebb Hinchliffe said one of the key priorities would be the fast‑tracking e‑invoicing and digital compliance.

“Support the BIR’s 2024-2028 digital roadmap while ensuring a pragmatic rollout of e‑invoicing,” he said in a Viber message.

Cross-border services

The ECCP also reiterated its call to reconsider Revenue Memorandum Circular (RMC) No. 05-2024, which sets out the tax treatment of cross-border services.

“If left unchanged, the issuance could significantly increase compliance costs and discourage cross-border service providers from operating in or expanding into the Philippine market,” it said.

GPCCI raised concerns over cross‑border transactions, citing uncertainties under RMC No. 5‑2024 and backlogs in tax treaty rulings. It urged the government to prioritize clearing the backlog, and provide “clearer guidance on the tax treatment of such transactions to reduce compliance risks for investors.”

The group said resolving these issues would reduce compliance risks and bolster foreign investment. — Aubrey Rose A. Inosante, Reporter

The Philippines should sustain its gradual fiscal consolidation to strengthen its fiscal space and external balance, and ultimately lower its debt-to-gross domestic product (GDP) ratio to its target, the International Monetary Fund (IMF) said. 

“Over the medium term, the authorities should implement gradual fiscal consolidation, in line with their targets, to reinforce fiscal space and support external balance,” the IMF said in a report on its Article IV Consultation with the Philippines. 

“With no new tax policy measures, staff’s baseline projections for 2027 (to 2028) assume the consolidation will be achieved largely through lower spending,” it added. 

The Legislative-Executive Development Advisory Council (LEDAC) included the excise tax on single-use plastics and the extension of the general tax amnesty in its list of 44 priority bills for the 20th Congress. 

Both measures are pending in both chambers. The House of Representatives having nine pending bills proposing an excise tax on single‑use plastics, while the Senate has four similar measures. 

Earlier, Finance Undersecretary Karlo Fermin S. Adriano said that the proposal is primarily not a tax bill but an environmental measure to curb the use of plastics. 

Mr. Adriano has said at a PHP 100-per-kilogram excise tax, the resulting revenue will be PHP 8 billion. 

However, the IMF frowned upon the administration’s proposed general tax amnesty, saying that it could lessen regular voluntary tax compliance. 

“Implementing voluntary disclosure programs should be preferred,” it said. 

Earlier this month, House approved on third and final reading the bill to extend the coverage of the estate tax amnesty to the estates of individuals who died on or before Dec. 31, 2028. 

The IMF also urged the Philippine government to adopt “concrete and durable” tax and spending measures to prevent potential cuts on its primary expenditures. 

“Underpinning MTFF (medium-term fiscal framework) targets with concrete tax and expenditure measures would further improve transparency and confidence in the fiscal targets,” the IMF said. 

“The authorities can also consider embedding their fiscal targets within a formal and well-designed fiscal rule to enhance their credibility, while minimizing pro-cyclical fiscal policies,” it added.

The IMF also said the government should prioritize reforms in its tax administration, particularly by improving compliance risk management and leveraging data analytics. 

The Philippines could likewise work on improving the efficiency of its value added tax (VAT), including reducing VAT exemptions on dwelling ownership, or introduce excise taxes on unhealthy food and beverages, it added. 

However, the government earlier said it does not plan to introduce new taxes on top of the LEDAC’s proposed measures as part of the administration’s fiscal consolidation efforts. 

“They do not plan to implement additional tax policy measures, but efforts to digitalize tax administration and stricter enforcement of tax compliance should continue to support revenue mobilization,” the IMF added. 

Meanwhile, the IMF noted that a favorable interest rate-growth differential will allow the country bring down the debt-to-GDP ratio. 

“Staff projects national government debt to decline gradually to about 60% of GDP by 2030, supported by a favorable interest rate-growth differential,” it said. 

As of end-September, the National Government (NG) debt as a share of GDP climbed to 63.1% from 60.1% in the same period last year. This exceeds the 60% threshold deemed sustainable for developing countries. 

The Department of Finance projects the NG debt-to-GDP ratio to settle at 61.3% by yearend, before eventually easing to 58% by 2030. — KKC