PSEi up on bargain hunting after three-day drop

The main index rose slightly on Tuesday on bargain hunting following its three-day slide, backed by positive momentum from Wall Street overnight.

The Philippine Stock Exchange index (PSEi) rose by 0.15% or 9.46 points to close at 6,093.53. Meanwhile, the broader all shares index dropped by 0.11% or 4.07 points to end at 3,657.85.

“The market ended in the green after three consecutive days of losses, driven by bargain hunting among investors,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message. “However, sentiment remains cautious as the Philippine peso continues to depreciate against the US dollar, while the country’s balance of payments (BoP) narrowed in September.”

The peso weakened by 5.5 centavos to close at PHP 58.225 against the dollar on Tuesday from Monday’s finish of PHP 58.17, Bankers Association of the Philippines data showed. This was its worst showing in over a week.

Meanwhile, the country’s BoP position was at an USD 82-million surplus in September, shrinking from the USD 3.526-billion surfeit in the same month a year ago, the central bank reported on Monday.

This helped narrow the country’s end-September BoP deficit to USD 5.315 billion. However, this was a reversal from the USD 5.117-billion surplus posted in the same period last year.

“The local market bounced back from a three-day decline as bargain hunting prevailed. The positive cues from Wall Street helped in Tuesday’s rebound,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

Wall Street stocks moved sharply higher on Monday with technology shares providing much of the upside muscle, as generally upbeat quarterly earnings results helped revive investor risk appetite, Reuters reported.

The Dow Jones Industrial Average rose 554.28 points or 1.20% to 46,745.63; the S&P 500 gained 78.61 points or 1.19% to 6,743.00; and the Nasdaq Composite gained 343.37 points or 1.52% to 23,023.62.

Back home, most sectoral indices closed in the red on Tuesday. Mining and oil sank by 2.95% or 429.85 points to 14,112.61; holding firms dropped by 0.64% or 31.44 points to 4,874.01; property decreased by 0.25% or 5.72 points to 2,254.32; and financials went down by 0.1% or 2.19 points to 2,044.12.

Meanwhile, services rose by 1.09% or 25.21 points to 2,324.29, and industrials increased by 0.38% or 33.96 points to 8,964.54.

Decliners outnumbered advancers, 127 to 84, while 47 names closed unchanged.

“JG Summit Holdings, Inc. was the day’s index leader, climbing 3.75% to PHP 24.90. LT Group, Inc. was the index’s worst performer, dropping 3.77% to PHP 14.28,” Mr. Tantiangco said.

Value turnover went up to PHP 5.24 billion on Tuesday with 1.31 billion shares traded from Monday’s PHP 3.65 billion with 1.86 billion shares changing hands.

Net foreign buying was at PHP 231.58 million on Tuesday, a reversal of the PHP 118.81 million in net selling on Monday. — Alexandria Grace C. Magno with Reuters

ERC approves higher FIT-All rate

Consumers may see higher electricity bills starting next month as the Energy Regulatory Commission (ERC) approved a new feed-in tariff allowance (FIT-All) that goes to paying renewable energy (RE) developers.

At a press briefing on Monday, ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan said the commission has approved a new rate of PHP 0.2073 per kilowatt-hour (kWh), higher than the PHP 0.1189 per kWh previously imposed.

“Under the rules of the feed-in tariff system released by the ERC, FIT-eligible plants are guaranteed to be paid the approved rate. And if they already generated and delivered this electricity, they must be paid because this is essentially a commitment we made, and it is grounded in law,” Mr. Juan said.

The FIT-All is a uniform charge billed to all on-grid electricity consumers to support the development and promotion of renewable energy.

Payments are remitted to the FIT-All fund established and administered by the National Transmission Corp. (TransCo). The fund goes towards paying eligible RE developers who have obtained fixed rates for electricity generated by their projects.

As the administrator, TransCo is tasked to file the application before the ERC to determine the annual FIT-All rate.

The ERC said it has conducted public hearings across the country and “carefully reviewed” the application from TransCo.

“This decision is a careful balance. It secures the growth of renewable energy that our country needs, while keeping electricity rates affordable for every Filipino household and business,” Mr. Juan said.

According to the ERC, the new rate covers outstanding payments and maintains a small buffer fund to prevent delays in future payments to RE producers.

The funds are required to settle a PHP 19.06-billion FIT differential and build a PHP 3.74-billion working capital allowance, which serves as a buffer to guarantee timely payment to RE generators.

The ERC has ordered an immediate audit to guarantee that the FIT-All fund is managed properly. All parties involved, including grid operators and power distributors, have been directed to make their records available for this review.

The National Association of Electricity Consumers for Reforms (Nasecore) called for full transparency and accountability in FIT-All rate adjustments, saying that public consultations are not enough.

In a statement sent to BusinessWorld, the consumer group urged the ERC to release an annual audit of the FIT-All fund and provide detailed explanations of calculations used to determine any shortfall requiring rate adjustments.

Nasecore also called on the regulator to consider alternative measures to sustain RE funding without putting too much financial pressure on consumers.

“Transparency is not optional; it is a legal and moral obligation. If ERC fails to release the audit and provide proper documentation and accountability, it can only mean a failure of regulatory oversight. Consumers deserve to see how their money is collected and utilized,” said Nasecore President Patronilo L. Ilagan.

Another hike

The ERC also approved the proposed new market fee of the Independent Electricity Market Operator of the Philippines (IEMOP) covering the period of 2025 to 2027 to improve the operations of the Wholesale Electricity Spot Market (WESM).

The new market fee of PHP 0.0071 per kWh is the cost of administering and operating the WESM, which will be collected from generators transacting in the spot market.

The approved fee covers the operational, administrative, and capital expenditure budgets of both IEMOP as the market operator and the Philippine Electricity Market Corp. (PEMC), which is the WESM’s governing body.

According to the ERC, the market fee ensures “a reliable and transparent WESM,” as it provides cost predictability for generators and guarantees the integrity of the market’s critical functions like pricing, settlement, and data reporting.

The allocation includes critical IT and cybersecurity upgrades.

“This approval is a key step in the ongoing reform of the electricity market. It ensures IEMOP and PEMC can operate sustainably and fulfill their mandates, balancing industry needs with accountability to consumers,” Mr. Juan said. “This decision is part of our continuing efforts to promote a secure, competitive, and consumer-oriented power industry.”

WESM is where energy companies can purchase power when their long-term contracted power supply is insufficient for customer needs. — Sheldeen Joy Talavera, Reporter

BoP surplus narrows to USD 82 million in Sept.

The Philippines’ balance of payments (BoP) surplus sharply narrowed year on year in September, the central bank reported on Monday.

The country’s BoP position was at a USD 82-million surplus in September, shrinking from the USD 3.526-billion surfeit in the same month a year ago, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.

This was also narrower than the USD 359-million surplus seen in August and marked the second straight month that the Philippine external position yielded a surfeit.

“The BoP surplus reflected the Bangko Sentral ng Pilipinas’ net income from its investments abroad and National Government’s (NG) net foreign currency deposits with the BSP,” the central bank said in a statement.

BoP refers to the country’s economic transactions with other nations. A surplus indicates more funds entered the country, while a deficit shows that the country spent more than it received.

Last month’s surplus helped narrow the country’s end-September BoP deficit to USD 5.315 billion. However, this was a reversal from the USD 5.117-billion surplus posted in the same period last year.

“Preliminary data indicate that the year-to-date BoP deficit was largely due to the continued trade in goods deficit,” the BSP said.

“This was partly offset by the sustained net inflows from personal remittances from overseas Filipinos, trade in services, foreign direct and portfolio investments, and foreign borrowings by the NG.”

The country’s trade gap, or the difference between its exports and imports, was at USD 32.38 billion in the first eight months of the year, the latest data from the Philippine Statistics Authority showed. This was narrower than the USD 34.33-billion deficit in the comparable year-ago period.

The Philippines’ trade-in-goods balance has been in deficit for over a decade or since the USD 64.95-million surplus recorded in May 2015.

“September’s BoP surplus was likely bolstered by net receipts in services trade, overseas Filipino remittance inflows, and net foreign equity investments that, combined, overshadowed trade-in-goods deficit and net foreign bond outflows. This led the third-quarter BoP to be in a surplus position,” Angelo B. Taningco, research head and chief economist at Security Bank Corp., said in an e-mail.

BSP data showed that the country recorded a USD 274-million surplus in the July-September period. This was smaller than the USD 3.676-billion surfeit in the same quarter last year.

Mr. Taningco said they expect another surplus this quarter, which would help trim the end-2025 BoP deficit to USD 4.5 billion.

The BSP expects the overall BoP position to end at a USD 6.9-billion deficit this year or -1.4% of gross domestic product.

“The smaller BoP surplus reflects fewer one-off inflows and a still-wide trade gap, but the external position remains manageable with steady remittances, strong services exports, and solid reserves,” Robert Dan J. Roces, economist at SM Investments Corp., said in a Viber message.

“As global rates ease and regional demand recovers, investment inflows may return and support liquidity and credit conditions, which should help firms with deep local roots and diverse sources of growth.”

Reserves

The BSP said the country’s BoP position mirrored the increase in its gross international reserves (GIR) to USD 109.1 billion at end-September from USD 107.1 billion as of August.

“The level of GIR remains an adequate external liquidity buffer, equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income,” it said. This is well above the three-month standard.

“Moreover, it covers about 3.8 times the country’s short-term external debt based on residual maturity.”

This ensures that the country has ample foreign exchange to meet its financing needs, such as import and debt payments, the central bank said.

The country’s gross reserves are made up of foreign-denominated securities, foreign exchange, and other assets such as gold. Aside from financing its external obligations, these are used by the central bank to help stabilize the peso and also serve as a buffer against global economic disruptions.

The BSP expects dollar reserves to settle at USD 105 billion by end-2025. — Katherine K. Chan

Digital transformation ‘no longer optional’ amid changing global order

Digitalization will not only make the Philippines a more competitive market for investments amid the shifting world order but also help in deterring corruption, industry leaders and a government official said.

At the 51^st Philippine Business Conference and Expo on Monday, Philippine Chamber of Commerce and Industry President Enunina V. Mangio said that digital transformation has become more important than ever amid global economic uncertainty due to growing protectionism and changing trade policies.

“We stand at an inflection point where digital transformation is no longer optional — it is imperative for national competitiveness and prosperity,” Ms. Mangio said.

“The question before us is not whether transformation will occur, but whether the Philippines will position itself at the forefront of this change,” she said. “Our neighbors are moving decisively. The competitive landscape is rapidly intensifying. The opportunity for regional leadership exists — but only for those bold enough to claim it, strategic enough to execute it, and committed enough to sustain it.”

In particular, artificial intelligence (AI) is reshaping how businesses are conducted, services are delivered, and complex problems are solved.

“From predictive analytics that optimize supply chains to AI-powered diagnostics that democratize healthcare, from intelligent automation to natural language processing — AI represents a quantum leap in human capability,” she said.

“The question is whether the Philippines will be a creator and beneficiary of these technologies or merely a passive consumer.”

Blockchain technology has also helped improve supply-chain traceability, particularly in authenticating Philippine exports and smart contracts that reduce transaction costs and increase trust, Ms. Mangio said.

However, the Philippines has yet to fully tap the opportunities being offered by digital transformation, she said, as it must address issues concerning data sovereignty, cybersecurity, and privacy protection that continue to hamper its digitalization journey.

“We must confront technological displacement in labor markets and develop comprehensive strategies for workforce adaptation and social protection,” she said.

“We must establish regulatory frameworks that foster innovation while safeguarding the public interest. We must ensure that digitalization benefits are broadly distributed, not concentrated among a privileged minority.”

Philippine Vice-President Sara Duterte-Carpio said that technology can also be a weapon against corruption.

“As we digitize, we automate our processes, make data and all government transactions transparent, and leave no room for scrupulous backdoor transactions,” she said in her keynote address at the event on Monday.

“We take away the power of corrupt leaders to manipulate public funds and capitalize on people’s money for their personal interests, greed, and political ambition.”

Technology can be used to “impose checks and balances, monitor paper trails, eliminate arbitrary and politically motivated decision-making, and prevent unconstitutional budget insertions to curry political favor at the expense of the people’s money,” she said.

However, the government should make sure that it develops and equips Filipinos so that the country can effectively leverage technology, she said.

“Digital transformation will be the bridge to the future, paving the way for inclusivity through training, upskilling, deep-dive mentoring, and industry exposure to equip our human resources,” she said.

“The new skills and knowledge they acquire will prove useful as they figure into roles that require creative and innovative thinking, problem-solving, and leadership.”

She added that the country should aspire to create future innovators, thinkers, producers, and entrepreneurs.

“Our goal is to maximize the potential of our human and natural resources, leveraging the power of technology and digital transformation to create growth centers that host competitive homegrown producers, service providers, and exporters,” she said.

“These strategies will be significant economic drivers that will help create local jobs, increase domestic economic activities, and spur development and progress in domestic and micro-economies across the Philippines.” — Justine Irish D. Tabile

Peso weakens after narrower BoP surplus

The Philippine peso weakened slightly against the dollar on Monday as investors digested the country’s narrower balance of payment (BoP) surplus, renewed global growth concerns and persistent US-China trade tensions.

It closed at PHP 58.17 a dollar, slipping by a centavo from PHP 58.16 on Friday. It was the peso’s weakest finish since PHP 58.125 on Oct. 14.

The peso opened at PHP 58.19, strengthened to as much as PHP 58.065 and hit an intraday low of PHP 58.195 before settling weaker. Trading volume fell to USD 1.13 billion from USD 1.43 billion in the previous session, based on Bankers Association of the Philippines data posted on its website.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso softened after the release of the Philippine central bank’s BoP data showing a smaller surplus.

The BoP surplus narrowed to USD 82 million in September, compared with USD 3.5 billion a year earlier and USD 359 million in August. The Bangko Sentral ng Pilipinas said the slimmer surplus reflected lower foreign exchange inflows from National Government deposits and investment income overseas.

The smaller BoP surplus and weaker external buffers contributed to the peso’s mild weakness, Mr. Ricafort said, adding that global risk aversion also pushed investors toward safe-haven assets.

Concerns resurfaced over the health of US regional banks after Reuters reported rising stress across smaller lenders. Shares of Zions Bancorporation and Western Alliance rebounded on Friday after steep losses earlier in the week, easing fears of a repeat of last year’s banking turmoil.

Meanwhile, investors also weighed geopolitical risks as US President Donald J. Trump renewed threats of a 100% tariff on Chinese imports and potential export curbs on rare earth minerals, raising the risk of escalation in trade tensions.

At home, sentiment was dented by comments from Economy Secretary Arsenio M. Balisacan, who said the Philippines might only hit the lower end of its 5.5% to 6.5% growth target this year due to slower public spending tied to corruption probes and the impact of recent typhoons.

Budget Secretary Amenah F. Pangandaman maintained that the 2025 growth goal remains “attainable,” citing planned spending acceleration and improving private demand.

The peso’s direction this week may hinge on the upcoming US inflation report, delayed by the recent government shutdown. Analysts expect the Federal Reserve to cut rates by 25 basis points at its Oct. 28-29 meeting after weak job data.

In the Philippines, BSP Governor Eli M. Remolona, Jr. said further rate cuts remain possible to sustain domestic demand, following the 25-bp policy reduction earlier this month that brought the benchmark rate to 4.75%, the lowest in more than three years.

Both Mr. Ricafort and the trader expect the peso to trade from PHP 58.05 to PHP 58.30 a dollar on Tuesday. — Aubrey Rose A. Inosante

Philippine stocks decline before earnings season

Philippine shares fell on Monday as investors turned cautious ahead of the earnings season, with traders weighing local economic concerns and overseas market developments.

The benchmark Philippine Stock Exchange index (PSEi) slipped by 0.09% or 5.46 points to close at 6,084.07, while the broader all-share index shed 0.08% or 3.16 points to 3,661.92.

“The PSEi edged lower as the market remained cautious ahead of the earnings season,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message.

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said the local bourse traded sideways throughout the day before a late round of profit taking.

“Investors remain cautious while weighing bargain opportunities against downside risks to local economic prospects, including corruption issues and offshore headwinds,” he said in a Viber message.

Investor sentiment was also dampened by concerns over public confidence in government institutions. A survey by Publicus Asia, Inc. showed that trust and approval ratings across key agencies fell sharply in the third quarter after reports of irregularities in flood-control projects.

The Department of Public Works and Highways posted the steepest decline, while the Senate and House of Representatives also had weaker results.

Mr. Limlingan said Wall Street’s rebound on Friday offered some relief after upbeat results from US regional banks and former President Donald J. Trump’s remarks on possible tariff cuts with China helped ease credit and trade worries.

“Early in the trading day, some buying pressure emerged as uncertainty from the US eased after President Trump signaled a possible tariff cut,” he said.

All three major US stock indexes — the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite — closed higher, notching weekly gains as investors assessed trade developments and awaited delayed US inflation data, Reuters reported.

Back in Manila, most local sectoral indexes fell. Mining and oil dropped 2.54% or 379.05 points to 14,542.46; services shed 0.61% or 14.1 points to 2,299.08; financials slipped 0.55% or 11.48 points to 2,046.31; and holding firms lost 0.11% or 5.6 points to 4,905.45.

On the other hand, property gained 0.55% or 12.37 points to 2,260.04, while industrials rose 0.27% or 24.53 points to 8,930.58.

Value turnover reached PHP 3.65 billion with 1.86 billion shares traded, lower than Friday’s PHP 4.42 billion with 1.52 billion shares changing hands. Losers beat winners 122 to 75, while 50 stocks were unchanged.

ACEN Corp. was the day’s top index gainer, climbing 3.78% to PHP 2.47, while Puregold Price Club, Inc. led losers with a 5.06% drop to PHP 37.50.

Net foreign selling eased to PHP 118.81 million from PHP 225.83 million on Friday. — Alexandria Grace C. Magno

Condo glut weighs on home prices

Sluggish demand and oversupply of condominium units in the market have dampened the growth in prices of residential properties in the National Capital Region (NCR), analysts said, which could persist until yearend as the glut remains.

Joey Roi H. Bondoc, director and head of research at Colliers Philippines, said weak demand for condominium units in the middle-income segment led to the slow growth of housing prices in NCR.

“I think we will attribute that to (the) slower take-up of unsold condominium units in the secondary, ready-for-occupancy (RFO) market,” he told BusinessWorld in a phone interview.

He said about 31,000 condominium units remain unsold in the RFO market, with nearly 60% under the mid-income segment or those worth P3.6 million to P12 million per unit.

Home prices in Metro Manila posted a slower growth of 2.4% in the second quarter from 13.9% in the January-March period and 9.3% in the same quarter last year, the Bangko Sentral ng Pilipinas’ (BSP) Residential Property Price Index (RPPI) showed.

Quarter on quarter, NCR housing prices contracted by 3.6%.

Condominium unit prices also dipped by 0.2%, a reversal from the 11.5% increase a year prior and the 10.6% growth last quarter.

Roy Amado L. Golez, Jr., director for research and consultancy at Leechiu Property Consultants, said buyers’ sentiment and preferences also affected the growth of condominium prices during the period.

“The slowdown in year-on-year growth in condominium prices in NCR from Q1 2025 (13.9%) to Q2 2025 (2.4%) can be attributed to the oversupply, cautious buyer sentiment, and possible shift in buyer preferences,” he told BusinessWorld in an e-mail. “Buyers are responding with a more critical examination of their needs before making any property purchases. There are less instances of speculative purchases in the market today for NCR.”

Mr. Golez said secondary or pre-owned units sold at lower prices are also cornering some of the demand for housing.

“Note that the RPPI doesn’t cover only primary units from developers — secondary units are competing for demand, and motivated sellers sell at a discount so they can liquidate their properties,” he said.

“With the low-yield environment, some owners are finding it more attractive to flip their condominium investments and divert to alternative instruments. This can also include sales of condominium units at discounted prices that developers are offering to move their unsold inventory.”

He added that developers’ project launches in Metro Manila have slowed as they still have existing inventory.

Claro dG. Cordero, Jr., director for Research, Consulting & Advisory Services at Cushman and Wakefield, said the past quarters’ strong performances could have amplified the price growth slowdown, adding that the 13.9% growth in the first quarter was “somewhat difficult to match.”

“That doesn’t mean though that the decline was very sharp,” he added.

Mr. Cordero also linked the oversupply of condominium units to the ban on Philippine offshore gaming operators (POGOs), whose workers previously resided in such properties.

“(A) lot of the excess inventory is due to the fact that the units were vacated by POGOs… So, since the POGOs left late last year, a lot of them were brought back to the market,” he said.

Meanwhile, expensive financing and high mortgage rates are also affecting demand for condominium units in the rental market, Mr. Bondoc said.

He said the mortgage rate for a five-year term ranges from 7.7% to 7.8% and would cost more if longer than five years.

“So, the rental market is experiencing sluggishness at this point… meaning if I buy a condominium unit (and) once it’s turned over, will I be able to rent it out to a BPO employee or a foreign employee?” Mr. Bondoc said.

“Unfortunately, the rental market is slowing in Metro Manila right now because again (there are) a lot of unsold condominium units (and) owners are imposing lower rental rates,” he added.

BSP data showed that the median price for all housing types in the Philippines stood at PHP 3.4 million in the second quarter. Condominium units had a median price of PHP 3.8 million, while houses cost around PHP 3.1 million.

Houses in the NCR were the most expensive at a median price of PHP 7.01 million, while houses in other areas in the Philippines were the cheapest at about PHP 2.7 million.

Slow take-up to persist

Mr. Golez said condominium sales have improved as of the third quarter amid lower interest rates.

“Now… we’re seeing renewed buyer activity in the (Metro Manila) condominium market,” he said. “Lower interest rates may be fueling this rise in demand, as well as discounts and promos from developers.”

The central bank’s policy rate currently stands at 4.75%, the lowest in over three years. It has lowered benchmark interest rates by 175 basis points since kicking off its easing cycle in August 2024, and BSP Governor Eli M. Remolona, Jr. has left the door open to more cuts in the coming months to help boost domestic demand due to a softer economic outlook as a widening corruption scandal involving government infrastructure projects has affected business sentiment.

However, condominium price growth, particularly for secondary units, in NCR will likely remain flat but could recover in the medium term once supply levels become more manageable and rental yields improve, Mr. Golez said.

“The pace of recovery will depend on how quickly developers clear unsold stock, whether buyer sentiment improves, and when rental demand picks up. Until then, we can expect subdued price growth.”

Mr. Bondoc said tepid demand for condominium units in Metro Manila will likely persist until yearend as the number of unsold units remains significant. However, developers’ RFO promos and discounts could help attract buyers.

“We saw that there was an improvement in take-up of condominiums in (the) second quarter this year because of promos and discounts offered by developers. But let’s see if that will be sustained. But in terms of rental prospects and appetite for condominium units for rent, we’re likely to see slower demand for the remainder of 2025,” he added.

He said the “strong” demand seen for residential properties outside Metro Manila is making up for the slowdown seen in the capital.

“I think what’s offsetting that is still a strong take-up outside of Metro Manila. So, that has been offsetting the lukewarm appetite for condominium units in the capital region at this point. That’s still a positive for the market that we’re seeing.”

“Buyer interest is increasing for housing options outside NCR, especially for landed housing. Developers are responding in kind by continuing to develop townships outside NCR, capitalizing on infrastructure improvements and lifestyle appeal,” Mr. Golez added.

In areas outside NCR, home prices rose by 11.5% in the second quarter, faster than the 3% growth logged in the first quarter and 7.2% the previous year, BSP data showed.

Mr. Cordero said they see home prices rising in the near term, particularly in the pinch areas in emerging regions such as Cebu.

“That’s driven by sustained demand for larger living spaces and more horizontal developments as well as regional migration and infrastructural enhancements.” — Katherine K. Chan

ECCP outlines policy recommendations to help boost investments

The European Chamber of Commerce of the Philippines (ECCP) has identified its advocacy recommendations across 12 key sectors that will help create a business environment that fosters investment, innovation, and sustainable growth.

“This year’s Advocacy Papers capture the perspectives of our committees, reflecting the expertise and dedication of ECCP members across a wide range of industries,” ECCP President Paulo Duarte said in a statement.

He said recent reforms in the country, including the passage of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, have been encouraging.

“Further progress in improving the ease of doing business and ensuring a level playing field for both local and foreign enterprises will be vital to unlocking the Philippines’ full potential as an investment destination,” he added.

This year’s Advocacy Papers span 12 sectors, which are agriculture, automotive, aviation, customs and logistics, environment and water, food and beverage, healthcare, human capital and education, infrastructure, renewable energy, tax and financial services, and tourism.

Under agriculture, the ECCP recommended the passage of the Animal Industry Development and Competitiveness Act to address the challenges in productivity, resilience, and market access of the Philippines’ animal sector value chains.

“The proposed law creates a unified institutional and fiscal framework, including the design of a multi-year competitiveness fund and clearer mandates for implementing agencies,” the group said.

This framework is expected to “enable sustained investments in feed and genetics, slaughter and cold-chain infrastructure, and disease-control capacity rather than the ad hoc, year-to-year programming typical under the current architecture.”

The group also recommended scaling value-chain investments around prioritized commodity roadmaps, accelerating climate-resilient cold-chain and aggregation infrastructure dispersal, institutionalizing data-driven agricultural insurance, and dedicating funding for biosecurity.

It also called for the harmonization of veterinary product regulation, integration of market access and sanitary and phytosanitary compliance for public agricultural investments, expanded financing for smallholder farmers, and the accelerated enactment of the National Land Use Act.

For the automotive sector, the ECCP asked for the elimination of import duties for European automotive brands, streamlined border procedures and certification, predictability of incentives and regulatory frameworks, and development of a support program for electric vehicle (EV) adoption.

It also called for the inclusion of road safety education into the basic education curriculum, requiring regular calibration and testing for critical electronics in EVs, and safety laws related to child car seats, dash cams, and dark car tints.

For aviation, the chamber sought more investments in the modernization of transport infrastructure and aviation safety oversight, improvements in the frameworks regulating the air transport sector, and the ratification of the Cape Town Agreement.

The groups asked for an incentive framework for competitive and sustainable aviation, strengthening human capital for the aviation sector, and integration of sustainability in the Philippine Aviation Strategy.

In logistics, the group asked for the promotion of ease of doing business, including operationalization of the National Single Window, enforcement and update of Citizen’s Charters, and establishment of guidelines to regulate charges imposed by international shipping lines.

The ECCP also recommended the amendments to the Philippine Ports Authority Charter and the passage of the Blue Economy Act and the Maritime Trade Competitiveness Act.

In the area of environment, the group asked for the implementation of the Extended Producers’ Responsibility (EPR) Scheme, incentive-based measures under EPR law, and the integration of environmental education in the curriculum.

Under food and beverage, the group is seeking the proper implementation of front-of-package labeling, implementation of policies regarding marketing to kids, education efforts that recognize benefits of prepackaged food, review of food taxes, and promotion of ease of doing business.

In healthcare, the group is asking for the expansion of Philippine Health Insurance Corp.’s coverage and the proper implementation of the New Government Procurement Act.

Meanwhile, ECCP is seeking enhanced curriculum for the basic education system, enhanced training programs for teachers, accelerated facility provisioning, strengthened vocational programs, enhanced support programs for private schools, and improved nutrition programs.

The group is also recommending revisions to the apprenticeship law, eased restrictions on the employment of foreign nationals, passage of the Enterprise Productivity Act, and reconsideration of across-the-board wage mandates.

In the area of infrastructure, the group is pushing for funds allocation for green infrastructure and faster blended cement adoption, implementation of the Mandanas-Garcia ruling, ensuring sanctity of public-private partnership contracts, and a level playing field for local and foreign-owned contractors.

The group is also seeking effective implementation of the Konektadong Pinoy Act, accelerated digital infrastructure development, development of a future-ready workforce, improvements in ease of doing business and cyber-resilience, and integration of regional development into the national information and communications technology strategy.

It also asked for improved ease of doing business and green financing mechanisms, effective implementation of the Energy Efficiency and Conservation Act, and the establishment of a policy framework for waste-to-energy technologies.

The group is also asking the government to digitalize and streamline tax processes, accelerate e-invoicing, resolve ambiguity in cross-border taxation, standardize tax assessment and valuations, establish a carbon credits facility, and strengthen tax awareness.

For tourism, ECCP recommended improvements to international and domestic connectivity, promotion of domestic and international tourism, restructuring of the Civil Aviation Authority of the Philippines, and integration of sustainability in a long-term tourism strategy.

The group also expressed support in the establishment of an independent agency focused on the development of Philippine airports through the Philippine Airports Authority and the creation of a Philippine Transportation Safety Board. — Justine Irish D. Tabile

Philippine banks’ assets expand to PHP 27.7T as of August

The Philippine banking sector’s total assets grew by 6.7% year on year as of end-August amid continued growth in loans and deposits.

Banks’ combined assets rose to PHP 27.729 trillion as of August from PHP 25.988 trillion a year prior, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Meanwhile, month on month, this was 0.04% lower than the PHP 27.742 trillion recorded at end-July.

Banks’ assets are mainly supported by deposits, loans, and investments. These include cash and due from banks as well as interbank loans receivable (IBL) and reverse repurchase (RRP) net of allowances for credit losses.

Universal and commercial banks still held the bulk of the Philippine banking system’s assets with PHP 25.9 trillion as of August. Thrift banks followed with PHP 1.3 trillion, rural and cooperative banks held PHP 385.45 billion, while digital banks had PHP 141.77 billion in assets.

Broken down, the banking sector’s total net loan portfolio, inclusive of IBL and RRP, expanded by 9.9% year on year to PHP 15.189 trillion at end-August from PHP 13.816 trillion a year ago. Month on month, it slipped by 0.5% from PHP 15.259 trillion.

Banks’ net investments, or financial assets and equity investments in subsidiaries, stood at PHP 8.167 trillion in the period, rising by 10.3% from PHP 7.407 trillion a year prior but down by 0.9% from PHP 8.242 trillion at end-July.

Meanwhile, net real and other properties acquired jumped by 17.9% to PHP 130.938 billion from PHP 111.029 billion in the same period last year. This was also up 0.9% from PHP 129.735 billion a month prior.

Banks’ other assets likewise rose by 11.2% to PHP 2.23 trillion as of August from PHP 2.005 trillion a year prior. Month on month, it climbed by 1.9% from PHP 2.187 trillion.

However, cash and due from banks slumped by 24% year on year to PHP 2.012 trillion from PHP 2.648 trillion. Meanwhile, this was up by 4.6% from PHP 1.923 trillion a month prior.

BSP data also showed that the total liabilities of the banking system stood at PHP 24.169 trillion as of August, rising by 6.3% from PHP 22.73 trillion in the comparable year-ago period but down 0.2% from the PHP 24.22 trillion seen at end- July.

This came as deposit liabilities climbed by 6.9% year on year to PHP 20.454 trillion from PHP 19.142 trillion.

Broken down, peso-denominated deposits stood at P1HP 6.811 trillion, while foreign currency deposits were at PHP 3.643 trillion.

Philippine banks’ assets continued to grow amid the BSP’s easing cycle and cuts in their reserve requirement ratios (RRR), as these helped boost demand for credit and increase their loanable funds, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Faster loan growth has been the largest contributor to the continued growth in banks’ total assets,” he said. “Continued growth in bank deposits also allowed banks to increase loans and other investments, thereby leading to the continued growth in banks’ total assets.”

In August, bank lending expanded by 11.2% year on year to P13.62 trillion, the slowest growth seen in nine months. The Monetary Board this month trimmed benchmark interest rates by 25 basis points (bps) for a fourth consecutive meeting, bringing the policy rate to an over three-year low of 4.75%.

It has now slashed borrowing costs by a cumulative 175 bps since it began its rate cut cycle in August 2024. BSP Governor Eli M. Remolona, Jr. has said that more cuts are possible as they want to support the economy amid weaker growth prospects.

Meanwhile, the BSP in March cut the RRR of universal and commercial banks and nonbank financial institutions with quasi-banking functions by 200 bps to 5%.

The ratio for digital banks was also lowered by 150 bps to 2.5%, while that for thrift lenders was cut by 100 bps to 0%. Rural and cooperative banks’ RRR has also been at zero since October 2024.

“Continued growth in banks’ net income also allows banks to increase their capital, lending, investments, and overall assets, as banks are among the most profitable businesses in the country,” Mr. Ricafort added.

Banks’ combined net income grew by 4.14% to PHP 198.14 billion in the first half as both net interest and non-interest earnings increased year on year, BSP data showed. Universal and commercial banks’ combined net earnings stood at PHP 184.45 billion in the first semester, while the thrift bank group booked a PHP 10.73-billion net profit, and the rural and cooperative bank sector posted net income of PHP 5.34 billion. Lastly, digital banks recorded a combined net loss of PHP 2.38 billion.

“For the coming months, continued growth in the local economy… as well as possible future Federal Reserve and BSP rate cuts would continue to sustain relatively faster growth in banks’ total resources and assets, as supported by the sustained growth in loans, deposits, earnings, and investments,” Mr. Ricafort said.

The Fed last month reduced its target rate by 25 bps points to bring it to the 4%-4.25% range. Fed Chair Jerome H. Powell last week hinted at more cuts as they seek to balance the US job market’s weakness with above-target inflation. — Katherine K. Chan

Growth goal still ‘attainable’ — DBM

The Philippine economy can still grow within the 5.5-6.5% target this year as spending is expected to “normalize” in the fourth quarter, Department of Budget and Management (DBM)Secretary Amenah F. Pangandaman said.

Ms. Pangandaman, who also chairs the Development Budget Coordination Committee (DBCC), said the gross domestic product (GDP) growth target of 5.5-6.5% for this year “remains attainable.”

“Spending is expected to catch up and normalize toward the latter part of the year,” she told BusinessWorld in a Viber message on Oct. 15.

“Momentary slowdown in public infrastructure spending is expected as agencies do due diligence, especially DPWH (Department of Public Works and Highways) as it reviews and evaluates its roster of projects,” she said.

Finance Secretary Ralph G. Recto earlier this week said economic growth likely cooled in the third quarter, adding that the slowdown may continue until early 2026 as heightened scrutiny over anomalous projects dampens government expenditure.

President Ferdinand R. Marcos, Jr. had flagged anomalous flood control projects during his State of the Nation Address in late July. This sparked several investigations into alleged corruption involving lawmakers, government officials, and private contractors.

Earlier, Economy Secretary Arsenio M. Balisacan said the DBCC will wait for third-quarter data to be released on Nov. 7 before revising growth targets.

However, he noted that achieving the full-year growth goal has “become harder” due to a likely slowdown in government spending.

In the first half, GDP growth averaged 5.4%, slower than 6.2% a year ago.

Ms. Pangandaman said the economic team remains “vigilant and proactive” in managing fiscal risks while staying aligned with the medium-term fiscal framework.

In June, the DBCC tempered its growth forecast to 5.5-6.5% for 2025 and 6-7% for 2026, mainly due to “heightened global uncertainties” arising from the Middle East conflict and US tariffs.

Ms. Pangandaman said the country’s growth momentum will be supported by key factors, including sound macroeconomic fundamentals, easing inflation, and a lower interest rate environment.

She also cited favorable credit and financial markets, stronger private sector momentum, and more efficient public spending as driving economic growth.

In a separate statement on Thursday, Mr. Recto said the economy is expected to post stronger economic growth ahead, citing improved governance and institutional reforms following the flood control mess.

“Growth is being supported by low inflation, easing policy rates, strong consumer spending, and a vibrant labor market,” he said.

Headline inflation averaged 1.7% in the first nine months of the year, matching the forecast of the Bangko Sentral ng Pilipinas.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the DBCC may need to revise its macroeconomic assumptions to reflect more realistic conditions amid persistent global headwinds, fragile consumer confidence, and fiscal constraints.

The economic managers should also prioritize targeted stimulus and institutional reforms to support resilience, he said.

“It will be challenging but not impossible, despite the third-quarter slowdown,” Mr. Rivera said in a Viber message on Thursday.

“Growth will depend on whether domestic consumption and investment rebound during the holiday season, if government spending accelerates, and if inflation remains within target,” he added.

Ser Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said the DBCC should revise its growth targets in light of the corruption scandal over flood control projects.

“Corruption scandals have had a chilling effect on investor sentiment,” he said in a Viber message on Thursday.

Mr. Peña-Reyes said the economy likely expanded by 5.6% in the third quarter, accelerating from 5.2% growth in the same period a year earlier.

For the full-year, growth will likely settle at 5.5%, matching the lower end of the government’s target range but slower than the revised 5.7% in 2024.

Foundation for Economic Freedom President Calixto V. Chikiamco said the Philippine economy’s performance is likely to “disappoint” this year given the headwinds facing the Philippines.

“The picture could be worse next year when the Trump tariffs start to bite and global slowdown occurs,” he said in a Viber message.

Recto rejects VAT reduction

In addition, Mr. Recto warned against some lawmakers’ proposals to lower the value-added tax (VAT) rate to 10%, saying this move could result in “massive revenue losses” and force the government to borrow to fund basic operations.

“The entire VAT collection for 2025 of PHP 1.39 trillion can only fund nine months’ worth of payroll, premium, and pension of active and retired government workers,” said Mr. Recto, who authored the measure that hike the VAT rate in 2005.

Several lawmakers have filed bills seeking to either scrap or cut the 12% VAT rate. VAT collections account for about a fifth of the Bureau of Internal Revenue’s total revenues.

Mr. Recto said excise tax collections, projected at PHP 576 billion this year, would not be enough to cover the PHP 965-billion budget for basic, tertiary, and technical-vocational education programs. — Aubrey Rose A. Inosante, Reporter

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