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The Department of Agriculture (DA) is considering extending the ban on rice imports until the end of the year, as farmgate prices of palay or unmilled rice continue to fall.

“I met with the President last week and we decided to extend the import ban by a minimum of 30 days,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. told reporters in mixed English and Filipino at the House of Representatives on Monday.

“It is possible that it will be extended until the end of the year depending on the situation. The problem is that palay prices have dropped,” he added.   

President Ferdinand R. Marcos, Jr. had earlier ordered a 60-day suspension of rice imports starting Sept. 1 to protect Filipino farmers during harvest season and to stabilize rice prices. The suspension was originally supposed to end on Nov. 2 and applies only to regular milled and well-milled rice.

Last Friday, Presidential Communications Office Undersecretary Clarissa A. Castro said the President ordered the extension of the import ban but did not give details.

Under Republic Act No. 12078, the President is allowed to suspend or prohibit the importation of rice during a specific period, when there are excess of local or imported supply resulting in a drop in local prices.

“I also talked to our rice millers and traders last week. They are actually requesting the import ban be extended until the end of this year,” Mr. Tiu Laurel said.

Mr. Tiu Laurel said there is “a big possibility” that tariffs on imported rice would be hiked before the import ban ends.

“We are running the numbers now from 20%, 25%, or 35%, and hopefully, we can make a decision before the closure of the (import) ban,” he added.

Tariffs on foreign rice are currently at 15% until 2028.

Mr. Tiu Laurel said the import ban extension was aimed at propping up farmgate prices of unmilled rice, which had dropped to P8 to P10 per kilo in some areas. “This is a loss to farmers,” he added.

The farmgate price for palay fell by 27.8% to PHP 17.11 per kilo in August, from the PHP 23.71 per kilo last year, data from the Philippine Statistics Authority showed.

Emergency procurement

The Agriculture chief also said that the President will also issue an executive order for emergency government procurement of palay.

“The DA also asked, and it is already approved in principle, for the President to issue an order for the emergency procurement of palay and the emergency procurement for additional lease and rent of warehouses,” he added.

Mr. Tiu Laurel said that this would allow the agency to procure more palay stocks from Filipino farmers in “depressed price areas.”

He added that the National Food Authority will purchase palay from farmers at a minimum of PHP 17 per kilo under the emergency plan.

“Hopefully, that will help. We are acting fast and we are deploying additional people so that if we get additional warehouses, they will be available for us to buy and help our farmers,” he said.

The Philippines is the biggest importer of rice in the world, according to the US Department of Agriculture. It is projected to import about 4.9 million metric tons this year.

Federation of Free Farmers National Manager Raul Q. Montemayor said that extension of the rice import ban to protect farmers would not have any effect on inflation, as local harvest is expected to offset any slowdown in rice shipments.

“Rice prices and inflation should not go up since whatever imported stocks are in the market now were bought at cheap prices before the ban, and local stocks are coming from fresh harvest that were bought at low prices,” Mr. Montemayor said in a Viber message.

He added that rice traders will continue to purchase palay from farmers at low prices “for fear that cheap imports will flood the market again when the ban is lifted.”

“We believe that the ban should be complemented by a reversion of the import tariff to 35% which will provide the leeway for local traders to buy at higher prices from farmers,” he said.

On the other hand, Roehlano M. Briones, a senior research fellow at the Philippine Institute for Development Studies, said that an extended rice import freeze would only raise retail prices.

“An extended ban will work if the intended effect is supporting palay prices. However, it will also prop up retail prices, forfeiting gains from lower retail prices for poor consumers,” he said in a Viber message.

Former Agriculture Undersecretary Fermin D. Adriano said in a Viber message that the extension will further irk rice exporters from Vietnam, the country largest rice trading partner.

The Philippines is Vietnam’s top rice export market, shipping about 2.47 million metric tons in the first nine months of 2025, according to the Bureau of Plant Industry as of Sept. 11. — Adrian H. Halili, Reporter

The Philippines’ external debt service burden dropped to USD 6.72 billion in the first half of the year as less foreign loans were due for repayment, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Debt service on external borrowings went down by 6.2% to USD 6.72 billion as of June from USD 7.164 billion in the same period in 2024.

Broken down, principal payments declined by 13.1% year on year to USD 2.77 billion in the January-to-June period from USD 3.189 billion.

Meanwhile, interest payments dipped by 0.7% in the first six months to USD 3.949 billion as of end-June from USD 3.976 billion last year.

“The decline in the Philippines’ external debt service burden in the first half mainly reflects lower principal repayments as fewer foreign obligations matured, alongside liability management efforts and a borrowing mix favoring domestic sources,” Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

Mr. Asuncion also noted the decline in debt servicing shows the country’s foreign debts are manageable, giving the government more fiscal space and easing the strain on its dollar reserves.

Meanwhile, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said external debt servicing declined as foreign loans account for a smaller share in the National Government’s total borrowing mix.

“This could be attributed to the lower share of foreign borrowings in the total National Government borrowing mix in recent years to better manage (foreign exchange) risks entailed in foreign borrowings,” he said in a Viber message.

The debt service burden represents principal and interest payments after rescheduling, according to the BSP.

This includes principal and interest payments on fixed medium- and long-term credits, including International Monetary Fund credits, loans covered by the Paris Club and commercial bank rescheduling, and New Money Facilities. It also covers interest payments on fixed and revolving short-term liabilities of banks and nonbanks.

However, the debt service data exclude prepayments on future years’ maturities of foreign loans and principal payments on fixed and revolving short-term liabilities of banks and nonbanks.

In the first half, the debt service burden as a share of gross domestic product (GDP) fell to 2.8% from 3.2% in the comparable year-ago period.

Meanwhile, the country’s outstanding external debt reached USD 148.873 billion as of June, a 14.4% jump from USD 130.182 a year ago.

Of the total, USD 94.801 billion is public sector debt, while USD 54.072 billion is private sector debt.

This brought the external debt as a percentage of GDP to 31.2% in the first six months from 28.9% in the same period last year.

Mr. Asuncion said the government may see a slight uptick in its foreign debt service bill in the coming months as more foreign obligations will be due for repayment.

“For the second half, we expect a modest pickup as more amortizations fall due, but the debt service ratio should stay within a comfortable range given ample reserves and a still-favorable global rate environment,” he said.

The BSP’s external debt data cover borrowings of Philippine residents from nonresident creditors, regardless of sector, maturity, creditor type, debt instruments or currency denomination.

The central bank gathers data on external debt through reports submitted by borrowers, banks, and major foreign creditors. — Katherine K. Chan

 

The Philippines slipped one spot in a global index on economic freedom, despite improvements in some areas, according to the Canada-based think tank Fraser Institute.

The country ranked 62^nd out of 165 economies in conservative think tank’s Economic Freedom of the World report, which uses 2023 data. In the previous year’s index, the Philippines ranked 61^st place.

This was the Philippines’ lowest placement in the index in two years, or since it ranked 68^th in 2021.

Despite the lower ranking, the country’s score inched up to 7.05 out of 10 in 2023 from 7.01 in 2022.

Among Asia-Pacific jurisdictions, the Philippines lagged behind Hong Kong (8.55), Singapore (8.50), New Zealand (8.33), Australia (8.03), Taiwan (8.03), Japan (7.83), Malaysia (7.56), South Korea (7.53), Thailand (7.10), and Brunei Darussalam (7.09).

However, the Philippines was ahead of Indonesia (6.96), Mongolia (6.83), Cambodia (6.79), Vietnam (6.21), China (6.13), Papua New Guinea (6.09), Fiji (6.08), Timor-Leste (5.97), Laos (5.65), and Myanmar (4.46).

The index measures the degree to which citizens are allowed to make their own economic choices through five areas: size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation.

The Philippines had its highest score in the sound money category with 9.01, ranking 34^th out of the 165 countries, slightly lower than its previous score of 9.04.

The country’s score in size of government went up to 7.88 from 7.77 previously. Its current ranking was at 21^st place from 26^th previously.

Manila’s score in regulation also went up to 6.65 (64^th) from 6.55 (67^th) previously.

However, the country yet again performed worst in the legal system and property rights area with a score of 4.57, ranking 109^th. Its score slightly improved from 4.55 previously.

Meanwhile, its score in freedom to trade internationally stood at 7.15, ranking 86^th from 87^th previously.

Foundation for Economic Freedom President Calixto V. Chikiamco said that the Philippines continues to underperform in the areas of legal system and property rights and trade freedom.

“Particularly in agricultural trade. We are still protecting our agricultural sector with quotas, high tariffs, and other forms of restrictions,” he said in a Viber message.

Meanwhile, Mr. Chikiamco said that the previous administration’s unilateral cancellation of the contracts with the private water concessionaires and refusal to abide by the decision of arbitration proceedings have impacted the country’s overall ranking.

“That and other instances where contracts aren’t honored cause low ratings of the country [in legal system and property rights],” he added.

However, Mr. Chikiamco said that the slight dip in the country’s ranking may also be attributed to improvements in other countries.

“The Philippines can fare better by dismantling agricultural protectionism, reforming an inefficient and corrupt judicial system, removing the Filipino First and Filipino Only provisions in the Constitution, and forging more free trade agreements with more economies,” he added.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said that the results of the index suggest that the Philippines is making progress, but “other economies are reforming faster and more comprehensively.”

“We continue to lag in critical areas like rule of law, regulatory quality, judicial independence, and most especially corruption control, which weigh down its overall ranking,” he said in a Viber message.

To improve, he said that there is a need for the Philippines to strengthen its institutional frameworks.

“It must also enforce property rights, simplify regulations, and promote a more transparent and predictable policy environment to boost investor confidence and economic dynamism,” Mr. Rivera said.

According to the Fraser Institute, economic freedom has been declining since the pandemic.

“Global economic freedom peaked in 2019 but has declined in each of the four years since then, which hasn’t happened since we began measuring economic freedom more than 25 years ago,” Matthew Mitchell, a senior fellow at the Fraser Institute, said in the report.

Hong Kong topped the latest index, followed by Singapore, New Zealand, Switzerland, the United States, Ireland, Australia and Taiwan (tied for 7^th), Denmark, and the Netherlands.

However, the Fraser Institute expects US President Donald J. Trump’s tariffs to further depress US economic freedom.

“When countries move to restrict trade freedom, other areas of economic freedom, such as size of government, sound money, and regulatory freedom, often soon follow,” it added.

Meanwhile, the lowest scoring economies on the index were Venezuela, Zimbabwe, Sudan, Algeria, Iran, Myanmar, Argentina, Syria, Libya, and Chad. — Justine Irish D. Tabile, Reporter

The national government’s (NG) gross borrowings nearly tripled in August amid sharp rise in domestic and foreign borrowings, the Bureau of the Treasury (BTr) said.

The latest data from the Treasury showed that total gross borrowings jumped by 192% to PHP 508.53 billion in August from PHP 174.03 billion in the same month a year ago.

Month on month, gross borrowings surged by 206% from PHP 166.11 billion in July.

Domestic borrowings, which made up 97.97% of the total, rose by 198% to PHP 498.21 billion in August from PHP 167.05 billion in the same month last year.

This was composed of PHP 425.61 billion in retail Treasury bonds (RTB), PHP 60 billion in fixed-rate Treasury bonds (T-bonds), and PHP 12.6 billion in Treasury bills (T-bills).

External borrowings, which mainly consisted of project loans, climbed by 47.57% to PHP 10.31 billion in August from PHP 6.99 billion in the previous year.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said elevated gross borrowings in August were likely driven by the latest RTB issuance as the government needed additional funds to plug the budget deficit.

The government raised PHP 507.16 billion from the issuance of RTBs in August, exceeding the PHP 30-billion target.

“The large increase in borrowings can be attributed to the large issuance of domestic debt securities by the government which successfully met the demand for these securities amid investors seeking safe returns,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message. 

End-August borrowing

Meanwhile, NG’s gross borrowings stood at PHP 2.27 trillion in the January-to-August period, up 17.22% from PHP 1.93 trillion a year ago.

The total borrowings accounted for 87.16% of the revised PHP 2.6-trillion financing program for 2025.

Domestic debt accounted for the bulk or 81.19% of total gross borrowings in the first eight months.

Gross domestic debt increased by 11.46% to PHP 1.84 trillion as of end-August from PHP 1.65 trillion in the same period last year. This made up 87.12% of the PHP 2.11-trillion program this year.

Broken down, domestic debt was composed of PHP 941.84 billion in fixed-rate Treasury bonds, PHP 425.61 billion in RTBs, PHP 300 fixed-rate Treasury notes, and PHP 172.45 in T-bills.

As of end-August, gross external debt rose by 50.89% to PHP 426.23 billion from PHP 282.46 billion a year ago. The total foreign borrowings in the January-to-August period accounted for 87.31% of the PHP 488.17-billion program this year.

Broken down, foreign debt was made up of PHP 191.97 billion in global bonds, PHP 171.31 billion in program loans and PHP 62.96 billion in project loans.

External borrowings in the end-August period were also padded by the global bond issuance that raised USD 3.3 billion or PHP 192 billion in late January but settled in February.

Mr. Ricafort said the government would likely exceed its borrowing program with the ballooning budget deficit.

“There is a chance if the budget deficit widened for the rest of 2025 and needed to be funded by additional NG borrowings,” he said.

Separate data from the BTr showed that the fiscal gap swelled by 56.38% to PHP 84.8 billion in August, which brought the eight-month deficit to PHP 869.2 billion.

“The government’s recalibration of debt to increase the share of domestic debt over foreign debt sources is reflective in the composition of new borrowings this August. We may see the same trend in the coming months,” Mr. Erece said.

The government favors domestic sources of debt as it aims to reduce foreign currency risk.

The BTr earlier said it is looking to borrow PHP 437 billion from the domestic market in the fourth quarter, comprised of PHP 262 billion in T-bills and PHP 75 billion in T-bonds.

For 2026, the financing program is set at PHP 2.68 trillion, of which PHP 2.05 trillion will be from local lenders and PHP 627.1 billion from foreign sources.

Higher debt

Meanwhile, the share of Philippines government debt to gross domestic product (GDP) edged up to 57.8% in the second quarter of 2025 from 56.7% a year earlier, according to the Institute of International Finance quarterly debt monitor.

Household debt as a share of GDP slid to 11.3% in the second quarter this year from 12.1% in the same period a year ago.

The domestic financial sector’s debt-to-GDP ratio eased to 7.2% in the second quarter from 7.6% in the same quarter in 2024.

On the other hand, nonfinancial corporates’ debt-to-GDP ratio also eased to 25.7% in the second quarter this year from 26.8% a year ago. — A.R.A.Inosante

Amari Neil B. Dimafeliz,18, first turned to artificial intelligence (AI) in 2023 when his small 3D-printing business started growing faster than he could manage.

Running a youth-led enterprise with limited manpower, he struggled to find employees willing to work for someone still in college. “My age has been an obstacle to hiring people, so I turned to AI because it’s not selective in who it’s performing for,” he said by telephone.

Instead of hiring extra staff, Mr. Dimafeliz invested in a PHP 100,000 printer with AI features that automatically checks the quality of his customized products, which include keychains, figurines, thesis prototypes, coasters, ballpens and pencil cases.

“On the operational side, our printers use artificial intelligence for precautionary measures when there are failures in printing,” he said.

AI also helps market his products. He uses it to generate captions and images for his small business’ social media pages, a task that once ate up hours of his time. For a full-time mechanical engineering student at Mapua University, AI has become a crucial tool for balancing academics with entrepreneurship.

Stories like Mr. Dimafeliz’s illustrate how AI could reshape the way micro, small and medium enterprises (MSME) operate.

MSMEs account for about 99% of all businesses in the Philippines, yet adoption of advanced digital tools remains low. As of 2021, only 14.9% of firms had integrated AI, according to the government think tank Philippine Institute for Development Studies (PIDS).

AI has the potential to transform these businesses, said Ian Jester M. De Vera, head of the research division at the University of the Philippines Institute for Small-Scale Industries (UP ISSI). “Some of the tasks of MSMEs are just repetitive, so if they’re going to leverage AI, they will do away with these tasks,” he told BusinessWorld by telephone.

AI can also help smaller firms scale operations and compete with larger corporations, said John Paolo R. Rivera, a PIDS senior research fellow. “By using AI, MSMEs can better compete with larger firms and participate in digital trade,” he said in a Viber message.

Among its practical benefits: AI can forecast demand, analyze customer behavior, and reduce overstock or shortages. It can personalize marketing strategies and improve logistics efficiency.

Beyond operations, AI can handle invoicing, payroll and appointment scheduling, reducing costs and human error. Virtual assistants and chatbots can also take over routine customer service inquiries, saving time for owners and staff.

AI may even help protect businesses from rising cyberthreats. MSMEs are often prime targets for ransomware and phishing attacks, noted Bambi Escalante, country manager at Fortinet Philippines.

Steep challenges

“Most small and medium businesses don’t have dedicated IT security teams, making it difficult to keep up with evolving threats,” she told BusinessWorld in an e-mailed reply to questions. “This is where AI becomes a game-changer — it automates routine security tasks and helps businesses stay ahead of cyber risks without needing extensive resources.”

A joint study by Google and Access Partnership estimates that if widely adopted, AI-powered products and solutions could unlock as much as P2.8 trillion in economic benefits for Philippine businesses.

Despite its promise, AI adoption among MSMEs faces steep challenges.

For one, resources remain tight. “Let’s face it, MSMEs have limited resources, and some of them are even cash-strapped,” Mr. De Vera said. “If AI would just add to their costs, maybe they would think twice about adopting it.”

Generational gaps also play a role. Many first-generation business founders remain hesitant to use AI themselves. “When I talk about AI, of course they’re amazed, but they instead want their children to learn how to use it, because they don’t know how to use it,” said Reynaldo C. Lugtu, Jr., president and chief executive officer (CEO) at consulting firm Hungry Workhorse.

Digital infrastructure is another major hurdle. Reliable internet access is still uneven across the country. “The foremost barrier is infrastructure, because it’s still a problem, especially in a developing country like the Philippines, to have a reliable internet connection,” Mr. De Vera said.

The Philippines ranked 56^th out of 77 countries in Huawei Technologies’ 2024 Global Digitalization Index, classifying it as a “starter” in digital transformation.

MSMEs also often lack the data needed to fuel AI systems. “AI requires large datasets to function effectively, but many MSMEs struggle with limited or unstructured data,” Mr. Rivera said. This data gap also affects their access to credit, marketing insights and long-term planning.

To address these challenges, organizations are working to strengthen MSMEs’ digital skills. The UP ISSI offers training and mentorship programs, guiding entrepreneurs on responsible AI use, strategy development and data-driven decision making. It has also rolled out a business course covering AI systems, analysis tools and ethical frameworks.

Private firms are innovating as well. Peddlr, a smart point-of-sale (POS) app for small businesses, plans to integrate AI into its analytics and reporting features.

“It is on our product roadmap to incorporate this technology with our POS app, starting with the reports and analytics module,” Peddlr founder and CEO Nel Laygo said in an e-mailed reply to questions.

Mr. Laygo added that MSMEs should begin embedding AI proficiency into their workforce development. “They should start incorporating AI proficiency into internal training to upskill staff and include this as a requirement when hiring new talent, alongside proficiency in Microsoft Word, PowerPoint and Excel,” he said.

Experts say both the government and private sector need to step in by subsidizing AI tools, improving internet infrastructure, and promoting digital literacy. “Both sectors can also invest in digital literacy and training, so this will upskill MSME employees through courses and workshops that will improve their competence in using AI,” Mr. De Vera said.

While MSMEs worldwide are beginning to integrate AI into their operations, many owners remain cautious about overreliance.

Mr. Dimafeliz, whose 3D-printing business continues to grow alongside his studies, sees AI as a helpful partner but not a substitute for creativity.

“AI is not perfect,” he said. “We still have to apply our personal touch to ensure originality. We still need the intervention of human beings.” — Beatriz Marie D. Cruz, Reporter