Philippines struggles to keep cyberwarriors due to tech brain drain

Jericho P. Dupo, a 25-year-old full-stack developer at IBM Philippines, is looking for a job overseas, where he expects to earn more and gain more experience as a cybersecurity expert.

“The benefits, experiences and social networks that I can have access to once I start working overseas will be much greater,” the Filipino cyberwarrior, whose job involves patching up web-based software from threats and vulnerabilities, told BusinessWorld. “The pay in Manila is too low despite the high cost of living.”

Eight of 10 Filipino cyber-experts work overseas, and there are only 200 of them remaining compared with 2,000 in Singapore, former Information and Communications Technology Secretary Ivan John E. Uy has said.

Expectedly, few cybersecurity experts work in the government, whose agencies are often the target of hackers, due to the measly pay at about PHP 50,000 a month, compared with PHP 200,000 in the private sector.

Local organizations lost about USD 1 million (PHP 56.5 million) in 2023 from cyberattacks, according to Cloudflare, Inc.

In a separate report, consulting firm Frost & Sullivan said the Philippines could sustain as much as PHP 200 billion in yearly economic losses due to cybercrime.

“Low compensation, especially in government, limited career mobility and a lack of structured support systems are pushing many of our skilled experts to seek better opportunities abroad,” Ronald B. Gustilo, national campaigner for Digital Pinoys group, told BusinessWorld in a Viber message.

“Compared with our Southeast Asian neighbors, the Philippines is still lagging in both infrastructure and manpower, putting our institutions, businesses and citizens at risk,” he added.

The Philippines is likely to post a surplus of 171,960 information technology (IT) positions this year, showing a mismatch between graduate skills and industry needs, the Philippine Institute for Development Studies said in February.

Allan S. Cabanlong, regional director for Southeast Asia hub at the Global Forum on Cyber Expertise, cited the need to review and craft better performance-based salary models for cybersecurity professionals without straining public resources.

“We need innovative compensation models that are performance-based, allowing pay scales without blanket increases, and more public-private collaboration on schemes to reduce the strain on public coffers,” he said by telephone.

Financial institutions supervised by the Bangko Sentral ng Pilipinas (BSP) lost PHP 5.82 billion from cyberattacks last year, up 2.6% from a year earlier, according to BSP Deputy Governor Chuchi G. Fonacier.

The central bank under Circular No. 1019 published in 2018 requires financial institutions to submit regular and event-driven reports covering technology-related information and major cyberattacks.

“The government must also provide dedicated funding for cybersecurity covering both tools and human resources and make public sector compensation more competitive,” Mr. Gustilo said. “These efforts shouldn’t be seen as costs, but as long-term investments in national security.”

‘Not just an IT function’

The Philippines posted 17.7 million cyberthreat incidents last year, according to Kaspersky Security Network. These were fewer than 22.7 million incidents in 2023.

In a March 3 report, the Cybercrime Investigation and Coordination Center (CICC) said cybercrime complaints more than tripled last year to 10,004 from a year earlier. Victims lost almost P198 million due to these crimes.

Data from the CICC showed that consumer fraud accounted for 3,534 or 35% of the cybercrime complaints, while online fraud accounted for 3,242 or 32%.

The DICT earlier reported 282 cyberattacks against government organizations between January and March 2024, adding that 90% of these had been resolved. It added that 811 or about 76% of the early-stage hacking attempts were detected and neutralized by the agency’s National Security Operations Center.

Last year, the Philippine Health Insurance Corp. was hit by Medusa ransomware, with more than 600 gigabytes of data stolen by hackers.

“Cybersecurity is not just an IT function,” Mr. Cabanlong said. “It is now a pillar of national resilience. Investing in talent is investing in national security and digital sovereignty.”

The DICT wants Congress to pass changes to the country’s 13-year-old cybersecurity law by requiring companies to report cyberattacks. The priority bill also creates a cybersecurity regulatory body that can impose monetary and administrative penalties on erring companies that operate critical information infrastructure.

Mr. Gustilo said it is crucial for the government to boost the country’s cybersecurity infrastructure, while allotting funding for these tools as more threats arise in the future.

“To move forward, we need a more aggressive and strategic national approach,” he said. “That starts with investing in digital literacy and cybersecurity education from an early stage to build a stronger talent pipeline.”

About 84.5% of Philippine organizations experienced an average of three cybersecurity breaches last year due to gaps in third-party cyber risk management, cyber defense company BlueVoyant LLC said in a report in January.

About 65% of Filipino organizations either do not or somewhat prioritize third-party cybersecurity risk management, it said, citing a survey conducted by independent market research group Opinion Matters.

Mr. Dupo, the full-stack developer, noted that the only way to advance in his career is to work toward high turnover rates when handling issues raised with his team and participate in as many software development projects as possible.

“Many cybersecurity professionals in the Philippines lack continuous training and development opportunities,” he said. “If they don’t have these certifications, it makes it difficult for them to stay up-to-date with industry trends.” — John Victor D. Ordoñez

ADB ramps up support for food security to USD 40B by 2030

MILAN, Italy — The Asian Development Bank (ADB) is ramping up its support to enhance food security in Asia and the Pacific to USD 40 billion up until 2030.

“Today, I am proud to announce an additional USD 26 billion in support by 2030, bringing the total to USD 40 billion,” ADB President Masato Kanda said at a press conference on Sunday during the 58^th ADB Annual Meeting.

The ADB initially committed to providing USD 14 billion for food security efforts from 2022 through 2025.

“This expanded support will help countries alleviate hunger, improve diets, and protect the natural environment, while providing opportunities for farmers and agribusinesses,” Mr. Kanda said.

“It will drive change across the entire food value chain, from how food is grown and processed to how it is distributed and consumed,” he added.

The funding will support a “comprehensive program spanning the entire food production process – from farming and processing to distribution and consumption.”

The move is seen to not only strengthen food systems but also create jobs, mitigate harmful environmental impacts and bolster resilience in agricultural supply chains.

“This food systems initiative is not only a response to immediate needs. It is ADB’s long-term investment in a more resilient, inclusive, and sustainable future,” Mr. Kanda said.

Broken down, the additional financing is composed of direct ADB funding for governments (USD 18.5 billion) and private sector investments (USD 7.5 billion).

“By 2030, ADB aims for private sector investments to account for more than 27% of the total USD 40-billion program — underscoring the critical role of the private sector in driving food systems transformation.”

The program also seeks to “modernize agricultural value chains to improve access to affordable and healthy food for vulnerable populations,” Mr. Kanda said.

“We will also invest in soil health and biodiversity conservation. And we will support the development of digital technology and analytics to improve decision-making for farmers, agribusinesses, and policymakers.”

Under the USD 40-billion funding, the ADB is also setting aside USD 150 million for the Natural Capital Fund, which is a “blended finance vehicle.”

It will draw from the Global Environment Facility and contributions from the Global Agriculture and Food Security Program.

“This fund will support agri-food system projects by farmers and innovators that protect, restore, and manage natural capital sustainably across ADB’s developing members.”

ADB Senior Director Qingfeng Zhang noted the vulnerability of Southeast Asia to climate change and its impact on food systems in the region.

“In Southeast Asia, we have a dedicated program focused on how we can make, on the one hand, address natural disasters and same time also build up the infrastructure for long-term food system resilience,” he told reporters on the sidelines of the press conference.

“If you look at the last 10 years, in Southeast Asia, the Philippines, Thailand, are so suffering from so many floods and droughts and also landslides and so forth.”

To date, the ADB has delivered more than USD 11 billion or 80% of its initial program to address the food crisis, as well as an additional USD 3.3 billion in investments slated for this year.

Developing Asia accounts for more than half of the undernourished population, the ADB said. About 40% of the region’s workforce are employed in jobs related to food systems.

“Unprecedented droughts, floods, extreme heat, and degraded natural resources are undermining agricultural production, while at the same time threatening food security and rural livelihoods,” Mr. Kanda said.

“Together with our partners, we are building food systems that feed people, sustain livelihoods, and protect our planet,” he added. – Luisa Maria Jacinta C. Jocson, Senior Reporter

Budget gap widens sharply in March

The national government’s (NG) budget deficit ballooned in March as revenues slipped and state spending jumped ahead of the election ban, the Bureau of the Treasury (BTr) said.

Data from the BTr showed the fiscal gap widened by 91.78% to PHP 375.7 billion in March from PHP 195.9 billion in the same month a year ago.

Government spending surged by 35.37% to PHP 655 billion in March from PHP 483.8 billion a year prior.

Primary spending — which refers to total expenditures minus interest payments — soared by 37.29% to PHP 566.9 billion from PHP 412.9 billion.

Interest payments jumped by 24.21% to PHP 88.1 billion from PHP 70.9 billion in the previous year.

In March, revenue collection fell by 3.01% year on year to PHP 279.3 billion, as nontax revenues plunged by 69.36% to PHP 19.6 billion.

Broken down, income from the BTr slumped by 83.32% to PHP 8.7 billion while revenues from other offices declined by 26.9% to PHP 10.9 billion.

Tax revenues, on the other hand, rose by 15.97% to PHP 259.6 billion in March from PHP 223.9 billion a year ago.

Bureau of Internal Revenue (BIR) collections jumped by 20.86% to PHP 175.7 billion, while Bureau of Customs’ (BoC) revenues went up by 7.3% to PHP 80.4 billion.

“The sharp widening of the budget deficit in March and the first quarter was driven primarily by stronger government spending, particularly on infrastructure and social programs, alongside a moderation in revenue growth,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said.

“Disbursements likely ramped up ahead of the election-related spending ban, while revenues, although growing, may have faced headwinds from slower-than-expected collections in certain tax components,” he added.

The 45-day election ban on the release of public funds for public works projects began on March 28. This is done to prevent incumbent officials from using these funds during the election period for their advantage.

First quarter

The budget deficit in the January-March period widened to PHP 478.8 billion, higher by 75.62% from the PHP 272.6-billion gap in the same period in 2024.

However, the Treasury said this was still in line with its PHP 1.5-trillion full-year deficit program.

Expenditures jumped by 22.43% to PHP 1.477 trillion as of end-March from PHP 1.21 trillion in the same period a year ago.

The Treasury said government spending in the first quarter already accounted for 23.89% of the PHP 6.2-trillion full-year disbursement program.

Primary spending increased by 21.96% to PHP 1.24 trillion and interest payments jumped by 24.88% to PHP 241 billion.

“The strong spending performance can be attributed to the higher disbursements recorded in the Department of Public Works and Highways (DPWH) for its road infrastructure program and regular operating requirements, and in the Department of Social Welfare and Development (DSWD) for its various protective services programs.”

It also cited National Tax Allotment (NTA) transfer shares, annual block grant to the Bangsamoro Autonomous Region and releases for the local government support fund.

“Likewise, the transfer of P32.8 billion (inclusive of accrued interest) to the Coconut Farmers and Industry Trust Fund in accordance with the mandated schedule of capitalization contributed to the larger spending outturn,” the BTr said.

Meanwhile, state revenues increased by 6.9% to PHP 998.2 billion in the first quarter from PHP 933.7 billion a year earlier. This year, the government is projecting to collect PHP 4.64 trillion in revenues.

Tax revenues rose by 13.55% to PHP 931.5 billion from PHP 820.4 billion last year.

The BTr said that its overall collections remain on track due to a “strong” performance from the BIR and Customs.

“The revenue agencies’ sustained growth for the third consecutive month was driven by their ongoing revenue enhancement measures, particularly the intensified campaign against the use of fake receipts, intensified crackdown on illicit trade, digitalization, and improvements in tax payment facilitation, among other initiatives,” it said.

BIR revenues climbed by 16.67% to PHP 690.4 billion, due to “higher collections from personal income tax (PIT), corporate income tax (CIT), percentage taxes, value-added tax (VAT), excise taxes, documentary stamp tax, and percentage taxes.”

Customs collections grew by 5.72% to PHP 231.4 billion driven by “higher VAT from non-oil imports and excise tax collections from oil and non-oil imports.”

On the other hand, nontax revenues slumped by 41.21% year on year to PHP 66.7 billion as of end-March.

BTr revenues plunged by 55.3% to PHP 32.3 billion while collections from other offices decreased by 16.5% to PHP 34.3 billion.

“Largely due to timing as 18 government-owned and -controlled corporations (GOCCs) remitted PHP 28.23 billion in early first-quarter dividends back in 2024 compared with only three GOCCs with PHP 0.027 billion early dividends for the current year,” the BTr said.

“Nevertheless, nontax revenues are expected to improve in the succeeding months, with dividends from the GOCCs set to be remitted to the National Treasury starting May 2025.”

The BTr said that the NG is still on track to keeping to its deficit targets for the year.

“With dividend remittances and other nontax receipts expected to materialize in the succeeding quarters, and as expenditures continue to track the full-year program in a more balanced manner, the 2025 fiscal deficit is projected to remain within the P1.5-trillion target.”

Under the latest Development Budget Coordination Committee (DBCC) figures, the NG capped its deficit ceiling at 5.3% of gross domestic product (GDP) this year.

Mr. Rivera said the NG’s budget gap reflects the need for “balancing fiscal support for development priorities with disciplined revenue mobilization to avoid long-term fiscal strain.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the wider fiscal deficit could also increase the need for additional borrowings to support cash flow.

“Faster growth in government expenditures also reflected increased debt servicing amid the dramatic increase in debt incurred since the COVID-19 (coronavirus disease 2019) pandemic started nearly five years ago,” he said.

On the other hand, Mr. Ricafort said the budget balance could revert to a surplus in April amid the seasonal increase in tax collections as the BIR deadline for filing was on April 15.

Mr. Ricafort said there may be a need for more fiscal reform measures to “reduce government expenses such as rightsizing of the government and tax reform to further increase collections to narrow the budget deficit and curb additional need for borrowings.”

“Additional tax revenue collections based on existing tax laws or through new tax reform measures and even higher tax rates would be needed, especially if inflation becomes more benign and better controlled since higher taxes could add to inflationary pressures,” he added.

The Finance department has said it has no plans to introduce new tax measures anytime soon, instead focusing on improving tax administration and efficiency. – Luisa Maria Jacinta C. Jocson, Senior Reporter

BSP sees inflation at 1.3%-2.1% in April

Headline inflation may have settled below the 2-4% target band again in April, the Bangko Sentral ng Pilipinas (BSP) said.

The central bank’s month-ahead forecast showed that inflation likely settled within the 1.3%-to-2.1% range in April.

If realized, April inflation would be much slower than the 3.8% print logged in April 2024.

At the upper end of the BSP forecast, inflation likely accelerated from the near-five-year low of 1.8% in March.

On the other hand, the low end of the forecast showed inflation could have hit its lowest clip in over five years or since 1.2% in November 2019. It would also mark the third straight month of deceleration.

The local statistics agency is set to release April inflation data on May 6 (Tuesday).

“Easing prices of rice, fish, fruits, and vegetables, favorable domestic supply conditions along with lower oil prices and the peso appreciation contributed to the downward price pressures for the month,” the BSP said.

Rice inflation has been on the decline after the government slashed tariffs on rice imports in July last year and following the food security emergency declared on the staple grain this February. In March, rice inflation decelerated to 7.7%.

The peso closed at PHP 55.84 per dollar on April 30, its strongest finish in more than seven months or since its PHP 55.69 finish on Sept. 20, 2024.

It was also the first time the peso hit the PHP 55 level since it closed at PHP 55.965 on Sept. 26, 2024.

Pump price adjustments stood at a net decrease of P0.80 a liter for kerosene in April. However, it stood at a net increase of P0.40 a liter each for gasoline and diesel.

“These could be offset in part by the higher electricity rates and LRT-1 fares,” the central bank added.

Starting April 2, the boarding fare at Light Rail Transit Line 1 (LRT-1) was raised to PHP 16.25 from PHP 13.29, while the distance per kilometer fare was increased to PHP 1.47 from PHP 1.21.

Manila Electric Co. (Meralco) hiked the overall rate by PHP 0.7226 per kilowatt-hour (kWh) to PHP 13.0127 per kWh in April from P12.2901 per kWh in March.

“Going forward, the Monetary Board will continue to take a measured approach in adjusting the monetary policy stance in line with its price stability objectives conducive to balanced and sustainable growth of the economy and employment,” the BSP said.

In April, the BSP resumed its rate-cutting cycle with a 25-basis-point (bp) rate cut. This brought the benchmark to 5.5%.

The Monetary Board had delivered a pause at its first policy review of the year in February as it waited to see how global trade policies would unfold.

BSP Governor Eli M. Remolona, Jr. has said there is room for further easing this year, but this will likely be delivered in “baby steps.”

The central bank earlier said risks to the inflation outlook have also eased and remained “broadly balanced” until 2027.

Accounting for risks, inflation is expected to average 2.3% in 2025, 3.3% in 2026, and 3.2% in 2027.

For the first quarter, inflation averaged 2.2%. — Luisa Maria Jacinta C. Jocson

Market turns to data for leads after volatile April

Key economic data and corporate results could help Philippine shares sustain their momentum this month after global trade concerns roiled markets in April, even dragging the local stock benchmark to a multi-year low.

The bellwether Philippine Stock Exchange index (PSEi) ended April in the green as it rose by 1.64% or 102.80 points to close at 6,354.99 on Tuesday.

Month on month, the PSEi was also up by 2.82% or 174.27 points from its 6,180.72 finish on March 31.

The market was closed on Thursday for Labor Day.

“The market managed to eke out a gain in April despite market volatility brought about by US President Donald J. Trump’s tariffs,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.

“While we expect the same issue to play a part in driving the market this coming month, investors will also likely consider domestic factors like first quarter earnings and gross domestic product (GDP) numbers,” Mr. Garcia said. “May is historically a weak month, so that’s something that should be accounted for as well. However, our outlook for the rest of the year remain moderately bullish, underpinned by what we believe is an undeserved undervaluation of Philippine stocks.”

On April 2, which Mr. Trump dubbed as “Liberation Day” for the US, Washington announced that it will impose “reciprocal” tariffs on most of its major trading partners, including the Philippines.

The PSEi on April 7 plummeted to 5,822.85, its worst finish in over two-and-a-half years or since it closed at 5,783.15 on Oct. 3, 2022, as Mr. Trump doubled down on his directive, sparking trade war fears.

However, Mr. Trump suspended the higher levies for 90 days starting April 9, instead implementing a blanket 10% tariff until July. Countries are now negotiating trade deals with the US.

DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin said in a Viber message that easing trade concerns allowed the PSEi to reverse the losses seen early last month.

“The market was further buoyed by a 25-basis-point rate cut and encouraging first-quarter 2025 earnings from key index heavyweights, contributing to a strong monthly close,” Mr. Tin said. The Bangko Sentral ng Pilipinas on April 10 resumed its easing cycle after an unexpected pause in February, bringing the policy rate to 5.50%.

“Looking ahead to May, investors will be closely watching for continued progress in global trade de-escalation. Trade negotiations between the Philippines and the US will also be in focus. A successful push for lower tariffs could provide a significant lift to market sentiment,” he added.

For this month, the PSEi may continue to trade between 6,100 to 6,500 with an upside bias, Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said in a Viber message. “Some catalysts that we see are April inflation rate and first quarter GDP growth rate.”

The Philippine Statistics Authority will release April inflation data on May 6 and first quarter GDP data on May 8. — Revin Mikhael D. Ochave

Fitch Ratings affirms PHL ‘BBB’ rating

Fitch Ratings affirmed the Philippines’ investment grade rating and kept its “stable” outlook amid the country’s strong growth prospects and minimal exposure to trade tensions.

In a rating action commentary on Tuesday, the credit rater said it affirmed the Philippines’ long-term foreign currency issuer default rating at “BBB,” which indicates low default risk and reflects the economy’s adequate capacity to pay debt.

The debt watcher also kept the outlook on the rating at “stable,” which means it is likely to be maintained rather than lowered or upgraded over the next 18-24 months.

“The ‘BBB’ rating and ‘stable’ outlook reflect the Philippines’ strong medium-term growth, which supports a gradual reduction in government debt-to-GDP, and the large size of the economy relative to ‘BBB’ peers,” it said.

However, Fitch said this is “constrained by low GDP (gross domestic product) per head, despite an upward trend. Governance standards are weaker than those of ‘BBB’ peers, though Fitch believes World Bank Governance Indicator (WBGI) scores somewhat overstate this.”

Fitch expects the Philippines’ GDP to grow by 5.6% this year, below the government’s 6-8% target.

It noted Philippine economic growth is being driven by “large public investments in infrastructure, services exports and remittance-funded private consumption.”

“Private demand should be supported by easing inflation and interest rates. However, domestic political uncertainty could affect investment, while global trade tensions will likely drag on growth, in particular indirectly through weaker global demand,” it added.

Real GDP growth is still expected to expand to over 6% in the medium term, Fitch said.

“Our forecast reflects a payoff from investments in infrastructure and a series of structural reforms in recent years to liberalize the economy and foster trade and investment, including through public-private partnerships.”

“Technological change poses risks to the Philippines’ large outsourcing sector, although it is adapting,” it added.

Meanwhile, the credit rater also noted the Philippines is relatively unaffected by global trade uncertainties, citing its lower reciprocal tariffs compared with its neighbors.

“The Philippines is a relatively closed economy, with goods exports of only about 12% of GDP in 2024, mostly electronics and machinery, based on balance of payments statistic. Over 16% of goods exports were to the US.”

The US slapped a 17% reciprocal tariff rate on the Philippines, which was the second lowest in Southeast Asia. However, this higher tariff has been suspended until July.

Fitch said the relatively lower US duties could be an advantage compared with its regional peers.

“The Philippines’ terms of trade could benefit from lower commodity prices or diversion of Chinese exports,” it added.

The debt watcher also cited the country’s “success in taming inflation” and expects further monetary easing this year.

“We expect consumer price inflation to remain around 2% in 2025-2026, at the lower bound of the central bank’s target range,” it said.

“We continue to view the central bank’s inflation-targeting framework and flexible exchange-rate regime as credible,” it added.

BSP Governor Eli M. Remolona, Jr. welcomed Fitch’s reaffirmation of the country’s credit rating and stable outlook.

“The BSP took actions to help keep inflation manageable and promote sustainable economic growth. The BSP will continue to do so,” he said in a statement.

Inflation averaged 2.2% in the first quarter, well within the central bank’s 2-4% target.

“Monetary financing of the fiscal deficit during the pandemic was limited and reversed more quickly than in some peers. The government’s response to the commodity-price shock was measured, for example, in resisting calls for widespread fuel subsidies,” according to Fitch.

Fitch expects a slower fiscal consolidation path, given the “government’s overriding focus on growth and a less permissive domestic political environment.”

The government is targeting to gradually bring down its deficit-to-GDP from 5.3% this year to 3.7% in 2028.

Fitch sees the country’s general government deficit narrowing to 3.6% next year and its central government deficit hitting 4.6% by 2026.

The general government debt-to-GDP ratio is also seen to remain mostly unchanged at 54% to 55% from 2025 to next year.

“Strong nominal GDP growth and narrowing fiscal deficits contribute to our forecast of a downward path for government debt-to-GDP over the medium term,” it added.

Meanwhile, Fitch also said the Philippines’ current account deficit will remain “broadly unchanged” from this year to 2026.

“Strong domestic demand, partly related to public infrastructure development, will continue to drive import growth, offset by lower hydrocarbon import prices and growth in remittances and service exports.”

Fitch also cited factors that could individually or collectively lead to a negative rating action, such as the failure to maintain stable debt-to-GDP levels; reduced confidence in medium-term economic growth; and a deterioration in foreign currency reserves.

On the other hand, factors that could support an upgrade are sustained reductions in the government’s debt levels, stronger-than-anticipated economic growth and the strengthening of governance standards, among others.

The BSP said the Fitch investment grade rating “signals low credit risk and affordable access to funding.”

“This enables a country to allocate funds to socially beneficial initiatives and programs,” it added. – Luisa Maria Jacinta C. Jocson, Senior Reporter

DoF withdraws proposal to hike capital gains tax

Finance Secretary Ralph G. Recto has withdrawn the Department of Finance’s (DoF) proposal to increase capital gains tax, donor’s tax and estate tax, citing higher revenue collections in the first quarter.

At the same time, Mr. Recto in a statement on Tuesday said that the government is not seeking to impose new taxes or revenue measures amid the government’s “robust fiscal position.”

“The government is properly managing its finances, ensuring that public needs are met without burdening the citizenry with new taxes,” he said. “At the same time, the DoF will continue to explore and strengthen nontax revenue sources to meet the revenue targets.”

In a letter to House Ways and Means Committee Chairperson and Albay Rep. Jose Ma. Clemente S. Salceda, Mr. Recto said the DoF is no longer pushing for the proposed amendments to the Capital Markets Efficiency Promotion Act (CMEPA) “which primarily sought to introduce measures that would secure our path to fiscal consolidation.”

“The Department respectfully requests to withdraw consideration thereof in view of the better-than-accepted revenue performance during the first quarter of the year,” he said.

Mr. Salceda’s office provided a copy of the letter to the media.

The DoF had previously urged legislators to replace the CMEPA with the Government Revenues Optimization through Wealth Tax Harmonization (GROWTH) bill.

Under its draft GROWTH bill, the DoF proposed to temporarily increase the rates of capital gains tax on real property, donor’s tax, and estate tax to 10% from 2025 to 2030. These rates will be reduced to 6% starting 2031.

The DoF had estimated this could yield around PHP 300 billion in revenues.

In the letter to Mr. Salceda, Mr. Recto said the proposed tax hikes were only intended as a buffer for higher government spending during “times of crisis and to provide the government with fiscal space in the worst-case scenario.”

“With double-digit growth in tax collection, the government is well on track in meeting its fiscal consolidation goals,” Mr. Recto said.

According to the DoF, total tax collections jumped by 13.55% to PHP 931.5 billion in the first three months of 2025, citing stronger tax administration and enforcement.

The Bureau of Internal Revenue’s (BIR) collections jumped by 16.67% to PHP 690.4 billion as of end-March. Revenues generated by the Bureau of Customs (BoC) rose by 5.72% to PHP 231.4 billion.

“This was primarily due to both revenue agencies’ continued success in strengthening tax administration, digitalization, and enforcement efforts,” the DoF said.

This year, the government is projecting to collect PHP 4.64 trillion in revenues. Of this, PHP 3.23 trillion is expected to come from the BIR and around PHP 1.1 trillion from Customs.

Mr. Recto said the National Government’s (NG) revenue levels are “more than sufficient to support the expenditure requirements.”

The government is also managing its deficit and debt levels, he added.

The government’s deficit ceiling is capped at 5.3% of gross domestic product (GDP) this year. It is seeking to bring this down further to 3.7% by 2028.

The International Monetary Fund earlier said that the Philippines has space to further enhance its tax efficiency, particularly in excise taxation, value-added tax and tax incentives.

Latest data from the DoF showed that the NG’s revenues as a share of GDP reached 16.72% in 2024, up from 15.73% in 2023.

However, the DoF’s withdrawal of its proposed tax hikes is considered moot since the CMEPA was already ratified by Congress last February. The bill is set to be transmitted to Malacañang for the President’s signature.

“Raising these taxes could have risked discouraging property transactions, capital mobility, and intergenerational wealth transfers, which are crucial for sustaining domestic consumption and investment,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.

The government should carefully evaluate which tax measures to implement, ensuring they do not result in revenue losses while maximizing potential gains for the state, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Mr. Salceda said the government should pursue taxes on luxury goods if it wants to generate additional revenues.

“That is a better tax on the wealthy,” he said.

Nixing the proposed hike on capital gains tax was a disappointing move, as it could have been a “small step” towards taxing wealthy Filipinos, Jose Enrique “Sonny” A. Africa, executive director of think tank Ibon Foundation, said in a Viber message.

“Keeping the lower rates on capital gains, donor’s and estate taxes reinforces fiscal inequity to favor the wealthy,” he said. — Kenneth Christiane L. Basilio, Reporter with Luisa Maria Jacinta C. Jocson

IT-BPM sector to cross USD 40B in revenues this year

The Philippine information technology and business process management (IT-BPM) sector is projected to generate over USD 40 billion in revenues this year amid sustained global demand, according to an industry group.

“We should cross USD 40 billion by the end of the year,” Information Technology and Business Process Association of the Philippines (IBPAP) President and Chief Executive Officer Jonathan R. Madrid told reporters on Monday.

Growth will be driven by global demand, especially for banking, financial, and healthcare services, he said.

Mr. Madrid said demand is still mostly from North America.

“[What] we should be scared about is not being skilled enough. That’s the only thing I am concerned about. Because the demand is there, we have the brand. The Philippines is very strong; we are a world leader,” he said.

He said that the Philippines should ensure that its graduates will have the relevant skills for new work types.

“[This is] not just because of artificial intelligence. The nature of work always changes, and so we must adapt and make sure that we give our students and seekers a chance to continue to compete,” he said.

Mr. Madrid said the industry is hoping to employ around two million in the next two years.

“We’re already at 1.82 million digital workers. We want to cross two million soon… If your question is when we will cross two million, I would say in the next 12 to 18 months,” he added.

Mr. Madrid said that the industry is set to exceed its baseline targets under the Philippine IT-BPM Industry Roadmap 2028.

“We have different targets. We have an aggressive target, and we have a baseline target. We will exceed our baseline [targets]. But I’m not satisfied with that,” he said.

“I want us as a country to hit our aggressive target. It’s part of our commitment to performance excellence, going for aggressive targets,” he added.

Under the roadmap, the IT-BPM industry is projected to reach 2.5 million in employee count and generate USD 59 billion in annual revenues by 2028.

Meanwhile, Mr. Madrid is still optimistic about industry growth despite US President Donald J. Trump’s protectionist policies.

“The problem now is the uncertainty of it all… But I remain optimistic about the growth prospects of the industry. Because every week, my team and I talk to investors who want to increase their operations or establish new operations in the Philippines,” he said.

“We need to focus only on one thing, and that is to upskill, reskill, and cross-skill our talent. We have the demographics. We have 700,000 university graduates a year. We need them to be employable.”

Most IBPAP members are already investing in the upskilling of the existing workforce, he said.

Mr. Madrid recalled that the IT-BPM sector took a hit during Mr. Trump’s first term as the US President adopted an “America First” policy. He said this affected the industry growth in 2017 and 2018.

“But we live in a different world now. Technology has changed everything. Who is going to do this work? I do not think we can find Americans to do some of the work that we do,” he said.

“So, I remain optimistic about the growth of the industry… We are recalibrating and reviewing our projections on the roadmap. Our roadmap is a six-year roadmap, so at the midpoint, which is later this year, we will do a midterm review,” he added. – Justine Irish D. Tabile, Reporter

Peso at 7-month high as tariffs weigh on USD

The peso strengthened to a seven-month high on Tuesday as the greenback continued to struggle due to tariff uncertainties.

The local unit closed at PHP 56.145 per dollar on Tuesday, surging by 27.5 centavos from its PHP 56.42 finish on Monday, Bankers Association of the Philippines data showed.

This was the peso’s best finish in seven months or since its PHP 56.03-a-dollar close on Sept. 30, 2024.

The peso opened Tuesday’s session stronger at PHP 56.333 against the dollar. It climbed to its intraday best of PHP 56.10, while its weakest was at PHP 56.35 versus the greenback.

Dollars exchanged rose to USD 1.78 billion on Tuesday from USD 1.57 billion on Monday.

The peso rose due to a weak dollar “after Chinese Foreign Minister Wang Yi said China would seek solidarity with other countries against US tariff threats after news that the Trump administration is exploring a new trade tool to pressure China,” a trader said in a phone interview.

The dollar recouped some of its losses on Tuesday, supported by reports that the US administration may ease planned tariffs, although investor caution lingered over whether a meaningful de-escalation in the US-China trade conflict was in motion, Reuters reported.

The administration of US President Donald J. Trump was set to take steps on Tuesday to soften the impact of his automotive tariffs.

The United States and China in recent days seemed to have softened their respective stances, with Washington signaling openness to reducing tariffs and Beijing exempting some US imports from its 125% levies.

Still, US Treasury Secretary Scott Bessent said that it was up to China to de-escalate on tariffs — the latest in a slew of conflicting signals over progress on trade talks between the world’s two largest economies.

The US dollar index, a measure of the greenback’s value relative to a basket of foreign currencies, strengthened 0.15% to 99.23 after falling 0.58% the previous day.

It remained on track for its biggest monthly drop since November 2022, as tariff tensions stoked fears of a global economic slowdown and undermined confidence in US assets.

The dollar rose against other major currencies, adding 0.25% to 142.38 yen.

Lower global crude oil prices also supported the peso, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message. Brent crude was 1.4% weaker at USD 65 a barrel on Tuesday.

For Wednesday, the trader expects the peso to move between PHP 56 and PHP 56.40 per dollar, while Mr. Ricafort sees it ranging from PHP 56.05 to PHP 56.25. — Aaron Michael C. Sy with Reuters

PSE index inches higher amid tariff uncertainty

Philippine stocks edged higher on Tuesday as the market remained cautious amid the ongoing trade policy developments and ahead of the release of key US economic data.

The Philippine Stock Exchange index (PSEi) inched up by 0.04% or 2.69 points to close at 6,252.19, while the broader all shares index climbed by 0.14% or 5.14 points to end at 3,686.23.

“The PSEi closed marginally higher. The local market moved sideways this Tuesday as investors traded cautiously amid lingering uncertainties caused by the US-ignited global trade frictions,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“The bourse came to a positive close, attributed to appreciation of corporate fundamentals, the peso’s strengthening against the dollar, and hopes that the Philippines would reach a trade deal with the US,” he added.

Key Philippine officials headed to Washington on Tuesday to negotiate the 17% reciprocal tariff imposed by President Donald J. Trump. On Monday, Trade Secretary Ma. Cristina A. Roque said the Philippine delegation seeks to lower the US tariff rate on Philippine goods to zero.

Meanwhile, Mr. Trump’s administration said it planned to reduce the impact of auto tariffs, a further sign of flexibility on a trade policy that has wreaked havoc on markets in April, Reuters reported.

The United States said it would move to reduce the impact of duties imposed on foreign parts in domestically manufactured cars, and keep tariffs on vehicles made abroad from stacking up on other duties, officials said.

“Philippine and US stocks closed mixed on Monday as investors awaited a heavy lineup of earnings, economic data, and trade developments,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Key US economic reports to be released this week include first-quarter gross domestic product data, the March personal consumption expenditures price index, and April jobs report.

Sectoral indices closed mixed on Tuesday. Industrials went up by 1.77% or 155.36 points to 8,929.86; financials rose by 1.34% or 31.78 points to 2,401.71; and mining and oil increased by 0.84% or 84.12 points to 9,999.33.

Meanwhile, services fell by 1.64% or 32.90 points to 1,965.85; property dropped by 1.42% or 32.32 points to 2,243.83; and holding firms went down by 0.10% or 5.31 points to 5,265.47.

“Universal Robina Corp. was the top index gainer for the day, climbing 5.22% to PHP 84.70. Puregold Price Club, Inc. was at the bottom, falling 4.36% to PHP 31.80,” Mr. Tantiangco said.

Value turnover dropped to PHP 4.88 billion on Tuesday with 622.8 million shares changing hands from the PHP 5.74 billion with 743 million issues traded on Monday.

Advancers beat decliners, 92 versus 77, while 66 names were unchanged.

Net foreign buying went up to PHP 275.68 million on Tuesday from PHP 228.16 million on Monday. — Revin Mikhael D. Ochave with Reuters

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