NG outstanding debt surges to record PHP 17.56T as of end-July

The national government’s (NG) outstanding debt ballooned to a record PHP 17.56 trillion at the end of July, breaching its full-year projection for 2025, data from the Bureau of the Treasury (BTr) showed.

The latest data from the BTr showed outstanding debt surged by 11.9% from PHP 15.69 trillion in July 2024.

This was already 1.15% higher than the PHP 17.36-trillion projected debt by end-2025.

Despite surpassing the 2025 projection, the Treasury said the debt stock is expected to decline by yearend as the government pays off PHP 814.2 billion in domestic bonds by December and as “fundraising activities wind down.”

Month on month, NG debt inched up by 1.7% from PHP 17.27 trillion in June, the BTr said.

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

“To mitigate exposure to foreign exchange risk, the government continued to favor domestic borrowings to deepen the local capital market, attaining a financing blend comprised of 76% domestic financing and 24% external borrowing in the first seven months of the year,” the Treasury said.

“As a result, the domestic component of the debt stock improved to 68.9% at the end of July from 68.1% at the end of 2024.”

Domestic borrowings increased by 12.6% to PHP 12.11 trillion as of end-July from PHP 10.75 trillion in the same month last year.

This was already 0.52% higher than the PHP 12.04-trillion year-end domestic debt projection.

Month on month, domestic borrowings slightly went up by 1.3% from PHP 11.95 trillion at end-June.

Domestic borrowings were made up mostly of government securities.

On the other hand, external debt rose by 10.5% to PHP 5.46 trillion as of end-July from PHP 4.94 trillion a year ago. This also exceeded the PHP 5.32-trillion external debt projection this year by 2.63%.

Month on month, external debt inched up by 2.6% from PHP 5.32 trillion at end-June.

Foreign debt was composed mainly of PHP 2.79 trillion in global bonds and PHP 2.67 trillion in loans.

External debt securities were made up of PHP 2.37 trillion in US dollar bonds, PHP 252.46 billion in euro bonds, PHP 58.5 billion in Japanese yen bonds, PHP 58.19 billion in Islamic certificates and PHP 54.77 billion in peso global bonds.

As of end-July, the NG-guaranteed obligations rose by 2.4% to PHP 352.97 billion from PHP 344.79 billion a year ago.

Month on month, it also edged higher by 2.3% from the end-June level of PHP 345.11 billion.

“The Marcos, Jr. administration remains steadfast in its commitment to prudent debt management by leveraging strong investor confidence in peso-denominated securities while ensuring that borrowings are at the lowest possible cost and support fiscal sustainability, inclusive growth, and a stronger Philippine economy,” the Treasury said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said debt rose as the government ramped up borrowings to plug the widening budget gap.

From January-to-July period, the fiscal deficit widened by 22.04% to PHP 784.4 billion amid faster state disbursements. This was on track to hit the revised PHP 1.56-trillion full-year deficit ceiling, the BTr said.

“(The debt) could possibly breach above PHP 18 trillion by end-2025 at the rate of the year-to-date increase if not curbed through narrower budget deficits in the coming months,” Mr. Ricafort said.

However, he noted that this could be partially offset by the settlement of large maturing NG obligations, particularly in August and September.

“This (rising debt) is concerning but not entirely unexpected given sustained borrowing needs, a weaker Philippine peso, and spending demands tied to infrastructure, subsidies, and tariff-related buffers,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.

Mr. Rivera said it will be likely that the NG debt level will exceed the year-end projection if current trends persist, such as “modest revenue growth” and “large spending needs such as flood control, defense, and infrastructure projects.”

Earlier, the Finance department projected outstanding debt to reach PHP 19.1 trillion by 2026, rising to PHP 20.5 trillion by 2027, PHP 21.9 trillion by 2028, and PHP 23.4 trillion by 2029. By 2030, outstanding debt is expected to reach PHP 24.7 trillion.

At the end of the second quarter, NG debt as a share of gross domestic product surged to 63.1%, the highest since 2005. This is above the 60% debt-to-GDP threshold considered by multilateral lenders to be manageable for developing economies.

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

Business groups seek jail time for corrupt officials

Thirty business groups on Thursday strongly condemned the continuing and excessive graft and corruption by government officials, calling for jail time for these corrupt individuals.

The business groups, led by the Philippine Chamber of Commerce and Industry (PCCI) and the Management Association of the Philippines (MAP), issued a strongly worded statement calling for the end to corruption in government’s public works and other projects.

“We hereby declare our outrage, disgust, and disappointment about the acts of many of our legislators in Congress and officials in the Executive Department, primarily in the Department of Public Works and Highways (DPWH), the local government units, and the Commission on Audit (CoA), for their shameful, unabated, continuing, and excessive acts of graft and corruption,” the groups said.

While the groups welcomed President Ferdinand R. Marcos, Jr.’s callout against corrupt officials, they expressed concern that the guilty officials will continue “their merry way of robbing the people and filling their pockets, completely oblivious to the fact that they are betraying the public trust (and) committing a treasonous act against our people.”

The business groups said a thorough investigation should be conducted by an independent body, with the aim of prosecuting these officials, putting them in jail and recovering the stolen funds.

“Justice for the Filipino people, especially the poor, can only be achieved by successfully punishing the corrupt,” they said.

“Our call therefore is not just to ‘moderate your greed.’ Our collective call to these corrupt officials is — Please stop! Maawa naman kayo sa mga naghihirap na taong bayan (Have mercy on our suffering countrymen).”

The business groups said they will help identify “those who have been guilty in the conspiracy to steal from the people.”

They also committed to gather evidence of corruption against government officials, particularly those in the DPWH, LGUs and CoA and “their partners in crime in the private sector.”

The groups also pledged to blacklist “notorious” businessmen and contractors who work with the corrupt politicians and officials.

They also vowed to participate in and support citizen and voter education campaigns as well as to lead the signing of the Integrity Pledge, where they promise not to bribe any politician in exchange for favors.

“(We will) encourage the financial sector, particularly the banks and the Anti-Money Laundering Council (AMLC), to be one with us in bringing out the money launderers and their unexplained wealth within legal and regulatory boundaries,” they said.

Aside from the PCCI and MAP, the statement was backed by other large business groups such as the Employers Confederation of the Philippines, Federation of Philippine Industries, Financial Executives Institute of the Philippines, and the Philippine Exporters Confederation, Inc.

The other signatories included the Alliance of Women for Action towards Reform, Alyansa ng Nagkakaisang Mamamayan, Association of CPAs for Sustainability, Inc., Brotherhood of Christian Businessmen and Professionals, Cebu Business Club, Cebu Chamber of Commerce and Industry, and Cebu Leads Foundation.

The FinTech Alliance Philippines, Chamber of Commerce of the Philippine Islands, Connected Women, Filipina CEO Circle, Green EDSA Movement, Iloilo Economic Development Foundation, Inc., Institute for Solidarity in Asia, and Institute of Corporate Directors also signed the statement.

Groups such as the Justice Reform Initiative, Military and Uniformed Personnel for United Philippines, Nextgen Organization of Women Corporate Directors, People Management Association of the Philippines, Philippine Institute of CPA, Philippine Women’s Economic Network, Semiconductor and Electronics Industries in the Philippines Foundation, Inc., Shareholders’ Association of the Philippines, and Women’s Business Council Philippines have also signed.

The business groups’ joint statement comes amid the government’s ongoing probe into reported anomalies in flood control projects under the DPWH.

In his State of the Nation Address on July 28, Mr. Marcos ordered an investigation into flood control projects days after Metro Manila experienced widespread flooding due to monsoon rains.

Resignations

Meanwhile, the Department of Trade and Industry (DTI) said that the executive director of the Construction Industry Authority of the Philippines (CIAP) and two board members of the Philippine Contractors Accreditation Board (PCAB) have stepped down amid allegations that PCAB was selling contractor accreditations.

“Executive Director Herbert D.G. Matienzo resigned. He put personal reasons in his resignation letter. He resigned on Sept. 3, and I accepted his resignation on Sept. 3 as well,” DTI Secretary Ma. Cristina A. Roque told reporters on Thursday.

“But even if he resigned, he said that he will cooperate and that he will be covered by the probe,” she added.

Ms. Roque said that the people that will replace the resigned officials are already identified but are yet to be announced.

PCAB Board Members Arthur N. Escalante and Erni G. Baggao have also resigned, the Trade chief said.

“So, for Ernie Bagao, he cited personal and health reasons; for Arthur Escalante, his term has actually expired in May 2025, so he just stepped down,” she added.

Late on Wednesday, the DTI said that it will release the full list of companies facing potential license revocation once it completes its review and receives the documents from the resigned executive director.

“This review aims to uphold transparency and accountability following PCAB’s board resolution revoking the licenses of nine construction firms owned by businesswoman Cezarah Rowena C. Discaya,” the department said.

“This also reflects DTI’s commitment to ensure fair practices and protect industry integrity in government procurement and licensing,” it added.

Asked what steps the department will take amid plans of the Discayas to file an appeal, Ms. Roque said that the department will stick with PCAB’s recommendation.

“Everybody is allowed to file an appeal. But for us, we will stick to the PCAB’s recommendation. I don’t know how long the process will be, but definitely, if they file, of course, the PCAB will counter it,” she added.

Mr. Marcos said previously that about P100 billion of the total P545 billion in government funds that were allocated for flood control projects nationwide since 2022 were cornered by just 15 contractors.

“Those are being checked. Actually, we started investigating those companies that are involved last week. We will just be putting them out once we get a conclusion,” she said. — Justine Irish D. Tabile

New fiscal regime for mining industry signed into law

Philippine President Ferdinand R. Marcos, Jr. on Thursday signed into law a measure that overhauls the tax regime for large-scale metallic mining, imposing royalties and profit-based levies to boost government revenue and share gains with host communities.

“This reform mandates mining companies that operate within government-designated mining sites to pay a royalty of 5% of their gross output,” the President said during signing ceremonies for Republic Act No. 12253 or the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act at the presidential palace.

“Those operating outside mineral reservations, on the other hand, will be subject to a margin-based royalty on income from metallic mining operations,” he added.

The measure also introduces a windfall tax on companies whose profit margins exceed 30%. “This ensures that the government receives its fair share from the extra profit and that the benefits will ripple into the lives of ordinary Filipinos,” Mr. Marcos said.

Each mining contractor will now be treated as a separate taxable entity, preventing companies from offsetting one project’s losses against another’s gains.

The law directs the Bureau of Internal Revenue and the Bureau of Customs, in coordination with the Mines and Geosciences Bureau (MGB), to audit past mineral sales and exports.

Local governments are set to benefit from the reform, with 40% of gross collections from excise taxes, royalties, and related charges allocated to them, Malacañang said in a statement.

In addition, 10% of royalties from mining sites will go to the MGB and Metals Industry Research and Development Center to fund exploration, research and environmental protection initiatives.

“This marks a significant milestone in positioning the Philippine mining sector as a key player in the global value chain. By modernizing the industry’s fiscal regime, we aim to drive economic growth, especially in support of green technologies, while protecting our environment and natural heritage,” Secretary Frederick D. Go, the special assistant to the President for investment and economic affairs, said in a statement.

The Chamber of Mines of the Philippines Chairman Michael T. Toledo said the new law is a step towards establishing a “stable, transparent, and competitive fiscal environment for the mining industry.”

“We recognize that increased taxation is inevitable. The law provides predictability and consistency in the fiscal framework, which are essential for long-term planning and investment. It aligns the Philippines with global mining jurisdictions, making us more competitive and attractive to investors, especially amid rising global demand for critical minerals,” he said in a statement.

Mr. Toledo said the law ensures both the government and host communities receive a fair portion of revenues when metal prices are high, but also allowing “reasonable tax relief” for companies when prices fall.

Senator Joseph Victor “JV” G. Ejercito, who was the principal author of the law, acknowledged that the proposed five-year moratorium on the export of locally-extracted minerals was not adopted in the final version.

“Although the export ban wasn’t included, which I think could have been a game changer by encouraging local processing and creating more jobs, we will continue to push for it in the next Congress,” he said.

‘Gains and gaps’

Cielo Magno, associate professor at the UP School of Economics and longtime advocate for transparency in extractive industries, described the new law as favorable to the industry but raised concerns about its broader impacts.

“This new regime will bring additional revenue to the government by attracting new mines because it is very friendly to them. It still doesn’t guarantee payments for minerals extracted because it is based on margins of profit, which can be easily reduced to zero through accounting,” she told BusinessWorld.

“With weak government regulation and monitoring, it doesn’t guarantee fair payment for our minerals.”

Ms. Magno noted the policy was formulated without any regard to the social, environmental, and political impact of mining.

“We missed the opportunity to address how mining will aggravate climate change effects on communities. This new policy did not even consider policies that would maximize value-adding through processing of raw minerals. This policy is beneficial, but only for mining companies,” she added.

When asked what specific measures or safeguards the government should implement, Ms. Magno said, “They have to review the regulations related to social, environmental, and climate impacts and upgrade them.”

John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, said the new mining fiscal reform is a long overdue step toward aligning mining revenues with actual profits.

“The shift to margin-based royalties and windfall taxes can improve equity, while transparency provisions help curb leakages and build investor trust,” Mr. Rivera said

“If implemented well, this can boost revenues, empower LGUs, and support long-term sustainability. The key now is consistent enforcement and clear, investor-friendly guidelines,” he added. — Erika Mae P. Sinaking

Peso returns to 56 per USD level on Fed easing view

The peso jumped back to the PHP 56 level versus the dollar on Thursday as weaker-than-expected US jobs data fueled expectations of a rate cut by the US Federal Reserve this month.

The local unit closed at PHP 56.98 per dollar, strengthening by 32 centavos from its PHP 57.30 finish on Wednesday, Bankers Association of the Philippines data showed.

The peso opened Thursday’s trading session flat at PHP 57.30 against the dollar. Its intraday best was at its closing level of PHP 56.98, while its worst showing was at PHP 57.32 versus the greenback.

Dollars traded increased to $1.46 billion on Thursday from USD 1.37 billion on Wednesday.

The peso rose on “reinforced dovish Fed bets after the dismal jobs release overnight,” the first trader said in a phone interview.

“The peso appreciated after the weak US job openings data continue to fuel views of a September Fed rate cut,” the second trader said in an e-mail.

The US dollar steadied on Thursday in a volatile week as investors contend with a fragile bond market and data showing a weakening labor market, which has reinforced expectations the Federal Reserve will cut rates this month, Reuters reported.

With the Fed focused on employment, Friday’s crucial jobs report will help set expectations for the central bank’s next few policy meetings. Data on Wednesday showed job openings fell to a 10-month low in July, although layoffs remained relatively low. Separate surveys on private sector employment and monthly layoffs were due later on Thursday.

Traders are pricing in a near-100% chance of the Fed cutting interest rates later this month, up from 89% a week ago, CME FedWatch showed. They are also pricing in 139 basis points of easing by the end of next year.

The dollar edged up in relatively steady trade, reflecting investor wariness of making any big moves ahead of Friday’s payrolls report.

The dollar index, which tracks the US currency against six others, was up slightly at 98.23.

Several Federal Reserve officials said labor market worries continue to underpin their view that rate cuts still lie ahead for the central bank, boosting expectations of an imminent rate cut.

For Friday, the second trader said the peso could depreciate anew against the dollar due an expected uptick in Philippine inflation in August.

A BusinessWorld poll of 16 analysts yielded a median estimate of 1.3% for the August consumer price index, faster than the 0.9% rise in July but slower than the 3.3% clip in August 2024.

The first trader sees the peso moving between PHP 56.80 and PHP 57.20 per dollar on Friday, while the second trader expects it to range from PHP 56.85 to PHP 57.10. — A.M.C. Sy with Reuters

Stocks up on bargain hunting after five-day slide

Philippine stocks inched up on Thursday as investors picked up bargains following the market’s five-day slide.

The Philippine Stock Exchange index (PSEi) increased by 0.39% or 23.99 points to close at 6,106.92, while the broader all shares index rose by 0.39% or 14.30 points to end at 3,677.92.

“The local market saw a technical bounce this Thursday backed by bargain hunting after five straight days of decline. Trading was still lethargic, however, with net value turnover at PHP 4.74 billion, below the year-to-date average of P5.97 billion. This reflects weak confidence towards the market amid lingering headwinds,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

Value turnover declined to PHP 4.81 billion on Thursday with 1.06 billion shares traded from the PHP 5.37 billion with 705.16 million shares that changed hands on Wednesday.

“The market saw a slight relief as investors engaged in bargain hunting, taking advantage of cheaper stock prices,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message.

“US equities showed signs of stabilizing as a tech sector rebound helped curb recent losses. A less-than-stellar jobs report is bolstering the case for future interest rate cuts, which has also provided a measure of support for investor sentiment,” he added.

Wall Street stocks recovered some ground on Wednesday after technology conglomerate Alphabet rose on a favorable antitrust ruling, but gains were muted as investors digested softer-than-expected labor market data and a selloff in long-term global government bonds, Reuters reported.

Job openings, a measure of labor demand, dropped 176,000 to 7.181 million by the last day of July, the Labor Department’s Bureau of Labor Statistics said in its “JOLTS” report. With the Fed focused on employment, Friday’s crucial jobs report will help set expectations for the central bank’s next few policy meetings.

All sectoral indices closed in the green on Thursday. Property went up by 1.08% or 26.11 points to 2,444.33; mining and oil climbed by 1.07% or 116.59 points to 10,928.22; services rose by 0.78% or 16.82 points to 2,171.49; financials increased by 0.27% or 5.57 points to 2,051.38; holding firms inched up by 0.1% or 5.27 points to 5,067.28; and industrials added 0.05% or 5.33 points to end at 8,988.14.

Advancers beat decliners, 111 to 88, while 53 names were unchanged.

Net foreign selling dropped to PHP 237.92 million on Thursday from PHP 921.7 million on Wednesday.

Mr. Limlingan said the Philippine August inflation data to be released on Friday, Sept. 5, will be a key trading driver for the market. — Alexandria Grace C. Magno with Reuters

DPWH pauses local project bidding

The Department of Public Works and Highways (DPWH) has suspended the bidding of all locally funded projects for two weeks, in line with the government’s ongoing investigation into alleged irregularities in flood control projects.

“I will order today a pause to all ongoing bidding of all locally funded projects nationwide,” Public Works and Highways Secretary Vivencio “Vince” B. Dizon said at a press briefing on Wednesday.

The suspension of ongoing bidding processes will apply to all national, regional and district offices, and will only be in effect for a maximum of two weeks, Mr. Dizon said, adding this will help the agency develop and implement safeguards against so-called “ghost” projects.

He said all foreign-funded projects will continue because he is confident that foreign funding agencies are closely monitoring project implementation.

The agency’s decision is also in line with President Ferdinand R. Marcos, Jr.’s State of the Nation Address on July 28, directing the DPWH to submit a full list of projects from the past three years and ordering an investigation into flood control projects.

The department has submitted a list of over 9,000 projects completed between July 2022 and May 2025. Of these, 160 projects have undergone validation, with 15 reported as missing or unlocated, according to former DPWH Secretary Manuel M. Bonoan.

Nigel Paul C. Villarete, a senior adviser on public-private partnerships at the technical advisory group Libra Konsult, Inc., said the suspension is a welcome development especially if the aim is to prevent any more irregularities.

He said it would be better if the government just paused the awarding of these projects.

“We can already incorporate necessary checks and balances considering the lessons learned without necessarily placing setbacks on our overall infrastructure development program. Once the probe is completed, then, these may be awarded, or not, in consideration with the findings of the probe,” Mr. Villarete said.

“What can be done is to allow the continuation of these existing bidding under a heightened transparency monitoring, considering the lessons learned, but up until pre-final award only,” he added.

Rene S. Santiago, former president of the Transportation Science Society of the Philippines, said it would be best to cancel the bidding for any flood control projects under the General Appropriations Act of 2025.

On Tuesday, DPWH’s Mr. Dizon said he will need between 30 and 60 days to reorganize the agency, after seeking courtesy resignations from all DPWH officials to facilitate an investigation into corruption in big-ticket flood control projects.

Mr. Marcos said previously that about PHP 100 billion of the total PHP 545 billion in government funds that were allocated for flood control projects nationwide since 2022 were cornered by just 15 contractors.

Among the top 15 flood-control contractors earlier identified by Mr. Marcos were Alpha & Omega Gen. Contractor & Development Corp. and St. Timothy Construction, both reportedly linked to former Pasig mayoral candidate Cezarah Rowena C. Discaya.

Licenses revoked

Meanwhile, Philippine Contractors Accreditation Board (PCAB) has issued a resolution on Sept. 1, revoking the licenses of nine construction companies owned by Ms. Discaya that were tagged in ghost projects.

“The decision comes after Ms. Discaya’s sworn testimony during the Senate Blue Ribbon Committee Hearing on Sept. 1, 2025, where she admitted ownership and control of the nine firms and their participation in government project bidding,” PCAB said.

Trade Secretary Ma. Cristina A. Roque, who is also the chairperson of the Construction Industry Association of the Philippines (CIAP), placed CIAP and its implementing boards and PCAB under her supervision.

Directly supervising CIAP and PCAB will ensure order and transparency within the agencies, Ms. Roque said.

The other contractors that were identified behind ghost projects are Legacy Construction Corp.; EGB Construction Corp.; Topnotch Catalyst Builders, Inc.; Centerways Construction and Development, Inc.; Sunwest, Inc.; Hi-Tone Construction & Development Corp.; Triple 8 Construction & Supply, Inc.; Royal Crown Monarch Construction & Supplies Corp.; Wawao Builders; MG Samidan Construction; L.R. Tiqui Builders, Inc.; and Road Edge Trading & Development Services.

With this, the DPWH had requested the Department of Justice (DoJ), and the Bureau of Immigration for a lookout order against the officials of the contractors and executives of DPWH.

Mr. Dizon said among the individuals they had requested to be included in an immigration lookout bulletin order are Henry C. Alcantara, former DPWH Bulacan First District Engineer; Brice Ericson D. Hernandez, officer-in-charge, office of the Assistant District Engineer in Bulacan; Ms. Discaya and Pacifico F. Discaya of Alpha & Omega; Edgar S. Acosta, president of Hi-Tone Construction and Development; and Mark Allan V. Arevalo, general manager of Wawao Builders.

Review of DPWH budget

Meanwhile, the President has directed Mr. Dizon and Budget Secretary Amenah F. Pangandaman to conduct a “sweeping review” and “make the necessary corrections” in the proposed 2026 budget of the DPWH, Palace Press Officer Clarissa A. Castro said at a press briefing.

“The President emphasized that the review must lead to necessary changes to guarantee transparency, accountability, and the proper use of the people’s money,” Ms. Castro told reporters in Malacañang.

Ms. Castro said any insertions or duplications in the DPWH’s proposed budget should be immediately corrected to ensure budget deliberations stay on track.

“The President does not want this review to drag on. It must be fast and thorough,” Ms. Castro said.

The review could lead to the reduction of the DPWH’s proposed budget if projects are found to be duplicates or already completed, she said.

In a press conference late on Wednesday, Mr. Dizon said the DPWH budget review will take around two weeks. — Ashley Erika O. Jose, Reporter with Erika Mae P. Sinaking

DoF asks Congress to prioritize key tax reforms

The Department of Finance (DoF) wants the 20^th Congress to prioritize several tax measures to help support the government’s fiscal consolidation effort, a Finance official said on Wednesday.

The government is considering a domestic top-up tax for multinational companies in the Philippines and an excise tax on single-use plastics, alongside general tax and estate tax amnesties, Finance Undersecretary Karlo Fermin S. Adriano said.

These measures could help bolster efforts to cut down government debt and sustain economic growth via state spending amid global uncertainties, shifting trade relations and geopolitical conflicts, he added.

“Right now, our debt-to-GDP (gross domestic product) ratio is still around 61-62%, and we want to have a fiscal buffer if there will be a crisis,” Mr. Adriano told lawmakers at a hearing at the House of Representatives. “We want to do fiscal consolidation at the moment, and at the same time we want to spend more at the moment given global uncertainties.”

The government is hard-pressed to tap new revenue streams as mounting public debt adds strain to already limited fiscal space.

As of end June, the debt-to-GDP ratio rose to 63.1%, its highest level since 2005. The figure remains above the 60% threshold that multilateral lenders view as manageable for developing economies.

The DoF is pushing for an excise tax on single-use plastics as a way to reduce the use of plastic as the Philippines is among the top contributors of plastic pollution in waterbodies globally, said Mr. Adriano.

The proposal was one of the 28 priority bills identified by the Legislative-Executive Development Advisory Council in the 19^th Congress. While it was approved by the House on third reading in 2022, the measure never made it out of the Senate Ways and Means Committee.

The DoF is looking at levying a PHP 150-per-kilogram tax on single-use plastics with an annual 4% increase, Mr. Adriano said.

“Previously, it only covered single-use plastic bags, like semi-transparent plastics and sando bags. Now, we’re considering to expand the coverage,” he said.

Implementing an excise tax on single-use plastics could net the government an average of PHP 11.59 billion in revenue annually over the first five years of implementation, said Mr. Adriano, with a portion of the collections being used to fund waste management programs.

Global minimum tax

The DoF official said they are also looking at pushing for a 15% domestic top-up tax for multinationals with a global revenue exceeding 750 million euros in two of the four preceding fiscal years.

The Philippines is a party to the Base Erosion and Profit Shifting program by the Organisation for Economic Co-operation and Development, a global initiative that seeks to crack down on tax avoidance by multinational companies. Signed by more than 100 nations, it included a proposal to introduce a 15% global minimum tax (GMT) rate.

Mr. Adriano said the absence of a GMT framework has cost the Philippines an estimated P162.9 billion in annual revenues since it was globally implemented in 2021.

“If we do not have a legislated domestic top-up tax here… we will not be able to collect it. But if another jurisdiction has that domestic top-up tax, they (multinationals) will pay it in another jurisdiction,” he said.

Most multinationals operating in the Philippines are Japanese companies, followed by those from the US, UK, Germany and France, according to a DoF presentation to lawmakers.

The tax proposals are a “step in the right direction” but are ill-timed due to challenges in economic growth and inflation risks, said Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co.

“The excise tax on single-use plastics and the domestic top-up tax align with global standards and can boost revenue while promoting sustainability. But effectiveness hinges on swift implementation and strong enforcement,” he said in a Viber message.

Tax amnesty

The Finance department is also proposing a general tax amnesty for outstanding income, withholding, capital gains, and other percentage taxes, with rates set at 2% of a taxpayer’s total assets as of December 2024 or 5% of total net worth, whichever is higher.

Lawmakers in the House and Senate are pushing for a general tax amnesty that will impose a 2% amnesty tax rate dependent on the total assets of taxpayers up to 2024.

Corporate rates would be based on subscribed capital, ranging from 5% or a fixed amount between P100,000 and P1 million under the tax amnesty proposal, DoF Director Euvimil Nina R. Asuncion said.

“There will be no Bureau of Internal Revenue (BIR) examination of books for amnesty-covered years,” she said at the same hearing, adding that those who will avail of the program would be immune from civil, criminal and administrative penalties.

Ms. Asuncion said taxpayers who avail themselves of the proposed general tax amnesty within the first three months of its implementation will receive a 20% discount. The discount would drop to 15% from the third to sixth month of implementation, and to 10% in the sixth and ninth month of implementation.

“Excluded from the general tax amnesty are those taxpayers with pending court cases related to those under the Presidential Commission on Good Government’s jurisdiction, anti-graft and money laundering and tax evasion,” Ms. Asuncion said.

The government is also keen on pushing an estate tax amnesty, after it expired in June, she added. “We want to extend this up to June 30, 2028.”

Ms. Asuncion said the estate tax amnesty would cover estates with unpaid taxes as of May 2024.

“The rate will remain at 6% and it will cover estates of descendants with the date of death on or before May 31, 2024,” she said.

The government collected PHP 1.36 billion from 42,373 taxpayers under the estate tax amnesty in 2022, PHP 1.89 billion from 51,400 taxpayers in 2023, and P2.66 billion from 56,901 taxpayers in 2024, a copy of BIR’s presentation to lawmakers obtained by BusinessWorld showed.

About PHP 4.18 billion from 92,066 taxpayers were collected in the first seven months of 2025.

VAT cut

Meanwhile, DoF’s Mr. Adriano said a House proposal to cut the value-added tax (VAT) rate to 10% from the current 12% could widen the budget deficit if enacted.

Batangas Rep. Leandro Antonio L. Leviste filed House Bill (HB) No. 4302 on Tuesday seeking to lower the VAT rate, arguing the current tax system is “regressive” and should be reduced to make taxation more progressive.

“That will have an impact. A big one,” Mr. Adriano told BusinessWorld in Filipino. “It could cost several billions, assuming there will be no new other [taxes] to offset losses.”

The BIR collected PHP 467 billion in VAT during the first seven months of the year, nearing the government’s PHP 473-billion full-year target, according to its presentation to lawmakers.

“The assumption is that VAT is regressive. But we’d like to point out that it can be progressive if exemptions are in place — which we already have,” Mr. Adriano said. “For example, food and agricultural products are exempt from VAT, and these account for about 40-50% of spending by the poorest households.”

HB No. 4302 also seeks to empower the government to return the VAT rate back to 12% for a year if the projected deficit is expected to exceed the programmed deficit.

Mr. Leviste, a former businessman, told reporters on Wednesday that he will push for a “wealth” tax to offset possible revenue losses.

“We want it to be a revenue-neutral bill, replacing a portion of the value-added tax with a more progressive wealth tax,” he said. “Instead of collecting… from the poor, we can collect those revenues from the wealthiest Filipinos.”

Mr. Leviste divested his stake in SP New Energy Corp. (SPNEC) before becoming a lawmaker. He sold around 16.44 billion SPNEC shares for PHP 20.49 billion. — Kenneth Christiane L. Basilio, Reporter

Council OKs stricter approval process for flood control projects

The Economy and Development (ED) Council has approved a resolution to tighten the approval process for flood control projects, as the government intensifies its investigation into alleged corruption within the Department of Public Works and Highways (DPWH).

In a statement on Wednesday, the Department of Finance said the ED Council’s Investment Coordination Committee-Cabinet Committee (ICC-CC) endorsed a resolution mandating a “comprehensive review” of flood control initiatives.

The resolution, approved on Aug. 12, was recommended by the Infrastructure Development Committee’s Sub-Committee on Water Resources.

Under the new guidelines, flood control and management projects will be aggregated by river basin rather than evaluated individually with lower tagged costs.

This addresses a gap in current ICC rules, which only require a review for projects exceeding PHP 2.5 billion, which leaves most flood control projects outside the ICC’s scope.

“By aggregating flood control and management projects in a single river basin, more of these projects will be subjected to the ICC evaluation, particularly in the aspects of technical, environmental, social, and economic viability, among others,” the Council said.

The Council said this resolution is expected to improve project quality and readiness, while promoting a unified strategy for long-term flood mitigation.

The resolution also designates the DPWH as the lead agency responsible for submitting aggregated projects to the ICC.

Following the approval made by the ICC-CC and its endorsement to the InfraCom-CC, the resolution will be elevated for the ED Council’s consideration and final decision.

Finance Secretary Ralph G. Recto said corruption related to flood control projects may have cost the Philippines up PHP 118.5 billion in economic losses since 2023. — Aubrey Rose A. Inosante

Peso rebounds before key data

The peso recovered against the dollar on Wednesday as players await the release of key economic data in the United States and at home.

The local unit closed at PHP 57.30 per dollar, strengthening by 21 centavos from its PHP 57.51 finish on Tuesday, Bankers Association of the Philippines data showed.

The peso opened Wednesday’s session flat at PHP 57.51 against the dollar. Its intraday best was at its closing level of PHP 57.30, while its worst showing was at PHP 57.55.

Dollars exchanged dropped to USD 1.37 billion on Wednesday from USD 1.92 billion on Tuesday.

The peso rose on profit taking before the release of the latest US jobs reports in the coming days and Philippine August inflation data on Friday, a trader said in a phone interview.

US nonfarm payrolls on Friday will be preceded by data on job openings and private payrolls, offering an update on the labor market that has become the focus of policy debate at the Federal Reserve, Reuters reported.

Markets widely expect the Fed to lower interest rates later this month, pricing in an 89% chance of a 25-basis-point cut.

The dollar edged 0.1% lower at 98.30 against a basket of currencies, having gained 0.66% on Tuesday.

Meanwhile, a BusinessWorld poll of 16 analysts yielded a median estimate of 1.3% for the August consumer price index, picking up from 0.9% in July but slower than the 3.3% clip in August 2024.

If realized, August would mark the sixth month in a row that inflation was below the Bangko Sentral ng Pilipinas’ 2-4% annual target. It would also be within the central bank’s 1-1.8% projection for the month.

The peso was also supported by expectations of a rate cut by the Fed at its policy meeting this month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Thursday, the trader sees the peso moving between PHP 57.20 and PHP 57.50, while Mr. Ricafort expects it to range from PHP 57.20 to PHP 57.40. — Aaron Michael C. Sy with Reuters

PSEi tumbles to 6,000 level as sentiment sours

Philippine shares sank to the 6,000 level on Wednesday to hit a near five-month low as corruption concerns and the peso’s weakness against the dollar affected investor confidence.

The Philippine Stock Exchange index (PSEi) declined by 0.75% or 45.96 points to close at 6,082.93, while the broader all shares index went down by 0.47% or 17.41 points to end at 3,663.62.

This was the PSEi’s lowest close in almost five months or since it finished at 6,082.44 on April 11.

“The local market extended its decline as lingering headwinds continued to weigh on sentiment. These include the corruption issues in the Philippines’ flood control projects, the weak position of the peso against the US dollar, and the uncertainties on the US’ tariff policies,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“Rising long-term Treasury yields in the US also weighed on the bourse,” he said, adding that trading activity at the market remained “tepid.”

Finance Secretary Ralph G. Recto said on Tuesday that corruption related to flood control initiatives has cost the Philippines up to PHP 118.5 billion in economic losses since 2023.

On Wednesday, the Department of Public Works and Highways said it has suspended the bidding for all locally funded projects amid the government’s ongoing investigation into alleged irregularities in flood control projects.

Meanwhile, the peso closed at PHP 57.30 per dollar on Wednesday, rebounding from its Tuesday finish of PHP 57.51, which was a near one-month low.

First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message that outflows related to the MSCI and FTSE rebalancing also dragged the Philippine market.

There was also “heightened risk-off sentiment” before the release of Philippine August inflation data on Friday, she said.

The majority of sectoral indices closed lower on Wednesday. Property fell by 1.38% or 34.04 points to 2,418.22; services decreased by 1.2% or 26.16 points to 2,154.67; financials retreated by 0.83% or 17.12 points to 2,045.81; and industrials went down by 0.81% or 74.12 points to 8,982.81.

Meanwhile, mining and oil jumped by 1.28% or 137.02 points to 10,811.63, and holding firms climbed by 0.34% or 17.27 points to 5,062.01.

Value turnover declined to PHP 5.37 billion on Wednesday with 705.16 million shares traded from the PHP 5.58 billion with 1.16 billion shares exchanged on Tuesday.

“San Miguel Corp. was the top index gainer, climbing 2.74% to PHP 59.90. Ayala Land, Inc. was the main index laggard, falling 2.96% to PHP 27.85,” Mr. Tantiangco said.

Decliners outnumbered advancers, 109 to 91, while 56 names were unchanged.

Net foreign selling surged to PHP 921.70 million on Wednesday from PHP 368.84 million on Tuesday. — Alexandria Grace C. Magno

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