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Headline inflation likely slowed further in May to another over five-year low amid the continued decline in food prices and a stronger peso.

A BusinessWorld poll of 17 analysts conducted last week yielded a median estimate of 1.3% for the May consumer price index (CPI), slower than the 1.4% in April and 3.9% in the same month a year ago. This is within the Bangko Sentral ng Pilipinas’ (BSP) 0.9%-1.7% forecast for the month.   

If realized, this would be the lowest clip in more than five years or since the 1.2% in November 2019.

The Philippine Statistics Authority is scheduled to release May inflation data on Thursday (June 5).

“We expect May inflation to have eased slightly to 1.3% year on year from 1.4% in April, implying a month-on-month decline of 0.1%,” Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said.

“The sustained drop in rice prices, coupled with lower energy and fuel costs, remained the primary drivers of disinflation,” he said.

Emmanuel J. Lopez, professorial lecturer at the University of Santo Tomas Graduate School, said inflation likely eased to 1.3% “owing to lower prices of food and agricultural products and lower transport costs.”

“This is added to the continued appreciation of the peso against the US dollar resulting in the cheaper price of imported products,” he added.

Sun Life Investment Management and Trust Corp. economist Patrick M. Ella said slower inflation in May is likely due to “favorable food prices decelerating and stable nonfood prices similar to the past two months.”

“The sustained fall in rice prices and decline in cost of oil likely kept inflation below the BSP’s 2-4% target,” Philippine National Bank economist Alvin Joseph A. Arogo added.

In April, rice inflation further contracted to 10.9% from the 7.7% decline in March.

Latest data showed the average price of a kilo of regular milled rice nationwide declined by 13.3% year on year to PHP 44.45 in April, while well-milled rice dropped by 10.4% to PHP 50.54. Special rice went down by 6.2% to PHP 60.69 per kilo.

“Food supply is expected to have improved compared to a year earlier due to better weather conditions, supporting better harvests. This should feed into stable retail price growth,” Moody’s Analytics economist Sarah Tan said.

“As for utilities, power rates were lowered in May, which will provide relief to households and businesses,” Ms. Tan added.

After three months of straight hikes, Manila Electric Co. lowered the overall rate for May by PHP 0.7499 per kilowatt-hour (kWh) to PHP 12.2628 per kWh from PHP 13.0127 per kWh in April.

The strong peso and lower global oil prices have lowered energy costs, said Aris D. Dacanay, economist for ASEAN at HSBC Global Research.

The peso closed at PHP 55.745 per dollar at end-May, strengthening by 9.5 centavos from the PHP 55.84 finish at end-April.

On the other hand, Chinabank Research flagged price pressures from key food items such as meat, vegetables, fruits, and eggs, though said these could have been offset by the monthly decreases in prices of rice, fish, sugar, electricity and liquefied petroleum gas.

Nicholas Antonio T. Mapa, chief economist at Metropolitan Bank & Trust Co., said upward pressure from meat prices and utility costs may have nudged the headline inflation rate higher last month.

“Prices of some livestock and vegetable items increased during the period, but these were offset by low oil prices in the global markets and lower electricity generation prices,” Oikonomia Advisory & Research, Inc. economist Reinielle Matt M. Erece added.

Mr. Neri also noted the “rebound in vegetable and fruit prices amid the ongoing dry season, which significantly reduced agricultural output.”

“Additionally, the lifting of the maximum suggested retail price (MSRP) for pork contributed to an uptick in meat prices during the month,” he added.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said headline inflation may have bottomed out in May and could pick up to 1.9% in August during the typhoon season and breach 2% for the rest of the year, adding that they expect the CPI to settle at 2.6% by yearend.

The central bank expects inflation to average 2.3% this year and 3.3% in 2026, both well within the 2-4% target range.

“Headline inflation is projected to remain subdued in the coming months, largely supported by sustained softness in key commodity prices and a high base from last year,” Mr. Neri said.

“However, favorable base effects — particularly for rice — are expected to diminish starting in September. This could gradually push the headline print close to, if not at, the 3% level by yearend,” he added.

Rate cut likely this month

The current inflation trajectory shows that another rate cut from the BSP this month “appears increasingly plausible,” Mr. Neri said.

“With inflation running below the lower end of the BSP’s 2-4% target, we think the central bank has room to cut its policy rate at its June meeting,” Chinabank Research said.

“With inflation easing and the peso strengthening, it seems to be an opportune time for the BSP to implement another rate cut,” Ms. Tan added.

The Monetary Board in April reduced the target reverse repurchase (RRP) rate by 25 basis points (bps) to 5.5%, bringing total cuts thus far to 100 bps since it began its easing cycle in August last year.

Its next meeting is scheduled for June 19. BSP Governor Eli M. Remolona, Jr. has said they could deliver two more rate cuts this year, still in “baby steps” or increments of 25 bps.

Security Bank Corp. Vice-President and Research Division Head Angelo B. Taningco also expects a 25-bp rate cut at the Monetary Board’s meeting this month amid the benign inflation environment.

Mr. Arogo said the continued low inflation and modest gross domestic product growth in the first quarter is a “strong justification for the BSP to reduce the RRP rate further by 25 bps on June 19.”

“This move would also offer additional support for the domestic economy, which grew slower than expected in the first quarter and is facing downside risks from global policy uncertainties and higher US tariffs,” Chinabank Research said.

“[We] believe BSP has a copious amount of space to cut rates and support growth momentum during these challenging times. We expect up to three more rate cuts this year,” Mr. Mapa said.

The Philippine economy grew by a weaker-than-expected 5.4% in the first quarter.

Meanwhile, Mr. Neri said the BSP’s recent comments of shifting to a point-targeting regime from the current range also shows “a subtle but meaningful shift from an increasingly dovish tone last month to a more cautious stance.”

“This evolving guidance suggests that while the BSP remains poised to cut rates in the near term, further easing is likely to be more measured and data-dependent, particularly as upside risks to inflation may re-emerge later in the year just as base effects become unfavorable again in 2026.”

Mr. Remolona earlier said they are studying how to shift to a point target for inflation, from the current 2-4% target range. He said they are eyeing for the target to be a bit lower than the 3% midpoint of the current band.

“The central bank’s subsequent moves after a potential June cut are likely to be more measured, as external headwinds linked to uncertain global trade environment cloud the policy landscape,” Mr. Neri added. – Luisa Maria Jacinta C. Jocson, Senior Reporter

The Board of Investments (BoI) has approved PHP 329.52 billion in investment pledges in the first five months of 2025 and expects to process at least PHP 1.12 trillion worth of projects in the next two quarters.

The investment promotion agency (IPA) approved four projects from January to May, with PHP 61.52 billion of their total value coming from foreign investors and PHP 268 billion from domestic investors, it said in a statement.

However, the investment pledges approved in the period were 48.53% lower compared to the PHP 640.22 billion worth of projects okayed a year ago.

This brought the BoI’s investment approvals in the last 35 months or since July 2022 to PHP 3.71 trillion.

Despite the year-on-year decline seen in the period, BoI Chairman and Trade Secretary Ma. Cristina A. Roque said the IPA expects a rebound in investment approvals, supported by the soon-to-be-released 2025-2027 Strategic Investment Priority Plan (SIPP) and upcoming roadshows.

“With the SIPP nearing approval and the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act campaign in full swing, we expect a rebound in investment approvals over the next quarter,” said Ms. Roque in a statement over the weekend.

“Our focus remains on converting interest into impact — bringing in high-value investments that will deepen our industrial base and future-proof our economy,” she added.

According to the BoI, the SIPP is undergoing final review and is nearing release. It is expected to unlock investment opportunities in digital infrastructure, energy transition, and climate-smart technologies. 

Meanwhile, for the upcoming legs of the CREATE MORE Roadshows, the BoI is targeting Cebu and Davao. They are also planning to attend investment fora in other strategic markets in the coming months.

For 2025, the BoI is targeting to secure PHP 1.75 trillion in investment pledges, an 8% increase from PHP 1.62 trillion last year.

The IPA said it expects to process projects worth at least PHP 1.12 trillion in the second half of the year, with 65 projects worth PHP 290 billion already undergoing checklisting and three projects worth PHP 832 billion securing the necessary documents to qualify for registration.

“Checklisting marks the initial phase of the BoI registration process where project proponents have formally signified their intent to apply and submitted the required documents to support their application,” the agency said.

The applications are now being reviewed by the BoI to assess their eligibility for registration, it said.

“We are now entering a crucial implementation phase where many of our previously approved investments are being realized on the ground,” Ms. Roque said. “At the same time, we are working hard to sustain momentum by pushing a new wave of projects toward registration, ensuring that today’s pipeline becomes tomorrow’s operational infrastructure, jobs, and innovation.”

Of the projects being checklisted, 12 projects worth PHP 116.81 billion are strategic investments approved to receive green lane treatment.

Established through Executive Order No. 18 in February 2023, green lanes were constituted to accelerate and simplify the permit and licensing processes for strategic investments.

As of May 27, the BoI has endorsed 208 projects worth P5.2 trillion in investment value to the One-Stop Action Center for Strategic Investments. The majority or 78% of the projects endorsed for green lane treatment are in renewable energy (RE).

The government has seen an increase in RE investments after it allowed full foreign ownership in the sector.

The BoI said the pipeline of investment pledges covers areas such as RE, information technology and business process management, manufacturing, logistics, food security-related, mass housing, and infrastructure.

“Once approved, these projects are expected to generate approximately 4,278 jobs, reinforcing the government’s commitment to high-quality, inclusive employment for Filipinos,” it said. — Justine Irish D. Tabile

The Philippines’ trade deficit in goods narrowed to its two-month low in April, as imports contracted to its lowest in 13 months, the Philippine Statistics Authority reported on Friday.

Preliminary data from the PSA showed the country’s trade-in-goods balance — the difference between the values of exports and imports — reached a deficit of USD 3.49 billion in April from the USD 4.51-billion deficit in March and the USD 4.73 billion gap a year earlier.

It was the slimmest trade gap in two months or since the revised USD 2.97-billion deficit in February.

The country’s trade balance has been in deficit for nearly a decade or since the USD 64.95-million surplus recorded in May 2015.

The narrower April deficit was due to a big pullback in imports while exports remained broadly healthy, Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said in an e-mail adding that this trend in the deficit is encouraging.

“The narrowing trade deficit suggests a more muted demand for dollars as imports contract, which in turn is positive for the peso,” Nicholas Antonio T. Mapa, chief economist at Metropolitan Bank & Trust Co., said in an e-mail.

He added that exports rose on a stark pickup in agro-based exports, in particular outbound shipments of coconut oil and related products while imports slowed due to a contraction in both raw materials and energy imports.

Total outbound sales of Philippine-made goods grew by 7% year on year in April, slower than the 8.7% growth in March and the 28.2% expansion a year earlier.
It was the slowest pace for exports in four months or since the 1.9% decline in December 2024.

By value, April logged the lowest level in three months since the USD 6.57 billion in January.

Meanwhile, the country’s merchandise imports declined by 7.2% year on year to USD 10.24 billion in April, a reversal from the 17.8% growth a month earlier and the 13.2% growth in April 2024.

The drop in imports was the sharpest in 13 months or since the 17.6% contraction in March 2024.

The import bill that month, on the other hand, was the smallest amount in two months or since the USD 9.76 billion in April.

In the first four months, exports grew by 9.5% to USD 26.87 billion while imports also rose by 5.6% to reach USD 42.78 billion, way above the government’s revised 6% and 5% growth targets this year for exports and imports, respectively.

This brought the trade deficit to USD 15.91 billion in the January to April period, smaller than the USD 15.99-billion gap in the same period last year.

Mr. Chanco said that the continued slowdown in headline export growth, while still robust in the grand scheme of things, was due to a continued moderation in upward momentum to some of the country’s main markets.

“This waning in momentum is coming off a very fast start to the year. In the meantime, demand from China effectively remains missing in action, providing little to no uplift on a month-to-month basis.”

For GlobalSource Partners Country Analyst Diwa C. Guinigundo, it is highly possible there may be frontloading of exports to the United States before the full launch of reciprocal tariffs.

“But that should also have increased imports because most of our major exports are import-dependent. We should be concerned with the weak imports because in a sense imports could be a leading indicator for exports,” he said in a Viber message.

In April, US President Donald J. Trump carried out a 10% blanket tariffs on all its trading partners. However, the plan to impose higher reciprocal tariffs on some countries has been suspended for 90 days or until July.

Mr. Trump imposed a 17% reciprocal tariff in the Philippines, the second lowest among Association of Southeast Asian Nations member countries trailing behind Singapore’s baseline rate of 10%.

‘Weak’ imports

Orders of raw materials and intermediate goods in April shrank by 11% to USD 3.67 billion from USD 4.12 billion in the same period last year. This accounted for 35.8% of the total April import bill.

Imports of capital goods rose by 6.6% and were valued at USD 3.28 billion in April while consumer goods inched up by 2.8% to USD 2.17 billion. These accounted for 32% and 21.2% of the total imports, respectively.

By commodity group, electronic products cornered the largest import value with USD 2.31 billion, 6% higher than the USD 2.18 billion in April 2024.

Imports of semiconductors, which accounted for 15.6% of the total electronic products, rose by 9.7% to USD 1.59 billion.

Additionally, imports of transport equipment jumped by 28.3% to USD 1.20 billion while mineral fuels, lubricants and related materials plunged by 35.1% to USD 1.08 billion, accounting 11% of the total.

In April, China remained the main source of imports, accounting 29.4% of the total or USD 3.01 billion of the total import bill from USD 3.15 billion a year earlier.

This was followed by South Korea with an 8.6% share or USD 878.36 million and Japan with 8.3% or USD 854.85 million.

Exports ease

In April, outbound shipments of manufactured goods grew by 7.7% year on year to USD 5.46 billion. This accounted for 81% of the total exports in the country. Exports of agro-based products grew by 15% to USD 527.67 million.

Electronic products, which made up 50.5% of the manufactured goods and half of the total exports, fell by 4.8% to USD 3.41 billion from USD 3.58 billion a year earlier.

From this commodity, about 38.1% of this came from semiconductors, which likewise declined by 6.9% to USD 2.57 billion.

Meanwhile, exports for other manufactured goods soared 143.8% to USD 843.60 million while other mineral products inched up by 1.3% to USD 291.61 million.

The United States was still the main destination of Philippine-made goods in April as exports reached USD 1.03 billion, accounting for 15.2% of the total exports that month.

Other top export trading partners include Hong Kong, which accounted for 13.6% of the total or USD 918.74 million and Japan with 13.2% or USD 893.60 million.

Outlook

Mr. Chanco expects “huge swings” to continue in the next few months due to uncertainties surrounding US tariff policies.

“Two-way trade has been quite lumpy and volatile since the start of the year, flipping between very strong and very weak months since January,” he said.

For Mr. Mapa, he said that capital imports should be monitored for it managed to gain but largely due to an outsized jump in aircraft purchases.

He explained that capital imports measure the investments of both the private and public sector and could point to a renewed build up in potential output that in turn could drive faster economic growth.

“We have not seen game changing reforms or policy developments recently so I don’t think exports and imports will be significantly different from last year,” Mr. Guinigundo said.

He added that with a strong peso, it might weaken export growth and imports could in fact go up for obvious reasons, but these changes have not been observed for now.

“It all boils down to the high cost of doing business in the Philippines—power is expensive, labor cost to many remains uncompetitive given the kind of skills available, and of course the cost of bad governance, corruption if you will.” – Abigail Marie P. Yraola, Deputy Research Head

 

The Bangko Sentral ng Pilipinas (BSP) is expected to cut benchmark interest rates further this year to support the economy amid a fragile global environment as inflation continues to ease.

ING Bank sees the BSP slashing borrowing costs by 75 basis points (bps) more, it said in a report.

“A lower-than-expected inflation trajectory, stronger-than-expected local currency, and high real rates — combined with uncertainty on global growth — all suggest a deeper rate cut cycle,” ING Bank’s economics unit said.

“We now expect the policy rate to reach 4.75% by the end of the year, which should contain peso appreciation.”

For its part, Bank of America (BofA) Global Research said in a separate report that it expects the central bank to deliver two more cuts in the coming months.

“We think the BSP will cut its policy rate at least 50 bps more for the balance of 2025, with the next cut likely on its June 19 meeting,” it said.

“The Bangko Sentral ng Pilipinas has returned to an easing bias, as policy and growth outlook have cleared up. GDP (gross domestic product) growth in the Philippines continues to stay weak and with the decline in oil and rice prices, inflation is set to stay low for an extended period, giving BSP room to ease further,” BofA Global Research added. “With the policy rate presently at 5.5%, the monetary policy stance would now appear restrictive.”

It expects the Philippine economy to expand by 5.5% this year and 5.6% in 2026, which are both below the government’s 6-8% growth target for those years.

Philippine GDP expanded by 5.4% in the first quarter, slightly faster than the 5.3% growth in the prior three-month period but slower than the 5.9% pace in the same quarter last year.

Department of Economy, Planning, and Development Undersecretary Rosemarie G. Edillon said that GDP needs to expand by at least 6.2% in the remaining three quarters to reach 6% growth — the low end of the government’s 6-8% growth target — by yearend.

BofA Global Research said that most central banks in the Association of Southeast Asian Nations (ASEAN) region have delivered rate cuts this quarter, resuming their easing cycles following the “heightened uncertainty” earlier this year.

“We expect this dynamic to continue, as relative stability in financial markets coupled by some breather on trade risks gives a window of opportunity for ASEAN central banks to cut rates further.”

Last month, the Monetary Board slashed benchmark interest rates by 25 bps to bring the policy rate to 5.5%, putting its rate-cut cycle back on track after an unexpected pause in February as officials considered the potential impact of the broad uncertainty brought about by the Trump administration’s shifting trade policies on the Philippine economy.

The BSP has now cut borrowing costs by 100 bps since it began its easing cycle in August last year.

Last week, BSP Governor Eli M. Remolona, Jr. said that the Monetary Board could deliver two more 25-bp cuts this year, with the next reduction on the table as early as next month’s meeting.

The BSP chief said cooling inflation gives them “plenty of room” to ease their policy stance further, although they don’t want to cut “too much” as this could stoke prices anew.

After the June 19 review, the Monetary Board’s remaining meetings are scheduled for August, October and December.

Meanwhile, ING said that the peso may weaken anew in the coming months following its recent surge as market risks due to global trade developments could affect the economy.

“While the Philippines is largely a domestic demand-driven economy, tariffs and the global trade slowdown are likely to impact export growth and BPO (business process outsourcing) business negatively in 2025,” it said.

“Balance of payments (BoP) weakness persisted into the first quarter of 2025. Consequently, we anticipate the PHP to exhibit a mild depreciation bias,” it added. “However, this view could be challenged by potential further dollar weakness and comments from the BSP indicating limited intervention to curb peso strength in such a scenario.”

The central bank earlier said it normally refrains from intervening in the foreign exchange market and only does so in “small amounts” when necessary to curb speculation and keep markets orderly.

The peso has been trading at the PHP 55 level this month due to broad dollar weakness after moving around the PHP 57-PHP 58 range for most of the first quarter as Mr. Trump’s policy announcements following his return to the White House in January roiled global financial markets.

The local unit last week hit near two-year highs as the dollar was under pressure after Moody’s Ratings cut the United States’ triple-A credit rating but has since weakened.

On Thursday, the peso closed at PHP 55.73 against the greenback, down by 25.5 centavos from Wednesday’s finish, after a US court ruling blocking most of Mr. Trump’s “Liberation Day” reciprocal tariffs announced in April lifted the dollar.

Year to date, the peso is still up by PHP 2.115 or 3.8% from its end-2024 close of PHP 57.845. — Luisa Maria Jacinta C. Jocson

The Philippine Economic Zone Authority (PEZA) is hoping to attract more Chinese investments in key sectors, including electronics and automotive, amid increased interest from Beijing.

PEZA Director-General Tereso O. Panga said he is participating in an investment mission in Shenzhen, which will last until Friday.

“They have good reception for the Philippines. In fact, investments from China were bigger compared to Japanese investments for the January-to-April period,” Mr. Panga told BusinessWorld.

Asked what the areas of interest for the mission are, he said, “electronics, electric vehicles, automotive, renewable energy, storage solutions, and textiles, among others.”

As of end-2024, PEZA hosted 118 Chinese locators accounting for over P8 billion in investments and more than 16,000 jobs.

Mr. Panga noted that investments coming from the United States, South Korea, and China have increased in the first few months of 2025 despite lingering geopolitical uncertainties.

In the January-to-April period, PEZA approved PHP 63.523 billion in investment pledges, surging by 112.06% from PHP 29.955 billion in the same period last year.

Most of the investments came from South Korea, the US, and China, which accounted for PHP 10.45 billion, PHP 2.53 billion, and PHP 2.17 billion, respectively.

These brought total investment approvals under the Marcos administration to PHP 574 billion, which are expected to create over 160,000 jobs.

PEZA is also eyeing proclamations of at least 30 new economic zones this year, particularly in Central Luzon, Cebu, and Mindanao.

Investment facilitation

Facilitating investments, improving the business environment, and streamlining government processes will help propel Philippine gross domestic product (GDP) growth to as high as 8-10%, according to the Research, Education, and Institutional Development (REID) Foundation, Inc.

“We can start dreaming of 8% towards the second half of the next administration. But right now, I think we should be happy to increase that by at least 6.5%,” Ronilo M. Balbieran, e-commerce, digitalization, infrastructure, policy, and planning specialist at REID, told reporters on the sidelines of an Anti-Red Tape Authority (ARTA) event on Thursday.

“I believe that we will hit 6.5% growth within the next three years, and hitting 8% will be in the first half of the next administration. But the challenge is to have it consecutively, and I think we can hit that in the second half of the next administration.”

However, this high-growth path can only be achieved if the government is able to “completely, consistently, and systematically” implement its streamlining and digitalization efforts, Mr. Balbieran said.

“If you are able to facilitate the creation of businesses and registration of investments for them to fully realize their investment plans, then actual businesses and jobs will be created and incomes will be earned that will lead to increased consumption,” he said.

“That is what is called the circular flow of income, where you can actually expand the economy because you will have production, employment, and income spending. That is the role of the government: to make sure that the circular flow of income continues to circulate.”

Apart from streamlining processes, he said the government should further push digitalization through the passage of the E-Governance Act.

“First you streamline, and then you digitalize. Because even if you streamline, if you do not digitalize, people will still be going to the government offices,” Mr. Balbieran said.

If the government can deliver interconnected services, including sharing information across agencies, businessmen and potential investors will be able to save time on documentary and other regulatory requirements.

“If that time is saved, it can be refocused on actually creating more ideas for businesses and how to create the next product. It’s a waste if you’re in line at a government agency when you could have just been thinking about team building and strategic planning for the company,” he said.

“That will let them actually create more ideas. Business creation is nothing but creating ideas for what the people need and then producing them so that jobs are created and incomes are made.”

This is essential for the more “sophisticated” sectors like transportation, telecommunications, mining, and energy, he added.

“Those are crucial industries in which, although we have actually made significant progress in streamlining the processes and reducing documentary requirements, I think there is much reform to be made moving forward. We still have a lot to improve.”

ARTA Secretary Ernesto V. Perez said his office is working with the Asian Development Bank in uploading the end-to-end inventory of regulations for renewable energy (RE) and digital connectivity by the second quarter for easier reference for potential investors.

“The cost of doing business in the country is quite high, so by doing this, we will be able to reduce the energy cost by streamlining the permitting process for RE and digital infrastructure projects,” he said.

“This is a policy-based loan arranged by the Department of Finance… We are also working out other sectors like responsible mining, water management, mining, semiconductors, and socialized housing,” he added.

These sector-focused initiatives are on top of the 30,000 regulations that will be uploaded in the Philippine Business Regulation Information System (PBRIS) through their partnership with the University of the Philippines (UP) Office of the National Administrative Register (ONAR), Mr. Perez said.

Government agencies are required to register their regulations with the UP ONAR, which ARTA can tap through the partnership to expedite the process of filling up the PBRIS. – Justine Irish D. Tabile, Reporter

The Anti-Money Laundering Council (AMLC) is pushing amendments to the Anti-Money Laundering Act as part of its next steps to ensure the country stays out of the Financial Action Task Force’s (FATF) “gray list.”

These amendments aim to align the Philippines’ law with international standards, such as the enhanced monitoring of virtual asset service providers (VASP).

“As part of the preparations for the forthcoming mutual evaluation, the AMLC is currently undertaking a review of the Anti-Money Laundering Act of 2001 (AMLA), as amended,” it said in an e-mail to BusinessWorld.

“With the country’s recent exit from the FATF gray list, this initiative is essential in ensuring sustained compliance with international standards and preventing any potential relisting.”

In February, the FATF removed the Philippines from its list of jurisdictions under increased monitoring for “dirty money” after over three years or since June 2021.

The next assessment is slated for 2027, when the FATF will verify if the anti-money laundering measures are being sustained and still in place.

“As part of this initiative, a set of proposed amendments has been formulated to enhance the provisions of the AMLA,” the AMLC said.

The proposed tweaks to the AMLA would “address the technical compliance requirements arising from the updated FATF standards.”

These include the authority to temporarily suspend transactions and the designation of VASP as covered persons under the revised international standards and FATF recommendations, it added.

The FATF said in its latest recommendations that countries must ensure VASPs are regulated for AML/CFT (countering the financing of terrorism) purposes. These providers must also be licensed or registered, as well as subject to effective systems for monitoring.

Virtual assets, also called crypto assets, refer to “any digital representation of value that can be digitally traded, transferred or used for payment.” However, these do not include digital representation of fiat currencies.

“Without proper regulation, virtual assets also risk becoming a safe haven for the financial transactions of criminals and terrorists,” the FATF earlier said.

The proposed amendments also aim to “ensure its continued effectiveness in addressing emerging threats.”

It will also ensure the alignment with international standards on its AML/CFT/CPF (countering proliferation financing) regime, as well as address gaps identified in previous FATF reports.

While AMLC gave no timeline for the proposed amendments to the AMLA, this is likely to be tackled by the 20^th Congress, which will formally open in late July. 

In 2002, the FATF blacklisted the Philippines for having no legal anti-money laundering framework. It was removed from the blacklist a year later after the passage of the AMLA.

The AMLA criminalizes money laundering, relaxes tight bank deposit secrecy laws, imposes requirements to better track transactions, and provides for international cooperation, among others.

Risk assessment

Meanwhile, the AMLC is currently conducting a National Risk Assessment (NRA), with a draft expected to be completed within the year.

“The NRA aims to evaluate potential money laundering threats and vulnerabilities affecting our country,” it said.

“Through the NRA, we will be able to adopt measures to address determined risks. This will ensure the sustainability of our country’s AML/CFT/CPF regime.”

The AMLC said the results of the risk assessment aim to guide government agencies in their preparations for the forthcoming mutual evaluation.

Aside from the ongoing NRA and proposed AMLA amendments, the AMLC said it is working on other initiatives after the Philippines’ exit from the gray list.

“Systems have been institutionalized to prevent another FATF gray-listing,” it said.

Malacañang last year issued an executive order mandating all government offices to adopt the National Anti-Money Laundering, Counter-Terrorism Financing, and Counter-Proliferation Financing Strategy 2023-2027.

“Likewise, the AMLC is consistently coordinating with relevant government agencies to ensure that the improvements made in our AML/CFT/CPF framework are continuously implemented and sustained.”

Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said that even with the gray list exit, money laundering risks still exist.

“The truth is money laundering is alive and well in the Philippines despite our exit from the gray list. It’s also an open secret that banks tolerate it,” he said via Messenger.

Mr. Sta. Ana said that the “shadow economy” in the Philippines accounts for about one-fourth or one-third of gross domestic product (GDP).

“That’s pretty high and that means money laundering is prevalent. I think the most effective solution is to lift the Bank Secrecy Act,” he added.

Earlier data from Moody’s Investors Service showed that from 2018 to 2023, the Philippines was among the top five countries in Southeast Asia with money laundering activity events added over the five-year period. The number of money laundering events added in the Philippines jumped by 45% from 2022 to 2023. – Luisa Maria Jacinta C. Jocson, Senior Reporter

Philippine President Ferdinand R. Marcos, Jr. expressed concern over the impact of the US tariffs on the global economy, warning of possible “shrinkage in economic activity.”

Speaking at a press conference following the 46^th ASEAN Summit in Kuala Lumpur on Tuesday evening, Mr. Marcos said the US tariffs imposed on Association of Southeast Asian Nations (ASEAN) members will have a significant impact on the region’s economies.

“If the tariff regime is unilaterally imposed, there will be a real collapse. It has a global effect, and it is not going to be a good one. There will be, I believe, a shrinkage in economic activity. I hope not. I hope I’m wrong,” he said.

Southeast Asia is bracing for the impact of the US reciprocal tariffs, which have been paused until July. Six ASEAN countries are facing tariffs of 32% to 49%, while the Philippines has been slapped with a 17% tariff, the second lowest in the region.

Even if the tariff is rolled back, Mr. Marcos said there is already a permanent effect on the economy that cannot be undone.

Southeast Asian leaders on Tuesday evening issued a statement expressing “deep concern” over the Trump administration’s tariff policies.

“We express deep concern over the recent announcement by the United States to impose unilateral tariffs and their potential impact on our economies,” according to a statement by the chairman of the ASEAN on Tuesday evening.

“The uncertainties arising from these tariffs and potential retaliation could heighten volatility in both capital flows and exchange rates.”

However, Southeast Asian leaders said they will continue their dialogue with the US, “and commit not to impose any retaliatory measures in response to US tariffs.”

“We also emphasized the urgency of diversifying trade beyond traditional markets,” according to the statement.

Meanwhile, Mr. Marcos said uncertainty remains as countries are awaiting developments in their negotiations with the US.

“We don’t know what will happen between now and July when the 90 days run out,” he said.

Mr. Marcos also called for stronger regional coordination and deeper economic integration within ASEAN.

“If we cannot sell to these markets anymore, then let’s sell to each other’s markets. The best, most solid way forward is to be a reliable partner for each other in ASEAN,” he said.

The Philippine president said he chatted with Chinese Premier Li Qiang during the ASEAN Summit on the issue of US tariffs.

“I asked him, ‘Premier, what do you think?’ He says, “Well, we do not want any of this.” They don’t want this (trade) war. And I said, ‘We’re very worried because China is the biggest economic driver in the region,’” Mr. Marcos said.

The US and China earlier this month agreed to temporarily cut the reciprocal tariffs for 90 days. The US slashed the extra tariffs it imposed on Chinese imports to 30% from 145%, while China’s levies on US imports will be reduced to 10% from 125%.

Negotiations

Meanwhile, Southeast Asian leaders reached an understanding on Tuesday that any bilateral agreements they might strike with the United States on trade tariffs would not harm the economies of fellow members, Malaysia’s premier Anwar Ibrahim said.

Mr. Anwar, the current chair of the ASEAN, said there was consensus during the ASEAN Summit that any deals negotiated with Washington would ensure the interests of the region as a whole were protected.

The ASEAN meeting came at a time of global market volatility and slowing economic growth, and amid uncertainty over a trade war that has ensued since US President Donald J. Trump’s announcement of sweeping “Liberation Day” tariffs.

“While proceeding with bilateral negotiations…, the consensus rose to have some sort of understanding with ASEAN that decisions should not be at the expense of any other country,” said Mr. Anwar, who on Monday said he had written to Mr. Trump requesting an ASEAN-US meeting on the tariffs.

“So, we will have to protect the turf of 650 or 660 million people,” he said of ASEAN.

ASEAN, a region with a combined gross domestic product of more than $3.8 trillion, is in a precarious position in relation to the United States, which is the biggest market for the region’s exports, which are key drivers of its growth.

The 10-member bloc on Tuesday released a five-year strategic plan to better integrate its economies, citing challenges that meant “carrying on business as usual will not suffice.”

Tuesday’s meetings also included an economic gathering of leaders of the ASEAN, Gulf countries and China.

At a dinner event late on Tuesday, China’s Mr. Li urged Gulf and ASEAN countries to remove trade barriers and expand liberalization in the face of rising protectionism and unilateralism.

“We all need to firmly maintain the multilateral trading system with the World Trade Organization as the core and promote the creation of a stable and orderly international market environment,” he said. — CMAH and Reuters

The Department of Tourism (DoT) said on Wednesday that it is seeking to establish the Philippines as a food and gastronomy destination within Southeast Asia.

Tourism Undersecretary Verna C. Buensuceso said at the launch ceremony for the gastronomy tourism roadmap that the program will tout the Philippines’ “culinary diversity and local produce.”

The roadmap includes strategies for creating food-focused tourism experiences to increase awareness of and recognition for Filipino food.

Tourism Secretary Ma. Esperanza Christina Garcia Frasco said the launch marks gastronomy tourism’s formal incorporation in the National Tourism Development Plan (NTDP).

“For the first time, gastronomy has been formally incorporated in the NTDP, not as an afterthought, but as a central pillar of our tourism strategy,” she said.

“It is not a top-down plan; it is a bottom-up strategy created in partnership with the people who know our food best,” she added.

In parallel, the DoT also launched its Market Tourism Product Development Program, which aims to transform public markets into destinations.

“Our markets are not merely venues for commerce and trade; they are our cultural landmarks. In Baguio, our pilot program has proven how a public market can become both a heritage site and an economic engine, and now we are ready to take this nationwide,” Ms. Frasco said. 

She said market tourism as a sub-product of gastronomy tourism took in ideas and contributions of culinary tourism advocates and the academic community.

“We will have market tours, and various places will now have an opportunity to become tourism destinations. We will give out handbooks to our local government units, which will serve as a guide on how to develop their markets into tourism circuits,” she said. — Justine Irish D. Tabile