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Central banks must remain a “stabilizing force” amid uncertainties in the global economy, the Bank for International Settlements (BIS) said.

“The most important task, particularly in these highly uncertain times, is for central banks to be a stabilizing force and maintain or, in some cases, rebuild trust in monetary policymaking,” BIS Deputy Head of the Monetary and Economic Department Frank Smets told BusinessWorld in a virtual interview.

This kind of trust creates positive dynamics, he added, which helps stabilize inflation expectations and maintain price stability.

“What this means for actual actions of central banks will be different across countries,” Mr. Smets said.

“For countries like the Philippines or countries in East Asia that are on the receiving end of the US tariffs, the rise in tariffs is more likely to be a negative demand shock.”

Markets have been rattled these past few months amid the United States’ flip-flopping tariff policies.

US President Donald J. Trump has set a 19% tariff on Philippine goods, which will take effect starting Aug. 7.

Countries like the Philippines could see falling demand for exports, which could lead to disinflationary pressures, particularly from lower commodity prices, Mr. Smets said.

“In those countries, the room for easing monetary policy is probably greater. It’s really a differentiated picture depending on the country.”

The Bangko Sentral ng Pilipinas (BSP) has said the impact of the US tariffs on the Philippines will be “modest” as the country is not a trading economy.

The central bank is currently in the midst of an easing cycle, so far lowering interest rates by a total of 125 basis points (bps) since August last year.

BSP Governor Eli M. Remolona, Jr. has also signaled the possibility of further easing this year despite these tariff policies.

“Whether the country retaliates or not will have an important impact on the likely inflation effects. But the most important thing for central banks is to stay steady and be a force of stability rather than uncertainty,” Mr. Smets said.

“Heightened policy uncertainty and unpredictability, particularly in the US, is putting the soft landing that we had expected until the beginning of this year into jeopardy.”

In its latest Annual Economic Report, BIS said consensus forecasts show global growth at just 2.7% in 2025. This was slightly lower than the above 3% forecast at the beginning of the year, Mr. Smets pointed out.

“A big part of the discussion is what are the effects of this trade policy uncertainty on the global economy,” he said.

“It’s clear that this heightened uncertainty, not only on trade policy, but also on fiscal policy, migration policy, and central bank independence, has affected the growth outlook.”

Central banks must “deal with the immediate fallout while keeping top of mind the deeper, structural weaknesses that threaten the resilience of the global economy,” according to the report.

“Success will depend on maintaining public trust — trust in central banks’ capacity to act and do so in the public interest. Trust in their commitment to low inflation was decisive in quelling pandemic-era inflation.”

“Now, trust in public institutions — including the trust in money — needs to serve as a fixed point for others to rally around.”

System for the future

Meanwhile, the BIS in its report also highlighted the need to build a monetary and financial system for the future.

“We should maintain the benefits of the current system, the two-tiered monetary system that we have, while enabling the new technologies to improve it,” Mr. Smets said.

The BIS proposed a “trilogy” of tokenization, namely, tokenized central bank reserves, tokenized bank deposits and tokenized government bonds, which will all reside on a unified or interoperable ledger.

“Tokenized central bank reserves would ensure what we call the singleness of money, because the settlement at par really happens on the central bank’s balance sheet,” he said.

Bringing commercial bank deposits into tokenization would also help maintain the elasticity of money. “Firms that expected to be hit by the tariffs and therefore anticipated a future need of working capital have increased their credit lines with the banks quite dramatically.”

“A well-working banking system can do that and thereby avoid gridlocks in liquidity. By bringing the commercial bank deposits into this tokenized world, this elasticity would be maintained.”

“Finally, we also suggest that other assets, and particularly government bonds, could be tokenized on the same platform. This would, for example, allow collateral management, including for central bank operations, to be automated on one ledger.”

Mr. Smets also noted Project Nexus, where the BSP is one of the five central bank partners in the region that established the Nexus Scheme Organisation, which will manage the project in its live implementation stage.

“The project aims at enhancing cross-border payments by linking domestic instant payment systems. That’s one example of where central banks get together and try to solve a real issue, which is international payments.”

This would also mark the BIS’ first Innovation Hub project that will be put into live implementation, Mr. Smets added.

The BSP earlier said it is seeking to strengthen collaboration on regional payment connectivity to foster a more inclusive financial ecosystem by enabling fast, seamless, and cheaper cross-border payments across the region.

“On the issue of the future monetary system, central banks must play a catalytic role. They can articulate their vision of the future monetary system to provide a guidepost for all stakeholders,” Mr. Smets added.

Meanwhile, he also noted the importance of developing and deepening local financial markets.

“That remains a priority. Authorities, including in the Philippines, continue to implement reforms to ease market access for borrowers and investors and lower transaction costs. This has resulted in the inclusion of bonds from several Asian economies in global bond indices.”

The Philippine government has been seeking ways to deepen its capital markets. The BSP has been working to enhance the interest rate swap market and the government securities repo market to improve benchmarks for a smoother yield curve.

“Developing the domestic financial system is a step in the right direction, but it’s not a panacea as you also increase the integration with the global investor community and the interconnectedness with global financial conditions,” Mr. Smets said.

“But for the real economy, this is definitely a good development. More generally, the region’s resilience, which has been shown in the response to the pandemic crisis, has been enhanced by reforms made during recent decades.”

These reforms include an increase in banks’ capital and liquidity buffers, implementing adequate loan loss provisions for banks and growing levels of foreign exchange (FX) reserves.

“The high level of FX reserves in Asia has helped resilience in response to some of the stresses. The strengthening of monetary policy frameworks has also helped the effectiveness of the monetary policy response,” he said.

“And then, finally, also the active use of macroprudential measures and capital market liberalization efforts. The theme here is that many of the good reforms that many countries in the region have implemented over the past years continue to be important.” — Luisa Maria Jacinta C. Jocson, Senior Reporter

Subsidies provided to government-owned and -controlled corporations (GOCCs) fell 26.68% from a year earlier in June, the Bureau of the Treasury (BTr) reported.

The BTr said budgetary support to GOCCs was PHP 7.45 billion in June, against P10.16 billion a year earlier.

Month on month, GOCC subsidies fell 5.90% from PHP 7.92 billion in May.

State-owned firms receive monthly subsidies from the National Government to support their daily operations if their revenue is insufficient.

In June, the National Food Authority (NFA) topped the subsidy list with PHP 3.43 billion or 46.07% of the total. It received no subsidies in February and March.

This was followed by the National Irrigation Administration (NIA), which received PHP 2.39 billion.

The Philippine Fisheries Development Authority was granted P268 million in subsidies in June.

State-run firms on the subsidy list included the Philippine Heart Center (PHP 184 million), the Philippine Coconut Authority (PHP 165 million), the National Kidney and Transplant Institute (PHP 124 million), the Philippine Children’s Medical Center (PHP 114 million), and the National Power Corp. (PHP 106 million).

Other GOCCs obtaining subsidies of less than P100 million include the Philippine Rice Research Institute (PHP 96 million), the Subic Bay Metropolitan Authority (PHP 86 million), the National Dairy Authority (PHP 75 million), the Light Rail Transit Authority (PHP 74 million), and the Philippine National Railways (PHP 72 million).

Those receiving less than PHP 50 million were the Lung Center of the Philippines (PHP 49 million), the Development Academy of the Philippines (PHP 40 million), the Cultural Center of the Philippines (PHP 34 million), the Philippine Institute of Traditional and Alternative Health Care (PHP 29 million), the Center for International Trade Expositions and Missions (PHP 20 million), the People’s Television Network, Inc. (PHP 18 million), the Metropolitan Waterworks and Sewerage System (PHP 14 million) and the Sugar Regulatory Administration (PHP 11 million).

Also in this tier were the Aurora Pacific Economic Zone and Freeport Authority (PHP 10 million), the Philippine Institute of Traditional and Alternative Health Care (P8 million), the Southern Philippines Development Authority (PHP 7 million), the Philippine Tax Academy (PHP 5 million), the Philippine Center for Economic Development (P5 million), and the Zamboanga City Special Economic Zone Authority (PHP 4 million).

Receiving no subsidies were the Land Bank of the Philippines, the Small Business Corp., the National Electrification Administration, the National Housing Authority, the Bases Conversion Development Authority, the Intercontinental Broadcasting Corp.-13, the Philippine Crop Insurance Corp., the Power Sector Assets and Liabilities Management Corp., the Tourism Infrastructure & Enterprise Zone Authority and the Tourism Promotions Board.

In the first six months, GOCC subsidies totaled PHP 52.50 billion, down 21.89%.

The NIA was the top recipient during the period with PHP 17.73 billion. This was followed by PSALM (PHP 8 billion) and the NFA (PHP 7.18 billion).

As of July, the Department of Finance had collected PHP 105 billion in GOCC dividends. — Aubrey Rose A. Inosante

The growth in Philippine exports seen in the first half could start slowing down beginning in early August after the 19% US reciprocal tariff took effect, an analyst said.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said there was some frontloading of exports in recent months to avoid the US tariffs.

“But once the US tariffs become effective on Aug. 7, this could slow exports to the US by many countries,” he said via Viber.

Preliminary data from the Philippine Statistics Authority indicate that exports grew 13.2% in the first half to USD 41.24 billion.

Of the total, 16%, or USD 6.598 billion, was accounted for by the US. US shipments rose 13.2% from a year earlier.

In a recent trade forecast, the World Trade Organization (WTO) said that a surge of imports in the US ahead of widely anticipated tariff hikes contributed to the upward revision to the projections for 2025.

Starting Aug. 8, the WTO projects world merchandise trade to grow 0.9% in 2025, up from the -0.2% projected in April.

“Global trade has shown resilience in the face of persistent shocks, including recent tariff hikes. Frontloaded imports and improved macroeconomic conditions have provided a modest lift to the 2025 outlook,” WTO Director-General Ngozi Okonjo-Iweala said.

“However, the full impact of recent tariff measures is still unfolding. The shadow of tariff uncertainty continues to weigh heavily on business confidence, investment, and supply chains. Uncertainty remains one of the most disruptive forces in the global trading environment,” she added.

For next year, the WTO projects a 1.8% increase in world trade.

Despite the temporary boost of frontloading and more favorable global macroeconomic outlook on trade, the WTO still expects recent tariff changes to have an overall negative impact.

“This stems from a combination of factors. On the one hand, the US-China truce and exemptions for motor vehicles are contributing positively,” the WTO said.

“On the other hand, higher ‘reciprocal’ tariff rates introduced on Aug. 7 are expected to weigh increasingly on imports in the United States and depress exports of its trading partners in the second half of 2025 and in 2026,” it added.

Mr. Ricafort said Philippine exports are around three to five times smaller compared to those of other Association of Southeast Asian Nations (ASEAN) countries, insulating it from the tariff impact.

“The Philippine economy is not that export dependent and lately domestically driven, wherein about 70% of the economy was accounted for by consumer spending,” he said.

“The markets are still in a wait-and-see mode if Trump would be willing to compromise and settle for lower negotiated tariffs during the trade negotiations, given the TACO track record in recent months,” he added, referring to the “Trump Always Chickens Out” investment thesis being peddled by market traders.

The TACO thesis holds that Mr. Trump usually issues threats at the start of negotiations, then backs off later.

Despite this, Mr. Ricafort said the Philippines needs to diversify its export markets to other affluent markets.

“It is also better to diversify export winners beyond electronics, like agricultural export winners such as coconut oil, bananas, pineapples, mangoes, other tropical fruits, tuna, other seafood, or marine products,” he added.

Economic affairs officers Rajan Sudesh Ratna and Jing Huang of the UN Economic and Social Commission for Asia and the Pacific (ESCAP) are projecting that the US tariffs will reduce ASEAN exports to the US.

According to their report, “the higher tariffs will reduce China’s competitiveness and prompt global buyers to seek alternative suppliers, both reducing demand and redirecting trade flows.”

However, it said ASEAN countries will benefit from this shift, “gaining market share as trade is diverted away from China.”

“All ASEAN member countries gain purely through trade diversion rather than trade creation, indicating that while overall demand remains unchanged, supply sources are shifting,” it said.

“ASEAN’s ability to absorb trade diverted from China demonstrates the importance of flexible supply chains and open trade policies,” it added.

However, they said ASEAN must explore alternate markets beyond China, as their exports “may face challenges due to increased costs associated with tariffs, especially if their exports are levied duties for China.”

To address these challenges, they recommended that bloc members increase intra-ASEAN trade.

“Strengthening intra-regional trade through harmonization of regulations and reduction of tariffs among member states will create a more robust internal market within ASEAN itself and prevent them from absorbing the external shock emanating from the additional US tariffs,” they said.

They said ASEAN should adopt a collective approach to enhancing bargaining power in negotiations with external partners to reduce reliance on the US market.

They added that “ASEAN can capitalize on the shifting trade dynamics by promoting bilateral and regional economic partnerships with China.”

Another recommendation is for ASEAN to look into market diversification, focusing on countries with which it has free trade agreements (FTAs), and to actively pursue new FTAs.

They also recommended a focus on services trade and the adoption of digital policies.

“With the US reciprocal tariffs imposed across the board on almost all countries with higher duties on China, some of the supply chain linkages of ASEAN members are likely to be disrupted,” they said.

“ASEAN must formulate an alternate export strategy. In this regard, looking at other important markets, focusing on services trade by including it in its FTAs, entering into FTAs with other major trading partners, and discussing how to enhance intra-ASEAN trade are some of the options,” they added. — Justine Irish D. Tabile

The Philippines’ gross international reserves (GIR) slipped in July amid lower gold prices and as the government paid back more of its foreign debt, preliminary data from the central bank showed.

The Bangko Sentral ng Pilipinas (BSP) on Thursday reported that dollar reserves dipped by 0.3% to USD 105.7 billion as of end-July from USD 106 billion as of end-June.

Year on year, the GIR inched down by 1% from USD 106.74 billion.

The central bank said the decline was mainly due to “lower global gold prices and the National Government’s drawdowns on its foreign currency deposits with the BSP to service external debt obligations.”

Ample foreign exchange buffers protect the country from market volatility and ensure that it is capable of paying its debts in the event of an economic downturn.

The central bank said the latest GIR provides “a robust external liquidity buffer.”

The level of dollar reserves as of end-July is enough to cover about 3.4 times the country’s short-term external debt based on residual maturity.

It is also equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income.

“By convention, GIR is viewed to be adequate if it can finance at least three months’ worth of the country’s imports of goods and payments of services and primary income,” the BSP said.

“The latest GIR level ensures availability of foreign exchange to meet balance of payments financing needs, such as for payment of imports and debt service, in extreme conditions when there are no export earnings or foreign loans.”

International reserves are foreign assets of the BSP held mostly as investments in foreign-issued securities, monetary gold, and foreign exchange.

These are supplemented by claims to the International Monetary Fund (IMF) in the form of reserve position in the fund and special drawing rights (SDRs).

The BSP’s foreign exchange holdings plunged by 34.3% to USD 826.3 million as of July from USD 1.26 billion as of end-June. Year on year, it rose by 2.1% from USD 809 million.

The value of the central bank’s gold holdings edged lower by 0.1% to USD 13.78 billion from USD 13.8 billion as of June. On the other hand, it jumped by 33.7% from USD 10.31 billion a year earlier.

At end-July, spot gold was down 1.5% at USD 3,275.92 per ounce. US gold futures settled 0.8% lower at USD 3,352.8, Reuters reported.

Gold tends to perform well during economic uncertainty and a low-interest-rate environment further supports the non-yielding asset.

BSP data showed foreign investments increased by 0.2% to USD 86.42 billion as of July from USD 86.26 billion a month ago. However, it dropped by 5.1% to USD 91.1 billion from the same period in 2024.

The country’s reserve position in the IMF slipped by 0.5% to USD 729 million from USD 732.4 million in the previous month. Year on year, it went up by 1.3% from USD 719.9 million.

SDRs — or the amount which the Philippines can tap from the IMF’s reserve currency basket — was unchanged month on month at USD 3.94 billion.

Meanwhile, net international reserves decreased by 0.3% to USD 105.7 billion as of end-July from USD 106 billion as of end-June.

Net international reserves refer to the difference between the GIR and reserve liabilities, including short-term foreign debt, and credit and loans from the IMF.

“The decline in GIR may be caused by larger debt repayments to address maturing securities and other obligations,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the drop in GIR was also amid the continued “Trump risk factor that led to some market volatility worldwide.”

Markets have been in a wait-and-see mode amid the US’ flip-flopping tariff policies.

In an executive order signed on July 31, US President Donald J. Trump imposed a 19% duty on many goods from five members of the Association of Southeast Asian Nations — the Philippines, Cambodia, Malaysia, Thailand and Indonesia. This was expected to take effect on Thursday (Aug. 7).

Meanwhile, Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said that the dollar reserves could trend lower in the coming months if the BSP intervenes to support the peso.

“If the BSP intervenes to keep the US dollar from breaching P59 and P60, we should see further depletion of our GIR,” he said in a Viber message.

BSP Governor Eli M. Remolona, Jr. told Bloomberg on Tuesday that the central bank is intervening more forcefully during periods of extended peso weakness as part of a new strategy, gradually moving away from day-to-day intervention.

He said the central bank adopted a new formula that determines the magnitude of peso losses that require stronger intervention to curb price pressures, Bloomberg reported.

“They aren’t worried about breaches of these levels though since inflation is pretty low,” Mr. Neri added.

Inflation sharply eased to a near six-year low of 0.9% in July from 1.4% in June and 4.4% a year ago, marking the fifth straight month that it settled below the central bank’s 2-4% target.

For the first seven months of the year, inflation averaged 1.7%, a tad higher than the BSP’s 1.6% forecast for 2025. — Luisa Maria Jacinta C. Jocson

Agricultural output expanded by an annual 5.7% in the second quarter — the fastest pace in eight years — as better weather conditions enabled high-value crops such as rice and corn to post double-digit growth, the Philippine Statistics Authority (PSA) said on Wednesday.

Data from the PSA showed the value of production in agriculture and fisheries at constant 2018 prices increased by 5.7% to PHP 437.53 billion in the April-to-June period, faster than the 2% growth in the first quarter.

This was a reversal of the 3.2% contraction in the second quarter of 2024 when the agriculture sector was affected by drought and dry spells caused by the El Niño weather phenomenon.

This was also the fastest growth in agricultural output since 6.4% in the second quarter of 2017.

“Crops and poultry recorded expansions in the value of production, while livestock and fisheries registered declines during the period,” the PSA said.

At current prices, the value of production in agriculture and fisheries rose to PHP 606.794 billion.

For the first half, the value of farm output expanded by 3.8% to PHP 875.56 billion, a reversal of the 1.5% decline a year earlier.

“We know that we still have to do a lot more to realize the vision of President Ferdinand R. Marcos, Jr. for a modern agricultural sector, where farmers and fisherfolk reap the full benefits of their hard work. But this result — and that of the first quarter — are a clear indication that we are on the right track,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. said in a statement.

Agriculture accounts for about a tenth of gross domestic product (GDP) and about a quarter of all jobs. The PSA will release second-quarter GDP data today (Aug. 7).

Crop output, which accounted for 56% of total agricultural production, rose by 11.3% to P244.9 billion in the second quarter. Palay and corn posted double-digit growth of 13.9% and 27.3%, respectively.

“Palay and corn and poultry are expected to rebound because of good weather and high prices,” former Agriculture Undersecretary Fermin D. Adriano said in a Viber message.

Other crops that saw double-digit expansion include sugarcane (341%), onion (77.5%), coffee (14.5%), cabbage (11.7%) and cacao (11.4%).

On the other hand, declines were seen in the value of production of abaca (18.2%), tomato (16%), mongo (13.6%), mango (8.6%), sweet potato (8%), potato (5.5%), banana (2.6%), and pineapple (1.1%).

Raul Q. Montemayor of the Federation of Free Farmers said better performance of the agriculture sector this year was expected since 2024 was an “abnormal year” due to the El Niño weather phenomenon.

For the first half, crop output grew by 5.9% to PHP 494.5 billion, reversing the 4.4% contraction last year.

At the same time, poultry, which made up 17.2% of total farm output, went up by 7% to PHP 75.07 billion in the second quarter. However, this was slower than 9.8% in the first quarter, and 8.7% in the second quarter of 2024.

The value of production for chicken grew by 8.2%, while chicken eggs rose by 4.8%. However, duck production fell by 1.1%, while duck eggs dipped by 0.7%.

For the first six months of the year, poultry production jumped by 8.4% to PHP 150.57 billion. This was an improvement from the 7.3% growth in the same period in 2024.

Livestock, fisheries

Meanwhile, the value of production for livestock declined by 5.9% to PHP 59.6 billion in the April-to-June period, worsening from the 0.3% drop in the same quarter a year ago and the 2.8% decline in the first quarter. Livestock accounted for 13.6% of total agricultural output.

In the second quarter, hog output contracted by 7.5%, while carabao production also fell by 2.9%.

On the other hand, dairy production grew by 9.6%, while cattle and goat rose by 2% and 1.3%, respectively.

For the first six months, the value of livestock production declined by 4.4% to PHP 117.43 billion, worse than the 1.9% drop in the same period a year ago.

On the other hand, the value of fishery output declined by 4.2% to P57.96 billion in the second quarter, reversing the 2.4% growth in the same quarter in 2024 and the 1.5% growth in the first quarter.

Fisheries accounted for 13.2% of total farm output.

Double-digit declines were seen for skipjack (35.6%), bigeye tuna (28.8%), P. Vannamei (22.4%), bluecrab or alimasag (19.6%), Bali sardinella or tamban (15%), mudcrab or alimango (11.9%), fimbriated sardines (11.2%), and roundscad or galunggong (10.4%).

Higher production was seen for grouper or lapu-lapu (25.6%), Indian mackerel or alumahan (20.7%), slipmouth or sapsap (17.9%), yellowfin tuna or tambakol (12.5%), threadfin bream or bisugo (12.1%), and big-eyed scad or matangbaka (9.1%).

Seaweed production grew by 6.1% in the April-to-June period.

In the January-to-June period, the value of fishery output slid by 1.5% to PHP 113.05 billion, reversing the 1.1% growth a year ago.

Analysts said the agricultural and fishery production in the third quarter would likely post a contraction due to the heavy rains that caused floods around the country.

“The prospects for the third quarter are very challenging due to the presence and impact of extreme weather events like typhoons, flooding and soil erosion,” former Agriculture Secretary William Dar said in a Viber message.

The Department of Agriculture (DA) said in late July the agricultural damage due to monsoon rains and recent tropical storms reached PHP 3 billion, affecting 93,070 farmers and fishers.

“The government must continue to make the needed investments to make the agriculture sector more climate resilient,” Mr. Dar said.

Mr. Adriano expects palay production to decline in the third quarter.

“Corn will contract as it is the rainy season, and corn does not like too much water,” he said.

Mr. Adriano said livestock production will continue its “lackadaisical” performance due to the African Swine Fever (ASF).

The Food and Drug Administration has yet to approve a Vietnamese vaccine against ASF for commercial rollout.

“Poultry is expected to grow unless hit by bird flu because of higher demand as it is the cheapest source of protein particularly for the poor,” Mr. Adriano said.

“As for fishery, performance will depend on whether we will be hit by destructive typhoons or not,” he added. — KATA

President Ferdinand R. Marcos, Jr. has ordered a 60-day suspension of rice imports starting Sept. 1, in a move aimed at protecting Filipino farmers affected by low rough rice prices during the harvest season.

The President acted on the recommendation of the Department of Agriculture (DA) after consultations with his Cabinet while on a five-day state visit to India, acting Presidential Communications Secretary Dave M. Gomez told reporters on Wednesday.

“[The move is] to protect local farmers reeling from low palay prices during this current harvest season,” he said.

Mr. Gomez said there are no plans to act on the DA’s recommendation to hike the rice tariff to 25% from the current 15%.

“We will still see if we need to resort to that. Right now, the decision is to suspend all rice importation for 60 days beginning Sept. 1,” he added.

The Philippines is the world’s biggest rice importer, having brought in 2.44 million metric tons (MT) as of end-July, based on Bureau of Plant Industry data. The country imported 4.7 million MT last year and is projected to exceed that volume this year. 

In June, Agriculture Secretary Francisco P. Tiu Laurel, Jr., told the House of Representatives he had recommended gradually restoring the rice import tariff to its original 35% rate from 15%, which was set under Executive Order (EO) No. 62 signed by Mr. Marcos in June 2024.

The 35% rate, valid until 2028, is subject to review every four months.

The debate comes as Philippine inflation slowed to 0.9% in July, the lowest since October 2019, according to data released on Tuesday by the Philippine Statistics Authority.

Food prices dropped, including a 15.9% year-on-year decrease in rice prices, helping ease overall price pressures.

“The suspension is a more calibrated action — one that we can quickly reverse if needed… It gives us the flexibility to act fast to protect both our farmers and our consumers. A premature tariff hike, on the other hand, could backfire and would take much longer to undo,” Mr. Tiu Laurel said in a separate statement.

He said the two-month pause on rice imports would allow the DA to assess the impact on palay prices and the market.

“If this strategy leads to higher farmgate prices and better income for our farmers, we may no longer need to raise the tariff,” he said.

Former Agriculture Secretary William D. Dar said the temporary suspension of rice imports is expected to benefit Filipino farmers by allowing them to secure better prices during the harvest season.

Since imported rice typically arrives 60 days after ordering, the timing supports the local market without disrupting supply, he added.

“The 60-day suspension is good enough to achieve meaningful impact on our rice industry and market,” Mr. Dar said via Viber.

“Inflation will be at very low levels, [and] we are also able to manage enough supply,” he added. “It will always be necessary to pursue a balanced strategy for a win-win arrangement — the farmers getting [a] fair price [for] their produce and the consuming public for a fair price as well.”

Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet said the 60-day halt on rice imports offers little real benefit to Filipino farmers, as rice tariffs remain at 15% and unmilled rice prices are expected to stay low.

He argued that EO 62 failed to protect local producers or stabilize the market, with importers able to time shipments around the suspension. With warehouses already full, there is no urgent need for new imports.

“Given these realities, the most effective and urgent course of action is to revert rice import tariffs to their previous levels: 35% for Association of Southeast Asian Nations (ASEAN) imports [and] 50% for non-ASEAN imports,” Mr. Cainglet said via Viber.

Fermin D. Adriano, a former undersecretary at the DA, called the initiative a “political move.”

“If I am [a] trader, having huge stocks in my warehouses, I will just wait for the two months to lapse before I resume importation,” he said via Viber.

“It takes around two months for [negotiations] with Vietnamese sellers and [the] actual arrival of rice imports. This is obviously just a political move.” — Chloe Mari A. Hufana, Reporter