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The Philippine economy likely cooled in the third quarter as soft government spending, typhoons and corruption scandals weighed on growth momentum, economists said.

However, resilient household spending supported by the central bank’s rate cuts may have helped anchor economic activity, they added.

Philippine gross domestic product (GDP) likely grew by 5.3% in the third quarter, based on a median forecast of 18 economists and analysts polled by BusinessWorld.

This is slower than the 5.5% expansion in the second quarter, but a tad faster than the 5.2% expansion in the July-to-September period of 2024.

If realized, this would bring the average GDP growth to 5.4%, falling short of the government’s 5.5%-6.5% full-year target.

The Philippine Statistics Authority is scheduled to release third-quarter GDP data on Nov. 7.

In a research note, Chinabank Research said that government consumption may have declined due to the timing of disbursements and slower releases for some programs.

“Capital formation was likely weighed down by reduced public infrastructure spending due to the ongoing probe on infrastructure projects,” it said.

HSBC Global Investment Research economist for the Association of Southeast Asian Nations Aris D. Dacanay said that since public construction usually represents 5-6% of GDP, the 20% year-on-year drop in public infrastructure spending in July and August may have cut GDP growth by around one percentage point.

Public spending or government final consumption expenditure accounts for almost 18% of the country’s GDP.

Angelo B. Taningco, vice-president and Research Division head at Security Bank Corp., said sluggish capital formation and weak government spending may have dampened growth in the third quarter.

“[This is] hampered by tepid public infrastructure works tainted by corruption in flood control projects,” he said in an e-mail.

Data from the Bureau of the Treasury also showed the National Government disbursed PHP 1.46 trillion in the third quarter, PHP 141.73 billion less than its PHP 1.6-trillion program for the period. This is mainly due to lower spending by the Department of Public Works and Highways, which is at the center of a corruption scandal involving flood control projects.

Ser Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said the corruption scandal involving infrastructure projects was the greatest domestic risk in the third quarter.

“Investor confidence has been shaken. Foreign investors are pulling back…, the scandal has created a toxic mix of political risk, fiscal uncertainty, and social unrest. It threatens our investment-grade rating and undermines our medium-term fiscal framework,” he said in an e-mail.

Mr. Peña-Reyes also noted that in the third quarter, the peso weakened past the PHP 58-per-dollar mark, and the Philippine Stock Exchange index (PSEi) fell below the 6,000 psychological support level, reflecting political instability and capital flight.

Bad weather

Several typhoons may have also dragged economic activity during the period, analysts said.

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. estimated GDP growth at 4.9%, largely due to the series of typhoons and disasters combined with significant decline in infrastructure spending.

In the third quarter, a total of 14 tropical cyclones formed or entered the Philippine Area of Responsibility as reported by the Philippine Atmospheric, Geophysical and Astronomical Services Administration.

According to the National Disaster Risk Reduction and Management Council, Typhoon Bising and the southwest monsoon caused P12 million in infrastructure damage in July. By August, the combined effects of the monsoon and tropical cyclones Crising, Dante, and Emong resulted in over P21 billion in agricultural and infrastructure losses nationwide.

“Furthermore, agricultural output also declined due to the typhoons. This may have also tempered household spending due to limited movement,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in an e-mail.

The agriculture sector accounts for about a tenth of the country’s GDP and provides about a quarter of all jobs. Third-quarter agricultural output data will be released on Nov. 6.

Household consumption

Maybank Investment Bank economist Azril Rosli said that sustained private consumption continues to anchor economic activity, supported by the Bangko Sentral ng Pilipinas’ (BSP) rate cuts.

“The BSP’s monetary easing cycle, which began in mid-2024, is providing gradual relief to households and businesses, helping to sustain domestic demand momentum,” Mr. Rosli said.

He added that private consumption remains fundamentally sound, underpinned by steady wage growth and a relatively resilient labor market condition.

Household final consumption expenditure, which accounts for 68% of the economy, rose by 5.5% in the second quarter, faster than 4.8% in the same period last year.

The BSP has now slashed borrowing costs by a cumulative 175 basis points since it began its rate cut cycle in August 2024. This brought the policy rate to 4.75%, the lowest in over three years.

BSP Governor Eli M. Remolona, Jr. also signaled another rate cut is on the table at its next policy meeting in December.

Meanwhile, Moody’s Analytics economist Sarah Tan expects the economy to grow by 5.9%, faster than 5.5% in the previous quarter.

“The improvement reflects stronger household spending as monetary policy easing feeds through to lower borrowing costs and improved credit conditions,” she said in an e-mail.

She added that “softer inflation has improved households’ purchasing power and given the central bank space to maintain an accommodative stance.”

In September, inflation quickened to a six-month high of 1.7% in September from 1.5% in August. In the nine-month period, inflation averaged 1.7%, lower than the 3.4% in the same period in 2024.

For Nicholas Antonio T. Mapa, chief economist at the Metropolitan Bank & Trust Co., household consumption will likely deliver a sizable contribution to growth although the pace of expansion may be similar to the previous quarter.

“Despite slower inflation; price levels remain elevated while households rely more on credit,” he said in a Viber message.

Chinabank Research noted that household consumption remained the key driver of GDP growth, supported by low inflation.

“Additionally, the trade deficit narrowed during the quarter, helped by front-loading by US importers early in the period and resilient demand for semiconductors,” it added.

Moody Analytics’ Ms. Tan also noted that on the external side, exports have held up relatively well through July and August, which should support overall trade performance in the third quarter.

However, Mr. Erece said export growth may have slowed as front-loading tapered off with the 19% US tariff on Philippine goods taking effect on Aug. 7.

Outlook

Meanwhile, economists expect Philippine GDP growth to accelerate in the remaining months of 2025.

“We expect growth to average 5.6% for the full year of 2025, settling within the government’s revised growth target range of 5.5% to 6.5%,” Moody’s Analytics’ Ms. Tan said.

She added that monetary easing, a strong labor market, and steady remittances will help sustain growth.

“These factors will sustain consumption, while external trade, on average across the year, should continue to contribute positively despite a softer global backdrop,” she said.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said that modest improvement is expected in the fourth quarter as fiscal spending catches up and monetary easing gains traction.

For Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, “there should be something of a bounce in the fourth quarter.”

“For the most part, we’re sticking to our below-consensus view that 2025 full-year growth will come in at 5.3%, well below the government’s aspirations.”

Mr. Erece said that apart from tighter public spending, the recent corruption scandal may have negatively affected foreign investments, given its impact on trust.

Still, he expects holiday spending to drive fourth-quarter GDP growth.

“However, global trade jitters and public spending scrutiny may continue to drag down growth,” he said.

Maybank’s Mr. Rosli said he expects growth to remain solid at 5.5-5.9% in the fourth quarter, driven by year-end spending from both the government and private sector. The full impact of BSP’s monetary easing is also likely to support consumption and revive investment.

“Overall, our full-year 2025 GDP forecast of 5.6% represents solid and sustainable growth, underpinned by the economy’s fundamental strengths,” Mr. Rosli said. — Heather Caitlin P. Mañago

Philippine manufacturing activity rebounded in October, despite a further drop in new orders and output, according to S&P Global.

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) improved to 50.1 in October, a turnaround from 49.9 in September.

A PMI reading above 50 denotes better operating conditions from the preceding month, while a reading below 50 shows a deterioration in operating conditions.

S&P Global noted that the latest PMI reading indicates “broadly stable” operating conditions.

Maryam Baluch, economist at S&P Global Market Intelligence, said the Philippine PMI reading in October reveals a “mixed picture.”

“The two largest segments, new orders and output, indicated further declines. Additionally, fresh contractions were observed in new export orders and purchasing activity, highlighting underlying demand conditions,” she said.

S&P Global noted that output and new orders “have now failed to record any growth for a second consecutive month, a trend not seen in over four years.”

“The decline in output was closely associated with falling new orders, which panelists linked to adverse weather conditions and the end-of-life status for certain products,” it said, adding that the pace of contraction slowed month on month.

S&P Global said new factory orders “fell at a stronger rate” in October, amid a “sluggish demand climate, with clients often putting orders on hold.”

“In addition, new export orders fell for the first time since May and at a solid pace which was the most pronounced for a year. Companies reported weaker demand from international clients,” it added.

S&P Global said the sharp drop in new orders led manufacturing firms to scale back their purchasing activity. This was the first decline in purchasing activity in nearly two years.

“However, according to anecdotal evidence, last-minute cancellations of orders meant that both pre- and post-production inventories recorded marginal increases. The latter registered a fresh uptick, marking the first expansion in three months,” it said.

Delivery times for inputs also lengthened in October, it said.

S&P Global said October marked a “further alleviation of underlying cost pressures.”

“The rate of input price inflation was modest and the weakest in three months. However, where goods producers reported higher prices, this was attributed to rising supplier and material costs,” it said.

Ms. Baluch said Filipino manufacturers also offered discounts in October to stimulate demand in a subdued market.

“Charges levied for Filipino manufactured goods fell for the first time in 19 months. The rate of decrease was marginal but the strongest since April 2020,” S&P Global said.

Business confidence also improved, nearing August levels, as manufacturers anticipated stronger output and strengthening demand trends” over the next 12 months.

“On a more positive note, manufacturers grew more optimistic about their growth prospects for output in the coming year. Companies also continued increasing their workforce numbers, with the latest rise in staffing numbers the strongest in three months,” Ms. Baluch said.

Ms. Baluch said the manufacturing sector remained in sluggish territory for most of the second half.

“Whether it can see a notable recovery in performance in the coming months will depend greatly on efforts to stimulate consumer demand,” she said.

S&P Global Marketing Intelligence Economics Associate Director Jingyu Pan said Philippine factory output in October showed that conditions are stabilizing.

“We have the output index falling at a less pronounced, in fact, very marginal pace. I think that’s a positive sign,” she said in an interview on Money Talks with Cathy Yang on One News on Monday.

However, Ms. Pan partly attributed the decline in output to a series of earthquakes in Cebu, a key electronics manufacturing hub, which damaged some business facilities.

Global trade tensions are expected to weigh on new export orders, with subdued demand already seen in October.

“I think, reflecting the kind of worries we had in terms of trade tensions coming through to actually impact the manufacturing economy in a more pronounced phase, especially now that as we enter the final quarter of the year with the tariffs settled in. I think that is something that we have to watch,” she said.

The US implemented the 19% tariff on Philippine-made goods on Aug. 7.

Better weather conditions may have also helped lift the Philippine manufacturing activity in October.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said factory activity shifted to expansion mode partly due to better weather conditions followed by two months of adverse weather and earthquake disruptions.

“(This is) also partly due to the positive effects of the local policy rate cuts that reduced borrowing costs for some local manufacturers,” he said in a Viber message.

In the coming months, Mr. Ricafort warned that political noise could dampen manufacturing activity, especially among firms linked to infrastructure supply chains. — Aubrey Rose A. Inosante, Reporter

The Philippines’ industry sector — including manufacturing and construction — may have slumped to its lowest level in recent years, dragging third-quarter economic growth, Economy Secretary Arsenio M. Balisacan said.

“I am not as optimistic (on growth) as I used to, given what the data that have been coming out in recent weeks, and particularly the performance of our industry,” he told reporters on the sidelines of an event on Monday.

“The industry is probably at its lowest point in recent years.”

He did not provide details on the gross domestic product (GDP)  data, which will be released by the Philippine Statistics Authority on Nov. 7.

Mr. Balisacan said the corruption scandal, weather-related disruptions and mounting global uncertainties may have weighed on GDP growth in the third quarter.

He said there was a slowdown in government spending and fixed-capital formation, as well as other areas like industry and services.

A crackdown on anomalous flood control projects alongside a corruption probe may have affected government disbursements.

The Marcos administration only disbursed P1.46 trillion in the third quarter, data from the Bureau of the Treasury showed, PHP 141.73 billion less than its PHP 1.6-trillion program for the period. This is mainly due to lower spending by the Department of Public Works and Highways, which is at the center of a corruption scandal involving flood control projects.

Mr. Balisacan also noted that adverse weather conditions that led to the suspension of work and classes may have contributed to slower growth in the July-to-September period.

However, he expects the impact on growth to be temporary, with a recovery likely in the next few quarters.

In the first six months of 2025, the economy grew by an average of 5.4%. The government is targeting 5.5-6.5% GDP growth this year.

“Our economic fundamentals have remained strong. The potentials have remained strong, our GDP growth potential is quite high, 6% and above. But reaching those potentials is another matter, and those are affected by instability, uncertainty, and we’ll see,” he said.

The country’s GDP likely grew by 5.3% in the third quarter, based on a median forecast of 18 economists and analysts polled by BusinessWorld. This is slower than the 5.5% expansion in the second quarter, but a tad faster than the 5.2% expansion in the July-to-September period of 2024.

Rice tariff review

Meanwhile, Mr. Balisacan said the Economic Development Council is scheduled to convene on Tuesday to tackle the proposal to raise rice tariffs to 35% from the current 15%.

The Department of Trade and Industry will present its recommendation on rice tariff adjustments during the meeting. This recommendation was endorsed to the Council by the Tariff-Related Matters Committee.

The Department Agriculture earlier recommended raising the rice import tariff to its original 35% rate from the current 15%.

Philippine President Ferdinand R. Marcos, Jr. on Sunday approved the extension of the country’s rice import ban until yearend.

Sought for comment, Mr. Balisacan said the government has “good enough supply” of rice to temper increases in retail prices.

“The overall goal of that is to protect farmgate prices from further falling, because in the past almost a year now, farmgate prices have dropped by more than 30%,” he said.

Farmer groups have blamed the current 15% tariff for keeping farmgate prices low by encouraging cheaper imports, undermining local producers.

However, Mr. Balisacan warned that tweaking the rice import tariff alone won’t fix the farmers’ problems.

“You have to use a combination of policy tools to address those problems, and that’s what we are going to present tomorrow,” he said noting that this approach will ensure the market will support medium-term and long-term development efforts.

Samahang Industriya ng Agrikultura spokesman Jayson H. Cainglet argued that the rice tariff cut to 15% has failed to benefit consumers, with importers and traders instead pocketing the savings.

He noted that palay production cost is P14.61 per kilo, but palay is only being bought at P8-12 per kilo, he told BusinessWorld in a Viber message on Monday.

He also noted that the reduced tariff has resulted in P25-billion foregone revenues from the imported rice as of end-August.

Separately, Mr. Balisacan led the opening of the Presidential Filipinnovation Awards that will select five winners out of 15 finalists which receive a cash grant and post-competition support package worth up to P3.5 million, including coaching and mentoring.

“Our goal here is that we can mainstream innovation in the private sector, that we can increase the success rate of our innovators,” he said during a briefing in Crowne Plaza Manila Galleria.

Economy Undersecretary Rosemarie G. Edillon said the government is targeting to raise the Philippines’ rank in the Global Innovation Index (GII) by 2028. The Philippines is currently at 50^th place out of 139 economies in the 2025 GII. — Aubrey Rose A. Inosante

Philippine inflation may have slightly accelerated in October amid elevated prices of food, fuel and electricity as well as a weak peso, analysts said.

A BusinessWorld poll of 17 analysts yielded a median estimate of 1.8% for the consumer price index in October. If realized, October inflation would have slightly picked up from the 1.7% clip in September but slowed from the 2.3% seen in the same month last year.

The median estimate also falls within the Bangko Sentral ng Pilipinas’ (BSP) 1.4-2.2% forecast for October.

It may also be the fastest clip in eight months or since the 2.1% in February and would match the 1.8% in March.

October could likewise mark the eighth month in a row that inflation undershot the BSP’s 2-4% target.

The Philippine Statistics Authority is set to release the October inflation data on Nov. 5.

Aris D. Dacanay, economist for the Association of Southeast Asian Nations at HSBC Global Investment Research, said inflation likely settled at 1.8% in October as prices of vegetables rose following typhoons.

“Electricity prices also increased as the depreciation of the peso over the US dollar led to higher generation charges,” he added.

The Manila Electric Co. hiked the overall electricity rate by PHP 0.2331 per kilowatt-hour (kWh) to PHP 13.3182 per kWh in October. 

Moody’s Analytics economist Sarah Tan said increased transport and fuel prices may have also contributed to faster inflation in October.

“Higher transport and fuel costs, together with weather-related disruptions affecting some food items, are putting mild upward pressure on prices,” she said in an e-mail.

In October, pump price adjustments stood at a net increase of PHP 1.80 a liter for gasoline, PHP 2.10 per liter for diesel and PHP 1.10 per liter for kerosene.

“Fuel prices also remained stable; global oil prices cooled in October, offsetting any inflationary impact brought by a weaker peso,” Mr. Dacanay said.

In October, the peso performed weaker against the greenback at PHP 58.850 per dollar, slipping by 65.4 centavos from its PHP 58.196 finish at end-September. The peso also hit a new all-time low of PHP 59.13 versus the greenback on Oct. 28.

“Downside price pressures also persisted (in October), the biggest coolant being rice. The price of regular milled rice in Metro Manila remained stable at PHP 39.4 a kilogram despite the ongoing import ban on the grain,” Mr. Dacanay said.

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said lower prices of meat, fruit and oil could have also prevented further acceleration of inflation.

“Going forward, upside risks to inflation are building as favorable rice base effects fade and the extension of the rice import suspension through yearend adds further pressure,” Mr. Neri said.

President Ferdinand R. Marcos, Jr. had earlier ordered a 60-day suspension of rice imports starting Sept. 1 to support Filipino farmers during harvest season and to stabilize rice prices.

The suspension was originally supposed to end on Nov. 2 but is now expected to be extended until end-2025. The ban applies only to imports of regular milled and well-milled rice.

Sticky core inflation

Meanwhile, core inflation is expected to remain “sticky,” analysts said.

“That is partly driven by firm inflation expectations and recent wage increases. Further, the peso has weakened broadly since June, feeding through to services and other core components as firms adjust prices to reflect higher costs,” Ms. Tan said.

Core inflation, which excludes volatile prices of food and fuel, slowed to 2.6% in September from 2.7% in August. It averaged 2.4% in the nine-month period, easing from 3.1% in the same period a year ago.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said in an e-mail that he expects core inflation to remain near that level in October.

“This stickiness suggests underlying demand-side pressures and second-round effects (e.g., wage adjustments, service costs) are persisting despite low headline inflation. It signals that disinflation is largely driven by volatile items, while structural price components remain firm,” Mr. Asuncion said.

Security Bank Chief Economist Angelo B. Taningco said in an e-mail that core inflation will likely remain elevated in the coming months amid holiday-driven spending.

Meanwhile, Maybank Investment Bank economist Azril Rosli said core inflation may settle between 2.5% and 3% until December.

“(This is due to) holiday season labor market tightening, annual rent adjustment cycles incorporating (year-to-date) inflation expectations, utility cost pass-through to business operating expenses, school year 2025-2026 tuition adjustments continuing to flow through, healthcare cost pressures from pharmaceutical imports affected by peso weakness, and the BSP’s expected continuation of supportive monetary policy,” he said in an e-mailed note.

Below 2% inflation

Despite emerging risks, analysts still expect full-year inflation to settle below the 2-4% target band of the central bank.

“Looking ahead, inflation is expected to remain manageable, averaging below the BSP’s 2-4% target this year and hovering around the midpoint of the target range next year,” Chinabank Research said in an e-mail.

If the 1.8% median estimate materializes, headline inflation would average 1.7% in the 10-month period, matching the BSP’s goal for the year.

For 2026, the central bank sees inflation accelerating to 3.1%, before slowing to 2.8% in 2027.

“Even with slight upticks in Q4, full-year inflation will likely stay below the BSP’s 2-4% target range, thanks to benign global commodity prices, improved domestic food supply, and policy support and subdued demand conditions,” Mr. Asuncion said.

This expectation gives the central bank room to continue its accommodative monetary policy until yearend and potentially in 2026, analysts said.

“We don’t expect the central bank to deviate much from their planned monetary policy easing path, especially if economic growth remains muted,” Reinielle Matt M. Erece, economist at Oikonomia Advisory & Research, Inc., said in a Viber message.

Last month the Monetary Board cut its benchmark policy rate by 25 basis points (bps) to 4.75%, the lowest in over three years. This brought its cumulative reductions to 175 bps since it began its easing cycle in August 2024.

BSP Governor Eli M. Remolona, Jr. has penciled in another 25-bp cut at the Monetary Board’s last meeting this year on Dec. 11 and potentially more in 2026 as they seek to support the economy amid weak business sentiment due to the flood control scandal.

“Looking beyond December, the BSP could still deliver up to two additional cuts in 1H 2026 if growth continues to run below potential,” BPI’s Mr. Neri said. “The central bank may also align its policy path with that of the Federal Reserve, particularly if markets begin to price in aggressive US rate cuts after Chairman Powell’s term ends in May 2026.”

Last week, the Fed delivered its second 25-bp cut this year, bringing its interest rate to the 3.75-4% range. This brought its cumulative cuts since September 2024 to 150 bps.

However, Fed Chair Jerome H. Powell signaled a pause at their next rate-setting meeting this year, citing risks from the unavailability of economic data due to the ongoing US government shutdown. — Katherine K. Chan

Government underspending in the third quarter, mainly due to a corruption crackdown that curbed public disbursements, is expected to temporarily dent economic growth this year, Finance Secretary Ralph G. Recto said.

“This (underspending in the third quarter) is expected to temporarily weigh on government final consumption expenditure and the overall GDP (gross domestic product) growth,” he told BusinessWorld in a Viber message on Oct. 31.

The Marcos administration only disbursed PHP 1.46 trillion in the third quarter, data from the Bureau of the Treasury showed, PHP 141.73 billion less than its PHP 1.6-trillion program for the period. This is mainly due to lower spending by the Department of Public Works and Highways, which is at the center of a corruption scandal involving flood control projects.

“Nevertheless, the government’s swift and decisive action following the recent flood control controversy marks the beginning of a major government cleanup that will lead to stronger institutions, better governance, and faster growth in the medium term,” Mr. Recto said.

President Ferdinand R. Marcos, Jr. had flagged anomalous flood control projects during his State of the Nation Address in late July. This sparked several investigations into alleged corruption involving lawmakers, government officials, and private contractors.

“The controversy has also revealed that not all capital expenditures translate into growth. And now that we’re plugging those leaks and reallocating funds to high-impact investments — such as education, healthcare, agriculture, and digitalization — we will only grow faster,” Mr. Recto said.

As of end-September, the National Government has released PHP 4.48 trillion, equivalent to 73.72% of its PHP 6.08-trillion full-year disbursement program for 2025.

Economic managers, including Mr. Recto, earlier warned that gross domestic product (GDP) growth likely softened in the third quarter. The government is targeting 5.5-6.5% GDP growth this year.

Official GDP data will be released by the Philippine Statistics Authority on Nov. 7.

Mr. Recto also vowed that “catch-up measures” are underway to keep spending on track and fuel growth.

“Although there has been a slowdown in government spending as we continue to address the flood control corruption controversy, this reflects the administration’s commitment to spend only on legitimate programs and projects,” he said.

He noted the “short-term adjustment” will pave the way for more efficient and transparent public expenditures in the future.

“Having identified and removed anomalous projects, we are ensuring that taxpayers’ money goes to genuine initiatives, eliminating waste and paying only for the true cost of government programs,” Mr. Recto said, adding the President has directed government agencies to cut costs by 50%.

Economy Secretary Arsenio M. Balisacan and Budget Secretary and Development Budget Coordination Committee Chairperson Amenah F. Pangandaman has earlier said the 5.5% to 6.5% GDP growth target remains achievable.

However, some economists have lowered their growth forecast for the Philippines, citing the corruption probe that led to lower investor sentiment.

Last week, Nomura Global Markets Research slashed its 2025 growth forecast for the Philippines to 4.7% from 5.3%, noting the mounting downside risks from a corruption scandal tied to flood control projects.

Sought for comment, Mr. Recto said Nomura’s downgrade is “overly conservative.”

“To reach a 4.7% GDP for 2025, this means the economy will grow by just 4% in the second half of the year. This fails to account for progress made in terms of lower inflation and improvements in the labor market, which will boost household spending, recovery in the agriculture sector, continued growth in services, and stronger performance of merchandise exports despite higher US tariffs,” he said.

Meanwhile, Mr. Recto said the Department of Finance (DoF) is regularly assessing the performance of revenue-collecting agencies as revenues are expected to be affected by the corruption scandal.

“The DoF… is open to making the necessary adjustments, when necessary,” he said. “Nevertheless, the economic managers remain committed to fiscal consolidation by closely monitoring the latest developments internally and externally to ensure we attain the set deficit targets.” — Aubrey Rose A. Inosante, Reporter

Philippine President Ferdinand R. Marcos, Jr. approved the extension of the country’s rice import ban until yearend to help stabilize farmgate prices for unmilled rice, Agriculture Secretary Francisco P. Tiu Laurel, Jr. said on Sunday.

An executive order formalizing the decision would be issued on Nov. 3, Mr. Laurel said in a statement.

“With the import ban having little impact on retail prices and supply of rice but a significant effect on the farmgate price of palay, President Marcos deemed it necessary to extend the suspension for two more months,” he added.

Palace Press Officer Clarissa A. Castro did not immediately reply to a Viber message when asked for confirmation.

The Marcos administration first imposed the import halt on Sept. 1 to counter falling palay prices ahead of the wet harvest season. 

Prices briefly improved after the suspension but began easing again as the policy neared its Oct. 31 expiry.

The country is the world’s top rice importer, according to the US Department of Agriculture (USDA). However, due to the rice import ban, it lowered its 2025 forecast for Philippine rice imports to 4.9 million metric tons (MT) from 5.4 million MT.

As of August, the Philippines had already imported 2.58 million MT of rice this year, compared with 4.81 million MT in 2024.

Mr. Laurel said the extended ban, coupled with assistance to farmers and fisherfolk and the implementation of a floor price for palay, would provide continued relief to rice farmers.

Mr. Laurel said the extension will allow the government to conduct a better assessment of the ban’s impact on the market while “continuing to protect local producers from the downward pressure of cheaper imports.”

At a Senate hearing last month, the Agriculture chief cited excessive import volume, poor-quality harvest, and adverse weather as factors that drove farmgate prices lower.

The Department of Agriculture (DA) estimated that the national rice supply will remain sufficient even with a four-month import suspension.

Retail rice prices have stayed relatively stable, according to the DA’s Agribusiness and Marketing Assistance Service. By November, well-milled rice is expected to average PHP 42 per kilo, while regular-milled varieties will hover around PHP 40 per kilo.

Sought for comment, Roy S. Kempis, retired agriculture economics professor at the Pampanga State Agricultural University, said he supported the extension of the rice import ban.

“This allows adjustments to align with (1) the desired outcome of higher and stable farmgate prices expected by farmers, (2) the predicted farmer behavior to produce and supply more rice because of the incentive to rake in more revenues and profits at the end of each cropping given a higher and stable farmgate price regime, and (3) the clearer policy regime surrounding trade, prices, production, and supply,” Mr. Kempis said in a Viber message.

Jayson H. Cainglet, executive director of the Samahang Industriya ng Agrikultura, urged the government to restore rice import tariffs to their original levels — 35% for Association of Southeast Asian Nations (ASEAN) countries and 50% for non-ASEAN nations — and to strengthen state participation in the palay market.

He said the current 15% tariff has kept farmgate prices low by encouraging cheaper imports, undermining local producers.

Mr. Cainglet added that the rice import ban and Executive Order (EO) No. 100, which established a floor price for unmilled rice, have failed to lift palay prices to the equitable level of PHP 18 per kilo.

He also noted that limited government procurement, covering only 2-4% of total harvest, leaves most of the market under the control of private traders and millers.

“The institutionalization of a palay floor price is a crucial reform,” he said via Viber.

“However, its success depends on the government’s capacity and commitment to buy directly from farmers at scale, ensuring that state procurement truly sets a price floor rather than a symbolic benchmark.”

On Oct. 25, Mr. Marcos signed EO 100, which established a floor price for unmilled rice to protect farmers from sharply falling farmgate prices and to promote fair returns on production.

The order mandated the DA to determine and regularly adjust the floor price based on production costs, market conditions, and regional disparities. — Chloe Mari A. Hufana

The national government’s (NG) debt service bill more than tripled in September as the government increased both amortization and interest payments, the Bureau of the Treasury (BTr) said.

The latest data from the Treasury showed that the debt service bill surged by 250% to PHP 327.89 billion in September from PHP 93.61 billion in the same month last year.

Month on month, the debt service bill slides by 50.67% from PHP 664.72 billion in August.

Debt service refers to the payments made by the government on domestic and foreign borrowings.

The bulk, or 75.08% of debt payments, was made up of amortization payments, the BTr data showed.

In September, amortization payments soared by 1,146% to PHP 246.19 billion from PHP 19.76 billion in the same month a year ago.

This was mainly composed of principal payments on domestic debt, which sharply grew to PHP 237.93 billion in September from PHP 87 million in the same month last year.

Amortization paid on foreign debt plunged by 57.99% to PHP 8.26 billion in September from PHP 19.67 billion in 2024.

Meanwhile, interest payments stood at PHP 81.7 billion in September, up by 10.63% from PHP 73.85 billion a year ago.

Domestic interest payments also increased by 17.81% to PHP 65.27 billion in September from PHP 55.41 billion in the same month last year.

Broken down, PHP 42 billion went to fixed-rate Treasury bonds, PHP 19.18 billion to retail Treasury bonds, PHP 4.04 billion to Treasury bills (T-bills) and PHP 48 million to others.

Interest payments for foreign borrowings slipped by 10.92% to PHP 16.43 billion in September from PHP 18.45 billion in the same month in 2024.

“This is largely due to the large Treasury bond maturity worth P288 billion in September 2025 in terms of large principal payments of the NG,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message over the weekend.

Nine-month period

The NG debt service bill stood at PHP 1.87 trillion in the first nine months of the year, up 13.69% from PHP 1.64 trillion in the same period last year.

The nine-month tally already accounted for 90.97% of the PHP 2.05-trillion debt service program this year.

Amortization payments, which made up the bulk of total payments, rose by 13.43% to PHP 1.2 trillion in the January-to-September period from PHP 1.06 trillion. This was 99.73% of the PHP 1.21-trillion full-year amortization program.

Principal payments on domestic debt increased by 14.4% to PHP 1.01 trillion, while payments on external debt rose by 8.7% to PHP 196.48 billion.

Meanwhile, interest payments grew by 14.15% to PHP 665.85 billion as of end-September from PHP 583.29 billion a year ago. This was 78.52% of the PHP 848.03-billion programmed interest payments for 2025.

Interest payments on domestic debt stood at PHP 494.39 billion, 18.24% higher than PHP 418.13 billion in 2024.

This was made up of PHP 334.14 billion in fixed-rate Treasury bonds, PHP 118.89 billion in retail Treasury bonds, PHP 34.4 billion in T-bills and others (PHP 6.96 billion).

On the other hand, interest payments on external debt rose by 3.81% to PHP 171.46 billion as of end-September from PHP 165.17 billion in the same period a year ago.

In the coming months, Mr. Ricafort said no large Treasury bonds will mature in the fourth quarter, which will likely temper the debt servicing bill.

“Large Treasury bond maturity of at least PHP 200 billion each are scheduled in February 2026 and April 2026,” he said.

The US Federal Reserve and Bangko Sentral ng Pilipinas’ cumulative rate cuts since the later part of 2024 may have helped to trim NG’s interest payments, he said.

However, this may be offset by the peso weakness against the US dollar, which could lead to higher servicing of foreign debt, Mr. Ricafort said.

The peso plunged to a record low of PHP 59.13 per dollar on Oct. 28.

The NG debt stock fell to PHP 17.46 trillion as of end-September but still remained above its projected PHP 17.36-trillion ceiling by end-2025. — Aubrey Rose A. Inosante