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The Philippines risks losing as much as PHP 30 billion in revenues if the government implements a zero-tariff scheme on selected American goods, the Bureau of Customs (BoC) told congressmen on Tuesday.

Customs Commissioner Ariel F. Nepomuceno said the agency projects PHP 27 billion to PHP 30 billion in collections from US imports such as vehicles, pharmaceuticals and soybeans this year. That revenue, however, would be foregone should tariffs be scrapped as part of trade talks with Washington.

“The reduction of tariff from our US imports… will impact our collections,” he told a House of Representatives hearing.

The discussions come as the US seeks wider trade concessions from Manila. US President Donald J. Trump earlier announced a 19% tariff on Philippine exports to the US, slightly lower than the 20% floated in August. In turn, the Philippines agreed in principle to exempt US cars, wheat, soybeans and medicines from domestic tariffs.

The Philippines had initially faced a 17% tariff in April.

Trade Undersecretary Allan B. Gepty said last month zero tariffs on American goods had not been formally granted, stressing that negotiations were continuing. Finance Secretary Ralph G. Recto also said in July that foregone revenues could reach about PHP 6 billion should the country agree to a narrower set of exemptions.

However, Mr. Nepomuceno’s estimate suggests a much bigger revenue impact if a broader tariff cut is applied.

The zero-tariff policy could complicate the government’s fiscal consolidation plans, John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, told BusinessWorld.

“The potential revenue loss is substantial, especially given the National Government’s ongoing efforts to manage the fiscal deficit and rising debt levels,” he said in a Viber message.

The Philippines’ debt-to-gross domestic product ratio stood at 63.1% as of end-June, the highest since 2005 and above the 60% threshold considered sustainable for developing economies.

Outstanding debt reached a record PHP 17.56 trillion in July, up 11.9% from a year earlier and already surpassing the government’s PHP 17.36-trillion projection for 2025.

Removing tariffs on selected US goods might ease consumer prices, but Mr. Rivera said the government should strengthen tax enforcement to offset revenue losses from the zero-tariff treatment.

“Beyond revenue concerns, the broader market implications could be mixed,” he said, noting that it could lead to cheaper goods but disproportionately affect producers.

“It may expose local producers, especially in agriculture and light manufacturing, to stiffer competition from cheaper US imports, which could affect domestic production and employment in vulnerable sectors,” he said.

Despite the risks, the Customs bureau expressed confidence in meeting its 2025 collection goals.

Customs Assistant Commissioner Vincent Philip C. Maronilla reported that revenues hit PHP 543.95 billion in the first seven months of the year.

“We’re pretty confident that we will reach, if not surpass, our 2025 collection target,” he told lawmakers.

The BoC is tasked with collecting PHP 1.06 trillion this year, 14.28% higher than its actual collection of PHP 931.05 billion last year.

Value-added tax (VAT) on imports has been the “largest and most consistent revenue contributor,” Mr. Maronilla said.

From January to July, VAT collections reached PHP 467 billion, close to the Bureau of Internal Revenue’s PHP 473-billion full-year target.
Economists said the government now faces a difficult balancing act between maintaining fiscal revenues and deepening trade relations with the US.

“While such a policy might bring short-term consumer gains, it must be approached with caution and complemented by safeguards,” Mr. Rivera said.

He added that any decision must weigh the potential benefits of cheaper imports and stronger trade ties against the long-term risks of eroding government revenue and weakening domestic producers. — Kenneth Christiane L. Basilio, Reporter

The Bangko Sentral ng Pilipinas (BSP) may deliver one more policy rate cut before year-end, but the move could depend on whether the US Federal Reserve lowers borrowing costs in its meeting this week, Finance Secretary Ralph G. Recto said on Tuesday.

Mr. Recto, who sits as a member of the BSP’s Monetary Board, told reporters the central bank is weighing the likelihood of the Fed’s first rate reduction this year and its implications for global capital flows.

“(This) depends on what happens in the US as well with the Fed,” he said. “[It] depends of course on our inflation numbers. But clearly, I think we can reduce the policy rate by another 25 basis points (bps).”

The Finance chief projected that the BSP might still implement two “safe” cuts of 25 bps each at its policy meetings on Oct. 9 and Dec. 11.

The BSP resumed monetary easing after inflation cooled within its 2-4% target, though a recent uptick in August could complicate its policy path.

Inflation averaged 1.7% in the first eight months, matching the BSP’s full-year forecast. The Philippine Statistics Authority will release September inflation data on Oct. 7.

Last month, the Monetary Board cut the benchmark rate by 25 bps to 5%, the lowest since November 2022. Since it started its easing cycle in August 2024, the BSP has slashed policy rates by 150 bps, including two separate 25-bp cuts each in April and June.

BSP Governor Eli M. Remolona, Jr. earlier noted that while the central bank had reached a “sweet spot” in its easing cycle, there is still space for another cut. However, he cautioned that shifts in inflation and external factors could alter the trajectory.

Mr. Recto said the Philippine economy remains on track to achieve its 2025 growth target of 5.5% to 6.5%. He also said the central bank is not yet in the final stretch of its easing cycle.

He added that the Philippines’ possible inclusion in JPMorgan’s Government Bond Index for Emerging Markets could boost investor confidence and help lower borrowing costs.

“What is important is that we may be included in the JP Morgan index,” he said.
“That will reduce rates as well. We’re very excited about that, and we have a good chance of getting 3% [or] 4% now. We’ll be in that basket, [and it will be] good for our credit rating.”

The Department of Finance earlier said the Philippines has been placed on JPMorgan’s positive watchlist, a precursor to inclusion in the index. Such membership could channel billions of dollars of passive investment into peso-denominated government bonds.

In a separate commentary, Nomura Global Markets Research said the BSP still has space to ease policy further while balancing the government’s fiscal consolidation drive with growth support.

“The government remains committed to its fiscal consolidation agenda but is slowing the pace in order to support growth, while BSP still has some scope to ease further,” Nomura economist Euben Paracuelles said.

Meanwhile, Mr. Recto said the Philippines is unlikely to return to the Financial Action Task Force’s (FATF) “gray list” of jurisdictions under increased monitoring for money laundering amid the government’s anti-corruption drive.

“We are already catching them,” he said. “They are being sued. People will be jailed. We will get our money back,” he added, referring to investigations into money laundering involving former Public Works engineers. The officials allegedly funneled flood-control funds through casinos.

The FATF removed the Philippines from its gray list in February after improvements in anti-money laundering and counterterrorism financing frameworks.

Last week, Senator Panfilo M. Lacson revealed that some Public Works officials allegedly laundered billions of pesos siphoned from flood-control projects by gambling in casinos and converting funds into chips. — Aubrey Rose A. Inosante, Reporter

Filipinos abroad sent more money home in July, hitting a seven-month high as remittances from sea-based workers grew at a slightly quicker pace than those from land-based workers, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

Cash remittances coursed through banks jumped by 3% to USD 3.179 billion in July from USD 3.085 billion in the same month a year ago, data from the central bank showed.

This marked the highest monthly remittance level since the USD 3.38 billion posted in December last year.

Month on month, remittances grew by 7% from USD 2.987 billion previously.

“The Philippines saw sustained growth in cash remittances in July of this year, with remittances from sea-based overseas Filipinos (OFs) increasing slightly faster than funds from land-based OFs,” the BSP said in a statement.

Money sent home by land-based workers made up the bulk of cash remittances in July, which went up by 3% year on year to USD 2.59 billion.

Remittances from sea-based workers rose by 3.1% year on year to USD 585 million in July.

“The peso’s relative weakness against the US dollar also encouraged higher remittances, as families received greater peso value,” Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines (UnionBank), said in a Viber message.

In July, the peso performed weaker at an average PHP 56.7523 per US dollar from the PHP 56.3586 recorded in June.

Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., said in a Viber message that the remittances growth in July was also driven by the start of the school season which meant overseas Filipino workers (OFWs) sent more money to their families to pay for tuition fees and school supplies.

Mr. Ravelas said global job stability may have allowed sea-based workers to send home more money.

Mr. Asuncion said the increase in remittances by sea-based workers reflects “strong demand in the maritime sector, buoyed by stable global trade and the recovery of cruise operations.”

“Higher dollar-denominated wages and renewed contracts for seafarers contributed to this growth, underscoring the sector’s resilience and its role as a stabilizing force for overall remittance inflows,” he said.

Meanwhile, personal remittances, which include both cash coursed through banks and informal channels and in-kind remittances, climbed by 3.1% to USD 3.53 billion in July from USD 3.43 billion in the same month last year.

Most of the personal remittances that month came from workers with contracts of one year and above, amounting to USD 2.81 billion, up 3% from a year earlier.

Those with contracts of less than one year sent home USD 650 million, rising by 3.3% year on year.

Seven-month period

In the first seven months of the year, cash remittances from OFWs increased by 3.1% to USD 19.932 billion from USD 19.332 billion a year ago.

This as remittances sent by land-based workers rose by 3.3% to USD 15.97 billion during the period, while sea-based workers’ remittances inched up by 2.3% to USD 3.96 billion.

Filipinos in the United States accounted for 40.3% of the total cash remittances sent in the January-to-July period.

This was followed by OFWs in Singapore (7.1%), Saudi Arabia (6.2%), Japan (5%), the United Kingdom (4.8%), the United Arab Emirates (4.4%), Canada (3.4%), Qatar (2.9%), Taiwan (2.8%) and South Korea (2.7%).

Personal remittances in the first seven months reached USD 22.206 billion, up by 3.1% from USD 21.532 billion a year prior.

Mr. Asuncion said the upcoming holiday season will allow remittances to sustain its growth in the coming months.

“Looking ahead, remittances are expected to maintain an upward trajectory in the coming months, supported by seasonal inflows during the ‘-ber’ months and the holiday season,” he said.

However, the UnionBank economist also noted that global economic uncertainty and policy changes across the world pose risks to the country’s remittances growth.

“Nonetheless, steady overseas employment and a competitive peso should help sustain positive momentum,” he added.

The BSP expects cash remittances to grow by 2.8% to USD 35.5 billion this year. — Katherine K. Chan

The Philippines’ outstanding external debt jumped to a record USD 148.87 billion as of end-June amid the weakening of the US dollar, the Bangko Sentral ng Pilipinas (BSP) said.

Central bank data showed the country’s external debt rose by 14.4% from USD 130.318 billion in the same period last year.

“The increase in external debt was driven primarily by borrowings, which included bond issuances by the National Government amounting to USD 5.83 billion and external financing tapped by local banks amounting to USD 3.44 billion,” the BSP said in a statement.

Quarter on quarter, external debt inched up by 1.5% from the USD 146.74 billion logged at the end of the first quarter.

“The increase in external debt for Q2 (second quarter) 2025 was primarily due to valuation effects from the depreciation of the US dollar,” the BSP said.

External debt accounts for all borrowings by residents from nonresidents.

The BSP said the external debt level remained “sustainable,” equivalent to 31.2% of gross domestic product. This was better than the 31.5% in the previous quarter but higher than the 28.9% a year ago.

The central bank said the weaker greenback increased the US dollar equivalent of borrowings denominated in other currencies by USD 1.49 billion.

In the April-to-June period, the peso recorded a strong performance against the dollar as it traded between the PHP 55 and PHP 56 level, averaging PHP 56.581 as of end-June.

“The net acquisition of Philippine debt securities amounting to USD 660.96 million also contributed to the increase (in external debt), while net repayments amounting to USD 315.67 million partially tempered the increase in the country’s external debt,” the BSP said.

Most of the country’s public sector obligations, amounting to USD 88.371 billion, were from the National Government while the rest came from the BSP (USD 3.919 billion) and government banks (USD 1.81 billion).

Japan remained the Philippines top creditor with loans amounting to USD 15.599 billion, followed by the United Kingdom with USD 6.358 billion and Singapore with USD 4.837 billion.

The borrowing mix was composed mainly of US dollar-denominated debt, followed by debt in Philippine peso and debt in Japanese yen.

As of the second quarter, the country’s short-term external debt based on remaining maturity concept (STRM) was at USD 28.63 billion. STRM debt is composed of loans with original maturities of one year or less plus amortization on medium and long-term accounts falling due within the next 12 months.

“This level remains well-covered by the country’s gross international reserves (GIR) of USD 106 billion, providing 3.7 times cover for short-term obligations,” the BSP said.

“The country’s GIR-to-STRM debt ratio remains at par with emerging economy peers.”

Meanwhile, the BSP said resident borrowers’ lower principal and interest payments brought the debt service ratio down to 8.7% during the period from 9.8% a year ago. This ratio measures a country’s capacity to meet its obligations based on its foreign exchange earnings.

“This resulted from lower principal and interest payments by resident borrowers as of the second quarter of 2025,” it said.

BSP data showed the public sector’s external debt went up by 88.2% to USD 94.801 billion at end-June from USD 50.36 billion the previous year.

Private sector obligations, on the other hand, declined by 32.3% year on year to USD 54.072 billion from USD 79.83 billion a year ago. — Katherine K. Chan

The Philippines’ largest business groups on Sunday expressed confidence the newly created Independent Commission on Infrastructure (ICI) could help restore investor confidence in the country’s public works program.

The Philippine Chamber of Commerce and Industry (PCCI) said the commission, tasked with probing anomalies in projects such as flood-control systems, is well positioned to drive systemic reforms that will improve governance and efficiency in big-ticket projects.

“The ICI, as currently composed and empowered, is a strong signal of the President’s political will to address infrastructure anomalies, especially in flood control,” the group said in a statement.

The ICI will be composed of former Public Works and Highways Secretary Rogelio L. Singson and former Chair of the Procurement Policy Board-Technical Support Office, Rossana A. Fajardo. Ms. Fajardo is now the country managing partner at SGV and Co.

Baguio City Mayor Benjamin B. Magalong will also be an adviser.

Mr. Marcos is expected to name the chairman this week.

“This strategically balanced team combines operational, institutional, and investigative strengths that can translate findings into actionable reforms,” the PCCI said.

This comes as the government intensifies efforts to crack down on corruption that led to incomplete and nonexistent flood mitigation projects worth billions of pesos.

“With its strong legal foundation and credible composition, the ICI can become a cornerstone institution for safeguarding public funds and ensuring that infrastructure projects deliver real value to the Filipino people,” the group said.

The PCCI said sustained funding, independence from political influence, and seamless interagency cooperation will determine whether the ICI can close procurement loopholes and reduce corruption risks that have historically delayed infrastructure pipelines.

The Federation of Philippine Industries (FPI) also welcomed the commission’s creation, saying it aligns with its long-standing push for a clean, rules-based market anchored on strict Philippine National Standards compliance.

“The ICI’s work will clean up a decade of flood control anomalies, restore trust in public works, and cut the corruption premium that drives up costs,” FPI Chairperson Elizabeth H. Lee said in a statement on Sunday.

“That means cheaper financing, stronger investor confidence, and a manufacturing sector that wins on standards, integrity, and quality — now and for years to come.”

By dismantling entrenched networks inflating costs and distorting competition, Ms. Lee said the ICI could allow compliant firms to access more affordable financing for capital-intensive upgrades, while attracting higher-quality bidders more likely to source inputs from local manufacturers.

The ICI has the power to issue subpoenas, request financial records and recommend preventive suspensions.

It may also endorse evidence for prosecution and collaborate with technical experts in support of its investigations.

BIR support

Meanwhile, the Bureau of Internal Revenue (BIR) has offered its services to the newly formed ICI.

“The entire BIR is ready to help the ICI if necessary, and the BIR will use all its powers granted by law to go after those who seek to use public funds for personal gain or greed,” BIR Commissioner Romeo “Jun” D. Lumagui, Jr. said in a statement.

“As a government agency that collects taxes to fund projects for the Filipino people, we aim for every Filipino to live well through the proper use of taxes,” Mr. Lumagui said.

The BIR earlier said the tax fraud investigation in the first batch of individuals linked to flood control anomalies, such as Cezarah Rowena “Sarah” Discaya and Pacifico “Curlee” F. Discaya II are almost concluded.

The BIR on Sept. 2 served contractors with Letters of Authority, which authorizes a tax audit on those who may have underpaid or evaded taxes.

The BIR warned that it will not issue an updated tax clearance, a document that guarantees that every contractor has no outstanding tax liabilities and has duly filed and paid all applicable taxes.

Unable to present this clearance will result in the suspension of contract settlements and the imposition of a tax lien over the contract amount in favor of the government.

Finance Secretary Ralph G. Recto earlier said corruption related to flood control projects may have cost the Philippines between PHP 42.3 billion and PHP 118.5 billion in average economic losses since 2023. — Chloe Mari A. Hufana and Aubrey Rose A. Inosante