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The Philippine economy could face stronger inflationary pressures and slower growth as increasingly frequent and severe typhoons disrupt supply chains and farm production, the International Monetary Fund (IMF) said.

“The Philippines is highly exposed to natural hazards, particularly typhoons, which are the most frequent and costliest climate shocks in the country,” the IMF Regional Office for Asia and the Pacific said in a Facebook post. “These events represent supply shocks, creating inflationary pressure and reducing economic activity.”

The IMF estimated that a Category 5 storm could raise headline inflation by 0.4 percentage point (ppt) and food inflation by 0.7 ppt, based on regional data from its latest Article IV consultation with Manila.

Super Typhoon Ragasa, locally named Nando, was one such storm that battered the country late last month, causing floods and an initial PHP 1.38 billion in agricultural damage.

Data from the Department of Agriculture showed that the southwest monsoon and typhoons Mirasol, Nando and Opong have caused PHP 7.71 billion in combined losses. Farmers and fisherfolk lost 472,701 metric tons in production and 205,016 hectares of farmland.

The IMF said such weather shocks could drag agricultural labor productivity by as much as 2.5% and shave 0.4 ppt off economic growth, with estimated damage amounting to about 0.2% to 0.3% of gross domestic product (GDP).

Inflation accelerated to 1.7% in September from 1.5% in August, the fastest in six months, the Philippine Statistics Authority said. While slower than 1.9% a year earlier, the pickup reflected higher food prices after recent typhoons.

The agency said vegetable prices rose 19.4% in September, up from 10% in August — the steepest increase since January. Food inflation climbed to 0.8% from 0.6% in the previous month.

Average inflation this year stands at 1.7%, matching the Bangko Sentral ng Pilipinas’ (BSP) full-year target but slightly above the IMF’s 1.6% forecast.

The economy expanded by 5.4% in the first half, slower than last year’s 6.2% but in line with the IMF’s full-year outlook.

Economy Secretary Arsenio M. Balisacan said growth might soften further in the third quarter due to typhoon-related disruptions but could still meet the lower end of the government’s 5.5% to 6.5% goal. The third-quarter GDP data will be released on Nov. 7.

The IMF said monetary authorities should carefully balance inflation control with the need to support growth after natural disasters. “Post-disaster, monetary policy must carefully weigh trade-offs between anchoring inflation expectations and supporting economic recovery,” it said.

The BSP delivered its fourth straight 25-basis-point (bp) rate cut on Oct. 9, bringing its benchmark rate to a three-year low of 4.75%. It has reduced borrowing costs by 175 bps since August 2024.

“Fiscal policy is central to building climate resilience before disasters strike, to help mitigate the macro impacts of natural disasters,” the IMF added. — Katherine K. Chan

Philippine President Ferdinand R. Marcos, Jr. on Tuesday unveiled a unified toll collection system that will let motorists use a single radio frequency identification (RFID) sticker across all expressways in Luzon, a measure aimed at easing congestion, cutting travel time and advancing the government’s digital transport modernization drive.

Speaking at the launch of the One RFID, All Tollways system in Calamba City, Mr. Marcos said the interoperability effort represents a major step toward a more connected and commuter-friendly road network.

“Starting today, only one RFID sticker will be needed for all our toll expressways across Luzon,” the President said in Filipino, according to a transcript from his office. “Group and fleet accounts will also be launched next year.”

Under the system, motorists can use a single RFID sticker and account — whether from San Miguel Corp.’s Autosweep or Metro Pacific Tollways Corp.’s EasyTrip — across all toll roads in Luzon, eliminating the need for multiple accounts and reducing bottlenecks at toll plazas.

Registration for the unified system is free and optional, with rollout for private vehicles beginning this month and fleet or corporate accounts expected by 2026.

‘’Years of consultation and cooperation with the DoTr (Department of Transportation) and the Toll Regulatory Board have finally led us to a unified system that responds to the real needs of our motorists,” Mr. Marcos said. “Our goal is a direct journey from north to south across Luzon — reducing unnecessary stress and delays.”

In a separate Facebook post, Acting Transportation Secretary Giovanni Z. Lopez said the system has undergone a stress test, which means it is fully functional, and problems will be blamed on defective stickers or low balance.

He said motorists might choose between Autosweep or EasyTrip as their preferred RFID provider to access major expressways.

He noted that motorists with two existing RFID stickers can opt in online to consolidate their accounts, then have the unused sticker removed — leaving only one, either Autosweep or EasyTrip.

Registration is free, optional and can also be done through walk-in centers. Motorists may also choose to keep their two separate RFID accounts.

“If you’re already satisfied with your current RFID setup, there’s no need to enroll. But for those who want to enroll and prefer to have only one account instead of two, you may do so,” Toll Regulatory Board Executive Director Jose Arturo M. Tugade said in Filipino at the launch.

Economic productivity

Nigel Paul C. Villarete, a senior adviser on public-private partnerships at the technical advisory group Libra Konsult, Inc., said the unified RFID system would make travel faster and more seamless, noting that toll collection has long been a bottleneck, reducing expressway efficiency.

He added that RFID technology eliminates the need for vehicles to slow down or stop at toll gates, saving time and boosting both personal and national economic productivity.

“People don’t realize that slowing down for toll collection or actually stopping actually eats a big chunk of otherwise continuous travel time, which translates to a reduction of both personal and national economic benefits,” he said via Viber.

During the launch, Mr. Marcos oversaw the online registration process by visiting RFID service providers Autosweep and EasyTrip to demonstrate how motorists can opt into the unified system.

He also witnessed the simultaneous removal of redundant RFID stickers from vehicles that previously carried multiple tags, ensuring that each vehicle now operates with only one RFID for use across all tollways.

After choosing their RFID online, motorists are then directed to visit an authorized customer service center to remove the unselected RFID sticker to ensure system compatibility.

Once their preferred account is activated, motorists can load funds into it to enjoy seamless travel across all tollways in Luzon.

The unified RFID system will be accepted across all major toll expressways in Luzon, including the Skyway, South Luzon Expressway, STAR Tollway, Tarlac-Pangasinan-La Union Expressway, Ninoy Aquino International Airport Expressway, Muntinlupa-Cavite Expressway, North Luzon Expressway (NLEX), NLEX Connector, Subic-Clark-Tarlac Expressway, Cavite-Laguna Expressway, Manila-Cavite Toll Expressway and C5 Southlink.

The Toll Collection Interoperability Project, initiated in 2017, is a joint effort of the DoTr, Toll Regulatory Board, Department of Public Works and Highways and Land Transportation Office, in partnership with the SMC and Metro Pacific groups.

It aims to create a more efficient, convenient and connected tollway system that enhances mobility and reduces travel time for Filipino motorists across Luzon.

Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., holds a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Chloe Mari A. Hufana, Reporter

The Philippines’ balance of payments (BoP) surplus sharply narrowed year on year in September, the central bank reported on Monday.

The country’s BoP position was at a USD 82-million surplus in September, shrinking from the USD 3.526-billion surfeit in the same month a year ago, preliminary Bangko Sentral ng Pilipinas (BSP) data showed.

This was also narrower than the USD 359-million surplus seen in August and marked the second straight month that the Philippine external position yielded a surfeit.

“The BoP surplus reflected the Bangko Sentral ng Pilipinas’ net income from its investments abroad and National Government’s (NG) net foreign currency deposits with the BSP,” the central bank said in a statement.

BoP refers to the country’s economic transactions with other nations. A surplus indicates more funds entered the country, while a deficit shows that the country spent more than it received.

Last month’s surplus helped narrow the country’s end-September BoP deficit to USD 5.315 billion. However, this was a reversal from the USD 5.117-billion surplus posted in the same period last year.

“Preliminary data indicate that the year-to-date BoP deficit was largely due to the continued trade in goods deficit,” the BSP said.

“This was partly offset by the sustained net inflows from personal remittances from overseas Filipinos, trade in services, foreign direct and portfolio investments, and foreign borrowings by the NG.”

The country’s trade gap, or the difference between its exports and imports, was at USD 32.38 billion in the first eight months of the year, the latest data from the Philippine Statistics Authority showed. This was narrower than the USD 34.33-billion deficit in the comparable year-ago period.

The Philippines’ trade-in-goods balance has been in deficit for over a decade or since the USD 64.95-million surplus recorded in May 2015.

“September’s BoP surplus was likely bolstered by net receipts in services trade, overseas Filipino remittance inflows, and net foreign equity investments that, combined, overshadowed trade-in-goods deficit and net foreign bond outflows. This led the third-quarter BoP to be in a surplus position,” Angelo B. Taningco, research head and chief economist at Security Bank Corp., said in an e-mail.

BSP data showed that the country recorded a USD 274-million surplus in the July-September period. This was smaller than the USD 3.676-billion surfeit in the same quarter last year.

Mr. Taningco said they expect another surplus this quarter, which would help trim the end-2025 BoP deficit to USD 4.5 billion.

The BSP expects the overall BoP position to end at a USD 6.9-billion deficit this year or -1.4% of gross domestic product.

“The smaller BoP surplus reflects fewer one-off inflows and a still-wide trade gap, but the external position remains manageable with steady remittances, strong services exports, and solid reserves,” Robert Dan J. Roces, economist at SM Investments Corp., said in a Viber message.

“As global rates ease and regional demand recovers, investment inflows may return and support liquidity and credit conditions, which should help firms with deep local roots and diverse sources of growth.”

Reserves

The BSP said the country’s BoP position mirrored the increase in its gross international reserves (GIR) to USD 109.1 billion at end-September from USD 107.1 billion as of August.

“The level of GIR remains an adequate external liquidity buffer, equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income,” it said. This is well above the three-month standard.

“Moreover, it covers about 3.8 times the country’s short-term external debt based on residual maturity.”

This ensures that the country has ample foreign exchange to meet its financing needs, such as import and debt payments, the central bank said.

The country’s gross reserves are made up of foreign-denominated securities, foreign exchange, and other assets such as gold. Aside from financing its external obligations, these are used by the central bank to help stabilize the peso and also serve as a buffer against global economic disruptions.

The BSP expects dollar reserves to settle at USD 105 billion by end-2025. — Katherine K. Chan

Digitalization will not only make the Philippines a more competitive market for investments amid the shifting world order but also help in deterring corruption, industry leaders and a government official said.

At the 51^st Philippine Business Conference and Expo on Monday, Philippine Chamber of Commerce and Industry President Enunina V. Mangio said that digital transformation has become more important than ever amid global economic uncertainty due to growing protectionism and changing trade policies.

“We stand at an inflection point where digital transformation is no longer optional — it is imperative for national competitiveness and prosperity,” Ms. Mangio said.

“The question before us is not whether transformation will occur, but whether the Philippines will position itself at the forefront of this change,” she said. “Our neighbors are moving decisively. The competitive landscape is rapidly intensifying. The opportunity for regional leadership exists — but only for those bold enough to claim it, strategic enough to execute it, and committed enough to sustain it.”

In particular, artificial intelligence (AI) is reshaping how businesses are conducted, services are delivered, and complex problems are solved.

“From predictive analytics that optimize supply chains to AI-powered diagnostics that democratize healthcare, from intelligent automation to natural language processing — AI represents a quantum leap in human capability,” she said.

“The question is whether the Philippines will be a creator and beneficiary of these technologies or merely a passive consumer.”

Blockchain technology has also helped improve supply-chain traceability, particularly in authenticating Philippine exports and smart contracts that reduce transaction costs and increase trust, Ms. Mangio said.

However, the Philippines has yet to fully tap the opportunities being offered by digital transformation, she said, as it must address issues concerning data sovereignty, cybersecurity, and privacy protection that continue to hamper its digitalization journey.

“We must confront technological displacement in labor markets and develop comprehensive strategies for workforce adaptation and social protection,” she said.

“We must establish regulatory frameworks that foster innovation while safeguarding the public interest. We must ensure that digitalization benefits are broadly distributed, not concentrated among a privileged minority.”

Philippine Vice-President Sara Duterte-Carpio said that technology can also be a weapon against corruption.

“As we digitize, we automate our processes, make data and all government transactions transparent, and leave no room for scrupulous backdoor transactions,” she said in her keynote address at the event on Monday.

“We take away the power of corrupt leaders to manipulate public funds and capitalize on people’s money for their personal interests, greed, and political ambition.”

Technology can be used to “impose checks and balances, monitor paper trails, eliminate arbitrary and politically motivated decision-making, and prevent unconstitutional budget insertions to curry political favor at the expense of the people’s money,” she said.

However, the government should make sure that it develops and equips Filipinos so that the country can effectively leverage technology, she said.

“Digital transformation will be the bridge to the future, paving the way for inclusivity through training, upskilling, deep-dive mentoring, and industry exposure to equip our human resources,” she said.

“The new skills and knowledge they acquire will prove useful as they figure into roles that require creative and innovative thinking, problem-solving, and leadership.”

She added that the country should aspire to create future innovators, thinkers, producers, and entrepreneurs.

“Our goal is to maximize the potential of our human and natural resources, leveraging the power of technology and digital transformation to create growth centers that host competitive homegrown producers, service providers, and exporters,” she said.

“These strategies will be significant economic drivers that will help create local jobs, increase domestic economic activities, and spur development and progress in domestic and micro-economies across the Philippines.” — Justine Irish D. Tabile