Philippines seen needing 350,000 more workers for RE

The Philippines needs to have about 350,000 more workers available to service pending renewable energy (RE) projects in the pipeline by 2030, according to the International Labor Organization (ILO).

The Philippines has the largest RE development pipeline in the region, with the current RE workforce estimated at only 120,000, ILO Philippines head Khalid Hassan told reporters on the sidelines of a green jobs forum in Makati City.

Mr. Hassan noted that the Philippines has obtained major RE investment commitments, including a deal with the United Arab Emirates government-owned Masdar (Abu Dhabi Future Energy Co.) for 10 gigawatts solar, wind, and storage by 2040.

He also noted Terra Solar is building a 3,500-megawatt RE project, which is expected to be the world’s largest solar plant by 2026.

Southeast Asia in general is projected to gain six million RE jobs by 2050, he said.

Mr. Hassan noted that skills gaps are crippling the growth of RE projects in the Philippines, with companies reporting a 75% shortage of skilled workers.

Training systems are outdated, fragmented, and not responsive to market needs, he added.

“Investments are being delayed or compromised due to a lack of ready, qualified workers,” he said.

He added that safety is also a major concern, with young workers most at risk, especially in the construction and installation of RE projects involving wind and solar.

The ILO noted that current technical and vocational education and training systems in the Philippines are government-driven, with employers “missing from the design and delivery” of the training.

Trainers often lack exposure to modern technology, Mr. Hassan said.

He also cited the absence of formal apprenticeships and the lack of a system to forecast skills needs.

“This disconnect is slowing returns on investment and affecting project quality,” he said.

The ILO is currently helping the Philippines establish a system that will offer quality apprenticeships in RE.

The program seeks to define industry standards and core competencies, establish certified apprenticeships linked to real jobs, promote occupational safety and health standards, and provide a direct voice to government on policy reform.

The platform is expected to shape policy on skills financing, labor mobility, and tax and regulatory incentives.

It seeks to help the Philippines establish “brand visibility” as a “green jobs leader.”

The platform aims to have 10,000 workers trained, half of them women, by 2029.

By that year, there should also be 2,400 certified apprentices with 80% job placement within six months, and 25 pilot training systems across the solar, wind, hydro, biomass, and geothermal industries.

By 2029, there should be at least 240 supervisors and 180 vocational instructors certified, the ILO said. — Kyle Aristophere T. Atienza

Jobless rate drops to 3.9% in May

The Philippines’ unemployment rate went down to 3.9% in May from 4.1% in April, with the number of individuals in the labor force hitting an all-time high, the government reported on Tuesday.

The number of jobless Filipinos declined to 2.03 million in May from 2.06 million in April and 2.11 million a year earlier, according to the results of the Philippine Statistics Authority’s (PSA) latest Labor Force Survey released on Tuesday.

Year on year, the jobless rate likewise went down from 4.1% in May 2024.

The country’s unemployment rate averaged at 4% in the first five months of 2025, unchanged from the same period last year.

National Statistician Claire Dennis S. Mapa attributed the drop in the May unemployment rate to a “substantial” growth in the ranks of Filipinos aged 15 years and older in the labor force.

“The increase in our labor force participation is substantial — there was a 1.35 million increase year on year,” he told a news briefing. “Usually, when labor force participation increases, unemployment also goes up. But this time is different — almost everyone was absorbed, and unemployment declined.”

“Our only concern is that underemployment increased (year on year),” he added. “Our underemployment rate last year was only 9.9%, it increased by 1.79 million to 13.1%. Those who entered the labor market, while they were employed, not all of them were full-time employees. So, they also contributed to the underemployment rate.”

PSA data showed that 52.32 million Filipinos were part of the labor force in May, rising from 50.74 million in April and the 50.97 million working Filipinos recorded in May 2024.

This was the highest recorded number since April 2005, which was when the PSA began tracking the data, it said.

The labor force participation rate (LFPR), or the proportion of the working-age population (15 years old and over) that is part of the labor force, rose to 65.8% in May from 63.7% in April and 64.8% in the same month last year.

Meanwhile, the underemployment rate — those who want longer working hours or an additional job — eased to 13.1% in May from 14.6% in April but climbed from 9.9% in the same month last year.

This translated to 6.6 million Filipinos looking for additional jobs or longer working hours, 489,000 lower than the 7.09 million in April. Year on year, this was up from 4.82 million in May 2024.

For the five-month period, the underemployment rate averaged 12.9%, up from 12.3% last year.

Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan said the increase in labor force participation in May indicated a “healthy and competitive” job market.

“Generally, a larger workforce can lead to increased economic output and potentially higher GDP (gross domestic product) growth, as more people contribute to the economy,” Mr. Balisacan said in a statement.

“This also reflects growing confidence in the labor market and the impact of ongoing efforts to expand access to employment opportunities across sectors,” he added.

The Philippines is targeting a GDP growth of 5.5%-6.5% for 2025.

The DEPDev added that the Philippine’s unemployment rate remains lower than those in China (5%) and India (5.6%), but higher than Malaysia (3%) and Vietnam (2.2%).

Finance Secretary Ralph G. Recto said in a statement that higher labor participation shows that more Filipinos are seeing better work opportunities and is a sign of economic development.

Mr. Balisacan said the government’s planned infrastructure projects can help attract job-generating investments.

He added that efforts to equip Filipinos with in-demand skills and competencies can help our workforce remain agile amid a competitive labor market

“We will leverage recently enacted policy reforms to improve upskilling and reskilling initiatives.”

Employment rate

The PSA also reported that the employment rate inched up to 96.1% in May from 95.9% in both April 2025 and May 2024.

The number of Filipinos with jobs grew to 50.29 million in May from 48.67 million the previous month and 48.87 million in the same month last year.

By sector, services remained the top employer for the month, accounting for 61.8% of total employed persons, followed by agriculture (21.1%) and the industry sector (17.1%).

Wholesale and retail trade; repair of motor vehicles and motorcycles saw the largest annual increase in jobs during the month, adding 489,000 jobs. This was followed by agriculture and forestry (469,000), administrative and support service activities (371,000), accommodation and food service activities (365,000), and other service activities (175,000).

On the other hand, manufacturing posted the biggest annual decline in employment (374,000). This was followed by construction (298,000); mining and quarrying (82,000); public administration and defense and compulsory so-cial security (54,000); and water supply and sewerage, waste management and remediation activities (50,000).

By class of worker, wage and salary workers accounted for 62.8% of the workforce in May, followed by self-employed individuals without paid employees (27.9%), unpaid family workers (7.5%), and employers in family-operated farms or businesses (1.8%).

Working hours averaged 39.8 hours per week in May, slightly lower than the 39.9 hours in April. Average working hours also fell year on year from the 40.6 hours per week recorded in May 2024.

Inflation woes

However, analysts said the increase in labor participation seen in May was likely a result of inflation concerns.

“High inflation, uncertainties, and insufficient employment opportunities made people, including those that were initially part of the labor force, go out and contribute to the financial resources of the family. Having just one earner in the family is no longer enough — not even two earners,” Maria Ella Calaor-Oplas, an economics professor who specializes in human capital development research at De La Salle University, said in a Facebook Messenger chat.

She added that the midterm elections likely boosted employment opportunities.

“The LFPR is plausibly increasing because family incomes are so low, and prices of basic goods and services are so expensive, that more household members are driven to more actively seek work,” IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa likewise said in a Viber message. “Unpacking this seemingly favorable increase shows more and more Filipinos trying to scrape out a living from whatever informal and poor-quality work they can find from an economy that is failing to create regular and decently paying work.”

Mr. Africa said the government should focus on developing the agriculture and industrial sectors to boost employment.

Federation of Free Workers President Jose Sonny G. Matula also said that the government should focus on domestic-led job creation by supporting small businesses and cooperative and rural enterprises and providing better wages, as the year-on-year increase in underemployment shows that many jobs in the country are “still low-paying or insecure.” — Adrian H. Halili, Reporter

Dollar reserves inch up to USD 105.3B in June

The Philippines’ dollar reserves inched up to USD 105.32 billion as of end-June on the back of the National Government’s foreign currency deposits and the central bank’s investment earnings.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) released late on Monday showed that the end-June gross international reserves (GIR) edged up by 0.14% from the USD 105.18 billion recorded as of May.

This marked the first month-on-month increase since February.

The central bank said the rise was “mainly due to foreign currency deposits by the National Government with the Bangko Sentral ng Pilipinas and income from BSP investments.”

Year on year, dollar reserves also inched up by 0.13% from USD 105.19 billion.

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).

Ample reserves help protect the country from market volatility and external shocks and ensure that it is capable of financing its imports and paying its debt obligations, as well as stabilizing the currency, in the event of an economic downturn.

The BSP said the end-June GIR level covers about 3.3 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, providing a “robust” liquidity buffer.

Broken down, the BSP’s foreign exchange holdings surged by 73.89% to USD 1.24 billion at end-June from USD 712.2 million as of May. Year on year, it climbed by 54.36% from USD 802.2 million.

Meanwhile, foreign investments slipped by 0.55% to USD 85.66 billion as of June from USD 86.13 billion the month prior. It likewise went down by 4.81% from USD 89.99 billion in the same period last year.

The value of the central bank’s gold holdings inched up by 0.56% to USD 13.8 billion at end-June from USD 13.73 billion as of May. Year on year, it climbed by 39.3% from USD 9.91 billion.

The country’s reserve position in the IMF rose by 2.32% to USD 732.4 million in the period from USD 715.8 million a month earlier but was down by 1.08% from USD 740.4 million a year ago.

SDRs — or the amount which the Philippines can tap from the IMF’s reserve currency basket — was unchanged month on month at USD 3.89 billion at end-June. Year on year, it went up by 3.85% from USD 3.75 billion.

Meanwhile, net international reserves increased by 0.29% to USD 105.3 billion at end-June from USD 105 billion as of end-May. 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 strong demand for government securities was one of the factors for the strong inflow of dollars,” said Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc.

“Apart from relatively stable macroeconomic conditions, the reaffirmation of the country’s credit rating by major credit rating agencies also helped in making the country an attractive destination especially for foreign funds.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the country’s dollar reserves rose at end-June after declining for three consecutive months, reflecting improved sentiment amid the volatility caused by the Trump administration’s protectionist policies and geopolitical concerns.

He added that the increase was also driven by elevated world gold prices, which drove up the value of the BSP’s holdings of the precious metal.

“World gold prices hovered near record highs recently after some demand for safe havens due to geopolitical risks during the month, particularly the Israel-Iran attacks,” Mr. Ricafort said.

The Philippines’ improved economic and credit fundamentals are expected to help further boost reserves moving forward, he added.

The BSP expects dollar reserves to reach USD 104 billion this year. — Aubrey Rose A. Inosante,Reporter

Philippine manufacturing growth hits 10-month high

Manufacturing increased for a second straight month in May at its fastest pace in 10 months, driven by food products, the Philippine Statistics Authority (PSA) reported on Tuesday.

However, analysts said lingering uncertainty over US President Donald J. Trump’s planned reciprocal tariffs could dampen demand for locally made goods.

Manufacturing output, measured by the volume of production index (VoPI), climbed to 4.9% year on year in May, according to the preliminary results of the Monthly Integrated Survey of Selected Industries.

This was faster than 4.2% in the same month last year and 4.3% in April. It was also the quickest growth in 10 months or since 7.2% in July 2024.

Adjusting for seasonality factors, VoPI declined 2.9%, a steep fall from the 15% growth in the previous month.

The May VoPI reading brought average manufacturing output growth to 1.8% for the first five months, a tad faster than the 1.7% seen in the same period in 2024.

The PSA attributed the year-on-year acceleration in the VoPI to the faster manufacture of food products, which rose by 15.7% from April’s 11.2% and 3.1% in May last year. The food products index accounted for 18.7% of factory output.

This was followed by transport equipment, which recorded a 13.5% increase from 7.4% the month prior.

Average capacity utilization, or the extent to which industry resources are used in producing goods, averaged 76.9% in May. This was slightly higher than 76.7% in the previous month and 75.2% in May 2023.

“Manufacturing is slowly but surely growing. Hopefully, it will continue the trend,” Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said in a phone interview.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said strong domestic demand was the primary driver of manufacturing activity.

“Despite external factors and global trade tensions weighing down on exports, household demand continues to be strong and is one of the primary drivers of growth,” he said in an e-mail.

In May, the country’s trade deficit in goods further narrowed to a three-month low in May as exports grew while imports further declined. The trade deficit narrowed to USD 3.29 billion in May from the USD 4.73-billion gap in the same month last year, PSA data showed.

Exports grew for the fifth straight month in May by 15.1% to USD 7.29 billion. Meanwhile, imports fell for the second consecutive month in May by 4.4% to USD 10.58 billion.

Moving forward, Mr. Erece said Mr. Trump’s reciprocal tariffs could weigh on exports and factory activity.

“However, the country’s advantage of having relatively lower tariffs than other neighboring countries will be good for production,” he said. “In addition, if trade negotiations with the US become successful, these developments will further increase demand for produced goods by Philippine industries.”

Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, added that the delayed deadline for the Trump’s administration’s proposed higher tariffs is sparking renewed global trade uncertainty.

“[This] means that investments into new productive capacity are likely to remain mostly on the sidelines until the dust settles. Ultimately, this in turn means weaker output growth in the longer term,” Mr. Chanco said in an e-mail.

The Trump administration’s decision to extend a negotiating deadline for tariff rates is prolonging uncertainty and instability for countries, the executive director of the United Nations trade agency said on Tuesday, Reuters re-ported.

Mr. Trump on Monday ramped up his trade war, telling 14 nations, from powerhouse suppliers such as Japan and South Korea to minor trade players, that they now face sharply higher tariffs from a new deadline of Aug. 1 from July 9 previously.

Countries have been under pressure to conclude deals with the US after Mr. Trump unleashed a global trade war in April that roiled financial markets and sent policymakers scrambling to protect their economies.

The US has imposed a blanket 10% tariff rate on its trading partners as they negotiate the planned “reciprocal” levies, under which the Philippines could be slapped a 17% tariff, one of the lowest among Southeast Asian nations.

In comparison, the S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) stood at 50.1 in May, dipping from 54.3 in April. A reading above 50 marks improvement for the manufacturing sector while anything below indicates deterioration.

The PMI is a leading indicator for future manufacturing activity, reflecting the raw materials ordered for future processing into manufactured goods. — Leigh Patrick Q. Batoon with Reuters

Bank lending expansion picks up to 11.3% — BSP

Bank lending growth picked up anew in May, driven by loans to businesses and consumers, the Bangko Sentral ng Pilipinas (BSP) said.

Preliminary BSP data released late on Monday showed that outstanding loans of universal and commercial banks increased by 11.3% year on year to PHP 13.37 trillion as of May from PHP 12.02 trillion in the same period in 2024.

This was faster than the 11.2% expansion in April. This comes as lending growth has slowed month on month since February.

“After adjusting for seasonal fluctuations, the outstanding loans increased by 0.9% in May compared with the previous month,” the BSP added.

Outstanding loans to residents rose by 11.8% year on year to PHP 13.05 trillion in May, a tad slower than the 11.9% growth posted in the previous month.

Meanwhile, loans to nonresidents declined by 6.6% year on year to PHP 323.83 billion that month following a 10% drop posted in April.

BSP data showed that outstanding loans to residents to fund business activities expanded by 10.2% to PHP 11.35 trillion in May, easing from the 10.3% growth a month prior.

“Loan growth eased slightly due to the slower expansion in lending to key industries such as: real estate activities (8.7%); wholesale and retail trade, and repair of motor vehicles and motorcycles (9.8%); and transportation and storage (14%),” the central bank said.

Loans for manufacturing activities fell by 3% year on year, it added.

Consumer loans to residents grew 23.7% to PHP 1.699 trillion in May, slowing from the 24% increase recorded a month prior.

These include credit card loans, which rose by 29.4%; motor vehicle loans, which went up by 18.2%; and salary-based general purpose consumption loans, which expanded by 8.7%.

“The BSP monitors bank loans because they are a key transmission channel of monetary policy. Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives,” the central bank said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the faster lending growth in May was likely a result of the lagged impact of the BSP’s rate cut cycle.

The Monetary Board has brought down benchmark interest rates by a cumulative 125 basis points (bps) since it started its easing cycle in August last year, with its latest move being a 25-bp reduction last month that brought the policy rate to 5.25%.

Money supply

Meanwhile, domestic liquidity (M3) grew 5.5% in May, slower than April’s 5.8% expansion.

M3 — which is considered the broadest measure of liquidity in an economy and include currencies in circulation, bank deposits, and other financial assets that are easily convertible to cash — increased to P18.35 trillion as of May from P17.4 trillion a year earlier.

Month on month, M3 inched up by 0.7% on a seasonally adjusted basis.

Central bank data showed that domestic claims grew by a slower 10.7% in May to PHP 20.88 trillion from 10.9% in April.

Claims on the private sector alone grew by 10.9% in May to PHP 13.43 trillion, easing from the revised 11.5% in the previous month.

This was “driven by the continued expansion in bank lending to nonfinancial private corporations and households,” the BSP said.

“Net claims on the central government increased by 9.1% from 9.3% (revised), driven by its higher borrowings,” it added.

Meanwhile, net foreign assets (NFA) in peso terms decreased by 4.6% in May from the 0.2% drop in April.

“The BSP’s NFA fell by 4.4% primarily due to the peso’s appreciation against the US dollar. Meanwhile, banks’ NFA declined largely on account of higher foreign currency-denominated bills payable,” the central bank said.

Mr. Ricafort said the slower money supply growth seen in May was likely partly due the BSP’s liquidity management efforts through its weekly auctions of term deposits and short-term securities, which are part of the tools it uses to better manage inflation and price expectations.

Still, these could have been offset by cuts to banks’ reserve requirement ratios, with the latest round implemented in April infusing some P300 billion in cash into the financial system. — Aaron Michael C. Sy

PSEi up on extended trade talks, rate cut bets

Local stocks rose for a second straight session on Tuesday, buoyed by extended talks between the US and trade partners including the Philippines, as well as expectations of a dovish policy stance from the Bangko Sentral ng Pilipinas (BSP).

The Philippine Stock Exchange Index (PSEi) added 0.13% or 8.36 points to close at 6,433.6. The broader all-share index rose 0.11% or 4.24 points to 3,784.17.

“The local market extended its rise as investors continued to cheer the extension of the US reciprocal tariff deadline to Aug. 1, giving the Philippines more time to strike a trade deal with the US,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

On Monday, US President Donald J. Trump signed an executive order moving the effectivity of reciprocal tariffs to Aug. 1 from the original July 9 deadline.

Starting Aug. 1, the US will impose varying tariffs — 25% on Japan, South Korea, Tunisia, Malaysia and Kazakhstan; 30% on South Africa and Bosnia and Herzegovina; 32% on Indonesia; 35% on Serbia and Bangladesh; 36% on Cambodia and Thailand; and 40% on Laos and Myanmar.

Shares also rose as the market was lifted by expectations of another policy rate cut by the Philippine central bank.

“Local shares closed higher, lifted by dovish expectations on the Bangko Sentral ng Pilipinas’ policy stance following soft June inflation data,” said Luis A. Limlingan, head of sales at Regina Capital Development Corp.

June inflation accelerated slightly to 1.4% from 1.3% in May, but below 3.7% a year earlier.

The BSP has cut interest rates twice this year, with the policy rate now at 5.25% after the latest 25-basis-point reduction on June 19.

Sectoral performance was mixed. Services rose 0.77% to 2,130.23, while holding firms gained 0.65% to 5,638.9.

On the other hand, mining and oil slipped 0.43% to 9,199.7, financials dropped 0.35% to 2,265.98, property shed 0.26% to 2,422.64, and industrials edged down 0.01% to 9,116.95.

Universal Robina Corp. led index gainers with a 4.33% jump to P94. ACEN Corp. was the biggest decliner, falling 2.26% to PHP 2.60.

Trading value dropped to PHP 6.96 billion from PHP 7.8 billion on Monday. Winners beat losers 104 to 96, while 56 stocks were unchanged.

Net foreign selling stood at PHP 168.05 million, reversing the PHP 107.24 million net inflow on Monday. — Revin Mikhael D. Ochave

Marcos open to online gaming tax

Philippine President Ferdinand R. Marcos, Jr. is open to taxing online gaming activities as well as proposals seeking to limit digital gambling to help curb the harms brought about by addiction, the Palace said on Monday.

“The DoF’s (Department of Finance) proposal to impose a tax to help restrict online gaming is for the welfare of Filipinos,” Palace Press Officer Clarissa A. Castro told reporters in Filipino during a news briefing. “The President is aware of the consequences of gambling addiction, and he will not oppose this proposal as long as it is supported by studies.”

“We want to limit this kind of gambling and those who are addicted to it. The President will not oppose proposals, including laws, that aim to do this… We will study any bills that will be passed by Congress to assess their impact on the economy and Filipinos’ welfare.”

Finance Secretary Ralph G. Recto last week said they will propose an online gaming tax and are also studying other policy options “to deter unimpeded and practically unrestricted access to gambling, particularly digital gambling platforms.”

These include imposing limits on playing time or cash-in to help prevent addiction, age restrictions, as well as displaying clear warnings about the risks of gambling, Mr. Recto said.

Ms. Castro said the government is also ramping up its crackdown on unlicensed and illegal online gaming sites.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said the DoF’s tax proposal is a “good way to increase government revenues.”

“The (online gambling) industry is growing quickly,” he said in a Viber message. “Whether it curbs gambling addiction is hard to answer, as it requires proper intervention and programs to promote responsible gaming.”

He added that an online gaming tax can serve as a barrier for new players while helping the government fund its programs.

Several lawmakers have filed bills seeking to curb online gambling amid its rising popularity among Filipinos.

On Monday, Senator Juan Miguel F. Zubiri said that he is seeking an outright ban on online gambling platforms, calling the rise of gambling addiction a “silent epidemic,” especially among the youth.

“The taxes earned are not worth the social cost. The lives of our countrymen are being ruined, families are fighting, crime is rising, and they are drowning in debt,” Mr. Zubiri said, adding that foregone revenues from the outright ban may reach P47 billion annually.

Senate Bill No. 142, or the Anti-Online Gambling Bill, seeks to ban online gambling on mobile gadgets. Internet service providers are also mandated to limit public access to online gambling platforms and applications.

It also seeks to prohibit electronic wallets and other digital payment systems from being used on online gaming platforms.

The Akbayan party-list also filed a bill in the House of Representatives that seeks to regulate online gaming sites.

“We cannot gamble away our youth’s future. Our children cannot become collateral in the jackpot dreams of gambling tycoons,” Party-list Rep. Jose Manuel “Chel” I. Diokno said in a statement.

House Bill No. 1351, or the Kontra E-Sugal bill, seeks to impose regulations for online gambling platforms, citing the need to safeguard public welfare, protect vulnerable groups, and ensure responsible gambling practices.

The bill wants to impose strict age verification protocols to prevent minors from accessing these platforms and limit advertising and promotion of digital gaming. It also seeks to impose a betting and loss limit.

Gross gaming revenue (GGR) rose by 27.44% to PHP 104.12 billion in the first quarter, the Philippine Amusement and Gaming Corp. earlier said, with electronic gaming out-earning physical casinos for the first time. Electronic businesses generated PHP 51.39 billion or 49.36% of GGR in the period. — Chloe Mari A. Hufana and Adrian H. Halili, Reporters

Digital payments post steady increase

Digital payments in the Philippines posted steady growth last year, making up almost 60% of both the volume and value of total monthly retail transactions, the Bangko Sentral ng Pilipinas (BSP) reported on Monday.

The BSP’s 2024 Status of Digital Payments in the Philippines report released on Monday showed that the share of online payments in monthly retail transactions stood at 57.4% in terms of volume and 59% in value terms in 2024.

These are up from 52.8% and 55.3%, respectively, in 2023. The BSP said in its report that these were also higher than the 2024 target of 52-54% for digital payments set under the Philippine Development Plan 2023-2028.

“This steady year-on-year growth reinforces the momentum built after surpassing the 2023 digitalization target of 50% for volume,” the central bank said.

“These figures reflect the continued shift toward digital channels and the growing trust of Filipinos in using digital financial services,” BSP Governor Eli M. Remolona, Jr. said in a message in the report.

“Beyond these headline figure lies our deeper challenge to ensure that digital payments are not just adopt but be integrated into the daily lives of every Filipino. We envision a future where digital becomes the default, not only because it is mandated but because the end users see real value in its convenience, security and the feeling of empowerment,” BSP Deputy Governor for the Payments and Currency Management Sector Mamerto E. Tangonan said in his own message.

Last year, the volume of digital payments was at 3.307 billion, higher than the 2.45 billion in non-digital transactions.

Meanwhile, the value of online transactions stood at USD 135.95 billion, more than the USD 94.54 billion in non-digital payments.

“Consistent with the previous year, merchant payments, person-to-person (P2P) transfers, and business-to-business (B2B) supplier payments remained key contributors to growth in digital payments,” the BSP said, with these three use cases collectively accounting for 93.2% of the total volume of digital transactions, equivalent to 3.082 billion transactions.

Merchant payments made up 66.4% or 2.196 billion of the monthly digital payment volume, up 29.1% year on year. In terms of value, merchant payments were at USD 28.8 billion.

P2P transfers comprised 20.6% of the total with 680.5 million digital transactions (worth USD 47.8 billion), rising by 34.7% from the prior year, which the central bank said was driven by broader access to transaction accounts.

Lastly, B2B or supplier payments had a 6.2% share with 205 million transactions (valued at USD 28.6 billion), up 28.1% year on year. The BSP said this reflects the impact of its digitalization initiatives in the business sector.

“The growing adoption of these contributors is evident through the increasing use of QR Ph P2M, InstaPay, and PESONet. More BSP-supervised institutions are joining QR Ph P2M, making it easier for Filipinos to pay by simply scanning or uploading QR codes at merchants nationwide,” the central bank said, noting that the number of merchants accepting QR Ph grew by 148.7% year on year in 2024.

“InstaPay also saw significant growth, with a 67.8% rise in transaction volume and 46.3% in value from 2023 to 2024, highlighting its popularity for fast, low-value P2P transfers. Meanwhile, the expansion of PESONet transactions, supported by the addition of a third daily settlement cycle in July 2024, has further boosted digital supplier payments, enhancing the efficiency of business transactions,” the BSP added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the increased use of e-wallets as consumers prefer more convenient payment options has also helped drive the rise in online transactions.

“E-wallets have also been integrated with online banking apps, further reducing the need to have cash or coins,” he said. “Furthermore, this also reflects the continued growth and increased adaptation of online business transactions, as well as increased use of delivery services, TNVS (transportation network vehicle service), and other online solutions that also make digital transactions more convenient.”

“The pandemic-induced shift in consumer behavior also had a lasting effect, with more Filipinos now preferring the convenience and safety of cashless transactions,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera added said in a Viber message.

Mr. Rivera said expanded merchant adoption of digital payment platforms and strong public-private collaboration through initiatives like QR Ph and the BSP’s Paleng-QR Ph program has propelled the growth of online transactions in the Philippines.

“This year, digital payments will likely continue to grow, fueled by the rollout of the National ID, expansion of digital infrastructure in rural areas, and stronger trust in fintech (financial technology) platforms. Continued BSP initiatives under the Digital Payments Transformation Roadmap will also play a key role in pushing usage toward the 70% target for retail transactions,” he said.

Mr. Ricafort added that digital transactions will likely continue to grow as financial literacy improves and amid rising incomes and savings.

“The BSP continues to pursue its vision of harnessing technology and finance not only to connect markets but also to ensure that every Filipino becomes part of the formal financial system,” Mr. Remolona said.

“In this light, we aim to foster an environment that empowers our regulated entities and fintech partners to leverage innovation in designing financial products that are not only accessible but also more responsive to the needs of consumers.”

Mr. Tangonan said the BSP will continue to support initiatives to advance innovation in the digital payments space while reinforcing safeguards against risks. “Ultimately, we want to ensure that progress does not come at the cost of consumer protection or systemic stability.”

These initiatives include Project Nexus, through which the Philippines, with India, Malaysia, Singapore and Thailand are working to establish a multilateral network to link their payment systems for cross-border transactions.

“We likewise aspire for a national retail payment system where one account is sufficient to meet all payment needs of a person in a secure and convenient manner, as supported by the full interoperability across BSP-supervised institutions’ platforms. This is more than just infrastructure; it is a blueprint of digital finance that is unified, intuitive, and centered around diverse payments needs,” Mr. Tangonan said.

The BSP is also pursuing policy initiatives related to designated payment system operators, clearing switch operations, and “reasonable” electronic fund transfer fees to make digital payments more affordable, accessible and attractive for consumers.

“The objective is to empower more users to participate in the digital economy, enhance financial inclusion, and drive economic growth,” the central bank said.

The BSP is targeting to achieve a 60-70% share of digital payments over total retail payments volume by 2028, in line with the Philippine Development Plan. — Aaron Michael C. Sy

Philippine-Korea deal to boost investments, trade

The Philippines’ free trade agreement (FTA) with South Korea is expected to continue encouraging Korean companies to make investments here and help bilateral trade rebound despite a challenging global environment, according to the Embassy of the Republic of Korea in the Philippines.

“Despite current fluctuations in Korea-Philippines trade, driven by geopolitical uncertainties and a downturn in global demand, the FTA is expected to significantly mitigate downward pressures,” Korean Embassy Commercial Attaché Taehyung Kim told BusinessWorld.

Philippine exports to South Korea declined by 20.1% year on year to USD 1.29 billion in the first five months of the year, data from the Philippine Statistics Authority showed.

Mr. Kim said he expects the FTA to help bilateral trade between the two countries recover once the global environment improves.

“With geopolitical uncertainties easing and global demand rebounding, we anticipate that the growth in Philippine exports to Korea, coupled with increased Korean investment, will positively impact trade between our two countries,” he said.

“In this evolving landscape, the Korea-Philippines FTA will play a crucial role by providing institutional stability for the mutually beneficial growth of both nations.”

Mr. Kim added that he has observed “a notable upward trend in investments from Korean companies into the Philippines.”

Citing data from the Philippine Economic Zone Authority (PEZA), he said, “Korea is the number one and most significant investor country for the first half of this year.”

“This surge in Korean investment is largely attributed to the Korea-Philippines FTA coming into effect, coupled with the Philippine government’s strong commitment to improving the investment climate,” said Mr. Kim.

In particular, he said that the government’s initiatives like the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act and the Luzon Economic Corridor have helped spur interest.

In the first semester, the PEZA approved 133 projects worth P72.36 billion, of which 14.87% came from South Korea.

PEZA Director-General Tereso O. Panga also said that increasing Korean investments can be partly attributed to the FTA.

“This agreement is anchored on expanding trade through enhanced market access, fostering robust economic cooperation, and attracting investments — particularly in key sectors such as critical minerals and supply-chain development,” Mr. Panga said in a Viber message.

“The Philippines stands to benefit from this FTA, which opens more opportunities for investors, increased market access, FDI (foreign direct investment) inflows, higher value-added production, and export diversification combined with deeper economic cooperation and innovation partnership,” he added.

Mr. Kim said the Philippines’ workforce, strategic location, and dynamic economy have helped attract Korean firms.

“Already, many Korean companies in sectors like semiconductors, auto parts, and apparel are achieving mutually beneficial growth here in the Philippines. Notably, last year also saw significant new investments from a Korean company in the shipbuilding sector,” he said.

“We expect Korean companies to continue bolstering reciprocal economic cooperation by contributing to the creation of quality jobs, revitalizing local economies, and advancing industrial structures within the Philippines.” — Justine Irish P. Tabile, Reporter

PSEi rises to 6,400 on rate cut bets, delayed tariffs

Philippine stocks advanced on Monday as investor sentiment was lifted by expectations of further local interest rate cuts and after the US delayed the implementation of its planned reciprocal tariffs to Aug. 1.

The bellwether Philippine Stock Exchange Index (PSEi) rose 0.46% or 29.67 points to 6,425.24, while the broader all-share index added 0.4% or 15.22 points to 3,779.93.

“The local market closed higher, backed by dovish expectations on the Bangko Sentral ng Pilipinas’ (BSP) policy outlook following June’s weak inflation print,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“Investors also digested the US decision to move the reciprocal tariff implementation to Aug. 1 for those who have not struck a trade deal with the country yet,” he added.

On Friday, Finance Secretary Ralph G. Recto said lower-than-expected June inflation gives the central bank more room to continue its policy easing.

Inflation rose to 1.4% in June from 1.3% in May but slowed from 3.7% a year earlier.

Last month, the BSP delivered a second straight 25-basis-point cut, bringing the policy rate to 5.25%.

US President Donald J. Trump on Sunday said the higher tariff rates would take effect on Aug. 1 as the US was nearing several trade pacts.

Mr. Trump imposed a 10% baseline tariff on all US imports effective April 1 to “level the playing field” by automatically applying tariffs equal to what US exports face abroad. On April 9, tariff rates were adjusted to 11–50% for 57 countries. On April 10, it hiked China’s tariff to 125% after retaliation.

“Philippine shares closed slightly above the 6,420 level, ahead of upcoming employment and industrial data to be released today,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message.

Most of the market’s sectoral indices closed higher. Financials gained 0.87% or 19.82 points to 2,274.12, while services increased 0.79% or 16.67 points to 2,113.88.

Property went up 0.74% or 17.84 points to 2,429.03, while industrials climbed 0.46% or 42.29 points to 9,118.44.

On the other hand, mining and oil dropped 2.31% or 219.30 points to 9,239.67, while holding firms slipped 0.006% or 0.31 point to 5,601.96.

Puregold Price Club, Inc. was the top index gainer, climbing 3.27% to PHP 36.30, while Globe Telecom, Inc. was at the bottom, falling 3.87% to PHP 1,639, Mr. Tantiangco said.

Value turnover rose to PHP 7.8 billion with 911.7 million shares traded from PHP 6.62 billion covering 1.12 billion issues exchanged on Friday.

Losers beat winners 100 to 96, while 66 stocks were unchanged. Net foreign buying retreated to PHP 107.24 million from PHP 295.82 million on Friday. — Revin Mikhael D. Ochave

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