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Archives: Business World Article

Philippine current account deficit seen to narrow – IMF

Philippine current account deficit seen to narrow – IMF

The International Monetary Fund (IMF) expects the Philippines’ current account deficit to narrow this year.

“The current account deficit is projected to narrow from 3.8% of gross domestic product (GDP) in 2024 to 3.4% of GDP in 2025, supported by weaker commodity prices,” IMF Mission Chief Elif Arbatli Saxegaard said in a statement.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the current account deficit widened by 41.4% to USD17.5 billion last year from USD12.4 billion in 2023. This brought the current account to 3.8% of economic output in 2024 from the 2.8% the year prior.

The central bank expects the current account deficit — which covers transactions involving goods, services, and income — to reach USD19.8 billion this year, equivalent to 3.9% of GDP.

Ms. Saxegaard also noted that while the country’s gross international reserves (GIR) have declined since the record-high in September, the dollar reserve level remains adequate.

The Philippines’ GIR declined by 1.9% to USD104.6 billion as of end-April from USD106.7 billion as of end-March, BSP data showed. Dollar reserves hit a record USD112 billion in September 2024.

Meanwhile, the multilateral institution said it remains critical that the Philippines sticks to its medium-term fiscal consolidation path.

This will also require “sustained and durable efforts to mobilize tax revenues and ensure efficiency of government spending,” it added.

Ms. Saxegaard said the government’s fiscal stance will likely be broadly neutral this year.

“The medium-term fiscal consolidation remains appropriate and should be supported by a sustainable plan to raise tax revenues and implement expenditure reforms to ensure that deficit targets are met and to create more space for priority spending.”

Under the latest Development Budget Coordination Committee (DBCC) figures, the NG capped its deficit ceiling at 5.3% of GDP this year.

“Tax reforms could prioritize raising excise taxes, enhancing VAT efficiency, improving tax administration, and ensuring effective control of tax incentives. Efforts to enhance public financial management and manage fiscal risks should continue.”

“Enhancing capacity at the local government level to execute additional spending responsibilities in line with the higher revenues allocated to them in the decentralization process is critical to support growth,” she added.

Ms. Saxegaard led an IMF team during its meetings in Manila from May 14 to 20.

For the coming months, she said the IMF will continue its dialogue in the context of this year’s Article IV Consultation. — Luisa Maria Jacinta C. Jocson

Marcos eyes ‘bold reset’ of government

Marcos eyes ‘bold reset’ of government

Cabinet members, including state economic managers, submitted their courtesy resignations on Thursday as part of President Ferdinand R. Marcos, Jr.’s “bold reset” of the government to better meet the needs of Filipinos.

The move comes following the poor performance of administration-backed senatorial candidates in the May 12 midterm elections, and amid global uncertainties due to trade concerns that could threaten the Philippine economy.

The Presidential Communications Office (PCO) said the request for resignations will give Mr. Marcos “elbow room to evaluate the performance of each department and determine who will continue to serve in line with his administration’s recalibrated priorities.”

“With this bold reset, the Marcos administration signals a new phase — sharper, faster, and fully focused on the people’s most pressing needs,” it said.

“It’s time to realign government with the people’s expectations. This is not business as usual,” Mr. Marcos said in the statement. “The people have spoken, and they expect results, not politics, not excuses. We hear them, and we will act.”

Officials will continue to perform their duties until their resignations are accepted, or new appointments are made by the President.

The President’s allies failed to win a majority of Senate seats contested in the May 12 polls, leaving Mr. Marcos facing a divided political and legislative landscape that could thwart his attempts to have an ally succeed him in 2028.

Candidates aligned with Mr. Marcos’ estranged vice-president, Sara Duterte-Carpio, outperformed expectations in the midterms, which many saw as a proxy battle between Marcos and the Duterte camps.

With less than three years in office left, Mr. Marcos is under pressure to deliver results and groom a successor capable of fending off any potential run by the popular Ms. Duterte-Carpio in the 2028 presidential election.

Over 30 Cabinet-level officials tendered their courtesy resignations, including economic managers Finance Secretary Ralph G. Recto, Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan, Budget Secretary Amenah F. Pangandaman, and Special Assistant to the President for Investment and Economic Affairs Frederick D. Go.

Cabinet members said in separate statements that they resigned as they “serve at the pleasure of the President.”

Mr. Recto said he fully supports the planned revamp, adding that Mr. Marcos “carries the heavy burden of leading the nation through complex global and domestic challenges.”

For his part, Mr. Balisacan said, “If deemed necessary, I stand ready to hand over the leadership to someone the President believes can better drive our nation’s development goals.”

“It’s a prerogative of the President. The President can change his team anytime, but I think it’s a good time because it’s [the middle of his term],” he said on the sidelines of the BusinessWorld Economic Forum 2025 on Thursday, adding that his department is also doing an internal assessment.

PCO Undersecretary and Palace Press Officer Clarissa A. Castro said at a news briefing that Mr. Marcos is frustrated with the performance of some of his Cabinet members, but did not specify anyone.

“The President has made it clear that all pending and ongoing projects will not be affected during this transition,” she said. “Work continues uninterrupted for our Cabinet secretaries and government personnel.”

While she gave no timeline, she said the President is acting with urgency.

Asked what priorities the government will focus on moving forward, Ms. Castro said infrastructure and education are on top of the list.

Political move

The directive drew mixed reactions from stakeholders, with some believing that it may have been driven by political concerns.

Arjan P. Aguirre, assistant professor of political science at the Ateneo de Manila University, said the recent polls likely triggered Mr. Marcos’ decision to revamp his Cabinet.

“Being the incumbent, this is something that we can expect as the most logical response to deliver more of what the people want and/or really need,” he said in a Facebook Messenger chat. “This is what I’m sensing as the response of the Marcos government, but again, we have yet to see if this will really lead to real changes or benefits.”

“The bigger effect that we can expect here is the identification of new priorities of the Marcos government — priority projects that target the concerns of the people,” he added.

Josue Raphael J. Cortez, a diplomacy lecturer at the De La Salle-College of St. Benilde, said this recalibration strategy is a timely political move from the Marcos administration.

“This move can be viewed in two ways: first, as a way of projecting that we have a listening government, and second, an implicit conditioning for the 2028 national elections, which will determine whether the ball will still be on the side of the Marcoses, or it will once again pivot towards the Dutertes, despite the issues surrounding the family,” he said in a Facebook Messenger chat.

IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa said the move may be due to Mr. Marcos’ declining approval and trust ratings.

Mr. Marcos has faced a steep decline in public support, according to a March survey by Pulse Asia, with only 25% of Filipinos approving of his performance, down from 42% previously.

In stark contrast, Ms. Duterte-Carpio enjoyed a significantly higher approval rating of 59%.

Sentiment towards the government has soured due in part to a perceived failure to control inflation, a top concern of Filipino households, even though it has been back within the central bank’s 2% to 4% target range since August.

“The ineffectiveness of government efforts to improve the well-being of the majority is most of all due to the nature of the economic policies themselves, which favor short-term corporate profitability and the wealth of politically connected families rather than universal provision of public social services and aiming for real Filipino industrialization to create jobs,” Mr. Africa said in a Viber chat.

He said the government needs to reset policies and not just the Cabinet. “No matter how many times Cabinet members are changed, the public sector and economy won’t be transformed unless real reforms for social and economic transformation are undertaken.”

Philippine Chamber of Commerce and Industry President Eunina V. Mangio said in a statement that the move is surprising as the government “has been performing relatively well in managing the economy,” although progress has been undermined by political issues.

“We are trying to get more investments for the country, especially with the passage of the CREATE MORE (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy) Act. We want to continue fostering economic growth and investor confidence, and so we hope that the courtesy resignations will bring in accountable and merit-based appointments and appointments done [as soon as possible] to avoid political instability and so as not to derail economic continuity,” Ms. Mangio said.

“We understand the President’s actions and intentions as this happens in business and the private sector. A CEO (chief executive officer) needs to make difficult calls, such as replacing talents, with the primary objective of improving the performance of the organization,” Management Association of the Philippines President Alfredo S. Panlilio said in a statement. “Difficult as it may be, the call of leadership is to make such hard decisions in the interest of establishing meritocracy and encouraging performance. We hope the President will find the appropriate talents for those he decides to replace — people who can effectively execute his government’s plans.”

“We trust that capable, proactive, and committed individuals will be empowered and work together as a cohesive team to execute the nation’s plans to uplift the lives of all Filipinos and move us closer to the outcomes our people deserve.”

Makati Business Club Chairman Edgardo O. Chua told reporters at an event that they are hoping that the Cabinet revamp would not be major as they are generally satisfied with the performance of the current economic team.

“If many of them are replaced, it will be disruptive,” he said. “We are hoping that the President will be able to maintain the good ones.”

Mr. Marcos’ call for courtesy resignations will “enable him to have a free hand in appointing or reappointing people who he believes will deliver in the second half of his term,” he said.

“So, we just hope that the President will be able to quickly announce who will be appointed or reappointed so that there is minimal disruption,” Mr. Chua added. — Chloe Mari A. Hufana with Reuters

US rating cut could benefit the Philippines, other markets

US rating cut could benefit the Philippines, other markets

The United States’ latest credit rating downgrade could benefit the Philippines and other emerging markets as this could prompt investors to diversify their portfolios.

“The US credit downgrade is negative for US dollar and US dollar-denominated assets but positive for the peso as global funds diversify into non-dollar assets, including emerging market asset classes. The Philippines is part of the emerging market universe,” Cristina S. Ulang, head of research at First Metro Investment Corp., said.

“It’s possible the downgrade could lead some investors to diversify away from dollar assets,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message. “This may create an opportunity for markets like the Philippines, but any shift would depend on broader risk sentiment and how local fundamentals compare with other emerging markets.”

Moody’s Ratings last week cut the US’ long-term issuer and senior unsecured ratings to “Aa1” from “Aaa,” revising its outlook to “stable” from “negative.”

The debt watcher said this downgrade “reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.”

The move stripped the US of its last triple-A rating from the big three credit raters. In 2011, S&P Global Ratings cut the US’ sovereign long-term credit rating to “AA+” from its top investment grade of “AAA.” Fitch Ratings in 2023 also downgraded the country’s rating to “AA+” from “AAA.”

The Philippines holds investment-grade ratings from all three debt watchers. S&P in November last year kept its “BBB+” long-term credit rating for the country, a notch below the “A” level grade targeted by the government, and raised its outlook to positive.

Meanwhile, Fitch and Moody’s rate the Philippines at “BBB” and “Baa2,” respectively, with stable outlooks, which are a level below S&P’s rating. Fitch affirmed its long-term rating in April, while Moody’s latest sovereign rating action was announced in August 2024.

The Philippines’ manageable debt-to-gross domestic product (GDP) ratio could make it a preferred option for investors, Ms. Ulang said.

The government is seeking to bring the debt-to-GDP ratio down to 60.4% by the end of 2025, and to 56.3% by 2028. Debt as a share of GDP stood at 62% at the end of the first quarter.

BDO Senior Vice-President and Trust and Investments Group Head Frederico Rafael D. Ocampo said the fiscal concerns cited by Moody’s for the rating downgrade could cause US assets to perform weaker in the near term as investors look for other markets.

“While the immediate reaction following the announcement was a sell-off across most US assets, the move has been partially retraced on investors looking to take advantage of cheap valuations,” Mr. Ocampo said in a Viber message.

“Looking ahead, we anticipate US-denominated portfolios to trade weaker following a broader de-risking in US assets in the near term, especially if the US government fails to address the more systemic issue of a growing deficit funded by more borrowings.”

Mr. Ocampo added that elevated long-term rates could “add pressure on portfolios with substantial exposures in the tail end of the yield curve, such as those of insurance companies and pension funds.”

Borrowing costs

Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. likewise said that higher rates could affect borrowing costs.

“Investors may demand higher yields on US government debt to compensate for the perceived increase in risk,” Mr. Neri said in a Viber message. “This could impact local corporates in the Philippines with dollar-denominated debt, as they may face higher borrowing costs.”

However, the rise in interest rates could be marginal as the US’ credit rating is still high, even with the latest downgrade.

“In addition, local corporates or investors holding US Treasuries could see a decline in the value of their holdings if yields rise, since bond prices typically move inversely with interest rates,” he said.

“Spillover effects on emerging markets in general might be on higher borrowing costs when there is a demand for higher premiums with higher risk due to the downgrade pushing rates relatively higher,” Mr. Limlingan added.

Meanwhile, Leonardo A. Lanzona, an economics professor at Ateneo de Manila University, said that while the downgrade could trigger a shift away from US risk assets, the Philippines may not necessarily be the first choice for investors.

“Since the Philippines is tied to the US, I don’t think (there) will be investing in the Philippines. Countries that have divested from US assets are more likely to gain. Canada and Europe may have done so already,” he said in an e-mail.

“Filipino investors can shift their investments in other countries, although the options can be limited to China.”

Mr. Lanzona added that the US economic concerns flagged by Moody’s would also have a negative impact on the Philippines.

“This can have both real and financial effects on the country. In the real sense, the country will be affected since the US is the country’s top importer.”

The Philippines should implement economic policies that “favor domestic production and greater protection for the workers,” he said, especially amid global uncertainties.

“Enhancing technological innovation within the country and greater flexibility for firms and workers should be given priority,” Mr. Lanzona added. — Luisa Maria Jacinta C. Jocson and Aaron Michael C. Sy

PSEi retreats as Marcos eyes Cabinet revamp

PSEi retreats as Marcos eyes Cabinet revamp

Philippine stocks fell on Thursday, weighed by President Ferdinand R. Marcos, Jr.’s move to revamp his Cabinet and assert his authority after his allies failed to win a majority of Senate seats in the midterm elections.

The bellwether Philippine Stock Exchange Index (PSEi) declined 1.09% or 69.98 points to 6,305.37, while the broader all-share index lost 0.79% or 29.76 points to 3,708.18.

“The PSEi corrected lower amid some wait-and-see stance in the markets on the new Cabinet appointments,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

The President asked his Cabinet secretaries to resign so he could evaluate the performance of each department and “determine who will continue to serve in line with his administration’s recalibrated priorities,” the presidential palace said in a statement.

Mr. Marcos said government projects would not be affected by the overhaul.

“Investor caution was further heightened by domestic political uncertainty after Mr. Marcos’ call for the courtesy resignation of his Cabinet secretaries, seen by some as a possible shift in policy direction,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message.

The local market also plunged on the back of negative cues from Wall Street caused by the rise in long term Treasury yields, Japhet Louis O. Tantiangco, a senior research analyst at Philstocks Financial, Inc., said via Viber.

“This comes amid concerns over the sustainability of the US fiscal position as the budget deficit is seen to widen further,” he said. “Investors also dealt with Mr. Marcos’ move to call for the resignation of his Cabinet secretaries.”

Almost all sectoral indexes fell. Properties fell 1.31% or 29.37 points to 2,206.93, while holding firms declined 1.22% or 66.85 points to 5,380.79.

Financials retreated 1.19% or 28.5 points to 2,348.18, while industrials fell 1.1% or 99.69 points to 8,929.97. Services shed 0.57% or 12.17 points to 2,098.46.

On the other hand, mining and oil rose 1.12% or 106.11 points to 9,559.56.

Emperador, Inc. was the top index gainer, climbing 1.02% to PHP 13.80, while China Banking Corp. was the worst performer, dropping 4.58% to PHP 73, Mr. Tantiangco said.

Value turnover fell to PHP 6.39 billion with 572.35 million shares traded from PHP 7.63 billion and 712.07 million stocks traded on Wednesday.

Lowers beat winners 112 to 66, while 57 shares were unchanged. Net foreign selling rose to PHP 519.7 million from PHP 287.34 million on Wednesday. – Revin Mikhael D. Ochave, Reporter

Contact centers target 5% growth

Contact centers target 5% growth

The Contact Center Association of the Philippines (CCAP) is projecting at least 5% growth in revenues and jobs this year, even as companies increasingly adopt new technologies, including artificial intelligence.

“For 2025, we’re still projecting a growth of between 5% and 7% as an industry,” CCAP President Haidee C. Enriquez said during a pre-event conference for Contact Islands 2025 on Wednesday.

Last year, the contact center industry booked USD 31.5 billion in revenues, 82% of the information technology and business process management (IT-BPM) industry’s total revenue. It also had 1.62 million full-time employees, making up 89% of the industry’s total employee count.

If the 5-7% growth is realized this year, the industry’s revenues by the end of the year may range from USD 33.1 billion to USD 35.42 billion, and its employee count may range from 1.7 million to 1.73 million.

However, she said that the Information Technology and Business Process Association of the Philippines is set to review the targets under the Philippine IT-BPM Industry Roadmap 2028.

“The 5-7% growth is not yet the revisited targets. But we are very confident that we will achieve that,” she said.

Citing an internal survey conducted among its 167 member companies, she said 100% of the companies said they are “somewhat confident” and “confident” that they will be hitting their targets.

Ms. Enriquez noted, however, that there has been slower growth in headcount due to the adoption of new technologies.

“But it does not necessarily impact the revenue, simply because members are slowly but surely going into higher value services,” she added.

CCAP Board Director Tonichi Achurra-Parekh said the headcount will likely continue to grow in the near term even as more companies adopt new technologies.

“Do we project that we will see a reduction in FTEs (full-time employees) in the next one to two years? Maybe not. But yes, it will be slower. Further than that, we don’t know, just because of the fast-paced development of the technology,” she said.

“We are now focused on upskilling and retraining our workforce to make sure that… we move up to the high-value, complex type of work. That we are going to see, and that will continue to happen,” she added.

Jamea S. Garcia, corporate secretary of CCAP, said upskilling workers would allow contact center companies to shift to higher-value work, which would boost revenues.

“The revenue per FTE becomes higher because there are more efficiencies to be had,” she added.

Following the group’s projection, the contact center industry is estimated to hire 80,000 to 100,000 more employees this year. This would be lower than about 110,000 new hires last year.

According to Ms. Enriquez, companies are deploying more resources towards upskilling existing workers.

“The industry in general got P500 million in funding from the Technical Education and Skills Development Authority (TESDA) for upskilling,” she said. “Well, the rest, hopefully, will come from the Department of Information and Communications Technology (DICT).”

Ms. Enriquez said workers will undergo training in new technologies, covering areas such as cybersecurity, data analysis, data annotation, and medical coding.

Challenges

Aside from talent and skills gaps, the contact center sector is also facing competition from new and re-emerging markets for IT-BPM services.

“There are more and more locations that want to be like the Philippines… And most of our members actually reported that this is a challenge more than ever for many of them when it comes to generating and attracting new clients,” said Ms. Enriquez.

These markets include countries in Latin America, the Association of Southeast Asian Nations, and Eastern Europe.

“They have discovered the gold mine that we discovered many, many years ago. So, they are capitalizing, like Cairo, for example, and our neighboring countries, like Malaysia and Vietnam,” said Ms. Achurra-Parekh.

“And they’re making it very attractive for the same investors that we have so that they (the clients) will go there,” she added.

‘Cautiously optimistic’

Meanwhile, Ms. Enriquez said they are closely monitoring the US government’s tariff policies for signals, as the US remains the dominant source of outsourced work to the Philippines.

“There is some concern. So, suffice it to say that we are cautiously optimistic as an industry that it will not have a long-term impact on us,” she said.

“The tariffs are now centered on goods, not services. But given the unpredictability on that side of the fence, there might be, later on, tariffs imposed on services that are being offshored to the Philippines,” she added.

However, Ms. Enriquez said the US tariffs on goods have not impacted the ways of doing business for contact centers in the Philippines.

“But we’re being very watchful and cautious,” she added.

Citing historical trends, CCAP said the industry growth fell sharply from 12.3% in 2016 to just 2.5% and 3.9% in 2017 and 2018, respectively. These years coincide with US President Donald J. Trump’s first term.

Mr. Trump, who began his second term in January, has upended global trade by imposing reciprocal tariffs on most of its trading partners.

The Philippines is facing a 17% reciprocal tariff, the second-lowest rate among Southeast Asian countries.

The US has paused reciprocal tariffs until July pending negotiations with trading partners.

However, Ms. Achurra-Parekh said that while the tariff policy only covers goods, it may also affect how contact centers in the Philippines provide services to US customers.

“Indirectly, the consumer behavior in the US will impact how we provide the services,” she said.

“Although we don’t manufacture the goods, at the end of the day, we service them,” said Ms. Garcia. – Justine Irish D. Tabile, Reporter

Filipinos turn electric amid high fuel prices

Filipinos turn electric amid high fuel prices

John Rex O. Gavales, a 22-year-old entrepreneur from Bulacan province north of the Philippine capital, bought his Chinese-made BYD Seagull electric car last year to replace his diesel-based hatchback amid high fuel prices.

“My fuel costs are far less now at about PHP 1,000 for every 600 kilometers from PHP 4,000,” he told BusinessWorld via Zoom. “I love this car.”

Fuel adjustments have led to a net increase of PHP 4 per liter for gasoline and PHP 3.80 for diesel as of May 20, according to Energy department data posted on its website.

Last year, 18,690 electric vehicles (EV) were sold in the Philippines, accounting for 4% of total car sales, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI). It expects EV sales to increase by 7% to 20,000 units this year.

Mr. Gavales, who bought the BYD car for PHP 938,000 (USD 16,800), admits that he often suffers from “range anxiety,” worried that his car battery would get drained while on a road trip.

“I was in Tarlac, coming from Bulacan, and I only had about 55% of charge left,” he recalled. “Do I continue driving home or do I pass by San Fernando or Angeles City to charge?”

“As an EV owner, that is my only concern, especially when going to places without a clear route plan,” he added.

There were more than 900 publicly accessible charging stations in the Philippines as of March 31, according to the Department of Energy (DoE).

“The DoE continuously develops policies and programs to further strengthen the adoption of EVs and the rollout of electric vehicle charging stations in the Philippines,” Patrick T. Aquino, director at the DoE’s Energy Utilization and Management Bureau, said in a Viber message.

These include guidelines and standards for the installation, operation and safety of EV charging stations, he pointed out.

Compared with an internal combustion engine vehicle (ICEV), an electric car is more efficient, and owners can save about PHP 3.29 per kilometer based on current energy prices, Mr. Aquino said.

“EVs offer several benefits compared with ICEVs, including less maintenance due to fewer moving parts,” he pointed out.

The Electric Vehicle Industry Development Act seeks to promote the development and adoption of EVs in the Philippines by mandating an increase in the share of EVs in corporate and government fleets.

Under the Comprehensive Roadmap for the Electric Vehicle Industry, the business-as usual scenario target is a 10% EV fleet share by 2040, while it sets a clean energy scenario target of at least 50%.

The roadmap also outlines a short-term goal of deploying 7,300 EV charging stations by 2028.

While these targets seem ambitious, Mr. Aquino said they could be hit with the right policies and interventions.

“By combining infrastructure development with public engagement, we can accelerate the transition to EVs and build a cleaner, more sustainable transportation sector,” he said.

CAMPI President Rommel R. Gutierrez earlier said EV sales growth is expected to track overall industry sales growth, driven by increasing consumer adoption, supportive government policies and the entry of more players.

Edmund A. Araga, president of the Electric Vehicle Association of the Philippines, expects EV adoption among Filipinos to rise 20%. There are also more choices now when it comes to EV brands, he said in a Viber message.

Several electric vehicle companies have established a presence in the Philippines, including China’s BYD and Changan Motor Group, Vietnam’s VinFast LLC and Tesla. Local companies like ToJo Motors Corp. make electric public utility vehicles.

Nissan Motor Co. Ltd., Kia Motors and Hyundai Motor Co. are also present in the Philippine EV market with their respective electric models like the LEAF, EV6 and IONIQ 5.

Sustainability push

In line with the government push, industry players are also leveling up their game to be at the forefront of the country’s EV adoption.

Green logistics service provider Mober expanded its EV fleet to more than 110 units last year and is now looking to deploy 500 EVs by yearend.

“Mober positions itself as the go-to partner for businesses looking to transition to green logistics without disruptions,” Dennis O. Ng, founder and chief executive officer at Mober, said in an e-mailed reply to questions.

As part of its medium to long-term strategy, the company is planning to build two more EV charging hubs in Southern and Northern Luzon to boost logistic capacity.

“We are currently finalizing the investment requirements for these projects, but we anticipate allocating a substantial portion of our capital expenditure over the next two to three years to support infrastructure development, fleet expansion and renewable energy integration,” Mr. Ng said.

“This expansion is a critical step in scaling our operations while maintaining our commitment to zero-emission logistics,” he added.

Manila Electric Co. (Meralco), the main power distributor of Metro Manila and nearby cities, is converting more than 150 of its vehicles to electric as part of its sustainability push. It has also deployed more than 60 level 2 and level 3 fast chargers to support the shift.

“With the expansion of the EV market, declining costs and the numerous advantages of electric vehicles including lower emissions, reduced maintenance, significant fuel savings and government incentives, the shift to electrification has become increasingly viable,” Ronnie L. Aperocho, Meralco executive vice-president and chief operating officer, said in a Viber message.

By the end of the decade, the company aims to invest and electrify 25% of its fleet, or more than 700 electric vehicles, supported by a robust charging infrastructure — level 3 direct current fast chargers across its business centers, sector offices and main headquarters, he added.

The company through unit Movem Electric, Inc. seeks to become a “caring player” by expanding commercial charging infrastructure in and out of its franchise area. Mr. Aperocho said public awareness is also needed to accelerate local EV adoption.

“One of the biggest concerns among potential buyers is range anxiety — the fear of running out of battery before reaching a charging station,” he said. “While EV battery technology has advanced significantly, skepticism remains due to misinformation and a general lack of awareness about the benefits of EV ownership.”

While there is a positive outlook on the future of EV adoption and infrastructure development in the Philippines, Mr. Ng said the industry needs “a stronger ecosystem” supported by government policy, infrastructure and private sector collaboration.

He said the Electric Vehicle Industry Development Act is “a promising step forward” with its tax breaks, import duty exemptions, and the mandate for EV fleet adoption in the government and private sector.

“However, its full potential can only be realized with clear guidelines, local government support and stronger enforcement,” he added. – Sheldeen Joy Talavera, Reporter

Local stocks eke out gains on bargain hunting

Local stocks eke out gains on bargain hunting

Philippine stocks rose on Wednesday to snap their five-day losing streak as investors bought bargains and waited for fresh leads.

The benchmark Philippine Stock Exchange index (PSEi) rose by 0.63% or 40.02 points to close at 6,375.35, while the broader all shares index went up by 0.46% or 17.37 points to 3,737.94.

“The local market’s sideways movement ended in the positive territory on the back of bargain hunting. Appreciation of corporate fundamentals helped in the rise,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Philippine shares booked modest growth on Wednesday, gaining 0.63% despite a slow start earlier in the session, as investors looked for new catalysts following the earnings season,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Mr. Limlingan added that the local market closed higher despite the weaker performance of US shares overnight.

“Wall Street edged lower from the recent recovery run, halting a six-day streak of gains amid ongoing trade uncertainty and political hurdles over tax legislation affecting investor optimism,” he said.

US stocks fell on Tuesday, with the benchmark S&P 500 ending six straight sessions of gains, under pressure from rising Treasury yields, with the US sovereign debt profile in focus, Reuters reported.

US President Donald J. Trump traveled to Capitol Hill, seeking to persuade Republican lawmakers to pass a sweeping tax-cut bill, which analysts estimate will possibly add $3 trillion-$5 trillion to the federal government’s USD 36.2 trillion in debt.

The Dow Jones Industrial Average fell 114.83 points or 0.27% to 42,677.24; the S&P 500 lost 23.14 points or 0.39% to 5,940.46; and the Nasdaq Composite lost 72.75 points or 0.38% to 19,142.71.

Moody’s and the other big ratings agencies Fitch and S&P Global Ratings have downgraded the US sovereign credit, citing the government’s debt profile.

At home, majority of sectoral indices closed higher on Wednesday. Mining and oil rose by 4.64% or 419.77 points to 9,453.45; holding firms went up by 1.34% or 72.29 points to 5,447.64; financials climbed by 1.12% or 26.35 points to 2,376.68; and services increased by 0.13% or 2.83 points to 2,110.63.

Meanwhile, property dropped by 0.6% or 13.55 points to 2,236.30 and industrials declined by 0.08% or 7.44 points to 9,029.66.

“Bank of the Philippine Islands led the index members, climbing 4.27% to PHP 136.70. China Banking Corp. was at the tail end, plunging 6.36% to PHP 76.50,” Mr. Tantiangco said.

Value turnover went up PHP 7.63 billion on Wednesday with 712.07 million shares traded from the PHP 7.32 billion with 1.35 billion stocks exchanged on Tuesday.

Advancers outnumbered decliners, 107 to 81, while 52 names were unchanged.

Net foreign selling dropped to PHP 287.34 million on Wednesday from PHP 886.21 million on Tuesday. — Revin Mikhael D. Ochave with Reuters

Peso weakens on geopolitical concerns

Peso weakens on geopolitical concerns

The peso weakened against the dollar on Wednesday as heightened geopolitical concerns affected market sentiment.

The local unit closed at PHP 55.66 per dollar, dropping by three centavos from its PHP 55.63 finish on Tuesday, Bankers Association of the Philippines data showed.

The peso opened Wednesday’s session stronger at PHP 55.58 against the dollar. It dropped to as low as PHP 55.70, while its intraday best was at PHP 55.56 versus the greenback.

Dollars exchanged went down to USD 1.51 billion on Wednesday from USD 1.999 billion on Tuesday.

“The dollar-peso initially [rose] to PHP 55.56, still on pressure on the dollar following Moody’s US credit rating downgrade, but risk-off sentiment due to ongoing tension between Israel and Iran lifted the dollar against the peso to PHP 55.70,” a trader said in a phone interview.

The news about Israel’s plan to strike Iran’s nuclear facilities also led to higher global crude oil prices on Wednesday, which dragged the peso further, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

For Wednesday, the trader expects the peso to move between PHP 55.50 and PHP 55.80 per dollar on Tuesday, while Mr. Ricafort sees it ranging from PHP 55.55 to PHP 55.75.

New intelligence obtained by the United States suggests that Israel is making preparations to strike Iranian nuclear facilities, CNN reported on Tuesday, citing multiple US officials familiar with the intelligence, Reuters reported.

It was not clear whether Israeli leaders have made a final decision and there was disagreement within the US government about whether the Israelis would ultimately decide to carry out strikes, CNN added, citing the officials.

Reuters could not immediately confirm the report, which contributed to a rise in oil prices by more than 1% on concern such a strike might upset Iranian flows. The National Security Council did not immediately respond to a request for comment.

The Israeli Embassy in Washington, the Israeli Prime Minister’s Office and the Israeli military did not immediately respond to requests for comment.

One source familiar with the intelligence told CNN the likelihood of an Israeli strike on an Iranian nuclear facility “has gone up significantly in recent months.”

The person added that the chance of a strike would be more likely if the US reached a deal with Iran that did not remove all of the country’s uranium, CNN added.

US President Donald J. Trump’s administration has been conducting negotiations with Iran aimed at achieving a diplomatic deal over its nuclear program.

The new intelligence was based on the public and private communications from senior Israeli officials as well as intercepted Israeli communications and observations of Israeli military movements that could suggest an imminent strike, CNN reported.

CNN cited two sources saying that among the military preparations the US had observed were the movement of air munitions and the completion of an air exercise.

Earlier on Tuesday, Iran’s Supreme Leader Ayatollah Ali Khamenei said US demands that Tehran stop enriching uranium are “excessive and outrageous,” state media reported, voicing doubts over whether talks on a new nuclear deal will succeed. — Aaron Michael C. Sy with Reuters

Philippines falls in global startup index

Philippines falls in global startup index

The PHilippines dropped four spots in the 2025 Global Startup Ecosystem Index amid persistent gaps in infrastructure and regulations, according to global research firm StartupBlink.

In this year’s index, the Philippines slipped to 64th place out of 100 countries with a score of 2.237.

This was the fourth straight year of decline for the Philippines, which ranked 52nd in 2021, 57th in 2022, 59th in 2023 and 60th in 2024.

Philippines continues to fall in Global Startup Ecosystem Index“The ecosystem growth of the Philippines is around 0.56% this year, and it’s being overtaken even by locations that are also decreasing in the rankings,” StartupBlink Head of Data & Consulting Ghers Fisman said in a virtual briefing on Tuesday.

The Philippines’ annual ecosystem growth rate was the lowest in Southeast Asia.

To increase the Philippines’ score, Mr. Fisman said the process of establishing a startup at the business level should be easier. He also noted the importance of faster and wider internet access for Philippine entrepreneurs.

The Global Startup Ecosystem Index evaluates startup ecosystems across 100 countries and 1,000 cities, using scores that assess the quantity and quality of startups and their existing business environment.

“The Philippines is making progress toward becoming a formidable startup ecosystem in the Asia-Pacific region,” StartupBlink said in the report.

The Philippines received total funding of $273.6 million (around P15.22 billion) last year, according to the report.

“The Philippines’ startup ecosystem is anchored by robust sectors such as fintech (financial technology), e-commerce, healthtech, edtech, and software-as-a-service. This diversification is propelled by a large digital consumer base and increasing regional demand,” it said.

StartupBlink noted the Philippines’ attractiveness to foreign entrepreneurs and digital nomads “should allow for successful ecosystem growth — provided more of the local population embraces entrepreneurship.”

The Philippines has six cities in the global top 1,000, led by Manila.

Manila ranked 112th globally, dropping 11 spots from the previous year. It also dropped to 6th place in Southeast Asia rankings and was the only city to see a decline.

“The Philippines’ startup scene remains centralized in Manila, whose ecosystem is twelve times larger than Cebu City’s. This gap has more than doubled since 2020,” StartupBlink said.

However, Manila had the lowest ecosystem annual growth rate among cities in the Philippines at 2.6%.

Cebu City fell 10 spots globally to rank 469th, with an annual growth rate of 9%.

Davao City rose 163 spots to 580th spot globally, as its startup ecosystem grew by 97.7% last year.

Cagayan de Oro and Naga climbed the global rankings at 693rd and 767th, respectively.

New entrants to the global rankings include Iloilo City (744th), Cauayan City, Isabela (1,040th), and Solana City in Cagayan (1,170th).

“The Philippines stands as Southeast Asia’s fastest-growing digital economy, reflecting a dynamic consumer market ripe for innovative startups,” StartupBlink  said.

However, the Philippines faces several challenges that are hampering its development as a mature startup ecosystem.

“The lack of infrastructure is a limiting factor to the country’s economic growth, and entrepreneurs struggle with slow regulatory support for their startups,” it added.

John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, said the country’s continued decline in the global startup rankings reflect structural gaps in the ecosystem.

“Improving our rank will depend not on isolated programs but on building a dynamic innovation ecosystem with strong interlinkages across the government, academe, industry, and startup founders themselves,” he said in a Viber message.

Key gaps in the local startup scene include poor early-stage funding support, uneven regional startup development, regulatory bottlenecks, and a “brain drain” of digital and entrepreneurial talent, Mr. Rivera said.

To address this, the Philippine government must adequately fund and fully implement the Philippine Startup Development Program, reduce bureaucratic red tape, and harmonize startup registrations and incentives, he added.

Venture capitalists and the private sector should also expand early-stage funding, mentorship, and link Filipino startups to global markets. Academic institutions can support student-founded ventures through incubation, intellectual property protection, and seed grants, Mr. Rivera said. – Beatriz Marie D. Cruz, Reporter

Philippine banks’ profit up nearly 11% in 1Q

Philippine banks’ profit up nearly 11% in 1Q

The Philippine banking industry’s combined net earnings jumped by 10.6% in the first quarter as both interest and non-interest income rose, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Central bank data showed the banking industry’s net profits climbed to PHP 101.9 billion at end-March from PHP 92.11 billion in the same period a year ago.

This as net interest income went up by 11.6% to PHP 276.23 billion in the first three months from PHP 247.41 billion in the same quarter in 2024.

Interest income increased by 11.1% to PHP 395.99 billion in the first quarter from PHP 356.43 billion a year ago, while interest expense rose by 9.6% to PHP 119.32 billion at end-March from PHP 108.86 billion last year.

Meanwhile, banks’ non-interest income stood at PHP 60.67 billion in the January-March period, higher by 14.5% from PHP 52.98 billion a year earlier.

Earnings from fees and commissions increased by 19.2% to PHP 44.59 billion as of end-March from PHP 37.42 billion a year ago.

However, trading income registered a net loss of PHP 1.17 billion in the first quarter, a reversal of the PHP 1.5-billion gain a year ago.

Lenders’ non-interest expenses rose by 13.1% to PHP 191.01 billion in the period ending March from PHP 168.95 billion year on year.

Meanwhile, the industry’s losses on financial assets widened to PHP 29.83 billion in the first three months of 2025 from PHP 21.81 billion a year ago. Provisions for credit losses likewise grew to PHP 34.89 billion from PHP 25.11 billion last year.

“Faster loan growth this 2025 relative to last year may have driven higher income growth for the banking industry this year,” Reinielle Matt M. Erece, an economist at Oikonomia Research and Advisory, Inc. said in a Viber message.

Latest data from the BSP showed bank lending rose by 11.8% year on year to PHP 13.19 trillion in March.

“This increased the volume of products they were able to sell, i.e. financial products, as interest rates are expected to go down,” he added.

Alfred Benjamin R. Garcia, research head at AP Securities, Inc., said the higher profits are “partly volume-driven,” noting the growth in high-yielding consumer loans.

Earlier BSP data showed consumer loans to residents jumped by an annual 23.6% to PHP 1.64 trillion in March.

“This helped keep net interest margins high even though interest rate levels are lower than where they were at the same time last year,” Mr. Garcia said.

The central bank began its easing cycle in August last year and has reduced borrowing costs by a total of 100 basis points (bps) so far, bringing the key rate to 5.5%.

The Monetary Board has delivered 25-bp rate cuts at each of its policy meetings in August, October, December last year and April this year.

Mr. Erece added that while lower interest rates reduce the margins of banks, it can also spur higher demand for financing services.

Banking system assets

Separate BSP data showed the banking industry’s total assets amounted to PHP 27.64 trillion as of end-March, higher by 7.8% from the PHP 25.65 trillion in the same period in 2024.

Banks’ assets are mainly supported by deposits, loans, and investments. These include cash and due from banks as well as interbank loans receivable (IBL) and reverse repurchase (RRP), net of allowances for credit losses.

The banking sector’s total loan portfolio inclusive of IBL and RRP jumped by 14.5% to PHP 15.14 trillion as of end-March from PHP 13.22 trillion a year ago.

Net investments, or financial assets and equity investments in subsidiaries, increased by 12% year on year to PHP 8.23 trillion.

Net real and other properties acquired stood at PHP 119 billion, up 11.2% year on year.

Banks’ other assets went up by 1.9% to PHP 2.06 trillion as of end-March.

On the other hand, cash and due from banks fell by 29% to PHP 2.1 trillion at the end of the first quarter.

“The continued growth in banks’ total resources may still be largely attributed to the growth in loans and in investments,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Also supported by the continued growth in bank deposits that partly helped fund the growth in loans and investments,” he added.

Meanwhile, the total liabilities of the banking system grew by 7.4% to PHP 24.18 trillion at end-March from PHP 22.53 trillion a year earlier. – Luisa Maria Jacinta C. Jocson, Senior Reporter

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