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MILAN, Italy — The Philippines will still need financing assistance due to its exposure to shocks like climate risks and even as it graduates to upper middle-income status, the Department of Finance (DoF) said, urging the Asian Development Bank (ADB) to continue expanding its support to the country.

“As we carry this partnership forward, we call on the bank to further deepen its commitment to our development agenda, and towards addressing global challenges,” Finance Undersecretary Joven Z. Balbosa said during the Governors’ Business Session at the 58^th ADB Annual Meeting here on Monday.

Mr. Balbosa delivered the speech for the Philippines as temporary alternate governor, as Finance Secretary Ralph G. Recto, who sits on the ADB Board of Governors, was unable to attend.

“Even as the Philippines progresses towards becoming an upper middle-income country, we remain among those most vulnerable to the impacts of climate change, and we urgently require sustained support from our development partners for a united and cohesive response,” he said.

The Philippines is currently classified as a lower middle-income economy, based on the latest World Bank data. The Marcos administration is targeting to achieve upper middle-income status by 2026.

The Department of Economy, Planning, and Development (DEPDev) earlier said that the transition to a higher income level will entail a “shift in access to resources.”

The Philippines’ eligibility for concessional financing and access to traditional official development assistance (ODA) would diminish upon reaching the upper middle-income threshold.

In 2024, the Philippines was the second-biggest recipient of ADB financial assistance with $6.02 billion, just after India ($7.26 billion).

The latest data from DEPDev showed that the total active ODA in the country reached $37.29 billion as of December 2023, higher by 15% from 2022.

Meanwhile, Mr. Balbosa also called on the ADB to “ensure availability and concessionality of financing for climate resilience.”

The Philippines remains the most at-risk country globally for 16 straight years, according to the latest edition of the World Risk Index.

Earlier data from the ADB also showed that the Philippines could potentially lose 18.1% of its gross domestic product (GDP) by 2070 due to climate change under a high emissions scenario.

The ADB should also scale up its efforts to improve access to technology amid rapid digital innovation, Mr. Balbosa said.

“We trust that through ADB’s continued assistance, we can achieve a whole-of-government approach to integrate sector-specific digital solutions and initiatives with digital public infrastructure that would further contribute to our growth and fiscal targets.”

Mr. Balbosa also highlighted the Philippines’ massive infrastructure spending needs.

“We likewise look forward to the bank’s continued support in terms of financing, as well as strengthening institutional capacity, recognizing that by investing in infrastructure, we do not only provide essential services and improve connectivity, but also spur employment opportunities.”

The government is targeting to spend 5-6% of GDP on infrastructure annually.

Mr. Balbosa also pushed for the ADB to “continue collaborating with other international finance institutions in supporting vulnerable countries and finding innovative ways to finance programs and projects that contribute to global growth and development.”

“We call on the international community to deepen collaboration and urge international financial institutions like ADB to be adequately equipped and step in more decisively to support lower- and middle-income countries through timely and accessible financing, technical assistance, knowledge support, and enhanced policy dialogue.”

Mr. Balbosa also reiterated the need for economies in the region to collaborate amid the unpredictability in trade policies.

“We recognize the importance of international cooperation and multilateralism, especially in the context of a hyperglobalized world.”

He said that there is a need to “carefully consider potential unintended spillovers and spillbacks from trade measures.”

The Philippines, like the rest of Southeast Asia, was not spared by the United States’ barrage of reciprocal tariffs in early April.

The country was slapped with a 17% reciprocal tariff, though this was suspended until July, save for the 10% baseline which remains in effect.

“In terms of trade, we see the need to further strengthen regional cooperation and tap new and emerging trade partners as a means to unlock growth opportunities,” Mr. Balbosa said.

“We remain committed to an open and rules-based trading system, and in preserving the integrity of regional and global value chains,” he added. – Luisa Maria Jacinta C. Jocson, Senior Reporter

The Philippines’ private investments in green projects declined in 2024 as higher investments in solar and wind energy projects were offset by the drop in waste management and green cement projects.

Private green investments in the Philippines went down by 12% to USD 1.28 billion in 2024 from USD 1.46 billion in the previous year, according to the 2025 Southeast Asia’s Green Economy report by Bain & Company, GenZero, Standard Chartered and Temasek.

Investments in solar and wind energy projects surged 1.5 times and six times, respectively, the report showed.

However, these were offset by the reductions in investments in the waste management and green cement sectors.

The Philippines accounted for 16% of the total investments in SEA-6 (Southeast Asia-6), which is composed of Thailand, Malaysia, Singapore, Indonesia, the Philippines, and Vietnam.

Green investments in SEA-6 surged by 43% year on year to USD 8 billion in 2024, with Malaysia and Singapore contributing over 60% of deals, according to the report.

Power accounted for two-thirds of green investments in the region as the size of deals increased.

Investments in solar surged by 100% while waste management deals jumped by 60% year on year.

According to the report, a systems-based approach and wider collaboration in the region could drive growth in Southeast Asia’s green economy.

“(This) could drive significant regional economic impact – with SEA-6 economies potentially reaping up to USD 120 billion in GDP (gross domestic product) growth, 900,000 new jobs, and closing up to 50% of the emissions gap by 2030,” it said.

The report defined system-level solutions as “high-impact interventions that address systemic barriers across multiple systems to deliver transformative and amplified impact.”

It said that this approach could address cross-cutting barriers; maximize return on investment, and co-benefits; and prevent “negative, unintended spillovers” across systems.

Dale Hardcastle, co-director of Bain & Company’s Global Sustainability Innovation Center, said Southeast Asia may see an acceleration in the development of the green economy as governments and companies pivot priorities.

“By focusing on scalable, high impact systems-level solutions, Southeast Asia can rewrite the green economy playbook and turn current challenges into opportunities. The need now is to drive two key outcomes in parallel — significant emissions reduction and sustained economic growth — ensuring that the region not only meets its climate goals but also builds long-term resilience and prosperity,” he said.

While corporations in most of the six Southeast Asian countries show progress in setting targets and establishing roadmaps, there is a significant gap in green investments.

“With just five years to 2030, our window for action to avoid the worst effects of climate change is rapidly closing. We need to increase the momentum and focus on pragmatic solutions with near-term impact,” said Franziska Zimmermann, managing director for sustainability at Temasek.

“Stakeholders in this region have an opportunity to drive transformative, systems-level change that can balance energy security, sustainability, and economic growth,” she added.

The report noted the progress made in the Philippines in terms of infrastructure and technology brought by improved grid interconnectedness and electric vehicle (EV) charging stations.

There are 912 publicly accessible charging stations operational as of March 31, according to the Department of Energy.

Under the Comprehensive Roadmap for the Electric Vehicle Industry, the Philippines targets to deploy 7,300 EV charging stations by 2028.

The report said national energy plans such as the National Renewable Energy Program (NREP) and Clean Energy Finance and Investment Roadmap offer clearer direction for renewables and financing.

Under the NREP, the Philippines seeks to significantly increase the share of renewable energy in the country’s power generation mix to 35% by 2030 and 50% by 2040. — S.J.Talavera

 

April inflation that’s likely to go below 2% gives the Philippine central bank “a lot of policy space,” while first-quarter growth that could be near or below the government’s 6-8% target would be an “important factor” in the Monetary Board’s policy meeting next month, according to its governor.

“I think it would be a good number,” Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. told reporters at the presidential palace on Monday, referring to last month’s inflation. “It gives us a lot of policy space. It makes our life easier.”

Inflation likely settled at 1.3% to 2.1% last month, according to BSP estimates released last week, which gives it leeway to cut benchmark interest rates further.

A BusinessWorld poll of 14 analysts last week yielded a median estimate of 1.8% for the consumer price index (CPI) in April, same as the March print.

The Philippine Statistics Authority is set to release the April inflation data on Tuesday (May 6), and preliminary first-quarter GDP data on Thursday (May 8).

Gross domestic product (GDP) growth that could be below the full-year goal of 6-8% also puts pressure on the BSP to ease monetary policy and stimulate growth. 

“Growth will be an important factor [when] we decide in June,” Mr. Remolona said.

The BSP’s next policy meeting is on June 19.

The Monetary Board in April resumed its easing cycle with a 25-basis-point (bp) rate cut, bringing the key rate to 5.75%. It lowered rates by a total of 75 bps in 2024.

Philippine GDP likely expanded by 5.8% in the first quarter, according to a median forecast of 15 economists and analysts polled by BusinessWorld, picking up from the revised 5.3% in the fourth quarter of 2024.

However, it would be a tad slower than the 5.9% growth recorded in the first quarter of 2024.

“Low inflation may be a sign of better supply control, but can also reflect slowing demand, of which the latter can negatively impact growth. Rate cuts can help with driving demand higher as it makes borrowing costs cheaper, allowing credit growth,” Reinielle Matt M. Erece, an economist at Oikonomia Research and Advisory, Inc., said in a Viber message.

Mr. Erece said he understands why the BSP is “hesitant,” as heightened global uncertainty can affect inflation.

“Right now, the Fed is hawkish on policy as they weigh in on the impacts of tariffs. This may be the time for the BSP to perhaps deviate from the Fed’s moves and decide policy based on what the country needs.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said inflation likely eased to 1.6% year on year in April. He expects inflation to average 2.2% for the full year, well within the BSP’s 2%-4% target range.

With subdued inflation and slowing economic growth, he said the BSP is expected to continue cutting policy rates to support growth.

“Relatively benign inflation at 2% levels is already possible for most of 2025, well within and even at the lower end of the BSP’s inflation target of 2%-4%, thereby could justify/support future local policy rate cut/s that would match future Fed rate cuts in 2025,” he noted.

Filomeno S. Sta. Ana III, cofounder and coordinator of Action for Economic Reforms, said Mr. Remolona’s statement points to the further easing of monetary policy.

“Inflation is no longer a binding constraint,” he said in a Viber chat. “What should worry us is fiscal policy that has encouraged unproductive, inefficient and corruption-prone government spending, made worse by government’s rolling back of tax reforms.”

Mr. Remolona earlier signaled further rate reductions this year as the benchmark is still “slightly restrictive.” Rate cuts will likely be delivered in “baby steps” or in 25-bp increments, he said. – Chloe Mari A. Hufana, Reporter

The Philippine government is optimistic that a deal on tariffs can be reached with the US, as it is set to continue negotiations for a lower tariff rate.

“The negotiation is a process. Not a one-time meeting. We believe the meeting went very well and our points were well received,” Trade Secretary Ma. Cristina A. Roque said in a statement on Monday.

Ms. Roque, Special Assistant to the President for Investment and Economic Affairs Frederick D. Go and Philippine Ambassador to the US Jose Manuel D. Romualdez met with the US Trade Representative (USTR) Jamieson Greer in Washington on May 2.

Before the trip, the Trade secretary said that the aim is to bring back the tariffs to at least the pre-“Liberation Day” level.

Last month, US President Donald J. Trump announced higher reciprocal tariffs on most of the country’s trading partners, with Philippine goods facing the second-lowest rate in Southeast Asia at 17%.

However, the reciprocal tariffs have been paused for 90 days until July. A baseline 10% tariff remains in place.

At a Palace briefing, Mr. Go said there will be more meetings with the USTR, although the Trade Undersecretary Allan B. Gepty would lead the talks.

He did not elaborate on a timeline.

Mr. Go said the meeting with the USTR focused on the local semiconductor and electronics industries since these are the top exports to the US.

Discussions also centered on the coconut, garment, furniture, food processing, and automotive industries, he added.

“The coconut industry is very important to us because it is our number one agricultural export to America,” he said in Filipino. “We brought up all the concerns and issues of our stakeholders, and as I said earlier, I believe it was very well received.”

In 2024, the US was the country’s top export market, receiving USD 12.12 billion worth of Philippine goods. The US was the Philippines’ fifth-largest source of imports accounting for USD 8.17 billion.

The Philippines’ top exports to the US are semiconductors, electronic integrated circuits, and insulated wire and other insulated electric conductors.

The country’s top imports from the US are soya beans, electronic integrated circuits, and wheat and meslin.

When asked if the USTR had committed to lowering the 17% reciprocal tariff imposed by Mr. Trump, Mr. Go said, “Let’s allow the process to take place.”

“I ask for your patience; let’s just wait for the outcome,” he added.

He refused to divulge if the US promised anything during the dialogues due to confidentiality agreements but noted it will take several negotiations to reach a favorable resolution.

The Foreign Trade Office of the DTI will now handle the negotiations with their American counterparts, he noted.

“We have to let the technical working groups work on a framework for discussions… both sides will have to work together to put a framework before the 90-day moratorium period is over,” he added.

Mr. Go noted the Philippine delegation was “well prepared” for the meeting, adding they discussed with Cabinet officials and the business sector before flying out.

Meanwhile, Department of Economy, Planning, and Development (DEPDev) Undersecretary Rosemarie G. Edillon said that the meeting with the USTR showed the Philippine government’s intention to strengthen trade relations with the US.

“We are very interested, especially in our trade relations, and to inform them of our initiatives to reduce, if not totally eliminate, what they call nontariff barriers,” she added.

Asked to comment, former Trade Undersecretary Rafaelita M. Aldaba said that the Philippines should get “as many products as possible in the exemption list.”

“In exchange we can offer zero tariffs on products that are important to the US,” she added.

In previous statements, Ms. Roque said that the Philippines might increase imports of US products, particularly soybeans and frozen meat, in exchange for lower tariffs.

According to the DTI Export Marketing Bureau, the US was the country’s third-largest trading partner last year, with total trade amounting to USD 20.29 billion.

Ateneo School of Government Dean and Economics Professor Philip Arnold P. Tuaño said that the country should also seek the reauthorization of the Generalized System of Preferences (GSP) while negotiating for lower tariffs.

“We should negotiate for lower tariffs on Philippine goods entering the United States and possibly also request the USA to reauthorize the GSP, which allows eligible developing countries to export their goods to the US tariff-free,” said Mr. Tuaño in an e-mail.

“[We should] also argue for preferential rates for strategic goods under the supply-chain resilience program, such as semiconductors and agricultural products,” he added.

While active, the Philippines was the GSP’s fifth-largest beneficiary, with about USD 1.6 billion in duty-free exports in 2020. This made up 10% of the total US GSP imports, which amounted to USD 16 billion.

The trade preference scheme eliminated duties on approximately 5,000 or 47% of the total US tariff lines. However, these benefits expired on Dec. 31, 2020. – Justine Irish D. Tabile and Chloe Mari A. Hufana, Reporters

The Philippine government on Monday launched a 10-year employment masterplan, which is targeting to increase the labor force participation rate (LFPR) to 68.2% by 2034.

“This is a very ambitious plan. If you look at the targets, it’s simple, we want to raise our LFPR from 64% to 68%,” Department of Economy, Planning, and Development (DEPDev) Undersecretary Rosemarie G. Edillon told reporters on the sidelines of the launch on Monday.

“So, this is actually a big ask, especially since by 2035, the majority of the workforce will be coming from Gen Z and Gen Alpha. So, we actually need a big policy reform,” she added.

Launched by the DEPDev, the Department of Trade and Industry (DTI), and the Department of Labor and Employment, the Trabaho Para sa Bayan (TPB) Plan aims to strengthen and future-proof the country’s workforce.

Under the plan, the government set near-term and long-term initiatives aimed at addressing challenges faced by the local labor market, such as rapid digitalization, geopolitical tensions, climate change, and demographic shifts.

Ms. Edillon said that the country’s LFPR is the lowest among the Association of Southeast Asian Nation (ASEAN) countries.

“Taking out the COVID-19 (coronavirus disease 2019) years, our LFPR is about less than 65%, but for the other countries, it is actually in the high 60s. You have Vietnam over there with an LFPR in the high 70s,” she added.

Preliminary data from the Philippine Statistics Authority showed that LFPR in February was estimated at 64.5%. For the first two months, the average LFPR stood at 64.2%.

However, the new jobs masterplan did not indicate any targets on how many jobs will be created until 2034.

“The problem with having a target with respect to jobs is that it’s very difficult, especially since we are moving towards a framework for flexible work arrangements where it would be possible for you to hold more than one job,” said Ms. Edillon.

“We’re also moving towards having a framework for part-time jobs. So, it’s difficult [to see] how it will translate into the number of jobs,” she added.

Labor Secretary Bienvenido E. Laguesma said that there have been previous targets to create a million jobs.

“But this does not ensure there will be enough jobs created for the new entrants (to the labor market),” he said.

“It’s not that simple to say that we want to create one or two million jobs by a certain year. What we want to see is that every Filipino family will have a job,” he added.

The TPB Plan also set a target of decreasing the unemployment rate to 3% by 2034 from 3.8% in 2024 and the underemployment rate to 7-9% from 13.3% last year.

In addition, the masterplan also aims to increase the female LFPR to 59% by 2034, which Ms. Edillon said is the lowest in the ASEAN region.

“Ours is about 48.8%, while in Vietnam it is actually 72.5%. So can you just imagine how much more human capital we could add if we could actually increase the LFPR for women?” she added.

The TPB Plan is also targeting to improve the country’s domestic industry diversification and production, as well as export complexity.

Citing the Global Innovation Index, Ms. Edillon said that the two factors measure the level of sophistication of the economy.

“That is actually the goal, that we will be a more competitive country before 2034. So that is actually the goal of the National Innovation Agenda and Strategy Document,” she added.

The TPB Plan outlines priority strategies that aim to address labor demand, supply, and governance, as well as how to future-proof labor demand, supply, and governance.

Strategies to ensure labor demand include expansion of market access, encouraging investments in priority sectors, ensuring ease of doing business, establishment of a dynamic innovation ecosystem, and promotion of technology adoption and enterprise-based education and training.

To improve labor supply, the TPB Plan recognized the need to expand lifelong learning opportunities, upgrade the design of skills training programs, enhance overseas Filipino reintegration programs, and increase program take-up among disadvantaged sectors.

Meanwhile, the TPB also cited 18 policy recommendations, which are seen to create an “inclusive and dynamic labor market environment.”

These policies include the Konektadong Pinoy bill, the Lifelong Learning Development Bill, tax incentives for employees on a work-from-home program, the Freelancers’ Protection Act, and the Amendment of the Maternity Leave Law, among others. — Justine Irish D. Tabile