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Philippine inflation is expected to remain within the central bank’s 2-4% target until 2027, according to economists surveyed by the Bangko Sentral ng Pilipinas (BSP).

The mean inflation forecasts are expected to settle at 3.1% this year, 3.3% in 2026 and 3.4% in 2027, the survey showed, based on the minutes of the Monetary Board meeting on April 10.

“The survey respondents see upside risks from the effect of geopolitical tensions, changes in global trade policies, adverse weather conditions and upward adjustments in utility rates, transport charges and minimum wages,” the BSP said. “Downside risks are still seen from lower rice prices.”

The central bank said it expects inflation below 3% until the fourth quarter, citing the steady decline in domestic food and global oil prices.

The BSP in its April policy review slashed its inflation forecasts to 2.3% for 2025 and to 3.3% for 2026. It now expects inflation to average 3.2% in 2027.

“However, inflation is expected to rise gradually and peak in the second quarter of 2026,” it said.

As global commodity prices stabilize, inflation could ease to near 3% starting in the third quarter of 2026. “Initial baseline projections also indicate within-target inflation in 2027.”

Inflation was the slowest in more than five years in April at 1.4%, bringing the four-month average to 2%.

Risks to the inflation outlook remain broadly balanced until 2027, which would let it continue taking a “measured approach” in further policy easing.

“Monetary policy settings still appear to be relatively tight,” it said. “The timing and magnitude of further monetary easing will be determined on a meeting-by-meeting basis.”

The Monetary Board resumed its easing cycle last month with a 25-basis-point (bp) rate cut to 5.5%. It has lowered borrowing costs by 100 bps since August last year.

BSP Governor Eli M. Remolona, Jr. earlier said they are open to cutting rates by 75 bps more this year amid a favorable inflation outlook.

Meanwhile, the central bank said it expects economic growth to settle at the lower end of the government’s 6-8% target this year until 2027.

“Domestic economic activity may benefit from disinflation but faces downside risks,” it added.

The economy grew by a weaker-than-expected 5.4% in the first quarter from 5.9% a year ago.

Central bank estimates showed “slightly lower” growth forecasts for 2025 compared with its forecast in February.

“The downward revision could be attributed to the higher real policy rate, which outweighed the impact of the decline in oil prices,” the BSP said.

It also flagged challenges from the external environment that could dampen global growth “and pose a downside risk to domestic economic activity.”

“Nevertheless, recent activity indicators suggest domestic demand will be supported by low inflation, improvements in real wages and labor market conditions and the gradual easing of monetary policy settings,” it added.

Meanwhile, Economic Secretary Arsenio M. Balisacan said it is “too early” to revise the government’s 6-8% growth target for 2025-2028 despite global uncertainties and lackluster first-quarter growth.

“My sense is that it’s too early to give up 6-8% for the medium term, meaning 2025-2028,” he told reporters. “We have to be ambitious.”

“We have been left behind so far by our neighbors. If you don’t push very hard to work on a more rapid growth, you’ll always be [the last],” he added.

Lowering the upper end of the goal is possible, but Mr. Balisacan said that could affect budget assumptions.

The Development Budget Coordination Committee is expected to review macroeconomic assumptions later this month.

The Philippine economy could still growth by 6-6.5%, Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message.

“This is as investments and trade deficits drag on growth, as long as trade uncertainties persist,” he said. “Although trade tensions have eased relative to what it was last April, unstable trade policies can still drag investment inflows and export growth.”

“A downward adjustment on the growth targets is something that is expected given the global environment,” he added.

The best course of action for the country is “internal housekeeping” pending tariff negotiations between the Philippines and the US Trade Representative, Mr. Balisacan said, citing the country’s limited political and economic clout.

“How we all end up remains uncertain, and for so long as that uncertainty stays, the ability of investors to make these commitments and investments, whether in the Philippines or elsewhere, is muted,” he added. — Luisa Maria Jacinta C. Jocson and Aubrey Rose A. Inosante

The Department of Agriculture (DA) on Wednesday said it would lift the maximum suggested retail price (MSRP) for pork, demand for which spiked during the election season, within 24 hours amid low compliance among suppliers.

“It’s called one step back and two steps forward,” Agriculture Undersecretary for Livestock Constante J. Palabrica told reporters on the sidelines of an industry event on Wednesday. The agency is studying a better way to deal with high pork prices, he added.

“We are going to lift it, we’re going to study it then come up with a revised program,” he said.

The MSRP was set at PHP 300 per kilo for whole pig, PHP 350 per kilo for pork shoulder and hind leg and PHP 380 per kilo for pork belly. 

But the agency had been complaining about low compliance with the MSRP since the first week of implementation, now at below 30%.

Mr. Palabrica attributed high pork retail prices to high farmgate prices that have hit as much as PHP 290 per kilo.

He said increased demand during the election season outpaced low domestic supply caused by the African Swine Fever (ASF). “It’s the law of supply and demand.”

“So, expect a possible revision of MSRP, holding it for the meantime while we are studying how to make it really effective,” he added.

For now, the agency will focus on buying hogs from pig farms at a lower price — set at PHP 230 per kilo — and distributing these to key slaughterhouses.

He was referring to a direct-sourcing strategy piloted by the Food Terminal, Inc. (FTI) with Thai firm Charoen Pokphand Foods PLC (CP Foods). The FTI is supplying a Caloocan slaughterhouse with 100 live hogs daily from CP Foods under a pilot program that started in April.

“The first thing we asked for was 100 pigs a day,” Mr. Palabrica said. “And then by next month, it will be 200. And then our target is around 500 pigs [a month].”

He added that the government is also looking into a similar strategy used by other farm companies including Pilmico Foods Corp.

“We are looking for other farms which can supply us with our own price,” he said. “If we can get a price of PHP 230, then we can supply at a lower price in the market.”

The Agriculture official said about PHP 5-7 billion is earmarked for the direct-sourcing program, which doesn’t cost the FTI because it sells the hogs at the same price, while the delivery cost to slaughterhouses is shouldered by the partner company.

“If we get it at PHP 230, you will also buy at PHP 230. Then for logistics, we have gotten a discounted price,” he added.

Mr. Palabrica said Philippine pork supply is stable. “We have enough supply of pork. But the limited number is for local pork. On imported pork, we have a lot of supply.”

Pork imports hit 53.598 million kilos in February, up from 38.994 million kilos a year earlier.

Forty-two Philippine villages had ASF cases as of March 28, up from 39 barangays as of March 14, according to data from the Bureau of Animal Industry. More than 6,200 villages have been affected by ASF cases since the first outbreak in 2019.

Mr. Palabrica said they expect the commercial rollout of a Vietnamese ASF vaccine by the end of the year.

The Agriculture department earlier said it is working with the hog industry to increase their herds by at least two million hogs each year through 2028 to return to pre-ASF levels.

Regionalization pact

Meanwhile, Mr. Palabrica said the Philippines is in talks with several countries as it implements a regionalization agreement for the imports of live chickens and their products.

Thailand, Taiwan, Paraguay and Chile are seeking to be included in the deal that seeks to do away with a countrywide ban on a trade partner dealing with bird flu outbreaks, he said.

Under the pact, the Philippines will impose a ban on poultry imports only from a specific area affected by avian influenza, allowing imports from zones or regions certified free from the animal disease.

The US, Poland, Spain, Portugal, Brazil and the Netherlands are among the countries that have been accredited by the Philippine government, Mr. Palabrica said.

The DA earlier said a countrywide ban limits the sources of day-old chicks, parent stocks and poultry meat, which leads to higher prices.

The three-phase process for inclusion in the agreement includes submission of documents on veterinary oversight, disease surveillance, traceability, control measures and zoning protocols by the exporting country.

The application will be reviewed by a risk assessment team.

A regionalization agreement will then be drafted and finalized after a successful evaluation, outlining the import terms and conditions, including revised veterinary certificates.

The agreement also mandates continuous disease reporting and biennial reviews and provides grounds for termination in cases of undeclared outbreaks.

Philippine chicken imports hit 31.7 million kilos in February from 32.426 million kilos a year earlier. – Kyle Aristophere T. Atienza, Reporter

The Philippine government should reform its housing policies as more Filipinos live with extended families — a sign that traditional family structures are shifting, according to the Philippines Institute for Development Studies (PIDS).

About 29% of Filipino households are no longer the traditional nuclear type, as more relatives resort to cohabitation to share in housing and other costs, PIDS Supervising Research Specialist Tatum P. Ramos told a recent webinar.

“They have decided to join their relatives in a household to gain support in growing their own family or [to manage] living and housing expenses,” she said, based on a PIDS statement released on Wednesday.

A PIDS paper cited the significant link between wealth and the likelihood of living in extended households.

“An extended family setup offers a resource-sharing opportunity and provides support for working young female adults who may not necessarily have the same amount of time for household management activities as before,” PIDS said.

Rising housing prices, especially in Metro Manila and in key cities, have forced households to share living spaces with relatives, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

“[There’s also the] lack of mass transport or train systems that would allow more Filipinos to live farther from central business districts to nearby provinces where housing is cheaper,” he added.

“The low attainability of housing in the Philippines is resulting in lower household formation with the rise of extended and multi-family arrangements and nonfamily housing arrangements (living alone or living with nonrelatives),” Ms. Ramos and her co-authors Marife M. Ballesteros and Jenica A. Ancheta said in the study.

“Government efforts to address this issue through a market-driven strategy should be reviewed, and housing affordability issues have to be closely examined,” they added.

Housing prices in the Philippines rose 6.7% in the fourth quarter of 2024 from a year earlier, according to the Bangko Sentral ng Pilipinas.

Mary Racelis, who teaches anthropology at the University of the Philippines, said housing policies should go beyond abstract models to address the lived experiences of the bottom 60% of the population — those who are underserved and priced out of formal housing markets.

She cited the need to understand the poor’s economic conditions to help design sustainable and inclusive housing plans.

“We should recognize that the informal settlers are not the problem, they are the solution,” she told the webinar, adding that informal settlers are not mere passive aid recipients.

Despite the wide membership of housing funds like the Home Development Mutual Fund (Pag-IBIG), the uptake of government assistance for housing finance remains limited, said Kevin Godoy, chief development specialist at the Department of Economy, Planning, and Development.

“Only 4% have government assistance as a financing source… considering that Pag-IBIG had 16 million members in 2024,” he pointed out.

He cited the importance of transport infrastructure, noting that long commutes rather than urban congestion alone are a major barrier to homeownership and household formation.

Mr. Godoy also sought the creation of a national rental housing program.

“We’re the only country in Southeast Asia that does not have a national program on public rental,” he said, noting how local governments have been left to experiment with rental solutions on their own in the absence of a national framework.

The Philippines faces a housing deficit of 6.5 million units, which could rise to 22 million by 2040 if not addressed, according to the United Nations Human Settlements Program. – Beatriz Marie D. Cruz, Reporter

MILAN, Italy — The government is open to adopting a seasonal tariff scheme for rice imports to better protect farmers.   

“Yes, we will need to study it. I would say if there are no operational or even legal impediments to it, I would favor it. Because that way, we can stabilize farmers’ incomes and prices that farmers receive,” Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan told BusinessWorld on the sidelines of the Asian Development Bank Annual Meeting here last week.

This comes after the Federation of Free Farmers (FFF) proposed implementing levies that are strategically timed to not clash with the height of the harvest season. Seasonal tariffs would also mean variable rather than fixed duties.

Since July last year, the government slashed tariffs on rice imports to 15% from 35% until 2028 to tame spiraling prices.

Mr. Balisacan said the government would need to study how to implement seasonal tariffs, adding that these used to be a primary instrument of the European Union and the United States prior to the World Trade Organization (WTO).

“Now, we have to find out how you navigate that, because who is following WTO at this time? Everybody’s just changing tariffs everywhere, so we have to find a way to study this.”

A seasonal tariff will shield farmers from the impact of volatile prices, he added.

“What you’re actually doing is establishing a price that you would want the farmers to face. Then when the world prices drop, you raise the tariff so as to keep the price. When the world prices rise sharply, you reduce the tariff. In other words, you’re stabilizing the price faced by farmers. So that’s good,” Mr. Balisacan said.

For the past few months, rice inflation has been on a downtrend after the government implemented several measures to tame the retail prices of the staple.

Apart from lower tariffs, it also declared a food security emergency on rice in February, which allows the release of buffer stocks. The Agriculture department also imposed a maximum suggested retail price on rice earlier this year.

In April, rice inflation further contracted to 10.9% from the 7.7% decline in March.

Data from the Philippine Statistics Authority showed the average price of a kilo of regular milled rice nationwide fell by 13.3% year on year to P44.45 in April. Average prices of well-milled rice dropped by 10.4% to P50.54 while special rice decreased by 6.2% to P60.69.

Despite this, farmers’ groups have said rice prices still remain elevated in most local markets.

The Committee on Tariff and Related Matters (CTRM) is already reviewing the proposal to implement seasonal levies, Mr. Balisacan said.

“From there, they will recommend it to the CTRM Cabinet, and then it will be elevated to the Economy and Development Council, which is formerly the National Economic and Development Authority Board.”

Farmers’ groups like the FFF and Samahang Industriya ng Agrikultura have also recommended bringing the rice tariff back to 35%.

Meanwhile, the Department of Agriculture (DA) said it is also open to considering seasonal tariffs pending further study.

“Conceptually, we are receptive to the idea and we’re willing to consider many ideas,” Agriculture Undersecretary Asis G. Perez told BusinessWorld on the sidelines of the same event. “But we have to find ways to implement it and also make sure, because when you do it at the seasonal level, sometimes it might cause uncertainty and unpredictability.”

“As for the concept itself, we are receptive to considering the idea as proposed. As always, the DA is like that. We don’t shut down an idea.”

Mr. Perez said their policies must aim to “take out the unpredictability” in food supply, which affects prices.

“That’s to ensure consistency, predictability, which is, I think, a critical element for a robust food supply system. Not only for rice but for everything, any other product,” he added.

The DA in January said it was expecting the palay or unmilled rice harvest to exceed 20 million metric tons (MT) this year. In 2024, palay output declined to a four-year low of 19.09 million MT, down by 4.84% from the previous year.

Rice imports will likely decline 1.9% to 5.2 million MT this year, according to the US Department of Agriculture. In 2024, rice imports hit a record 4.7 million MT. – Luisa Maria Jacinta C. Jocson, Senior Reporter

Net inflows of foreign direct investments (FDI) dropped sharply in February due to a high base, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

Uncertainty due to the Trump administration’s shifting policies also affected sentiment, leading to lower inflows, analysts said.

Latest BSP data showed that FDI net inflows declined by 61.9% to USD 529 million in February from USD 1.388 billion in the same month a year ago.

“This decrease was primarily attributed to base effects,” the central bank said in a statement.

Month on month, net inflows likewise went down by 27.63% from the USD 731 million recorded in January.

The drop in FDI net inflows in February was largely driven by the 85.9% decrease in nonresidents’ net investments in equity capital, other than the reinvestment of earnings, to USD 108 million from USD 764 million.

Broken down, equity capital placements dropped by 82.96% to USD 146 million that month from USD 857 million a year prior, while withdrawals slid by 58.06% to USD 39 million from USD 93 million.

The BSP said the bulk of equity placements in February mostly came from Japan (56%), followed by the United States (11%), Ireland (10%) and Malaysia (5%).

“These investments were largely directed towards the manufacturing, financial and insurance, real estate, and information and communication industries,” the central bank said.

Reinvestment of earnings dropped by 13.1% year on year to USD 73 million from USD 84 million.

Overall, foreigners’ investments in equity and investment fund shares plunged by 78.77% to USD 180 million in February from USD 848 million a year prior.

Meanwhile, nonresidents’ net investments in debt instruments of local affiliates also fell by 35.4% to USD 348 million in February from USD 540 million in the same month in 2024.

January to February

During the first two months of 2025, total FDI net inflows likewise declined by 45.2% to USD 1.26 billion from USD 2.301 billion in the same period last year.

Foreigners’ investments in equity capital other than the reinvestment of earnings slumped by 74% to USD 196 million in the January-February period from USD 753 million a year prior.

Equity placements dropped by 74% year on year to USD 249 million, while withdrawals declined by 73.9% to USD 53 million.

These placements were mostly from Japan (53%), the US (16%), Singapore (8%), Malaysia (6%) and Ireland (6%) and mainly went to the manufacturing sector.

Meanwhile, nonresidents’ reinvestment of earnings increased by 12.6% year on year to USD 197 million in the first two months from USD 175 million.

Lastly, net investments in debt instruments went down by 36.8% to USD 867 million from USD 1.373 billion in the same period last year.

“The latest year-on-year and month-on-month decline in the latest FDI data… could be attributed to uncertainties on possible protectionist measures by US President Donald J. Trump,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. “Trump’s trade wars could slow down exports, as well as FDIs that are export oriented.”

“The decline in FDIs may be seen as the waiting and hesitant behavior from investors as they wait for clearer directions on global trade,” said Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc.

Since returning to the White House in January, Mr. Trump has introduced a slew of protectionist measures, which he said meant to encourage investments in the United States to restore its dominance. These measures include various import tariffs, with some targeting specific products.

In April, he announced “reciprocal” tariff rates to be imposed on America’s largest trading partners, including the Philippines. These higher duties have been suspended until July, with most countries now negotiating with the US.

Mr. Ricafort added that foreign investors were on wait-and-see mode prior to the release of the implementing rules and regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, which was signed into law in December.

The CREATE MORE Act further reduces the corporate income tax to 20% from 25% for registered business enterprises.

The IRR for the law released in mid-February now gives investors more clarity, Mr. Ricafort said.

In the coming months, Mr. Erece said investment growth may slow with the global economic outlook expected to take a hit due to the Trump administration’s trade policies.

“Easing monetary policy, better business environment, and a resilient domestic economy may be ways to still attract investments in the country,” he added.

BSP Governor Eli M. Remolona, Jr. told Bloomberg last week that they are open to cutting rates by a further 75 basis points (bps) this year amid cooling inflation.

Last month, the central bank slashed benchmark borrowing costs by 25 bps, bringing the policy rate to 5.5%. It has now reduced benchmark rates by a total of 100 bps since it kicked off its rate-cut cycle in August last year. – Aubrey Rose A. Inosante, Reporter