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Residential households in areas served by Manila Electric Co. (Meralco) will see lower electricity bills in June as the power distributor cut power rates amid a drop in generation charges.

In a statement on Wednesday, Meralco said that electricity rates will fall by PHP 0.1076 per kilowatt-hour (kWh) in June to PHP 12.1552 per kWh from PHP 12.2628 per kWh in May.

Households consuming 200 kWh will see their monthly electricity bills go down by around PHP 22. Those consuming 300 kWh, 400 kWh, and 500 kWh will see a reduction of PHP 32, PHP 43, and PHP 54, respectively.

Meralco attributed the overall rate reduction to the lower generation charge, which dropped by PHP 0.1099 per kWh to PHP 7.3552 per kWh.

“The reason for this reduction is the decrease in the charges from our suppliers and the Wholesale Electricity Spot Market (WESM),” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said at a briefing.

Charges from power supply agreements (PSA) and independent power producers (IPP) slipped by P0.3699 and P0.1034 per kWh, respectively, due to lower fuel costs and higher average dispatch.

WESM charges likewise declined by PHP 0.6342 per kWh amid an improved supply situation in the Luzon grid for the May supply.

PSAs, IPPs, and WESM accounted for 48%, 33%, and 18%, respectively, of the power distributor’s total energy requirement for the period.

Despite the continued decline of prices in the WESM, rates during the rainy season are still uncertain due to power plants that may undergo maintenance, according to Lawrence S. Fernandez, Meralco vice-president and head of utility economics.

“We are expecting the demand to go down from the peaks that we experienced during summer because it’s already the rainy season. It’s not as warm anymore, so electricity usage will decrease. That will tend to push down power prices,” Mr. Fernandez said in mixed English and Filipino.

“However, on the supply side, since power plants were not allowed to go on maintenance during the summer months… now that it’s the rainy season, this is the time they can do their regular scheduled maintenance. So, in that case, supply will go down because they’re on outage, and that will tend to push prices up,” he added.

On the other hand, transmission charges increased by PHP 0.0214 per kWh due to higher ancillary service charges from the National Grid Corp. of the Philippines’  ancillary service procurement agreements and the reserve market.

Other charges, including taxes, went down by PHP 0.0191 per kWh.

“Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges, and Feed-in Tariff Allowance are all remitted to the government,” the company said.

Meralco’s distribution charge remained unchanged since the PHP 0.0360 per kWh in August 2022.

The company said that the implementation of the distribution-related refund of PHP 0.2024 per kWh for residential customers is still ongoing.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

NET INFLOWS of foreign direct investments (FDI) fell to a three-month low in March, with first-quarter inflows also dropping by more than 40% year on year, amid heightened global uncertainty arising from the US tariff policies.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that FDI net inflows declined by 27.8% to USD 498 million in March from USD 689 million in the same month a year ago.

This was the lowest FDI level in three months or since the USD 110-million inflow posted in December.

“The said decline resulted from lower net inflows across all major FDI components,” the BSP said.

Nonresidents’ net investments in debt instruments of local affiliates plunged by 31.6% to USD 329 million in March from USD 481 million in the same month in 2024.

Nonresidents’ net investments in equity capital, other than the reinvestment of earnings, declined by 27.4% to USD 102 million from USD 141 million year on year.

This came as equity capital placements dropped by 5.5% to USD 148 million. On the other hand, withdrawals nearly tripled (185.1%) to USD 46 million.

Equity placements in March mostly came from Singapore (25%), Japan (24%) and the United States (20%), as well as South Korea (9%) and Malaysia (5%).

“These were infused largely to the real estate; manufacturing; financial and insurance; and administrative and support services industries,” the central bank said.

Reinvestment of earnings dipped by 1.2% to USD 66 million in March from USD 67 million a year ago.

Investments in equity and investment fund shares fell by 19% to USD 168 million in March from USD 208 million a year earlier.

First-quarter slide

In the first quarter, FDI net inflows plunged by 41.1% to USD 1.76 billion from USD 2.99 billion in the comparable year-ago period.

Net investments in debt instruments dropped by 35.3% to USD 1.2 billion in the period ending March from USD 1.85 billion a year ago.

Investments in equity capital other than the reinvestment of earnings plummeted by 66.7% to USD 298 million in the January-March period from USD 894 million in the previous year.

Equity placements declined by 64.4% year on year to USD 397 million while withdrawals fell by 54.8% to USD 99 million.

These placements were mainly from Japan (42%), followed by the United States (17%), Singapore (14%), and Malaysia and Singapore (both at 6% each).

Nearly half (47%) of these were invested in the manufacturing sector, followed by real estate (22%) and the financial and insurance (13%) sectors.

On the other hand, nonresidents’ reinvestment of earnings rose by 8.8% to USD 264 million from USD 242 million.

“The decline in FDI is among the different indicators, along with increasing debt and rising unemployment, that show the gradually decreasing economic growth in the country,” Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said.

In the first quarter, the Philippine economy grew by a weaker-than-anticipated 5.4%, well below the government’s 6-8% target for the year.

Gross capital formation, the investment component of the economy, grew by 4% in the first quarter, slowing from the 5.5% seen in the fourth quarter.

“The truth of the matter is the country’s growth is only dependent on its remittances and consumption. Hence, if global conditions remain poor, we will not be expecting FDIs to come in,” Mr. Lanzona added.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the drop in FDI is due to a combination of global and domestic headwinds.

“Externally, rising geopolitical tensions, high interest rates in developed markets, and global trade uncertainties especially from US tariff actions continue to dampen cross-border investments,” he said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted the US government’s tariff policies have led investors to adopt a wait-and-see stance on investments.

US President Donald J. Trump had started making tariff threats since he assumed office in late January. However, it was only in early April that he announced a baseline 10% tariff on all its trading partners, as well as higher reciprocal tariffs on most of its trading partners. The so-called reciprocal tariffs are suspended until July.

Domestically, Mr. Rivera said investors were likely more cautious in the first quarter and are now awaiting more clarity on “policy direction, post-election stability, and economic strategy execution in medium to long term.”

“Internally, the Philippines is contending with political noise, investor concerns over regulatory predictability, and slow progress in structural reforms that are necessary to boost long-term investor confidence.”

For the coming months, Mr. Ricafort said the full implementation of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act could entice investors.

“Some foreign investors could have also waited for Fed and BSP rates to go down further before becoming more aggressive to finance more FDIs,” he added.

BSP Governor Eli M. Remolona, Jr. has signaled further easing this year, possibly through two more 25-basis-point (bp) rate cuts. He said a rate cut is also still on the table at the Monetary Board’s policy review on June 19.

The BSP’s FDI data differ from the investment data of other government sources as they cover actual investment flows, it said.

The approved foreign investments data published by the Philippine Statistics Authority are sourced from investment promotion agencies and represent investment commitments that may not be fully realized in a given period. — Luisa Maria Jacinta C. Jocson

The growth of the Philippine information technology and business process management (IT-BPM) industry this year is expected to outpace the global average in terms of job generation and export revenues, an industry group said.

“We have grown to 1.82 million in 2024 and will hit 1.9 million by the end of 2025. So, we are closing in on the 2-million mark. What we will also hit in 2025 is USD 40 billion in export revenue,” IT & Business Process Association of the Philippines (IBPAP) President and Chief Executive Officer Jonathan R. Madrid said at a press briefing late on Monday.

“That is a growth of 5% over last year and 4% in jobs over the previous year. Growth is always good news but considering that the global growth of our industry only grew 3%, it shows that yet again the Philippines is leading the growth of the industry,” he added.

These numbers, he said, are the recalibrated targets for the year but are below the industry’s aggressive targets under the IT-BPM Industry Roadmap 2028.

“We are exceeding our baseline targets, but we are slightly below our aggressive targets,” Mr. Madrid said.

When setting the targets, he said that the industry considers the changing work types, availability of talent, and ease of doing business.

“This industry is no longer about cost optimization. It is about the availability of the talent, ease of doing business, and balancing where you give the work. Because investors cannot put all their work in one place, there has to be diversification,” he said.

“So, being such a leader, together with India, the issue of over concentration has become a topic, and so we really need to address those other issues so that we can maintain our market share,” he added.

According to IBPAP officials, the industry continues to face challenges at the local government unit (LGU) level despite the implementation of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act and its implementing rules and regulations (IRR).

“With the passage of CREATE MORE, we hope that problems with LGUs and the Bureau of Internal Revenue will have been addressed,” said IBPAP Chief Operating Officer Celeste B. Ilagan.

“But we see that even with the issuance of the IRR, some of our members still encounter problems with certain LGUs. And it really revolves around how the LGUs interpret the provisions of CREATE MORE in terms of incentives that enterprises are entitled to,” she added.

To resolve this, she said that the Department of Trade and Industry, the Department of Finance, and the Department of the Interior and Local Government are planning to issue a joint memorandum circular (JMC) that will specify how the LGUs should interpret CREATE MORE.

“We have seen a draft of that JMC that has done the rounds of consultation. We know that there’s one more consultation in the province before they are able to pass that JMC,” she said.

“That will specify what the LGUs should follow in terms of imposing fees and charges, what requirements there are for business permits, all of that,” she added.

Ms. Ilagan said these challenges are being experienced by existing enterprises, as new investors are still checking out which cities they should set up shop.

Meanwhile, Mr. Madrid said there are opportunities for growth in global capability centers (GCC).

“I am happy to say that every week our office is visited by locators and investors who want to expand their footprint in the Philippines and are considering setting up operations in the Philippines,” he said.

“Much of the growth and interest comes from GCC; these are companies like JPMorgan and HSBC. I think this is a sector that we need to focus on because these tend to offer higher value-added jobs,” he added.

For instance, Mr. Madrid noted that India has seen an increase of 100 GCCs per annum, with its entire GCC industry already as big as the entire Philippine IT-BPM industry.

“I think we should really emphasize and focus on growing GCCs. As it is, we only have 150 GCCs in the country. I think the potential is much more,” he said.

“I think there is an opportunity to grow our presence in the GCCs. And I think this is important because the revenue per employee in GCC is much higher than the broader industry,” he added.

To date, the industry has 250,000 employees in GCCs led by banking and financial, insurance, and healthcare services. The GCCs accounted for USD 8 billion, or 20% of the total industry revenues last year.

Also, Mr. Madrid said that there has been a rise in employment in the countryside mostly because cities in the provinces do not have the same kind of public commuting issues faced by workers in Metro Manila.

“The countryside is a bright spot for the industry. Before COVID, we were only 25% outside Metro Manila. Today, we are at 32% of a bigger base,” he said.

“And according to our roadmap projections, we see that growing to 40% by 2028. Congestion in Metro Manila is an issue, so the countryside helps to decongest that,” he added.

However, he said that revenues are still higher in Metro Manila, as most of the GCCs are located in Metro Manila and Cebu. – Justine Irish D. Tabile, Reporter

 

The travel and tourism sector is expected to contribute PHP 5.9 trillion to the Philippine economy this year, according to the World Travel & Tourism Council (WTTC).

“This new record would represent more than one-fifth (21%) of national gross domestic product (GDP), cementing travel and tourism’s place as a backbone of the Philippine economy,” the WTTC said in a statement, citing its 2025 Economic Impact Research report.

Economic managers are targeting 6-8% GDP growth this year until 2028.

The WTTC also projected the travel and tourism sector to employ 11.7 million by yearend, accounting for 23.8% of all jobs in the Philippines.

Last year, the travel and tourism sector contributed PHP 5.3 trillion to the country’s GDP and accounted for 11.2 million jobs.

If the projections are realized, it will represent an 11.3% and 4.5% increase in GDP contribution and employment, respectively, from last year.

The WTTC said that the travel and tourism sector’s contribution for this year would be 13.5% higher than the 2019 level or before the pandemic.

“International visitor spending is also on the rise, projected to reach PHP 709.2 billion — up 2.1% on the previous high in 2019, while domestic visitor spending is anticipated to reach PHP 4.1 trillion — a 9.3% increase over its previous peak,” the WTTC said.

Last year, spending by domestic visitors stood at PHP 3.6 trillion, while spending of international visitors hit PHP 644.8 billion.

If the WTTC’s spending projections are realized, these will represent an almost 10% increase in international spending and a 13.9% increase in domestic spending.

“The Philippines is a standout example of how travel and tourism, when supported by a clear, long-term vision, can deliver real economic impact and long-term opportunity,” said WTTC President and Chief Executive Officer Julia Simpson.

“This success speaks to the country’s extraordinary appeal, its policy focus on tourism as a growth engine, and the energy of its people and private sector,” she added.

By 2035, the WTTC expects the travel and tourism sector to contribute PHP 9.2 trillion to the Philippine economy, representing 19.8% of GDP.

It also expects the creation of 2.5 million jobs, which will bring total sector employment to 14.1 million.

“As the country continues to strengthen air connectivity, invest in infrastructure, and prioritize destination resilience, travel and tourism are positioned not just to grow but to transform the national economy,” said the global tourism body.

“WTTC calls on policymakers to continue fostering this trajectory with clear regulation, long-term investment in workforce development, and sustained global promotion of the Philippines as a world-class destination,” it added.

Sought for comment, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said that tourism is a “low-hanging fruit” for the Philippines.

“The Philippines is yet to fully catch up with other Asian or Association of Southeast Asian Nations countries that have three to five times more foreign tourism, so this could be a major source of economic growth,” said Mr. Ricafort in a Viber message.

He said that the tourism sector has the potential to create more jobs, generate more investments, and spur business activity.

“This could be made possible with further development of the country’s infrastructure, especially airports, seaports, mass transport systems, and accommodation facilities,” he added.

Colliers Research Director Joey Roi H. Bondoc said it would be a challenge to reach the tourism targets this year.

“The 2024 figures are down compared to the target of the government, and that was even before the South Korean economic crisis. But now that you no longer have the Chinese tourists, and then the Korean figures are down, so it will be extra challenging,” he said in a phone interview.

Data from the Department of Tourism  showed that the Philippines booked 5.95 million visitor arrivals last year, missing the agency’s target of 7.7 million.

However, Mr. Bondoc said that the DoT’s initiatives are in the right direction but need to be complemented with initiatives that will address infrastructure, peace and order, and affordability, among others.

“I think they’re doing the right thing; attracting Indians and implementing visa-upon-arrival or visa-free access to the Philippines are steps in the right direction, but it needs to be complemented,” he said. – Justine Irish D. Tabile, Reporter

The Philippine banking system’s nonperforming loan (NPL) ratio hit a five-month high in April, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Banks’ bad loan ratio rose to 3.39% in April from 3.3% in March. However, it eased from 3.45% a year ago.

This was the highest bad loan ratio in five months or since the 3.54% logged in November 2024.

Data from the BSP showed that soured loans inched up by 0.6% to PHP 519.23 billion as of April from PHP 516.12 billion a month prior.

Year on year, bad loans jumped by 8% from PHP 480.65 billion in the same month in 2024.

Loans are considered nonperforming once they remain unpaid for at least 90 days after the due date. These are deemed risk assets since borrowers are unlikely to pay.

BSP data also showed the total loan portfolio of the banking system stood at PHP 15.34 trillion as of end-April, down by 1.9% from PHP 15.63 trillion as of end-March. On the other hand, it rose by 10% from PHP 13.94 trillion a year ago.

Past due loans went up by 1.1% to PHP 653.26 billion in April from PHP 646.37 billion in March. It likewise increased by 5.7% from PHP 618.04 billion a year earlier.

This brought the past due loan ratio to 4.26%, higher than 4.14% in March but lower than 4.43% in the same period in 2024.

Restructured loans edged higher by 0.1% to P311.66 billion in April from PHP 311.48 billion month on month. Year on year, it rose by 7.3% from P290.37 billion.

Restructured loans accounted for 2.03% of the industry’s total loan portfolio in April, higher than 1.99% in the month prior but lower than 2.08% in April 2024.

Banks’ loan loss reserves stood at PHP 493.79 billion, up by 0.7% from PHP 490.56 billion a month ago and higher by 4.8% from PHP 471.35 billion a year earlier.

This brought the loan loss reserve ratio to 3.22% in April, higher than 3.14% last month but lower than 3.38% a year ago.

Lenders’ NPL coverage ratio, which gauges the allowance for potential losses due to bad loans, stood at 95.1% in April from 95.05% in March and 98.07% a year prior.

“The uptick in NPL ratio likely reflects a lagged response to tighter financial conditions, elevated interest rates, and persistent cost of living pressures on both households and businesses,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said.

“While still relatively low and manageable, the rise signals early signs of stress, especially among more vulnerable borrowers, such as MSMEs (micro, small and medium enterprises) and lower-income consumers. In my opinion, it is not yet a cause for alarm, but it is a signal for banks to remain vigilant in their credit risk management.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the slight uptick in NPLs is seen amid slowing growth in bank loans.

Bank lending rose by 11.8% year on year to PHP 13.19 trillion in March, its slowest pace in four months, as loan growth for production activities and consumers eased.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said the rise in unemployment could also be a factor behind the rise in NPLs.

“On the consumers’ side, higher unemployment these past few months may indicate slower earnings growth, making it harder to pay their loans. In addition, slow demand and business growth may also impact business cash flows during the period,” he said.

The jobless rate rose to 4.1% in April from 3.9% in March and 4% a year ago, the latest data from the local statistics authority showed.

This was equivalent to 2.06 million unemployed Filipinos in April, higher than 1.93 million a month ago and 2.04 million the year prior.

“If the trend continues over the next few months, it could indicate that some sectors of the economy are experiencing difficulty servicing debt, possibly due to slower-than-expected income recovery or tightening liquidity,” Mr. Rivera said.

“Monetary authorities and banks will likely monitor this closely. If credit quality deteriorates further, it could prompt more cautious lending behavior and affect the overall pace of credit growth, which in turn could have broader implications for economic recovery and domestic consumption.” – Luisa Maria Jacinta C. Jocson, Senior Reporter

 

 

The Bangko Sentral ng Pilipinas (BSP) will be able to further reduce interest rates amid below-target inflation and weak economic growth, analysts said.

“With inflation holding near multi-year lows and the peso showing relative strength, a rate cut from the BSP in June has become more certain,” Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said.

This after inflation cooled to an over five-year low of 1.3% in May, bringing the five-month average to 1.9%. This is below the BSP’s 2-4% target band.

Inflation is also seen to remain well contained for the remainder of the year, analysts said.

Nomura Global Markets Research analysts Euben Paracuelles and Nabila Amani said headline inflation could average 1.8% this 2025.

“Our forecast pencils in CPI (consumer price index) inflation becoming more benign at 1.3% in the third quarter, down from 2% year-to-date, before edging back up to 2% by yearend,” they said in a report. 

The central bank expects inflation to average 2.3% this year.

“This benign inflation outlook is underpinned by various factors, such as a negative output gap, low crude oil prices and the government maintaining supply-side measures (to keep rice prices low, in particular),” Nomura added.

Weaker-than-expected first-quarter gross domestic product (GDP) growth would also justify further easing, Mr. Neri said.

Consumption growth has not yet returned to pre-pandemic levels, which has kept overall GDP below 6%.

“However, with inflation stabilizing at lower levels, there is room for further recovery in the coming months,” he added.

The Philippine economy grew by a weaker-than-anticipated 5.4% in the January-to-March period, sharply slowing from the 5.9% expansion a year ago.

“Coupled with the weaker-than-expected GDP print in the first quarter, we think the latest inflation report supports the case for another 25-bp (basis point) cut at the BSP’s June 19 meeting,” Chinabank Research said.

The Monetary Board’s next policy meeting is scheduled for June 19.

In April, the BSP resumed its rate-cutting cycle with a 25-bp rate cut, bringing the benchmark rate to 5.5%.

Nomura expects the BSP to deliver another 75 bps worth of cuts for the remainder of the year.

“We continue to believe BSP has scope to steadily shift towards a more accommodative stance, as inflation expectations remain well-anchored and domestic demand is still subdued,” it said.

“We reiterate our call for BSP to deliver an additional 75 bps of rate cuts this year, taking the policy rate to a below neutral 4.75%.”

BSP Governor Eli M. Remolona, Jr. has signaled the possibility of two more rate cuts this year, in increments of 25 bps. He also said another 25-bp cut this month is still “on the table.”

The central bank has reduced borrowing costs by a total of 100 bps so far since it began easing rates in August last year.

Risks ahead 

Despite macroeconomic indicators pointing to a cut, Mr. Neri said the BSP must still remain cautious. 

“However, while the environment favors a cut, caution is still warranted. A shift in US monetary policy remains a key risk, particularly if inflation there rises further due to tariffs.”

“An overly aggressive easing cycle could leave the Philippine economy exposed to a sharp reversal in the Federal Reserve’s stance, potentially forcing the BSP into abrupt and sizable rate hikes in response,” he added.

US Federal Reserve policymakers have already signaled they are in no rush to cut interest rates, and a government report on Friday showing the labor market is far from crumbling amid big trade policy changes only cements that stance, Reuters reported.

Financial markets have been betting the Fed will wait until September to cut rates and will deliver a second reduction in borrowing costs by December.

Meanwhile, Chinabank Research said the central bank will also consider the recent wage hike proposal and its impact on prices.

“The BSP will likely remain cognizant of persisting upside risks to the inflation outlook, including upticks in food prices and the proposed legislated wage hike.”

The House of Representatives last week approved on third and final reading a bill seeking to raise the minimum daily wage by P200 across the board. If passed into law, this would mark the first legislated national wage hike since the late 1980s.

“Looking ahead, we expect inflation to remain low in the next months, though a hefty increase in the minimum wage could add to inflationary pressures,” Chinabank added.

Business groups have warned that the proposed wage hike could lead to closure of small businesses, joblessness and higher cost of goods and services. — Luisa Maria Jacinta C. Jocson

The National Government’s (NG) debt service bill sharply increased year on year in April as amortization payments more than doubled, the Bureau of the Treasury (BTr) reported.

Data from BTr showed that the debt service bill went up by 73.72% to PHP 280.9 billion in April from P161.7 billion in the same month last year.

Month on month, the debt service bill also rose by 53.2% from P183.36 billion in March.

Debt service refers to the payments made by the government on domestic and foreign borrowings.

In April, amortization payments stood at PHP 234.45 billion, up 148.89% from PHP P94.2 billion in the same month in 2024.

The bulk of debt payments in April were made up of amortization payments, BTr data showed.

Principal payments on domestic debt surged by 208.23% to PHP 169.83 billion in April from PHP 55.1 billion a year ago.

Amortization paid on foreign debt increased by 65.27% to PHP 64.63 billion in April from PHP 39.1 billion in April 2024.

Meanwhile, interest payments slid by 31.19% to PHP 46.45 billion from PHP 67.5 billion a year earlier.

Domestic interest payments went down by 34.37% to PHP 30.47 billion in April from PHP 46.43 billion in the same month last year.

This was composed of PHP 21.3 billion in fixed-rate Treasury bonds, PHP 3.84 billion in Treasury bills (T-bills), and PHP P3.58 billion in retail Treasury bonds and others (P1.76 billion).

Interest payments for foreign borrowings dropped by 24.17% to PHP 15.98 billion in April from PHP 21.07 billion a year prior.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the increase in debt servicing was primarily due to the PHP 140-billion Treasury bond payments in early April.

“However, there would be relatively large NG debt/Treasury bond maturities from August-September 2025 that could be principal payments that need to be paid by then,” Mr. Ricafort said in a Viber Message.

Mr. Ricafort also said the rate cuts from the Bangko Sentral ng Pilipinas and the US Federal Reserve from the latter part of 2024 may have also partly helped in reducing NG interest payments.

YEAR TO DATE
Meanwhile, for the first four months of the year, the NG debt service bill stood at PHP 622.92 billion, a 45.73% decline from PHP 1.15 trillion in the same period last year.

Amortization payments slumped by 62.19% to PHP 335.47 billion in the January-to-April period from PHP 887.24 billion. This accounted for 53.85% of the four-month tally.

Amortization payments on domestic debt fell by 77.42% to PHP 170.4 billion, while external payments increased by 24.61% to PHP 165.07 billion.

Meanwhile, interest payments rose by 10.35% to PHP 287.45 billion in the January-to-April period from PHP 260.49 billion in the same period a year ago.

Interest payments on domestic debt stood at PHP 209.03 billion, 12.8% higher annually from PHP 185.31 billion in 2024.

This was composed of PHP 146.13 billion in fixed-rate Treasury bonds, PHP 43.21 billion in retail Treasury bonds, PHP 16.08 billion in Treasury bills (T-bills), and others (PHP 3.63 billion).

On the other hand, external debt inched up by 4.3% to PHP 78.42 billion in the first four months from PHP 75.18 billion a year ago.

“The maturity of government securities caused the uptick in debt payments for the government, specifically government bonds,” Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said in a Viber message.

Mr. Erece said he expects debt payments to rise in the coming months.

“The government debt service bill may continue to increase in the next few months as government securities saw high demand mature. In addition, the long-term fiscal consolidation plan of the government can also explain elevated debt payments to try and reduce the country’s debt burden,” he said.

In 2025, the debt service program is set at PHP 2.051 trillion, consisting of PHP 1.203 trillion in principal payments and PHP P848.031 billion in interest payments.

The NG debt stock registered a fresh high of PHP 16.75 trillion as of the end-April. It is projected to hit PHP 17.35 trillion by yearend.

The debt-to-gross domestic product (GDP) ratio rose to 62% as of end-March — the highest in 20 years.

“The country remains firmly on track to reduce the NG debt-to-GDP ratio to below 60% by the end of the President’s term,” the Department of Finance said last week. — A.R.A. Inosante