Archives: Business World Article

Achieving abover-6% gross domestic product (GDP) growth for the rest of the year to meet the government’s target may be “challenging” with the global trade picture still uncertain due to the Trump administration’s evolving tariff policies, analysts said. 

“It will certainly be challenging to achieve a 6.2% growth rate for the rest of the year, but it is still possible,” Ateneo School of Government Dean and Economics Professor Philip Arnold P. Tuaño said in an e-mail over the weekend. “Some of the downside risks for the Philippine economy remain the continued high levels of US tariffs, global political and security uncertainties especially in Europe and the Middle East which affect global demand for goods, and climate related shocks.”

“US President Donald J. Trump’s reciprocal tariffs, trade wars, and other protectionist policies could still slow down global trade, investments, employment, and overall world economic growth that could slow down, indirectly, Philippine GDP growth,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message, but likewise added that the growth goal remains achievable.

The Philippine economy expanded by 5.4% in the first quarter, slightly faster than the 5.3% growth in the prior three-month period but slower than the 5.9% pace in the same quarter last year, the government reported last week.

This was well below the government’s 6-8% growth target band for the year.

The weak growth came as gross capital formation growth was dampened by businesses’ anticipation of global trade uncertainties.

Since Mr. Trump was inaugurated in January, he has launched a series of protectionist policies, with one of them hiking import tariffs imposed on its major trading partners, including the Philippines. Countries are now negotiating with the US regarding the higher “reciprocal” tariffs, which have been suspended until July.

Department of Economy, Planning, and Development Undersecretary Rosemarie G. Edillon said that GDP needs to expand by at least 6.2% in the remaining three quarters to reach 6% growth — the low end of the government’s target — by yearend.

Mr. Tuaño said Philippine economic growth could be lifted by stronger government spending in the coming months as the lifting of the election ban on public works would allow for the resumption of suspended state infrastructure projects.

In the first quarter, government spending jumped by 18.7% as agencies front-loaded public projects ahead of the ban that started on March 28.

An expected rebound in exports once the Trump administration concludes its tariff negotiations with its trading partners could also provide a boost as this could lead to a recovery in electronics demand, he said.

Both Mr. Tuaño and Mr. Ricafort said that easing inflation may help drive consumption to support the economy.

“While consumption growth in the first quarter of 2025 was at 5.3%, there are certain factors that are necessary to happen to ensure higher consumption growth in the coming quarters, including the sustained decline in inflation rates, lower interest rates and the continued growth in remittances,” Mr. Tuaño said.

“Government can support this by strengthening social protection and also increasing investments especially in the rural areas in order to ensure food supply and countryside incomes,” he said.

Mr. Ricafort added that the soft GDP growth in the first quarter and benign inflation would allow the Bangko Sentral ng Pilipinas (BSP) to cut benchmark rates further, which would support the economy.

The Monetary Board resumed its easing cycle last month with a 25-basis-point (bp) cut, bringing the policy rate to 5.5%.

BSP Governor Eli M. Remolona, Jr. told Bloomberg last week that they are open to cutting rates by 75 bps more this year amid cooling inflation.

Budget Secretary and Development Budget Coordination Committee Chairperson Amenah F. Pangandaman on Friday said they remain hopeful that GDP growth could meet the 6-8% target this year.

“We still expect GDP to accelerate throughout the year as domestic demand strengthens, and public investments are sustained. This is even amidst global uncertainty, as domestic growth prospects supported by improving private consumption, including government infrastructure spending, provide a buffer against external headwinds,” Ms. Pangandaman said.

“We remain optimistic that the Philippines will meet its growth target for 2025 of 6-8%, especially as the government remains strongly committed to achieving our medium-term plans and long-term vision. Given the substantial 8.2% growth registered by the capital spending of the government — a testament to the successful implementation of public infrastructure projects — we are certain we can sustain our high-growth trajectory.”

‘Lower growth path’

Meanwhile, IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa was less positive.

“Hoping for a 6.2% growth rate in the remaining quarters of the year is overly optimistic and structurally blind to global and domestic realities,” Mr. Africa said in a Viber message over the weekend.

“The government mostly fails to achieve even the low end of its growth targets and has only been able to squeeze into its target ranges of GDP growth twice in the last decade. The government is still refusing to accept that the economy has shifted to a lower growth path from the average 6.4% growth in the 2010-2019 decade before the pandemic to just 5.6% in 2023-2024, considering the 2020-2022 years of lockdown and rebound as an aberration,” he added.

Mr. Africa warned that growth will continue to shift lower amid global disruptions and “persistent domestic structural economic weaknesses,” noting that both household and investment spending have remained low compared to pre-pandemic levels.

“Achieving 6.2% growth in the next quarters is not impossible but will require bold policies and structural transformation, not just optimism from mere statistical computations. Economic policies have to be redirected toward boosting domestic demand such as with real wage and income growth, more equity and redistribution, and expanded public services. Over the long term, stronger agricultural and Filipino industrial capacity is needed so that the growth achieved is not fragile, exclusionary and unsustainable,” he said. – Aubrey Rose A. Inosante, Reporter

The Philippines’ dollar reserves declined by 1.9% as of end-April, as the National Government (NG) repaid more foreign debt, the central bank said.

Data from the Bangko Sentral ng Pilipinas (BSP) showed gross international reserves (GIR) dropped to USD 104.6 billion as of end-April from USD 106.7 billion as of end-March.

Year on year, the dollar reserves rose by 1.9% from USD 102.65 billion.

“This latest GIR level provides a robust external liquidity buffer,” the BSP said.

The dollar reserves in April were the lowest since the USD 103.27 billion seen in January.

“The month-on-month decrease in the GIR level reflected mainly the (1) NG’s drawdowns on its foreign currency deposits with the BSP to meet its external debt obligations and pay for its various expenditures, and (2) BSP’s net foreign exchange operations,” the central bank said in a statement.

International reserves are foreign assets of the BSP held mostly as investments in foreign-issued securities, monetary gold, and foreign exchange. These are supplemented by claims to the International Monetary Fund (IMF) in the form of reserve position in the fund and special drawing rights (SDRs).

Ample foreign exchange buffers protect the country from market volatility and ensure that it is capable of paying its debts in the event of an economic downturn.

BSP data showed the level of dollar reserves as of end-April is enough to cover about 3.6 times the country’s short-term external debt based on residual maturity.

It is also equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income.

BSP data showed foreign investments fell 3.19% to USD 86.09 billion at end-April from USD 88.9 billion as of end-March. Year on year, foreign investments inched up 1.19% from USD 87.13 billion.

The country’s reserve position in the IMF rose by 13.57% to USD 741.6 million as of end-April from USD 653 million a month earlier. It also went up by 0.75% from USD 736.1 million a year ago.

SDRs — or the amount which the Philippines can tap from the IMF’s reserve currency basket — was unchanged month on month at USD 3.8 billion. Year on year, it dropped by 1.7% from USD 3.74 billion.

The value of the central bank’s gold holdings went up by 4.51% to USD 13.34 billion at end-April from USD 12.76 billion a month ago. Year on year, it jumped by 30.06% from USD 10.26 billion.

The BSP’s foreign exchange holdings increased by 23.52% to USD 648.6 million at end-April, from USD 525.1 million at end-March. Year on year, it decreased by 17.84% from USD 789.4 million.

Meanwhile, net international reserves slipped by 1.88% to USD 104.6 billion at end-April from USD 106.6 billion as of end-March.

Net international reserves refer to the difference between the GIR and reserve liabilities, including short-term foreign debt, and credit and loans from the IMF.

“The decline in GIR in April was mainly due to debt payments, foreign exchange operations, and lower gold valuations,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the BSP’s possible interventions to defend the peso could have also led to the lower GIR in April.

The peso closed at P55.84 a dollar on April 30, strengthening by PHP 1.37 from its PHP 57.21 finish on March 31. Year to date, the local unit gained by PHP 2.005 from its PHP 57.845 close on Dec. 27, 2024.

“Moving forward, GIR is expected to stay stable, supported by remittances, BPOs (business process outsourcing), tourism, and government borrowings, though risks like global volatility and a widening current account deficit could weigh on it,” Mr. Rivera said. — AMCS

MILAN, Italy — The Asian Development Bank (ADB) is eyeing to extend about $4 billion in financing for the Philippines this year, which will fund key infrastructure projects like the Bataan-Cavite Interlink Bridge and Laguna Lakeshore project.

“We’re looking at about $4 billion in lending for 2025. That’s more or less what we’re seeing as an average volume for lending over the next few years,” ADB Country Director for the Philippines Pavit Ramachandran told BusinessWorld in an interview on the sidelines of the 58^th ADB Annual Meeting here.

In 2024, the multilateral bank extended a little over $6 billion to the Philippines, the second-biggest recipient of financial assistance.

The ADB earlier said it is allocating about $24 billion in lending to the Philippines from 2024 to 2029.

“We’re continuing to support these infrastructure projects. Some of these have additional tranches. We’ve got these large-scale (projects). The Malolos-Clark (railway) is one,” Mr. Ramachandran said.

Last month, the ADB approved a $1.45-billion loan for the Malolos-Clark component of the 163-kilometer (km) North-South Commuter Railway, which will connect Malolos, Bulacan with the Clark International Airport.

Aside from this, there are also upcoming additional tranches for the Bataan-Cavite Interlink Bridge and Laguna Lakeshore Road Network project, he said.

The 32-km interlink bridge will connect the provinces of Bataan and Cavite across Manila Bay, with construction expected to start this year.

The Laguna Lakeshore project is a 37.5-kilometer expressway that will shorten travel time between Taguig City and Calamba, Laguna.

“These are programmatic investments over the course of the Country Partnership Strategy (CPS) period,” Mr. Ramachandran said.

The CPS, which covers the years 2024 to 2029, is focused on human development, infrastructure, disaster resilience, and economic competitiveness, among others.

Mr. Ramachandran said there are agriculture and energy investments in the pipeline.

“We are in the process of also very advanced stages of looking at the food voucher program,” he said.

The food stamp program last month was approved by the National Economic and Development Authority Board, which is now known as the Department of Economic, Planning and Development Board.

“We are targeting July for board consideration within ADB. That’s a priority project for us this year,” he added.

The program seeks to feed food-poor families with a monthly voucher worth P3,000.

Mr. Ramachandran said the ADB also has ongoing work around tax mobilization.

The bank also has an initiative aimed at further improving the ease of doing business in the country.

“That is basically about reducing red tape, streamlining business processes, using digital technology,” he added.

Food security

ADB President Masato Kanda earlier this week announced that the lender is raising its commitment to food security projects in the region to $40 billion up to 2030.

“In the Philippines, we are now seeing real interest from the government to do big transformative work around food systems,” Mr. Ramachandran said.

He said the bank is working on designing a project preparatory facility that will help prepare big-ticket initiatives in the agriculture, food, and natural resource space.

“First, we have plans around port development. I think the Department of Agriculture has ambitious plans for ports. These are roll-on, roll-off ports, fishing ports, ports for exports,” he said.

These will also cover aquaculture, large-scale irrigation, and flood disaster resilience, among others.

“We are in the process of now preparing for delivery this year a program on blue economy. This is a policy-based loan with very strong linkages to food security, just given the dependence of the coastal communities on fisheries and the aquatic environment… This will also have a biodiversity link which is also directly related to food security,” he added.

Mr. Ramachandran noted that the country has recently faced challenges with food price inflation.

“It has to be a holistic solution. It can’t only be a demand side. There’s also supply-side issues around making sure farmers have access to credit, information, insurance, technology, supporting them with irrigation systems, something that we are looking to also engage with,” Mr. Ramachandran said.

Energy is also a crucial area to alleviate many food system-related challenges.

“In the Philippines, the other challenge really is around energy and looking at the energy food nexus… We have also work that we’re doing in the energy sector to essentially help with reducing the cost of energy, ensuring stability of the grid and energy access, which will also have synergistic positive impacts on food security and the food sector.”

Growth corridors

Mr. Ramachandran also noted the significance of expanding growth corridors in the country.

About half of the country’s gross domestic product (GDP) is concentrated in Metro Manila and surrounding regions, he said.

“What we would like is more balanced development. I think the government is also keen on that to ensure that there’s more broad-based, inclusive development.”

“The benefits actually trickle to communities in other parts of the country. Mindanao and Visayas obviously are still lagging in terms of the poverty benefits. So, we are trying to look at what some of those future growth corridors.”

The ADB has been in discussion with the government and other stakeholders to explore what areas could “catalyze growth in terms of potential opportunities,” such as human capital.

“At the end of the day, skills and ensuring that you have the human capital base to drive growth is crucial. And, ensuring that development can be solidified in these corridors is important, particularly for these future-oriented industries,” Mr. Ramachandran said.

“These industries include semiconductors, critical minerals, the pharmaceutical sector, and renewables.”

“This will require a real ramping up in terms of skills. There’s an ambitious enterprise development plan that the government has, which we’re also engaging with to support some of these new areas and private sector-led growth in these areas.”

“Service development, or what we’re calling ‘servicification,’ around these areas is important. Because, currently, the services sector delivers a big proportion of the growth. But we’d like to also see more transition to high-value services.”

Meanwhile, Mr. Ramachandran said that the 58^th Annual Meeting has been productive for the Philippines.

“I think this solidifies some of the partnership between Europe and Asia as well. This whole conference is actually, in a way, a bridge.”

He noted the development priorities raised during the meeting resonates very strongly with its efforts in the Philippines.

On the sidelines of the meeting, the country’s economic team also held the Philippine Economic Dialogue to attract investors.

“I think it’s a good opportunity for Philippines to showcase what they’ve been doing on the reform front to highlight some of their macroeconomic fundamentals. Milan is obviously a very attractive venue for investors,” Mr. Ramachandran said. – Luisa Maria Jacinta C. Jocson, Senior Reporter

Agricultural output grew by an annual 1.9% in the first quarter, as good weather helped boost crops, fisheries and poultry production, the Philippine Statistics Authority (PSA) said.

Data from the PSA showed the value of agriculture and fisheries production rose by 1.9% in the January-to-March period to PHP 437.74 billion, faster than 0.2% in the first quarter of 2024.

This was a turnaround from the revised 2% contraction in the fourth quarter and ended three quarters of decline.

“The value of crops, poultry, and fisheries production recorded improvements, while livestock continued to decline during the quarter,” the PSA said in a report, citing constant 2018 prices.

At current prices, the value of production in agriculture and fisheries rose by 2.3% in the first quarter to PHP 623.66 billion.

“We are optimistic that the recovery in the first quarter signals momentum for the latter half of the year — especially as we bring new infrastructure online such as cold storage facilities and rice processing systems,” Agriculture Secretary Francisco Tiu Laurel, Jr. said in a statement.

However, former Agriculture Undersecretary Fermin D. Adriano said the first-quarter agricultural output results were “expected.”

“(This follows the) normal pattern of agri performance for first quarter of the year given the absence of typhoons and extreme weather occurrences… The harvest season extends in the first quarter of the year. Wait till the second quarter, which is planting (lean supply) season for rice and intense heat affects water supply for irrigation,” he said in a Viber message.

Crop production, which accounted for 57% of the total, increased by 1% to PHP 249.61 billion in the January-to-March period. This was a turnaround from the 0.3% decline in the same period last year.

Palay or unmilled rice production inched up by 0.3%, an improvement from the 2% contraction a year ago.

The volume of palay production went up to 4.7 million metric tons (MMT) in the period ending March from 4.69 million MMT in the same period last year.

The Department of Agriculture (DA) said that yield reached a record high of 4.09 MT per hectare, offsetting the decline in rice-planted areas. It targets a record palay output of 20.46 MMT this year.

PSA data showed corn production declined by 5.1% in the first quarter, a reversal of the 0.5% growth last year.

Coconut output slipped by 0.3%, slower than the 3.3% decline in the same quarter in 2024.

Crops that saw a double-digit increase in the value of output include tobacco (80.4%), cacao (23.6%), sugarcane (19%), rubber (13.6%), coffee (10.7%) and mongo (10.1%).

On the other hand, the value of production contracted for abaca (15.4%), sweet potato (9.4%), mango (7.5%), cabbage (6.4%) and calamansi (0.8%).

PSA data showed the poultry sector grew by 9.4% to PHP 75.22 billion, contributing 17.2% to total farm production.

The value of chicken egg production rose by 12.1%, while chicken output increased by 8.7% and duck by 1.5%.

On the other hand, duck egg production declined by 2.2% in the first quarter.

“We can see a little shift in the consumption pattern of consumers to the poultry sector as a source of food protein due to higher prices of meat, especially of hogs,” Philippine Chamber of Agriculture and Food, Inc. President Danilo V. Fausto said in a Viber message.

“This can be seen in the good performance of chicken and egg production and decrease in growth of the hog sector,” he added.

However, Mr. Fausto warned the local poultry industry may face challenges if there are increased imports from the US.

“The poultry sector will experience headwinds, however, if the US will require the entry of more chicken to the country as a bargaining chip to reconsider the tariff imposed by Trump for Philippine exports to the US,” he said.

Slump in livestock

Meanwhile, the value of livestock production continued to decline in the first quarter.

PSA data showed livestock output slipped by 2.8% to PHP 57.82 billion in the period ending March, although the pace of decline was slower than 3.5% in the same quarter last year. This accounted for 13.2% of the total farm output.

Hog production slumped by 3.7% in the first quarter, while carabao output dipped by 0.2%.

However, an increase in production was seen in dairy (10.5%), cattle (1.3%), and goat (1.2%).

“Livestock contraction is expected as the much-vaunted ASF (African Swine Fever) vaccine of the DA is ineffective with little adoption by hog raisers,” Mr. Adriano said.

The DA in March said it was expecting the approval of the Food and Drug Administration by April for the commercial rollout of ASF vaccines from Vietnam.

“Hopefully, we could also begin later this year the commercial roll out of the long-awaited vaccine for ASF, which will help kickstart the DA’s a large-scale hog repopulation effort,” Mr. Laurel said.

Bureau of Animal Industry data as of April 11 showed ASF had been detected in 54 villages, up from 39 as of March 14.

Meanwhile, fishery production rose by 1.5% to PHP 55.1 billion in the first quarter, accounting for 12.6% of the total output. This was an improvement from the 0.2% drop in the same period in 2024.

Milkfish (bangus) production rose by 7.8%, while tilapia inched up by 2.2%.

Double-digit growth was seen for slipmouth or sapsap (21%), mudcrab or alimango (20%), Indian mackerel or alumahan (14.5%) and blue crab or alimasag (12.1%).

However, declines were seen for fimbriated sardines or tunsoy (34.5%), roundscad or galunggong (14.7%), cavalla or talakitok (12.7%) and bigeye tuna or tambakol (11.2%).

Raul Q. Montemayor of the Federation of Free Farmers said the agriculture sector still has a lot of catching up to do, especially since output declined last year.

In 2024, farm output shrank by 2.2%, due in large part to the El Niño weather pattern, which is estimated to have caused about P15-billion in damage to local agriculture. — K.A.T.Atienza

The national government’s (NG) outstanding debt edged up to a fresh high of PHP 16.68 trillion as of end-March, the Bureau of the Treasury (BTr) said on Wednesday, adding that this debt “remains manageable.”

Latest data from the Treasury showed that the debt rose by 0.31% from PHP 16.63 trillion at the end of February.

Year on year, outstanding debt went up by 11.78% from PHP 14.93 trillion at end-March 2024.

“The NG’s robust revenue performance in the first quarter of 2025 has enabled the government to finance key priority programs without imposing new taxes, keeping debt growth well within sustainable levels,” the BTr said in a statement.

NG debt is the total amount owed by the Philippine government to creditors such as international financial institutions, development partner-countries, banks, global bondholders and other investors.

The bulk or 68.2% of the total debt stock came from domestic sources, while the rest were external borrowings.

“This financing mix reflects a prudent approach to debt management to help mitigate exposure to external risks while taking advantage of the country’s liquid domestic market,” BTr said.

Domestic debt, which was composed of government securities, rose up by 1.39% to PHP 11.38 trillion at end-March from PHP 11.22 trillion at end-February.

Year on year, it jumped by 10.72% from PHP 10.28 trillion in the same period.

“This was mainly due to the net issuance of domestic securities worth PHP 157.86 billion, demonstrating strong investor confidence in government instruments,” the BTr said.

However, the increase in domestic debt was partially offset by the peso appreciation against the US dollar, which reduced the overall valuation by PHP 2.03 billion.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the higher debt in March partly reflected the widening budget deficit, which required additional borrowings by the government.

Oikonomia Advisory and Research, Inc. economist Reinielle Matt M. Erece said the rise in domestic debt reflected the high demand for government bonds, which continues to be oversubscribed.

“This is an indication of confidence in this asset and the risk-averse sentiment while waiting for major market catalysts,” he added.

Meanwhile, external debt dropped by 1.92% to PHP 5.3 trillion as of end-March from PHP 5.41 trillion at end-February.

However, it jumped by 14.12% from PHP 4.65 trillion in March 2024.

“The (year-on-year) reduction was primarily due to the P66.22-billion decrease in the peso equivalent of US dollar-denominated debt behind local currency appreciation, as well as the net repayment of external loans, which further trimmed the external debt total by P60.84 billion,” the Treasury said.

“These more than offset the PHP 23.19-billion upward revaluation effect of third-currency movements against the US dollar,” it added.

The peso closed at PHP 57.21 against the dollar at end-March, appreciating by 78.5 centavos from its PHP 57.995-per-dollar finish at end-February.

External debt was composed of PHP 2.77 trillion in global bonds and P2.53 trillion in loans.

The NG’s guaranteed obligations slipped by 0.37% to PHP 339.86 billion as of end-March from PHP 341.11 billion in the previous month.

The Treasury attributed the monthly decline to the net repayment of external guarantees amounting to PHP 1.29 billion and the PHP 1.13-billion downward revaluation amid the continued appreciation of the peso versus the greenback.

“These more than offset the PHP 0.77 billion in additional domestic guarantees and the PHP 0.4- billion impact of third-currency exchange rate movements on external guarantees, reflecting the government’s continued efforts to prudently manage contingent liabilities while supporting key development initiatives,” it added.

Year on year, guaranteed obligations declined by 1.79% from PHP 346.04 billion.

The BTr said that 91.5% of the debt stock had fixed interest rates, shielding the Philippines from abrupt shifts in global interest rates and currency movements.

It also noted that 81.3% of the obligations are long term, “giving the government ample fiscal space and time to support growth-enhancing investments.”

Mr. Ricafort said in the following months, the debt stock could hit a new fresh high due to the need to hedge both local and foreign borrowings because of the “Trump factor.”

This year’s financing program is set at PHP 2.545 trillion, with 80% coming from local lenders and 20% from foreign sources.

The NG’s outstanding debt is projected to reach PHP 17.35 trillion by end-2025.

“With the economy continuing to grow faster than its obligations, the country remains firmly on track to achieve fiscal consolidation and reduce the debt-to-GDP (gross domestic product) ratio to below 60% by 2028,” the BTr said.

Under the Medium-Term Fiscal Framework, the government seeks to bring the ratio down to 60.4% by the end of 2025, and to 56.9% by 2028.

“The Marcos administration has inherited a large debt due to the pandemic, amounting to approximately PHP 12.79 trillion, but it has already made improvements to the country’s debt statistics by reducing the NG debt-to-GDP ratio to 60.7% in 2024, below the 70% international threshold,” the BTr said.

First-quarter GDP and debt-to-GDP ratio data will be released on May 8.

“Moreover, the country’s recent credit rating upgrades and reaffirmations underscore strong investor confidence in the country’s economic fundamentals, translating to greater demand for Philippine bonds, thereby preserving government access to reasonable borrowing costs, crucial for sustaining the country’s inclusive growth momentum,” the BTr said.

In late April, Fitch Ratings affirmed its “BBB” investment grade rating and “stable” outlook amid the country’s strong growth prospects and minimal exposure to trade tensions. – Aubrey Rose A. Inosante, Reporter

The Philippines’ unemployment rate inched up to 3.9% in March from a month earlier, even as the number of jobless Filipinos fell by the tens of thousands from a month and a year earlier, according to the statistics agency.

In its latest Labor Force Survey, the Philippine Statistics Authority (PSA) said the jobless rate rose to 3.9% in March from 3.8% in February, but flat from a year ago.

This is equivalent to 1.93 million jobless Filipinos in March, slightly lower than the 1.94 million unemployed in February and the two million jobless in March last year.

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

PSA data also showed underemployment worsened to 13.4% in March from 10.1% in February and 11% a year earlier.

The ranks of underemployed Filipinos — those who want longer work hours or an additional job — reached 6.44 million in March. This was higher than 5.39 million in March 2024 and 4.96 million in February.

“Underemployment rose by 1.05 million, it was mainly contributed by what we call the ‘invisible underemployed.’ They work for 40 hours and above but seek additional work or other jobs with higher salaries,” National Statistician Claire Dennis S. Mapa said at a media briefing.

He added that the rise in the underemployment rate in March was spread out across all sectors.

For the first three months, the unemployment rate stood at 12.3%, unchanged from last year.

PSA data showed 49.96 million Filipinos were part of the labor force in March, lower than the 51.09 million in February and 51.15 million in March 2024.

The labor force participation rate (LFPR) — the proportion of the working-age population (15 years old and over) that is part of the total labor force — slipped to 62.9% in March from 64.5% in February. Year on year, the LFPR fell from 65.3%.

“In March 2025, we saw that a substantial number decided to go back to school. That means that they had to forego their opportunities in the labor market to continue their studies,” Mr. Mapa said.

He said some may have also opted out of the labor force due to “household family duties.”

The employment rate was steady at 96.1% from a year ago, but slightly lower than the 96.2% in February.

However, the number of Filipinos with jobs dropped by over a million to 48.02 million in March, from 49.15 million a year ago, signaling concerns about labor participation and underemployment.

For the first quarter, the average employment rate was unchanged at 96%.

Mr. Mapa said that the decline in the employment rate in March can be traced to the drop in jobs in the agriculture sector.

He said the suspension of government hiring may have also affected the labor data in March.

“There was a ban on hiring in government positions, we think this had an impact on the reduction of employed persons,” he said, referring to the election ban on hiring of new government employees that runs from March 28 to May 12.

By sector, services remained the top employer, accounting for 62% of total employed persons in March, followed by agriculture (20.1%) and the industry sector (17.9%).

The education sector saw the largest annual increase in jobs during the month, adding 210,000 jobs. This was followed by administrative and support service activities (+145,000), fishing and aquaculture (+138,000), arts, entertainment and recreation (+91,000), and human health and social work activities (+51,000).

On the other hand, agriculture and forestry saw the biggest annual decline in employment (-609,000). This was followed by public administration and defense and compulsory social security (-349,000), manufacturing (-281,000), wholesale and retail trade, repair of motor vehicles and motorcycles (-175,000), and professional, scientific and technical activities (-100,000).

Wage and salary workers accounted for 63.4% of the workforce in March, followed by self-employed individuals without paid employees (27.9%), unpaid family workers (6.6%), and employers in family-operated farms or businesses at 2.1%.

Working hours averaged 41.2 hours per week in March, increasing from the average 40.7 hours reported last year and the 41.4 hours in February.

“The Philippines’ unemployment rate remained low, signaling a robust labor market that should help support domestic demand and overall economic growth amidst external headwinds,” Chinabank Research said in a statement.

University of the Philippines Diliman School of Labor and Industrial Relations Assistant Professor Benjamin B. Velasco, in a Facebook chat, said the month-on-month uptick in the jobless rate could be due to the loss of seasonal jobs in construction and trade.

“The loss of jobs in those sectors could not be compensated by higher temporary employment created by the election season — falls under the administrative and support service activities,” Mr. Velasco said.

Federation of Free Workers Vice-President Julius H. Cainglet said the rise in the underemployment rate could be due to Filipinos looking for extra work.

“Workers seek additional jobs since the wages in their existing jobs are not enough to sustain their family’s needs. They need living wages, not starvation wages,” Mr. Cainglet said in a Viber message.

Chinabank Research said the rise in underemployment shows the need for more quality jobs for Filipinos.

Mr. Velasco said that the annual increase in employment in the education sector shows the need for new teachers as the student population grows.

“The (increase in) administrative and support services is due to temporary employment related to elections. There are thousands of ward leaders and so-called volunteers doing paid work for candidates,” Mr. Velasco added. — A.H.Halili

Benign inflation gives the Bangko Sentral ng Pilipinas (BSP) room to reduce benchmark interest rates further, but it could stay cautious due to the economic uncertainty caused by the United States’ protectionist policies, analysts said.

The slower April inflation print affirms that there is room for further easing, BSP Assistant Governor Zeno R. Abenoja also said on the sidelines of the 58th Asian Development Bank Annual Meeting in Milan, Italy on Wednesday, but the pace and size of rate cuts will still need to be studied.

“The BSP has the monetary space to do additional cuts because, number one, the actual inflation for the first four months of the year is 2% — just at the lower end of the target of 2-4%,” GlobalSource Partners Country Analyst and former BSP Deputy Governor Diwa C. Guinigundo said in a phone interview. “Based on actual first four-month average of 2%, and the next three years’ risk-adjusted inflation forecast, the BSP has the flexibility to do it.”

Mr. Guinigundo said he expects the BSP to cut rates by two to four more times this year.

“However, I’m sure the BSP will be more circumspect, more careful in doing further monetary policy easing for the reason that there is greater uncertainty in the global financial markets and in the global economy,” he said, noting the Trump administration’s evolving tariff, tax and immigration policies.

“All of this could translate into higher inflation and lower growth in the US. And since the US is the biggest economy in the world, chances are many of us will be affected in the process. So, I think the BSP will have to monitor what is happening in other economies and what the central banks are also or will be doing in the process.”

Philippine headline inflation slowed to 1.4% in April from 1.8% in March and 3.8% a year prior. This brought average inflation in the first four months to 2%.

Accounting for risks, the BSP expects inflation to average 2.3% in 2025 and 3.3% in 2026.

The central bank resumed its easing cycle last month with a 25-basis-point (bp) rate cut, bringing the policy rate to 5.5%.

The Monetary Board has four remaining meetings this year, with the next one scheduled for June 19.

BSP Governor Eli M. Remolona, Jr. told Bloomberg on Wednesday that they are open to cutting rates by a further 75 bps this year amid cooling inflation.

“The inflation number in April confirms or reaffirms the analysis that was done in the last meeting, that inflation will continue to be manageable moving forward this year,” Mr. Abenoja told reporters.

“At that time, the Monetary Board mentioned that there’s flexibility to support this shift to a more accommodative monetary policy stance. But perhaps the pace, the timing, and the magnitude, we have to look at the data in each meeting.”

Mr. Abenoja said the low inflation in April was partly due to the normalization of food inflation.

He added that cooling inflation is unlikely to be a signal of slowing consumer spending.

“It may not yet be evident that there is a significant slowdown of demand coming from the external shocks. We don’t think this is yet a reflection of that. It’s more of the supply issues resolving themselves, including for rice,” he added. “We could also be benefiting, including moving forward, from the reduction in international oil prices.”

The first-quarter gross domestic product (GDP) report to be released on May 8 (Thursday) will be a crucial data point for the BSP’s next policy decision, Mr. Abenoja said.

“It will be one of the major indicators that will be analyzed by the Monetary Board. So we will see,” he added. “The Monetary Board can discuss how much of that scope of flexibility can be undertaken in the remaining four meetings for monetary policy.”

Inflation to stay low

For his part, Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said he anticipates at least 75 bps more in cuts from the BSP this year following the April consumer price index (CPI) result as inflation is likely to stay within target for the rest of the year

“I wouldn’t be surprised if they went further with 100 bps, given how subdued inflation has been recently and will likely continue to be going forward,” Mr. Chanco said in an e-mail. “Our base case now is that inflation will hover just below the 2% lower bound of the BSP’s target range for the rest of this year, especially with global oil prices tanking amid the US’ trade war.”

“The real rate of interest in the Philippines is still very elevated as things stand, especially in the wake of the recent declines in inflation, so the Monetary Board has ample room to cut rates without overdoing it.”

Moody’s Analytics economist Sarah Tan likewise said they expect the CPI to stay at the lower bound of the BSP’s 2-4% annual target this year.

“Even if global inflation rises due to supply-chain disruptions stemming from evolving US trade policies, it is unlikely that inflation in the Philippines will exceed the upper limit of the target range,” Ms. Tan said.

“Continued progress on the inflation front will create room for further monetary policy easing over the remainder of the year. We anticipate at least one more 25-basis-point rate cut in the second half of 2025. A lower policy rate would help ease the financial burden on households and provide some relief to the domestic economy, offsetting the negative effects of a weakening trade environment as US tariffs increase,” she added.

Meanwhile, Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc. (UnionBank), said they expect inflation to bottom out before accelerating anew by August amid the typhoon season.

Still, UnionBank expects the CPI to remain within target this year and next.

Mr. Guinigundo added that upside price risks could come from potential second-round effects like transport fare and wage hikes.

“Upside risks to inflation remain… At present, the low inflation, low oil prices and strong peso gives the BSP leeway to cut,” Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., said in a Viber message. — Aubrey Rose A. Inosante and Luisa Maria Jacinta C. Jocson