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Headline inflation accelerated to a six-month high in September, mainly due to costlier fuel and vegetables, but remained below the central bank’s 2-4% target, the Philippine Statistics Authority (PSA) said on Tuesday.

Preliminary data from the PSA showed the consumer price index  quickened to 1.7% in September from 1.5% in August, but eased from 1.9% in September 2024.

This was the fastest inflation rate since 1.8% in March.

It was also within the Bangko Sentral ng Pilipinas’ (BSP) 1.5-2.3% forecast for the month, but below the 1.9% median estimate in a BusinessWorld poll last week.

September also marked the seventh straight month that inflation settled below the BSP’s 2-4% target.

In the nine months to September, inflation averaged 1.7%, easing from 3.4% in the same period last year.

Meanwhile, core inflation, which excludes volatile prices of food and fuel, eased to 2.6% in September from 2.7% in August. Still, it was faster than the 2.4% clip a year earlier.

Core inflation averaged 2.4% in the nine-month period, slowing from 3.1% in the same period last year.

National Statistician Claire Dennis S. Mapa said the September inflation print was “not a surprise” as recent typhoons drove vegetable prices higher.

“This September, there were no surprises because, of course, we expected the large increase to be in vegetables, but we already saw that in August; it just continued into the month of September,” Mr. Mapa said in mixed English and Filipino. “This is still the effect of the flooding and typhoons we experienced in July. There were really many typhoons then.”

According to the PSA, the transport index was the main driver of faster inflation in September, picking up to 1% from a 0.3% decline the previous month. In September, gasoline declined at a slower pace of 0.9% from 6.1% in the previous month, while diesel quickened to 5.1% from  a 0.8% fall.

The heavily weighted food and nonalcoholic beverage index rose to 1% in September, picking up from 0.9% in August.

Food inflation quickened to 0.8% in September from 0.6% the previous month, but slower than 1.4% a year ago.

This was mainly driven by a year-on-year rise in vegetables, tubers, plantains, cooking bananas and pulses at 19.4% in September from 10% in August. This was the fastest pace in vegetable inflation in nine months or since 21.1% in January.

On the other hand, corn saw a slower annual decline of 4.5% from 11.8% in August.

“What we really saw were rain and flooding, particularly in our vegetable-producing provinces,” Mr. Mapa said. “So, this had an impact in August and continued into September.”

“We see that this may continue in the coming months because we have had storms again in the past month. It is possible that our inflation rate will remain somewhat elevated,” he added.

Last month, typhoons Mirasol, Ragasa (locally known as Nando) and Bualoi (Opong), coupled with the southwest monsoon, brought heavy rains and flooding in parts of the country.

“The slight uptick in inflation underscores the sensitivity of domestic food prices to supply disruptions,” Department of Economy, Planning, and Development Secretary Arsenio M. Balisacan said in a statement. “We are working closely with various agencies to stabilize supply, keep essential goods affordable, and safeguard household welfare.”

Rice deflation continues

Meanwhile, the decline in rice prices moderated in September, with the annual rate easing to -16.9% from -17% in August. September marked the ninth straight month of rice deflation.

“Rice prices generally continued to decline due to adequate supply, lower international rice prices, and government measures to stabilize prices,” the BSP said in a statement.

The average price of local regular milled rice slipped by 1.02% month on month to PHP 37.79 per kilo in the last week of September from PHP 38.18 per kilo, based on data from the Agriculture department.

Well-milled rice also dropped by nearly 1% to PHP 43.10 per kilo from PHP 43.52, while special rice rose by 0.2% to PHP 57.10 per kilo from PHP 56.99.

On Sept. 1, the National Government implemented a 60-day import ban on regular and well-milled rice to address falling farmgate prices of unmilled rice.

On the other hand, meat inflation slowed to 6% from 7.1% in August, while fish and other seafood prices also cooled to 7.9% from 9.5%.

Meanwhile, inflation in the National Capital Region (NCR) slowed to 2.7% in September from 2.9% in August. However, it was quicker than 1.7% in September 2024.

Outside NCR, inflation accelerated to 1.5% from 1.1% in August, but slower than the 2% clip a year ago.

Central Visayas remained the region with the highest inflation rate at 4.1%, while the Bangsamoro Autonomous Region in Muslim Mindanao saw the biggest decline in prices at -1.5%.

For the bottom 30% of income households, inflation saw a slower annual decline to -0.2% from -0.6% in August. The nine-month average stood at 0.3% from 4.6% a year ago.

Outlook

Despite emerging risks to inflation, the central bank said inflation will likely average below the 2-4% target this year, mainly due to easing rice prices.

“Nonetheless, higher rice tariffs and rising global food prices could raise supply-side pressures over the policy horizon. Meanwhile, higher electricity rates could be offset by expectations of subdued global oil prices owing to a stable production outlook,” the BSP said.

The BSP sees inflation averaging 1.7% this year.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion said the below-expectation inflation print could prompt the BSP to cut interest rates on Thursday.

“Growth has been especially uncertain lately and we think that the BSP would be delivering a cut to pre-empt downside risks to growth in general,” he said. “So, lower-than-expected (inflation) gives more reason for BSP to cut now and not run the risk of being behind the curve.”

However, Chinabank Research sees emerging inflation risks as a signal for the central bank to pause at its upcoming meeting.

“While overall price growth is still expected to remain low for the rest of the year, increased upside risks to the inflation outlook could prompt the BSP to adopt a more cautious stance and keep interest rates on hold at Thursday’s policy meeting,” it said in a note.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said developments in rice supply and transport costs will continue to drive inflation in the coming months.

“In the coming months, inflation may continue to edge higher due to risks such as weather-related supply disruptions, holiday spending, the global oil price situation, and a weak (peso) that could raise import costs,” he said in a Viber message.

A BusinessWorld poll showed 10 of 16 analysts expect the Monetary Board to keep rates steady at 5% on Thursday.

BSP Governor Eli M. Remolona, Jr. earlier said the policy rate is now at their “Goldilocks” rate or “sweet spot” for both inflation and output. However, he said last month that they are open to cutting rates again this October if the country’s economy weakens due to slow demand. — Katherine K. Chan

The Philippines’ dollar reserves rose to its highest in 11 months at end-September, driven by higher global gold prices, earnings from the central bank’s investments and the National Government’s foreign currency deposits.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed that gross international reserves (GIR) reached USD 108.805 billion as of end-September, up 1.6% from USD 107.098 billion in August.

This was the highest GIR level in nearly a year or since the USD 111.084 billion seen in October 2024.s

However, it was 3.5% lower than USD 112.707 billion in September last year.

“The Philippines’ gross international reserves rose in September 2025 due to higher global gold prices, income from Bangko Sentral ng Pilipinas’ investments, and foreign currency deposits by the National Government with the BSP,” the BSP said in a statement.

Dollar reserves are the central bank’s foreign assets held mostly as investments in foreign-issued securities, foreign exchange and monetary gold, among others.

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).

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

It is also equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income, well above the three-month standard.

“The latest GIR level provides a robust external liquidity buffer,” the central bank said in a statement.

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.

The BSP’s foreign investments inched up by 0.3% to USD 87.243 billion as of end-September from USD 86.987 billion in the previous month. However, it went down by 8.4% from USD 95.199 billion in the same period a year ago.

Central bank data also showed that its gold holdings were valued at USD 16.385 billion, jumping by 12.8% from the USD 14.523 billion seen at end-August and by 50.9% from USD 10.86 billion last year.

Meanwhile, foreign exchange holdings slumped by 44.9% to USD 505.1 million in September from USD 916.1 million in August and by 75.3% from USD 2.042 billion a year earlier.

The Philippines’ reserve position in the IMF edged up by 0.2% to USD 737.7 million at end-September from USD 736.4 million in August. It climbed by 0.9% from USD 731.1 million in September 2024.

SDRs — or the amount the Philippines can tap from the IMF’s reserve currency basket — were unchanged month on month at USD 3.935 billion. Year on year, it was 1.5% higher than USD 3.875 billion.

The BSP also reported that net international reserves inched up by 1.6% to USD 108.8 billion as of end-September from USD 107.1 billion as of end-August.

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

“This GIR uptrend appears to be above expectations as the end-September GIR already exceeds the BSP’s year-end target of USD 105 (billion),” Security Bank Corp. Chief Economist Angelo B. Taningco said in an e-mail.

However, Mr. Taningco noted that a weakening peso could pose risks to the country’s dollar reserves in the coming months.

“Potential risks on GIR in upcoming months include persistent peso depreciation pressures induced by foreign capital outflows and higher (United States) Treasury yields,” he said.

At end-September, the local currency closed at PHP 58.196 per US dollar, falling by PHP 1.066 from its PHP 57.13 finish on Aug. 29.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort also noted a USD 411-million month-on-month decline in the central bank’s foreign exchange holdings amid the foreign exchange market volatility and “political noises.”

Earlier this month, the BSP revised its GIR projection for this year to USD 105 billion, slightly higher than its previous forecast of USD 104 billion. In 2026, it expects GIR to reach USD 106 billion. — Katherine K. Chan

The World Bank maintained its Philippine gross domestic product (GDP) growth forecasts for this year and 2026, amid heightened uncertainty and slowing global growth.

In its latest East Asia and Pacific Economic Update released on Tuesday, the multilateral lender kept its growth outlook for the Philippines at 5.3% this year and 5.4% for 2026, unchanged from its projections in June.

These forecasts are below the government’s 5.5-6.5% target for this year, and 6-7% for next year.

The Philippines is expected to be the region’s fourth fastest-growing economy in the East Asia and Pacific this year, trailing Vietnam (6.6%), Mongolia (5.9%), and Palau (5.7%).

For 2026, the Philippines is projected to post the third-fastest growth after Vietnam (6.1%) and Mongolia (5.6%).

The country’s growth forecast is above the regional average, with East Asia and the Pacific expected to expand by 4.8% this year and 4.3% in 2026.

“East Asia and Pacific region growth remains relatively high, but it is slowing down,” World Bank East Asia and Pacific Chief Economist Aaditya Mattoo said in a virtual briefing on Tuesday.

“At the same time, domestic policy choices, especially the reliance in some countries on fiscal stimulus rather than structural reform, are likely to shape near and longer-term growth outcomes. Turning to the reasons why growth is slowing down, we identify three main factors — trade restrictions, increased economic policy uncertainty, and slowing global growth,” he said.

The US imposed a 19% tariff rate for Philippine-made goods starting Aug. 7.

Mr. Mattoo noted that most economies in the region now face higher tariffs, but the Philippines, Thailand and Vietnam are less affected since electronics and semiconductors are exempted from tariffs for now.

The World Bank noted that economies in the region have lowered tariffs exclusively on US imports and pledged to increase purchases of specific American goods, in response to higher tariff rates.

“In some cases, countries have engaged with other trading partners to pursue greater diversification of their trade. These actions may be costly but necessary in an uncertain trading environment,” it said.

The Philippine government has vowed to adopt a zero-tariff scheme on selected US goods, but the move could cost the government PHP 27 billion to PHP 30 billion in forgone revenues. However, negotiations with the US have yet to be finalized.

Rise of digital informality

Meanwhile, the Philippines is seeing a shift in informal work from agriculture to digital platforms like ride-hailing applications, the World Bank said. However, poor education may prevent workers from capitalizing on tech-driven jobs, it added.

“Now there is the new informality, which is informality of these new platform-based services, which are growing in Thailand and in the Philippines,” Mr. Mattoo said.

However, Mr. Mattoo said regulation and taxation of the informal sector can be reformed to ensure fewer people are marginalized from the economy.

“I think the Philippines is in a position to benefit (from emerging jobs due to technology) if it deals with the huge deficit in human capital,” he said.

“It is stunning that a country that punches above its weight in services, exports, still has feet of clay when it comes to basic education.”

Mr. Mattoo noted that companies in the Philippines are actively involved in the artificial intelligence (AI) economy but see a lack of skills in workers due to poor basic educational foundation.

“East Asia’s export-oriented labor-intensive growth lifted a billion people out of poverty in the last three decades, but the region now faces the twin challenges of trade protection and job automation,” he said.

Mr. Mattoo called for reforms in the business climate and education system to foster a “virtuous cycle between opportunity and capacity,” which would lead to stronger growth and better-quality jobs.

The World Bank also called for reforms and investments in human capital and digital infrastructure, greater competition in services, and policies to ensure a match between job opportunities and people’s skills.

It noted that rapid advances in AI, robotics, and digital platforms require greater agility from firms, workers, and policymakers.

Meanwhile, Mr. Mattoo also flagged the Philippines’ slow industrialization compared with regional peers such as Vietnam, citing the country’s continued reliance on trade tariffs.

“Trade taxes are the simplest way of limiting revenue especially in countries with low administrative capacity,” he said, as it diverting resources away from sectors where the country holds an advantage.

The Philippine government lowered the rice import tariff to 15% from 35% in July 2024 to curb inflation. Agriculture groups have since called for the restoration of the original rate, citing adverse effects on local farmers and an estimated P4.3-billion revenue loss for the government.

“I think non-discriminatory instruments like value-added taxes, better and more effective income taxes and perhaps even the more controversial wealth taxes might be the more effective way of meeting revenue needs,” Mr. Mattoo said.

Finance Secretary Ralph G. Recto has downplayed the urgency of a wealth tax, but said he would support the measure if passed by Congress. — Aubrey Rose A. Inosante

Factory output expanded in August, driven by higher production of food products, machinery and equipment, and a slower annual decline in basic metals, the Philippine Statistics Authority (PSA) reported.

Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries showed factory output, as measured by the volume of production index (VoPI), rose by 1.4% year on year in August. This was slightly faster than the 1.3% growth in the same month last year, and a turnaround from the 1.8% drop in July.

The August reading was the fastest growth since the 1.6% expansion in June.

In the eight months to August, factory output growth averaged 0.5%, slower than the 2.5% average in the same period last year.

On a monthly basis, August’s output picked up by 0.1%, slower than 2.6% in July. Stripping out seasonality factors, it fell by 3.2%.

According to the PSA, the faster year-on-year growth rate of VoPI for manufacturing in August was primarily driven by food products, which jumped by 20.2% from 11.4% in July.

There was also an uptick in machinery and equipment except electrical (6.7% in August from 3.1% in July), and a slower annual decline in basic metals (-9.6% from -26.8%).

Nine other divisions recorded expansions, while 10 saw declines.

The PSA also said that the top three industry divisions that contributed to the overall year-on-year growth in the VoPI were food products, transport equipment (6.5% in August from 9.5% in July), and electrical equipment (19.5% from 21.2%).

Average capacity utilization, or the extent to which industry resources are used in producing goods, averaged 77.3% in August. This was a tad higher than the revised 77.2% in July and the 75.6% posted last year.

In comparison, the Philippines in the S&P Global Manufacturing Purchasing Managers’ Index (PMI) expanded to 50.8 in August from 50.9 in July.

PMI is a leading indicator for factory activity, reflecting the volume of materials purchased in advance of manufacturing operations weeks or months down the line. A reading above 50 separates expansion from contraction.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said the expansion in food production can be attributed to producers’ anticipation of strong holiday demand.

“Inflation was still relatively low overall, so consumer purchasing power remained intact, supporting demand for processed food,” he said in a Viber message.

Mr. Asuncion also said the immediate impact of the US tariffs on the Philippines was limited as food and machinery production is mostly domestic-focused or exempted from tariffs.

“However, exports slowed significantly, and US-bound shipments fell, signaling that the tariff’s full effect will likely hit in the fourth quarter 2025. Sectors like garments and footwear faced pressure, but they contribute less to overall manufacturing output compared with food and machinery,” he said.

US President Donald J. Trump imposed a 19% tariff on Philippine goods, which took effect on Aug. 7.

Sergio R. Ortiz-Luis, Jr., president of the Philippine Exporters Confederation, Inc., said in a phone interview that manufacturers may have ramped up production ahead of the implementation of US tariffs.

“For food products, there was frontloading for the US tariff… Double time in manufacturing food products,” he said.

Meanwhile, Mr. Asuncion said manufacturing output is expected to “grow moderately” in the remaining months of the year, driven by food demand ahead of the holidays, infrastructure-linked machinery production, and further monetary easing by the central bank.

“However, risks remain from US tariffs, global trade slowdown, weather-related disruptions, and local political risks. If BSP delivers another rate cut and fiscal spending accelerates, output could rebound toward yearend despite external and internal headwinds,” he said. — Isa Jane D. Acabal

The Philippines will implement a one-month rice import window in January and reimpose a ban on imports from February to April, as the government seeks to support the prices of rough rice in the 2026 harvest season.

Agriculture Secretary Francisco P. Tiu Laurel, Jr. said the department is looking to allow about 300,000 metric tons (MT) of rice imports in January 2026, a plan “more or less” approved by President Ferdinand R. Marcos, Jr. following the extension of the rice import ban through end-2025.

“We have to import by January just to be sure,” Mr. Tiu Laurel told lawmakers in Filipino at a House of Representatives hearing. “Our imported stocks, which we stopped in September, are estimated to run out by the end of November and we’ll be running on local stocks in December.”

“That kind of situation is quite risky,” he added.

Mr. Marcos had earlier ordered a 60-day suspension of rice imports starting Sept. 1 to support Filipino farmers during harvest season and to stabilize rice prices. The suspension was originally supposed to end on Nov. 2 and applies only to regular milled and well-milled rice.

“We will extend the rice import stoppage until the end of 2025,” Mr. Tiu Laurel said.

He said the Philippines, the world’s top rice buyer, had imported around 3.5 million MT of rice as of end-September, overshooting this year’s rice import target limit by 800,000 tons.

“We should be at the 2.7 [million MT levels] in imported rice. So, we are… in excess,” he said. “The monthly import volume should only be around 300,000 tons or 3.6 million MT a year.”

Monthly rice imports ranged from 305,000 MT to 517,800 MT in the first eight months of the year, Agriculture Undersecretary Christopher V. Morales said at the same congressional hearing.

The Philippines last year imported about 4.7 million MT of rice, and the US Department of Agriculture in August projected the Southeast Asian nation to bring in about 4.9 million MT of rice for the whole year.

Mr. Tiu Laurel said the Department of Agriculture’s (DA) hands are tied when it comes to regulating rice imports into the country after it was liberalized in 2019 by the Rice Tariffication Law, which replaced quota restrictions with tariffs.

“We have to manage our stocks and our importation versus our production… Full liberalization only puts us in this situation,” he said, alluding to falling farmgate prices of unhusked rice due to the entry of foreign rice imports.

The farmgate price for palay fell by 27.8% to PHP 17.11 per kilo in August from the PHP 23.71 per kilo last year, data from the Philippine Statistics Authority showed.

“In my opinion, we can’t liberalize importation because we’re competing with our own production,” said Mr. Tiu Laurel. “We need to calibrate our imports. We should prioritize our local market first.”

DA farmgate price monitoring data last week showed that palay prices ranged from as low as PHP 7.50 to as high as PHP 18.20 per kilo, while dry rough rice fetched between PHP 11.09 and PHP 25 per kilo, Mr. Morales said.

Mr. Tiu Laurel also said that policymakers should consider hiking the rice tariffs after Mr. Marcos last year cut tariffs to 15% from 35% until 2028 to tame rice prices.

“Our wish is for tariffs to go up again. But this is still being studied by our economic managers, along with its implications,” he said.

The DA chief said the decision to extend the rice import ban until yearend gives the government ample time to determine the appropriate tariff hike, while avoiding potential market shocks.

Meanwhile, the Finance department is still evaluating whether to restore higher rice tariff rates or maintain the current rates, Finance Undersecretary Karlo Fermin S. Adriano said, noting the government could lose about P20 billion in annual revenues under the current tariff level.

“On the revenue foregone due to the import ban, the range is about PHP 1.4 [billion] to PHP 2 billion every month,” he said at the same House hearing.

The decision to extend the rice import ban until yearend may benefit farmers under normal weather conditions, but recent typhoons threaten domestic output and could undermine the country’s ability to meet consumer demand, Roy S. Kempis, retired agriculture economics professor at the Pampanga State Agricultural University, said.

“An extension may be catastrophic once you include in the decision equation the adverse effects of weather conditions,” he said in a Viber message.

For his part, Mr. Morales said the Philippines could have around 3.24 million MT to 4.06 million MT of rice by the end of 2025, enough to cover national consumption for about 85-106 days.

Avoiding rice imports could also strain the Philippines’ trade relations with key suppliers such as Vietnam, former Agriculture Undersecretary Fermin D. Adriano said.

“Sooner or later an exporting country, like Vietnam, will get mad at us,” he said in a Viber message. “We import almost 90% of our rice from Vietnam, and because of our action, it is seeking alternative markets for their rice.”

The Philippines is Vietnam’s top rice export market, shipping about 2.73 million MT in the first nine months of 2025, according to the Bureau of Plant Industry as of Sept. 24.

“Our sources of imported rice may not be quick enough to supply our rice needs when vicious typhoons come, because they could have discounted the Philippines as a consistent buyer,” Mr. Kempis said.

Extending the rice importation could also lead to higher rice prices in the first months of next year due to a possible shortage, said Mr. Adriano.

“We might experience higher rice prices and then limited inventory by the beginning of next year, which will result in a temporary shortage,” he said.

Raul Q. Montemayor, national manager of the Federation of Free Farmers, said banning rice imports alone won’t be sufficient to support local farmers, stressing the need to raise tariffs on imported rice to ensure long-term protection for domestic producers.

“Banning imports is very imprecise. Even if imports stop at harvest time, prices will still be low if importers have brought in large volumes before the seasonal ban, resulting in congested warehouses and tie-up working capital,” he said in a Viber message. “Still, it can help avoid overimportation but tariff rates will also be crucial.” —± Kenneth Christiane L. Basilio, Reporter

The economy and Development (ED) Council has overhauled the review and approval process for government programs and infrastructure projects, such as raising the cost threshold and including public-private partnership (PPP) projects.

In a statement, the Department of Economy, Planning, and Development (DEPDev) said the Council, chaired by President Ferdinand R. Marcos, Jr., approved the new guidelines that would be applied to new and ongoing projects that require action from the ED Council or Investment Coordination Committee (ICC).

Under the new guidelines, projects funded by the national budget will now require ICC review if they exceed PHP 5 billion. The previous threshold was at PHP 2.5 billion.

“We have raised the threshold from PHP 2.5 billion to PHP 5 billion already, while at the same time putting safeguards into the various stages of the approval process so that we can spot possible issues or problems that may arise,” DEPDev Secretary and ED Council Vice-Chair Arsenio M. Balisacan said in the Philippine Development Forum on Monday.

The sweeping changes were prompted by a billion-peso flood control scandal that exploited loopholes in government policies to evade scrutiny.

The ICC earlier said that flood control and management projects will now be aggregated by river basin rather than evaluated individually with lower tagged costs.

Under the new guidelines, the ICC’s coverage also includes PPP projects.

The ICC will also conduct a mandatory review of all foreign loan-assisted projects, regardless of loan amount or total cost, except for grant-assisted projects, which are reviewed by DEPDev.

Mr. Balisacan said streamlining the ICC process and clarifying its scope will make project evaluation more rigorous while minimizing delays.

“As we work to ensure that every peso invested by the government delivers maximum value for Filipinos, streamlining the ICC process and clarifying its scope will make project evaluation more rigorous while minimizing delays,” Mr. Balisacan said.

MRT-3 Adjustments

Meanwhile, the ED Council also approved “critical” adjustments to the Metro Rail Transit Line 3 (MRT-3) rehabilitation project, including the full replacement of the rails and overhaul of 72 light rail vehicles.

The ED Council said the Department of Transportation (DoTr) requested the approval for these changes in project scope, cost, financing and implementation timeline “to address emerging technical requirements.”

The changes include additional system upgrades, equipment rehabilitation, and facility improvements aimed at enhancing the long-term reliability and safety of the MRT-3 system.

The DoTr had sought the full replacement of main line rails, a general overhaul of 72 CKD-Tatra light rail vehicles, and procurement of bogie frames and assemblies.

The project also involves the integration of the MRT-3 to the MRT Common Station, the deployment of the Dalian trains, and a transition to four-car train operations.

“The MRT-3 is a vital artery in Metro Manila’s transport network. These adjustments are necessary to meet evolving technical demands and ensure that commuters benefit from a safer, more efficient, and more reliable transit system,” Mr. Balisacan said.

Mr. Marcos had also ordered the DoTr to implement safeguards to ensure the operations and maintenance of the MRT-3 in the short and long term, operational sustainability and maintenance of the MRT-3.

The DoTr aims to start the bidding process for the operations and maintenance of MRT-3 within the first half of 2026.

US projects

Meanwhile, the Council greenlit a USD 400-million cost increase and an extension for four US-backed projects to ensure continuity after the shutdown of the United States Agency for International Development.

The DEPDev said the request of some government agencies to increase the cost as well as extend the implementation and grant validity period for four US government-assisted development objective agreements.

“The changes are intended to ensure continuity in implementation during the transition of project management from the United States Agency for International Development (USAID) to the US Department of State,” the DepDev said in a statement.

USAID was shuttered in July after the Trump administration dismantled the agency, then froze and cut billions of dollars of foreign aid.

US President Donald J. Trump had wanted to ensure that aid was given only to programs in line with “America First” policies.

“By approving these measures, we are making sure that implementation remains uninterrupted despite the transition in management,” Mr. Balisacan said.

The Council approved a USD 300-million cost adjustment for the Department of Health’s “Improved Health for Underserved Filipinos” project, raising its budget to USD 524 million from USD 224 million.

This aims to sustain better health outcomes among underserved populations and strengthen overall health profile.

The “Enhanced Ecosystem and Community Resilience” project also saw a USD 100-million increase in funding to USD 250 million. The project, undertaken by the departments of Agriculture, Energy and Environment and Natural Resources, aims to address the impact of climate change on natural ecosystems.

The Department of Finance’s “Economic Growth and Democratic Governance with Equity’ program and the Department of Education’s ‘Improved Basic Education Outcomes” program were extended until Sept. 30, 2027. — A.R.A.Inosante

President Ferdinand R. Marcos, Jr. vowed to tighten government spending and curb inefficiencies in the use of public funds as he called for faster project implementation and better coordination among agencies on Monday.

Speaking before development partners and senior officials in Mandaluyong City during the Philippine Development Forum 2025, Mr. Marcos said his administration will not tolerate waste or inaction in the execution of government programs.

“We will not tolerate measurement without action, nor will we tolerate the wastage of public funds,” he said in mixed English and Filipino. “No money will go to waste. We will not allow the nation’s coffers to be squandered.”

The President said reforms are underway to accelerate the disbursement of official development assistance (ODA) and ensure foreign-funded projects translate into tangible results.

He also announced the overhaul of Investment Coordination Committee guidelines — the first comprehensive update in a decade, as well as the simplified issuance of Special Authority to shorten approval timelines for ODA-supported programs.

This comes amid a widening probe into allegations of corruption in government infrastructure projects, particularly flood control projects.

Department of Economy, Planning, and Development  Secretary Arsenio M. Balisacan told reporters that he hopes the “corruption issues” will be a temporary thing.

“As I said, we expect to come up with measures that will improve the governance of public spending. And if the short-term cost is compensated by a much-improved environment for the medium term and long term, that’s not bad,” he said.

Mr. Balisacan said the flood control mess is unlikely to affect the Philippines’ credit ratings, adding that the ongoing probe will be viewed positively.

“I’m sure that they know there is some corruption there. But, then again, if I were a credit rating agency, if I see a sense that the government is doing something about it, seriously, then I would, in fact, take that as a positive, and I would not be worried about the future,” he said.

Also, Mr. Balisacan said he is open to publicizing the list of barred contractors amid the billion-peso flood control scandal.

“I think that the public being aware of what is a good partner and a bad partner should be part of the accountability mechanism,” he said.

The World Bank and the Asian Development Bank have a joint agreement to cross-debar contractors found to have violated project guidelines or engaged in questionable conduct.

Meanwhile, World Bank Division Director for the Philippines, Malaysia and Brunei Zafer Mustafaoğlu said the government’s action towards corruption will improve investor appetite and should support long-term growth.

“We also work in the countries, including in the Philippines, to actually enhance transparency, enhance institutional structures to actually deal and reduce corruption,” he said.

In his opening speech, Mr. Mustafaoğlu said that there are opportunities to leverage ODA funding to increase transparency and introduce system improvements for better results and accountability.

“Collectively, the development partners stand ready to extend around USD 50 billion in support over the next three years, if requested by the government, to accelerate the delivery of better services for Filipino citizens,” he said.

Finance Undersecretary Joven Z. Balbosa said the government can learn from the project cycle and “well-established international process” of development partners. 

“From project preparation, project implementation, execution, and then the monitoring and evaluation, the learnings from it gets to new project proposals and design. Within those cycles, there are missions or what you call intermittent reviews, which looks at the project, ensuring quality of the project delivery and whether they’re on time,” he said. 

For his part, Budget Assistant Secretary Romeo Matthew T. Balanquit ruled out concerns over underspending amid the probe into anomalous flood control projects.

“The worry of underspending is not really there. We still have accounts payable, meaning those projects that were already finished in the previous year and we have to pay them,” he said.

Meanwhile, Gary D. Ador Dionisio, dean of the De La Salle-College of St. Benilde School of Diplomacy and Governance, said the President must implement institutional reforms that enhance financial transparency, strengthen independent oversight and establish comprehensive anti-corruption mechanisms to achieve his administration’s goals. 

These reforms are essential not only to prevent fund misuse but also to ensure that ODA effectively supports infrastructure, social services and inclusive growth, he added.

“There is imperative to strengthen public financial management by fully digitalizing procurement and budgeting processes, enforcing performance-based spending, and ensuring independent audits are transparent and accessible to the public,” he said via Facebook Messenger.

He also noted that oversight bodies like the Commission on Audit and the Office of the Ombudsman should be empowered with greater prosecutorial authority and led by individuals of unquestionable integrity.

Ateneo de Manila University political science lecturer Hansley A. Juliano said Mr. Marcos is working to distance himself from ongoing corruption scandals by projecting an image of impartiality and reform.

This effort, however, is complicated by controversies involving his own family, including former Speaker Ferdinand Martin G. Romualdez and Senator Ma. Imelda Josefa Remedios “Imee” R. Marcos, who is aligned with the rival camp. 

Mr. Marcos’ primary goal, according to Mr. Juliano, appears to be political survival and completing his term to cement a narrative that the Marcoses endured without corruption.

The 17^th Philippine President made sweeping anti-corruption statements during his State of the Nation Address last July following a series of rains and flooding in several areas of the country.

He launched a crackdown against anomalous public works projects and established the Independent Commission for Infrastructure to probe such problems. — Chloe Mari A. Hufana and Aubrey Rose A. Inosante