Shares may move sideways before holiday break
PHILIPPINE SHARES may trade sideways this week as investors stay cautious ahead of the holiday break and amid a lack of catalysts.
On Friday, the bellwether Philippine Stock Exchange index (PSEi) dropped below 6,000 again, falling by 1.83% or 110.61 points to end at 5,920.87, while the broader all shares index declined 1.42% or 49.24 points to close at 3,397.72.
Week on week, the PSEi decreased by 115.85 points from its 6,036.72 close on Dec. 12.
“The local bourse’s early-week momentum dissipated Friday as pre-holiday de-risking pulled the PSEi below the 6,000 psychological floor,” 2TradeAsia.com said in a market note.
“The local market declined last week with investors immediately taking gains from the prior week’s rally, as trust towards the local economy’s growth prospects remains weak. Ultimately, anemic confidence remains as the local market’s main problem,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.
Mr. Tantiangco said the market could continue to move sideways during this shortened trading week. Philippine financial markets are closed on Dec. 24-25 for the Christmas holidays.
“Investors are expected to maintain their cautious stance. Investors may sell positions to shield themselves from any possible negative developments over the holidays. Investors are also expected to watch out for fresh leads,” he said.
“On a positive note, the local currency’s appreciation, if it continues, is expected to provide support to the local bourse. Given all of these, next week, the market could move sideways.”
He added that with the PSEi returning to the 6,000 level last week, the market may continue to move within this range.
“The market’s MACD (moving average convergence/divergence) line is about to cross the signal line. If this continues, it will signal bearish momentum for the bourse. If the market is unable to get back above 6,000, its next support is seen at 5,800.”
“Locally, the approaching holiday break points to thin trading volumes, with most funds shifting focus toward 2026 positioning,” 2TradeAsia.com said.
It said the market remains cautious amid governance risks due to the lingering concerns over the scandal surrounding the use of public funds for allegedly anomalous infrastructure projects.
“Next year’s theme centers on identifying rebound angles in undervalued cyclicals and defensives, supported by resilient consumption and potential infrastructure acceleration,” it said.
“With holiday liquidity potentially capping downside and valuations offering attractive entry points, disciplined accumulation in quality names positions portfolios well for 2026 upside.”
It placed the PSEi’s immediate support at 5,800 and resistance at 6,000, with secondary resistance at 6,100. — Alexandria Grace C. Magno
PEZA expects more ecozone proclamations early next year
THE Philippine Economic Zone Authority (PEZA) said it is expecting additional economic zones (ecozones) to be proclaimed by January, and is targeting 30 new ecozones next year.
PEZA had in October given an estimate of 14 proclamations by year’s end, but now sees the approvals to start coming next month.
“We wrote a follow-up letter to the Executive Secretary (ES). Developers have been meeting with the ES. They were told that by January, there’s going to be another release of newly proclaimed eco-zones,” PEZA Director-General Tereso O. Panga said on the sidelines of the agency’s 30th anniversary event last week.
Mr. Panga said PEZA is also targeting 30 new ecozones in 2026.
Since 2022, 35 new and expanded ecozones have been proclaimed, according to PEZA.
“Most of them (are) strategically located in the countryside to promote regional development. And we have more in the pipeline, including new public economic zones in the Bicol region and in Palawan,” Mr. Panga said at the event.
The Office of the President issues proclamations that designate specific sites as special economic zones, upon the recommendation of PEZA.
Mr. Panga said PEZA is trying to locate ecozones in new areas. “They can only attract investment when there are new locations for development. We’re trying to locate in new growth areas,” he said. — Vonn Andrei E. Villamiel
Sugar import ban extended until December 2026
THE Department of Agriculture (DA) said the ban on importing sugar will be extended until December 2026 to protect domestic producers, who are expected to post strong output.
“Based on the current outlook for sugar production and demand, a longer import moratorium than initially suggested is necessary,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. was quoted as saying in a statement.
Sugar imports were halted in October to encourage traders to purchase domestic sugar and prop up prices.
Mr. Laurel said domestically produced sugar should be prioritized to stabilize the market.
The DA said it will also step up monitoring of refinery operations to maintain accurate data on standard and premium-grade refined sugar inventories. Mr. Laurel said this is critical to prevent supply distortions and speculative pricing.
The DA and the Sugar Regulatory Administration (SRA) are also finalizing a regulatory framework governing molasses imports to shield domestic producers.
Under the proposed rules, the DA said molasses users will first be required to purchase and withdraw domestically produced molasses before applying to import, subject to a pre-determined ratio and the SRA’s approval. — Vonn Andrei E. Villamiel
Industrial policy deemed key to elevating PHL to UMIC status
By Aubrey Rose A. Inosante, Reporter
THE Philippines needs to make public spending more transparent and assign more weight to industrialization to achieve upper middle-income country (UMIC) status, analysts said.
The road to UMIC status, a long-stated government objective, is now expected to face further delays, possibly to 2027, due to cooling economic growth, they added.
“Better transparency on public spending and strong industrial policy are the key to reaching UMIC status,” Oikonomia Advisory and Research, Inc. economist Reinielle Matt M. Erece told BusinessWorld via Viber.
A corruption scandal in infrastructure projects surfaced after heavy rains in July, which exposed flood control works that were substandard or even non-existent. It resulted in an overhaul of the Department of Public Works and Highways, whose disbursements were subjected to greater scrutiny, slowing down public spending and damaging investment confidence.
Mr. Erece also noted that the government may find it challenging to achieve UMIC status unless the gross domestic product (GDP) growth expands by at least 7%.
“Even if we reach that pace in 2026, we may only reach UMIC status by 2027,” he added, noting that this projection represented the optimistic scenario.
This will take longer than the government’s target of achieving UMIC status by 2026. The Philippines has been classified as lower middle-income since 1987.
“It’s going to be quite a challenge to do that. (Economy Secretary Arsenio M.) Balisacan already said he’d want 6 to 7% growth to have a strong chance of achieving that goal,” Ser Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said via Viber.
Finance Secretary Frederick D. Go last week said he remains optimistic the Philippines can achieve UMIC status by 2026, assuming a rebound in economic growth.
“Our strategy is to grow the economy and make sure that no one is left behind,” Mr. Go told reporters on Dec. 18.
The Philippines’ gross national income per capita stood at $4,470 in 2024, up from $4,230 a year earlier, according to the World Bank’s country income classification issued in July.
The Philippines was $26 short of the threshold of $4,496 to be reclassified as an UMIC. The upper end of the UMIC band is $13,935.
Securing up to 7% GDP growth is likely out of reach, with Mr. Balisacan conceding that the Philippines may not even hit 5.5 to 6.5% goal this year.
“If public spending continues to be tight, and more politicians continue to want to cut spending rather than improving transparency measures, GDP growth will continue to falter,” Mr. Erece said.
Analysts also lagged the peso’s recent weakness as a potential risk to UMIC status, but some said it could support exports, with remittance inflows also cushioning the currency’s depreciation.
Mr. Peña-Reyes said he sees the weak peso as a concern but noted that the central bank is intervening to stabilize the currency.
The central bank said it is intervening in the foreign exchange market to dampen volatility in the peso, thought it has no target rate against the dollar.
“We don’t always intervene. We’re kind of shy about intervening. But if we do decide to intervene, we’re more likely to do it when the market is going crazy,” Bangko Sentral ng Pilipinas governor Eli M. Remolona, Jr. said.
The peso breached the P59-to-the-dollar mark several times since November and hit a record low of P59.22 on Dec. 9.
Mr. Go has said that the peso could be one of the obstacles to the UMIC transition, as the World Bank income categories are set in dollars.
“Even if we grow in pesos, if the foreign exchange rate works against us, that’s the problem,” Mr. Go said.
Mr. Erece said the depreciation of the peso is an economic risk, but does not consider it a “major risk” in achieving UMIC.
“A depreciated peso may even be helpful in boosting export demand due to competitive prices, and OFW (Overseas Filipino Workers) remittances may also offset the falling peso,” he said.
The weak peso can make the exports more competitive, Mr. Erece said.
“Thus, a strong industrial policy is also needed to boost the economy and create more jobs. If the government is concerned about higher import costs due to the falling peso, a strong industrial policy is much more needed to create competitive domestic industries, which may even absorb some of the demand away from imports,” he said.
Foundation for Economic Freedom President Calixto V. Chikiamco said pursuing UMIC status is irrelevant, as it does not account for how income is distributed.
“The fact that a fluctuating figure like the exchange rate affects the milestone emphasizes its artificiality,” he told BusinessWorld via Viber.
Mr. Chikiamco said the UMIC transition is “nothing to celebrate and nothing to keep watching over,” as it affects the country’s eligibility for access to cheap loans or multilateral assistance.
Achieving UMIC status would mean the Philippines would have reduced access to official development assistance from development partners.
Budget utilization rate hits 94.5% in November
THE cash utilization rate of government agencies hit 94.5% at the end of November, the Department of Budget and Management (DBM) said.
In a report released Dec. 19, the DBM said the National Government, local governments, and government-owned and -controlled corporations used P4.32 trillion worth of notices of cash allocation (NCAs) issued during the period.
Unused NCAs amounted to P249.78 billion, as of the end of November.
The cash utilization rate compares with the year-earlier pace of 94%.
NCAs are quarterly disbursement authorities issued by the DBM to agencies, allowing them to withdraw funds from the Bureau of the Treasury for their spending needs.
During the 11 months, line departments used P3.15 trillion, or 92.9% of their allotments, while P241.90 billion remained unused.
The Department of Migrant Workers posted the highest utilization rate of 99.4% at the end of November.
This was followed by the Department of Social Welfare and Development (97.5%), the Office of the Vice-President (95.8%), the Commission on Human Rights (95.6%), and the Department of Education (95%).
The Department of Energy and the Commission on Elections posted the lowest usage rates of 62.5% and 67.7%, respectively.
Budgetary support to state-run firms was 98.6% utilized, while allocations to local government units amounted to 99.4%. — Aubrey Rose A. Inosante
NGCP approved to build P13-B CamSur substation
THE Energy Regulatory Commission (ERC) granted approval to the National Grid Corp. of the Philippines (NGCP), which is seeking to build the Milaor 500-kilovolt Substation Project in Camarines Sur to accommodate the additional power to be generated by offshore wind farms.
In a decision promulgated on Dec. 18, the ERC called the P13-billion project a necessary component of the NGCP’s expansion plans.
The regulator said cost recovery will be determined after expenses are validated in the next rate reset process.
Camarines Sur is expected to host several energy projects, including offshore wind farms. Developers with offshore wind power projects in the province have targeted commissioning of their projects as early as 2027.
The NGCP said the substation will provide a connection point for the proposed bulk offshore wind power plants in Camarines Sur to the grid.
The Philippines hopes to generate initial power from offshore wind by 2028.
The NGCP also said the substation will complement the planned increase in the transfer capacity of the Luzon-Visayas link by upgrading the high-voltage direct current system’s transfer facility from 440 megawatts (MW) to 880 MW.
The ERC directed the grid operator to complete the installation and commissioning of one of the two 1,000-megavolt-ampere power transformers at the substation by 2027, with full completion scheduled by Aug. 31, 2030.
“Non-compliance therewith will result in administrative penalty provided under relevant laws, and pertinent rules and regulations of the Commission,” the ERC said.
The Commission also ordered NGCP to pay a P97.2-million permit fee.
Under a congressionally granted 50-year franchise, the NGCP has the right to operate and maintain the transmission system and related facilities, and to exercise the right of eminent domain as needed to construct, expand, maintain, and operate the transmission system.
NGCP’s capital expenditure projects must be approval by the ERC under Republic Act No. 9136 or the Electric Power Industry Reform Act. — Sheldeen Joy Talavera
Go sees continued role in attracting investment following move to DoF
FINANCE SECRETARY Frederick D. Go will continue to assist President Ferdinand R. Marcos, Jr. in screening global investors next year, after he relinquished his position as the government’s chief investment adviser.
Mr. Go said he will “continue to help coordinate and support the investment promotion activities of the government” as the new Secretary of Finance.
His previous posting was as head of the head of the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA), starting 2023, until his appointment to the Department of Finance (DoF) on Nov. 13.
Despite the abolition of the OSAPIEA, Mr. Marcos appointed former Deputy Treasurer and World Bank Executive Director Erwin D. Sta. Ana as undersecretary for economic affairs.
“For example, there are overseas plans next year of the President. So again, we will meet some of the most serious investors or interested investors in the Philippines,” Mr. Go told reporters on Dec. 18.
He will also vet prospective investors and recommend those that Mr. Marcos should meet.
“I’ll continue to help with investments. That’s what we really need. It’s all about job creation, increasing the number of jobs,” he said.
Foreign direct investment net inflows fell 25.8% to $320 million in September, the lowest monthly level in over five years, the Bangko Sentral ng Pilipinas reported. This brought the nine-month tally to $5.537 billion.
Mr. Go said 10 staffers from his former OSAPIEA team will remain with the Office of the President to assist on investment matters.
Mr. Go said he would like reforms like the Public-Private Partnership Law and the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act tax incentives to play a key role in attracting investment.
He added that the Accelerated and Reformed Right-of-Way Act, the Land Lease for Foreign Investors Act, and the Philippine Mining Fiscal Regime Act should be broadened.
Mr. Go said the Department of Trade and Industry (DTI) remains the key agency in trade negotiations, with the DoF’s input to be required on issues that involve taxation.
“I’ll still be very much involved because in trade negotiations, majority of the discussion are tariff considerations. So as Secretary of Finance, again, no choice but I’ll be actively involved,” he said.
Mr. Go as head of OSAPIEA had been a key member of the delegation that negotiated tariff arrangements with the US after Washington imposed its reciprocal tariff regime in April.
The DTI has that most Philippine agricultural products, valued at more than $1 billion, were declared exempt from the 19% reciprocal tariff by virtue of a US executive order which took effect on Nov. 13. — Aubrey Rose A. Inosante
E-commerce platform promotional events seen boosting small-business growth
By Justine Irish D. Tabile, Reporter
E-COMMERCE platform special sales, especially those held late in the year, are expected to drive growth for smaller businesses, US-listed global commerce media company Criteo said.
“Double-day sale events are expected to remain a major growth engine in the Philippines heading into next year,” Criteo Managing Director for Southeast Asia Sukesh Singh told BusinessWorld.
“Filipino consumers have embraced events like 10.10, 11.11, and 12.12 not only as opportunities for substantial savings but also as part of their broader year-end shopping rituals,” he added.
He said he expects health and beauty to remain one of the strongest-performing segments, amid a sustained interest in self-care and personal wellness across Southeast Asia.
“Apparel and travel-related categories, including luggage, are also expected to continue driving sales given the country’s highly festive culture and consistent appetite for domestic and international travel,” he said.
“Another category worth watching is home and garden. While it traditionally performs more strongly at the regional level, we may see spillover effects influence Filipino shoppers to renew and update their living spaces,” he added.
He said double-day events, the signature promotional activity of the e-commerce industry, are opportunities for micro, small, and medium enterprises (MSMEs) to tap shoppers who are more willing to explore unfamiliar brands during such periods.
“In 2024, Southeast Asia saw significant gains in first-time buyers during the major double-day events. This openness is particularly advantageous for small businesses that rely on discovery and differentiation,” he added.
However, he said that MSMEs will have to prepare prior to the events to be able to service the expected surge in demand.
He said that shoppers begin their discovery journey anywhere from 1-2 weeks to a few days before the actual sale event.
“This means brands can maximize impact by planning in advance — ensuring that the right creative assets, product visibility, and retail media placements are in place during the high-intent phase,” he added.
The company also observed higher basket sizes and stronger sales volumes during these events, indicating customer readiness to spend.
“Brands can capitalize on this by curating bundles, introducing complementary add-ons, and activating limited-time flash sales to encourage customers to increase their cart size,” he said.
He said MSMEs are naturally agile, which allows them to adapt to market conditions faster than their larger competitors through tweaking messaging, pivoting categories, or updating promotions in real time.
“To harness this advantage, MSMEs must stay up to date with market-specific trends and festive behaviors, especially in the Philippines, where purchasing patterns shift noticeably between 11.11 and 12.12,” he said.
“Localizing campaigns by market and category and personalizing them to the individual allows smaller sellers to align their offerings with seasonal activities and established purchase habits. When executed well, this combination of agility, early planning, and localization will allow them to maximize returns across every major sales event,” he added.
In the Philippines, demand during double-day events is seasonally driven, as demand shifts across the categories every month.
“In 2024, Singles’ Day (11.11) was the biggest double-day event, with demand increasing sharply across various categories focused on self-care and leisure at home,” he said.
“When compared to the beginning of October, peaks in demand were observed across Health & Beauty (+234%) and Arts & Entertainment (+223%) on Singles’ Day. These preferences align with Filipinos preparing early for holiday gatherings and year-end downtime,” he added.
Meanwhile, he said demand gravitated towards fashion and travel essentials during 12.12.
“These category movements indicate thoughtful, purpose-driven purchasing rather than impulse-driven spikes,” he added.
He also said that the fourth quarter stands out as the most powerful acquisition period not only in the Philippines but also in Southeast Asia, as double-day events in October to December align with the year-end holiday season.
“As Filipino shoppers begin their gift-buying journeys, they naturally encounter new brands and products along the way, making this a time when discovery and trial are at their peak,” he said.
“With three fourth-quarter double days, Philippine sellers have multiple touchpoints to drive first-time and repeat purchases. When brands activate their strategies deliberately and consistently throughout the fourth quarter, they can extend the impact of these events well beyond the shopping season,” he added.
ASEAN chairmanship to boost 2026 growth prospects, biz chamber says
THE Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) said it expects economic growth to pick up in 2026 as the Philippines takes up the rotating chairmanship of the Association of Southeast Asian Nations (ASEAN), promising a boost to investment, trade, and tourism.
In a statement, FFCCCII President Victor Lim said the chamber remains cautiously optimistic despite geopolitical risks, inflationary pressures, and supply-chain adjustments.
“Given this environment, we are still hopeful that the Philippines is uniquely positioned at a strategic inflection point, poised to convert substantial domestic and regional opportunities into tangible, inclusive growth, as long as reforms are continued,” Mr. Lim said.
The FFCCCII said chairmanship of ASEAN presents an opportunity to improve the Philippines’ economic standing and visibility among global investors, with the potential to improve investor perception and encouraging foreign direct investment (FDI).
According to the chamber, chairing ASEAN could highlight the Philippines’ macroeconomic fundamentals, young labor force, and public-private partnership pipeline to attract job-generating investments.
However, the chamber said growth prospects are contingent on sustained policy reforms.
“The FFCCCII emphasizes that sustained growth requires an unwavering commitment from all sectors to implement systemic reforms—enhancing regulatory efficiency, investing in critical infrastructure, enhancing good governance and fortifying human capital,” Mr. Lim said.
He said the FFCCCII is prepared to support government and private-sector initiatives tied to the ASEAN chairmanship.
“We stand ready to engage in dialogue, facilitate partnerships, and contribute to projects that will maximize the dividends of our ASEAN hosting and solidify our economic trajectory,” he said. — Vonn Andrei E. Villamiel
Parañaque, Laguna, Misamis Oriental ecozones seen creating over 7,000 jobs
NEW economic zones (ecozones) in Parañaque, Laguna, and Misamis Oriental reflect investor confidence in their strategic location and skilled labor pools, Executive Secretary Ralph G. Recto said.
President Ferdinand R. Marcos, Jr. approved proclamations granting economic zone status to the three sites, Mr. Recto said in a statement Sunday, which combined are expected to attract about P3.03 billion in investment and create as many as 7,200 jobs.
Proclamation No. 1111 designates a property along ASEAN Avenue in Aseana City, Parañaque an information technology hub.
Proclamation No. 1112 establishes an agro-industrial economic zone in Medina, Misamis Oriental, covering parcels of land in barangays Cabug and Maanas. It will be known as the Alloco Development Corp. Industrial Estate.
Proclamation No. 1113, meanwhile, covers Filinvest Innovation Park in the Calamba barangays of Bubuyan and Punta. The park is targeted at advanced manufacturing locators.
Mr. Recto signed the proclamations on Dec. 16, but they were posted on the Official Gazette Dec. 18.
Special economic zones offer firms a mix of fiscal and non-fiscal incentives, depending on their location and industry, and may include industrial estates, export processing zones, IT parks and tourism-related developments.
The newly proclaimed zones will operate under Republic Act No. 7916, or the Special Economic Zone Act of 1995, as amended, and are subject to regulations set by the Philippine Economic Zone Authority. — Chloe Mari A. Hufana
Refrigerated van maker sees growth in PHL driven by food, pharma industries
JAPANESE refrigerated van brand Cooltech said the outlook for the Philippine cold chain industry remains strong due to growing demand from food and pharmaceuticals producers.
“Cooltech is optimistic about its long-term outlook in the Philippine market, driven by the country’s growing demand for reliable cold chain logistics, expanding food and pharmaceutical sectors, and increasing awareness of quality transport solutions,” according to Centro Nippon Fruehauf Cooltech, Inc. (CFCI), which distributes Cooltech products.
CFCI General Manager Benigno V. Dumlao, Jr. said more companies now recognize the importance of maintaining product quality from origin to destination.
“The Philippines is experiencing steady growth in industries that depend heavily on cold chain reliability — food distribution, dairy, pharmaceuticals, and retail,” he said.
“We see a clear shift toward professional-grade refrigerated transport, and that aligns perfectly with what Cooltech offers,” he added.
The company recently participated in the VDS Golf Tournament, where it showcased its flagship Fuso F-resh Refrigerated Van.
“The strong interest generated by the Fuso F-resh Van during the tournament reflects this trend… The vehicle attracted logistics professionals, entrepreneurs, and executives who were keen to learn more about its advanced cooling technology, durable build quality, and seamless integration with the trusted Fuso commercial vehicle platform,” the company said.
“These interactions provided valuable insights into customer needs and reaffirmed Cooltech’s confidence in the market,” it added.
Meanwhile, Mr. Dumlao said that the company plans to expand its footprint by supporting businesses of varying sizes.
“We believe the next phase of growth will come from helping more Filipino enterprises professionalize their cold chain operations,” he said.
“As demand rises, so does the need for solutions that are efficient, compliant, and built to last,” he added.
“The outlook for Cooltech in the Philippines is very positive. We are committed to growing with the market and supporting industries that keep the country moving — fresh, safe, and efficient,” he said. — Justine Irish D. Tabile
The role of blockchain in promoting trust and transparency in the national budget
IN BRIEF:
• Blockchain technology has gained prominence in public and policy discussions for its potential to enhance security, transparency, and operational efficiency.
• Legislative measures proposing the use of blockchain in managing the Philippine national budget have been filed in both chambers of Congress, led by Senator Paolo Benigno A. Aquino IV in the Senate and Representative Javier Miguel L. Benitez of Negros Occidental’s Third District in the House of Representatives. On Dec. 15, the Senate approved Senate Bill No. 1506 or the Cadena Bill.
• Aligned with the theme of Trust, Transformation, and Transparency, the 4th SGV Tax Symposium held in October featured a presentation on blockchain, highlighting recent developments and practical government use cases aimed at improving transparency and efficiency in public-sector operations.
Blockchain technology, a decentralized digital ledger that enables secure, immutable record-keeping, has gained global prominence across multiple industries. By allowing transactions and data to be recorded transparently and verified by network participants without intermediaries, blockchain improves efficiency, streamlines processes, and reduces fraud risk. Industries such as finance, supply chain management, healthcare and public administration increasingly rely on blockchain to automate operations, ensure data integrity, and strengthen trust.
In the Philippines, blockchain adoption is steadily advancing as both the private sector and government explore its potential. Financial institutions and startups have begun integrating blockchain into payment and remittance systems, while the government is studying its use as a mechanism to combat corruption and promote transparency in public transactions. Pilot initiatives and consultations are underway to assess how blockchain technology can enhance government services, ensure accountability, and build public trust through tamper-resistant digital records.
BLOCKCHAIN AND THE NATIONAL BUDGET
These developments were highlighted during SGV’s 4th Tax Symposium, where Armand N. Cajayon, SGV Principal under Technology Consulting, discussed the role of blockchain in public financial management, particularly in relation to the national budget. His discussion covered blockchain fundamentals, public-sector-use cases, and global examples demonstrating its impact.
Blockchain has also entered the legislative arena. Senate Bill No. 1330, written by Senator Paolo Benigno A. Aquino IV, and known as the “Blockchain the Budget Bill,” proposes placing the entire Philippine national budget on a blockchain-based system. The measure seeks to enhance transparency, accountability, and public trust by making government spending traceable and auditable in near real time through a public portal.
Under the proposal, the Department of Information and Communications Technology (DICT), the Department of Budget and Management (DBM) and the Commission on Audit (CoA) will jointly implement the National Budget Blockchain System. Access would be extended to citizens, journalists, and watchdog organizations. If the bill passes, the Philippines could become the first country to fully integrate its national budget into blockchain technology.
The Bill has since evolved and been substituted by Senate Bill No. 1506, otherwise known as the Citizen Access and Disclosure of Expenditures for National Accountability or CADENA Bill. The revised bill calls for the creation of a digital budget portal to serve as the official and publicly accessible portal for all public budget data, which should be in an open-source, interoperable, tamper-resistant and structured digital format. This substitute bill was introduced on Nov. 12 and was approved on its third and final reading on Dec. 12.
A counterpart measure, House Bill No. 4380, has also been filed by Representative Javier Miguel L. Benitez of Negros Occidental’s Third District.
At the Tax Symposium, Mr. Cajayon framed the discussion with a central question: Is blockchain a silver bullet for the Philippines’ governance challenge?
Blockchain is a distributed ledger technology in which all participants maintain synchronized copies of transaction records. Transactions are encrypted and validated through consensus mechanisms, making alterations extremely difficult. Unlike centralized systems, no single entity controls the ledger. Smart contracts, such as self-executing code embedded in the blockchain, enable automated, rules-based transactions that further reduce human intervention and operational risk.
Why use blockchain in public finance?
Applied to public financial management, and as discussed during the Tax Symposium, blockchain offers several advantages:
• Trust: Multiple validation points reduce reliance on single authorities.
• Transparency: Immutable records allow transactions to be traced end to end.
• Efficiency: Automation lowers administrative costs and minimizes fraud.
• Modernization: Integration with digital payment systems improves fund disbursement and control.
However, Mr. Cajayon pointed out that blockchain is not universally applicable as it does not always operate in real time, particularly in large networks where validation may take longer. Implementing blockchain also requires substantial investment, making careful evaluation essential.
As a framework for evaluating suitability, he outlined a five-point test focused on key conditions: the involvement of multiple parties; the importance of trust among participants; the management of finite resources; reliance on shared and complex business logic; and processes that operate across an extended business network.
Blockchain delivers clear value only when all these conditions are present.
IMPLEMENTATION CONSIDERATIONS
Even if enabling legislation is passed, nationwide implementation would be gradual. Mr. Cajayon outlined a phased roadmap beginning with a feasibility and alignment stage during which high-value cases would be identified and key stakeholders aligned, followed by a pilot development phase focused on building permissioned pilots with key agencies. The initiative would then move into expanding participation and adding smart contract pilots. The final phase would concentrate on governance and operations, with the formalization of governance structures and supporting legal frameworks.
A proposed governance model includes a National Budget Blockchain Governance council to oversee policy, compliance, and validation authority. An inter-agency working committee led by the DICT would manage technical standards, security protocols and overall project execution.
A REAL-WORLD EXAMPLE: TORONTO
To illustrate blockchain’s practical benefits, Mr. Cajayon cited the case of Toronto, which processed over two million interdivisional transactions in 2018, requiring extensive manual reconciliation, and delaying financial reporting.
The city implemented a pilot blockchain proof of concept, which consolidated data from multiple systems, digitized asset tracking, classified expenditures and automated reporting. The pilot focused on the Fleet Services division, which has the highest transaction volume.
The results were significant. Manual reconciliation time dropped from approximately 160 hours to nearly zero. Improved expenditure tracking increased forecast accuracy, enhanced transparency, and provided timely insights into asset utilization. By shifting from nominal to actual budget allocation, the city strengthened accountability and enabled staff to focus on higher-value activities.
While Mr. Cajayon concluded that blockchain is not a silver bullet that cannot, by itself, guarantee good governance, its effectiveness ultimately depends on how it is implemented and how citizens engage with it.
Technology can enable transparency, but accountability requires informed and vigilant stakeholders. For blockchain to meaningfully improve public financial management in the Philippines, it must be paired with active citizen participation, institutional discipline and sustained political will.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.
Earvin Darren Lee and Hazel Valerie Sy are global compliance and reporting (GCR) senior managers of SGV & Co.