BSP to cut rates by 25 bps — poll
THE BANGKO SENTRAL ng Pilipinas (BSP) is expected to cut rates by 25 basis points (bps) this week amid easing price pressures and slowing economic growth.
A BusinessWorld poll conducted last week showed that 15 out of 16 analysts expect the Monetary Board to reduce the target reverse repurchase rate by 25 bps at its policy meeting on June 19.
If realized, this would bring the benchmark rate to 5.25% from the current 5.5%.
Only one analyst, Ateneo Center for Economic Research and Development Director Ser Percival K. Peña-Reyes, expects the BSP to keep rates unchanged.
Analysts said the inflation downtrend and weaker-than-expected growth in the first quarter gives the central bank room to continue its easing cycle.
“A lower-than-expected Philippine inflation trajectory, a stronger local currency, high real rates, and uncertainty over global growth reinforce our view that monetary policy easing is far from over,” ING Bank said.
HSBC economist for ASEAN Aris D. Dacanay said he previously forecasted a pause in June “to be mindful of the Fed’s preference of taking its time,” but now expects a 25-bp rate cut on Thursday.
“Due to low inflation over the past two months and slow growth in 1Q 2025, we now expect the BSP to cut its policy rate by 25 bps to 5.25% (on June 19),” he said.
Inflation cooled to an over five-year low of 1.3% in May, as utility costs rose at a slower pace. This brought the five-month average to 1.9%, slightly below the BSP’s 2-4% target band.
“Easing inflation offers relief to consumers and businesses that grappled with elevated prices from 2022 until the first half of last year,” Moody’s Analytics economist Sarah Tan said.
ANZ Research said the outlook for inflation “remains benign amid softer global commodity prices.”
“Given how retail rice prices haven’t plunged as low as global rice prices did, there is still room for food and overall inflation to remain subdued throughout the rest of 2025,” Mr. Dacanay said.
In May, rice inflation continued its downtrend, falling to 12.8% from the 10.9% decline in April.
Metropolitan Bank & Trust Co. Chief Economist Nicholas Antonio T. Mapa said he expects inflation to be “target consistent” for this year, 2025 and 2026.
The central bank slashed its risk-adjusted inflation forecasts to 2.3% in 2025 from 3.5% previously; and 3.3% in 2026 from 3.7% previously. It also now expects inflation to average 3.2% in 2027.
BELOW-TARGET GROWTH
Angelo B. Taningco, chief economist of Security Bank, said below-target gross domestic product (GDP) growth in the first quarter, as well as the strong peso, are some of the factors the BSP will take into consideration for this week’s decision.
Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said he expects a rate cut this week “with GDP growth still struggling to engineer a material pickup.”
The Philippine economy expanded by an annual 5.4% in the first quarter, slightly faster than the 5.3% growth in the fourth quarter of 2024 but slower than the 5.9% pace in the same quarter last year.
This was also below the government’s 6-8% growth target band for the year.
“We think this slowdown adds pressure on the BSP to hasten its easing cycle. This is because a policy rate cut can help shore up the country’s services exports (or exports in general) by improving the peso’s competitiveness vis-à-vis other currencies,” Mr. Dacanay said.
Reinielle Matt M. Erece, Oikonomia Advisory & Research, Inc. economist, said the peso’s recent strength gives the BSP some headroom to cut rates ahead of the US Federal Reserve.
The local unit closed at P56.21 per dollar on Friday, falling by 32.5 centavos from its P55.885 finish on Wednesday, Bankers Association of the Philippines data showed.
This was the peso’s weakest finish in more than a month or since its P56.42 close on April 28. It was also the first time the local currency breached the P56-per-dollar level since ending at P56.145 on April 29.
Year to date, the peso has gained by P1.635 from its P57.845 close on Dec. 27, 2024.
Ms. Tan said the recent stabilization of the peso will “provide an additional nudge to the decision-making process.”
“Continued monetary easing would play a vital role in supporting the domestic economy amid a complex external environment. While negotiations with the US to lower reciprocal tariffs are ongoing, the outcome remains uncertain,” she said.
Maybank Investment Banking Group Economics Research said further rate cuts will also help shield the country’s economy against global growth uncertainties and tariff-related risks.
OUTLOOK
Analysts expect the BSP to lower borrowing costs further this year as inflation remains under control.
“Given the manageable inflation outlook, we think the BSP will lower the policy rate by another 50 bps by (third quarter) 2025 bringing the terminal rate to 5%,” ANZ Research said.
Oikonomia’s Mr. Erece said the BSP could cut rates by 50-75 bps more this year in 25-bp increments to avoid extreme foreign exchange fluctuations.
“A rate cut, more than its impact on borrowing costs, is also a signal to the markets that the central bank is confident that inflation is well under control,” he said.
Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said the BSP could hold borrowing costs steady at its Aug. 28 meeting.
“To avoid the need for an abrupt policy reversal, BSP will likely keep the policy rate above 5% before the end of this year and well above 4% through 2026. Risks include a spike in global oil prices, global tariff policy uncertainty, US stagflation, local wage hikes and other potential risks to a rise in local inflation expectations,” he said.
BSP Governor Eli M. Remolona, Jr. previously said the Monetary Board could cut rates twice in increments of 25 bps for the remainder of the year. — A.M.C. Sy
Current account gap further widens in Q1
THE PHILIPPINES’ current account deficit (CAD) ballooned to $4.25 billion in the first quarter amid a larger trade gap, the central bank said.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that the current account deficit surged by 105% to $4.25 billion in the first quarter from $2.07 billion in the same period a year ago.
This brought the CAD as a share of gross domestic product (GDP) to 3.7% in the January-to-March period, larger than the 1.9% in the same quarter in 2024.
“This development reflected the widening merchandise trade gap, as import spending grew faster than export earnings,” the BSP said in a statement dated June 13.
“The increase in the current account deficit also resulted from the contraction of net revenues from trade in services due to lower transport services receipts and increased outbound travel spending,” the central bank said.
However, this was partly tempered by higher remittances from overseas Filipino workers.
Cash remittances rose by 2.7% to $8.44 billion in the January-to-March period, while personal remittances went up by 2.7% to $9.4 billion in the first quarter.
The central bank expects the current account deficit — which covers transactions involving goods, services, and income — to reach $19.8 billion or -3.9% of economic output in 2025.
TRADE IN SERVICES
Data from the BSP showed net receipts from trade in services stood at $3.3 billion in the first quarter, down 9.3% from $3.7 billion in the same period last year.
This came as service exports slipped by 1.5% annually to $12.56 billion in the first quarter, while imports rose by 1.7% to $8.92 billion.
“The decline in receipts was mainly due to lower earnings from transport services (from $1.1 billion to $755 million), and technical, trade-related, and other business services (from $5.5 billion to $5.4 billion),” the BSP said.
Earnings from insurance and pension services dropped by 9.8% to $16 million, while those from construction fell by 25.7% to $14 million.
On the other hand, receipts from exports of telecommunications, computer and information services rose by 8.8% to $1.92 billion, manufacturing services on physical inputs owned by others went up by 0.6% to $980 million, and travel up by 0.2% to $2.89 million.
Earnings from exports of financial services went up by 72.6% to $128 million, personal, cultural, recreational services by 5.3% to $63 million, and charges for the use of intellectual property surged by 1,469.5% to $8 million.
Exports of technical, trade-related, and other business services as well as computer services include earnings from business process outsourcing (BPO)-related transactions.
The BSP estimated that BPO export revenues, including computer and other business services reached $7.2 billion in the first quarter, up 1.3% from $7.1 billion in the same period last year.
The services industry is a key growth driver of the Philippine economy.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the wider current account deficit “largely reflects the wider trade deficit/net imports” amid the uncertainty surrounding the US tariff policy.
Mr. Ricafort noted the Trump administration’s higher tariffs and trade wars could “slow down global trade, investments, employment, and overall world GDP growth.”
The US slapped the Philippines with a 17% reciprocal tariff, but this has been on hold until July. A 10% baseline tariff remains in effect.
“The widening of current account deficit was mainly driven by the persistent trade deficit, as merchandise imports continued to outpace exports despite modest growth in outbound shipments,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message.
The country’s trade-in-goods deficit grew by 14.7% year on year to $16.8 billion in the first quarter from $14.7 billion, as the growth of imports outpaced exports.
However, analysts warned on the escalating attacks between Israel and Iran that could bring more uncertainty, particularly in global crude oil prices.
“Israel-Iran is a source of uncertainty in terms of volatility in global crude oil prices near 4-month highs, as the Philippines imports almost all of its oil,” Mr. Ricafort said.
In the coming months, Mr. Rivera said current account deficit will likely balloon in the short term, if oil prices remain high or if the peso weakens further and makes imports more expensive.
He noted steady growth in services receipts, remittances, and BPO revenues may help cushion the pressure.
“The trajectory will depend on external demand, import growth, and how global trade conditions including the evolving US-China dynamics play out. A wider deficit, if not offset by stable financing inflows like FDIs (foreign direct investments) or portfolio investments, could add strain on the PHP and forex (foreign exchange) reserves,” Mr. Rivera said.
Meanwhile, primary income rose to $1.5 billion in the first quarter, up 14.6% from $1.3 billion in the same period last year.
CAPITAL ACCOUNT
Meanwhile, the capital account posted a $23-million surplus in the first quarter, wider than the $17 million in the same period last year.
“The surplus was driven by gross disposals of non-produced nonfinancial assets amounting to $4 million, compared with $1-million gross acquisitions in Q1 2024,” the BSP said.
The financial account net inflows amounted to $6.7 billion in the first quarter, up 43.2% from the $4.6-billion net inflows in the same period a year earlier.
“This stemmed mainly from the notable increase in net inflows in the direct and other investment accounts, alongside sustained inflows in the portfolio investment account,” the central bank said.
In the January-to-March period, net inflows of direct investments surged by 179.5% to $1.8 billion.
For portfolio investments, net inflows inched up by 0.4% to $978 million in the first quarter.
Meanwhile, net inflows of other investments expanded by 31.1% to $3.9 billion in the first quarter.
On the other hand, the Philippines’ gross international reserves (GIR) reached $106.7 billion as of end-March 2025, higher than the $104.1-billion level in the same period a year ago.
“At this level, the reserves adequately covered 7.2 months’ worth of imports of goods and payments of services and primary income. It was also equivalent to 3.3 times the country’s short-term external debt based on residual maturity,” the central bank said.
The central bank noted that the GIR are foreign assets that are mostly in foreign-issued securities, gold, and foreign exchange. — ARAI
Capital req’ts under SEC crypto guidelines may discourage small players
By Revin Mikhael D. Ochave, Reporter
THE NEW GUIDELINES of the Securities and Exchange Commission (SEC) on crypto-asset service providers (CASPs) might discourage smaller players due to steep capitalization requirements.
Corporations interested in becoming CASPs should register with the corporate regulator and must have a minimum paid-up capital of at least P100 million in cash or property, excluding crypto-assets, based on SEC Memorandum Circular No. 5 that contained guidelines on the operations of CASPs.
Under the rules, a corporation is required to show proof that it has met the minimum capital requirement and that it has sufficient financial resources to “ensure that the business is resilient.”
A corporation also needs to apply for a license with the SEC to operate as a CASP.
Jiro Luis S. Reyes, chief executive officer at crypto education platform Bitskwela, said the capital requirement is “overregulation.”
“The P100-million capitalization required for CASPs stands as a major problem for most builders in the Philippines. This is overregulation in my opinion. There should be tiers to this at the very least,” he said in a Viber message.
“Since the CASP rules cover any CASP, this could technically mean that anyone who wants to build a homegrown Pinoy Web3 product would need to meet the P100 million,” he added.
Mr. Reyes said the high capitalization requirement might push smaller Filipino companies to consider establishing their platform in other countries.
“This would probably mean that Filipino builders would just choose different markets or countries to launch in, resulting in less innovation for us,” he said.
“Larger players will have an easier time penetrating the market — there are clearer rules now, which work in their favor. But for smaller players and communities, it feels like a loss. There’s not much upside for them at this stage,” he added.
Arlone P. Abello, founding chairman of the Innovative Movement of the Philippine Association of Crypto Traders, recommended a differentiated approach on the CASP registration requirements depending on the size of the corporation.
“These requirements ensure operational accountability but could be more challenging for early-stage startups with limited resources. A differentiated approach may help support innovation while upholding oversight,” he said in a Viber message.
INVESTOR PROTECTION
At the same time, Mr. Abello said the SEC should also consider releasing rules on anti-manipulation and insider trading to boost investor protection.
“These are important investor protection measures, and their reintroduction via future rules or guidance may be helpful.” he said. “This will supplement the current framework and align with international investor protection standards.”
Mr. Abello also suggested improved coordination among regulators such as the SEC, Bangko Sentral ng Pilipinas, and the Department of Information and Communications Technology to boost compliance.
“There should also be enhanced coordination among relevant regulators to ensure a harmonized compliance environment, especially for multi-layered business models,” he said.
In terms of investor education, Mr. Abello suggested a voluntary certification system for crypto educators to help differentiate educational content from promotional activities.
He also urged the creation of a public portal where applicants and stakeholders can access guidance on registration steps, obligations, and key timelines.
Meanwhile, GCash Vice-President & Group Head for New Businesses Winsley Royce Bangit said in a Viber message that the move to regulate CASPs will help build trust, protect consumers, and legitimize the industry.
“Clear regulatory guidelines create a more stable environment for innovation and allow responsible players like us to grow sustainably while ensuring user security,” he said.
The GCash app offers the GCrypto cryptocurrency trading platform that allows users to buy, sell, and manage cryptocurrencies. GCrypto has 2.7 million users, and 48 cryptocurrencies offered as of the first quarter.
The SEC’s guidelines also require corporations to submit various documents such as a business plan, a written description of the software and hardware components, business conduct rules, and listing and delisting standards for admission of crypto-assets to trading.
The SEC said that an estimated $40 billion worth of cryptocurrency value was received by the Philippines from July 2023 to June 2024, citing data from the 2024 Geography of Crypto Report of Chainalysis.
“The Philippines is experiencing a widespread adoption of crypto-assets. The continued growth and development of new crypto-asset markets, services, and business models relies on clear, proportionate, and robust regulatory frameworks, which can ensure that markets are fair, efficient, and transparent,” the SEC said.
In April, the SEC opened the applications for participation in the strategic sandbox for CASPs. The sandbox provides a controlled environment where CASPs can test and pilot their products.
EY GDS Philippines strengthens talent development through academic partnerships
EY Global Delivery Services (EY GDS) Philippines has formalized partnerships with leading academic institutions to help bridge classroom learning and industry practice, aiming to equip students and young professionals with practical experience and future-ready skills.
In its most recent initiative, EY GDS Philippines signed a Memorandum of Understanding with the Asian Institute of Management (AIM), establishing collaborative programs that include internships, curriculum development support, and career-building activities. Both organizations share a common goal to supplement the learning of AIM students and graduates with real-world business experiences, helping them apply classroom knowledge to potential career opportunities.
“Our commitment to knowledge-sharing and upskilling is unwavering. Through this collaboration, our professionals in Consulting, Assurance, Tax, Strategy and Transactions and Managed Services will engage in curriculum development, guest lectures, training sessions and industry talks. We believe that by sharing our experience, we can help shape the next generation of leaders and innovators in the workforce,” said EY GDS Philippines Location Leader Dench Decino.
EY GDS Philippines and AIM intend to enhance graduate hiring initiatives, provide valuable internship opportunities and facilitate career fairs that connect aspiring professionals with industry practitioners.
San Beda University (SBU), also in collaboration with EY GDS, recently held its highly successful local edition of the GDS Digiversity program with Accounting and Managerial Accounting students. Through this initiative, Filipino students received training in leading-edge technologies like Microsoft Power BI and Excel VBA Programming.
The program featured hands-on exercises applying learned concepts through real-world scenarios, collaborative learning and problem-solving group work to enhance teamwork skills and presentation opportunities to develop communication abilities.
As part of the program, SBU students also visited the GDS Philippines Manila office, giving them a glimpse into the professional services world and a potential workplace after graduation.
Karthik Bhaskaran, EY GDS Philippines assurance leader, emphasized the importance of these academic collaborations: “Teaming up with these institutions is fundamental to our mission as an organization to bridge the gap between academe and industry. Through this effort, we are creating meaningful pathways for students to develop practical skills while giving them exposure to real industry challenges. This collaborative approach likewise strengthens the overall quality of professional services in the country.”
SparkUp is BusinessWorld’s multimedia brand created to inform, inspire, and empower the Philippine startups; micro, small and medium enterprises (MSMEs); and future business leaders. This section will be published every other Monday. For pitches and releases about startups, e-mail to bmbeltran@bworldonline.com (cc: abconoza@bworldonline.com). Materials sent become BW property.
UNDP: AI can steer human development and inclusive growth in the Philippines
The United Nations Development Programme (UNDP) Philippines, in partnership with the Philippine Human Development Network (HDN), successfully held the Philippine launch of the 2025 Global Human Development Report (HDR) at the Securities and Exchange Commission (SEC) Headquarters in Makati City.
With this year’s report titled “A Matter of Choice: People and Possibilities in the Age of AI,” the launch brought together government officials, industry leaders, private sector representatives, academics, and civil society representatives to discuss how artificial intelligence (AI) can be a tool for inclusive and sustainable human development.
The 2025 HDR, first unveiled globally in May in Brussels, emphasizes the growing role of AI in reshaping economies and societies. It calls for deliberate choices to ensure that AI technologies empower people, narrow inequalities, and support development goals, particularly in developing countries like the Philippines.
During the launch, Dr. Selva Ramachandran, UNDP Philippines resident representative, noted: “At its core, the HDR is a call to action for governments, businesses, communities, and individuals to make deliberate choices about how AI is designed, used, and governed. If we make the right choices today, AI could become a force and an engine for freedom, opportunity, and progress, not just for a few, but for everyone.”
Dr. Philip Arnold Tuaño of the HDN, Commissioner Javey Francisco of the SEC, and Hon. Reynaldo Cancio from the Department of Economy, Planning, and Development (DEPDev) also delivered opening remarks, underscoring the importance of inclusive innovation and robust policy frameworks.
“This year’s launch of the HDR comes at a pivotal moment. While the promise of AI grows even more visible, we are reminded that the path of progress is not inevitable. It is a matter of human choice and governance. This report highlights how AI can be harnessed to enhance human capabilities, rather than diminish,” noted Dr. Tuaño in his opening message.
Through digital transformation, the SEC is building a culture of transparency, measurable accountability, and ongoing performance enhancement. Commissioner Francisco highlighted that the SEC: “sees AI playing a growing role in our work — improving our ability to detect fraud, assess risk, and promote financial inclusion. AI can help us direct capital toward sustainable enterprises, enhance market integrity, and protect investors more effectively than ever before.”
The highlight of the event was a presentation of the HDR 2025 findings by Mohamed Shahudh, UNDP Philippines Economist, followed by a panel discussion titled “Shaping the AI Agenda for Human Empowerment and Inclusive Growth in the Philippines.”
The speakers explored the potential of AI to boost productivity, improve public services, and create new economic opportunities — while also addressing the risks of exclusion, job displacement, and uneven access to digital resources. Panelists stressed the need for forward-looking investments in education, research and development, and AI governance.
A recent IMF study cited during the event revealed that while one-third of Filipino workers are highly exposed to AI, 61% of those jobs could benefit from AI-enhanced productivity, particularly among young, urban, and college-educated workers.
The open forum that followed enabled participants to engage directly with the panelists on issues ranging from AI adoption in education and health to its implications for gender equity and development.
The 2025 HDR highlights that the Philippines, while making gains in its Human Development Index (HDI) — which rose to 0.720 in 2023 — continues to face challenges from inequality and climate vulnerability. The report argues for a pivot toward AI-augmented human development, where AI serves as a complement to human capabilities rather than a replacement.
The full report is available at https://hdr.undp.org.
SparkUp is BusinessWorld’s multimedia brand created to inform, inspire, and empower the Philippine startups; micro, small and medium enterprises (MSMEs); and future business leaders. This section will be published every other Monday. For pitches and releases about startups, e-mail to bmbeltran@bworldonline.com (cc: abconoza@bworldonline.com). Materials sent become BW property.
Public consultation on certification of cage-free egg systems concluded
The Bureau of Animal Industry (BAI), in partnership with the Animal Kingdom Foundation (AKF), has completed its public consultation process on the proposed certification guidelines for cage-free egg production.
The consultation, which began in August 2024 last year and carried on recently in Cebu this April, provided stakeholders with the opportunity to contribute feedback on the development of the guidelines aimed to “ensure transparency and truth in the promotion, declaration, labeling, and marketing of cage-free and free-range chicken eggs to avoid misrepresentation, fraud, and protect consumers against false advertising of eggs sold in the market.
Dr. Hyacinth Napiloy, Head of the Animal Health and Welfare Division of BAI, said that this initiative reflects BAI’s ongoing commitment to advancing animal welfare standards while supporting sustainable and ethical farming practices. She added that the public consultation seeks valuable feedback from the stakeholders to ensure the final standard is practical, transparent, and aligns with current best practices in animal welfare, food safety, and environmental stewardship.
Throughout the consultation, submissions were received from a wide range of participants, including producers, animal welfare organizations, and industry experts. Their valuable inputs will be instrumental in shaping a certification framework that is practical, science-based, and aligned with both consumer expectations and industry capabilities.
Atty. Heidi Caguioa, the Program Director for AKF, said that the certification also aims to protect the cage-free producers who have invested in more ethical and sustainable egg production. This will also address the rising interest of consumers for cage-free eggs and protect them against unsubstantiated claims.
The BAI is currently reviewing all feedback and will consolidate responses alongside the finalized standards in the coming months. The final framework is expected to support transparent labeling and consumer confidence while encouraging the transition to more humane farming practices across the egg production sector.
Stakeholders from the egg industry, including egg farm owners and farm representatives, physically attended the public consultations to discuss the nature of the certification and its importance in implementing it.
The BAI and the AKF thank all participants for their engagement and contributions to this important initiative.
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Climate resilient schools sought
THE government must invest in more climate resilient schools to ensure continued learning for students, the United Nations Children’s Fund (UNICEF) said.
“Climate-related class disruptions deprive them of opportunities to develop the necessary foundational and socioemotional skills to thrive in the future,” Behzad Noubary, UNICEF Philippines representative said in a statement.
UNICEF said that the government should invest in infrastructure, curriculum, learning materials, teacher training, and alternative delivery modes to support flexible learning strategies when classes are disrupted.
“Education systems can be climate-resilient and can play a critical role in equipping the school community with the knowledge, skills, and values needed for the green transition,” the UN agency noted.
The UN organization also called on the Philippines to make Nationally Determined Contributions (NDC) more child sensitive which could provide “safe, equitable, and continuous access to quality education.”
“For children to achieve their full rights to education, the NDCs need to commit to adaptation measures to promote safe, equitable, and continuous access to quality education for all,” Mr. Noubary added.
The NDC is a national climate action plan that aims to modernize and pursue low carbon and resilient development for the agriculture, waste, industry, transport and energy sectors
Children in the Philippines are ranked second highest in the East Asia and the Pacific Region to the most vulnerable to climate risk, according to a UNICEF report.
The World Risk Index also showed that the county has been the most disaster-prone for the past three years. — Adrian H. Halili
3,200 jobs created at San Fernando port in 1st half
AROUND 3,200 jobs were created at the San Fernando International Seaport in the first half under the interim operation and management of Poro Point Management Corp. (PPMC), the Bases Conversion and Development Authority (BCDA) said.
“The PPMC has earned P50 million in revenue between December 2024 and May 2025 during its interim operation and management of the San Fernando International Seaport in the Poro Point Freeport Zone, La Union,” the BCDA said in a statement over the weekend.
“The port’s growing viability as a key logistics node in Northern Luzon has also created around 3,200 jobs within the first half of 2025,” it added.
According to the BCDA, the port’s earnings came from leases, vessel and cargo fees, and the government share of port services.
“This performance affirms the potential of San Fernando International Seaport as a vital logistics and investment hub,” BCDA President and Chief Executive Officer Joshua M. Bingcang said.
“As we continue to modernize our ports, we are opening more doors for trade, employment, and inclusive growth in the region,” he added.
To support this growth, the BCDA said that the PPMC has been carrying out major repairs and upgrades at the port.
These include refurbishment of port offices and facilities, replacement of rubber fenders and concrete curbs, upgrading of electrical lines, establishment of a systematic waste disposal mechanism, and technical assessment and benchmarking.
“The rehabilitation and expansion of the San Fernando International Seaport will help drive opportunities for Northern Luzon,” PPMC President and Chief Executive Officer Felix Racadio said.
“It will create jobs for local residents, bring in new businesses, and gain traction in the tourism sector,” he added.
Meanwhile, the PPMC said that a new tariff structure for cargo handling and port service fees was approved and took effect on June 5.
This will enable “more stable and sustainable revenue streams moving forward,” the BCDA said.
“With its solid interim performance, upgraded facilities, and local workforce engagement, the BCDA and the PPMC are optimistic that the San Fernando International Seaport is poised to play a leading role in Northern Luzon’s economic transformation,” it added. — Justine Irish D. Tabile
University of the Philippines chemists explore safer methods for detecting methanol in lambanog for MSMEs
Scientists from the University of the Philippines-Diliman are aiming to identify low-cost, effective methods for detecting methanol in lambanog, in an effort to make safety testing more accessible for small-scale producers.
Researchers Kristine Anne Ladines and Dr. Cynthia Grace Gregorio of the UP College of Science’s Institute of Chemistry reviewed existing techniques to find solutions that are not only effective but also simple and affordable enough for use by micro, small, and medium enterprises (MSMEs). Their goal: enable safer lambanog production through portable or paper-based methanol testing kits.
“Lambanog holds cultural and economic significance in the Philippines, but repeated methanol poisoning incidents have harmed its reputation and endangered lives. Many cases of death and hospitalization have been linked to unsafe, unregulated production,” Ms. Ladines said. “Given these serious public health risks, we were driven to help find solutions that empower small producers to test and ensure the safety of their products.”
By identifying affordable and practical detection methods, the review can help inform national agencies such as the Food and Drug Administration about which technologies are best suited for widespread use among small producers.
“It can guide regulatory policies to mandate methanol testing using appropriate tools, helping ensure consumer safety while supporting industry compliance,” Ms. Ladines added.
She believes that government and academic institutions can support MSMEs in adopting safer production and testing methods in several ways — including training and education on safe fermentation and distillation practices, providing subsidies or grants for acquiring basic detection equipment or kits, and developing accessible technologies such as low-cost paper-based sensors tailored for field use.
The paper, titled “Finding MeOH: A literature review on methods for the determination of methanol in lambanog and alcoholic beverages,” is published in JSFA reports, a food science journal publishing papers on food science and agriculture, with particular emphasis on the agriculture/food interface.
SparkUp is BusinessWorld’s multimedia brand created to inform, inspire, and empower the Philippine startups; micro, small and medium enterprises (MSMEs); and future business leaders. This section will be published every other Monday. For pitches and releases about startups, e-mail to bmbeltran@bworldonline.com (cc: abconoza@bworldonline.com). Materials sent become BW property.
ERC sets final prices for 4th green energy auction
THE Energy Regulatory Commission (ERC) has issued the final ceiling prices for the fourth round of the Green Energy Auction (GEA-4), which will offer 10,653 megawatts (MW) of renewable energy (RE) capacities.
In a resolution, the ERC set the green energy auction reserve (GEAR) price at P5.68 per kilowatt-hour (kWh) for ground-mounted solar, P4.4832 per kWh for rooftop solar, and P6.5258 per kWh for floating solar.
For other technologies, the commission set the GEAR price at P6.0859 per kWh for onshore wind and P5.4028 per kWh for solar systems equipped with energy storage.
The GEAR price serves as the maximum price in pesos per kWh that will be used as the basis for bid offers during the auction.
Most of the final prices are higher than the preliminary figures after the ERC received comments from stakeholders and conducted public consultations.
In a recent advisory, the Department of Energy (DoE) raised the total capacity for floating solar in the Visayas due to regional demand and increased investor interest.
Under GEA-4, developers may compete for 3,940 MW of ground-mounted solar, 48 MW of rooftop solar, 3,175 MW of floating solar, 2,390 MW of onshore wind, and 1,100 MW of solar with energy storage.
In a statement on Saturday, the DoE said the auction proper is scheduled for Sept. 2. The list of winning bidders will be released on Oct. 22.
As a flagship government initiative, the program is expected to support the target of increasing the RE share in the country’s power generation mix to 35% by 2030.
“With over 10 gigawatts of solar and wind capacity up for auction — targeted for commercial operations from 2026 to 2029 — this round aims to boost the RE share in the country’s energy mix, strengthen grid reliability, and ensure energy security,” the DoE said.
“GEA-4 not only promotes increased investment in RE, but also affirms the DoE’s commitment to competitive, transparent, and efficient energy procurement practices,” it added. — Sheldeen Joy Talavera
Motoring ahead
PHL auto sales still in ‘Drive’ mode
THE PHILIPPINE automotive industry continues in its drive to motorization. For the first four months of 2025, the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI); Truck Manufacturers Association (TMA); and Association of Vehicle Importers and Distributors (AVID) jointly reported that sales are up by 2.5% (versus the same period last year) to 150,654 units.
Independent vehicle importers and distributors that are not members of the abovementioned automotive associations are estimated to add another 5,000 to 6,000 units to the market, taking growth to around six to seven percent from January to April 2025.
The sustained growth trajectory is on the back of a 20% average rise in sales from 2020 to 2023 and an 8% expansion in 2024 that led to a new sales record for the Philippine auto industry of just over 475,000 units last year. In fact, the Philippine auto market has been a bright spot in the Association of Southeast Asian Nations (ASEAN) region, exhibiting consistent growth and resiliency while other markets experienced significant swings.
From January to March 2025, perennial market leaders Thailand and Indonesia have, in fact, registered continued drops in auto sales of 7% and 5%, respectively, on the back of double-digit declines in the past two years. A report by The Nation (Thailand) quoting Nikkei Asia figures revealed that vehicle sales in the first quarter of the year for the so called ASEAN-5 — Thailand, Indonesia, Malaysia, Vietnam, and the Philippines — declined by 1.7% to 732,898 units. This was despite a strong showing by Vietnam with a 24% growth in sales.
This year, CAMPI and TMA estimate that annual vehicle sales will top the 500,000 mark — a new milestone for the industry. This will put the Philippines in the same league as Thailand, Indonesia, and Malaysia with markets in excess of half-a-million units. Interestingly, auto sales in the Philippines directly correlate to the movement in the country’s per-capita gross domestic product (GDP) that has grown by an average of 5.2% over the past four years since the pandemic. So, as the economy continues in its trajectory toward making ours an upper-middle-income country by 2027, it is expected that auto sales will continue to rise. Add to this the demographic bonus resulting from a young population that is now graduating into the workforce, and we have a reasonably sustainable growth curve for auto sales.
As more Filipinos enter the ranks of the labor force, they can establish their credit credentials. This grows access to consumer credit which is another strong driver of auto sales. Additionally, the prospects of more unbanked Filipinos moving into the banked community are high. A BusinessWorld report by Abigail Yraola quoted a study by Euromonitor International showing the Philippines as having an unbanked and underserved population of 76% compared to 67% in Indonesia, 47% in Vietnam and only 25% in Thailand. If the Banko Sentral ng Pilipinas (BSP) is successful in bringing banking and contactless payments to more Filipinos, this will significantly increase our banked population, enable higher consumption and, surely, more consumer loans as well.
Household debt as a percentage of GDP in the Philippines is still low compared to other ASEAN countries. Statistics from CEIC Data show that Thailand has the highest ratio at 88.8%. This is a significant contributor to the drop in its auto sales since credit extension has tightened quite severely because of increased loan defaults. Malaysia comes second with an 84.2% ratio, followed by Vietnam at 33.8%. Meantime, the Philippines posted only 11.7% household debt-to-GDP ratio in December 2024. This indicates an encouraging runway for auto loans, albeit with very judicious credit approvals by banks and financing institutions to avoid inordinate vehicle repossessions.
Another upside to the market is the growing demand for electrified vehicles (EVs). The share of EVs in the market has increased from 5% last year to 8% in the first trimester of 2025. The recent addition of plug-in hybrids (PHEVs) to the suite of electrified product offerings has activated a new segment of buyers, accounting for 42% of the EV market this year. Hybrid electric vehicles (HEVs), on the other hand, account for a larger 52% of the segment while battery electric vehicles (BEVs) make up the remaining 8%. Sales of EVs are expected to pick up even more with the recent announcement of government to reinstate the odd-even coding scheme during the implementation of the “Rebuild EDSA” project — recently postponed by at least a month upon the order of President Marcos.
However, encouraging as the auto industry fundamentals are for the Philippines, we should not ignore the growing turmoil in geoeconomics and their possible impact on the local auto industry. For one, China’s economic recovery is still not as robust as expected. Trading Economics reported that GDP in China grew by 5.3% in 2023 and 2024. In the first quarter of 2025, it remained fairly flat at 5.4%. This is perhaps a primary reason for them to export their excess economic capacity including for automobiles. Although China remains a top trade partner for the Philippines, we are not as heavily dependent on exports as our ASEAN neighbors. The Philippine GDP is 70% driven by domestic consumption. Therefore, China’s slow recovery has impacted us less than our neighbors. We should not underestimate the fallout, though.
Another destabilizing factor, of course, is the US Trade Diplomacy under President Trump that is undermining global economic activity. Although it can be argued that the disruptive “Liberation Day” tariff rates have not really gone into effect yet — except for the 25% increase on autos and a 10% baseline tariff rise — it is, perhaps, the very uncertainty of the on-again, off-again tariffs that is even more devastating and disruptive. Businesses are unable to plan, supply chains are in suspense, and capital expenditures are put on hold. This is quite a toxic elixir for the global economy. As an import dependent economy, we are vulnerable to a full-blown trade war that will likely result to higher prices, a potential slowdown in consumption and, consequently, a slide in economic growth. Stagflation is everyone’s worst-case scenario here.
With the national elections behind us, government spending expected to resume, inflation remaining low, the Philippine Peso holding its value and interest rates on the downtrend, there are many reasons to believe the 500,000 auto sales mark will be breached this year. Early reports for vehicle sales in May show a significant comeback from a lethargic April but still trailing the same month last year. The market seems to be burning off its recovery thrust and transitioning to a more measured pace going forward — a good sign of a more sustainable trajectory.
PSEi could hit 7,000 by yearend amid tariff uncertainties
By Revin Mikhael D. Ochave, Reporter
THE BENCHMARK Philippine Stock Exchange index (PSEi) could reach the 7,000 level by yearend, fueled by investor optimism over expected earnings growth among listed companies, despite uncertainties related to global trade, according to some analysts.
“Despite our expectations that valuations will continue to persist below long-term averages given heightened trade policy and global growth uncertainties, we still think there remains scope for the PSEi to recover back to at least the 7,000 level amid expectations of sustained earnings growth in listed companies,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail interview.
“Over the next few weeks, we think that the PSEi could consolidate between 6,300 and 6,600 as it builds a base for its next major move,” he added.
On Friday, the PSEi rose by 0.22% or 14.27 points to close at 6,395.59, while the broader all shares index gained 0.24% or 9.12 points to end at 3,785.31.
Week on week, the PSEi increased by 0.29% or 18.80 points from its 6,376.79 finish on June 5.
DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin said in a Viber message that the PSEi could reach 6,700 by the end of the year.
“My conservative guess is 6,700 yearend. I feel that the worst has already been priced in when the PSEi hit a 52-week low of around 5,800 with Trump’s Liberation Day. Since then, tariffs have significantly come down and trade deals are being made,” he said.
“With the Bangko Sentral ng Pilipinas (BSP) having room for two more rate cuts this year as well as a declining trend in the reserve requirement ratio (RRR), I feel that the PSEi has ample room for upside,” he added.
Analysts expect a 25-basis-point rate cut at the BSP’s policy meeting on Thursday (June 19), as inflation slowed to 1.3% in May from 1.4% in April amid lower utility costs.
BDO Capital & Investment Corp. President Eduardo V. Francisco said in an interview that the PSEi could “realistically” reach 6,600 to 6,700 this year.
“It will go sideways. The underlying [factor] is the global concerns,” he said.
“While the Trump tariffs are still there, unless there’s a resolution, I don’t think it will change significantly. I don’t think it will reach 7,000 unless the US resolves its dispute with China,” he added.
BPI Securities Corp. said in a statement that the PSEi could settle at 7,300 by end-2025, lower than its initial forecast of 7,600, due to supply shocks caused by the ongoing trade war.
“Global economic uncertainties arising from US tariff measures continue to weigh on investor confidence. The local market also faced an uphill climb following weaker-than-expected first-quarter gross domestic product results and a lackluster corporate earnings season,” it said.
Mr. Mercado said investors should monitor consumer and banking stocks amid slowing inflation.
“We think that the consumer and banking sectors could lead growth given expectations of continued consumption recovery amid stable and low inflation and improving credit demand as policy rates continue to ease,” he said.
BPI Securities said its top picks include Ayala Corp. and SM Investments Corp., which may benefit from a rebound in consumption and spending. It also cited Century Pacific Food, Inc. and Converge ICT Solutions, Inc. as major players in expanding markets with “dynamic growth strategies.”
Other recommended stocks for dividend-yield-focused investors include Manila Water Company, Inc., Puregold Price Club, Inc., and RL Commercial REIT, Inc.