Chinese state-sponsored contract hacker arrested in Italy at US request, DOJ says

July 9, 2025 | 10:10 am

WASHINGTON – The U.S. Department of Justice said on Tuesday a Chinese state-sponsored contract hacker was arrested last week in Italy at the request of Washington, but the arrested man claimed he is a victim of mistaken identity.

Xu Zewei, 33, was arrested on July 3, the Justice Department said, adding a nine-count indictment was unsealed on Tuesday in the Southern District of Texas alleging the involvement of that individual and a co-defendant in computer intrusions between February 2020 and June 2021.

Mr. Xu was arrested in Milan, Italy, and will face extradition proceedings, the DOJ said in a statement.

It alleged China’s ministry of state security had directed theft of COVID-19 research and the exploitation of Microsoft MSFT.O email software vulnerabilities.

The Chinese government has previously denied allegations of being involved. Liu Pengyu, a spokesperson for China’s embassy in Washington, said on Tuesday China opposes all forms of cyber crimes, adding that “China has neither the need nor the intention to acquire vaccines through so-called theft.”

Mr. Xu’s lawyer said on Tuesday that he is a victim of mistaken identity, that his surname is quite common in China and that his mobile phone had been stolen in 2020.

The 33-year-old IT manager at a Shanghai company appeared on Tuesday before an appeals court in Milan, which will decide whether to send him to the United States. The man was arrested last week after he arrived at Milan’s Malpensa airport for a holiday in Italy with his wife.

U.S. authorities allege that he was part of a team of hackers who tried to access a COVID-19 vaccine being developed by the University of Texas in 2020.

The DOJ also says that in 2021, he was part of a cyber-espionage group known as Hafnium, which has alleged ties to the Chinese government and which “exploited zero-day vulnerabilities in U.S. systems to steal additional research.”

Hafnium targeted over 60,000 U.S. entities, according to the DOJ.

The charges listed on the arrest warrant were wire fraud and aggravated identity theft, conspiracy to commit wire fraud and unauthorized access to protected computers. – Reuters

Trump says US to impose 50% tariff on copper imports, copper futures jump

July 9, 2025 | 10:08 am

copper-1504098_1920 — STOCK PHOTO | Image by Alexa from Pixabay

WASHINGTON – President Donald Trump said he will announce a 50% tariff on copper on Tuesday, hoping to boost U.S. production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods.

U.S. Comex copper futures jumped more than 12% to a record high after Mr. Trump announced the planned tariffs, which came earlier than the industry had expected, and the rate was steeper.

Mr. Trump told reporters at a White House cabinet meeting that he planned to make the copper tariff announcement later in the day but he did not say when the tariff would take effect.

“I believe the tariff on copper, we’re going to make 50%,” Mr. Trump said.

After Mr. Trump spoke, U.S. Commerce Secretary Howard Lutnick said in an interview on CNBC that the copper tariffs would likely be put in place by the end of July or August 1. He said Trump would post details on his Truth Social media account sometime on Tuesday.

Mr. Trump had yet to formally announce the tariffs by Wednesday evening and several countries, mining companies and trade groups said they were awaiting firm details.

Analysts with RBC Capital Markets said they expect short-term volatility in copper prices and shares of copper companies should the tariff be implemented.

In February, the administration announced a so-called Section 232 investigation into U.S. imports of the red metal. The deadline for the investigation to conclude was November, but Mr. Lutnick said the review was already complete.

“The idea is to bring copper home, bring copper production home, bring the ability to make copper, which is key to the industrial sector, back home to America,” Mr. Lutnick said.

The National Mining Association declined to comment, saying it preferred to wait until details were released. The American Critical Minerals Association did not immediately respond to requests for comment.

Copper is used in construction, transportation, electronics and many other industries. The U.S. imports roughly half of its copper needs each year and only has three copper smelters.

Major copper mining projects across the U.S. have faced strong opposition in recent years due to a variety of reasons, including Rio Tinto and BHP’s Resolution Copper project in Arizona and Northern Dynasty Minerals’ Pebble Mine project in Alaska.

Shares of the world’s largest copper producer, Phoenix-based Freeport-McMoRan, shot up more than 5% at one point in Tuesday trading. The company, which produced 1.26 billion pounds (571,530 metric tons) of copper in the U.S. last year, did not immediately respond to a request for comment.

Freeport, which would benefit from U.S. copper tariffs but worries that the duties would hurt the global economy, has advised Trump to focus on boosting U.S. copper production.

Countries set to be most affected by any new U.S. copper tariff would be Chile, Canada and Mexico, which were the top suppliers to the U.S. of refined copper, copper alloys and copper products in 2024, according to U.S. Census Bureau data.

Chile, Canada and Peru – three of the largest copper suppliers to the U.S. – have told the administration that imports from their countries do not threaten U.S. interests and should not face tariffs. All three have free trade deals with the U.S.

Mexico’s Economy Ministry and Canada’s Finance Ministry did not immediately respond to requests for comment, while Chile’s Foreign Ministry said it had not received any formal communication about the tariffs.

Chile’s Mining Ministry declined to comment. Chairman Maximo Pacheco of Codelco, the country’s top copper miner, told Reuters the company wanted to know which copper products would be included and if the tariff would hit all countries.

Pierre Gratton, president of the Mining Association of Canada, said the tariff is concerning for copper smelters such as Glencore’s Horne facility in Quebec. Gratton added he was waiting for the 232 report from Trump officials.

A 50% tariff on copper imports would hit U.S. companies that use the metal because the country is years away from meeting its needs, said Ole Hansen, head of commodity strategy at Saxo Bank.

“The U.S. has imported a whole year of demand over the past six months, so the local storage levels are ample,” Hansen said. “I see a correction in copper prices following the initial jump.” – Reuters

Trump, Netanyahu meet a second time as gaps said to narrow in Gaza ceasefire talks

July 9, 2025 | 10:03 am

WASHINGTON – U.S. President Donald Trump on Tuesday met for a second time in two days with Israeli Prime Minister Benjamin Netanyahu to discuss Gaza as Trump’s Middle East envoy said Israel and Hamas were closing their differences on a ceasefire deal.

The Israeli leader departed the White House on Tuesday evening after just over an hour’s meeting with Trump in the Oval Office, with no press access. The two men also met for several hours during a dinner at the White House on Monday during Netanyahu’s third U.S. visit since the president began his second term on January 20.

Mr. Netanyahu met with Vice President JD Vance and then visited the U.S. Capitol on Tuesday, and is due back in Congress on Wednesday to meet with U.S. Senate leaders.

He told reporters after a meeting with the Republican House of Representatives Speaker Mike Johnson that while he did not think Israel’s campaign in the Palestinian enclave was done, negotiators are “certainly working” on a ceasefire.

“We have still to finish the job in Gaza, release all our hostages, eliminate and destroy Hamas’ military and government capabilities,” Mr. Netanyahu said.

Shortly after Mr. Netanyahu spoke, Mr. Trump’s special envoy to the Middle East, Steve Witkoff, said the issues keeping Israel and Hamas from agreeing had dropped to one from four and he hoped to reach a temporary ceasefire agreement this week.

“We are hopeful that by the end of this week, we’ll have an agreement that will bring us into a 60-day ceasefire. Ten live hostages will be released. Nine deceased will be released,” Mr. Witkoff told reporters at a meeting of Trump’s Cabinet.

A delegation from Qatar, which has been hosting indirect talks between Israeli negotiators and the Hamas Palestinian militant group, met with senior White House officials for several hours before Netanyahu’s arrival on Tuesday, Axios reported, citing a source familiar with the details.

The White House had no immediate comment on the report.

The Gaza war erupted when Hamas attacked southern Israel in October 2023, killing around 1,200 people and taking 251 hostages, according to Israeli figures. Some 50 hostages remain in Gaza, with 20 believed to be alive.

Israel’s retaliatory war in Gaza has killed over 57,000 Palestinians, according to the enclave’s health ministry. Most of Gaza’s population has been displaced by the war and nearly half a million people are facing famine within months, according to United Nations estimates.

Mr. Trump had strongly supported Mr. Netanyahu, even wading into domestic Israeli politics by criticizing prosecutors over a corruption trial against the Israeli leader on bribery, fraud and breach-of-trust charges that Netanyahu denies.

In his remarks to reporters at the U.S. Congress, Mr. Netanyahu praised Mr. Trump, saying there has never been closer coordination between the U.S. and Israel in his country’s history. – Reuters

UK should limit trial by jury to reduce record criminal backlog, report says

July 9, 2025 | 10:01 am

LONDON – Britain must radically reform its criminal justice system, including by removing the right to trial by jury for certain offences, to help tackle a record-high backlog of cases, a government-commissioned report recommended on Wednesday.

The report recommends removing the right to choose a jury trial where a defendant faces a maximum of two years in jail and proposes that complicated fraud cases should be tried by a judge alone.

Brian Leveson, formerly the head of criminal justice in England and Wales, also called for greater use of “out of court resolutions” for low-level crime.

The backlog of cases in the Crown Court, where more serious cases are heard by a judge and a jury, is over 75,000 – more than double the number in 2019 – and trials are currently being listed to take place as far away as in 2029.

Defendants, victims and witnesses are often waiting years for justice to be done, with defendants in custody before trial taking up limited prison places, which has recently prompted Britain to release prisoners early.

Mr. Leveson further recommended the creation of a new branch of the Crown Court, where less serious offences could be tried by a Crown Court judge and two other judges instead of a jury.

Justice Secretary Shabana Mahmood said the government will “consider all his recommendations and will respond, in full, ahead of legislating” later this year.

Lawyers’ professional bodies broadly welcomed the recognition of the problems in the criminal justice system, but expressed concern about some recommendations, particularly relating to trial by jury.

Richard Atkinson, president of the Law Society, which represents solicitors in England and Wales, said that limiting jury trials would effectively just move the Crown Court backlog to lower courts and that a permanent solution required sustained investment to address “decades of neglect”.

Barbara Mills, chair of barristers’ body the Bar Council, said “there is no need to curtail the right to trial by jury”, echoing the Law Society’s call for greater investment. – Reuters

US tariffs to take center stage as ASEAN meets in Malaysia

July 9, 2025 | 10:00 am

KUALA LUMPUR – Southeast Asian foreign ministers will meet on Wednesday as the region grapples with renewed uncertainty over U.S. trade tariffs and as a simmering territorial dispute between Thailand and Cambodia threatens to disrupt the bloc’s unity.

The gathering in Malaysia of the 10-member Association of Southeast Asian Nations will be followed by a flurry of meetings on Thursday and Friday between the group and its major trade partners, including the United States, China, Japan, Russia, India and the European Union.

China’s Foreign Minister Wang Yi and Russian counterpart Sergei Lavrov are expected to join the Kuala Lumpur meetings, as will U.S. Secretary of State Marco Rubio, who makes his first trip to Asia looking to smooth over relations with allies and partners rattled by President Donald Trump’s tariff strategy.

Mr. Trump on Monday announced hefty levies of between 25% and 40% on six Southeast Asian countries, despite concerted efforts by some to offer broad concessions and negotiate lower rates.

The export-reliant ASEAN is collectively the world’s fifth-biggest economy, with some members beneficiaries of supply chain realignments from China. Only Vietnam has secured a deal, which lowers the levy to 20% from 46% initially.

Indonesia, Thailand and Malaysia said they would seek further talks ahead of the tariff implementation on August 1.

TARIFFS ‘COUNTERPRODUCTIVE’

ASEAN foreign ministers will express “concern over rising global trade tensions and growing uncertainties in the international economic landscape, particularly the unilateral actions relating to tariffs,” according to a draft joint communique seen by Reuters.

The draft, dated July 7 and before the latest tariff rates were announced, did not mention the United States and used language similar to an ASEAN leaders’ statement in May. Both said tariffs were “counterproductive and risk exacerbating global economic fragmentation”.

The bloc in April said it would not impose retaliatory measures and its leaders have pledged any bilateral deals they strike with Washington would not harm fellow ASEAN members.

OCBC senior ASEAN economist Lavanya Ventakeswaran said countries including Vietnam face additional uncertainty over tariffs targeting transshipments, a measure aimed at products largely from China, with questions remaining over enforcement and implementation.

“The bottom line is that it’s going to be quite complicated moving forward,” Ms. Ventakeswaran said.

The issue has also been complicated by Mr. Trump’s initial threat of an additional 10% on tariffs on countries aligned with the BRICS grouping. Indonesia is a member, while Malaysia, Thailand and Vietnam are partner countries.

ASEAN will promote a treaty on a nuclear weapons-free zone in Southeast Asia and the meeting could also see Thailand and Cambodia seek to ease a dispute that led to a mobilization of their troops at their border and a crisis for a Thai government now hanging by a thread.

Thai Prime Minister Paetongtarn Shinawatra has since been suspended pending a court case over her leaked phone call with Cambodia’s influential former leader, Hun Sen, a conversation her opponents say undermined Thailand’s sovereignty and integrity.

The dispute puts more pressure on ASEAN to maintain a united front, amid other unresolved issues including an intensifying civil war in Myanmar and a protracted drafting of a code of conduct with Beijing for the South China Sea, a key source of geopolitical tension. – Reuters

Trump considers taking over D.C. government, chides New York

July 9, 2025 | 9:57 am

WASHINGTON – U.S. President Donald Trump said on Tuesday his administration was considering taking over governance of Washington, D.C., and suggested he could take similar action in New York because of his distaste for the leading candidate for mayor there.

Mr. Trump has made a similar threat regarding Washington before, but has not followed through even as he criticized crime rates and bashed other institutions there.

The president, speaking during a cabinet meeting at the White House, said his chief of staff, Susie Wiles, was in close touch with Mayor Muriel Bowser, who favors making the city a U.S. state.

“We have tremendous power at the White House to run places when we have to. We could run D.C. I mean, we’re … looking at D.C.,” Mr. Trump said. “Susie Wiles is working very closely with the mayor.”

Ms. Bowser’s office declined to comment.

The District of Columbia was established in 1790 with land from neighboring Virginia and Maryland. Congress has control of its budget, but voters elect a mayor and city council, thanks to a law known as the Home Rule Act. For Trump to take over the city, Congress likely would have to pass a law revoking that act, which Trump would have to sign.

Becoming the 51st state would give Washington’s roughly 700,000 residents voting representation in Congress. Democrats support that plan, while Republicans, who are reluctant to hand Democrats any politically safe seats in the House of Representatives and Senate, oppose it.

Mr. Trump suggested his administration would run the city better with an appointed leader than the democratically elected government.

“We would run it so good, it would be run so proper. We’d get the best person to run it,” he said. “The crime would be down to a minimum, would be much less. And you know we’re thinking about doing it, to be honest with you.”

While Mr. Trump said his administration had a good relationship with Bowser, he had less complimentary words for Zohran Mamdani, the democratic socialist who won the race to be the Democratic Party’s nominee in New York’s November mayoral election.

Mr. Trump described Mr. Mamdani as a “disaster.” A representative for Mr. Mamdani did not immediately respond to a Reuters request for comment.

“We’re going to straighten out New York… Maybe we’re going to have to straighten it out from Washington,” Mr. Trump said. “We’re going to do something for New York. I can’t tell you what yet, but we’re going to make New York great again also.” – Reuters

Jobless rate drops to 3.9% in May

July 9, 2025 | 12:50 am

Job fair-seeker — Sta. Mesa residents attend a job fair in Manila. — PHILIPPINE STAR/EDD GUMBAN

By Adrian H. Halili, Reporter

THE PHILIPPINES’ unemployment rate went down to 3.9% in May from 4.1% in April, with the number of individuals in the labor force hitting an all-time high, the government reported on Tuesday.

The number of jobless Filipinos declined to 2.03 million in May from 2.06 million in April and 2.11 million a year earlier, according to the results of the Philippine Statistics Authority’s (PSA) latest Labor Force Survey released on Tuesday.

Year on year, the jobless rate likewise went down from 4.1% in May 2024.

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

National Statistician Claire Dennis S. Mapa attributed the drop in the May unemployment rate to a “substantial” growth in the ranks of Filipinos aged 15 years and older in the labor force.

“The increase in our labor force participation is substantial — there was a 1.35 million increase year on year,” he told a news briefing. “Usually, when labor force participation increases, unemployment also goes up. But this time is different — almost everyone was absorbed, and unemployment declined.”

“Our only concern is that underemployment increased (year on year),” he added. “Our underemployment rate last year was only 9.9%, it increased by 1.79 million to 13.1%. Those who entered the labor market, while they were employed, not all of them were full-time employees. So, they also contributed to the underemployment rate.”

PSA data showed that 52.32 million Filipinos were part of the labor force in May, rising from 50.74 million in April and the 50.97 million working Filipinos recorded in May 2024.

This was the highest recorded number since April 2005, which was when the PSA began tracking the data, it said.

The labor force participation rate (LFPR), or the proportion of the working-age population (15 years old and over) that is part of the labor force, rose to 65.8% in May from 63.7% in April and 64.8% in the same month last year.

Meanwhile, the underemployment rate — those who want longer working hours or an additional job — eased to 13.1% in May from 14.6% in April but climbed from 9.9% in the same month last year.

This translated to 6.6 million Filipinos looking for additional jobs or longer working hours, 489,000 lower than the 7.09 million in April. Year on year, this was up from 4.82 million in May 2024.

For the five-month period, the underemployment rate averaged 12.9%, up from 12.3% last year.

Department of Economy, Planning, and Development (DEPDev) Secretary Arsenio M. Balisacan said the increase in labor force participation in May indicated a “healthy and competitive” job market.

“Generally, a larger workforce can lead to increased economic output and potentially higher GDP (gross domestic product) growth, as more people contribute to the economy,” Mr. Balisacan said in a statement.

“This also reflects growing confidence in the labor market and the impact of ongoing efforts to expand access to employment opportunities across sectors,” he added.

The Philippines is targeting a GDP growth of 5.5%-6.5% for 2025.

The DEPDev added that the Philippine’s unemployment rate remains lower than those in China (5%) and India (5.6%), but higher than Malaysia (3%) and Vietnam (2.2%).

Finance Secretary Ralph G. Recto said in a statement that higher labor participation shows that more Filipinos are seeing better work opportunities and is a sign of economic development.

Mr. Balisacan said the government’s planned infrastructure projects can help attract job-generating investments.

He added that efforts to equip Filipinos with in-demand skills and competencies can help our workforce remain agile amid a competitive labor market

“We will leverage recently enacted policy reforms to improve upskilling and reskilling initiatives.”

EMPLOYMENT RATE

The PSA also reported that the employment rate inched up to 96.1% in May from 95.9% in both April 2025 and May 2024.

The number of Filipinos with jobs grew to 50.29 million in May from 48.67 million the previous month and 48.87 million in the same month last year.

By sector, services remained the top employer for the month, accounting for 61.8% of total employed persons, followed by agriculture (21.1%) and the industry sector (17.1%).

Wholesale and retail trade; repair of motor vehicles and motorcycles saw the largest annual increase in jobs during the month, adding 489,000 jobs. This was followed by agriculture and forestry (469,000), administrative and support service activities (371,000), accommodation and food service activities (365,000), and other service activities (175,000).

On the other hand, manufacturing posted the biggest annual decline in employment (374,000). This was followed by construction (298,000); mining and quarrying (82,000); public administration and defense and compulsory so-cial security (54,000); and water supply and sewerage, waste management and remediation activities (50,000).

By class of worker, wage and salary workers accounted for 62.8% of the workforce in May, followed by self-employed individuals without paid employees (27.9%), unpaid family workers (7.5%), and employers in family-operated farms or businesses (1.8%).

Working hours averaged 39.8 hours per week in May, slightly lower than the 39.9 hours in April. Average working hours also fell year on year from the 40.6 hours per week recorded in May 2024.

INFLATION WOES

However, analysts said the increase in labor participation seen in May was likely a result of inflation concerns.

“High inflation, uncertainties, and insufficient employment opportunities made people, including those that were initially part of the labor force, go out and contribute to the financial resources of the family. Having just one earner in the family is no longer enough — not even two earners,” Maria Ella Calaor-Oplas, an economics professor who specializes in human capital development research at De La Salle University, said in a Facebook Messenger chat.

She added that the midterm elections likely boosted employment opportunities.

“The LFPR is plausibly increasing because family incomes are so low, and prices of basic goods and services are so expensive, that more household members are driven to more actively seek work,” IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa likewise said in a Viber message. “Unpacking this seemingly favorable increase shows more and more Filipinos trying to scrape out a living from whatever informal and poor-quality work they can find from an economy that is failing to create regular and decently paying work.”

Mr. Africa said the government should focus on developing the agriculture and industrial sectors to boost employment.

Federation of Free Workers President Jose Sonny G. Matula also said that the government should focus on domestic-led job creation by supporting small businesses and cooperative and rural enterprises and providing better wages, as the year-on-year increase in underemployment shows that many jobs in the country are “still low-paying or insecure.”

Dollar reserves inch up to $105.32 billion in June

July 9, 2025 | 12:40 am

mackenzie-marco-XG88BYDSDZA-dollar-unsplash — UNSPLASH

By Aubrey Rose A. Inosante, Reporter

THE PHILIPPINES’ dollar reserves inched up to $105.32 billion as of end-June on the back of the National Government’s foreign currency deposits and the central bank’s investment earnings.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) released late on Monday showed that the end-June gross international reserves (GIR) edged up by 0.14% from the $105.18 billion recorded as of May.

This marked the first month-on-month increase since February.

The central bank said the rise was “mainly due to foreign currency deposits by the National Government with the Bangko Sentral ng Pilipinas and income from BSP investments.”

Year on year, dollar reserves also inched up by 0.13% from $105.19 billion.

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

Ample reserves help protect the country from market volatility and external shocks and ensure that it is capable of financing its imports and paying its debt obligations, as well as stabilizing the currency, in the event of an economic downturn.

The BSP said the end-June GIR level covers about 3.3 times the country’s short-term external debt based on residual maturity.

It is also equivalent to 7.2 months’ worth of imports of goods and payments of services and primary income, providing a “robust” liquidity buffer.

Broken down, the BSP’s foreign exchange holdings surged by 73.89% to $1.24 billion at end-June from $712.2 million as of May. Year on year, it climbed by 54.36% from $802.2 million.

Meanwhile, foreign investments slipped by 0.55% to $85.66 billion as of June from $86.13 billion the month prior. It likewise went down by 4.81% from $89.99 billion in the same period last year.

The value of the central bank’s gold holdings inched up by 0.56% to $13.8 billion at end-June from $13.73 billion as of May. Year on year, it climbed by 39.3% from $9.91 billion.

The country’s reserve position in the IMF rose by 2.32% to $732.4 million in the period from $715.8 million a month earlier but was down by 1.08% from $740.4 million a year ago.

SDRs — or the amount which the Philippines can tap from the IMF’s reserve currency basket — was unchanged month on month at $3.89 billion at end-June. Year on year, it went up by 3.85% from $3.75 billion.

Meanwhile, net international reserves increased by 0.29% to $105.3 billion at end-June from $105 billion as of end-May. Net international reserves refer to the difference between the GIR and reserve liabilities, including short-term foreign debt, and credit and loans from the IMF.

“The strong demand for government securities was one of the factors for the strong inflow of dollars,” said Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc.

“Apart from relatively stable macroeconomic conditions, the reaffirmation of the country’s credit rating by major credit rating agencies also helped in making the country an attractive destination especially for foreign funds.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the country’s dollar reserves rose at end-June after declining for three consecutive months, reflecting improved sentiment amid the volatility caused by the Trump administration’s protectionist policies and geopolitical concerns.

He added that the increase was also driven by elevated world gold prices, which drove up the value of the BSP’s holdings of the precious metal.

“World gold prices hovered near record highs recently after some demand for safe havens due to geopolitical risks during the month, particularly the Israel-Iran attacks,” Mr. Ricafort said.

The Philippines’ improved economic and credit fundamentals are expected to help further boost reserves moving forward, he added.

The BSP expects dollar reserves to reach $104 billion this year.

PHL manufacturing output growth hits 10-month high in May

July 9, 2025 | 12:35 am

Toyota Aisin Transmission Plant-workers — Workers are seen at a manufacturing facility in Santa Rosa, Laguna. — PHILIPPINE STAR KRIZ JOHN ROSALES

MANUFACTURING OUTPUT increased for a second straight month in May at its fastest pace in 10 months, driven by food products, the Philippine Statistics Authority (PSA) reported on Tuesday.

However, analysts said lingering uncertainty over US President Donald J. Trump’s planned reciprocal tariffs could dampen demand for locally made goods.

Manufacturing output, measured by the volume of production index (VoPI), climbed to 4.9% year on year in May, according to the preliminary results of the Monthly Integrated Survey of Selected Industries.

This was faster than 4.2% in the same month last year and 4.3% in April. It was also the quickest growth in 10 months or since 7.2% in July 2024.

Adjusting for seasonality factors, VoPI declined 2.9%, a steep fall from the 15% growth in the previous month.

The May VoPI reading brought average manufacturing output growth to 1.8% for the first five months, a tad faster than the 1.7% seen in the same period in 2024.

The PSA attributed the year-on-year acceleration in the VoPI to the faster manufacture of food products, which rose by 15.7% from April’s 11.2% and 3.1% in May last year. The food products index accounted for 18.7% of factory output.

This was followed by transport equipment, which recorded a 13.5% increase from 7.4% the month prior.

Average capacity utilization, or the extent to which industry resources are used in producing goods, averaged 76.9% in May. This was slightly higher than 76.7% in the previous month and 75.2% in May 2023.

“Manufacturing is slowly but surely growing. Hopefully, it will continue the trend,” Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said in a phone interview.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said strong domestic demand was the primary driver of manufacturing activity.

“Despite external factors and global trade tensions weighing down on exports, household demand continues to be strong and is one of the primary drivers of growth,” he said in an e-mail.

In May, the country’s trade deficit in goods further narrowed to a three-month low in May as exports grew while imports further declined. The trade deficit narrowed to $3.29 billion in May from the $4.73-billion gap in the same month last year, PSA data showed.

Exports grew for the fifth straight month in May by 15.1% to $7.29 billion. Meanwhile, imports fell for the second consecutive month in May by 4.4% to $10.58 billion.

Moving forward, Mr. Erece said Mr. Trump’s reciprocal tariffs could weigh on exports and factory activity.

“However, the country’s advantage of having relatively lower tariffs than other neighboring countries will be good for production,” he said. “In addition, if trade negotiations with the US become successful, these developments will further increase demand for produced goods by Philippine industries.”

Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, added that the delayed deadline for the Trump’s administration’s proposed higher tariffs is sparking renewed global trade uncertainty.

“[This] means that investments into new productive capacity are likely to remain mostly on the sidelines until the dust settles. Ultimately, this in turn means weaker output growth in the longer term,” Mr. Chanco said in an e-mail.

The Trump administration’s decision to extend a negotiating deadline for tariff rates is prolonging uncertainty and instability for countries, the executive director of the United Nations trade agency said on Tuesday, Reuters re-ported.

Mr. Trump on Monday ramped up his trade war, telling 14 nations, from powerhouse suppliers such as Japan and South Korea to minor trade players, that they now face sharply higher tariffs from a new deadline of Aug. 1 from July 9 previously.

Countries have been under pressure to conclude deals with the US after Mr. Trump unleashed a global trade war in April that roiled financial markets and sent policymakers scrambling to protect their economies.

The US has imposed a blanket 10% tariff rate on its trading partners as they negotiate the planned “reciprocal” levies, under which the Philippines could be slapped a 17% tariff, one of the lowest among Southeast Asian nations.

In comparison, the S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) stood at 50.1 in May, dipping from 54.3 in April. A reading above 50 marks improvement for the manufacturing sector while anything below indicates deterioration.

The PMI is a leading indicator for future manufacturing activity, reflecting the raw materials ordered for future processing into manufactured goods. — Leigh Patrick Q. Batoon with Reuters

Bank lending expansion picks up to 11.3% — BSP

July 9, 2025 | 12:30 am

BANK LENDING growth picked up anew in May, driven by loans to businesses and consumers, the Bangko Sentral ng Pilipinas (BSP) said.

Preliminary BSP data released late on Monday showed that outstanding loans of universal and commercial banks increased by 11.3% year on year to P13.37 trillion as of May from P12.02 trillion in the same period in 2024.

This was faster than the 11.2% expansion in April. This comes as lending growth has slowed month on month since February.

“After adjusting for seasonal fluctuations, the outstanding loans increased by 0.9% in May compared with the previous month,” the BSP added.

Outstanding loans to residents rose by 11.8% year on year to P13.05 trillion in May, a tad slower than the 11.9% growth posted in the previous month.

Meanwhile, loans to nonresidents declined by 6.6% year on year to P323.83 billion that month following a 10% drop posted in April.

BSP data showed that outstanding loans to residents to fund business activities expanded by 10.2% to P11.35 trillion in May, easing from the 10.3% growth a month prior.

“Loan growth eased slightly due to the slower expansion in lending to key industries such as: real estate activities (8.7%); wholesale and retail trade, and repair of motor vehicles and motorcycles (9.8%); and transportation and storage (14%),” the central bank said.

Loans for manufacturing activities fell by 3% year on year, it added.

Consumer loans to residents grew 23.7% to P1.699 trillion in May, slowing from the 24% increase recorded a month prior.

These include credit card loans, which rose by 29.4%; motor vehicle loans, which went up by 18.2%; and salary-based general purpose consumption loans, which expanded by 8.7%.

“The BSP monitors bank loans because they are a key transmission channel of monetary policy. Looking ahead, the BSP will ensure that domestic liquidity and bank lending conditions remain aligned with its price and financial stability objectives,” the central bank said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the faster lending growth in May was likely a result of the lagged impact of the BSP’s rate cut cycle.

The Monetary Board has brought down benchmark interest rates by a cumulative 125 basis points (bps) since it started its easing cycle in August last year, with its latest move being a 25-bp reduction last month that brought the policy rate to 5.25%.

MONEY SUPPLY

Meanwhile, domestic liquidity (M3) grew 5.5% in May, slower than April’s 5.8% expansion.

M3 — which is considered the broadest measure of liquidity in an economy and include currencies in circulation, bank deposits, and other financial assets that are easily convertible to cash — increased to P18.35 trillion as of May from P17.4 trillion a year earlier.

Month on month, M3 inched up by 0.7% on a seasonally adjusted basis.

Central bank data showed that domestic claims grew by a slower 10.7% in May to P20.88 trillion from 10.9% in April.

Claims on the private sector alone grew by 10.9% in May to P13.43 trillion, easing from the revised 11.5% in the previous month.

This was “driven by the continued expansion in bank lending to nonfinancial private corporations and households,” the BSP said.

“Net claims on the central government increased by 9.1% from 9.3% (revised), driven by its higher borrowings,” it added.

Meanwhile, net foreign assets (NFA) in peso terms decreased by 4.6% in May from the 0.2% drop in April.

“The BSP’s NFA fell by 4.4% primarily due to the peso’s appreciation against the US dollar. Meanwhile, banks’ NFA declined largely on account of higher foreign currency-denominated bills payable,” the central bank said.

Mr. Ricafort said the slower money supply growth seen in May was likely partly due the BSP’s liquidity management efforts through its weekly auctions of term deposits and short-term securities, which are part of the tools it uses to better manage inflation and price expectations.

Still, these could have been offset by cuts to banks’ reserve requirement ratios, with the latest round implemented in April infusing some P300 billion in cash into the financial system. — Aaron Michael C. Sy

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