A portrait of a Filipino as a consumer: Spending wiser, saving smarter

September 15, 2025 | 12:05 am

earnings — STOCK PHOTO | Image by Macrovector_official from Freepik

By Abigail Marie P. Yraola, Deputy Research Head

FILIPINO CONSUMERS are walking a financial tightrope — tightening belts, gripping wallets, and bracing for every shift in the economic winds.

In the second quarter, Filipino consumers are seen to be optimistic about their earnings but remain cautious. Consumers are adjusting their attitudes towards budgets and savings, despite the increase in their pay checks to brace for economic shocks.

This consumer behavior is reflected in a quarterly survey from TransUnion. In its Q2 2025 Consumer Pulse Study, it assessed the everchanging consumer attitudes based on the dynamics of income, debt, and identity theft.

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“The report underscores a dual reality: optimism about future income coexists with persistent financial stress and caution,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said in a Viber message.

He added that the report implies that consumer confidence is fragile and highly sensitive to economic headwinds such as inflation and job security.

For the banking industry, the future isn’t just about expanding credit access — it’s about earning trust through transparency, personalization, and education.

Mr. Asuncion said that banks that integrate financial wellness tools, alternative credit scoring, and proactive fraud protection will not only meet immediate needs but also position themselves as long-term partners in resilience.

“The winners will be those who shift from being lenders to becoming financial enablers,” he said.

Development Bank of the Philippines (DBP) President and Chief Executive Officer (CEO) Michael O. De Jesus said that banks have the responsibility to improve financial literacy among the population.

But to do this, a better understanding of individual attitudes toward savings is needed.

SAVING SMARTER
Mr. De Jesus pointed out that saving is essentially setting aside the money we earn due to different reasons, and mostly these reasons for savings are valid enough but the challenge is not in “piling up cash” but how we manage it.

“Saving may be a ‘good idea,’ but it is never going to make one seriously wealthy unless you can save a massive proportion of your income and your income is massive as well,” he said in an e-mail.

While saving is a commendable act, investing, on the other hand, can generate wealth, provided there is money to begin with.

“Saving can be a virtue, but you have to move beyond keeping your money in savings and start investing to reap the full benefit,” he advised.

He added that as financial institutions, providing consumers the knowledge (financial literacy), planning tools (wealth and asset management) and savings and investment products to achiever their life goals are necessary.

INCOME AND SPENDING
According to the TransUnion report, consumer financial health stayed mostly stable as 41% of consumers suggested a rise in their income for the past three months, while 73% of Filipino consumers expect a rise in come next year, an optimistic outlook on their financial futures.

Still, financial stress is evident with 44% of consumers expecting difficulties in paying bills.

This financial worry mirrors that consumers are cautious in spending and adjusting their savings, driven by concerns in inflation and job securities.

Still, the report highlighted that there was a 45% increase in emergency savings and a 47% cutback in discretionary spending in the past three months.

Moreover, some were upbeat in managing their finances by increasing savings and paying off debt faster.

“Spending patterns reflected a balancing act between optimism and constraint,” the report noted.

“This often leads to a ‘bunker’ mentality as consumers scrimp on spending and buttress their savings for the expected ‘rainy days’ ahead,” he noted.

He cautioned that if this “behavior” cascades among consumers, it could lead to a recession. In turn, businesses may respond to reduce demand by cutting back on productions on their services and goods.

“The shift in savings behavior means many households adopt a more conservative mindset, prioritizing liquidity and financial safety versus ‘wants’ spending — which benefits the consumer, the financial institutions, and the economy in the long run,” Maybank Philippines said in an e-mail.

This provides peace of mind for consumers amid uncertainty and prevents them from falling into debt in emergencies. While they continue to spend, consumers will seek value to justify what they spend.

“Consumers may become more receptive to financial literacy campaigns and products framed around security, preparedness and long-term goals,” Maybank said.

This indicates an increased demand for savings accounts, time deposits and low-risk investment products as the appetite for personal loans and credit card spending tempers.

“Higher savings means better ability to lend out these funds to businesses,” it said, which in turn will boost long-term growth and help strengthen the economy.

For Nicholas Antonio T. Mapa, chief economist at Metropolitan Bank & Trust Co., this behavioral shift aligns with conventional economic thought as households shift their budgets to prioritize essential while cutting back on discretionary spending during challenging periods.

“The growth in personal loans have helped support domestic consumption throughout the period of elevated inflation, delivering robust household expenditure,” Mr. Mapa said in an e-mail.

He added that as inflation slows, this should at least help restore some purchasing power to help households restore savings or pay down loan balances.

SAVINGS AND CREDIT BEHAVIOR
As highlighted by the report, rising prices, job security and interest rates were the sources of caution of consumers and financial institutions are taking countermeasure in addressing these financial woes.

For Rizal Commercial Banking Corp. Credit Cards President and CEO Arniel Vincent B. Ong, financial institutions can ensure their borrowers added value for using their credit cards on everyday essentials to help address rising prices and cost of living pressures

“Lenders can help address the concern on job security (and its resulting income uncertainty) by offering flexible payment programs for customers,” Mr. Ong said in an e-mail.

For Mr. Mapa, the central bank’s lowering borrowing costs provide relief to households and firms.

“Lower interest rates will help firms hire more workers or invest to bolster operations, resulting in increased efficiencies and or job creation,” Mr. Mapa explained.

Latest government data showed inflation picked up 1.5% in August from 0.9% in July. This was the fastest reading since the 1.8% recorded in March.

A year earlier inflation rate was higher at 3.3%.

Meanwhile, in late August, the Monetary Board slashed the target reverse repurchase rate by 25 basis points (bps) to 5% from 5.25%, for a third straight meeting.

Since it began its easing cycle in August last year, the BSP has reduced borrowing costs by a total of 150 bps. In its last two meeting this year, it delivered two 25-bp cuts each in April then in June.

On the other hand, government data also showed that the Philippine economy expanded by an annual 5.5% in the April-to-June period, slower than the 6.5% growth in the same period last year.

However, this was a tad faster than the 5.4% in the first three months.

In the first semester, GDP growth averaged 5.4%, significantly slower than the 6.2% a year earlier.

The latest gross domestic product print (GDP) missed the lower end of the government’s 5.5% to 6.5% growth target this year.

Results of the study also showed that 58% of Filipinos see access to credit as a “major enabler” of their financial goals. But even so, 57% had dropped their application or refinancing proposal due to fears of rejection resulting from income or work status and the high cost of new credit.

“To meet strong demand for credit while addressing fears of rejection and high costs, banks need to adopt a more inclusive and transparent lending approach,” UnionBank’s Mr. Asuncion said.

This, he added, includes leveraging alternative data such as utility or rental payment history, for credit scoring to assist those with limited credit files.

He noted that ultimately, banks must position credit as an enabler of financial stability, not just consumption.

For RCBC’s Mr. Ong, an effective way for banks to adapt their lending approach is by utilizing nontraditional sources of data.

“Banks have relied on a combination of traditional employment documents proof and data from credit bureaus — which means that first-time borrowers or those working in the gig economy have no access to credit,” he said.

In this day and age where data is king, there are numerous other data points available that can help predict a borrower’s creditworthiness, Mr. Ong said.

“Financial institutions must make a strategic decision to leverage this alternative data in order to expand the population of credit-worthy individuals.”

MANAGING FINANCIAL STRESS
It is worth noting enough that banks should invest in financial literacy or education to aid consumers in making informed decisions to adjust their spending and saving patterns amid inflationary pressures, and economic uncertainty.

For the Bangko Sentral ng Pilipinas (BSP), it said that it has been a pioneer in promoting financial literacy in the country when it established the BSP Consumer Education Committee.

This established a structured financial education program to empower Filipinos in making informed financial decisions.

Efforts include BSP e-Learning Academy, collaborative programs, innovative programs for marginalized sectors, training and capacity building, financial learning sessions, digital platforms, and educated materials.

For RCBC’s Mr. Ong, banks can play a crucial role in enhancing consumers’ financial literacy and health through various strategies such as educational resources, user-friendly tools and apps, transparent information and promoting savings.

“Private financial institutions as well as BSP roll out programs to help grow financial learning and literacy to equip households and firms with the understanding and knowhow to navigate the challenging economic landscape with the help of financial market tools,” Mr. Mapa said.

For Mr. Asuncion, banks in the country and the BSP are investing heavily in financial literacy to help consumers make informed decisions amid inflation and uncertainty.

Initiatives [may] aim to build resilience, promote responsible borrowing, and empower Filipinos to navigate inflationary pressures and economic uncertainty, said Mr. Asuncion.

The central bank strongly urges banks to go beyond providing basic access to financial services and improve in strengthening their clients’ financial health.

“Banks are well-positioned to champion financial literacy because of their direct interaction with consumers and their central role in financial transactions,” the BSP said in an e-mail.

It added that by embedding financial literacy into their products, promoting responsible lending, scaling education through partnerships, and tracking client outcomes, banks can help convert financial inclusion into financial resilience and well-being.

Banks, businesses, and the government should work to shore up confidence in the overall economy, Mr. De Jesus said.

“[This can be done] by loosening credit, such as through interest rate reductions initiated by the BSP, making it easier for borrowing and lending, encouraging business investments that boost the business climate, and ensuring that the ventures we fund will have maximum impact on employment and incomes.”

First Gen, Unilever Philippines renew RE partnership

September 15, 2025 | 12:05 am

FIRST GEN COrp. will supply 10 megawatts (MW) of renewable energy (RE) to seven Unilever Philippines facilities as part of a renewed partnership supporting the consumer goods maker’s operational and sustainability goals.

The agreement covers Unilever’s production and distribution sites in Metro Manila, Cavite, Laguna, and Batangas, First Gen said in a statement over the weekend.

The sites manufacture a range of products, including ice cream, sauces and seasonings, beauty and personal care items, and home care goods.

First Gen will source the power from the geothermal plants of its subsidiary Energy Development Corp. (EDC) in Bicol, Tongonan in Leyte, and Palinpinon in Negros Oriental.

“Since 2017, First Gen has been our partner in helping us reduce the carbon footprint of our manufacturing operations with a steady supply of RE,” said Rondell Torres, Unilever sustainability lead.

“We are committed to continually use RE for our factories and facilities to achieve our operational and sustainability ambitions.”

Carlo L. Vega, First Gen chief customer engagement officer, said the company remains committed to supporting Unilever’s efficiency and sustainability goals.

“First Gen and Unilever share similar concerns over climate change and are doing our part to mitigate risks by choosing to decarbonize,” he said.

First Gen has a total generating capacity of 3,668 MW from geothermal, wind, hydropower, solar, and natural gas plants.

Since 1976, EDC has led the development of geothermal energy in the Philippines, operating facilities across Bicol, Leyte, Negros Island, and Mindanao. — Sheldeen Joy Talavera

In surprise twist, Armani’s will sets stage for sale of fashion empire

September 15, 2025 | 12:04 am

MILAN — The late designer Giorgio Armani instructed his heirs to gradually sell the revolutionary fashion house he created 50 years ago or seek a market listing, his will said, setting off a race to control one of the world’s best-known brands and a major shift for a company highly protective of its independence and Italian roots.

The designer, known in the industry as “King Giorgio,” died on Sept. 4 at 91 with no children to inherit his fashion empire, which industry analysts value at between €5 billion and €12 billion ($5.9 billion-$14 billion).

The will says that priority should be given to luxury conglomerate LVMH, beauty heavyweight L’Oreal, eyewear leader EssilorLuxottica or another group of “equal standing” identified by a foundation the designer set up to preserve his legacy with the agreement of Armani’s business and life partner Pantaleo Dell’Orco.

All three companies named issued statements suggesting they were open to the possibility of a deal.

The explicit mention of stake sales and of France-listed players as potential buyers came as a surprise, given Giorgio Armani’s persistent refusal to dilute his control or list his fashion group, which industry experts say retains appeal despite a global luxury slowdown.

LVMH, controlled by French billionaire Bernard Arnault, said it was honored to be named as a potential partner.

“Giorgio Armani honors us by naming us as a potential partner for the exceptional fashion house he has built,” LVMH’s Mr. Arnault said in a statement. “If we were to work together in the future, LVMH would be committed to further strengthening its presence and leadership around the world.”

EssilorLuxottica, controlled by the heirs of Italian entrepreneur Leonardo Del Vecchio and with commercial ties to Armani, said in a statement it would consider a possible deal.

French cosmetics group L’Oreal which holds a licensing agreement with the Armani group until 2050, also said on Friday it will study the opportunity.

The Armani group has commercial partnerships with both L’Oreal and EssilorLuxottica.

But with a market value of €240 billion and a reputation for being a patient and supporting minority investor, LVMH may ultimately prevail, some analysts said.

“We think that LVMH would likely be the most interested, of the three, in a stake, were it to become available, given the strategic fit,” analysts at Berenberg said in a note. They said the group could easily afford to buy Armani, which they valued at €5 billion to €7 billion.

The will, comprising two documents filed with a notary in March and April respectively and reviewed by Reuters, states heirs should sell an initial 15% stake in the Italian fashion house within 18 months of Armani’s death. They should later transfer an additional 30% to 54.9% stake to the same buyer three to five years after the designer’s death.

As an alternative to the sale of the second tranche of shares, an initial public offering should be pursued, in Italy or in a market of equal standing, the will said.

These types of provisions are essentially binding and could be challenged in court if not fulfilled, according to the Italian notary association.

ARMANI ENTERS NEW ERA
Over the years, the brand that revolutionized modern fashion through its minimalist jackets and suits received several approaches, including one in 2021 from John Elkann, scion of Italy’s Agnelli family, and another from luxury brand Gucci, when Maurizio Gucci was still at the helm.

Armani was the sole major shareholder of the company he set up with his late partner Sergio Galeotti in the 1970s and over which he maintained a tight rein — both creative and managerial — until the very end.

He leaves behind a business which generated relatively stable revenue — €2.3 billion ($2.7 billion) in 2024 — but whose operating profits have shrunk to less than 3% of revenue, according to Berenberg’s calculations.

The will, which lists six different types of shares with different voting rights, gives the Fondazione Giorgio Armani and Dell’Orco 30% and 40% of the company voting rights, respectively, meaning they would together control the fashion group with 70% of total.

The foundation will retain a 30.1% stake in a listing and in a sale.

“The Fondazione… shall never hold less than 30% of the capital, thereby acting as a permanent guarantor of compliance with the founding principles,” Armani’s executive committee said in a statement, adding that the foundation will propose the name of Giorgio Armani’s successor as group chief executive officer.

The foundation’s five-member board will be chaired by Mr. Dell’Orco, in accordance with bylaws. Other board members include Rothschild partner Irving Bellotti, Mr. Armani’s nephew Andrea Camerana, and two family outsiders, a person close to the matter told Reuters.

Heirs should consider other fashion and luxury companies with which the Armani group has commercial ties for a future sale, the will also said.

ELEPHANT TUSKS, VILLAS, A WARHOL
Two elephant tusks, Japanese folding screens, a bronze bear, and a portrait by American artist Andy Warhol are some of the more singular possessions bequeathed by Mr. Armani in his will.

Aside from the outlines the future of the luxury empire he founded, the will divides the billionaire’s many homes among his heirs. It also shares out the eclectic contents of his residence in the center of Milan.

His many properties in glamorous locations around the world regularly featured in home design magazines, and in 2000 he launched his minimalist aesthetic Armani/Casa interiors brand.

The designer left the portrait of himself by Andy Warhol to Mr. Dell’Orco, who also inherited his home on the French Riviera, a Provence-style villa with a pool nestled in the hills of Saint-Tropez.

Mr. Dell’Orco was also granted the right to use Mr. Armani’s house in Antigua, another in the countryside near his birthplace of Piacenza, and his beloved summer retreat, an extensive property on the Sicilian island of Pantelleria.

The Pantelleria home is made up of seven dammusi, traditional rural buildings built from white lava stone with a domed roof and surrounded by more than 150 palm trees.

The residences in Pantelleria, Antigua, and Piacenza are owned by a real estate company which Mr. Armani left to his sister Rosanna, his niece Silvana, and his nephew Andrea Camerana, together with an apartment in New York, while another apartment there also went to Mr. Dell’Orco.

To his sister, Mr. Armani left an apartment in Paris, a painting by Henri Matisse, the elephant tusks, and a table by Italian designer Ettore Sottsass with three green chairs.

Another niece, Roberta, can request to use the various houses.

Mr. Armani’s right-hand man has lifelong rights to use the main Armani residency in Milan, and a house in St. Moritz that will be owned by Camerana, the will showed.

Mr. Dell’Orco also became the owner of multiple sofas, armchairs, shelves, and Japanese rugs. The long list of decorative items includes a desk and table by French interior designer Jean-Michel Frank, a bronze bear, bronze panther, and other metal casting animals, including a crab.

Mr. Dell’Orco and Michele Morselli, the head of Armani’s real estate firm, inherited his vintage cars, which they have permission to sell. Ms. Morselli was also bequeathed a Z-shaped table and an orange pony skin armchair. — Reuters

Rates of short-term BSP bills end mixed

September 15, 2025 | 12:04 am

RATES of the Bangko Sentral ng Pilipinas’ (BSP) short-term bills ended mixed on Friday, with both tenors oversubscribed as the offer volume was lowered.

The BSP bills fetched bids amounting to P112.781 billion, above the P100 billion placed on the auction block but lower than the P126.497 billion in demand for the P120-billion offer a week prior. The central bank made a full P100-billion award of the securities.

Broken down, bids for the 28-day papers amounted to P46.395 billion, more than the P40 billion auctioned off but below the P47.96 billion in bids seen in the prior week for a P60-billion offer.

This marked the first time after five weeks that the one-month bills were oversubscribed.

Banks asked for rates from 5.198% to 5.395%, narrower than the 5.175% to 5.42% margin seen in the previous auction. With this, the average rate of the one-month securities inched up by 0.61 basis point (bp) to 5.3431% from 5.337% previously.

Meanwhile, the 56-day bills attracted P66.386 billion in tenders, higher than the P60-billion offer but below the P78.537 billion in demand for the same volume offered a week prior.

Accepted yields were from 5.25% to 5.359%, narrower than the 5.195% to 5.38% spread a week prior. This caused the weighted average accepted rate for the two-month securities to decline by 1.48 bp to 5.3258% from 5.3406% previously.

The central bank uses the BSP securities and its term deposit facility to mop up excess liquidity in the financial system and to better guide short-term market rates towards its policy rate.

The BSP bills also contribute to improved price discovery for debt instruments while supporting monetary policy transmission, the central bank said.

The short-term securities were calibrated to not overlap with the Treasury bill and term deposit tenors also being offered weekly.

Data from the central bank showed that around 50% of its market operations are done through its short-term securities.

The BSP bills are considered high-quality liquid assets for the computation of banks’ liquidity coverage ratio, net stable funding ratio, and minimum liquidity ratio. They can also be traded on the secondary market. — Katherine K. Chan

Toyota rolls out new-car deals

September 15, 2025 | 12:04 am

VELO_PAGE2_image2 — Toyota GR Yaris — PHOTO BY KAP MACEDA AGUILA

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TOYOTA MOTOR PHILIPPINES (TMP) rolls out deals on the Hilux, RAV4, GR Yaris, and more this September. The Hilux 4×2 2.4 G A/T is available for a down payment of P220,800 under the company’s Pay Low offering. This option offers customers down payments as low as 15% with free insurance for the first year, free LTO registration for three years, and no chattel mortgage at 60 months to pay.

The same variant is also available through a monthly payment of P15,511 under the Pay Light option, which offers customers low monthly plans with 50% down payment at 60 months amortization. The Conquest 4×2 2.4 G A/T variant gets a P30,000 discount for cash buyers.

Meanwhile, the RAV4 2.5 LTD HEV CVT premium SUV is made available for a down payment of P307,800 under the Pay Low option, or a monthly payment of P21,312 under the Pay Light offer. The same variant also gets P200,000 off through straight cash payment. The GR Yaris can be had for a down payment of P523,500 or a monthly payment of P35,500 for the 1.6 Turbo A/T variant. Customers paying straight cash get a P160,000 discount.

The Tamaraw Utility Van is also available with special plans: The 2.4 Utility Van DSL M/T is offered for a down payment of P171,300 or a monthly payment of P10,365. A P100,000 discount is also available for those who will pay in straight cash for the 2.4 Utility Van DSL M/T and 2.4 GL Dropside DSL A/T through Toyota Financial Services Philippines.

TMP also offers free periodic maintenance service (PMS) up to the 20,000-km checkup for all brand-new units of the Raize, Veloz, and select variants of the Vios, Fortuner, Hilux, Innova, and Avanza purchased from an authorized Toyota dealership within the promo period. Customers may avail of the free PMS session within 36 months from the release date of their vehicle so long as they don’t skip any maintenance from the 1,000-km to 20,000-km checkups.

All variants of the Tamaraw sold and released during the promo period are also qualified for a service discount voucher of P1,200 (VAT-inclusive), applicable to nine PMS sessions from the 1,000-km to 40,000-km checkups. Customers may avail of the P1,200 service discount voucher within 48 months of the release date of the vehicle. Owners of brand-new Rush, Corolla Altis and Wigo units sold and released during the promo period also qualify for the P1,200 service discount voucher. The voucher, which can be availed within 36 months from the release date of the vehicle, is applicable to seven PMS sessions from the 1,000-km to 30,000-km checkups.

Owners of a Vios, Innova, Fortuner or Hilux may trade up for a brand-new Corolla Cross HEV, Yaris Cross HEV, or Zenix HEV and get a rebate of P30,000 (P20,000 if trading up any brand for a Toyota Tamaraw).

The rebate can be used as cash discount for the purchase of the new vehicle during the promo period or to purchase Toyota genuine accessories. During the promo period, select Vios, Wigo, Avanza, Veloz, Innova, Fortuner, and Hilux sold and released are entitled to a free one-year comprehensive insurance provided by Toyota Insure given that the unit is purchased from any authorized Toyota dealer. The one-year comprehensive insurance covers 24/7 personal accident, passenger auto personal accident, three-year CPTL, own damage (OD), loss/theft, excess bodily injury (EBI), property damage (PD) and acts of nature (AON), and includes emergency roadside assistance.

All brand-new vehicles purchased at any authorized Toyota dealer in the Philippines starting Jan. 1 this year are also eligible for the Toyota Five-Year Warranty, which is composed of a three-year or 100,000-km Manufacturer Warranty, and an additional two-year or 40,000-km Toyota Service Loyalty Warranty if qualified.

All brand-new 2.4 Tamaraw Dropside DSL M/T and A/T, and 2.4 Tamaraw Utility Van LWB DSL M/T units purchased through financing with Toyota Financial Services Philippines are eligible for zero percent interest at the following down payment options: 30% (12 or 24 months), 50% (12, 24, or 36 months).

For more information, visit https://www.toyota.com.ph/promos/EpicJourneys or follow Toyota Motor Philippines on Facebook, Instagram and X (toyotamotorph), and join the ToyotaPH community on Viber to get the latest updates on products, services, and promos.

How the BSP’s upcoming rules could make or break online gambling

September 15, 2025 | 12:04 am

online gambling-casino — STOCK PHOTO | Image by Macrovector from Freepik

By Pierce Oel A. Montalvo, Researcher

WHAT STARTED as a free-for-all for online gambling is about to get some serious house rules from the central bank.

Last July, the Bangko Sentral ng Pilipinas (BSP) released a draft circular introducing comprehensive regulations for online gambling payment services.

The draft circular represents the regulator’s assertive stance on online gambling. Should it become regulation, providers, operators, and consumers alike will be met with drastic changes in the gambling industry.

Then, in August, the central bank ordered to remove in-app gambling links from e-wallets.

“The BSP directive is issued in light of the surge in online gambling transactions and its impact on the financial health of consumers and their families,” the central bank said in a statement.

AN URGENT RESPONSE
The central bank’s intervention followed growing alarm from lawmakers and health experts over online betting’s devastating impact. The Aug. 14 order gave financial firms 48 hours to remove links redirecting users to gambling websites.

“The Monetary Board has approved our policy ordering BSP-supervised institutions to take down all icons and links redirecting to online gambling sites,” BSP Deputy Governor Mamerto E. Tangonan said during a Senate committee hearing on online gambling in August.

The new draft circular goes further, aiming to build comprehensive regulatory walls rather than simply patching leaks. BSP said the suspension would remain in place until guidelines for online gambling payment services are finalized.

“It is finalizing new rules, developed following public consultation, that will require banks, e-wallets, and other financial service providers to adopt stronger safeguards against gambling-related harm,” the central bank said in a statement dated Aug. 7.

The scale of the challenge is substantial. According to Philippine Amusement and Gaming Corp. (PAGCOR), gaming industry gross gaming revenues jumped 26% to P214.75 billion in the first half of 2025. Electronic games drove this growth with a 53.47% increase in gross revenues to P114.83 billion.

PAGCOR currently collects a 30% rate from e-gaming platforms, down from 35%, which could encourage illegal operators to register. However, concerns remain about the proliferation of unlicensed and unregulated sites that could undermine anti-money laundering efforts.

BSP Governor Eli M. Remolona, Jr. said that more measures to regulate e-gaming are being considered.

“We’re still studying it. Basically, as before, we just want to put sand in the wheels,” he said during the Manila Tech Summit on Aug. 26.

The regulatory pressures are heard not just in the government but also in the streets, among online gambling users who have already felt the first blows.

“If you’re a gambler, you’re really a gambler. You’ll find and find other sites,” said a bike taxi driver, who plays scatter slots on his mobile phone. He requested to be anonymous.

“All the riders we’ve been with, they all want to gamble,” he said in an interview in mixed English and Filipino.

“You say all sites disappear, everything, whether illegal, legal, whatever, nothing left, totally banned. Damn, then gambling in street corners will be rampant again.”

DEFINING THE BATTLEGROUND
At its core, the proposed regulations seek to erect an accountability system for all participants in the industry.

The circular places further enforcement on Payment Service Providers (PSPs) — e-wallets, banks, and other financial institutions facilitating these transactions. Under the proposal, these entities must secure prior BSP authority to offer online gambling payment services.

This privilege depends on meeting strict criteria, including minimum capitalization of P300 million.

PSPs must also maintain “strong anti-money laundering and counter-terrorism financing risk management” systems. This function ensures only financially sound and compliant institutions operate in high-risk platforms.

Central to the BSP’s strategy is creating the Online Gambling Transaction Account (OGTA). This account must be created specifically for online gambling, funded exclusively through on-us transfers from the eligible account owner.

By mandating separate OGTAs, the BSP aims to force deliberate decision-making while creating auditable fund trails.

To enforce this, PSPs will implement enhanced know-your-customer measures, including mandatory facial biometric verification for account opening.

The circular will amend specific sections of the Manual of Regulations for Payment Systems to establish these new compliance requirements. PSPs must also conduct periodic reverifications to maintain account integrity and prevent unauthorized access by restricted individuals.

OPERATIONAL LIMITS
The circular imposes strict OGTA operational limitations, establishing daily funding limits not exceeding 20% of primary account average daily balance.

It mandates “transaction windows” not exceeding six hours per day and 24-hour “cooling-off periods” following “heavy usage.”

Heavy usage, among other considerations, is to be defined by PSPs through their company-specific Responsible Online Gambling Policy. These policies should be intended to promote responsible gambling and enable account owners to exercise self-control and prevent gambling addiction.

Once OGTAs are created, all lending options within the same digital platform must be disabled. This measure could sever dangerous links between gambling and reckless spending.

In the draft circular, Online Gambling Operators (OGOs) face strict onboarding requirements through PSPs, which must treat them as “high-risk merchants.” This entails enhanced due diligence, including beneficial ownership verification to identify ultimate natural persons behind corporate structures.

PSPs must verify if OGOs are properly licensed by appropriate government agencies like PAGCOR and maintain good standing.

INDUSTRY PREPARATIONS
The financial technology (fintech) sector is implementing comprehensive systems while bracing for challenges.

Fintech Alliance.PH Chairman Angelito “Lito” M. Villanueva said that members have declared “zero tolerance policy on misuse of digital payment platforms by illegal businesses, especially online gambling.”

“Our members are already putting in place robust due diligence measures and real-time monitoring systems,” Mr. Villanueva, who also sits as Rizal Commercial Banking Corp. executive vice-president and chief innovation and inclusion officer, said in an e-mail.

“This means stricter onboarding for licensed gaming merchants, blacklisting of unregulated sites, and detection tools to flag suspicious activity.”

The Alliance supports proactive, risk-based approaches beyond simply blocking transactions. “We are recommending tools such as transaction caps, time-based restrictions, and self-exclusion features built directly into user interfaces,” Mr. Villanueva said.

Financial institutions are developing internal safeguards to prevent staff from participating in online gambling.

“Many of our members have introduced internal awareness campaigns, stricter HR compliance protocols, and even employee self-exclusion policies,” Mr. Villanueva added.

“If we, the fintech industry players, are safeguarded against gambling risks, then so are the consumers we serve.”

Mr. Villanueva further said that a delicate balance between compliance and user experience has to be made.

“We need proper safeguards without creating unnecessary friction for legitimate digital transactions.”

There are legitimate concerns about implementation costs, though Mr. Villanueva said the Alliance’s position is clear.

“Consumer protection and financial integrity are investments, not expenses,” he said.

Major players have signaled alignment with regulators. In separate statements, GCash and Maya said they will comply with the BSP’s directive immediately. Both e-wallets subsequently dropped links to gambling sites on their platforms.

According to the results of a survey conducted by research firm The Fourth Wall, GCash emerged as the most-used e-wallet app, cited by 92% of respondents, followed by Maya (6%).

“When BSP ordered removal of in-app gambling links, Maya acted swiftly and complied within the mandated period,” Maya said in an e-mail statement to BusinessWorld.

“Maya fully supports the BSP’s efforts to ensure the responsible use of digital financial services, safeguard system security, strengthen consumer protection, and promote financial inclusion.”

Despite industry cooperation, debates emerge about whether regulation is enough.

“We need to go beyond taking down icons and links,” said Mr. Villanueva.

The Alliance plans comprehensive guidance for dispute resolution.

“I would like to create and execute an encompassing ‘bible book’ that will compile these concerns, protocols, and best practices,” Mr. Villanueva said.

THE HUMAN COST
The BSP’s urgency for regulation is underscored by alarming rates of addiction.

Jayvee Vargas, representative for rehabilitation center Bridges of Hope, revealed during a video interview that “seven out of 10 people admitted to our facilities have gambling disorders.”

Bridges of Hope Drugs and Alcohol Rehabilitation Foundation, Inc. is a PAGCOR-accredited help center with 15 branches nationwide.

“I’ve seen in the last five years, I’ve seen it almost double,” Mr. Vargas said, describing the trend as “scary.”

COVID-19 served as a key point when the lockdown drove people to online gambling. However, Mr. Vargas said accessibility is the fundamental issue. “For me, that’s the first problem. It’s very accessible to the public,” he said.

The barriers to entry are minimal. “All you need is capital of P100, and then you can have access to it already,” he said. “You can bet in cents.”

Gambling addiction affects all social strata without discrimination. “Some come from wealthy families. Some come from the lower bracket. It affects everybody.”

Current age verification systems remain fundamentally flawed. “There’s no way to validate the age. You just have to tick, like, a box [saying] ‘Okay, I’m 21 years old,’” Mr. Vargas said. “But there’s no measure that says, ‘Now, show me proof that you’re 21.’”

The addiction cycle follows predictable patterns. “When you have that habit of gambling, you’re always thinking about the wins and not anymore the losses.”

Similarly, the bike taxi driver said that gambling is “like drugs.”

“If you don’t know how to control yourself, you’ll really be addicted to it. That’s why you see, they removed it from GCash… But, we can still gamble.”

The driver added that illegal gambling sites do not impose cash-in limits.

“Because with sites, you really can’t stop the sites. They get a lot from that.”

PROHIBITION VS REGULATION
Mr. Vargas views daily caps and time limits as improvements. “I think that’s better than none,” he said regarding proposed time limits.

However, he said that determined addicts may explore jailbreaks. “The only cap is the limit of how deep their wallet goes,” Mr. Vargas said, regarding self-imposed caps. “If there are limits, daily limits, I’ll just max out the daily limits if I’m really addicted.”

Cooling-off provisions and pop-up risk messaging may provide some benefit. “I think it will have some effect,” Mr. Vargas said, drawing parallels to anti-drunk driving campaigns that have reduced road accidents.

The exclusion of vulnerable groups receives strong support. “I think it’s good to protect that, especially minors and senior citizens,” Mr. Vargas said. For elderly gamblers, “they’re supposed to be relaxing, enjoying life, right?”

The debate ultimately centers on whether regulation suffices or outright prohibition becomes necessary. Mr. Vargas maintains conditional support for regulated access.

“If gambling operators and regulators have robust safety measures for the gaming public, then I don’t believe we need to remove access,” he said.

“But if there’s no robust measure. We’re kind of playing with fire,” he added.

Mr. Villanueva advocates stronger measures given escalating social costs. “The social costs outweigh the financial benefits,” he said.

“A clear and decisive stance will help protect Filipinos from gambling addiction dangers becoming too easy through digital channels.”

A critical risk involves potential migration to illegal platforms. “There could be spillover to the illegal gambling sites,” Mr. Vargas said. “That’s what we have to watch out for — how to stop those sites from existing.”

The driver said that industry giants like GCash should be allowed to provide services on online gambling sites.

“What they should do better there: just bring it back to GCash. Because that’s where they’ll earn.”

The driver added that gambling is a universal reality that should be regulated instead. “Almost all people in the world gamble. There’s no person who doesn’t gamble. Even those who go to church, they gamble.”

“So, even if you’re good, if you hold cards, you’re still a gambler.”

However, Mr. Villanueva said that regardless of their legality, online gambling sites “still allow users to connect their e-wallets and even bank accounts directly.”

“These wallets should be delinked completely from gambling transactions, period.”

America’s friends will never trust the US again

September 15, 2025 | 12:04 am

By Andreas Kluth

“WE RESPECTFULLY SUGGEST … ,” the letter says. It was sent by a group representing more than 300 veterans of American diplomacy, intelligence, and national security and addressed to the leaders of the intelligence committees in the Senate and House. For a fleeting moment, I thought — hoped? — that I was reading a Swiftian satire in the tradition of A Modest Proposal. Then it hit me with full force that the entreaty was dead serious and reflected what I and other observers of US foreign policy under President Donald Trump have been worrying about for months.

The letter asks Congress to demand a classified intelligence assessment that answers questions such as the following: Whether America’s allies believe the US remains a stable democracy; whether they regard the US as a reliable partner; whether they’re hedging their security by seeking alternative alliances without the US; and even whether they’re developing contingency plans for wars “in which they might, for the first time in generations, have to fight against US forces if America were to align with Russia against NATO or Ukraine, for example.” Let that sink in.

Such an intelligence assessment, of course, stands a snowball’s chance in hell. The relevant committees, like Congress as a whole, are controlled by Republicans, who are in thrall to Trump. So is the so-called intelligence community that would execute the analysis, which is in the throes of an effort by the Trump administration to purge its ranks of anybody deemed disloyal, even at the expense of losing vital expertise.

But the concerns are out there and becoming more urgent with every news cycle. Consider those military drones that Russia just sent into Poland, where NATO jets shot them down. It appears that Russian President Vladimir Putin was testing NATO’s air defenses, crisis procedures, and resolve, feeling increasingly confident — especially after that cuddly Alaska summit — that Trump is as wobbly on NATO’s mutual-defense commitment as he is indulgent toward his strongman BFF in the Kremlin.

Or consider the Israeli bombing of Qatar, with the aim of killing Hamas leaders. Both Israel and Qatar are, in the jargon, Major Non-NATO Allies of the US. Qatar even hosts America’s largest military base in the region and recently hosted Trump with lavish promises of deals and the personal gift of a luxury jet. All that was clearly irrelevant as Israel’s prime minister once again ignored Trump, who either can’t or won’t protect the sovereignty of his Qatari allies and was reduced to grumbling that the strikes made him “very unhappy.”

If the Polish episode highlights Trump’s inconstancy within NATO and the Qatari event shows his weakness toward Benjamin Netanyahu, America’s actions in Greenland point to downright malice. That semi-autonomous territory belongs to Denmark, one of America’s oldest and tightest allies.* And yet Trump keeps threatening to seize Greenland “one way or the other.” Last month, the Danish foreign minister summoned the top US diplomat in Copenhagen, for the second time this year, to protest covert operations that had come to light. Some Americans had infiltrated Greenland to make lists of people who might turn against Denmark and support a US takeover. This is not friendly.

The list of friends and allies scorned, humiliated and disdained continues: Trump wants to annex Canada, which shares with the US the world’s longest undefended border and now views Washington as one of its top threats. His intelligence director has blocked information about Russia from going to the Five Eyes, an intelligence-sharing arrangement with Britain, Australia, New Zealand, and Canada that is one of America’s most intimate and useful alliances (and has apparently saved many American lives by foiling terrorist plots).

Trump casts doubt on AUKUS, a budding alliance among the US, UK, and Australia, and on the Quad, a partnership among the US, Japan, Australia, and India that was meant to blossom into an alliance one day. From Taiwan and the Philippines to Estonia and Germany, no American ally can be sure that Washington, in a pinch, would have its back.

Trump’s willful destruction of America’s alliance capital is so self-defeating that it “discombobulates us,” says Graham Allison at Harvard University, a doyen among international-relations scholars. It was by deepening and widening its alliances after World War II that the US was able to deter another world war for eight decades and to limit the number of nuclear powers to just nine so far, a degree of geopolitical stability that Allison deems “unnatural” by historical standards. Trump doesn’t get this and instead interacts with allies as if he were a Dickensian landlord squeezing his tenants or a mob boss shaking down a mark.

For the sake of argument, ignore factors such as honor, credibility, ideals, and values for a moment and think only in terms of realpolitik and the looming contest with communist China. Even and especially then, Trump’s de facto policy of contempt for allies seems bonkers. Kurt Campbell and Rush Doshi, who were top foreign-affairs experts in the administration of Joe Biden, point out that China already surpasses the US in many of the metrics that matter in war, from ships and factories to patents and people. But if the US cooperated more with its allies, their combined economic and military power — what Campbell and Doshi call “allied scale” — would dwarf China’s.

The way things are going, that allied scale will remain a pipe dream. The US’ allies are instead reacting as predicted by the “balance-of-threats” theory in international relations. They’re forming other trading and security networks, excluding the US to hedge against hostility by Trump or a future president. The Europeans in their notoriously disunited Union are pulling closer together. The UK, France, and Germany are signing backup defense treaties in case NATO should falter. All of them are talking about how to adapt their nuclear stances to fit a world in which the US “umbrella” may not be there when it rains.

Some Americans are aware that the current direction points toward disaster. I went to see Gregory Meeks this week. He’s the ranking member and former chairman on the House Foreign Affairs Committee. Trump “is isolating America,” he told me. “He’s not leading. If you’re leading, you got to have other people following you, and he’s pushing people away. He treats our allies as if they’re adversaries.”

I asked Meeks what, among all the problems in his inbox, worries him most. He pondered that for a long minute, during which my gaze drifted to the window behind his desk, which perfectly framed the Capitol in all its splendor. “What keeps me up most,” he finally answered, is “whether or not our friends and allies will ever trust the United States again.” The way I heard it, the question was rhetorical. I fear the answer is simple and sad: They won’t.

BLOOMBERG OPINION

*Per capita, Denmark suffered the highest casualty rate in the coalition that joined the US in Afghanistan, for example.

Extended land leases for foreigners seen to boost property demand, values

September 15, 2025 | 12:04 am

Antipolo City skyline — PHILIPPINE STAR/WALTER BOLLOZOS

By Beatriz Marie D. Cruz, Reporter

THE RECENTLY enacted law allowing foreign investors to lease private lands in the Philippines for up to 99 years is expected to drive up land values and rental prices, boosting demand across office, residential, and industrial segments, property consultants said.

“The extension of land leases for foreigners to 99 years is expected to push up land values and rentals over time, especially in key business hubs, industrial zones, and tourist destinations,” said Jamie Dela Cruz, research manager at KMC Savills, Inc.

“With longer security of tenure, foreign investors are more likely to commit bigger capital, which can fuel both demand and pricing.”

President Ferdinand R. Marcos, Jr. recently signed Republic Act No. 12252, or the Act Liberalizing the Lease of Private Lands by Foreign Investors.

The law increases the maximum lease term from 50 to 99 years, although the President may impose shorter terms for investors engaged in vital services or critical infrastructure.

Roy Amando L. Golez, Jr., director for research at Leechiu Property Consultants, Inc., said the law would benefit high-potential growth areas and income-generating properties such as resorts, hotels, warehouses, offices, and retail spaces.

“A longer land lease can also encourage more launches of industrial parks, logistics hubs, resorts, and mixed-use townships,” said Ms. Dela Cruz, noting that segments requiring long payback periods — such as hospitality and large-scale residential developments — stand to gain the most.

Janlo C. De Los Reyes, head of research and strategic consulting at JLL Philippines, added that extended land leases improve the country’s competitiveness, giving foreign investors greater confidence to commit to high-value developments.

However, consultants cautioned that longer leases could encourage speculative buying, potentially making property less affordable for locals.

Safeguards, such as protections for landowners, clear zoning rules, limits on agricultural and ancestral lands, and transparency in lease agreements, would be necessary to ensure balanced growth, Ms. Dela Cruz said.

57,000 transport workers set to access P20/kg rice

September 15, 2025 | 12:03 am

Rice-Kadiwa Store — PHILIPPINE STAR/EDD GUMBAN

TRANSPORT WORKERS will be eligible to purchase subsidized government rice at P20 per kilogram (kg) starting Sept. 16 (Tuesday), the Department of Agriculture said.

It said the expected number of beneficiaries is about 57,000, with the initial distribution sites identified as follows: The Bureau of Animal Industry in Quezon City for 17,633 beneficiaries; the Philippine Fisheries Development Authority in Navotas City for 1,001 beneficiaries; Barangay Pandan, Angeles City, Pampanga for 9,961 beneficiaries; Food Terminal, Inc. in Cebu City for 24,742 beneficiaries; and Tagum City, Davao del Norte for 3,650 beneficiaries.

The departments of Transportation and Interior and Local Government and the Land Transportation Franchising and Regulatory Board are assisting with the distribution.

Future distribution areas will include the Bureau of Animal Industry and Agricultural Development Center in Quezon City, the Agribusiness and Marketing Assistance Division (AMAD) office in Cebu, the Food Terminal, Inc. warehouse in Angeles, and the AMAD office in Tagum.

Agriculture Secretary Francisco P. Tiu Laurel, Jr. said in a statement: “This is more than a food program. It’s a promise being fulfilled — a fight against hunger that meets people where they are.”

The program was initially rolled out for senior citizens, solo parents, persons with disabilities, and indigent households. It has since been expanded to minimum-wage earners, farmers, and fisherfolk. Set to join at a later date are public school teachers, non-teaching education department staff, and Walang Gutom program beneficiaries of the Department of Social Welfare and Development.

Mr. Laurel said that President Ferdinand R. Marcos, Jr. plans to expanding the market to 15 million households by 2026 and to continue expanding until the end of his term in 2028. — Andre Christopher H. Alampay

Chevrolet Philippines, BPI offer up to P140K off on Captiva

September 15, 2025 | 12:03 am

VELO_PAGE2_image4 — IMAGE FROM CHEVROLET PHILIPPINES

FROM AUG. 22 to Oct. 31 this year, Chevrolet Philippines and BPI Auto Loan are offering up to P140,000 in cash discounts or P46,000 all-in down payment (based on 20% down payment) when buying a brand-new Captiva from authorized Chevrolet dealerships nationwide. In a release, Chevrolet Philippines said that the Captiva “has undergone rigorous endurance testing that simulates five years of use in just 85 days, proving its value and reliability in handling the demands of modern family life.”

The Chevrolet Captiva boasts advanced safety features, including six air bags, an elevated ride height, MacPherson suspension, and 18-inch alloy wheels. Inside is a panoramic sunroof, 10.4-inch vertical touch screen with Bluetooth, Android Auto, and Apple CarPlay.

With a seven-seat capacity and flexible cargo configurations, the Captiva can accommodate up to 1,709 liters of payload.

For more information, visit the official Chevrolet Philippines website at chevrolet.com.ph, follow the company on social media, or visit the nearest Chevrolet dealership.

Yields on gov’t debt go down on soft US data

September 15, 2025 | 12:03 am

YIELDS on government securities (GS) went down last week amid the growing likelihood of a rate cut by the US Federal Reserve this week due to soft inflation data.

GS yields, which move opposite to prices, declined by an average of 4.21 basis points (bps) week on week at the secondary market, according to data from the PHP Bloomberg Valuation System Reference Rates as of Sept. 12 published on the Philippine Dealing System’s website.

At the short end, the 91-, 182-, and 364-day Treasury bills (T-bill) fell by 8.73 bps, 9.92 bps and 11.68 bps to fetch 5.0896%, 5.2143% and 5.3531%, respectively.

At the belly, rates of the two-, three-, four-, five- and seven-year Treasury bonds (T-bonds) also declined by 2.92 bps (5.5977%), 2.84 bps (5.6802%), 2.87 bps (5.7529%), 3.14 bps (5.8131%), and 3.88 bps (5.8911%), respectively.

Meanwhile, rates at the long end were mixed, with the 10-year T-bonds falling by 3.12 bps week on week to 5.9702, while yields on the 20- and 25-year debt rose by 1.39 bps and 1.43 bps to 6.3493% and 6.3491%, respectively.

GS volume traded fell to P46.9 billion on Friday from P63.87 billion the week prior.

“Yields broadly declined over the week amid growing expectations of a September rate cut from the US Federal Reserve following the soft US producer and consumer inflation reports,” the first bond trader said in a Viber message.

US consumer prices increased by the most in seven months in August amid higher costs for housing and food, but a surge in first-time applications for jobless benefits kept the Federal Reserve on track to cut interest rates next Wednesday, Reuters reported.

The larger-than-expected rise in the consumer price index (CPI) reported by the Labor department on Thursday resulted in the biggest year-on-year increase in inflation since January. Higher inflation and softening labor market conditions fanned fears of stagflation, and pose a dilemma for the US central bank, beyond Wednesday’s anticipated rate decision.

The CPI rose 0.4% last month, the biggest gain since January, after increasing 0.2% in July, the Labor department’s Bureau of Labor Statistics said. The CPI was driven by a 0.4% jump in the cost of shelter. Food prices increased 0.5%, with prices at the supermarket soaring 0.6%.

In the 12 months through August, the CPI advanced 2.9%, the largest increase since January, after climbing 2.7% in July.

Economists polled by Reuters had forecast consumer prices would rise 0.3% in August and increase 2.9% on a year-over-year basis.

Financial markets have fully priced in a quarter-percentage-point reduction in rates this Wednesday, with the Fed expected to deliver two similar-sized additional cuts this year.

Meanwhile, another cut by the Bangko Sentral ng Pilipinas this year also remains possible as inflation remained below the central bank’s 2-4% target even as it picked up to 1.5% in August from 0.9% in July, the first trader added.

“Despite prospects of further rate cuts, increasing demand from investors securing fixed returns also contributed to the decline in government bonds.”

A second bond trader said GS yields mostly moved sideways as players were likely taking positions before the Fed’s Sept. 16-17 meeting.

“Two-way interest was seen as some investors try to take profit ahead of quarter-end while some are just waiting to reposition at key levels,” the second trader said.

For this week, yields may continue to go down as the market awaits the Fed’s policy meeting, the first trader said.

“Local yields might continue to decline… as market participants will likely seek for clues on the future moves of the Fed based on potential policy hints from Fed Chair [Jerome H.] Powell following the expected rate cut by the US central bank this week,” the first trader said.

“We now look forward to the language in this week’s FOMC (Federal Open Market Committee) decision for more clues,” the second trader added. — Lourdes O. Pilar with Reuters

Treasure on the road less traveled: CMEPA’s promise for Filipino investors

September 15, 2025 | 12:03 am

investment-savings — STOCK PHOTO | Image by Jcomp from Freepik

By Matthew Miguel L. Castillo, Researcher

PUBLIC CLAMOR erupted on July 1 after the government announced the implementation of the Republic Act No. 12214 or the Capital Markets Efficiency Promotion Act (CMEPA) countrywide.

Filipinos complained of a seemingly new tax, entailed by the law, targeting their passively held savings in banks. This emerged as the law’s primary point of impression on the people which led to widespread verbal dismissals of its entirety.

But there are no new taxes.

Instead, CMEPA introduces a simpler, fairer, and more efficient income tax system to encourage saving and to boost capital markets in the Philippines.

The law aims to boost capital markets, increase market participation, improve liquidity, and lower transaction costs. However, such objectives have been greatly overshadowed by the law’s final withholding tax (FWT) component, leading it to be tagged as another money-making scheme that only favors greedy lawmakers.

Regardless of the backlash it received, the CMEPA has already changed the game in the Philippine banking landscape — a reality that investors and depositors will inevitably face.

VAGUE DIRECTIONS
Michael Gerard D. Enriquez, president of Sun Life Investment Management and Trust Corp., said that the immediate negative feedback came from a lapse in communication to the public.

“It was misconstrued that it would withhold taxes on deposits or investments as a whole,” he told BusinessWorld during a Zoom interview, saying that a lot got surprised in hearing this.

BDO Capital and Investment Corp. President Eduardo V. Francisco said in an e-mail that the public thought a new 20% tax on investments and deposits will be added, which “has already been in place for a long time.”

“They should make it clearer next time for communication that [the tax] is only on the interest,” Mr. Enriquez added.

Taxes on interest earnings of deposits and other interest-bearing accounts have been in effect in cascading tiers according to time kept before CMEPA came in.

Interest on money kept for less than three years had been taxed at 20%, between three and four years at 12%, and between four and five years at 5%. The Bangko Sentral ng Pilipinas (BSP)-certified deposits kept beyond the five-year mark were free of taxes.

The CMEPA equalized the rate for all time lengths at 20% for all deposits made after July 1 for both peso- and dollar-dominated accounts.

Mr. Francisco said that the law just “levels the playing field” through this adjustment.

IS THE GRASS GREENER?
As it has taken effect, Mr. Enriquez said that the CMEPA generates “a more equal opportunity for everyone,” pertaining to big and small investors alike.

“[It] addresses not just taxation on investments [but also] the taxes on transactions, especially on equity trading,” he added.

Through the act, the stock transaction tax (STT) has been lowered to 0.1% from 0.6%, implying a smaller cut in trading shares of a domestic corporation through local and foreign stock exchanges.

Additionally, documentary stamp taxes (DST) on the original issuances of shares have been reduced to 0.75% from 1% and completely lifted from initial transactions on mutual and investment trust funds.

CMEPA also imposes a blanket 0.75% DST on bonds, debentures, and certificates of stock and indebtedness issued in a foreign country.

Mr. Francisco said that the law makes it easier for Filipinos to try their hand at investing through such reduced transaction costs and more consistent tax schemes across diverse types of investments.

Sales or transfers of shares listed on either local or foreign stock exchanges are consistently subject to a 0.1% STT, rather than being taxed under the capital gains tax (CGT) system.

Mr. Enriquez said that this change “has greatly brought us closer to the global industry.”

CGTs, which are imposed on profits of unlisted domestic and foreign shares have been equalized to a 15% rate through the law.

Prior to CMEPA, only sales of domestic shares received the 15% tax, while those of unlisted foreign shares were subject to an income tax of 25% for corporations and a progressive tax of up to 35% for individuals.

Mr. Enriquez also noted the benefits CMEPA provides to holders of Personal Equity Retirement Accounts (PERA).

The provision is an additional 50% tax reduction on employers that contribute equal or greater amounts to their PERA beneficiary employees.

PERA is a voluntary retirement saving program that encourages Filipinos to increase their financial security by investing in viable products.

Mutual funds, stocks, securities, and the like — which are nonspeculative, marketable, and provide regular income payments to investors — fall under such products.

Funds placed in the program may be withdrawn as the investor turns 55 years old and has made qualified contributions for at least five years.

THE BIGGEST ROADBLOCK
In reaping the law’s benefits and reaching its objectives, both analysts mentioned that the lack of financial literacy among Filipinos must be addressed first.

“While CMEPA is good, we have a lot of work to do in educating the Filipinos on savings and investments,” Mr. Francisco said.

“Financial literacy is still a big problem in the Philippines… we need to bombard [Filipinos] on the importance of this,” Mr. Enriquez added.

Financial literacy is defined by the BSP as the ability to make informed financial decisions and to maximize the potential benefits of financial resources.

The BSP’s latest financial inclusion survey (FIS) of 1,200 Filipinos in 2021 showed that only 2% of respondents correctly answered all six questions on basic financial literacy.

Financial concepts including division, risk-return trade-off, diversification, inflation, and simple compound interest rates were covered by the questions.

Results showed that 58% of all respondents were aware of portfolio diversification while only 32% knew how to calculate simple interest earned in saving accounts.

In addition, only 7% of respondents said they have attended seminars on financial literacy, while 54% expressed interest in doing so.

TREADING THE WRONG VENTURES
Mr. Enriquez said that Filipinos are more likely to look into get-rich-quick schemes rather than the discipline of managing their finances diligently.

“They are more susceptible to scams and online gambling,” he added.

TransUnion’s State of Omnichannel Fraud update for the first half of 2025 showed that phishing was the most prevalent scamming scheme in the Philippines.

Phishing involves the scammers’ impersonation of reputable companies to bait victims’ in providing sensitive information such as credit card details and bank account numbers.

More than three-fifths (63%) of surveyed Filipino consumers reported being targeted by scams and more than 10% ended up falling victim.

The study also reported that Filipino victims lost an average of $768 or more than P44,700 during the period.

On the other hand, Mr. Francisco said that Filipinos have also been “more conservative with their investments and expansions.”

The latest FIS reflected this downtick, showing that only 37% of adults surveyed had savings in banks from the 53% seen in the previous edition.

Likewise, adults with insurance slipped to 17% from the 23% seen previously.

“We are still educating them to save, so the next stage is to teach them to how and where to invest… we have to [show] them more options,” Mr. Francisco said.

Mr. Enriquez said that financial discipline must be prioritized regardless of financial status and that low earnings should not hinder Filipinos from expanding their financial portfolio.

He added that the highest consideration must be “how much you save rather than how much you make.”

JITTERS ALONG THE WAY
Both analysts also identified wobbly areas in the Philippine investment atmosphere which the act could have addressed further.

Mr. Enriquez said that the country still can catch up on global practices in government securities even with the law’s current provisions.

Individual Filipino investors face a 20% FWT on deals concerning government securities.

Among members of the Association of Southeast Asian Nations, only Thailand and Indonesia also impose FWTs on government securities, at 10% and 15%, respectively.

Additionally, Mr. Enriquez noted that a drawback in CMEPA is the increased tax on foreign currency bonds.

The interest income tax on foreign currency-denominated accounts climbed to 20% from the 15% imposed beforehand.

For the parties concerned to deal with this, Mr. Enriquez suggested that investors may opt for alternative investment instruments offshore where interest rates would be more attractive for them.

Meanwhile, Mr. Francisco said that there is still “a lot to be done” in reducing other fees such as those seen in the Philippine Stock Exchange listing, the Securities and Exchange Commission processing, custodial fees, and the like.

“Filing rules and documentations can be simplified, especially for small to medium enterprises, to encourage more listings,” he added

He also noted the persisting weakness of the stock market after CMEPA took effect, despite one of the law’s objectives being to boost the local bourse.

“Most investments are going towards bank deposits and fixed income investments,” he added.

THE PATH AHEAD
Mr. Francisco said that attracting foreign investors will be key to maximizing the effectiveness of CMEPA in improving capital markets.

“There are macro issues to solve [in light of] CMEPA, we still have to [garner] more foreign direct investments as a lot of foreigners have shunned or left the Philippine stock market,” he said.

The latest BSP data on foreign direct investments show that cumulative investments up to June were down year on year by 23.8% to $3.42 billion from $4.49 billion.

The drop was attributed to monthly levels of nonresident’s net investment in equity capital with $57 million in outflows from the $85 million inflows a year earlier.

He added that talks to improve PERA and Real Estate Investment Trust laws should also be done to boost CMEPA investments moving forward.

On the other hand, Mr. Enriquez said that an awareness campaign is essential for the success of the law and its provisions.

“The tools, like PERA [and CMEPA] are there, but nobody is using them… there should be an aggressive awareness campaign on their benefits,” he said.

He added that the campaign should focus on the “grassroots level” — the employees, which the law aims to help in fund management.

Mr. Enriquez said Filipinos should learn and try investing to know how much the CMEPA offers and enables them.

“The main argument is that ‘I am not earning enough’ […] but a lot of programs have democratized investing,” he added.

Widely used mobile wallets such as GCash and Maya offer investment opportunities in mutual funds and unit investment trust funds through various fund providers.

“[Filipinos] should have a legitimate way to grow their money; you don’t have to start big, you just have to start somewhere,” Mr. Enriquez said.

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