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Japan, Philippines sign new security pacts as regional tensions rise

Motegi Toshimitsu, Minister for Foreign Affairs of Japan, who is visiting Manila, met with Maria Theresa Lazaro, Secretary of Foreign Affairs of the Republic of the Philippines on Thursday. — COURTESY OF EMBASSY OF JAPAN IN THE PHILIPPINES

MANILA — The Philippines and Japan signed two defense pacts on Thursday, including a deal allowing their forces to exchange supplies and services, with both countries seeking to strengthen security cooperation in response to rising regional tensions.

The Acquisition and Cross-Servicing Agreement, designed to enable the swift provision of supplies and services between their militaries, comes months after a landmark Reciprocal Access Agreement between two of Washington’s closest Asian allies took effect.

Japanese Foreign Minister Toshimitsu Motegi signed the deals in Manila during a nine‑day Middle East and Asia tour, with stops in Israel, the Palestinian territories, Qatar and India, reflecting Tokyo’s growing strategic footprint.

Mr. Motegi and his Philippine counterpart Foreign Affairs Secretary Ma. Theresa P. Lazaro, also announced a $6 million Official Security Assistance from Tokyo to fund the building of facilities to house rigid‑hulled inflatable boats donated by Japan to boost Manila’s naval capabilities.

Japan has voiced concerns about rising maritime tensions in East Asia, opposing any unilateral attempt to change the status quo and backing Philippine maritime security as part of a broader trilateral framework with the United States.

“The Secretary and I also confirmed the importance of the Japan, Philippines, US trilateral cooperation in the face of an increasingly severe strategic environment,” Mr.  Motegi said in a joint press conference with Ms. Lazaro.

Japan has supported the 2016 ruling by the Permanent Court of Arbitration in The Hague rejecting China’s expansive South China Sea claims, a decision Beijing has rejected.

Ms. Lazaro said both nations recognize the value of promoting the rule of law, including the freedom of navigation and overflight, adding that Japan remained a vital strategic partner.

Mr. Motegi’s visit comes as the Philippines takes over the chair of the Association of Southeast Asian Nations, and as tensions rise in the Taiwan Strait.

Japan has warned that peace and stability around Taiwan are vital to global security, and remarks by Prime Minister Sanae Takaichi in November that a Chinese attack on Taiwan could trigger Japanese military action drew a furious response from Beijing, including a travel boycott and an export ban on dual-use items.

China claims sovereignty over Taiwan, which sits just over 100 kilometers (60 miles) from Japanese territory, and has not ruled out using force to take control of the island. Taiwan rejects Beijing’s claim and says only Taiwan’s people can decide their future.

Japan has embarked on a historic military build-up to counter Beijing’s growing might and assertiveness in the region. — Reuters

Four space station crewmates, one ailing, begin emergency return flight

SpaceX Falcon 9 rocket lifts off carrying Starlink V2 Mini satellites into low Earth orbit, in Cape Canaveral. — Reuters

A SPACEX CAPSULE departed the International Space Station on Wednesday carrying a four-member crew on an emergency return flight to Earth necessitated by an undisclosed serious medical condition afflicting one of the astronauts aboard.

The Crew Dragon capsule carrying two US NASA astronauts, a Japanese crewmate, and a Russian cosmonaut undocked from the space station and began its descent from orbit at about 5:20 p.m. EST (2220 GMT). It was headed for a splashdown in the Pacific Ocean off the California coast early on Thursday.

If all goes as planned, the capsule dubbed Endeavor will parachute into the sea following a return flight of about 10-1/2 hours, capped by a fiery re-entry through Earth’s atmosphere, concluding a 167-day mission.

Live video from a NASA webcast of the departure showed the capsule separating from the ISS and drifting away from the orbiting laboratory as the two vehicles soared some 418 kilometers  (260 miles) over the Earth south of Australia.

The astronauts were seen strapped into the crew cabin, seated side by side and wearing their helmeted white and black space suits as the undocking proceeded.

MYSTERY MEDICAL ISSUE
The plan to bring all four members of Crew-11 home a few weeks ahead of schedule was announced January 8, with NASA Administrator Jared Isaacman saying one of the astronauts faced a “serious medical condition” that required immediate medical attention on the ground.

This marks the first time NASA has cut short the mission of an ISS crew because of a health emergency.

NASA officials have not identified which of the four crew members was experiencing a medical issue or described its nature, citing privacy concerns.

The crew consists of U.S. astronauts Zena Cardman, 38, and Mike Fincke, 58, Japanese astronaut Kimiya Yui, 55, and Russian cosmonaut Oleg Platonov, 39. They arrived at the space station following a launch to orbit from Florida in August.

Mr. Fincke, a retired Air Force colonel who was the station’s designated commander, and Ms. Cardman, a rookie astronaut and geobiologist assigned as flight engineer, had been scheduled to conduct a six-hour-plus spacewalk last week to install hardware outside the station. The spacewalk was canceled on January 7 over what NASA then characterized as a “medical concern” with an astronaut.

NASA Chief Health and Medical Officer James Polk later said the medical emergency did not involve “an injury that occurred in the pursuit of operations.”

In an Instagram post a few days ago, Mr. Fincke, wrapping up the fifth space mission of his NASA career, wrote that the four members of Crew-11 “are all OK,” adding, “Everyone on board is stable, and well cared for.”

“This was a deliberate decision to allow the right medical evaluations to happen on the ground, where the full range of diagnostic capability exists. It’s the right call, even if it’s a bit bittersweet,” Mr. Fincke wrote.

Crew-12, the 12th regular crew rotation mission flown by SpaceX to the ISS, is expected to launch in mid-February with four more astronauts. In the meantime, the space station remains occupied by NASA astronaut Christopher Williams and two cosmonauts who flew to the ISS aboard a Russian Soyuz spacecraft in November. — Reuters

Tropical Depression Ada maintains strength; Storm Signal No. 1 up in a dozen areas

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Tropical Depression Ada has maintained its strength as it moves near Eastern Visayas, according to the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) on Thursday. Storm Signal No. 1 has been raised over a dozen areas.

Ada continues to pack maximum sustained winds of 55 kilometers per hour (kph) and gusts of up to 70 kph, PAGASA said in its 11:00 a.m. advisory.

It was last located 420 kilometers east of Surigao City, Surigao del Norte, moving west-northwestward at 10 kph.

As the storm remains over the sea and continues to gain strength, it may intensify into a tropical storm within the next 12 to 24 hours, which may prompt the hoisting of Storm Signal No. 2 over affected areas.

As of the forecast period, PAGASA said Storm Signal No. 1 is in effect over a dozen areas, including Sorsogon, the southeastern portion of Albay, and Catanduanes.

It is likewise in effect over Northern Samar, Samar, Eastern Samar, the eastern portion of Biliran, the eastern portion of Leyte, Southern Leyte, Dinagat Islands, Surigao del Norte, and Surigao del Sur.

Under Storm Signal No. 1, minimal to minor wind threats are expected within 36 hours, which may cause slight damage to infrastructure made of light materials.

In a separate advisory, PAGASA also raised rainfall warnings over areas affected by Tropical Depression Ada.

Yellow rainfall warnings are in effect from Thursday until Friday over Northern Samar, Samar, Biliran, Leyte, Southern Leyte, Dinagat Islands, Surigao del Norte, Surigao del Sur, and Agusan del Norte.

These areas may receive 50 to 100 millimeters of rainfall within 24 hours, which could result in localized flooding and landslides in hazard-prone areas.

Meanwhile, an orange rainfall warning is in effect from Friday until Saturday noon over Catanduanes, Northern Samar, and Eastern Samar.
The warning is also raised over Camarines Sur, Albay, and Catanduanes from Saturday noon until Sunday noon, PAGASA said.

Under an orange rainfall warning, heavier rainfall ranging from 100 to 200 millimeters is expected, which may lead to widespread flooding and landslides in highly susceptible areas.

As for its track, Tropical Depression Ada is forecast to be about 265 kilometers east of Guiuan, Eastern Samar by Friday morning.

By Saturday morning, it may move to around 165 kilometers east-northeast of Catarman, Northern Samar, and by Sunday morning, about 150 kilometers east-northeast of Virac, Catanduanes.

By Monday, it is expected to be approximately 500 kilometers east of Infanta, Quezon.

PAGASA said that, as of the forecast period, the cyclone is not expected to make landfall, although there remains a possibility that it may make landfall over parts of Eastern Visayas or the Bicol Region. — Edg Adrian A. Eva

Free kidney testing aims to curb rising CKD cases

Urine Albumin-to-Creatinine Ratio (UACR) screening at Mercury Drug Shangri-La Plaza in Mandaluyong. — ALMIRA S. MARTINEZ

Local drugstore chain Mercury Drug Corp., in partnership with AstraZeneca and Diabetes Philippines, said on Wednesday that it aims to delay the “end cases” of Chronic Kidney Disease (CKD) by offering early detection through free Urine Albumin-to-Creatinine Ratio (UACR) screening.

“Our goal is to be able to find out who among these patients or Filipinos may potentially have kidney disease because kidney disease is asymptomatic,” AstraZeneca Philippines Medical Affairs Director Cyril Joseph P. Tolosa told BusinessWorld in an interview.

“By being able to have yourself tested or screened, there is an opportunity for you to address the problem of kidney disease early,” he added.

The UACR test is a non-invasive procedure that measures the amount of albumin, a type of protein, in the urine relative to creatinine, a waste product. Tracing the amount of protein that leaked into the urine could indicate a “critical early warning sign” of kidney stress that requires early intervention.

“The problem with kidney disease is if you address it late, there’s not much you can do,” Mr. Tolosa said. “This patient will just progress to dialysis which is the worst thing that could happen for this patient.”

Diabetes Philippines Treasurer Rey D.F. Rosales noted that early screening, like the UACR test, could also slow down or prevent dialysis treatment.

“If the patient has been diagnosed with chronic kidney disease, we classify them in terms of the risk of progression to end-stage renal disease,” he told BusinessWorld at the sidelines of the launch.

“We want early screening so we can identify the CKD patient’s stage and manage it properly to delay it,” he added.

The free UACR test is available across four Mercury Drug branches, specifically, Pavilion Mall and Shangri-La Plaza in Mandaluyong, TriNoma Mall in Quezon City, and in Noveleta, Cavite.

The free test targets to benefit more than 13,000 Filipinos nationwide.

“Anybody who walks into this Mercury Drug branch can avail of the screening. They don’t need to bring anything, they don’t need to show anything,” Mr. Tolosa said.

“The healthcare professional, specifically the nurse, will request them to provide their urine in the cup and once they’re able to provide the specimen, they will be tested for UACR and the nurse will advise the patient as necessary,” he added.

According to the National Kidney Transplant Institute (NKTI), 64,845 dialysis patients were recorded in 2024, a 22% increase from the previous year. Among the most common kidney disease cases are hypertensive nephrosclerosis (33.07%), diabetic nephropathy (30.04%), and chronic glomerulonephritis (12.20%).— Almira Louise S. Martinez

Global trade finance gap at $2.5 trillion as global trade tensions rise, ADB says

More foreign capital went into the country in July to yield a net inflow for a second straight month. — REUTERS/DADO RUVIC/ILLUSTRATION

SINGAPORE – Financial institutions globally failed to meet $2.5 trillion in financing that companies needed for trade last year, holding back the global economy, according to a new survey by the Asian Development Bank.

Though the figure was unchanged since the last survey in 2023, ADB head of trade and supply chain finance Steven Beck said the persistently large gap represented a lost opportunity to drive global growth and development. The gap has also widened since 2015, when it stood at $1.5 trillion.

“Without the financing to back trade, imports, and exports, we’re just not going to be able to realize the kind of growth and development that we can from trade,” he said.

Mr. Beck added that the current policy environment created by tariffs imposed by the United States will drive greater demand for capital as companies diversify their trading relationships and reconfigure supply chains.

“If we don’t have sufficient financing to back that sort of transition into this sort of new world of trade, then the transition is going to be more bumpy than it needs to be,” Mr. Beck said.

In its report released on Thursday, ADB said the trade finance gap could also reflect cyclical factors rather than a lack of access, saying that falling commodity and energy prices since 2023 might have reduced working capital requirements, especially for small and medium-sized enterprises.

Fintech platforms that emerged from a boom five years ago may also be helping to fill the gap, Beck noted, adding that deeper study was needed into their impact on financing.

The report also noted a gradual growth in alternative currencies used, including China’s yuan. Though the US dollar was still used in over 82% of traditional trade finance transactions, ADB found that nearly 57% of bank respondents perceive a growing need for the use of local currencies.

Mr. Beck said this was partially a result of supply chain reconfigurations, with some trade no longer passing through the United States, but the lack of access to the U.S. dollar was also a factor.

“So if we can increase availability of local currency financing solutions then, presumably, we’ll be able to reduce that gap, at least to some extent,” he said. — Reuters

Uganda to vote in tense election clouded by succession questions

KAMPALA — Ugandan President Yoweri Museveni is seeking to extend his rule into a fifth decade in an election on Thursday with internet restricted across the country following an often violent campaign.

Mr. Museveni is expected to fend off a challenge from the popular singer Bobi Wine, but the vote will be a test of the 81-year-old leader’s political strength and ability to avoid the kind of unrest that has rocked neighbors Tanzania and Kenya.

The longtime leader has campaigned on a slogan of “protecting the gains”, vowing to maintain peace and lift the country into middle-income status.

Mr. Wine, a 43-year-old pop star nicknamed the “Ghetto President” for his humble origins, has promised to end what he calls Mr. Museveni’s “dictatorship” and has appealed to young people angry about scarce economic opportunities. More than 70% of Uganda’s population is under the age of 30.

HUNDREDS ARRESTED, AT LEAST ONE KILLED
Security forces have repeatedly opened fire at Mr. Wine’s campaign events, killing at least one person, and have arrested hundreds of his supporters. Mr. Museveni’s government has defended the security forces’ actions as a justified response to what it called lawless conduct by opposition supporters.

The military has deployed heavily on the streets of the capital Kampala and authorities cut internet access and limited mobile access across the country on Tuesday to curb what they called “misinformation” about the vote.

The UN Human Rights Office said last week that the elections were taking place amid “widespread repression and intimidation”.

Besides Mr. Wine, six other opposition candidates are challenging Mr. Museveni – Africa’s third-longest-ruling head of state. Voters will also choose more than 500 members of parliament. Polls are due to close at 4 p.m. (1300 GMT) with results expected to be announced within 48 hours, i.e. by Saturday afternoon.

MUSEVENI IS A STRATEGIC PARTNER OF THE WEST
Mr. Museveni came to power at the head of a rebellion in 1986. He has changed the constitution twice to remove age and term limits, and his dominance of Ugandan institutions means there is little prospect of an election upset, political analysts say.

As president, he has positioned Uganda as a strategic partner of Western nations, sending troops to regional hotspots like Somalia and taking millions of refugees.

Economic growth, traditionally reliant on agriculture and tourism, is expected to surge into double digits when crude oil production from fields run by France’s TotalEnergies and China’s CNOOC begins later this year.

Mr. Museveni has faced criticism for alleged human rights abuses and unfair elections, charges his government has always denied.

The United States denounced his last election victory in 2021 – in which he defeated Mr. Wine with 58% of the vote – as neither free nor fair. Security forces killed more than 50 opposition supporters in the lead-up to that vote.

Similar criticism from President Donald Trump’s administration is unlikely this time after US diplomats were instructed in July not to comment on the integrity of foreign elections.

PRESIDENTIAL SUCCESSION IN FOCUS
Mr. Museveni is widely believed to favor his son, military chief Muhoozi Kainerugaba, as his successor, though the president has denied grooming him for the role.

Mr. Kainerugaba, a prolific social media presence who often posts threats of violence against opposition leaders, has openly declared his presidential ambitions, but his status as heir apparent is not universally accepted within the ruling party, analysts say.

“While bringing stability, another term for the 81-year-old President Museveni will heighten succession risks, effectively kicking the can down the road on leadership transition,” said Jervin Naidoo, a political analyst at Oxford Economics.— Reuters

Beijing tells Chinese firms to stop using US and Israeli cybersecurity software, sources say

STOCK PHOTO | Image from Freepik

CHINESE authorities have told domestic companies to stop using cybersecurity software made by more than a dozen firms from the US and Israel due to national security concerns, three people briefed on the matter said.

As trade and diplomatic tensions flare between China and the US and both sides vie for tech supremacy, Beijing has been keen to replace Western-made technology with domestic alternatives.

The US companies whose cybersecurity software has been banned include Broadcom-owned VMware, Palo Alto Networks and Fortinet, while the Israeli companies include Check Point Software Technologies, two of the sources said. The third source said other companies whose software was banned included Alphabet-owned Mandiant and Wiz, whose purchase Alphabet announced last year, as well as US firms CrowdStrike, SentinelOne, Recorded Future, McAfee, Claroty, and Rapid7.

Israeli firm CyberArk, whose purchase was announced by Palo Alto last year, was also on the list, as were Orca Security and Cato Networks, two Israeli firms, and Imperva, which was purchased by French defense firm Thales in 2023.

SHARES SLIDE FOLLOWING SOFTWARE BAN
Recorded Future said in an email that “Recorded Future does not do business in China, and has no intention to do business in China.” McAfee said it is a consumer-focused company whose technology “is not built for government or enterprise use.”

CrowdStrike said it did not sell into China and did not have offices, hire people or host infrastructure there, and thus could “only be negligibly affected.” SentinelOne said it had “no direct revenue exposure to China” as it did not sell to Chinese entities or resellers and had no offices there.

The other blacklisted companies did not immediately respond to Reuters’ requests for comment.

Shares of Broadcom were down more than 5% in Wednesday afternoon trading, while Palo Alto’s shares slipped about 1%. Fortinet shares fell around 2%.

Reuters was unable to establish how many Chinese companies received the notice that the sources said was issued in recent days.

Chinese authorities expressed concern the software could collect and transmit confidential information abroad, the sources said. They declined to be named due to the sensitivity of the situation.

China’s internet regulator, the Cyberspace Administration of China, and the Ministry of Industry and Information Technology had not responded to requests for comment at the time of publication.

PREPARATIONS UNDER WAY FOR TRUMP VISIT
The United States and China, which have been locked in an uneasy trade truce, are preparing for a visit by US President Donald Trump to Beijing in April.

While the West and China have clashed over China’s efforts to build up its semiconductor and artificial intelligence sectors, Chinese analysts have said Beijing has become increasingly concerned that any Western equipment could be hacked by foreign powers.

It has therefore sought to replace Western computer equipment and word processing software.

The country’s largest cybersecurity providers include 360 Security Technology and Neusoft.

Some of the US and Israeli companies facing a ban for their part have repeatedly alleged Chinese hacking operations, which China has denied.

Last month, Check Point published a report on an allegedly Chinese-linked hacking operation against an unidentified “European government office.” In September, Palo Alto published a report alleging a Chinese hacking effort targeted diplomats worldwide.

SIGNIFICANT CHINESE FOOTPRINT
Several of the firms do not conduct business with Chinese clients, but others have built a significant footprint in China.

Fortinet has three offices in mainland China and one in Hong Kong, according to its website. Check Point’s website lists support addresses in Shanghai and Hong Kong. Broadcom lists six China locations, while Palo Alto lists five local offices in China, including one in Macau.

The politics around foreign cybersecurity vendors has long been fraught. Such firms are often staffed with intelligence veterans, they typically work closely with their respective national defense establishments, and their software products have sweeping access to corporate networks and individual devices – all of which at least theoretically provides a springboard for spying or sabotage.

Suspicions about the origin and motive of Russian anti-virus firm Kaspersky, for example, eventually led to a purge of the software from US government networks in 2017. In 2024, sales of Kaspersky products were banned across the United States.— Reuters

Iran temporarily closes airspace to most flights, forcing airlines to reroute

THE Iranian flag flutters outside the IAEA headquarters in Vienna, Austria, June 9, 2025. — REUTERS/LISA LEUTNER

WASHINGTON — Iran closed its airspace temporarily to most flights late on Wednesday, forcing airlines to cancel, reroute or delay some flights, amid concerns about possible military action between the United States and Iran.

Iran said in a notice posted by the US Federal Aviation Administration that it had closed its airspace to all flights except international ones to and from Iran with official permission at 5:15 p.m. ET (2215 GMT). The prohibition was set to last for more than two hours until 7:30 p.m. ET, or 0030 GMT, but the end time was an estimate, the notice said. It was still on the FAA website site 30 minutes after its estimated expiry.

Iranian airspace was almost completely empty of civilian airplanes at 7:15 p.m. ET except for two Mahan Air flights traveling between Iran and China, according to tracking data from FlightRadar24.

President Donald Trump has been weighing a response to the situation in Iran which is seeing its biggest anti-government protests in years.

The United States was withdrawing some personnel from bases in the Middle East, a US official said on Wednesday, after a senior Iranian official said Tehran had warned neighbors it would hit American bases if Washington strikes.

Missile and drone barrages in a growing number of conflict zones represent a high risk to airline traffic.

India’s largest airline, IndiGo said some of its international flights would be impacted by Iran’s sudden airspace closure. Air India said its flights were using alternative routes that could result in delays or cancellations.

A flight by Russia’s Aeroflot bound for Tehran returned to Moscow after the closure, according to Flightradar24 data.

Earlier on Wednesday, Germany issued a new directive cautioning the country’s airlines from entering Iranian airspace, shortly after Lufthansa rejigged its flight operations across the Middle East amid escalating tensions in the region.

The United States already prohibits all US commercial flights from overflying Iran and there are no direct flights between the countries.

Airline operators like flydubai and Turkish Airlines have canceled multiple flights to Iran in the past week.

“Several airlines have already reduced or suspended services, and most carriers are avoiding Iranian airspace,” said Safe Airspace, a website run by OPSGROUP, a membership-based organization that shares flight risk information. “The situation may signal further security or military activity, including the risk of missile launches or heightened air defense, increasing the risk of misidentification of civil traffic.”

A Ukraine International Airlines jet was downed by Iran’s military in 2020, killing all 176 passengers and crew.

Lufthansa said on Wednesday that it would bypass Iranian and Iraqi airspace until further notice while it would only operate day flights to Tel Aviv and Amman from Wednesday until Monday next week so that crew would not have to stay overnight. Some flights could also be canceled as a result of these actions, it added in a statement.

Italian carrier ITA Airways, in which Lufthansa Group is now a major shareholder, said that it would similarly suspend night flights to Tel Aviv until Tuesday next week.—Reuters

Peso slides to record low P59.44:$1

BW FILE PHOTO

By Aaron Michael C. Sy, Reporter

THE PHILIPPINE PESO slid to a record low of P59.44 a dollar at Wednesday’s close, failing to sustain support seen late last year due to renewed demand for the greenback amid heightened geopolitical tensions.

The local currency weakened by 9.9 centavos from Tuesday’s 59.341 finish, according to Bankers Association of the Philippines data posted on its website. The close broke the previous record low of P59.355 on Jan. 7.

The peso opened Wednesday’s trading session weaker at P59.38 versus the dollar. Its intraday best was at P59.35, while its worst showing was at P59.45 against the greenback.

Dollars traded inched down to $951 million on Wednesday from $999.2 million on Tuesday.

Demand for the greenback persisted on Wednesday amid geopolitical concerns arising from the tariffs imposed by US President Donald J. Trump against Iran and its trading partners, a trader said by telephone.

The trader also cited increasing bets of fewer rate cuts by the US Federal Reserve this year.

This as the Trump administration threatened Fed Chair Jerome H. Powell with criminal indictment over his testimony before the US Senate regarding the renovation of the Fed’s headquarters in Washington, D.C.

The peso was also dragged by the local government’s reduction of its infrastructure spending target for the year, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Department of Budget and Management cut its infrastructure spending target to 4.3% of gross domestic product (GDP) this year from 5.1% previously following weaker government spending and economic growth last year due to the flood control scandal.

The lower target translates to about P1.3 trillion in infrastructure outlays, Acting Budget Secretary Rolando U. Toledo said on Tuesday.

Mr. Ricafort noted that the peso moved within familiar ranges on Wednesday, signaling possible interventions from the central bank.

“So far, the signals have been consistent that [the Bangko Sentral ng Pilipinas (BSP) has] been on intervention in recent months and at least for more than three years already. So, these are familiar levels because the previous record high for more than three years was P59,” he told Money Talks with Cathy Yang on One News on Wednesday. 

AIA Investment Management Philippines Chief Executive Officer Angie L. Pacis said in the same program that the peso could test the P62 level due to growing interest rate differentials between the Philippines and the US.

“We’re actually of the camp that, for now, based on what we see, maybe the rate cut in February is actually iffy, simply because the BSP is already within their 2-4% [inflation] target range,” she said.

BSP Governor Eli M. Remolona, Jr. said last week that a rate cut at the Monetary Board’s Feb. 19 meeting “remains on the table” but was “unlikely.” He also noted that the BSP is nearing the end of their easing cycle.

The Monetary Board has delivered 200 basis points in reductions since August 2024, bringing the policy rate to an over three-year low of 4.5%.

For Thursday, the trader said the market players will await developments with Mr. Trump’s subpoenas against Mr. Powell.

The peso could also be weighed by US producer inflation data which are expected to remain high and could further fuel hawkish Fed expectations, the trader added. The data will be released overnight.

The trader sees the peso moving between P59.20 and P59.60 per dollar on Thursday, while Mr. Ricafort expects it to range from P59.35 to P59.55.

World Bank projects Philippine growth above 5% until 2027

Photo shows the central business district in Makati City, Dec. 16, 2025. — PHILIPPINE STAR/ RYAN BALDEMOR

THE PHILIPPINE ECONOMY is projected to grow above 5% this year and in 2027, although governance concerns remain, the World Bank said.

The multilateral lender kept its growth forecast for the country until 2027, unchanged from its December projection.

In its bi-annual Global Economic Prospects report, the bank said the Philippine gross domestic product (GDP) is expected to expand by 5.3% in 2026 and 5.4% in 2027.

The World Bank’s forecasts were within the government’s 5-6% GDP target range for this year but below the 5.5-6.5% target for 2027.

“In the Philippines, planned structural reforms are likely to boost investment and productivity, but concerns around governance remain,” the World Bank said.

A corruption scandal over anomalous flood control projects has curbed government spending, eroded business sentiment, and affected household spending.

However, the World Bank estimated that GDP growth may have averaged 5.1% in 2025, slower than its earlier estimate of 5.3%. This is also below the government’s 5.5-6.5% target and the actual 5.7% growth in 2024.

“More recently, weather-related disruptions dampened growth in the Philippines and a contraction in public investment as well as slowing tourism revenues led to a deceleration in Thailand,” the World Bank said.

In addition, it noted that industrial production rose in the Philippines, along with Malaysia and Vietnam, largely owing to artificial intelligence (AI)-driven demand for semiconductor exports.

THIRD-FASTEST GROWTH
Meanwhile, the World Bank said the Philippines is expected to be the third fastest-growing economy in the East Asia and the Pacific region until 2027.

Vietnam is projected to grow by 6.3% this year, followed by Mongolia (5.6%).

The Philippines’ 5.3% growth projection would put it ahead of Indonesia (5%), Samoa (4.4%), China (4.4%), Cambodia (4.3%), Malaysia (4.1%), and Marshall Islands (4.1%).

For 2027, Vietnam is still poised to be the fastest-growing economy with 6.7%, followed by Mongolia (5.5%), the Philippines (5.4%), Indonesia (5.2%), Cambodia (5.1%), China (4.2%), Malaysia (4%), and Laos (3.9%).

The Philippines’ GDP growth forecast would also put it above the region’s 4.4% average growth projection for 2026 and 4.3% in 2027.

The World Bank said the economic growth in the East Asia and the Pacific (EAP) region was projected to moderate mainly due to the deceleration in China.

“Elsewhere in EAP, activity is expected to moderate this year before picking up next year. This reflects the unwinding of front-loading, along with stronger investment growth in some countries, owing to domestic policy support,” the bank said.

The World Bank also said risks to the regional outlook remain tilted to the downside, noting that further escalation in trade restrictions and policy uncertainty pose a significant risk to East Asia and the Pacific’s growth.

“Other downside risks include tighter global financial conditions, slower-than-expected growth in China, political uncertainty and social unrest in some economies, and natural disasters,” it added.

The multilateral bank also cited a lower drag from a higher trade barrier as private sector adaptability and AI‑driven expansion in investment and exports could lift growth prospects in the region as upside risks.

RESILIENT GLOBAL ECONOMY
Meanwhile, the global economy is proving more resilient than expected, with 2026 GDP growth expected to improve slightly over forecasts from last June, the World Bank said while warning that growth is too concentrated in advanced countries and overall too weak to reduce extreme poverty.

Its semi-annual Global Economic Prospects report showed that global output growth will slow slightly to 2.6% this year from 2.7% in 2025 before edging back to 2.7% in 2027.

The 2026 GDP forecast is up two-tenths of a percentage point from the last predictions released in June, while 2025 growth will exceed the prior forecast by four-tenths of a percentage point.

The World Bank said about two-thirds of the upward revision reflects better-than-expected growth in the US despite tariff-driven trade disruptions. It predicts US GDP growth will reach 2.2% in 2026, compared to 2.1% in 2025 — up two-tenths and half a percentage point from the June forecasts, respectively.

After an import surge to beat tariffs early in 2025 held back US growth for that year, bigger tax incentives will aid growth in 2026, offset by the drag of tariffs on investment and consumption, the World Bank said.

But if the current forecasts hold, the 2020s are on track to be the weakest decade for global growth since the 1960s and too low to avert stagnation and joblessness in emerging market and developing countries, the global lender said.

“With each passing year, the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty,” Indermit Gill, the World Bank’s chief economist, said in a statement. “But economic dynamism and resilience cannot diverge for long without fracturing public finance and credit markets.”

Mr. Gill added that global GDP per person in 2025 was 10% higher than on the eve of the COVID-19 pandemic — marking the fastest recovery from a major crisis in the past 60 years. But he said many developing countries are being left behind, with a quarter of them saddled with lower per-capita incomes than in 2019, particularly the poorest countries.

Growth in emerging markets and developing economies will slow to 4% in 2026 from 4.2% in 2025, up two-tenths and three-tenths of a percentage point from the June forecasts, respectively. But excluding China, the 2026 growth rate for this group will be 3.7%, unchanged from 2025, the World Bank said.

China’s growth will slow to 4.4% in 2026 from 4.9%, but the forecasts are both up four-tenths of a percentage point from June due to fiscal stimulus and increased exports to non-US markets.

Growth in the euro zone is set to slow to 0.9% in 2026 from 1.4% in 2025 due to the drag from US tariffs but recover to 1.2% in 2027 due to increases in European defense spending, the World Bank said.

Japan’s outlook is much the same for 2026, with growth slowing to 0.8% after a rise of 1.3% in 2025, a year aided by the front-loading of exports to the US to beat President Donald J. Trump’s tariffs. But slower consumption and investment in Japan will keep GDP growth unchanged at 0.8% for 2027, the World Bank said. — Aubrey Rose A. Inosante with Reuters

Tame Philippine inflation leaves room for BSP easing this year — HSBC

IN 2025, Philippine inflation settled at 1.7%, the slowest in nearly a decade or since the 1.3% clip in 2016. — PHILIPPINE STAR/MIGUEL DE GUZMAN

PHILIPPINE INFLATION may remain subdued over the next two years amid softer global commodity prices, allowing the Bangko Sentral ng Pilipinas (BSP) to ease further, Hongkong and Shanghai Banking Corp. (HSBC) Private Bank said. 

In its 2026 outlook on the Philippine economy and market, HSBC said headline inflation will likely pick up to 2.4% this year and quicken to 2.8% in 2027. Both are within the central bank’s 2%-4% target.

“Cheaper imports from China and easing global commodity prices have led to low and stable inflation,” Fan Cheuk Wan, chief investment officer for Asia at HSBC Private Bank and Premier Wealth, said.

In 2025, Philippine inflation settled at 1.7%, the slowest in nearly a decade or since the 1.3% clip in 2016. This was slightly faster than the central bank’s 1.6% full-year forecast but below its target.

With inflation seen within target and growth prospects remaining dim, HSBC expects another 25-basis-point (bp) reduction to the key policy rate within the first quarter of the year.

“Tighter fiscal policy and slower infrastructure spending will curb capital imports, narrowing the current account deficit and giving leeway for the BSP to keep monetary policy accommodative,” Ms. Fan said.

“We expect one more 25-bp rate cut by the BSP to 4.25% in Q1 2026 to support domestic demand recovery.”

If realized, the benchmark interest rate would reach its lowest since August 2022 or when it stood at 3.75%. It would likewise match the 4.25% rate in September 2022.

In 2025, the Monetary Board delivered five straight 25-bp cuts from April to December, which brought the key borrowing costs to an over three-year low of 4.5%. It has so far slashed a total of 200 bps since it began its easing cycle in August 2024.

BSP Governor Eli M. Remolona, Jr. said another rate cut remains on the table but noted that the current policy rate is already “very close” to their desired rate, hinting at the end of their easing cycle.

Still, he said that weaker-than-expected growth may prompt them to deliver a total of two rate cuts this year.

The Monetary Board will have six policy meetings this year, with the first review scheduled for Feb. 19.

NEUTRAL PESO
Meanwhile, HSBC’s Ms. Fan said the peso is projected to remain range-bound this year, with a P59.20 finish against the dollar likely by yearend.

“After the Philippine peso weakened to its record low level against the US dollar in 2025, we expect the peso to remain largely range-bound this year and will reach P59.20 at the end of 2026,” she said. “We hold a neutral view on the peso over the next six months.”

The peso fell to a new record low of P59.44 versus the greenback on Jan. 14.

“On the Philippine stock market, its significant underperformance against the regional peers in 2025 has already priced in the growth headwinds from weaker infrastructure investment and subdued domestic demand,” Ms. Fan added.

The flood control corruption scandal battered both the peso and the stock market amid weak investor and business confidence as probes implicated government officials and private contractors in receiving kickbacks from infrastructure projects.

On Nov. 14, the Philippine Stock Exchange index plunged to 5,584.35, its weakest close in nearly five and a half years or since the 5,570.22 close on May 28, 2020.

However, HSBC said discounted stock valuations could buffer the local stock market against further downside risks, adding that the market may see an 8% income growth this year.

“The deeply discounted valuations should limit further downside for the market,” Ms. Fan said. “Hence, we maintain our neutral view on Philippines stocks.” — Katherine K. Chan

Philippine banks’ loan growth steadies in Nov.

PJCOMP-FREEPIK

PHILIPPINE BANKS’ loan growth held steady in November, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Outstanding loans of universal and commercial banks, net of reverse repurchase agreements, grew by 10.3% year on year to P13.988 trillion in November from P12.676 trillion in the same month in 2024.

November’s growth rate matched the pace of October. October saw the slowest growth in bank lending since the 10.1% recorded in June 2024.

On a seasonally adjusted basis, bank lending expanded by 0.9% month on month.

“Outstanding loans from universal and commercial banks (U/KBs) to businesses and individual consumers expanded in November,” the central bank said in a statement released late on Tuesday.

“Preliminary data show that loans from U/KBs grew at a steady rate of 10.3% year on year in November,” it added.

BSP data showed that big banks’ outstanding loans to residents grew by an annual 10.7% to P13.681 trillion in November, slightly easing from the 10.9% growth seen in the previous month.

On the other hand, loans to nonresidents fell by 4.5% year on year to P307.253 billion from the 11.1% drop logged in October.

Banks’ loans to residents for production activities grew by 9% to P11.789 trillion in November, slowing from 9.1% in the previous month.

This as lending for electricity, gas, steam, and air-conditioning supply sector jumped by 26.6%. Other segments that showed growth in lending include transportation and storage (12.7%); wholesale and retail trade, repair of motor vehicles and motorcycles (11.6%); real estate activities (9%); information and communication (7%); and financial and insurance activities (3.5%).

Meanwhile, big banks’ consumer loans to residents — which account for credit card, motor vehicle, and general-purpose salary loans but exclude residential real estate loans — rose by 22.9% in November to P1.892 trillion, slightly slower than the 23.1% growth in October.

Broken down, credit card loans jumped by 29.5% to P1.158 trillion, picking up from the 29.2% growth in October, while lending growth for motor vehicles eased to 16.3% at P524.037 billion from 17.6% in the previous month.

On the other hand, loans for general-purpose salaries reached P164.932 billion in November, climbing by 6.4%. This is a tad faster than 5.8% a month ago.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the consistent double-digit expansion in bank lending can help spur the local economy, especially after the sharp slowdown in the third quarter of 2025.

“Banks’ loan growth still at double-digit levels could still bode well as a leading indicator to the broader economic growth,” he said in a Viber message.

Mr. Ricafort noted that the 10.3% loan growth in November was mainly because of the fast growth in consumer loans, particularly credit card and motor vehicle loans, “amid the country’s favorable demographics.”

In the coming months, banks may see more demand for loans if the BSP lowers key borrowing costs and the reserve requirement ratio (RRR) further to match the Federal Reserve’s moves.

“Loan growth could continue to sustain at double-digit growth levels if the Fed cuts rates further in the coming months that could be matched by the BSP, alongside possible cut/s in local banks’ RRR, all of which could further reduce borrowing costs that could spur greater demand for loans or credit and help boost investments and overall economic growth,” Mr. Ricafort said.

The Monetary Board has so far slashed the benchmark policy rate by a total of 200 bps since August 2024, bringing it to its lowest in over three years at 4.5%.

BSP Governor Eli M. Remolona, Jr. left the door open for another 25-bp cut at its first meeting this year on Feb. 19, though noted that the current easing cycle is nearing its end as the current policy rate is approaching their neutral rate.

On the other hand, the Fed has so far delivered 175 bps in cuts since September 2024, bringing its key policy rate to the 3.5%-3.75% range. It is scheduled to have its first meeting this year on Jan. 27-28.

MONEY SUPPLY

Meanwhile, separate BSP data showed that domestic liquidity (M3) rose by 7.6% year on year to P19.439 trillion in November from P18.071 trillion. This was slower than the 8.3% climb in October.

M3 is considered as the broadest measure of liquidity in an economy.

The country’s money supply expanded by 1.2% month on month on a seasonally adjusted basis.

Domestic claims, which include claims from private and government entities, jumped by an annual 10.6% year on year to P21.984 trillion, picking up from the 10.5% growth in October.

This as higher borrowings boosted net claims on the central government by 11% to P5.888 trillion. This was up from 10% growth a month earlier.

Meanwhile, claims on the private sector rose by 11.1% to P14.162 trillion, faster than the 11% the previous month, amid “continued expansion in bank lending to non-financial private corporations and households.”

Claims on a sector refer to that sector’s liabilities to depository corporations such as banks and the central bank.

Central bank data also showed net foreign assets (NFA) in peso terms climbed by 4.4% in November versus the 2.1% expansion in October.

“NFAs of the BSP increased by 1.9%,” the BSP said. “Similarly, NFAs of banks grew primarily on account of lower foreign currency-denominated bills payable.”

Broken down, the central bank’s NFAs grew by 1.9% year on year, a turnaround from the 0.4% decline in October, while banks’ NFA climbed by 26.9%, slightly faster than the 26.3% the previous month.

NFAs reflect the difference between depository corporations’ claims and liabilities to nonresidents.

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

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