BSP easing may continue as weak growth drags

January 12, 2026 | 12:33 am

Vehicle-traffic-crowd — Vehicles are stuck in traffic along EDSA, Dec. 27, 2025. — PHILIPPINE STAR/RYAN BALDEMOR

THE BANGKO SENTRAL ng Pilipinas (BSP) may further ease this year as the corruption scandal may continue to dampen government spending and economic growth, Nomura Global Markets Research said.

In a report dated Jan. 9, Nomura Chief ASEAN (Association of Southeast Asian Nations) Economist Euben Paracuelles and Macroeconomic Research Analyst Yiru Chen said the BSP could deliver one 25 basis points (bps) each at its February and April meetings.

“Our forecast is underpinned by our more cautious view on the growth outlook, which is the overriding policy consideration for BSP,” they said. “The negative output gap has widened sharply, adding to a benign inflation outlook.”

The Nomura analysts see Philippine gross domestic product (GDP) growing below 4% in the last quarter of 2025 to bring the full-year print to 4.7%, falling short of the government’s 5.5%-6.5% goal.

If realized, this would mark a sharp slowdown from the 5.7% growth posted in 2024.

“We believe the ‘bad scenario’ continues to play out regarding the impact on growth of the ongoing government corruption scandal via a sharp drop in public sector spending amid increased scrutiny,” Mr. Paracuelles and Ms. Chen said.

Government spending fell for the fourth consecutive month in November after slipping by 9.61% year on year to P498.3 billion.

Expenditures have declined since August following the corruption scandal that embroiled government officials and private contractors in kickback allegations from anomalous flood control projects.

Household spending likewise eased to 4.1% in the third quarter from 5.2% last year, marking the slowest clip seen in over four years.

Nomura noted that the ongoing flood control mess could also hit private investment spending in the near term.

For this year, the think tank expects the economy to expand around the lower end of the administration’s recently revised 5%-6% target at 5.3%.

“We expect a rebound in growth only in (the second half), helped by base effects and the government implementing catch-up spending plans,” Mr. Paracuelles and Ms. Chen said, adding that the local economy may face risks if global growth weakens and public spending remains slow.

The BSP earlier said that they are approaching the end of their easing cycle even as their growth outlook remains clouded.

BSP Governor Eli M. Remolona, Jr. has left the door open for one more cut at its Feb. 19 review, though noted it could be “unlikely” considering existing economic data and as the current policy rate is already near their neutral rate.

The Monetary Board has lowered key borrowing costs by a total of 200 bps since the start of its easing cycle in August 2024, bringing it to an over three-year low of 4.5%.

Still, Mr. Remolona said a weaker-than-expected growth could prompt them to deliver two reductions this year.

The BSP projects the economy to have grown by 4.6% by end-2025. It sees growth to pick up to 5.4% in 2026 and 6.3% in 2027.

NARROWER DEFICIT
Meanwhile, Nomura said the government’s budget gap may narrow to 5.1% of its GDP this year amid ongoing fiscal tightening.

Latest Treasury data showed that the budget deficit fell by an annual 26.02% in November to P157.6 billion, reversing from the P11.2-billion surplus in October.

“Given the fiscal tightening, we forecast a narrowing of the fiscal deficit to 5.1% of GDP in 2026 from 5.5%, slightly outperforming the 5.3% target in the medium-term fiscal consolidation framework but still well above the pre-COVID average of 2.4%,” Mr. Paracuelles and Ms. Chen said.

On the other hand, Nomura said the Philippines could earn a credit rating upgrade if the government manages to resolve the flood control corruption issue in the next 12 months.

In November, S&P Global affirmed the Philippines’ long-term “BBB+” and short-term “A-2” credit ratings with a “positive” outlook, as it expects growth recovery despite the impact of the corruption scandal on the economy.

The government seeks to achieve the “A”-level credit rating.

Meanwhile, a “positive” outlook means the Philippines’ credit rating could be raised within 24 months if improvements are sustained.

However, Nomura noted that failure to address the issue could prompt S&P to revert its outlook on the Philippines to “stable” or even downgrade it to “negative.” — Katherine K. Chan

Philippine remittances seen to keep momentum despite new US tax

January 12, 2026 | 12:32 am

OFW-airport — Overseas Filipino workers (OFWs) arrive at the Ninoy Aquino International Airport (NAIA) Terminal 1, June 16, 2025. — PHILIPPINE STAR/RYAN BALDEMOR

By Katherine K. Chan and Aaron Michael C. Sy, Reporters

OVERSEAS Filipino workers’ (OFW) remittances are expected to remain stable this year despite the United States’ move to charge a 1% tax on cash transfers to foreign countries, analysts said.

Analysts see the new duty having a muted impact on remittance growth in the Philippines.

“The proposed 1% tax on OFW remittances in the US could be a drag, though minimal or negligible, on OFW remittances growth and on the overall local economy,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort told BusinessWorld in a Viber message.

On Jan. 1, the US government began to impose a 1% tax on remittances from US-based senders, regardless of citizenship status, made via cash payments, money orders and cashier’s checks.

However, the regulation exempts money wired via US banks or US-issued debit and credit cards, as well as hand-carried cash.

Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion noted that steady global demand for Filipino workers and better labor conditions in major host countries should support continued growth in remittances this year.

“Regarding the newly implemented 1% US remittance tax, its macroeconomic impact is likely minimal, as it applies only to cash-based transfers while digital and bank channels remain exempt,” he added via Viber.

Mr. Ricafort estimated the Philippines may lose around P8 billion to P9 billion annually due to the tax, although noted that remittances could still grow by around 3% this year.

“About 3% OFW remittances growth (is) still possible for 2026 since the 1% tax would be relatively affordable for many OFWs in the US,” he said.

A 1% tax means the US government gets a dollar for every $100 remitted from the US to other countries.

In October, Filipinos abroad sent home $3.171 billion, up 3% year on year from $3.079 billion, latest data from the Bangko Sentral ng Pilipinas (BSP) showed.

This was the slowest growth since May when remittances rose by 2.9% but matched the 3% growth in July.

The US remained the top source of remittances to the country in the first 10 months of the year, accounting for 40.3% of total remittances during the period.

“The new US remittance tax will put mild pressure on the peso in the short term as inflows dip slightly,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas likewise said in a Viber message.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message that the new remittance tax could slightly dampen support for the peso as the US is a major source of inflows.

“In the near term, any impact on the Philippine peso is likely to be modest, as remittances are relatively resilient and driven more by labor demand and migrant incomes than taxes alone. For the medium to long term, the effect will depend on whether tax meaningfully changes remittance behavior,” Mr. Rivera said.

In addition to reduced inflows, Mr. Rivera said the added tax could weaken key buffers for the local unit as it could encourage the use of informal channels.

Meanwhile, a trader said OFWs would likely adapt by sending more money home to offset the tax costs.

“Since there will be 1% excise tax, there will be changes in behavior. But if the remittances are intended for their families, I think the remittances will adjust rather than result (in) a reduction,” the trader said in a Viber message.

“Those in the US who will send money here will just work harder to compensate for the excise tax rather than send something smaller,” the trader added.

Mr. Asuncion also noted that the levy might drive OFWs to switch from traditional or physical remittance service providers to digital platforms to cut costs.

“(I)t could influence remittance practices by encouraging OFWs to shift toward formal, digital platforms to avoid additional costs, potentially reducing reliance on informal channels and improving financial inclusion,” he said. “While some households may adjust transfer frequency or consolidate remittances to manage costs, overall inflows should remain broadly stable.”

In the long term, Mr. Ravelas said the peso could be kept broadly stable by OFWs’ shift to cheaper digital channels to send money home.

He said this could prompt policymakers to strengthen monitoring and promote low-cost formal channels.

BDO Capital & Investment Corp., President Eduardo V. Francisco said he is hopeful the additional tax would not dampen remittances, given that the bulk of remittances sent to the Philippines are for families.

“I guess we have to see if the remittance businesses will just absorb the new excise tax or pass it to their customers. I hope it is not the latter,” he said in a Viber message.

The BSP projects cash remittances to grow by 3% to $36.6 billion this year.

Relaxing foreign currency deposits secrecy may boost investor confidence, analysts say

January 12, 2026 | 12:31 am

Euro-Dollar-currency — US DOLLAR and euro banknotes are seen in this illustration taken on July 17, 2022. — REUTERS/DADO RUVIC/ILLUSTRATION

By Katherine K. Chan, Reporter

ALLOWING authorities to scrutinize foreign currency deposits when investigating illegal financial transactions is a “welcome move” and could help the Philippines attract more investments if implemented properly, analysts said.

“Overall, this is a constructive step if implemented carefully,” SM Investments Corp. economist Robert Dan J. Roces told BusinessWorld in a Viber message. “Limited, court-supervised access to foreign currency deposits linked to clearly defined offenses strengthens the fight against corruption and aligns the country with global anti-money laundering standards.”

Republic Act No. 6426 or the Foreign Currency Deposit Act of the Philippines requires all foreign currency deposits to be treated with absolute confidentiality, except if the depositor provides a written permission to access their account or records.

It also exempts said funds from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body.

Such tight regulations were part of the government’s efforts to spur the economy by boosting lending and investment activity using foreign currency deposits in the country.

However, lawmakers last month filed House Bill No. 6902 seeking to allow authorities to probe foreign currency deposit accounts linked to cases of impeachment, bribery or dereliction of duty of government officials, or where the funds are the subject of court proceedings.

This came after the House of Representatives approved on third and final reading another measure pushing to ease the decades-old bank secrecy law and allow the central bank to access the bank accounts of bank officers and employees suspected to be involved in financial crimes.

Analysts noted that the bill’s clear line of exemptions allows it to be an effective measure against illicit financial activities.

“Allowing scrutiny of foreign currency deposits only in clearly defined cases like impeachment, bribery, or court proceedings helps close a major loophole used to hide illicit funds, strengthens investigations, and aligns (the Philippines) more closely with global AML/CFT (anti-money laundering and countering the financing of terrorism) standards,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, told BusinessWorld via Viber.

“Access must be risk-based, court-authorized, and case-specific, not blanket,” he added.

Renielle Matt M. Erece, an economist at Okonomia Advisory and Research, Inc., said the measure should only authorize access to foreign currency deposits upon formal and legally obtained court orders.

“If it does, then it can improve efficiency and growth,” he said.

Meanwhile, Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the government must ensure its implementation will be anchored in transparency for accountability to avoid tainting investors’ confidence.

“The key is balance: transparency for accountability, but not a free-for-all that could erode trust,” he said in a Viber message.

FDI IMPACT
Analysts also said that exempting suspicious foreign currency deposits from confidentiality could boost investors’ confidence in the financial system in the long run.

“The impact on FDI (foreign direct investments) should be modest, as serious investors value predictability and rule of law more than absolute secrecy,” Mr. Roces said. “The key is strong safeguards — clear scope, judicial oversight, and protection from political misuse — so the measure targets illicit activity without undermining confidence in the financial system.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort also said that introducing such reforms could improve the Philippine government’s rating, which could be manifested in foreign investments.

“This would help increase the country’s governance rating or ranking that would help attract more international investments into the country,” he said in a Viber message.

Latest central bank data showed that FDI net inflows into the country slumped to its lowest in over five years at $320 million in September, falling by 25.8% from $432 million a year ago.

Still, Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. said that the economy may begin to recover later this year as the local investment climate improves.

“Serious, long-term investors value clean governance and predictable rules more than absolute secrecy,” Mr. Rivera said.

“As long as legitimate deposits remain protected and due process is clear, reform can actually improve the investment climate by lowering corruption and reputational risk rather than deterring capital.”

Accelerating Asia’s Cohort 12 to showcase South and Southeast Asian startups in Singapore

January 12, 2026 | 12:10 am

Accelerating Asia Ventures will hold the Demo Day for its 12^th startup cohort in Singapore on Jan. 15, bringing together early-stage companies from South and Southeast Asia and a group of regional and international investors.

The in-person event will mark the culmination of the cohort’s accelerator program, following a final week of activities that include master classes, pitch reviews, and investor preparation sessions. A virtual edition of the Demo Day is scheduled for Jan. 22, allowing global participants to view company presentations and engage with founders remotely.

According to Accelerating Asia, Demo Day is designed to emphasize substance over spectacle, with participating startups expected to present clear business fundamentals, customer traction, and realistic scaling strategies. The accelerator said the event focuses on founders who demonstrate a strong understanding of their financials and operational challenges, rather than promotional pitches.

Cohort 12 consists of eight startups operating across fintech, artificial intelligence, insurtech, education technology, and consumer sectors. These include Chamak, a Bangladesh-based trade finance platform providing working capital through invoices and purchase orders; and Biniyog.io, a shariah-compliant SME financing marketplace also based in Bangladesh. Indonesia-based Fineksi is developing an automated credit analysis platform for banks; while InsureCow, another Bangladesh startup, provides digital insurance infrastracture for livelihood and crop protection.

The cohort also includes India-based Kustodian, which focuses on helping individuals recover funds tied up in pensions and banking systems; and InLustro, an AI-powered education technology platform offering job simulation tools for workforce readiness. Singapore-based Podium operates a peer discovery platform for working women; while Wellspring, a Bangladeshi consumer and social enterprise, distributes affordable food and beverage products through more than 6,000 retail outlets.

Accelerating Asia said Demo Day will bring together investors aligned with its long-term approach to company building, emphasizing sustainable growth and ongoing engagement rather than short-term outcomes. Attendance for the in-person event is limited, with priority given to investors and strategic partners.

Separately, Accelerating Asia announced that applications are now open for Cohort 13. The accelerator said its portfolio includes around 100 startups, with a combined valuation exceeding $1.1 billion and total capital raised of more than $152 million.

SparkUp is BusinessWorld’s multimedia brand created to inform, inspire, and empower the Philippine startups; micro, small and medium enterprises (MSMEs); and future business leaders. This section will be published every other Monday. For pitches and releases about startups, e-mail to bmbeltran@bworldonline.com (cc: abconoza@bworldonline.com). Materials sent become BW property.

Monetunes breaks into global top 1% music publishers for catalog output, UGC usage

January 12, 2026 | 12:08 am

SparkUp_2 - Monetunes OL — Monetunes CEO Antonio Di Puorto on the ‘Publishing 2.0’ panel at Music Frontiers, Berlin

Monetunes, a Manila-based music rights company focused on the creator economy, has ranked among the world’s top 1% of music publishers within a year of its launch, according to 2025 analytics from Muso.ai. The company placed in the top percentile globally by catalog output and user-generated content (UGC) usage.

From January to November 2025, tracks under Monetunes’ management recorded more than 1.4 billion combined streams across platforms. The company also reported 2.4 billion UGC views linked to its catalog, alongside 10 million Shazams and approximately 789,000 creator videos using Monetunes-represented audio.

Monetunes was founded in 2025 by industry entrepreneur Antonio Di Puorto, who said the company was created in response to widespread gaps in royalty collection caused by fragmented global rights systems and limited transparency. The platform was initially developed as a minimum viable product while Mr. Di Puorto was based in the Philippines, with the aim of helping independent artists identify and recover unclaimed royalties.

“I saw countless creators lose money simply because they didn’t understand publishing, neighboring rights, or where their royalties were even supposed to come from,” Mr. Di Puorto said.

Monetunes now represents thousands of works written by artists all around the world, including recordings by Anuel AA, Charlie Puth, Chance The Rapper, Roberta Flack and Zedd.

Monetunes’ platform relies on automated systems, including artificial intelligence tools, to scan short-form video platforms, match audio usage, detect ownership conflicts, and identify unclaimed royalties. According to the company, these systems allow it to process large volumes of UGC and rights data that would be difficult to manage manually.

Since its launch, Monetunes has expanded into a global music publishing and royalty administration platform, representing artists across more than 100 countries. The company positions its services as an infrastructure layer connecting creators with performance rights organizations and collective management organizations, an area that can be difficult for emerging artists to navigate.

Monetunes focuses on global royalty recovery and metadata compliance, identifying gaps in royalty distribution across more than 200 territories. Its services include global metadata registration, royalty collection across multiple rights societies, black-box royalty recovery, UGC usage tracking, monthly royalty statements, and multi-currency payouts.

The company said demand for its services has grown among independent labels, distributors, and management firms, as the creator economy continues to expand globally.

SparkUp is BusinessWorld’s multimedia brand created to inform, inspire, and empower the Philippine startups; micro, small and medium enterprises (MSMEs); and future business leaders. This section will be published every other Monday. For pitches and releases about startups, e-mail to bmbeltran@bworldonline.com (cc: abconoza@bworldonline.com). Materials sent become BW property.

Sari-sari stores using artificial intelligence see 46% sales jump — Packworks report

January 12, 2026 | 12:06 am

Artificial intelligence (AI) is beginning to reshape how local sari-sari stores operate, helping small retailers make smarter decisions and improve profitability through practical, data-driven insights.

New findings from tech startup Packworks.io show that AI is no longer a distant concept for microenterprises but is becoming a tool that directly supports day-to-day store management and sales performance for neighborhood stores.

Packworks analyzed more than 300 stores in its network over a two-week period following data collection in September 2025 and recorded a 46% increase in daily gross merchandise value (GMV). This increase highlights substantial gains in overall store efficiency, resulting in a 17% rise in total sales for stores during the same period.

Packworks also found that stores that applied AI-driven recommendations earned higher revenue despite operating on 20% fewer active selling days — dropping from five to four days over two weeks. This indicates how AI can guide store owners in managing inventory, improving product mix, and planning demand more efficiently, enabling owners to maximize sales during their operating hours.

The insights come from Packworks’ analysis of sari-sari stores that accessed its Store Insighting Project (SIP) document, a personalized report that turns each store’s transaction history into actionable recommendations powered by AI. By reviewing pre- and post-performance across stores, Packworks quantified the impact of engaging with the SIP document on business outcomes for its partner stores. The analysis also showed that the increase in sales was driven by underperforming products identified by the AI tool, giving store owners insight into which stock to move to maintain operational efficiency.

Packworks’ AI-powered precision marketing tool was developed with DoST-PCIEERD’s Startup Grant Fund (SGF) Program, awarded in 2024 to support wider AI adoption in the country’s microretail sector. The company also partnered with ST Telemedia Global Data Centres (Philippines) (STT GDC Philippines) to access its AI Synergy Lab to run large-scale machine learning models, and with Ateneo’s Business Insights Laboratory for Development (BUILD) to build a comprehensive data warehouse and business intelligence tools.

“Even at this early stage of adoption, we’ve recorded increased sales and enhanced operational efficiency from stores by using the AI tools we’ve developed with support from DoST and through our collaborations with STT GDC and Ateneo BUILD. As stores learn to leverage the recommendations from the AI-driven insights they can access through SIP, microretailers can make smarter decisions that translate into higher sales and more efficient operations,” Packworks Chief Data Officer Andoy Montiel said.

Packworks’ mission to bring AI into micro retail stores aligns with the Philippine Development Plan 2023-2028, which recognizes the role of digital transformation and emerging technologies like AI in increasing efficiency and revitalizing industries and services.

SparkUp is BusinessWorld’s multimedia brand created to inform, inspire, and empower the Philippine startups; micro, small and medium enterprises (MSMEs); and future business leaders. This section will be published every other Monday. For pitches and releases about startups, e-mail to bmbeltran@bworldonline.com (cc: abconoza@bworldonline.com). Materials sent become BW property.

Lost glamor

January 12, 2026 | 12:06 am

scale-model-of-the-Met — A SCALE MODEL of the Manila Metropolitan Theater — JOSEPH L. GARCIA

1 of 3

AUTHOR Carmen Guerrero Nakpil was supposed to have been the one who coined the phrase “300 years in a convent and 50 years in Hollywood” as a description of Philippine history under Spanish and American colonial rule. For half that time under the Americans, the Philippines was clothed in the beauty that was the Art Deco style.

The design style originated in the Exposition internationale des arts décoratifs et industriels modernes in Paris in 1925 (thus it just celebrated its centennial). To mark the occasion, the National Museum of the Philippines opened an exhibition of Art Deco in the Philippines in November last year, running until May 31 of this year.

The exhibition, titled Art Deco: Modernity and Design in the Philippines 1925-1950, collects examples of Art Deco and emphasizes its pervasiveness. It’s easy to think of its popular design styles as influencing architecture (seen in photographs and scale models in the exhibit) but the style is also seen in stationery, furniture, clothes — and even in the way we approach religion.

For example, the exhibition greets visitors with bas-reliefs taken from the facade of the Capitol Theater, built in 1935. A timeline also establishes the arrival of Art Deco in the Philippines. While arriving to the rest of the world via Paris, it reached our shores secondhand through our colonizers. While Art Deco as a style, as we mentioned, began in 1925 and was overtaken by other styles by the end of the 1930s, the timeline in the National Museum of Fine Arts extends before and after the heyday of Art Deco. It extends farther back in time to reflect American laws and policies that made it possible to build, import, and manufacture in the style that dominated its home base, while the timeline extends after to reflect a nation scarred by war, building with the bones it had been left with.

The exhibit cites the first expression of Art Deco in the Philippines as The Chapel of the Crucified Christ at St. Paul College in Manila, featuring hints of Art Deco juxtaposed with tropical-Gothic themes. Prominently featured in the exhibition is the Manila Metropolitan Theater, built in 1931. It survives today as one of the finest examples of Art Deco architecture in the Philippines — a fate not shared by many buildings built in the period. For example, while the exhibition also celebrates the Manila Jai Alai building, it did not survive to the present day — not due to the Second World War (the exhibition notes the wartime damage taken by other Art Deco landmarks such as the aforementioned theater, the Rizal Sports Complex, Quezon Bridge, and the Crystal Arcade shopping center), but due to bureaucracy and the passage of time — the building was demolished in 2000 by then Manila Mayor Lito Atienza, despite an intense effort to save it, to make way for a new Manila Hall of Justice (which was never built).

Another gallery housing the exhibit (which takes up galleries VII and X) moves past architecture and goes on to show the design style in everyday life. Ternos and Filipiniana dress show the bold, vibrant patterns that made Art Deco distinct. The dresses from the collections of prominent women of the period: think ternos worn by Aurora Quezon, the country’s First Lady then.

Everybody has a little piece of Art Deco in their homes apparently: more than the items from prominent people of the era (check the dressing table owned by Aurora Aquino, the mother of politician then hero Benigno “Ninoy” Aquino, Jr.), some of the items are on loan from regular Filipinos like writer Jose “Butch” Dalisay, Jr., for example, who lent pens and stationery indicative of the period.

Notes at the exhibition said, “Art Deco flourished at a crossroads of history when Filipinos were longing for asserting a nationalist identity while embracing modernity in a Western colonial milieu.” Erased by war, it bore witness to new styles: mid-century modern became popular here too, but it could be argued that in architecture, the next most prominent style in the Philippines was Marcos-era Brutalism. The exhibit thus gains a sort of wistfulness: more than showing what the Philippines was, there’s almost a sigh in thinking what else it could have been, before the glamor of that era was lost to war, then successive generations of corruption. — Joseph L. Garcia

EDC plans up to P100-B Leyte geothermal upgrade

January 12, 2026 | 12:06 am

EDC-geothermal plant — ENERGY DEVELOPMENT CORP.

LOPEZ-LED Energy Development Corp. (EDC) plans to invest up to P100 billion to expand and upgrade its Leyte geothermal power complex.

EDC is proposing several modifications to the Tongonan Geothermal Project (TGP) that would raise its total rated capacity to 967.224 megawatts (MW) from 637.21 MW, according to a filing with the Department of Environment and Natural Resources (DENR).

The proposed works include the construction of a new Upper Mahiao Power Plant, the upgrade of the Mahanagdong Power Plant, the drilling of additional wells, the upgrading of existing well pads, the expansion of the battery energy storage system, and further exploration drilling.

“The planned modifications at the TGP will secure long-term production, sustain supply to the Visayas grid, and improve efficiency by generating more power from the same steam resource,” EDC said.

The company plans to decommission the existing 30-year-old Upper Mahiao Power Plant and replace it with a new facility with a capacity of 450 MW, or more than three times its current output.

The existing 136.5-MW Upper Mahiao plant, which EDC took over in 2006, began commercial operations in 1996 and was the country’s first geothermal project developed under a build-operate-transfer scheme.

EDC is also proposing to upgrade the 180-MW Mahanagdong Power Plant through the deployment of modular binary units, a move aimed at improving efficiency without expanding the plant’s footprint.

To increase steam supply, the company plans to drill 172 additional wells within the existing project block and to upgrade current well pads to improve safety and reliability while minimizing additional land use.

Adjacent to the existing 10-MW Tongonan battery energy storage system, EDC plans to expand capacity to 30 MW to provide additional grid support.

Separately, the company is targeting the start of drilling activities at Alto Peak, which is expected to contribute steam equivalent to about 30 MW of additional generating capacity.

Construction and commissioning of the new facilities are expected to begin this year, with all proposed modifications targeted to be operational by 2029.

“Once operational, the additional output will reinforce Leyte’s position as a major energy supplier and help meet the power needs of Eastern Visayas and the national grid,” EDC said.

EDC, the renewable energy subsidiary of First Gen Corp., has a total installed capacity of 1,480.19 MW, accounting for about 20% of the Philippines’ total renewable energy capacity.

Since 1976, the company has developed geothermal facilities across Bicol, Leyte, Negros Island, and Mindanao. — Sheldeen Joy Talavera

Saks woes cloud cashmere king Cucinelli’s department store bet

January 12, 2026 | 12:05 am

Saks-Fifth-Avenue-and-Hudson's-Bay---Can-Pak-Swire-Flickr — SAKS Fifth Avenue flagship store in Toronto, Canada. — CAN PAK SWIRE/FLICKR

MILAN — Italian luxury brand Brunello Cucinelli, known for its $3,000 cashmere sweaters, bet big on department stores, a strategy now in the spotlight as iconic US High Street retailer Saks struggles to pay back debts.

Saks Global, created after Saks Fifth Avenue parent Hudson’s Bay Company bought rival Neiman Marcus, saw its chief executive officer (CEO) depart this month, amid reports it was preparing for bankruptcy after missing an over $100-million interest payment.

That’s put a harsh spotlight on the strategy of firms like Cucinelli that have bet heavily on high-end department stores, whose future is more uncertain in a weak global luxury market where many brands have shifted towards their own outlets.

The firm, however, is doubling down.

Brunello Cucinelli, founder and chairman of his namesake firm, told Reuters that the company was sticking with its strategy, which gives a strong emphasis to the wholesale channel.

He said that so far it had only faced a one-month delay in payments from Saks Global, and at the operational level had not had any issues with the retailer.

“We don’t foresee any economic risks, except for extremely limited ones,” Mr. Cucinelli told Reuters by phone.

“And bear in mind, they would be the first (losses) in 45 years of business. Every year, we lose 0.1% from our multibrands, which is practically nothing.”

CUCINELLI RELIES MORE THAN PEERS ON WHOLESALE
Cucinelli is, however, more exposed than most.

Co-CEO Luca Lisandroni in December lauded the cashmere king’s ties with Saks and heralded some of its “best results ever” in its stores around the United States, “demonstrating the great centrality of this client in the global luxury landscape.”

The Italian firm makes some 36% of its revenues from the wholesale channel and around 64% from its own retail outlets, relying more heavily on multi-brand distribution than some key luxury peers, according to data compiled by Reuters.

Over the past decade, luxury groups have shifted toward their own retail networks, giving them more control over pricing, inventory and margins. Retail now accounts for some 90% of sales by Prada, 81% at Moncler, 87% at Zegna, and 75% at Gucci-owner Kering.

Cucinelli, which targets some of the highest-end wealthy customers, has proved to be among the most resilient brands in the industry hit by lower demand.

Sales in both the wholesale and retail channel grew in the first nine months of 2025 and the brand raised its full-year revenue growth forecast to 11-12% in December.

Morningstar analyst Svetlana Menshchikova said that a possible Saks bankruptcy or restructuring could lead to “delayed payments, limited bad-debt exposure and maybe some lost sales if the department stores would fail to replenish their stock.”

“The company has consistently highlighted the US wholesalers as key clients and an integral part of its brand image and business model,” she said. “Although we do not expect a severe impact on the company given Cucinelli’s global footprint and strong balance sheet.”

‘HYPOTHETICALLY SPEAKING, I WOULD BUY SAKS GLOBAL TOMORROW’
Saks Global’s financial troubles reflect wider challenges in the $417-billion global luxury market, which is battling to emerge from years of stalling sales.

The US luxury retailer, which operates Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, missed an interest payment due at the end of December and it is preparing to file for bankruptcy, the Wall Street Journal reported last month.

Founder Mr. Cucinelli credited department stores in part for that and said he had faith in Saks and the 400 multibrand stores he said the brand worked with worldwide.

“We do 40% of our business with multibrands and I’m absolutely delighted,” he said, calling department stores the “true custodians of the brand.”

“To make it even clearer how much we believe in multibrand (stores), hypothetically speaking, I would buy Saks Global tomorrow if I were an interested investor.” — Reuters

Rates of Treasury bills, bonds may drop on BSP policy bets

January 12, 2026 | 12:05 am

RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week could end lower as investors price in their bets for the Bangko Sentral ng Pilipinas’ (BSP) next policy move.

The Bureau of the Treasury (BTr) will auction off P27 billion in T-bills on Monday or P9 billion each in 91-, 182-, and 364-day papers.

On Tuesday, the government will offer P30 billion in reissued seven-year T-bonds with a remaining life of five years and four days.

Yields on the T-bills and T-bonds placed on the auction block could go down and track the week-on-week decline seen at the secondary market on signals from the BSP Governor Eli M. Remolona, Jr. that another rate cut remains on the table next month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

This came as headline inflation picked last month but remained below target, which would support further easing, he said.

A trader said in an e-mail that the reissued seven-year bonds could see good demand and fetch rates of 5.675% to 5.725%.

“The government securities (GS) market will likely be stuck in a range until we get more traction on the potential 25-basis-point (bp) rate cut in February,” the trader added.

At the secondary market on Friday, yields on the 91-, 182-, and 364-day T-bills went down by 5.38 bps, 6.72 bps, and 6.29 bps week on week to end at 4.8009%, 4.9097%, and 4.9746%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data as of Jan. 9 published on the Philippine Dealing System’s website.

Meanwhile, the seven-year bond’s rate eased by 5.69 bps week on week to 5.884%, while the five-year paper, the tenor closest to the remaining life of the T-bonds on offer this week, declined by 6.91 bps to yield 5.7273%.

Last week, Mr. Remolona said a rate cut is “on the table” at the Monetary Board’s Feb. 19 meeting, but could be “unlikely” even as inflation remains benign.

“I can say that we’re very close to where we want to be in terms of policy,” he said. “There’s a chance that we may cut some more, and there’s also a chance that we may not move at all. But there’s not a lot of probability that we will raise in 2026.”

The Monetary Board ended last year with a fifth straight 25-bp cut at its Dec. 11 meeting, bringing the policy rate to 4.5%. It has delivered 200 bps in reductions since it began its rate-cut cycle in August 2024.

The BSP chief has signaled since December that their easing cycle was nearing its end, with further cuts — if any — likely to be limited and data-dependent.

Meanwhile, analysts have said that the central bank could still ease further to help support domestic demand as growth prospects have weakened due to a wide-ranging corruption scandal that has stalled both public and private investments, dragging economic growth.

Last week, the BTr raised P34.2 billion via the T-bills it auctioned off, higher than the P27-billion plan, as the offer was more than four times oversubscribed, with total tenders reaching P108.1 billion.

The BTr doubled its acceptance of noncompetitive bids for the 91- and 182-day T-bills to P7.2 billion each due to strong demand and as average yields were all lower than secondary market rates, it said.

Broken down, the government awarded P12.6 billion in 91-day T-bills, above the P9-billion plan, as demand for the tenor reached P36.235 billion. The three-month paper fetched an average rate of 4.755%, up by 2.4 bps from the previous auction. Yields accepted were from 4.69% to 4.78%.

The Treasury also increased the award for the 182-day debt to P12.6 billion from the P9-billion program as tenders hit P41.15 billion. The average rate of the six-month T-bill was at 4.895%, down by 0.8 bp from the previous week. Tenders awarded carried yields from 4.83% to 4.923%.

Lastly, the BTr sold P9 billion as planned in 364-day securities as the tenor attracted bids totaling P30.715 billion. The one-year paper’s average yield was at 4.937%, up by 1.3 bps from the previous auction. Accepted rates were from 4.875% to 4.937%.

Meanwhile, the reissued seven-year T-bonds to be offered on Tuesday were last auctioned off on April 2, 2024, where the government raised P30 billion as planned at an average rate of 6.299%, above the 6.125% coupon rate.

The BTr is looking to raise P180 billion from the domestic market this month, or P110 billion via T-bills and P70 billion through T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.647 trillion or 5.3% of gross domestic product this year. — Aaron Michael C. Sy

Upstream oil, gas sector upbeat as work programs start

January 12, 2026 | 12:05 am

By Sheldeen Joy Talavera, Reporter

THE upstream oil and gas sector is starting the year on an optimistic note, with industry players set to begin their work programs after securing new petroleum service contracts from the government.

“The year 2026 marks a new era for the Philippines’ upstream oil and gas industry — one of renewed exploration, energy innovation, and investor confidence,” Edgar Benedict C. Cutiongco, president of the Philippine Petroleum Association, told BusinessWorld.

He said newly awarded onshore and offshore petroleum service contracts are expected to begin their approved exploration and development activities this year, “bringing in vital investments and reinforcing the country’s role in regional energy security.”

Last year, the government awarded eight new petroleum service contracts, representing potential investments of about $207 million over seven years of exploration.

Areas with identified potential petroleum and hydrogen resources include the Sulu Sea, Cagayan, Cebu, Northwestern Palawan, Eastern Palawan, and Central Luzon.

Under their service contracts, companies may undertake work programs that include geological and geophysical studies, seismic surveys, and drilling activities, as appropriate, to assess resource potential.

The government has also recently granted a new contract to PXP Energy Corp. and its partners, allowing them to continue production at the Galoc Oil Field off northwest Palawan.

The new contract replaces Service Contract 14C-1, which expired on Dec. 17 and covered the exploration, development, and production of petroleum resources in the Galoc field.

Since the issuance of Presidential Decree (PD) No. 87 in 1972, which promotes the discovery and development of the country’s indigenous petroleum resources, a total of 65 million barrels of oil have been discovered from various oil fields, Mr. Cutiongco said.

“PD 87 remains a cornerstone of fiscal stability for the upstream sector. Any future adjustments to PD 87 will be carefully considered to enhance incentives and maintain the Philippines’ competitiveness as an investment destination,” he said.

He added that the awarding of the development and production petroleum service contract for the Galoc field ensures that remaining reserves are developed and resources are not stranded.

“Fiscal stability remains the bedrock of growth. Strong interest in recent bidding rounds signals renewed confidence, even as global risks persist,” Mr. Cutiongco said. “The shift from globalization to regionalism will define energy strategies — and the Philippines is ready.”

There is always hope

January 12, 2026 | 12:04 am

edsa-road-vehicle — Will 2026 finally be the year the local auto industry breaks the 500,000-unit sales mark? — PHOTO BY JOYCE REYES-AGUILA

A confluence of natural events and government misadventures tampered with 2025

LET THE NEW YEAR begin. Before anything else, though, allow me to take this opportunity to wish everyone a meaningful and hopeful 2026. Though anxieties are running high, I am reasonably optimistic that the year ahead will bring some welcome respite from the body blows that pummeled the Philippine economy in the second half of 2025.

The past year started on a very confident note on the back of supply chain stabilization and rising consumer spending. It turned guarded in the third quarter due to disruptions wrought by natural calamities. And then things turned downright wobbly in the last quarter as significant irregularities in government spending surfaced. While the economic numbers tumbled, the country still fared better than other economies in the ASEAN region. As they say, we got knocked down, but not knocked out. The final numbers are yet to be reported but, in all likelihood, GDP will fall short of 5%, probably closer to Singapore’s higher-than-expected 4.8% growth rate that was buoyed by exports of semiconductors due to exceedingly strong artificial intelligence (AI)-related demand.

The Philippine automotive industry was counting on another banner year in 2025. To be sure, it will get one. Yearend estimates place auto industry sales between 490,000 to 495,000 vehicles, likely beating 2024 sales of 475,000 units, and chalking up a new record high. This includes sales of non-affiliated auto companies of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI), Truck Manufacturers Association (TMA), and Association of Vehicle Importers and Distributors, Inc. (AVID). Having said that, the industry was looking to break the 500,000 sales level last year. It came within clear reach but will have to wait another day for that milestone to be achieved. To get to 500,000, the total sales volume in December should be 56,000 units, which is not likely.

So as we look ahead to 2026 and beyond, I decided to look back. Interestingly, I found an article from The Philippine STAR dated Dec. 27, 2015. The headline: “Philippines to become major car market by 2020.” It paraphrased Dante Santos, then Mitsubishi Motors Philippines Corp. (MMPC) First Vice-President and Corporate Secretary as saying, “The Philippines… will become an important automotive market growth area in the region as volume of vehicles sold is expected to zoom to 500,000 units by 2020.” At that time, the market had only broken the 300,000-unit mark. To project 67% growth in five years seemed pretty audacious. Yet, by 2017, the industry recorded sales of 473,000 units and was within 5% of that 500,000 mark. And then COVID happened and the figure was scaled back to 240,000 units — a seriously major setback in the country’s trek to motorization.

But the mobility needs of the country would not be denied. It seems that the projection of the MMPC executive to break 500,000 unit sales within five years was just reset to 2020 instead of 2015. Indeed, five years hence, the Philippine automotive market is on the verge of crossing 500,000. Therefore, the prospects for 2026 are tantalizing.

As mentioned, I have a reasonably optimistic outlook for the industry this year. Overall, I think that the first half of the year will be dominated by supply-side growth with the various auto brands resorting to new model introductions, marketing events, and sales promotions to keep units moving off the showroom floor. The second half, on the other hand, will be more demand-led, resulting from a regularization of government spending and a restoration of consumer confidence.

My source of optimism is that the Philippine auto market continues to expand despite the dizzying domestic economic tremors and even as sales in perennial ASEAN large markets — Thailand and Indonesia — continue to languish. To underscore this, I estimate average monthly vehicle sales in Q4 of 2025 to be around 42,000 units, higher than in any of the three quarters before it. Of course, seasonally, the last quarter usually sees the highest volume, but given the extraordinary downward macro pressures, the auto industry seems to have climbed the down staircase, so to speak. This fuels my constructive confidence in the outlook for the new year.

There is good reason to believe that the recent political brouhaha hounding the halls of government will not completely undermine the strong economic fundamentals of the country. Reforms in the bureaucracy are in the making, the 2026 Government Appropriations Act has been signed into law, inflationary pressures have stabilized, interest rates continue to lower, employment remains high and rural development is strong. All this on top of the fact that the business sector is wanting to do business. This is a fairly strong recipe for growth. Indeed, I would be so bold as to venture that the Philippine economy will grow faster this year than last.

Granted, the volume ramp-up for vehicles in the first quarter may be lukewarm versus the high base of 2025. I suspect the second quarter will be more vibrant with auto retailers dialing up their sales deals. In the third quarter, accelerated government spending from the first half will hopefully flow into the economy, leading to a rise in demand for vehicles, though the weather will remain a significant variable. Barring any further political turmoil, 2026 should see a strong sales finish, including the return of capital expenditure spending by corporate fleet accounts.

My only caveat: We will have a more steady social and political environment.

Some would say that the wind has been taken out of our sails; I say the winds of growth remain strong. We just need to reposition our sails so we can catch those winds and sail ahead to better days. This might be the year the Philippine automotive market finally breaks the 500,000 mark. I hope I do not jinx it.