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Spain’s student housing draws global investors as overseas enrollment booms

Edificio Metropoli, Gran vía - Madrid, Spain — JORGE FERNANDEZ SALAS-UNSPLASH

MADRID/LONDON – Global investors are piling into Spain’s under-supplied student housing market as the country emerges as a top destination for international students willing to pay premium rents.

Cities from Madrid to Barcelona have seen an influx of overseas buyers and developers, attracted by the prospect of inflation-topping returns and international student numbers that have rocketed 77% in the past decade.

Spain is set for a record year for student housing sales, according to MSCI data, boosted by Canadian pension fund CPP’s 1.2 billion euro ($1.4 billion) purchase of Iberian student flats operator Livensa from Canada’s Brookfield.

US developers Greystar and Hines – two of the biggest student landlords in Europe – told Reuters they were actively looking to expand their Spanish portfolios.

Although beyond the means of many locals, new student blocks have not provoked the same backlash as the proliferation of short-term holiday lets, which has sparked protests against overtourism in Spain.

‘THE MOST LANDLORD-FRIENDLY’
“The fundamentals in Spain are arguably the best in Europe,” said Nigel Allsopp, head of investment strategy in Europe for Greystar, which operates more than 5,500 student homes in the country.

“The ratio of beds to students is the most landlord-friendly…For that reason, growth is pretty strong. It’s obviously a very hot sector.”

Spain’s student housing market is relatively immature compared with other parts of Europe, meaning demand far outstrips the supply of purpose-built accommodation.

There are just 117,000 beds in such developments, covering less than a fifth of the 622,000 students in need of accommodation, according to agency JLL. In Britain, about 30% of the student market is covered by purpose-built developments.

The influx of global cash chasing returns poses a social challenge for Spain, as developers prioritize premium flats particularly for overseas students who can pay more than 1,000 euros per month, while some local students struggle to find rooms for half the price.

The student sector has fewer rules than Spain’s increasingly regulated wider market. It operates under service agreements rather than leases, allowing rents to be hiked more easily or when students leave, investors said.

Hines said it was planning to develop 1,700 new beds in Iberia, after 30% revenue growth in one of its first Barcelona projects in 2024.

Prime yields on student flats are 4.5% in Madrid and Barcelona, according to agency CBRE, topping the benchmark 3.3% on offer from 10-year government bonds.

‘TOO DIFFICULT TO FIND A PLACE’
Laura Teske, a 21-year-old second-year student from Germany, has moved into one of the newly built upmarket blocks in Madrid.

Teske said she was paying 1,080 euros ($1,271) a month for a room with a kitchen in a nine-building complex built by local investor Stoneshield Capital, and is looking forward to greater comfort after leaving a cheaper shared flat.

The development offers residents a gym, pool, library, and a roof terrace. Stoneshield said it would double its portfolio of 10,000 student beds in Spain and Portugal over time.

Jose Angel Martinez, a 22-year-old film student from Spain, has a budget half of Teske’s.

“Now it’s too difficult to find a place for less than 500 euros…I think many places have gone to rent to tourists,” Martinez said, adding he had paid 40% less than that for a room in Madrid five years ago.

Record tourism and immigration have widened the housing deficit to 400,000 homes, according to the Bank of Spain, while short-term rentals for tourists have jumped 25% over two years.

LESS RESTRICTIVE MIGRATION POLICIES
Spain’s appeal has been bolstered by cheaper tuition fees and less restrictive migration policies than in the United States and other European countries, investors said. In Britain, tougher immigration rules have squeezed student visa applications – a potential risk for developers anywhere.

According to research by JLL, a third of Spain’s more than 150,000 overseas students now attend private universities, which tend to attract wealthier foreign students. Nine in ten at business schools such as IESE and IE are from abroad.

“Compared to my hometown Los Angeles or New York, and certainly compared to London, Barcelona is quite affordable,” said American student Claire Zeng, who studies at Barcelona’s IESE Business School.

The premium flats do attract some Spanish students.

Irfati Urra is paying 1,200 euros a month in a central Madrid block.

“The only thing is that my American roommates are very noisy,” she said. — Reuters

Fed’s Miran presses case for fast rate cuts, but other policymakers push back

A sign for the Federal Reserve Board of Governors is seen at the entrance to the William McChesney Martin Jr. building in Washington, D.C. — REUTERS

The Federal Reserve’s newest policymaker, Stephen Miran, continued on Thursday to press for sharp US interest-rate cuts to prevent labor market collapse, saying his fellow central bankers are more scared than they should be that tariffs will drive inflation up.

His colleagues universally argued for more caution, underscoring the uphill battle Miran faces as he argues from inside the Fed for the lower rates that he, as President Donald Trump’s economic advisor, had previously called for from the outside.

“Heavy front-loading of cuts before you know whether this is all there’s going to be on inflation and before you know whether this inflation is going to be persistent runs a risk of a mistake,” Chicago Fed President Austan Goolsbee told reporters after an event in Grand Rapids, Michigan, where he characterized the labor market as stable and only mildly cooling.

San Francisco Fed Bank President Mary Daly, speaking in Utah, noted “yellow flags” in some of the labor market data, including how hard it is for new college graduates to find jobs and the increasing amount of time it takes for job-seekers to find work. But with inflation still above the Fed’s 2% target even discounting the impact of tariffs, she said, the central bank should move slowly.

“I think a little bit more will be needed over time to get that interest rate where it’s balancing out those two risks” to the Fed’s goals of full employment and price stability, Daly said. “If you adjust the path all at once, you risk one of the goals. … If you adjust the path gradually, assess the information before deciding, then you can actually get to a good achievement.”

Even Fed Vice Chair for Supervision Michelle Bowman, a Trump appointee who with Miran agreed that tariffs imposed by President Donald Trump won’t reignite inflation, expressed little sympathy for his call for steep rate cuts.

“We have a more fragile labor market than we were expecting to see,” she said at an event at Georgetown University, explaining her rationale for why “we may come to see” three quarter-point Fed rate cuts by the end of this year.

The Fed cut the policy rate last week by a quarter of a percentage point, and short-term borrowing costs are now in a range of 4.00%-4.25%. Fed projections show most policymakers are leaning towards additional rate cuts this year, but about a third don’t feel that any further cuts would be appropriate.

“My view is that inflation remains too high while the labor market, though cooling, still remains largely in balance,” Kansas City Fed President Jeffrey Schmid said in Dallas, Texas as he appeared to lay out the case for holding rates steady. “I view the current stance of policy as only slightly restrictive, which I think is the right place to be.”

Miran for his part said the Fed should quickly lower rates to 2%, a view that dovetails with that of Trump, who has railed at the Fed all year for not cutting rates and moved quickly to install Miran at the central bank when a seat opened up in August. Trump is also trying to remove Fed Governor Lisa Cook, who is fighting her firing in a case that’s now before the Supreme Court.

Miran was confirmed by the Senate on the eve of the Fed’s September 16-17 meeting, where he dissented in favor of a half-point rate cut. He is on unpaid leave from his job as White House economic advisor and intends to return to that job after his term at the Fed is up on January 31.

Miran said the policy rate should drop two percentage points in half-point cuts at each coming Fed meeting because “when monetary policy is in that restrictive stance, the economy becomes more vulnerable to downside shocks.”

“It is very clear from the outcome of last week’s meeting that people don’t feel urgent,” Miran said on Fox Business’ Mornings with Maria program. “Part of that is because they are still very scared of tariff inflation…In my mind there has not yet been material evidence of tariff inflation. And I think that is what is holding up a lot of my colleagues.”

Since his dissent, Miran has given an in-depth speech in New York and conducted several TV interviews, including two on Thursday, to argue his case, which turns heavily on his view the policy rate is much too high, especially with Trump’s immigration crackdown set to deliver disinflation.

Goolsbee, who in the past week has had almost as many public speaking engagements as Miran, kept to Fed tradition by declining to comment directly on other Fed policymakers’ views – but then proceeded to take apart key bits of Miran’s argument.

“If excessively restrictive rates were pushing the economy toward recession, you would think that the cyclical and interest-rate-sensitive parts of the economy would be showing that, canary-in-the-coal-mine style,” Goolsbee said. But business investment has been “surprisingly strong,” he said, and while housing is weak, that weakness is not new and isn’t getting worse.

In fact, he said, with inflation above the Fed’s 2% target for more than four years and headed up, not down, even holding the policy rate steady at this point is the equivalent of cutting the real rate.

Goolsbee also sets little store by the idea that a drop in immigration will bring down inflation overall.

“Normally we think of a substantial drop in immigration as having an inflationary component, especially in a lot of services …the immigrant share of the workforce in those sectors is much higher than the overall economy,” Goolsbee said.

As for the impact on rent inflation, which Miran said is due for a drop now that there are fewer immigrants seeking housing, “anything that’s going to affect housing inflation or shelter inflation is almost certainly going to have a long tail to it,” Goolsbee said.

“Partly by the way the numbers are calculated and partly by the nature of how the market works, I would not expect anything that’s changing housing inflation to show up in the monthly CPI in a dramatic way, in the immediate run.”

Separately, Kansas City Fed’s Schmid said that while he felt last week’s central bank interest-rate cut was “a reasonable risk-management strategy as the Fed balances its inflation objective with some heightened concern over the health of the labor market,” further rate adjustments would depend on what the data says. — Reuters

Instagram’s teen safety features don’t work well or don’t exist, researchers say

A person using a smartphone is seen in front of displayed social media logos in this illustration taken on May 25, 2021. — REUTERS

Numerous safety features that Meta has said it has implemented to protect young users on Instagram over the years do not work well or, in some cases, don’t exist, according to a report from child-safety advocacy groups that was corroborated by researchers at Northeastern University.

The study, which Meta disputed as misleading, comes amid renewed pressure on tech companies to protect children and other vulnerable users of their social-media platforms.

Of 47 safety features tested, the groups judged only eight to be completely effective. The rest were either flawed, “no longer available or were substantially ineffective,” the report stated.

Features meant to prevent young users from surfacing self-harm-related content by blocking search terms were easily circumvented, the researchers reported. Anti-bullying message filters also failed to activate, even when prompted with the same harassing phrases Meta had used in a press release promoting them. And a feature meant to redirect teens from bingeing on self-harm-related content never triggered, the researchers found.

Researchers did find that some of the teen account safety features worked as advertised, such as a “quiet mode” meant to temporarily disable notifications at night, and a feature requiring parents to approve changes to a child’s account settings.

Titled “Teen Accounts, Broken Promises,” the report compiled and analyzed Instagram’s publicly announced updates of youth safety and well-being features going back more than a decade. Two of the groups behind the report – Molly Rose Foundation in the United Kingdom and Parents for Safe Online Spaces in the US – were founded by parents who allege their children died as a result of bullying and self-harm content on the social-media company’s platforms.

The findings call into question Meta’s efforts “to protect teens from the worst parts of the platform,” said Laura Edelson, a professor at Northeastern University who oversaw a review of the findings. “Using realistic testing scenarios, we can see that many of Instagram’s safety tools simply are not working.”

Meta – which on Thursday said it was expanding teen accounts to Facebook users internationally – called the findings erroneous and misleading.

“This report repeatedly misrepresents our efforts to empower parents and protect teens, misstating how our safety tools work and how millions of parents and teens are using them today,” said Meta spokesman Andy Stone. He disputed some of the report’s appraisals, calling them “dangerously misleading,” and said the company’s approach to teen account features and parental controls has changed over time.

“Teens who were placed into these protections saw less sensitive content, experienced less unwanted contact, and spent less time on Instagram at night,” Stone said. “We’ll continue improving our tools, and we welcome constructive feedback – but this report is not that.”

The advocacy groups and the university researchers received tips from Arturo Bejar, a former Meta safety executive, indicating that the Instagram features were flawed. Bejar worked at Meta until 2015, then came back in late 2019 as a consultant for Instagram until 2021. During his second stint at the company, he told Reuters, Meta failed to respond to data indicating severe teen safety concerns on Instagram.

“I experienced firsthand how good safety ideas got whittled down to ineffective features by management,” Bejar said. “Seeing Meta’s claims about their safety tools made me realize it was critical to do a vigorous review.”

Meta spokesman Stone said the company responded to the concerns Bejar raised while employed at Meta with actions to make its products safer.

GETTING AROUND SEARCH-TERM BLOCKERS
Reuters confirmed some of the report’s findings by running tests of its own and reviewing internal Meta documents.

In one test, Reuters used simple variations of banned search terms on Instagram to find content meant to be off limits for teens. Meta had blocked the search term “skinny thighs” – a hashtag long used by accounts promoting eating-disorder content. But when a teen test account entered the words without a space between them, the search surfaced anorexia-related content.

Meta documents seen by the news agency show that as the company was promoting teen-safety features on Instagram last year, it was aware that some had significant flaws.

For instance, safety employees warned in the last year that Meta had failed to maintain its automated-detection systems for eating-disorder and self-harm content, the documents seen by Reuters show. As a result, Meta couldn’t reliably avoid promoting content that glorifies eating disorders and suicide to teens as it had promised, or divert users who appeared to be consuming large amounts of such material, according to the documents.

Safety staffers also acknowledged that a system to block search terms used by potential child predators wasn’t being updated in a timely fashion, according to internal documents and people familiar with Meta’s product development.

Stone said that the internal concerns raised about deficient search term restrictions have since been addressed by combining a newly automated system with human input.

Last month, US senators began an investigation into Meta after Reuters reported on an internal policy document that permitted the company’s chatbots to “engage a child in conversations that are romantic or sensual.” This month, former Meta employees told a Senate Judiciary subcommittee hearing that the company had suppressed research showing that preteen users of its virtual reality products were being exposed to child predators. Stone called the ex-employees’ allegations “nonsense.”

Meta is making a fresh push to demonstrate its steps to protect children. On Thursday, it announced an expansion of its teen accounts to Facebook users outside the United States and said it would pursue new local partnerships with middle and high schools.

“We want parents to feel good about their teens using social media,” Instagram head Adam Mosseri said. — Reuters

NBI recommends prosecution of 21 individuals, including 3 senators

NBI FACEBOOK PAGE

The National Bureau of Investigation (NBI) has recommended the prosecution of 21 individuals, including several lawmakers and Public Works officials, over their alleged involvement in anomalous infrastructure projects, the Justice department said.

In a statement, the Department of Justice (DoJ) said the NBI has recommended the prosecution of the 21 individuals for “case build-up” with the National Prosecution Service.

“No one is above the law, and no position, title or influence will shield you from accountability. Those named will be required to answer, under the rule of law, the serious allegations now standing against them,” the DoJ said.

The DoJ released the list which includes: Ako Bicol Party-list Rep. Elizaldy “Zaldy” S. Co., Senator Francis “Chiz” G. Escudero, Senator Emmanuel Joel J. Villanueva, Senator Jose “Jinggoy” P. Estrada, and former Senator Ramon “Bong” B. Revilla, Jr.

The list also includes Department of Public Works and Highways (DPWH) Undersecretary Roberto R. Bernardo, former DPWH Bulacan District Engineer Henry C. Alcantara and DPWH engineers Brice Ericson P. Hernandez, Jaypee D. Mendoza and Arjay S. Domasig.

The DOJ noted that the individuals on the list are based on the sworn testimonies of Messrs. Alcantara, Hernandez, Mendoza, and Bernardo.

“Their statements provided the basis for identifying these individuals as having sufficient preliminary links to the acts under investigation,” it added.

Mr. Escudero was replaced as Senate president earlier this month after he admitted receiving campaign donations from a contractor but denied influencing contract awards.

Mr. Villanueva, Mr. Estrada and Mr. Revilla have also denied any hand in the flood control scam, while Mr. Co has called the allegations against him “false and baseless.”

The Philippine Senate is investigating irregularities in the DPWH flood-mitigation projects, which have received about P500 billion since 2022.

CO SAYS HE WILL RETURN TO THE COUNTRY
Meanwhile, Mr. Co, who is overseas, said he will return to the country to answer “false, baseless and politically charged” accusations against him.

In a Sept. 25 letter to House Speaker Faustino Dy III, Mr. Co expressed concern that his approved travel clearance was revoked while he is currently abroad for a scheduled medical treatment.

“I am saddened that my colleagues in the House of Representatives would deprive me of the time needed for medical care that I have long previously scheduled and gravely concerned that the decision to revoke my travel clearance was borne by pressure, rather than adherence to facts and procedure,” he said.

“I have every intention of returning to the Philippines. I am also intent on belying the false claims made against me before the proper forum.”

However, Mr. Co did not say when he will return to the country. — Almira Louise S. Martinez

Philippine housing prices rise in Q2 – BSP data

A view of row of houses in front of a condominium being constructed in Makati City, May 22, 2017. — REUTERS

By Katherine K. Chan, Reporter

Philippine housing prices increased in the second quarter as consumers were less pessimistic about purchasing residential properties, the Bangko Sentral ng Pilipinas (BSP) reported.

The BSP’s Residential Property Price Index (RPPI) showed housing prices nationwide went up by 7.5% in the April-June period.

BSP Survey: Property Prices Rise by 7.5% in Q2However, this was slower than the 7.6% annual growth seen in the first quarter and the 7.9% a year ago. Quarter on quarter, the RPPI rose by 4.2%, outpacing the 2.6% growth in home prices logged in the first quarter.

The RPPI measures the average price changes over time of various residential properties using banks’ data on actual housing loans. The central bank said the data gives insight on the real estate and credit market conditions in the Philippines.

However, home prices in the National Capital Region (NCR) went up by 2.4% in the second quarter, slowing from the 13.9% in the previous quarter and 9.3% last year.

Quarter on quarter, NCR housing prices contracted by 3.6%.

Outside of NCR (AONCR), home prices rose by 11.5% during the April to June period, faster than the 3% in the first quarter and 7.2% a year ago.

Balance Greater Manila Area (GMA) had the highest annual growth in housing prices at 13.2%, followed by Metro Cebu (11.5%), other areas in the Philippines (8.8%), and Metro Mindanao (7.7%).

CONDO PRICES SLUMP
By housing type, condominium unit prices dipped by 0.2% in the second quarter, a reversal from the 11.5% increase in the comparable year-ago period and the 10.6% growth last quarter.

The cost of houses, which include single-attached or detached units, apartments, townhouses and duplexes, rose by 13.1% year on year. This was faster than the 5.4% in 2024 and 4.5% in the first quarter.

Data from the central bank showed the median price for all housing types in the Philippines stood at P3.4 million in the second quarter. Condominium units had a median price of P3.8 million, while houses cost around P3.1 million.

Houses in the NCR were the most expensive at a median price of P7.01 million, while houses in other areas in the Philippines were the cheapest at about P2.7 million.

In the second quarter, residential real estate loans (RREL) granted for all types of housing units in the country grew by 14.7% year on year.

“This uptick aligns with the results of the Q2 2025 Consumer Expectations Survey, which showed a less pessimistic outlook among consumers regarding the purchase of a house and lot,” the central bank said.

“Reflecting this shift in sentiment, a larger share of households considered Q2 2025 as a favorable time to purchase residential property,” it added.

By area, loan availments increased by 10.3% year on year in the NCR and by 16.6% in the AONCR. It was highest in the Balance GMA at 22.5%, followed by Metro Cebu at 18.7%, Metro Mindanao 12.9%, and other areas in the Philippines at 4.3%

The BSP said 74.6% of RRELs availed in the April-June period were for new housing units, while 25% were for pre-owned properties and 0.4% for foreclosed.

Over half or 60.4% of the loans were used for houses, while 39.6% were for condominium units.

Banks approved the most housing loans in Calabarzon (33.2% share) and NCR (28.5%), followed by Central Luzon (11.9%), Central Visayas (8.8%), Western Visayas (6.6%), Davao Region (4.2%) and Northern Mindanao (2.3%).

The BSP first launched the RPPI in the first quarter of 2025 which replaced its predecessor Residential Real Estate Price Index.

Donald Trump slaps new US tariffs on drugs, trucks and furniture

US President Donald J. Trump announced he will impose a 10% baseline tariff on all imports to the United States. — REUTERS

WASHINGTON – President Donald Trump on Thursday unveiled a fresh round of punishing tariffs on a broad range of imported goods, including 100% duties on branded drugs and 25% levies on heavy-duty trucks, set to come into force next week.

The latest salvo, which Trump said was to protect the US manufacturing industry and national security, follows sweeping duties on trading partners of up to 50% and other targeted levies on imported products such as steel.

The barrage has cast a pall over global growth and paralyzed business decision-making around the world, while the Federal Reserve has said it is also contributing to higher consumer prices in America.

Trump’s latest announcements on Truth Social did not mention whether the new levies would stack on top of existing national tariffs. But recently struck trade deals with Japan, the EU, and the United Kingdom include provisions that cap tariffs for specific products like pharmaceuticals.

Tokyo said it was still analyzing the potential impact of the new measures, which Canberra called “unfair” and “unjustified”.

Trump also followed through on a pledge to “bring back” America’s furniture business, saying he would start charging a 50% tariff on imported kitchen cabinets and bathroom vanities and a 30% tariff on upholstered furniture. All the new duties take effect from October 1.

“The reason for this is the large scale ‘FLOODING’ of these products into the United States by other outside Countries,” Trump said.

Stocks of pharmaceutical companies across Asia fell as investors reacted to the news, with Australia’s CSL hitting a six-year low, Japan’s Sumitomo PharmaT tumbling more than 3% and pharmaceutical indices in Hong Kong and India down more than 1%.

An index tracking Chinese-listed furniture makers also dropped around 1%.

The new actions are seen as part of the Trump administration’s shift to better-established legal authorities for its tariff actions, given the risks associated with a case before the Supreme Court on the legality of his sweeping global tariffs.

The new 100% tariff on any branded or patented pharmaceutical product will apply to all imports unless the company has already broken ground on building a manufacturing plant in the United States, Trump said.

The Pharmaceutical Research and Manufacturers of America, an industry group, said companies “continue to announce hundreds of billions in new US investments. Tariffs risk those plans.”

The Trump administration has opened a dozen probes into the national security ramifications of imports of wind turbines, airplanes, semiconductors, polysilicon, copper, timber and lumber and critical minerals to form the basis of new tariffs.

Trump this week announced new probes into personal protective equipment, medical items, robotics and industrial machinery. He previously imposed national security tariffs on steel and aluminum and derivatives, light-duty autos and parts, and copper.

FOREIGN POLICY TOOL
Trump has made the levies a key foreign policy tool, using them to renegotiate trade deals, extract concessions and exert political pressure on other countries.

His administration has played down the impact on consumer prices and touted tariffs as a significant revenue source, with Treasury Secretary Scott Bessent saying Washington could collect $300 billion by the end of the year.

Some economies that have already struck deals may get a reprieve on the latest duties.
The EU’s deal with the US stipulates it will pay a 15% tariff on goods including pharmaceuticals, while Japan has an agreement that its tariff rates will not exceed others including the EU, Tokyo’s trade negotiator Ryosei Akazawa said on Friday.

Akazawa declined to comment directly on the new measures, adding Tokyo was still assessing how they related to their existing deal.

In Australia, Health Minister Mark Butler told reporters the government was working to understand the implications of the new “unfair, unjustified tariffs after 20 years of free trade.”

More than half of the $85.6 billion in ingredients used in medicines consumed in the United States are manufactured in the US, with the remainder from Europe and other US allies, the US pharmaceutical trade group said earlier this year.

When it comes to furniture, imports to the United States hit $25.5 billion in 2024, up 7% from the year prior. About 60% of those imports came from Vietnam and China, according to Furniture Today, a trade publication.

“Many of our members were shocked when we heard the news. I think the decision on the additional tariff is unfair,” said Nguyen Thi Thu Hoai from the Wood and Handicraft Association of Dong Nai province, one of Vietnam’s largest furniture clusters.

Trump in August had promised to impose new furniture tariffs, saying it “will bring the Furniture Business back” to North Carolina, South Carolina and Michigan.

Furniture and wood products manufacturing employment in the US has halved since 2000 to around 340,000 today, according to government statistics.

INFLATION PRESSURE
Higher tariffs on commercial vehicles could put pressure on transportation costs just as Trump has vowed to reduce inflation, especially on consumer goods such as groceries.

Trump said the new heavy-duty truck tariffs were to protect manufacturers from “unfair outside competition” and said the move would benefit companies such as Paccar-owned Peterbilt and Kenworth and Daimler Truck-owned Freightliner.

The US Chamber of Commerce earlier urged the department not to impose new truck tariffs, noting the top five import sources are Mexico, Canada, Japan, Germany, and Finland “all of which are allies or close partners of the United States posing no threat to US national security.”

Mexico, the largest truck exporter, has opposed new tariffs, telling the Commerce Department in May that all Mexican trucks exported to the United States have on average 50% US content, including diesel engines. Chrysler-parent Stellantis is among many companies that produces trucks in Mexico.

Last year, the United States imported almost $128 billion in heavy vehicle parts from Mexico, accounting for approximately 28% of total US imports in the category, Mexico said. — Reuters

Bad weather, weak demand weigh on Philippine business sentiment in Q3

Workers dismantle a tarpaulin billboard along EDSA in San Juan City, Sept. 22, as heavy rains swept across Metro Manila. PHOTO BY MIGUEL DE GUZMAN, The Philippines

By Katherine K. Chan, Reporter

Philippine businesses turned less optimistic about the economy in the third quarter amid bad weather and sluggish demand during “ghost month,” a survey by the Bangko Sentral ng Pilipinas (BSP) showed.

Based on its latest Business Expectations Survey, the overall confidence index (CI) for businesses fell to 23.2% in the third quarter, down from the 28.8% in the second quarter and the 32.9% in the same quarter last year.

BSP Survey: Business Sentiment Less Optimistic While Consumer Spending Seen to Increase in Q3A positive CI indicates that more respondents are optimistic than pessimistic.

However, this was the lowest CI seen since the 23.9% recorded in the fourth quarter of 2022.

The business confidence index has been on a decline for three consecutive quarters.

“Philippine businesses were less optimistic about the economy in the third quarter of the year,” the BSP said in a statement. “Their dampened confidence was primarily attributed to the slack in demand during the ‘ghost month’ and the onset of the rainy and typhoon season.”

This year, “ghost month,” the seventh month in the Chinese lunar calendar, ran from Aug. 23 to Sept. 21. Some investors avoid making big investments or decisions during this period.

The country also experienced heavy rains and flooding brought by several tropical storms and the southwest monsoon from late July to early August.

“Global headwinds, such as higher US tariffs, geopolitical tensions, and weaker foreign demand, also weighed on business confidence,” the BSP said.

The US began imposing a 19% tariff on goods from the Philippines on Aug. 7.

At the same time, business confidence for the fourth quarter improved to 49.5% from 39.3% previously, as a surge in consumer spending is usually seen ahead of the holidays.

The overall business outlook for the next 12 months eased to 48.1% from 51% the previous quarter.

“Despite the lower year-ahead CI, it remained positive, reflecting businesses’ continued optimism about near-term economic prospects,” the BSP said.

Businesses surveyed also see the peso appreciating against the US dollar in the fourth quarter and over the next 12 months but expect inflation to accelerate further.

“Firms also expect inflation over the next 12 months to remain within the National Government’s target range, indicating firmly anchored business inflation expectations. Within-target inflation supports investments and job creation,” the BSP said.

Businesses expect inflation to have settled at 2.1% in the third quarter, and picking up to 2.3% next quarter, and 2.4% in the next 12 months.

The central bank surveyed 1,523 firms nationwide, 580 of which are in the National Capital Region (NCR) and 943 in areas outside NCR, from July 4 to Aug. 17.

CONSUMERS LESS PESSIMISTIC
Meanwhile, Filipino consumers turned less downbeat in the third quarter, citing more financial opportunities, the results of the BSP’s Consumer Expectations Survey (CES) showed.

Based on the third-quarter CES, consumers’ CI turned less negative to -9.8% from -14% in the second quarter and -15.6% a year ago.

A negative CI means more respondents are pessimistic than optimistic.

“Filipino consumers were less pessimistic in the third quarter of the year, citing new income sources, higher earnings, and more working family members as the main reasons,” the BSP said.

However, consumers showed stronger confidence for the fourth quarter with a CI of 6.9% from 0.6% in the previous survey.

For the year ahead, consumer confidence improved further14.1% from 11.8% previously.

“The more upbeat outlook of consumers for both periods was attributed to expectations of higher income, additional earnings, more job openings, and stable prices of goods and services,” the central bank said.

Meanwhile, consumers expect prices to rise in the second half of the year but see inflation easing in the year ahead.

They see inflation averaging 2.6% in the next 12 months, lower than the 3.7% recorded in the previous survey.

The consumers’ top concerns included rising food prices, limited supply of food and fuel, and the effectiveness of government programs and policies in addressing higher prices.

The latest CES survey was conducted from July 1 to 12, covering 5,493 households, with 2,475 from the NCR and 3,018 from areas outside NCR.

Global debt hits record high of nearly $338 trillion, says IIF

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

LONDON – Global debt hit a record high of $337.7 trillion at the end of the second quarter, driven by easing global financial conditions, a softer US dollar and a more accommodative stance from major central banks, a quarterly report showed on Thursday.

The Institute of International Finance (IIF), a financial services trade group, said that global debt rose over $21 trillion in the first half of the year to $337.7 trillion.

China, France, the United States, Germany, Britain, and Japan recorded the largest increases in debt levels in U.S. dollar terms, though some of that was due to a waning dollar, the IIF found.

The U.S. currency has weakened 9.75% since the start of the year against a basket of major trading partners.

GLOBAL DEBT SURGE COMPARABLE TO COVID-ERA INCREASE
“The scale of this increase was comparable to the surge seen in H2 2020, when pandemic-related policy responses drove an unprecedented buildup in global debt,” the IIF said in its Global Debt Monitor.

Looking at debt-to-GDP ratios – an indicator of the ability to repay debt by comparing to what is being produced – Canada, China, Saudi Arabia and Poland saw the sharpest increases. The ratio declined in Ireland, Japan, and Norway, the report found.

Overall, the global debt-to-output ratio continued to move slowly lower, standing just above 324%. However, in emerging markets the ratio hit 242.4% – a new record after a downward revision on the last report in May.

Total debt in emerging markets rose by $3.4 trillion in the second quarter to a record high of more than $109 trillion.

Emre Tiftik, IIF Sustainable Research Director, said in a webinar that rising military spending will strain government balance sheets amid intensifying geopolitical tensions.

Tiftik noted that the debt increase is mainly in government debt, which has risen sharply in G7 countries and China.

He added that bond market reactions are harsher in advanced economies, with G7 10-year yields near their highest since 2011.

BOND MARKET PRESSURES
Emerging markets face a record high of nearly $3.2 trillion in bond and loan redemptions in the remainder of 2025, the IIF said.

It warned that fiscal strains could intensify in countries such as Japan, Germany, and France, urging caution over so-called “bond vigilantes” – referring to investors who sell off bonds of countries whose finances they deem unsustainable.

“While government debt ratios rose sharply across emerging markets in H1 — most notably in Chile and China — market reaction has been stronger in mature markets this year,” the IIF said.

The report flagged U.S. debt concerns, noting that short-term borrowing makes up about 20% of total debt and 80% of Treasury issuance.

It warned that this reliance could increase political pressure on central banks to keep rates low, risking monetary policy independence. — Reuters

Philippines to secure part of $55-million US maritime security funds

ORIGINAL PHOTO FROM THE PHILIPPINE COASTGUARD FACEBOOK ACCOUNT

The Philippines is among the nations that will get a share of the $55 million funding aimed at enhancing maritime law enforcement in the Indo-Pacific, according to the US Department of State.

In a statement, the State Department said it will allocate $55 million in new funding to boost maritime law enforcement capacity of several countries in the Indo-Pacific, including the Philippines, Vietnam, Indonesia, Malaysia, the Pacific Islands, and maritime South Asian nations.

“This funding will enable these partners to counter illicit maritime activities, exercise their sovereign rights, and interdict illicit fishing and maritime trafficking operations,” it said.

The US has contributed over $1.5 billion in maritime security assistance to the Indo-Pacific since 2017.

US Secretary of State Marco Rubio emphasized “the importance of collective efforts to advance a free and open South China Sea, through which trillions of dollars in global trade flow annually.”

He also noted China’s “expansive and unlawful maritime claims” in the South China Sea.

The South China Sea remains one of Asia’s most volatile flashpoints, claimed wholly or partly by China, the Philippines, Vietnam, Malaysia, Brunei, Indonesia, and Taiwan. Beijing asserts sovereignty over more than 80% of the waterway based on a 1940s map — a claim dismissed by the Permanent Court of Arbitration in The Hague.

Mr. Rubio had co-hosted a ministerial meeting on “Reinforcing Cooperation to Achieve a Secure and Stable Maritime Domain” on Sept. 24. This was attended by his counterparts from Australia, Estonia, Greece, Japan, the Netherlands, the Philippines, Romania, and the UK, among others.

“A free, open Indo-Pacific is vital to global trade and security. Together, we’re building a coalition to safeguard these principles,” Mr. Rubio said in a separate post on X on Thursday.

President Ferdinand R. Marcos, Jr., who came to office in 2022, has taken a stronger public stance against Beijing’s actions in the South China Sea. His administration has deepened ties with the US and other like-minded partners such as Australia and Japan, while expanding joint maritime activities. — Almira Louise S. Martinez

What’s behind the flood corruption scandal in the Philippines?

Filipinos attack a motel during anti-corruption demonstrations in Manila on Sept. 21. PHOTOGRAPHER: EZRA ACAYAN/GETTY IMAGES VIA BLOOBERG CONNECT

Allegations of widespread government corruption in flood infrastructure projects worth billions of dollars ignited mass protests across the Philippines on Sept. 21, intensifying pressure on President Ferdinand Marcos Jr. to implement sweeping reforms to root out a problem that has long plagued the Southeast Asian nation.

The scandal has sparked outrage across the Philippines, a country highly vulnerable to deadly flooding, particularly after it emerged that much of the government-funded infrastructure was defective, or, in some cases, not even built.

The pattern of corruption in flood-control projects over the past decade has reached an unprecedented level, with losses possibly exceeding a trillion pesos, according to Public Works Secretary Vince Dizon. At that magnitude, it would surpass the $10 billion in ill-gotten wealth allegedly amassed by the late Ferdinand Marcos — father of the current president — and his cronies during his dictatorship four decades ago.

WHAT IS THE SCANDAL ALL ABOUT?
Since 2022 when Mr. Marcos Jr. took office, his administration has rolled out 9,855 flood-control infrastructure projects nationwide worth P546 billion ($9.5 billion). Many other flood-related projects were undertaken prior to 2022. These projects were meant to fortify the Philippines against frequent typhoons and flooding.

This year’s persistent and massive flooding in many parts of the country prompted citizens to vent their frustrations on social media, and question how the government was addressing the issue. Subsequent investigations revealed that many flood-control projects had not been built to approved specifications and in some instances had not been built at all, despite funds having been disbursed. The revelations raised the alarm over possible corruption.

Testimony at a Senate inquiry in September suggested widespread collusion between government engineers, politicians and private building contractors, who allegedly pocketed hefty kickbacks from flood-control projects. According to one former government engineer, at least 25% of each project’s budget was routinely skimmed off as kickbacks. To make up for the lost funds, corners were often cut through the use of low-quality materials, or construction costs were inflated, on paper, it’s alleged.

The revelations have hit a raw nerve in the Philippines, one of the world’s most disaster-prone nations. For a country that experiences about 20 tropical cyclones a year, these flood-control projects are seen as critical.

WHO HAS BEEN IMPLICATED IN THE SCANDAL?
Sixty-seven legislators in the House of Representatives were allegedly contractors of their own government-funded infrastructure projects, according to Senator Panfilo Lacson, who’s leading the probe in the Senate.

Among those implicated in the scandal is House Speaker Martin Romualdez, a cousin of Mr. Marcos Jr. He has since given up the chamber’s leadership while denying any wrongdoing. That decision by Mr. Romualdez, one of Mr. Marcos Jr.’s closest allies, signals a political fallout that may deepen in coming weeks as investigations continue.

Senator Francis Escudero was replaced as Senate head after he admitted that a private contractor donated to his 2022 election campaign, but he denied helping the company secure government projects.

HOW HAS THE PUBLIC RESPONDED?
Following several smaller rallies, tens of thousands of Filipinos took to the streets in the capital and across the nation on Sept. 21 to denounce the corruption. The protests were largely peaceful, authorities said. But there were incidents of chaos in Manila where some young protesters set fire to a container van and threw rocks and Molotov cocktails at police officers in two separate incidents not far from the presidential palace. More than 200 people, some of them minors, were arrested.

The public also poured out their anger on social media, targeting relatives of contractors and politicians who have flaunted their wealth online.

Philippine business groups have called for an end to corruption in government, saying guilty officials must be prosecuted and vowed to blacklist those who conspire with erring politicians.

“Anger is directed not only at those directly implicated in the theft of public funds, but also at a political system seen as failing to safeguard the public interest in areas ranging from legislative corruption to the ineffectiveness of anti-corruption agencies,” Bob Herrera-Lim, managing director of advisory firm Teneo, wrote in a Sept. 18 note.

So far, the corruption allegations and public uproar haven’t affected Philippine financial markets to a great extent, with the peso about 1% lower against the dollar since the start of September and the benchmark stock index down less than 1%.

HOW HAVE MARCOS JR. AND HIS GOVERNMENT RESPONDED?
Mr. Marcos Jr. first mentioned the graft scandal during his annual State of the Nation address to Congress in July, saying that many of the government’s flood-control projects were money-making schemes and promising to crack down on the corruption.

After the accusations came to light, he personally inspected some of the projects, particularly in Bulacan province, north of the capital, where the largest number of projects were approved, including one that secured public funding but was never built.

Since the beginning of September, the government has fired four public works officials and suspended 16 others. It has also filed corruption cases against those state employees and four private contractors with the Ombudsman. Mr. Marcos Jr. appointed Mr. Dizon as the new head of the public works department, after the former chief quit because of the scandal.

The government has canceled P252 billion worth of flood-control projects for 2026, tightened the approval process, and formed an independent commission that’s investigating these programs from the past 10 years.

Upon the request of the Anti-Money Laundering Council, a Philippine court has ordered hundreds of bank accounts to be frozen as authorities build cases against those involved in unlawful activities.

Mr. Marcos Jr. said no-one would be spared in the government’s probe, including his relatives and allies. He also supported the protests, saying he understood the public anger but warned that law enforcement would act if demonstrations became violent.

WHAT’S AT STAKE FOR THE PHILIPPINES?
Political stability and economic growth hang in the balance as Marcos Jr. confronts the fallout from the corruption scandal — a fight analysts say could shape his legacy.

He will be under intense public scrutiny over his resolve to stamp out corruption amid growing calls for the government to prosecute corrupt officials. Failure to do so could stoke further public dissatisfaction, fuel more street protests, and embolden the opposition, including his deputy, Vice President Sara Duterte, who has criticized the Marcos Jr. administration’s response to the scandal as slow.

But there could be economic repercussions. Tighter scrutiny over flood-control projects will likely slow government disbursements in the short term, according to Union Bank of the Philippines chief economist Ruben Carlo Asuncion. He estimated that a 10% decline in spending over one quarter could shave about a 0.13 percentage point off annual gross domestic product growth. Still, the broader economic impact may be minimal, Maybank Securities analysts said, given that household consumption — not government spending — makes up about 70% of the country’s GDP. — Bloomberg

SMHCC upcycles over 10,000 yards of linens into livelihood through ‘Tela Tales’

Women volunteers from Brgy. Felisa, Bacolod learn embroidery techniques as part of SMHCC’s Tela Tales program, which transforms upcycled linens into sustainable livelihood opportunities.

SM Hotels and Convention Centers (SMHCC), the hospitality arm of SM Prime Holdings, Inc. (SM Prime), has upcycled more than 10,000 yards of used hotel linens under its sustainability initiative, ‘Tela Tales.’ The volume is equivalent to the fabric needs of more than 500 hotel rooms, underscoring how circular design can create both environmental and social impact.

Launched in 2024, ‘Tela Tales’ transforms discarded bedsheets, banquet linens and towels into handcrafted products such as bags, home items and its newest line — Snuggle Mates plush toys. The toys, designed by social enterprise brand Brave Story, feature 11 animal characters inspired by SMHCC’s properties nationwide.

These include Bamboo the panda for Lanson Place Mall of Asia, Ozzy the bear for Taal Vista Hotel, Lori the parrot for Pico de Loro Beach and Country Club, and Pau the turtle for Park Inn by Radisson Iloilo, among others.

Tela Tales Snuggle Mates, handcrafted by community artisans using upcycled hotel linens, are the latest creations from SMHCC’s circular sustainability program.

‘Tela Tales’ products are sewn by 55 women volunteers from partner communities in Tagaytay, Nasugbu, Bacolod, Iloilo and Quezon City. Part of the proceeds directly support local livelihoods, while the program itself reduces waste and diverts materials from landfills. Even prior to ‘Tela Tales,’ SMHCC had avoided disposal of linens by donating them to charities or distributing them during calamities.

“To date, the program has produced more than 1,000 upcycled items and received recognition from local governments in Iloilo, Bacolod and other cities for its contribution to waste reduction and inclusive community partnerships,” said Leah Magallanes, SMHCC Vice-President for Sustainability and Quality.

Moving forward, SMHCC plans to expand ‘Tela Tales’ to more locations and introduce new product lines, including travel accessories and seasonal collections.

The initiative also aligns with SMHCC’s commitment to the United Nations Sustainable Development Goals (SDG), particularly SDG 17 on Partnerships for the Goals. Beyond cutting storage and disposal costs, ‘Tela Tales’ deepens employee engagement, promotes sustainable practices in operations and strengthens long-term ties with local communities.

 

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Trust your product, never quit, Mega Prime founder advises entrepreneurs

The executive behind the canned sardines brand, Mega Sardines, shared key advice for aspiring entrepreneurs, especially those in the manufacturing sector.

“I would like to state that you must believe in your product. If you believe in your product, then you do your best to come up with a very consistent product,” William Tiu Lim, founder and chairman of Mega Prime Foods Inc., said.

Interview by Edg Adrian Eva
Video editing by Arjale Queral

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