Category: Business Mirror

THE Bangko Sentral ng Pilipinas (BSP) may see faster inflation in September, but local economists believe this is not enough reason to exit its easing cycle when the Monetary Board meets next week.

On Wednesday, the BSP said it projects that September 2025 inflation will settle within the range of 1.5 to 2.3 percent. If the high end of the outlook is reached, this will be the second fastest inflation on record this year.

The Philippine Statistics Authority (PSA) will release the latest inflation print on October 7, ahead of the October 9 policy meeting at the BSP.

‘Upward price pressures for the month are likely to arise from higher prices of rice and fish. Elevated domestic fuel costs likewise contribute to upside price pressures for the month,’ the BSP said.

‘These pressures could be partially offset by the decline in vegetables and meat prices along with lower electricity rates,’ it added.

Ateneo de Manila University economist Luis F. Dumlao told BusinessMirror on Wednesday that the inflation projection was still within the 2 to 4 percent inflation target of the BSP.

This means, Dumlao said, the BSP has ‘space to be dovish.’ He said any reduction in policy rates will help support the country’s GDP growth.

Dumlao said the country’s GDP growth is growing slower than its natural growth of around 6.2 percent. Reducing policy rates can help boost the country’s economic performance this year.

‘The only way they will raise interest is if they see inflationary pressure over 4 percent the next 6 months,’ Dumlao told this newspaper.

Should the BSP decide to reduce rates next week, Jonathan Ravelas, senior adviser at professional services firm Reyes Tacandong and Co., said the impact on the economy could last for a year.

Ravelas said the Monetary Board is expected to maintain policy rates in December, unless there is another reduction in United States Federal Reserve rate cuts.

He also does not see any off cycles and increases in policy rates any time soon. However, former Socioeconomic Planning Secretary Dante B. Canlas said that if there is a surge in inflation in September due to the recent typhoons, there is a chance for an off cycle.

‘The MB [Monetary Board] may still stick to its announced plan to cut interest rates. The GDP growth is at risk; ADB [Asian Development Bank], for example, downsized already its GDP growth forecast for the Philippines,’ Canlas said.

Meanwhile, HSBC Asean economist Aris Dacanay likened the BSP’s careful calibration of monetary policy to how a driver parks his or her car.

In Filipino parlance, this is atras-abante which literally means backward-forward, actions needed to move a car to fit parking spaces with exact dimensions.

‘As the BSP nears the end of its easing cycle, finding the right monetary stance has become an exercise of making small adjustments. Like parking one’s car, calibrations to monetary policy will likely be made in increments based on marginal movements of the data on hand,’ Dacanay said. ‘We think the BSP’s monetary policy decision on the 9th of October will be a tough call between a hawkish cut or a dovish hold.’

Given this, Dacanay said he is penciling in a rate hold next week, which means BSP will keep its policy rate at 5 percent. At this point, he said, this data is limited on whether the economy is slowing.

He noted that consumer vehicle purchases are falling and government capital spending is tightening while goods exports are holding. Dacanay said domestic demand has also been firm with the imports of capital and consumer goods both steady.

Further, Dacanay said inflation risks should be considered, given that core inflation increased 2.7 percent and headline inflation at 1.5 percent. He said inflationary pressures are expected to persist due to typhoons Nando and Bualoi.

THE country’s earnings from coconut-based products surged by 44 percent to over $2.2 billion as of August, as supply constraints pushed prices.

Data from the Philippine Statistics Authority (PSA) showed that the value of coconut-based exports leaped to $2.26 billion as of the end of August from $1.57 billion a year ago.

Shipments of coconut oil led the product group among other products, as it jumped by 43 percent to $1.83 billion in the reference period from $1.28 billion last year.

Industry sources said coconut oil prices have been on an upswing, propelled by tight supply from major producing countries due to adverse weather effects and the spike in quotations for other vegetable oils.

Historical figures from the World Bank showed that the average price of coconut oil skyrocketed to a record $2,771 per metric ton (MT) in July.

If this trend continues, the Philippine Coconut Authority (PCA) said the country’s export receipts from coconut oil alone will hit a new record high in 2025.

Such an outlook stemmed from growing demand and surging prices of the tropical oil in the world market. Last year, coconut oil earnings grew to $2.22 billion.

The World Bank expects coconut oil products to average at $1,800 per MT this year, higher than the average price of $1,519 per MT posted in 2024.

Meanwhile, the country’s outbound shipments of desiccated coconut skyrocketed by 75 percent to $323.52 million in January to August from $185.15 million in the previous year.

Export revenues of other coconut products also grew by 45 percent to $75.82 million from $52.49 million.

However, earnings from the outbound shipments of copra meal or cake slumped by 45 percent to $26.49 million from $48.08 million.

The United Coconut Association of the Philippines (Ucap) recently said export receipts from coconut-based products could hit as high as $3 billion in 2026 on the back of an expected rebound in output.

Meanwhile, PSA data also indicated that the country’s exports of fruits and vegetables during the reference period jumped by 21.3 percent to $1.9 billion from $1.55 billion.

Outbound shipments of bananas led the category, rising by 29 percent to $1.05 billion from last year’s $818.37 million, based on PSA data.

Exports of pineapple juice grew by 32.5 percent to $92.1 million from $69.5 million a year ago. However, shipments of canned pineapple dropped by 0.8 percent to $141.88 million from $143.06 million.

With over 19,000 learners affected by the 6.9-magnitude earthquake that struck northern Cebu, Education Secretary Juan Edgardo ‘Sonny’ Angara assured parents and teachers that education will continue as immediate emergency measures are being addressed.

Angara stressed that the Department of Education (DepEd) will rely primarily on modular learning, the most practical mode for communities with damaged classrooms or limited connectivity.

Policies on lesson packets and the Dynamic Learning Program are also set to be finalized next week, with emergency funds for learning materials to be released right after, the DepEd said.

The DepEd Learning Systems Strand (LSS) is also coordinating with Schools Division Superintendents for context-specific interventions once immediate emergency measures are addressed.

To minimize lost school days, estimated at about one month in the hardest-hit areas, DepEd will also establish Temporary Learning Spaces (TLS) in Bogo and nearby Cebu towns to prioritize early grade learners and resume limited face-to-face classes sooner.

‘Bayanihan ang susi. Dapat mabilis ang aksyon ng lahat para mas mabilis din makakabalik ang ating mga guro at mag-aaral sa normal na klase,’ Angara said.

On Thursday, President Ferdinand R. Marcos Jr., Angara, and other national government officials on visited Bogo, Cebu to provide immediate assistance and assess the impact of the earthquake that damaged thousands of classrooms and communities.

Marcos led the situation briefing together with Angara and other Cabinet Secretaries, including Social Welfare Secretary Rex Gatchalian, , Public Works Vince Dizon, Tourism Secretary Christina Frasco, and Health Secretary Teodoro Herbosa. They also assessed the City of Bogo Science and Arts Academy, one of the hardest-hit campuses, where at least three buildings were not declared safe for occupancy.

Damaged classrooms

As of 11 p.m. on October 1, the DepEd reported 5,587 classrooms sustained minor damage, 803 major damage, and 1,187 were totally destroyed in Cebu schools. There were 950 teaching and non-teaching personnel affected.

‘Sa gitna ng trahedya, kailangan mas maagap tayong tumulong para hind rin maputol ang pag-aaral ng ating mga mag-aaral. Habang inaayos ang mga paaralan, agad tayong maghahatid ng alternatibong paraan upang may gabay, pag-asa, at direksyon silang mahahawakan,’ Angara said.

Subject to further validation by field offices, a vetted list will then be endorsed for joint DepEd-Depatment of Public Works and Highways validation to determine costs.

The department noted that reconstruction funds will be downloaded immediately.

Recovery kit

The DepEd chief also distributed nearly 90 EduKahon teaching and learning recovery kit.

DepEd also said that those in affected areas declared under a state of calamity may avail of Special Emergency Leave under CSC rules.

The DepEd added that unaffected regions are mobilizing resources to extend support, including financial aid, to affected teachers.

GEOPOLITICAL unrest in places like Thailand, Indonesia, the Philippines, Nepal, Japan, the USA, and across Europe may disrupt supply chains through protests, regulatory shifts, and ‘unstable’ governments, according to a report published by global logistics provider Dimerco Express Group.

‘These events can lead to port slowdowns, border delays, and unpredictable sourcing changes, especially in labor, raw materials, and transport logistics,’ Dimerco’s Asia Pacific Freight report for October 2025 noted.

October is a ‘turning point’ for global logistics, according to Kathy Liu, Vice President for Global Sales and Marketing at Dimerco Express Group, as this month is hounded by ‘peak-season demand, layered with geopolitical uncertainty and tariff changes.’

These developments, she pointed out, are creating ‘one of the most complex supply chain environments we’ve seen in years.’

As such, she advised businesses to ‘stay agile, plan early, and diversify their logistics strategies to mitigate disruptions.’

Dimerco said the October report highlights growing geopolitical risks-including protests, regulatory changes and trade negotiations ‘that could further destabilize supply chain operations.’

The global logistics provider said these are the developments along the supply chain that countries should watch out for, on top of the rising freight rates amid peak season.

In the case of the Philippines, goods being shipped through the seas may be slapped with higher freight rates in October 2025.

Dimerco’s freight report showed that ocean freight rates imposed on Philippine cargo bound for Asia, Europe and the United States are seen to rise this month.

As to the capacity of this cargo, the report said market is picking up, but demand of space can still be met by current supply.

In terms of the rates that may apply on Philippine cargo being shipped by air, the freight report divulged that only products bound for the United States may see rising freight rates.

Air freight rate for goods transported bound for Asia will remain stable in October with ‘soft’ capacity, meaning supply is greater than demand. Meanwhile, Philippine goods bound for Europe will see stable air freight rate but capacity is on an upturn, meaning, market is picking up but demand of space can still be met by current supply.

For the air freight market of the Philippines, Dimerco cautioned that with La Niña expected to begin in October 2025, this may affect flight operations and cause temporary road closures.

Moreover, the report said: ‘Peak-season imports of holiday goods and year-end inventory may cause localized short-term capacity constraints and higher rates in late October to early November.’

Liu, Dimerco’s Vice President for Global Sales and Marketing, explained that September to November is always the peak season for air freight.

‘This year, demand growth is more focused on Southeast Asia, particularly Thailand, Vietnam, Malaysia, and Singapore,’ Liu said.

‘With high-tech, AI, and semiconductor production increasing in these countries, more finished goods are being shipped out. As a result, we expect capacity pressure at major transit hubs including Singapore, Taiwan, Hong Kong, and Korea,’ she also noted.

With the onset of the season of festivities, Vision Express, the leading premium optical retailer in the Philippines, officially launches its Fall/Winter 2025 campaign Unwrap the Holidays.

This year, the brand invites Filipinos to celebrate in style by elevating their holiday looks, finding the perfect gifts through exclusive eyewear deals, and enjoying high-end eye care services.

Unwrapping the most-awaited season

With the holidays right around the corner, our social calendars start to fill up. This means every gathering is a perfect excuse to play with different looks and showcase one’s personal style. Vision Express offers a wide selection of designer eyewear that brings any look to life. Global fashion powerhouses like Gucci, TOM FORD, Prada, Miu Miu, and Loewe launched collections that blend fashion-forward design with nostalgic charm, bringing back classic favorites while catering to every fashion sensibility.

‘Eyewear is one of the most effortless yet impactful accessories. The festive season is the perfect time to explore styles and silhouettes that reflect your personality. At Vision Express, we take pride in our thoughtfully curated selection of designer eyewear, ensuring there’s a perfect pair for every taste and occasion,’ said Vision Express President Neelam Gopwani.

Unwrapping services just for you

Before the holidays kick in, this is a reminder to have your eyes checked first. Vision Express puts premium eye care at the core of its promise. Its seven-step comprehensive eye exam, called Vision7, is tailored to every patient’s visual needs. To make one’s journey more precise, Vision Express launches its newest machine called the Spark 4 by Shamir. This device is designed to be accurate, fast, and comfortable. The machine is programmed to provide exact pupillary distance (PD) measurements in seconds, great for those in need of progressive lenses.

To keep up with the technological advances in the medical field, Vision Express also prides itself on VisionPlus. This is an AI-powered health screening that can detect potential health issues such as hypertension, glaucoma, and diabetes in just three minutes. Results are instantly sent via email, making the process seamless and patient-friendly. Click here to book your appointment: https://visionexpressph.short.gy/Visionplus

For fashion-driven customers, Vision Express’ AI Styling Studio makes finding the perfect pair effortless. Through virtual try-on and personalized recommendations, this AI-powered stylist suggests frames that complement facial features and personal style based on a quick analysis of face shape, hair color, and skin tone. If you are unsure of which frames or sunglasses suit you, the AI Styling Studio is your answer.

Unwrapping festive exclusives

The holidays also mean exciting reasons to go on a long-awaited shopping spree. From October 1 to December 31, shoppers can enjoy a Buy One, Get One (BOGO) promotion on premium eyewear. With this offer, customers can select two stylish pairs for the price of one, making it the perfect opportunity to refresh their look or find thoughtful gifts for loved ones.

The BOGO offer also extends to light-adaptive lenses, ideal for those seeking the convenience of prescription eyeglasses and sunglasses in one. These lenses automatically adjust to changing light conditions, transitioning to darker tints outdoors and remaining clear indoors. Whether heading to the beach or attending outdoor celebrations, customers can enjoy uncompromised style and comfort throughout the season.

Unwrapping the man of the season

At the heart of Vision Express’ Unwrap the Holidays campaign is Jericho Rosales, one of Philippines’ most respected actors and style icons. Known for his versatility on screen and effortless charm off it, Rosales perfectly embodies the dynamic, modern Filipino – someone who values both substance and style.

For Rosales, the holiday season is a time to slow down and reconnect with what truly matters. ‘The real gift for Christmas is good food, deep conversations, and being in the company of family and friends,’ he shared. Yet, he also embraces the season’s flair for fashion, adding, ‘Eyewear is the easiest yet most underrated accessory that can transform an outfit. Every moment is a gift, wrapped in Vision Express’ signature style.’

A WIDER trade-in-goods gap may keep the country’s Balance of Payments (BOP) in deficit in the next two years, according to the Bangko Sentral ng Pilipinas (BSP).

The BOP is projected to post a steeper decline of 1.4 percent of GDP to a deficit of $6.9 billion for 2025 and post -0.6 percent of GDP to a deficit of $3.4 billion in 2026.

With this, the current account shortfall is expected to stay at 3.3 percent of GDP in 2025 and 2.9 percent of GDP in 2026.

‘These reflect a widening trade-in-goods gap, subdued services receipts, and restrained capital inflows amid global uncertainty and shifting trade policies,’ BSP said.

BSP said goods exports and imports are both expected to post an average growth of 1 percent this year and next year.

Exports could average $55.6 billion in 2025 and $56.2 billion in 2026, while imports could reach $125.2 billion in 2025 and $126.4 billion in 2026.

‘Infrastructure investments, potential trade diversion, and efforts to diversify export and import partners may help cushion external shocks,’ BSP said.

‘However, structural constraints, such as logistical inefficiencies, skills mismatches, and elevated input costs, continue to weigh on export competitiveness,’ it added.

Services exports are projected to grow 2 percent in 2025 and 5 percent in 2026 while service imports are expected to increase 6 percent in 2025 and 2026.

The country’s services exports could reach $52.6 billion in 2025 and $55.2 billion in 2026. Service imports are projected to average $39.9 billion in 2025 and $42.3 billion in 2026.

BSP said the country’s service exports and imports, particularly from Business Process Outsourcing firms and tourism, could moderate due to ‘uncertainties surrounding US reshoring policies and weakening inbound travel.’

In terms of cash remittances, BSP said these inflows may average 3 percent to $35.5 billion this year and $36.6 billion next year.

‘Overseas Filipino remittances are expected to remain a resilient source of external support, underpinned by strong global labor demand and sustained confidence in formal transfer channels, despite the impending US tax on remittances,’ the BSP said.

Meanwhile, BSP said foreign direct investment inflows are projected to slow this year to $7.5 billion and $8 billion next year.

The data also showed foreign portfolio investments are expected to average $6.2 billion in 2025 and $5 billion in 2026.

‘[This reflects the] heightened global financial volatility and

cautious investor behavior. However, recent policy reforms-including amendments to the Investors’ Lease Act-are poised to improve the investment climate,’ the BSP said.

With these, the country’s Gross International Reserves are expected to average $105 billion in 2025 and $106 billion in 2026.

BSP said this remains adequate and serve as a robust buffer against external liquidity needs even as global market conditions evolve.

IF one were to believe the petroleum prophets of doom, the world should have run dry of oil somewhere between bell-bottoms and the Bee Gees.

In 1939, the US Department of the Interior declared that oil was limited, which was about as revelatory as saying the sun eventually sets. President Jimmy Carter warned in 1977: ‘The oil and natural gas we rely on for 75 percent of our energy are running out. We can use up all proven reserves of oil in the whole world by the end of the next decade.’

Yet here we are in 2025: oil still flows, and prices hover around US$80 per barrel-hardly the death rattle of a vanishing commodity.

The International Energy Agency, however, offers less comfort. To keep production steady through 2050, the world must spend around US$540 billion every year. Decline rates in existing fields are steepening, particularly as dependence on US shale grows. Shale wells gush quickly but fade fast. As Fatih Birol, the IEA’s executive director, put it: the industry has to ‘run much faster just to stand still.’

The IEA reported that global upstream oil and gas investment reached US$528 billion in 2023, up from US$474 billion the year before. But half that increase vanished into cost inflation, not new supply. More revealing still: less than half of industry cash flow is plowed back into drilling. The rest is lavished on dividends, buybacks, or debt reduction. Apparently, buybacks are sexier than barrels.

This is why cheap oil never lasts. When prices dip, producers shelve projects and idle rigs. Supply contracts, and the inevitable rebound follows. Traders have long joked that the only cure for low oil prices is low oil prices. It is one of the few clichés that happens to be true.

The IEA’s latest analysis puts hard numbers to this cycle and underscores the danger. Without steady investment, global supply would shrink by over 5 million barrels per day every year-the equivalent of Brazil and Norway combined. Declines are now about 40 percent faster than in 2010. Unless demand shifts away from fossil fuels, companies will have to develop reserves that are not even discovered yet. Some analysts already warn that by next year, non-Opec growth will flatten for more than a year. In short, coasting is not an option.

Oil’s capital intensity has always been both curse and strength. For decades, the industry thrived on heavy upfront spending, a commitment most other sectors could not match. But today the tables have turned. Tech giants are now more capex-hungry than oil drillers, leaving the question: in a world drowning in investment needs, who will provide half a trillion dollars annually for oil-especially if a recession tightens global credit?

Nowhere is this uncertainty more consequential than in the Philippines, a nation that produces barely 1 percent of the oil it consumes yet relies on petroleum for nearly 50 percent of its energy. Over 90 percent of crude and refined products come from abroad, while transportation alone burns nearly half of all petroleum. Gasoline and diesel imports account for the overwhelming majority of consumption. When crude spiked past US$120 in 2022, pump prices blasted beyond P70 per liter, straining household budgets and stoking inflation. Renewables are expanding, and the Philippine Energy Plan envisions 35 percent clean power by 2030. But even that blueprint admits oil will dominate transport for years to come. Solar panels will not fly airplanes or fuel inter-island ferries.

The irony is unmistakable. Western institutions keep seeking oil’s epitaph, even as they concede demand has not peaked. Clean energy spending is surging, but oil’s near-term role is entrenched – especially where infrastructure, affordability, and energy density still tilt toward hydrocarbons. For the Philippines, this reality collides with financial and geopolitical forces far beyond its control. The less global producers invest, the more Filipino consumers are left exposed to the next round of price shocks.

What lies ahead is not an oil apocalypse, but a long and uneven path where geology, capital flows, and political will collide. If investment keeps pace, prices may stabilize, and obituary writers will once again look premature. If underinvestment continues, the next shortage will not whisper. It will roar.

The real weakness of the ‘end of oil’ narrative is not its optimism but its complacency. Oil is not ending because the planet is dry. It may end because the money stops flowing. For the Philippines, failing to see that distinction could be the costliest mistake of all.

HIGHER tariffs that could undermine the country’s export earnings and investment growth will prevent the Philippines from attaining its growth targets until next year, according to the International Monetary Fund (IMF).

In a briefing in Manila on Wednesday, IMF Mission Chief for the Philippines Elif Arbatli Saxegaard told reporters that the Washington-based lender projects GDP to average 5.4 percent in 2025 and 5.7 percent in 2026.

The Development Budget Coordination Committee (DBCC) GDP target is at 5.5 to 6.5 percent in 2025 and 6 to 7 percent in the 2026 to 2028 period.

‘Risks to the growth outlook are tilted to the downside. The main external risks stem from prolonged global trade policy uncertainty, geopolitical tensions, and disruptive financial market corrections,’ Saxegaard said. ‘On the domestic front, more frequent and intense climate shocks would cause notable macroeconomic losses.’

Saxegaard also said these new projections emanating from the completion of IMF’s 2025 Article IV Consultation with the Philippines, are also downgraded from its July forecasts.

In July, the IMF estimated that full-year GDP growth could average 5.5 percent in 2025 and 5.9 percent in 2026. Saxegaard said this reflected the country’s weak economic performance in the first six months of the year.

It may be noted that in the first quarter, the country’s GDP averaged 5.38 percent and recorded 5.5 percent in the second quarter of the year. The average first semester growth, based on data from the Philippine Statistics Authority (PSA), was at 5.4 percent.

‘This revision reflects factors related to the performance in the first half of 2025, which was weaker than what we had anticipated. Some of the important drivers of growth will be the higher tariffs, which are imposed on the Philippine exports to the US, will weigh on exports and investment,’ Saxegaard said. ‘We see also high frequency indicators pointing to negative growth momentum in the second half.’

Climate change, Asean

Given the country’s slower growth, IMF recommended that the country should focus on efforts to address the changing climate and inspire greater cooperation in the Association of Southeast Asian Nations (Asean) when the Philippines assumes the chairmanship next year.

On climate change, the IMF recommended more programs that could better address climate conditions. She recommended enhancing green Public Financial Management (PFM) practices, with an emphasis on improving climate tagging systems and integrating climate considerations and estimating maintenance needs and costs.

She also noted that climate shocks to the economy are similar in effect to shortfalls in supply. Just a few days ago, Severe Tropical Storm Opong (international name Bualoi) hit the Philippines, entering through Samar, and exiting near Mindoro.

While there were no casualties, Opong affected up to eight transmission lines of the National Grid Corporation of the Philippines.

‘We think that there are a few areas where there could be further efforts, [like] public sector investment in adaptation, which is critical to raise macroeconomic resilience to climate shocks and also to protect the vulnerable by lowering the rebuilding costs when such shocks happen,’ Saxegaard said.

‘We have been looking at the impact of climate shocks on the Philippine economy, [and] what we find is that climate shocks do work like a supply shock: they tend to raise inflation and lower output,’ she also said.

Meanwhile, Saxegaard said the Philippines should start negotiating and implementing deep trade agreements. She also said the country should further enhance global value chain integration and resilience but will require steps to lower non-tariff barriers.

One of the ways this can be done is through Asean and with the country assuming the chairmanship of the association next year, this can be included in the agenda.

‘We understand that the government is already working on a very good agenda as part of its Asean leadership. We would support these efforts, including in terms of achieving higher integration, lowering trade and investment barriers across Asean countries, and better digital and payments infrastructure.’

Risks on the horizon

One of the things that the IMF intends to closely monitor includes private consumption, particularly consumer loans. Saxegaard said these loans have been rising and thus warrants close monitoring.

The Bangko Sentral ng Pilipinas (BSP) earlier reported that consumer loans to residents-which include credit card, motor vehicle, and general-purpose salary loans-grew by 23.6 percent from 24 percent.

The data showed salary-based General-Purpose Consumption Loans grew 6.4 percent in July 2025, albeit at a slower pace compared to the 8.3 posted in June 2025.

‘For private consumption, it’s more the consumer loans that have been growing quite fast in recent years that warrant monitoring. So we recognize it’s coming from a low base, but nevertheless it’s something to watch,’ Saxegaard said.

Apart from this, the IMF also flagged vulnerabilities in the real estate sector which is considered ‘quite important’ for the Philippine economy.

Saxegaard noted that vacancy rates remain elevated in some segments of the real estate sector and the banking system’s exposure to the real estate sector remains sizable.

In the second quarter, the number of real estate loans rebounded to 2.7 percent from a decline of 4.4 percent in the first quarter of 2025. The BSP said this was driven by an 8.9-percent growth in loan availments in Areas Outside the National Capital Region, which more than offset the sharp 45.6-percent contraction in the NCR.

‘The exposure of the banking system to the real estate sector is also an important part of their loan portfolio. With all of that, we do think that it’s important to monitor the potential risks from that segment in light of the high vacancy rates,’ Saxegaard said.

Apart from these, Saxegaard said it was also important to monitor the interconnectedness of the financial system, particularly the ‘exposure of banks to the non-financial corporate sector.’ She stressed that banks are linked to ‘complex conglomerate structures.’

In June, Moody’s Ratings said the ties between the country’s top conglomerates and the Philippine banking system is a ‘double-edged sword’ that could lead to contagion risks. These ties, the report said, allowed conglomerates access to capital and banks are given corporate lending opportunities, strengthening banks, there are risks.

It showed in its study that only six families in control of major conglomerates are the same ones linked to the country’s largest banks. Moody’s Ratings estimated that Philippine banks are the major source of funding by conglomerates. Part of these funds is the local currency bond market that was valued at $23.4 billion at the end of 2024.

‘If we look at the financial system in terms of the main linkages across different sectors, what really stands out is the exposure of banks to the non-financial corporate sector. Given those linkages, any risks in the non-financial corporates could feed into the banking system, so it’s again an important exposure that we advise the authorities to monitor and continuously assess potential risks because of this exposure,’ Saxegaard said.

THE Philippine manufacturing sector has slipped into ‘negative territory’ for the first time since March as goods producers saw fresh drops in output and new orders, according to the S and P Global Market Intelligence.

The country’s Purchasing Manager’s Index (PMI) score plunged to 49.9 in September from 50.8 in August. The country’s PMI score in September was the lowest since the 49.4 PMI score in March.

‘While signaling just a fractional deterioration in the health of the manufacturing sector, this was only the third time in just over four years where the headline index has been in contraction territory,’ S and P Global said.

S and P Global said ‘weaker operating conditions’ were mainly attributed to a ‘renewed’ drop in order intakes in September.

It also noted that the decline in sales was the first in six months, as surveyed businesses noted lower customer numbers.

However, S and P Global pointed out that order books with foreign clients continued to improve, signaling that the ‘downturn’ was mainly centered on the domestic market.

As such, it said that reduced sales volumes led Filipino manufacturers to scale back production at the end of the third quarter, which ended a three-month sequence of expansion.

Meanwhile, David Owen, Senior Economist at S and P Global Market Intelligence, explained that the Philippines PMI survey data moving into negative territory at the end of the third quarter ‘has been highly unusual in the sector’s post-pandemic history.’

‘New orders and output decreased slightly, as firms mentioned a fall in client numbers and a modest drop in production from the suspension of rice imports,’ added Owen.

‘However, with overall sentiment in the year-ahead remaining upbeat in September, and purchasing quantities increasing, manufacturers appear hopeful that the dip in sector performance is temporary,’ he added.

Philippine economists pointed to Washington’s tariff policy as partly the culprit behind the country’s manufacturing sector entering into contraction mode.

Ateneo De Manila University (ADMU) economist Leonardo A. Lanzona, Jr. said ‘this has to do with the poor performance in exports.’

‘I think this has to do with the poor performance in exports. Manufacturing is significantly linked with exports. Hence, given the global headwinds, particularly with Trump’s unconventional policies, exports are down, bringing down manufacturing as well,’ Lanzona told the BusinessMirror in a Viber message on Wednesday.

Data from the Philippine Statistics Authority (PSA) showed that export earnings growth slowed in August as outbound shipments only grew 4.6 percent to $7.06 billion in August from the $6.75 billion in the same period last year.

It may be noted that after peaking at 26.9 percent in June 2025, export earnings slowed to 17.6 percent in July and posted single-digit growth in August.

Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael L. Ricafort said the contraction in the Philippine manufacturing sector could be largely attributed to the weather-related disruptions, particularly the series of storms and flooding which he said reduced working days for some local manufacturers.

Ricafort added this could also partly be due to US President Donald Trump’s higher tariffs that could reduce demand for exports from other countries, trade wars, and other protectionist measures ‘that led to some wait-and-see attitude for some exports from the country and also exports in the global supply chains in terms of more cautious stance on their production and capacity.’

THE Supreme Court has stopped the parliamentary elections in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) scheduled on October 13, 2025 after it declared unconstitutional the Bangsamoro Autonomy Act (BAA) No. 77 or the Bangsamoro Parliamentary Redistricting Act of 2025, and BAA No. 58 or the Bangsamoro Parliamentary Act Districts Act of 2024.

The decision was reached during the Court’s regular en banc session on Tuesday, where 11 justices concurred with ponencia while three justices concurred in the declaration of the nullity of BAA 77, but dissented with the finding that BAA 58 is invalid.

The three-acting Chief Justice Marvic Leonen and Associate Justices Ricardo Rosario and Antonio Co-were of the opinion that there was sufficient legal basis for the election to continue.

‘There can be no parliamentary elections on October 13, 2025 because of the lack of a valid districting law,’ SC Spokesman Camille Sue Mae Ting said at a press briefing.

Instead, the Court directed the Commission on Elections to continue with its preparations and conduct of the parliamentary elections not later than March 31, 2026 and in compliance with Section 5 of the Voter’s Registration Act which provides for the establishments of precincts.

It also ordered the Bangsamoro Transition Authority (BTA) to immediately undertake, not later than October 30, 2025, the determination of parliamentary districts for the first regular election of the members of parliament in compliance with the provisions of the Bangsamoro Organic Law (BOL).

The Court said BAA 77, signed into law on August 28, 2025, is unconstitutional for violating Section 5 Section 5 of the Voter’s Registration Act, which prohibits any alteration of precincts once the election period has started.

It noted that BAA 77, which reorganizes parliamentary districts within the BARMM to reallocate seats originally intended for Sulu, was passed on August 19, 2025 or five days after the election period began on August 14, 2025.

Likewise, the SC said BAA 77 is void for violating the BOL’s requirement that each district should comprise adjacent and adjoining areas as far as practicable.

It observed that some local government units in Lanao Del Sur, Maguindanao del Norte, and Cotabato City were assigned to different districts that were neither contiguous or adjacent.

However, the SC ruled that the nullification of BAA 77 does not revive its predecessor law, BAA 58, which still includes Sulu in its parliamentary districts.

‘Since BAA 58 is based on an outdated framework following the removal of Sulu from BARMM, it cannot be reinstated. Rather, a new and valid districting law must be passed consistent with the Bangsamoro Organic Law, national laws, and the Constitution,’ the Court said.

In ordering the conduct of elections on October 13, 2025, the Court took into consideration practical concerns such as several trainings for the poll workers, which usually takes weeks and the deployment and installation of Starlink which takes at least two weeks.

‘More importantly, enforcing BAA 77 with less than a month before the BPE would cause massive confusion among the more than 2.25 million registered voters across BARMM’s 105 municipalities and three cities, as the redistricting will heavily impact precinct assignments.,’ the SC said.

Comelec back to zero

Comelec on Thursday said preparations for the Bangsamoro parliamentary polls are now back to zero following the Supreme Court’s decision.

Comelec Chairman George Erwin M. Garcia said the ruling left the poll body without a law to implement for the October 13 elections.

‘There is no piecemeal conduct of election.Now, it is very clear that we have no law to enforce. [It’s] back to zero for Comelec,’ Garcia told reporters in a text message.

He stressed that the poll body cannot move forward until a new legal framework is in place.

‘But in the meantime, the ball is in the hands of the Bangsamoro Parliament. We shall be waiting for their action and compliance,’ Garcia said.

Earlier, the Comelec said proceeding with the October polls would be ‘legally and factually impossible’ given the legal uncertainty.

The poll body has yet to disclose how much has been wasted from its initial preparations for the elections, which will no longer push through.

However, it noted that if the Supreme Court later upholds BAA 77, the Comelec would need at least P774 million in additional funds since preparations would have to restart from scratch, including reconfiguring the automated election system to reflect the new seat distribution.

If the polls are reset but conducted under the earlier BAA 58, the additional cost would be lower, at around P50 million.

Consolidated petitions

The Court’s ruling stemmed from the consolidated petitions filed by BTA parliament member Lanang T. Ali Jr., et al (G.R. No. E-02219) and BTA parliament member Abdullah Macapaar at al. (G.R. No. E-002235).

Ali et al filed a petition for certiorari and prohibition with prayer for TRO challenging BAA 77 for allegedly violating the Voter’s Registration Act by altering precincts during the election period, among others.

Macapaar et al filed a petition for certiorari and prohibition and for the issuance of a status quo ante order, arguing BAA 77 is unconstitutional for violating the provisions on ensuring free, orderly, honest, peaceful, and credible elections during election period, among others.

On September 16, the Court issued a TRO enjoining the Comelec and the BTA from implementing BAA 77.

BAA No. 77 reorganizes parliamentary districts within the BARMM to reallocate the seven parliamentary seats initially assigned to the province of Sulu following the 2024 SC decision excluding the Province of Sulu from BARMM after the province rejected the law’s ratification.

The 2024 decision declared unconstitutional the interpretation of the provision in the law directing the provinces and cities of BARMM to vote as one geographical unit including provinces that did not vote to be included.

The said provision, according to the SC, violates Article X, Section 18 of the Constitution, which states that only provinces, cities, and geographic areas voting favorably in the plebiscite shall be included in the autonomous region.

Amnesty not affected

Meanwhile, the Supreme Court decision to postpone the BARMM parliamentary elections will have no impact on the ongoing process of providing amnesty to former members of the Moro Islamic Liberation Front (MILF) and the Moro National Liberation Front (MNLF), according to the National Amnesty Commission (NAC).

In a press briefing in Malacañang on Wednesday, NAC chairperson Leah Tanodra-Armamento said the amnesty initiative is separate from the BARMM polls.

‘There will be no effect since the amnesty is a different process. As far as the BARMM is concerned, this [amnesty process] is part of our peace agreement with them,’ she explained in Filipino.

‘So the election is different. That is a political matter that the BARMM will deal with. This is for our government,’ she added.