Category: Business Mirror

THE government has restored funding for flood-control projects in the proposed 2027 national budget, allocating P107.4 billion to continue, repair and improve existing infrastructure amid persistent flooding during the rainy season.

The restoration of the funding, the massive misuse of which sparked thorough reforms and stalled infrastructure spending that in turn reduced growth, comes at about a year after the 2025 State of the Nation Address where President Ferdinand Marcos Jr. first assailed massive corruption in flood-control projects.

Its restoration is hoped to help revive economic activity and a lackluster growth, reported at only 2.3 percent in the second quarter.

Acting Budget Secretary Kim Robert De Leon said the condition of unfinished projects and the continuing operational needs of flood-control facilities were among the major considerations in restoring the funding under the 2027 National Expenditure Program (NEP).

‘Especially now that it is raining, we see the importance of having proper flood-control projects to prevent excessive water from damaging our roads,’ De Leon said in a press conference after the turnover of the 2027 NEP to Congress.

‘That is why, when we were preparing the 2027 National Expenditure Program, one of the important considerations was whether to restore funding for flood-control projects,’ he added.

De Leon said the government could not abandon projects that had already begun because unfinished structures would fail to deliver their intended benefits.

‘First and foremost, we cannot simply abandon the flood-control projects that have already been started. They will not be effective if they are left unfinished,’ he said.

He also explained that flood-control spending is not limited to one-time construction expenses. Pumping stations and other facilities require funding for their continued operation and maintenance.

‘Second, not all flood-control projects are one-off expenditures. They also have operating requirements, including pumping stations and facilities that must be sustained year after year,’ De Leon said.

According to De Leon, these considerations led the government to approve several proposals from the Department of Public Works and Highways (DPWH) involving existing projects that must be continued, completed or repaired.

‘This is why we agreed to several proposals from the Department of Public Works and Highways involving existing flood-control projects that must be continued, completed and repaired so that their intended benefits can be realized by our people,’ he said.

Of the P107.4-billion allocation, P19.6 billion in capital outlay will finance ongoing foreign-assisted flood-control projects. The total also covers the maintenance, repair, rehabilitation, and improvement of existing infrastructure.

The Metropolitan Manila Development Authority (MMDA) will separately receive P3.41 billion under its flood-control program. The amount will support the operation and maintenance of existing flood-control structures, including pumping stations, facilities, and equipment.

De Leon said flood-control proposals underwent stricter evaluation with the cooperation of DPWH Secretary Vince Dizon.

‘We ensured that the locations of the projects were properly identified and properly tagged and that they were already supported by actual programs of work to ensure that they would not become ghost flood-control projects once approved by Congress,’ De Leon said.

He added that the government would disclose information on the projects-from appropriations to the release of funds-through the DBM’s COMPASS platform.

Implementation will also be monitored through the DPWH Transparency Portal and the DBM’s Project DIME, or Digital Imaging for Monitoring and Evaluation.

‘We will not rely solely on documentary reports stating the level of accomplishment. We will also use technology and satellite data to verify whether the reported structures actually exist,’ De Leon said.

He said the government was expanding the number of projects covered by Project DIME, not only within the DPWH but also across other government agencies.

Meanwhile, De Leon said the proposed budget contains P10.773 billion for confidential and intelligence expenses-P4.368 billion for confidential funds and P6.405 billion for intelligence funds.

‘We wish to note that the P10.773 billion in combined confidential and intelligence funds is lower than the P11.818-billion level under the 2026 General Appropriations Act, or lower by 8.8 percent,’ he said.

The same agencies and departments that received the funds in 2026 will remain the recipients in 2027, although the Philippine National Police will receive a slight increase compared with its proposed NEP level.

De Leon emphasized that only agencies legally authorized to perform confidential and intelligence functions would receive such funding-point deemed significant at this point, given the mind-boggling revelations at the Senate impeachment trial of how over P600 million CIFs were quickly disbursed by the offices of Vice President Sara Duterte under the OVP and the Department of Education.

‘We wish to reiterate that the use of confidential and intelligence funds remains subject to existing budgeting, utilization, liquidation and auditing rules to ensure accountability and that the funds are used solely for their intended purposes,’ De Leon said.

Tough scrutiny

House Speaker Faustino ‘Bojie’ G. Dy III on Tuesday vowed that the House of Representatives would subject the proposed 2027 national budget to rigorous scrutiny to ensure that every peso delivers concrete benefits to the Filipino people.

As the House formally received the 2027 NEP, Dy said lawmakers would keep Filipinos at the center of the budget process, guided by the government’s theme, ‘People-Centered Growth for an Inclusive and Resilient Future.’

‘It is not enough to state how much is being spent. We must show what every peso can accomplish. Every peso must bring tangible relief to every Filipino,’ Dy said during the NEP turnover ceremony.

‘In the New Congress, we will carefully scrutinize every part of the proposal. We will ask agencies not only how much they are requesting but also how the funds will be used and what concrete benefits they will deliver to the Filipino people,’ he added.

The speaker said the proposed budget would be evaluated based on three fundamental questions: ‘Where will the funds go, what concrete changes will they bring, and how will ordinary Filipinos feel their impact?’

Dy stressed that the national budget is more than a collection of figures and allocations, noting that behind every peso are Filipinos counting on the government for better services, greater opportunities and an improved quality of life.

‘This budget is for families hoping that food will become more affordable; parents who need adequate healthcare services; children who dream of completing their education; farmers who need support; and workers seeking decent jobs and fairer opportunities,’ he said.

‘They must be the basis of our priorities,’ he added.

Dy noted that President Ferdinand R. Marcos Jr., in his State of the Nation Address, laid down the government’s direction of strengthening the country’s security and self-reliance while ensuring that government services reach those who need them most.

From food and energy to education, healthcare, employment, infrastructure and disaster preparedness, Dy said the proposed 2027 national budget would be one of the government’s most important instruments for turning these priorities into concrete action.

With the NEP now in Congress, Dy said the House has the responsibility to ensure that these objectives are preserved throughout the deliberations and reflected in the final version of the General Appropriations Bill.

He also committed to keeping the congressional budget process open and transparent, building on reforms introduced last year.

‘Last year, we began implementing reforms such as the Budget Amendments and Review Subcommittee, or BARSC, and introduced the live-streaming of our bicameral meetings,’ he said.

‘The budget belongs to the people. They have the right to know where their money will go. We will strive to make the process of crafting our national budget even more open,’ he added.

The Speaker also echoed the President’s call to prevent waste, improper spending and corruption, noting that every peso saved could instead be directed toward classrooms, hospitals, food, employment, agriculture and other services that Filipinos directly need.

In the coming weeks, the Speaker said lawmakers would closely examine the NEP, question government agencies, listen to stakeholders, and keep the public informed throughout the process.

‘In the coming weeks, our work will be thorough. We will ask questions. We will listen. And we will ensure that every step of the process is clear to the public,’ he said.

Dy said the House would carry with it the challenge issued by President Marcos at the conclusion of his SONA: to finish what the government has started and fulfill its promises to the Filipino people.

‘For the New Congress, that is the purpose of the 2027 budget-to translate promises into programs, programs into concrete results and every peso spent into meaningful improvements in the lives of our fellow Filipinos,’ Dy said.

GETTING feedback at work can be a mixed bag, with 23 percent of Filipino professionals saying their latest performance review made them feel less positive about their roles.

This was according to global talent solutions firm Robert Walters’ Salary Survey Guide Philippines, which found that while 43 percent of professionals felt more motivated after their latest review, another 34 percent said the process had no impact on their engagement.

‘Performance reviews are becoming increasingly important management moments, particularly as organizations look to balance worker needs while managing tight budgets,’ Robert Walters Chief Commercial Officer Andrew Powell said.

‘Employees want to know how their skills are valued, where they can progress, and whether the business is investing in their long-term development,’ he added.

Salary reviews also remain an important concern among Filipino professionals. More than half, or 53 percent, expect to receive a salary review this year, while 35 percent said they were unlikely to receive one.

Another 10 percent were unsure, while only 2 percent had already received a salary review. However, compensation is not the only factor workers consider when assessing their jobs.

Excellent compensation and benefits ranked highest among the factors professionals value from an employer, cited by 73 percent of respondents. This was followed by flexible working conditions at 47 percent and job security and stability at 29 percent.

Career growth and advancement opportunities, flexibility in working hours and location, and a positive and inclusive company culture were also identified as key factors influencing professionals’ decisions to stay with their current employers.

Leadership style, likewise emerged as a factor in workplace engagement. A majority, or 56 percent, preferred transformational leaders who inspire and motivate change, while 34 percent favored a laissez-faire approach that gives employees greater autonomy.

Yet, despite the generally positive impact of performance reviews, more than 80 percent of Filipino professionals remain open to exploring new job opportunities, the survey found.

Robert Walters Southeast Asia Chief Executive Officer Kimberlyn Lu said the finding suggests that employers face a broader retention challenge even when employees have positive views of their current roles.

‘Even though performance reviews positively impact employee attitudes toward their current roles, our research reveals that over 80 percent of Filipino professionals remain open to exploring new opportunities,’ Lu said.

Lu said the figure reflects the competitiveness of the Philippine talent market, where professionals continue to assess opportunities beyond their current employment.

‘The fact that over 80 percent of professionals in the Philippines remain open to new opportunities highlights just how competitive today’s talent market has become,’ she said.

She added that employers need to maintain open and transparent communication with workers, particularly on career development and what they value from their organizations.

‘It’s no longer just about offering competitive salaries; it’s about driving a sense of purpose and creating an environment where employees feel genuinely valued,’ Lu said.

Meanwhile, Philippine Statistics Authority data released last week showed that underemployment rose to 6.11 million in June, up from 5.76 million a year earlier, while employment also increased to 50.66 million from 50.47 million in June 2025.

The Energy Regulatory Commission (ERC) has proposed a draft resolution to remove the 12-percent value-added tax (VAT) on system loss charges, aiming to lower electricity bills for consumers.

System Loss refers to electricity that is generated and paid for but is physically dissipated or lost in the course of transmission and distribution before it ever reaches consumers. Under existing rules, consumers are charged for this lost electricity, and on top of that, they are also made to pay VAT on the charge.

The proposal follows the directive of President Ferdinand R. Marcos Jr. in his State of the Nation Address (SONA), where he called for the reduction of electricity costs and the elimination of charges that do not reflect actual services rendered to consumers. The VAT on system loss has long been identified as a charge that consumers pay on electricity that was never actually delivered to them – a burden the President expressly sought to address.

The draft resolution, once finalized and confirmed by the Bureau of Internal Revenue (BIR), will effectively remove the VAT on the system loss charge, delivering direct and immediate relief to household and commercial electricity users nationwide.

‘System loss is electricity that consumers pay for but never receive,’ ERC Chairperson Francis Saturnino Juan said. ‘Imposing VAT on top of a charge for electricity that was never delivered to consumers is fundamentally at odds with the nature of VAT as a tax on the value of goods and services actually rendered. This proposed resolution addresses that and gives consumers the relief they rightly deserve.’

The proposed resolution amends pertinent provisions of ERC Resolution No. 20, Series of 2005, and ERC Resolution No. 14, Series of 2022, to align the existing regulatory framework with this policy position.

‘This is a concrete and immediate step as directed by the President toward making electricity more affordable. Working within our existing regulatory authority and in close coordination with the BIR, we are seeking to remove a layer of taxation that consumers have been shouldering for far too long,’ he added.

The ERC will conduct public consultations on the proposed resolution this month. ‘We invite all stakeholders to participate in the public consultation process,’ Juan said.

Should Congress amend the EPIRA law to remove the system loss charge, Juan said his office will abide. ‘We continue to coordinate with the DOE and Congress on how they want the removal of the system loss charge to happen. The policy direction from President is clear ,and we fully support it,’ the ERC chief added.

The ERC has required all distribution utilities to submit their system loss data from 2021 to 2025 and every year thereafter. In particular, the data required for submission include the generation purchased cost, transmission cost, energy output, energy input, sub-transmission and substation, feeder technical loss, non-technical loss, and kilowatt hour (kWh) shouldered by the DU in excess of the feeder loss cap, if any.

The Department of Energy (DOE), ERC, National Electrification Administration (NEA), electric cooperatives (ECs) , distribution utilities (DUs), and Congress are now working on the technical, regulatory and legislative reforms needed to address system-loss charges and their corresponding VAT.

The DOE has already created a joint task force to move this work forward across the distribution sector.

For an average household-specifically residential customer consuming 200 kilowatt-hours in July-the system-loss charge was P0.8751 per kWh. Removing the VAT corresponding to that system-loss charge alone would translate to approximately P21 in potential savings for that household.

‘It may be one component of the electricity bill, but it reflects a larger principle: consumers should not be made to shoulder costs that can and should be addressed through greater efficiency and accountability.

This is one of the first steps toward carrying out the President’s call. We are working with Congress and the Senate to move the necessary reforms forward as quickly as possible,’ said DOE secretary Sharon Garin.

‘If electricity is stolen, the cost should not simply be transferred to those who pay their bills honestly,’ she added.

DUs and ECs are not in favor of shouldering the cost related to system loss charges.

The Manila Electric Company (Meralco) had warned that completely removing system loss charges would cost tens of billions of pesos, creating a financial burden that private power firms cannot survive.

‘It’s a big bill for the industry because it cuts across generation, transmission, and distribution. The bill is too big for the industry to absorb all of it. So, there’s got to be that discussion. It’s going to impact the entire power industry in this country.

‘It is not a small matter to simply [cut it] just because you can raise the bill, but the system loss is still there. It’s not going to disappear. So, who’s going to pay for that? The industry? It’s going to cost tens of billions of pesos. We will not survive,’ said Meralco chairman Manuel Pangilinan.

Scrapping the charge, he added, would severely disrupt the generation, transmission, and distribution sectors. Meralco’s current system loss rate sits at six percent, keeping it safely below the ERC’s 6.5 percent regulatory cap.

According to the NEA, if 25 percent of the non-technical systems loss is prohibited, 62 ECs will be affected or will suffer financial losses. If 50 percent will be removed, 71 ECs will experience financial losses. If 100 percent is removed, 89 out of the 121 ECs will surely experience financial losses.

With these figures, we have formulated some programs of the NEA-whose mandate includes the extension of loans for sustainable capex [capital expenditures] to ECs.

If the 25 percent will be implemented, we will be needing about P3.5 billion to cushion the effect to the ECs. If 50 percent of the non-technical loss will be implemented, we will be needing a loan equity fund to extend to ECs in the amount of P5.5 billion.

‘If there would be an outright implementation of 100 percent removal, NEA will be needing additional loan equity fund of P10 billion to extend loans to ECs,’ said NEA administrator Antonio Mariano Almeda.

The biggest competition in Philippine hospitality today is not for guests. It is for brands. Across Metro Manila and major tourism destinations, developers are scrambling to secure partnerships with internationally recognized hotel operators, convinced that the right global flag can unlock a property’s long-term value and competitiveness.

Latest hospitality investment trends indicate that global hotel operators are making a major vote of confidence in the Philippine hospitality market. Rising tourist arrivals, the return of Chinese travelers, expanding visa-free programs, and the surge in MICE (meetings, incentives, conferences, and exhibitions) demand are encouraging international brands to aggressively expand across Metro Manila and key areas outside of the capital region.

Foreign brands betting big on PH hospitality

Latest Colliers Philippines data reveal that foreign hotel operators are significantly increasing their presence across Metro Manila and major provincial destinations, accounting for nearly half of the new hotel supply expected from 2026 to 2029. International brands such as Hilton, Mandarin Oriental, Banyan Tree, Citadines, Radisson, Dusit, Sofitel, Pullman, and Moxy are among those strengthening their footprint in the country.

The expansion comes as the country’s tourism sector continues to gain momentum. Foreign visitor arrivals reached 3.16 million in the first half of 2026, up 5.4 percent year-on-year. One of the most notable developments is the resurgence of the Chinese market, with arrivals from China surging by 64.5 percent annually, helping offset softer arrivals from South Korea.

Global brands are not investing based solely on current demand. They are positioning themselves for the next wave of growth driven by tourism recovery, expanding air connectivity, visa liberalization, and the country’s rising prominence as a business and events destination.

Colliers noted that Metro Manila alone is expected to deliver 2,486 new hotel rooms in 2026, a 236% increase from the previous year’s completion level. From 2026 to 2029, annual hotel completions are projected to average about 1,880 rooms, bringing a fresh wave of internationally branded accommodations into the market.

Strategic expansion outside Metro Manila

Beyond leisure travel, the emergence of large-scale MICE facilities is also poised to drive hotel demand. More than 522,000 square meters of new exhibition space are expected to be added nationwide, including major developments in Metro Manila, Clark, Cebu, and Cavite. These projects are expected to support higher room demand from business travelers, convention delegates, and event organizers.

Colliers believes that the combination of rising tourist arrivals, expanding MICE infrastructure, and aggressive international brand expansion supports a positive long-term outlook for the Philippine hospitality market. The consultancy forecasts hotel occupancy to return to pre-pandemic levels of 72 percent by 2028, supported by an estimated 7.5 million foreign arrivals.

As more global brands plant their flags across the country, the Philippines is steadily strengthening its position as one of Southeast Asia’s most compelling hospitality investment destinations,’ Bondoc added. ‘The message from international operators is simple: they’re betting big on Philippine tourism.

Bringing in more international brands

Increasingly, local developers see affiliation with global operators as a competitive advantage rather than a marketing exercise. In a market where travelers are becoming more brand-conscious and investors are prioritizing institutional-grade assets, securing an international flag can enhance project value, improve financing prospects, and drive stronger long-term occupancy. This helps explain why developers are aggressively pursuing partnerships with established hotel groups across both Metro Manila and key tourism destinations.

The growing scramble among Philippine developers to secure global hotel brands signals more than just confidence in tourism, it reflects a broader recognition that hospitality is becoming a strategic real estate play. Colliers Philippines believes that in an increasingly competitive market, internationally recognized operators bring not only brand prestige but also global distribution networks, operational expertise, and access to high-value travelers. As foreign arrivals rebound, MICE activity accelerates, and infrastructure upgrades improve connectivity, developers are racing to align with brands that can capture future demand.

By aggressively pursuing these partnerships, Philippine developers are making a major bet on local tourism. If current trends in hospitality, infrastructure, and business travel continue, we see a greater comeback story for major hospitality players in the country.

Financial institution Chinabank brings Apple Pay to its cardholders in the Philippines. Apple Pay is an easy, secure, and private way to pay in-store, in-app, and online.

To pay in-store, customers simply double-click the side button, authenticate, and hold their iPhone or Apple Watch near a payment terminal to make a contactless payment. Every Apple Pay purchase is secure because it is authenticated with Face ID, Touch ID, or device passcode, as well as a one-time unique dynamic security code. Apple Pay is accepted in grocery stores, pharmacies, restaurants, coffee shops, retail stores, and many more places that accept contactless payments.

‘At Chinabank, we continuously enhance the way our customers pay by providing secure and convenient experiences that are aligned with our customers’ evolving needs. With Apple Pay, our cardholders can enjoy a seamless way to make purchases in stores, in apps, and online using the Apple devices they use every day. This reflects our focus on delivering best-in-class payment experiences all while enabling our customers to continue enjoying the rewards and benefits of their Chinabank cards,’ said Jose Julian E. Baduria Jr., payment solutions head of Chinabank.

Customers can also use Apple Pay on their iPhone, iPad, and Mac to make faster and more convenient purchases in apps or on the web without having to create accounts or repeatedly type in contact information, card details, or shipping and billing information.

Security and privacy are at the core of Apple Pay. When customers use a credit or debit card with Apple Pay, the actual card numbers are not stored on the device, nor on Apple servers. Instead, a unique Device Account Number is assigned, encrypted, and securely stored in the Secure Element, an industry-standard, certified chip designed to store the payment information safely on the device.

Apple Pay is easy to set up. On an iPhone, simply open the Wallet app, tap the ‘+’, and follow the steps to add Chinabank credit or debit cards. Once a customer adds a card to iPhone, Apple Watch, iPad, and Mac, they can start using Apple Pay on that device right away. Customers will continue to receive all of the rewards and benefits offered by Chinabank cards.

Former Ateneo men’s basketball coach Tab Baldwin and Ateneo de Manila University were ordered to jointly and solidarily pay P4.9 million for his failure to secure the required certificate of exemption while working for the university.

The Department of Labor and Employment (DOLE) also imposed separate P10,000 fines on Baldwin for working without a valid Alien Employment Permit (AEP) and on Ateneo for employing him without the required permit.

The P4.9-million penalty covered 490 days from Feb. 10, 2025 until Baldwin’s resignation on June 15, 2026, with DOLE imposing P10,000 for each day he rendered services without the required certificate of exemption under Department Order No. 248-25.

The separate AEP violations covered Baldwin’s employment with Ateneo from Dec. 1, 2015 to Sept. 28, 2016, when he worked for at least nine months without a valid permit.

Labor Secretary Francis N. Tolentino also referred Baldwin’s case to the Bureau of Immigration for summary deportation proceedings, without prejudice to civil, administrative or criminal complaints pending before other investigative agencies or the courts.

THE Philippine peso slid back to the 61-per-dollar level as Brent crude nearly touched the $90 per barrel level amid renewed external pressures as negotiations between the United States and Iran stalled.

Data from the Bankers Association of the Philippines (BAP) showed the peso closed at P61.26 against the dollar on Tuesday.

This is 55.5 centavos or over half-a-peso weaker than its previous finish of P60.705 against the greenback on Monday.

John Paolo R. Rivera, Senior Research Fellow at Philippine Institute for Development Studies (PIDS) said this ‘likely reflects renewed external pressures, particularly the rise in global oil prices amid uncertainty in the Middle East and continued caution ahead of US inflation data.’

As a net oil importer, Rivera said higher oil prices tend to increase the Philippines’s demand for dollars and put pressure on the peso.

The senior research fellow for the state think tank said Brent crude rose about 5 percent over two days as US-Iran negotiations ‘stalled.’

This was almost echoed by Jonathan L. Ravelas, senior adviser at Reyes Tacandong and Co., who said: ‘The USD/PHP fell to 61.26 on higher oil prices and stronger dollar as US-Iran peace talks fall anew.’

For his part, Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines (UBP) said the peso’s weakness appears to have been driven more by external factors than domestic developments.

‘Rising US Treasury yields, a stronger US dollar, and the sharp increase in oil prices amid Middle East tensions likely weighed on emerging market currencies, including the peso,’ added Asuncion.

While markets also reacted to Bangko Sentral ng Pilipinas’s (BSP) Governor Eli Remolona Jr.’s remarks that slower GDP growth has eased pressure for further policy tightening, Asuncion said: ‘The magnitude of the peso’s depreciation suggests global factors were the more dominant driver.’

Asuncion pointed out that as long as Brent crude remains near $90 per barrel and US Treasury yields stay elevated, the peso ‘may continue to face depreciation pressure.’

‘In the near term, global developments, particularly US inflation data, Federal Reserve expectations, and oil market dynamics, are likely to be more important drivers of the exchange rate than domestic factors,’ Asuncion explained further.

Rivera also noted that the peso is expected to remain volatile with movements ‘largely influenced’ by oil prices, geopolitical developments, US monetary policy, and domestic economic conditions.

‘Some depreciation is manageable, but sustained weakness could add to imported inflation, so stability rather than defending a particular forex rate level is more important,’ added the PIDS senior research fellow.

Ravelas expects the local currency to trade within the 61.00-61.50 range against the dollar in the near term.

Within Tuesday’s session, the local currency traded from as strong as 60.9 to as weak as 61.275 against the greenback.

The official GDP numbers for the second quarter are in, and they present a bleak picture that no amount of official optimism can soften. Growing by a dismal 2.3 percent-down from 2.8 percent in the first quarter and far below the 5.4 percent recorded a year ago-the economy is experiencing its most sluggish performance since the depths of the pandemic in 2021. Strip away the Covid-19 period, and one has to look back nearly 17 years to the end of 2009 to find a weaker quarter The economy’s central driver-household consumption-has visibly sputtered, expanding by just 2.8 percent as families grapple with persistent high prices and eroded purchasing power. When citizens stretch government cash assistance to build safety nets for financial shocks rather than spend it, cash transfers cease to act as the consumer jump-start policymakers expect.

More alarming, however, is the collapse in fixed investment. Gross capital formation contracted by 9.2 percent, led by a severe 14.8 percent drop in construction activity. Public infrastructure projects remain bogged down, exposing systemic bottlenecks that cannot be resolved merely by issuing mobilization funds late in the game.

Against this backdrop, the official posture remains pinned to a catch-up narrative. Economic managers insist that reaching the lower bound of the revised 3.5 to 4.5 percent full-year target is feasible, provided the economy expands by at least 4.4 percent in the second half. But hope is not a policy strategy. Counting on delayed disbursements from June and July to miraculously fuel an instant second-half turnaround ignores the lag between administrative releases and real-world economic output.

To escape economic stagnation, the country must immediately execute three critical policy shifts. First, the government must move beyond temporary fiscal handouts to deliver structural tax relief and tackle supply-side inflation in food and energy, restoring household purchasing power. Second, with public execution constrained, private capital must be mobilized to fast-track strategic infrastructure and technology projects-such as the Luzon Economic Corridor-by eliminating regulatory friction and creating a predictable investment climate. Finally, leadership must replace political distractions with strict governance discipline, prioritizing macro-level stability to dispel uncertainty and restore market confidence among consumers and businesses.

Calling 2026 a ‘lost year’ should be taken as a warning to act, not a guarantee of failure. It would do well for the government to move past administrative catch-up targets and execute the structural reforms needed to unlock private investment and restore household stability. Without a decisive pivot, the economy risks remaining trapped in low gear long after the second half of the year has passed.

THE slower growth rate of the Philippine economy in the second quarter has reduced the pressure for the central bank to raise the key interest rate, its governor said Monday.

Following the release of the second quarter gross domestic product (GDP) data last August 7, the governor of the Bangko Sentral ng Pilipinas (BSP) was asked if the pressure to hike rates was reduced.

BSP Governor Eli M. Remolona Jr. replied to reporters, ‘Yes.’

Prior to his affirmation, however, the central bank governor explained the balancing act that the BSP-the institution whose primary goal is to keep prices stable-has to consider, against the backdrop of subdued economic activity.

‘We’re focused mainly on inflation but we also consider the output gap,’ Remolona said.

Normally, he said inflation weighs heavily on the central bank’s monetary policy decisions given its price stability mandate.

However, Remolona emphasized: ‘Growth is implied by the inflation mandate. If you can maintain price stability, that tends to sustain growth.’

In the short run, however, the BSP governor said, ‘Sometimes there are problems with growth. And we take that into account. We don’t ignore that.’

Last Friday, the Philippine Statistics Authority (PSA) reported that the growth of the Philippine economy in the second quarter slowed to 2.3 percent from the 2.8 percent in the first quarter.

The latest reading was the slowest since the first quarter of 2021, when the economy contracted by 3.8 percent.

Excluding the pandemic period, it was the weakest growth recorded since the fourth quarter of 2009, when gross domestic product (GDP) expanded by 1.8 percent.

Two days before the release of the growth print or last Wednesday, the PSA reported that headline inflation eased to 6.2 percent in July from 6.4 percent in June.

The latest reading extended the downtrend from the 7.2-percent peak in April. Inflation eased to 6.8 percent in May and 6.4 percent in June, bringing the year-to-date average to 5 percent.

When asked, however, if the easing of headline inflation for the third straight month would rule out further rate hikes, Remolona said: ‘Hindi masyadong downtrend, eh. Yung core [inflation] one data point lang yung binaba. Yung headline bumaba ng ilang beses na.’

Core inflation, which strips out selected volatile food and energy items, eased to 4.2 percent in July from 4.4 percent in June.

According to Remolona, core inflation is a ‘good focus’ instead of the headline inflation.

‘Because the core [inflation] we can control, but the headline inflation is impacted by many supply shocks,’ added the BSP governor, partly in Filipino.

Both headline and core inflation, however, remained above the central bank’s 2 to 4 percent target range.

Further pressed if the Monetary Board would deliver one last rate hike at its upcoming August 27 rate-setting meeting, Remolona, who also chairs the MB said, ‘As much as necessary to bring inflation down to target.’

Analysts’ take on recent signal

Sought for comment, local experts shared mixed views on what the BSP chief might have meant as he agreed that the pressure of the central bank to raise the key interest rate has been reduced.

For one, Bank of the Philippine Islands (BPI) Senior Vice President and Lead Economist Emilio S. Neri Jr. told the BusinessMirror: ‘Gov was probably just shooting from the hip. I would rather wait until the August 27 meeting is close to hear his most recent comments before I share our opinion.’

Meanwhile, Jonathan L. Ravelas, senior adviser at Reyes Tacandong and Co., told this newspaper that the central bank may be delivering fewer hikes moving forward.

‘Balancing act between growth and falling inflation. My take is less hikes. But looking at 25 basis points hike on the 27,’ he also told this paper.

With the low domestic demand, analysts said over the weekend that there may no longer be ‘much room’ for the central bank to raise the key interest rate beyond the August 27 rate-setting meeting of the Monetary Board.

For one, United Kingdom-based research firm Capital Economics said the continued weakness of the economy means the case for further hikes is less clear-cut.

But with inflation still well above target, Capital Economics expects one more quarter-point hike on August 27, before it calls a halt to its hiking cycle.

The BSP has raised the key interest rate by a total of 50 basis points since the start of the conflict in the Middle East, delivering two separate quarter-point rate hikes at the Monetary Board’s rate-setting meetings held on April 23 and June 18.

These policy actions brought the Target Reverse Repurchase (RRP) Rate to 4.75 percent.

During its June 18 meeting, the Monetary Board decided that monetary policy tightening was ‘warranted’ to keep inflation expectations anchored and mitigate the risk of second-round effects.

‘The measured monetary policy action will also complement fiscal measures in supporting steady consumption and strengthening business sentiment,’ the central bank also said in a statement on June 18.

After more than a year since their last EP release, SunKissed Lola returns with ‘Edi Magalit Ka,’ a warm, playful, and honest new single that builds on the heartfelt storytelling behind previous fan favorites such as ‘Pasilyo,’ ‘Paki Sabi,’ and ‘Makalimutan Ka.’

Turning a familiar Filipino phrase into a song about love, patience, and choosing the relationship over the argument, the track marks a fresh yet familiar chapter for the band.

Known for heartfelt songs about love, longing, and the emotions people carry through relationships, SunKissed Lola enters a new chapter with a track that feels both familiar and refreshing. ‘Edi Magalit Ka’ takes its title from a phrase often heard in everyday conversations, especially between couples and friends, but the band gives it a softer meaning. Instead of sounding dismissive or prideful, the song becomes an affectionate way of saying that even when things get difficult, love is still there.

‘It’s a song about relationships,’ vocalist Laura Lacbain shares. ‘Hindi maiiwasan ang away sa relationship, pero hindi pa rin mawawala ang love. Susuyuin pa rin sa huli.’

Vocalist and guitarist Alvin ‘Bino’ Serito describes the track as a ‘loving anthem,’ saying that even when someone is upset, the feeling behind the song remains tender. ‘Even if you’re mad with your special someone, at the end of the day, they’re still your favorite person to come home to,’ he says.

The song first began in 2021, but its earliest version carried a more prideful tone. As the track developed, the band softened the lyrics and gave the song more emotional openness. According to vocalist and guitarist Dan Ombao, Bino helped shape the confession-like parts of the song and added the line ”Di ba?’ to make the message feel gentler.

Bino explains that the heart of the song lies in choosing love over ego. ‘No one has to win,’ he says. ‘I will always choose the relationship over the argument.’

That emotional shift became central to the final version of ‘Edi Magalit Ka.’ What could have been read as stubborn or sarcastic became something more sincere.

The title itself invites curiosity because it depends on how the listener understands it.

‘The title was intriguing in itself,’ Laura says. ‘You will be curious. Pwedeng i-send sa jowa. You really need to listen to the song to understand the context.’

Musically, ‘Edi Magalit Ka’ also reflects a more relaxed and intentional side of SunKissed Lola. Dan shares that the song started as an acoustic piece before he brought it to the rest of the band. From there, the arrangement came together naturally, with each member adding their own parts.

For bassist Danj Quimson, the goal was to keep the sound simple and laid-back so the lyrics could stand out. ‘We all united to make it sound laid-back, simple, and we wanted to highlight the lyrics of the song,’ he shares.

Compared to some of their earlier songs, which leaned into more unpredictable arrangements, ‘Edi Magalit Ka’ was designed to feel lighter, warmer, and easier on the ears.

‘For this one, we made it simple for the audience,’ Bino says. ‘We made it magaan sa tainga.’

Dan adds, ‘That’s also what the song asks for. A very simple, refreshing, and warm song.’

For drummer Genson Viloria, the song’s charm comes from how instantly familiar it feels. He shares that when he first heard it, he thought it sounded like a cover because of how catchy and natural it was.

While the track still carries the easy-listening quality that listeners have come to love from SunKissed Lola, the band sees it as a more vulnerable and straightforward release. For Dan, ‘Edi Magalit Ka’ stands apart because of how honest it feels. Laura also sees it as a fresh direction for the band, especially because it focuses on being in a relationship and working through the struggles that come with it.

‘It’s the comeback of SunKissed Lola,’ Laura says.

As the band approaches its fifth year, the release of ‘Edi Magalit Ka’ also marks a more mature and intentional era for the group. Danj shares that he felt a change in the band during the recording process, with each member becoming more focused on serving the song in the best way possible.

Bino says the band has returned to its roots with more conviction. ‘We know our strengths, and now we are able to maximize it,’ he shares. ‘We are more intentional in releasing this song.’

Ultimately, SunKissed Lola hopes ‘Edi Magalit Ka’ makes listeners smile, feel kilig, and maybe even rethink the way they handle small conflicts with the people they love.

‘We want them to feel what we felt the first time we played the song,’ Bino says. ‘We hope it makes them smile, the way kung paano namin siya niyakap sa umpisa.’

Laura adds that she hopes younger listeners, especially those new to relationships, realize that love also means learning how to work things out. ‘Sana kiligin din sila,’ she says. ‘Sana our young listeners na bago pa lang sa relationship, ma-realize nila na they need to work it out.’

With ‘Edi Magalit Ka,’ SunKissed Lola opens the door to more music, more stories, and a deeper connection with their listeners. Fans can expect more songs, more content, more gigs, more tours, and a closer look at the members beyond their roles in the band.

‘We want to be part of more people’s stories,’ Bino says.

‘Edi Magalit Ka’ is out on all major streaming platforms.