Category: Business Mirror

THE government is proposing a total of P69.9 billion for three major rice programs for next year in its bid to boost local production of the country’s staple food and make rice prices affordable.

Under the proposed P7.2-trillion National Expenditure Program, the government has earmarked P29.9 billion for the National Rice Program, one of the Department of Agriculture’s banner programs.

The proposed budget will bankroll the provision of quality seeds, farm inputs, extension services and modern production technologies to improve rice farmers’ productivity and incomes.

Another P30 billion is allocated for the Rice Competitiveness Enhancement Fund (RCEF). Of the amount, P9 billion will be used for rice farm machinery and equipment through the Philippine Center for Postharvest Development and Mechanization.

Meanwhile, P6 billion will fund rice seed development, propagation and promotion through the Philippine Rice Research Institute.

The remaining P15 billion will finance other priority programs, including rice training and extension services, financial assistance and credit programs for farmers, composting facilities, irrigation and soil health improvement, pest and disease management and farming support programs under the contract farming program.

The annual Rice Competitiveness Enhancement Program (Rcef) allocation was increased threefold from P10 billion to P30 billion under Republic Act 12078, which extended the fund until 2031. The fund is sourced from tariffs collected from rice imports.

Moreover, the government is seeking P10 billion for the Rice for All Program, which aims to make affordable rice available to consumers through Kadiwa Centers and other accredited facilities nationwide.

Budget Secretary Kim Robert C. de Leon said the proposed budget forms part of the administration’s food security agenda, which puts greater productivity and better livelihoods for farmers and fishermen at the center of the country’s efforts to secure its food supply.

‘For agriculture and food security, P261.7 billion is proposed across the agriculture sector, supporting programs that increase productivity, strengthen food security, and improve the incomes of our farmers and fisherfolk,’ De Leon said.

As the government seeks to achieve zero hunger by 2030, the proposed budget is intended to strengthen both production and consumer access to rice.

THE true pressure on the Philippine peso comes from a combination of external and structural forces-reflecting decades of neglected industrial policy, over-reliance on imported fuel, and a failure to build a robust domestic manufacturing sector, according to an economist.

Analysts have recently pinned the persistent weakening of the Philippine peso on global factors such as the growing expectations of a Federal Reserve rate hike and the higher oil prices amid the renewed tensions in the Middle East.

This time, however, an economist traced back to decades worth of structural neglect in the country to explain why the local currency is vulnerable to foreign exchange volatility.

Ateneo De Manila University (ADMU) economist Ser Percival K. Peña-Reyes explained to the BusinessMirror: ‘The true pressure on the peso comes from a combination of external and structural forces.’

‘We have decades of neglected industrial policy, an over-reliance on imported fuel, and a failure to build a robust domestic manufacturing sector,’ Peña-Reyes told this newspaper.

He said the peso is weak because the economy is ‘fundamentally uncompetitive in producing physical goods.’

Peña-Reyes made this comment after data from the Bankers Association of the Philippines (BAP) showed the peso continued to plummet as it closed at P62.565 against the dollar on Wednesday, 16.5 centavos weaker than its previous finish of P62.40 on Tuesday.

Data also indicated this marks the fourth consecutive record low of the local currency since it started to weaken on August 27 when it closed at P61.888 against the greenback.

With the local currency weakening further to P62.565 per dollar, two analysts unraveled short- and long-term blueprints to help businesses plan ahead and for the government to contain the second-round impact of a weaker peso.

Short-term solutions

John Paolo R. Rivera, Senior Research Fellow at Philippine Institute for Development Studies (PIDS) said the government’s ‘priority should be to contain the second-round effects of a weaker peso and higher oil prices.’

It should particularly keep an eye on the impact on food, transport, and other essential goods, while ‘maintaining credible monetary and fiscal policy,’ he added.

The Bangko Sentral ng Pilipinas (BSP), Rivera said, can continue ‘smoothing excessive volatility without necessarily defending a particular forex rate level.’

For businesses, the Senior Research Fellow at the state think tank said: ‘Importers can strengthen forex risk management through appropriate hedging, better timing of dollar requirements and diversification of suppliers where feasible.’

For exporters and other dollar earning firms, Rivera said they may benefit from a weaker peso in peso terms, ‘but they should also recognize that imported inputs, energy, and financing costs can offset part of that advantage.’

Long-term buffer

Meanwhile, Peña-Reyes said the long-term buffer for the peso requires ‘structural policy shifts.’

For one, he said the Philippines would need to beef up the export sector.

‘Governor Remolona himself admitted that the peso’s slide is difficult to stop without structural improvements in merchandise exports to offset the heavy import bill,’ Peña-Reyes said.

Another long-term solution he presented is to put in place ‘strategic industrial policies.’

‘Investing heavily in local manufacturing, food production, and agriculture reduces the structural need to import everyday commodities, which would naturally fix the trade deficit,’ said Peña-Reyes.

The government must also consider wage and tax reforms.

‘Giving workers higher disposable income through wage adjustments or localized tax relief can create an actual financial surplus that makes personal saving viable,’ added Peña-Reyes.

At a briefing at the Senate last week, BSP Governor Eli M. Remolona Jr. said the exchange rate itself is ‘something very hard to fix’ for a country like the Philippines.

Remolona explained to the Senate Committee on Finance that the country’s outbound shipments are ‘expensive’ and ‘inadequate,’ making it difficult to stop the local currency from further weakening.

‘Our trade deficit is about 13 percent of our GDP [gross domestic product],’ Masyadong mahal ang exports natin; kulang na kulang ang exports natin,’ the central bank governor said at the Development Budget Coordination Committee (DBCC).

‘So mahirap pigilin ang pagbaba ng peso. Pwedeng pigilan para mabagal pero hindi kayang i-fix; hindi pwedeng P60 lang, mauubusan tayo ng reserves, ng dollars,’ added Remolona.

Remolona, who sat in the DBCC briefing as resource person, shared his hopes for the peso.

‘But I still hope our exports will strengthen as it’s really lacking in volume. That’s our challenge here with the exchange rate.’

Trade deficit

The country’s trade deficit widened further in July as imports continued to grow nearly twice as fast as exports, data from the Philippine Statistics Authority (PSA) showed.

The PSA on Friday reported that the country’s trade deficit reached $5.97 billion in July, 34.9 percent higher than the $4.43 billion recorded a year earlier.

It was also the largest deficit since May 2026, when the trade gap reached $6.10 billion.

The wider trade gap came as import payments increased 19.8 percent year-on-year to $14.12 billion from $11.79 billion, while export receipts grew 10.8 percent to $8.15 billion from $7.36 billion. (See: https://businessmirror.com.ph/2026/08/29/july-trade-gap-widens-further-to-5-97b-as-imports-grow-twice-as-fast-as-exports/)

Within the trading session on Wednesday, the peso hit an intraday low of P62.69 against the dollar while its strongest point was seen at P62.4 against the greenback.

Global factors

Rivera said the peso’s drop to a new record low ‘reflects a combination of strong external pressures.’

‘Renewed Middle East tensions have pushed oil prices higher and increased demand for safe-haven dollar assets, while elevated US Treasury yields have made dollar-denominated assets more attractive. The fact that other Asian currencies have also weakened indicates that this is not solely a Philippine-specific development,’ added Rivera.

He said the peso may remain volatile and under pressure in the near term, particularly if oil prices remain elevated, geopolitical tensions persist, and US financial conditions stay tight.

For his part, Jonathan L. Ravelas, senior adviser at Reyes Tacandong and Co., also noted: ‘The USD/PHP weakened to 62.565 as safe-haven demand lifted the greenback after oil prices rose amid renewed Middle East tensions.’

‘Expect the peso to remain under pressure and trade within the 62.300-62.750 range in the near term,’ added Ravelas.

Along Nicanor Reyes Street, the Art Deco buildings of Far Eastern University (FEU) have stood through decades of change in Manila. Their geometric façades and sweeping lines form one of the most recognizable campuses in the University Belt, serving not only as classrooms and offices but also as enduring landmarks in the city’s architectural landscape.

FEU is home to the country’s largest ensemble of Art Deco buildings. Six of these structures, designed by National Artist for Architecture Pablo Antonio and his son Pablo Jr., have been declared National Cultural Treasures. Rather than standing as monuments to a bygone period, they remain in active use, making architectural preservation part of the school community’s everyday experience.

Founded in 1928, FEU has been in the heart of Manila for 98 years. Its presence has helped define the character of the city, while generations of students have passed through its classrooms during periods of reconstruction, urban growth, and social change.

That history gave wider context to a distinction conferred on June 18, when FEU received the Natatanging Tagapagbayad ng Buwis para sa Negosyo (Korporasyon) award during the Gawad Manileño 2026 at the Metropolitan Theater. Held as part of Manila’s 455th founding anniversary celebration, the awards recognized individuals and organizations whose dedication and service support the capital’s development.

In his remarks, Manila Mayor Francisco ‘Isko Moreno’ Domagoso emphasized that building a city is a shared responsibility. ‘A great city is not built by the government alone; it is built by the citizens who choose to care,’ he said.

FEU was the only university represented among the corporate awardees during the ceremony. Dr. Rowena Capulong Reyes, FEU Vice President for Corporate Affairs, accepted the recognition.

‘[Our] history has always been closely linked with the history of Manila,’ Reyes said. ‘For almost 100 years, FEU has grown alongside the city and its people. We are honored by this distinction and remain committed to contributing to Manila through education, culture, community engagement, and nation-building.’

The award highlights a form of civic participation less immediately visible than a heritage campus or an educational legacy. Fulfilling its financial obligations allows an institution to contribute to the city’s development while demonstrating fiscal responsibility, accountability, and responsible corporate citizenship.

FEU Chief Finance Officer Rosanna Salcedo said the recognition reflects the university’s approach to financial stewardship.

‘This recognition reflects FEU’s commitment to responsible corporate citizenship and good governance. It underscores the university’s strong financial stewardship, integrity, and accountability, while demonstrating that FEU not only educates future leaders but also actively contributes to the sustainable growth and progress of the community it serves.’ Salcedo said.

FEU will mark its centennial in 2028. The milestone will commemorate not only a century of education, but also a century since the university made Manila its home and became part of the city’s continuing life.

MOTORISTS using the San Fernando-Pulilan stretch of the North Luzon Expressway (Nlex) will receive a toll rebate on both northbound and southbound passages beginning noon of September 2, as the tollway operator moves to ease the burden on travelers caught in flooding that has snarled traffic across Pampanga.

The rebate will run until all lanes in the affected stretch are passable to all vehicle classes, Nlex Corp. said, with credits applied directly to a motorist’s radio frequency identification (RFID) account the day after the toll passage.

Non-RFID users were urged to have the device installed to qualify for the rebate and ensure seamless transactions.

The relief supplements the toll-free passage Nlex has extended to provincial buses since August 2026, part of the operator’s continuing effort to support public transport. Regular toll for the Pulilan-San Fernando route is P113 for Class 1 vehicles, P281 for Class 2, and P338 for Class 3.

The flooding stems from continuous Habagat, or southwest monsoon, rains that raised water levels at the Pampanga River, whose overflow inundated San Simon and Tulaoc and overwhelmed the area’s capacity to discharge excess water. The congestion has been concentrated at the Tulaoc Bridge in San Simon.

The rebate was arranged directly between the government and the operator. Transportation Secretary Giovanni Lopez said he personally reached out to Nlex Corp. President Luis Reñon to waive tolls along the corridor.

Beyond the immediate relief, the Department of Transportation (DOTr), through the Toll Regulatory Board (TRB), has directed Nlex Corporation to put in place a faster warning system for motorists during heavy rains and flooding, including direct SMS or text messages and other accessible platforms.

Lopez said toll operators must anticipate flood-prone areas and alert drivers before conditions deteriorate.

‘Our toll operator must be proactive.Let’s anticipate the spots that must be closely ttracked during heavy rain, so mtorists can be quickly alerted which parts of the expressway are flooded por impassable, and must be avoided,’ he said.

The operator was ordered to issue advisories and rerouting options through variable message signs (VMS), portable VMS, and other channels three hours before expected rainfall and closures.

The TRB has also served Nlex Corporation a Notice to Explain (NTE) dated August 31, 2026, requiring it to account within three days for the flood-induced congestion and to propose measures to mitigate the impact and prevent a recurrence.

In a separate letter on the same date, the operator was directed to consider reimbursing the toll fees of Class 1 motorists forced to make a U-turn along the expressway because of the flooding.

The DOTr and TRB likewise ordered Nlex to provide food and water and to set up portable toilets for motorists stranded in the heavy traffic.

Nlex said it has mobilized emergency, maintenance, traffic management, engineering, and customer service teams, along with pumping equipment and sandbags, to manage water accumulation and assist motorists.

It is coordinating with the DOTr, the Department of Public Works and Highways (DPWH), the Metropolitan Manila Development Authority (MMDA), the Northern Luzon Command (NOLCOM), the Philippine Coast Guard (PCG), and Pampanga’s local and provincial governments on the response.

The measures build on Metro Pacific Tollways Corp.’s (MPTC) announcement on Tuesday that it will raise the northbound and southbound pavements in Tulaoc, San Simon, once the Tulaoc Bridge elevation is completed-a permanent fix to flooding that Pampanga Gov. Lilia Pineda has attributed to a broader provincial drainage problem, with downstream areas like Macabebe and Masantol already full and unable to discharge water toward Manila Bay.

Palace: Free toll

Malacañang announced free toll for a certain section of the NLEx to assist motorists, who were affected by traffic congestion after its part in San Simon, Pampanga became flooded during the weekend due to the heavy rainfall caused by the Southwest Monsoon.

Citing the Department of Transportation (DOTr), Palace Press Officer Claire Castro said the free toll will last until the traffic situation in the Nlex normalizes.

‘This is in accordance with the directive of President Ferdinand R. Marcos Jr. to assist motorists and passengers stranded in traffic on Nlex due to flooding at the Tulaoc Bridge in San Simon, Pampanga,’ Castro said in Filipino in a press briefing on Wednesday.

She said MPTC decided to give free toll after talking with the President and DOTr.

‘The Nlex management-responded positively [to the President],’ Castro said.

Many motorists were trapped in horrendous traffic congestion in the Nlex during the weekend because of the flooding in San Simon, Pampanga.

Castro said DOTr and its attached agency, the Toll Regulatory Board to make sure motorists affected by the traffic congestion will be given food and drinks and access to portalets.

On Tuesday, the Presidential Communications Office undersecretary said it will let the MPTC, which operates the NLEX, decide if it will implement the free toll.

Senate Minority Leader Alan Peter Cayetano and his fellow Minority Bloc senators: Senator Mark Villar, Camille Villar, Christopher Lawrence Bong Go, Pia Cayetano, Imee Marcos, and Robinhood Padilla on Wednesday paid tribute to ordinary Filipinos whose acts of service, sacrifice, and compassion have made a difference in the lives of others.

During the National Heroes’ Day event organized by the Senate minority, they recognized 20 modern-day heroes, including security guards, reservists, volunteers, missionaries, healthcare workers, transport and delivery workers, and teachers.

‘It’s not about credit but about giving inspiration na sa hirap ng buhay at sa pagka-toxic ng politika, mayroon pa rin talagang mga taong willing to go beyond,’ Cayetano said.

THE Department of Agriculture (DA) and Department of Energy (DOE) are seeking alternative feedstock to expand domestic ethanol output as part of government efforts to slash reliance on imported fossil fuels.

Agriculture Secretary Francisco Tiu Laurel Jr. and Energy Secretary Sharon Garin explored initiatives to bring down feedstock costs and maximize idle distillery capacity, aimed at increasing the country’s ethanol blend to 15 percent from the current 10 percent.

The options to hike ethanol production include molasses and sugarcane juice from the sugar industry, as well as locally produced corn.

‘We are studying these options carefully, and there is potential for them to help bring down gasoline prices.’ Tiu Laurel said.

This comes as domestic feedstock has historically cost higher than imported supplies, while locally produced bioethanol prices are double that of imported bioethanol, according to the DA.

As such, every increase in feedstock costs translates to roughly P1 per liter increase in ethanol prices.

With locally-produced corn emerging as the leading alternative feedstock to complement molasses and sugarcane juice, the DA is studying ways to boost corn output through better seeds, mechanization, and contract farming.

The agency explained that corn can be harvested within 90 to 110 days, enabling supply to respond to increased demand.

In addition, it added that corn used for bioethanol will still have dried distillers grains with solubles (DDGS) as a byproduct which feed manufacturers can use as a high protein source.

At present, sugarcane byproducts supply the majority of local ethanol production.

Local ethanol production is estimated at 325 million to 385 million liters annually using sugarcane derived feedstock, while existing plants have a capacity exceeding 500 million liters.

To protect the sugarcane industry, officials said only the unused capacity could be sourced from corn, which would accommodate additional production without displacing existing agricultural output.

Despite this, the DA warned against creating another price problem since higher demand from ethanol producers could raise corn prices for livestock raisers, who rely on the crop for animal feed.

Tiu Laurel said palm oil could provide another long-term feedstock for biodiesel and even aviation fuel, although plantations would take about three years to mature.

The government is also finalizing a Philippine National Standard (PNS) for bioethanol, with the draft now undergoing public consultation.

THE Social Security System (SSS) sees room to be more aggressive in managing its assets, as higher interest rates provide an opportunity to boost returns and push investment income toward P71.412 billion this year.

In a press briefing on Tuesday, SSS President and Chief Executive Officer Robert Joseph M. De Claro said the state-run pension fund booked a net income of P55.5 billion as of July 2026, up from P48 billion a year earlier.

Income from investments, which stood at P27.157 billion in the first half of the year, is projected to reach P71.412 billion by year-end.

SSS Executive Vice President for the Investments Sector Ernesto D. Francisco Jr. said government securities will be the biggest contributor to investment income, as they account for about half of the pension fund’s investment portfolio.

Of the pension fund’s total investments worth P1.271 trillion as of end-June, government securities accounted for P629.050 billion.

SSS expects a return of P34.748 billion by yearend from this, providing a stable and secure foundation for the pension fund.

‘We are comparing our portfolio regionally and globally. We are actually still quite conservative,’ Francisco said. ‘We should be adding a little more aggressiveness because half of our portfolio is in government securities.’

With the Bangko Sentral ng Pilipinas (BSP) raising the key policy rate to 5 percent, Francisco said SSS could also benefit from the high-interest-rate environment and earn better returns on new investments, with prospective investments expected to generate yields of around 7 to 8 percent.

‘But we cannot hope for interest rates to remain high forever because high rates also affect the overall economy,’ Francisco said. ‘Still, we have a very robust portfolio, and we have been here for 67 years.’

Fresh hostilities in the Middle East also present opportunities for SSS, particularly given its holdings in US dollars.

Francisco said the pension fund could potentially sell some of its dollar holdings to help fund the 13th-month pension, or annual cash gift, it automatically credits to all eligible pensioners.

‘Whatever the situation, we look for opportunities. That is what we focus on rather than dwelling on the situation,’ Francisco said.

By the end of 2026, SSS expects to have P15 billion in foreign investments, based on its year-end estimates.

Under its charter, SSS can invest 1 percent of its investment reserve fund in foreign investments during the first year. This can be increased by 1 percent for each succeeding year, up to a maximum of 15 percent of the fund.

Other sources of investment income include equities and member loans, with SSS expecting P8 billion from each, as well as corporate notes and bonds with returns of P5.363 billion by year-end.

‘A big thrust that we’re doing is we’re trying to improve our loan portfolio. Our loans on average earn 200 basis points more than government securities. But they’re almost as safe because they’re secured by their contributions or their pensions,’ noted Victor Alfonso A. Limlingan, commissioner of the Social Security Commission.

SSS likewise estimated P11.763 billion in income from its property investments by year-end, providing a stable and good source of returns.

SSS expects its assets under management to grow to P1.5 trillion by the end of the year from the current P1.3 trillion, representing an expected increase of about P200 billion, Francisco said.

A former deputy governor of the Bangko Sentral ng Pilipinas (BSP) warned against the economy holding on to a negative real interest rate-when the nominal interest rate is lower than the country’s inflation rate-as the loss of purchasing power to inflation would be greater than the return earned on money.

In a commentary last Tuesday, former BSP Deputy Governor Diwa C. Guinigundo wrote that ‘a nominal policy rate of 5 percent may sound restrictive. But when inflation is above 6 percent, the real cost of money remains negative.’

Explaining further the concept behind a ‘negative real cost of money,’ Guinigundo told the BusinessMirror that the real cost of money is the nominal interest rate adjusted for inflation.

‘If the policy rate is 5 percent while inflation is above 6 percent, the real policy rate is still negative. In effect, the purchasing power lost to inflation is greater than the nominal return earned on money,’ he told this newspaper.

At a 5-percent policy rate and July headline inflation of 6.2 percent, Guinigundo explained in his commentary that the ex-post real policy rate remains about negative 1.2 percent.

Using the BSP’s own 2026 inflation forecast of 6.1 percent, the ex-ante policy rate is around negative 1.1 percent.

Even against its 2027 inflation forecast of 5.4 percent, it remains ‘slightly negative,’ added the former BSP deputy governor.

Anchored less firmly

WITH this, Guinigundo told the BusinessMirror, the main risk ‘is that monetary policy may not be restrictive enough to bring inflation back to target.’

‘Negative real rates can encourage borrowing and spending, discourage saving, and sustain demand even when the economy needs some cooling,’ he added.

Moreover, he said negative real rates can weaken the peso by making peso assets ‘relatively less attractive,’ especially if markets expect inflation to remain elevated.

‘If this persists, inflation expectations can become less firmly anchored, making inflation harder and more costly to bring down later,’ added Guinigundo.

Negative real rates impact

FOR households, he told the BusinessMirror that borrowers may still find credit ‘relatively inexpensive’ in real terms, while savers and fixed-income earners can see the real value of their money eroded by inflation.

This, he pointed out, can encourage consumption rather than saving.

For businesses, Guinigundo said negative real rates can support borrowing and investment, which he said is ‘positive’ if directed toward productive activities.

‘But if inflation and uncertainty remains high, businesses may still hesitate to invest despite relatively cheap money,’ Guinigundo emphasized.

‘The bigger issue is therefore not just the cost of credit, but confidence in future demand and economic conditions,’ he added.

For markets, Guinigundo said ‘persistently’ negative real rates can put pressure on the peso and encourage investors to seek better real returns elsewhere.

‘This is important because a weaker peso can, in turn, add to imported inflation, particularly through fuel and other dollar-priced commodities,’ he explained.

As such, he said the policy message is quite clear: ‘Monetary policy cannot a?ord to look only at the nominal rate. What matters is the real stance. With inflation still above 6%, a 5% policy rate remains accommodative in real terms.’

Direction correct

MOVING forward, Guinigundo pointed out that the challenge is to bring inflation down without unnecessarily sacrificing growth.

‘And that requires not only appropriate monetary policy but also credible fiscal and economic management and stronger supply-side measures,’ he added.

Guinigundo explained the concept behind real interest rate after he released a commentary that scrutinized the BSP’s forward guidance after the Monetary Board held its monetary policy meeting last August 27.

The BSP raised its policy rate by another 25 basis points last Thursday, bringing the target reverse repurchase rate to 5.0 percent.

‘It was the right direction,’ Guinigundo wrote.

However, he pointed out that the ‘more important question’ is whether it was enough and, more importantly, whether the BSP’s message was ‘strong enough to convince markets that it remains firmly committed to bringing inflation back to target.’

Reaction to hike

STILL, the former BSP deputy governor said the market’s immediate verdict was ‘hardly reassuring.’

Guinigundo noted that instead of strengthening after the MB’s decision, the peso weakened further, closing at a new record low of P61.888 to the dollar on Thursday and breaching P62 on Friday, at P62.265.

To be sure, he said the peso is influenced by global dollar strength, oil prices and other external forces.

But he pointed out that the peso’s immediate reaction to a rate hike is ‘nevertheless instructive,’ adding that the market did not seem ‘full convinced’ that the central bank had signaled an ‘unambiguous commitment to staying on top of inflation.’

With this, he said the issue is not simply whether the BSP should raise, hold or eventually cut its policy rate.

‘The more fundamental question is whether monetary policy is sufficiently restrictive in real terms to bring inflation back to target and keep expectations firmly anchored,’ added Guinigundo. He said the 25-basis-point increase therefore did not suddenly transform monetary policy from accommodative into restrictive. Instead, it merely made an accommodative real stance ‘somewhat less accommodative.’

Expectations shaped

FURTHER, Guinigundo said the BSP had earlier indicated that it could afford to be less aggressive because of the slowdown in economic activity, while ‘qualifying’ that position by the need to see a more convincing decline in inflation.

‘But markets may have interpreted the message as suggesting that the tightening cycle is already nearing its end,’ he pointed out.

Guinigundo then emphasized that central banking is partly about the current policy rate. ‘But it is also about shaping expectations of where policy is going,’ he added.

‘If households, businesses and markets begin to believe that the central bank is becoming more concerned about weak growth than inflation that remains substantially above target, expectations can become less firmly anchored. Once that happens, monetary policy may have to do considerably more later than it would have had to do today,’ he further explained.

A ‘preemptive move’

AT the monetary policy briefing on Thursday, BSP Governor Eli M. Remolona Jr. said they are ‘hoping that we won’t need another rate hike.’

However, Remolona also noted that the MB ‘will tighten as much as we need to, to bring the inflation rate down to its target.’

‘The [MB] is prepared to take monetary policy action as warranted to ensure that inflation returns to the 3-percent target, in keeping with its price stability mandate,’ the BSP said in a statement last Thursday.

The central bank said the measured increases in the policy rate will continue to anchor inflation expectations and mitigate the risk of further second-round effects.

FOODPANDA platform operator Delivery Hero Philippines Inc. is looking increasingly beyond Metro Manila as thousands of small and medium-sized businesses in regional markets become a growing part of its merchant base.

The Foodpanda GmbH Philippine subsidiary now operates in 150 cities and municipalities nationwide, reflecting its expansion from its domestic launch in June 2014. The company works with thousands of partner vendors and delivery partners across the country, its current profile read.

According to Delivery Hero PHL Growth and Marketing Director Patricia Jacinto, the company’s regional presence is increasingly tied to the growth of local businesses that remain rooted in the communities they serve.

‘MSMEs (micro, small and medium enterprises) outside Metro Manila are an increasingly important part of foodpanda’s business, with thousands of partner vendors across regional markets,’ Jacinto told the BusinessMirror.

She added the platform continues to see growth in its merchant base and overall business performance outside the capital.

Davao, for instance, has emerged as one of the regional markets where Foodpanda GmbH is seeing expansion among local merchants, according to Jacinto. Some of these businesses are using digital platforms to bring local food products and flavors into the wider online marketplace.

MSMEs make up the overwhelming majority of nationwide merchant base actively using the foodpanda platform, she said, mirroring the broader business landscape where more than 99 percent of establishments are classified as MSMEs, according to the Philippine Statistics Authority. The company’s push into regional markets comes as digital platforms become another sales channel for businesses outside major urban centers, although Jacinto said simply getting online is not enough. The regional push also mirrors Foodpanda GmbH’s broader expansion across Asia. The company operates in more than 400 cities across 11 Asian markets, including the Philippines, according to its corporate profile.

In December 2025, Delivery Hero PHL reported a double-digit year-on-year increase in merchant sign-ups across Asia and said it would expand its merchant-support programs across its Asia-Pacific markets in 2026.

The company said regional programs are expected to focus on areas such as merchant onboarding, digital tools and other support mechanisms for small businesses.

Riders and the platform economy

ALONGSIDE merchant expansion, Delivery Hero PHL continues to participate in discussions on rider welfare and social protection as policymakers examine the future of platform-based work, the company said in a statement.

Jacinto said the company supports stronger protections for riders but maintained that any regulatory framework should consider the operating realities of digital platforms.

‘We support stronger rider welfare and social protection, but any framework needs to be sustainable and responsive to the realities of platform-based work,’ she told the BusinessMirror. ‘We believe this is best developed through continued dialogue between government and industry.’

According to the company, its riders are covered by insurance during active sessions, including benefits for accidental death, permanent total disability and accidental medical expenses.

The company also said it continues to engage with government agencies, local government units and industry groups on issues involving the platform economy, including discussions with the Department of Labor and Employment on decent work and rider welfare.

SLOWER credit growth could weigh on domestic demand as the central bank’s tightening cycle starts to bite, according to the University of Asia and the Pacific (UAandP).

In the August issue of ‘The Market Call,’ UAandP economists said credit conditions are beginning to cool as businesses and households become more cautious about taking on new debt amid elevated borrowing costs.

‘Continued lending to productive sectors should cushion the slowdown, but weaker construction and consumer credit could increasingly weigh on investment and consumption,’ the document read.

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the growth of bank lending slowed to 9.8 percent year-on-year in June from 12.1 percent in May, reaching a four-month low as credit demand adjusted to elevated borrowing costs. Outstanding bank loans stood at P14.88 trillion.

The slowdown, however, was uneven across sectors. Lending to businesses grew 9.2 percent, led by those in the electricity, gas, steam and air-conditioning supply sectors. Lending to the latter expanded 22.6 percent.

Loans to wholesale and retail trade rose 7.6 percent while real estate lending grew 6.1 percent. Construction lending, however, contracted 13.9 percent year-on-year.

Consumer borrowing also moderated, with consumer loan growth easing to 17.8 percent in June from 19 percent in May. Credit card lending still grew 24.9 percent, while motor vehicle loans increased 8.6 percent.

‘The key risk is that further moderation in credit growth begins to drag on domestic demand,’ the UAandP noted.

The softer credit environment comes as UAandP expects economic growth to remain weak in the third quarter before gaining momentum toward year-end.

UAandP expects third0quarter growth to remain close to the 2.3 percent pace recorded in the second quarter, citing August flooding and delayed infrastructure spending as major factors.

The Philippine economy grew 2.3 percent in the second quarter of 2026, slower than the 2.8 percent expansion in the first quarter, according to the Philippine Statistics Authority (PSA).

UAandP economists expect growth to pick up in the fourth quarter as government infrastructure spending returns, with quarterly growth potentially moving above 4 percent.

‘The return of government infra spending, softer crude oil prices, and better demand conditions are tailwinds to watch out for,’ read the report.

The think tank’s expected recovery, however, faces continued price pressures, with inflation seen remaining above the BSP’s target through 2027.

The UAandP cited geopolitical tensions, agricultural damage from heavy rains, a potentially aggressive dry season, and minimum-wage adjustments as risks to the inflation outlook.