Category: Philippine Star

As corruption is an issue that affects us all, its impact on various industries cannot be denied. However, despite massive corruption issues recently brought into the spotlight in the Philippines, the property market remains resilient as stakeholders focus on improving compliance and transparency initiatives.

‘While corruption remains a long-standing concern, the Philippine property market continues to show resilience,’ KMC Savills chief executive officer Joe Curran told The STAR in an email.

‘Investor sentiment has become more discerning rather than withdrawn. Many are now focusing on developers and locations with strong compliance, transparency and ESG (Environmental, Social and Governance) practices. The government, in turn, has been introducing digital systems for permitting and land titling as well as implementing public financial management reforms to improve accountability and investor confidence,’ he added.

In a recent interview with reporters, Leechiu Property Consultants chief executive officer David Leechiu said the impact of corruption issues on the property market is likely temporary.

‘There might be a pullback in transaction volume, but I don’t think prices are going to fall. I think this is highly temporary,’ Leechiu said.

‘As far as the property market is concerned, we are very blessed because the office market continues to perform very strongly. Despite all the problems of the world and this country, the property market continues to perform very well. Data centers, malls, office tenants and residential tenants are expanding. And what you see, which is the depression in the stock market and the depression in the currency, it’s all sentiment-driven,’ he added.

Caution on luxury market

Asked to comment on reports that the luxury residential segment has seen weaker demand since corruption issues regarding flood control projects surfaced, Curran said there has been some caution.

‘It’s true that the luxury segment has seen some caution, particularly among speculative investors. However, this is balanced by continued interest from end-users, expatriates and overseas Filipinos who view prime developments as long-term lifestyle and investment assets,’ Curran said.

For licensed real estate broker Michelle Daygo, demand in the luxury property market continues to remain strong, noting that she has not personally seen weaker demand since recent corruption issues surfaced.

‘It’s just a certain portion of the buyers that are involved in politics. So, in my case, the take-up of luxury properties is not affected,’ Daygo, president and founder of Kuaima Realty, said in a phone interview.

Daygo emphasized that buyers in the luxury market remain mostly businessmen.

According to LPC, sales in the upper-middle to luxury segments rose sharply in the third quarter of the year, with the luxury segment posting a 214 percent increase in unit sales from the same period a year ago.

With some caution among speculative investors in the luxury market, Curran said developers are responding by elevating quality standards – integrating sustainability certifications, enhancing property management services and aligning more closely with global luxury benchmarks.

‘These efforts are reinforcing trust in the premium market even amid broader political or governance challenges,’ he added.

Zero tolerance for corruption

Aside from the efforts of the private sector, the government has also introduced measures geared toward addressing corruption in the property sector, particularly the housing market, such as the Department of Human Settlements and Urban Development’s (DHSUD) zero-tolerance policy for corruption, which is among its recently launched eight-point agenda.

Senior Undersecretary Sharon Faith Paquiz explained that as part of its zero-tolerance effort, the agency launched a zero-backlog program that aims to resolve pending regulatory cases filed with the agency.

‘When we launched the zero-backlog program, we inventoried more or less 3,100 to 3,500 cases pending since 2020, and we were able to zero it out in a six-week period,’ she said in a press conference last week.

‘What is good about this is that the applications for licenses to sell that have been pending or sleeping in the regional offices for the longest time have been released within a six-week period. It boosts the housing industry by issuing the necessary permits and licenses,’ she added.

Paquiz explained that ‘too many delays breed corruption’ when it comes to the issuance or release of required permits and licenses, as it builds the perception that one must pay for faster processing.

‘The longer the application, the more they will be encouraged to ask how much they need to give for it to be released. This is what we are trying to kill in the department. It has to be released within a certain period of time,’ she said in a mix of English and Filipino.

Improvement in transparency

The Philippines still has room for improvement when it comes to real estate transparency, as it ranks 45th among 89 countries in the Global Real Estate Transparency Index released by Jones Lang LaSalle in 2024. The country posted a composite score of 2.95, placing it among semi-transparent markets. This is three spots lower than its 42nd rank in 2022.

Based on the 2024 report, the Philippines posted its highest rank in the market fundamentals category, ranking 29th, while its lowest rank was in the regulatory and legal category, placing 55th. Other areas analyzed by the report include investment performance (43rd rank), listed vehicles (34th), transaction process (50th) and sustainability (50th).

As part of the country’s efforts to boost transparency in the real estate sector, the Real Property Valuation and Assessment Reform Act was signed in June last year. The measure will standardize the conduct of appraisal and valuation in the country through the creation of Philippine Valuation Standards, which push the use of prevailing market values.

In an earlier statement, Santos Knight Frank chairman and CEO Rick Santos said the law is an important step in raising valuation standards in the Philippines and encouraging transparency in the real estate sector.

He noted that global investors look at market transparency when entering emerging markets such as the Philippines, and the measure is a vital instrument to drive more investments to the country.

The law mandates a nationwide update of the Schedule of Market Values (SMVs), which will replace the BIR’s zonal values and local government units’ fair market values. It also covers the creation of a Real Property Information System, which will serve as a database of all real property transactions including sales and leases.

‘If reforms continue alongside greater transparency initiatives, the Philippines is well-positioned to sustain growth in the medium to long term. The country’s young population, strong domestic consumption and continued urbanization will remain key drivers,’ Curran said.

He emphasized that collaboration between the public and private sectors – including digitalization of real estate transactions, infrastructure partnerships and the promotion of sustainable developments – are all positive steps that can mitigate corruption-related risks and help attract more institutional capital into the country.

‘Overall, while corruption remains an ongoing challenge, both the government and the private sector have made visible efforts toward modernization, transparency and stronger governance – factors that are slowly but surely enhancing investor confidence in the Philippine property market,’ Curran said.

National Development Co. private sector board member Arsenio Bartolome believes that the government should move to combine and harness the assets of the Maharlika Investment Corp. (MIC), the National Development Co. (NDC) and the Development Bank of the Philippines (DBP) to grow the Philippine economy.

He even suggests that the government should seriously look into combining the private sector insurance fund, the Social Security System (SSS), with the Government Service Insurance System (GSIS) to create a bigger fund that would help the government invest in projects that would boost the local economy.

He pointed out that combining the SSS with the GSIS may lead to better benefits for SSS members since the GSIS provides better benefits to government workers.

In an exclusive interview, Bartolome expressed the view that the government should combine the assets of the MIC and NDC with that of the DBP, with the latter as the lone government financial institution focused on national development.

Just like what the government had done with the Philippine National Bank, which was privatized and is now owned by the family of taipan Lucio Tan, Bartolome is of the opinion that the Land Bank of the Philippines, which is also embroiled in the ongoing corruption probe on flood control projects, should also be privatized.

According to Bartolome, who previously headed the PNB and supported its privatization, the merger of the MIC, NDC and DBP would enable the government to focus on one or two major economic projects of national interest that would help spur economic activity, especially amid the slowdown in construction due to the ongoing probe into corruption in flood control projects of the Department of Public Works and Highways.

Bartolome noted that the MIC leadership has been unusually quiet for several months, with rumors swirling about the health of Rafael Jose ‘Joel’ Consing Jr., who was appointed in November 2023.

So far, the only announced investment of the MIC was a partnership with Thai agriculture giant Charoen Pokphand Group for a $1 billion private equity fund focusing on agriculture, food production and digital innovation. Since that announcement, no further update has been communicated by the MIC on the partnership.

Bartolome admits that he has been puzzled by the creation of the MIC from the start, pointing out that a review of its charter shows that its goal of national development is almost the same as the mandate of the NDC. The NDC, he said, could have easily been named Maharlika.

The NDC, Bartolome pointed out, holds most of the real estate assets of the PNB before its privatization and that of the DBP, and easily has more than P10 billion in assets.

In its 2024 annual audit report, it recorded a net income of P1.45 billion, a significant decrease from its 2023 net income of P3.45 billion. However, the 2024 audit report of the NDC questioned the investment property account valuation of P32.011 billion, noting the need to reconcile some variances and inconsistencies in the audit report.

Bartolome stressed the need for the Marcos Cabinet members to coordinate more closely in addressing the country’s economic challenges. ‘You get the impression they are not talking and are being overtaken by politics,’ he said.

‘Where are we going?’ Bartolome lamented, especially with the Philippines now being labeled as corrupt and foreign equity buyers exiting the local stock market, causing the bourse to momentarily fall below the 6,000 level before settling at that level at present.

Furthermore, Bartolome added, ‘In terms of power, we are the most expensive.’

He said the economic managers ‘seem to have lost their direction’ in guiding the economy, with Cabinet members not coordinating on how to steer the economy through the current corruption probe.

All eyes, Bartolome observed, are focused on the Independent Commission for Infrastructure or ICI.

‘How long do you think they should be able to come up with something? Six months? It should be very, very clear. But what if the investigation is wider? If within six months the commission is not able to complete its work, what is the proposal for the economy then?

‘Everything’s down. What does it mean? Nothing moves, nothing works. I think there’s no coordination, no understanding between the Cabinet members, the Department of Economy, Planning and Development formerly NEDA, and the Department of Finance,’ Bartolome lamented.

The NDC private board member also acknowledged the damage caused by talks of political threats and possible military upheaval that are harming the economy, leading to the flight of foreign equity funds and discouraging foreign investors from investing in the Philippines.

All these are happening even as the global economy is trying to deal with the tariff upheaval caused by US President Trump with his ‘Liberation Day’ tariff hikes and his continuing dispute with China, on which he recently announced his intent to slap a 100 percent tariff.

With the corruption probe unearthing eye-popping money laundering, there are also valid fears that the Philippines may once again be included in the Financial Action Task Force grey list, which may result in difficulties for Filipinos accessing funding or their personal foreign bank accounts.

Even though the Philippines has been removed from the grey list, there have been reports that one country has refused to accept Philippine pesos for currency exchange because we are seen as a corrupt country.

Less activity at Manila Golf

One interesting tidbit from Bartolome was his observation about how activity at the Manila Golf Club has subsided following the corruption probe.

Before the probe, Manila Golf was a beehive of activity for big shots with their entourage of bodyguards, necessitating the construction of a new canteen just for security personnel and constantly leading to a congested parking lot.

Nowadays, he chuckles, ‘there are more empty parking spaces.’

Following a reduction last month, the electric concessionaire Manila Electric Co. (Meralco) announced an upward adjustment for the month of October.

In an advisory on Monday, October 13, Meralco said that it will implement a rate increase of P0.2331 per kilowatt hour (kWh).

This increase brings the overall rate for a typical household to P13.3182 per kWh, up from P13.0851 per kWh in September.

For residential customers consuming an average of 200 kWh, this adjustment translates to an additional P47 in their total monthly electricity bill, according to Meralco.

Meralco attributed the rate hike to the generation charge, which rose by P0.1903 per kWh after having seen a P0.2603 per kWh reduction in the previous month.

The jump in the generation charge was primarily driven by the costs associated with independent power producers and power supply agreements, which increased by P0.3622 and P0.3567 per kWh, respectively.

The electricity concessionaire also attributed this to the depreciation of the local currency against the US Dollar, which it said affected 99% of IPP costs and 48% of PSA costs.

The generation charge also reflected the impact of the interim extension of Meralco’s power purchase agreement with First Gas-Sta. Rita plant, as approved by the Energy Regulatory Commission.

The increase, meanwhile, was partially mitigated by a significant decrease in charges from the Wholesale Electricity Spot Market, or WESM, which went down by P2.0688 per kWh due to a decrease of about 1,000 megawatts in Luzon’s peak demand.

For the period, IPPs, PSAs and WESM accounted for 21%, 74% and 5%, respectively, of Meralco’s total energy requirement.

Transmission and other charges. Transmission, taxes and other pass-through charges collectively registered a total increase of P0.0428 per kWh.

Meralco clarified that pass-through charges for generation and transmission are remitted to power suppliers and the grid operator, while taxes and universal charges are remitted to the government.

Meralco said its distribution charge remains unchanged, seeing no movements since the P0.0360 per kWh reduction implemented in August 2022.

‘Customers also continue to benefit from the ongoing implementation of the distribution-related true-up adjustment, equivalent to a reduction of P0.2024 per kWh for residential customers,’ it said.

Are the anti-corruption forces ready to play the long game?

They have to be, because their foes are. With billions at stake, with their political and family fortunes and the inheritance of their children and great-great-grandchildren at stake, the crooks play to win. And many have a proven track record of success.

These days it might look like the thieves are being drowned in the Great Flood of public opprobrium, but these creatures thrive in dirty water, and their swimming skills can win them an Olympic gold.

Their assets may be frozen and their fleets of luxury vehicles impounded, but these are the ones under their names. There must be other accounts, other fixed assets under other names, in the Philippines and overseas, that they can access outside the radar of the anti-graft and anti-money laundering police.

And a number of them are so well-connected that they can muddle or divert probes, discredit critics and investigators or sue them – and win.

Or else realpolitik can get in the way, and put an end to high-profile probes. We’ve seen this in the Blue Ribbon committee, where Sen. Panfilo Lacson’s resignation as chairman is seen as a way to save his former running mate Vicente Sotto III from losing the Senate presidency.

The Independent Commission for Infrastructure (ICI), which people had thought would pick up where the Blue Ribbon and House infra comm left off, has instead gone out of its way to protect the presumed innocence of the big shots implicated in the grand looting of national coffers.

If the ICI had been formed earlier and had handled the initial hearings instead of the Senate and House, we would never have seen those photos presented by sacked engineer Brice Hernandez of the huge piles of cash supposedly meant for kickbacks to senators and public works officials. All of those implicated, after all, are presumed innocent until convicted with finality, which could happen when many of us carping critics are already dead.

Meanwhile, speculations continue to swirl over whose house wall Baguio City Mayor Benjamin Magalong crashed into while carrying out what he thought was his mandate as ICI investigator of flood control anomalies.

Magalong is not changing his story that he quit the ICI after a Palace press briefing effectively sent him the message to ‘stand down’ and to ‘stop investigating’ the flood control scandal.

Presidential Communications Undersecretary Claire Castro dismissed this as ‘intrigue.’ She told us on One News’ ‘Storycon’ last week that it was President Marcos himself who had designated Magalong as ICI special adviser and not investigator. Castro said this was after Magalong refused to resign as Baguio mayor so he could concentrate fully on the ICI.

Magalong had said he appeared to have ‘struck a nerve’ and might ‘have hit too close to home.’ But he has since dialed back his pronouncements and seems ready to drop the subject, at least for now.

Castro had asked: ‘Whose nerve?’ She dared Magalong to ‘name names.’

Pressed about it on Storycon, Magalong jokingly likened our line of questioning to ‘torture.’ He told us only, ‘Let’s leave it at that.’ Last Friday, he also skirted telling The STAR’s online show ‘Truth on the Line’ whose home he might have gotten too close to in his probe.

Responding to my question, he said he and Public Works Secretary Vince Dizon have not yet looked into flood control projects in Ilocos Norte, where President Marcos’ son Sandro is a congressman. Former Ilocos Sur governor Luis Singson said last month that the Marcos bailiwick should be among the first to be subjected to the probe, adding that four contractors linked to the Discayas have many big projects in the province.

It’s a valid observation. Magalong told me that Dizon is expected to include Ilocos Norte in the inspections. For the sake of credibility, let’s hope this happens sooner than later.

Magalong told me he had no regrets in his short-lived stint in the ICI, whose members he continues to respect. He also urged people to give the ICI a chance to do its work as the commission sees fit, although he said its proceedings could be partly opened to the public – a divergence from the stand of its chairman.

Presumably, Magalong is happy to have imparted pointers on investigating the anomalies during his interactions with Dizon. Magalong has turned over to his replacement, retired national police chief Rodolfo Azurin, the voluminous notes and documents that he put together in those few days with the ICI.

Magalong’s departure from the ICI, however, continues to fuel speculations about the nerve that he struck. He is rumored to be the choice of disgruntled military officers (and PMA alumni who entered the police), mostly retirees and mid-level officers in the active service, to head a civilian-military junta.

But Magalong, like his fellow PMAyer and veteran mutineer Antonio Trillanes IV, maintained that a coup at this point is in the realm of wishful thinking, leaderless and with no support from the military top brass.

The mayor obviously knows who the disgruntled retired officers are. He indicates that while he sympathizes with their grievances against corruption and other anomalies in government, he disagrees with a leadership change and the proposed means to that end.

Like Lacson, Magalong is instead continuing his anti-corruption advocacy, even as issues are hurled in attempts to discredit them. So far the issue that refuses to go away is the speculation – and not just from the DDS – that they are protecting Marcos’ relatives, starting with resigned speaker Martin Romualdez.

Magalong is working with the Mayors for Good Governance to launch a website where government projects can be uploaded for public scrutiny and monitoring – for costing, implementation and completion, political credit grabbing and related attempts at using public resources for personal ends.

Lacson, who is still being wooed by Tito Sen to return to the Blue Ribbon (yes is yes, no is no, Lacson said), is expected to continue his anti-corruption exposés in his well-researched privilege speeches, no longer constrained by Blue Ribbon rules.

The more tortuous challenge in the long game, however, is in seeing the looters punished. This is the exclusive realm of those in charge of the legal system – a blackhole impervious to any exposé by lawmakers, multimedia and angry netizens.

Do our government leaders know what they are doing? That is, other than enriching themselves at the expense of the national good?

What happened with the 2025 National Budget is Exhibit ‘A.’

BBM said infrastructure programs are a priority, especially the rail transport systems for Metro Manila. But the budget he eventually signed relegated our counterpart funding for these ODA-assisted projects to the unappropriated section.

Donor agencies like JICA have reason to wonder what’s wrong with us. They are faithfully funding projects we urgently need, using the taxes the Japanese people paid and we don’t seem grateful enough to do our part of the deal.

Baba Takashi, JICA’s Chief Representative, diplomatically wondered about that in a recent speech at the Philippine Development Forum. Your budget priorities are often not aligned with your Philippine Development Plan, he observed.

Of course. The priorities set in our budget by our legislators with the connivance of DBM and BBM himself are pork barrel projects. To create fiscal space for pork, counterpart funding for ODA-sponsored infrastructure projects were relegated to unprogrammed status. Bahala na kung may pera pa.

But pork projects with no feasibility studies, no detailed engineering and are not even part of the national development plan are assured of funding. The intention is just to collect the funding, ghost projects lang.

Mr. Baba said: ‘We find that while the Philippine development plan sets the strategic direction, its alignment with the national budget is not always strong. This has caused delays in projects supported by Official Development Assistance (ODA).’

Naku! Mahiya naman sana ang mga opisyales natin. Tinutulungan na nga tayo, binababoy pa natin yung tulong nila.

Mr. Baba also noted the poor coordination by core government agencies, leading to inefficiencies in project rollouts.

Cited are bureaucratic bottlenecks or procedures that delay results on the ground. These include lengthy and unresponsive processes for procurement, approval of contracts, payments, right-of-way acquisition, etc.

After projects were completed, Mr. Baba complained that ‘inadequate funding or lack of long-term planning for maintenance leads to rapid deterioration of facilities and services. This gap undermines the very investment made in infrastructure.’

In other words, sinasayang lang natin ang pera ng mga Japanese taxpayers. If we keep this up, we will lose ODA support. South Korea has announced a pause in assistance due to the massive corruption in public works projects.

‘Let me emphasize that the infrastructure agenda is not just about building roads, bridges or facilities. It is about laying the foundation for inclusive growth and resilience through the combined commitment of government and development partners, backed by reforms and innovative approaches,’ Baba said.

The United States said something similar. In the State Department’s 2025 assessment of the Philippine business climate, it said, ‘Various organizations, including the World Economic Forum, have cited corruption among the top problematic factors for doing business in the Philippines.’

Aside from massive corruption in flood control projects, Sen. Win Gatchalian reports overpriced farm-to-market road (FMR) projects in 2023 and 2024, worth a total of P10.3 billion. These are not known as farm-to-pocket roads for nothing.

Based on Gatchalian’s list, the ongoing concreting of the FMR in Barangay San Roque in Tacloban City, Leyte is considered the most overpriced project, at the cost of P348,432 per meter. The DPWH standard is only P15,000 per meter. Under the 2024 GAA, the project was allocated P100 million for a length of 6.7 kilometers.

Corruption’s impact on our economy is horrible. ‘Investors aren’t fleeing because of weak fundamentals; they’re fleeing because of weak integrity. It’s a stark reminder that corruption is a weapon of mass wealth destruction… When trust breaks down, capital dries up, and everyone – government, business and the public – pays the price,’ SEC chairman Francis Lim said.

But there’s more.

Two flyovers in Iloilo Ungka Flyover (P680 million) and Aganan Flyover (P802 million) in Pavia, Iloilo have remained monuments to waste and possibly corruption. Both remain unusable: Ungka was closed to vehicular traffic after problems (foundations sinking, etc.). Aganan remains unfinished/unusable due to design/foundation flaws.

Both have the same general contractor, same design consultant, same defects, same need to stabilize the soil and similar amounts to rectify the design flaw at around P300 million each.

Worse, these flyovers are probably not needed. I have seen one of these flyovers in a recent visit to Iloilo and it is a shame.

And not to forget, the bridges in Cagayan Valley that recently collapsed. One was not yet officially open to the public and the other took years of delay to complete.

DPWH engineers on these projects should lose their professional license and be fired.

Then there is the sad state of our country’s rule of law, a major reason why investors choose other countries. The reputation of our justice system is the best that money can buy. In other words, as corrupt as everything else in our government.

The DOJ says the rule of law refers to measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency.

Almost anyone who has had experience with our judicial system has a sad story to tell. The tediousness of the process alone can test the patience of Job. The cost of litigation is why the poor end up in crowded jails for minor offenses while the corrupt politicians accused of plunder roam free.

Failure of law and order is a characteristic of a failed state. While we are not yet quite there, we soon will be at the rate our corrupt leaders are running our country.

So, here we are. Filipinos are running our government like hell. Manuel Quezon must be turning in his grave, never imagining it would get this bad.

It’s the Dasmarinas City Monarchs then everybody else.

Dasma continued to stamp itself as the top title contender by trouncing the Caloocan AM Spikers, 25-19, 25-10, 25-13, for its fourth straight win in the 2025 Maharlika Pilipinas Volleyball Association (MPVA) over the weekend at the Caloocan Sports Complex.

Not even the AM Spikers’ homecourt advantage could stand the juggernaut by the Monarchs, who needed just 77 minutes to take care of business and shore up their hold of pole position at 4-0.

Former UAAP juniors MVP and incoming UAAP seniors rookie Samantha Cantada finally introduced herself with 14 points to headline Dasma’s barrage in the eight-team upstart league founded by also Maharlika Pilipinas Basketball League chairman Manny Pacquiao.

Myrtle Escanlar added 12 points while Dennese Daylisan, Harlyn Serneche and setter Abegail Pono had eight, seven and six points, respectively, for the Monarchs, who are supported by the two-time UAAP and three-time SSL reigning champion National University Lady Bulldogs.

Dasma hardly needed the services of aces Vange Alinsug and Celine Marsh in scoring a dominant road win midway through the first round of the MPVA backed by Mikasa, Asics, Spurway Enterprise, Gerflor, Smart Communications and XIV Apparel.

Dasma’s stellar campaign so far in the MPVA included a commanding sweep of reigning champion Quezon back in the opener, ushering in a statement campaign as the new team to beat in the regional league aimed at championing further volleyball development like basketball in the MPBL.

No player managed to finish in double figures with Rhea Manalo scoring eight points as the AM Spikers remained winless in four games.

In the other game, Biñan Tatak Gel Arellano Lady Chiefs scored a quick rebound against the San Juan Lady Knights, 27-25, 19-25, 25-18, 25-17.

Laika Tudlasan erupted for 23 points while Heart Villaflores poured in 20 points for Biñan, which improved to 2-1 to stay in the Top 4 of the MPVA organized by the Volleyball Masters of the Philippines.

Samantha Gabrielle Tiratira and Marianne Lei Angelique Padilon were also instrumental with 11 and 10 points, respectively, in the Lady Chiefs’ balanced attack after losing to Quezon the other day.

Kaycee Balingit and Mary Christine Ecalla churned out 19 points each while Abegail Nuval tallied 16 points each for the Lady Knights, who slid to1-4.

The Bangko Sentral ng Pilipinas may continue easing its policy settings in the coming months, as analysts said the BSP’s latest surprise rate cut marked a decisive shift toward a more dovish stance amid weakening business sentiment and governance concerns in public spending.

HSBC ASEAN economist Aris Dacanay said the BSP’s move to reduce the policy rate by 25 basis points (bps) to 4.75 percent, its lowest in three years, was unexpected, but ‘even more surprising was the dramatic shift in tone.’

He noted that the BSP’s latest statement acknowledged ‘moderating domestic demand,’ a sharp contrast to its earlier view that demand remained firm.

The central bank attributed this change to weaker business confidence following corruption allegations in government flood control projects.

‘In explaining the change in outlook, the BSP singled out the impact of the flood control corruption allegations on business confidence and expansion plans,’ Dacanay said, citing the Monetary Board’s statement that ‘the favorable inflation outlook and moderating domestic demand provide room to further support economic activity.’

He said this could signal more rate cuts ahead, noting that BSP Governor Eli Remolona Jr. also disclosed that the central bank is reviewing its estimate of the neutral or ‘Goldilocks’ rate, which is now between four and five percent, lower than previously assumed.

‘Though having more room to accommodate a looser policy stance is in line with our view that policy rates could go down to as low as 4.5 percent, we didn’t expect the easing cycle to be this fast, nor did we expect the BSP to shift its tone this abruptly,’ Dacanay said.

HSBC now expects another 25-basis-point cut by December, bringing the policy rate to 4.5 percent by year-end and holding it steady through 2026.

Dacanay said the BSP could even ease more aggressively if growth remains below potential, as public and private infrastructure spending will be critical in determining the pace of recovery.

Meanwhile, BPI lead economist Jun Neri said the BSP’s latest rate cut brings the total reduction to 175 bps since August 2024, ‘one of the most aggressive in the region.’

He noted that the decision reflects a clear departure from the BSP’s August tone, when Remolona described the policy rate as being in a ‘sweet spot’ for both growth and inflation. ‘This stance has now changed significantly,’ Neri said. ‘The BSP now believes there is more room to ease policy than earlier thought.’

Neri said the move appears preemptive, with the BSP acting ahead of potential weakness in economic growth as governance issues weigh on infrastructure spending. He also expects another rate cut in December, followed by further easing in the first half of 2026.

‘We expect the BSP to pause its easing cycle once the policy rate reaches four percent in 2026,’ Neri said, although he cautioned that ‘such aggressive easing could prove to be an overshoot, raising the risk of a sharp policy reversal later on once inflation accelerates.’

Neri projected inflation to hover near two percent for the rest of 2025 before gradually rising to 3.5 percent by mid-2026 as base effects fade.

In a separate commentary, Citi said it expects a 25 bps cut at the last Monetary Board meeting on Dec. 11 followed by another 25 bps cut in February next year, bringing the key rate to 4.25 percent. There is also a risk of another 25 bps cut thereafter.

Citi noted that the BSP is now paying closer attention to sentiment indicators as activity data show signs of strain. Passenger car sales dropped by 23 percent year-on-year in July to August, remittance growth slowed to three percent and investment approvals have declined for three straight quarters.

Meanwhile, government infrastructure and capital outlays fell double digits year-on-year in July and August, reflecting tighter budget controls and slower project implementation following the corruption probe.

‘The BSP’s tone suggests it is prioritizing support for demand while remaining confident that inflation will stay below target through early 2026,’ Citi said.

The bank projects the Philippines to grow by 5.3 percent in both 2025 and 2026, below the official 5.5 to 6.5 percent target of the government.

‘With the Goldilocks rate likely closer to four percent, another 25-basis-point cut remains possible,’ it added.

The BSP has now cut rates seven times since August 2024, totaling 100 basis points last year and 75 basis points so far in 2025.

The Department of Public Works and Highways will introduce reforms to create a transparent and equitable system for allocating infrastructure funds as DPWH Secretary Vince Dizon has cited the need to simplify the ‘complex and confusing’ budgeting process previously implemented that had been open to congressional ‘insertions.’

At a press briefing last Friday, Dizon said he directed Undersecretary for planning and public-private partnerships Nicasio Conti to review and revamp the current budget planning and allocation system, which even dubiously classifies funds into so-called allocable and non-allocable categories.

Dizon said his long-term goal is to make infrastructure planning straightforward and transparent – ensuring that projects are aligned with local development council priorities and regional development council endorsements.

He noted that the 2026 DPWH budget had already been submitted to Congress prior to his assumption of office.

‘The only thing I managed to do was to remove all flood control allocations, make sure there were no duplicate or incomplete projects and ensure that everything included had proper plans, programs of work and the necessary local and regional approvals,’ he added.

The Department of Transportation (DOTr) has ordered Transportation Undersecretary Ricky Alfonso to explain his alleged involvement in a road altercation and the reported misuse of a government-issued protocol plate.

Acting Transportation Secretary Giovanni Lopez issued a notice to explain to Alfonso on Friday, October 10, directing him to justify why he should not face disciplinary action.

Unauthorized plate use. According to the DOTr memo, Alfonso’s vehicle bore a low-number protocol plate ’10’, which is officially reserved for presiding justices and the solicitor general. The same vehicle was reportedly involved in a road rage incident on Katipunan Avenue in Quezon City, where Alfonso’s driver allegedly punched and slapped another motorist during an argument.

Alfonso has three days from the issuance of the memo to submit a written explanation.

The memo stressed that ‘the use of protocol plates and the unauthorized use of blinkers do not automatically confer any sort of VIP status to any public official.’

Road altercation. Video footage of the altercation showed traffic enforcers attempting to mediate between the two parties, who were arguing over which vehicle had cut off the other. The footage quickly circulated online, prompting public outrage and calls for accountability.

The Land Transportation Office has since taken action, suspending the driver’s license for 90 days and issuing a show-cause order. Alfonso’s driver has also been terminated following the incident, officials confirmed.

The Quezon City government deployed over the weekend a rapid disaster assessment and needs analysis team to assist in rehabilitation efforts in areas affected by the powerful twin earthquakes that hit Davao region and nearby areas.

Fifteen personnel of city government agencies were deployed to Davao Oriental, which was among those severely affected by the magnitude 7.4 temblor on Friday.

Among those deployed were engineers from the city’s Department of Engineering and Department of Building Official, as well as members of the search and rescue team of the Disaster Risk Reduction and Management Office.

The local government said it would also send 500 hygiene kits for affected residents in Davao Oriental.

The kits contain toothbrush, toothpaste, shampoo, baby wipes, soap, sanitary napkin, comb, shaving razor, nail cutter, diaper and plastic chamber pots.

Quezon City earlier provided assistance to families affected by the magnitude 6.9 earthquake that struck Cebu on Sept. 30.