BSP urged: Adopt ‘modest easing’ T
WORLD » A6
ISRAEL ISSUES SWEEPING EVACUATION ORDERS IN GAZA STRIP, RAISING FEARS OF IMMINENT GROUND OPERATION
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HE Bangko Sentral ng Pilipinas (BSP) should adopt a “modest easing” approach as uncertainties in growth, financial stability and weakening external position pose risks to inflation and the peso, a New York-based think tank said. In a commentary by GlobalSource Partners, country analysts Diwa Guinigundo and Audrey Herrera-Lim said inflation may have settled to a low of 1.7 percent to as high as 2.1 percent in March. This is based on the vector error correction model (VECM) and dynamic factor model (DFM) they used, considering the impact of exchange rates, food prices and Dubai crude. As such, the inflation forecast was driven by easing cost of food, utilities and transportation.
Specifically, rice prices dropped due to more ample supply from imports and government-imposed price controls. Utilities costs and transport expenses also showed the same downtrend after the costs of power and fuel fell. “Such prognosis allows the monetary authorities ample leeway to further ease monetary policy. However, some word of caution is imperative,” the analysts said. While the Bangko Sentral ng Pilipinas, in its recent Monetary Policy Report, said that economic growth would continue, it said expansion could be moderate in 2025 and 2026 due to weak services and agriculture. Latest forecasts of the International Monetary Fund and the World Bank are also just close to the lower end of the government’s 6 to 8 percent growth target.
“Weak business activities, given the flexibility afforded by within-target inflation forecasts, could argue in favor of more rate cuts,” the analysts said. United States tariff policies as well as higher global commodity prices cited by the BSP could also lead to sustained monetary easing, they added.
Growing risks
HOWEVER, the BSP has also flagged growing risks to financial stability as global trade pressures, geopolitical tensions and domestic debt concerns. Moreover, the BSP projects that the current account and overall balance of payments position may be weaker this year due to slower global trade and subdued investor confidence linked to increased uncertainty
in global trade policy and geopolitical developments. Analysts said inflows from foreign investments and foreign debt would not suffice to reverse the “huge” current account deficit of nearly $20 billion in 2025 and over $21 billion in 2026. “Unless the BSP keeps its policy rate steady, or shifts to a more cautious stance, inflation is bound to gather some pace due to exchange rate pass through,” they said. Still, the think tank said the BSP could sustain its easing cycle at least twice this year and in “baby steps.” “With a potentially weak external payments position and the adverse exchange rate pass through, monetary policy could in fact remain generally cautious until the See “BSP,” A2
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Wednesday, April 2, 2025 Vol. 20 No. 172
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N.G. DEBT HITS NEW HIGH OF ₱16.6T AS OF END-FEB T
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By Reine Juvierre S. Alberto @reine_alberto
HE national government’s outstanding debt soared to a new high of P16.632 trillion as of the end of February, according to the Bureau of the Treasury (BTr). Treasury data showed the outstanding debt grew by 1.96 percent to P16.632 trillion as of end-February from P16.312 trillion in endJanuary. “The rise was primarily driven by the net issuance of new domestic and external debt to support more public programs and projects,” the Treasury said, adding that the peso appreciation helped manage foreign debt obligations. Ateneo de Manila University economist Leonardo A. Lanzona told the BusinessMirror that the peso appreciation, which partially offset the rising debt, can only be temporary. Lanzona said the US Federal Reserve’s announcement that it will maintain its key policy rates and the Bangko Sentral ng Pilipinas’s easing monetary policy could make the US dollar stronger.
Year-on-year, outstanding debt rose by 9.57 percent from P15.178 trillion. Broken down, the government’s outstanding debt is composed of 67.5 percent domestic debt, while the remaining 32.5 percent of the total was sourced externally. “This financing mix reflects a prudent approach to debt management to help mitigate exposure to external risks while taking advantage of the country’s liquid domestic market,” the Treasury said. As such, domestic debt reached P11.223 trillion, 1.26 percent higher than the P11.084 trillion recorded in January 2025. This was due to the P140.72 billion in net domestic financing, the Treasury said, as the gross issuance of government securities reached P268.25 billion, exceeding redempSee “N.G.,” A2
REPORT: NEW ERA OF SUPPLY CHAIN VULNERABILITY UP AHEAD By Andrea E. San Juan
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@andreasanjuan
S tariffs are expected to result in a “new era of supply chain unpredictability” as congestion and a series of bottlenecks are expected in Intra-Asia with rising demand from shifting supply chains, according to a report by global logistics provider Dimerco. Peter Lin, Vice President for Ocean Freight at Dimerco Express Group, said with US tariffs and potential port taxes on Chinese-built or operated vessels “accelerating” the shift away from China, Southeast Asia is absorbing a surge in manufacturing and trade flows. “But without rapid improvements in vessel capacity and port infrastructure, we’re heading toward a major stress test in
Intra-Asia logistics. The real risk isn’t just cost—it’s congestion, bottlenecks, and a new era of supply chain unpredictability.” Dimerco explained in its April 2025 Asia Pacific Freight Report that US Port Tax on Chinesebuilt/operated vessels may lead to vessel redeployments, skipping smaller US ports, and increased intermodal movements, causing congestion and higher costs. “The US is proposing a fee of up to $1.5 million on Chinesemade ships entering US ports, aiming to boost domestic shipbuilding,” the Dimerco report noted. The global logistics provider said this could “disrupt” coal and agricultural exports, as vessel availability shrinks. In fact, the freight report noted that the coal industry, worth See “New,” A2
TURNIP THE COOL A vendor sells bundles of turnips (singkamas) for P50 along Commonwealth Avenue in Quezon City. Rich in vitamin C, folate, iron and calcium, singkamas is a popular summer
snack, often enjoyed fresh to help beat the heat. As Metro Manila continues to experience sweltering temperatures, PAGASA has placed several areas under “extreme caution” for heat indices. On April 2, 2025, Dagupan City, Pangasinan, is forecast to hit a scorching 45°C, highlighting the intensifying summer heat across the country. NONOY LACZA
Masungi Georeserve bucks DENR junking of accord By John Eiron R. Francisco
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LUE Star Construction & Development Corp. (BSCDC), the developer behind the renowned ecotourism site Masungi Georeserve in Rizal, organized the Masungi Nature Defense Camp on Tuesday, coinciding with the 15th day of the eviction notice issued by the Department of Environment and Natural Resources (DENR). According to Masungi Georeserve Foundation (MGFI) CoFounder Ann Dumaliang, the defense camp—attended by hundreds of volunteers, conservationists, and community leaders— symbolizes their stand against the eviction and the cancellation of the 2002 Supplemental Joint Venture Agreement (SJVA), which she
claimed was carried out without due process or dialogue. “What we really want to emphasize today is how damaging DENR’s decision to cancel the agreement is. For three decades, this agreement enabled the protection of this area, despite the destruction happening around it,” Dumaliang said in a mix of Filipino and English. She said many of the issues raised by DENR had already been addressed over the past two years, making the cancellation even more confusing. Instead of engaging in discussions or reviewing the available information, the department opted for outright termination, she said. On the newly released DENR document, Dumaliang asked why the department did not raise its
concerns through the oversight committee or initiate a dialogue before making a final decision. “If they had these concerns, why didn’t they bring them up in the oversight committee? Why weren’t we called for discussions? Instead, they imposed an instant cancellation,” she said, adding that upon reviewing the legal documents, “a lot of them are misleading or plainly false.” In March 2025, the DENR canceled its 2002 SJVA with BSCDC and gave a 15-day notice to vacate the area, citing legal issues and unfulfilled contract terms. The reasons for the cancellation included the lack of a presidential proclamation designating the land for housing, the absence of proof that the project went through a proper
bidding process, and the failure to complete the 5,000-unit Garden Cottages housing project within five years of the agreement’s signing. However, Dumaliang clarified that the construction firm had already delivered housing units in the first area of the georeserve, known as the JVA area, which the company entered into in 1996. She explained that, due to various developments, the project was opened to the open market, leading to land-only options. Meanwhile, they have yet to receive a response from President Ferdinand Marcos Jr. regarding their appeal to revoke the cancellation of the SJVA. However, they remain firm in their call to suspend the cancellation See “Masungi,” A2
PESO EXCHANGE RATES n US 57.3820 n JAPAN 0.3835 n UK 74.2236 n HK 7.3768 n CHINA 7.9006 n SINGAPORE 42.7618 n AUSTRALIA 36.0359 n EU 62.0758 n KOREA 0.0391 n SAUDI ARABIA 15.3027 Source: BSP (March 31, 2025)