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A broader look at today’s business Friday, April 25, 2025 Vol. 20 No. 194
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PHL MISSING SGD GOALS, BUT UPBEAT ON UMIC ’26 n
Retail lending to reach 25% share of all loans: Moody’s
By Malou Talosig-Bartolome
T
HE Philippines is lagging behind its goals to eradicate poverty and zero-hunger goals, yet the National Economic and Development Authority (Neda) is confident the country can become an upper middle income country (UMIC) by next year. Neda Secretary Arsenio Balisacan said they are hoping that the Philippines will achieve its growth goal this year despite the looming global trade disruption with Trump’s plan to impose tariffs. According to the World Bank, for the Philippines to be considered an upper middle income economy, the gross national income per capita should be between US$4,516 (around P257,000 ) and US$14,005 (around P800,000). The Philippine GNI in 2024 is P75,848.55. Balisacan said the country was lagging behind its Sustainable Development Goal of “no-poverty in all forms” largely due to the effects of the Covid-19 pandemic. Fighting hunger is likewise a challenge partly due to the vulnerabilities of communities from the effects of typhoons and other economic shocks. “Regardless of what metric you use, what you find is that the level of poverty as the proportion of population has been going down. “We are relatively slow compared to our neighbors but we are less inclusive. This time, we are seeing more inclusive growth so that to us, it gives us an optimism that we can hasten the reduction of poverty,” Balisacan said. He said the biggest challenge in attaining the middle-income economy status is secure “massive investment” in public and private sectors, and generate “high quality jobs.” See “PHL,” A2
By Reine Juvierre S. Alberto
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tail Competition and Open Access (RCOA) program. “Meralco has shown commendable steps. Its technological capabilities, especially in disaster response, are exemplary and should be adopted more widely by electric operators. In diversification of sources of energy, including renewable energy, the Meralco group has also been a leader,” Lotilla said. Despite Meralco’s achievements over the years, Lotilla strongly believes that a DU’s performance is foremost measured in its ability to deliver the most affordable power rates. “Meralco does not have the cheapest power rates when com-
ETAIL lending in the Philippines is poised to account for a quarter of all bank loans within three years, despite banks’ vulnerability to heightened asset risks due to borrowers’ higher indebtedness and exposure to unsecured credit, according to Moody’s Ratings. In a report, Moody’s Ratings said the share of retail loans in the banking system is expected to reach around 25 percent over the next three years, compared with 18 percent in December 2021. Retail loans are projected to continue outpacing non-retail loan growth, on the back of strong credit demand and policy initiatives. Credit demand will be driven by the country’s “strong” economic growth as well as lower interest rates, which make retail loans more “attractive.” The Bangko Sentral ng Pilipinas (BSP) recently lowered the key policy rate by 25 basis points to 5.50 percent, making borrowing costs cheaper. The country’s large unbanked population also presents an opportunity for banks to grow their retail loans, as the central bank aims to increase the percentage of adults with transaction accounts to 90 percent in 2028, Moody’s Ratings said. Retail loan growth is also expected to be supported by the Muslim population, as most have expressed interest in using Islamic financial services. Local banks are also focusing on expanding their retail loans, leveraging a large retail deposit base and various avenues to acquire new customers and crosssell products. However, Moody’s Ratings warned that new borrowers are untested and banks face higher asset risks if macroeconomic conditions change unexpectedly. “Credit cards and personal loans are the riskier retail products, while job losses could put stress on retail loans,” the credit
See “DOE,” A2
See “Retail,” A2
MANILA MOURNS THE PONTIFF A portrait of Pope Francis graces a chapel inside the historic Manila Cathedral, where the faithful now gather in silent prayer for his eternal rest. As news of the pontiff’s passing reverberates across the globe, the portrait becomes both a symbol of mourning and a focal point of devotion—honoring the life and legacy of the spiritual leader of over a billion Catholics. BERNARD TESTA
DOE to Meralco: Be the very best you can be By Lenie Lectura
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@llectura
NERGY Secretary Raphael Lotilla wants the Manila Electric Company to further step up and be the “very best it can be” following the renewal of its franchise for another 25 years or until 2053. During the 2025 Giga Summit spearheaded by the Meralco Power Academy (MPA), the energy education unit of Meralco, Lotilla recognized Meralco’s important role in the power industry. “What I would like to see is more internalization of the responsibilities that Meralco and our distribution group utilities have towards
the public far beyond the borders of its franchise area. In this way, as we confront the dual challenges of energy security and affordability, we can step up to the challenge. This remains my main message to Meralco: Be the very best you can be,” said Lotilla. Meralco currently serves 7.8 million customers in 39 cities and 72 municipalities. Its coverage area is five times larger than the combined area covered by two largest water utilities, which is less than 2,000 square kilometers, compared to Meralco’s nearly 10,000 square kilometers. Moreover, Meralco’s power demand of nearly 9,000 megawatts (MW) accounts for half of the entire
country’s power demand and 70 percent of Luzon’s demand. In the retail electricity market, the energy chief said that nearly 40 percent of all contestable customers in the Meralco franchise area are served by Meralco’s local retail electricity suppliers (RES) and its RES units serve the combined demand equal to 25 percent of the entire country’s contestable demand. Contestable customers are large electricity end-users with a minimum monthly average peak demand of 500 kilowatts (kW). They can choose their electricity supplier by switching from their existing distribution utility to a RES under the government’s Re-
@reine_alberto
PESO EXCHANGE RATES n US 56.6020 n JAPAN 0.3954 n UK 75.0826 n HK 7.2948 n CHINA 7.7659 n SINGAPORE 43.0074 n AUSTRALIA 36.0159 n EU 64.1244 n KOREA 0.0397 n SAUDI ARABIA 15.0903 Source: BSP (April 24, 2025)