Policy rate cuts still on table, amid inflation By Cai U. Ordinario
A
WORLD » A6
ISRAELI STRIKE KILLS JOURNALISTS IN GAZA CITY, WORSENING THE DEATH TOLL FOR THE MEDIA
ROTARY CLUB OF MANILA JOURNALISM AWARDS
2006 National Newspaper of the Year 2011 National Newspaper of the Year 2013 Business Newspaper of the Year 2017 Business Newspaper of the Year 2019 Business Newspaper of the Year 2021 Pro Patria Award PHILIPPINE STATISTICS AUTHORITY 2018 Data Champion
@caiordinario
REDUCTION in key policy rates remains “on the table” despite the recent increase in the country’s core inflation rate, according to the Bangko Sentral ng Pilipinas (BSP). On the sidelines of the forum of the Economic Journalists Association of the Philippines (EJAP) on Monday, BSP Governor Eli M. Remolona Jr. said core inflation is not expected to reach 3 percent until 2027 while headline inflation is expected to average 2 percent this year. Last week, the Philippine Statis-
tics Authority (PSA) reported that core inflation remains elevated at 2.3 percent in July. This is faster than the 2.2 percent recorded in June but slower than the 2.9 percent recorded a year ago. (See: https://businessmirror.com. ph/2025/08/06/july-core-inflation-worries-analysts/). “Things look good, we have room for at least one more cut in the policy rate. We’ve cut already five times in the key rate, and we’ve cut [banks’] reserve requirements. Both measures help stimulate growth in the economy without stoking inflation,” Remolona said. The Monetary Board began reducing key policy rates in August
2024 by 25 basis points to 6.25 percent, followed by another 25 bps cut in October to 6 percent; and another 25 bps in December to 5.75 percent at the end of 2025. While the BSP kept interest rates steady in January 2025, by April 2025, the Monetary Board reduced policy rates by 25 bps to 5.5 percent, and by another 25 bps in June to 5.25 percent. The Monetary Board has three more meetings left in 2025 and industry expectations are pointing toward another policy rate reduction in the next meeting slated for August 28. This was after the BSP Governor issued forward guidance that
a rate cut is on the table in August 2025. (See: https://businessmirror.com.ph/2025/07/30/ august-rate-cut-seen-as-tariffchaos-clears/). Last October, the BSP reduced the Reserve Requirement Ratio (RRR) for universal and commercial banks by 250 basis points to 7 percent from the initial 9.5 percent, with a promise of even more cuts in the coming months (See: https://businessmirror.com. ph /2024/10/09/ banks-willprofit-from-cuts-in-reserve-requirement-ratio/). “Three (cuts) is unlikely kasi lagpas na yun dun sa mga tinitignan See “Policy,” A2
BusinessMirror A broader look at today’s business
EJAP JOURNALISM AWARDS
BUSINESS NEWS SOURCE OF THE YEAR
(2017, 2018, 2019, 2020, 2021) DEPARTMENT OF SCIENCE AND TECHNOLOGY
2018 BANTOG MEDIA AWARDS
NET FDI INFLOWS DECLINE BY 26.9% IN FIRST 5 MOS TO $3B www.businessmirror.com.ph
n
Tuesday, August 12, 2025 Vol. 20 No. 303
P25.00 nationwide | 2 sections 20 pages | 7 DAYS A WEEK
By Cai U. Ordinario
D
@caiordinario
ESPITE posting a double-digit increase in May, net Foreign Direct Investment (FDI) inflows still posted a contraction in the first five months of the year.
On Monday, the Bangko Sentral ng Pilipinas (BSP) said net FDI inflows contracted 26.9 percent to $3 billion in January-May 2025 from the $4 billion posted in January–May 2024. This was despite the 21.3-percent growth in net FDI inflows to $586 million in May 2025 from $483 million in May 2024. “The May FDI rebound shows investors still see value in the Philippines— but let’s be clear, it’s an emerging trend,” Jonathan Ravelas, senior adviser at professional services firm Reyes Tacandong & Co. told BusinessMirror. Ravelas said efforts to make FDI growth more sustainable require addressing ease of doing business concerns. This will make the country a more attractive place for investors to do business. “To make it sustainable, we need to cut red tape, protect contracts, and position the country as a stable, strategic hub in Asia,” Ravelas told this newspaper. Meanwhile, Ateneo de Manila University economist Luis F. Dumlao told BusinessMirror that FDI flows “regularly See “Net,” A2
FLOOD OF PATIENTS: NKTI GYM NOW HEALING GROUND A gymnasium at the National Kidney and Transplant Institute (NKTI) in Quezon City has been converted into a hospital ward, accommodating both chronic bronchitis
patients and leptospirosis victims, as seen Monday, August 11, 2025. The Department of Health (DOH) has opened specialized leptospirosis “fast lanes” in select government hospitals nationwide to speed up risk assessments and treatment for individuals exposed to floodwaters after recent heavy rains and widespread flooding. The initiative follows a spike in cases, with 2,396 infections recorded from June 8 to August 7, 2025, according to DOH data. Leptospirosis, a bacterial disease spread through water contaminated by the urine of infected animals, can cause severe complications such as kidney failure if left untreated. NONOY LACZA
PHL AIMS TO CLOSE AI SKILLS GAP VIA TARGETED TRAINING By Bless Aubrey Ogerio
I
@blessogerio
LOILO City—The government is banking on targeted upskilling programs to enable wider adoption of artificial intelligence (AI) in the country, amid persistent gaps in digital access. Science and technology chief Renato Solidum Jr. outlined measures aimed at preparing the workforce, students and the public to use AI in industries and daily life. “But we would like to know
what the industry needs so that we can train appropriately the current employees for the benefit of the industry,” Solidum said on the sidelines of the AI Festival here on Monday. He added that talent development will require support from the Department of Education (DepEd) and the Commission on Higher Education, while the Department of Science and Technology (DOST) committed to continue providing assistance through undergraduate and graduate scholarships. See “PHL,” A2
Govt wants to shield chips from US tariffs By Andrea E. San Juan @andreasanjuan
M
ANILA is still aiming to shield “several items” that are exported to the United States from the reciprocal tariffs slapped by Washington on Philippine products. Special Assistant to the President for Investment and Economic Afairs (SAPIEA) Frederick Go revealed this during the 2025 Economic Journalists Association of the Philippines (EJAP) Economic Forum on Monday after he was asked about the government’s response to US President Donald Trump’s announcement that he would slap 100 percent tariffs on imported semiconductors.
“On our part, we are negotiating with the USTR [United States Trade Representative], right? We are negotiating that the semiconductor exported out of the Philippines, which is the ATP [assembly test and packaging] be exempted from those. That is what we can do, or we can try to do,” Go said. He said the Philippine government is “lobbying” for the country’s semiconductor exports to be exempted from the tariff imposed by Washington. “(But), we still have to schedule a call or a meeting with them to clarify this matter.” On the sidelines of the 2025 EJAP Economic Forum, he said talks with Washington are ongoing and that the government is trying to include several items in the list
of products that will be exempted from tariffs. As to the specific products that the government wants to exempt from the duties, he said, “For example, an exporting country produces a certain product in abundance that cannot be produced in the United States. You may seek exemption for such products.” Go, however, refused to provide more details as the Philippine negotiating team is covered by a nondisclosure agreement (NDA). Trade Undersecretary Allan B. Gepty told reporters recently that the NDA would lapse in four years. He said it is Philippines’s wish to spare the semiconductor and electronics outbound shipments, a major export product of the country,
from additional duties. “We’re hoping that they [US] view the work we do here in the Philippines which is assembly, testing, and packaging to be part of the process that the United States may not really want to do,” Go told reporters. He said assembly, testing and packaging is a process that US semiconductor firms usually outsource. “They don’t want to do it in America. The very reason that this was outsourced means that this is probably something they are not keen on doing. So, we’re hoping that it will be viewed this way,” added Go. Last week, global news reports See “Govt,” A2
PESO EXCHANGE RATES n US 57.0310 n JAPAN 0.3864 n UK 76.6896 n HK 7.2655 n CHINA 7.9432 n SINGAPORE 44.3787 n AUSTRALIA 37.1785 n EU 66.4468 n KOREA 0.0411 n SAUDI ARABIA 15.1965 Source: BSP (August 11, 2025)