H1 growth will remain ‘modest’—BSP report
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IRAN WARNS US, ISRAEL OF RETALIATION FOR STRIKES; PROTEST DEATH TOLL CLIMBS
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HE slowdown in investments is expected to persist and would cause economic growth to remain “modest” through the first half of the 2026 amid “less favorable” economic sentiment, according to the Bangko Sentral ng Pilipinas’s (BSP) Monetary Policy Report. However, the central bank said growth is projected to be slightly higher in 2027, supported by the “lagged” impact of the BSP’s policy rate cuts since August 2024. “Nonetheless, persistent uncertainty surrounding global economic policies, particularly in trade and investment, continues to pose downside risk to domestic growth,” added the BSP.
The BSP noted, however, that “persistent uncertainty” surrounding global economic policies, particularly in trade and investment, continues to pose downside risk to domestic growth. Meanwhile, the central bank said potential output growth is expected to moderate in the near term, as “weak economic sentiment continues to constrain private investment.” “This is compounded by subdued public infrastructure spending following the proposed removal of flood control projects from the 2026 budget of the Department of Public Works and Highways [DPWH],” it added. Nonetheless, it noted that rising
real wages and household incomes could support consumption, while a gradual recovery in investment activity and infrastructure spending is expected to support overall demand beginning 2027. BSP highlighted that the output gap has become “more negative” relative to the previous round as governance issues have dampened investment prospects. Output gap, measured as the difference between the actual and potential output, is a summary indicator of the relative demand and supply conditions in the economy, according to the BSP. “The BSP monitors the output gap to assess the degree of demand-based inflation pressure,” it
said. If the output gap is positive over time, prices will begin to rise in response to demand pressures. Similarly, it further explained, if actual output falls below potential output over time, reflecting “economic slack,” prices will begin to fall to reflect weak demand relative to supply. In its Asia Economic Monthly report, Japan-based think tank Nomura said it sees 2026 GDP growth to pick up only slightly to 5.3 percent in 2026 from 4.7 percent in 2025 despite low base effects, which is at the lower end of the government’s 5 to 6 percent forecast range that was recently See “Growth,” A2
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‘TOURISM REVIVAL KEY TO REVVING UP GDP’ www.businessmirror.com.ph
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Monday, January 12, 2026 Vol. 21 No. 92
P25.00 nationwide | 2 sections 20 pages | 7 DAYS A WEEK
By Andrea E. San Juan @andreasanjuan
USINESSMEN belonging to the Filipino Chinese Chambers of Commerce and Industry Inc. (FFCCCII) are prodding the government to implement “comprehensive” tourism reforms to revive what it deems as the “lowhanging fruit” sector. FFCCCII made the pronouncement after it cited government data indicating that the Philippines recorded only 5.24 million international arrivals in January to November 2025, a decline of 2.2 percent from the same period in the previous year and a “concerning” 37 percent below the pre-pandemic level. FFCCCII President Victor Lim
said the Philippine tourism decline is a “direct blow” to the national economic well-being, considering that tourism is the economy’s “low-hanging fruit,” or “the most accessible engine for inclusive economic growth” as it directly creates jobs and sustains the micro, small, and medium enterprises (MSMEs). See “GDP,” A2
MANILA LAYOVER TOURISTS GET NEW CITY TOUR OPTION OF D.O.T By Ma. Stella F. Arnaldo Special to the BusinessMirror
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HE Department of Tourism (DOT) has just launched a brief city tour program for foreign tourists in transit through Manila. In a post on its Facebook page, the DOT said its Transit Tour Program is “designed to create positive first impressions of the Philippines and encourage travelers to return for longer visits.” The program is open for “eligible international transit passengers with at least an eight-hour layover, and carry-on luggage, and a connecting flight from the same terminal” at the Ninoy Aquino International Airport (Naia). Eligible transit passengers are those from visa-free countries or those holding valid Philippine visas. The program, which will start on January 16, will allow said passengers to “clear immigration and experience” Manila in four hours on weekends from Fridays to Sundays. The morning tours will feature heritage sites such as Intramuros or the National Museum, while the
afternoon tours will take participants to entertainment and lifestyle destinations such as Okada Manila or Solaire Resort in Pasay or Parañaque. “The Transit Tour costs $50 for a four-hour guided experience, inclusive of a 49-seater, air-conditioned tour bus, entrance fees, a DOT-accredited tour guide, travel insurance, a police officer onboard, and light refreshments,” said the government agency. Netizens and tour operators noted though that at $50 (P2,950), the Manila tour costs more than the hop-on, hop-off bus tours abroad which offer more tourist spots and may be done an entire day. London’s Big Bus Tours, for instance, cost just 29 euros (P2,000), according to its web site. In 2023, the DOT also launched its own Hop On, Hop Off Tours covering Manila, Makati, and Pasay/Entertainment City in Aseana. While DOT officials have yet to respond on the status of these tours, it’s believed to have ceased as none of its buses have See “Tourists,” A2
CHILDLIKE FAITH, TIMELESS DEVOTION A mother cradles her child as images of the Santo Niño gleam behind glass at a shop selling religious items along Tayuman, Manila, on Sunday,
January 11, 2026—seven days before the Feast of the Sto. Niño on January 18. The feast, celebrated nationwide, honors the Holy Child Jesus and marks the introduction of Christianity to the Philippines in 1521. Across the country, devotees prepare with novena Masses, processions, and vibrant festivities such as the Sinulog in Cebu, Dinagyang in Iloilo, and Ati‑Atihan in Aklan. Scenes like this reflect a faith quietly passed from one generation to the next, where devotion, family, and tradition converge in everyday moments. NONIE REYES
US optimistic about PHL’s Asean chairship By Malou Talosig-Bartolome
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HE United States said it is “very optimistic” about the Philippines taking over the chairship of Asean, highlighting Manila’s role in advancing America’s priorities in the region and ensuring peace in the Indo-Pacific. US Assistant Secretary of State for East Asian and Pacific Affairs Michael George DeSombre visited Bangkok and Phnom Penh last week to follow up on the Kuala Lumpur Peace Accords. The deal was brokered last October by US President Donald Trump and then-Asean chair Malaysian Prime Minister Anwar Ibrahim after deadly clashes erupted along the Thai-Cambodian border.
“We’re very optimistic with the Philippines now being the chair of Asean, and we’ll be focusing with them on our joint priorities and ensuring a safe, secure, and more prosperous Indo-Pacific,” DeSombre told reporters in a virtual press briefing from Bangkok.
Monitoring ceasefire
DESOMBRE underscored Asean’s role in deploying observer teams to monitor the fragile ceasefire between Thailand and Cambodia. “Their creation and deployment took longer than hoped, but we’re confident they will play an increasingly valuable role.” The ceasefire, reached last July after weeks of border fighting and mass displacement, was credited
to Trump’s direct intervention and Malaysia’s mediation. The Kuala Lumpur Peace Accords were signed in October, with Washington pledging continued support.
Funding commitments
DeSombre announced new US assistance packages: n $15 million for border stabilization and displaced communities n $10 million for demining and clearing unexploded ordnance n $20 million to combat scam centers and drug trafficking He said the restoration of peace “opens new opportunities for the United States to deepen our work with both countries.” In Bangkok, DeSombre also informed Thai Foreign Minister Siha-
sak Phuangketkeow that Washington plans to provide $68 million in Foreign Military Financing (FMF), $10 million for cybercrime cooperation, and $14 million under the Mekong-US Partnership (MUSP).
Border dispute
THE Thai-Cambodian conflict stems from France’s colonial-era demarcation of their 800-kilometer (500-mile) border, where both sides claim overlapping territory and several centuries-old temple ruins. The disputed frontier has flared repeatedly into violence, most recently in 2025, when two rounds of clashes escalated into the deadliest fighting in years. The second wave of hostilities See “Chairship,” A2
PESO EXCHANGE RATES n US 59.1480 n JAPAN 0.3771 n UK 79.5067 n HK 7.5912 n CHINA 8.4697 n SINGAPORE 46.0475 n AUSTRALIA 39.6114 n EU 68.9725 n KOREA 0.0408 n SAUDI ARABIA 15.7732 Source: BSP (January 9, 2026)