NGCP studies ₧28.3-B cost recovery By Lenie Lectura
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HE National Grid Corporation of the Philippines (NGCP) is assessing the impact of the P28.29-billion staggered cost recovery on its operations while it awaits the decision on the fifth regulatory period (5th RP) rate reset. The grid operator could not yet say how the amount will affect key transmission projects moving forward, but NGCP spokesperson Atty. Cynthia Alabanza said fil-
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@llectura
ing for motion for reconsideration remains an option. “There is space for that but again, we are studying it if it’s necessary. There were several items that were disallowed and we’re still studying it further to see the impact on the NGCP side. On the consumer side, I think it was announced by the chair already but on the impact on NGCP side, we’re still studying,” she said. Last week, the Energy Regulatory Commission (ERC) set NGCP’s maximum allowable revenue (MAR) at P335,788.65 bil-
lion for the fourth regulatory period (4RP), or from 2016 to 2022, using the “as spent” approach and adopting a Weighted Average Cost of Capital (WACC) of 11.33 percent. MAR is the maximum amount that NGCP is allowed to take in annually to recover its operational expenses. In contrast, NGCP applied for P554 billion for the 4RP. Following this decision, NGCP was entitled to recover an additional P28.29 billion in under-recoveries, leading to an increase of P0.0384 per kilowatt hour (kWh)
in transmission charges to be collected from consumers over 84 months starting August this year. “We will implement the decision of the ERC for the recovery of the P28 billion this coming July 2025 billing period. The impact of this to consumers is starting August,” said NGCP Head of Business and Regulatory Development Julius Ryan Datingaling during a news conference. Alabanza said the NGCP still welcomed the ERC decision because it gave the grid operator a See “NGCP,” A13
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Tuesday, July 15, 2025 Vol. 20 No. 275
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By Andrea E. San Juan @andreasanjuan
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HE Philippine government still views the United States as a “very important” trading partner as it accounts for 10 percent of Philippine trade, but some Filipino economists deem it more important to pivot to other markets such as countries within the BRICS (Brazil, Russia, India, China, and South Africa) bloc, and the 27-member bloc European Union, among others. TRADE TUG-OF-WAR: STAY WITH U.S. OR PIVOT TO NEW MARKETS? TOP PHILIPPINE EXPORT MARKETS Pro-US Trade Advocates
Leonardo Lanzona (ADMU): ❝The sooner we move away from the US, the better.❞
Maria Ella Oplas (DLSU): ❝“It’s still worth working on a trade deal with the US despite how they’re treating us now.❞ Jonathan Ravelas (Reyes Tacandong): ❝We need allies like the US to help defend the West Philippine Sea.”
The country’s economists are split on how they view the US as a trading partner after Washington hiked the reciprocal tariff that it would be imposing on
Dante Canlas (Former NEDA): ❝Just negotiate with ASEAN, ANZ, Japan, China, and BRICS.❞ George Manzano (Former Tariff Chief): ❝Trump won’t agree to zero tariffs. An FTA is unlikely.❞ Robert Young (FOBAP): ❝An FTA with the US is a long shot under MAGA thinking.❞ Maritess Jocson-Agoncillo (Conwep): ❝We’re not selling to India. 70% of our exports still go to the US.❞
BM Graphics: Ed Davad | Sources: PSA
Allan Gepty (DTI): ❝An FTA with the US will strengthen our trade, services, and investments.❞
TARIFF IMPACT BREAKDOWN
Pivot Advocates
Philippine goods entering its territory, with one economist even saying there is a need to “decouple” from the US. See “Pivot,” A13
TARIFFS COULD HIT PHL COCO EXPORTS TO U.S., A TOP BUYER By Ada Pelonia
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@adapelonia
ERSISTENTLY high tariffs could dampen economic activity and dent demand for coconut products in the United States, one of the biggest buyers of Philippine coconuts, according to an industry group. United Coconut Association of the Philippines (Ucap) Chairman Marco Reyes noted that the 20- percent reciprocal tariffs slapped by Washington on Philippine coconut products would be passed on to American con-
sumers. “If this higher tariff persists, what will happen is that it will dampen economic activity in the USA as a whole. American consumers will buy less coconut products due to the higher prices. Purchasing power drops,” Reyes said. “The expected drop in American demand will have an effect on Philippine exports of coconuts to the USA since it is the second biggest market for Philippine coconuts.” Despite this, Reyes noted that the country’s coconut products See “Tariffs,” A2
WAGE OF REASON Construction workers toil at a call center project in Pasay City on Monday, July 14, 2025—just days before the new P50 daily minimum wage hike in Metro Manila takes effect on
July 18. Labor Secretary Bienvenido Laguesma reminded employers to swiftly address wage distortions, especially for employees earning slightly above minimum. DOLE emphasized that preserving fair pay differentials through voluntary adjustments helps maintain workplace harmony and morale. The Department warned that unaddressed distortions could spark dissatisfaction among longer-serving or more skilled workers. ROY DOMINGO
Group: Tariffs to spur export firms layoffs
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By Ada Pelonia
HE 20-percent reciprocal tariffs unveiled by the United States could push Philippine exporters to lay off employees, according to the Philippine Food Processors and Exporters Organization (Philfoodex). With the country having a relatively “higher” production cost compared to others, Philfoodex President Ruben See raised a concern that the additional duties could dent the demand for Philippine goods in the US, thus pulling down outbound shipments of certain commodities. “If our exports decrease, our sales will also decline. If that happens, our exporters or processors might lay off their workers—that’s what we’re seeing as a significant
effect [of the reciprocal tariffs],” See said in a radio interview on Monday. “We don’t want that, but there’s nothing we can do if exports decline, since this will affect the exporters,” he added. In particular, See said exporters and processors that belong to the micro, small, and medium enterprises (MSMEs) would likely shoulder the impact, since they “wouldn’t get to compete.” He added that some of them are not even direct exporters and instead bank on consolidators. While the Philippines has several free trade agreements (FTAs) with other countries, including China, Japan, South Korea, Australia, New Zealand, and European nations, See noted that the US remains a crucial market for Philip-
PHILFOODEX President Ruben See
pine goods. “We have an FTA with these countries, but the US market is different because it’s a captured market. Sayang [What a waste],” he said. With this, See urged President Ferdinand Marcos Jr., who is set
to meet with US President Donald Trump this month, to discuss the tariffs levied on Philippine goods. “Our request to the president, especially to our negotiators, is to continue the negotiations so that we can achieve zero tariff, or at least a maximum of 5 percent, and we would be happy,” See said. “But if it’s really 20 percent, we will have a hard time. That’s our stand,” he added. Despite this, See noted that the reciprocal tariffs could prompt the Philippines to search for other markets through local and international trade shows that could boost the country’s products. “If we really can’t get a lower tariff, we have no choice but to look for other markets [...] There are many markets that the Philippines is yet to penetrate,” he said.
PESO EXCHANGE RATES n US 56.4710 n JAPAN 0.3836 n UK 76.1963 n HK 7.1940 n CHINA 7.8758 n SINGAPORE 44.0835 n AUSTRALIA 37.0619 n EU 65.9355 n KOREA 0.0409 n SAUDI ARABIA 15.0590 Source: BSP (July 14, 2025)