PBBM approves ’26 budget proposal By Reine Juvierre S. Alberto
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@reine_alberto
HE country’s record-high P6.793-trillion national budget proposal for 2026 was approved by President Ferdinand R. Marcos Jr. on Tuesday. Next year’s proposed budget is higher by 7.4 percent from the current P6.326-trillion national budget. This is equivalent to 22 percent of the country’s gross domestic product.
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“The President himself sat down with the different agencies to ensure that all our priorities are aligned towards our common goal of achieving our vision of a Bagong Pilipinas,” Budget Secretary Amenah F. Pangandaman said. “So we are very grateful to the President for his leadership and active role in the crafting of this budget.” Sustaining the country’s economic growth and enhancing the standards of living of Filipinos
prompted President Ferdinand Marcos to approve the proposed 2026 budget, according to Malacañang. “With the aim of improving the quality of education in the Philippines and improving the living standards of Filipinos, President Ferdinand R. Marcos Jr. approved the P6.793 trillion proposed budget for next year,” Undersecretary Claire Castro, Palace press officer, said in Filipino in a press briefing. She said Marcos gave assuranc-
es that the budget will be used not only to boost the economy, but uplift the quality of life of Filipinos. The P6.793-trillion 2026 National Expenditure Program (NEP) is higher compared to the P6.352-trillion 2025 NEP and the P6.326-trillion General Appropriations Act (GAA). The bulk of the proposed budget, or P2.639 trillion, will be allocated for maintenance and other operating expenses to fund government See “PBBM,” A2
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5-MO REMITTANCES UP, BUT SLOWDOWN FEARED www.businessmirror.com.ph
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Wednesday, July 16, 2025 Vol. 20 No. 276
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PHL exiting MIC status: What it will take, per WB
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NEXT STOP: PAY RAISE Commuters crowd the MRT-3 Taft Avenue Station in Pasay City during the Tuesday morning rush—reflecting the daily grind of Metro Manila’s working class. As the cost of living continues to climb, Labor Secretary Bienvenido Laguesma announced that five Regional Tripartite Wages and Productivity Boards (RTWPBs) are conducting public hearings on proposed wage increases in Ilocos, Cagayan Valley, Central Luzon, Calabarzon, and Central Visayas. Meanwhile, a P50 daily wage hike for minimum wage earners in Metro Manila takes effect on July 18, set to benefit about 1.2 million workers. NONIE REYES
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By Cai U. Ordinario @caiordinario
HE Philippines needs to employ diversification in order to maximize remittances from Filipinos abroad, according to local experts. REMITTANCE INFLOWS HOLD STRONG AMID GLOBAL RISKS Top Sources of Cash Remittances (Jan–May 2025)
→EXPERTS URGE PIVOT TO NEW MARKETS AND SMARTER USE OF CASH INFLOWS
❝Global demand for Filipino labor remains, but we must pivot to markets like the EU and Asean. Fintech makes remitting easier, and peso depreciation boosts gains— but without transition, growth may slow to 2.7 percent.❞ — Jonathan Ravelas, Reyes Tacandong & Co.
Cash and Personal Remittances Comparison (May 2024 vs. May 2025 & Jan–May 2024 vs. Jan–May 2025)
❝Income remittances tend to be stable come hell or high water. But don’t expect a surge any time soon given the uncertainty from the Iran-Israel conflict.❞—Dante B. Canlas, Former Socioeconomic Planning Secretary
☛What counts as a remittance? Cash sent through banks (cash remittances), informal channels, and goods or services sent in kind (personal remittances).
BM Graphics: Ed Davad | Source: BSP
❝What should be diversified are the ways in which cash remittances are used by remittance-receiving households productively.❞—Jeremaiah M. Opiniano, Institute for Migration and Development Issues
On Tuesday, the Bangko Sentral ng Pilipinas (BSP) said cash remittances grew 2.9 percent to $2.66 billion in May 2025 from $2.58 billion recorded in May 2024. This brought total remittances in the first five months of the year to $13.766 billion in 2025, a 3-percent growth from 13.365 billion in 2024. “...Global demand for Filipino labor remains but needs to pivot to other areas like EU and Asean states, and Peso depreciation boosting foreign exchange gains as well as increased adoption of digital wallets and fintech solutions makes sending much accessible. However, if we don’t transition, it could slow to 2.7 percent,” Jonathan Ravelas, senior adviser at professional services firm Reyes Tacandong & Co. told reporters. Institute for Migration and Development Issues (IMDI) Executive Director Jeremaiah M. Opiniano agreed that diversification will help but thinks the focus should be on helping Overseas Filipino Workers (OFWs) and their families diversify the spending of their remittances. Opiniano told BusinessMirror in an email that these remittances must also be used for savings, entrepreneurship, See “5-mo,” A2
DIGITAL CENTRICITY OF RURAL, THRIFT, CO-OP BANKS IN FOCUS By Reine Juvierre S. Alberto
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@reine_alberto
HE Bangko Sentral ng Pilipinas (BSP) wants to level the playing field between digital banks and conventional banks by creating guidelines to determine the level of digital centricity of the latter. During the Chamber of Thrift Banks’ national convention on Tuesday, BSP Deputy Governor Chuchi G. Fonacier said the central bank is crafting guidelines on the assessment of the level of digital centricity of thrift banks, rural banks and cooperative banks. The guidelines will put in place indicators that will be considered in evaluating the level of digital centricity of the said banks to “ensure proportionate application of prudential requirements,” accord-
ing to Fonacier. “We need to level the playing field, that’s why we also would require some more, let’s say, capital from those doing the work. So the guidelines will also be issued for that,” Fonacier told reporters when asked for more information. Digital banks are required to have a minimum capital of P1 billion, while the amount varies for thrift banks, from P750 million to P2 billion; and cooperative banks with P50 million to P200 million, depending on the number of branches in Metro Manila. Rural banks’ minimum capitalization also depends on the number of branches, from P50 million to P200 million. Fonacier said the guidelines will be subject to a phased implementation of higher regulatory See “Digital,” A2
F the economy can grow by 6.8 percent annually for the next 25 years, the Philippines may have a prayer to finally end its extended stay as a middle income country, according to the World Bank. In its latest report, the Bank said enhancing investments in infrastructure and human capital; improving regulations and governance; and mobilizing private capital will provide a 1.4 percentage point boost to GDP growth to 6.8 percent annually from the current 5.4 percent. Raising productivity through investments in infrastructure and human capital would add 0.78 percentage points to annual GDP growth. while efforts to deepen capital markets would add another 0.45-percentage points to growth; and those that would increase labor force participation would lead to a 0.18-percentage boost to GDP. “You need the reforms to be fully implemented. And we estimate that 1.4 percentage point kick in growth. Half of that comes from more productivity and more human capital. And you bring the economy to a growth rate of 6.8 until 2050. That’s the horizon we look at. It’s 2050, next 25 years,” Gonzalo Varela, World Bank Lead Economist, said in a briefing on Tuesday. “From our simulations that we present in the report, that brings the economy to the verge of that high-income threshold as defined today. The thresholds change over time based on a number of factors. But as that threshold is defined today, if we think in real terms, how much we expect the economy to grow, if these reforms are implemented, we’re thinking that within 25 years, you’re close to that threshold of high income again,” he explained. Based on the World Bank’s Atlas Method, the Philippines is considered a Low Income country, a position it has held since 1987 or 38 years. In the latest estimate, the Philippines still lacked $26 to become an Upper Middle Income Country. Earlier this month, the World Bank reported that the country’s gross national income (GNI) per capita rose to $4,470 in 2024, a 5.67-percent increase from See “PHL,” A2
PESO EXCHANGE RATES n US 56.6420 n JAPAN 0.3835 n UK 76.1155 n HK 7.2158 n CHINA 7.8973 n SINGAPORE 44.1860 n AUSTRALIA 37.0892 n EU 66.0729 n KOREA 0.0410 n SAUDI ARABIA 15.1033 Source: BSP (July 15, 2025)