BSP’s worry: De-anchored inflation expectations By Andrea E. San Juan
O
NE of the things that keeps the Philippines’s central bank governor awake at night is the possibility that inflation expectations will de-anchor. “Our legacy of high inflation still affects the way we behave today, which means that when inflation is going up, you have to worry about expectations because people still remember those days,” Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr. said in a televised interview over the weekend as he traced back to the time
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when the Philippines faced severe inflation spikes in the 1980s. Remolona emphasized that the central bank does not only move the policy rate to reduce inflation. He pointed out: “You also move the policy rate to influence expectations.” “And it’s one of the things that keeps me awake at night—is that the possibility that our inflation expectations will de-anchor, which is what happened in the past, and then it becomes much harder to manage inflation,” added Remolona. Bank of the Philippine Islands (BPI) Emilio S. Neri Jr. earlier
explained to this newspaper that inflation expectations become unanchored when businesses, consumers and investors no longer believe the central bank can or will return inflation to its target. “This loss of credibility transforms inflation from a temporary headache into a self-fulfilling cycle,” Neri explained further to the BusinessMirror. Results from the June 2026 BSP Survey of External Forecasters (BSEF) showed that analysts’ inflation forecasts shifted upward, reflecting the impact of the oil price shock on domestic inflation, according to the central bank’s lat-
est Monetary Policy Report. Forecasts provided by 23 analysts indicated that inflation is projected at 6 percent over the next 12 months, easing to 4.1 percent over the next 24 months, and remaining slightly above the target but within the tolerance range at 3.4 percent over the next 36 months. According to analysts, the spillover effects of the conflict in the Middle East and elevated global oil prices on food prices, transport fares, and core inflation are the likely sources of inflation pressures in the near term. See “Inflation,” A9
BusinessMirror A broader look at today’s business
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‘PROGRESS BILL’ OF TAX REFORMS, PBBM LEGACY www.businessmirror.com.ph
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Monday, July 27, 2026 Vol. 21 No. 286
P25.00 nationwide | 3 sections 24 pages | 7 DAYS A WEEK
By Jovee Marie N. Dela Cruz & Reine Juvierre S. Alberto
T
HE Marcos Jr. administration is crafting a new tax reform package that seeks to recalibrate personal income taxes and provide relief measures to micro enterprises, targeted for passage before President Ferdinand R. Marcos Jr. leaves office in 2028.
Finance Secretary Frederick D. Go confirmed to the BusinessMirror on Sunday that the tax package, dubbed the “Progress Bill,” will include adjustments to personal income tax and provide tax breaks for micro, small and medium enterprises (MSMEs). The Finance chief withheld further details of the package, saying these would be disclosed after the annual State of the Nation Address on Monday, July 27, where
Marcos is expected to outline his administration’s legislative and economic priorities for the final two years of his term. “The ‘Progress Bill’ is a combination of tax breaks, revenue-reducing measures and revenue-enhancing measures,” Go said in an earlier press chat. The measure is intended to benefit lower-income earners and MSMEs, while the revenue-generating component See “Legacy,” A2
HOW FORCED LABOR IMPORTS FROM CHINA, MYANMAR LED TO 12.5% U.S. TARIFFS ON PHL By Malou Talosig-Bartolome
F
ILIPINO exporters woke up to unwelcome news last Friday: nearly everything they ship to the United States now carries an extra 12.5-percent duty at the border. The trigger, according to a USTR report and investigation record, is what the Philippines has been letting in rather than what it sends out. US trade officials point to a pattern of the country freely importing goods flagged as tainted by forced labor—solar panel components and cotton sourced from China, and rice brought in from Myanmar—without any law on the books to stop them. The reason has nothing to do with
dumping, currency manipulation, or the usual trade grievances. It comes down to a single, narrower complaint—Manila never passed a law banning the import of goods made with forced labor. That gap in Philippine policy is now costing the country’s exporters real money, and it’s worth unpacking how allowing those tainted imports through an open door turned into a blanket tariff on everything the Philippines sells to the US.
The legal hook: Section 301
THE US Trade Representative built its case on Section 301 of the Trade Act of 1974, a decades-old statute that lets Washington punish trading partners whose policies are See “Imports,” A2
BusinessMirror
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BRUSHSTROKES FOR BETTER HEALTH Families and advocates from ImagineLaw paint a community mural depicting healthy families and a sustainable food environment during National
Nutrition Month activities at Quezon Memorial Circle. The event also features interactive nutrition exhibits, including sodium-content displays, front-of-pack warning label mock-ups and the Pagkain Check! Nutrition Calculator, while Plantitas Baesa, an urban farming group based in Quezon City, showcases freshly harvested produce. NONIE REYES
Marcos weekend spent on Sona preps By Samuel P. Medenilla
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N the eve of his fifth State of the Nation Address (Sona), President Ferdinand Marcos Jr. was still making minor tweaks in his latest report to Congress and other Filipinos on his administration’s new accomplishments and goals since last year, according to Malacañang. In a radio interview on Sunday, Palace Press Officer Claire Castro said the chief executive was already 90 percent complete with his speech. She noted the President had dedicated the weekend to finishing his Sona. “There are no more Cabinet meetings now; the [President’s] focus is entirely on the Sona. He is really finalizing the speech he is set to deliver tomorrow,” Castro said in Filipino. “The President tends to make last-minute changes; sometimes
he even alters the wording [of his Sona],” she added. Marcos is set to deliver his fifth SONA on 27 July 2026 in the Batasang Pambansa Complex in Quezon City. It will be the second to the last SONA he will deliver before he ends his term in 2028. Castro said security preparations by the House of Representatives, which will host the upcoming Sona, are already completed. The Presidential Communications Office (PCO) undersecretary also said the Radio Television Malacañang (RTVM), which will direct the Sona this year, has also concluded its technical preparations. All that is left uncertain, she said, was the weather. Based on the forecast of the Philippine Atmospheric Geophysical and Astronomical Services Administration (Pagasa), there is a 40 percent chance it will rain in Metro Manila
on Monday. “Let’s also pray for good weather [on Monday],” Castro said. Last Friday, Marcos said in his next Sona, he will highlight government efforts to cushion the effects of the Middle East crisis and its other accomplishments. The President issued Executive Order No. 110 in March, where he declared a State of National Energy Emergency in response to the conflict, which broke out in the Middle East after the United States and Israel attacked Iran on February 28. The war, which is still ongoing, disrupted global supply chains and resulted in higher pump prices. EO 110 implemented the Unified Package for Livelihoods, Industry, Food, and Transport (UPLIFT), which includes providing fuel subsidies, cash aid, and service contracting to sectors, which are vulnerable to the effects of the said conflict.
“Our response has been good, and we have had to make adjustments, but those adjustments have been effective and have served their purpose. And I know that it has helped people weather this storm and continue to weather this storm until things hopefully normalize,” Marcos said in Filipino in an interview with reporters last week. In his fourth Sona, Marcos highlighted the P20 per kilo rice program of the Department of Agriculture, the distribution of land titles to more farmers, as well as the expansion of lifeline electricity rates to low income families and zero-balance billing of the Department of Health. At that time, he also announced his administration will go after those behind the numerous flood control project anomalies, sparking a year-long flurry of controversies that have roiled both Congress and the Executive.
PESO EXCHANGE RATES n US 61.7450 n JAPAN 0.3770 n UK 82.2320 n HK 7.8750 n CHINA 9.1100 n SINGAPORE 47.7977 n AUSTRALIA 43.0239 n EU 70.2658 n KOREA 0.0419 n SAUDI ARABIA 16.4500 Source: BSP (July 24, 2026)