Economy ‘largest collateral damage’ in Senate drama By Andrea E. San Juan
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CLASS ACT Education Secretary Juan Edgardo “Sonny” Angara, Israel Ambassador to the
Philippines Dana Kursh, TESDA Secretary Jose Francisco Benitez, and Foreign Affairs Undersecretary Maria Theresa Dizon-De Vega lead the ribbon-cutting during the inauguration of a Learning Resource Center, an Israeli-Philippine Digital Literacy Center donated by the Israeli Embassy, which includes computers and books, held at Jacinto Zamora Elementary School in Pandacan, Manila. The event is part of the celebration of Israel’s 78th Independence Day themed “Celebrating Friendship, Investing in the Future,” in cooperation with the Israeli Embassy, DepEd, and EDCOM. ROY DOMINGO
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HE Philippine economy, which is currently marred by elevated fiscal pressures and persistent inflation concerns due to the ongoing Middle East conflict, could become the “largest collateral damage” amid the political drama that has gripped the Senate since a month ago, a former central bank deputy governor warned. In a commentary sent to reporters on Wednesday, former Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo explained how the Senate’s credibility as an institution is not the only one at stake here, as recent political events could sow doubt among
investors, citizens, and the business community. “The problem is that the consequences may extend far beyond politics,” Guinigundo stressed. The deeper risk, the former BSP official said, is the “sustained” erosion of public trust in democratic governance itself. “When the Upper House, historically regarded as a stabilizing institution and a chamber of sober statesmanship, becomes consumed by factional maneuvering, shifting loyalties, and narratives of political survival, confidence in the rule of law weakens alongside it,” said Guinigundo. As a result of this, he pointed out that citizens begin to doubt whether accountability mecha-
nisms still function fairly. He also noted that investors could begin to question “institutional predictability.” Moreover, the business community becomes more cautious and social cohesion deteriorates, Guinigundo warned. “Public policy loses legitimacy because the institutions crafting it no longer command broad trust,” the former BSP deputy governor underscored. “Unfortunately, the Philippine economy could become the largest collateral damage,” Guinigundo pointed out. The former BSP deputy governor said this as he emphasized that markets do not respond only to economic indicators.
“They also respond to political coherence, institutional credibility, and policy stability,” said Guinigundo. As such, a Senate perceived as “divided, reactive, and vulnerable” to political pressure, creates uncertainty especially at a time when the country is facing elevated fiscal pressures, persistent inflation concerns, weak productivity growth, and growing external risks. Worse, Guinigundo said stagflation is increasingly becoming a likely scenario if this political dynamics “further deteriorates.” He said each event may be dubbed a political drama. Collectively, however, “they reveal a See “Drama,” A2
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OECD CUTS PHL GROWTH OUTLOOK FROM 5.1% TO 3.2% T www.businessmirror.com.ph
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Thursday, June 4, 2026 Vol. 21 No. 233
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By Justine Xyrah Garcia
HE Philippines could be headed for one of its weakest growth years since the pandemic recovery as the escalating Middle East conflict fuels inflation and squeezes household spending, according to the Organisation for Economic Cooperation and Development (OECD). In its latest Economic Outlook released on Wednesday, the OECD cut its Philippine gross domestic product (GDP) growth projection for 2026 to 3.2 percent from the 5.1 percent it forecast in February, citing the combined impact of an energy shock, weak consumer demand, and sluggish investment. If realized, the revised forecast would mark the Philippines’s weakest economic expansion since the Covid-19 pandemic, when the economy contracted by 9.5 percent in 2020. Excluding the pandemic years, it would be the slowest growth print since 2009, when GDP expanded by just 1.4 percent. OECD economist Cyrille Schwellnus said the downgrade comes as the Philippine economy was already losing momentum be-
fore oil prices surged. He explained that growth already slowed to 2.8 percent in the first quarter of the year as public investment remained weak following corruption investigations in late 2025, while household spending softened amid a weakening labor market. Data from the Philippine Statistics Authority (PSA) showed that household consumption, the country’s biggest growth driver, has been steadily slowing over the past year. Private spending growth eased from 5.3 percent in the first quarter of 2025 to 5.2 percent in the second quarter, 4 percent in the third quarter and 3.8 percent in the fourth quarter before slowing further to 3 percent in the first quarter of 2026. See “Growth,” A2
UNCTAD WARNS OF RISKS FROM $20-B OIL IMPORT BILL’S SURGE By Bless Aubrey Ogerio
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@blessogerio
SUSTAINED 50-percent increase in refined oil prices could push the world’s annual net oil import bill higher by more than $20 billion, according to an estimate by the United Nations Trade and Development (Unctad) based on current import levels. In its latest monitoring report, Unctad said recent geopolitical tensions have underscored how quickly energy disruptions can translate into broad economic costs, with effects that persist long after supply conditions stabilize. Before the recent disturbances, the Strait of Hormuz handled around one-fifth of global oil shipments, making it one of the world’s most critical energy transit routes. When disruptions began on February 28, crude prices climbed sharply, driving up costs in transport, supply chains, and energy markets globally. Unctad noted that the impact is uneven, with developing and vulnerable economies absorbing a disproportionate share of the shock.
Of 75 vulnerable economies analyzed, 65 are net oil importers, and most rely heavily on refined petroleum products rather than crude oil. Unctad said that these countries collectively account for nearly one billion people, with more than 30 percent of their population living on less than $3 a day. The Philippines, while not directly importing crude oil from Iran, remains exposed to global price swings due to its reliance on Middle Eastern supply routes and Asian refining hubs tied to the Persian Gulf. About 98 percent of the country’s crude oil imports come from the Middle East. In addition, 97 percent of liquid petroleum products and 91 percent of liquefied petroleum gas (LPG) are sourced from Asian refineries dependent on Gulf crude flows. “When the Strait of Hormuz is strangled, the world’s poorest and most vulnerable cannot breathe,” United Nations SecretaryGeneral António Guterres said. Based on 2024 import volumes, Unctad estimated that least developed countries would face an additional $16 billion in oil import costs, while small island developing states See “UNCTAD,” A2
SENATE WIN Lawmakers share a light moment on the Senate floor following the oath-taking of Senator Sherwin “Win” Gatchalian as Senate President Pro Tempore, and Acting Senate President.
Gatchalian’s elevation comes amid continuing uncertainty over the Senate leadership after Senator Alan Peter Cayetano’s takeover of the chamber presidency last month and growing calls from the reform-oriented bloc for a leadership reorganization. The session also marked Senator Francis “Chiz” Escudero’s move to the group backing Gatchalian, giving the bloc 12 members and strengthening its position in the ongoing battle for control of the Senate. ROY DOMINGO
DA chief defends higher pork MAV By Ada Pelonia
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@adapelonia
HE government’s decision to increase pork imports entering the Philippines at lower tariffs is crucial amid risks posed by African swine fever (ASF) and war-driven inflation pressures. Agriculture Secretary Francisco Tiu Laurel Jr. made the pronouncement after AGAP Party-list Rep. Nicanor Briones recently suggested that raising the minimum access volume (MAV) allocation for pork was “no longer timely” and had been issued without the DA chief ’s knowledge. Executive Order (EO) 116, issued
by President Marcos Jr., raised the MAV for pork to 204,210 metric tons (MT) for 2026 from the current 54,210 MT. Tiu Laurel said the proposal was requested in 2025 when pork prices were surging and domestic supply remained constrained by ASF-related losses. “EO 116 was crafted to help stabilize pork prices and ensure consumers have access to more affordable food,” he said. “While the proposal was initiated last year, the conditions that justified it remain—and may even be more pronounced today.” Furthermore, Tiu Laurel stressed that the global oil crisis has added to inflationary pressures, while the onset of
the southwest monsoon season raises the risk of fresh ASF outbreaks, threatening to further disrupt hog output and tighten pork supply. “Historically, ASF infections tend to increase during the rainy season. If supply is affected again, pork prices could climb as it did in before. This measure provides an added layer of protection for consumers and serves as a precautionary food security measure,” he said. The EO stipulated that 30,000 MT should be given to processors while 120,000 MT was earmarked for the Food Terminal Inc. (FTI) or the Kadiwa program. The regular MAV allocation of 54,210 MT will be given to meat
processors (50 percent), FTI (20 percent) and “others” (30 percent). The additional allocation for meat processors and the government ensures stable prices of processed pork and pork products, according to the DA. Meanwhile, Tiu Laurel noted that EO 116 is yet to be enforced, as the implementing rules and regulations (IRR) still need to be drafted and approved. The DA has been ordered to lead the drafting of the guidelines. “EO 116 is not self-executing. The IRR will ensure that the interests of consumers, hog raisers, importers, and other stakeholders are properly balanced,” he said.
PESO EXCHANGE RATES n US 61.7190 n JAPAN 0.3860 n UK 83.1478 n HK 7.8757 n CHINA 9.1233 n SINGAPORE 48.2519 n AUSTRALIA 44.3142 n EU 71.7792 n KOREA 0.0407 n SAUDI ARABIA 16.4448 Source: BSP (June 3, 2026)