Budget deficit seen to widen through mid 2028 By Reine Juvierre S. Alberto
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NEW EARTH QUEEN CROWNED The new environmental ambassadors of the Philippines pose after the coronation of the Miss Philippines Earth 2026 pageant at the Malitbog Cultural Center in Malitbog, Bukidnon, on June 27. From left are Miss Philippines EcoTourism 2026 Roveelaine Eve Castillo of Siocon, Zamboanga del Norte; Miss Philippines Water 2026 Alyssa Mildred Villariña of Mandaluyong City; Miss Philippines Earth 2026 Rina Andrea de los Santos of Ballesteros, Cagayan; Miss Philippines Air 2026 Prima Joy Alamban of Tumauini, Isabela; and Miss Philippines Fire 2026 Patricia Anne Nichole Bangug of Agoo, La Union. De los Santos, a community tour guide, will represent the Philippines at the Miss Earth 2026 international pageant after winning the national title with an advocacy centered on environmental stewardship and sustainable tourism. PHOTO COURTESY OF CAROUSEL PRODUCTIONS
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HE Philippines’s budget deficit will widen in peso terms through the end of the Marcos Jr. administration, instead of narrowing as previously planned to support economic growth and allow higher spending to cushion the impact of the Middle East war and El Niño. This year, the Philippines is projected to run a deficit of P1.658 trillion, or 5.4 percent of the gross domestic product (GDP), according to a memo released by the Department of Budget and Management bearing the latest adjusted assumptions of the Development Budget Coordination Committee (DBCC). The latest forecast is higher than the P1.611-trillion deficit, or
5.3 percent of GDP, that the DBCC set in its previous meeting in December. Based on the adjusted targets, the budget hole is projected to stretch until 2028—P1.695 trillion in 2027 and P1.722 trillion in 2028—before contracting in 2029 and 2030. As a share of GDP, however, it continues to narrow from 5.1 percent in 2027, 4.8 percent in 2028, 4.2 percent in 2029 and 3.5 percent in 2030. The document read that the upward revision reflects a “more realistic” fiscal stance, while remaining “fully aligned” with growth-enhancing fiscal consolidation. “The government has less room for policy slippage,” Domini S.D. Velasquez, chief economist at Chinabank, said, even if the def-
icit-to-GDP ratio is projected to narrow through 2030. “Any significant deviation from its fiscal targets or a prolonged period of weaker-than-expected growth could undermine investor confidence, increase borrowing costs, and put pressure on the country’s sovereign credit rating,” Velasquez told the BusinessMirror. The revision comes after the economic managers trimmed the GDP growth target to a range of 3.5 to 4.5 percent in 2026, on account of the Middle East conflict, weak consumer and business confidence and the intensification of El Niño. GDP growth is expected to recover beginning 2027, with a target range of 5 to 6 percent until 2030.
Revenue, spending targets changed
WITH these changes, the revenue
collection target for 2026 is lowered to P4.807 trillion compared to the previous target of P4.824 trillion. However, spending is higher at P6.465 trillion—up from the P6.434-trillion target earlier—to prioritize infrastructure, human capital and agriculture. With economic growth slowing in the past quarters, the government is trying to form some recovery in the second half by spending more, Leonardo A. Lanzona, economist at the Ateneo de Manila University, explained. This recovery assumes that ramping up deficits financed by loans at higher levels before the flood control scandal will catapult the economy back to its previous trajectory, Lanzona noted. See “Budget,” A2
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BSP REVISES FORECAST: WIDER BOP GAP IN ’26, ’27 www.businessmirror.com.ph
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Monday, June 29, 2026 Vol. 21 No. 258
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By Andrea E. San Juan
OST-DRIVEN trade imbalances and tighter financial conditions are seen to weigh on the country’s external position in 2026 and 2027. The Bangko Sentral ng Pilipinas (BSP) said this as it revised anew its forecast for the country’s overall Balance of Payments (BOP) position for this year and next year. Latest projections by the central bank showed that BOP is expected to widen to a $10.7-billion deficit this year. For 2027, the BSP’s forecast revealed the country’s BOP could further go deeper into an $11-billion deficit. “Looking ahead, the Philippines’s external position is expected to remain under pressure in
2026–2027, as cost-driven trade imbalances and tighter financial conditions continue to shape both current account and financing dynamics,” the BSP said in a statement over the weekend. The central bank also noted that the current account deficit is projected to widen relative to 2025, “though less than earlier expected as weaker domestic demand tempers import growth while export performance remains constrained.” See “BOP,” A2
PHL BACKS TRUSTED AI SUPPLY CHAIN PUSH, INKS JOINT PACT By Bless Aubrey Ogerio
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@blessogerio
HE Philippines has joined a United Statesled initiative to strengthen trusted artificial intelligence (AI) supply chains, signing a joint declaration that seeks to promote secure cross-border technology networks while supporting a pro-innovation approach to AI development. The commitment was announced following the 2026 Pax Silica Summit, where nearly three dozen economies endorsed the Joint Statement on AI Op-
portunity, aligning on policies aimed at supporting AI developers, startups and private-sector innovation while protecting global AI supply chains. The Philippines was among the signatories, together with the United States, Japan, Singapore, India, Australia, the United Kingdom, Germany, South Korea and several other partner economies. The latest commitment builds on the country’s formal accession to the US-backed Pax Silica initiative in April, when it also unveiled plans for a 4,000-acre See “Supply,” A2
DIOKNO URGES PURPOSE-DRIVEN LEADERSHIP Akbayan Rep. and human-rights lawyer Chel Diokno delivers the keynote address during the BPI MS Insurance Freelancer Wellness
Summit in Makati City on June 27, 2026. Speaking on the theme, “Unfolding Limitless Possibilities,” Diokno urged freelancers and professionals to lead with purpose, champion meaningful causes, and seize opportunities to create positive change in their communities and careers. Joining him are (from left) BPI MS Chief Governance Officer Katsuya Kobayashi, BPI MS Chief Distribution Officer Yusuke Takamura, BPI MS President and CEO Noriyuki Kobayashi, BPI Executive Vice President and Consumer Banking Head Maria Cristina “Ginbee” Go, and BPI MS Marketing Director Maya del Rosario. NONOY LACZA
At WTO review, EU prods PHL on reforms By Bless Aubrey Ogerio
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@blessogerio
USTAINING reforms to attract investment and facilitate trade should remain a priority for the Philippines, the European Union (EU) said during the country’s Trade Policy Review at the World Trade Organization (WTO). Speaking on behalf of the EU during the review in Geneva on June 24, Ambassador María Martin-Prat said the bloc welcomed the Philippines’s efforts to modernize its economy but sought further information on several policy areas affecting trade and investment. “The EU greatly values the Philippines’s commitment to this transparency exercise,” Martin-Prat
said, describing the Philippines as a longstanding partner with whom the bloc shares interests in sustainable economic growth, regional stability and a rules-based international trading system. The EU acknowledged recent reforms in the country, including amendments to the Foreign Investments Act, the Public Service Act and the Retail Trade Liberalization Act, as well as the creation of Green Lanes for Strategic Investments, saying these measures could help integrate the country more deeply into regional and global value chains. However, it said further clarification was needed on how the government intends to address longstanding issues affecting the investment climate, including regulatory and
administrative complexity, infrastructure and logistics constraints and restrictions on foreign participation in certain sectors. The bloc also sought updates on measures to improve transparency and reduce administrative burdens under the revised Government Procurement Act, as well as efforts to streamline border procedures to lower costs and improve predictability for traders. In agriculture, the EU requested additional information on policies affecting trade, particularly sanitary and phytosanitary measures and market access conditions. It also asked for clarification on government initiatives supporting strategic industries, including the Tatak Pinoy Act, and how such
measures would remain consistent with the Philippines’ commitments under WTO rules. Bilateral trade between the Philippines and the 27-member European Union grew 4.5 percent to €17.6 billion in 2025. The EU also affirmed its support for the country’s participation in the multilateral trading system, citing the country’s acceptance of the WTO Agreement on Fisheries Subsidies in 2024 and its participation in the Agreement on Electronic Commerce. Martin-Prat said the EU continues to value its longstanding trade relationship with the Philippines under the Generalised Scheme of Preferences Plus (GSP+), which has supported Philippine exports and See “WTO,” A2
PESO EXCHANGE RATES n US 61.3890 n JAPAN 0.3795 n UK 81.0151 n HK 7.8305 n CHINA 9.0291 n SINGAPORE 47.3534 n AUSTRALIA 42.4075 n EU 69.8238 n KOREA 0.0398 n SAUDI ARABIA 16.3495 Source: BSP (June 26, 2026)