BSP sees inflation slowing to 1.3-2.1% By Cai U. Ordinario
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HEAPER food items such as rice and fish may have cooled inflation in April 2025, according to the Bangko Sentral ng Pilipinas (BSP). In its Month Ahead forecast, the BSP said it expects inflation to slow to a range of 1.3 percent and 2.1 percent due to more affordable rice, fish, fruits, and vegetables. If inflation reaches 1.3 percent in April 2025, this will be the slowest increase in commodity
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prices since the 1.2 percent posted in November 2019. “[The] favorable domestic supply conditions along with lower oil prices and the peso appreciation [may have also] contributed to the downward price pressures for the month,” BSP also said. However, the BSP said the lower prices expected for rice, fish, fruits, and vegetables, among others, could still be offset by higher electricity rates and LRT-1 fares. “Going forward, the Monetary Board will continue to take a measured approach in adjusting
the monetary policy stance in line with its price stability objectives conducive to balanced and sustainable growth of the economy and employment,” the BSP said. Earlier, the BusinessMirror reported that economists say uncertainties, including global tariffs and currency shifts, could stir up new price pressures. The Philippine Statistics Authority on Friday reported that the rise in consumer prices slowed to 1.8 percent in March. (See: https://businessmirror.com.
ph/2025/04/04/inflation-eases-to-1-8-in-march/) Last month, food inflation eased to 2.3 percent in March, down from 2.6 percent in February, largely due to a steeper yearon-year decline in rice prices. Rice inflation fell to -7.7 percent from -4.9 percent, while price increases in meat, vegetables, and other food items also slowed. Inflation for meat and other parts of slaughtered land animals dipped from 8.8 percent to 8.2 percent. See “BSP,” A2
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Q1 BUDGET GAP UP 75.6% ON EXPENDITURES SPIKE T
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By Reine Juvierre S. Alberto @reine_alberto
HE national government’s budget deficit spiked by 75.62 percent in the first quarter of the year due to the sharp rise in expenditures outpacing revenue growth, according to the Bureau of the Treasury (BTr). Latest data from the Treasury showed the budget deficit widened by 75.62 percent to P478.8 billion in the first quarter this year from P272.6 billion during the same period a year ago. Total revenue collections in the first quarter reached P998.2 billion, higher by 6.90 percent from P933.7 billion last year. Tax revenues from the Bureau of Internal Revenue (BIR) amounted to P931.5 billion, a 16.67-percent increase from P591.8 billion due to higher personal income tax (PIT), corporate income tax (CIT), percentage taxes, value-added tax (VAT), excise tax and documentary stamp tax collections. The Bureau of Customs (BOC) also collected P231.4 billion, up by 5.72 percent from P218.9 billion a year ago, on higher VAT from non-oil imports and excise tax collections from oil and nonoil imports. Non-tax revenues dropped by
41.21 percent to P66.7 billion in the first quarter from last year’s P113.4 billion due to fewer early dividend remittances from staterun firms compared to the same period last year. The Treasury said non-tax revenues are expected to improve in the succeeding months, with dividends from state-run corporations set to be remitted to the National Treasury starting May 2025. Meanwhile, expenditures increased by 22.43 percent to P1.477 trillion in the first three months compared to the P1.206 trillion posted during the same period a year ago. Expenditures accounted for almost a quarter of the P6.2 trillion 2025 full-year disbursement program. The spending was mainly driven by infrastructure outlays under the Department of Public See “Budget,” A2
PESO HITS STRONGEST LEVEL IN 7 MOS, CLOSES AT P55.84
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HE local currency continued to appreciate on Wednesday to its strongest level in over seven months, according to data from the Bankers Association of the Philippines (BAP). On Wednesday, the peso closed at P55.84 to the United States dollar, the strongest since it closed P55.69 to the greenback on September 20, 2024. Some analysts are tying the strength of the peso to uncertainties with the US GDP numbers which is slated for release on Thursday, Manila time. “Let’s wait for US GDP report on May 1, Philippine time. If it disappoints, [the] USD [US dollar] may continue to fall,” Bank
of the Philippine Islands Chief Economist Emilio S. Neri Jr. told BusinessMirror. Nonetheless, he said the pace of strengthening of the peso was quite fast. “Other Asian currencies gained more than PHP [Philippine peso]. It appears to be a USD weakening story. Bets that US GDP will disappoint seem to be growing,” he added. Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael L. Ricafort said weaker economic data from the US could support future Fed rate cuts that will lead to a weaker US dollar vs. major global currencies. Ricafort said that for tomorrow, he expects the US dollar/ See “Peso,” A2
RATING HIGH Skyscrapers rise above Ortigas Center, home to numerous businesses and BPO firms fueling the country’s economic engine. The Philippines retained its investment-grade “BBB” credit
rating with a stable outlook from Fitch Ratings, citing strong medium-term growth prospects, effective debt management, and the country’s substantial economic scale. Fitch projects a 5.6 percent GDP growth in 2025—driven by infrastructure spending, service exports, and resilient remittances that support household consumption. NONIE REYES
‘BBB’ from Fitch a huge vote for PHL: DOF
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HE Philippines’s “BBB” credit rating affirmed by Fitch Ratings is a “powerful vote of confidence” against the backdrop of geopolitical and trade tensions, according to the country’s Finance chief. The international credit watchdog affirmed the country’s “BBB” rating with a “Stable” outlook due to its “strong medium-term growth” supporting a gradual reduction in the government’s debt-to-GDP. “It underscores the strength of our economic fundamentals, the
credibility of our ongoing reforms, and our resilience in navigating global headwinds—all while maintaining robust growth,” Finance Secretary Ralph G. Recto said. The DOF said the rating reflects the country’s “strong creditworthiness,” resulting in lower interest rates and better returns for Philippine bonds. “Fitch’s recent affirmation of the Philippines’ credit rating places the country in a good position to maintain its investment-grade status across all major regional and inter-
national debt rating agencies,” the DOF added. However, Fitch Ratings flagged the risk of fiscal slippage, as consolidation is seen to slow given the government’s overriding focus on growth and a less permissive domestic political environment. “An update to the government’s medium-term fiscal program last year scaled back both revenue mobilization and expenditure consolidation plans,” Fitch Ratings said. “Any revenue outperformance has tended to be offset by higher
spending through unprogrammed appropriations,” it added. The general government debt-toGDP is seen to remain broadly unchanged at 54 percent to 55 percent of GDP over 2025 to 2026, on the back of strong nominal GDP growth and narrowing fiscal deficits. The general government budget deficit is also projected to narrow to 3.6 percent of GDP by 2026, from Fitch’s estimates of 4.6 percent in 2024 and a peak of 5.4 percent in 2022. See “BBB,” A2
PESO EXCHANGE RATES n US 56.2520 n JAPAN 0.3955 n UK 75.4339 n HK 7.2507 n CHINA 7.7359 n SINGAPORE 43.0094 n AUSTRALIA 35.9169 n EU 64.0710 n KOREA 0.0393 n SAUDI ARABIA 14.9973 Source: BSP (April 30, 2025)