‘Stagflation risk low, spending may save the day’ By Justine Xyrah Garcia
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HE Philippines may still avoid a prolonged economic stall if government spending gains traction in the coming months, despite risks from rising inflation and slowing growth. Speaking at an economic briefing at the University of Asia and the Pacific (UA&P), senior economist Victor A. Abola said the risk of outright stagflation remains low, noting that weak growth in the first half does not neces-
» A10
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sarily imply a contraction. “I think the risk for stagflation is not very high because stagflation implies not low growth, but actually negative,” Abola explained, adding that economic activity is likely to remain subdued in the first two quarters before picking up later in the year. UA&P forecasts show first-quarter gross domestic product growth could settle at 3.1 percent—slightly above 2025 fourth quarter’s 3 percent but significantly lower than the 5.4 percent recorded a year earlier.
Full-year growth, meanwhile, is projected at 4.2 percent. If realized, this would match the pace recorded in 2021 at the height of the Covid-19 pandemic. Excluding the pandemic period, it would be the slowest growth since 2010, when the economy expanded by 3.6 percent. The projection also falls short of the government’s 5-6 percent growth target for the year. Abola said a rebound in government spending, particularly in infrastructure, could
help prevent a deeper slowdown. It may be recalled that gross capital formation—or overall investment in infrastructure and construction—contracted by 9.4 percent in the fourth quarter of 2025, worsening from the 2-percent decline in the previous quarter. The government largely attributed the drop to the fallout from a corruption scandal over public works projects, which dampened construction and investment activity.
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Q1 BORROWINGS UP 35% ON FRONTLOADING TACK www.businessmirror.com.ph
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Monday, May 4, 2026 Vol. 21 No. 202
P25.00 nationwide | 2 sections 18 pages | 7 DAYS A WEEK
By Reine Juvierre S. Alberto
HE national government has already borrowed P1 trillion in just three months, relying on domestic sources as a buffer against global uncertainty, data from the Bureau of the Treasury showed. In the first quarter of 2026, the government’s gross borrowings jumped by 34.69 percent to P1.003 trillion from P745.142 billion in the same period last year. According to Jonathan A. Ravelas, senior adviser at Reyes Tacandong & Co., the surge in borrowings is “not alarming by itself.”
“It reflects front-loaded funding and a deliberate shift toward domestic markets amid still-uncertain global conditions,” Ravelas said. “Borrowing early gives the government flexibility and reduces refinancing risk later in the year.” Figures indicate that domestic
DOUBLE ISLAND TRIUMPH FOR THE PHILIPPINES Entalula Beach in Palawan
(above) and Kalanggaman Island in Leyte (left) shine on the global stage, ranking No. 1 and No. 25 respectively in The World’s 50 Best Beaches 2026, celebrated for their pristine waters, striking natural formations, and largely untouched beauty preserved through limited access and sustainable tourism practices. The recognition underscores the country’s strong positioning in sun, sea, and island tourism as a key growth driver under the national recovery roadmap.
See “Borrowings,” A6
HSBC’S 6% APRIL INFLATION FORECAST MIDPOINT OF BSP’S By Andrea E. San Juan
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ITH rice and energy cornering a big chunk of the Philippine consumer basket, second-order effects on inflation particularly in restaurants and furnishings, likely pushed inflation to 6 percent in April -- the fastest rise in prices since May 2023, according to HSBC Global Investment Research Senior Asean Economist Aris Dacanay. In a commentary, Dacanay said HSBC Global Investment Research expects headline inflation to have jumped to 6 percent year-onyear to April. “Though retail fuel prices eased at the end of the month, gasoline prices spiked by 25 percent month-on-month (m-o-m) while
diesel prices rose by 46 percent m-o-m, significantly pushing inflation upward,” the HSBC Senior Asean Economist said. Dacanay also took into account that retail rice prices rose to P46.8 per kilogram in Metro Manila. “With rice and energy being large components of the Philippine [Consumer Price Index] CPI basket, second-order effects on inflation—particularly in restaurants, furnishings, and non-volatile food items—might have pushed inflation higher,” he said. Albeit a bit lower than Dacanay’s projection, Angelo Taningco, Research Head and Chief Economist at Security Bank Corporation, also noted that inflation in April would be driven largely by the energy shock triggered See “Inflation,” A2
MAYON ON EDGE People watch as Mayon Volcano emits ash plumes amid ongoing magmatic unrest under Alert Level 3, with Phivolcs reporting continued lava flows, volcanic earthquakes, rockfalls, and pyroclastic density currents, and reiterating strict enforcement of the 6-kilometer Permanent Danger Zone and evacuation of high-risk communities as ashfall affects surrounding areas, as seen from Camalig, Albay, on May 2, 2026. CHRISTIAN AÑONUEVO LORILLA VIA AP
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Govt helps Mayon-affected areas By Jovee Marie N. Dela Cruz and Jonathan L. Mayuga
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HE government on Sunday assured continued assistance to Bicolano families affected by the recent pyroclastic flow from Mayon Volcano. Assistant Secretary Irene Dumlao of the Department of Social Welfare and Development’s (DSWD) Disaster Response Management Group (DRMG) said the agency’s Field Office 5 has distributed 59,153 family food packs, along with hot meals and hygiene kits, to displaced residents in Tabaco City, Camalig, and Malilipot, based on the May 3, 6 a.m. report. Mayon emitted tons of volcanic ash on Saturday, affecting 52 barangays in various towns in Albay, the Office of the Civil Defense (OCD) in Region 5 reported. On Sunday morning, OCD Assistant Secretary Raffy Alejandro,
together with Albay Governor Noel Rosal, conducted an inspection to fast-track flushing operations in affected areas in Guinobatan, Albay, that were covered with thick volcanic ash. Firefighters were deployed to flush the volcanic ash, starting with the National roads. At a press conference, Jessar Adornado, OCD Bicol officer-in-charge, said about 2 to 3 inches of ash covered most of the National and barangay roads in Camalig and Guinobatan, Albay. In the Mi-isi gully, 18 barangays were affected, while 17 others were affected by ashfall in the town of Camalig. In Ligao City, a total of 17 barangays were also covered with thick ash. The Philippine Institute of Volcanology and Seismology (Phivolcs) reported that successive pyroclastic density currents along Mi-isi Gully within the Permanent Dan-
ger Zone and ashfall on the southwestern slopes were observed during the past 24 hours. A 24-hour Phivolcs observation from 12 a.m. Saturday to 12 a.m. Sunday showed Mayon, currently under Alert Level 3 or magmatic unrest, continues to show restiveness. Eruptive activity at Mayon during the period was characterized by lava effusion with lava flow on Basud Gully, located on the eastern slope of the volcano, and one of the primary drainages of the volcano, Bonga and Mi-Isi gullies, with episodic minor strombolian activity and short-lived lava fountaining, Phivolcs reported. In the last 24 hours, Phivolcs recorded 32 volcanic earthquakes, including 25 volcanic tremors lasting 2 to 15 minutes. Phivolcs also recorded a total of 284 rockfalls and 14 PDC signals. See “Mayon,” A2
FROM BALIKBAYAN TO BEAUTY QUEEN Bea Millan-Windorski has officially
claimed the Miss Universe Philippines 2026 crown, turning a long, grueling pageant journey into a defining win—powered by purpose, poise, and a message that resonated beyond the stage. Representing La Union, the 23-year-old standout topped a highly competitive field and now sets her sights on bringing home the country’s fifth Miss Universe crown. The winning answer that sealed it: “I chose to pack my life into balikbayan boxes... because I believe in the limitless potential of the Filipino people... I promise to be a public servant for all.” In photo, Bea wears “Elyucana,” a gown designed by Anthony Ramirez, a tribute to the girls of La Union. Story on A10. Photo by @dookieducay
PESO EXCHANGE RATES n US 61.5060 n JAPAN 0.3836 n UK 82.8978 n HK 7.8490 n CHINA 8.9882 n SINGAPORE 48.0178 n AUSTRALIA 43.7492 n EU 71.8206 n KOREA 0.0413 n SAUDI ARABIA 16.3998 Source: BSP (April 30, 2026)
STAGE 5 May 3, 2026 (Sunday)
ROAD RACE | MASS START
1 2 3
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4 5 6 7
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Santiago City - Tuguegarao City 130.6km
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8 Alrefai Yousef Ibrahiem — LCW — 02:47:27.1 9 Bordeos Mark Julius — PAN — 02:47:27.1 10 Mendoza Aidan James — G4G — 02:47:27.1
STAGE 5 CLASSIFICATION TOP FINISHERS 1 Anisimov
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