Debt-GDP ratio to stay elevated–think tank
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By Reine Juvierre S. Alberto
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HE government’s blueprint for debt reduction is being challenged by slower economic growth and oilprice-induced fiscal pressures, with the country’s debt, measured against its gross domestic product (GDP), seen shifting to an elevated path, according to the Congressional Policy and Budget Research Department (CPBRD). In a discussion paper, the House of Representatives’ CPBRD said the country’s debt trajectory has deviated from the post-pandemic normalization path toward a “higher and more persistent” debt profile as weaker growth and inflationary pressures weigh on the economy. This is the result of its analysis using the International Monetary Fund’s (IMF) Debt Sustainability Analysis (DSA) framework, which
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integrates macroeconomic projections and debt dynamics to assess fiscal sustainability over the medium-term. The country’s debt-to-GDP ratio is seen to remain elevated, rising from 63.8 percent in 2026 to 64.3 percent in 2028, after peaking at 64.4 percent in 2027. This sharply contrasts with the Marcos Jr. administration’s original Medium-Term Fiscal Framework, which projected the debt-to-GDP ratio to fall below the 60-percent threshold by 2025 and continue declining over the medium term. “Slower domestic and global growth is the most significant debt risk in the country,” CPBRD said, warning that the economy’s capacity to “grow out” of elevated debt has “weakened.” The economy grew 2.8 percent in the first quarter, the lowest since the post-pandemic period, pushing the debt-to-GDP ratio further
to 65.2 percent. Oil-price-induced inflation also poses a “dual risk” by dampening economic growth while increasing fiscal pressure, according to CPBRD. Prolonged oil shocks could force the government to ramp up spending on subsidies and assistance programs for vulnerable sectors, putting additional strain on public finances. This also adds pressure on the government’s borrowing needs amid pandemic-era amortization and increasing interest burdens. “If not managed prudently, a growing portion of government resources becomes devoted to debt servicing rather than productive investments,” CPBRD warned. Despite the deteriorating outlook, the country’s debt is mostly peso-denominated, with 68 percent of total debt in local currency,
to reduce exposure to exchange-rate risks. Around 94.8 percent of the country’s debt is also medium- and long-term, limiting rollover risks. Still, elevated interest costs and a less favorable interest-growth differential continue to threaten the debt-to-GDP ratio trajectory. “Crucially, the interest rate regime is expected to face upward pressure,” CPBRD said. As the government rolls over maturing debt—much of which was issued during the pandemic when global and domestic interest rates were at historic lows—it will coincide with a sharp rate hike cycle, CPBRD said. Interest payments will also likely eat up a larger share of the budget, leaving less funding for priority programs and making it harder to bring down the country’s total debt-to-GDP ratio, it added.
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DEMAND SPIKES STRAIN LUZON, VISAYAS GRIDS www.businessmirror.com.ph
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Thursday, May 14, 2026 Vol. 21 No. 212
P25.00 nationwide | 2 sections 22 pages | 7 DAYS A WEEK
By Lenie Lectura @llectura
HE Luzon and Visayas grids, which have been placed on yellow and red alerts on Wednesday, have set a new record high for electricity demand. As of May 12, Luzon’s peak demand reached an all-time high of 14,268 megawatts (MW), surpassing the previous record of 14,016MW which occurred on April 24, 2024. This year’s peak demand numbers grew 3.1 percent from the 2025 annual peak of 13,839MW. For the Visayas grid, electricity demand last May 12 also reached an all-time high of 2,774.87 MW, exceeding last year’s annual peak of 2,682.98MW. The surge is mainly attributed to high heat indices of up to 45C,
causing a spike in the usage of cooling appliances. The high electricity demand and the prolonged shutdown of some power plants have led to the issuance of yellow and red alerts by the National Grid Corporation of the Philippines (NGCP). The red alert is hoisted over the Visayas grid from 2pm to 6pm, followed by a yellow alert from 8pm to 9pm. A red alert indicates insufficient power supply to meet demand, often caused by high forced See “Demand,” A2
GLOW AND TELL The Philippine Space Agency said the bright, jellyfish-like lights seen over parts of the country at around 8:10 p.m. PhST (May 13, 2026, Quezon City) on May 12, 2026, were highly
NCR OFFICE MARKET RESILIENT IN Q1 DESPITE M.E. TENSIONS By Justine Xyrah Garcia
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HE office market in Metro Manila remained resilient in the first quarter of 2026 despite growing uncertainty from the ongoing Middle East conflict, according to property consultancy firm Colliers Philippines. In its latest market report, Colliers said office demand in the capital stayed steady in the first three months of the year, even as businesses grappled with geopolitical tensions, inflationary risks and concerns over potential disruptions to construction and operating costs.
The firm recorded a total of 193,000 square meters of office transactions in Metro Manila during the quarter, up 12 percent from the same period last year. Net take-up, which measures the change in occupied office space, reached 73,000 square meters. Traditional firms continued to drive leasing activity, accounting for 67 percent of transactions. These included companies from sectors such as legal services, engineering and construction, government agencies and See “Tensions,” A2
likely caused by the passage of China’s Long March 6A (Chang Zheng 6A) rocket launched from the Taiyuan Satellite Launch Center at about 7:58 p.m. PhST. The agency explained the phenomenon, commonly referred to as a “space jellyfish,” occurs when a rocket’s high-altitude exhaust plume is illuminated by sunlight while observers on the ground are in darkness. The expanding plume spreads across the thin upper atmosphere, scattering light into a glowing, jellyfish-shaped formation visible during twilight conditions. It added that no debris drop zones from the launch were projected over Philippine territory or waters. RACHIEL BATUTAY BOLALJOG VIA PHILIPPINE SPACE AGENCY
Slowest growth in consumer loans in 3 yrs By Andrea E. San Juan
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FTER consumer loans posted the slowest growth rate in over three years, an analyst underscored the need for the Bangko Sentral ng Pilipinas (BSP) to adopt a wait-and-see monetary policy approach as the reduced appetite in borrowing could signal a strain in consumer demand. “For the BSP, this is a delicate balancing act: inflation at 7.2 percent is clearly uncomfortable, but with growth already weakening and consumer demand showing strain, an aggressive rate hike now risks doing more harm than good,” Jonathan Ravelas, senior adviser at Reyes Tacandong & Co. told the BusinessMirror on Wednesday.
Ravelas said this after he explained the “mixed signal” sent by the latest bank lending data released by the central bank. “From where I sit, the signal is mixed but telling—on one hand, the slowdown in consumer loans, especially auto loans, shows households are becoming more cautious as higher borrowing costs bit and inflation squeezes budgets,” he also told this newspaper. While BSP data showed bank lending grew at its fastest pace in seven months to 10.7 percent in March, consumer loans grew to P1.98 trillion by only 20.5 percent, its slowest pace since January 2023 or in three years and two months when growth was at 20.3 percent. Out of the Philippine banking system’s total loan portfolio as of March 2026 which
amounted to P14.60 trillion, 13.54 percent of the pie was occupied by consumer loans while the remaining and the larger chunk of the pie or 84.38 percent of the loan portfolio was cornered by loans for production. Under consumer loans, there are three types of loans: credit card, motor vehicle loans, and salary-based general purpose consumption loans. Data from the central bank divulged that credit card has the biggest share in the consumer loans pie, amounting to P1.23 trillion or 62.15 percent share, and 8 percent of the total loan portfolio. This was followed by motor vehicle loans, with P538.29 billion as of March 2026. This is equivalent to 27.22 percent of the consumer
loans category. Motor vehicle loans, however, grew by 12.5 percent, the slowest pace since August 2023 or in two years and 7 months when this type of loan grew by 11 percent. Michael L. Ricafort, chief economist of the Rizal Commercial Banking Corporation (RCBC) told this newspaper that the slow growth in auto loans is consistent with the year-on-year decline in vehicle sales but offset by the faster growth in sales of electric and hybrid vehicles. “Some Filipinos are already looking for savings/cost cuts amid the sharp increase in fuel prices since the war in the Middle East. That is why there is also an increase in motorcycle sales in recent months,” Ricafort also told this paper. See “Growth,” A2
PESO EXCHANGE RATES n US 61.4130 n JAPAN 0.3898 n UK 83.1716 n HK 7.8449 n CHINA 9.0373 n SINGAPORE 48.3035 n AUSTRALIA 44.4507 n EU 72.1111 n KOREA 0.0411 n SAUDI ARABIA 16.3676 Source: BSP (May 13, 2026) TEAM GENERAL CLASSIFICATION TOP 3
STAGE 14 May 13, 2026 (Wednesday)
ROAD RACE | MASS START
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