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‘SIGNS OF STAGFLATION NOW APPARENT IN PHL’ www.businessmirror.com.ph
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Friday, May 15, 2026 Vol. 21 No. 213
P25.00 nationwide | 2 sections 20 pages | 7 DAYS A WEEK
ERC probes outages as PCCI airs concern
By Justine Xyrah Garcia
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HE Philippines’s weaker-thanexpected 2.8-percent growth in the first quarter is beginning to flash signs of stagflation, according to HSBC Global Investment Research. The bank has also slashed its 2026 growth forecast for the country to 3.4 percent from its earlier 4.6 percent projection. 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 gross domestic product (GDP) expanded by just 1.4 percent. The projection would likewise fall short of the Marcos administration’s 5- to 6-percent growth target for 2026. In a commentary released Thursday, HSBC Senior Asean Economist Aris Dacanay said the weak first-quarter GDP growth came alongside elevated inflation and rising unemployment, strengthening concerns over a stagflationary environment. Stagflation refers to a period when economic growth slows while inflation and unemployment remain elevated simultaneously. April inflation accelerated to 7.2 percent, the highest in three years, while unemployment in the first quarter climbed above 5 percent. “The medium-term effects of the growth and inflation shocks are already apparent. All told, stagflation in the Philippines has taken shape,” Dacanay said. Dacanay warned that conditions could worsen in the coming months as tighter fertilizer supply, linked to the continued blockage of the Strait of Hormuz, triggers what he described as a “caloric shock.” He said the disruption is expected to weigh on agricultural output in the second half of the year, compounding the effects of El Niño and keeping food prices elevated. “Consequently, higher food prices tend to have broader spillover effects to core [consumer price index] and inflation expectations,” he added. HSBC now expects inflation to average 6.6 percent this year, sharply higher than its earlier 4-percent forecast and well above the government’s 2- to 4-percent target range. See “Stagflation,” A2
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SURF AND SAIL From left: Pasig Rep. Roman Romulo, Department of Information and Communications Technology (DICT) Secretary Henry Aguda, Pasig City Mayor Vico Sotto, and
Metropolitan Manila Development Authority Chairman Don Artes lead the ceremonial launch of the Free Public Internet Access Program (FPIAP) aboard the MMDA Pasig River Ferry Service on Thursday, May 14, 2026. The initiative aims to provide commuters with free internet connectivity while supporting the modernization of public transport facilities along the Pasig River. The program also complements the administration’s “Pasig Bigyang Buhay Muli” rehabilitation campaign, which seeks to revive the historic waterway as an alternative transport corridor and public space in Metro Manila. NONOY LACZA
C. LUZON TOP SITE FOR FOREIGN INVESTMENT COMMITMENTS
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ENTRAL Luzon emerged as the top destination for foreign investment commitments in the first quarter of 2026, cornering more than three-fourths of the approved pledges registered with state-run Investment Promotion Agencies (IPAs), data from the Philippine Statistics Authority (PSA) showed. The PSA on Thursday said Region III accounted for 77.6 percent of total approved foreign investments during the January-to-March period, equivalent to P33.08 billion in pledges. Overall approved foreign investments surged by 52.3 percent to P42.64 billion in the first quarter from P27.99 billion recorded a year earlier. Other regions that attracted sizeable foreign investment commitments were Region IV-A or Calabarzon with P3 billion, the National Capital Region with P2.13 billion, and Region II or Cagayan Valley
with P1.8 billion. South Korea emerged as the largest source of approved foreign investments, accounting for P25.37 billion or 59.5 percent of total pledges. Singapore followed with P3.18 billion in commitments, equivalent to 7.5 percent of the total, while China contributed P2.54 billion or 5.9 percent. By industry, arts, entertainment and recreation accounted for the largest share of approved foreign investments at P10.38 billion or 24.4 percent of total commitments. This marked a sharp increase from the P1.46 billion recorded in the same period last year. Manufacturing also posted strong investment approvals amounting to P9.08 billion or 21.3 percent of total pledges, followed closely by accommodation and food service activities with P9.07 billion See “Investment,” A2
Prolonged ME war may see $1:₧65 exchange By Andrea E. San Juan
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PROLONGED Middle East conflict could weaken the Philippine peso further to P65 against the dollar on the assumption that the price of oil shoots up to $150 to $170 per barrel (Brent Crude), an analyst warned. “65, probable on prolonged Middle East conflict and trades towards 150-170 [price of Brent Crude] ” Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co. told the BusinessMirror in a Viber message on Thursday. According to Ravelas, his assumption is a conflict lasting three to nine months. He said this period will dictate oil prices and the direction (of the local currency.) Asked how long is a “prolonged”
Middle East conflict, he replied: “Right now it’s already prolonged. It’s been 10 weeks.” “What more after nine months? Look at inflation from 2 to 7.2 percent, that is a huge jump. The key is, the longer the conflict lasts the higher probability of 65,” added Ravelas. The analyst said this after the local currency plunged to a new record low of P61.64 against the dollar on Thursday. Data from the Bankers Association of the Philippines (BAP) showed the Philippine peso closed at P61.64 against the greenback on Thursday. This rate is 26 centavos weaker than its previous finish of P61.38 on Wednesday. Ravelas said the peso fell to this value after the greenback was “firmer on higher US Treasury See “ME war,” A2
By Lenie Lectura & Bless Aubrey Ogerio
OR the second consecutive day, Red and Yellow alerts were raised over the Luzon and Visayas grids due to insufficient supply, prompting an inquiry by the Energy Regulatory Commission (ERC) and concern by the largest business alliance over the impact on the economy. On Thursday, the ERC ordered the National Grid Corp. of the Philippines (NGCP) to submit a comprehensive report concerning the Red Alert and Yellow Alert raised over the Luzon and Visayas grids. “Consumers have the right to a clear and comprehensive account of what occurred during these alert declarations. Visiting the System Operations Command Center enabled us to closely observe the situation and ensure that the Commission bases its actions on verified information rather than assumptions,” ERC Chairperson Atty. Francis Saturnino Juan said. Juan personally proceeded to the System Operations Command Center to observe realtime operations, confer with system operators on the causes of the recent Red Alert and Yellow Alert declarations, as well as the current status of generating units and transmission facilities. The on-site verification forms part of the commission’s commitment to ensure that any disruption affecting power supply reliability is met with prompt, transparent, and evidence-based regulatory action. In a letter addressed to NGCP President and CEO Mr. Anthony L. Almeda, the ERC directed NGCP to submit a detailed account covering, among others, the specific date, time, and duration of each Red and Yellow Alert declaration and the areas affected; the root cause or triggering factor of the supply deficiency or grid contingency; the generating units, transmission lines, and grid facilities that experienced forced outages, derating, or reduced availability; the reserve and demand levels at the time of each alert declaration; the immediate corrective measures undertaken, including any load management or dispatch instructions issued; the restoration timeline and normalization actions; and any related coordination with the Department of Energy (DOE), the ERC, and concerned generation companies. “The reliability and adequacy of our power supply are non-negotiable. We expect NGCP to fully and faithfully discharge its reportorial duties so that the public, the industry, and the regulators can collectively address the root causes of these incidents,” he added.
Brownouts stressing economy—PCCI
RECURRING power outages in the Visayas could evolve into a broader economic threat, as supply instability collides with slowing growth and rising See “Outages,” A2
PESO EXCHANGE RATES n US 61.5080 n JAPAN 0.3897 n UK 83.1957 n HK 7.8559 n CHINA 9.0582 n SINGAPORE 48.3554 n AUSTRALIA 44.6302 n EU 72.0689 n KOREA 0.0413 n SAUDI ARABIA 16.3939 Source: BSP (May 14, 2026)