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BusinessMirror
www.businessmirror.com.ph
A broader look at today’s business Tuesday, May 20, 2025 Vol. 20 No. 219
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PHL BOP GAP HITS $5.5B, WIDEST IN NEARLY 3 YRS n
By Cai U. Ordinario
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@caiordinario
HE Philippines recorded its widest yearto-date Balance of Payments (BOP) deficit in nearly three years, according to the latest data released by the Bangko Sentral ng Pilipinas (BSP). The BSP data showed the country’s BOP deficit reached $5.516 billion in the January to April 2025 period, the widest since the $7.263-billion deficit recorded in the full year of 2022. The central bank said the trade in goods deficit was the main culprit for the wider BOP deficit in the first five months of the year—something that some economists consider a cause for concern. “Of course it is [a cause for concern]. With cheap imports from China due to Trump tariffs, local producers are disadvantaged, while the trade deficit will continue to bloat,” University of Asia and the Pacific economist Victor A. Abola told BusinessMirror on Monday. According to Abola, given the new trade policy of the United States, the Philippines’s trade deficit could continue to swell, leading to an even wider BOP deficit in the coming months. However, what could be beneficial to the Philippines, Abola said, is a weaker peso. He expects the peso to start depreciating starting in June, after the elections. Jonathan Ravelas, senior adviser at professional services firm Reyes Tacandong & Co., told BusinessMirror that a “little depreciation” in the Philippine peso can reduce the BOP deficit by making exports cheaper and more competitive globally. This, in turn, will cause the country’s imports to be more expensive. With import prices higher, Ravelas said there could be a decline in import volumes. What is important, Ravelas said, is for the country to manage currency volatility. Nonetheless, the wider BOP deficit as of April 2025 could be a cause for concern. “It may indicate underlying economic issues such as increased imports, reduced exports, or capital outflows. Not to mention the potential secondary effects of inflation and currency volatility arising from Trump’s Tariff,” Ravelas told BusinessMirror. See “BOP,” A2
PARTY-LIST WINNERS The Commission on Elections proclaimed the winning party-lists in the May 12 polls at the Manila Hotel Tent on Monday, May 19, 2025. The poll body, however, suspended the proclamation of two party-lists which face disqualification cases for alleged serious violations. Story in A12, Second Front Page, “Comelec suspends proclamation of Duterte Youth, BH party lists.” ROY DOMINGO
Agencies seek ₧11T from DBM PHL NOT ‘FULLY SHIELDED’ By Reine Juvierre S. Alberto
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@reine_alberto
OVERNMENT agencies have asked for nearly double the proposed national budget for 2026, submitting a combined P11 trillion in funding requests to the Department of Budget and Management (DBM). At the sidelines of the Open Government Week 2025 opening ceremony on Monday, Undersecretary Goddes Hope Libiran told reporters that the estimated overall budget submissions of government agencies, including Tier 1 and Tier 2, amounted to P11 trillion. This is P2 trillion more than
the P9 trillion in budget submissions received by the DBM for this year’s national budget and 1.6 times higher than next year’s projected expenditure program worth P6.793 trillion. Libiran said the higher budget requests were driven by the 200to 300-percent increase in agencies’ budget submissions. “There are a lot of agencies that want to do a lot,” Libiran said, noting that not all proposals will be approved due to the tight fiscal space. The total proposed budget is structured under the government’s two-tier budgeting process, where Tier 1 covers ongoing expenses while Tier 2 is for the agencies’ new or expanded pro-
grams, activities and projects. Tier 2 budget proposals will only be funded by the available fiscal space that is the projected expenditure program, excluding the budget for Tier 1 and the financial impact of the Mandanas ruling and the full devolution of functions to local government units. The Mandanas ruling refers to the landmark Supreme Court ruling requiring the national government to increase the revenue share of local government units. According to budget documents, the Cabinet-level Development Budget and Coordination Committee (DBCC) has set the Tier 1 budget ceiling to
FROM TARIFF IMPACT: HSBC
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HILE the Philippines may benefit from Washington’s new trade policy, it is not “fully shielded” from the effects of higher tariffs, according to the Hongkong and Shanghai Banking Corporation (HSBC) Limited. In a report on Philippine electronics, HSBC said the country can benefit from the “China+1+1” strategy that investors could adopt to bring down their costs in light of Trump tariffs. However, HSBC cautioned that high uncertainty and the
risk of higher tariffs on semiconductors would not guarantee the country’s success under the new trade regime. “The archipelago is not fully shielded from the broader cascading effect of tariffs. However, we see opportunities and think all eyes will be on how the Philippines can maximize them,” HSBC said. According to the report, other factors complicate the Philippines’s chances in taking advantage of its lower tariffs on products shipped to the US. See “PHL,” A2
See “Agencies,” A18
PESO EXCHANGE RATES n US 55.5870 n JAPAN 0.3822 n UK 73.8362 n HK 7.1140 n CHINA 7.7094 n SINGAPORE 42.7790 n AUSTRALIA 35.5924 n EU 62.1518 n KOREA 0.0397 n SAUDI ARABIA 14.8204 Source: BSP (May 19, 2025)