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Saturday, May 24, 2025 Vol. 20 No. 223
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MARCOS KEEPS ECONOMIC TEAM, MAKES CHANGES AT DOE, DFA, DENR, DHSUD
PRESIDENT Ferdinand Marcos Jr. speaks during the presentation of newly enacted laws to stakeholders at Malacañang on Thursday, May 22, 2025. AP/AARON FAVILA
By Samuel P. Medenilla & Reine Juvierre S. Alberto
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RESIDENT Ferdinand Marcos has retained his economic managers and Executive Secretary Lucas P. Bersamin, but has started a wide-scale revamp in his Cabinet. In a press briefing in Malacañang on Friday, Bersamin said the chief executive declined to accept his courtesy resignation. “Just this morning, he communicated to me that I have his full backing for as long as I wish to work for him. And that is a very good gesture from the President because that is a sign of his manifestation of his full trust and confidence in myself,” he said. He noted his retention belied the claim made in an online news report, which he tagged as false, that the decision of Marcos to call for a mass courtesy resignation in Cabinet last Thursday was meant to remove him from his position.
MICHAEL EDWARDS | DREAMSTIME.COM
International perception
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By Cai U. Ordinario
HE Bangko Sentral ng Pilipinas (BSP) is considering two more 25-basis-point cuts in key policy rates this year given the slowdown in inflation and rise in global uncertainties. BSP Governor Eli M. Remolona Jr. said in a briefing on Friday that the recent slowdown in inflation has given the Monetary Board more room to introduce reductions in the policy rate. The next meeting of the Monetary Board is slated for June 19 where, Remolona said, a rate cut is on the table. However, Remolona said this may not necessarily be consecutive cuts. “How many cuts, is it 2 cuts or three cuts? I think at least 2 cuts,” Remolona said. “It’s still 25 [bps] at
a time, given what we know about what’s going on.” The uncertainties in the global economy, Remolona said, is one of the major factors in the monetary policy setting of the BSP. These are causing BSP to tread monetary policy carefully. “The hard part is we don’t know because this is new territory for us, it’s new territory for most central banks. That’s the most uncomfortable part,” Remolona said. Remolona said the inflation
BSP BALANCING ACT: EASING RATES WITHOUT TRIGGERING INFLATION GOAL Lower policy rates Support faster growth Improve rate transmission
rate of 1.4 percent posted in April 2025 and 1.8 percent recorded in the month prior gives the BSP a lot of room to reduce policy rates. However, the BSP Governor said cutting rates aggressively may become inflationary. This can be a concern given external risks to the Philippine economy. “So far, the hard data says we have plenty of room to cut especially because inflation is low. But we have to be careful because we don’t want to cut too much. If you cut to the point where our demand exceeds our capacity, then that will be inflationary,” Remolona said.
RISK Inflationary pressures External uncertainties Lagging market responsiveness
Apart from the reduction in the policy rates, Remolona said the BSP is also working on improving the transmission mechanism to allow the policy rate to be reflected in the local market. “In the meantime, we’re trying to strengthen the transmission mechanism. So, a rate cut may be more effective, somewhat more effective than before,” he said. Meanwhile, in its latest Market Call report, the University of Asia and the Pacific (UA&P) said further rate cuts can make the peso more competitive for local producers.
ASIDE from Bersamin, Marcos also decided to keep his core economic team, due to their importance in keeping the country’s “economic health.” Among those who will remain in the Cabinet are Trade Secretary Cristina A. Roque; Finance Secretary Ralph G. Recto; Economic, Planning and Development Secretary Arsenio M. Balisacan; Budget Secretary Amenah F. Pangandaman; and Special Assistant to the President for Investment and Economic Affairs Frederick D. Go. DEPDev Secretary Arsenio M. Balisacan issued this statement in reaction to the retention of the Economic Team: “I thank the President for his continued trust and confidence and assure him of the Department of Economy, Planning and Development’s continued efforts, together with members of the Economic Team, to steer the economy to a prosperous, inclusive, and resilient future where every Filipino benefits from our nation’s progress.” In a news report by the BusinessMirror on Friday, some economic experts said it was “risky” for the Marcos administration to change the composition of his economic team amidst domestic and Continued on A2
“The President really wants to be responsive to the popular clamor for performance and change.”— Executive Secretary Lucas P. Bersamin
CABINET MOVEMENTS & NEW APPOINTMENTS DEPARTMENT DFA DOE DENR DHSUD
OUTGOING Enrique Manalo ( UN Rep) Raphael Lotilla ( DENR) Maria Antonia Yulo-Loyzaga (rested) Jose Rizalino Acuzar ( Pasig River Advisor)
INCOMING / STATUS Ma. Theresa P. Lazaro Sharon Garin (OIC) Raphael Lotilla Jose Ramon Aliling
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Raise taxes, pursue reforms to hit fiscal goals, PHL told
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O further narrow the country’s fiscal deficit, the International Monetary Fund (IMF) said the government should continue to pursue tax reforms, including raising taxes. In a statement after a recent visit to the Philippines, IMF Team Leader Elif Arbatli Saxegaard said tax reforms should also ensure effective control of tax incentives as well as enhance VAT efficiency and improve tax administration. Saxegaard said the fiscal deficit has already narrowed to 5.7 percent of GDP in 2024 from 6.1 percent of GDP in 2023. However, she said, more needs to be done to achieve the deficit targets and “create more space for priority spending.”
“The medium-term fiscal consolidation remains appropriate and should be supported by a sustainable plan to raise tax revenues and implement expenditure reforms to ensure that deficit targets are met and to create more space for priority spending,” Saxegaard said. IMF also said efforts are also needed to enhance local government capacity for them to respond to their “additional spending responsibilities” in line with the Mandanas Ruling, which became final and executory in 2019. The Department of Budget and Management (DBM) said the Supreme Court ruled that the just share of LGUs in taxes should not be based on national internal rev-
enue taxes but on all national taxes. The SC also said any mention of “internal revenue allotment” in the Local Government Code of 1991 should be understood as pertaining to the allotment of the LGUs derived from the national taxes. Meanwhile, IMF said the Philippine economy is still resilient despite the uncertainties in the global economy. IMF said the economy is projected to grow at 5.5 percent in 2025 and 5.8 percent in 2026. IMF noted that risks remain on the downside and will be driven mainly by weaker-than-expected output in the first quarter. The Philippine economy grew 5.4 percent in the first three months of the year.
“The medium-term fiscal consolidation remains appropriate and should be supported by a sustainable plan to raise tax revenues and implement expenditure reforms.”—Elif Arbatli Saxegaard, IMF Team Leader
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PESO EXCHANGE RATES n US 55.6370 n JAPAN 0.3863 n UK 74.7094 n HK 7.1092 n CHINA 7.7209 n SINGAPORE 43.0560 n AUSTRALIA 35.6633 n EU 62.7752 n KOREA 0.0403 n SAUDI ARABIA 14.8373 Source: BSP (May 23, 2025)