PBBM eyes Asean focus on AI, tariffs By Samuel P. Medenilla
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RELIEF AFLOAT Personnel from the Philippine Charity Sweepstakes Office (PCSO), in coordination with the PNP and the local government, distribute food packs to evacuees in Datu Piang, Maguindanao del Sur, on Saturday, as part of the agency’s rapid response to massive flooding triggered by the Intertropical Convergence Zone. Acting on the directive of President Ferdinand Marcos Jr., PCSO deployed 1,000 food packs and announced the airlift of 2,500 more Charitimba packs. The PCSO conducted the relief work with the Office of Civil Defense (OCD) and the Philippine Air Force (PAF). PCSO PHOTO
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RESIDENT Ferdinand Marcos said he will push for region-wide guidelines on Artificial Intelligence (AI) use and a consensus on the reciprocal tariff imposed by the United States (US) during the 46th Association of Southeast Asian Nation (ASEAN) Summit and other related meetings in Malaysia this week. In his pre-departure speech at the Villamor Airbase in Pasay City on Sunday afternoon, the chief executive stressed the importance of AI in the economic development of Asean.
“I will also highlight the Philippines’s commitment to the development of a common regional framework for ethical and responsible AI or Artificial Intelligence aligned with Asean values,” he said. While some Asean member countries, including the Philippines, have initiated bilateral talks with the US on the reciprocal tariff, he said the regional bloc should complete the process of coming out with a joint position on the matter, which was initiated by Malaysian Prime Minister Anwar Ibrahim. “Considering the many different situations that the member
states of Asean have concerning the trade—concerning trade and specifically the tariff schedule imposed by the United States, we must find a way to find consensus amongst the disparate situations that the different member states are operating under,” Marcos said. United States President Donald Trump imposed additional tariffs ranging from 10 percent to as high as 125 percent on imported goods in April in his bid to correct the alleged “unfair trading” practice of other countries. The International Monetary Fund (IMF) projected that the tariffs may cause a global economic slowdown.
Aside from addressing digital disruption and economic volatility, Marcos said other issues, to be tackled in the Asean Leaders’ Summit on May 26 and 27 in Kuala Lumpur, Malaysia are developments in the South China Sea, the situation in Myanmar, which is still under civil war, and climate change. Marcos said he hopes the discussions will result in a futureready Asean that is not only “competitive, but also people-centered and sustainable.” “As always, our participation in the Asean Summit reaffirms our dedication to deepening regional See “PBBM,” A2
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BSP TO PUSH SINGLE-PT TARGET FOR INFLATION www.businessmirror.com.ph
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Monday, May 26, 2025 Vol. 20 No. 225
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By Cai U. Ordinario @caiordinario
HE Bangko Sentral ng Pilipinas (BSP) is following the lead of the United States Federal Reserve and other central banks that have set a single-point inflation target. BSP Governor Eli M. Remolona Jr. recently told reporters that they are working with the International Monetary Fund (IMF) on this undertaking. The exercise is being done to be more precise in terms of inflation targeting. Currently, the inflation target of the BSP is 2 to 4 percent until 2028. The central bank chief explained why they plan to veer away from setting a target denoted as a range.
“I was seriously thinking of just having a point, a level, target level, because the band kinda says, ‘If we’re at 3.9 [percent] that’s just as good as three, and I don’t feel that way. Three [percent] is better than 3.9 [percent],” Remolona said. However, setting an inflation target of zero would not be ideal for a growing economy. It can be noted that inflation is an indicator of demand which is needed in growing See “BSP,” A2
GROUPS THANK, BID FAREWELL TO DENR’S YULO-LOYZAGA By Jonathan L. Mayuga
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NVIRONMENTAL groups on Sunday extended their heartfelt gratitude to outgoing Secretary Maria Antonia-Yulo Loyzaga for her exceptional leadership as the country’s chief steward of environment and natural resources. Yulo-Loyzaga is credited with introducing a science-based, multistakeholder approach to conservation that involves national government agencies, local government units, the private sector, the scientific community, the academe, and communitybased groups. In separate message posts in their official social media accounts, the Philippine Eagle Foundaiton, Zoological Society of
London, and World Wide Fund for Nature—Philippines shared their sentimental goodbyes to Yulo-Loyzaga, who tendered her resignation in compliance with President Ferdinand Marcos Jr.’s directive for the mass resignation of members of the official cabinet. Loyzaga will be replaced by Department of Energy Secretary Raphael Lotilla. YuloLoyzaga was appointed by Marcos Jr. and took her oath on July 19, 2022. “We extend our heartfelt thanks to Hon. Maria Antonia Yulo-Loyzaga for her exceptional leadership as Secretary of the Department of Environment and Natural Resources. “During her tenure, we witnessed a See “Groups,” A2
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NO CHANGE AHEAD A Coin Deposit Machine (CoDM) is seen at a mall in Metro Manila following the Bangko Sentral ng Pilipinas’ (BSP) announcement that all CoDMs will be temporarily deactivated
starting June 17, 2025. The pause allows the BSP to review and improve coin recirculation and exchange services for the public. The CoDM program—launched in 2023—has collected P1.373 billion worth of coins as of mid-March 2025, according to BSP data reported by BusinessMirror. These machines allowed the public to convert idle coins into e-wallet credits, vouchers, or charitable donations. NONIE REYES
RRR cuts will likely wait till next year–BSP
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HE Bangko Sentral ng Pilipinas (BSP) does not intend to reduce the reserve requirement ratio (RRR) of banks anytime soon. BSP Governor Eli M. Remolona Jr. recently told reporters that if the Monetary Board will reduce the RRR, that decision may only come next year. In February, the Monetary Board reduced the RRRs by 200 basis points (bps) for banks, unlocking billions in funds. (See: https:// businessmirror.com. ph/2025/02/22/bsp-to-cut-rrr%e2%82%b1330-b-funds-seenunlocked/). “It’ll likely be for next year because we’re trying somewhat to make the yield curve more reliable, which means managing liquidity in
the system better than we have,” Remolona told reporters, speaking partly in Filipino. The reserve requirement is a minimum amount of deposits and deposit substitutes that banks should set aside in liquid cash. These set-aside funds, required by central banks, cannot be lent out by banks. The latest reduction in the RRR placed the rate for Universal and Commercial Banks (UKBs) at 5 percent and digital banks at 2.5 percent. There is no reserve requirement for thrift banks—this was removed in February—as well as for rural and cooperative banks, which were removed in 2024. (https://businessmirror.com. ph/2024/09/21/bsp-cuts-banksrrr-in-bid-to-spur-growth/). This means, if a UKB received a
deposit of P100,000, 5 percent of this amount or P5,000 should be set aside as liquid cash. Reducing and removing the ratio for banks, therefore, allows financial institutions to increase lending and investment in securities, foreign exchange, and other assets as well as financial instruments. The reduction in the RRR in February was estimated to have poured P330 billion into the banking system. These additional funds increase the liquidity in the banking system, which could lead to faster inflation. Remolona explained that this is what BSP is trying to manage. He said the BSP has been issuing its own bills to mop up excess liquidity to prevent it from causing prices to surge. “We’ve been issuing large amounts of BSP bills in an effort
to absorb the liquidity...that’s in the system. Reserve requirements expand that liquidity that’s in the system. So we’re trying to manage that,” Remolona said. The BSP said in February it will reduce the RRR for UKBs, as well as non-bank financial institutions with quasi-banking (NBQBs) functions, by 200 bps to 5 percent. Similarly, the RRR for digital banks will be trimmed by 150 bps to 2.5 percent while thrift banks will see a 100bps cut, bringing their reserve requirement down to 0 percent. The Central Bank said the new ratios will take effect on the reserve week starting March 28, 2025. The move shall apply to the local currency deposits and deposit substitute liabilities of banks and NBQBs. Cai U. Ordinario
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)