‘Infra mess cleanup could dent growth’ T By Reine Juvierre S. Alberto
HE government’s push to root out corruption in infrastructure projects could take a toll on economic momentum, causing the country to miss its growth target and dampen tax revenue collections, according to Finance Secretary Ralph G. Recto. On the sidelines of the Department of Finance’s budget hearing before the Senate Committee on Finance on Tuesday, Recto said the economy could expand below the lower end of the government’s target of 5.5 percent. “We could miss it—the 5.5 percent. We could hit 5.4 percent,” Recto said. The economy could slow down due to slower government spending, Recto said, with the impact to be felt in the second half of the year and extend into the first quarter of 2026. “The good news is, moving forward, all of that is
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on the upside because we are solving the problem [on infrastructure projects]. So moving forward, you will realize your full potential for growth,” Recto said. The Development Budget Coordination Committee (DBCC) has lowered the country’s growth target to 5.5 to 6.5 percent this year, down from the range of 6 to 8 percent, due to heightened global uncertainties. The possible slowdown in economic growth, however, could also weigh on the government’s revenue collection, Recto said. “Once you miss your GDP (gross domestic product) growth, naturally it affects your revenue target or tax revenues,” Recto said. Taxes to be collected by the country’s main revenue-collecting agencies will also fall short of the targets set by the government this year. “They will miss their targets a bit,” Recto said, referring to the Bureaus of Internal Revenue (BIR) and Customs (BOC), which will collect P3.219 trillion and
P958.7 billion, respectively.
Geopolitical tensions
RECTO said geopolitical tensions with China, as well as between China and the United States, also spell external headwinds to the government’s revenue collections. “There are many global challenges that we’re facing today. And naturally, if you have a global economic slowdown, it will also affect the collections of BOC,” Recto added. The Philippines itself is facing new tariffs from the US, which would make exports more expensive and less competitive in the American market, potentially reducing exports and worsening the current account balance, Recto added. Despite the impact on tax collections, Recto said non-tax revenues will make up for the shortfall as this is projected to reach P350 billion this year. This would still enable the government to hit its
P4.520 trillion revenue target for the year. With expectations of slower economic growth and revenue collection, Recto said the government has prepared a catch-up plan that prioritizes the accelerated implementation of projects with high multiplier effects. Recto said the government is supporting the rehabilitation and reconstruction of damaged infrastructure, as well as providing temporary employment to those displaced or affected by recent calamities. Top priority projects of the government also include education, agriculture, health and information, communications and technology. “Our approach is anticipatory and strategic, ensuring that available fiscal space is directed toward high-impact, fast-disbursing projects to counteract the potential growth slowdown and help keep full-year GDP growth within the DBCC See “Infra,” A2
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Wednesday, October 15, 2025 Vol. 21 No. 7
P25.00 nationwide | 2 sections 24 pages | 7 DAYS A WEEK
By Reine Juvierre S. Alberto @reine_alberto
HE Philippines could have finally clinched an “A” credit rating from Standard & Poor’s (S&P) Global this year, but the alleged corruption in the government’s flood control projects derailed the upgrade, Finance Secretary Ralph G. Recto has revealed. On the sidelines of the Department of Finance’s budget hearing to the Senate Committee on Finance on Tuesday, Recto said that if it weren’t for the issues that surfaced due to flood control projects, the country’s credit rating could have been raised. “When we met with them last week, they were ready. We were already going to be a notch upward. So, nakakapanghinayang [It’s a shame],” Recto told reporters. “There’s a big chance that [the credit rating] could be maintained. There was a bigger chance for a credit rating upgrade,” Recto added. S&P affirmed the Philippines’ BBB+ credit rating and upgraded
its outlook to “Positive” from “Stable” in November last year. Having an “A” credit rating indicates strong investor confidence, affirms the country’s progress in fiscal management and reduces borrowing costs, among others. The Philippines has set out a comprehensive “Road to A” initiative to secure more credit rating upgrades and gain wider access to cheaper borrowing costs for the government and the private sector. So far, the Philippines secured an “A-” rating with “Stable” outlook from Rating and Investment Information Inc. and Japan Credit Rating Agency. See “Fund,” A2
PALAY FARM GATE HITS LOWEST LEVEL IN NEARLY 5 YRS–PSA By Ada Pelonia
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@adapelonia
HE average farmgate price of palay in September plunged to its lowest level in nearly five years, according to the Philippine Statistics Authority (PSA). Data from the PSA showed that the average farm gate price of unmilled rice fell by 30.5 percent to P15.60 per kilo in the reference month from P22.43 per kilo last year. The latest farm gate price is the lowest level recorded since November 2020, when it settled at P15.03 per kilo, based on PSA data. On a monthly basis, the average quotation in September dropped by 8.6 percent from P17.06 per kilo in the previous month. Ilocos Region had the fastest decline in the reference month,
where the farm gate prices had a year-on-year drop of 43.5 percent, based on PSA data. The farm gate prices in the region averaged P14.3 per kilo in September, lower than the P25.29 per kilo last year. This was followed by Cordillera Administrative Region (CAR), which registered a 38.2-percent contraction to P12.79 per kilo last month from P20.71 per kilo in September 2024. Top rice-producing regions Central Luzon and Cagayan Valley also posted a year-on-year decline in farmgate prices of palay by 32.9 percent and 36.8 percent, respectively. The government has been scrambling to prop up farmgate prices of paddy rice, which fell to a low of P8 per kilo, especially with torrential downpours threatening to blunt improvements in palay harvests due to See “Palay,” A2
BOOKED FOR GREATNESS Visitors gather around a colorful Philippine jeepney brought to Frankfurt, Germany, for the 2025 Frankfurt Book Fair, where the Philippines is this year’s Guest of Honor. As the centerpiece of Asia’s literary presence, the Philippines showcases over 500 titles available for rights selling and a 102-member delegation of authors, artists, and publishers across its three key venues—the Philippine Pavilion, the Philippine Stand, and the Comics Stand. Through a program highlighting translation, co-publishing, and global dialogue, the country positions its literature as a bridge between cultures. From ancient oral epics and mythic retellings to modern works by Jessica Zafra, Katrina Tuvera, Allan Derain, Patricia Evangelista, Maria Ressa, and Jose Dalisay, Philippine writing embodies centuries of resilience and imagination. The participation, led by the National Book Development Board (NBDB), NCCA, and Senator Loren Legarda, underscores literature’s power to advance cultural diplomacy, democracy, and human rights. The fair runs from October 15 to 19, 2025 in Frankfurt am Main. AP/MICHAEL PROBST
Reforms, not removing ₧1K bills, right tack
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NSTEAD of literally removing “dirty money” from circulation through demonetization, banksecrecy reform, digitalization and transparency measures are more targeted and capable of real change, according to the Bangko Sentral ng Pilipinas (BSP). In a research blog, BSP officials Maria Margarita Debuque-Gonzales, Mamerto E. Tangonan and Eloisa T. Glindro wrote that financial transparency reforms offer far greater promise in combating corruption. Among the reforms proposed is changing the country’s Bank Secrecy Law, which remains one of the strictest in the world, according to the BSP. Amending the law, the authors said, would empower investigators to trace illicit funds, match depos-
its to asset declarations and build prosecutable cases. They also recommended digitalizing and streamlining procurement to minimize discretion and leakage, and strengthening antimoney laundering and counterterrorism financing enforcement, particularly for politically exposed persons. Promoting broader financial inclusion through publicly supported digital payment systems to lessen reliance on physical cash was also among the measures highlighted. “As international experience shows, denomination or paymentsystem reforms are most effective when sequenced with broader structural shifts—such as digital adoption, transparency initiatives and institutional strengthening— rather than pursued in isolation,”
the authors wrote. Although removing the highest denominations from circulation to flush out “dirty money” from the banking system to confront graft may be “tempting,” cash is still king in the Philippines. The P1,000 bill dominates daily transactions and is preferred for regular and recurring transactions by Filipinos, according to the BSP. “The P1,000 bill, in particular, is the economy’s workhorse,” they said. Citing the BSP’s Currency Policy and Integrity Department (CPID) draft working paper, the P1,000 bill accounts for 83 percent of the total value and 40 percent of the volume of all banknotes in circulation. The CPID estimates that replacing the P1,000 and P500 notes, or
about 2.5 billion pieces worth P2.2 trillion, would absorb 93 percent of the value and 51 percent of the volume of all notes in circulation. This would cost around P11.5 billion just in printing, excluding replacement, storage, transport and destruction costs, according to CPID. It would overload automated teller machines and cash drawers, and require expanded armored car logistics and more vault space for banks and businesses. “The logistical cost would far outweigh any potential benefit,” the BSP officials said. Moreover, they cited an analysis by the BSP suggesting that the P1000 bill remains appropriate for current price levels, and an even larger denomination might be justified. See “Reforms,” A2
PESO EXCHANGE RATES n US 58.1970 n JAPAN 0.3823 n UK 77.6232 n HK 7.4807 n CHINA 8.1599 n SINGAPORE 44.8255 n AUSTRALIA 37.9095 n EU 67.3514 n KOREA 0.0408 n SAUDI ARABIA 15.5183 Source: BSP (October 14, 2025)