Aug factory output dips on higher tariffs P
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ROTECTIONIST measures and higher US tariffs caused the slowdown in the Philippine manufacturing output in August, according to S&P Global Market Intelligence. The country’s Purchasing Manager’s Index (PMI) score slowed to 50.8 in August from the 50.9 recorded in July this year. “The latest PMI data for the Philippines manufacturing sector once again indicated a subdued performance, with growth rates for output and new orders remaining below their historical averages,” Maryam Baluch, Economist at S&P Global Market Intelligence, said. “Additionally, job creation came
to a halt in August, ending a period of two consecutive months of marginal increases in employment,” she also said. Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the uncertainties created by higher US tariffs and the tariff wars gave rise to a “wait and see attitude” when it comes to exports. Ricafort said uncertainties caused the slowdown in demand for exports to the United States and global trade as well as job creation. He also noted that Trump’s higher import tariffs/reciprocal tariffs slowed global GDP growth as well as local growth in respec-
tive economies. The Philippines also saw its growth slow down to 5.4 percent in the second quarter of the year. This placed the country’s GDP growth at 5.5 percent in the first semester of the year. “Trump’s higher tariffs, trade wars, and other protectionist measures...led to some wait-and-see attitude for some exports locally and in the global supply chains in terms of their production, capacity, a gauge of manufacturing capacity utilization among prepandemic highs in recent months,” Ricafort said. The report of S&P Global Market Intelligence described manufacturing sector employment in
the Philippines as stable. Nonetheless, the report noted that employment remained “stagnant” given the rise in production requirements. This has increased work backlogs, the fastest in a sixmonth period. Further, S&P Global Market Intelligence stated that manufacturers used their post-production inventories to meet new orders, leading to a decline in finished goods. “Reductions have now been noted in three of the last four survey periods, with some firms reporting that they released stock onto the market to mitigate potential damage at warehouses from heavy See “Aug,” A2
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BSP TO KEEP RATES AT NEXT MEETING, SAYS BMI www.businessmirror.com.ph
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Tuesday, September 2, 2025 Vol. 20 No. 324
P25.00 nationwide | 2 sections 20 pages | 7 DAYS A WEEK
By Cai U. Ordinario @caiordinario
HE Philippine central bank is expected to maintain policy rates in its next meeting following the “tightest rate differential” seen between the United States Federal Reserve and the Bangko Sentral ng Pilipinas interest rate. BMI, a Fitch Solutions Company, said in its latest note that the differential between the Federal Reserve and BSP’s rates declined
to 50 basis points after the central bank reduced policy rates by 25 basis points last month. See “BSP,” A2
GENERAL TAX AMNESTY LIKELY TO COVER 2007 TO 2024–DOF By Reine Juvierre S. Alberto
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@reine_alberto
HE general tax amnesty pronounced by the Department of Finance (DOF) may cover tax liabilities between 2007 and 2024. During the Cabinet-level Development Budget Coordination Committee’s briefing for the Senate Committee on Finance on Monday, Revenue Operations Group Undersecretary Charlito R. Mendoza said the GTA might cover the year 2024 and prior years. “We’re still studying it. Actually, it’s still very, very broad. We
have a working draft for further study,” Mendoza told reporters when asked for further details. “But definitely, we will submit a draft, a proposed General Tax Amnesty Bill. That’s definite,” Mendoza added. Mendoza also confirmed that all internal revenue taxes, such as estate, income, withholding, among others, including excise taxes and value-added taxes collected by the Bureau of Customs, will be included. Although granting a tax amnesty would result in lower revenues collected by the government, See “General,” A2
MAKING CENTS (From right) Bangko Sentral ng Pilipinas Governor Eli Remolona Jr., Office of the Special Assistant to the President for Investment and Economic Affairs (Osapiea) Secretary Frederick Go, and Department of Budget and Management (DBM) Secretary Amenah Pangandaman attend the Committee on Finance briefing by the Development Budget Coordination Committee (DBCC) on the proposed National Expenditure Program for fiscal year 2026. ROY DOMINGO
Budget gap to narrow to 3.1% of GDP by ’30 By Reine Juvierre S. Alberto
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AWASH WITH TROUBLES The weekend flash flood that displaced over 200 families in
Barangay East Kamias following a “phenomenal” downpour has forced them into an evacuation center and carries a larger warning for Quezon City. The incident highlights persistent issues, including the failure of multibillion-peso flood control projects to protect vulnerable communities. NONOY LACZA
@reine_alberto
HE country’s budget deficit as a share of the overall economy is seen to narrow to 3.1 percent by 2030, according to the country’s economic manager. Budget Secretary and Development Budget Coordination Committee (DBCC) cochair Amenah F. Pangandaman said the budget deficit will be brought down to 3.1 percent of the gross domestic product (GDP) by 2030, citing the government’s fiscal framework. This comes after Senator Panfilo M. Lacson Sr. inquired about whether the government would
ever record a balanced budget since it always operates under a budget deficit during the Development Budget Coordination Committee’s briefing to the Senate Committee on Finance on Monday. As the government runs on a deficit, it would have to resort to borrowing in order to fund its programs and projects, Lacson said. Latest data from the Bureau of the Treasury (BTr) showed the budget deficit from January to July this year reached P784.4 billion, higher by 22.04 percent from P642.8 billion in the same period last year. (See: https://businessmirror.com.ph/2025/08/29/report-government-budget-gap-
BUDGET Secretary and Development Budget Coordination Committee (DBCC) cochair Amenah F. Pangandaman
widens-by-22-in-7-months/). This year, the deficit is projected at P1.561 trillion, as expenditures
will hit P6.082 trillion and exceed revenues at P4.520 trillion. To plug this, the government will borrow a total of P2.6 trillion from domestic and foreign creditors. In a separate presentation during the briefing, Finance Undersecretary Karlo Fermin S. Adriano said the deficit will continue to decrease until 2030. For next year, the DOF projects this will settle to P1.646 trillion; P1.603 trillion in 2027; P1.551 trillion, 2028; P1.447 trillion, 2029; and eventually to P1.325 trillion in 2030. Finance Secretary Ralph G. Recto said earlier that to achieve these targets, the government must avoid wasteful expenditures.
PESO EXCHANGE RATES n US 57.0420 n JAPAN 0.3881 n UK 77.0466 n HK 7.3159 n CHINA 7.9999 n SINGAPORE 44.4460 n AUSTRALIA 37.3055 n EU 66.6821 n KOREA 0.0411 n SAUDI ARABIA 15.2019 Source: BSP (September 1, 2025)