Last Week in Philippine Business (May 25-May 31, 2025)

The Department of Public Works and Highways (DPWH) has officially announced an extensive rehabilitation project for EDSA, the main artery of Metro Manila, with work scheduled to commence on June 16, 2025. This initiative is a crucial step towards alleviating the chronic traffic congestion that has plagued the thoroughfare for years. The project will encompass a series of phased road repairs, modern drainage system upgrades, and the application of high-quality, durable asphalt, starting with the critical segment between Pasay and Shaw Boulevard in Mandaluyong. To effectively manage the expected traffic disruptions during the rehabilitation process, an odd-even scheme will be implemented, which is aimed at minimizing vehicular congestion and ensuring smooth traffic flow in the affected areas.

The implications of the EDSA rehabilitation project extend beyond road improvement; it presents significant opportunities for local businesses and contractors poised to participate in the bidding and execution phases. With infrastructure development being a key component of the Philippine government's economic agenda, this project aligns with broader goals to enhance urban mobility and attract investment in the region. As EDSA serves as a critical route for commuters, businesses, and logistics operations, its upgrade could potentially lead to reduced travel times and improved accessibility, subsequently fostering economic growth in surrounding areas. Additionally, the DPWH's strategic approach, utilizing an odd-even traffic scheme, indicates a proactive stance in addressing public concerns regarding the anticipated disruptions, showcasing a commitment to balancing urban development with community needs.

Overall, the rehabilitation project not only signifies a much-needed upgrade for one of Metro Manila's most vital roadways but also reflects the government’s sustained investment in infrastructure as a catalyst for economic resilience and sustainability in the face of ongoing urban challenges. READ MORE

In a significant move following the administration's underperformance in the 2025 midterm elections, President Bongbong Marcos has ordered all cabinet secretaries, heads of agencies, presidential advisers, and assistants to submit their courtesy resignations. This directive aims to facilitate a comprehensive assessment of each department’s performance and allows for the realignment of the government’s priorities moving forward. As the administration grapples with heightened scrutiny and calls for accountability, this reshuffle reflects an urgent need to recalibrate strategies to better serve the electorate and address pressing national issues.

The decision has been met with cautious optimism from the business sector, with organizations such as the Makati Business Club and the Philippine Chamber of Commerce and Industry expressing their support for the retention of the economic team. This endorsement underscores the importance of stability in economic policy amidst a turbulent political landscape, as investors and stakeholders alike are keenly focused on consistent governance that fosters a conducive environment for business growth. The potential reshuffling of cabinet positions presents both challenges and opportunities — while it may lead to fresh ideas and policies, it also runs the risk of disrupting ongoing initiatives that are crucial for economic recovery and development.

As the Marcos administration navigates this pivotal phase, the business community will be watching closely how these changes affect key economic indicators and overall governance. A successful reassessment could significantly strengthen investor confidence, enhance public services, and lead to improved economic outcomes in the long term. The effectiveness of these changes will ultimately depend on the administration's ability to implement a cohesive and collaborative approach, ensuring that the right talent is in place to address the demands of a rapidly evolving economic landscape. READ MORE

In a recent report, global investment firm KKR anticipates a robust growth trajectory for the private sector in 2025, driven by a paradigm shift in investor focus away from government initiatives in light of escalating global deficits. With countries around the world grappling with fiscal challenges, including the Philippines which is projected to face a budget deficit of P213 billion as of November 2024, private investments are expected to surge as businesses look to seize opportunities in areas traditionally dominated by public funding. This transition is likely to provide a fertile ground for innovative sectors, positioning the Philippines as a growing hub for private investment.

KKR highlights that sectors such as digital infrastructure, space exploration, and defense are poised to attract substantial private capital. The digital infrastructure segment, in particular, is of paramount importance for the Philippines, a nation increasingly reliant on technology for economic growth. As more Filipinos gain access to high-speed internet, enterprises focusing on digital solutions are likely to flourish. Additionally, with the global race in space exploration heating up, local firms could tap into partnerships and funding aimed at expanding sovereign capabilities, providing both technological advancement and potential revenue streams. Defense, too, is set to see heightened investment as regional security concerns prompt a recalibration of national priorities, paving the way for private firms to participate in defense contracting and technology development.

This shift toward private sector reliance entails a broader transformation in the investment landscape, suggesting that companies must adapt strategically to cater to evolving market demands. For the Philippines, capitalizing on this trend will not only stimulate economic activity but also create a diversified portfolio of growth drivers that can stabilize the economy against future fiscal uncertainties. As KKR forecasts, proactive engagement between the government and private entities will be essential to harness the full potential of these sectors, ultimately shaping a more resilient economic landscape for the future. READ MORE

Analysts from BMI Research are optimistic about the Philippine economy, predicting an impressive growth rate of 6.1% in 2025. This positive outlook is largely attributed to anticipated rate cuts from the Bangko Sentral ng Pilipinas (BSP), which have been a pivotal factor in shaping the financial landscape of the country. Since August 2024, the BSP has already enacted three quarter-point rate reductions, a strategic move aimed at countering inflationary pressures and stimulating economic activity. As businesses and consumers adjust to these lower borrowing costs, the expectation is that increased spending and investment will consequently drive growth.

The impact of these rate cuts is expected to resonate particularly within the banking sector, as cheaper loans encourage more extensive bank lending. With consumer spending and business investments accounting for a substantial portion of the Philippine economy, analysts emphasize that the financial sector will play a crucial role in this anticipated surge. Additionally, the easing of monetary policy may also bolster consumer confidence, leading to enhanced demand for goods and services. As economic conditions continue to evolve, stakeholders across various sectors should remain vigilant to capitalize on the opportunities presented by this favorable lending environment.

As Philippine banks prepare for further reductions in interest rates, they are likely to focus their strategies on expanding lending portfolios while managing the associated risks. This shift may lead to innovative financial products aimed at attracting borrowers who have been hesitant due to previous rate hikes. Furthermore, these developments could foster greater collaboration between banks and businesses, fostering a more dynamic economic ecosystem capable of sustaining growth in the longer term. Overall, the combination of strategic monetary policy and a responsive banking sector sets the stage for a promising economic landscape in 2025. READ MORE