Last Week in Philippine Business (Mar 30-Apr 5, 2025)

In March 2025, the Philippines marked a significant milestone in its economic landscape, recording the lowest annual inflation rate in nearly five years. The consumer price index (CPI) rose by just 1.8%, a marked decrease from 2.1% in February and falling below the anticipated 2.0% forecast. This notable decline can largely be attributed to sharp reductions in food and transport prices, with rice prices experiencing a remarkable 7.7% plunge—the steepest decrease since March 2020. Additionally, transport costs also saw a decrease of 1.1%, contributing to the overall easing of inflationary pressures. Core inflation, which excludes volatile food and energy prices, also reflected a more stable economic environment, dipping to 2.2% from 2.4% the previous month.

The subdued inflation figures are promising for both consumers and businesses alike, providing a potential boost to consumer spending amidst a global economy facing various challenges. Analysts believe this environment may offer the Bangko Sentral ng Pilipinas (BSP) the flexibility to pursue a more accommodative monetary policy. With the upcoming meeting on April 10, there is speculation that the central bank could implement a 25 basis points cut in interest rates, a move that would aim to stimulate economic activity and further encourage investment. The decline in inflation not only eases the financial burden on households but also presents opportunities for companies to strategize around lower operational costs, paving the way for a more robust economic recovery in the Philippines. READ MORE

In 2024, the Philippine government's gross borrowings surged to P2.564 trillion, reflecting a strategic pivot towards increased domestic financing. This decision underscores a concerted effort to mitigate the potential risks associated with foreign exchange fluctuations, particularly in light of a volatile global economic landscape. By relying more heavily on local debt instruments, the government aims to stabilize its financial position while adequately addressing the growing fiscal deficit, which has been exacerbated by ongoing spending initiatives in infrastructure and social programs.

The move to prioritize domestic borrowing highlights the government's confidence in its local financial markets and investors, which are becoming increasingly pivotal in funding national expenditures. This reliance not only supports the local economy but also strengthens investor sentiment, positioning the Philippines as a resilient player in the regional fiscal realm. Additionally, with global interest rates remaining uncertain, focusing on domestic instruments can potentially provide a more favorable borrowing cost. Analysts suggest that while this strategy may help manage short-term risks, it remains essential for the government to maintain fiscal discipline to ensure long-term economic stability and to address evolving challenges in the global financial environment. READ MORE

Security Bank Corp., a prominent publicly listed mid-sized lender in the Philippines, has recently garnered accolades for its exceptional fund management capabilities at the CFA Society Philippines's "Vision 2025" event. This prestigious gathering not only featured the annual economic forecasting session but also served as the backdrop for the "10th Annual Best Managed Fund of the Year Awards" ceremony. The recognition underscores Security Bank’s commitment to excellence and innovation in its financial strategies, showcasing the institution's ability to navigate a complex economic landscape while delivering value to its investors.

In an environment marked by fluctuating market conditions and evolving investor expectations, Security Bank's achievement highlights its strategic approach to fund management and asset allocation. Such recognition serves as a testament to the bank's robust investment processes, risk management practices, and its dedication to adhering to best practices in transparency and performance. As financial markets continue to evolve, firms recognized for their management capabilities stand out, providing investors not just with competent handling of funds but also with the assurance of long-term growth potential.

This award comes at a time when Philippine financial institutions are focusing on enhancing their fund management operations to remain competitive amidst increasing regulatory scrutiny and market volatility. Security Bank’s accomplishments position it favorably within the crowded banking sector, attracting both institutional and retail investors seeking reliable avenues for their assets. With a track record of strong performance, the bank is poised to leverage this recognition to strengthen its reputation in the market and drive further growth opportunities in the coming years. READ MORE

In light of the ongoing global market disruptions fueled by increasing tariff threats and shifting trade dynamics, local exporters in the Philippines are advocating for critical fiscal reforms to maintain competitiveness and sustainability. Key among their demands is the enactment of the CREATE More law, which aims to further enhance the benefits of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE). This proposed legislation seeks to provide additional fiscal incentives and optimize taxation systems, effectively reducing the burden on exporters. By alleviating tax pressures, exporters hope to redirect funds towards innovation, upgrading facilities, and enhancing product quality, thereby positioning themselves more favorably in the international market.

Moreover, stakeholders in the export sector emphasize the urgent need for infrastructural improvements, particularly in the areas of port development and railway systems. Upgrading and modernizing transportation infrastructure can significantly reduce logistical costs and turnaround times, which are crucial factors in meeting international standards and responding to market demands. The Philippine economy has been grappling with supply chain challenges exacerbated by the pandemic, and enhancing logistical capabilities can provide exporters with a competitive edge. As the global economy continues to recover and adapt, these fiscal reforms and infrastructure investments could serve as a lifeline for the export industry, helping to mitigate the effects of external pressures and fostering long-term growth in the sector. READ MORE

The Department of Energy (DOE) in the Philippines, in collaboration with prestigious South Korean institutions, has officially launched a Knowledge Sharing Program (KSP) designed to enhance the country’s energy sector through technical support and policy guidance. This strategic partnership marks a significant step towards addressing the Philippines’ energy challenges while fostering sustainable development standards in line with global best practices. The KSP aims to leverage South Korea’s advanced technology and expertise in energy management, renewable resources, and energy efficiency, which are pivotal in achieving the Philippines' long-term energy goals.

The initiative comes at a crucial time as the Philippines seeks to diversify its energy sources and transition towards more sustainable alternatives amidst rising energy demands and climate change challenges. By tapping into South Korea's experience in successfully implementing efficient energy policies, the DOE hopes to formulate actionable strategies that can enhance energy accessibility, affordability, and security for Filipino consumers. This program not only promotes technology transfer but also encourages knowledge exchange and collaboration that can lead to innovative solutions tailored to the unique energy landscape of the Philippines. Increased cooperation with South Korean partners is expected to create business opportunities within the renewable energy sector, paving the way for investment and development projects that can significantly contribute to the nation’s economic growth and stability. READ MORE