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JP-PH Deals and MSMEs: AI Upskilling & Resilient Progress
Then headline inflation rose to 7.2% in . This data gives room for the BSP to focus on core inflation for its policy rate adjustments. The next scheduled meeting of the BSP is . A policy rate hike is a necessary move to bring inflation down. (see also: 1 & 2 Citation at References section)
Also, news entities online report that the BSP is planning an increase of 25 bps or 50 bps. There are some financial analysts who see possible increases to 75 bps. Whatever is decided, how ought MSMEs prepare for these different scenarios?
The value of the PHP to the USD has appreciated since the PHP 61.6840 depreciation last , as shown in the chart below. The currency vs. the USD is still in a weak position. The JPY:PHP performance for the month of is more stable.
2b JPY:PHP exchange rate
, JPY 1.00 : PHP 0.3860
, JPY 1.00 : PHP 0.3872
, JPY 1.00 : PHP 0.3862
3 Bilateral Trade & Investment: PH President's visit to JP (–) opens more opportunities for MSME development
Important Economic Deal: Signing of landmark collaborations between PH and JP through the Ayala Group and leading Japanese companies in Tokyo.
Investment pledges of PHP 210 billion (USD 3.4 billion) were committed by Japanese firms to strengthen Philippine-Japanese global value chains (with focus on financial technology, intelligent city solutions, digital innovation, and smart urban development).
The partnerships envision daily transactions that are faster and more convenient. This creates more opportunities for Filipino consumers, businesses, and workers.
Investments will create more jobs, expand digital opportunities, and support a more innovative and inclusive Philippine economy.
A meeting with the Japan International Cooperation Agency (JICA) also strengthened PH-JP cooperation on infrastructure, healthcare, climate action, and peace and development initiatives in Mindanao.
Key agreements on economic cooperation will improve investor confidence, trade, and technology flows. Agreements are also expected to benefit OFWs, the agricultural and fisheries sector, and businesses operating in both countries (see also: Marcos, Takaichi announce key agreements on defense, economic cooperation).
The PH-JP bilateral trade agreements provide the economic macro-stability needed by MSMEs. By , with greater fintech access, digital tools, and smart infrastructure, the costs of doing business can decrease, and markets will begin to expand. There will be stronger value chains, 10%-15% more MSME digital adoption, job creation, and better shock absorption.
MSMEs will be more resilient to economic shocks like inflation, fuel spikes, or supply disruptions via diversified financing, more advanced technology, and stable supply chains.
BSP Central projections: Inflation is projected to settle at 3.6% in and 3.2% in . see also: Economic Outlook, BSP Report
In , core inflation increased to a two-year high of 3.9% from 3.2% in and 2.2% last year, . The BSP told BusinessWorld that they are now focusing on core inflation rather than headline inflation (7.2% in ) to guide their monetary policy decisions. (see also: 7 Citation at References section for difference between headline inflation and core inflation)
From the Philippine News Agency (PNA): the BSP projects May 2026 headline inflation rate at 7.1% to 7.9% due to the higher prices of food and a weaker PHP. (see also: 16 Citation at References section)
7 The Debt-to-GDP Ratio is still at 65.2% (with a buffer of
34.8%). Although the total outstanding debt of the Philippines is Php 18.49 trillion as of end-, which is a 21-year high, and is projected to hit Php 19.06 trillion by end-, it remains manageable as the economy scales to Php 31.8 trillion - bigger than its debt. And that debt remains smaller than the nation's total economic output when GNI (Gross National Income) is used. (GNI includes remittances of OFWs). see also: 4 & 6 Citation at References section
8a Consumer and Labor Market Indicators:
Consumer confidence: reduced pessimism from -22.2% (Q4 2025) to -15.8% (Q1 2026); +1.8% forecast of Quarter ahead, +9.6% of Year-ahead
Remittances trends: USD 35.63B (, full-year), USD 5.81B (early , Jan-Feb); resilient at ~3.0% growth; BSP reports for : remittances at USD 2.87B (+3.2% YoY). Q1 2026 total USD 8.68B (+2.8%).
Credit availability/NPLs: as of , PH Banks NPL ratio is stable at 3.3%; as for : NPL 3.29%; : NPL 3.4%. There is a stable credit demand.
Labor force survey: as of , unemployment rate eased to
5.0% (from
5.1% in with 2.58 million jobless); employment rate at
95%
Philippine GDP for January-March Q1 2026 growth slowed to
2.8%, trailing its regional peers (see also: 5 Citation at References section)
The Department of Economy, Planning, and Development (DEPDev) is implementing the UPLIFT (Unified Package for Livelihoods, Industry, Food, and Transport) program, to cushion soaring prices (see also: UPLIFT microsite for statistics on "ensuring sufficient food supply" and "keeping food prices within reach")
The latest 91-day T-bill average rate issued on : 5.074%
Electricity cost: Meralco residential rate down to ~ Php 14.3345/kWh this , compared to Php 14.3496/kWh for / Meralco enterprise rates: Business & commercial rates vary by customer class and demand, but generally rates slightly above residential rates.
9 Proxy indicators to regularly monitor for actual inflation:
Fuel prices: expected price decrease, Diesel (~Php 8.00 ⇓), Gasoline, & Kerosene, all down ⇓ for Tuesday 6:00 a.m.,
PHP currency performance: PHP appreciated , but still weak at Php 61.5010 vs USD 1.0 (import cost pressure)
Food (esp. rice): Persistent high prices (~13.7% Year-over-Year in April); PH government imposing price caps under EO 118 implemented nationwide (Php 50.00/kg on all imported rice)
How to leverage JP-PH macro-deals for resilient progress
Integrate these proactive steps in prep for JP-PH business macro-stability:
Upgrade fintech systems and learn how to network with contacts in any JP-PH digital innovation joint projects/ventures.
Reskill and upskill your homegrown talent and staff. Select the smart core of your workforce for better AI literacy, implementation, and responsibility. Make it your frugal, stable, and best move yet.
Finally, with upgraded fintech systems and an AI-smart homegrown workforce, discover ways to pivot operations before any BSP rate policy change, fuel price hike, currency depreciation, or inflationary trend. Reinvest and wisely use working funds with holds and cautions.
Your MSME Innovate, Upskill, Reinvest Flywheel
Engineered for Professional & MSME Business Strategies
The Strategy: With greater economic macro-stability forecasted from the PH-JP macro-deals last May 26-29, 2026, make progressive systems thinking moves: upgrade and further innovate digital systems, train homegrown workforce to be at their best in business operations, and study with AI how to reinvest assets for a more definite ROI.
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