PH firms less upbeat amid tariff worries

Business sentiment fell in the second quarter, the Bangko Sentral ng Pilipinas (BSP) reported late on Friday, primarily due to worries over unilateral tariffs ordered by US President Donald Trump.

The overall confidence index (CI) in the BSP’s latest Business Expectations Survey dropped to 28.8 percent from 31.2 percent three months earlier.

The primary concern raised by survey respondents, the BSP said, “was the potential economic effects of a 17-percent reciprocal tariff on Philippine exports to the US.”

“Although the higher tariff rate has been paused for 90 days and reverted to 10 percent, businesses still view this as a sign of rising global trade uncertainty,” it added.

“Businesses also expect fewer clients and orders in Q2 2025 due to the expected slowdown in business activity after the May midterm elections and the sugar off-milling season,” the BSP continued.

Sentiment was also lower with regard to the following quarter and the next 12 months, with the CIs for the two periods falling to 39.3 percent and 51.0 percent, respectively, from 45.4 percent and 56.4 percent.

For the third quarter, respondents cited global trade tensions that may be triggered by the US tariffs and also said that demand could drop due to the rainy season.

The more cautious year-ahead outlook, meanwhile, was attributed to the above factors and “expectations of fewer clients and orders due to expiring contracts and softer market conditions...”

Second-quarter sentiment was more upbeat among construction (38.2 percent from 35.8 percent), but declined for services (31.7 percent from 35.9 percent), wholesale and retail (31.8 percent from 34.1 percent), and industry (17.9 percent from 18.3 percent) sectors.

Anticipated projects during the summer lifted the construction sector outlook, the BSP said.

For the wholesale and retail trade and services sectors, the lower optimism was said to be “primarily due to concerns over US tariffs.”

“Additionally, weaker demand from rental contract expirations and client losses to competitors, further weighed on their sentiment,” the central bank added.

As for the next quarter, construction and services firms were less optimistic. The industry sector was more upbeat, meanwhile, while wholesale and retail trade sentiment was little changed.

Over the next 12 months, long-term confidence dipped in most sectors, with construction the exception.

Companies said that cash positions and credit access would remain tight in the second quarter while the hiring and expansion outlooks for the third quarter and the next 12 months remained positive but were lower compared to three months earlier. 

The peso is expected to strengthen against the dollar over all three periods, averaging P57.09:$1, P57.12 and P57.14, respectively, during the second quarter, third quarter and the next 12 months.

Inflation could rise due to election-related spending, US tariffs, fuel prices, agricultural losses due to bad weather and supply constraints, among other factors, but expectations remained within the government’s 2.0- to 4.0-percent target.

“Within-target inflation supports investments and job creation,” the BSP said.

Source: Manila Times

Results-as-a-Service: The next evolution in business

We are entering an era where instant results are no longer a luxury but a necessity. Businesses and consumers alike demand speed, efficiency, and guaranteed outcomes, leading to a fundamental shift in how services are delivered. Where Software-as-a-service (SaaS) revolutionized software access and Infrastructure-as-a-service (IaaS) and Platform-as-a-service (PaaS) streamlined IT operations, the next evolution is here: Results-as-a-service (RaaS).

Unlike traditional service models that provide tools and infrastructure, RaaS is built entirely around delivering measurable and guaranteed outcomes. Instead of paying for subscriptions, software, or support with no guaranteed success, companies now pay only for results — whether that's qualified leads, cybersecurity protection, AI-driven insights or business growth. This shift is redefining industries, ensuring that businesses invest in performance-driven solutions rather than uncertain processes.

At its core, RaaS is outcome-based. Businesses no longer need to invest in tools, technology or expertise; instead, they partner with providers who guarantee specific results. This model creates an alignment of incentives, where service providers are as committed to success as their clients — an answer to one's skin in the game.

Imagine RaaS happening in key business areas, such as sales and marketing, cybersecurity, and AI-powered decision-making. For the first one, traditional agencies charge for campaigns regardless of performance. In contrast, RaaS marketing models focus on delivering actual sales or leads, ensuring companies only pay for tangible revenue growth.

For cybersecurity, instead of purchasing software and hiring IT teams, businesses can opt for RaaS-based cybersecurity, where they only pay if threats are prevented or resolved. Finally, companies can leverage AI-driven insights without buying expensive software. They simply pay for actionable recommendations and successful implementations. Companies are increasingly getting into this model.

Scorpion, a marketing and lead generation RaaS provider, offers digital marketing for businesses in law, health care and home services. Instead of paying for ad placements or marketing tools, businesses pay based on the actual leads and revenue generated.

DoNotPay offers AI-powered legal services that help users dispute parking tickets, cancel subscriptions and resolve small claims cases. Instead of charging for software access, users pay only when they successfully resolve a case, making it a prime example of legal RaaS. Mobavenue, an AdTech company focusing on acquiring relevant users through acquisition or retargeting, only charges per successful app download, for example.

The adoption of RaaS brings several significant benefits for businesses. One of the primary advantages is cost efficiency; by paying only for results rather than investing in tools or services upfront, organizations can allocate their resources more effectively.

This model allows companies to concentrate on their core competencies while outsourcing non-core functions to specialized providers, enhancing their overall focus. Additionally, RaaS facilitates scalability, enabling businesses to expand their operations without the burden of substantial upfront investments in technology or personnel.

Furthermore, RaaS improves decision-making by providing access to real-time data and analytics from partners, allowing organizations to make informed decisions quickly. This model also offers flexibility, as businesses can adapt their strategies based on performance metrics supplied by RaaS solutions.

However, while the benefits of RaaS are compelling, organizations must also navigate potential challenges. One concern is the dependency on external providers for critical functions, which can create vulnerabilities if those partnerships falter. Quality control is another important consideration; ensuring that service providers consistently meet agreed-upon outcomes necessitates robust oversight mechanisms. Additionally, sharing sensitive data with external partners raises significant concerns regarding privacy and security.

As industries continue to evolve toward RaaS models, both businesses and employees must embrace this transformation. The emphasis on measurable outcomes over traditional service models represents a substantial shift in how success is defined in the marketplace.

The rise of RaaS signifies a fundamental change in business operations — one that prioritizes results over processes. As organizations navigate this new landscape, they must remain agile and innovative while aligning their strategies with the principles of performance-driven success. Ultimately, the future belongs to those who can adapt to this new paradigm and leverage it for sustainable growth and competitive advantage.

As RaaS gains momentum, employees must adapt or risk obsolescence. This model shifts job roles from task execution to strategic thinking and results-driven contributions. Those who thrive in a RaaS-driven economy will adopt a performance mindset, develop versatile skill sets, and commit to lifelong learning, given the need to stay ahead of industry trends and emerging technologies.

The transition to RaaS marks a new era in business — one where success is measured not by tools or processes but by tangible, real-world impact. As industries shift toward this model, both businesses and employees must embrace the change, innovate and align themselves with the future of results-based success.

Source: Manila Times

Philippine business conditions seen headed in right direction

The Philippines is headed in the right direction in terms of becoming a more conducive business environment, the Chandler Institute of Governance (CIG) said.

“The attractive marketplace (pillar) is about the capabilities that the government has to create a conducive business environment,” Kenneth Sim, dean at Chandler Academy of Governance, a Singapore-based public-sector training organization, said in an event organized by CIG and the Eastern Regional Organization for Public Administration.

“Relative to peers, the Philippines doesn’t do as well. But the gap is closing, and in the right direction, which means the Philippines is actually catching up to the global average,” he added, citing comparable economies like Vietnam and Egypt.

Citing results of the Chandler Good Government Index (CGGI) in 2024, Mr. Sim said that the Philippines posted a 0.56 marketplace attractiveness score last year, up from 0.53 in 2023. The global average is 0.58.

“Part of the reason why this is improving is the stable macroeconomic environment, which looks at things like inflation, as well as the other one that has improved, which is logistics competence,” he said.

Some key indicators for an attractive marketplace, like property rights and business regulations, are below the global average.

In particular, the country scored 0.39 in stability of business regulations, against the 0.51 global average. It scored 0.30 in property rights, against the 0.50 global average.

Mr. Sim noted opportunities to improve in the leadership and foresight components of the index.

“Over the years, there has been a decline in the score for the Philippines. It started at just above 0.4 in 2021, and by 2024, the Philippines will have dropped to 0.33. So this means, again, that the gap between the Philippines and the global average has been widening,” he said.

“It is important to point out, however, that even though we call it leadership and foresight, it is not about individual leaders; it is about the ability of the system to develop these capabilities,” he said.

“Of course, leaders play an important role, but this pillar is not about people. It is about the system,” he added.

“The performance of the Philippines in the CGGI in 2024 is somewhere in the middle. 67th out of 113, not the best, but certainly not the worst,” Mr. Sim said.

He added that although the country’s rank has suffered, its score has declined only slightly.

“What this means is that over time, relative to itself, in your own country, you have kept your performance relatively stable, but the rank has fallen, which simply means that more people are joining the index, and others are doing even better,” he said.

“So, staying in place and being patient is not going to help you to improve in ranking,” he added.

He said that the Philippines is stronger in areas like strong institutions and financial stewardship.

Source: Business World