Good morning. It’s Friday, August 1.

PesoWeekly readers—big moves and tough questions this week. Our top story: the Philippines’ 2040 dream of joining the world’s richest countries is now in doubt, with economic planners admitting the window is closing fast. As our neighbors race ahead, are we ready to face the facts and make the hard changes? Plus: Microsoft crosses the $4 trillion mark, a universal cancer vaccine moves to human trials, and Malaysia bets $185B on its tech-powered future. We also break down what Dropbox Passwords’ shutdown means for users.

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Nearly a decade ago, “AmBisyon Natin 2040” set out a bold vision: end poverty and transform the Philippines into a high-income nation by 2040. Now, the country’s top economic planners are raising the alarm, this dream may be out of reach.

What Happened
Socioeconomic Planning Secretary Arsenio Balisacan says the pandemic dealt a crushing blow, wiping out three years of economic momentum. The 2020 recession shrank the economy by 9 percent, making the original 6 to 8 percent annual growth target almost impossible. “At our current pace, reaching high-income status by 2040 is not likely anymore,” Balisacan told reporters.

Big Picture: ASEAN Race
While the Philippines stumbles, Vietnam and Indonesia are speeding ahead.
Key differences:

Why It Matters
The problem runs deep. The Philippine economy leans too heavily on household spending and services, which offers some protection from global shocks but limits long-term growth. Balisacan stresses the urgent need to diversify: modernize agriculture, strengthen industries, invest in education, and fix infrastructure. Without these changes, the country may miss out on becoming even an upper-middle-income nation, let alone a rich one.

Zoom Out
Despite this sobering outlook, officials say the Philippines might still reach upper-middle-income status by 2025 or 2026, thanks to recent gains in national income. But as Balisacan warns, the window to achieve the original 2040 goal is closing. Now, more than ever, the country needs action—not just aspiration.

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Infrastructure spending is expected to surge in the third quarter after slowing down during the May election period, according to the Department of Finance. May 2025 figures showed a 9.2% drop year-on-year to ₱123.8 billion, with the first five months down 0.6% at ₱417.5 billion. Officials attribute the dip to the 45-day election spending ban and usual weather delays. With the ban lifted, disbursements are projected to recover. The government is targeting infrastructure spending at 5%–6% of GDP, aiming for ₱1.54 trillion in 2025. Cyclones remain a challenge but are already factored into planning.

SSS pensioners will see a 33 percent increase in their monthly benefits over the next three years under a new Pension Reform Program. Starting September 2025, retirement and disability pensioners will get a 10 percent annual hike, while survivor pensioners receive 5 percent. This will continue each year until 2027, marking the first time SSS has made a multi-year increase. The program benefits over 3.8 million pensioners and is expected to inject nearly ₱93 billion into the economy. SSS says the fund remains financially stable, even without higher contributions from members, thanks to stronger collections.

Exporters criticized President Marcos Jr. for failing to present a government strategy to address the new 19% US tariff on Philippine goods in his recent SONA. Robert Young, head of the Foreign Buyers Association of the Philippines, said exporters were left “in the dark” as officials sent mixed signals about possible support. With the new tariff putting Philippine exports on par with rivals like Indonesia and Vietnam, industry fears losing competitiveness. Exporters had hoped for government measures such as tax breaks or subsidies, but no clear plan or assurance has been given to help cushion the impact.

The Bureau of Customs confiscated ₱40.5 million in smuggled vape products and other goods from China at the Manila International Container Port. The vapes and items, falsely declared as kitchenware, were discovered during a full inspection of three container vans. The shipment included 81,000 vape units and paraffin wax, all subject to seizure for violating customs and vape laws. Authorities are pursuing legal action against those involved. This follows a series of crackdowns, with the BOC intercepting ₱483 million worth of illegal vape products in early 2025.

SEC Chairman Paul S. Atkins unveiled “Project Crypto,” a sweeping plan to modernize US securities regulations and make America the top destination for crypto innovation. Speaking at a policy event, Atkins pledged clearer rules on crypto asset distributions, self-custody rights, and new guidelines to help firms categorize digital assets. The initiative will enable “super-apps” where brokerages can offer a range of crypto and financial services under one license. Atkins also promised updated rules for decentralized finance and rapid regulatory pathways for new business models. The goal: keep US markets ahead in the global crypto race.

Everyone loves the idea of “making money work for you.” But let’s be real—most investment horror stories begin with someone skipping the basics. Before you open a trading app or chase the next viral stock, here are five non-negotiables you need to tick off first.

1. Crush High-Interest Debt
If you have unpaid credit cards, salary loans, or “5-6” utang, focus on wiping these out. No investment will beat the 18–36% interest rates that debt racks up. Pay it off, and you’ve already scored a risk-free return.

2. Build an Emergency Fund
Life loves plot twists. A medical bill, sudden job loss, or urgent repairs can force you to cash out investments early—often at a loss. Stash 3–6 months’ worth of expenses in a dedicated, easy-access account. It’s your parachute for financial free-falls.

3. Get Proper Insurance
Hospital bills can wipe out years of savings. Life and health insurance protect your family (and your investments) from total wipeout. It’s boring—until you need it.

4. Set Clear Goals and Timelines
Want to retire by 50? Buy a condo in 5 years? Different dreams need different investments. Know your “what for” and “when,” so you don’t end up with mismatched risks.

5. Start Small, Be Consistent
You don’t need a huge bankroll. Even ₱1,000 per month in mutual funds, digital banks, or Pag-IBIG MP2 can grow big over time. The secret? Consistency and patience.

Why it matters:
Skipping these steps is like building a house on sand. Investments rise and fall, but life’s emergencies don’t care about the stock market. A solid financial foundation—zero high-interest debt, emergency cash, and insurance—keeps you from making panic decisions or going broke when things go sideways. Investing is powerful, but only when you’re truly ready. Your future self will thank you for doing it right.

The UK government has announced it will recognize Palestine as a state in September unless Israel meets conditions like a Gaza ceasefire and renewed two-state talks. This move would be historic, but what does “recognition” actually change?

Symbolic Shift
Recognition is mostly symbolic. While Palestine is recognized by 147 UN states, has embassies, and even Olympic athletes, it lacks defined borders, a unified government, and real sovereignty. UK recognition would send a strong political message and add diplomatic weight to Palestine’s cause, especially if joined by France and most Security Council powers—leaving the US and Israel isolated.

Why Now?
Pressure is mounting. Starvation in Gaza, anger over Israel’s campaign, and a massive swing in British public opinion have pushed the UK to act. The decision is conditional: if Israel won’t budge on a ceasefire or new peace process, the UK will act alone. This is a direct response to a stalled two-state solution, which many now see as a fading hope.

Zoom Out
In practice, UK recognition is unlikely to end the conflict or change conditions on the ground immediately. But it marks a major shift in Western attitudes, piling pressure on Israel and signaling that the world’s patience is wearing thin.

Microsoft just became the world’s second $4 trillion company, following a surge in cloud computing and artificial intelligence demand. Its Azure cloud business raked in over $75 billion last year, up 34%, with major clients like OpenAI and Meta driving growth. CEO Satya Nadella credits cloud and AI for reshaping industries and powering Microsoft’s record run. Founded in 1975, Microsoft evolved from Windows pioneer to a tech powerhouse, rivaling Amazon in cloud and surviving tough times. Investors are betting big that Microsoft’s AI push will keep the company at the top for years to come.

Malaysia has unveiled its largest-ever five-year blueprint, allocating $185 billion to turbocharge digitalisation, artificial intelligence, and high-value industries. Prime Minister Anwar Ibrahim aims for Malaysia to reach high-income status and rank among the world’s top 30 economies by 2030. The plan, which channels 53% more funds than the previous one, targets booming sectors like semiconductors and renewable energy. Political stability remains crucial, analysts warn, with Anwar pledging to keep government debt below 60% of GDP. Malaysia also seeks to boost electronics exports and become Southeast Asia’s digital and AI hub, leveraging the “generational opportunity” offered by tech innovation.

Four senators are challenging the Supreme Court’s move that blocked the impeachment trial of Vice President Sara Duterte. Senators Kiko Pangilinan, Tito Sotto, Bam Aquino, and Risa Hontiveros signed a resolution urging the Court to reconsider its decision, saying the ruling unfairly changed the rules for impeachment complaints. They point out that the new rule, which dismissed earlier complaints for not being referred to a committee, should not apply to cases filed under the old guidelines. The senators want the Supreme Court to apply its new interpretation only to future cases and let the Senate proceed with the trial.

President Ferdinand Marcos Jr. will travel to India on August 4, marking the first state visit by a Philippine president since 2007. Invited by Indian Prime Minister Narendra Modi, Marcos will meet key officials including President Droupadi Murmu and business leaders. The trip comes as the Philippines and India celebrate 75 years of diplomatic ties, with trade reaching $3.54 billion last year. The visit will also highlight defense cooperation, following the recent delivery of BrahMos missiles to Manila. Marcos will cap his visit by meeting the Filipino community before returning home on August 8.

President Marcos Jr. formally appointed Lt. Gen. Antonio Nafarrete as the new commanding general of the Philippine Army, promising continued and stronger support for the Armed Forces. Marcos praised the Army’s professionalism and integrity, expressing confidence in Nafarrete’s leadership during a time of global uncertainty. Nafarrete, the 67th Army chief, replaces Lt. Gen. Roy Galido and previously led the AFP’s Western Mindanao Command. Marcos said the Army will remain a pillar of strength and professionalism under Nafarrete’s command.

Palawan Ex-Governor Reyes, Planning Officer Get 110 Years for Graft

Former Palawan governor Mario Joel Reyes and provincial planner Samuel Madamba II were convicted of graft and sentenced to up to 110 years in prison for the misuse of ₱1.58 billion in Malampaya royalties. The Sandiganbayan found them guilty of 11 counts of graft over irregular contracts for roads, schools, and other projects. The court cited gross negligence, rigged bidding, and falsified documents. Both are banned from holding public office. Several provincial engineers were also convicted, while other officials and contractors were acquitted due to lack of evidence. The case highlights deep flaws in public procurement.

A new genetic study has finally revealed the potato’s mysterious roots, tracing it back to a chance hybridization between an ancient wild tomato ancestor and a potato-like plant called Etuberosum about nine million years ago. Researchers found that a gene from the tomato triggered tuber growth, while Etuberosum provided the underground stem trait—creating the first true potato. This adaptation helped potatoes thrive in the cold, harsh Andes, evolving into over 100 wild species. The discovery may help scientists develop hardier potatoes resistant to disease and climate change, keeping the humble spud at the center of global diets.

Dropbox has announced it will shut down its password manager, Dropbox Passwords, with all services ending by October 28. The surprise move gives users just a few months to export their saved passwords and switch to another tool like 1Password, LastPass, or built-in browser managers. The Dropbox Passwords app will stop working on September 11, and all stored data will be permanently deleted after October. Dropbox says the closure lets the company focus on its core cloud storage business. Users are urged to act fast to avoid losing their password data, as there’s no recovery option after the deadline.

A new mRNA-based cancer vaccine has shown promise in mice, sparking hope for a universal “off-the-shelf” therapy. Unlike personalized vaccines tailored to each patient, this experimental shot boosts the innate immune system’s early defenses against tumors, helping the body spot and attack cancer cells. In studies, the vaccine worked well alone and supercharged existing immunotherapy drugs against stubborn tumors. Now in early human trials, scientists hope this approach could speed up cancer care, making treatments available faster for more people. While more research is needed, experts say it could be a breakthrough for hard-to-treat “cold” tumors.

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