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Firms’ results, window dressing may lift stocks

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CORPORATE RESULTS, month-end window dressing and market bets ahead of the US presidential vote may push up Philippine stocks this week.

On Friday, the benchmark Philippine Stock Exchange index (PSEi) climbed by 0.41% or 30.44 points to 7,314.23, while the broader all shares index went up by 0.24% or 9.88 points to 4,017.27.

Week on week, however, the PSEi dropped by 1.37% or 101.50 points from its 7,415.73 close on Oct. 18.

“Local equities pulled back as Tropical Storm Kristine wreaked havoc, washing away built-up optimism early this month,” online brokerage firm 2TradeAsia.com said in a market note.

“The local market is having a hard time getting past the 7,400-7,500 resistance range as the weakening of the peso together with offshore uncertainties weigh on sentiment. Consequently, the market is being hindered from continuing its bull run,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

On Friday, the peso closed at P58.32 per dollar, dropping by 44 centavos from its P57.88 finish on Tuesday, Bankers Association of the Philippines data showed. This was its weakest finish in almost three months or since it ended at P58.333 per dollar on Aug. 1.

Week on week, the local unit fell by 80.90 centavos from its P57.511 finish on Oct. 18.

For this week, Philippine shares may rise on bargain hunting as prices remain attractive, Mr. Tantiangco said.

“Investors are expected to look forward to the corporate sector’s third-quarter reports. Upbeat corporate results are seen as one of the possible catalysts that could drive the market higher,” he said.

“The dovish monetary policy outlook of the Bangko Sentral ng Pilipinas (BSP) is still expected to give the market support… Investors are also expected to monitor the movement of the local currency.”

Mr. Tantiangco put the market’s support at 7,150.

“Absent other catalysts, [this] week’s month-end window dressing period might be an opening for traders to position and bet ahead of the US polls, especially given the timing of the earlier RRR (reserve requirement ratio) cut implementation that should further inject available cash flow for trading,” 2TradeAsia.com said.

2TradeAsia.com put the PSEi’s immediate support at 7,000 and resistance at 7,500.

Effective Friday, the BSP reduced the RRR for universal and commercial banks and nonbank financial institutions with quasi-banking functions by 250 basis points (bps) to 7% from 9.5%.

It also cut the RRR for digital banks by 200 bps to 4%, while the ratio for thrift lenders was brought down by 100 bps to 1%. Rural and cooperative banks’ reserve requirement was slashed by 100 bps to 0%.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed the PSEi’s immediate support at 7,050-7,260 and resistance at 7,600-7,800. — R.M.D. Ochave

Peso may stay at P58 level ahead of US election

THE PESO could stay at the P58-per-dollar level this week as the market stays cautious ahead of the US presidential elections on Nov. 5.

The local unit closed at P58.32 per dollar on Friday, sinking by 44 centavos from its P57.88 finish on Tuesday, Bankers Association of the Philippines data showed.

This was the peso’s worst close in almost three months or since it ended at P58.333 per dollar on Aug. 1.

The foreign exchange (forex) market was closed on Oct. 23-24 due to the suspension of work in government offices amid the typhoon.

Week on week, the peso plummeted by 80.9 centavos from its P57.511 finish on Oct. 18.

The peso dropped against the dollar on Friday as players filled their forex requirements following the two-day trading halt, a trader said by phone.

The local unit declined as the dollar was also generally stronger last week due to market caution ahead of the US presidential elections, the trader added.

The dollar slipped for a second straight session on Friday as a recent ascent lost steam, but the greenback was still on track for a fourth straight week of gains after data kept interest rate expectations for the Federal Reserve in check, Reuters reported.

The dollar index, which measures the greenback against a basket of currencies, shed 0.02% to 104.03, with the euro up 0.02% at $1.083.

The Commerce department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, jumped 0.5% last month after an unrevised 0.3% gain in August and above the 0.1% rise estimated by economists polled by Reuters.

A separate report by the University of Michigan showed October consumer sentiment rose to 70.5 from 70.1, topping the 69.0 estimate, while the one-year inflation outlook fell to 2.7% from the preliminary reading of 2.9% but in line with September’s final result.

The dollar was poised for its fourth straight week of gains as a run of positive economic data has quieted expectations about the size and speed of the US Federal Reserve’s rate cuts, which has also lifted US Treasury yields.

The dollar has also benefited from a rise in market expectations for a victory next month by Republican candidate and former US President Donald J. Trump, which would likely bring about inflationary policies such as tariffs.

The peso weakened as banks’ lower reserve requirement ratios (RRR) took effect on Friday (Oct. 25), Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Bangko Sentral ng Pilipinas (BSP) on Friday reduced the RRR for universal and commercial banks and nonbank financial institutions with quasi-banking functions by 250 basis points (bps) to 7%.

It also cut the RRR for digital banks by 200 bps to 4%, while the ratio for thrift lenders was reduced by 100 bps to 1%. Rural and cooperative banks’ RRR likewise went down by 100 bps to 0%.

For this week, the peso could continue to weaken as the market monitors the US presidential race, the trader said.

Mr. Trump and Democratic Vice-President Kamala Harris are polling neck-and-neck in crucial swing states ahead of the Nov. 5 election, Reuters reported. Investors are taking their cues from betting markets, where the odds have shifted in Mr. Trump’s favor.

Mr. Ricafort added that the peso could remain at the P58 level as investors await more policy signals from the BSP.

The Monetary Board this month cut benchmark interest rates by 25 bps for a second straight meeting, bringing its policy rate to 6%.

The BSP in August kicked off its easing cycle with a 25-bp reduction, marking its first rate cut in nearly four years.

BSP Governor Eli M. Remolona, Jr. signaled the possibility of another 25-bp cut at the Monetary Board’s last meeting for the year on Dec. 19, which would bring the policy rate to 5.75% by end-2024.

The trader sees the peso moving between P57.80 and P58.50 per dollar this week, while Mr. Ricafort expects it to range from P58 to P58.50. — A.M.C. Sy with Reuters

PHL pension system seen facing sustainability, governance issues

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By Aaron Michael C. Sy, Reporter

THE pension system is facing sustainability issues as well as questions about its ability to resist political interference, analysts said.

“The Social Security System (SSS) pension payout is notoriously low. It may be good for some food, but certainly not enough for utility bills and maintenance medicine. There are doubts about its sustainability given its current reserve deficit. It also suffers from integrity issues given the history of government trying to raid it for development needs,” University of Los Baños Economics Senior Lecturer Enrico P. Villanueva said in a social media message.

The Government Service Insurance System (GSIS) likewise has a “massive” reserve deficit, Mr. Villanueva noted.

“The lack of (correspondence) between contributions and defined benefits means there is doubt about its sustainability,” he added.

Mr. Villanueva noted the government’s initial plan to use the pension funds to provide seed capital for the Maharlika Investment Corp. (MIC).

“While the government has not reneged on pension payments, there is distrust created by attempts to transfer funds away from them, as in the case of Maharlika,” he said.

The MIC eventually received its initial capital from the Land Bank of the Philippines (P50 billion), Development Bank of the Philippines (P25 billion) and the National Government (P50 billion).

State pension funds are also unable to provide formal social security benefits for the majority of the  population due to their informal nature, Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said via Facebook Messenger.

He noted the disparity in pension benefits between public and private sector employees, and within the public sector, between civilian and uniformed personnel.

“Within the public sector, some have heftier benefits than others (e.g., members of judiciary and military and uniformed personnel),” he said.

Monetary Board Member Romeo L. Bernardo said via Viber cited a study by the World Bank and the Department of Finance which recommended harmonizing the benefit formulas of military and civilian pensions.

“Increased contributions to a reformed Pag-IBIG might be a good means for providing a larger share of military pensions rather than creating a new specialized fund for the military,” the study concluded.

“There was an initial attempt to reform the military and uniformed personnel pension system to prevent what former Finance Secretary  Benjamin E. Diokno called an overgenerous, undisciplined pension system that can trigger a “fiscal collapse,” Mr. Sta. Ana added.

A study by Mercer CFA Institute likewise suggested improving the governance requirements for the private pension system.

According to the institute’s Global Pension Index 2024, the Philippines had the third-worst pension system in the world, scoring 45.8 out of 100 on its index.

The study also recommended increasing the minimum level of support for poorer aged individuals, aligning the benefit to cost-of-living indices, improving vesting requirements in private-sector plans, and introducing non-cash-out options for retirement plan proceeds so they are preserved for retirement purposes.

The Philippines scored 41.7 out of 100 on the adequacy sub-index, 63.4 out of 100 on the sustainability sub-index, and 27.7 on the integrity sub-index.

Clarity on mining fiscal regime to benefit ore processing sector

FREEPIK

By Justine Irish D. Tabile, Reporter

CLARITY on the provisions of the mining fiscal regime is expected to attract more investment in mineral processing, the Chamber of Mines of the Philippines (CoMP) said.

On the sidelines of the 13th Arangkada Philippines Forum, CoMP Chairman Michael T. Toledo said investors have cited unstable regulation and the uncertain fiscal regime as behind their reluctance to invest in the Philippines.

“The first thing that they say always will be ‘The problem with mining is that your laws always change and then your fiscal regime is unclear and there seems to be no transparency or flip-flopping of policies’ … So those are the reasons why they have been very hesitant,” Mr. Toledo said.

However, he said this will be addressed once the government signs into law the proposed fiscal regime for the mining industry.

At the same event, Senate President Francis G. Escudero said Congress is hoping to pass the measure in the remaining 41 session days until June 30, 2025.

“This was passed in the Lower House months before, so now it’s pending in the Senate. And we are hoping that it will be passed, and it will be the first time that we will have in place a mining fiscal regime bill that will actually govern the industry,” Mr. Toledo said.

“With a law clearly defining and governing the rights of all those into the industry, government, the mining operators, and the other related government agencies and other stakeholders, it will attract more investment,” he added.

He said that the passage of the bill will help ensure transparency and predictability, which will allow investors to make long-term plans.

The House of Representatives approved its version of the measure in September last year, while the bill is awaiting second reading at the Senate.

Senate Bill No. 2826 aims to establish a five-tier margin-based royalty rate range of 1-5% and a five-tier windfall profit tax range of 1-10%.

Meanwhile, House Bill No. 8937 aims to charge large-scale miners 4% of their gross output and to set up a margin-based royalty range of 1.5–5% with eight tiers and a 1–10% windfall profit tax with 10 tiers.

According to Mr. Toledo, the Senate’s version of the bill incorporates input from the CoMP, the Department of Finance, the Anti-Red Tape Authority, the Department of Trade and Industry, and other stakeholders.

“The technical working group hearings were very exhaustive … because we really want this bill to be passed because if not, it might be hard to get another bill on mining,” he said.

“This is only what businessmen from overseas are waiting for before they invest billions of dollars here so they can help the industry … Mining can do many things as long as it is responsible and sustainable,” he added.

Aside from pushing for the passage of a mining fiscal regime, Mr. Toledo said that the industry is also seeking local ordinances to not go against the laws passed by the Congress.

“Why are we allowing a local ordinance issued by a local government, for example, to ban mining or ban a certain methodology of mining, like open-pit mining, when there is a law that states that it is allowed? Isn’t that a violation of the law?” he said.

“If you are a local government official, you are supposed to execute the laws that were passed by Congress, who is tasked under the Constitution to pass laws and to legislate, and the Supreme Court and the courts to interpret the law,” he added.

Developer calls for formation of IATF to address housing crisis

PHILSTAR FILE PHOTO

MASS HOUSING developer Raemulan Lands, Inc. said the national and local governments must engage in a coordinated effort to address the housing crisis.

On the sidelines of the EY Entrepreneur of the Year 2024 Philippines Awards Banquet, Raemulan Group Executive Officer Jacinto Ng, Jr. said the issue has already been declared a crisis.

“If you remember during the pandemic, COVID-19 was of course declared a national crisis, and the response of the government was to have an Interagency Task Force (IATF), and that brought everybody together,” he told BusinessWorld.

He said what is needed is more than a one-stop shop, but rather policy coordination at all levels of government and alongside private companies, developers, suppliers, and contractors.

“I don’t think it’s red tape. I think in some areas, the process needs to be simplified and coordinated. More than that, I think it’s an appreciation of the benefits of doing socialized housing and therefore, to be more proactive in promoting an environment for socialized housing,” he said.

“In our experience, families actually improve their economic status once they have a house of their own. So when their economic status improves, then theoretically, consumption and tax collection should improve in that locality also. So there will be a domino effect,” he added.

He said that benefits start as early the house construction stage, as the manufacture of building materials such as steel bars, pipes, and concrete create jobs.

“So the National Government should be able to provide support to the local government units (LGUs) as well, especially in the beginning. Because, of course, you need to establish the services first, and sometimes you need to invest in those,” he said.

“I think some LGUs are unfortunately not equipped, especially the LGUs that are far from the metropolis. So, I think that’s where collaboration between national and local governments is important,” he added.

He said demand for socialized housing is still on the rise and remains an underserved market.

“Our government in every election always highlights how many homeless families there are. During the last election, it was 6.5 million,” he said.

The study that said there was 6.5 million homeless families also stated there would be 12.5 million homeless families by 2030, he said.

“So, it’s a huge issue. If you do the math, it represents a trillion-peso industry,” 

Socialized housing not only tackles social challenges but also plays a crucial role in driving economic growth for the country, he added.

“It is of great importance because that’s millions of families that are suffering every single day by not having their own home,” he said.

“It’s a huge source of continuing poverty. It almost perpetuates poverty, especially when children are born into it,” he added.

Raemulan operates in Cavite, Laguna, Rizal, Bulacan, and Pampanga under the Pasinaya, Pagsikat, and Pagsibol brands.

He noted that costs continue to rise for social housing developments near the capital region.

“It is impossible for socialized housing to be affordable to the everyday minimum wage earner. Apart from that, there are actually restrictions against socialized housing in various municipalities in the periphery of Metro Manila,” he said.

“Some local government units cannot sustain socialized housing, and we do not know why. And so, they are not incentivizing it because I think they have some administrative or management issues,” he added.

He said that mass housing developers are having a hard time finding good locations that are not too far out from Metro Manila.

He said the company has a target to build 10,000 units per year, starting in 2024. — Justine Irish D. Tabile

PUV co-op loan freeze not affecting DBP credit growth

PHILIPPINE STAR/WALTER BOLLOZOS

A DECISION by the Development Bank of the Philippines (DBP) to suspend lending to some public utility vehicle (PUV) cooperatives is not expected to substantially affect loan growth this year, it said. 

“The DBP’s portfolio is diversified, so we’re not just concentrated on the PUVMP (PUV modernization program). There are other industries that we cater to,” Rustico Noli D. Cruz, who heads the DBP’s Program Assistance to Support Alternative Driving Approaches (PASADA) Financing Program, said via telephone.

“So, whatever the gap, if ever, in the target for 2024, we can easily get it from other sectors,” he said.

The state-run bank focuses on supporting infrastructure and logistics, including power, water, transport, logistics, tourism, as well as environment-related projects such as, namely solid and hazardous waste, sanitation, and energy efficiency.

It also lends to social services organizations like schools, hospitals, housing, local government units. It also supports micro, small and medium enterprises.

The DBP has been extending financial support to transport cooperatives to comply with the government’s PUV modernization initiative.

The PASADA Financing Program supports transport corporations and cooperatives to help them in their modernization transition.

The loans can partially finance the purchase of brand new PUVs that comply with government standards, alternative transport technologies, and the acquisition and/or construction of support facilities and equipment necessary for the proper operations and maintenance of the PUVs.

In August, DBP President and Chief Executive Officer Michael O. de Jesus told senators that the bank has stopped lending to PUV cooperatives, particularly in Metro Manila and areas without an approved route plan, due to debt repayment issues.

The DBP continues to lend to cooperatives with approved route plans, Mr. Cruz said.

“We sustained nonperforming loans, so… we really have to scrutinize further the viability of the various routes. One way is to look into, first, those with the approved route plan,” he said.

Under the Local Public Transport Route Plan, the maximum route distance for highly urbanized cities, independent component cities, and component cities is 15 kilometers (km).

Inter-regional, inter-provincial, provincial, and municipal routes have a maximum length of 35 km.

“We’re doing some sensitivity analysis, which will be the subject of our discussions with the DoTr (Department of Transportation), so they can consider the business aspect of the PUJ (public utility jeepney) operation,” Mr. Cruz said.

At the end of June, the DBP had approved P8.7 billion of the P10 billion in funding earmarked for the PUV modernization program.

The DBP’s net loans and receivables declined in the first half by 2.6% to P471.38 billion. — Beatriz Marie D. Cruz

EVAP not seeking to extend EV zero-tariff policy past 2028

PHILIPPINE STAR/EDD GUMBAN

THE Electric Vehicle Association of the Philippines (EVAP) said it is not seeking to extend the current zero-tariff policy for electric vehicles (EV), which runs until 2028, citing the need to support the domestic production of EVs. 

“At the moment we’re not (seeking an extension) … we’re fine (2028). If we extend the tariff, this encourages imports. We’re pushing for localization,” EVAP President Edmund A. Araga said on the sidelines of the 12th Philippine Electric Vehicle Summit 2024 last week.

In May, the National Economic and Development Authority Board, chaired by President Ferdinand R. Marcos, Jr. expanded the coverage of Executive Order (EO) No. 12 to temporarily reduce tariffs on EVs to zero until 2028. 

The zero-tariff policy covers e-motorcycles, e-bicycles, nickel metal hydride accumulator batteries, e-tricycles and quadricycles, hybrid EVs and plug-in hybrid EV jeepneys or buses.

EO 12, which was signed in 2023, temporarily removed the tariffs on EVs and parts and components for five years.

Mr. Araga has said that the EO helped improve the sales of EVs in the Philippines.

The group is projecting a 6.6 million EV fleet by 2030, mainly driven by hybrid and other light electric vehicles.

The Department of Trade and Industry said it hopes to issue the incentive scheme for EVs within the year.

The scheme outlines the perks for businesses that invest in domestic EV manufacturing, and will cover potential investors in the e-mobility industry. — Ashley Erika O. Jose

Attractiveness of PHL to be tested by Taiwan supply chain de-risking

REUTERS

THE PHILIPPINES can leverage its free trade agreements (FTAs) and proximity to Taiwan to attract multinational companies (MNCs) looking to de-risk global supply chain away from greater China, the Philippine Economic Zone Authority (PEZA) said.

In a Facebook post, PEZA Director General Tereso O. Panga said Taiwan is also looking to strengthen its Southbound Policy, which aims to make Taiwan less dependent on China.

“With the Taiwan government’s resolve to further strengthen its New Southbound Policy, the current administration of President William Lai Ching-te is looking beyond cooperation and exchange between Taiwan and 18 countries in Southeast Asia, South Asia, and Australasia,” he said over the weekend.

“Taiwan companies operating in China and even Taiwan have adopted the China+1 and Taiwan+1 strategies to de-risk the global supply chain through the establishment of alternative manufacturing sites, diversification of supply chains, and improvement of domestic production,” he added.

The trend is for Taiwan companies set up offshore facilities in ASEAN to avail of lower tariffs on exports to the European Union and the US but also to take advantage of the host economy’s domestic markets.

“As such, PEZA aims to target strategic and high-tech industries from Taiwan that will provide for ecozone product sophistication, export diversification, labor-intensive and highly skilled jobs, knowledge transfer, enhanced local supply chain, and creation of industry clusters,” said Mr. Panga.

To attract these investments, he said that the Philippines can leverage the Indo-Pacific Framework, the Regional Comprehensive Economic Partnership, and other FTAs.

He added that the trilateral agreement with the US and Japan in developing the Luzon Economic Corridor as well as the US CHIPS & Science Act can also help steer these investments to the Philippines.

“We need to capture as well those MNCs that relocate their export-manufacturing facilities from China to ASEAN,” Mr. Panga said.

PEZA and other investment promotion agencies can capture business from these MNCs by promoting their economic zones’ strategic locations, thriving business ecosystems, and the fiscal incentives package on offer under the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy regime.

Mr. Panga also sees proximity to Taiwan as one of the reasons why the Philippines could be a beneficiary of the Taiwan+1 Strategy and New Southbound Policy.

“With our bigger landmass and natural and human resources, the Philippines can be an ideal alternative site for Taiwan manufacturing,” he said. — Justine Irish D. Tabile

BIR extends tax deadlines for areas hit by ‘Kristine’ to end of October

PPA POOL/MARIANNE BERMUDEZ

THE Bureau of Internal Revenue (BIR) has extended until Oct. 31 a few tax deadlines falling on Oct. 25 as a form of relief to taxpayers and BIR personnel affected by Typhoon Kristine.

“The BIR is hereby extending the deadline for the filing of tax returns and the payment of taxes due thereon, including submission of certain documents,” it said in a circular dated Oct. 25.

“The extension is intended to provide ample time for taxpayers and BIR personnel within the following affected revenue district offices (RDOs) including affected authorized agent banks (AABs), to comply with the statutory tax deadlines.”

The extension covers the physical and electronic filing of BIR Form 2550Q (quarterly value-added tax return) and BIR Form 2551Q (quarterly percentage tax return) for the quarter ending Sept. 30.

The deadline of the quarterly summary list of sales/purchases/importations by a VAT taxpayer for Non-eFPS (Electronic Filing and Payment System) filers for the quarter ending Sept. 30 was also extended to Oct. 31.

Also extended was the deadline for submitting the sworn statement of a manufacturer’s or importer’s volume of sales of each particular brand of alcohol products, tobacco products and sweetened beverage products for the quarter ending Sept. 30.

RDOs covered by the deadline extension include those in the Ilocos Region, Cagayan Valley, and Cordillera Administrative Region.

In Central Luzon, tax deadlines have also been extended in RDOs 17A, 17B, 18, 19, 20, 21A, 21B, 21C, 22, 23A, 23B, 25A, and 25B.

In the National Capital Region, the following RDOs were granted extensions: 24, 26, 27, 28, 29, 30, 31, 32, 33, 34, 38, 39, 40, 41, 42, 43, 44, 45, 47, 48, 49, 50, 51, 52, 53A, 53B, 116, 121, 124, 125, and 126.

The extension was also granted to RDOs 46, 54A, 54B, 55, 56, 57, 58 59, 60, and 61 in the Calabarzon region.

In Mimaropa, the BIR extended the deadlines for RDOs 35, 36, 37, 62, and 63.

Bicol Region RDOs 64, 65, 66, 67, 68, 69, and 70 were also granted an extension of the tax deadline.

“If the extended due dates fall on a holiday or non-working day, the submission and/or filing contemplated herein shall be made on the next working day,” the bureau said.

At the end of September, the BIR has collected P2.9 trillion in taxes, falling short of its P2.12-trillion goal for the period. This also accounted for 73.52% of the total P2.8-trillion full-year collection target.

The BIR collects around 70% of the government’s overall revenue. — Beatriz Marie D. Cruz

Secure long-term maritime security investments from allies, Manila told

PHILIPPINE COAST GUARD PHOTO

By John Victor D. Ordoñez, Reporter

THE PHILIPPINES needs to go beyond joint patrols and secure long-term investments from its allies that would beef up the country’s maritime security amid China’s growing assertiveness in the South China Sea, according to security analysts.

“Joint patrols alone are necessary but not sufficient,” Raymond M. Powell, a fellow at Stanford University’s Gordian Knot Center for National Security Innovation, said on Sunday in an X message.

“Japan, the US and other partners will need to make robust investments in building up Philippine maritime security capabilities to deter Chinese adventurism.”

Last week Philippine Foreign Affairs Secretary Enrique A. Manalo and newly appointed Japanese Foreign Minister Takeshi Iwaya had a telephone meeting to ensure a rules-based international order in the region amid sea tensions with China, according to Japan’s embassy in the Philippines.

The envoys discussed regional and international issues during the call and vowed to work together in easing tensions in the East and South China Sea, where both Japan, and the Philippines have disputes with China.

Tokyo and Manila should ensure their cooperation on these maritime issues, which should hinge on peaceful solutions to these disputes, Rommel C. Banlaoi, president of the Philippine Society for International Security Studies, said in a Viber message.

“Otherwise, it will only trap the Philippines in the crossfire of major power rivalry between China and Japan,” he said.

Both countries signed in July a reciprocal access agreement to ease the entry of equipment and troops for combat training from Japan.

Japan is committing to provide the Philippines with more patrol vessels and surveillance radar systems that it can deploy in the South China Sea, Japanese Foreign Minister Yoko Kamikawa told a news briefing during her visit in Manila in July.

Senate President Francis “Chiz” G. Escudero earlier told foreign journalists they plan to ratify the military pact before the year ends.

The Philippines has a visiting forces agreement with the US and Australia. Tokyo, which hosts the biggest concentration of US forces abroad, has a similar deal with Australia and Britain, and is negotiating another with France.

In July, the US Defense department said Washington is committing about $500 million (P29.2 billion) to the Philippines as part of a national security package to help its allies “defend themselves against threats to their sovereignty and to the lives and freedom of their citizens.”

In April, Republican Senator Bill Hagerty and Democrat Senator Tim Kaine pushed a bill that increased US military aid for the Philippines to $500 million from $40 million over five fiscal years through 2029.

US Marines, sailors and their Filipino counterparts held joint military exercises earlier this month to boost interoperability with allied forces in the Indo-Pacific region.

Philippine Defense Secretary Gilberto Eduardo Gerardo C. Teodoro has said Manila is considering all security options that would deter China’s aggression in the waterway, after the US said it does not plan on pulling out its missile system it left in Manila.

Washington has no plans to withdraw its Typhon missile system from the Philippines and is studying its use in a regional conflict, Reuters earlier reported.

The Philippines is open to acquiring the Typhon midrange missile system, Agusan del Norte Rep. Jose “Joboy” S. Aquino II earlier told the House plenary as he sponsored the Defense department’s budget next year.

Beijing insists it has sovereignty over most of the South China Sea based on its old maps and has deployed hundreds of coast guard vessels deep into Southeast Asia to assert its claims, disrupting offshore energy and fishing activities of its neighbors including Malaysia and Vietnam.

China has ignored a 2016 international arbitral ruling that voided its claims for being illegal.

The country has fully militarized at least three of several islands it built in the South China Sea, which it mostly claims in full despite the 2016 ruling that backed the Philippines, arming them with anti-ship and anti-aircraft missiles, the US has said.

Portions of the waterway, where $3 trillion worth of trade passes yearly, are believed to be rich in oil and natural gas deposits, as well as fish stocks.

“The Philippines will need to secure an enduring, long-term commitment from its security partners to hold off China’s aggression in the West Philippine Sea,” Mr. Powell said.

Mechanisms in place to sustain ‘ber months’ jobs

PHILIPPINE STAR/MIGUEL DE GUZMAN

By Chloe Mari A. Hufana, Reporter

IN RESPONSE to shifting employment trends, the Department of Labor and Employment (DoLE) is focusing on preparing the Filipino workforce to keep them employable after the holidays when demand tend to be seasonal or project-based.

“What we’re trying to do on the supply side for our workers is ensure that even if jobs become flexible, with seasonal or project-based roles, it’s important that they remain employable. They need to have the right skills so the market can easily absorb them,” Patrick P. Patriwirawan, Jr., director of the Bureau of Local Employment, told BusinessWorld on the sidelines of an event in mixed English and Filipino.

“That’s why…we continue to strengthen our upskilling and reskilling efforts, especially in partnership with [the] Technical Education and Skills Development Authority, aligning educational requirements with [technical and vocational courses],” he added.

In terms of supporting micro, small and medium enterprises (MSMEs), to generate more jobs, the department is amplifying its financial support to fund their activities through capacity development, product development, and just transition measures, he added.

He said the department is currently lobbying private firms to sustain the jobs created during the holidays.

“We’re trying to coordinate and collaborate with industry associations and other government agencies that directly connect with our MSMEs. The private sector is really important for us to ensure that this program is utilized and truly benefits these enterprises,” he said.

He noted a need to strengthen the partnership between DoLE and industry associations to reach MSMEs within their supply chains that stand to benefit from the adjustment measures program.

The Philippine Statistics Authority earlier this month said it is expecting an uptick in employment during the “ber months” as companies try to meet increased consumer demand and prepare for the holiday season.

Historically, businesses across various sectors, particularly retail, hospitality, and logistics, ramp up hiring in the last quarter of the year to handle the surge in activities and customer transactions.

Meanwhile, Federation of Free Workers President Jose Sonny G. Matula reminded employers to ensure fair pay for workers as this could help boost the economy during the season.

“As the holiday season approaches, we remind employers that the 13th month pay and bonuses will boost workers’ take-home pay, leading to increased demand for goods and services,” he said in a Viber message.

“Higher wages during this season will benefit not just workers but also the economy, as workers are key consumers.”

Keep policy in focus amid ‘warring’ dynasties — analysts

PHILSTAR FILE PHOTO

By Kenneth Christiane L. Basilio, Reporter

THE ACADEME and media should step up and steer the political conversation on key policy issues faced by Filipinos instead of the deepening political feud between the Marcoses and Dutertes, political analysts said, as the 2025 national midterm elections fast approaches.

Filipinos have nothing to gain from the feud as the warring factions are only concerned with consolidating political power, with policy agenda being sidelined in favor of incendiary remarks and personal attacks, they added.

“The sad thing here is that our political discussions revolve around what is happening with these warring dynasties… Other stakeholders should be stepping up, like academic institutions, media institutions, non-governmental organizations, and even political parties,” Arjan P. Aguirre, who teaches political science at the Ateneo De Manila University, said in a Facebook Messenger chat at the weekend.

“They should never allow these dynastic quarrels to dominate the discussion. Stakeholders should assert their concerns and issues, like what should be done with the economy, education crisis, food security,” he added.

The campaigns of both the Marcoses and Dutertes would likely focus on personality politics, Hansley A. Juliano, who teaches political science at the Ateneo, said in a separate Facebook chat. “I don’t really see these campaigns being about policies.”

The unwillingness of the voting public to discuss “civic, political, and economic rights” is at fault for the country’s perennial “basic governance issues,” he added. “It’s a fundamental failure of our overall political education situation.”

The May 2025 midterm elections will take place amid the collapse of the UniTeam alliance that delivered landslide votes that elected Ferdinand R. Marcos, Jr.’s as president, and his running mate Sara Duterte-Carpio as vice president.

Their relationship has since turned sour as the Marcos administration launched investigations against former president Rodrigo R. Duterte’s anti-narcotics campaign and the Office of the Vice President’s controversial confidential and intelligence fund.

POLITICAL FALL OUT
The falling out was the result of the electoral coalition failing to transition into the current administration, Mr. Aguirre said. “When the government was being formed, the legislative coalition, headed by Romualdez, merged with the new government coalition of Marcos Jr. The Duterte bloc was not able to keep up with these changes.”

Leyte Rep. Ferdinand Martin G. Romualdez, Mr. Marcos’ cousin, has reins over the House of Representatives, serving as the chamber’s leader since 2022.

“The rift… is just a result of insecurities and uneasiness of both camps,” he added.

There is more at stake from the Marcos-Duterte feud for ordinary Filipinos as they both could “determine the form of governance and citizen-to-citizen relations” of Philippine society should one of them emerge victorious, Anthony Lawrence A. Borja, a political science professor at the De La Salle University, said in a Facebook chat.

“What makes this feud distinct from the usual ‘guns, goons, and gold’ is that it puts the core political values of Filipinos at stake,” he said.

“I don’t think this supposed rivalry can be compared to any previous political rivalries,” Edmund Tayao, president of Political Economic Elemental Researchers and Strategists, said in a Viber message. “At least, say from Quezon-Roxas, to Garcia-Yulo-Macapagal, to Marcos-Aquino, the rivalry was there at the outset and there were clear issues that divided them.”

“Today’s rivalry is purely personal. Exchanges have even gone to gutter language that’s very much incomparable to previous political exchanges,” he added.

Ms. Carpio, during a two-hour press conference on Oct. 18, hurled statements against the Marcoses, including threats to behead Mr. Marcos and exhume the body of his father to be thrown in the South China Sea.

UNLIKELY TO CONVERT
Independent and opposition candidates would find it difficult to directly challenge the Marcoses and Dutertes despite the two being preoccupied with their squabble, Mr. Borja said, citing that Filipinos are not keen on voting for political outsiders.

“A large majority is behind the UniTeam and they will not look kindly on any outsider,” he said, referring to the electoral coalition formed by the Marcoses and Dutertes in the 2022 elections. “In other words, even if supporters of the UniTeam attack each other and withhold votes for concerned candidates, this tendency will not necessarily translate into support for perceived outsiders.”

Opposing candidates should look at getting votes by strategizing around the habit of Filipino voters to “mix-and-match” their ballots, he added. “Whatever the strategy is, the goal is to slip into the mix-and-matching habit of ordinary Filipino voters.”

They should also employ creative campaign strategies to compete against the political mainstays, according to Mr. Juliano.

“We have an economically vulnerable and disconnected population, that the calculus of electoral support cannot but be monetized or made in clientelistic terms unless the campaign is smart enough,” he said.