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PSEi ends at 7,000 level as Fed rate cut looms

REUTERS

THE MAIN INDEX on Thursday closed above 7,000 for the first time since February 2023 as August US consumer inflation data bolstered expectations of a US Federal Reserve rate cut next week and amid strong foreign buying.

The Philippine Stock Exchange index (PSEi) rose by 1.14% or 79.79 points to end at 7,024.67 on Thursday, while the broader all shares index went up by 0.67% or 25.44 to close at 3,791.65. This was the PSEi’s best finish and was the first time it closed at the 7,000 level since it ended at 7,027.38 on Feb. 3, 2023.

“The PSEi finally closed above the 7,000 level for the first time in more than 19 months as investors reacted to a relatively favorable US August headline inflation print as well as an overnight tech-driven rally in US stock markets,” Juan Paolo E. Colet, managing director at Chinabank Capital Corp., said in a Viber message.

“The index was finally able to breach its key resistance at 7,000 after US inflation fell to its lowest level since February 2021, strengthening the case for a Fed rate cut next week,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia added in a Viber message.

The US consumer price index (CPI) increased 0.2% last month after rising by a similar margin in July, the Labor department’s Bureau of Labor Statistics said, Reuters reported. The rise in the CPI was in line with economists’ expectations.

In the 12 months through August, the CPI advanced 2.5%. That was the smallest year-on-year rise since February 2021 and followed a 2.9% increase in July.

Financial markets saw a roughly 15% probability of a 50-basis-point rate cut at the Fed’s Sept. 17-18 policy meeting, down from 29% before the CPI data was published, according to CME Group’s FedWatch Tool. The odds of a quarter-point rate reduction were around 85%, up from 71% earlier.

Philippine stocks climbed amid “a wave of foreign buying interest,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

Net foreign buying rose to P348.48 million on Thursday from P340.59 million on Wednesday.

All sectoral indices rose on Thursday. Property climbed by 1.4% or 39.12 points to 2,829.83; services rose by 1.28% or 28.53 points to 2,248.74; holding firms went up by 1.16% or 67.69 points to 5,875.02; industrials added 0.63% or 58.92 points to end at 9,301.64; financials gained 0.58% or 12.53 points to close at 2,157.59; and mining and oil increased by 0.35% or 27.56 points to 7,832.18.

Value turnover went down to P5.46 billion on Thursday with 1.05 billion shares changing hands from the P8.02 billion with 926.84 million shares traded on Wednesday.

Decliners outnumbered advancers, 107 versus 90, while 60 names closed unchanged.

“We’re fairly confident that the index will be able to hold above this level, especially with corporate fundamentals and macroeconomic indicators looking good so far,” Mr. Garcia said.

“If the 7,000 breakout is sustained in the next few days, the market may attempt to hurdle the next resistance at 7,100,” Mr. Colet added. — S.J. Talavera with Reuters

Philippine, Chinese diplomats hold talks on their sea dispute in Beijing

PHILIPPINE COAST GUARD PHOTO

PHILIPPINE and Chinese envoys on Wednesday held diplomatic talks in Beijing on how to ease sea tensions, even as both sides insist on upholding their sovereignty rights over features in the South China Sea, including Sabina Shoal.

In a statement on Thursday, Manila’s Department of Foreign Affairs (DFA) said Undersecretary Ma. Theresa P. Lazaro met with Chinese Vice Foreign Minister Chen Xiaodong in Beijing, where the Philippine side reiterated that the shoal, the site of recent collisions between their coast guard vessels, is part of the Philippines’ exclusive economic zone.

“Both sides also reaffirmed the bilateral consultation mechanism as a forum for promoting maritime dialogue and enhancing bilateral cooperation while agreeing to continue engagement through diplomatic channels,” it added.

In a separate statement, the Chinese Foreign Ministry said both countries had a “candid and in-depth exchange of views,” with Beijing renewing its call for Manila to remove an “illegally anchored” vessel at Sabina.

“China will firmly safeguard its sovereignty and the seriousness and effectiveness of the Declaration on the Conduct of Parties in the South China Sea (DoC),” it added.

Both parties committed to boost cooperation on hotline mechanisms and marine, scientific partnerships, according to the DFA. Ms. Lazaro and her Chinese counterpart also explored ways to “lower the tension in the area.”

The Southeast Asian nation has anchored its biggest coast guard vessel at Sabina Shoal since April to monitor what it suspects to be China’s small-scale reclamation activities. This has angered China, turning the shoal into their latest flashpoint in the disputed waterway.

The Sabina Shoal, which China calls Xianbin Reef, lies 150 km (93 miles) west of the Philippine province of Palawan, well within its exclusive economic zone. Manila calls it Escoda Shoal.

The two nations have traded accusations of intentional ramming of each other’s vessels in a series of clashes last month, just after reaching a pact on resupply missions to a beached Filipino naval ship at Second Thomas Shoal.

China claims sovereignty over most of the China Sea, overlapping into maritime zones of Brunei, Indonesia, Malaysia, the Philippines, and Vietnam.

In 2016, a United Nations-backed tribunal in the Hague voided China’s expansive and historical claims for being illegal. Beijing has rejected the ruling.

A Philippine inter-agency task force handling maritime disputes with China has accused a Chinese vessel of deliberately ramming the Philippines’ largest coast guard vessel named BRP Teresa Magbanua thrice near Sabina Shoal.

The Chinese side made a similar claim, with Coast Guard spokesperson Liu Dejun saying the smaller Philippine Coast Guard vessel had deliberately collided with their ship.

Sabina Shoal has been a staging ground for Philippine resupply missions to Second Thomas Shoal, where it grounded a World War II-era vessel in 1999 to serve as an outpost for a handful of Filipino troops.

Both countries held the first round of bilateral talks this year in Manila, where they agreed on a “provisional arrangement” on resupply missions at Second Thomas Shoal and new lines of communications to improve their handling of sea disputes.

The Chinese Foreign Ministry earlier said the Philippines should not “backpedal” or do anything that would complicate their sea dispute.

In his third address to Congress in July, Philippine President Ferdinand R. Marcos, Jr. said the Philippines would continue to find ways to de-escalate tensions in the waterway without compromising its position or principles. “The Philippines cannot yield. The Philippines cannot waiver,” he said.

His government has filed 176 diplomatic protests against China, 43 this year, DFA spokesperson Ma. Teresita C. Daza said on Sept. 3.

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. — John Victor D. Ordoñez

House committee cuts OVP budget for 2025

VICE-PRESIDENT SARA DUTERTE-CARPIO — PHILIPPINE STAR/KRIZ JOHN ROSALES

By Kenneth Christiane L. Basilio, Reporter

A HOUSE of Representatives committee has slashed the Vice President’s proposed budget for next year by 64%, citing redundant funds that are already covered by other agencies.

Members of the House appropriations committee agreed to cut Vice-President Sara Duterte-Carpio’s budget by P1.29 billion to P733 million, Marikina Rep. Stella Luz A. Quimbo, a senior vice chairperson of the body, told a news briefing on Thursday.

Congressmen had recommended that the cut be transferred to the Social Welfare and Health departments, she said.

The cut comes after Ms. Carpio snubbed the budget hearing for her office, as she accused congressmen of using the venue to revive old issues against her including her office’s P125-million confidential funds in 2022.

The budget cut would be split between the Social Welfare and Health departments, Ms. Quimbo said.

The OVP did not immediately reply to an e-mail seeking comment.

“While the Office of the Vice President (OVP) and Department of Budget and Management proposed a budget of P2.03 billion for the OVP, the committee on appropriations recommended P733.19 million,” she said. “This means there is a cut of P1.29 billion.”

“There are redundant social programs that are being implemented [by the OVP] even though similar programs already exist within National Government agencies, particularly the Department of Social Welfare and Development and Department of Health,” the lawmaker said.

“It is more efficient to implement these programs directly through these agencies.”

Ms. Carpio failed to attend her office’s budget hearing at the House earlier this week. In August, she declined to answer questions from the committee about her office’s spending plan.

“The lack of information… had the biggest impact,” Ms. Quimbo said in Filipino, adding that Ms. Carpio’s refusal to answer their questions and subsequent absence pushed lawmakers to cut her budget.

“The budget is an informed decision,” she added.

Ms. Duterte said in a recorded interview released on Wednesday she does not mind not having a budget for 2025. “We are ready. I am ready at the Office of the Vice President to work even without a budget.”

Ms. Quimbo said the committee recommendation to cut her budget was not yet final, adding that they are open to amending it once the budget enters plenary debates.

The proposed P6.352-trillion national budget for next year will be taken up in plenary from Sept. 16 to 25, the lawmaker said.

The House committee on appropriations “did the right thing” in cutting the OVP budget given the redundancies, Zy-za Nadine M. Suzara, an independent budget analyst and lead convener of the People’s Budget Coalition, said in a Viber Message.

“It will not significantly impact the ability of the OVP in performing its mandate,” she said. “The programs they are implementing are just duplications of projects that agencies have the mandates to implement.”

Ms. Suzara said the OVP’s social projects are not “strategic, high-impact and well-targeted,” citing it’s mostly used to fuel her office’s patronage politics.

‘Fake news,’ says palace on Defense chief’s resignation

DEFENSE SECRETARY GILBERTO ‘GIBO’ C. TEODORO, JR. — SENATE PRIB

THE PRESIDENTIAL palace on Thursday belied claims on social media that President Ferdinand R. Marcos, Jr.’s Defense chief had quit.

“There are rumors that Secretary [Gilberto Eduardo Gerardo “Gibo” C.] Teodoro, Jr. is stepping down? Really now?” Mr. Marcos, Jr. told reporters in Navotas City. “First, let me answer your question: That’s fake, fake, fake, fake, fake, fake, fake news.”

He said he and Mr. Teodoro had laughed off the rumor over telephone earlier in the day.

He said the Defense chief had told him that the rumors should just be ignored, but he insisted that the public needed to know that the fake news was being spread to sow chaos.

“Let us not be swayed by the chaos they are trying to sow,” the President said. “If there are changes in the Cabinet, in government, we will be the ones to make the announcement.”

In a separate statement, the palace said the rumors were meant to sow disunity within the agency. The President’s “trust and confidence” in Mr. Teodoro had “never wavered,” it added.

The rumors are “pathetic attempts to sow disunity in an organization united in protecting our people and defending our territory,” Presidential Communications Secretary Cesar B. Chavez said in the statement.

“Busy as they are with their mission, we should spare our fighting men of the corrosive politicking that has no place in their ranks,” he added.

Mr. Teodoro was appointed Defense chief in June 2023 — after the ban on the appointments of losing candidates ended — amid growing sea tensions with China.

He has called out China on several occasions amid encounters between their coast guard vessels near Second Thomas Shoal and Sabina Shoal in the South China Sea.

Weeks after the Philippines signed a reciprocal access agreement with Japan, Mr. Teodoro said the country would pursue similar pacts with Canada, France, New Zealand and other “like-minded” nations.

He also served as Defense secretary under the government of ex-President Gloria Macapagal Arroyo.

Mr. Teodoro is a second cousin of the late President Benigno “Noynoy” S.C. Aquino III. — Kyle Aristophere T. Atienza

Reconsider bill vs online gambling — PAGCOR

PHILIPPINE STAR/IRISH LISING

By John Victor D. Ordoñez, Reporter

THE PHILIPPINE Amusement and Gaming Corp. (PAGCOR) on Thursday renewed its call for the Senate to reconsider its proposal to outlaw online gambling, saying it is the future of the industry and citing P35 billion in expected revenues this year from the sector.

“Most of the biggest land-based operators in the US and Canada, if not all, have online gaming operations, that’s as much I can report to this committee,”  PAGCOR Chairman and Chief Executive Officer Alejandro H. Tengco told a Senate ways and means committee hearing looking into a bill seeking to ban gambling operations amid the government’s ban of Philippine Offshore Gaming Operators (POGOs).

“This is the trend, and I think that this will be the future of gaming, and most jurisdictions around the world are legalizing online gaming, even the first world countries.”

He said the industry, which is expected to account for about 35% of PAGCOR’s revenues this year, could generate more jobs for Filipinos with countries around the world legalizing electronic gaming.

Online gambling brought the government about P22.5 billion in revenues last year, the state gaming regulator’s chairman said, reiterating that his agency aims to generate about P100 billion in total revenues this year.

In the first eight months of this year, the electronic gambling industry generated close to P30 billion in revenues, Mr. Tengco said.

Based on the Department of Finance’s initial findings on online gaming revenues last year, Finance Assistant Secretary Karlo Fermin S. Adriano told the same hearing that the Bureau of Internal Revenue (BIR) collected at least P13.3 billion in taxes from online gambling last year, but said this number was “highly preliminary” and could still increase.

“There are still some inconsistencies (in PAGCOR’s data) so we’re still cleaning the data,” the Finance official said. “It is highly likely that the P13.3 billion will be the floor.”

Senators earlier filed separate bills seeking to repeal a law taxing POGOs after President Ferdinand R. Marcos, Jr. ordered the industry shut down in July, and another banning online gambling due to social costs.

Congress under former President Rodrigo R. Duterte passed Republic Act 11590, the Act Taxing POGOs as a mechanism for legalizing the industry, amid concerns about their social costs.

“It would be challenging to resist the evolving landscape of gaming,” John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.

“Government must be vigilant in regulating this new scheme and be on the lookout in managing negative unintended consequences like what happened with POGO operations disrupting social fabric….”

Labor Secretary Bienvenido E. Laguesma on Wednesday said his agency is preparing to help around 27,000 workers expected to lose their jobs once the ban on POGOs takes effect by the end of the year.

“We must regulate it (online gambling) properly, and generate revenue for PAGCOR, which we give back to the country and to the Filipino people,” Mr. Tengco said.

SC asked to hear PhilHealth lawsuit

PHILSTAR FILE PHOTO

THE PHILIPPINES’ Supreme Court (SC) should set the oral arguments for a petition seeking to disallow the Philippine Health Insurance Corp.’s (PhilHealth) transfer of P89.9 billion to the National Government’s (NG) coffers next month, a congressman said, citing the need to expedite proceedings.

“I appeal to the Supreme Court to hear oral arguments early next month, not in mid-January. Otherwise, it will be too late,” Cagayan de Oro Rep. Rufus B. Rodriguez said in a statement on Thursday.

The Department of Finance in March issued a circular ordering government-owned or -controlled corporations including PhilHealth to remit their excess funds to the Treasury, allowing the government to fund unprogrammed appropriations.

Plaintiffs led by Senator Aquilino Martin “Koko” D. Pimentel III has asked the SC to stop the transfer of PhilHealth funds to the government and void the Finance department circular. The tribunal has set a hearing on the lawsuit for Jan. 14, 2025.

“It will be too late,” said Mr. Rodriguez, noting that the funds would have already been remitted by November.

PhilHealth is remitting the money in four tranches, with P20 billion already sent on May 10 and P10 billion on Aug. 21. A P30-billion transfer is scheduled for October, and the remaining P29.9 billion for November. — Kenneth Christiane L. Basilio

Stricter BoC inspections sought

BW FILE PHOTO

A PHILIPPINE senator on Thursday urged the Bureau of Customs (BoC) to tighten its inspection protocols on vessels leaving the country’s seaports to deter smuggling of illegal drugs and guns.

At a Senate public services hearing, Senator Rafael “Raffy” T. Tulfo made the call after Customs Deputy Collector Julito L. Doria said customs officers do not inspect personal belongings and only inspect taxable goods.

“Luggage should be inspected because what if there are bombs, guns, or illegal drugs hidden in these?” he said in Filipino. “It’s no wonder shabu (crystal meth) and cocaine slip through our borders.”

The senator also called on the Transportation and Justice departments to work together to ensure these stricter inspection protocols are employed.

Mr. Tulfo sought the probe to investigate gaps in Philippine airport and seaport security, after a former town mayor accused of having links with Chinese criminal syndicates and her siblings managed to flee last month.

Dismissed Bamban Mayor Alice L. Guo, who has been linked to illegal offshore gaming operators in the country, fled the country amid accusations that she had faked her Filipino identify and was Chinese. She has denied the accusations. — John Victor D. Ordoñez

Marcos hopeful on ADB partnership

PHILIPPINE President Ferdinand R. Marcos, Jr. said he hopes his country’s green projects would benefit from a six-year program with the Asian Development Bank (ADB), citing annual economic losses worth billions due to climate change.

The Philippine government and ADB on Thursday launched the six-year Country Partnership Strategy, which focuses on human development, economic competitiveness and quality infrastructure, and natural resources management and disaster resilience.

In his speech at the turnover ceremony at the Presidential Palace, Mr. Marcos cited his country’s vulnerability to climate change and noted that its damage to the national economy could reach up to 7.6% of the gross domestic product by 2030.

“With annual economic losses due to climate change exposure potentially reaching 7.6% of gross domestic product by 2030. It is a critical challenge,” he said.

Citing a recent World Index Report showing that the Philippines remained the most disaster-prone country for the 16th straight year, Mr. Marcos said it has been more important for his country to invest more in renewable projects and climate solutions.

Under the partnership strategy, the ADB will help the country tailor-fit solutions based on its needs. It will leverage partnerships and increase cofinancing for priority projects. — Kyle Aristophere T. Atienza

Mindanao opportunities explored

The 33rd Mindanao Business Conference (MBC), which opened on Thursday at the KCC Convention and Events Center in General Santos City, aims to explore the range of opportunities in Mindanao.

Carrying the theme “Unlocking the Potentials and Opportunities in Mindanao,” the event gathered business leaders to discuss business trends, opportunities, and macro points of view on where the country’s economy is headed.

“The theme of the conference may seem to be a cliche but in reality, there remains a wide range of opportunities for investment for Mindanao,” Joji Ilagan Bian, chair of the Philippine Chamber of Commerce and Industry Committee on BIMP-EAGA, told BusinessWorld.

Ms. Bian said business leaders can explore areas in digital technology, energy, and environment sustainability and even agricultural innovations.   

“Now is the time to look beyond and capture the tremendous technological changes that are happening in the world,” she said.

Ms. Bian added that these Mindanao Business leaders who will be networking and discussing common areas of interest must be encouraged to go beyond the traditional mode of doing business to be able to expand their business horizons.

The 33rd Mindanao Business Conference is poised to kick off with exciting events, beginning with the MBC Fun Golf Tournament, which attracted nearly 60 enthusiastic participants. — Maya M. Padillo

PhilHealth pays Baguio in advance

PHILSTAR FILE PHOTO

BAGUIO CITY — The Baguio City government has received the promised second capitation fund or advance payment from the Philippine Health Insurance Corp. (PhilHealth) after posting an exceptional performance in implementing the Konsultasyong Sulit at Tama (Konsulta) program.

Mayor Benjamin B. Magalong and the City Health Services Office team, led by Acting City Health Officer Dr. Celia Flor Brillantes, received P33.2 million from PhilHealth-Baguio Chief Social Insurance Officer Janet Palaez during the flag-raising ceremonies here on Monday.

The capitation fund is under PhilHealth’s sandbox innovation program which grants primary care provider networks (PCPNs) in the country advance payments even before services have been rendered.

Baguio City was among the first seven PCPNs in the country that were frontloaded capitation funds receiving P16 million in December 2023.

Ms. Palaez said the city was granted the second capitation fund after posting a 111% accomplishment exceeding its baseline of 60% of the target in the performance of its Konsulta tasks. — Artemio A. Dumlao

P4.4M worth of shabu seized 

PHILSTAR FILE PHOTO

COTABATO CITY — Agents of the Philippine Drug Enforcement Agency-9 (PDEA-9) seized P4.4 million worth of shabu from three peddlers entrapped in a residential area in Ipil town in Zamboanga Sibugay on Wednesday night.

Maharani Gadaoni-Tosoc, director of PDEA-9, told reporters on Thursday that the suspects are now detained, to be charged with violation of the Comprehensive Dangerous Drugs Act of 2002.

Two of the suspects, one armed with a nine-millimeter pistol and the other carrying a vintage .30 caliber Carbine rifle, first resisted and opened fire at the PDEA-9 agents and policemen to whom they have sold P4.4 million worth illegal merchandise and attempted to run after the gunfight ensued.

Gadaoni-Tosoc said the entrapment operation was premised on reports by municipal officials and barangay leaders in Ipil about their large-scale peddling of shabu in the adjoining Zamboanga Sibugay, Zamboanga del Norte and Zamboanga del Sur provinces and in barangays in Zamboanga City. — John Felix M. Unson

Magmatic eruption looms for Kanlaon volcano amid rising activity- PHIVOLCS

PHILSTAR FILE PHOTO

The Philippine Institute of Volcanology and Seismology (PHIVOLCS) has issued a warning about the potential for a magmatic eruption of Kanlaon volcano. This warning is due to the increasing volcanic activity observed.

“If this kind of trend continues like it has a flow progression or worsening (volcanic activity), what we might see is a possible magmatic eruption, which could be effusive,” Ma. Antonia V. Bornas, Chief of Volcano Monitoring and Eruption Prediction Division (VMEPD) said in mixed Filipino and English during a phone interview. 

In a magmatic effusive eruption, Kanlaon is expected to emit a steady flow of lava.  

While this type of eruption is less violent compared to an explosive eruption, it can still present danger, primarily on nearby communities.   

In a volcano advisory on Thursday, PHIVOLCS reported that Kanlaon released a peak sulfur dioxide (SO2) emission of 11,556 tons per day on Wednesday.  

This level of SO2 emission is the highest recorded since PHIVOLCS began instrumental gas monitoring of the volcano. 

Ms. Bornas said, SO2 serves as an indicator to assess the state of magma beneath the volcano.  

“So pag tumataas yan that is concerning kasi ayun nga may shallow magma ka na nagpo-produce ng mataas na concentration ng mataas na SO2 [When that increases, it is concerning because it indicates the presence of shallow magma producing high concentrations of SO2],” Ms. Bornas said.  

For comparison, Bornas said that Kanlaon’s average background sulfur dioxide emission is only 300 tons per day or less. 

“It is really alarming, naamoy na sa communities, araw-araw may narereport tayo ng SO2 fumes [It’s really alarming; the communities can already smell it, and every day we receive reports of SO2 fumes],” Ms. Bornas said. 

Sulfur fumes were reported reaching several localities including Brgy. San Miguel, La Carlota City; Brgy. Masulog and Brgy. Pula, Canlaon City; Brgy. Codcod, San Carlos City; Brgy. Inolingan, Moises Padilla.  

According to PHIVOLCS, prolonged exposure to volcanic sulfur dioxide can irritate the eyes, nose, and respiratory tract. 

Apart from the highest SO2 levels, a total of 79 volcanic-tectonic (VT) earthquakes have also been recorded for the past 24 hours on Wednesday.  

Although it is significantly lower than the 337 (VT) earthquakes recorded on Tuesday, PHIVOLCS has reminded the public to remain cautious.  

“We shouln’t look at just the short-term increase and decrease… Kung titignan yung size ng mga VT events malalaki pa rin yan [If we will look to the size of these VT events, it is still big in number],” Ms. Bornas said.  

Given the threat of magmatic eruptions, PHIVOLCS reminds the public to avoid entering the 4-kilometer radius Permanent Danger Zone (PDZ) to minimize volcanic hazards such as pyroclastic density currents, ballistic projectiles, rockfalls, and others. 

It is also recommended to avoid outdoor activities and wear a mask, preferably an N95 facemask, to prevent irritation. – Edg Adrian A. Eva

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