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PAGCOR tax treatment

Imagine a world where the rules of the game are crystal clear. In December, the Bureau of Internal Revenue (BIR) took a huge step to clarify the tax treatment of the Philippine Amusement and Gaming Corp. (PAGCOR), including its Contractees and Licensees, when it issued Revenue Memorandum Circular (RMC) No. 132-2024.

Building on past issuances (under RMC Nos. 33-2013 and 32-2022) and Supreme Court rulings, the BIR’s latest guidelines aim to untangle the complexities of PAGCOR’s diverse income streams and their tax treatment. Whether gaming operations or non-gaming operations, for both contractees or licensees, the RMC aims to streamline compliance and eliminate the long-standing ambiguities that may have produced multiple interpretations.

In general, PAGCOR’s income can be classified into the following: (1) income from operations under PAGCOR’s franchise/gaming operations; and (2) income from other related operations/services or from non-gaming operations. Income from gaming operations is derived from issuing and/or granting licenses to operate casinos, gaming clubs, and other similar recreation or amusement places, gaming pools, to PAGCOR Contractees and Licensees, as well as earnings derived by PAGCOR from its own operations under its franchise. Such income includes income from casino operations, dollar pit operations, regular bingo operations, and mobile bingo operations operated by it, with agents on commission basis.

On the other hand, income from other related operations/services or from non-gaming operations pertains to income from the operation of necessary and related services, shows and entertainment.

PAGCOR’s income from its franchise/gaming operations is subject to 5% franchise tax, in lieu of all taxes, including value-added tax (VAT). Conversely, income from related operations/services or from non-gaming operations is subject to the regular corporate income tax, VAT and other applicable taxes.

Now, to the curious, why is there a need to set out these clarifications? At first reading, RMC No. 132-2024 may seem to only reinforces the implementation of the 5% franchise tax on gaming operations. However, after reading through the previous issuances and the related SC cases, several differences can be noted.

Backtracking to 2022, the BIR issued RMC No. 32-2022 stating that regulatory/license fees were considered income from “other related operations/services.” In RMC No. 132-2024, the BIR clarified that “gaming operations” include the granting of licenses to operate casinos, gaming clubs, etc. Regulatory/license fees received by PAGCOR from its Licensees are to be considered income from PAGCOR’s operations under its franchise or gaming operations.

Moreover, in the 2022 RMC, PAGCOR’s tax exemption extends only to those that have contracted with PAGCOR in connection with PAGCOR’s gaming operations. This effectively excluded PAGCOR Licensees, resulting in their revenue from gaming operations being considered subject to VAT. This is contrary to a 2021 SC decision that affirmed that the tax exemption under Section 13(2)(b) of Presidential Decree No. 1869 (or the PAGCOR Charter) extends to both Contractees and Licensees of PAGCOR. Following the hierarchy of laws, the 2022 RMC should have followed the 2021 SC decision.

Although a few years late, RMC No. 132-2024 has finally clarified that income derived from gaming operations by both Contractees and Licensees is subject to the 5% franchise tax, in lieu of all taxes, including VAT. Moreover, similar to PAGCOR, the income of the Contractees and Licensees from related operations/services or from non-gaming operations is subject to corporate income tax and VAT. Any circular inconsistent with this 2024 RMC is amended, modified, or revoked accordingly. This means that moving forward, any conflicting provisions in the 2022 RMC are no longer applicable. However, it may be worth revisiting if a prospective application of RMC 132-2024 is sufficient, considering that the SC had already ruled on the matter as early as 2021.

With the applicability of the 5% franchise tax, for PAGCOR’s Licensees located in Ecozones/Freeports, the Special Corporate Income Tax (SCIT), Income Tax Holiday (ITH), or corporate income tax, no longer applies to income from gaming operations. The incentives granted by the concerned Investment Promotion Agency (IPA) will only apply to their income from other related services/operations or non-gaming operations that are covered by their registration with the IPA. For a PAGCOR Licensee electing to pay 5% SCIT, its income from other related services/operations or non-gaming operations is exempt from regular corporate income tax and VAT. For a PAGCOR Licensee enjoying an ITH, such income is exempt from corporate income tax, but is subject to VAT. Finally, if a PAGCOR Licensee’s other related operations/services or non-gaming operations are not covered by its registered activity, such income is subject to regular corporate income tax, VAT, and other applicable taxes.

The issuance of RMC No. 132-2024 marks a pivotal moment for PAGCOR and its Contractees and Licensees, bringing much needed clarity to their tax obligations. As the gaming industry continues to evolve, these updated guidelines not only streamline compliance, but also pave the way for a more transparent and efficient fiscal environment. With these clarifications, PAGCOR and its Contractees and Licensees can now focus on their core operations, confident in their understanding of the tax landscape. Here’s to a future where the rules of the game are clear, and everyone plays by them.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Maria Isabel Silpedes is a manager at the Tax Services department of Isla Lipana & Co., a Philippine member firm of the PwC network.

maria.isabel.silpedes@pwc.com

Philippines sends biggest coast guard ship to watch China vessels near coast

PHILIPPINE COAST GUARD PHOTO

THE Philippine Coast Guard (PCG) on Tuesday night said it had sent its biggest ship — the 97-meter BRP Teresa Magbanua — to monitor Chinese vessels near the coast of Zambales province in the country’s north.

In a statement, the PCG said Teresa Magbanua replaced the 44-meter vessel BRP Cabra, which arrived at Subic Port on Tuesday morning to unload the body of a fisherman recovered on Monday.

“The vessel’s departure from an area where the Chinese Coast Guard has been illegally present prompted Commandant Admiral Ronnie Gil Gavan to deploy the PCG’s 97-meter vessel, BRP Teresa Magbanua,” it said.

It added that Teresa Magbanua was actively challenging Chinese Coast Guard vessels off the coast of Zambales.

Teresa Magbanua can displace 2,265 tons of water, compared with 12,000 tons for China Coast Guard (CCG) ship 5901, the largest coast guard ship in the world.

The PCG on Monday night accused China Coast Guard 3304 of shadowing its ship that was rescuing a distressed fishing boat near the Zambales coast.

It said Cabra navigated through heavy waves to retrieve the body of a Filipino fisherman using its crane and to transport it back to Subic, Zambales.

“It is crucial to note that the Chinese Coast Guard vessel CCG 3304, despite being aware of the distress call from the Filipino fishermen, engaged in shadowing that hindered the PCG vessel’s efforts to recover the body,” the PCG said.

On Tuesday night, the PCG said it had tracked CCG 3304 at an average distance of 152 to 163 kilometers (km) from the shoreline.

Citing Canada’s dark vessel detection device, the PCG said it had also spotted three other China Coast Guard vessels near the disputed Scarborough Shoal, which China as occupied since 2012.

These include China’s “monster ship” or CCG 5901, which was about 184 km from Zambales; CCG 3502 at 244 km; and CCG 3103 at 248 km.

The Philippines has accused China of intimidating Filipino fishermen near Scarborough Shoal and normalizing its “illegal presence” after Beijing sent its monster ship into the Philippines’ exclusive economic zone (EEZ) on Jan. 4.

A United Nations-backed court in the Hague voided China’s expansive claim in the South China Sea in 2016, as it ruled the shoal is a traditional fishing ground for Filipino, Chinese and Vietnamese fishermen.

The PCG on Tuesday vowed to ensure the safety of Filipino fishermen, safeguard the country’s maritime jurisdiction, enforce international law and prevent the “escalation of tensions.”

Last week, it accused CCG 3103 of using a long-range acoustic device against its vessel near the Zambales coast, weeks since it started monitoring the area after the deployment of China’s monster ship.

The use of the long-range acoustic device marked “an increase in the aggression of the Chinese Communist Party in the West Philippine Sea,” Philippine Navy spokesman Roy Vincent T. Trinidad said.

He added that the Navy had monitored two People’s Liberation Army-Navy warships, five China Coast Guard vessels and two Chinese maritime militia vessels during its rotation and resupply mission on Jan. 24 for BRP Sierra Madre at Second Thomas Shoal.

“Depending on the previous rotation and resupply mission, there were fewer numbers this time,” he said.

The Jan. 24 mission for BRP Sierra Madre was the fifth after the bilateral consultation mechanism between Manila and Beijing on Jan. 16.

The Philippines grounded BRP Sierra Madre, a Word War II-era vessel, at Second Thomas Shoal in 1999 to assert its sovereignty.

During their 10th consultation, Manila and Beijing agreed to continue resupply missions to the shoal and sustain the de-escalation of tensions in the area, the Department of Foreign Affairs said last week.

PACAF VISIT
Meanwhile, the Philippine Air Force (PAF) on Wednesday said it expects more high-level interactions with the US Pacific Air Force (PACAF).

PACAF Commander Gen. Kevin Schneider paid a visit to PAF Chief Arthur M. Cordura at Villamor Air Base near the Philippine capital on Tuesday, Air Force spokesperson Ma. Consuelo N. Castillo said in a statement.

“During the visit, Gen. Schneider and Lt. Gen. Cordura engaged in discussions on bolstering interoperability between the two air forces and excellence in combined operations,” she said.

She added that the two air force commanders emphasized in their meeting the importance of joint exercises and training in enhancing their forces’ operational capabilities. “The high-level meeting further addressed key areas, including information-sharing, airman-to-airman talks and routine maritime cooperative activities,” she added.

The two also discussed projects under the 2014 Enhanced Defense Cooperation Agreement (EDCA), which President Ferdinand R. Marcos, Jr. expanded in 2023 to give the US access to four more military bases on top of the five original sites.

“As part of the visit, Gen. Schneider and his delegation will visit PAF Air Bases and EDCA project sites in Pampanga, Palawan, Cebu, and Lumbia Airport in Cagayan de Oro,” Ms. Castillo said.

“With this activity, the PAF and PACAF reinforce their commitment to enhancing interoperability, promoting operational excellence, strengthening bilateral relations, boosting defense capabilities and supporting peace and security in the Indo-Pacific Region,” she added.

Also on Wednesday, the New Zealand Embassy in Manila said the Philippines and New Zealand officially started talks in Manila for their status of visiting forces agreement on Jan. 23, a step toward boosting their bilateral defense relations.

The commitment to finalize the military pact came after discussions between Philippine President Ferdinand R. Marcos, Jr., and New Zealand Prime Minister Christopher Luxon during Mr. Luxon’s visit to Manila in April 2024, it said in a statement.

Once concluded, the deal would enhance the existing memorandum of arrangement, signed in 2017, between the Department of National Defense and the Armed Forces of the Philippines (AFP) and New Zealand’s Ministry of Defense.

It will enable the military forces of both nations to increase collaboration and hold joint exercises in each other’s territories.

Josue Raphael J. Cortez, a lecturer at the De La Salle-College of St. Benilde School of Diplomacy and Governance, said the deal would bolster Philippine defense capabilities and show the commitment of New Zealand to help the Philippines in upholding a rule-based maritime order.

“This shows that New Zealand is one with the Philippines in its advocacy of ensuring that freedom of navigation would remain supreme despite threats being posed by countries attempting to exert further influence over these waters,” he told BusinessWorld in a Facebook Messenger chat.

The Philippines and New Zealand will celebrate the 60th anniversary of their diplomatic ties in 2026. — Kyle Aristophere T. Atienza and Chloe Mari A. Hufana

Speaker orders House to fast-track wage bills

PHILIPPINE STAR/RUSSELL PALMA

SPEAKER Ferdinand Martin G. Romualdez on Wednesday ordered the House of Representatives to fast-track hearings on a proposed legislated wage hike, which has been stalled at the labor committee for eight months.

The House will likely settle for a P200 wage hike, seen as a middle ground between the P150 and P750 minimum wage increases proposed by congressmen, he said in a statement. “The emerging consensus in the House of Representatives, pending ongoing public consultation, is that the minimum wage could potentially be increased by P200 per day.”

Separate proposals that seek to increase the wages of private-sector workers by P150 to P750 have been filed at the chamber, but they remain pending at the House labor committee, which held its last hearing on the bills in May last year.

The Senate approved a bill increasing the daily minimum wage in the private sector by P100 in February 2024.

Mr. Romualdez said the last time Congress legislated a wage hike was through the 1989 Wage Rationalization Act, which created wage boards nationwide.

The Philippines adjusts salaries through its wage boards, but slow and meager increases against the backdrop of rising prices have prompted lawmakers under President Ferdinand R. Marcos, Jr.’s government to legislate wage increases.

“If we were able to do this in the past, there is no reason why we cannot do it now, especially with careful planning and collaboration with all sectors,” Mr. Romualdez said in mixed English and Filipino.

He said the House is considering wage subsidies and salary hike exemptions for micro, small and medium enterprises (MSMEs) to ease the impact of a legislated wage increase.

“Our MSMEs are the backbone of our economy, and they must be protected even as we address the needs of our workers,” he said.

The Southeast Asian nation has about 1.2 million small businesses, accounting for more than 99% of total establishments, according to government data.

Meanwhile, Senator Maria Imelda “Imee” R. Marcos has filed a bill that seeks to abolish regional wage boards in favor a single wage board that will set the national minimum wage across regions to ensure pay hikes help workers cope with rising prices.

Under Senate Bill No. 2962 or the National Minimum Wage Act, which was filed on Jan. 25, the National Minimum Wages and Productivity Board will adjust the national minimum wage every year based on inflation.

“The National Wages and Productivity Board will be tasked with determining the proper minimum wage for the country through the issuance of wage orders, subject to an annual review,” she said in the bill’s explanatory note.

The new wage board must consider the right to a living wage and the cost of basic goods.

The Regional Tripartite Wages and Productivity Board of the National Capital Region in July last year approved a P35 minimum wage hike for workers in Metro Manila, bringing the daily pay for nonagricultural workers to P645.

This was way lower than the petitions filed by labor groups seeking monthly pay increases of P597 to P750. 

Under the Senate bill, employers who fail to comply with paying their workers the national minimum wage will be fined as much as P100,000 or get jail time of as long as five years. The erring employer may also face a permit suspension of up to three years.

In its latest consumer expectations survey, the Bangko Sentral ng Pilipinas (BSP) said households still expect inflation to remain above 4%. Inflation averaged 3.2% last year, and central bank expects it to stay within its 2-4% target this year.

Labor groups have said the country’s wage-setting system has failed since many workers still live in poverty even after paltry minimum wage increases.

A Filipino family of five needs at least P13,797 a month or P460 a day to meet their basic needs, according to the Philippine Statistics Authority.

“Instead of decentralizing growth to the countryside, the (regional wage-setting system) preserves the economic inequality between the poor regions and Metro Manila and resultantly perpetuates the poverty of these poor regions and their workers,” Ms. Marcos said. — Kenneth Christiane L. Basilio and John Victor D. Ordoñez

Senate approves measure that will raise gov’t share in mining profits

PHILSTAR FILE PHOTO

By John Victor D. Ordoñez, Reporter

THE PHILIPPINE Senate on Tuesday evening approved on second reading a bill that seeks to set up a five-tier margin-based royalty and windfall profit system for the mining industry, which is expected to raise the government’s share in mining profits.

Under Senate Bill No. 2826, a priority measure of the Marcos government, the five tier margin-based royalty system will range from 1% to 5%, while the five-tier windfall profit tax system will range from 1% to 10%.

Under the law, mining companies pay corporate income tax, excise tax, royalty, local business tax, real property tax and fees to indigenous communities.

In a statement, the Chamber of Mines of the Philippines welcomed the Senate approval but urged senators to do away with a provision in the bill banning the export of raw ores.

“Its intended purpose of compelling mining companies to build processing plants within five years before the enforcement of the ban will not happen,” it said.

“A raw ore export ban will lead to more mine closures and, consequently, to unemployment for hundreds and thousands of Filipino workers who rely on mining, directly or indirectly, for their livelihood,” it added.

The group also cited the need for more power plants to address high power costs.

“Rationalizing taxes and royalties in the mining sector can unlock substantial revenues for the government,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.

“This is especially important given the sector’s potential to support infrastructure development and rural job creation while ensuring environmental safeguards,” he added.

The House of Representatives approved its version of the bill in September.

Under House Bill No. 8937, large-scale miners inside mineral reservations must pay the government only 4% of their gross output, while the Senate version requires them to pay 5%.

The House version proposes an eight-tier margin-based royalty regime ranging from 1.5% to 5% and a 10-tier windfall profit tax system ranging from 1% to 10%.

In October, Australian Ambassador to the Philippines Hae Kyong Yu said that the Australian Embassy in Manila had brought in Australian mining tax experts to work with their Philippine counterparts as Congress worked on the mining tax bill.

The embassy has also been encouraging players in Canberra’s mining industry to partner with their Philippine counterparts on best practices.

Senator Joseph Victor “JV” G. Ejercito, who sponsored the bill, earlier said the new tax regime would boost government revenue from the industry.

In his sponsorship speech in September, he said the new fiscal measure would “foster an enabling policy environment” and make the industry more competitive with Manila’s regional peers.

The Department of Finance has said the government could generate P6.26 billion in additional annual revenue from the revised mining tax regime.

“We submit that a more sustainable approach would be to focus on improving infrastructure, reducing energy costs and enhancing regulatory stability to attract investments in mineral processing,” the local mining group said.

House approves bill recalibrating tobacco tax structure on 2nd reading

SVKLIMKIN -PIXABAY

A MEASURE setting an alternating tax scheme on tobacco products up to 2035 to curb smuggling and illicit tobacco trade has been approved on second reading in the House of Representatives.

In a voice vote, lawmakers approved House Bill (HB) No. 11360, which will amend the National Internal Revenue Code, imposing a 2% tax rate on tobacco products by 2% every even-numbered year, starting 2026, and 4% every odd-numbered year, starting 2027.

“[The increase shall be implemented] until Dec. 31, 2035, provided that after the ten-year period, a review of the tax imposed and its impact on revenue collections, health costs, and prevalence of smoking shall be conducted,” the bill read.

Heated tobacco products would be charged with a P41 tax per pack of 20, with vape and cigarettes being imposed with a P66.15 tax per pack, according to the proposal.

“Excise tax collection is expected to stabilize and recover from successive tax increases by arresting the widening gap between illicit cigarettes and tax-paid cigarettes,” Ilocos Sur Rep. Grace Kristine Singson-Meehan, who sponsored the bill, told lawmakers.

“The consumption of illegal products is expected to decline, and consumers will shift to legitimate tax-paid cigarettes,” she added.

The House is hard-pressed to cut down on illicit tobacco, which is eating government revenues. A tax moratorium was initially proposed before the House tax panel settled on an alternating tax scheme in its bid to discourage cigarette smuggling.

The Bureau of Internal Revenue (BIR) was P52 billion short of its P185-billion tobacco excise tax target last year, collecting only P134 billion in 2024.

The bill will also empower the Finance department and BIR against front-loading of tobacco products.

Moreover, the chamber adopted a change allowing the Philippine president to jack up the tax rates up to 5% “in case the actual National Government deficit of the previous year exceeds the program deficit by an equivalent of 2% of the gross domestic product of the previous year.”

Nueva Ecija Rep. Mikaela Angela B. Suansing, also among the sponsors of the bill, said the measure would net the government P66 billion from 2026 to 2030, citing a projection from the House ways and means committee.

The Finance department did not officially present a revenue impact estimate of the measure.

Marikina Rep. Stella Luz A. Quimbo, however, said it is improbable for the government to net revenues from the measure, citing reduced tax rates and increases.

“We have public health losses and revenue losses [under this bill],” she told lawmakers in Filipino during her interpellation of the bill. — Kenneth Christiane L. Basilio

Manila told to strengthen ties ahead of expected rise in Chinese aggression   

PHILIPPINE COAST GUARD PHOTO

By John Victor D. Ordoñez, Reporter

MANILA must continue building its ties with other countries in the international community as Beijing is expected to continue its aggressive maneuvers in the South China Sea this year, foreign affairs and security analysts said.

“The Philippines must continue to push for a rules-based order and resolution to the difficulties we are facing in the West Philippine Sea,” retired Major General and former spokesperson of the Armed Forces of the Philippines Restituto F.  Padilla, Jr., told BusinessWorld on the sidelines of a Foreign Affairs event.

“It should be a fight with the whole world going against a nation pushing its unilateral ways because after all what is being defined are rules that are made by the world itself so that there will be order in the world.”

While China has always maintained its presence in the waterway, claimed in part by the Philippines, Brunei, Malaysia, Taiwan, and Vietnam, tensions have risen over the past years as it continued engaging in dangerous activities, such as firing water cannons, shadowing, and ramming.

China’s gray zone tactics and aggressive assertion of its claims in the waterway is likely to worsen in 2025, with Donald J. Trump assuming the post of America’s president for the second time, Chester B. Cabalza, founding president of Manila-based International Development and Security Cooperation, said. 

“Beijing is poised to increase its aggression as it may see Manila topside more with Washington,” he said in a Facebook Messenger chat.

“Given the situational prediction, the Philippine contested waters will be tested as a battleground for the widened strategic competition of the naval buildup of China and the US in the Indo-Pacific.”

The Philippine government has continued to deepen its ties with the international community, securing military pacts, arms assistance funding and maritime capacity building deals with allies, such as the United States and Japan, in the past year.

The Philippine Senate in December also ratified the country’s Reciprocal Access Agreement with Japan to facilitate the exchange and combined training of their troops. This also followed Tokyo’s move to provide P611 million worth of security assistance to the Philippines, which includes radar systems, inflatable boats, and other maritime equipment.

The European Union is also keen on bolstering ties with Manila in diplomatic efforts on free and open waters in the Indo-Pacific region as it reaffirmed commitment to international law amid Manila’s maritime dispute with Beijing, according to its External Action Service Managing Director for the Asia and the Pacific Niclas Kvarnström.

“Manila building its coalition with its western allies and other countries will be dictated by political and diplomatic policies,” former Philippine Navy Flag Officer in Command Alexander P. Pama told BusinessWorld.

“It’s easy to have wish lists and ambitions to boost the country’s security capacity, but it has to be in conjunction with having the capacity to maintain these (military equipment from allies).”

The Philippines has been conducting joint military drills with its allies and like-minded partners in the Indo-Pacific region, which are expected to build the country’s capacity to defend its national security in the long run. The government has also recently enacted a measure that will boost local production of defense equipment, designed to make a more self-reliant defense posture.

The Southeast Asian nation is likely to seek help from the United Nations (UN) on resolving the dispute since diplomatic protests and efforts to summon Beijing’s envoy are not effective measures anymore, Josue Raphael J. Cortez, who teaches diplomacy at the De La Salle College of St. Benilde, said in a Facebook Messenger chat.

“However, one must also bear in mind that seeking for the help of the Security Council may not be a viable move given of course that China is among its permanent members,” he said.

Being a permanent member of the UN Security Council, alongside the US, France, Russia, and the United Kingdom, entitles China to a right to veto resolutions.

The Chinese Foreign Ministry has said Manila and its allies ganging up on Beijing would only worsen tensions and destabilize the region.

Philippine Foreign Affairs Secretary Enrique A. Manalo earlier said the Philippines is gearing up for its chairmanship of the Association of Southeast Asian Nations, where it seeks to raise its maritime dispute with China.

China has rejected a 2016 ruling by the Permanent Court of Arbitration in The Hague that invalidated its claims, which had no basis under international law.

The Philippines, under President Ferdinand R. Marcos, Jr., has filed 193 diplomatic protests over China’s actions in the South China Sea, 60 of which were filed this year, Foreign Affairs spokesperson Ma. Teresita C. Daza earlier told reporters.

“Policy continuity for the long term is crucial,” Don Mclain Gill, who teaches international relations at De La Salle University, said in a Facebook Messenger chat. “We have to understand that China has been consistent since 1949 in pursuing its expansionist ambitions.”

On the side of trade, Manila is unlikely to cut ties with China anytime soon even amid their sea dispute, according to Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII).

“Most likely, the trade will continue coming here. China also needs our products. Because we have mining products, we have agricultural products, which are needed by China,” FFCCCII President Cecilio K. Pedro told BusinessWorld.

In March last year, Chinese Ambassador to the Philippines Huang Xilian told a business forum in Manila that nations that “talk down on China” would miss out on its ambitious economic expansion target of about 5% this year.

China has been the Philippines’ biggest trading partner for eight straight years, and one of its biggest sources of foreign investment, he said.

“We must also bear in mind that the country is among our primary importers of agricultural products and given the challenges we face in this aspect of the economy, then severing ties with it can exacerbate these difficulties,” Mr. Cortez said.

“Trade-wise, the tension which we may describe as highly political in nature, has not affected trading that much.”

Beijing bankrolled about 233 projects in the Philippines between 2000 and 2022 worth $9.1 billion, according to a 2024 study by Virginia-based research firm AidData.

The Marcos government has withdrawn loan negotiations with China for the P142-billion South Long-Haul project in the Bicol Region, the P50-billion Subic-Clark Railway project and the first phase of the Mindanao Railway project worth P36 billion.

The National Economic and Development Authority earlier said it would bank on the Asian Development Bank’s technical know-how to bankroll the South Long-Haul project after Chinese loans failed to materialize.

“Increased Western presence did not dissuade, but instead fortified Chinese militarism over the disputed territories,” Mr. Cortez said.

“This is something that is already expected given that it sounds the alarm — threatening Chinese presence and strength.”

PEZA, Australian chamber tie up

THE Philippine Economic Zone Authority (PEZA) tapped the Chamber of Commerce and Industry Australia Philippines, Inc. (CCIAP) as its investment promotion partner.

With PEZA signing a memorandum of understanding with CCIAP on Jan. 24, CCIAP outlined possible collaborations and investment opportunities in a sustainable circular economy.

Among these are research and development in partnership with academic institutions and laboratories and attracting multinational biotech firms for manufacturing and commercialization.

The partnership also aims to ensure “steady foreign direct investment inflows through strategic partnerships with ASEAN governments and industry organizations.”

“This agreement represents a pivotal step toward attracting global biotech players, establishing a robust value chain, and strengthening economic and diplomatic ties between the Philippines and Australia,” PEZA said.

“This also aligns with PEZA’s vision of not only promoting the Philippines as a prime investment destination but also positioning the country as a regional biotechnology hub within ASEAN,” it added.

Australian equity among PEZA locators is currently valued at P11 billion in investments. These account for $750 million in exports and 47,000 jobs. — Justine Irish D. Tabile

Collab to bridge skill gap pushed

K-TO-12 STUDENTS at a high school in Marikina City during their in-person graduation ceremony on July 2, 2022. — PHILIPPINE STAR FILE PHOTO/WALTER BOLLOZOS

A LABOR leader called for stronger collaboration between industry and education sectors in the Philippines to bridge the skills gap and improve the employability of K-12 graduates, urging stakeholder consultation, international partnerships, work-based learning programs, skills recognition and information dissemination.

Federation of Free Workers President Jose Sonny G. Matula said that the decline in critical thinking over the past decade has hindered graduates’ ability to meet labor market demands.

He said that to align education with national development goals, labor unions, employer groups, industry leaders, and government agencies should engage in regular dialogues to shape an education framework that meets labor market needs and supports an agro-industrialization strategy.

He noted that technology transfer from developed economies, along with the development of indigenous innovations, could drive long-term socio-economic growth in the Philippines.

He added that improving international partnerships by seeking collaboration with the International Labour Organization, the European Union, and the United States among others would implement global best practices and facilitate technology transfer for higher-value employment opportunities.

Moreover, work-based learning programs aim to strengthen internships, apprenticeships, and job placement initiatives, facilitating the transition into full-time employment while preventing worker exploitation.

The labor leader added that skills recognition and accreditation could establish industry-backed certifications to boost employer confidence in K-12 graduates’ qualifications.

Lastly, public awareness campaigns can bridge the gap by utilizing media, job fairs, and industry events to highlight K-12 graduates’ skills and educate them on workplace realities and labor rights. — Chloe Mari A. Hufana

Bill delaying BARMM polls urgent

@BANGSAMOROGOVT

PRESIDENT Ferdinand “Bongbong” R. Marcos, Jr. has certified as urgent a bill postponing elections in the southern region of Bangsamoro, according to his office.

Malacañang made the confirmation as the two chambers of Congress work on different versions of the postponement bill.

“This is confirmed,” Presidential Communications Office Acting Secretary Cesar B. Chavez told reporters when asked about Senate President Francis “Chiz” G. Escudero’s disclosure of the move.

The Senate on Jan. 28 approved on second reading a bill that would reschedule the parliamentary elections of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) to October 2025 from May of the same year.

The House of Representatives, on the other hand, passed its version last December, seeking to move the BARMM elections to May 2026.

While the Senate bill separates BARMM’s first regular elections from the May midterm elections, it will synchronize succeeding elections with the Philippines’ national and local elections.

If the Senate bill is passed on final reading, a bicameral committee will decide the final schedule of the BARMM polls.

Calls for the postponement of the first-ever parliamentary elections in one of the Philippines’ poorest regions have been made after a Supreme Court decision excluding Sulu province from BARMM. 

Mr. Marcos in November said his administration was studying postponement proposals, citing the “unintended consequence” of the court’s decision.

Replacing the Autonomous Region in Muslim Mindanao, BARMM was inaugurated in 2019 following a peace negotiation between Moro separatists and the Philippine government in 2014 that paved the way for an organic law in 2018.

The first-ever parliament election in the region was originally set for May 2022 but was postponed due to the coronavirus pandemic and the failure to come up with an electoral code. — Kyle Aristophere T. Atienza

P85-B smuggled goods seized in 2024

PHILIPPINE STAR/MIGUEL DE GUZMAN

THE Bureau of Customs (BoC) Commissioner Bienvenido Y. Rubio said on Wednesday that P85.167 billion worth of smuggled goods was apprehended last year.

“Another record-breaking and unprecedented anti-smuggling accomplishment in the history of the Bureau of Customs,” Mr. Rubio said in a statement.

Mr. Rubio also said that for nearly four decades the Customs Intelligence and Investigation Service has served as the frontlines, serving the intelligence arm of the agency.

In a previous report, Customs said it seized a total of 1,572 smuggled goods last year, amounting to P84.36 billion for the first 11 months of 2024.

It conducted 1,572 seizure operations from the January to November period. — Aubrey Rose A. Inosante

CHR probes killings in Zamboanga del Sur, Maguindanao

THE Commission on Human Rights (CHR), through its regional offices, is conducting an independent investigation into the recent killings of local executives and election candidates in Zamboanga del Sur and Maguindanao, it said on Wednesday.

“We denounce similar incidents which violate the most fundamental of all rights—the right to life—this time affecting public officials and candidates as we approach the 2025 National and Local Elections,” it added in a statement.

The CHR expressed grave concern over the continuing attacks on local officials, as these incidents undermine public service, instill fear within communities, and erode democratic processes.

“We must be reminded that a secure environment is essential for conducting proper and credible elections, thereby enabling every citizen and voter to participate in political processes without fear for their safety,” it added.

On Jan. 3, a councilor from a village in Zamboanga del Sur was shot 12 times and died instantly. The next day, another councilor from another village in the same town was killed while riding a motorcycle, it noted.

Also on Jan. 3, the chair of a village in Maguindanao del Sur was shot multiple times at home shortly after praying on the balcony. The victim was rushed to a nearby hospital but was pronounced dead on arrival.

On Jan. 18, a candidate for municipal council in Northern Kabuntalan, Maguindanao del Norte, was ambushed while riding a motorcycle home from the Midsayap area. The victim died on the spot.

Authorities are still investigating whether these killings were politically motivated. — Chloe Mari A. Hufana

Advocacy groups feel impact of US foreign aid freeze

A PHILIPPINE organization promoting the welfare of patients with Human Immunodeficiency Virus (HIV) on Wednesday said the United States (US) government’s temporary freeze on foreign assistance will affect some of its programs.

The stop-work order issued by the US State Department last week “does affect key innovations we’ve worked hard to deliver,” LoveYourself Inc. said in a statement, citing its free PrEP (pre-exposure prophylaxis), self-testing kits, and campaigns aimed at increasing awareness and scaling up life-saving services.

PrEP is a medication that reduces HIV risks.

The order also “impacts many of our staff working on these programs, who are the heart and soul of our innovations,” the group added.

US President Donald J. Trump recently ordered a 90-day pause on existing and new foreign development assistance, to ensure alignment with his foreign policy.

LoveYourself said that its essential services — HIV testing, treatment, and TransHealth — remain unaffected.

The group urged decision-makers “to revisit and act quickly on” the impacts of the order.

“While we respect processes, the urgency to save lives cannot be overstated. Every delay affects real people, real families, and real futures,” it said.

The group said the void is a moment for the Philippine government “to step up and partner with civil society organizations.”

National Economic and Development Authority Secretary Arsenio M. Balisacan on Monday said the stop-work order would only have a minimal impact on the Philippines, saying US foreign assistance represents only a “small part” of Philippine economic activities.

LoveYourself said in many countries with high HIV rates, “disruptions like these can halt medication procurement and vital services, putting countless lives at risk.”

The Department of Health last month said HIV cases in the Philippines would likely rise to 215,400 by the end of 2024, citing 4,595 confirmed cases from July to September 2024 alone.

Of the confirmed cases from July to September 2024, 1,301 or 28% had an advanced HIV infection at the time of diagnosis, according to the agency’s data.

Meanwhile, a Zamboanga-based LGBT organization on Tuesday night said it needs to suspend its Mindanao-wide human rights caravan due to the freeze order.

“This project has been a beacon of hope for so many, championing human rights and reaching communities across Mindanao,” its President and Executive Director Alvin Toni Fernandez said in a Meta post.

“To have it halted because of this policy shift is heartbreaking for all of us who have worked tirelessly to make a difference,” he added, noting the organization is hopeful that the freeze order is temporary. — Kyle Aristophere T. Atienza

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