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Agencies face queries on how spending will spread wealth

PHILSTAR FILE PHOTO

THE House of Representatives will ask government agencies defending their budgets this week to demonstrate how they plan to spread prosperity beyond a few favored segments of the economy, Speaker and Leyte Rep. Ferdinand Martin G. Romualdez said on Sunday.

“Our economic expansion, projected by multilateral financial institutions at between 5.9-6.2% next year, should be felt by our people, especially the poor, in terms of more job and income opportunities, more affordable food on their tables and lower consumer prices,” Mr. Romualdez said in a statement.

Congress is set to begin its deliberations on the proposed P6.352-trillion national budget for 2025 today, Monday, with economic managers first on deck.

The Development Budget Coordination Committee (DBCC) will brief the House on how the macroeconomic assumptions for next year influenced the drafting of the 2025 budget.

Legislators are also set to ask Budget Secretary Amenah F. Pangandaman, Finance Secretary Ralph G. Recto, Socioeconomic Planning Secretary Arsenio M. Balisacan, and Central Bank Governor Eli M. Remolona, Jr. how the proposed budget will work to spur economic growth next year, he added.

The Department of Budget and Management (DBM) last week handed over the 2025 National Expenditures Program (NEP) to the House, proposing to spend the equivalent of 22.1% of gross domestic product (GDP). If borne out, the NEP would be 10.1% higher than the P5.768-trillion budget this year.

The Philippines is expected to surpass the growth of most of its neighbors despite external economic headwinds, the DBCC said in June, setting its gross domestic product growth projection at 6.5-7.5%. 

“There is a need to explain how the proposed budget could support economic growth amid concerns by Filipinos that the expansion only benefits the rich, the big companies, and stock and financial market investors,” Mr. Romualdez said.

“If (the) majority of our people do not feel our economic expansion, they should at least see it in terms of the proper use of the national budget for social services, education, health, infrastructure, and direct financial assistance to the poor and other vulnerable sectors,” he added.

In a statement last week, think tank IBON Foundation said that the proposed budget puts the needs of businesses ahead of ordinary Filipinos despite the administration’s claims that it is focusing government resources towards addressing joblessness and poverty.

“Despite the Marcos administration’s claims, the proposed budget spends less on the needs and welfare of the majority of Filipinos while increasing spending on debt service, and infrastructure that disproportionately benefits those already better-off,” it said.

The 2025 proposed budget for the Department of Social Welfare and Development (DSWD) was slashed by 7.2% to P230.1 billion.

Health spending — including funding for the Department of Health (DoH) and the Philippine Health Insurance Corp. (PhilHealth), will receive P297.6 billion of next year’s proposed budget, down 3.5% from this year’s allocation.

Debt service is expected to account for P2.1 trillion in 2025, up 9.1%, according to a document from the DBM.

Infrastructure outlays are expected to dip 0.26% to P1.506 trillion next year.

Going before Congress will be officials from the Philippine Gaming and Amusement Corp. (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO), who are expected to brief the House appropriations committee on their proposed budgets on Tuesday. They will be followed by the Department of Environment and Natural Resources (DENR) and the Department of Human Settlements and Urban Development (DHSUD) on Wednesday.

On Thursday will be the turn of the Department of Energy (DoE), the Energy Regulatory Commission (ERC), and the Commission on Higher Education’s (CHED).

The House appropriations panel will conduct budget deliberations until Sept. 9, after which the NEP will be hammered out to become the draft General Appropriations Act for plenary action.

The House is seeking to approve the proposed budget in September to give the Senate ample time to deliberate, Majority Leader and Zamboanga City Rep. Manuel Jose M. Dalipe said at a briefing last week. — Kenneth Christiane L. Basilio

June WESM prices fall on decreased demand

BW FILE PHOTO

ELECTRICITY spot prices dropped in June, with a decline in power demand offsetting any impact on prices of lower supply, according to the Independent Electricity Market Operator of the Philippines (IEMOP), citing preliminary data.

IEMOP reported that the average power price at the Wholesale Electricity Spot Market (WESM) system-wide fell 3% month on month to P5.97 per kilowatt-hour (kWh) in June.

Supply fell 3.9% to 18,867 megawatts (MW), while demand fell 4.9% to 13,989 MW.

For Luzon, the average WESM price fell 0.9% to P5.92 per kWh compared to May.

The sub-grid’s power supply declined 3.8% to 13,340 MW while the demand dropped 4.9% to 10,142 MW.

Spot prices on the Visayas fell 12.4% month on month to P7.50 per kWh.

Supply fell 9.3% to 2,105 MW. Demand decreased 5.4% to 1,894 MW.

Mindanao spot prices rose 1.3% month on month to P4.67 per kWh.

Supply fell 1% to 3,421 MW while demand declined 4.5% to 1,952 MW.

“The supply-demand scenario in Mindanao (was affected by) some baseload plants that (had) undergone outages. This resulted in a minimal increase in price,” the IEMOP said.

IEMOP operates the WESM, where energy companies can buy power when their long-term contracted power supply is insufficient for customer needs.

Last week, the Energy Regulatory Commission lifted the suspension on settlement in the reserve market.

It ordered the IEMOP to recalculate the resulting reserve trading amounts for the billing periods February and March. It also ordered the IEMOP to adjust the value for the remaining 70% for the March billing month.

The reserve market allows the system operator to procure power reserves from the WESM to meet the reserve requirements of the energy system. — Sheldeen Joy Talavera

How AI can sustain business continuity

IN BRIEF:

• AI transforms business continuity management by enabling proactive risk assessment, dynamic planning, and adaptive response strategies, ensuring organizations are better prepared for disruptions.

• AI enhances incident and crisis management with early-warning systems, intelligent data protection, and effective communication tools, improving disaster preparedness and response.

• AI-driven simulations and continuous learning from exercises and real events refine BCM plans, while organizations must navigate challenges like resource requirements, data reliability, and ethical decision-making.

Artificial intelligence (AI) is transforming the way we innovate — empowering machines to perform tasks that typically require human intelligence. It focuses on emulating human behavior and performance, from simple task automation to complex problem-solving and decision-making.

As businesses continue to navigate an increasingly volatile landscape, the traditional, reactive approaches to continuity and crisis management no longer suffice. AI can help redefine organizational resilience by enabling companies to anticipate disruptions and fortify their operations against them.

To adapt, businesses are increasingly turning to AI to transform their approach to Business Continuity Management (BCM). This article examines how AI’s capabilities improve BCM strategies and foster a proactive approach to organizational resilience.

THE ROLE OF AI IN BCM
AI’s role in BCM goes beyond redefining business continuity procedures. It transforms the way organizations plan, detect, respond, and withstand business disruptions.

RISK ASSESSMENT, IMPACT ANALYSIS, PLANNING
AI can be used to analyze large volumes of data to identify risks within an organization. It can also predict potential disruptions by analyzing patterns from past incidents. These capabilities reshape how organizations can prepare for unprecedented events and turn reactive measures into proactive strategies.

AI can also be used in conducting Business Impact Analysis (BIA) and can streamline the identification of critical business functions, products and services, and the impact assessments of disruptions. It helps ensure that recovery efforts include interdependency requirements that are aligned with the criticality and recovery objectives of business functions, products, and services.

AI can also assist in developing dynamic and adaptive disaster response plans by leveraging its acquired knowledge on various disaster scenarios and predicting their potential impacts on business operations. AI can further keep businesses abreast of regulatory shifts and ensures that BCM strategies are aligned with the latest mandates through automated compliance monitoring and reporting.

INCIDENT AND CRISIS MANAGEMENT
The detection of threats or system failures becomes faster and precise with the use of AI-enhanced monitoring systems. The early-warning capability of such monitoring systems is critical for managing incidents before they escalate into large-scale business disruptions or crises. In fact, the Philippines, being one of the most disaster-prone countries in the world, has been incorporating AI and advanced technologies for monitoring seismic activity, volcanic eruptions, tsunamis, and typhoons for better disaster preparedness.

Aside from detection, AI ensures availability of data through intelligent backup and recovery systems — safeguarding data integrity and facilitating swift restoration in the event of disruptions. AI-driven communication tools are also vital during a crisis where effective and timely communication is crucial. They provide stakeholders with immediate and accurate information when it is most needed.

SIMULATIONS AND CONTINUOUS IMPROVEMENT
AI-driven simulations can train employees on emergency and response procedures as well as enrich the decision-making capabilities of Crisis Management Teams to help them prepare for real-world incidents and business disruptions.

This capability parallels organizations in civil aviation that use AI in flight simulators where various flight conditions, system failures, and weather scenarios are simulated to train pilots in handling different situations. Similarly, military organizations also use AI in combat simulations and war games to create realistic training scenarios.

Last, AI does not just respond to incidents — it learns from them. By analyzing BCM exercises and real events, AI provides actionable insights for refining continuity plans, ensuring that each iteration is stronger than the last. AI can help transform business continuity from reactive recovery to proactive preparedness, redefining organizational resilience.

CHALLENGES OF AI-DRIVEN BCM
While AI offers significant advantages for BCM, it also presents several challenges that organizations must navigate.

Resource requirements. AI systems require substantial funding for resources, such as technology, infrastructure and, ultimately, skilled talent. The use of AI needs specialized skills and knowledge to develop, manage, and interpret AI systems. Yet these times, the number of professionals in the field of AI is still limited.

Reliability of data. AI systems require significant volume of high-quality data to work effectively, as insufficient or poor-quality data may result in inaccurate predictions. The AI systems may also inherit biases or result in unfair outcomes if data will not be managed properly.

Decision-making capability. As AI systems are highly complex and lack transparency in their decision-making processes, organizations may find it difficult to understand and trust the recommendations made by AI. The extent to which decision-making should be automated and whether AI-driven decisions align with the organization’s values and ethical standards are also some of the factors that organizations should consider.

MAXIMIZING AI TO ACHIEVE RESILIENCE
To harness AI’s full potential in BCM and overcome challenges, organizations must facilitate thorough planning, stakeholder engagement, continuous monitoring, and the improvement of AI systems. Integration with existing systems is one of the key factors to ensure a holistic approach in enhancing every area of BCM. Moreover, it is essential to have subject matter experts in AI who can interpret and manage AI-generated intelligence to bridge the gap between data and decision-making.

AI is not just complementary to BCM — it’s a transformative initiative that is redefining the very essence of organizational resilience. As organizations start to embrace this AI-driven future, the ones who skillfully integrate AI systems into their business continuity strategies will not only survive disruptions but thrive in their aftermath.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

 

Philip B. Casanova is a technology consulting principal and  Ma. Airra S. Hernandez is a technology consulting manager, both from SGV & Co.

Q2 2024 GDP growth forecast

PHILIPPINE ECONOMIC GROWTH likely picked up in the second quarter as higher government spending may have offset the impact of El Niño on agriculture, analysts said. Read the full story.

Q2 2024 GDP growth forecast

Beijing deployed research vessel near Palawan, not leaving soon — analyst

PHILIPPINE COAST GUARD PHOTO

By Kyle Aristophere T. Atienza and John Victor D. Ordoñez, Reporters

CHINA has deployed a research vessel to features west of the Philippine island of Palawan to signal it is not leaving its neighbor’s exclusive economic zone in the South China Sea despite agreeing to ease tensions in the waterway through dialogue, a security analyst said at the weekend.

Chinese research vessel Ke Xue San Hao was last seen at about 4 a.m. on Sunday 30 kilometers east of Sabina Shoal, said Raymond M. Powell, a fellow at Stanford University’s Gordian Knot Center for National Security Innovation. It was moving north, he added.

Sabina Shoal is part of the Spratly Islands and falls within the Philippines’ exclusive economic zone. It is 123.6 nautical miles from Palawan Island, which is facing the South China Sea.

“In sending the survey ship to within 40 nautical miles of the coast Palawan, China may be signaling its intent to keep the pressure elsewhere in the West Philippine Sea despite loosening its blockade of the Philippine outpost,” Mr. Powell said, referring to Manila’s outpost at Second Thomas Shoal.

Manila and Beijing on July 2 reached a “provisional arrangement” for Philippine resupply missions to the shoal, which the Philippines calls Ayungin.

They resumed talks to ease tensions in the waterway after accusing each other of raising tensions in disputed shoals and reefs in the South China Sea.

Mr. Powell noted that the Chinese research vessel had left Sanya port at Hainan Island on July 19, two days before the Philippine Department of Foreign Affairs (DFA) announced it had concluded a deal with China to resume resupply missions to BRP Sierra Madre.

Manila grounded the World War II-era ship at the shoal in 1999 to bolster its sea claim.

The research vessel has sailed through submerged features near Sabina Shoal such as First Thomas Shoal, Half Moon Shoal, Bombay Shoal, Royal Captain Shoal, Northeast Investigator Shoal and Boxall Reef after passing by China’s military base at Mischief Reef on July 26, Mr. Powell said, citing satellite imagery.

He said the ship passed within 600 meters of First Thomas Shoal, which is about 35 kilometers south of Second Thomas Shoal.

This is the first recorded appearance of the Ke Xue San Hao in Philippine waters since May 2020, when it explored an area 60 nautical miles east of northern Luzon over four days, he pointed out.

The Philippine Coast Guard (PCG) said in a 4 p.m. update on Saturday that it had been monitoring the ship through a dark vessel technology donated by Canada.

“The vessel has exhibited irregular automatic identification system (AIS) transmissions while navigating in the northern part of Escoda Shoal,” PCG spokesman Jay Tristan Tarriela said in an X post.

He added that the PCG vessel BRP Teresa Magbanua has been “physically tracking” the Chinese research vessel since it passed her dead astern from about 5.5 nautical miles.

Ke Xue San Hao left Mischief Reef on July 26 and has since passed through several critical locations including Second Thomas Shoal, Raja Soliman Shoal, Bulig Shoal, Hasa Hasa Shoal, Abad Santos Shoal and eventually reached Sabina Shoal.

The research vessel, which was designed by the Marine Design and Research Institute of China and built by Wuchang Shipbuilding Industry Co., is “equipped with advanced technology that enables comprehensive marine environment observation, detection, sampling, and analysis,” Mr. Tarriela said.

“The Philippines does not engage in bloc politics, but pursues cooperation for its national interest, which is based on international law,” Don McLain Gill, who teaches international relations at De La Salle University, said in a Facebook Messenger chat. “The problem lies in Chinese expansionism, to which Manila must act upon as a sovereign state.”

Last week, the Chinese Foreign Ministry said a Philippine-US tag team against China would worsen tensions in the South China Sea, after Washington committed to give Manila $500 million (P29.3 billion) in military aid.

“The Philippines needs to see that ganging up with countries outside the region to engage in confrontation in the South China Sea will only destabilize the region and create more tensions,” Foreign Ministry spokesman Lin Jian told a news briefing in Beijing on Wednesday.

He said Manila should focus on engaging in dialogue and consultation instead of allowing the United States to “interfere in the maritime issue.”

US Secretary of State Antony Blinken and US Defense Secretary Lloyd Austin III announced the new military funding in Manila last week after their 2+2 ministerial dialogue with Philippine Foreign Affairs Secretary Enrique A. Manalo and Defense Secretary Gilberto C. Teodoro, Jr.

“To seek security assurance from external forces will only lead to greater insecurity and turn oneself into someone else’s chess piece,” the Chinese spokesman said.

But Foreign Affairs spokesperson Ma. Teresita C. Daza said the Philippines does not intend to destabilize the region with its military cooperation with the US.

“It is the Philippines’ sovereign right to engage with whichever country we choose,” she told BusinessWorld in a WhatsApp message, commenting on the Chinese Foreign Ministry’s remarks.

“The South China Sea is important to the Philippines as well as the region and we want the South China Sea to be a sea of peace, stability and prosperity.”

China claims more than 80% of the South China Sea, overlapping with the exclusive economic zones of Vietnam, Malaysia, Brunei, Indonesia and the Philippines.

A United Nations-backed tribunal in 2016 voided China’s claim over the waterway for being illegal. Beijing has ignored the ruling.

“The Philippine government is wise to ignore these protests (from China) and continue to strengthen its position by building its network of like-minded allies and partners,” Mr. Powell said.

Philippines, Germany to bolster defense relations

REUTERS

THE PHILIPPINES and Germany on Sunday vowed to boost their defense ties, citing security challenges including attempts to advance expansive claims through force.

The two nations recognize “the wide array of opportunities” to enhance bilateral defense relations amid common security challenges, German Federal Minister of Defense Boris Pistorius and Philippine Defense Secretary Gilberto Teodoro, Jr. said in a joint statement after a meeting in Manila.

They “committed to conclude a broader arrangement on defense cooperation, which will expand the scope of mutually beneficial cooperation between the Philippines and Germany into new areas.”

The Philippines, which has been struggling to stop Chinese expansionism in the South China Sea, and Germany, which on Friday joined a US-led United Nations Command in South Korea amid increasing nuclear threats from North Korea, are celebrating 70 years of diplomatic relations.

Germany and other European nations have been at the forefront of international condemnation of Chinese aggression in the waterway, which Beijing claims almost in its entirety.

The meeting was held just as Manila was monitoring a Chinese research vessel roaming around features west of the Philippine island of Palawan.

In their joint statement, the Defense chiefs reaffirmed that a 2016 arbitral ruling that voided China’s claims “final and legally binding.”

They exchanged views on security issues in the Indo-Pacific region and Eastern Europe, and opposed unilateral attempts to advance expansive claims, especially through force or coercion.

“Against the background of concerted efforts to deepen bilateral relations in a comprehensive manner, the ministers expressed their unwavering commitment to the revitalization of Philippine-Germany defense relations, recalling that Germany is one of the Philippines’ oldest formal defense partners through the 1974 Administrative Agreement concerning Training of Armed Forces of the Philippines (AFP) Personnel in Germany,” they said.

“Germany has been exploring how to extend its own Indo-Pacific strategy in the Philippines as more Western European powers are racing for diplomatic, economic and strategic influence in the most dynamic region in the world,” Chester B. Cabalza, founder of Manila-based International Development and Security Cooperation, said in a Facebook Messenger chat.

“Berlin has been helping the country’s armed forces in software capabilities by actively engaging in security sector reform efforts, including increasing economic trade and investments,” he added.

Meanwhile, the Philippines and Cambodia have committed to expand their ties in defense, cybersecurity and disaster response, according to the Philippine Embassy in Cambodia.

In a statement on Aug. 2, the embassy said Cambodian Prime Minister Hun Manet had told Philippine Army Commanding General Roy M. Galido and Philippine Ambassador to Cambodia Camille P. Mayo during their courtesy call in Phnom Penh on July 29 that his country wants to set up more capacity building programs with Manila’s military.

“Prime Minister Hun Manet, who once served as the Cambodian Army’s commander, articulated his country’s interest in capacity building, resource and experience sharing and unit-to-unit engagements in the areas of nontraditional threats, cybersecurity and humanitarian assistance and disaster response,” it said.

Mr. Galido also met with his Cambodian counterpart General Mao Sophan on July 26 to discuss more joint military exercises on counterterrorism.

Both militaries held a joint counterterrorism training course on July 26 in Kampong Speu province, with 100 miliary officers from both countries participating.

“Our combined efforts on the diplomatic and defense fronts are well-placed investments in our peoples’ shared future and prosperity that thrives on a rules-based order,” Ms. Mayo said. — Kyle Aristophere T. Atienza and John Victor D. Ordoñez

Angara likely to breeze through CA confirmation — lawmaker

PHILSTAR FILE PHOTO

FORMER Senator Juan Edgardo M. Angara’s confirmation as Education secretary is expected to sail smoothly when he faces the Commission on Appointments (CA) on Wednesday, a congressman said on Sunday.

The constitutional committee expects Mr. Angara to bare his plan on resolving the country’s education crisis, Surigao del Sur Rep. Johnny T. Pimentel said in a statement.

“We expect Secretary Angara’s trouble-free confirmation,” he said. “Secretary Angara is widely recognized to be immensely qualified for the job. So, this is not just about according courtesy to a former member of the House of Representatives and the Senate.”

Members of the appointment body are expected to ask Mr. Angara about his roadmap to bring up the test scores of Filipino students in global assessments, said Mr. Pimentel, an assistant minority floor leader of the appointment body.

Mr. Angara replaced Vice-President Sara Duterte-Carpio as Education secretary on July 19, a month after she resigned from the Cabinet amid a growing political rift between the Marcoses and her family.

Filipino students were still among the world’s weakest in math, reading and science, according to the 2022 Program for International Student Assessment (PISA). The Philippines ranking 77th out of 81 countries and performed worse than the global average in all categories.

The CA’s education committee headed by Senator Rafael “Raffy” T. Tulfo will hear Mr. Angara’s appointment.

The appointment body is also set to hear Migrant Workers Secretary Hans Leo J. Cacdac’s appointment on Wednesday, to be deliberated by the CA’s labor committee headed by Negros Occidental Rep. Mercedes K. Alvarez.

President Ferdinand R. Marcos, Jr. named Mr. Cacdac Migrant Workers secretary on April 25, replacing Maria Susana “Toots” V. Ople, who died. — Kenneth Christiane L. Basilio

Agri budget cut explanation sought

PHILIPPINE STAR/ MICHAEL VARCAS

THE GOVERNMENT should explain budget cuts to the agriculture sector’s proposed budget for 2025, a congressman said last week, adding that the House of Representatives should address potential spending issues by the Agriculture department.

The government is allotting P211.3 billion for agriculture next year, 4.7% less than this year’s budget. The bulk of the budget will be used to fund agriculture modernization efforts and cash aid to farmers and fisherfolk, according to a summary from the Budget department.

“In the coming budget deliberations, we will clarify in Congress the deductions and additional funding under the Department of Agriculture’s (DA) budget, and how we could use it to fund essential projects,” Party-list Rep. Wilbert T. Lee told BusinessWorld in a Viber Message in Filipino.

“Among the topics that should be discussed during the budget deliberations is DA’s underspending because an increase in funding is [pointless] if it’s not being used properly,” he added.

The government last week proposed a P6.352-trillion national budget for 2025, 10.1% higher than this year and equivalent to 22.1% of gross domestic product. — Kenneth Christiane L. Basilio

House sports bill pushed

THE PHILIPPINE Senate should act on a bill that seeks to support the grassroots sports scene by providing vouchers to homegrown athletes, a congressman said on Sunday.

This was after gymnast Carlos Edriel P. Yulo bagged a gold medal in the 2024 Summer Olympics in Paris on Saturday.

“I hope Yulo’s triumph in Paris will also move our grassroots sports bill, which the House sent to the Senate months ago,” Party-list Rep. Alfred C. de los Santos said in a statement.

Mr. Yulo’s gymnastic performance earned the country the second-ever top prize in the Olympics after Hidilyn F. Diaz-Naranjo’s gold medal performance in weightlifting in the Tokyo Games three years ago.

The House of Representatives will give Mr. Yulo P3 million for winning the gold medal in the Paris Games, Speaker and Leyte Rep. Ferdinand Martin G. Romualdez said.

He has also started a fundraising campaign among congressmen to give the gymnast an additional cash prize. — Kenneth Christiane L. Basilio

Davao eyes investment changes

BW FILE PHOTO

DAVAO CITY — The Davao City Investment and Promotion Center is proposing changes to the city’s Investment Incentive Code to attract more investments.

Christian Cambaya, the center’s unit head for Investor Assistance and Servicing, on Friday said the code would list the preferred investment area and provide tax incentives to potential investors.
He said there are 10 sectors under the preferred investment area including property development, tourism, agribusiness, tourism, technology, business process outsourcing, transportation and infrastructure.

He also said its partner, accounting firm Punongbayan and Araullo, would lead the review and study of the Incentive Code.

He said there are two components under the memorandum of agreement signed by the center and the accounting firm — the conduct of the study and a review of the Incentive Code. — Maya Padillo

Police, Army probe fatal ambush

FILIP ANDREJEVIC-UNSPLASH

COTABATO CITY — Policemen and Army intelligence agents are working together in trying to identify the suspects in a fatal ambush of the vice mayor of South Upi in Maguindanao del Sur and his security aide on Friday.

Brigadier General Prexy D. Tanggawohn, director of the Police Regional Office-Bangsamoro Autonomous Region, and Major General Antonio G. Nafarrete, commander of the Army’s Six Infantry Division, separately told reporters on Sunday that they have enlisted the help of local officials in identifying the gunmen behind the killing of Vice Mayor Roldan D. Benito and his private bodyguard, Weng S. Marcos.

Mr. Benito’s wife and a minor were hurt in the shooting.

The victims were in a pick-up truck on their way to the village center when their attackers, armed with assault rifles opened fire.

Village officials had told reporters that the victims, both wounded, had managed to get out of their vehicle and tried to crawl away. — John Felix M. Unson

PhilHealth fund transfer questioned

PHILIPPINE STAR/MICHAEL VARCAS

A PROPOSAL to transfer P90 billion in excess funds from the Philippine Health Insurance Corp. (PhilHealth) to the National Government may be subject to abuse and corruption, a labor leader said.

“Any ordinary worker would struggle to understand why PhilHealth holds P500 billion in massive reserves while providing minimal benefits,” Jose Sonny G. Matula, chairman of Nagkaisa Labor Coalition, told BusinessWorld on Saturday

“It’s especially infuriating that this happened despite PhilHealth having a huge reserve. Worse, it happened right after PhilHealth increased the premium from 4% to 5% this year, even as many workers were barely surviving on poverty wages,” he added.

Plaintiffs led by Senate Minority Leader Aquilino Martin “Koko” D. Pimentel III on Friday asked the Supreme Court to stop the transfer of the PhilHealth funds to the National Government and void a Finance department circular allowing it.

“Legal due diligence was exercised through coordination with the Governance Commission of GOCCs, the Office of the Government Corporate Counsel and the Commission on Audit (CoA), all of which have issued a favorable opinion on its legality,” Finance Secretary Ralph G. Recto said in a statement last week.

“The main argument of the government is that these are ‘sleeping’ funds that incur substantial opportunity costs if left unused,” Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said in a Facebook Messenger chat. “This argument works depending on where it is used.” — Chloe Mari A. Hufana