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‘Honda Helps’ extends 30% discount on select parts for Carina-affected cars

PHOTO BY KAP MACEDA AGUILA

HONDA CARS PHILIPPINES, INC. (HCPI), through its Honda Helps program, extends a helping hand to customers whose vehicles were adversely affected by the recent Super-Typhoon Carina. HCPI offers a 30% discount on select spare parts for units damaged by the typhoon.

The parts include: ECU, cooling fan motor, accelerator pedal, throttle body, SRS unit, meter assembly, alternator, air bag module, EPS, starter motor, cable reel, heater control, radiator fan motor, fuse box (MICU), and seatbelt pre-tensioner.

Said HCPI President Rie Miyaki in a release, “We would like to offer our sympathies to all Filipinos affected by Super-Typhoon Carina. ‘Honda Helps’ is our way of supporting our loyal customers in bouncing back from this calamity, and get them back on the road as soon possible. We sincerely hope everyone stays safe at this time.”

The company stated that as it aims to provide quality service and products, “part of this commitment is to ensure the safety of customers by making it easier to take care of their units.” The list of Honda Cars dealerships can be found at https://www.hondaphil.com/dealer-finder. This offer is valid for all inundated units received until Sept. 30, 2024.

Toby’s Sports sees 20% growth in revenues this year

SPORTING GOODS retailer Quorum International, Inc. (Toby’s Sports) is expecting revenue growth of up to 20%, driven by athleisure wear and growing interest in sports.

Quorum Founder and Chairman Roberto S. Claudio, Sr. said the company is looking at a 15%-20% increase in revenues this year.

“The main driver is that since the pandemic, people have become more conscious of their health, so there is really an effort to engage in sports because it is the cheapest way to work out,” Mr. Claudio told reporters last week.

“Second is that because of the pandemic, which resulted in work-from-home arrangements, the attitude of people now is to dress down. So employees come into their offices wearing sneakers and jogging pants,” he added.

Mr. Claudio did not provide the company’s revenues for last year but noted that 2023 revenues have already exceeded the pre-pandemic level.

In line with the company’s revenue growth projections, it is also planning to open four to five new stores this year, valued between P5 million and P10 million, depending on the size of the stores.

“These will be located in new malls. Half will be in provinces, and the other half will be in Metro Manila,” he said.

“So yes, the retail business is still growing; in fact, we just recently opened stores in Cabanatuan and Tuguegarao,” he added.

So far, the company has 70 stores nationwide, divided across three formats: Toby’s Sports, Runnr, and Urban Athletics.

“Our Urban Athletics format is the fastest-growing because the young generation nowadays is not only looking at performance when buying shoes but is also looking for lifestyle shoes,” he said.

“But the store openings this year will be a mix of the three formats. Most probably, three will be Toby’s Sports outlets, and one will be an Urban Athletics outlet,” he added.

Despite the optimistic outlook for the company’s top line, Mr. Claudio said that retailers these days are being hit by inflation, the exchange rate, supply chain problems, the recent wage hike, and a shortage of manpower.

“The cost of doing business has also increased just as much as our revenues. So most retailers are really focusing on maintaining good cash flow so we can pay our employees and our payables,” he added. — Justine Irish D. Tabile

Rice imports hit 2.44 MMT in late July

REUTERS

THE PHILIPPINES imported 2.44 million metric tons (MMT) of rice by late July, according to the Bureau of Plant Industry (BPI).

The BPI reported that rice shipments for the month as of July 25 totaled 101,013.48 MT, less than the 156,981.75 MT recorded a year earlier.

The government lowered the tariffs on imported rice to 15% from 35%, until 2028 through Executive Order No. 62. The order took effect last month.

The Department of Agriculture is expecting rice imports to pick up in the coming months, citing the approved volumes in import permits issued by the BPI.

For July, the BPI issued 686 sanitary and phytosanitary import certificates with approved applicants seeking to import 557,815 MT.

As of late July, the permits issued amounted to 5,133 with applicants seeking to ship in 5.62 MMT.

The BPI reported that Vietnam remained the top supplier of rice as of late July, accounting for 75% of all imports in the year to date, or 1.83 MMT.

Thailand supplied 358,727.74 MT during the period, or 14.7% of the total, followed by Pakistan with 154,523 MT, or 6.3%.

It added that Myanmar and India shipped 66,640 MT and 21,605 MT of rice, respectively.

The US Department of Agriculture projects Philippine rice imports to hit 4.7 MMT this year, upgrading its initial 4.6 MMT estimate due to the higher-than-expected volumes during the first semester.

Imports as of the first half amounted to 2.33 MMT, up 25.3% from a year earlier. — Adrian H. Halili

The 2024 SONA on nutrition, early education — focus on results

PHILIPPINE STAR/ EDD GUMBAN

A meaningful assessment of the 2024 State of the Nation Address (SONA) by President Ferdinand Marcos, Jr. should be made relative to clear goals and targets in terms of what the country needs. Such goals were spelled out in the 2017-2022 Philippine Development Plan (PDP) for the Duterte administration and the 2023-2028 PDP for the Marcos Jr. administration. Both five-year plans were developed in the context of the longer-term Ambisyon 2040.

This piece will focus on just a couple of thematic but very critical, even existential, issues that need to be addressed forcefully and at a scale significant or massive enough to make a dent on the problem.

The opening tone got my attention that this was a serious SONA, when the president faced head on the gut issues by acknowledging that economic growth numbers did not mean anything to the people who have to buy rice at P44 to P65 per kilo. This is a vast improvement from last year’s opening, when he erroneously said “Bumaba ang presyo ng mga bilihin” (prices of basic commodities went down) when he meant to have said “bumagal ng pagtaas ng presyo” (inflation rate slowed down).   

The inflation rate for the bottom 30% of households has been consistently higher by one to two percentage points than the national inflation rate. The inflation basket for the bottom 30% consists mostly of food and basic necessities like water, electricity, and transportation. For the last June 2024 inflation rate of 3.7%, a full 45.2% was accounted for by rice alone. This is consistent with Engel’s law in economics which says that the lower the income level, the greater the proportion spent on food and basics.  Conversely, at higher income levels the share of basic necessities goes down, while the share for discretionary spending goes up.

Without going into much detail, one can only point out that the historical growth rate of the Agriculture, Fisheries, and Forestry (AFF) sector has been in the 1% range. While the 2023-2028 PDP targets for AFF growth at 1.8-3.3% (very optimistic or aspirational), the World Bank projection for 2023-2026 for the sector is only 0.1% (WB, Philippine Economic Update, June 2024, page 40). An economy expected to have a growth rate of 5-7% that includes an agricultural sector growing at only 1% can only mean it will not be producing enough to feed its people, with serious repercussions on food inflation and nutrition.

NUTRITION — AN EXISTENTIAL ISSUE FOR THE NEXT GENERATIONS
The chronically low growth of agriculture which underpins food inflation directly impacts the malnutrition problem that handicaps one-third of our young children.

Dr. James Heckman of the University of Chicago won the Nobel prize for Economics in 2000, and he was a keynote speaker at the 2022 annual convention of the Philippine Economic Society. His work emphasized the importance of drastic interventions to address malnutrition from age zero to age three, or the first 1,000 days. Some correctly argue that the intervention should begin with proper pre-natal care, even before the child is born. If they do not get the proper nutrition by age three, they will remain stunted forever, and no amount of additional nutrition or learning input will improve their cognitive capacity.  As an analogy, children stunted by age three will just become the equivalent of a Celeron chip and will never become a Pentium chip no matter what you do afterwards.

This is the most basic starting point for an economy and society. Both the World Bank and the Philippine Statistics Authority document that 29-30% of children at age three are malnourished, which handicaps them EVEN BEFORE they reach pre-school. To be fair, this finding is clearly recognized in the EDCOM 2 Year One report, although it uses a slightly different metric of under-five stunting at 26.7% (MISEDUCATION: The Failed System of Philippine Education, page xxv). The report identified Nutrition and Feeding as a Priority 1 recommendation (page xxxvi, Executive Summary).

DEMOGRAPHIC DIVIDEND — NUTRITION and EARLY EDUCATION
Having properly nourished children is just the first building block that will determine whether a country can reap the so-called demographic dividend. There is a major distinction between a demographic WINDOW and the demographic DIVIDEND.  They are not the same. Demographic window is a period during which the working age population increases as a ratio of the total population —this is projected to last up to 2045 for the Philippines, longer than the same window for India.

On the other hand, the demographic dividend is achieved only when the working age population is productive, which is the result of receiving the proper nutrition and the proper early education. If the children are malnourished, at best they will end up as unskilled workers while at worst they will end up as drug addicts and criminals. In short, a demographic burden to society instead of a dividend.

The second very critical building block to reaping the demographic dividend is quality EARLY EDUCATION. Here the starting point is also dismal. The 2023-2028 PDP notes that learning poverty rate, defined as children at 10 years old who are unable to read a simple text, stood at 91% as of 2021 (PDP 2023-2028, page 55).

NO TARGET IN PDP
While the 2023-2028 PDP was an improvement over the previous five-year plans which start with a baseline number of 90.9% as of 2019 and projected targets for improvements through 2028, it is rather shocking to learn that there is no numerical target for the reduction of the learning poverty rate in the PDP — only the world “declining” (PDP 2023-2028, page 55).  This target, so conspicuous by its absence, should be a priority area for Education Secretary Sonny Angara that should sharpen the focus of the numerous EDCOM 2 recommendations.

Without discussing anything else in the SONA, the issue of malnutrition and early education are the foundational issues that will determine in the next 10-20 years whether we can indeed reap the demographic dividend. From my perspective as a strategic planner, it is imperative for the president to set bold goals to address these two foundational issues of malnutrition and early education.

The key task of a CEO or head of state is to challenge the nation, his cabinet and Congress with clear, unequivocal goals that will galvanize them into a clear direction. For example, I would recommend:

1. Accelerate the target to cut the rate of stunting from 26.7% in 2021 to 5% by 2030, instead of 17.9% in the 2023-2028 PDP (page 87).

2. Reduce the learning poverty rate from 90% to 10% in five years.  With corresponding adjustments to the EDCOM 2 recommendations on how to achieve this.

3. Improve the PISA scores from an average of 250 points in reading, science, and mathematics by 100 points in 2028. This will cut the gap between Philippine and Singapore (which has an average score of 550) scores by half. The PISA report states that a 10-point gap means a one-year lag. This means the 200 points gap with Singapore is equivalent to 20 years!  A marginal or incremental improvement is no longer acceptable.

With the clear, specific and measurable targets the president’s task of throwing the challenge is set. It is then incumbent upon the rest of his team to work together to work backwards and figure out how to reach that goal. The team can then focus on WHAT WILL IT TAKE (resources, organization, especially multi-agency coordination and alignment) to achieve the desired results.

And for the next SONA, the message of the president on the issue of malnutrition and early education — and any other key result area — should be simplified to say the following “At the start of my term or last year we set the following audacious goals for my administration. For this year’s report, this is what we have accomplished, and this is where we did well. On the other hand, this where we fell short and this what we are doing to catch up.”

This change in approach will mean a major paradigm shift — focusing on RESULTS that really matter instead of simply activities. And whether the results or progress are good enough.

 

Alexander C. Escucha is president of the Institute for Development and Econometric Analysis, Inc. (IDEA), and chairman of the UP Visayas Foundation, Inc. (UPVFI). He is a fellow of the Foundation for Economic Freedom (FEF) and a past president of the Philippine Economic Society (PES) and a past president of the Corporate Planning Society of the Philippines (CPSP). He wrote the Handbook on the Overview of the Banking Industry for the BAP’s 65th anniversary in 2014. He is an international resource director of The Asian Banker (Singapore).

alex.escucha@gmail.com

From lockdowns to skyscrapers: Dermorepubliq opens new office

DERMOREPUBLIQ PRODUCTS

IT’S NOT easy to find good skincare at P500: all the new acids and proteins and vitamins do cost money. Dermorepubliq does all that, and at and at just over P200.

We’ll let you in on a little secret: we used Dermorepubliq’s Clarifying Toner, at P189 for a 100 mL bottle, after we ran out of a more expensive brand and couldn’t get it immediately. After a week of using the cheaper product, we decided not to go back — the local product did the job of the American brand just as well. However, we went back to our old brand after about five months, because the Dermorepubliq toner’s bottle managed to twist off its atomizer cap in our suitcase, and left a wet, medicinal-smelling film all over our cosmetic pouch. We told Keith Sta. Barbara, President and Founder of Dermorepubliq, about this incident during our interview on July 30 at their new corporate offices in Eastwood (they’re working on it).

Mr. Sta. Barbara had been just like us: he started out by looking for new, more affordable products. The thing is, he kicked off a brand in the middle of a global pandemic.

“During the pandemic, we were cooped up at home. I still had my corporate job. I worked as a corporate trainer for a B2B company based in the US,” he said. “It was very stressful right? You’re always at home, you’re also puyat (up late at night). I did really break out a lot,” he said.

To cure himself of his acne back in the lockdowns of 2020, he resorted to using expensive products from a well-known brand, which back then cost upwards of P1,000 for a bottle of serum. He found just two local brands that also did the job and cost less, and figured he could fill a gap.

He took an online cosmetic formulation course from Australia for about a year, and then made his own formulas (the first one was a dupe of the expensive serum he bought), then presented it to manufacturers. He then made two more products and started filling orders with his partner and two other people out of his Marikina condominium. After six months on the Shopee online platform, he expanded his store to Lazada. To fund their own laboratory in Rizal, he borrowed money from his mother, dipped into his savings, and sold his car. “Blood, sweat and tears,” he told us. “I put everything in it.”

The gamble paid off: their serums are bestsellers on TikTok, and their Hyaluronic and Snail Mucin Serum, meanwhile, is No. 1 on Shopee for that category. The price, well below the P500 mark, plays a role in it.

They also have FDA (Food and Drug Administration) approval, and they test their products according to FDA and ASEAN directives. Their lab in Rizal is populated with scientists, chemists, chemical technicians, and microbiologists (their dermatology consultation is done by a third party).

“Our edge from other local competitors is we manufacture everything in-house,” he said. “At the end of the day, everyone deserves quality skincare. That’s always been our motto.”

The products are also formulated according to Filipino skin needs. While the active ingredients are based on products we see in other more expensive lines, there are significant differences. Mr. Sta. Barbara says, “Personally, it’s because of the climate. It’s very humid [here]. I think that’s one of the reasons why most of our products don’t contain oil. Oil does not really cooperate well with our climate.”

They only have stalls in SM Masinag, SM Tanza, and recently, at SM Fairview, and Riverbanks as their physical presence, and the venture focuses primarily on their online sales. That’s a result of starting online during the pandemic, which jumpstarted many online businesses. He’s not in a hurry to build in the real world though: “There’s also the economic side of things. It’s a lot cheaper to set up an online presence rather than putting up a kiosk.”

They’re releasing a new hydrating ampoule later this year, and putting the finishing touches on their new office. “Right now, my gauge of success are my employees. As long as we continue to provide jobs, that’s my measure of success,” he said. Still, he said, “We want to be a household name… that’s always going to be a dream for me.”

Mr. Sta. Barbara was once behind a coffee venture that failed: “I’m glad it didn’t work out. I used the learning,” he said. To potential entrepreneurs looking into starting their own ventures, he says, “If you believe in the product, you have to go big or go home.”

Dermorepubliq is available on Shopee, Lazada, and TikTok. — Joseph L. Garcia

Do you have what it takes to be a sim racing champ?

IMAGE FROM TOYOTA MOTOR PHILIPPINES

TOYOTA MOTOR PHILIPPINES (TMP) has announced the start of registration for its premier sim racing competition, the Toyota Gazoo Racing Gran Turismo Cup (TGR GT Cup). Sim racing enthusiasts from all over the country are invited to see who is king (or queen) of the hill. Winners stand to get cash prizes, original GR merchandise, as well as Autocross and Asia Finals stints.

Now on its fifth season, the TGR GT Cup is introducing a new competition format. Qualifiers will be picked via a time-attack challenge, then the 40 quickest players will advance to the quarterfinals. This will take place from July 26 to Aug. 3.

Registrants have the option to participate in their qualifier online or on-site at the Toyota Motor Philippines Marketing office in Makati City. The top 20 players from the quarterfinals will then advance to the semifinals which, in turn, will determine the top 10 who will battle it out in the national finals. The top three will go on to represent the Philippines at the Asia finals in Malaysia later this year.

The quarterfinals, semifinals, and national finals will be held at an on-site event in Metro Manila on Aug. 17 and 18. Participants will compete in a series of sprint races to determine their standing. Interested participants can register through https://tinyurl.com/GTCup2024Registration. To participate, a player must be a Filipino citizen residing in the Philippines, 14 years old or older at the time of registration, and have an active PlayStation Network (PSN) account and active PS Plus subscription.

For other requirements and more information on the TGR GT Cup Philippines, visit https://toyota.com.ph/tgrphilippines/tgr-gtcup and follow (TGR Philippines) on Facebook and Instagram.

The Toyota Gazoo Racing GT Cup Philippines is presented by Petron and GT Radial, and in cooperation with Seiko. This event is also supported by Toyota Financial Services Philippines, myToyota Wallet, Denso, AVT, 3M, ROTA, Tuason Racing, OMP, and Kinto One. For Toyota updates on products, services, events, and more, follow (Toyota Motor Philippines) on Facebook and Instagram, ToyotaMotorPH on X, and join the Viber community at Toyota PH.

Cebu Pacific shelves plan to resume China-Beijing flights

BW FILE PHOTO

CEBU PACIFIC will delay resuming its Manila-Beijing flights this year and will instead explore other routes, as travel demand to China has not yet recovered, according to the company’s president.

“No, I think [we will not do] Beijing. We will make the formal announcements, but we are going to be suspending that until further notice,” Cebu Pacific President and Chief Commercial Officer Alexander G. Lao told reporters last week.

Cebu Pacific was initially set to resume its Manila-Beijing route in 2023, but it was deferred to October this year.

“The demand to and from China, at least for us, has not been as robust compared to 2019,” Mr. Lao said.

The airline company previously offered flights to Beijing but stopped offering them due to restrictions imposed during the pandemic.

To date, it offers flights to Guangzhou, Shanghai, Shenzhen, and Xiamen.

Mr. Lao said the company’s plan to increase frequencies on its existing China routes will also be postponed for now.

“We have made a couple of network-related decisions lately. When we take a look at Da Nang and how successful it was, we then take a look at our network and ask what other opportunities are there,” he said.

In 2023, the budget carrier started operating direct Manila-Da Nang, Vietnam flights, three times weekly.

This year, it is also set to operate direct flights between Manila and Chiang Mai, Thailand, due to the market acceptance of its Da Nang route.

The company is exploring newer routes, both international and local, Mr. Lao said, adding that it was able to fly to fresh destinations as part of its redeployment strategy, as China’s market has yet to fully recover.

“Some of the additional flying we are seeing today is because we have reduced some of China [routes] and have redeployed the assets elsewhere. We do not think there will be a quick recovery in China,” he said.

For the year, the company has initially set a target of 24 million passengers, significantly higher than its 2023 passenger volume.

Last year, Cebu Pacific flew over 20 million passengers and operated more than 140,000 flights, representing increases of about 41% and 30%, respectively, from the previous year. — Ashley Erika O. Jose

T-bill, bond rates may be mixed

BW FILE PHOTO

RATES of Treasury bills (T-bills) and Treasury bonds (T-bonds) to be auctioned off this week may end mixed due to expectations of a slight pickup in headline inflation last month.   

The Bureau of the Treasury (BTr) will auction off P20 billion in T-bills on Monday, or P6.5 billion each in 91- and 182-day papers and P7 billion in 364-day debt.

On Tuesday, the government will offer P30 billion in reissued seven-year T-bonds with a remaining life of four years and nine months.

Yields on the T-bills and T-bonds on offer this week could track the mixed movements in secondary market rates on Friday as Philippine headline inflation likely inched up in July, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Secondary market rates consolidated on Friday, a trader said in an e-mail. “Government securities started the day with buying interest but was halted by profit takers continuing to dominate the market.”

The trader expects the five-year bond on offer this week to fetch yields ranging from 6.05% to 6.125%, with demand expected to be strong as the market wants fresh supply of the tenor.

A BusinessWorld poll of 15 analysts conducted last week yielded a median estimate of 4% for the July consumer price index (CPI), matching the lower end of the 4%-4.8% forecast of the Bangko Sentral ng Pilipinas (BSP).

If realized, the July CPI would be faster than 3.7% in June but slower than 4.7% a year earlier. It would mark the eighth straight month that inflation settled within the BSP’s 2-4% target.

The Philippine Statistics Authority will release July inflation data on Tuesday (Aug. 6).

At the secondary market on Friday, yields on the 91-day, 182- day, and 364-day T-bills rose by 5.77 basis points (bps), 2.53 bps, and 0.48 bp week on week to end at 5.7871%, 6.0643%, and 6.1631%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data published on the Philippine Dealing System’s website.

Meanwhile, the seven-year bond declined by 13.26 bps week on week to 6.1162%, while the five-year debt, the tenor closest to the remaining life of the papers to be offered this week, decreased by 11.39 bps to yield 6.0809%.

Last week, the BTr raised P20 billion as planned from the T-bills it auctioned off as total bids reached P35.99 billion, or almost twice the amount on offer.

Broken down, the Treasury borrowed P6.5 billion as programmed from the 91-day T-bills as tenders for the tenor reached P12.01 billion. The average rate for the three-month papers rose by 3.6 bps to 5.779% from the previous week. Accepted rates ranged from 5.759% to 5.799%.

The government likewise made a full P6.5-billion award of the 182-day securities as bids for the tenor reached P12.12 billion. The average rate for the six-month T-bill stood at 6.014%, up by 2.3 bps week on week, with accepted rates at 5.95% to 6.042%.

Lastly, the Treasury raised the planned P7 billion via the 364-day debt papers as demand totaled P11.86 billion. The average rate of the one-year debt increased by 2.7 bps to 6.108%. Accepted yields were from 6.04% to 6.16%.

Meanwhile, the reissued seven-year T-bonds to be offered on Tuesday were last auctioned off on July 2, where the government raised P30 billion as planned at an average rate of 6.406%, 9.4 bps below the 6.5% coupon rate.

The BTr wants to raise P220 billion from the domestic market this month, or P80 billion through T-bills and P140 billion via T-bonds.

The government borrows to help fund its budget deficit, which is capped at P1.48 trillion this year. — A.M.C. Sy

China Vice Premier calls for action to secure autumn grain harvest

REUTERS

BEIJING — China’s Vice Premier has urged local authorities to minimize agricultural losses, and ensure a robust autumn grain harvest after heavy rains from Typhoon Gaemi lashed its largest wheat-growing Henan province.

Provinces such as central Henan have braced for severe rainstorm and floods recently after Typhoon Gaemi made a landfall in late July, which adversely impacted agricultural production.

During his visit to Henan, Liu Guozhong emphasized the critical need for disaster prevention and mitigation to protect the autumn grain crops and achieve a successful harvest, state news agency Xinhua reported on Thursday.

He also called for enhanced efforts to promote grain and oil crop yields to bolster national food security, according to Xinhua.

Henan, known as China’s “granary,” produces about one-third of the country’s wheat. A reduced wheat harvest could lead China, the world’s largest wheat consumer, to seek additional supplies overseas.

Although the summer wheat harvest in Henan is mostly complete, hot temperatures and rainy weather have raised concerns about the quality of stored wheat, prompting some farmers to sell their supplies.

China’s state grains stockpiler Sinograin said on Wednesday the firm and its subsidiaries will increase the scale of domestic wheat storage to support farmers. — Reuters

PhilHealth’s cash sweep is just the tip of the iceberg

PHILIPPINE STAR/MICHAEL VARCAS

At the recent Senate hearing conducted by the Committee on Health and Demography, Department of Finance (DoF) Secretary Ralph Recto once again justified the transfer of PhilHealth and other Government-Owned or -Controlled Corporation (GOCC) funds as a measure that will enable the Marcos administration to ramp up its revenue and growth targets for the year. He added that the “Unprogrammed Appropriations” is neither a discretionary nor confidential fund, and that the excess GOCC funds will only be used to finance priority programs and projects listed under UA — no more, no less.

The cash sweep of unused GOCC funds to finance the Unprogrammed Appropriations has been explicitly framed by the Marcos administration as fiscal prudence. The end justifies the means. The underlying message is that taxpayers should trust the Marcos administration and its allies in Congress to have the best interest of Filipinos in mind. Let the DoF carry out its mandate. They are, after all, just following a directive of Congress. The planned transfer of the P90-billion PhilHealth funds and other GOCC funds to the National Treasury is legal. The tax-paying public should not bother too much about the technicalities of the Unprogrammed Appropriations.

Much has already been said about PhilHealth’s P90-billion fund transfer. In the last few weeks, health reform advocates have boldly opposed the implementation of DoF Memorandum Circular No. 003-2024. The PhilHealth fund transfer is just the tip of the iceberg in relation to the larger issue of fiscal transparency and accountability under the current administration.

How exactly did the directive to sweep the cash of GOCCs come about? What does it have to do with the Unprogrammed Appropriations? How did the government end up with P731.4 billion in Unprogrammed Appropriations? Who called the shots?

The national budget tells a different story than what the current administration would like us to believe. The Bicameral Conference Committee or Bicam (or what’s come to be known as “the third house”) that finalized the 2024 General Appropriations Act is at the center of this fiscal controversy. While guns are pointed at the DoF for implementing the special provision of the Unprogrammed Appropriations, the Bicam Chairs seem to have gone scot-free, unnamed, and unscathed even as health advocates have filed a case in the Supreme Court. The Bicam is primarily accountable for the authorizing of the sweep of GOCC funds. What was the motivation?

Contrary to DoF’s narrative, the goal is not to maximize the government’s fiscal space nor to accelerate growth via government spending. If that was the case, then the Bicam should have kept a majority of the “unprogrammed” items under the Programmed Appropriations. The national budget consists of three types of appropriations: a.) programmed appropriations which have guaranteed cash cover, b.) unprogrammed appropriations which are stand-by authority to spend, and c.) automatic appropriations for which are provided funds for specific purposes authorized by other laws.

The funding for strategic, big-ticket, and priority programs and projects of government is typically lodged in the Programmed Appropriations precisely because they are factored in the fiscal program. Budget priorities need guaranteed cash cover in order to be implemented. There is no wisdom in putting priority programs and projects under the Unprogrammed Appropriations. By its very nature, Unprogrammed Appropriations are just stand-by appropriations, which can only be tapped if there are new or excess revenues. This is consistent with the constitutional requirement for passing a supplemental budget and has historically been quite difficult to activate. The Bicam, however, found a way to circumvent that by adding unutilized GOCC funds as a source of financing for the bloated Unprogrammed Appropriations.

The bloated “Unprogrammed Appropriations” is a consequence of accommodating pork in the programmed appropriations. Here’s what the Bicam did in the last stretch of budget legislation: The Bicam members deprioritized many programs, activities, and projects by removing them from the programmed appropriations and transferring them into the Unprogrammed Appropriations. These included hundreds of billions of funds for COVID-19 benefits of healthcare workers, the Department of Transportation’s rail program, basic and tertiary education, social protection, military pension, compensation for Marawi siege victims, the prior year’s Local Government Unit (LGU) shares, payment of right-of-way, and many other programs.

So why did the Bicam move priority projects into the Unprogrammed Appropriations? It is to accommodate “pork” in the 2024 national budget and use the Unprogrammed Appropriations as a way to conceal the pork’s magnitude. This is a practice that the Bicam has perfected since the enactment of the 2022 national budget. With hundreds of billions freed up in the programmed appropriations, the Bicam then inserted partisan and pet projects of congressional allies into the programmed appropriations.

The majority of these patronage-driven projects were inserted in the Department of Public Works and Highways (DPWH) budget under two major programs: the Convergence Program which contains local infrastructure projects, and the Flood Control Program. The Flood Control Program grew by a whopping P29 billion, from P215 billion in the proposed version to P245 billion in the enacted version.

With “pork” accommodated in the programmed appropriations, the Bicam had to find a way to finance the Unprogrammed Appropriations, which ballooned from P282 billion to P731 billion. P731 billion worth of Unprogrammed Appropriations would be very difficult to finance from new or excess revenues and/or foreign loans. With elections around the corner, the Bicam knows it could not leave the priority programs and projects of the administration, now placed under the Unprogrammed Appropriations, unfunded.

Thus, it included unutilized GOCC funds as an additional source of financing by way of the special provision of the Unprogrammed Appropriations in the 2024 national budget. This is not the first time the Bicam did this. Rep. Edcel Lagman had already previously alleged that this was a premeditated move by the House Committee on Appropriations Chair Zaldy Co by recommending House Bill No. 915, “An Act Providing Additional Criterion for the Availment of Unprogrammed Appropriations, amending for the Purpose the 2023 General Appropriations Act.” The bill amending the 2023 national budget was railroaded by the House of Representatives in the midst of the deliberations for the 2024 national budget.

Aside from identifying GOCC funds as an additional source of financing, the Bicam inserted a clause in the special provision of the 2024 Unprogrammed Appropriations that reads: “Notwithstanding the foregoing, the order or priority may be MODIFIED to support the funding or urgent or implement-ready projects which are: 1.) based on commitments to international/multilateral organizations or 2.) in furtherance of (i) the Philippine Development Plan, (ii) the Medium-Term Fiscal Framework and (iii) the 8-Point Socio-Economic Agenda and (iv) those that may be identified as key budget priorities.” By expanding the sources of financing to include GOCC funds and its purposes, the “Unprogrammed Appropriations” have morphed into a discretionary fund — like the President’s Contingent Fund.

Secretary Recto’s assertion that the Unprogrammed Appropriations can only fund specific programs and projects listed under it is blatantly wrong and misleading. While there is indeed a list of projects, the special provision does not preclude the Executive branch from using it like a discretionary fund for as long as there is available cash from the GOCCs. The amendments to the Unprogrammed Appropriations ensured that the national budget would favor not only the Speaker and his allies in Congress but also the President.

The whole scheme would probably have gone unnoticed had the Bicam swept less controversial GOCC funds instead of PhilHealth’s initial P20 billion. The public would remain in the dark about the lengths that the Bicam is willing to go to satisfy greed, an act Congress already previously authorized by amending the 2023 national budget.

But no matter how many times Secretary Recto or anyone from the current administration insists that the transfer of GOCC funds is a fiscally prudent measure, remember that this was all a consequence of the excesses of the Bicam. Let us not be deceived. That is not fiscal discipline.

 

Zy-Za Nadine Suzara is an independent public budget analyst and lead convenor of the People’s Budget Coalition. She previously served in the Department of Budget and Management.

The Guest, Batman, and Stormtrooper are Lladró’s newest stars

SPANISH porcelain brand Lladró celebrates both the classic and contemporary in their latest limited-edition figurines — Batman, Stormtrooper, and new renditions of their famed collection, The Guest.

The Valencia-based company is known for its masterfully handcrafted porcelain pieces, each modeled to perfection by their in-house sculptors and artisans. Since their founding in 1953, Lladró’s high-end home decorations and lighting, fashion accessories, and prized statuettes have adorned the homes of many families around the world, even becoming valuable hand-me-downs from one generation to another.

While Lladró is well-loved by vintage connoisseurs for their timeless pieces, they have proved the versatility of their artistry by also taking on more modern designs. The brand has expanded their market to the younger demographic by featuring emblematic figures from pop culture.

All the way from Gotham City and the Galactic Empire, Batman and the Stormtrooper star in Lladró’s latest releases. They follow in the footsteps of countless icons, including Darth Vader, Snoopy, Disney princesses, Mickey and Minnie Mouse, and more.

Meanwhile, The Guest has remained a classic collection since its inception 10 years ago. Considered Lladró’s “most captivating character,” it is among their most famous pieces to date.

THE DARK KNIGHT ARRIVES
Lladró collaborated with Warner Bros. for the first time to honor the 85th anniversary of DC Comics’ caped crusader, Batman. The character debuted in May 1939 in Detective Comics #2, exponentially rising in popularity since. He has starred in countless comic books, novels, films, animated series, and a variety of other media. His latest appearance is in the 2024 game Suicide Squad: Kill the Justice League. Lladró’s Batman is the work of Spanish 3D artist Eva Cuerva, who is also behind Lladró’s Star Wars collection.

The sculpture combines matte and glazed tones of black, with a few touches of gold luster to accentuate Batman’s muscular anatomy and the intricacies of his customary superhero uniform. To give justice to his vigilante character, he perches on one of the iconic gargoyles of Gotham City with his cape blowing in the wind.

Like previous pop culture pieces, Batman is a limited-edition Lladró figurine. He is ready to jump into action and into the homes of the lucky 500 who grab this special release.

STORMTROOPER INVASION
Star Wars fans are in for a treat as Lladró introduces their seventh addition to the collection — the Stormtrooper.

Launched in 2019, the Star Wars collection pays tribute to some of the saga’s prominent characters, including Grogu, Princess Leia, Ahsoka Tano, Rey, and Queen Amidala. Darth Vader was a fan favorite, selling out within three months after its release, said Lladró Sales Director Roberto Marco Andreu.

The Stormtrooper is glazed in white porcelain and accented with black and gray tones. It has their signature E-11 Blaster Rifle on hand, crafted with matte black porcelain. The piece also comes with a base featuring an identifying plaque and its edition number.

An army of 1,138 limited-edition Stormtroopers is waiting for their new owners. The number is a nod to Star Wars creator George Lucas’ first feature film, THX 1138.

WELCOMING A NEW GUEST
The Guest is a Lladró classic that has taken on many faces, colors, and interpretations. The figurine is characterized by its bear-like head and a small body wearing what seems to be a pair of sweats.

Designed by Jaime Hayon, its distinct shape is a blank canvas on which many artists have expressed their creativity and personality. Paul Smith, Tim Biskup, Devilrobots, and Gary Baseman were only some who have tried their hand at decorating their own Guest.

“Understanding, appreciating and learning from artisanship has always been a crucial part of my work, which is a mix of tradition and culture. To preserve this source of learning it is necessary to couple it with design, with a view to advancing artisan techniques and to contextualizing their value in the present,” said Hayon.

The Guest is symbolic of Lladró’s commitment to diversity in their craft. The concoction of cultures in the brand’s collections proves their dedication to honoring the classic and embracing modernity.

The new Lladro figurines are found in Rustan’s Makati. — Chelsea Visto

Team BMW finishes southern leg of ‘Philippine Loop’

Posing in Batangas are (from left) Bernard Aboboto and Brennan Ramos of SMC Asia Car Distributors Corp., Brando Rosales of AutoIndustriya, Isaac Atienza of GoFlatOut, Manskee Nascimento of Visor, Toto Villanueva of SMC Asia Car Distributors Corp., and Alex ‘Banawe Boy’ Lim. — PHOTO FROM BMW PHILIPPINES

OVER 13 DAYS, Team BMW — aboard the BMW 318i Touring, BMW X3 xDrive20d Business, and the BMW X5 xDrive30d M Sport — completed the southern leg of its so-called “Philippine Loop” adventure. The participants logged over 3,000 kilometers in 13 days — encountering “breathtaking landscapes” and enjoying the hospitality of Filipinos. Taking ROROs (roll-on, roll-off) whenever needed, the team went through, reported BMW Philippines in a release, “a cultural immersion.” The statement added, “Team BMW’s southern adventure wasn’t just about conquering the distance. They made strategic stops to experience the rich history and food of the region.”

The team drove to Naga City in Bicol, Tacloban City in Leyte, Surigao City in Surigao del Norte, Davao City in Davao del Sur, General Santos City in South Cotabato, Valencia City in Bukidnon, Dapitan City in Zamboanga del Norte, Bacolod City in Negros, and Boracay Island.

“The journey demanded adaptability. Team BMW navigated diverse landscapes, seamlessly transitioning between Luzon, Visayas, Mindanao, and back… However, the true spirit of adventure lies in embracing the unexpected. While meticulous route planning was a key strategy, Team BMW demonstrated impressive adaptability when faced with unforeseen circumstances. Route changes due to inclement weather, unpaved roads, unpassable bridges and delays in their RORO schedule tested their flexibility,” continued the statement.

Meanwhile, SMC Asia Car Distributors Corp. (BMW Philippines) President Spencer Yu said, “The comfort and fuel efficiency of our BMWs were the pillars of our success. Even with the constant change in terrain and the demands of long-distance travel, our vehicles consistently delivered impressive mileage. Additionally, the comfort of our vehicles ensured everyone on the team stayed refreshed and focused throughout the journey.”

Team BMW’s Philippine Loop adventure continues as they take on the “northern loop” next.

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