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With brooms in hand as symbol for change, Indonesian women join Jakarta protests

Municipality workers clean debris at a burned bus stop following a recent protest in Jakarta, Indonesia, Sept. 2, 2025. — REUTERS/WILLY KURNIAWAN

JAKARTA — Hundreds of women dressed in pink joined protests in Indonesia’s capital on Wednesday against lawmakers’ perks and police brutality, brandishing brooms as a symbol of their calls for reform, while the president flew to China for a military parade.

The women carried signs with slogans such as “reform the police” and “your sweet promises cause diabetes,” as well as the brooms which protest organizer The Alliance of Indonesian Women said symbolized a need to “sweep the state’s dirt… and the repressiveness of security forces.”

The protests that began in Jakarta last week have rocked the world’s third-largest democracy, with the demonstrations escalating nationwide after a police vehicle hit and killed a motorcycle taxi driver on Thursday night.

Rights groups say 10 people have died in the protests, which have also sparked some looting and rioting.

The Alliance, a coalition of women-led civil society groups, had called off a planned protest on Monday citing the risk of a violent response by authorities.

“We want to show that protests are mostly peaceful,” said 30-year-old Rizky Ananda, who was demonstrating against violence against people, and women in particular, as well as wasteful government spending.

“If the government said protests were treasonous, it should be questionable.”

President Prabowo Subianto has said the military and police would stand firm against violence, and said on Sunday that some of the unrest bore the signs of terrorism and treason.

Prabowo was making a trip to China to attend a lavish military parade on Wednesday after initially cancelling due to the unrest, with his office saying that signs of normalcy returning in Indonesia were a factor in his decision to travel.

The National Commission on Human Rights was conducting an investigation into security forces’ handling of the protests, commissioner Anis Hidayah told journalists on Tuesday.

The United Nations’ rights office called on Monday for investigations into “all alleged violations of international human rights law, including with respect to use of force.” — Reuters

Fed Governor Cook says mortgage ‘contradictions’ do not justify removal by Trump

LISA COOK — EN.WIKIPEDIA.ORG

US FEDERAL RESERVE Governor Lisa Cook on Tuesday laid out in greater detail her opposition to President Donald J. Trump’s bid to remove her from office, saying it was too late to fire her for mortgage information she disclosed during her confirmation process.

In a filing in US District Court, Ms. Cook said she listed mortgages on three properties on forms submitted to the White House and US Senate in the vetting process for her appointment to the Fed in 2022. Any inconsistencies were known when she was confirmed and cannot give Mr. Trump grounds to fire her now, she said.

Mr. Trump and Federal Housing Finance Agency Director William Pulte, whom Mr. Trump appointed, have accused her of committing fraud by listing all three properties as primary residences when she applied for mortgages, potentially to secure lower interest rates.

Mr. Trump has said that gives him cause to fire Mr. Cook, the first Black woman to serve as a Fed governor.

She has filed a lawsuit seeking to block her unprecedented removal, setting up a legal battle that could upend long-established norms for the Fed’s independence. Tuesday’s filing reiterated in greater detail arguments she made in court last week as part of the lawsuit.

In the filing, Ms. Cook said that on a background check form, she listed a property in Michigan as a primary residence and one in Georgia as a “second home.” On a separate questionnaire she listed both homes as her “present residence,” the Michigan property as her “current permanent residence,” and a third property in Massachusetts as both a present residence and a second home and rental property, she said.

“If those are facial contradictions, as the Government and President claim… Senators or White House advisors could have inquired of her about any alleged ‘facial inconsistencies,’” Ms. Cook’s lawyer, Abbe Lowell, wrote in the filing.

The White House and the US Department of Justice did not immediately respond to requests for comment.

Ms. Cook has asked US District Judge Jia Cobb in Washington, DC, to temporarily block Mr. Trump from removing her from her post pending further litigation. She says that Mr. Trump does not have the legal authority to remove her and that the fraud allegations were a pretext to do so.

Ms. Cobb held a hearing on Friday where a Trump administration lawyer argued that removing a Fed governor for cause is within the President’s broad powers and Ms. Cobb had no power to review it.

Mr. Trump, a Republican, attacked the Fed for not cutting interest rates during his first term in the White House and resumed that campaign when his second term began in January. He has berated Fed Chair Jerome Powell, though he has stopped threatening to remove Mr. Powell before his term as central bank chief ends in May.

The Fed cut rates three times in 2024 but has held them steady since December out of concern that Mr. Trump’s aggressive reshaping of US trade policy could boost inflation. Ms. Cook voted with Mr. Powell and the majority of the central bank’s rate-setting committee in all those policy decisions.

The central bank, however, is widely expected to reduce its benchmark interest rate by a quarter of a percentage point from the current 4.25%-4.50% range at its Sept. 16 to Sept. 17 policy meeting. Mr. Trump has demanded a far more aggressive decrease in borrowing costs. — Reuters

‘Front-runner’ to be North Korea’s next supreme leader makes international debut in China

A North Korea flag flutters next to concertina wire at the North Korean embassy in Kuala Lumpur, Malaysia March 9, 2017. — REUTERS/EDGAR SU/FILE PHOTO

SEOUL — North Korean leader Kim Jong Un brought his teenage daughter to Beijing this week in her first public outing overseas, fueling further speculation that she may be his potential successor in the family’s dynastic rule over the nuclear-armed state.

Secretive North Korea has never revealed her name or age, but South Korean intelligence officials believe she is the daughter identified as Ju Ae by former American basketball player Dennis Rodman. Mr. Rodman spent time with Mr. Kim’s family in 2013 and described holding her as a baby.

She was seen just behind her father as they stepped off the armored train they used to travel overnight from Pyongyang to the Chinese capital Beijing, where Mr. Kim attended a massive military parade on Wednesday staged by China to commemorate Japan’s surrender ending World War II in the Pacific.

“Right now, Ju Ae is the front-runner as next supreme leader of North Korea,” said Michael Madden, a North Korea leadership expert at the US-based Stimson Center. “She is getting practical protocol experience which should serve her well as North Korea’s next leader or a core elite.”

It is the first time she has accompanied Mr. Kim outside North Korea — an experience that neither her father nor powerful aunt ever had, Mr. Madden said.

“She is getting valuable experience greeting and interacting with foreign leadership and other elites,” he said.

Analysts said there is no evidence Mr. Kim ever accompanied his father, Kim Jong Il, on overseas trips. Jong Il did make foreign trips in the 1950s with his father, North Korea’s founder Kim Il Sung.

North Korea’s tightly controlled state media had revealed nothing about Mr. Kim’s children until Ju Ae was first shown to the world accompanying her father to the launch of a massive intercontinental ballistic missile in 2022.

There is still little known about other Kim children.

South Korea’s intelligence agency considers Ju Ae to be the most likely successor so far, despite questions over whether she can ultimately rise to the top of the male-dominated dynasty.

Estimated to be about 13 years old, Ju Ae has attended increasingly high-profile events, including her diplomatic debut at a Russian Embassy event in May.

“The scope of her public appearances certainly has expanded from military-related sites to political and economic events over the years,” said Rachel Minyoung Lee, another researcher with the Stimson Center. “If this is part of a succession campaign, this would certainly help with that effort as it would be seen as Kim Ju Ae’s debut on the international stage.”

While it’s premature to say conclusively whether this visit means she is Mr. Kim’s successor, it could still help broaden her horizons, said Ms. Lee, adding that how the North Korean media covers Ju Ae in China would give better insight. — Reuters

Explainer: What’s fuelling the rage in Indonesia?

Municipality workers clean debris at a burned bus stop following a recent protest in Jakarta, Indonesia, Sept. 2, 2025. REUTERS/Willy Kurniawan

Protests have flared in parts of Indonesia since August 25 in some of the country’s worst violence in decades, presenting the biggest challenge so far to Prabowo Subianto’s 10-month-old presidency.

WHAT’S BEEN HAPPENING?
Protests started outside parliament in the capital, Jakarta, initially by groups angered by reports that lawmakers were receiving huge housing allowances on top of base salaries.

Protesters hurled rocks at riot police who responded with tear gas and water cannon. Over the course of a week that grew into wider demonstrations, in at least 32 of Indonesia’s 38 provinces according to the home minister, many of which turned violent, with some regional parliaments set ablaze.

A flashpoint was the August 28 killing of a motorcycle taxi driver in Jakarta, who was not part of the protest but was hit by a riot police vehicle, fuelling further rage, arson and destruction and demands for police reform, scenes replicated elsewhere.

Some prominent officials have been targeted with social media “doxxing” that reveals the addresses of their homes, leading to looting, most notably Finance Minister Sri Mulyani Indrawati, after a deep fake video in which she appeared to say teachers were a burden.

The home of lawmaker Ahmad Sahroni was looted after he said calls to dissolve parliament over the allowances were being made by the “stupidest people in the world”.

Prabowo cancelled a trip to China and in a big concession on August 31 announced a scrapping of some perks and privileges for lawmakers and a moratorium on overseas travel, but at the same time vowed a firm response to mob violence.

The tally of deaths stands at eight by September 2. With at least 1,200 detained in Jakarta alone and a heavy police and military presence in the streets, some groups opted to keep to the sidelines, but smaller demonstrations were undeterred.

WHO IS LEADING THE PROTESTS?
It is unclear who, if anyone is driving the protest movement that appears on its surface to have no core.

Though initially led by student groups with a long history of government protests, the demonstrations have taken on a life of their own, with some gatherings fuelled by anger over the response by security forces.

New York-based Human Rights Watch has said authorities “acted irresponsibly by treating the protests as acts of treason or terrorism”.

The All Indonesian Students’ Executives Body, Indonesia’s largest grouping of student associations, is staging organised protests, as are other unaffiliated university groups, but yet other groups are capitalising on the momentum with their own gatherings to vent grievances.

WHAT’S DRIVING THE ANGER?
The trigger was monthly pay for parliamentarians of upwards of 100 million rupiah ($6,150), a huge income in Indonesia, including a substantial housing allowance.

That fed frustration about wealth gaps, inequity and the minimum wage in the country of 280 million, and a perception of corruption or flagrant displays of largesse by the political elite.

Though Indonesia’s economy is not in poor shape, signs of unease have emerged in the provinces over the government’s state budget priorities and efforts to re-centralise finances.

Last month Prabowo unveiled in parliament a $234 billion budget for 2026 that slashes regional funding by a quarter to $40 billion, the lowest in a decade and a second year of decline. The cuts have forced local authorities to hike land and property taxes to plug the gap.

The budget proposes a rise of 37% on defence and a near doubling in spending on Prabowo’s signature free school meals programme to $20.5 billion.

Also stoking anger is the response of police and military and accusations by rights groups of disproportionate use of force, including tear gas and rubber bullets.

WHAT DOES THIS MEAN FOR PRABOWO?
It is a major test for political veteran Prabowo, elected president by a huge margin on his third successive attempt. He has a big majority in parliament and has faced muted opposition, with all but one party in his “big tent” coalition.

It has been tough to gauge public sentiment, with few major opinion surveys since Prabowo crossed 100 days of his presidency in January, with an approval rating of about 80%.

The protests have been a startling check on his power. His response could be critical in determining his popularity, how long the protests last and the likelihood of a recurrence in the rest of his term.

Indonesia’s student-led movements have long been regarded as vanguards of democracy and Prabowo knows well their ability to mobilise.

As a former son-in-law of Indonesia’s late authoritarian ruler Suharto, whom he served in the military as a special forces commander, Prabowo has first-hand experience of the protests that brought down the strongman in 1998 after 32 years of autocratic rule. — Reuters

DPWH halts bidding for all locally funded projects

DPWH

The Department of Public Works and Highways (DPWH) has suspended the bidding process for all locally funded projects, in line with the government’s ongoing investigation into alleged irregularities in flood control projects.

“I will order today a pause to all the ongoing bidding of all locally funded projects nationwide,” Public Works and Highways Secretary Vivencio B. Dizon said during a press briefing on Wednesday.

The suspension will be in effect for two weeks and will not apply to foreign-funded projects.

“All foreign-assisted projects will continue because I am complacent that foreign funders are monitoring it, but all projects currently being auctioned by national and regional are on pause,” he said.

The decision follows the government’s ongoing probe into reported anomalies in flood control projects under the DPWH.

The department has submitted a list of over 9,000 projects completed between July 2022 and May 2025. Of these, 160 projects have undergone validation, with 15 reported as missing or unlocated, according to former DPWH Secretary Manuel M. Bonoan.–Ashley Erika O. Jose

Customs secures 12 luxury vehicles of Discayas

The Bureau of Customs recovered 12 luxury vehicles linked to the Discaya family following a court-ordered search operation in Pasig City, Sept. 2, 2025.

The Philippine Bureau of Customs (BoC) said on Tuesday it had recovered all 12 luxury vehicles linked to the Discaya family, following a search operation in Pasig City.

In a statement issued late Tuesday, the BoC confirmed that the 10 vehicles, initially reported missing, have now been accounted for following a day-long search operation. The search was conducted under a warrant issued by the Regional Trial Court of Manila, Branch 18.

Earlier in the day, the BoC seized only two units: a Toyota LC300 3.3 V6 ZX AT SUV 2024 and a Maserati Levante Modena 2022, from the Discaya compound.

At around 9 p.m., the agency said seven more vehicles were surrendered and secured at the compound of St. Gerrard Construction General Contractor and Development Corp. in Pasig.

These include a Rolls Royce Cullinan 2023, Bentley Bentayga, Mercedes Benz G-Class (Brabus G-Wagon), Mercedes AMG G 63 SUV 2022, Toyota Tundra 2022, Toyota Sequoia, and Cadillac Escalade ESV 2021.

Commissioner Ariel F. Nepomuceno added that the last three vehicles — Mercedes Benz G 500 SUV 2019, GMC Yukon Denali SUV 2022 (Gas), and Lincoln Navigator L 2024 — are currently in authorized service centers for repair and will subsequently be surrendered to the BoC.

All vehicles have been sealed and are under 24-hour surveillance by BoC personnel and the Philippine Coast Guard, the agency said.

Mr. Nepomuceno said the Discaya family complied with the bureau’s directive.

“With all twelve (12) luxury vehicles now accounted for, the BoC continues to verify their importation records to determine compliance with customs laws,” it said.

The BoC said should discrepancies be established, appropriate enforcement and legal actions will be undertaken pursuant to the Customs Modernization and Tariff Act (CMTA).

The Discaya-link firms, such as Omega & Alpha Construction and St. Timothy Construction, were among the top 15 flood control contractors earlier disclosed by President Ferdinand R. Marcos Jr. that cornered P100 billion of flood control projects since 2022.

Finance Secretary Ralph G. Recto earlier estimated that corruption related to flood control projects has cost the economy between P42.3 billion and P118.5 billion in economic losses since 2023. — Aubrey Rose A. Inosante

Coffee roasters hike prices in Brazil as raw bean costs surge

STOCK PHOTO | Image by Kelly Sikkema from Unsplash

LONDON/NEW YORK – Coffee roasters 3 Coracoes and Melitta are raising prices for their products in Brazil, the world’s second-largest coffee consumer behind the US, according to documents sent to clients and seen by Reuters.

A joint venture between Brazilian company Sao Miguel and Israeli group Strauss, 3 Coracoes said it was increasing prices for roast and ground coffee by 10% and for instant coffee by 7% as of September 1.

Melitta South America, also a major player in Brazil, said it was increasing prices by 15% as of September 1.

The two companies, which cited rising raw bean prices, volatility and climate issues as reason for the price hike, did not immediately answer requests for comment.

Global prices for raw arabica beans have risen more than 20% this year after soaring 70% last year, as top grower Brazil experienced another poor crop due to adverse weather.

More recently, the US move to slap 50% tariffs on imports from Brazil boosted prices further, as roasters in the world’s top coffee drinker raided existing stockpiles.

Raw bean prices account for about 40% of the wholesale cost of a bag of roast and ground coffee, on average, meaning roasters all over the world will be facing pressure to raise prices.

Having previously hiked roast and ground prices by 11% in January and 10% in December, 3 Coracoes raised them by 14.3% on March 1. Melitta increased prices by 25% in December.

There was a brief price decrease in Brazil’s coffee retail in August, industry group ABIC had said, as futures prices fell from record highs earlier in the year. ABIC, however, also projected the trend would be reversed as the tariffs kicked in. That reversal is happening now.

Roasters are starting to buckle under pressure from rising costs as cash-strapped consumers are pushing back against price hikes by engaging in bargain-hunting or trading down to supermarket brands. — Reuters

Nestle plunged into crisis as CEO fired for hiding romance with staffer

ZURICH – Nestle has fired CEO Laurent Freixe after just a year in the job for concealing a romantic relationship with a subordinate, throwing the Swiss food giant into a leadership crisis that compounds a share price slump and slowing sales.

Freixe is replaced by Nespresso chief Philipp Navratil, 49, a rising star at the world’s largest food company, as it struggles to deal with the impact of US tariffs, a darkening global economic outlook and dwindling investor confidence after years of underperformance.

Laying bare wider tensions, Tuesday was a whipsaw day for global consumer companies as Japan’s Suntory parted with its CEO and Kraft Heinz announced a split and activist investor Elliott Management called for a turnaround at PepsiCo.

“The loss of two CEOs and a chairman in a year is of historic proportions for Nestle,” said Ingo Speich, head of Corporate Governance and Sustainability at Deka, a top-30 Nestle investor.

“The new CEO needs to fix the business model and bring volumes back. He needs to do better M&A and focus more on emerging markets.”

Freixe, a 63-year-old Frenchman, was sacked just over a year after his predecessor Mark Schneider was ousted for failing to turn Nestle around.

The company also said in June that Paul Bulcke, CEO from 2008 to 2016, will step down as chair in April 2026 and be replaced by Pablo Isla, a former CEO of Spanish fashion retailer Inditex.

Freixe’s dismissal follows an investigation into an undisclosed romantic relationship with a direct subordinate that breached Nestle’s code of business conduct, Nestle said late on Monday.

Shares in the maker of Nescafe instant coffee and KitKat chocolate bars closed 0.7% lower in Zurich, paring earlier losses when the stock fell as much as 3.6%.

SPEAK UP

The company said concerns about a possible relationship were first raised by staff via the company’s internal reporting channel Speak Up, although an initial investigation was unsubstantiated.

Freixe initially denied the relationship to the board, a company spokesperson said.

When staff concerns persisted, Nestle ordered an investigation, overseen by Bulcke and Isla, with the support of Swiss lawyers Baer & Karrer, Nestle said.

The report was completed in recent days, leading to a board meeting and Freixe’s dismissal on Monday.

Freixe, who spent 39 years with Nestle, will receive no exit package following his departure, the company told Reuters.

In a short statement, Bulcke thanked Freixe for his service at Nestle, but said the dismissal was a “necessary decision”.

His removal adds to a list of chief executives forced to resign following investigations into their relationships with colleagues.

Energy giant BP’s former CEO Bernard Looney and McDonald’s CEO Steve Easterbrook were both removed for failing to disclose relationships.

Swiss financial news website Inside Paradeplatz reported that Freixe met the woman in 2022, before he became CEO, when he was head of Nestle’s Latin America business.

Freixe was not immediately available to comment when contacted via email. The female subordinate, whose identity has not been made public, left Nestle over the summer, a company spokesperson said.

Swiss law does not prohibit relationships between senior executives, although most large companies – including Nestle – have internal codes of conduct that require them to be disclosed. If there is a conflict of interest, one of the people has to switch roles.

At Nestle, direct reporting relationship between family members, partners and close associates is not allowed, while indirect reporting lines are assessed on a case-by-case basis.

Corporate governance expert Peter V Kunz, from the University of Bern, said he was not familiar with Nestle’s rules, but that requirements at most public companies were broadly similar.

“In this respect, Mr Freixe’s behaviour – regardless of whether it was legal or not – seems to me to be simply stupid and incomprehensible in this day and age,” Kunz told Reuters, adding that he did not think investors had grounds for legal action against Nestle.

STABILITY SOUGHT

As price-sensitive consumers have turned to cheaper alternatives, Nestle’s shares, a bedrock of the Swiss stock exchange, have lost almost a third of their value over the past five years, underperforming European peers.

Freixe’s appointment failed to halt the slide, with the company’s shares shedding 17% during his leadership, disappointing investors.

One top-20 Nestle investor said Freixe had been a disappointment and that bringing in Navratil was an opportunity for a more ambitious overhaul.

The new CEO needs to slim down the company, cut costs and above all reduce the headcount, said the investor who declined to be named due to the sensitivity of the matter. It was also crucial that the company raise organic growth to boost volumes.

In July, Nestle launched a review of its underperforming vitamins business that could lead to the divestment of some brands after first-half sales volumes missed expectations.

AJ Bell investment director Russ Mould said that the company would likely face a period of uncertainty.

“While Navratil is also an internal appointment, he will want to put his own mark on strategy and that suggests the clock could be reset when it comes to the turnaround plan,” he said. — Reuters

Trump dismisses rumors he is in ill health

U.S. President Donald Trump — REUTERS/LEAH MILLIS/FILE PHOTO

WASHINGTON – President Donald Trump on Tuesday dismissed reports on social media that he is in ill health, saying he was busy over the Labor Day weekend giving media interviews and visiting his Virginia golf course.

“I was very active over the weekend,” Trump told reporters in the Oval Office. Asked if he was aware of the reports, he called them “fake.”

Trump, 79, in January became the oldest person to assume the U.S. presidency.

Speculation about his health swirled on the social media platform X over the weekend, with posts citing Trump’s lack of a public schedule late last week and a USA Today interview with Vice President JD Vance published on Thursday.

When asked during the interview if he was ready to assume the role of commander in chief, Vance said he was confident Trump was “in good shape” but also suggested he was prepared to step in if anything happened to the president.

Before Tuesday, Trump’s last extended exchange with reporters came during a cabinet meeting a week earlier. Trump led the more than three-hour session on August 26, his longest on-camera appearance as president.

Over the Labor Day weekend, reporters saw him leaving the White House each day to visit his golf course.

Trump underwent an extensive physical examination on April 11 at Walter Reed National Military Medical Center in suburban Washington. It found he had a normal heart rhythm and no major health problems, according to official results released by the White House.

On July 17, White House spokeswoman Karoline Leavitt said Trump was experiencing swelling in his lower legs and bruising on his right hand after photos showed him with swollen ankles and makeup covering part of his hand.

His physician, Sean Barbabella, said in a letter released by the White House that tests confirmed the leg issue was due to “chronic venous insufficiency,” a benign and common condition, especially in people over 70.

The doctor said the bruising on Trump’s hand was consistent with minor soft tissue irritation from frequent handshaking and aspirin use, which Trump takes as part of a “standard cardiovascular prevention regimen.”

Since then, the White House has played down concerns about Trump’s health, without detailing how the leg issue is being treated. — Reuters

LPA likely to become tropical depression

PHILIPPINE STAR/MIGUEL DE GUZMAN

One of the low-pressure areas (LPAs) being monitored has a ‘high’ chance of developing into a tropical depression within 24 hours, but its effect on the country is not expected, the state weather bureau said on Wednesday.

At a 5 a.m. briefing, the Philippine Atmospheric, Geophysical, and Astronomical Services Administration (PAGASA) said that the LPA is likely to be the first tropical cyclone in September and will be named “Kiko.”

It was located 1,190 kilometers east-northeast of Northern Luzon and is expected to exit the Philippine Area of Responsibility (PAR).

“It is already quite far from our landmass, and at present, it no longer has any effect or direct effect on any part of the country,” Loriedin Dela Cruz-Galicia said in a press briefing in Tagalog.

Meanwhile, PAGASA said the southwest monsoon (Habagat) is still expected to affect large parts of the country, bringing heavy rains, particularly in the western section. — Edg Adrian A. Eva

Peso to rise as Fed woes drag dollar

BW FILE PHOTO

THE PHILIPPINE PESO is expected to end the year stronger against the US dollar as the greenback remains under pressure due to US President Donald J. Trump’s continued attacks against the US Federal Reserve.

MUFG Global Markets Research said they expect the peso to rise to the P56 level in the coming months as global investors remain bearish on the US dollar.

“We have adjusted our PHP forecast slightly stronger and see USD/PHP moving towards the P56 levels (from P56.50 levels previously). The key reason for the forecast change is mainly global rather than local, with our G10 team now seeing more US dollar weakness with increasing concerns around President Trump’s attack on Fed independence,” it said in its Foreign Exchange Outlook report for September.

On Tuesday, the peso closed at P57.51 versus the dollar, plunging by 35 centavos from Monday’s finish of P57.16. This was its worst showing in nearly a month or since it ended at P57.63 against the greenback on Aug. 5.

Year to date, the local unit is still up by 33.5 centavos or 0.58% from its end-2024 close of P57.845.

According to its latest forecasts, the research firm expects the peso to close this quarter at P57 versus the dollar and strengthen further to end 2025 at P56.50. It sees the local unit then rising to P56 against the greenback in the first half of 2026.

MUFG Global Markets Research said concerns over the Fed will continue to be a key focus for investors.

“The decision of President Trump on Aug. 25 to fire Fed Governor Lisa Cook has dramatically escalated the risks associated with threats to Fed independence… Whatever the outcome, it is clear that Mr. Trump is willing to act aggressively and that to us underlines the need for investors to price this risk into US assets. The financial market indifference so far is unlikely to last and this is likely to be a prominent theme throughout the remainder of Trump’s term in office… We have therefore lowered our US dollar forecasts to reflect these increased risks,” it said.

Mr. Trump has been exerting relentless pressure on the Fed to cut interest rates and publicly discussed firing Fed Chairman Jerome H. Powell, whom he called a “numbskull” and a “moron,” for not giving in to his demands, Reuters reported.

Upping this battle, Mr. Trump last month attempted to fire Ms. Cook, setting off a critical legal test over the Fed’s ability to function without political interference, the cornerstone of modern central banking.

Mr. Trump is demanding lower rates to boost investment and give mortgage borrowers relief over some of the highest interest rates in the developed world.

But politically motivated rate cuts would signal that the Fed is willing to tolerate higher inflation, eroding trust among investors, who hold trillions of dollars of US assets, banking on policy certainty from the Fed.

Such a loss of confidence could then push up longer-term borrowing costs, which are more relevant than short-term central bank rates for mortgages and business loans, potentially undoing any Fed effort to ease the financing burden.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said that while Mr. Trump’s continued efforts to undermine the Fed could weigh on the dollar and benefit the peso and other emerging-market currencies, this may not be felt unless the market sees “concrete Fed policy shifts or political pressure affecting rate cuts.”

“For now, the peso remains anchored near P57 due to cautious investor sentiment and persistent trade and fiscal pressures. A sustained shift to P56 level would require both global US dollar weakness and improved local macro signals, including moderating inflation and consistent FDI (foreign direct investment) or remittance flows,” Mr. Rivera said.

DOMESTIC SUPPORT
MUFG Global Markets Research likewise said that the peso will be supported by a broadly positive economic environment.

“From a domestic perspective, many of the positive factors we mentioned have not changed, and as such, we remain comfortable in our view for PHP to strengthen modestly against the dollar,” it said.

Inflation is expected to remain benign amid modest rice prices and “low upside risks” to transport and electricity costs, it said.

“The recent temporary ban on rice imports is a key risk, but with domestic rice inventories still high, the impact should be manageable.”

Philippine headline inflation averaged 1.7% in the first seven months, well below the Bangko Sentral ng Pilipinas’ (BSP) 2-4% annual target and matching its forecast for the year.

Rice inflation has been decelerating amid the government’s measures to curb rising prices of the staple, including lowering tariffs.

The 60-day suspension of rice imports started on Sept. 1 and will end on Oct. 30. It covers imports of regular milled and well-milled rice but excludes varieties that are not commonly produced locally.

It added that it sees the BSP cutting benchmark interest rates by 25 basis points (bps) again in the fourth quarter to bring the terminal rate to 4.75%.

The BSP last week cut the target reverse repurchase rate by 25 bps for a third straight meeting to 5%. It has now slashed borrowing costs by a total of 150 bps since the start of its easing cycle in August 2024.

BSP Governor Eli M. Remolona, Jr. said the latest move puts the policy rate at a “sweet spot” in terms of both inflation and output, signaling that the central bank is nearing the end of its rate-cut cycle.

Still, he left the door open to one last reduction within this year to support the economy if needed.

“Second, we expect actual FDI to improve, reflecting the surge in FDI approvals already seen especially in the renewable energy space,” MUFG Global Markets Research said. “Third, the pipeline of public and private infrastructure projects remains strong.” 

It added that the effect of the 19% “reciprocal” tariff rate on Philippine exports to the US is to be minimal as the levy was mostly at par with those slapped on competitors, and with the economy being domestic oriented.

“Details of upcoming sectoral tariffs on semiconductors will nonetheless be important for the Philippines’ exports given the country’s focus on lower value-added testing and assembly activity.”

Mr. Trump has threatened to impose a 100% tariff on semiconductors.

In June, the United States was the top destination for Philippine-made goods amounting to $1.22 billion, 35.2% higher from the same month a year ago. Around 53% of the Philippines’ total exports to the US were semiconductors and electronics. — BVR with Reuters and a report from K.K. Chan

Economic losses from anomalous flood control projects likely hit up to P119 billion, Recto says

PHILIPPINE STAR/MIGUEL DE GUZMAN

By Aubrey Rose A. Inosante, Reporter

CORRUPTION related to flood control projects have cost the Philippines up to P118.5 billion in economic losses since 2023, Finance Secretary Ralph G. Recto said on Tuesday.

“Due to ‘ghost’ projects, our economy lost between P42.3 billion and P118.5 billion from 2023 to 2025,” Mr. Recto said in his presentation during a Senate Finance Committee hearing.

These estimated average economic losses are based on information from “anecdotal accounts” that put the extent of corruption in the Department of Public Works and Highways’ (DPWH) flood control projects at around 25% to 70% of the total project cost, the presentation showed.

These could have translated to 95,000 to 266,000 jobs for Filipinos, Mr. Recto said.

These allegedly anomalous projects not only drained public funds but also stunted economic growth in the previous years, the Finance chief said.

Philippine gross domestic product (GDP) grew by 5.5% in 2023 and 5.7% in 2024.

“We just learned that the extent of the problem with flood control is this big. Maybe if that money was spent better, we could have grown by 6%,” Mr. Recto told reporters.

“It’s a waste. The economy would have grown at a faster rate. If the money wasn’t wasted, more jobs would have been created.”

He added that the controversy could also dampen investor confidence in the Philippines.

Still, the economy remains on track to meet the government’s 5.5%-6.5% growth target for 2025 despite higher tariffs and adverse weather conditions, Mr. Recto said.

Philippine GDP grew by 5.5% in the second quarter, bringing the first-semester average to 5.4%, a tad below the state’s goal.

The government has launched a widespread probe into alleged anomalies in multibillion-peso flood control programs, which have long been flagged for irregularities as the Philippines faces more weather disturbances.

The DPWH is among the largest recipients of the national budget, securing more than P900 billion this year, a substantial share of which is earmarked for flood control projects nationwide.

President Ferdinand R. Marcos, Jr. earlier said that some P100 billion of the total P545 billion in government funds that were allocated for flood control projects nationwide since 2022 were cornered by just 15 contractors.

Over the weekend, Mr. Marcos appointed former Transportation Secretary Vivencio “Vince” B. Dizon as the new Public Works chief after the resignation of Manuel M. Bonoan.

The President also set up an independent commission to investigate flood control anomalies to further reinforce accountability.

Mr. Recto said the government’s tax collecting agencies are ramping up their probe into the contractors that benefited from these allegedly anomalous projects.

The Bureau of Customs on Tuesday issued a search warrant for the luxury vehicles of the Discayas in Pasig City, but only two out of 12 cars were found during the search.

Among the top 15 flood-control contractors earlier identified by Mr. Marcos were Omega & Alpha Construction and St. Timothy Construction, both reportedly linked to former Pasig mayoral candidate Cezarah Rowena “Sarah” Discaya.

“The Bureau of Customs takes the issue of the missing luxury cars of Discaya with utmost seriousness. We will ensure that these vehicles are located without delay, and if discrepancies are uncovered, all taxes and duties will be collected in full,” Customs Commissioner Ariel F. Nepomuceno said in a statement.

Mr. Nepomuceno has warned that hiding or abetting the concealment of these cars will be punished to the “fullest extent of the law.”

Meanwhile, the Bureau of Internal Revenue has served letters of authority to the tagged contractors.

Analysts have long flagged corruption as one of the biggest risks to Philippine economic growth.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said corruption is not just a governance issue but also a direct economic cost.

“Losses in flood-control projects represent funds that could have gone to infrastructure, jobs, and social services,” Mr. Rivera said in a Viber message.

He described Mr. Recto’s estimate as “realistic,” citing the multiplier effects of efficient public spending.

“The challenge now is to tighten transparency and accountability so that public funds truly translate into inclusive growth,” he added.

Foundation for Economic Freedom President Calixto V. Chikiamco said all kinds of corruption end up as economic losses.

“Corruption exists everywhere, but it hasn’t stopped Vietnam from growing fast,” Mr. Chikiamco said in a Viber message.

Meanwhile, Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, called Mr. Recto’s statement “hypocritical” and “deceiving” as fund transfers from state-run agencies — some of which were stopped by the Supreme Court — were approved under his watch.

“Find the link between the infra projects tainted with corruption and the transfer of PhilHealth (Philippine Health Insurance Corp.) and PDIC (Philippine Deposit Insurance Corp.) funds that enabled the funding of these highly questionable projects,” he said in a Viber message.

In 2024, the government initiated the transfer of P89.9 billion from PhilHealth to the National Treasury, labeling these as “excess funds.” The money was supposed to fund various projects, including infrastructure and social services.

The High Court in October issued a temporary restraining order to stop the last tranche of transfers worth P29.9 billion.

Meanwhile, in January, the PDIC remitted excess funds amounting to P107.23 billion to the Treasury.