PSEi member stocks performed — July 8, 2024
Here’s a quick glance at how PSEi stocks fared on Monday, July 8, 2024.
Peso climbs as US data bolster Fed easing view
THE PESO rose to an over one-month high against the dollar on Monday after softer-than-expected US jobs data supported bets of US Federal Reserve rate cuts within the year.
The local unit closed at P58.502 per dollar on Monday, inching up by 2.8 centavos from its P58.53 finish on Friday, Bankers Association of the Philippines data showed.
This was the peso’s strongest finish since its P58.42 close on May 29.
The peso opened Monday’s session slightly weaker at P58.55 against the dollar. Its weakest showing was at P58.60, while its intraday best was at P58.47 versus the greenback.
Dollars exchanged rose to $1.07 billion on Monday from $836 million on Friday.
“The peso strengthened after the softer US employment report bolstered expectations of a US policy rate cut in September,” a trader said in an e-mail.
The dollar was generally weaker following the jobs report, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
The dollar remained on the back foot following surprisingly soft US payrolls data on Friday, which boosted bets for the Fed to soon start cutting interest rates, Reuters reported.
The dollar index, which measures the US currency against the euro, sterling, yen and three other major rivals, was flat at 104.95, licking its wounds after a nearly 1% slump last week, exacerbated by Friday’s softer US jobs market reading.
Traders currently set about 76% odds for a rate cut at the Fed’s September meeting, up from 64% a week ago, according to the CME Group’s FedWatch Tool. A subsequent cut is predicted by December.
US employment increased solidly in June, but government and healthcare services hiring made up about three-quarters of the payrolls gain and the unemployment rate hit a 2-1/2-year high of 4.1%, pointing to a slackening labor market that keeps the Federal Reserve on course to start cutting interest rates soon.
Nonfarm payrolls increased by 206,000 jobs last month, lifted by government hiring, the Labor department’s Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls would increase by 190,000 last month, with the unemployment rate unchanged at 4%.
The Fed has maintained its benchmark overnight interest rate in the current 5.25%-5.5% range since last July.
For Tuesday, the trader said the peso could weaken due to market caution ahead of Fed Chair Jerome H. Powell’s congressional testimony on July 9-10.
The trader expects the peso to move between P58.35 and P58.60 per dollar, while Mr. Ricafort sees it ranging from P58.40 to P58.60. A second trader said in a phone interview that the local unit could trade from P58.40 to P58.70 versus the greenback. — AMCS with Reuters
Philippine shares rise on August rate cut hopes
PHILIPPINE SHARES climbed on Monday as slower-than-expected June inflation boosted expectations of a Bangko Sentral ng Pilipinas (BSP) rate cut by next month.
The benchmark Philippine Stock Exchange index (PSEi) climbed by 0.56% or 36.68 points to end at 6,529.43 on Monday, while the broader all shares index rose by 0.44% or 15.43 points to close at 3,524.42.
“The local bourse gained … as hopes for an interest rate cut by August continued to boost sentiment following the easing of the June inflation rate,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
Headline inflation stood at 3.7% in June, the Philippine Statistics Authority reported on Friday, easing from 3.9% in May and 5.4% in the same month a year ago.
This was within the BSP’s 3.4-4.2% forecast for the month and was slightly slower than the 3.9% median estimate in a BusinessWorld poll of 14 analysts.
This also marked the seventh straight month that the consumer price index (CPI) settled within the BSP’s 2-4% target band.
BSP Governor Eli M. Remolona, Jr. has said the Monetary Board is “on track” to deliver its first rate cut in over three years at its Aug. 15 meeting as they expect inflation to continue easing this semester.
“Philippine shares continued their upward trajectory as in the main index closed above 6,500 as investors brace themselves for another week that could give hints on the timing of the US Federal Reserve’s rate cut,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
The market is awaiting Fed Chair Jerome H. Powell’s US congressional testimony on July 9-10, as well as the release of US consumer inflation data on July 11, among others, he said.
The Fed has maintained its target rate at the current 5.25%-5.5% range since July 2023.
Traders currently set about 76% odds for a rate cut at the Fed’s September meeting, up from 64% a week ago, according to the CME Group’s FedWatch Tool, Reuters reported. A subsequent cut is predicted by December.
Sectoral indices ended mixed on Monday. Financials went up by 2.65% or 52.30 points to 2,018.88; industrials rose by 0.59% or 53.66 points to 9,123.48; and mining and oil climbed by 0.57% or 48.78 points to 8,607.99.
Meanwhile, services fell by 0.49% or 10.10 points to 2,018.16; property went down by 0.09% or 2.37 points to 2,549.76; and holding firms dropped by 0.08% or 4.71 points to 5,529.52.
Value turnover climbed to P5.63 billion on Monday with 447.35 million shares changing hands from the P4.24 billion with 454.88 million issues traded on Friday.
Decliners outnumbered advancers, 104 to 95, while 42 names closed unchanged.
Net foreign buying stood at P143.69 million on Monday versus the P11.47 billion in net selling recorded on Friday. — A.E.O. Jose with Reuters
DoF expects rice prices to fall below P50 per kilo by August
THE LOWER tariff on rice imports is expected to bring rice prices to below P50 per kilogram by August, the Department of Finance (DoF) said.
“By slashing the tariff on imported rice from 35% to 15%, we anticipate an average of 10% reduction in retail prices for the rest of the year,” Finance Secretary Ralph G. Recto said at the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum on Monday.
“This could lower the price of rice by at least P5 per kilo. From an average of P54.40 per kilo last June, prices could go down to below 50 pesos as early as August.”
President Ferdinand R. Marcos, Jr. implemented the tariff reduction via Executive Order (EO) No. 62 last month.
The Department of Agriculture’s price monitors reported that well-milled rice was selling in Metro Manila markets for as much as P55 per kilo.
Mr. Recto said that lower tariffs on rice could reduce full-year inflation by 0.18 percentage points.
Headline inflation eased to 3.7% in June from 3.9% in May. Rice inflation, which accounts for almost half of overall inflation, eased to 22.5% from 23% a month earlier.
Rice prices were likely to have remained above P50 had the government not cut tariffs, Mr. Recto said.
“A sustained high price of rice could continue to drive inflation, delaying the reduction of policy interest rates by the (central bank) and derailing the country’s economic growth trajectory,” he added.
Mr. Recto said that the tariff cut will result in foregone revenue of P9.2 billion this year but noted that “in the bigger picture, this improves the welfare of households, especially the poor.”
He also cited the 27.7% increase to P221.7-billion budget for agriculture sector, much of it going to modernizing farming. Around half of the agriculture budget goes to rice, he added.
“This will enable us to install more irrigation systems, construct farm-to-market roads, procure agri machinery and equipment, and prioritize research and development,” Mr. Recto said.
The DoF said it is working with Congress to ensure an increase in the P10-billion-a-year allocation for the Rice Competitiveness Enhancement Fund (RCEF), which is funded from import tariffs.
Republic Act No. 11203 or the Rice Tariffication Law, the law which creates RCEF, authorizes the fund to distribute machinery, seed, credit, and fertilizer for six years. The RCEF expired last month, but efforts are underway in Congress to extend its term and increase the annual allocation.
Farmer’s groups last week asked the Supreme Court to issue a temporary restraining order freezing EO 62, saying they were not consulted properly prior to its issuance, as the law requires.
“I don’t think there’s a reason for the courts to get involved in that,” Mr. Recto told reporters on the sidelines of the forum. — Beatriz Marie D. Cruz
Manufacturing weakness hinders poverty-reduction effort — NEDA
THE National Economic and Development Authority (NEDA) said weak manufacturing is preventing the Philippines from achieving its poverty-reduction goals.
“Given the country’s low level of development, the steady decline of agriculture and manufacturing’s share in GDP (gross domestic product) significantly limits our opportunities for poverty reduction,” NEDA Secretary Arsenio M. Balisacan said during the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum.
The manufacturing sector accounted for 0.9 percentage point (ppt) of the 5.7% GDP growth reported in the first quarter, according to the Philippine Statistics Authority.
In comparison, net exports of goods and services accounted for 1.2 ppts of GDP. Mr. Balisacan said the services sector made up about two-thirds of GDP growth.
“We want growth that delivers prosperity. And so, we need to see those high productivity sectors and those pillars of growth must also come in and augment services,” he added.
He noted that growth in the manufacturing sector was a primary driver of poverty reduction in many Asian economies.
The Philippines’ poverty rate fell to 22.4% in the first half of 2023 from 23.7% two years earlier.
The government aims to slash the poverty rate to 9% by the time it steps down in mid-2028.
“While we continue to buoy consumption and enhanced services, we must reinvigorate the other pillars of economic growth, investments and exports, particularly manufacturing and agribusiness, to sustain growth and make it more resilient in the years and decades to come,” Mr. Balisacan said.
“So that’s why if you look at our efforts, we are so focused on improving the ecosystem for investment,” he added.
The ICT (information and communications technology) and BPM (business process management) industries can serve to strengthen manufacturing, Mr. Balisacan added.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index, which measures factory activity, slowed in the Philippines to 51.3 in June from 51.9 in May due to low demand and reduced worker numbers. — Beatriz Marie D. Cruz
Full electrification expected to require P72 billion in funding
ILOILO CITY — The Department of Energy (DoE) said it is seeking P72 billion for its total electrification program, and estimated the economic benefit of providing power to the entire country at P315 billion.
On the first day of the US Embassy’s 16th Media Seminar on Monday, Energy Undersecretary Rowena Cristina L. Guevara said that the estimate for the funds needed to achieve total electrification covers the period to 2028.
“A portion of that budget will be taken out of a loan because we already have a budget allocated for total electrification — around P3 billion to P5 billion per year,” Ms. Guevara said.
“So that’s around P25 billion, and we need P72 billion … so we might need to borrow because we have a deficit and the budget cannot increase suddenly,” she added.
She said that the DoE is in talks with the World Bank and the Asian Development Bank (ADB) for the loan. The program will seek to build distribution lines, electrify remote barangays and sitios, and install home solar systems.
Ms. Guevara said that the department presented the program and its economic benefits to the National Economic and Development Authority and the Department of Finance last week.
“We presented to them our request, and they seem to be happy about the numbers that came out of our study, particularly the economic benefits,” she said.
“Nobody reported (the estimated economic benefits) to them before. So, because of that, we’re thinking of a possible loan from ADB or the World Bank and thinking of government appropriations through the Department of Budget Management (DBM),” she added.
According to the study, giving low-income families access to up to eight hours of electricity a day will boost their income by 17.9%, while their expenditure is expected to increase by 17%.
If access to electricity were increased to eight hours to 16 hours per day, income and expenditure are expected to increase by 33.3% and 33%, respectively.
If low-income families are given access to electricity for 16 to 24 hours a day, their income and expenditure are projected to increase by 49.4% and 52.2%, respectively.
“If we are able to do total electrification, the economic benefit (of) P315 billion… (is equivalent to) 1.8% of our gross domestic product (GDP),” Ms. Guevara said.
“And the total electrification program is just P72 billion. If you invest that but get P315 billion back, wouldn’t that be a win?” she added.
According to Ms. Guevara, more than 2 million households currently have no access to electricity.
The DoE estimates the current household electrification rate at 93.12% at the end of March, while the target for this year is 94.83%.
President Ferdinand R. Marcos, Jr. said in his State of the Nation Address last year that the target is to achieve full household electrification by the end of his term. — Justine Irish D. Tabile
Below-market KADIWA rice to be priced initially at P45-P48 per kilo
THE Department of Agriculture said on Monday that it will launch the sale of subsidized rice to the broader public via KADIWA stores, with initial pricing set at P45-P48 per kilogram.
Agriculture Assistant Secretary and Spokesperson Arnel V. de Mesa said that the subsidized rice program will offer well-milled rice, and is separate from another program targeted at vulnerable segments of society for P29.
“Due to the developments which have caused rice prices to fall, most likely, the selling price will also go down,” Mr. De Mesa told reporters.
The price of well-milled rice in Metro Manila markets was between P48 and P55 per kilo as of July 5, according to DA price monitors.
“The program will run parallel with the P29 rice. The participating KADIWA centers will be doubled next week. By August, Visayas and Mindanao will also be included,” he added.
The P29 rice is meant to be sold to persons with disabilities, solo parents, and senior citizens, as well as those below the poverty line, at 10 kilos per month, subject to monitoring via booklets issued to beneficiaries.
Rice sold at P29 will be taken from ageing stocks held by the National Food Authority.
He said that the DA is also studying whether to limit the quantities of rice sold at P45-P48.
The national network of KADIWA stories is at about 300 outlets, along with 119 pop-up stores operating on rotation.
“We want this to be a sustainable and long gestating program. Our target is for it to be implementable until the end of our President’s term,” Mr. De Mesa said. — Adrian H. Halili
Luzon Economic Corridor rail cost estimated at $7B — Go
THE cost of setting up the rail lines linking the various sites along the Luzon Economic Corridor was estimated at $7 billion by Secretary Frederick D. Go of the Office of the Special Assistant to the President for Investment and Economic Affairs.
Mr. Go made the remarks on the sidelines of the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum on Monday.
Mr. Go said that a number of countries are interested in investing in the US and Japan-backed corridor’s development. “I believe that European countries are now wanting to join in on this project,” he added.
Mr. Go said discussions with interested countries are still at the preliminary stages.
“Say the UK will join, or say for example, a few countries from the European Union (EU) will join, they will encourage companies, both government and private corporations, from their countries to invest in that corridor,” he said.
“When we say invest in that corridor, we’re not just talking about the rail, we’re talking about everything that goes up around it — the infrastructure and businesses.”
The project is being pursued under a trilateral agreement between the Philippines, US and Japan. The proposed corridor seeks to boost connectivity between Manila, Batangas, Subic and Clark via a cargo rail line.
The project will “prioritize strategic investments in high-impact infrastructure projects such as rail, ports, clean energy, data centers, and agri-business centers,” Mr. Go added.
The Philippine Economic Zone Authority (PEZA) has said that many of its locators are expected to benefit from the corridor.
There are about 1,600 PEZA-registered manufacturing, service, and export-oriented companies based in 137 economic zones in Metro Manila, Clark, and Batangas.
The project is being pursued under the US-led G7 Partnership for Global Infrastructure and Investment and is the “first of its kind” in the Indo-Pacific region, according to the US State department.
Meanwhile, Mr. Go said the contract to maintain and operate Laguindingan International Airport in northern Mindanao is expected to be awarded to the private sector soon.
“Moreover, within this quarter, we are also expected to award a concession agreement for the Laguindingan International Airport,” he said.
The Transportation department has said that at least two parties have expressed interest in the upgrade and operations contract for the airport. — Beatriz Marie D. Cruz
Vietnam fertilizer supply partnership eyed
THE Department of Agriculture (DA) said it is studying a potential fertilizer supply deal with a company from Vietnam.
In a statement on Monday, the DA said that it was looking to tap Binh Dien Fertilizer Joint Stock Co. for NPK (nitrogen, phosphorus and potassium) fertilizer.
“We see great potential in partnering with Binh Dien. Our country stands to benefit significantly from their advanced technology and expertise in agriculture,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. was quoted as saying.
He added that the agreement, which is being structured as a distribution arrangement, could also lead to a potential investment in a manufacturing facility in the Philippines.
“They aim to contribute their specialized knowledge to enhance agricultural practices in the Philippines while fostering their own growth outside Vietnam,” the DA said.
The company was quoted as saying that the Philippines could be a “strategic opportunity” for its international expansion.
Binh Dien is one of Vietnam’s largest producers of NPK and has a combined capacity of 1 million metric tons (MMT). It supplies around 30% of Vietnam’s fertilizer requirements.
“Their management and technical team’s expertise is impressive and much needed in the Philippines,” he added.
In January, the Philippine and Vietnamese governments signed an agreement giving the Philippines a quota of 1.5 MMT to 2 MMT of rice annually for five years.
Imports from Vietnam amounted to 1.71 MMT as of June 27, according to the Bureau of Plant Industry. This accounted for 74% of the 2.31 MMT imported during the first half. — Adrian H. Halili
The EoPT Law on Computerized Accounting Systems (CAS)
I have been practicing tax for a while now, and I was a bit surprised to discover how technical tax practice can get. In my first year as an associate, I was stunned by the details that we needed to review for our client’s application for registration of Computerized Accounting System (CAS) and Computerized Books of Account (CBA). I was also surprised at how challenging it was to secure a Permit to Use (PTU) for CAS/CBA. It would be a big deal for us if one of the teams handling this type of application passed the scrutiny of the Bureau of Internal Revenue’s (BIR) Technical Working Group (TWG).
One example is that multinational companies using CAS globally spend significant amounts on the reconfiguration of their CAS in order to comply with the rules of the Philippines. Since these rules are not required by other tax authorities in other countries, the reconfiguration is done solely for the Philippines.
There are still challenges today, but I can honestly say that the BIR’s efforts to streamline the requirements and process to secure a PTU for CAS/CBA have been significant since then.
The BIR had several issuances to address these concerns. In 2020, citing the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 (RA 11032), the BIR issued Revenue Memorandum Circular No. 010-20 Suspending the Requirement for Permit to Use Computerized Accounting System, Computerized Books of Account, and/or Component(s) thereof.
In RMC 010-20, all taxpayers with pending applications filed with the National Accreditation Board (NAB) and assigned to the TWG for evaluation were allowed to use their CAS/CBA without securing a PTU, but they were required to submit a sworn statement, a sample print copy of the system-generated receipts and invoices, and a sample print copy of the system generated books of account in order to secure an Acknowledgement Certificate (AC) within three days from submission. Here, the BIR removed the requirement for a system demonstration, but the system will be subject to post-evaluation by the BIR during tax audits.
Further, it is worth noting that the BIR mentioned in this RMC that in case of any enhancement, modification, or upgrade in the system, the taxpayer must notify the bureau.
Following RMC 010-20, the BIR issued RMC 005-21, which simplified the policies on the application for registration of CAS and CBA. For this RMC, policies related to Electronic Storage System (ESS), Middleware, and other similar systems were provided. In this RMC, the BIR introduced the various action points for taxpayers should there be major system enhancements, upgrades, or minor enhancements. The BIR then issued RMC 009-2021, which provided detailed guidelines for CAS/CBA applications. Here, the BIR clarified that an enhancement is considered major if it involves a change in the functionalities of the system, particularly enhancements that will have a direct effect on the financial aspect of the system, which includes modified computations and other financial-related issues that were considered.
This type of enhancement was specifically mentioned by the BIR in Revenue Regulations (RR) 7-2024 and RR 11-2024. Pursuant to the provisions of the Ease of Paying Taxes (EoPT) law, Section 3 of RR 7-2024 provides that all VAT-registered persons and those required to register for VAT must comply with the following:
1. A VAT-registered person shall issue a duly registered VAT invoice, for every sale, barter, exchange, or lease of goods or properties, and for every sale, barter, or exchange of services, regardless of the amount of the transaction.
2. A VAT invoice shall be issued as evidence of the sale of goods and/or properties and the sale of services and/or leasing of properties issued to customers in the ordinary course of trade or business, whether cash sales or on account (credit), which shall be the basis of the output tax liability of the seller and the input tax claim of the buyer.
The above invoicing and accounting requirements, which will have a direct effect on financials, VAT recording, among others, must be implemented by the taxpayers who are using CAS, CBA, or CBA with Accounting Records (CBA with AR). As these changes are enhancements with a direct effect on the financial aspect, they are considered major enhancements that require taxpayers to update their system registration following the existing guidelines for registering CAS or CBA with AR. It must be noted as well that the existing AC or PTU must be surrendered to the BIR in exchange for a new AC.
However, it is worth noting that there are companies or industries, such as financial institutions and educational institutions exempt from VAT, which are using CAS and that these taxpayers are already recognizing revenue on an accrual basis, for tax purposes. The change of document serving as primary evidence from invoice does not affect the recording of revenue. It can be argued that these industries will no longer need system enhancement because the current setup is already proper based on the new law and regulations. Hence, the question is, do they need to secure a new AC as required by RR 7-2024 and RR 11-2024? Perhaps if the taxpayer can prove that there is no direct impact, these taxpayers will no longer be required to secure an AC, so long as the current one used is capable of issuing invoices.
On the other hand, taxpayers are given until Dec. 31, 2024 to reconfigure their systems and implement these enhancements to comply with EoPT law.
While the period given seems reasonable and subject to extension, the dilemma for taxpayers lies in the actual implementation of the changes, not to mention the disruption to their normal operations. However, transition periods are always challenging. And we all look forward to the time that we realize that these challenges we encounter right now have bought so much ease to taxpayers conducting business in the Philippines.
Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.
Gemmalu O. Molleno-Placido Is a senior manager of the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.
Philippines and Japan sign defense pact amid growing China tensions
By John Victor D. Ordoñez and Kyle Aristophere T. Atienza, Reporters
THE PHILIPPINES and Japan on Monday signed a pact that eases the entry of equipment and troops for combat training, saying they want stability in the region amid growing tensions with China.
Japanese Foreign Minister Yoko Kamikawa, who visited Manila, called the so-called reciprocal access agreement a “landmark achievement.”
“This is another milestone in our shared endeavor to ensure a rules-based international order,” Philippine Defense Secretary Gilberto C. Teodoro, Jr. told reporters after the signing.
The agreement is the first of its kind to be signed by Japan in Asia, and coincides with increased Chinese assertiveness in the South China Sea, where Beijing’s expansive claims conflict with those of several Southeast Asian nations.
Ms. Kamikawa and Mr. Teodoro signed the deal in the presence of Philippine President Ferdinand R. Marcos, Jr. and Japanese Defense Minister Minoru Kihara at the presidential palace in Manila.
Ms. Kamikawa and Mr. Kihara were in Manila for the second 2+2 ministerial meeting with their Philippine counterparts.
“Your presence here increases our confidence,” Mr. Marcos told the Japanese side. “I’m very glad that we have come to this day.”
A United Nations-backed tribunal based in the Hague in 2016 voided China’s expansive claims in the sea for being illegal.
Japan, which last year announced its biggest military build-up since World War II in a step away from its post-war pacifism, does not have any claims to the South China Sea, but has a separate maritime dispute with China in the East China Sea, where they have repeatedly faced off.
It has supported the Philippines’ position in the South China Sea and has expressed serious concern over China’s actions, including recent incidents that resulted in damage to Philippine vessels and injured a Filipino sailor.
“The Philippines and other Southeast Asian Nations are situated in… a key junction of Japan’s sea lanes; advancing defense cooperation and exchanges with the Philippines is important for Japan,” Mr. Kihara said.
The Philippines has a visiting forces agreement with the United States and Australia. Tokyo, which hosts the biggest concentration of US forces abroad, has a similar deal with Australia and Britain, and is negotiating another with France.
The reciprocal access agreement will take effect after being ratified by both countries’ Parliaments.
The pact is not targeted against any country, Ms. Kamikawa told a news briefing in Manila after the 2+2 ministerial meeting.
“The Philippines is a strategic partner that shares values and principles with Japan, and strengthening that relationship is not against any particular country in mind but rather something that is crucial for peace and stability in the region,” she said in Japanese.
Japan is committing to provide the Philippines with more patrol vessels and surveillance radar systems that it can deploy in the South China Sea, she said.
“Japan believes that the issue is directly related to the peace and stability of the Indo-Pacific region, and it opposes any attempt to change the status quo by force,” Mr. Kihara told the same briefing in Japanese.
Philippine Foreign Affairs Secretary Enrique A. Manalo said the military pact with Japan allows the parties to have a framework for cooperation in defense and other related issues. “It could serve as a force for stability in the region, for greater prosperity.”
Joshua Bernard B. Espeña, who teaches foreign policy at the Polytechnic University of the Philippines, said Japan has contributed to the stability of the Indo-Pacific region “throughout the years.”
“So, Manila will gladly accept all the help it would get from it,” he said in a Facebook Messenger chat. He said the pact’s effectiveness would heavily depend on “American contribution to the larger trilateral and regional alliance network.”
‘DEEP WOUNDS’
Don Mclain Gill, who teaches international relations at De La Salle University, said Japan could not replace the US in case American politics turns inward after the November elections “given the strategic limitations Japan still faces in playing a larger role as a defense partner.”
“But Japan remains one of the most important constants in our foreign policy calculations,” he said via Messenger chat. “In a scenario where the US may dial down its support for Manila, our partnership with Japan is likely to remain steadfast and consistent.”
Meanwhile, activist Antonio L. Tinio said the Senate should reject the military pact with Japan because it puts the Philippines in the middle of a potential war in the South China Sea.
The Philippines could be used as a staging ground for foreign military forces if tensions erupt in the waterway, Mr. Tinio, spokesman of civic group P1NAS, said in a statement.
“P1NAS calls on the Filipino people to oppose this dangerous agreement and calls on the Senate to deny its ratification,” he said.
“This agreement must be seen in the context of the ongoing US-led military build-up in the region. The US is pushing its allies, particularly Japan, towards massive militarization to serve as its proxies,” he added.
The military pact is part of the US strategy to contain China and keep its dominance in Southeast Asia, Mr. Tinio said.
“The reciprocal access agreement confirms the US intention to use the Philippines as a springboard for military action… to support its wars,” he added.
“While we stand firm in defending our sovereign rights in the West Philippine Sea, we must not allow this conflict to be used as a pretext for turning our country into a battleground for a US-China war for regional hegemony,” he said, referring to areas of the sea within the country’s exclusive economic zone.
The military pact also “reopens the deep wounds” of war crimes committed by Japan against Filipinos during World War II, he added.
Mr. Tinio said the reciprocal access agreement is not just a simple defense pact.
“It carries profound historical significance that cannot be ignored,” he said. “The Filipino people have not forgotten the atrocities committed during that dark period of our history, including the systematic use of comfort women, the Bataan Death March and countless other war crimes.”
Senate President Francis G. Escudero said they would scrutinize the deal “like other treaties that the Senate is asked to ratify by the Executive.” “Regardless of whether it ‘agitates’ another country, I believe we should pursue it if it is in our national interest and I believe that it is,” he told reporters in a Viber group message — with Kenneth Christiane L. Basilio and Reuters
Marcos urged to certify as urgent bills on oil regulation
By Kenneth Christiane L. Basilio
PHILIPPINE President Ferdinand R. Marcos, Jr. should certify as urgent a package of bills that seeks to lower oil prices as another round of fuel price increases looms, a congressman said on Monday.
The Lower Oil Prices bill package, which seeks to regulate the oil industry and centralize the procurement of oil products, could lead to lower petroleum prices if enacted into law, Deputy Minority Leader and Party-list Rep. France L. Castro said in a statement.
“This package includes critical measures such as House Bill No. 400 or the Lower Oil Price bill, House Bill No. 3003 to renationalize Petron, House Bill No. 3004 to unbundle oil prices, House Bill No. 3005 for centralized procurement of petroleum and House Bill No. 3006 to regulate the downstream oil industry,” she said.
“This bill package, when made into law, can lower oil prices, cause a domino effect in lowering basic products and services, and at least alleviate the suffering of consumers,” she added.
Fuel retailers on Monday announced an increase in oil prices for the fourth straight week, due to geopolitical tensions in the Middle East, according to the Department of Energy (DoE).
“Geopolitical tensions in the Middle East, an unexpectedly large withdrawal in US crude inventories and optimistic forecasts for summer fuel demand have all contributed to pushing prices in oil products higher,” Energy Director Rodela I. Romero said in a statement last week.
Oil companies said prices on Tuesday would jump by P1.60 per liter of gasoline, P0.65 per liter of diesel and P0.60 per liter of kerosene.
The Philippines deregulated the oil industry in 1998, ultimately resulting in fuel price increases “to go unchecked,” according to House Bill No. 3006 filed by Party-list Reps. France L. Castro, Arlene D. Brosas and Raoul Danniel A. Manuel in 2022.
The bill seeks to create a petroleum regulatory council to police against drastic increases in oil prices and prevent runaway price hikes.
The lawmakers are also seeking to centralize the procurement of imported crude oil by creating a national petroleum exchange system, which would allow the country to buy the cheapest crude oil in the world market.
Under House Bill No. 3005, the National Petroleum Exchange Corp. must get “the best prices” for imported oil products while also ensuring adequate supply.
Also part of the bill package is House Bill No. 400, which will cut the excise tax on petroleum products under the Tax Reform for Acceleration and Inclusion (TRAIN) law and exempt these from value-added tax.
The measure could slash P6 per liter of diesel and P5.35 per liter of unleaded gasoline, the authors said in the bill’s explanatory note.
The lawmakers are also seeking to make the price-setting by petroleum companies transparent by forcing them to provide a detailed computation of costs.
Under House Bill No. 3004, oil companies must provide a breakdown of costs affecting oil prices such as import and freight costs, refining charges and their profit margins on petroleum products before the DoE Oil Industry Management Bureau and House energy committee.
Legislators are also looking at renationalizing Petron Corp. so the government could use it to set “fair and regulated prices.”
Petron Corp. did not immediately reply to a Viber message seeking comment.
Under the measure, the Philippine National Oil Co. (PNOC) will reacquire Petron within four years using funds from the national budget.
“Malacañang and the House leadership must prioritize these measures,” Ms. Castro said. “It’s time to stop runaway oil prices and provide real relief to our people.”
She said these reforms should not be delayed because spiraling fuel prices have “far-reaching consequences” on the economy.
“These price hikes don’t just affect transportation; they inflate the costs of basic goods and services, further burdening our already struggling populace,” she added.