Home Blog Page 1685

MPIC unit Landco’s Baguio foray a play for strong leisure market

PHILSTAR FILE PHOTO

By Justine Irish D. Tabile, Reporter

THE interim management contract awarded to Metro Pacific Investment Corp. (MPIC) unit Landco Pacific Corp. for Camp John Hay is a play on the leisure segment, where interest is currently high, analysts said.

“The MVP group has been pushing to boost its property and hospitality business through Landco Pacific Corp., and this potential Baguio deal looks like a good opportunity for expansion,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said via Viber, referring to the group run by MPIC Chairman and President Manuel V. Pangilinan (MVP).

“MVP clearly sees the growth potential of the tourism industry. We expect that he will turn Camp John Hay into a sustainable world-class destination,” he added.

Last week, the Bases Conversion and Development Authority named Landco the interim manager of the Manor and Forest Lodge at Camp John Hay.

Under the agreement, Landco will operate the two facilities for one year, extendable to two.

Asked to comment, Colliers Research Director Joey Roi H. Bondoc described Landco’s decision as a “strategic move.”

“Now is an opportune time to invest in leisure-themed developments, and Baguio is definitely one of the ideal locations that developers should further explore,” he said via Viber.

“Landco has always been known for these developments, and the focus on Baguio complements the launch of the Spinnaker, a beachside property in Batangas,” he added.

The Department of Tourism reported that visitors spending at least a night in Baguio City numbered 1.31 million in 2023, accounting for 2.37% of all overnight travelers during the period.

“I think the interim management of the Manor is a good opportunity for Landco to assess further expansion into similar developments that are resort- or leisure-themed developments, as these projects cater to a thriving domestic and foreign tourism market,” Mr. Bondoc said.

According to Mr. Bondoc, leisure-oriented developments in the Philippines are being buoyed by the tourism rebound.

“This kind of project is popular. One developer’s project in Makati had a slow take-up, but its condotel in Batangas is sold out,” he said.

“These projects also benefit from the rebound of tourism. Note that foreign ownership for vertical development is allowed up to 40%,” he added.

Colliers reported that The Spinnaker, Pico Terraces, and Solmera Coast in Batangas have sold over 50% of launched units, while Escana in Boracay has sold over 70%.

Launched units at Villas at Aruga of Cebu and the Dusit Thani Residences in Davao were sold out. 

Meanwhile, Alpine Villas-Basel in Cavite had a take-up rate of 43%, and The Crown Residences and Bridgeport Park Sapphire Tower in Davao are at 69% and 81% sold, respectively.

Rice price ceiling could be adjusted to reflect declining international prices

PHILIPPINE STAR/EDD GUMBAN

WEAKER international rice prices could cause the proposed price ceiling on imported rice to be set lower, the Department of Agriculture (DA) said on Monday.

“The maximum suggested retail price (MSRP) for imported rice… most likely, in the coming days will further go down,” Agriculture Assistant Secretary and Spokesperson Arnel V. de Mesa said in a briefing.

The DA had set the MSRP at P58 per kilogram for imported rice with broken-grain content of 5%. A price ceiling has not yet set for imported 25% broken rice. The price ceiling is expected to take effect on Jan. 20, initially in Metro Manila.

He estimated an MSRP for 25% broken rice of below P50 per kilo.

Last week, the DA announced plans to set an MSRP for imported rice to further lower rice prices and curb profiteering from rice traders.

It also set labeling rules for imported rice identifying country of origin, type, and broken-grain content. The DA had noted that prices of some imported rice brands remained elevated despite lower import tariffs.

President Ferdinand R. Marcos, Jr. last year issued Executive Order No. 62 which slashed tariffs on rice imports to 15% from 35% previously until 2028.

The lower tariff rates on rice, which took effect on July 5, were intended to bring down prices and curb inflation.

The Philippines imported a record 4.78 million metric tons (MT) of rice in 2024, according to the Bureau of Plant Industry (BPI).

Mr. De Mesa said that there was an upward revision of the 2024 data due to “delayed counting.” Last week, the BPI reported rice imports of 4.68 million MT.

The BPI had issued 9,795 sanitary and phytosanitary import certificates (SPSIC) last year, equivalent to about 9.37 million MT of rice. Utilization by rice importers was about 66.13% or 6,477 SPSICs used.

He added that not all issued SPSICs will be fully utilized by rice traders due to factors like delayed shipping and transactions.

“There are applications which were not acted upon by the BPI, after seven days they will be deemed approved,” Mr. De Mesa said.

He added that international rice prices have declined, setting the tone for domestic rice prices.

Citing data from Vietnam as of Jan. 10, he added that the price of 5% broken rice dropped to $434 per MT from $510 per as of Dec. 10, while 25% broken rice fetched $409 per MT, down from $454.

According to DA price monitors, as of Jan. 10, a kilogram of imported special rice in Metro Manila markets sold for between P53 and P65 per kilo, while imported premium rice fetched between P52 and P60 per kilo.

The Philippines remains the world’s top importer of rice, according to the USDA. The Philippines is projected to import 5.3 million MT of rice in 2025. — Adrian H. Halili

Exporters urged to develop underserved markets in EU

A worker uses a microscope at an electronics manufacturing assembly plant in Biñan, Laguna, April 20, 2016. — REUTERS

EXPORTERS need to maximize the potential of electronic equipment, machinery, electricity, precious metals, and fruit exports to Europe, according to the Philippine Exporters Confederation, Inc. (Philexport).

Citing the International Trade Centre’s (ITC) Export Potential Map, Philexport said these product categories have unrealized potential in the European Union (EU)  and Western Europe.

The map identified electronic integrated circuits (ICs) and IC processors as the products with the most export potential, valued at $4 billion.

Actual exports of ICs amounted to $1.7 billion and $1.5 billion, respectively, with unrealized potential of about $493 million and $653 million, respectively.

Gold exports amounted to $1.3 billion with $497 million in further export potential.

Storage for data-processing machines had exports valued at $1.3 billion and unrealized potential worth $753 million.

Other products with top export potential are coconut oil, static converters, printers and copying machines, semi-manufactured gold, and parts of automatic data-processing machines.

Nelli Hajdu, ITC EU Market Access Expert, said that several regulatory and policy developments in the last five years have impacted business opportunities in the EU market.

These include climate change and its global response, supply chain vulnerability and changing geostrategic perception of the food trade, and greening initiatives.

“The shift from sanitary and phytosanitary and food safety to sustainability points to the EU trade agenda,” Ms. Hajdu said.

In the agriculture and food and beverage sector, the top products include bananas, crude coconut oil, pineapples (fresh or dried), and prepared or preserved tunas.

Other top products are desiccated coconuts, pineapples (prepared or preserved), mucilages and thickeners derived from vegetable products, edible parts of plants, and frozen yellowfin tuna. — Justine Irish D. Tabile

Arms industry expects gun law amendments to unlock growth

PHILSTAR FILE PHOTO

FIREARMS manufacturers and dealers said they support amendments to an 11-year-old law to unlock growth in the industry.

“By amending Republic Act (RA) No. 10591, we are not simply adjusting regulations, we are empowering an industry that can generate significant economic returns, provide employment and support innovation,” said Alaric Alexander J. Topacio, comptroller for the Association of Firearms and Ammunitions Dealers, during a House of Representatives hearing.

RA 10591 is also known as the Comprehensive Law on Firearms and Ammunition.

The House public safety and order committee held its first hearing on bills seeking to rationalize RA 10591, which regulates the manufacturing, import, and export of firearms.

Sta. Rosa City Rep. Danilo S. Fernandez, who heads the House public safety panel, formed a technical working group to consider the possibility of consolidating three separate bills seeking to amend the firearms law.

“We must support industries that can offer stability and growth. The firearms sector, with its potential to expand domestically and internationally, should be recognized as a key player in our economic strategy,” Mr. Topacio said.

President Ferdinand R. Marcos, Jr. signed into law in October the Self-Reliant Defense Posture Act, which seeks to “fully harness the potential of the defense industry.”

“This (firearms) industry has the capacity to generate thousands of jobs… and contribute to our economic development,” Mr. Topacio said.

He urged legislators to amend the law in a manner that effectively “addresses the root causes of illegal firearms trafficking, while supporting responsible gun ownership.”

The Philippines is among the least gun restrictive countries in Southeast Asia partly due to cultural influences from the American occupation. The national police, which regulates gun ownership in the country, allows Filipinos to own high-powered rifles.

Police General Ericson D. Dalig said there are about 2.7 million registered firearms in the country, while the count for “loose firearms” is more than 545,000.

“We have around 545,742 firearms that can be categorized as loose firearms (as) they cannot be renewed anymore because (their permits) were revoked,” he told legislators. — Kenneth Christiane L. Basilio

LANDBANK expects to boost credit support for sugar farmers

PHILSTAR FILE PHOTO

SUGAR FARMERS are expected to have expanded access to credit under the revised implementing rules and regulations (IRR) of the Sugarcane Industry Development Act’s (SIDA) Social Credit Program, Land Bank of the Philippines (LANDBANK) said.

In a statement, LANDBANK said it recently signed the revised IRR of the Social Credit Program, alongside the Sugar Regulatory Administration (SRA), which will expedite credit applications by sugarcane farmers.

“The streamlining of the program’s processes aims to provide more accessible and affordable credit support, in line with the Bank’s commitment to empowering sugarcane farmers and boosting the agriculture sector,” it added.

SIDA, also known as Republic Act 10659, seeks to raise the competitiveness of the sugarcane industry and improve incomes of farmers and workers.

Currently 50% of SIDA funds go to the construction of farm-to-market roads. The remaining funds are allocated to research and mechanization, socialized credit, and block farm development, with 10% dedicated to scholarships.

SRA Administrator Pablo Luis S. Azcona did not immediately reply to a Viber message seeking comment.

As of the end of November, LANDBANK had approved P1.32 billion for the Social Credit Program, benefitting over 4,000 farmers, including six block farms and four common service centers. — Adrian H. Halili

Inventory list and schedules for real estate, construction firms

Traditionally, the Bureau of Internal Revenue (BIR) inventory list is associated with taxpayers in manufacturing and retail, where inventories form part of the cost of goods sold, which is a critical component of major deductions on the income tax return.

However, when the BIR issued Revenue Memorandum Circular (RMC) 57-2015, it significantly broadened the scope, requiring other types of businesses, including those in the real estate and construction industries, to submit an inventory list along with the schedules.

The RMC requires all businesses with “tangible asset-rich” balance sheets to submit an annual inventory list along with schedules in the format prescribed by the BIR. Accordingly, a tangible asset-rich balance sheet is defined as at least 50% of the total assets composed of working capital, such as accounts receivable and inventory. This requirement has consequently brought real estate and construction businesses into the fold of compliance if they meet the criteria. If qualified, they must submit the required inventory list and schedule within 30 days after the close of a taxable year.

Moreover, the preparation of the required list and schedules for these industries must conform with the prescribed format, specifically dedicated to real estate and construction, under Annexes B and C of RMC 8-2023, respectively. Non-compliance with these formats will result in the submission being considered as not received by the BIR and subject to penalties.

If we look into the aforementioned annexes, it is clear that the information needed is significantly more data-intensive, as compared to a typical manufacturing or retail business, where taxpayers simply need to report basic details such as the inventory on hand, the valuation method, unit prices, quantity in stock, and total cost. For taxpayers involved in real estate, there is a detailed disclosure of the individual projects involved, contracted sales, and movement of the beginning and ending accounts receivable.

Similarly, for construction businesses, taxpayers must provide detailed information such as client names per project, the contracted price, the movement of the beginning and ending accounts receivable, billings and collections for the year, the estimated gross profit, and the percentage of completion, among others.

Based on my experience with these industries, gathering and preparing the required information for the list and schedule, while ensuring accuracy, could pose significant challenges, especially when aiming to meet the deadline within the 30th day after the close of the taxable year.

Real estate and construction companies typically have numerous transactions and projects, making it difficult to accurately account for the transactions with clients, track the movement of their accounts receivable, and reconcile their cash collections.  Additionally, for construction companies, obtaining the percentage-of-completion reports from the engineers on time is critical for calculating the estimated project cost and profit as part of the schedule. Thus, we cannot discount the significant time and effort that goes into preparing and organizing the information into the required BIR format.

Hence, it is important that these taxpayers should employ a computerized accounting system capable of generating the necessary data and timely report preparation. Additionally, effective coordination among the accounting, operations, and procurement departments is essential to prevent any miscommunication or inconsistent data entry, which could lead to errors and delays in compliance.

Another challenge is that the information available during the preparation and submission to the BIR on Jan. 30 may be based on unaudited account balances. As such, the reported figures in the schedules could still change due to adjustments made during the finalization of the financial statements (FS). These adjustments may be attributed to client’s adjustments (CAJE), external auditor’s adjustments (PAJE), or a combination of both, aimed at correcting the account balances.

In this light, it is crucial for taxpayers to assess the impact of any changes. If the adjustments are significant, it would be prudent for the taxpayer to refile and amend the previously submitted inventory list and schedule to the BIR. The main goal is to ensure that the submitted inventory list and schedules are accurate and would line up with the amount in the audited FS and Annual Income Tax Return (ITR) since the BIR uses this information in audits.

Normally, the BIR uses the inventory list and its schedule to identify any discrepancies that might indicate under-declaration of revenue when the BIR cross-checks the amount in the AFS and ITR. It may also include procedures of recalculating and analyzing the relationship between the accounts receivable movements, cash collections, gross profit recognized in the previous and among others. Any discrepancies identified must be adequately explained by the taxpayer. Otherwise, failure to provide a satisfactory explanation could result in the imposition of deficiency taxes.

It is worth noting that some taxpayers choose to pay the administrative penalties of P25,000 for failing to comply with the submission of the inventory list and schedule, as the fine may be relatively low compared to the cost and/or difficulty of preparing the report. However, these taxpayers should be cautious, as the BIR may view such non-compliance as willful. If deemed intentional, this act could be grounds for a mandatory tax audit.

In conclusion, while complying with BIR inventory list and schedule submission requirements may be cumbersome, particularly for the real estate and construction business, taxpayers should explore strategies to automate record-keeping and monitoring processes to efficiently capture the necessary information. Beyond fulfilling this annual statutory submission, the preparation of the list and schedule should offer a valuable opportunity to pinpoint areas for improvements and enhance transparency, ultimately fostering sustained growth of the business.

 

Richard R. Ibarra is a director of the Tax Advisory & Compliance Practice Area of P&A Grant Thornton.

Tweet us: @GrantThorntonPH Facebook: P&A Grant Thornton

pagrantthornton@ph.gt.com

www.grantthornton.com.ph

Peso sinks as markets trim Fed cut bets

THE PESO sank to an over three-week low against the dollar on Monday on expectations of a more cautious US Federal Reserve as strong jobs data stoked fresh inflation concerns.

The local unit closed at P58.70 per dollar on Monday, plummeting by 34 centavos from its P58.36 finish on Friday, Bankers Association of the Philippines data showed. This was the peso’s weakest finish in more than three weeks or since its P58.81-a-dollar close on Dec. 20, 2024

The peso opened Monday’s session weaker at P58.525 against the dollar. Its intraday best was at P58.50, while its worst showing was at P58.70 versus the greenback.

Dollars exchanged declined to $1.35 billion on Monday from $1.82 billion on Friday.

“The peso closed lower on the back of a strong dollar following stronger-than-expected US nonfarm payrolls and unemployment rate, which reduced bets of a rate cut by the Fed,” a trader said by phone.

Rising consumer inflation expectations in the US also affected Fed easing bets, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

For Tuesday, the trader sees the peso moving between P58.50 and P58.80 per dollar, while Mr. Ricafort expects it to range from P58.60 to P58.80.

The dollar charged higher on Monday and drove its peers to multi-year lows after a blowout US jobs report underscored the strength of the world’s largest economy and muddied the outlook for further Federal Reserve rate cuts this year, Reuters reported.

The greenback surged to its highest in over two years on Monday against a basket of currencies to peak at 109.98, extending a rally from last week.

Trading was thinned in the Asian session with Japan markets closed for a holiday, but nonetheless moves in the foreign exchange market were volatile and other currencies notched fresh lows on the back of the dollar’s strength.

Friday’s data showed US job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1% as the labor market ended the year on a solid footing, leaving traders heavily scaling back bets of Federal Reserve rate cuts this year.

Markets are now pricing in just 27 basis points worth of Fed rate cuts this year, down from roughly 50 bps at the start of the year.

With Wednesday’s reading on US inflation up next, any upside surprise could threaten to close the door on easing altogether. A slew of Fed officials is also due to speak this week. — A.M.C. Sy with Reuters

PSEi sinks to 6,300 level as Fed cut hopes fade

BW FILE PHOTO

THE MAIN INDEX sank to the 6,300 level on Monday as a spate of strong US labor data fanned renewed inflation concerns in the world’s largest economy, causing markets to rethink their Federal Reserve rate cut expectations.

The benchmark Philippine Stock Exchange index (PSEi) slumped by 2.35% or 153.22 points to close at 6,343.10 on Monday, while the broader all shares index dropped by 1.33% or 49.94 points to end at 3,704.91.

This was the PSEi’s lowest close in over six months or since it ended at 6,313.11 on June 26, 2024.

“The local market plunged as it took into consideration the rising inflation expectations in the US together with the possibility of the Federal Reserve slowing down their policy easing,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. “This comes following the US’ strong December 2024 labor market data.”

“Philippines share slid below the 6,400 level as sentiment was pulled down from the Friday night performance of the US, which saw its economy’s latest employment figures crush estimates,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message.

US stocks sold off on Friday, with the S&P 500 erasing its 2025 gains, after an upbeat jobs report stoked fresh inflation fears, reinforcing bets that the Federal Reserve will be cautious in cutting interest rates this year, Reuters reported.

The Dow Jones Industrial Average fell 696.75 points or 1.63% to 41,938.45; the S&P 500 lost 91.21 points or 1.54% to 5,827.04; and the Nasdaq Composite lost 317.25 points or 1.63% to 19,161.63.

A Labor Department report showed job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1% as the labor market ended the year on a strong note.

A hotter-than-expected job gain could translate into faster economic expansion, leading to a rise in prices. To contain still-elevated inflation, the Fed could be forced to take a more conservative stance on rate cuts this year.

“The peso’s decline against the dollar also added to the pessimism,” Mr. Tantiangco said. On Monday, the peso sank to an over three-week low of P58.70 as the dollar surged due to fading Fed cut hopes.

All sectoral indices ended in the red on Monday. Holding firms plummeted by 3.46% or 192.17 points to 5,347.85; property retreated by 1.78% or 42.04 points to 2,308.20; services sank by 1.53% or 32.58 points to 2,084.45; financials went down by 1.46% or 32.22 points to 2,170.85; industrials dropped by 1.37% or 126.91 points to 9,090.62; and mining and oil declined by 0.30% or 23.55 points to 7,736.26.

Value turnover rose to P4.96 billion on Monday with 806.77 million shares traded from the P3.77 billion with 1.04 billion issues changing hands on Friday.

Decliners overwhelmed advancers, 123 versus 68, while 51 names were unchanged.

Net foreign selling rose to P696.26 million on Monday from P45.93 million on Friday. — R.M.D. Ochave with Reuters

Philippines, US, Japan vow to deepen ties in face of Chinese actions at sea

CHINA COAST GUARD VESSEL 5901, nicknamed the “monster ship,” off the coast of Capones Island, Zambales on Jan. 4, 2025. — PHILIPPINE COAST GUARD

By Kyle Aristophere T. Atienza, Reporter

THE PHILIPPINES, the United States and Japan vowed to further boost cooperation under a trilateral arrangement in the face of rising tensions in the South China Sea, the three countries said after a call among their leaders.

Philippine President Ferdinand R. Marcos, Jr., outgoing US President Joseph R. Biden and Japanese Prime Minister Shigeru Ishiba met virtually on Monday morning, in which they “agreed to enhance and deepen economic, maritime and technology cooperation,” the presidential palace in Manila said in a statement.

At the virtual meeting, the US president also lauded the Philippines for standing up to Chinese aggression in the South China Sea.

Mr. Marcos said he is confident that the three countries would “continue working together to enhance and deepen trilateral ties.”

“I am confident that our three countries will continue to work together closely to sustain the gains that we have made in enhancing and deepening our ties,” Mr. Marcos said at the virtual summit, according to his office.

The palace said Mr. Biden had expressed hope at the meeting that his successor would continue the trilateral partnership. Donald J. Trump succeeds Mr. Biden on Jan. 20.

“Our countries have an interest in continuing this partnership and institutionalizing our cooperation across our governments so that it is built to last,” the outgoing US leader said. “I’m optimistic that my successor will also see the value of continuing this partnership, and that it is framed the right way.”

A White House readout said Mr. Marcos, Mr. Biden and Mr. Shigeru Ishiba sought ways “to advance our continuing cooperation in the Indo-Pacific.”

It said the three leaders discussed “trilateral maritime security and economic cooperation, as well as the People’s Republic of China’s dangerous and unlawful behavior in the South China Sea.” “The three leaders agreed on the importance of continued coordination to advance a free and open Indo-Pacific.”

Among the participants of the first-ever trilateral summit in April 2024, only Mr. Marcos will remain in power by Jan. 20. Mr. Ishiba took over in September 2024 after Fumio Kishida’s resignation amid corruption issues within the ruling Liberal Democratic Party.

“Since then, we’ve made historic progress in our trilateral partnership, especially in areas of maritime security, economic security, technology cooperation and high-quality infrastructure investments,” Mr. Biden said.

Hansley A. Juliano, a political analyst who studied at Nagoya University’s Graduate School of International Development in Tokyo, said the Marcos government’s policy should not change amid risks of backsliding under the second presidency of Mr. Trump, who is known for his America-first policy.

“Its current strength is precisely in its ability to bring in additional allies,” he said.

Manila can count on South Korea and Australia should the US and Japan become “unreliable” partners in the short term, he said. “The multilateral arrangements facilitated by the US and Japan in the past are precisely for these kinds of moments.”

Mr. Juliano said the security agencies of Japan and the US “tend to hold themselves to longstanding commitments unless the incumbent is drastically against multilateral or international engagements.”

“Shifts in US foreign policy have happened, but it has not significantly waned even during the first presidency of Trump,” he said. “And as for Japan, it is much concerned with containing China in line with its free and open and Indo-Pacific policy.”

“The trilateral partnership of Japan, the Philippines and the US is at its best form,” said Chester B. Cabalza, founding president at International Security and Development Center. The three have “common strategic interests amid challenges in maintaining a rules-based order in the Indo-Pacific region.”

He noted that Washington, Tokyo and Manila “build bilateral defense pacts to address impending challenges.” “Despite changes, these allied countries remain committed to fostering peace and order in the South China Sea.”

Don McLain Gill, an international relations lecturer at De La Salle University, said the trilateral partnership is an important component of the Indo-Pacific program of the US and Japan.

“It’s a matter of continuing where it has left off,” he said in a Facebook Messenger chat, noting that their commitment to building an economic corridor on the main Philippine island of Luzon would remain because it’s long-term in nature.

“Japan eagerly tries to leverage whatever it can to maximize its presence in the Indo-Pacific region, the US as well,” he added.

Joshua Bernard B. Espeña, who teaches foreign policy at the Polytechnic University of the Philippines, said Mr. Marcos should be candid with Mr. Trump about what Manila could offer and where Americans and other partners should come in.

“The most apparent is the sustainability of the supply chain of defense industries that are direly needed to create an impactful deterrent against Beijing in times of conflict,” he said via Messenger chat.

“It matters much that while Mr. Trump asks regional allies for more, it must also look in the mirror to where it can be of most help — something that Manila should communicate down the line,” he added.

DIPLOMATIC PROTEST
The US and Japan have condemned China’s intrusions into Philippine waters in the South China Sea, which Beijing claims almost in its entirety.

The presidential palace in Manila said Mr. Biden commended Mr. Marcos for his diplomatic response “to China’s aggressive and coercive activities in the South China Sea.”

As the three leaders held their summit, which lasted 25 minutes, the Philippine government said it had filed diplomatic protests over the presence of Chinese vessels including Beijing’s monster ship China Coast Guard Vessel-5901 within its exclusive economic zone (EEZ) in the South China Sea.

The National Maritime Council had yet to provide details of the diplomatic protests but it cited “China’s recent illegal actions in the West Philippine Sea.”

In a statement, it said the Philippine Coast Guard’s (PCG) air and sea assets were immediately deployed when the presence and operations of China Coast Guard (CCG) vessels CCG 5901 and CCG 3304 were detected on Jan. 5 and 10 near Scarborough Shoal and the coastline of the Zambales province.

“The PCG continuously challenged CCG 5901 and CCG 3304 and told them to leave the area immediately,” it added.

Scarborough has been a major source of tensions in the South China Sea, with Chinese coast guard vessels backed by maritime militia ships continuing to block Filipino fishermen. A United Nations-backed court in the Hague voided China’s expansive in the South China Sea in 2016, as it ruled the shoal is a traditional fishing ground for Filipino, Chinese and Vietnamese fishermen.

1.4M INC members hold rally in Manila as House steps up raps vs VP Sara

MORE THAN a million members of religious group Iglesia ni Cristo held a rally at the Quirino Grandstand in Manila on Monday to oppose impeachment moves against Vice-President Sara Duterte-Carpio. — PHILIPPINE STAR/EDD GUMBAN

By Kyle Aristophere T. Atienza, Reporter

MORE than a million members of the bloc-voting religious group Iglesia Ni Cristo (INC) held a rally in the Philippine capital on Monday as lawmakers stepped up impeachment efforts against Vice-President Sara Duterte-Carpio.

Ms. Duterte- Carpio, who was in Japan at the weekend, said the rally was a “powerful show of unity and faith.” “In the face of rising prices of commodities, poverty and other challenges, a peaceful and united Philippines will never be unbowed,” she said in a recorded speech in in Filipino.

The Manila Public Information Office estimated the crowd at 1.41 million as of 2 p.m. The INC members came from Metro Manila, Central Luzon, Calabarzon and Mimaropa regions.

INC members held rallies at 13 sites across the country, including Iloilo City in central Philippines and the southern city of Davao, the stronghold of the Dutertes.

The Philippine National Police said overall, there were 1.8 million INC members who joined the rallies across the country as of Monday noon.

“The bulk of that, which is more or less 1.5 million to close to 1.6 million, is now at the Quirino Grandstand,” police spokesperson Jean S. Fajardo told a news briefing in Filipino.

The INC remains a minority church group in the predominantly Catholic nation, with 2.8 million members. There are more than 80 million members of the Catholic Church, which was active in two popular uprisings that led to the ouster of the late dictator Ferdinand E. Marcos in February 1986 and former President Joseph E. Estrada in 2001.

Impeachment talks have gained ground at the House of Representatives after lawmakers’ probe of Ms. Duterte-arpio’s confidential funds at the Office of the Vice-President and the Department of Education, which she led for about two years under the Marcos government.

The presidential palace early on Monday asked agencies to respect the right of INC to protest, noting that “to peaceably assemble is a bedrock right guaranteed by our Constitution, cherished by our people and consistently upheld by this administration.”

“All government agencies are, therefore, ordered that this right to be exercised today by our Iglesia ni Cristo brethren should not be impaired,” Executive Secretary Lucas P. Bersamin said in a statement.

“We view today’s assemblies as part of the national conversation we should be having as a people to bring clarity and consensus on issues that face us all and affect our future,” he added.

Malacañang earlier suspended government work and classes at all levels in Pasay and Manila for Jan. 13. The Senate and some local government units also suspended work.

Arjan P. Aguirre, who teaches political science at the Ateneo de Manila University, said the rally was political and was “intended to send a message to the Marcos government” — “that it is a show in support of the embattled Duterte dynasty.”

“The Dutertes are very close to the INC,” he said in a Facebook Messenger chat. 

Ms. Duterte-arpio and her father, former president Rodrigo R. Duterte, separately visited Executive Minister Eduardo V. Manalo on October 1 and 10, 2024, respectively. Mr. Marcos, meanwhile, visited Mr. Manalo two days before the church leader’s 69th birthday on Oct. 31, 2024.

‘POLITICAL RESPONSE’
The President has declared the founding anniversary of the INC on July 27, 2025, as a special nonworking day.

Politicians have been seeking the support of the INC due to its bloc-voting rule, which is a requirement for its members.

Senators Francis N. Tolentino and Ronald M. dela Rosa, who are both seeking another Senate term, attended the rally in Manila.

Ateneo Policy Center fellow Michael Henry Ll. Yusingco cited a rule in political science “that no government can withstand a challenge of 3.5% of its population. “That means a mass action will only be impactful if it is demonstrably massive, meaning its attendees come close to 3.5% of its population,” he said via Messenger chat.

“The mass demonstration must be that perceptibly big, otherwise it will not have the impact. So in our country’s case, a rally must palpably show that 4.2 million of us, or somewhere around that number, joined it.”

Mr. Aguirre said the rally was a delayed response to impeachment complaints filed against Ms. Duterte-Carpio since December.

“It is a political response — muscle flexing on the part of the Dutertes that the INC is with them. INC agreed to this because they are invested in Sara, hoping that their favored place and privileges would stay should she become the president in 2028,” he said.

“It’s a gamble that they are willing to take since they know that the Marcoses do not have a strong candidate in 2028,” he added.

Anthony Lawrence Borja, a political science professor from De La Salle University, said the INC rally “highlights the impact of religious organization and mobilization on the willingness of ordinary citizens to participate in politics outside elections.”

“It is a mark that a secular split between religion and politics along liberal lines remains a far-off reality for Filipino politics,” he said via Messenger chat.

“Shouldn’t we pray for justice and good governance by holding those who violate our laws accountable instead of tolerating corruption and plunder in the name of peace and unity?” Antonio P. Contreras, a political analyst from the University of the Philippines Los Baños, asked.

Marcos government told to expand bureaucracy to boost public services

PRESIDENT FERDINAND R. MARCOS, JR. — PHILIPPINE STAR/NOEL PABALATE

PHILIPPINE lawmakers should seek to expand the government bureaucracy to boost social and economic services instead of getting rid of obsolete positions since “rightsizing” would just weaken the delivery of public services, an economist said.

“The Rightsizing bill is similarly misguided and will just further reduce government capacity to provide services and productively intervene in the public interest,” IBON Foundation Executive Director Jose Enrique A. Africa said in a Viber message.

“The better direction is to assess public needs for social and economic services, identify the required government capacity for this and expand the existing bureaucracy to ensure this capacity,” he added.

Senate Bill No. 890, which seeks to do away with obsolete government positions, empowers the President to scale down agencies under the Executive branch.

Senator Sherwin T. Gatchalian last week urged lawmakers and officials from the Budget department to conduct a cost-benefit study on rightsizing.

He noted that the power could be abused since the President removes people or agencies he doesn’t like.

Under the bill, Congress, the Judiciary, constitutional commissions, the Ombusdman and local governments may restructure their offices.

Affected state workers with five to 11 years of service would be entitled to half their monthly salary for every year of service.

But John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said cutting the bureaucracy would boost efficiency and reduce costs.

“Streamlining government operations and reducing the bureaucracy is essential for improving efficiency, cutting unnecessary costs and reallocating resources to critical sectors like education, healthcare and infrastructure,” he said Viber message.

Senate President Francis “Chiz” G. Escudero, who sponsored the measure before the plenary in December, said the measure would not necessarily downsize the government and remove employees but would also raise the quality of state services.

The House of Representatives passed a similar measure in March 2023 that seeks to form a committee on rightsizing that would review and study roles, functions and manpower levels of agencies in the Executive branch.

The Senate president and Senator Sherwin T. Gatchalian earlier pushed to add a provision to the bill that would automatically create permanent positions for qualified contractual employees that have held job-order positions for decades.

The Budget department earlier said the savings from cutting the government bureaucracy would fund more priority infrastructure, social welfare and agriculture projects.

“The development question is not how to make the bureaucracy smaller but how to make it better and up to the many challenges of Philippine development,” Mr. Africa said. “The downsizing premise sugarcoated as rightsizing is arbitrary and mainly motivated by cutting on personnel expenses.” — John Victor D. Ordoñez

DILG to probe 2016-2022 cases, cites ‘grand conspiracy’ to conceal drug hauls

Department of Justice Secretary Jesus Crispin Remulla (left) and Department of Interior and Local Government Secretary Jonvic Remulla (right) conduct a press briefing with other officials in Malacañan Palace on January 13, 2025. — PHILSTAR FILE PHOTO

THE Department of Interior and Local Government (DILG) on Monday said it will investigate drug-related operations from 2016, citing a “grand conspiracy” to conceal criminal activities within the Philippine National Police (PNP).

DILG Secretary Jon Victor Remulla said this as the Department of Justice (DoJ) announced the filing of charges against 30 police officers including two generals over a fabricated drug haul in 2022.

“There appears to be a grand conspiracy to conceal a criminal enterprise within the PNP,” he said at a Palace briefing.

“We will go back to 2016 all the way down to 2022,” he said, noting that when a reward system was instituted in the PNP in 2016, drug hauls were not being reported.

“And because there was a reward, they would take small amounts and put them there,” he said in mixed Filipino and English. “With the reward, they would have an accomplishment.”

The PNP enforced a reward system under former President Rodrigo R. Duterte, retired police colonel Royina Garma revealed in a House quad committee hearing in October last year, with the former Philippine leader allegedly offering cash rewards for every drug suspect killed in his war on drugs.

The DoJ said in a statement on Monday that the 30 erring cops planted evidence and mishandled a high-profile drug case involving the seizure of over 900 kilograms of methamphetamine (shabu) worth P6.7 billion in Tondo, Manila.

The officers failed to conduct lawful arrests of a police officer allegedly involved in the drug trade and another individual accused of drug trafficking, the agency said, citing a resolution by its prosecutors.

“The charges were filed under the Comprehensive Dangerous Drugs Act (RA 9165) against several high-ranking officials, including Lieutenant General Benjamin Santos, Jr., Brigadier General Narciso Domingo, and 28 other officers,” it said.

It said the case was already filed before the Manila Regional Trial Court Branch 175.

The case centers on the arrests in October 2022 of Police Master Sergeant Rodolfo Mayo, Jr. and Ney Saligumba Atadero.

Police claimed Mr. Mayo was apprehended in a hot pursuit operation on Oct. 9, 2022, while Mr. Atadero was allegedly arrested in a buy-bust operation on Oct. 8, 2022. Both incidents reportedly led to the confiscation of billions worth of shabu.

But the arrests were simulated, the DoJ said, citing CCTV footage presented by the Criminal Investigation and Detection Group (CIDG) and the National Police Commission (Napolcom) which “reveal inconsistencies in the police narrative.”

“The footage, also shown by former Interior Secretary Benjamin “Benhur”Abalos, Jr. during a press conference, allegedly showed Mr. Mayo in handcuffs as early as Oct. 8, contradicting claims of his arrest the following day,” it said.

The DoJ said Mr. Mayo was seen being brought to WPD Lending — a site linked to the drug bust — while Mr. Atadero was observed moving freely in the same location.

“We can conclude from the complaints that Mayo was already arrested earlier in Bambang, Tondo, Manila, for allegedly possessing two kilograms of shabu. Atadero can also be seen from CCTV footage freely roaming the WPD Lending office. Hence, the subsequent arrests were staged,” the DoJ resolution read.

It added that Mr. Atadero was merely awaiting the arrival of senior officers to inspect the staged arrests.

“Prosecutors noted that while charges had been filed in court against Mr. Mayo and Mr.Atadero for drug offenses, the indictment was based on simulated arrests and planted evidence,” DoJ said. — Kyle Aristophere T. Atienza