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Profit taking halts PHL shares’ three-day climb

REUTERS

PHILIPPINE SHARES closed lower on Tuesday as investors pocketed their gains following the market’s three-day rally.

The Philippine Stock Exchange index (PSEi) fell by 0.33% or 22.28 points to close at 6,667.09 on Tuesday, while the broader all shares index dropped by 0.23% or 8.29 points to end at 3,585.93.

“The local market dropped due to last-minute profit taking after a three-day consecutive climb,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message. “Many chose to remain on the sidelines as net market value turnover was tepid.”

“This Tuesday’s correction may imply that investors are not yet prepared to see the bourse above the 6,700 resistance level,” Mr. Plopenio added.

“Local shares succumbed to profit taking following a successive run-up of the index as investors bet that the unsuccessful assassination attempt boosted Donald J. Trump’s chances of reclaiming the White House,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The shooting attempt on Republican candidate and former US President Donald J. Trump’s life immediately altered the dynamics of the presidential campaign, which had been focused on whether President Joseph R. Biden should drop out due to concerns about his age and acuity following a halting June 27 debate performance, Reuters reported.

Mr. Limlingan added that dovish comments from US Federal Reserve Chair Jerome H. Powell overnight also affected the local market’s movement on Tuesday.

Mr. Powell said on Monday the three US inflation readings over the second quarter of this year do “add somewhat to confidence” that the pace of price increases is returning to the Fed’s target in a sustainable fashion, remarks that suggest a turn to interest rate cuts may not be far off, Reuters reported.

Traders continue to expect a September rate cut followed by additional cuts in November and December, bringing the policy rate down to 4.5%-4.75% by yearend.

Almost all sectoral indices closed lower on Tuesday, with property being the sole gainer, rising by 1.73% or 45.86 points to 2,697.04.

Financials dropped by 1.32% or 26.89 points to 2,000.53; services went down by 0.84% or 17.35 points to 2,029.27; mining and oil declined by 0.56% or 48.98 points to 8,597.27; holding firms retreated by 0.33% or 19.45 points to 5,765.91; and industrials lost 0.27% or 24.75 points to end at 9,131.75.

“Among the index members, Ayala Land, Inc. was at the top, climbing 3.26% to P31.70. PLDT, Inc. lost the most, dropping 3.23% to P1,499,” Mr. Plopenio said.

Decliners beat advancers, 98 versus 79, while 55 issues were unchanged.

Net foreign buying stood at P304.96 million on Tuesday, a turnaround from the P46.18 million worth in net selling recorded on Monday. — R.M.D. Ochave with Reuters

Peso rebounds vs dollar as dovish Powell comments bolster easing view

PHILSTAR FILE PHOTO

THE PESO rebounded against the dollar on Tuesday as dovish comments from the US Federal Reserve chief bolstered bets of a rate cut from the central bank soon.

The local unit closed at P58.385 per dollar on Tuesday, strengthening by 9.5 centavos from its P58.48 finish on Monday, Bankers Association of the Philippines data showed.

The peso opened Tuesday’s session slightly stronger at P58.455 against the dollar. Its intraday best was its closing level of P58.385, while its weakest showing was at P58.52 versus the greenback.

Dollars exchanged rose to $1.42 billion on Tuesday from $1.095 billion on Monday.

The peso rose as the dollar remained relatively weak on Tuesday due to dovish comments from Fed Chair Jerome H. Powell overnight, a trader said by phone.

The dollar inched away from five-week lows on Tuesday, as investors weighed the case for a September rate cut after comments by Mr. Powell and pondered rising odds for the reelection of former US President Donald J. Trump, Reuters reported.

On Monday, Mr. Powell said the second quarter’s three US inflation readings “add somewhat to confidence” that the pace of price increases is returning to the Fed’s target in a sustainable way.

Markets now anticipate 68 basis points of easing this year, with a rate cut in September fully priced in, the CME FedWatch tool showed.

The dollar index, which measures the US unit against six peers, was 0.12% higher at 104.36, not far from the one-month low of 104 it touched on Monday.

The peso was also supported by lower global crude oil prices and improved global market risk appetite, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

On Tuesday, Brent futures fell 0.3% to $84.63 a barrel, while US West Texas Intermediate crude slipped 0.3% to $81.64, Reuters reported.

For Wednesday, the trader expects the peso to move between P58.20 and P58.60 per dollar, while Mr. Ricafort sees it ranging from P58.30 to P58.50. — AMCS with Reuters

Business chambers identify 21 pending bills as priorities

PHILIPPINE STAR/MICHAEL VARCAS

BUSINESS CHAMBERS said they view the lifting of foreign equity restrictions and the increased ceiling for farmland owned by foreigners, among other pending bills, as the highest priorities for Congress.

In a statement on Wednesday, Philippine Business Groups and the Joint Foreign Chambers (PBG-JFC) said they are requesting President Ferdinand R. Marcos, Jr.’s support to pass 21 measures they deem critical.

“These proposed reforms aim to drive economic growth, enhance global competitiveness, and promote inclusive development,” the chambers said.

They said that some of the measures are part of the 24-item priority list they compiled for Congress in July 2022.

“We greatly appreciate that of the 24 measures, three have been signed into law and three more have been identified in the LEDAC (Legislative Executive Development Advisory Council) Common Legislative Agenda for passage,” they added.

Resolution of Both Houses (RBH) No. 7, which is currently with a Senate committee, seeks to amend economic provisions in the constitution to change foreign participation restrictions on public utilities, educational institutions, and advertising.

The groups also sought to increase the ownership ceiling for foreigners on agricultural land from five hectares to 24 hectares and to remove the 15% domestic preference in awarding contracts for construction or repair of public works contained in Commonwealth Act 138.

The groups also sought changes to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) and Philippine Economic Zone Authority laws, particularly regarding flexible work schedules, as well as reforms to apprenticeship programs.

“Amendments are sought to allow locators greater flexibility in setting work-from-home arrangements,” PBG-JFC said. “Further reforms in the current apprenticeship program will make it more attractive to both enterprises and prospective apprentices.”

The groups also said that the government should prioritize amendments to the E-Commerce Act and the Intellectual Property Code to align with treaty obligations and adopt international best practices.

They said that the Capital Income and Financial Taxes Reform should be passed to simplify the taxation of passive income and financial transactions, harmonize tax rates on interest, dividends, and capital gains, and rationalize the documentary stamp tax to reduce costs.

The groups also sought amendments to the Secrecy of Bank Deposits Law to allow the central bank to exercise its supervisory powers to examine deposits related to unlawful activities.

The groups also sought priority treatment for the Konektadong Pinoy Bill, the Freedom of Information Act, and the Satellite-based Technologies Promotion Act. They also urged the promotion of digital payments.

They said that these measures will help lower internet costs, bridge the digital divide, make digital payments efficient, and provide citizens with access to information in all government offices.

They also pushed for the creation of the Philippine Airports Authority, which will handle the regulation and operation of all airports, and the transfer of Philippine Ports Authority-operated ports to a separate public sector body.

In relation to this, the PBG-JFC said that the International Maritime Trade Competitiveness Act should strengthen the oversight functions of government agencies over the imposition of shipping charges by international shipping lines.

Other measures being pushed by the groups are the National Unemployment Insurance Program, the Department of Disaster Resilience bill, the Pandemic Protection Act, the Holiday Rationalization Act, and the strengthening of the Philippine pension system.

“With one year left in the current Congress, we believe that the 21 measures are achievable reforms that will generate substantial impact in achieving our shared vision of inclusive growth through job generation, poverty reduction, and global competitiveness,” PBG-JFC said.

“We will continue to work with Congress and the administration in support of these remaining reforms as we look forward to the State of the Nation Address,” it added.

Signatories to the statement were the Management Association of the Philippines, Makati Business Club, Semiconductor and Electronics Industries in the Philippines Foundation, Inc., Association of International Shipping Lines, Inc., Chambers of Customs Brokers, Inc., Confederation of Wearable Exporters of the Philippines, and the Philippine Association of Multinational Companies Regional Headquarters, Inc.

The other signatories are the American Chamber of Commerce of the Philippines, Inc., the Canadian Chamber of Commerce of the Philippines, Inc., the European Chamber of Commerce of the Philippines, the Japanese Chamber of Commerce and Industry of the Philippines, Inc., and the Korean Chamber of Commerce Philippines. — Justine Irish D. Tabile

Social spending put forward as growth driver instead of infra

DSWD.GOV.PH

THE GOVERNMENT needs to spend more on social spending and agriculture instead of infrastructure projects to stimulate economic development amid signs of slowing growth, an economist said on Tuesday.

The government should fund social projects, agricultural infrastructure, and provide support for industry to stoke economic growth as trade and investment slump, Jose Enrique A. Africa, executive director at think tank IBON Foundation, said.

“The only thing the government can do to support growth is to spend more… on high-impact, high-multiplier activities,” he said in a briefing.

“We strongly disagree that infrastructure spending is a high-multiplier activity, especially for big-ticket projects, as they are very import-dependent,” he added.

The Philippines won’t meet its target gross domestic product growth of 6-7%, Mr. Africa added, noting that slowing household spending, slumping foreign investment, and weak domestic capital formation are hampering growth.

The Bangko Sentral ng Pilipinas reported that foreign direct investment (FDI) inflows fell 36.9% to $556 million in April. This was the lowest monthly reading for FDI inflows in 10 months, or since the $541 million posted in June last year.

Month on month, net inflows dropped 19% from March.

On the other hand, household spending rose 4.6% in the first quarter, against 5.3% in the fourth quarter and 6.4% a year earlier, according to the Philippine Statistics Authority (PSA). 

“Unless there’s going to be a major shift in terms of government spending, it’s unlikely (to meet growth targets),” he said.

Funding big-ticket infrastructure projects does not offer “bang for the buck” as most of it is spent on materials, equipment, and overseas contractors, he said, and won’t help in developing domestic industry, which could stimulate growth.

The government has 185 infrastructure flagship projects valued at P9.54 trillion under the Marcos administration’s “Build Better More” program.

While increasing government spending on social projects won’t “generate financial returns,” it would help increase consumer spending, benefiting domestic industry, he added.

“It’s going to be money spent on Filipinos, and that’s money Filipinos will spend domestically,” said Mr. Africa. “It won’t generate financial returns, but (it will) …  increase purchasing power and spending.”

The government should also focus on irrigation projects to enable the agriculture industry to increase food production, eventually making food cheaper, he said.

He advocated the development of a domestic electronics industry to establish a stronger foundation for the economy, instead of relying on foreign investments, he said.

Electronic products were the top export in May, accounting for 56.2% of total Philippine exports during the period, bringing in $3.56 billion, the PSA said last week.

“Much of our exports are electronic components. Why not find that segment of electronic components where the Philippines already has supply and consumer capacity, then go all out to support that?,” he said. — Kenneth Christiane L. Basilio

NEDA Board approves changes to Laguna lakeshore road project

PPP.GOV.PH

THE National Economic and Development Authority (NEDA) Board approved changes to the Laguna Lakeshore Road Network (LLRN) project, to include connecting roads to nearby areas.

“The NEDA Board, chaired by President Ferdinand R. Marcos, Jr., has approved modifications to the Phase 1 scope of the LLRN Project, which now includes the development of connecting roads and interchanges in various locations,” NEDA said in a statement following its July 15 meeting.

The roads and interchanges will be in Barangay Tunasan, Muntinlupa City, as well as San Pedro, Biñan, and Cabuyao, Laguna, it said.

The LLRN is a 37.5-kilometer primary road and a 12.0-kilometer viaduct from Lower Bicutan, Taguig, to Tunasan, Muntinlupa. It also includes a 25.5-kilometer shoreline viaduct and embankment from Tunasan, Muntinlupa to Calamba, Laguna.

Due for completion in 2027, the project is expected to boost economic activity in southern Metro Manila and provinces to the south of the capital region.

“The NEDA Board recognizes the significant potential of this project in reducing transportation constraints on existing road networks, promoting economic development in the region, and providing safer, more convenient, and faster travel for road users coming from the north and south to various tourist and business destinations in Laguna and nearby provinces,” NEDA Secretary Arsenio M. Balisacan was quoted as saying in the statement.

Feasibility studies for the second phase of the LLRN project will be completed by December, NEDA said.

This will cover the eastern shore of Laguna de Bay from Binangonan, Rizal to Calamba, Laguna, bringing the total length of the LLRN main road to around 71.5 kilometers.

Meanwhile, the NEDA Board also approved the negotiated parameters, terms, and conditions for the Bohol-Panglao International Airport project and the Laguindingan International Airport project in Misamis Oriental.

The approved parameters ensure the Bohol-Panglao International Airport complies with Republic Act No. 11966 or the Public-Private Partnership (PPP) Code.

The project costs P4.5 billion and seeks to increase the maximum number of passengers handled by the airport to 3.9 million a year.

Approved changes in the parameters for the upgrade and expansion of the Laguindingan International Airport include guidelines for adjusting the passenger service charge.

Changes in the passenger service charge “will be contingent upon achieving the set key performance indicators and minimum performance standards and specifications for operation and maintenance during the concession period.”

The project costs P12.75 billion, and will result in the upgrade of standing facilities, NEDA said.

“We expect these projects to significantly boost tourism, and as a result, generate more high-quality jobs,” Mr. Balisacan said.

The NEDA Board also signed off on an additional $30-million loan for the Project Development and Monitoring Facility (PDMF).

The PDMF is a project preparation facility that’s supporting agencies in the preparation, development, approval, procurement, coordination, and monitoring of various PPP projects.

“As we strive to expand private sector participation in our infrastructure projects, this additional support for the PDMF will ensure that our PPP undertakings are meticulously planned and executed to the highest standards,” Mr. Balisacan said.

“It will also guarantee continued access to international sources of innovation, expertise, advice, and best practices in the development and implementation of PPP projects,” Mr. Balisacan added. — Beatriz Marie D. Cruz

Meat imports up 10% led by pork, chicken

REUTERS

MEAT imports rose 10% in the five months to May with pork, chicken, and beef seen leading, according to the Bureau of Animal Industry (BAI).

The BAI said imports amounted to 524.68 million kilograms during the five-month period.

In May, meat imports rose 4.9% to 128.29 million kilos.

Shipments of pork increased 10.6% to 253.55 million kilos during the five months, accounting for 48.32% of the total.

Spain supplied around 64.7 million kilos of pork, followed by Brazil (58.4 million), and Canada (36.5 million) during the period.

Imports of chicken meat totaled 181.23 million kilos in the five months. Shipments rose 4.98% and accounted for 34.5% of meat imports.

Brazil remained the top supplier of chicken with shipments of 98.3 million kilos, followed by the US (58.9 million kilos), and Australia (7.2 million kilos).

Shipments of beef accounted for 13.1% of total imports. Imports increased 28.8% to 68.53 million kilos during the five months.

Beef from Brazil amounted to 23.9 million kilos, followed by Australia (20.4 million kilos), and Ireland (6.3 million kilos).

Imports of turkey increased to 647,529 kilos from 89,889 kilos a year prior.

Meanwhile, imports of buffalo, duck, and lamb fell during the five-month period.

Buffalo imports, which accounted for 3.89% of the total, fell 9.87% during the five months to May to 20.4 million kilos.

Shipments of duck declined 39.7% to 84,254 kilos, while lamb imports fell 48.2% to 199,000 kilos. — Adrian H. Halili

Railway masterplan seen delayed to 2026, JICA says

THE Philippines’ 30-year railway master plan will not be released by yearend, with the Japan International Cooperation Agency (JICA) saying it needs more time to complete the study.

(By the end of 2024) is too early. We still need a few years, it will not be ready within the year, we need more time,” JICA Chief Representative in the Philippines Takema Sakamoto told BusinessWorld on the sidelines of a forum on Tuesday. 

Last month, Transportation Secretary Jaime J. Bautista said the DoTr (Department of Transportation) is expecting the completion of the rail masterplan by the end of the year. 

“I think we are targeting the completion of the master plan in two years. So, maybe by 2026,” Mr. Sakamoto said.

Signed in 2023, the project to draft a master plan will aim to raise the share of passenger trips accounted for by railways.

Last year, the Transportation department said JICA committed 300 million yen to draft the 30-year railway master plan.

The master plan calls for Philippine rail lines to be brought up to international standards using Japanese technology, the Transportation department said.

It is also expected to outline how to enhance the sustainability of the Metro Manila Subway, North-South Commuter Railway; Metro Rail Transit Line 3 and other ongoing and upcoming rail projects. — Ashley Erika O. Jose

Crop insurance GOCC urged to modernize

THE Department of Agriculture (DA) said that it is seeking to modernize the operations of the Philippine Crop Insurance Corp. (PCIC) to better support local producers.

“PCIC should digitalize its processes, upgrade its technologies, and develop insurance products that will provide better protection for its clientele,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. said in a statement on Tuesday.

In May, President Ferdinand R. Marcos, Jr. signed Executive Order No. 60, which transferred the control and supervision of the PCIC back to the DA from the Department of Finance.

Mr. Laurel added that modernizing will allow the PCIC to offer more affordable insurance products, and pointed to the crop insurance systems of Japan, Taiwan, Thailand, and Vietnam as possible models.

He said that the PCIC should also enhance its reinsurance practices to better manage its risk profile.

He urged the use of crop insurance to facilitate farmer access to financial services, by reassuring lending institutions that the collateral they hold will have the benefit of insurance cover.

The PCIC has an annual budget of P4.5 billion. It indemnifies farmers, fisherfolks, and livestock raisers who sustain losses from natural calamities, diseases, pest infestation, and other risks.

For 2024, the PCIC aims to increase its coverage to 1.2 million farmers, 21,000 livestock raisers, and fisheries stakeholders. It processed 744,000 claims in 2023. — Adrian H. Halili

Palay farmgate prices up 27% in June

PHILIPPINE STAR/EDD GUMBAN

THE average farmgate price of palay, or unmilled rice, rose 27.9% year on year to P24.59 per kilogram in June, according to the Philippine Statistics Authority (PSA).

The PSA said that all regions reported year-on-year growth in the average farmgate price of palay during the month.

On a month-on-month basis, farmgate prices slipped 0.8% from the P24.8 per kilo reported in May.

The highest prices in June were posted in the Ilocos Region, where palay prices rose 40.2% year on year to P28.3 per kilo.

The lowest farmgate price was recorded in the Eastern Visayas at P19.97 per kilo, up 13.3% year on year.

The National Food Authority Council has raised its purchasing price for palay in order to build up government reserves in preparation for possible calamities.

The buying price for dry and clean palay was raised to P23 to P30 per kilo and that for fresh palay to P17 to P23 per kilo, depending on location and quality of the grain.

The NFA said that it has total reserves of 149,000 metric tons, equivalent to about four days’ demand.

During the second quarter the PSA said that the average farmgate price rose 29.4% from a year earlier.

The Western Visayas reported the highest increase of 39%. The average farmgate prices in the region was P27.85 per kilo.

The Eastern Visayas had the lowest price average of P19.8 per kilo, up 15.8% from a year earlier. — Adrian H. Halili

PHL to set global standard in tourism training with FBSE program

MICE Conference 2024 in Clark, Pampanga | photo source: Trade Promotions Board

The Philippines aims to become a model for tourism training programs worldwide by amplifying the Filipino Brand of Service Excellence (FBSE) program in tourism front liners, Ex-Link Management and Marketing Services Corporation Chief Operating Officer Orlando Ballesteros said. 

“The main goal is to uplift the service of our country and to become the best model in Asia and the world,” Mr. Ballesteros said.

Mr. Ballesteros presented data at the 2024 Philippine M.I.C.E. Conference showing that the Filipinos’ warm hospitality and kindness outshined the country’s beautiful beaches and sceneries. 

In the FBSE program, “Mabuhay and Salamat” gestures were also showcased to accentuate Filipino hospitality further. | photo by Almira Louise S. Martinez

“All other Asian countries have beaches so there’s no differentiation. What we can differentiate is the way we deliver the service, the people,” he said. 

Additionally, the Philippines must commit to its branding of service to attract more visitors, Mr. Ballesteros said. 

“If we can establish our brand as a country in the tourism sector that provides service excellence, all the potential markets will go to our country to experience that,” he said. 

Educating workers and businesses in the tourism sector can push the initiatives of making the Filipino service known globally according to Mr. Ballesteros. 

“The more that we push FBSE and target it to our MSME and tourism stakeholders, more satisfied customers will choose to come back to our country,” he said. 

Mr. Ballesteros added that the government aims to train approximately 200,000 tourism professionals this year. 

 

Department of Tourism (DOT) Secretary Christina Frasco

Employment in tourism 

Based on a press release by the Department of Tourism (DoT) on July 11, more than 3 million tourists visited the country, with an estimated P280 billion in visitor receipts.  

“The significant increase in our tourism earnings is a testament to the relentless efforts of the Marcos administration in revitalizing our tourism sector,” Tourism Secretary Christina Garcia Frasco said.  

Ms. Frasco added that the rise in tourism figures highlights its tangible benefits to the country’s economy and citizens.  

“The income generated through tourism directly translates to more opportunities and improved livelihoods for Filipinos, reinforcing the critical role this industry plays in our nation’s progress,” she said.  

Employment in the industry is projected to surpass 9.5 million or 20% of the national workforce, the 2024 Economic Impact Research (EIR) of the World Travel & Tourism Council (WTTC) said. – Almira Louise S. Martinez

Head of Joint Chiefs of Staff in Manila to discuss ‘free and open’ Indo-Pacific

US JOINT CHIEFS OF STAFF chairman and Air Force General Charles Q. Brown, Jr. at Veterans Park in Sumter, South Carolina in February. — US DEPARTMENT OF DEFENSE/BENJAMIN APPLEBAUM

By Kyle Aristophere T. Atienza, Reporter

THE HEAD of the US Joint Chiefs of Staff arrived in the Philippines on Tuesday as part of his wider trip to the Indo-Pacific region, which Washington considers a priority amid tensions with China and nuclear threats from North Korea.

US Joint Chiefs of Staff chairman and Air Force General Charles Q. Brown, Jr. will participate in a series of engagements with Philippine military chief General Romeo S. Brawner, Jr. and other military officials, the US Defense department said in a statement.

It cited “recent strides in the long-standing US-Filipino defense relationships.”

Mr. Brown is also set to visit one of the sites under Manila’s Enhanced Defense Cooperation Agreement (EDCA) with Washington.

“In the Philippines, we have a long-standing, shared interest in regional stability that’s backed by international law,” Mr. Brown said in the statement. “The Philippines is one of our oldest treaty allies in the region.”

The Joint Chiefs of Staff is the body of the most senior uniformed leaders within the US Department of Defense that advises the US president, Defense chief, Homeland Security Council and National Security Council on military matters.

The US Defense department said America’s “robust partnerships” with key allies in the region remain central to the US plan to advance a shared vision of a free and open Indo-Pacific, citing “increased competition with China” and “threats posed by North Korea.”

In the statement, Mr. Brown cited the growth of Balikatan or shoulder-to-shoulder military exercises between the Philippines and the United States.

This year marked the 39th iteration of the war games, and the US Defense department said it’s the largest on record with about 16,000 participants from the US and Philippine military, and with Australian and French troops as well as representatives from 14 countries as international observers.

Mr. Brown also cited the expansion of the Enhanced Defense Cooperation Agreement, with the inclusion of four new sites last year.

He will tour one of the nine EDCA sites during his visit.

The Philippine Senate in 1991 rejected the renewal of a bilateral military base agreement between the two countries.

The decision led to the dismantling of an American air base in Clark, Pampanga and a naval base in Subic, Olongapo.

President Ferdinand R. Marcos, Jr. has veered away from his predecessor’s pro-China policy, boosting ties with the United States and other Indo-Pacific powers such as Japan and Australia.

The US, Japan and Australia have been at the forefront of international condemnation of Chinese ships’ harassment of Philippine vessels deployed for resupply and rotation missions within the Philippines’ exclusive economic zone in the South China Sea.

US President Joseph R. Biden, who is seeking reelection in November, and his Philippine and Japanese counterparts met at the White House in April and discussed ways to help boost Manila’s defense and economy.

“I do see that the relationship is gaining momentum,” Mr. Brown said. “I think it’s a positive trajectory.”

The US Defense department said Mr. Brown’s trip to the Indo-Pacific region follows key engagements with his global counterparts during a recent summit of the North Atlantic Treaty Organization (NATO) and last month’s conference of African Defense chiefs in Botswana.

Mr. Brown will travel to Japan later this week to meet with senior government officials and military leaders “for discussions on regional deterrence and security cooperation.”

He will also meet with US servicemen stationed at Yokota Air Base.

DoF willing to forego taxes from offshore gaming firms

MORE THAN 160 Chinese nationals who worked for POGO Zun Yuan Techonology, Inc. were deported on May 14, 2024. — PRESIDENTIAL ANTI-ORGANIZED CRIME COMMISSION

THE DEPARTMENT of Finance (DoF) on Tuesday said it could forego about P13 billion in tax and gaming revenues from Philippine Offshore Gaming Operations (POGO) if these are banned, adding that more investments could come in if crimes linked to these outfits are cut.

“Although we are forgoing some tax revenues if ever there will be a ban of POGOs, these can be compensated if there will be more investments coming in because of the ban,” Finance Assistant Secretary Karlo Adriano S. Fermin told a Senate ways and means hearing.

The reputational risk from POGOs — mostly Chinese gambling firms that operate online casinos targeting Chinese clients — could cost the government P55.36 billion in forgone investments due to crimes linked to them, and P29.01 billion in forgone revenues in tourism, he added.

The Senate body is discussing a bill that seeks to ban all forms of online gambling.

POGOs generate about P10.32 billion yearly taxes for the Bureau of Internal Revenue and P3.15 billion in gross gaming revenues for the Philippine Amusement and Gaming Corp. (Pagcor), Mr. Fermin said.

Pagcor earlier said the government could lose P20 billion in yearly revenues if these gambling firms are banned.

Senator Sherwin T. Gatchalian told BusinessWorld on the sidelines of the hearing that the government could replace revenues from POGOs by developing the business process outsourcing (BPO) industry.

“The BPO sector is a growing industry,” he said. “It employs about 1.7 million people, so we can easily replace these revenues through this sector.”

Last week, Finance Secretary Ralph G. Recto said a letter had been sent to President Ferdinand R. Marcos, Jr. recommending the total ban of offshore gaming operators.

Pagcor Chairman and Chief Executive Officer Alejandro H. Tengco earlier told senators that his agency has banned POGO hubs and was working on guidelines for stricter regulation.

National Economic Development Authority Secretary Arsenio M. Balisacan last week said the Cabinet had yet to discuss the ban.

“In general, the Department of Finance supports the prohibition of POGO operations due to the social costs and reputational risks they entail,” Mr. Fermin said.

Also on Tuesday, a political coalition urged the Marcos government to cancel the license of all POGOs that cater to the Chinese market, citing an internet gaming regulation banning websites from being accessed in the Philippines and countries where gambling is prohibited.

Pagcor’s Internet Gaming Regulations dated July 12, 2023 bar POGOs from allowing their gaming websites to be accessed within the Philippines or in countries where online gaming is illegal, 1Sambayan said in an open letter to Mr. Marcos.

The Chinese Embassy in Manila has already stressed that under mainland China’s law, “any form of gambling, including online gambling and overseas gambling by Chinese citizens, is illegal,” the group said.

1Sambayan said Mr. Marcos should immediately cancel licenses of POGOs that cater to the mainland Chinese market.

It noted that under Pagcor rules, ‘In case the license has been granted and the misrepresentation or false information is later discovered, the license shall immediately be canceled and a 10-year ban from holding a license under these regulations shall be imposed.”

1Sambayan noted that recent developments show that “Chinese POGOs are mostly operated by criminal syndicates.”

“There is no legal, moral, economic or social justification to allow such POGOs to operate in the Philippines,” it said in a letter signed by advocates and former government officials including former Supreme Court justice Antonio T. Carpio, former Audit Commissioner Heidi L. Mendoza and ex-Bangko Sentral ng Pilipinas Deputy Governor Diwa C. Guinigundo. — John Victor D. Ordoñez and Kyle Aristophere T. Atienza

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