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SB Corp. targets P460M in operating income this year

THE Trade department’s micro, small and medium enterprise development financing arm, Small Business Corp. (SB Corp.), has set a target of P460 million in net operating income this year after setting a record in 2024.

On the sidelines of a briefing on Friday, SB Corp. President Robert C. Bastillo said the company’s 2025 target is double the 2024 goal.

“The target is still over P400 million,” Mr. Bastillo said, adding that the company will seek to stretch performance to as much as P500 million.

If net operating income hits P500 million, it would represent a 15.9% increase from the P431.1 million booked last year.

The 2024 result was nearly double the performance of the last full pre-pandemic year, when it booked P228.6 million.

He said the revenue target is P1.2 billion in 2025, which would represent a 20% increase from the 2024 performance.

“The corporate losses of the past few years were largely due to SB Corp.’s countercyclical role in the Philippine financial system and prudent provisioning for the mandated COVID-related accounts,” Mr. Bastillo said.

“However, we believe that the corporation’s performance in 2024 signals a new chapter of growth and financial sustainability,” he added.

According to SB Corp., the positive results can be attributed to streamlined and faster loan application and approval processes, enhanced governance, and a commitment to financing 100% of all approved loan applications.

SB Corp. lent to over 61,000 businesses last year, with a target of at least 65,000 businesses in 2025.

On Friday, the Department of Trade and Industry and SB Corp. announced the launch of three more lending programs due to be up and running next month.

These are the receivables financing (P200 million), Creative Industry Fund (P500 million), and Halal Financing (P500 million) programs.

SB Corp.’s other loan programs are Enterprise Rehabilitation Financing (P2 billion), Franchise Funding (P1 billion), Business Expansion Financing (P1 billion), Regular Business Loan (P3 billion), and Purchase Order Financing (P500 million). — Justine Irish D. Tabile

Canning raw material tariff cut seen reducing prices of canned goods

A worker is seen inside the new Mega manufacturing plant in Sto. Tomas, Batangas, March 1, 2023. — PHILSTAR/KRIZ JOHN ROSALES

REDUCING the most favored nation (MFN) tariff rate on tin-mill black plates (TMBPs) is expected to boost domestic production of tin plate and tin-free steel, possibly leading to reduced canned goods prices, the Tariff Commission heard.

At a public hearing on Friday, Perstima (Philippines), Inc., sought the reduction of the MFN tariff rate for TMBPs.

TMBPs are primarily used in the production of food cans, beverage cans, paint cans, and industrial cans.

Perstima, the sole manufacturer of tin plate and tin-free steel in the Philippines, currently imports 77% of its TMBP needs from Japan.

“The TMBP supply from Japan is very limited. And now our operation rate is around 30% or 40% of capacity. So we are thinking we want to increase our utilization rate,” according to Kai Adachi, Perstima sales manager.

“In order to do that, we need more TMBP from countries other than Japan, so a 3% (tariff) reduction on TMBPs from Taiwan and China is really important for us,” he added.

Perstima is a Philippine Economic Zone Authority-registered business enterprise in LIMA Estate. Its plant has the capacity to produce 200,000 metric tons of tin plate annually.

Between 2021 and 2024, source countries for TMBPs were Japan (77%), Taiwan (19%), China (3%), and South Korea (1%). Imports of TMBPs from Japan and South Korea are zero-duty, while Taiwan and Chinese TMBPs are subject to 3% duty.

According to Perstima, reducing the tariff rates on TMBP will not affect domestic industry.

“There are no domestic manufacturers in the Philippines that would be adversely affected by the tariff reduction,” it said. — Justine Irish D. Tabile

Offshore wind to add 16 GW in new capacity — Energy dep’t

STOCK PHOTO | Image by Grahame Jenkins from Unsplash

THE Department of Energy (DoE) said it is projecting more than 16 gigawatts (GW) of new capacity from offshore wind power projects.

The DoE said it is currently assisting 16 offshore wind proponents who committed to start construction by 2027 and to deliver the first kilowatt-hour by 2028. 

The largest project is Domhain Earth Corp.’s Bulalacao Offshore Wind Farm in Oriental Mindoro and Antique with capacity of 3,100 megawatts (MW).

Other large-scale projects are the 1,830-MW Calatagan Offshore Wind Farm in Batangas and Mindoro; the 1,600-MW Claveria Offshore Wind Farm in Ilocos Norte and Cagayan; and the 1,500-MW Mariveles Offshore Wind Farm in Bataan, Cavite and Batangas.

The DoE has also recognized BuhaWind Energy Northern Luzon Corp.’s 2,000-MW Northern Luzon Offshore Wind Power Project in Ilocos Norte as a so-called “frontrunner project.”

Other offshore wind project include CI NMF (PH) Corp.’s 1,000-MW San Miguel Bay Offshore Wind Power Project in Camarines Norte and Camarines Sur; the 650-MW Samar Norte Offshore Wind Power Project in Northern Samar; and the 350-MW Dagupan Offshore Wind Power Project in Pangasinan and La Union.

The other frontrunners include Vind Energy Corp.’s 994-MW Cavite Offshore Wind Project and the 728-MW GS2 Offshore Wind Power Project in Guimaras; Triconti SouthWind Corp.’s 600-MW Guimaras Strait Wind Power Project; and Jet Stream Windkraft Corp.’s 600-MW Guimaras Strait II Wind Power Project.

Also designated frontrunner projects are Ivisan Windkraft Corp.’s 450-MW Frontera Bay Wind Power Project in Bataan and Cavite and ACX3 Capital Holdings, Inc.’s 500-MW San Miguel Bay Wind Power Project in Camarines Sur, 475-MW Lucena Wind Power Project in Quezon, and 275-MW Tayabas Bay Wind Power Project in Quezon.

The DoE is hoping to stage the fifth round of the green energy auction (GEA-5) focused on offshore wind power this year, Undersecretary Rowena Cristina L. Guevara said.

“We announced this in December because some of the front-runner offshore wind projects needed to assure their investors that the Green Energy Auction 5 is going to happen,” Ms. Guevara told reporters last week.

GEA-5 is expected to secure market access for offshore wind developers, ensuring long-term demand for their generation capacities and keep them on track to generate the first kilowatts by 2028.

The government had awarded 92 offshore wind contracts with 68-GW potential capacity as of October. Of the total, 21 contracts were awarded to foreign-owned companies with an aggregate capacity of 19.2 GW.

However, for these projects to be realized, ports need to be developed to serve as logistics hubs throughout the lifecycle of the projects.

Ms. Guevara said that transmission and ports are the crucial components of offshore wind development. The DoE is currently working with the National Grid Corp. of the Philippines for the transmission and local government units for right of way.

The department is also in talks with the Department of Environment and Natural Resources (DENR) and the Philippine Ports Authority (PPA).

The PPA has committed and allocated a budget for repurposing and expansion of three priority ports. Due to their proximity to high-potential wind energy service contracts, Currimao port in Ilocos Norte, the Port of Batangas, and the Jose Panganiban port in Camarines Norte have been identified as critical to offshore wind development.

In October, the DoE and the DENR signed a memorandum of agreement allowing access to both offshore and auxiliary areas during the pre-development/exploration, development and commercial development phases, subject to the necessary DENR requirements.

“Our move is really coordinated because we want to succeed,” Ms. Guevara said.

The Philippines’ offshore wind resources are estimated at a potential 178 GW, according to the World Bank’s 2022 Offshore Wind Roadmap for the Philippines. — Sheldeen Joy Talavera

Commercial vessels could deplete fish stocks in municipal waters — NGO

PHILIPINE STAR/ RYAN BALDEMOR

OCEANA Philippines warned of the potential depletion of fish stocks after a Supreme Court (SC) resolution allowing commercial fishing operations in municipal waters.

“We are worried that this court decision will result in the depletion of our fish stocks with the unabated fishing operations of commercial fishers, displacement of our small, municipal fisherfolk, and destruction of marine habitats and spawning grounds of juvenile fish needed to restore our fisheries,” Oceana Vice-President Gloria E. Ramos said in a statement.

The SC’s First Division upheld a Malabon Regional Trial Court ruling declaring the Fisheries Code’s preferential access provisions unconstitutional.

Under the Republic Act No. 10654, or the Amended Fisheries Code of the Philippines, commercial fishing vessels are only allowed to operate outside a 15-kilometer zone designated as municipal waters.

Oceana said 533 out of 884 coastal towns in the Philippines will now have to open up 90% of their municipal waters to commercial fishing vessels.

“All these will push back the reforms for science-based fishery management areas system now in place, rendering irrelevant the vessel monitoring requirement for commercial fishing vessels,” Ms. Ramos added.

She said that the move could also lead to “deeper hunger and poverty” among small-scale fisherfolk due to more intense competition.

In a statement over the weekend, the Department of Agriculture said that it was urging the High Court to reconsider its decision.

“At a depth of seven fathoms, or 12 meters, corals are at risk, and our scarce marine resources could face further depletion,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. said during a meeting with fishing industry representatives.

The volume of fish catch delivered to regional ports declined by 11.5% to 42,445.26 metric tons in December, according to the Philippine Fisheries Development Authority. — Adrian H. Halili

Supply chain disruptions, skills gap expected to delay PHL AI adoption

FREEPIK

By Beatriz Marie D. Cruz, Reporter

THE Philippines’ adoption of artificial intelligence (AI) this year are expected to be hampered by supply chain vulnerabilities and the digital skills gap, according to software firm Hitachi Vantara.

“Supply chain issues are a significant challenge in adopting AI technologies, and the Philippines is no exception,” Matthew Hardman, chief technology officer for Asia-Pacific at Hitachi Vantara, said in an e-mail.

“These challenges manifest in several ways, including difficulties in accessing hardware, software, talent, and regulatory frameworks needed to build and sustain AI systems effectively.”

Around 54% of organizations globally identified supply chain challenges as the biggest barrier in achieving cyber resilience, according to the World Economic Forum’s Global Cybersecurity Outlook for 2025.

“Supply chain disruptions, like the global semiconductor shortage, have made this hardware more expensive and less predictable. For the Philippines, which is still developing its digital infrastructure, this poses a significant barrier to scaling AI solutions,” Mr. Hardman added.

While the Philippines is making steady progress in adopting AI, its adoption rates and maturity levels lag those of its regional counterparts like Malaysia and Singapore, he also said.

Compared to its ASEAN (Association of Southeast Nations) peers, the Philippines’ AI adoption remains hampered by limited talent, a fragmented digital infrastructure, and lower public and private sector investment in research and development, Mr. Hardman said.

To strengthen AI adoption this year, businesses must consider partnering with a reputable data infrastructure companies to gain access to advanced tools, expertise, and best practices in data management.

Mr. Hardman also cited the need for increased public-private partnerships, streamlined regulatory frameworks for data sharing and AI adoption, and expanded AI-focused education and training.

“Strengthening the digital backbone, including broadband connectivity and local manufacturing of critical components, can help to reduce reliance on international supply chains and support the seamless operation of AI systems,” he also said.

Preliminary 2026 budget activities set for late January — Budget dep’t

BUDGET SECRETARY AMENAH F. PANGANDAMAN — PHILIPPINE STAR/KRIZ JOHN ROSALES

THE Department of Budget and Management (DBM) said it will convene with government representatives and state-run firms in a series of budget forums later this month in preparation for drafting the 2026 budget proposal.

In a circular dated Jan. 15, Budget Secretary Amenah F. Pangandaman announced that the budget forums will take place at the Philippine International Conventional Center.

For the heads of budget, accounting, and planning units of National Government Agencies (NGAs) and Government-Owned or Controlled Corporations (GOCCs), both forums will be held on Jan. 28.

“State Universities and Colleges (SUCs) under the coverage of the DBM Regional Offices (ROs) are excluded from the target attendees. A separate forum will be conducted by their respective RO counterparts,” Ms. Pangandaman said.

On the first week of January, the DBM issued National Budget Memorandum No. 153, signaling the preparatory stage for drafting the National Expenditure Program and outlining the priorities for next year.

The Development Budget Coordination Committee set a P6.54-trillion spending target for 2026. It also projected that revenue will hit P5.063 trillion or 16.2% of gross domestic product next year. — Aubrey Rose A. Inosante

Ease of doing business: The BIR 2028 DX Roadmap

IN BRIEF:

• The BIR’s Digitalization Program aims to modernize and enhance the efficiency, transparency, and effectiveness of tax administration and revenue collection processes.

• The BIR envisions taxpayers as customers, adopting taxpayer-centric views in their services. Completed projects reflecting this approach include the Online Registration Update System (ORUS), Enhancement of the Electronic One-Time Transaction (eONETT) System, and the Optimized Knowledge Management System for Chatbot Revie.

• Despite foreseeable challenges such as increased security risks and budget constraints, the BIR is prepared to address them by focusing on system upgrades, modernization, and adhering to its vision of collecting taxes through the just enforcement of tax laws.

Change is inevitable in today’s dynamic environment. To keep pace with rapid modernization, organizations must evolve their offerings to meet public needs. On Jan. 8, a key official of the Bureau of Internal Revenue (BIR) shared insights at the 3rd Tax Symposium of SGV, discussing how the BIR is adapting to modernization and transforming its services to meet the evolving needs of taxpayers.

EVOLUTION OF THE BIR DX ROADMAP
The BIR revitalized its digital transformation journey with the issuance of Revenue Memorandum Order (RMO) No. 27-2020, known as the BIR Digital Transformation (DX) Roadmap 2020-2030. This initiative was pursued in compliance with Republic Act No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, which requires government offices to assess and improve their transaction systems and procedures. The DX Roadmap is built around three core principles: adopting a people-first approach, instituting a process perspective, and embracing digital technology, with a digital transformation mindset as its foundation.

Recognizing the need for a more comprehensive and updated roadmap, the BIR issued RMO No. 48-2024, known as the Adoption of the New BIR Digital Transformation Roadmap for CY 2025-2028. This initiative aligns with Section 43 of RA No. 11976, or the Ease of Paying Taxes Act, which requires the BIR to adopt an integrated digitalization strategy by providing automated end-to-end solutions for taxpayers. The roadmap also reflects BIR Aspiration 2028, which envisions the BIR as highly digital and propelled by empowered revenue officers with integrity, providing excellent services aligned with international tax standards.

PROJECT UPDATES
The speaker emphasized that despite recent legislation requiring the digital transformation of BIR services, the BIR has long been committed to making its services convenient and efficient for the public. This commitment is evident in the expansion of eServices and the leveraging of technology for a robust tax administration.

It was highlighted that during the time when the world stood still due to the COVID-19 pandemic, the BIR’s Electronic Filing and Payment System (eFPS), e-BIR Forms, and electronic payment facilities were already in place. This allowed taxpayers to efficiently comply with their filing and payment duties.

A report on the status of projects under the BIR DX Program for CY2024 as of Nov. 30, 2024 was also presented. There are eight completed projects and eight ongoing projects.

Completed projects include the Online Registration Update System (ORUS), Enhancement of the Electronic One-Time Transaction (eONETT) System, Optimized Knowledge Management System for Chatbot Revie, Property Management System (PMS) (National Office Phase), Expansion of Digital Platform and Tools, Establishment of a Command Center with IT Operations Center, Enterprise Risk Management (ERM), and Enhanced Monitoring and Managing Administrative Cases (EMMAC).

Meanwhile, ongoing projects include the Project 230X, Electronic Tax Clearance System (eTCS), Electronic Invoicing/Receipting and Sales Reporting System (EIS/SRS), eAppointment (BIR Services under Assessment and Collection Service, Development of Cloud Based Electronic Documentary Stamp Tax (eDST) System, Document Tracking Management System (DTMS), Cybersecurity Program and Internal Revenue Integrated System (IRIS).

Eleven other projects under the DX Program are in varying stages of project planning and execution. These include taxpayer-facing projects as well as projects for internal customers.

A notable highlight of the DX project is the EIS/SRS Program. Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Law (TRAIN Law) authorized the establishment of a system capable of storing and processing the required data within five years from the effectivity of the Law. Republic Act No. 12066 or the CREATE MORE Law removed the five-year implementing period. In terms of updates, out of the 100 Pilot Taxpayers, 63 are currently transmitting their sales data.

The ongoing Tax Modernization Feasibility Study Project will determine the best way forward for the EIS/SRS program. The study’s result will be out towards the end of the first quarter of 2025. By then, the Bureau can provide firmer guidelines and timelines regarding the EIS/SRS implementation.

Further, under the CREATE MORE Law, taxpayers under the jurisdiction of the Large Taxpayer Service and exporters are still covered both by the requirement of issuing electronic invoices (EIS) and electronic reporting of their sales (SRS) data to the Bureau. What was amended is that those engaged in e-commerce are only required to comply with the EIS, but it is not mandatory for them to comply with the SRS program. Instead, they may opt to voluntarily comply.

Meanwhile, other taxpayers may voluntarily issue electronic invoices and use an SRS. Those who volunteer will be granted incentives, specifically an additional deduction from taxable income of 100% total cost for setting up an EIS/SRS for taxpayers classified as micro and small and an additional 50% for medium and large, which can only be availed of once.

MODERNIZING TAX SERVICES
Transformation is not just about modernization. It aims to establish a more efficient, transparent, and responsive tax administration capable of addressing the changing needs of the public.

As the BIR strives for transformative and modernized services for taxpayers, it acknowledges foreseeable challenges such as increased security risks, budget constraints, customer/taxpayer readiness, among others. Nonetheless, the BIR is prepared to address these challenges.

These developments in the BIR’s DX Program give taxpayers a renewed optimism recognizing the significance of its successful implementation in improving tax processes towards realizing BIR’s vision of a modern, efficient, and technology-driven tax system that benefits both the taxpayers and government.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

 

Thyrza F. Marbas is a tax partner and Rule Amethyst L. Oporto is a tax senior manager of SGV & Co.

Philippines and US hold joint maritime exercises in disputed South China Sea

PHILIPPINE COAST GUARD PHOTO

THE PHILIPPINES and the US held joint maritime exercises for a fifth time in the South China Sea, Manila’s armed forces said on Sunday, in a move that could irk China.

The Philippine military said in a statement it held a “maritime cooperative activity” with the US on Friday and Saturday, its first for the year and fifth overall since launching the joint activities in 2023.

Security engagements between the two allies have soared under Philippine President Ferdinand R. Marcos, Jr., who has pivoted closer to Washington, allowing the expansion of military bases that American forces can access, including facilities that face Taiwan.

The joint maritime activity included the US’ Carl Vinson Carrier Strike Group, two guided missile destroyers, two helicopters and two F-18 Hornet aircraft.

The Philippine side deployed its Antonio Luna frigate, Andres Bonifacio patrol ship, two FA-50 fighter jets and search and rescue assets of the air force.

The activities “reinforced bilateral maritime cooperation and interoperability,” the Philippine armed forces said.

Their joint activity came at a time when the Philippines had called out China over the presence of Chinese coast guard vessels inside its maritime zone, including the 165-meter-long ship that it describes as “the monster” for its size.

The Chinese Embassy in Manila did not immediately respond for a request for comment at the weekend.

Meanwhile, the Philippine Coast Guard (PCG) vowed to prevent China from normalizing its ship deployments within Manila’s exclusive economic zone (EEZ) in the South China Sea.

In a statement on Saturday night, the agency said its vessel BRP Gabriela Silang was “actively monitoring and challenging the unlawful presence” of Chinese Coast Guard vessel 5901 or its so-called monster ship.

The monster ship was last seen 60-70 nautical miles from the Zambales coastline, it said.

The PCG crew conducted a radio challenge to remind the Chine Coast Guard of their “unlawful actions, particularly regarding their claims of conducting maritime patrols.”

The 83-meter French-built BRP Gabriela Silang was “boldly asserting its stance against any attempts to legitimize illegal activities in the West Philippine Sea,” the PCG said, referring to parts of the South China Sea within the Philippine EEZ.

“By confronting the presence of Chinese Coast Guard vessel 5901, the PCG sends a clear message: the normalization of unlawful deployments will not be accepted or tolerated,” it added.

The PCG noted that under the United Nations Convention on the Law of the Sea, freedom of navigation for foreign-flagged vessels does not extend to patrols within the EEZ of other states.

“The PCG stands firm in its dedication to ensuring that no unlawful actions by the China Coast Guard in the West Philippine Sea go unchallenged.”

The Philippines last week accused China of intimidating Filipino fishermen near Scarborough Shoal and normalizing its “illegal presence” after Beijing sent its biggest coast guard ship into the Philippine EEZ.

The monster ship was first spotted within the Philippine EEZ on Jan. 4, prompting the dispatch of the PCG’s largest ship.

A United Nations-backed tribunal based in the Hague in 2016 voided China’s expansive claims in the South China Sea for being illegal, as it ruled Scarborough Shoal, which Beijing has controlled since 2012, is a traditional fishing ground for Filipino, Chinese and Vietnamese fishermen.

The shoal, which Manila calls Bajo de Masinloc, is 241 kilometers off Zambales and is within the Philippines’ 200-nautical mile EEZ.

PCG spokesman Jay Tristan Tarriela last week said the monster ship’s presence near the Zambales coast could not be considered an innocent passage and does not fall under the principle of freedom of navigation because its movement is “not continuous and it is not expeditious.”

“Meaning, it has erratic movements — sometimes it goes up, goes down, turns left, turns right arbitrarily. There is no specific reason why they are doing that,” he noted. — Kyle Aristophere T. Atienza with Reuters

Congressmen told not to politicize oversight power before midterm elections

By Kenneth Christiane L. Basilio, Reporter

THE House of Representatives should not abuse its oversight powers for political purposes, a political analyst said, as the chamber vowed to continue congressional investigations before midterm elections in May.

Speaker and Leyte Rep. Ferdinand Martin G. Romualdez last week said the chamber would exercise oversight by continuing inquiries of pressing issues including food smuggling and expensive power prices.

“The oversight function of the Legislature, like holding committee hearings in aid of legislation, is also prone to being politicized by a faction,” Arjan P. Aguirre, who teaches political science at the Ateneo de Manila University, said in a Facebook Messenger chat. “It can be instrumentalized to malign or demonize rivals in the government.”

The House of Representatives has launched high-profile investigations of issues from Vice-President Sara Duterte-Carpio’s alleged misuse of secret funds to persistently steep rice prices.

The chamber also formed a joint committee to look into ex-President Rodrigo R. Duterte’s bloody drug war and operations of illegal online casinos.

“Recent investigations involving the unexplained spending and the drug war can easily be criticized for singling out the Dutertes,” Mr. Aguirre said.

The House could have expanded the scope of its investigations more by focusing on “important issues about our institutions” rather than concentrating on personalities, such as the Dutertes, he added.

The Duterte camp has had a falling out with the government of President Ferdinand R. Marcos, Jr. due to policy differences including on foreign policy and the President’s push to boost security ties with the US.

Tensions between the two camps boiled over last year, when Ms. Carpio publicly lashed against Mr. Marcos, calling him a weak leader and issuing threats against the Marcos family.

The House will continue its investigation of issues that hounded the Duterte presidency next week, scheduling a hearing into illegal Philippine Offshore Gaming Operators, drug killings and concerns over the influx of Chinese nationals into the country, according to the House website.

Filipino will choose a new set of congressmen for the House and 12 of the 24-member Senate on May 12, apart from other local government officials.

Congressional investigations “appeal to voters as they are televised, gaining wide public attention,” according to Jean S. Encinas-Franco, a University of the Philippines political science professor.

But lawmakers should not only focus on exercising oversight. “To focus only on this aspect would make legislators remiss in their jobs,” she said in a Viber message.

Edmund S. Tayao, president of Political Economic Elemental Researchers and Strategists, said exercising oversight over laws and government activities is a constitutional mandate for Congress and should not be treated separately from the lawmaking process.

“It is a fundamental function of the Legislature, especially of the House of Representatives, given that they have the ‘power of the purse,’” he said in a Viber message. “It is the Legislature’s duty to exercise it. It’s not something it can just choose not to exercise.”

“The exercise of oversight functions doesn’t mean it’s entirely different and separate from pending initiatives. It is in fact complimentary,” he added.

Congressional oversight functions include reviewing government programs, conducting inquiries recommending measures to enhance government efficiency, Mr. Tayao said.

“[These are done] with the end in view of promoting transparency, public participation, and democracy.”

Philippine natgas law seen attracting more investors

BW FILE PHOTO

By John Victor D. Ordoñez, Reporter

THE NEWLY signed Philippine Natural Gas Industry Development Act, which seeks to promote natural and liquefied natural gas (LNG) as fuel sources to fast-track the country’s shift to renewable energy, would likely lure more investors, according to a Philippine senator.

“High energy cost is one of the stumbling blocks for foreign and local investors to do business in the country,” Senator Joseph Victor G. Ejercito told BusinessWorld in a Viber message.

“With this new law, we expect that there will be more investments in local gas resources and infrastructure, more employment opportunities and will attract more foreign investments,” he added.

Philippine President Ferdinand R. Marcos, Jr. on Jan. 15 signed into law a bill that seeks to develop the country’s natural gas (natgas) industry as the Philippines seeks to diversify its power mix and fast-track its transition to renewable energy (RE).
Republic Act (RA) No. 12120 or the Philippine Natural Gas Industry Development Act seeks to promote natural gas as a “cost-effective source of energy and an indispensable contributor to energy security.”

Under the law, an entity may hold an interest in upstream and downstream natural gas facilities as well as the supply of natural gas, but this will be subject to competition laws.

The Department of Energy will evaluate, approve and issue permits for natural gas facilities and craft a regulatory and legal framework for the downstream natural gas industry.

The law also seeks to make Manila an LNG trading and transshipment hub in the Asia-Pacific region.

The Malampaya gas field, the Philippines’ sole indigenous source of gas, is expected to run out of easily recoverable gas using current techniques by 2027.

The country is trying to raise the share of RE in the country’s energy mix to 35% by 2030 and to 50% by 2040 from 22% now.

“A more immediate question is why there is a need for a transition fuel before the full-blown adoption of renewable energy,” Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said in a Facebook Messenger chat. 

“Given the pressing need to address climate change, direct transitions to clean energy are often more aligned with global sustainability goals.”

Energy Undersecretary Sharon S. Garin earlier told senators the government wants more battery system companies to do business in the country to meet its RE goals.

She said battery technology is evolving quick enough to make the country’s 2050 RE goals feasible.

Last year, Mr. Marcos said his government might explore gas reserves in nonconflict areas within the country’s exclusive economic zone in the South China Sea to boost the country’s power generation capabilities.

PXP Energy Corp.’s exploration work at Reed Bank, another potential source of gas in disputed waters, remains suspended due to tensions with China.

China claims more than 80% of the South China Sea, seen as a substantial source of oil and gas deposits and where over $3 trillion worth of trade passes through each year.

“This new law will help ensure that gas and energy prices and supply will be stabilized in the event where there are international conflicts or war,” Mr. Ejercito said.

Stricter enforcement of Labor Code pushed amid dim Philippine employment outlook

WORKERS are seen at a manufacturing facility in Santa Rosa, Laguna. — PHILIPPINE STAR KRIZ JOHN ROSALES

By Chloe Mari A. Hufana, Reporter

A STRICTER monitoring and enforcement mechanism to ensure compliance with labor standards is needed amid a “dim” employment outlook, particularly in the country’s service and agriculture sectors, a labor leader said.

A recent International Labour Organization (ILO) report on insufficient global employment growth mirrors the situation in the Philippines, where persistent decent work deficits in the service and agriculture sectors are attributed by the Federation of Free Workers (FFW) to rampant contractualization, low wages, and unsafe working conditions.

“The outlook remains dim, particularly when considered alongside the International Monetary Fund’s (IMF) recent report. It estimates that 14% of the workforce — around 5 million Filipino workers — are at risk of displacement this year due to artificial intelligence (AI) and climate change,” FFW President Jose Sonny G. Matula told BusinessWorld in a Viber message over the weekend.

The ILO’s World Employment and Social Outlook: Trends 2025, released last week, found employment growth globally remained “too weak” to significantly impact lingering decent work deficits.

While employment growth remains steady, various factors are testing the resilience of labor markets worldwide, it added.

“The lack of faster global productivity growth is partly linked to the failure of structural change to move people out of agriculture into manufacturing and services,” it noted.

“Given the poor working conditions in much of farming outside advanced economies, this also means that working poverty and informality have not benefited from people moving out of agriculture to better-paying jobs in industry and services,” it added.

Individuals in informal employment, particularly in agriculture and other sectors like wholesale and retail trade, often face irregular income and lack access to social protection, it added.

“In this context, the vigorous exercise of the Department of Labor and Employment’s (DoLE) inspection and visitorial powers under the Labor Code is essential,” Mr. Matula said.   

“Strengthened monitoring and enforcement mechanisms will ensure that employers comply with labor standards, while the Employment Plan should adapt to rapidly changing labor market dynamics, including those influenced by technology and climate change,” he added.

In 2024, global employment grew alongside the expanding labor force, maintaining the global unemployment rate at a steady 5%, consistent with the level recorded in 2023, the ILO noted.

However, this growth remains insufficient to address persistent decent work deficits as young workers continue to face high unemployment rates, around 12.6%, with little sign of improvement, it added.

Labor Secretary Bienvenido E. Laguesma said the department conducted “extensive national consultations,” culminating in the upcoming 10-year Trabaho Para sa Bayan (TPB) Plan to address weak job growth.

“Through these initiatives, we have identified several key areas of intervention that align with the goals of the TPB Plan and aim to address the challenges of regional employment disparities, particularly in rural areas,” he told BusinessWorld in a Viber message over the weekend.

“Agriculture remains a cornerstone of rural employment, and we are committed to transforming this sector to boost productivity and job creation,” he added.

He noted the Labor department aims to introduce technology-enabled farming practices, climate-resilient methods and value-added processes into agribusiness through the Agricultural Competitiveness Enhancement Fund.

“These initiatives will not only create more jobs but also enhance the sustainability and profitability of rural livelihoods,” he said.

According to the Philippine Statistics Agency’s (PSA) November 2024 Labor Force Survey, the agriculture sector experienced the highest year on year job loss, with 1.99 Filipinos leaving the sector.

The agency attributed the loss to typhoons.

RURAL WORKFORCE
According to Mr. Laguesma, DoLE is empowering local government units (LGUs) to spearhead rural development by supporting them with investment strategies, microfinance for micro, small and medium enterprises (MSMEs) and infrastructure projects under the Build Better More program.

“These initiatives will ensure that rural areas become hubs for inclusive economic activity,” he added.

In addition, DoLE is collaborating with the Technical Education and Skills Development Authority (TESDA) and local institutions, prioritizing tailored skills training.

Programs will focus on green skills development, digital upskilling and vocational training to prepare rural workers for opportunities in sustainable agriculture, eco-tourism, and renewable energy, he noted.

“Our Public Employment Service Offices (PESOs) are key to facilitating job placement and matching in rural areas,” he added, noting that digitalization and enhancing labor market intelligence.

“We aim to make employment services more accessible and effective, enabling rural job seekers to connect with opportunities tailored to their skills and aspirations,” he noted.

The labor chief also added the department is committed to fostering sustainable job opportunities in agriculture, eco-tourism and clean energy. These green initiatives will ensure long-term job creation while protecting environmental resources.

Social safety nets for rural workers are critical, he noted, adding the ILO has been helping DoLE in achieving these initiatives.

“We will broaden coverage of social protection programs to include informal workers, addressing vulnerabilities and providing stability during economic transitions,” he added.

“By prioritizing rural job creation and addressing regional disparities, we aim to build a resilient and equitable labor market where every Filipino has access to quality employment.”

Nearly 200 Afghans in PHL fly to US

ALMOST 200 Afghan nationals who had stayed in the Philippines while awaiting resettlement in the United States have left the country after finishing their special immigrant visa applications, according to the US Embassy in Manila.

In a Viber message to reporters, US Embassy spokesperson Kanishka Gangopadhyay said that from 300 Afghan nationals initially slated to participate in the special immigrant visa program, about 100 dropped out due to medical concerns, among other factors.

“It’s natural to have some attrition for immigration programs due to long timelines,” he said. “All departed the Philippines for immigration to the United States aboard commercial flights between Jan. 15 and 17.”

Last year, Manila and Washington agreed to allow a limited number of Afghan nationals to temporarily stay in the Southeast Asian nation while waiting for the approval of their special immigrant US visas.

Afghan applicants would only be allowed to stay in Manila for 59 days, Philippine Foreign Affairs spokesperson Ma. Teresita C. Daza told reporters in a WhatsApp message in August.

During President Ferdinand R. Marcos, Jr.’s state visit to Washington in May 2023, US President Joseph R. Biden floated the idea of sheltering Afghan nationals for a limited time while they await their visas.

“The government of the United States extends deep appreciation to the government of the Philippines for their cooperation and support for US efforts to assist Afghan Special Immigrants,” US embassy spokesman said. — John Victor D. Ordoñez

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