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Warner Bros. fight heats up with $108-billion hostile bid from Paramount

PARAMOUNT SKYDANCE on Monday launched a hostile bid worth $108.4 billion for Warner Bros. Discovery, in a last-ditch effort to outbid Netflix and create a media powerhouse that would challenge the dominance of the streaming giant.

Netflix had emerged victorious on Friday from a weeks-long bidding war with Paramount and Comcast, securing a $72-billion equity deal for Warner Bros. Discovery’s TV, film studios, and streaming assets. But Paramount’s latest attempt means the jockeying for Warner Bros. and its prized HBO and DC Comics assets will not come to a conclusion swiftly.

The Warner Bros. Discovery board of directors on Monday afternoon said it would review Paramount’s offer, but was not modifying its recommendation with respect to Netflix. It advised the company to “take no action at this time” in regard to the Paramount Skydance proposal.

Paramount’s $30-per-share cash offer includes financing from Affinity Partners, the investment firm run by Jared Kushner, US President Donald J. Trump’s son-in-law, and several Middle Eastern government-run investment funds, and is backstopped by the Ellison family. Larry Ellison, the world’s second-richest person, is the father of Paramount head David Ellison and has close ties to the White House.

Larry Ellison called Mr. Trump after the Netflix deal was announced and told him the transaction would hurt competition, the Wall Street Journal reported, citing a White House official and a person familiar with the matter.

The studio argues its bid for the entirety of Warner Bros. Discovery is superior to Netflix, giving shareholders $18 billion more in cash and an easier path to regulatory approval. It said a Paramount-Warner Bros. combination, which would be among the largest media deals in history, would be in the best interest of the creative community, movie theaters, and consumers, who would benefit from enhanced competition.

“We believe our offer will create a stronger Hollywood,” Paramount Chief Executive Officer (CEO) David Ellison said in a statement. Separately, he said Paramount’s proposal offered “higher headline value, increased certainty in that value, greater regulatory certainty, and a pro-Hollywood, pro-consumer and pro-competition future.”

Paramount’s bid includes Warner Bros. Discovery’s cable television properties; Netflix’s bid is limited to the Warner Bros. film and television studios, HBO, and the HBO Max streaming service.

Analysts noted that Paramount’s offer comes with its own antitrust scrutiny as a consolidation of two major television operators. Last month, Democratic senators warned that such a transaction would result in “one company controlling almost everything Americans watch on TV.” The combined studio would also have a greater market share than current leader Disney, and add to fears of consolidation that have hit the industry in recent years.

The offer represents a 139% premium over the company’s value from before the buyout talks started, and bests Netflix’s $27.75 offer that mixes cash and stock.

KUSHNER, SAUDIS PART OF PARAMOUNT OFFER
At a UBS conference, Netflix co-CEO Ted Sarandos said Paramount’s hostile bid for Warner Bros. was “entirely expected,” but added that he was confident of closing the deal.

“In the offer that Paramount was talking about today, the Ellisons were talking about $6 billion of synergies,” said Mr. Sarandos. “Where do you think synergies come from? Cutting jobs? So we’re not cutting jobs. We’re making jobs.”

In a regulatory filing, Paramount said that the Ellison family, which owns Paramount, along with private equity firm RedBird Capital, had agreed to backstop $40.7 billion in equity capital. The offer also includes financing from Mr. Kushner’s Affinity Partners, the Saudi and Qatari sovereign wealth funds, and L’imad Holding Co., owned by the government of Abu Dhabi.

“A Paramount Skydance-Warner Bros. merger would be a five-alarm antitrust fire and exactly what our anti-monopoly laws are written to prevent,” US Senator Elizabeth Warren, a Democrat, said on Monday. The hostile bid “is backed by a who’s who of Trump buddies… raising serious questions about influence-peddling, political favoritism, and national security risks.”

If Warner Bros. accepts Paramount’s offer, it will have to pay Netflix a $2.8-billion breakup fee. Netflix, on its part, is on the hook for $5.8 billion if its deal falls through. The streaming pioneer is likely to face strong antitrust scrutiny, and Mr. Trump has already raised questions about its offer.

On Monday, Mr. Trump said neither bidding party “are friends of mine,” and he wanted “to do what’s right.” He added that he had not spoken to Mr. Kushner about the Paramount bid.

Netflix’s bid has already drawn sharp criticism from bipartisan lawmakers and Hollywood unions over concerns that it could lead to job cuts as well as higher prices for consumers.

“While it is perhaps a sad commentary on the US that Paramount thinks its closeness to the occupant of the Oval Office will help it seal the deal, it is merely doing what it can to steal a march on its rival,” said Chris Beauchamp, chief market analyst at UK-based IG Group.

Shares of Paramount were up 7.3% on Monday. Warner Bros. Discovery rose 5.3%, while Netflix shares fell 4%.

TWISTS AND TURNS
Reuters had already reported, citing sources familiar, that Paramount had raised its offer to $30 per share on Thursday for the entire company, but that the Warner Bros. board had concerns about the financing.

“The Warner Bros. Discovery acquisition is far from over,” said eMarketer senior analyst Ross Benes. “Paramount will appeal to shareholders, regulators, and politicians to try to stymie Netflix. The battle could become prolonged.”

Paramount maintained that it would be a champion of Hollywood and its talent, would remain committed to releasing movies in theaters, and that its path to regulatory approval would be faster than Netflix’s. In its appeal to shareholders, Paramount said it submitted six proposals over the course of 12 weeks, but Warner Bros. “never engaged meaningfully” with these proposals.

The company said it had sent a letter to Warner Bros., questioning the sale process and alleging the company has abandoned a fair bidding process and predetermined Netflix as the winner.

That followed reports that Warner Bros.’ management called the Netflix deal a “slam dunk” while speaking negatively about Paramount’s offer.

In an interview with CNBC on Monday, David Ellison said there was an “inherent bias” in the bidding. — Reuters

CEB to receive seven aircraft in 2026, adds Riyadh route

PHILSTAR FILE PHOTO

BUDGET CARRIER Cebu Pacific (CEB) said it expects to receive seven aircraft deliveries next year as it looks to expand its domestic and international network.

“This growth will really strengthen our position in the region and will allow us to serve more destinations with greater efficiency and comfort,” Cebu Pacific President and Chief Commercial Officer Alexander G. Lao said during the airline’s year-end media briefing on Tuesday.

Cebu Pacific is set to end 2025 with 100 aircraft, after taking delivery of seven planes this year, Mr. Lao said.

For 2026, the airline expects five narrow-body aircraft and two wide-body aircraft.

The carrier also announced it will launch direct flights between Manila and Riyadh beginning March 1, 2026.

“We remain committed to providing reliable and accessible connections for Filipinos wherever they may be in the world,” Mr. Lao said.

The service will operate four times a week, with Manila-Riyadh flights departing every Monday, Wednesday, Friday and Sunday, while return flights to Manila are scheduled every Monday, Tuesday, Thursday and Saturday.

Cebu Pacific said Riyadh will be its sole long-haul market next year even as it continues to explore other opportunities.

“We do try to stay in the areas that we are pretty strong at,” Mr. Lao said, adding that the airline will also focus on strengthening its existing routes.

“It is really how we strengthen the existing network so that we are able to gain economies of scale. It is important because that is how we lower our fares,” Cebu Pacific Chief Marketing and Customer Experience Officer Candice A. Iyog said.

Cebu Pacific currently serves 37 domestic and 27 international destinations across Asia, Australia and the Middle East.

For the third quarter, the airline reported a 13.9% rise in passenger volume to 19.95 million, from 17.51 million a year earlier.

Domestic passengers grew 12.7% to 14.88 million, while international passengers increased 17.7% to 5.07 million.

For the first half, Cebu Air, Inc., the airline’s operating unit, posted an attributable net income of P8.97 billion, more than double the P3.55 billion recorded a year earlier, as gross revenues climbed 23.1% to P63.33 billion.

Passenger revenues amounted to P44.23 billion, while cargo and ancillary revenues contributed P3.51 billion and P15.59 billion, respectively.

Cebu Pacific said it expects strong demand in the fourth quarter, driven by holiday travel and a favorable macroeconomic environment in the Philippines and Southeast Asia.

At the stock exchange on Tuesday, Cebu Pacific shares gained P1.05, or 3.28%, to close at P33.05 apiece. — Ashley Erika O. Jose

What the US national security strategy tells us about how Trump views the world

WHITE HOUSE

The White House has released its national security strategy, a document put out by every US presidential administration in order to spell out its foreign policy priorities. These documents are legally required to be released by Congress and are typically written by a committee. Still, they bear the president’s signature and usually serve as a distillation of how the current commander in chief views the world.

This latest document is no exception. But perhaps even more so than any previous national security strategy, it reflects a focus on the views and activities of the current president. It touts supposed achievements of the Trump administration in a way that would be more appropriate in a campaign speech. And at numerous points, it lavishes praise on Donald Trump for upending conventional wisdom and setting US foreign policy on a new course.

So what can we learn from this document about how Trump views the world? Three themes stand out. The first is that, contrary to some claims, Trump is not an isolationist. He doesn’t want to pull the US back from foreign entanglements completely. If he did, it would hardly make sense to boast of having brokered eight peace deals or of having damaged Iran’s nuclear program.

Like more traditional national security strategy documents, the latest one still portrays the US as having a responsibility for global peace and prosperity. But within that broad remit, it has a new set of priorities.

The most striking is the focus on the western hemisphere. Whereas recent administrations have identified the containment of China as their key priority, Trump vows he will “restore American preeminence in the western hemisphere.” Yet the only concrete “threats” the document identified as originating in the region are drug cartels and flows of irregular migrants.

Viewed from the standpoint of previous administrations, this makes little sense. US foreign policy has usually been concerned mainly with grave security threats, particularly from Russia and China. Drugs and migrants were less important than nuclear weapons and aircraft carriers.

Trump views things differently. From his perspective, dangerous narcotics and migrants who he has previously said are “poisoning the blood” of the US are much more direct threats to the American people. Putting “America First,” to use Trump’s favorite phrase for describing his own foreign policy, means focusing on them.

But this does not mean Trump is isolationist. Protecting the American people, even in the way Trump understands it, means having an active foreign policy.

The second key theme of the document is its attitude towards “civilization.” In it, Trump has returned to a central aspect of his political rhetoric — that “western civilization” is under attack from a combination of hostile migrants, spineless liberals, and cultural degeneracy. Just as Trump appears to see himself as leading the fightback against these forces in the US, he wants others to do the same.

In passages that have sent shockwaves through Europe’s political establishment, the national security strategy lambasts European governments for allegedly welcoming too many migrants, persecuting far-right political parties and betraying the west’s civilizational heritage.

Again, these are not the words of an isolationist. They are the words of someone who, as I have concluded in my own research, views themselves as the protector of a racially and culturally defined civilization that covers both the US and Europe.

The particularism here is striking. Whereas past US national security strategies spelled out a desire for Washington to spread liberal democracy throughout the world, Trump’s document says this is an unachievable goal. Instead, he seems to be interested primarily in the destiny of white Europeans — and in shaping their democracy and values to conform with his own.

The national security strategy warned that several countries risk becoming “non-European” due to migration, adding that if “present trends continue, the continent will be unrecognizable in 20 years or less.” This is a stance that some observers say echoes the racist “great replacement theory,” a comparison the White House has branded as “total nonsense.”

The third and final theme that stands out from the document is its intensely economic focus. The most detailed parts of the document relate to economic statecraft — how to reshore industries to the US, reshape the global trading system, and enlist US allies in the mission of containing the economic rise of China.

Regional security matters, by contrast, receive much less attention. Russia’s ambitions in Europe are barely mentioned as a problem for the US, and Taiwan merits only a paragraph. Indeed, the Kremlin has said the new strategy is “largely consistent” with its vision.

Rarely has a US national security strategy been so transactional. In its discussion of why the US will support Taiwan, the document only invokes the island’s semiconductor industry and strategic position as reasons. Not a word is said about the intrinsic worth of Taiwanese democracy or the principle of non-aggression in international law.

The impression this leaves is that, in foreign policy, Trump prioritizes economics over values. He views leaders such as China’s Xi Jinping and Russia’s Vladimir Putin not as implacable dictators hell-bent on regional domination, but as possible business partners. He seems to believe the focus of foreign policy ought to be to maximize profits.

For US allies in Europe and Asia, this raises an uncomfortable question: what if the profitable thing to do turns out to be to abandon them and strike a grand bargain with Russia or China? Based on this document, they have little reason to think Trump will do anything else.

THE CONVERSATION VIA REUTERS CONNECT

Andrew Gawthorpe is a lecturer in History and International Studies at Leiden University. He is affiliated with the Foreign Policy Center in London.

Jobstreet: AI skills starting to show up in MSME hiring

STOCK PHOTO | Image by DC Studio from Freepik/THIS RESOURCE WAS GENERATED WITH AI

MICRO, small and medium enterprises (MSME) are beginning to screen applicants for artificial intelligence (AI) skills as they try to keep pace with bigger competitors, according to Jobstreet by SEEK.

“AI adoption has gradually begun to shape the requirements employers are posting on Jobstreet by SEEK,” Henry Jose “Joey” Yusingco, head of market at Jobstreet by SEEK in the Philippines, said in an e-mailed reply to questions.

“We’re seeing AI-related skills slowly popping up in job requirements, much like how proficiency in Microsoft Office became essential decades ago, or how digital skills became standard requirements about 10 years ago,” he added.

MSMEs are checking whether applicants can use generative AI tools that fit a firm’s workflow, he said, adding that AI literacy is starting to form part of employers’ baseline expectations.

About 60,000 SMEs have posted openings on the platform this year, covering retail, trade and smaller outsourcing firms. Mr. Yusingco said smaller companies continue to grapple with rising costs, heavier workloads and competition for talent, and the platform is offering free job ads to help widen their pool.

About 72% of employers say AI knowledge influences their hiring decisions, according to Jobstreet’s Hiring, Compensation and Benefits report. Thirty-six percent view AI literacy — ranging from soft skills such as using generative tools for administrative tasks to technical skills like prompt engineering — as “crucial.”

AI knowledge is no longer a “nice-to-have,” but an expected skill among job candidates, Mr. Yusingco said.

“Jobseekers who list specific skills in workflow automation and AI verification are gaining a distinct advantage due to a current shortage of AI-literate talent,” he said.

About nine of 10 Philippine chief executive officers expect moderate to large use of AI in their operations in the next three years, according to PwC’s 28th Global CEO Survey. — Beatriz Marie D. Cruz

BIS raises concerns of gold and stocks double bubble

ZLATAKY CZ-UNSPLASH

LONDON — The combination of gold and share prices soaring in unison is a phenomenon not seen in at least half a century and raises questions of a potential bubble in both, global central bank umbrella body, the Bank for International Settlements (BIS), says.

While equity markets continue to be driven by artificial intelligence (AI) and tech gains, gold’s 60% surge this year is set to be its biggest since 1979, fueling debate about whether its traditional role as a safe-haven asset has changed.

“Gold has behaved very differently this year compared to its usual pattern,” Hyun Song Shin, economic adviser and head of the Monetary and Economic Department at the BIS said as it released its final report of the year on Monday.

“The interesting phenomenon this time has been that gold has become much more like a speculative asset.”

Dubbed the central bank to the world’s central banks, the BIS has given regular warnings about potential stock market bubbles in recent years, but its concern around the co-movement with gold is twofold.

Where would investors shelter if stocks and gold both crash? And what could it mean for central banks and other reserve managers given some have been heavy buyers of gold?

The BIS’ analysis concluded that this year has been the first time gold and the S&P 500 have jointly exhibited “explosive behavior” in the last 50 years.

Not only is gold up 60% this year, it is up more than 150% since 2022 when the post-COVID pandemic surge in inflation began to impact markets, alongside Russia’s invasion of Ukraine and subsequent Western sanctions on Moscow.

Another possible bubble warning sign is that retail investors have also been piling in.

Gold exchange-traded fund (ETF) prices have been consistently trading at a premium relative to their net asset value (NAV) this year, signaling “strong buying pressure coupled with impediments to arbitrage,” the BIS said.

Central banks’ purchases have “clearly set a very firm tone in the price of gold,” Shin added.

“Whenever you have prices actually doing quite well, you will see other investors jumping in, and certainly retail investors have also taken part (in the rally), and not just in gold.”

The BIS gave a broader warning too about the “growing fragility” of the risk-on environment amid the concerns about artificial intelligence (AI) valuations and the recent 20% dives in cryptocurrencies like bitcoin.

The European Central Bank and Bank of England have both raised their own AI bubble concerns in recent weeks and the risk of an abrupt burst if investors’ rosy expectations are not met.

Shin said the profits being made by the AI firms — now spending enormous amounts on data centers — was an important difference between now and the “dotcom bubble” of the early 2000s when firms weren’t making money.

The “fundamental question,” however, is whether those expenditures will be seen as being justified in the long run, Shin said, adding that the other key determinant for markets will be how the global economy holds up next year.

“So far, activity has been surprisingly resilient,” Shin said.

The BIS is also watching where the dollar goes from here. This year it is headed for its biggest annual drop since the Lehman Brothers collapse in 2007.

“After the April episode (when US President Donald J. Trump announced sweeping trade tariff plans), the dollar has been relatively stable,” Shin said.

“I think the hedging behavior of non-US investors is going to be a very, very important input into how markets will co-move from here.” — Reuters

PLDT says sustainability performance improved in 2025

WIKIMEDIA COMMONS/PATRICKROQUE01

PLDT INC. said its sustainability performance improved this year, citing gains in the S&P Global Corporate Sustainability Assessment (CSA).

The Pangilinan-led telecommunications firm reported that its environmental, social and governance (ESG) score rose by five points to 77 this year from 72, out of a possible 100, in the S&P Global CSA 2025.

“Our latest S&P Global CSA rating reflects the progress we continue to make in connection with our organization-wide goals to adopt global best practices and report developments in our ESG journey,” PLDT Chief Sustainability Officer Melissa Vergel de Dios said in a media release on Tuesday.

S&P Global annually assesses more than 12,000 companies based on industry-specific ESG criteria, helping companies align their sustainability initiatives with business strategy.

“Going beyond scores, we remain steadfast in harnessing lessons learned from independent benchmarks, such as the S&P CSA, to help the business further in creating long-term value and making a positive impact on our stakeholders,” Ms. Vergel de Dios said.

PLDT said its sustainability efforts are aligned with international frameworks and standards such as the United Nations Global Compact, Task Force on Climate-related Financial Disclosures, Global Reporting Initiative, and Task Force on Nature-related Financial Disclosures.

In September, the company also reported that its ESG rating improved to “BBB” this year from “BB” under the latest assessment by MSCI ESG Ratings.

Earlier this year, PLDT and its wireless unit Smart Communications, Inc. adopted policies to conserve biodiversity and support nature-based solutions as the group expands its network infrastructure.

The company also secured a P2-billion social loan last year to support the rollout of its fiber network and a P1-billion green loan for network upgrades and expansion.

At the local bourse on Tuesday, PLDT shares gained P20, or 1.56%, to close at P1,300 apiece.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings Inc., holds a majority stake in BusinessWorld through the Philippine Star Group. — Ashley Erika O. Jose

One Battle After Another leads Hollywood’s Golden Globe nominations

One Battle After Another (2025)
One Battle After Another (2025)

LOS ANGELES — Dark comedy One Battle After Another racked up a leading nine Golden Globe nominations on Monday, positioning the Leonardo DiCaprio thriller as an early favorite on Hollywood’s road to the Academy Awards.

The movie directed by Paul Thomas Anderson stars Mr. DiCaprio as a washed-up revolutionary who springs into action when his daughter’s life is in danger. The Warner Bros. film will compete in the best movie musical or comedy category against Marty Supreme and Bugonia, among others.

Norwegian family drama Sentimental Value claimed eight nominations, just ahead of supernatural horror film Sinners with seven. Both were nominated for the movie drama prize alongside Guillermo del Toro’s take on Frankenstein and Hamnet, a story about the family of William Shakespeare.

“Frankenstein is a film I have been wanting to make for as long as I can remember, and to have it embraced in this way means so much to me,” Mr. Del Toro said in a statement.

Acting nominees included Mr. DiCaprio and One Battle After Another co-stars Benicio Del Toro, Sean Penn, Chase Infiniti, and Teyana Taylor, who said the nominations left her “speechless and teary-eyed.”

George Clooney and Adam Sandler received nods for Jay Kelly, as did Dwayne Johnson for The Smashing Machine, and Jessie Buckley for Hamnet.

Ariana Grande and Cynthia Erivo earned nominations for their roles in Wicked: For Good, though the second part of Universal Pictures’ The Wizard of Oz prequel failed to make it into the musical or comedy field.

The Globes are among first Hollywood accolades to be handed out before the film industry’s top honors, the Oscars, in March. The Globes telecast is scheduled for Jan. 11.

INTERNATIONAL FILMS RECOGNIZED
Voters for the Globes are entertainment journalists from around the world. Their choices this year reflected their affection for films made outside of Hollywood, said Debra Birnbaum, editor of awards website Gold Derby.

Beyond Sentimental Value, they nominated revenge thriller It Was Just an Accident from Iranian director Jafar Panahi and Brazilian drama The Secret Agent.

“The biggest surprise over everything is the big showing for all the international films,” Ms. Birnbaum said. “I think those are the films we’re going to be watching, not just at the Golden Globes, but throughout all the film (awards) season.”

In a new podcast category, Globes voters nominated Armchair Expert with Dax Shepard, Call Her Daddy, Good Hang with Amy Poehler, The Mel Robbins Podcast, Smartless, and National Public Radio’s Up First.

HBO’s vacation mystery The White Lotus led TV categories with six nominations, ahead of Netflix limited series Adolescence about a 13-year-old accused of murder.

Netflix, the streaming pioneer attempting to remake Hollywood by purchasing TV, film and streaming assets including HBO from Warner Bros. Discovery, outpaced all networks with 22 nominations in television categories. Paramount Skydance made a hostile bid for Warner Bros. Discovery on Monday.

Independent distributor Neon, the studio behind Sentimental Value, It Was Just an Accident, and The Secret Agent, landed the most film nominations with 21.

Globe winners are chosen by more than 300 entertainment journalists, compared with roughly 9,000 voters who select the Oscars. The Globes voting body was expanded in recent years and organizers instituted reforms after criticisms for ethical lapses and a lack of diversity.

Comedian Nikki Glaser will return to host the Globes ceremony for a second time. The show will be broadcast live on CBS and streamed on Paramount+. — Reuters

How does the Philippines’ sectoral debt as a share of GDP compare with other emerging markets in East and Southeast Asia in Q3 2025?

THE Institute of International Finance (IIF) said Philippine government debt as a share of the economy was 57.8% in the third quarter. Read the full story.

How does the Philippines’ sectoral debt as a share of GDP compare with other emerging markets in East and Southeast Asia in Q3 2025?

How PSEi member stocks performed — December 9, 2025

Here’s a quick glance at how PSEi stocks fared on Tuesday, December 9, 2025.

Initial EDSA rehabilitation work planned for Jan.

PHILIPPINE STAR/WALTER BOLLOZOS

THE Department of Public Works and Highways (DPWH) said it hopes to begin initial work to rehabilitate Epifanio de los Santos Avenue (EDSA) by January.

“By January, we will start the repair of EDSA. It will not be the full-blown rehabilitation, but we will begin initial repairs. Hopefully by that time we already have a faster method (for repairs) so we can quickly carry out the project,” Public Works Secretary Vivencio B. Dizon told reporters on Tuesday. 

The planned rehabilitation of EDSA, Metro Manila’s main circumferential road, had been pushed back to late 2026 or early 2027 after President Ferdinand R. Marcos, Jr. ruled out the original timeline as too disruptive, citing the outsized impact of the repairs on commuters, motorists, and the broader economy.

The rehabilitation of EDSA was initially set to begin in June and scheduled to run for two years. 

For now, the DPWH is still working on reducing the project’s estimated cost, Mr. Dizon said, noting that the department is also looking for a possible partner to complete the project.

“Last time, the budget for the project was around P15 billion but I think that is too high. If we can finish the project fast, we can lower the project cost,” he said.

“We do not have a technology partner yet, but there are some proposals,” Mr. Dizon said, noting that the agency will focus on widening sidewalks and pedestrian lanes and creating a more accessible EDSA, especially for persons with disabilities.

On Tuesday, the DPWH and the Department of Transportation (DoTr) announced a joint project to make roads commuter and pedestrian-friendly via wider sidewalks and the removal of obstructions along EDSA.

Earlier this year, Mr. Dizon’s predecessor, Manuel M. Bonoan, said that the best-case estimate for the EDSA rehab is six months.

The DoTr has said that it is working with other agencies to assess options for expediting the rehabilitation, including innovative construction methods that promise shorter completion times compared to conventional methods. — Ashley Erika O. Jose

Senate approves 2026 budget bill on 3rd reading

BW FILE PHOTO

By Adrian H. Halili, Reporter

THE SENATE approved the proposed P6.793-trillion national spending plan for 2026 on third reading late Tuesday, amid heightened scrutiny over the budget process following the cloud hanging over infrastructure spending and alleged budget “insertions.” 

In plenary session, 17 senators voted to pass the chamber’s 2026 General Appropriations Bill, which re-channeled funding from public works to education, health, and emergency preparedness.

Next year’s spending plan is 7.4% higher than this year’s P6.352-trillion budget and equivalent to 22% of gross domestic product.

Economic managers ruled out economic growth hitting the government’s 5.5%-6.5% full-year target, following a 4% reading in the third quarter.

“In our long discussions, we revisited two important goals. First, to strengthen government programs to meet the needs of our countrymen, and second to keep (the budget process) open and free from any form of corruption,” Sen. Sherwin T. Gatchalian, who heads the Finance Committee, told the Plenary.

Senators approved the P53.99 billion reduction in the budget of the Department of Public Works and Highways (DPWH) to P570.58 billion. The House version of the spending bill had called for DPWH funding of P624.48 billion.

“One of the major amendments to the DPWH budget was the use of adjustment factors in the costing of infrastructure projects following the President’s directive to drive down the cost of construction materials,” Mr. Gatchalian added.

Mr. Gatchalian said that as all infrastructure projects will now be more closely tracked to avoid the recurrence of so-called “ghost projects,” which emerged after inspections of flood control projects turned up many works that were substandard or non-existent.

The Senate raised funding for education to P1.375 trillion. The House version of the budget bill had called for education funding of P1.283 trillion. 

The classroom construction budget was raised to P65.93 billion from the P46.68 billion stipulated by the House. The classroom construction budget will fund more than 24,000 classrooms.

Funding for the School-based Feeding Program was also raised to P28.66 billion from the P13.61 billion specified by the House. The funding is good for 200 school days, benefiting 4.8 million students.

The Senate also raised funding for State Universities and Colleges to P139.04 billion from P131.69 billion in the House budget bill.

The Senate also raised funding for the government’s Zero Balance Billing program — which subsidizes hospital care — to P62.66 billion from the House’s P53.3 billion.

“With this additional funding, more patients in basic or ward accommodations will be able to receive medical services without out-of-pocket costs,” he added.

The Finance committee also allocated P1 billion to fund the pilot testing of the Zero Balance Billing in selected hospitals, with funding overseen by local government units.

The budget for specialty government hospitals also rose to P13.55 billion from the P6.66 billion allocated by the House.

The National Disaster Risk Reduction Management Fund allocation was also raised to P44.1 billion from the P29.25 billion set aside by the House.

“The amendments to education, health, and emergency response are anchored on one fundamental virtue: that government’s greatest obligation is to the welfare of its people,” Mr. Gatchalian said.

Legislators approved the national budget after 47 days of committee and plenary debate as public concern intensified regarding the opaqueness of the budget process coupled with the alleged involvement of senior legislators in siphoning off billions from flood control funds.

Legislators from both Houses are now expected to convene the Bicameral Conference Committee to harmonize the Senate and House budget bills.

The Senate Finance committee has said that it will no longer allow insertions during the bicameral conference.

Bicameral meetings are scheduled for Dec. 12-14, followed by ratification on Dec. 19, according to the Senate’s revised calendar.

“Given the corruption scandals involving many legislators, greater public scrutiny of the budget is needed more than ever,” according to Joy G. Aceron, convenor-director of transparency group G-Watch. Speaking to BusinessWorld via chat, she added: “It’s yet to be seen whether Congress budget deliberations and budget implementation will be more transparent.”

Ederson DT. Tapia, a political science professor at the University of Makati, said the government’s transparency initiatives remain “surface level.”

“The real test is whether citizens, journalists, and independent analysts can actually trace how items enter, change, or disappear across the budget cycle. Until that level of visibility exists, reform remains more symbolic than substantive,” he said via chat.

The Senate ordered all 2026 budget documents — including transcripts, hearings and briefings — to be posted online.

The Palace has indicated that bicameral conference committee meetings will be livestreamed.

Ms. Aceron also warned that corruption will persist if transparency reforms stall or remain superficial.

“Corruption… could get worse if we are unable to realize the necessary reforms,” she added.

Mr. Tapia noted that opaque budget insertions may return, prompting further erosion of public trust in Congress.

“People already view the budget as vulnerable to political bargaining. If reforms do not deepen, every controversy will feed that perception, and Congress will struggle to rebuild legitimacy,” he added.

PHL 2026 growth forecast reduced to 5.1% — MUFG

MUFG.JP

ECONOMIC GROWTH is expected to pick up to 5.1% next year, which if realized would once again leave the government short of its targets, MUFG Global Markets Research said.

In its Asia FX Outlook 2026, MUFG Global said it cut its 2026 Gross Domestic Product (GDP) projection from 5.5% previously, but added that prospects for weak growth could signal easing moves by the central bank.

The government’s official target band for that year is 6-7%. If the MUFG Global forecast pans out, it would be the fourth straight year the target will be missed.

“We forecast the Philippines’ growth to improve slightly above 5% in 2026, as government spending picks up post the pullback from the flood control corruption cases,” MUFG Global analysts said.

In October, government spending fell for a third straight month to P430.6 billion, down 7.76% year on year.

President Ferdinand R. Marcos, Jr. has said that the government will boost spending in the fourth quarter in a bid to catch up with its growth targets.

However, MUFG Global said government spending typically picks up after six months to over a year after a scandal involving government funds, citing the case of the 2013 Priority Development Assistance Fund graft controversy.

“This is in a sense our implicit base case, and is reflected in our expectation for government spending to pick up next year, but with growth remaining below trend with a still negative output gap,” it added.

MUFG Global noted that slower expenditure in recent months led GDP growth to weaken significantly to 4% in the third quarter from 5.5% in the previous quarter and 5.2% a year earlier.

This brought the year-to-date average GDP growth to 5%, slightly above MUFG Global’s 4.7% full-year growth forecast, but short of the government’s 5.5-6.5% target for the year. 

The Japanese bank also said that the anticipated ramping up of government expenditure and stronger capital inflows could help the peso strengthen to around P58 against the dollar in the first half of next year.

Last month, the peso breached the P59 level against the dollar several times, hitting a record-low P59.17 on Nov. 12.

However, further easing by the Bangko Sentral ng Pilipinas (BSP) could offset the currency’s projected recovery, MUFG noted.

“Nonetheless, we see this FX (foreign exchange) move as being shallow given a still dovish BSP, with the current account deficit unlikely to narrow significantly despite softer domestic demand,” it said.

According to a BusinessWorld poll, 17 out of 18 analysts surveyed expect the Monetary Board to cut the target reverse repurchase rate by 25 basis points (bps), with one expecting a 50-bp cut, at its last policy meeting of the year on Dec. 11.

If the consensus view holds, the benchmark rate will be at 4.5%, the lowest in over three years, or since the 4.25% rate set in September 2022.

Most analysts, including MUFG Global, also expect the BSP to deliver more rate cuts next year amid a weak growth outlook.

“Softer growth, uncertain fiscal impulse, and continued negative output gap we forecast in the Philippines implies the BSP is likely to remain dovish moving forward,” MUFG Global said. “We have another 50 bps of rate cuts in our forecast profile, and we see the risk tilted towards more cuts.”

Meanwhile, MUFG Global analysts expect Philippine inflation to average 2.4% next year, down from its earlier 3% forecast, as lower global oil and rice prices are expected to ease consumer price pressures.

If this estimate materializes, inflation will return to the BSP’s 2-4% target band.

“The lagged impact of a negative output gap is likely to weigh on core inflation, while low global oil and rice prices are also likely to cap any upside pressures on headline inflation more broadly,” it said.

“There are some risks arising from the government’s move to ban rice imports into end-2025 coupled with a new formula for rice import tariffs for 2026, but overall, we think low global rice prices and still decent domestic rice inventories should cap upside pressures for now,” it added.

The suspension of rice imports will be lifted in January before being reimposed between February and April.

The government has likewise approved a flexible tariff scheme for rice starting Jan. 1, with the 15% rate subject to adjustment by five percentage points, capped at 35%, for every 5% shift in global prices.

“With inflation likely remaining low and below the mid-point of the BSP’s inflation target in 2026, this should help support domestic demand and in particular consumption spending given the lagged impact of lower inflation and rates,” MUFG Global said. — Katherine K. Chan

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