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Empowering LGUs: The key to unlocking regional growth in the Philippines

STOCK PHOTO | Image by Yanalya from Freepik

By Ildrim Valley and  Kevin Cruz

The Philippines has made steady economic progress since 2010, doubling its GDP, reducing unemployment, and creating millions of jobs. Much of this growth was driven by spatial convergence, with poorer regions growing faster than richer ones. From 2009 to 2022, labor productivity in low-income regions grew by 3.2% annually, outpacing Metro Manila’s 1.5% growth.

This helped narrow regional gaps, but disparities remain large. Not all Filipinos enjoy the same standard of living. Poverty incidence is the lowest in Metro Manila (NCR), as it continues to dominate the national economy, contributing over 30% of the country’s income. The Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) has experienced significant progress over the past decade but continues to lag far behind. Its average worker earns just one-sixth of what a worker in Metro Manila does, with the overall income levels comparable to some of the world’s poorest countries.

Bridging this gap is not only a matter of fairness; sustaining spatial convergence is essential for sustaining fast growth. At the heart of this challenge lies a powerful but underutilized force: the country’s Local Government Units (LGUs).

WHY LGUs MATTER FOR GROWTH
LGUs are not just administrative units. They are the boots on the ground, the first responders to community needs, and the architects of local progress. Under the 1991 Local Government Code, LGUs were granted significant autonomy. This means they directly influence trade, investment, and access to core services like health. Their proximity to communities positions them uniquely to tailor development strategies to local needs, making them essential players in driving inclusive growth.

Experiences from other countries reinforce the importance of strong local governance. In India, the state of Kerala’s decentralized planning helped achieve some of the country’s best health outcomes. In Brazil, cities like Porto Alegre used participatory budgeting to improve public trust and service delivery. Meanwhile, complementing a comprehensive industrial strategy South Korea’s local governments played a key role in supporting small and medium enterprises, helping drive the country’s rapid industrialization. These examples show that when local governments are empowered and accountable, they can be powerful engines for growth.

In Philippines, many services have been devolved to LGUs, but there is room to improve capacity and governance as well as creating incentives for better execution and delivery.

MONEY MATTERS BUT ISN’T EVERYTHING
The 2019 Mandanas ruling further strengthened the LGUs’ role by increasing their share of national tax revenues, thus increasing their budgets. In 2022, LGUs received 4.4% of GDP in transfers, up from 2.9% in previous years. This increase in LGU budgets pushed subnational spending to 6% of GDP, comparable to what we see in upper-middle-income countries. This opens new opportunities for LGUs to lead in local development through more and better-quality services in infrastructure, education, and health investments.

Despite the boost in funding, many LGUs struggle to turn budgets into results. In the recently published World Bank Growth and Jobs report we show that local governments consistently under execute their budgets by over 20%. When it came to money set aside for big projects like infrastructure, only a little over half was used, meaning much of the funding remained untouched. That means half of the funds meant for infrastructure and development projects go unspent.

Why does this happen? Limited technical expertise, bureaucratic bottlenecks, and uneven governance all contribute. Wealthier LGUs tend to perform better, while poorer ones face more severe capacity and funding constraints. Without targeted support, these disparities risk becoming entrenched — undermining development where it is needed most.

First, many LGUs lack technical expertise, systems, and staffing needed to plan and implement complex projects. Without the right people and tools in place, even well-funded programs can stall. This challenge is especially acute in smaller or poorer LGUs, where attracting and retaining skilled personnel is difficult.

Second, there are few incentives for LGUs to improve performance. Funding is typically allocated based on formulas, not results. Whether a project is completed or left unfinished, the money still comes in. This weak link between funding and outcomes makes it harder to hold local governments accountable or encourage them to improve.

Third, most LGUs rely heavily on transfers from the National Government, underpinned by weak own-source revenue generation. While these transfers are essential, they can limit local autonomy and responsiveness. This dependence and lack of local revenue generation also weaken accountability, when resources come from the center, local officials may feel less pressure to answer their constituents.

GOOD GOVERNANCE = GOOD JOBS
Here’s the good news: when LGUs are well run, they deliver. The quality of local governance has a direct impact on economic outcomes. Regions with higher scores that measure governance efficiency and business friendliness show higher labor productivity and more formal employment.

Better governance means better services and human capital, more transparent regulations, and a more attractive environment for investors including smoother and transparent licensing and local regulations. In short, it means better jobs and better lives.

Improving governance at the local level is therefore essential. Streamlining permitting processes, like business licenses and construction permits, enhancing transparency, and aligning local regulations with national standards can make LGUs more attractive to investors and more responsive to citizens’ needs.

To unlock the full potential of LGUs, several reforms are needed:

Strengthen local capacity; people and systems: Many LGUs face challenges in planning and delivering services because they lack the right skills and tools. Investing in training and mentoring for local staff can help improve how projects are designed and implemented. But it’s not just about people, LGUs also need better systems for budgeting, tracking progress, and managing resources. Stronger teams supported by reliable systems can help LGUs make better use of public funds and deliver services that truly meet community needs.

Consider performance-based transfers: While LGUs now receive a larger share of national revenues, the effectiveness of spending varies widely. Linking funding to measurable outcomes, such as infrastructure completion rates, improved management of public funds, a regulatory environment, or service delivery outcomes, can incentivize better governance and ensure that resources translate into results.

Enhance fiscal autonomy: Local governments often depend heavily on national transfers, which can limit their ability to respond to local priorities. Giving LGUs more control over how resources are managed, such as allowing them to exert more control over the taxes and fees already assigned to them and strengthening systems over service-based fees and property taxes, can help align spending with community needs. These approaches link payments to services consumed and encourage more accountable and responsive local governance.

These reforms can empower LGUs to become engines of growth, capable of driving spatial convergence and reducing inequality across regions.

The Philippines’ journey toward a middle-class, poverty-free society by 2040 hinges not just on national policies but on local action. LGUs are uniquely positioned to deliver inclusive development, if they are given the tools, resources, and autonomy to do so. By investing in LGU capacity and governance, the country can unlock growth in every corner of the archipelago and ensure that prosperity is shared by all.

 

Ildrim Valley is a public sector specialist based in Manila, with over a decade of experience in policy advisory, operations, and research across regions and countries of varying income levels. His work focuses on subnational governance, fiscal management, and tax reforms.

Kevin Cruz is the country economist for the Macroeconomics, Trade, and Investment Global Practice. He currently leads the macroeconomic monitoring program of the World Bank Philippines and is working on fiscal policy issues for the Philippines. Prior to joining the Bank, he worked in various research institutes in the University of the Philippines Diliman.

BMI expects further BSP rate cuts

BW FILE PHOTO

EASING INFLATION will allow the Bangko Sentral ng Pilipinas (BSP) to slash benchmark borrowing costs further this year to support a slowing economy, Fitch Solutions’ unit BMI said.

“We expect the Bangko Sentral ng Pilipinas to maintain a pro-growth policy stance in the second half of 2025 amid growing economic uncertainty,” BMI said in an Aug. 20 note.

“Against this backdrop, we expect the BSP to cut its policy rate by a further 50 bps (basis points) to 4.75% by end-2025.”

Philippine gross domestic product (GDP) grew by 5.5% in the second quarter, slightly faster than the 5.4% print in the first quarter.

For the first half, GDP expansion averaged 5.4%, slower than the 6.2% a year ago. This is a tad below the government’s 5.5-6.5% growth target for the year.

“We believe this underperformance will continue into the coming quarters, given mounting signs of softening domestic activity and the winding down of exports frontloading,” BMI said.

The Philippines’ trade-in-goods deficit narrowed to $3.95 billion in June as exports jumped by 26.1% to $7.02 billion, driven by frontloading in anticipation of higher US tariffs.

For the first semester, the trade gap narrowed to $23.97 billion from the $25.06-billion deficit a year ago.

BMI said the BSP has the policy room to continue its easing cycle as inflation remains benign. Headline inflation eased to a near six-year low of 0.9% in July, which brought the seven-month average of 1.7%, slightly higher than the BSP’s 1.6% forecast for the year but below its 2-4% annual target.

“With geopolitical risks, particularly surrounding the Israel-Iran conflict, now largely de-escalated, energy-related price pressures are expected to remain contained,” BMI said.

It added that it now expects inflation to average just 1.6% this year, down from its previous forecast of 2.2%.

The BSP has lowered benchmark interest rates by a cumulative 125 bps since August 2024, with the policy rate now at 5.25%.

BSP Governor Eli M. Remolona, Jr. earlier said that another rate cut is “quite likely” at the Monetary Board’s Aug. 28 meeting, adding that the central bank could deliver only two more reductions this year, including the one they could implement next week.

After the Aug. 28 review, the Monetary Board’s remaining meetings for this year are scheduled for Oct. 9 and Dec. 11.

BMI’s forecasts showed that it also expects another 25-bp cut in 2026 that would bring the policy rate to 4.5%. It sees the BSP bringing down its benchmark rate to 3.5% by 2027 to mark the end of its current easing cycle, backed by its expectation that the consumer price index will remain within the 2-4% target in the next two years.

“Despite rate cuts by the BSP, the peso will strengthen slightly from current levels as the evolving situation in the US weighs on the dollar,” BMI added.

It expects the peso to trade from P55.20 to P59.20 against the dollar this semester. supported by a healthy interest rate differential between the US and the Philippines as the Federal Reserve is also expected to cut its own target rate by 50 bps in the second half.

The Fed has kept its target rate at the 4.25%-4.5% range since December 2024. Markets widely expect the US central bank to bring down benchmark borrowing costs next month.

“The Fed is facing growing political pressure from President Donald J. Trump, who has publicly and repeatedly called for looser monetary policy. In turn, markets could interpret any rate cuts as politically driven, raising doubts about the Fed’s independence especially if rate cuts coincide with fiscal slippage or policy uncertainty,” it said.

“This would support risk appetite for EM (emerging market) currencies such as the peso.”

On Wednesday, the peso closed at P56.96 versus the dollar, climbing by 14 centavos from Tuesday’s finish of P57.10.

Year to date, the local unit is up by 1.55% from its end-2024 close of P57.845. — BVR

Austin Butler’s cat-sitting gets hairy in Aronofsky’s Caught Stealing

Austin Butler and Tonic in a scene from Caught Stealing. —IMDB

LONDON — Austin Butler tackles an action-heavy lead role in Darren Aronofsky’s dark comedy crime caper Caught Stealing.

Set in New York in 1998, the Elvis actor plays Hank Thompson, whose promising baseball career was cut short by tragedy.

Hank appears to have his life back on track, tending a dive bar and dating a cool and caring emergency medical technician (Zoe Kravitz).

But when his British punk rocker neighbor Russ (Matt Smith) leaves his cat in his care while he’s out of town, Hank suddenly finds himself in the crosshairs of the city’s ruthless criminal gangs. Intense scenes ensue as Hank, with the cat in tow, tries to outwit the thugs.

“There’s a lot of running. There’s a lot of action. I got the crap beat out of me. I got to run a lot,” Mr. Butler said at the movie’s London premiere on Tuesday, adding that Hank is also running away from his problems.

“That’s kind of a universal thing, whether it’s reaching for a new relationship or a new job or whatever those things are that can keep you from feeling certain things. And in this, he’s finally forced to face these things. That’s the theme for me that resonates,” Mr. Butler said.

The film is based on the 2004 book of the same name by Charlie Huston, who also wrote the screenplay.

Black Swan and The Wrestler director Aronofsky said he was after a new challenge following his 2022 drama The Whale and “wanted to have some fun.”

“Making something that’s funny, that has a lot of jokes, you’re lighter on your feet,” he said. “When I read the book, I was excited and deeply moved by all the twists and turns, the action, the kind of energy on the streets. I wanted to give that back and bring it to life on the big screen.”

The project also marked a departure for The Crown and House of the Dragon star Mr. Smith. The British actor sports a towering brightly colored mohawk on screen.

But rather than Russ’s hair, it was his pet that stole the limelight, said Mr. Butler.

“The cat’s the real star of the show. His name’s Tonic and he’s an amazing actor, an amazing little animal. I love him a lot.”

Caught Stealing, which also stars Bad Bunny, Regina King, Liev Schreiber, and Vincent D’Onofrio, rolls out to cinemas globally on August 27. It opens in the Philippines on Sept. 10. — Reuters

UA&P unions gain support amid looming strike

UAP.ASIA

COALITIONS of labor unions and student groups have expressed solidarity with employees of the University of Asia and the Pacific (UA&P), as faculty and staff prepare for a strike over stalled wage talks and onsite work requirements.

The UA&P Union of Faculty Members (UA&PUFM) and the UA&P Union of Allied Employees (UA&PUAE) filed a notice of strike in early August, citing what they described as a bargaining deadlock with university management.

The dispute centers on demands for salary increases and resistance to a return-to-office policy, which the unions say disregards the economic difficulties faced by teachers and staff.

Since the strike notice was filed, the unions have received public backing from groups such as the Solidarity of Workers in Private Education (SWIPE), Alliance of Concerned Teachers (ACT)-Private Schools and Council of Teachers & Staff of Colleges and Universities in the Philippines, the unions said in a joint statement on Thursday.

Also supporting their case are the Center for Trade Union and Human Rights in the Philippines and Samahan ng Progresibong Kabataan, it added.

These organizations echoed calls for wage adjustments and criticized policies that they say worsen the financial and professional burdens of private school employees.

“This shows the reasonableness and justness of our demands, especially given that we benchmarked our collective bargaining agreement to industry standards,” UA&PUAE President Keith Panganiban said in a statement.

The UA&P management did not immediately reply to an e-mail seeking comment. BusinessWorld also reached out via the university’s official Facebook page but did not get a response.

Under the Labor Code, a strike grounded on a collective bargaining deadlock may be carried out 30 days after a notice is filed, provided that it is approved by a majority of union members.

It may push through seven days after the Department of Labor and Employment’s National Conciliation and Mediation Board (NCMB) is notified.

The UA&P unions are scheduled to meet management in an NCMB conciliation session on Friday, the UA&PUAE said.

“We are undergoing conciliation mediation in NCMB,” UA&PUFM President Ferdinand D. Delos Reyes said in a Viber message, adding that the university management “did not reach out” to the unions for talks.

The unions have “exhausted all possible legal means,” in pressing for their demands, according to the joint statement, citing a SWIPE statement from Aug. 11.

ACT–Private Schools had also called on UA&P to recognize the economic realities facing teachers, the unions said, citing an Aug. 10 statement from ACT.

“We believe that our fellow private school educators’ call for just economic benefits and wages are all the more essential, especially under current circumstances where economic crises, soaring prices, and rising costs of living persistently burden our teachers,” according to the ACT statement cited by the UA&P unions. — Kenneth Christiane L. Basilio

D&L to proceed with second biodiesel plant

DNL.COM.PH

LISTED food ingredients and oleochemicals producer D&L Industries, Inc. will proceed with its planned second biodiesel plant to increase capacity despite the recent suspension of the government-mandated blend increase.

“Even if the (blend) increase was postponed, it was not canceled. It will only be done at a later date. It would still make sense to proceed with more capacity for biodiesel,” D&L President and Chief Executive Officer Alvin D. Lao told reporters recently.

“It’s still in the planning stages. I would say it’s probably a matter of when, not if. There’s a high probability we will make a second plant. In terms of when, how big, or how much we’ll spend, we’re not there yet,” he added.

The Department of Energy issued an advisory last month announcing the suspension of the planned increase in the coco methyl ester (CME) component of biodiesel amid high coconut oil prices that could impact pump prices.

The increase to a 4% biodiesel blend was supposed to be implemented on Oct. 1, rising to 5% a year later.

Mr. Lao said that a second biodiesel plant “makes sense” for D&L moving forward.

D&L subsidiary Chemrez Technologies, Inc. operates a biodiesel plant in Quezon City with an annual capacity of 90 million liters.

“The fact that we made that announcement, it’s something we’re very serious about,” Mr. Lao said.

In March, D&L said it was evaluating the risks and returns of building a second biodiesel plant.

The company added that the decision depends on how the plant would align with its growth objectives and the goal of maximizing long-term shareholder value.

“D&L maintains a positive long-term outlook on the local biodiesel sector, recognizing the significant benefits that an increased biodiesel blend can offer to the economy, environment, and consumers,” it said.

In October last year, the CME blend in diesel was raised to 3% from 2%, in support of efforts to lower dependence on imported fuel, reduce greenhouse gas emissions, and support the biodiesel industry.

D&L shares were last traded on Aug. 20, unchanged at P5 apiece. — Revin Mikhael D. Ochave

China’s high-seas game of chicken is backfiring

SCREENGRAB OF VIDEO POSTED ON PHILIPPINE COAST GUARD FACEBOOK ACCOUNT

By Karishma Vaswani

CHINA’s military has long been accused of reckless behavior in the air and at sea. Last week’s collision between two of its vessels in the South China Sea underscores how a single miscalculation could spark a wider conflict.

At stake is the stability of the Indo-Pacific, a strategically important region for the US, where several of its partners, including Japan, the Philippines, and Australia, are increasingly exposed to Beijing’s risky maneuvers.

The latest incident is part of a broader pattern of behavior, especially in the areas China says it owns. Video of last Monday’s dangerous encounter shows a Chinese coast guard ship firing water cannons as it chased a Philippine coast guard vessel, before slamming into one of its own warships. Despite the evidence, Beijing blamed Manila for the accident, accusing it of deliberately “intruding” into its waters.

China’s strategy of pushing boundaries is also about testing American resolve. The US and the Philippines are treaty allies, with Washington legally obligated to defend Manila if attacked. By escalating encounters at sea just to the brink of confrontation, Beijing is probing whether Washington will stand by that commitment.

China’s repeated harassment of Philippine vessels comes despite a 2016 arbitration ruling in The Hague that sided with the Philippines, declaring Beijing’s historical assertions baseless. China claims more than 80% of the lucrative waters, and refuses to acknowledge the competing stakes of other Southeast Asian nations.

This assertiveness isn’t limited to the sea. Beijing regularly deploys warplanes toward self-ruled Taiwan, which it claims as its own. One of the most recent high-profile incursions took place in June after US lawmakers visited a top Taiwanese military figure on the island. The tactic appears to have two goals in mind: Exhaust Taipei’s pilots, but also to normalize China’s military presence. 

It’s also about checking how far Washington would go to defend Taiwan in a crisis. Under President Donald Trump, there’s been little guarantee the US would step in if it were attacked.

Key allies Japan and Australia have felt heightened pressure, too. In July, Tokyo expressed serious concerns after a Chinese fighter bomber flew within 30 meters of one of its surveillance planes over the East China Sea. Beijing defended those actions as “justified” and “professional.” In February, Australia was forced to issue aviation warnings when Chinese naval vessels staged live-fire exercises off its coast, followed by similar drills near New Zealand the next day.

Individually, Beijing can dismiss these incidents as isolated, and insist that it’s doing nothing wrong. Combined, they reveal a broader pattern — a calculated strategy to assert dominance while stopping short of outright war, as the RAND Corp., a California-based think tank noted in a 2024 report.

China views these actions as a continuation of politics rather than warfare, deliberately keeping them below the threshold of open conflict, the report added. This allows Beijing to secure economic resources in disputed territories, while limiting the ability of other countries to do the same. 

Some recent moves from Washington have been reassuring. Last Wednesday, the US deployed two warships to Scarborough Shoal, the site of the collision, in an apparent show of support. Beijing said it had expelled one of the American ships that entered its territorial waters, while Washington defended the operation as legal under international law.

Such freedom-of-navigation operations must continue in the face of China’s expanding claims, even at the risk of further angering Beijing. Equally important is consistently raising awareness about its destabilizing actions, challenging the narrative of ownership. 

These incidents can’t be shrugged off as routine. Left unchecked, the dangers of a miscalculation will only grow in China’s high-seas game of chicken. One wrong move could ignite a much wider crisis.

BLOOMBERG OPINION

Michelle Yeoh sees Ne Zha 2 movie as homage to Chinese mythology

Ne Zha II (2025) — IMDB
Ne Zha II (2025) — IMDB

LOS ANGELES — For Oscar-winning actor Michelle Yeoh, it is time for Hollywood to focus more on Asian mythological characters like the ones showcased in the Chinese film Ne Zha 2, which has become the highest-grossing animated film in history worldwide.

“They’re warriors and demigods,” Ms. Yeoh, who voices the role of Ne Zha’s mom for the film’s English dub, told Reuters.

“I guess it’s like Zeus, you know, and Thor, but these are ours. And I think that’s very important because when you learn about another culture’s myths, you have a nice, deeper understanding, and it teaches you to embrace something that is different,” the Everything Everywhere All at Once actor added.

Ne Zha 2, distributed by A24, follows the events of the first film, 1999’s Ne Zha. In the new film, the souls of Nezha and Aobing work to regain their physical bodies and protect their families. The original film grossed over $700 million worldwide.

The English dubbed version of the fantasy film directed by Yu Yang and based on Xu Zhonglin’s 16th century novel called Investiture of the Gods, arrives in US theaters on Friday.

The sequel, originally in Mandarin, made waves when it overtook Pixar’s Inside Out 2 in February to become the highest-grossing animated film globally in history, according to data from ticketing platform Maoyan.

Ne Zha 2 has amassed a total box office of 12.3 billion yuan ($1.69 billion) including pre-sales and overseas earnings, making it the eighth highest grossing box office film globally in history.

While Ms. Yeoh emphasizes the cultural richness of the film, she wants audiences of all walks of life to understand that the most important thing is that it’s “a beautiful story.”

“I think we should stop seeing it as, ‘Oh it’s a Chinese film,’” she added.

The Crouching Tiger, Hidden Dragon actor recalled watching the movie for the first time and not being able to tear her eyes away from the screen.

“You’re going up to the heavens. You’re going down to the bottom of the seas. You see the dragons. You see all these kinds of things, and just for that two hours — be transported,” Ms. Yeoh said. — Reuters

Asia’s wealthy investors seek more crypto assets

REUTERS

HONG KONG/SINGAPORE — Wealthy Asian families and family offices are ramping up their cryptocurrency investments, driven by the bullishness around digital assets, increased mainstream adoption and favorable regulatory developments in key markets.

Wealth managers said they are receiving more enquiries, cryptocurrency exchanges have seen trading volumes surge and crypto funds are in huge demand as high-net-worth Asian investors seek more exposure.

“We raised over $100 million in just a few months, and the response from LPs has been encouraging,” said Jason Huang, founder of NextGen Digital Venture, referring to Limited Partners that represent high-net-worth individuals.

Mr. Huang launched a new long-short crypto equity fund, the Next Generation Fund II, in Singapore in late May, after winding down his first fund last year, which returned 375% in less than two years.

“Our investors — mainly family offices and internet/fintech entrepreneurs, recognize the growing role of digital assets in diversified portfolios,” he said.

Swiss investment bank UBS said some overseas Chinese family offices plan to raise their crypto exposure to around 5% of their portfolios.

“Many second- and third-generation individuals of family offices are starting to learn about and participate in virtual currencies,” said Lu Zijie, head of wealth management at UBS China.

The surging interest comes on the back of strong cryptocurrency returns and favorable regulatory developments in the United States under President Donald J. Trump, such as the recently approved GENIUS Act. Bitcoin prices have been hitting record highs this month, surpassing $124,000.

Hong Kong’s recent passage of its stablecoin legislation has also fuelled a wave of crypto enthusiasm.

“The momentum has definitely built, and I think it’s a function of just general maturity of the asset class,” said Saad Ahmed, head of Asia-Pacific at crypto exchange Gemini. 

Wealth managers said the mindset among Asian clients has changed from merely wanting to have a small allocation to digital currencies a few years ago to now embracing it as a must-have in portfolios and exploring tools to optimize returns.

“Last year, they (family offices) started to dip their feet into bitcoin ETFs… now they have begun to learn the difference of holding a token directly,” said Zann Kwan, chief investment officer at Singapore-based Revo Digital Family Office.

Lighthouse Canton, a Singapore-based wealth manager, said some more sophisticated family offices have started adopting market-neutral strategies, such as basis trades and arbitrage.

Giselle Lai, associate investment director for digital assets at Fidelity International, said investors are increasingly treating bitcoin as a “portfolio diversifier” to hedge macro uncertainties, given its low correlation with stocks and bonds.

Cryptocurrency exchanges have also benefited from increased trading demand.

The number of registered users at Hong Kong’s HashKey Exchange surged 85% year on year by August 2025, the firm said.

Total trading volumes at South Korea’s three major exchanges grew 17% so far in 2025 over the same period of 2024, with average daily trading volumes rising more than 20%, according to research platform CryptoQuant. — Reuters

DICT plans follow-up study on BNPP repurposing

BW FILE PHOTO

THE Department of Information and Communications Technology (DICT) plans to conduct its own study on converting the mothballed Bataan Nuclear Power Plant (BNPP) into a data center.

“The KOICA (Korea International Cooperation Agency) funded study is expected to be finished by November. There is an ongoing technical study if it can really be done,” DICT Secretary Henry Rhoel R. Aguda told reporters on the sidelines of the general membership meeting of the Philippine Chamber of Commerce and Industry on Wednesday.

Mr. Aguda was referring to the memorandum of understanding signed between the Philippines and South Korea in 2024.

Immediately after KOICA’s feasibility study is finished, the agency will conduct its own study as well, Mr. Aguda said, noting that the BNPP is well suited to be converted into a data center.

“The ingredient of a hyperscaler is already there, the infrastructure and it is also a very good location. There’s a free port, fiber optic connectivity around the area and there’s a landing station,” he said.

Mr. Aguda added that the BNPP has the capacity to be converted into a 600-megawatt (MW) data center.

In November, the Department of Energy (DoE) said it remains focused on reviving the mothballed BNPP, although it is also actively studying the feasibility of converting it into a data center.

Last year, Bataan Governor Jose Enrique S. Garcia III floated the data center plan, citing it as a potential draw for investors. — Ashley Erika O. Jose

Getting the timing right: Disasters, debt and livelihoods

VOLUNTEERS prepare food boxes for flood victims during a humanitarian relief operation at the Philippine Red Cross Headquarters in Mandaluyong City. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Alexander Raabe and Matteo Ficarra

ACROSS Asia and the Pacific, floods, typhoons, heatwaves, and droughts now strike with a frequency unimaginable a generation ago. Rising temperatures and seas fuel fiercer storms, while rapid urban growth pushes more families into harm’s way.

When disaster hits, it is the poorest who pay twice — first through the loss of homes, crops, and jobs, and again through the invisible cost of higher government borrowing.

Rebuilding roads, hospitals, and schools costs billions. Governments often raise that money by issuing sovereign bonds. Yet lenders grow cautious after a disaster, fearing tax revenue will fall and relief spending will rise. To compensate, they demand a disaster premium — a higher interest rate on new debt.

For a country already balancing tight budgets, every extra percentage point paid to bondholders means less cash for emergency shelter, social protection, and the small grants that help shopkeepers reopen. In effect, a spike in sovereign borrowing costs can delay the very investments that pull communities back on their feet.

ADB’s research for the Asian Bond Monitor tracked bond issuances worldwide over two decades. The pattern is clear: the larger the recent damage relative to national income, the higher the interest rate a government must accept.

A damage bill equal to just 1% of GDP can add roughly a third of a percentage point to borrowing costs. For low-income countries, that is the difference between funding a new elementary school or paying creditors.

Markets have short memories. The disaster premium peaks when emotions run high and uncertainty clouds forecasts. Each passing day brings new information — relief funds arrive, revenue rebounds, rebuilding begins — and investor anxiety ebbs. On average, waiting three months after a major disaster trims the added cost by almost two fifths.

This finding does not mean governments should always delay borrowing. People need water, power, and healthcare immediately.

But it highlights a trade-off: issue bonds at once and pay more, or bridge the gap with cheaper stop-gap finance and enter markets later at lower cost.

Well-designed disaster insurance reduces the premium further. When investors see that a share of losses will be covered by a payout — whether from a catastrophe bond, a regional risk pool, or a parametric policy — they worry less about default and settle for lower yields. In our dataset, the difference between insured and uninsured events often reaches several dozen basis points.

For poor families, those saved basis points matter. While insurance reduces borrowing costs, it comes at a premium, making it essential to balance coverage levels with fiscal realities. Lower interest payments, when achieved cost-effectively, free up funds for relief and rehabilitation that speed up recovery and protect hard-won gains in poverty reduction.

Developing countries, and their partners, can use the following strategies:

Use fast, concessional relief to buy time. Multilateral lenders and regional facilities can step in with quick-disbursing, low-interest loans or grants immediately after a disaster. This bridge finance covers urgent needs while allowing debt managers to wait for calmer markets before issuing large volumes of bonds.

Expand affordable insurance. Many countries in Asia and the Pacific remain under-insured. Scaling regional risk pools, encouraging catastrophe-bond issuance, and offering premium subsidies can shrink the disaster premium and protect public balance sheets.

Plan debt issuance calendars with disasters in mind. Just as farmers watch the skies, treasuries should watch the disaster season. Keeping a portion of annual borrowing requirements pre-financed, building modest reserves, and lining up contingent credit lines, reduce the pressure to tap markets at the worst moment.

Focus on public communication. Transparent damage assessments, clear reconstruction plans, and credible budget updates reassure investors and citizens alike. Confidence lowers borrowing costs and attracts private capital for rebuilding.

The debate over sovereign spreads can feel remote to families who lost roofs and livelihoods. Yet every basis point shaved off borrowing costs multiplies into classrooms rebuilt, vaccines procured, and micro-loans issued.

By timing debt wisely and protecting budgets with insurance, governments can turn financial choices into concrete relief for the most vulnerable.

When storms and floods strike, people suffer twice if governments pay too much for post-disaster debt. Smart timing and insurance cut financing costs, leaving more resources to help communities rebuild stronger than before. n

The views expressed are those of the authors and do not necessarily reflect the views of the Asian Development Bank, its management, its Board of Directors, or its members.

 

Alexander Raabe is an economist at ADB’s Economic Research and Development Impact Department. Matteo Ficarra researches empirical macroeconomics and international economics at the Geneva Graduate Institute.

Delivering on our budgets

Many of us are initiating or in the midst of budget season, including our National Government. This process concludes later in the year and sets the tone for our organization’s 2026. While I won’t deny the importance of financial knowledge in my role, I believe the true strength of a corporate budget lies not just in the numbers themselves but in its ability to turn vision into reality, driven by our collective efforts and shared purpose. Developing a solid budget isn’t just a financial task; it’s a strategic roadmap created with the very individuals who will bring it to life.

The process begins long before the first spreadsheet is opened. As the former US President said, “Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” It requires a deep understanding of our organization’s strategic goals, market dynamics, and our people. We need to start with a clear vision of where we want to be in the next year, five years, and beyond. This involves working closely with the CEO, executive team, and department heads to define our strategic priorities, identify key growth opportunities, and assess potential risks. It’s a conversation, not a financial exercise done in isolation. At PHINMA, we hold kickoff meetings to share strategic objectives and key inputs that will influence every department’s plans.

Next, we analyze the data: past performance, market trends, and competitor insights to develop our assumptions and forecasts. But data alone is never enough. We must go beyond the numbers and tap into our teams’ collective knowledge and expertise. Each department offers unique insights into their areas, especially regarding challenges and opportunities. We promote ownership and accountability by involving them in the budgeting process, which also helps us get a clearer picture of the actual situation. During budget season, I make an effort to meet with as many teams as possible to understand their confidence levels. We actively seek input from all levels, hold workshops, and engage in one-on-one conversations to ensure every voice is heard.

Next, we start translating our strategic goals into specific, measurable financial targets. We collaborate with each department to create realistic and achievable budgets that match our overall strategic objectives. We encourage them to be ambitious but also to stay grounded in reality. It’s a balancing act, but it’s essential for laying the groundwork for success. This often involves a lot of back and forth and depends on our ability to communicate effectively within the organization.

A well-crafted budget should be more than just a financial plan; it should be a living document that guides our decision-making throughout the year. It should be flexible enough to adapt to changing market conditions and emerging opportunities, but also disciplined enough to ensure that we stay on track to achieve our goals. Regular monitoring and reporting are crucial for keeping us informed of our progress and identifying any potential issues early on. We embed cyclicality and seasonality into our budgets and develop milestones to track progress over time.

However, the most advanced budget in the world is worthless if it’s not embraced and executed by our people. We need to communicate the budget clearly and openly, explaining the reasoning behind the targets and the implications for each department. We need to foster a culture of accountability, where everyone understands their role in reaching our financial goals and is empowered to take ownership of their responsibilities.

More than that, we need to create an environment where our people feel valued, supported, and motivated to give their best efforts. This involves investing in their growth, providing the resources they need to succeed, and recognizing and rewarding their achievements. It also means fostering a culture of collaboration, where teams work together to overcome challenges and achieve shared goals. After all, our employees are the ones who make the budget a reality. As CFO, my job is not just to manage the finances; it’s to empower our people to bring that budget to life, turning a financial plan into a shared, tangible success. That is the true measure of a successful budget.

The views expressed herein are the author’s own and do not necessarily reflect the opinion of his office as well as FINEX.

 

EJ Qua Hiansen is the chief financial officer of PHINMA Corp. and the president of the Financial Executives Institute of the Philippines.

Film Mistress Dispeller observes love triangle with shifting sympathies

Mistress Dispeller (2024) — IMDB
Mistress Dispeller (2024) — IMDB

LONDON — Filmmaker Elizabeth Lo’s quest to document modern relationships in China led her to a little-known practice to tackle infidelity, discovering that people catching their spouses cheating can hire a professional to end the affair.

Ms. Lo’s documentary Mistress Dispeller gives a close-up glimpse into what is a relatively new industry in China.

Shot over four months, the film follows the real-life case of Mr. and Mrs. Li. The badminton-loving parents of one are considered a model couple by many in their neighborhood but lately, Mr. Li has gotten close to a young woman from a nearby town, Fei Fei.

Anguished, Mrs. Li reaches out to Teacher Wang, an experienced mistress dispeller.

Ms. Lo and her team met with dozens of mistress dispellers, but Ms. Wang was the only one able to persuade her clients to go on camera.

Ms. Lo said seeing it unfold in front of her, her sympathies kept shifting from the wife to the husband and even the mistress, which took her by surprise.

It took her team three years of following Ms. Wang, filming multiple cases, before they landed on the Li’s. The film shows Wang infiltrating the family under a false identity and after gaining Mr. Li and Fei Fei’s trust, influencing them to break up.

In order to authentically capture the process, the husband and the mistress could not be let in on the film’s concept and were approached to participate in a documentary about modern love in China. A disclaimer at the start of the film declares that none of the scenes are scripted or re-enacted and the subjects agreed to participate in it.

“We really grappled with how we stay ethical as a production when we can’t be transparent at first,” said Ms. Lo.

“We knew that we would show them a cut of the film and give them the opportunity to re-consent to being a part of it. We were very prepared that if they were to drop out, we could pivot to a different film.”

Mistress Dispeller combines sweeping drone shots of bustling cities and wilderness landscapes with fly-on-the-wall scenes capturing intimate conversations.

“I really wanted audiences to be able to watch the organic interplay between characters. What strings does Teacher Wang pull that elicit what reaction? She’s 10 steps ahead of everybody constantly,” Ms. Lo said.

Hong Kong-based Ms. Lo, whose previous feature Stray centered on street dogs in Istanbul, hopes Mistress Dispeller will encourage audiences to reflect on their own approaches to love and forgiveness.

“We’re all sort of fumbling through love and trying to find love, sustain love and to keep it,” she said.

Mistress Dispeller will be released in the United Kingdom on Aug. 22 and the United States in late October. — Reuters

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