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US risks losing focus on Indo-Pacific amid Israel-Iran war, analysts say

EMERGENCY personnel worked at an impact site after missiles were launched from Iran to Tel Aviv, Israel on June 16, 2025. — REUTERS/RONEN ZVULUN

By Kenneth Christiane L. Basilio, Reporter

THE US could lose its security focus on the Indo-Pacific region due to escalating war in the Middle East, with dire consequences for the Philippines’ push against Chinese expansion in the South China Sea, political analysts said at the weekend.

Beijing might take advantage of the war between Israel and Iran by stepping up its militarization of the waterway, which could strain regional stability and test Manila’s capability to protect its maritime interests, they added.

“The US is a major security partner in the Indo-Pacific region and underpins much of the region’s defense agreements,” Sherwin E. Ona, a security analyst and associate professor at De La Salle University, said in a Viber message. “So, tensions in the Middle East and their effect on the US defense posture is worrisome.”

Israel launched surprise air attacks against Iran early this month, targeting key nuclear and ballistic missile facilities as well as senior military leaders, in what it described as an effort to cripple Tehran’s ability to develop nuclear weapons.

Washington joined Israel’s military campaign against Iran on Sunday, launching airstrikes on key nuclear sites well ahead of President Donald J. Trump’s two-week timeline to decide on US involvement.

It was a “spectacular military success,” Mr. Trump said in a televised Oval Office address, explaining that US bombers had “totally and completely obliterated” Iran’s vital nuclear facilities. He opened the door for further military action if Iran does not pursue peace. “Future attacks would be far greater — and a lot easier,” he said.

“The US has identified the Indo-Pacific region as a priority theater, but Middle East tensions nevertheless could take away its focus occasionally,” Julio S. Amador III, chief executive officer at Manila-based geopolitical risk firm Amador Research Services, said in a Viber message. “But that does not mean that the South China Sea is being disregarded.”

“The US has to look at both and see whether what should be prioritized,” he added.

An aircraft carrier in the Indo-Pacific was heading to the Middle East, discarding its planned dock at Vietnam. The Philippine Navy was not concerned of the USS Nimitz’s repositioning, with navy spokesman Rear Admiral Roy Vincent T. Trinidad last week saying that the country is capable of defending itself.

The Philippines and US are bound by a 1950s Mutual Defense Treaty that compels both countries to defend each other in case of an armed attack.

“The US is not the Philippines’ security guard,” Mr. Amador said. “The alliance with the US should complement the efforts to defend our maritime domains, but not supplant it.”

An escalation in the Middle East could embolden China to step up harassment of Filipino fishermen in the South China Sea, Chester B. Cabalza, founding president at Manila-based think tank International Development and Security Cooperation, said in a Facebook Messenger chat.

Chinese vessels separately harassed Philippine ships last week at two contested areas in the South China Sea — the Spratly Islands and Scarborough Shoal — as more than 50 Chinese militia ships were spotted anchored near the disputed Iroquois Reef.

China claims nearly all of the South China Sea via a U-shaped, 1940s nine-dash line map that overlaps with the exclusive waters of the Philippines and neighbors like Vietnam and Malaysia.

“Considering that two People’s Liberation Army Navy carrier battle groups are operating near Taiwan and the constant swarming tactics in the South China Sea, [the Middle East conflict] can embolden China to be more aggressive,” Mr. Ona said.

“We cannot discount the possibility that the Middle East tensions can open malign opportunities for Beijing,” he added.

The Chinese Embassy in Manila did not immediately reply to a Viber message seeking comment.

‘UNLAWFUL ACTIONS’
The Philippines should urge regional allies such as Japan and Australia to bolster their presence in the South China Sea and expand joint naval drills with Manila to offset a possible security vacuum that could be created if US pivots more to the Middle East, Mr. Ona said.

“Diplomatic efforts must also be strengthened,” he said, citing the need to push a code of conduct in the disputed waters that aims to prevent conflict in the South China Sea.

The Philippine government should also continue its military modernization efforts to counter China’s military might in the region and continue to “expose” Beijing’s harassment at sea, Mr. Amador said.

Manila has allotted about $35 billion for military upgrades over the next decade.

Mr. Cabalza said the Philippines should maintain a neutral stance in the Israel-Iran conflict and position itself as a potential peace broker by advocating for multilateral dialogue.

Meanwhile, the National Maritime Council condemned China’s Coast Guard (CCG) for its “aggressive” actions against Philippine civilian ships near Scarborough Shoal last week.

In a statement, the agency said a CCG vessel hit a fishery bureau ship with a water cannon on June 20 while its was delivering supplies to Filipino fishermen near the shoal.

“We call on China to cease unlawful actions, act with restraint and adhere to international law to maintain regional peace and stability,” it said.

The Philippine Coast Guard on Friday said two ships of the Bureau of Fisheries and Aquatic Resources were harassed by the CCG near Scarborough Shoal, with authorities monitoring two Chinese navy vessels loitering nearby.

“These actions violate international law,” the council said, adding that their activities jeopardize the safety of fishermen in the area.

Chinese ships have repeatedly barred Filipino fishermen from accessing Scarborough Shoal, which lies within Manila’s exclusive economic zone. The atoll is a vast fishing lagoon near major shipping lanes that China seized in 2012 after a standoff with Philippine troops.

The shoal is 240 kilometers west of the main Philippine island of Luzon and is nearly 900 kilometers from Hainan, the nearest major Chinese landmass.

Marcos secures clean energy, shipping deals in Japan working visit

President Ferdinand R. Marcos, Jr. is joined by Tourism Secretary Ma. Esperanza Christina G. Frasco in a courtesy call of Japanese tourism partners during a working visit in Japan. — PRESIDENTIAL COMMUNICATIONS OFFICE

The Philippines is set to benefit from investment pledges and partnership agreements following a working visit by President Ferdinand R. Marcos, Jr., to Japan, aimed at boosting economic ties and showcasing the country’s potential in clean energy, green shipping, and tourism.

In a statement on Sunday evening following his return, Mr. Marcos said the trip yielded “new opportunities that will create jobs, bring in investments, and help improve the lives of Filipinos.”

Among the deals announced were a collaboration between Japanese firm Kanadevia Corporation and Philippine Ecology Systems Corp. on a waste-to-energy project aimed at waste management while generating renewable power.

Tsuneishi Group, a Japanese shipbuilding conglomerate, committed to construct the world’s first methanol dual-fueled KAMSARMAX bulk carrier in Cebu.

Mr. Marcos also engaged with Japanese tourism executives to bolster arrivals to the Philippine and expand opportunities for Filipino workers.

Discussions with the Japan Aerospace Exploration Agency opened avenues for cooperation in space-based technologies focused on disaster monitoring and agricultural productivity.

The President capped his visit with a meeting with members of the Filipino community in Osaka, lauding their contributions to the economy and image of the Philippines abroad.

He also visited the World Expo 2025, where the Philippine Pavilion was promoted as a symbol of the nation’s innovation and commitment to sustainable growth.

This trip, from June 19-22, was Mr. Marcos’ third time visiting Japan during his presidency. – Chloe Mari A. Hufana

Escalating Iran-Israel conflict to weigh on PSEi

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PHILIPPINE SHARES may drop further this week as market sentiment could remain bearish due to escalating conflict between Israel and Iran.

On Friday, the bellwether Philippine Stock Exchange index (PSEi) fell by 0.27% or 17.24 points to 6,339.77, while the broader all shares index dropped by 0.49% or 18.62 points to 3,760.56.

Week on week, the PSEi went down by 0.87% or 55.82 points from the 6,395.59 close on June 13.

The market’s performance last week was driven by geopolitical concerns over the Iran-Israel conflict as well as the Bangko Sentral ng Pilipinas’ (BSP) policy decision on Thursday, online brokerage 2TradeAsia.com said in a note.

“The market’s wall of worry continues to steepen. The recent flare-up between Iran and Israel dominated global headlines, reviving concerns of oil supply disruptions and clouding inflation outlook just as central banks were trying to pivot. At the same time, trade tensions have not abated materially…,” it said.

“Back home, the BSP’s long-telegraphed 25-basis-point cut finally came through. With inflation soft and the peso stable, the central bank had room to act, and on paper, is in alignment with the easing bias we have flagged in previous notes,” it added.

For this week, market sentiment may remain bearish due to the escalating conflict between Israel and Iran, Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message. “If the said conflict continues to push oil prices higher and cause the peso to depreciate further, then these may pull the local market lower. A further escalation of the said conflict is also expected to be a significant headwind for the local bourse.”

“Technically, the local market is still moving sideways. However, this sideways movement is exhibiting a downward bias, especially with the market being unable to get past its 10-day exponential moving average,” Mr. Tantiangco said. He placed the PSEi’s major support at 6,150 and major resistance at 6,400.

US forces struck Iran’s three main nuclear sites, President Donald J. Trump said late on Saturday, and he warned Tehran it would face more devastating attacks if it does not agree to peace, Reuters reported.

After days of deliberation and long before his self-imposed two-week deadline, Mr. Trump’s decision to join Israel’s military campaign against its major rival Iran is a major escalation of the conflict and risks opening a new era of instability in the Middle East.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail that the PSEi’s minor support is at 6,290-6,300 and resistance is at 6,500.

2TradeAsia.com pegged immediate support at 6,300 and resistance at 6,500-6,550.

“In the current environment, portfolio strategy must favor calibration over conviction. Markets remain highly sensitive to exogenous shocks — both geopolitical and policy-driven…,” it said. — Revin Mikhael D. Ochave with Reuters

Peso may remain under pressure amid worsening conflict in the Middle East

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THE PESO may remain at the P57 level against the dollar this week due to worsening geopolitical concerns after the United States struck Iran’s nuclear sites to join the ongoing conflict in the Middle East.

On Friday, the local unit halted its eight-day losing streak as it closed at P57.17 per dollar, rebounding by 28 centavos from its near three-month low finish of P57.45 on Thursday, Bankers Association of the Philippines data showed.

Week on week, however, the peso dropped by 96 centavos from its P56.21 close on June 13.

“The peso’s recovery today was driven by a softer dollar, improved global risk sentiment, and a technical correction after recent weakness. Easing US inflation data and expectations of a less aggressive US Federal Reserve supported emerging market currencies, including the peso,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said in a Viber message on Friday.

The local unit climbed as Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said the central bank will intervene in the foreign exchange market more strongly if the peso’s weakness threatens inflation, Rizal Commercial Banking Corp. Chief Economist Michal L. Ricafort said in a Viber message.

The dollar was also generally weaker early on Friday on hopes that the US would not join the conflict between Iran and Israel, Mr. Ricafort said. However, on Saturday, the US attacked Iran.

For this week, Mr. Rivera said the market will monitor US economic data and global oil prices to drive peso-dollar trading, adding that geopolitical shocks could cause the local unit to weaken.

Mr. Rivera sees the peso moving between P57 and P57.50 per dollar this week, while Mr. Ricafort said it could range from P56.90 to P57.40.

A US attack on Iranian nuclear sites could lead to a knee-jerk reaction in global markets when they reopen, sending oil prices higher and triggering a rush to safety, investors said, as they assessed how the latest escalation of tensions would ripple through the global economy, Reuters reported.

The attack, which was announced by President Donald J. Trump on social media site Truth Social, deepens US involvement in the Middle East conflict. That was the question going into the weekend, when investors were mulling a host of different market scenarios.

In the immediate aftermath of the announcement, they expected the US involvement was likely to cause a sell-off in equities and a possible bid for the dollar and other safe-haven assets when trading begins, but also said much uncertainty about the course of the conflict remained.

Mr. Trump called the attack “a spectacular military success” in a televised address to the nation and said Iran’s “key nuclear enrichment facilities have been completely and totally obliterated.” He said the US military could go after other targets in Iran if the country did not agree to peace.

A key concern for markets would center around the potential impact of the developments in the Middle East on oil prices and thus on inflation. A rise in inflation could dampen consumer confidence and lessen the chance of near-term interest rate cuts.

While global benchmark Brent crude futures have risen as much as 18% since June 10, hitting a near five-month high of $79.04 on Thursday, the S&P 500 has been little changed, following an initial drop when Israel launched its attacks on Iran on June 13.

Before the US attack on Saturday, analysts at Oxford Economics modeled three scenarios, including a de-escalation of the conflict, a complete shutdown in Iranian oil production and a closure of the Strait of Hormuz, “each with increasingly large impacts on global oil prices.”

In the most severe case, global oil prices jump to around $130 per barrel, driving US inflation near 6% by the end of this year, Oxford said in the note.

Economists warn that a dramatic rise in oil prices could damage a global economy already strained by Mr. Trump’s tariffs.

An escalation in the conflict could have mixed implications for the US dollar, which has tumbled this year amid worries over diminished US exceptionalism.

In the event of US direct engagement in the Iran-Israel war, the dollar could initially benefit from a safety bid, analysts said. — Aaron Michael C. Sy with Reuters

Farm output seen posting strong Q2

PHILIPPINE STAR/MICHAEL VARCAS

By Kyle Aristophere T. Atienza, Reporter

AGRICULTURE is expected to post stronger growth in the second quarter, driven by a significant rise in rice and corn output, the Department of Agriculture (DA) said on Sunday.

Palay (unmilled rice) output is projected at 4.36 million metric tons (MMT) in the second quarter, which would be up 13% from a year earlier, the DA said in a statement.

This also represents an upgrade to the 4.34 MMT forecast issued in April.

The increase is driven by the growth in riceland to be harvested — up 9.2% at 972,730 hectares — and improved yields, projected at 4.48 MT per hectare, up from 4.32 MT previously.

The DA cited favorable weather, increased government support through the Rice Competitiveness Enhancement Fund (RCEF), contract farming initiatives, and stronger palay procurement by the National Food Authority (NFA).

The NFA currently buys palay at between P18 and P24 per kilo.

The farmgate price of palay has averaged P17.75 per kilogram, down 28.9% year on year in May.

Month on month, the palay farmgate price fell 1.6% in May.

The DA said corn production is expected to grow “even more dramatically,” noting that based on the standing crop as of May 1, the government projects second-quarter output to increase 27% year on year to 1.487 MMT.

The land area to be harvested is set to expand 16% to 402,690 hectares.

Rice and corn production are major contributors to crop production, which accounts for about 57% of agricultural output.

Meanwhile, the DA said in a separate statement it is putting the “final touches” on a draft bill that aims to restore critical functions of the NFA.

The bill seeks to amend the Rice Tariffication Law to grant certain regulatory powers to the NFA to “better manage buffer stocks” and “regulate rice distribution and marketing,” it said.

The bill also seeks to empower the NFA to set a floor price for palay, and support farmers’ cooperatives and recipients of rice processing systems funded under the RCEF.

“It will also refine protocols for DA-led rice imports to ensure the country can respond swiftly to supply shortages and sudden spikes in commodity prices,” the DA added.

“Critically, the measure grants the NFA greater flexibility in managing the appropriate level of buffer stock and ensuring that they are always of optimum quality — an essential tool in supporting not only the P20-per-kilo rice goal but also broader government efforts to ensure price stability and protect both producers and consumers,” the DA said.

PHL-EU third round of FTA talks make ‘good progress’

REUTERS

THE Department of Trade and Industry (DTI) said the third round of negotiations last week for a Philippines-European Union (EU) free trade agreement (FTA) was marked by “good progress.”

“Good progress has been made in the text-based negotiations,” Trade Undersecretary for International Trade Policy Allan B. Gepty said via Viber.

“Our fourth round of negotiations will be in October in Manila, but we have agreed to take advantage of intersessional (consultations) to help fast-track the negotiations,” he added.

Mr. Gepty was in Brussels last week for the third round of FTA negotiations.

“This is a very important FTA for the Philippines not only because the EU remains one of our major trade partners but also because it is also a major source of investment,” he said.

“This FTA will further deepen and strengthen our economic relations with the EU,” it added.

Last month, EU Ambassador to the Philippines Massimo Santoro cited the importance of speedily concluding negotiations for the FTA without compromising quality in the face of recent events, including the new US tariff measures.

He also noted that both parties aim to include a digital trade chapter in the FTA, which is considered vital in improving services and access in an archipelago like the Philippines.

“The potential gains from this agreement extend far beyond trade and investments as we cover elements also on sustainability, good governance, and cooperation,” Mr. Gepty said.

The EU is a key market for Philippine tuna, coconut, cacao, pineapple, semiconductors, and electronics.

In 2024, the Philippines exported $8.073 billion worth of goods to the EU, while importing $7.463 billion. — Justine Irish D. Tabile

PCA says Japan green-tech companies exploring fertilizer, aviation-fuel ventures

PCA.DA.GOV.PH

JAPANESE conglomerate Swung, Inc. is exploring collaboration with Philippine biofuel producers to make sustainable aviation fuel (SAF) in the Philippines, according to the Philippine Coconut Authority (PCA).

The PCA met in late May with a delegation from Swung, Inc., led by CEO Manabu Mizoguchi, and its partners Green Carbon Co., Ltd. and Kira Shoten Co., Ltd.

Swung, which conducted exploratory talks with the Department of Energy’s Renewable Energy Management Bureau, is interested in using byproducts from coconut and other crops, the PCA said in a statement.

“While the SAF production pathway remains under global regulatory review, particularly under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the PCA underscored its openness to facilitating discussions with biodiesel manufacturers and agencies, such as the DoE and the Philippine Sugar Regulatory Administration (SRA), to assess technical feasibility and industry alignment.”

The PCA said potential local production was discussed of Swung’s patented organic fertilizer technology, which has been undergoing evaluation by Philippine authorities since the submission of 50 kilograms of the product during an initial March visit.

The Japanese-developed formulation combines organic waste materials such as coconut residues, sugarcane, and beer waste. — Kyle Aristophere T. Atienza

Mining industry bracing for volatile nickel, copper

REUTERS

THE Chamber of Mines of the Philippines (CoMP) said on Sunday that the air strikes on Iran will make prices of industrial metals like nickel and copper more volatile, while investors are expected flock to gold to ride out the crisis.

“Historically, industrial metals such as copper and nickel often experience volatility due to supply chain disruptions and shifting demand, while geopolitical tensions of this scale drive up gold prices,” CoMP Chairman Michael T. Toledo said via Viber.

The US early Sunday struck several key nuclear facilities in Iran, with US President Donald J. Trump claiming in a speech that sites were “totally obliterated,” and warned that the US could go after additional targets.

Iranian officials have downplayed the attack’s impact but warned of “everlasting consequences.” They have sought an emergency UN Security Council meeting.

“Despite global uncertainty, we remain cautiously optimistic about the resilience of the Philippine mining industry, particularly in gold, copper, and nickel production,” Mr. Toledo said.

The Chamber said downside risks include inflation, rising energy costs, and logistical constraints, which may all affect miners’ operations and project timelines.

“Our members remain committed to managing these risks with discipline,” Mr. Toledo said.

The Chamber, meanwhile, said it supports government efforts to ensure a “stable, competitive policy environment for mining,” citing recent reforms including the proposed rationalization of the mining fiscal regime, which it said strengthens “investor confidence and positions the industry for sustained growth, even amid external headwinds.”

The measure, which seeks a margin-based royalty tax on mines operating outside mineral reservation and a windfall profits tax on all mines, is now up for the President’s signature after legislators agreed to drop a proposed ore export ban. — Kyle Aristophere T. Atienza

BoC sees pickup truck tax, rice tariff hike mitigating revenue foregone due to EO 62

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THE Bureau of Customs (BoC) said it is counting on the reinstated excise tax on pickup trucks and a potential gradual increase in tariffs on rice imports to offset the revenue foregone as a result of Executive Order (EO) No. 62.

Assistant Commissioner Vincent Philip C. Maronilla told BusinessWorld by phone that these measures could help mitigate the fiscal impact of EO 62, which reduced import levies on rice, electric vehicles (EVs), pork, corn, and mechanically deboned poultry meat.

Customs blamed the P30 billion in revenue foregone due to EO 62 for missing its P939.6-billion collection target last year.

“We’ve also been expecting the implementation of (Capital Markets Efficiency Promotion Act) since last year. Again, that’s one of the things that we look at in order to balance out the reduction in tariff when it comes to EVs,” Mr. Maronilla said.

Republic Act No. 12214 or CMEPA reduced the stock transaction tax and documentary stamp tax.

The Department of Finance earlier estimated that CMEPA could generate P25 billion until 2030 for the Treasury.

“We see pickup trucks evolving into commuter vehicles. Also in being used in the same manner as some other SUVs (sport utility vehicle). There are also luxury pickup trucks already in the market,” he said.

Pickup trucks had been exempt from excise tax under the Tax Reform for Acceleration and Inclusion Law, to support small business owners and professionals.

In addition, Mr. Maronilla said the BoC is counting on proposals to gradually return the rice import tariff to 35% from the current 15%.

Any increase in the tariff is positive for Customs revenue, he said.

“We support the Department of Agriculture (on the tariff adjustment) not just because it’s going to mean more revenue, but I think the world prices of rice right now are falling, so increasing the tariff (won’t affect retail prices much),” Mr. Maronilla said.

This year, the BoC is hoping to collect P1.06 trillion, 14.28% higher than the actual collections of P931.05 billion in 2024.

In April, Customs revenue fell 7.48% to P74.7 billion. This brought year-to-date collections to P306.1 billion, up 2.16% from a year earlier.

Mr. Maronilla said surge of prices such as petroleum due to the escalation of the Middle East conflict means higher tariff collection, though he cautioned about the impact on inflation.

“As much as the Bureau wants to collect so much in terms of taxes on petroleum products, we want also to have a balance of economic gain and economic impact of these kinds of products,” it said.

President Ferdinand R. Marcos, Jr. has ordered agencies to prepare for potential spikes in global oil prices after the US intervened in the Israel-Iran war.

The government is considering additional targeted subsidies should prices surge, aside from the initially announced fuel subsidies.

Under the 2025 spending plan, the government allotted P2.5 billion in fuel subsidies to transport operators and farmers to contain the broader impact of high fuel costs on the prices of basic goods and services.

“We’re not seeing any effect of the conflict on other countries where we get most of our (energy) imports,” he said.

“Unless it escalates into something that’s reaching some other countries… then I don’t think that’s a point of concern.” — Aubrey Rose A. Inosante

Philippines set to host ASEAN Business Advisory Council event

REUTERS

THE ASEAN Business Advisory Council (BAC) Philippines will be hosting the first ASEAN-BAC Retreat next month, with the aim of redefining the council’s role in ASEAN integration.

“The retreat will also feature a high-level reception that will serve as the soft launch of the Philippines’ BAC Chairmanship in 2026,” ASEAN BAC Philippines said.

“It will bring together business leaders from across Southeast Asia, senior government officials, members of the diplomatic corps, and development partners — highlighting the Philippines’ whole-of-nation approach to driving ASEAN prosperity,” it added.

ASEAN-BAC Philippines Chair Jose Ma. A. Concepcion III said that the retreat will allow business leaders an opportunity for “a timely reset as we get ready to lead next year and turn ideas into action.”

“During our last chairmanship in 2017, our vision was “Prosperity for All.” In 2026, as ASEAN-BAC turns 25, we expand this vision to the whole of ASEAN, toward a future that is inclusive, resilient, innovative, and sustainable,” he added.

ASEAN-BAC Malaysia Head Tan Sri Nazir Razak said council members who were appointed by their respective heads of state or government will review their mandate.

“This is not just a meeting — it is a reset. In a world shaped by disruption and divergence, ASEAN-BAC must evolve to remain a credible and effective platform for the private sector,” he said.

“This first-ever retreat reflects our collective responsibility to strengthen our relevance and impact for the region,” he added.

The retreat will be facilitated by McKinsey & Co. to help guide the council “in sharpening its priorities and enhancing its roles in driving ASEAN’s economic integration and public-private cooperation.” — Justine Irish D. Tabile

The first global generation is forcing workplace reinvention

IN BRIEF:

​• Research indicates that 59% of young adults believe they should work for two to five organizations throughout their careers, while 19% feel they should work for six or more. Changing jobs is no longer seen as a negative but as a necessary step for career advancement.

​• Today’s youth desire employers who share their values and respect their personal time, reflecting a broader desire for careers that support stable lives.

​• Financial security is seen as a means to fulfilling life rather than an ultimate objective, prompting organizations to realign their strategies with the evolving values of young adults.

Today’s young adults are not just adapting; they are reimagining adulthood. A new EY global study, The First Global Generation reveals that 18-to-34-year-olds across 10 countries prioritize financial independence on their own terms. They embrace responsibility while rejecting outdated standards, redefining success as a holistic pursuit beyond just financial metrics.

As a result, executives must reevaluate long-held assumptions about their organizations. Here are five insights from the study for organizations to consider in preparing for the next generation of consumers, employees, and citizens.

THE FIRST TRULY GLOBAL GENERATION: CONNECTED, INFORMED, CULTURALLY ADAPTABLE
Unlike earlier generations, the youth today have been exposed to global culture and crises in real time, fostering unprecedented interconnection while still maintaining unique regional identities. Although not everyone engages with the same content, there is a shared tendency to seek answers on common social platforms.

Technology serves as a foundation for these shared global experiences, providing young people with a common digital language and experience that bridges cultural gaps. The widespread use of social media has intensified this effect, with 94% of young adults engaging with these platforms daily. However, this environment is not without its drawbacks; 44% of respondents globally expressed a desire to reduce their social media usage, particularly in countries like Brazil, Germany, and Sweden.

A report by Sven Group highlights that social media is the preferred source of entertainment, education, news, and social connection for Generation Z (born 1995-2012). YouTube, TikTok, and Instagram are their top platforms.

Understanding how technology influences today’s youth is essential for business leaders shaping the future. This insight will guide organizations in evolving their product and service strategies to cater to both global trends and local preferences.

PAST MILESTONES ARE IRRELEVANT
In 1935, when the Social Security Act was signed into law in the US, the official retirement age was 65, while the average life expectancy was just 60.7 years. Today, life expectancy is around 80.1 years. The Act was designed to support individuals who were largely expected to pass away before needing it. Similarly, in China, life expectancy has risen from 33 in 1960 to 79 today. The timelines of the past — how long we live, when we should stop working, and how we should approach retirement — have shifted from decades past, along with our extended lifetimes.

Young adults today, often referred to as the “Pragmatic Generation,” approach traditional milestones with skepticism and a global perspective. Instead of committing to a single company for life, research indicates that 59% of young adults believe they should work for two to five organizations throughout their careers, while 19% feel they should work for six or more. In many cultures, changing jobs is no longer seen as a negative but as a necessary step for career advancement.

According to a study cited by multi-platform media and events company HRM Asia, Gen Z employees in the Philippines seek purpose and prosperity. They prioritize financial security, family support, and societal impact, reflecting a blend of pragmatism and purpose-driven goals. Millennials, the generation preceding Gen Z, tend to prioritize interesting work and collegial environments, while Gen Z employees place greater emphasis on securing their financial future.

The study also revealed the collectivist nature of Filipino culture, with many Gen Z employees expressing a strong sense of duty to their families and a desire to make a positive impact on society through their work.

This shift signifies more than just a generational change; it is reshaping the very foundations of life. As boundaries blur, organizations must adapt their products, services, and employee value propositions to meet consumers where they are.

Companies looking to attract and retain customers can implement sustainability initiatives, as exemplified by a clothing brand that uses eco-friendly materials and ethical labor practices while showcasing their positive impact through marketing campaigns. Social responsibility is demonstrated by a food company that partners with local farmers and donates a portion of profits to community programs, sharing stories of positive community changes. To attract and retain employees, a tech startup promotes work-life balance through flexible working hours and remote options, with employee testimonials highlighting this support.

HEALTH AND RELATIONSHIPS OVER FINANCIAL SUCCESS
Young adults are placing greater emphasis on their physical and mental well-being, as well as their family relationships, rather than solely focusing on wealth and career advancement. A significant 51% of young people globally consider their mental and physical health the most important measure of future success, followed closely by family relationships at 45%, surpassing wealth (42%) and occupation (41%). This trend challenges long-held societal beliefs that equate success with financial gain and material possessions.

The 2024 AXA Mind Health Report reveals alarming rates of mental distress among young Filipino employees, particularly 18-24-year-olds, who are disproportionately affected by severe anxiety, stress, and depression compared to older age groups. Beyond flexible work arrangements, such as remote work options, flexible hours, and generous vacation policies, 38% of those surveyed highlight the need for mental healthcare days, or any programs that encourage them to take breaks, disconnect from work during non-work hours, and prioritize their well-being.

While financial concerns remain, today’s youth seek more than just a paycheck. They desire employers who share their values (69%) and respect their personal time (61%). This reflects a broader desire for careers that support stable lives rather than careers that dominate their lives.

As young adults’ definitions of success evolve, organizations must adjust their consumer and employee value propositions to resonate with the deeper meanings these individuals seek in life.

MONEY AS A MEANS, NOT AN END
In times of economic uncertainty, the pursuit of wealth is undergoing a transformation. For younger generations, financial security is increasingly viewed as a foundation for a fulfilling life rather than the ultimate goal. A striking 87% of young adults globally consider economic independence very or extremely important, with over half of the surveyed countries (Brazil, Saudi Arabia, South Africa, India, and China) rating this importance above 90%. Sweden stands out with only 58%, likely due to its robust social systems.

Despite this emphasis on financial security, many young people face challenges in achieving economic independence due to broader economic instability and heightened financial anxiety. In the US, young adults often experience what some describe as the “unattainability complex.” Similarly, in countries like China, South Korea, and Japan, many young adults view homeownership in desirable cities as an elusive dream unless they inherit property.

YOUNG ADULTS SEEKING BALANCE
A complex interplay of hopefulness and doubt has emerged. The data indicate a notable dichotomy: while 31% of youth worldwide feel very or extremely excited about their future lives at 50, slightly more (34%) harbor significant fears about what lies ahead.

Optimism is often linked to opportunities and a desire to improve the world, while pessimism tends to correlate with distrust, apathy, and risk aversion. As we navigate this intricate landscape, the future is more than just a destination; it reflects our collective beliefs shaped by the interplay of opportunity, culture, and geography.

Organizations must consider how their products and services can foster opportunity, hopefulness, and stability in these uncertain times.

SHAPING THE FUTURE WITH CONFIDENCE
The first global generation is reimagining adulthood — and forcing businesses to reinvent themselves in the process. Shaping the future of an organization necessitates understanding the people driving it. As businesses navigate this transformative period in human history, the perspectives of younger generations provide valuable insights into societal shifts.

Organizations that dare to think differently and embrace the unknown will not only confront the future — but also create it.

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 author and do not necessarily represent the views of SGV & Co.

 

Rossana A. Fajardo is the consulting leader of SGV & Co.

Congressman backs VP probe

OFFICE OF THE OMBUDSMAN PHILIPPINES FACEBOOK PAGE

THE Office of the Ombudsman’s move to open a corruption probe into Vice-President (VP) Sara Duterte-Carpio’s alleged misuse of public funds signals it found credible grounds in a House of Representatives report, a congressman said on Sunday.

The House public accountability panel, which last year investigated Ms. Duterte for alleged misuse of secret funds, plans on participating in the anti-graft body’s investigation, Manila Rep. Joel R. Chua, who heads the committee, said in a statement.

The Office of the Vice-President did not immediately reply to an e-mail seeking comment.

“Since the Ombudsman has effectively treated our committee report as the initiating complaint, we are prepared to fulfill our role as the complainant and ensure the process is based on truth, fairness and accountability,” he said.

The anti-graft body last week ordered Ms. Duterte and other officials respond to plunder, corruption, technical malversation and bribery cases that the House public accountability panel recommended to be filed against the Vice-President.

The House committee based the recommendations on its four-month investigation into the P625 million worth of secret funds allegedly misused by Ms. Duterte.

“The Ombudsman acted purely on the strength of our committee report. We have not yet even attached or submitted the supporting evidence,” said Mr. Chua, adding that they will file pieces of evidence that could help bolster the case against the Vice-President. “We want to make sure this is not just a speedy process — but a credible one.” — Kenneth Christiane L. Basilio