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PHL stocks rebound as Fed hints at policy easing

REUTERS

PHILIPPINE SHARES rebounded on Thursday on improved investor sentiment as the US Federal Reserve kept rates steady at its final meeting this year, with its chief saying they are done hiking borrowing costs.

The Philippine Stock Exchange index rose by 154.74 points or 2.47% to end at 6,410.48 on Thursday, while the broader all shares index climbed by 55.82 points or 1.67% to close at 3,394.96. 

“This Thursday, the local market rose by 154.74 points to 6,410.48 as investors cheered the Federal Reserve’s dovish outlook after it held policy rates unchanged in its recent meeting. The Federal Reserve stated that they anticipate three possible rate cuts for 2024, to be done in 25-basis-point (bp) increments,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“This gave hope that the Fed may ease their policy soon after more than a year-long combat against inflation. As a result, the bourse was in the green territory for the whole session and even breached the 6,400 resistance level,” he added. 

The Federal Reserve left interest rates unchanged on Wednesday and US central bank chief Jerome H. Powell said the historic tightening of monetary policy is likely over as inflation falls faster than expected and with a discussion of cuts in borrowing costs coming “into view,” Reuters reported.

“People are not writing down rate hikes” in their latest economic projections, Mr. Powell said in a press conference following the end of the central bank’s final policy meeting of the year.

“That’s us thinking we’ve done enough,” he said, adding that rate increases were “not the base case anymore.”

“Locally, investors bought into the assumption that the Bangko Sentral ng Pilipinas (BSP) would follow in a similar fashion, maintaining its own policy rate, but reducing this next year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The BSP on Thursday kept its policy rate steady at a 16-year high of 6.5% for a second straight meeting, as expected by 15 of 17 analysts in a BusinessWorld poll conducted last week, but said there is a need to remain hawkish amid lingering upside risks to inflation.

Most sectoral indices ended higher on Thursday. Holding firms increased by 228.11 points or 3.82% to 6,185.79; property rose by 96.92 points or 3.51% to 2,851.14; financials went up by 27.77 points or 1.64% to 1,719.58; industrials gained 144.33 points or 1.64% to end at 8,926.87; and mining and oil climbed by 61.44 points or 0.64% to 9,573.89. 

Meanwhile, services slipped by 6.28 points or 0.4% to 1,546.28.

Value turnover went up to P6.78 billion on Thursday with 385.71 million issues changing hands from the P3.55 billion with 245.11 million shares seen the previous day.

Advancers overwhelmed decliners, 120 against 59, while 44 names ended unchanged.

Net foreign selling climbed to P367.52 million on Thursday from P280.55 million on Wednesday. — with Reuters

Peso recovers as Fed, BSP keep key rates unchanged

THE PESO recovered against the dollar on Thursday as both the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) kept rates unchanged at their policy meetings.

The local unit closed at P55.795 per dollar on Thursday, strengthening by 26 centavos from P56.055 on Wednesday, based on Bankers Association of the Philippines data.

The peso opened Thursday’s session at P55.75 against the dollar. Its intraday best was at P55.62, while its worst showing was at P55.80 versus the greenback.

Dollars exchanged went down to $1.48 billion on Thursday from $1.6 billion on Wednesday.

“Today, the pair tapered off as volatility overnight saw the dollar weaken after the US Fed held rates steady while signaling that their next move will be rate cuts,” Security Bank Corp. Chief Economist Robert Dan J. Roces likewise said in a Viber message on Thursday.

The US central bank kept the fed funds rate steady at the 5.25%-5.5% range for a third straight time during its Dec. 12-13 meeting, with Fed Chair Jerome H. Powell saying they are likely done hiking borrowing costs.

The Fed raised rates by a total of 525 basis points (bps) from March 2022 to July 2023.

The peso was supported by the BSP’s hawkish rhetoric after its meeting on Thursday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The BSP on Thursday kept its policy rate steady at a 16-year high of 6.5% for a second straight meeting, as expected by 15 of 17 analysts in a BusinessWorld poll last week, but said they remain cautious amid lingering upside risks to inflation.

The Monetary Board has raised benchmark interest rates by 450 bps since it began its tightening cycle in May 2022.

For Friday, Mr. Roces said the peso could continue to get a lift from the BSP’s hawkish stance. He expects the peso to move between P55.50 and P55.80, while Mr. Ricafort sees it ranging from P55.70 to P55.90. — A.M.C. Sy

Maharlika’s Consing outlines fund’s proposed structure

Rafael D. Consing, Jr. — COURTESY OF THE PRESIDENTIAL COMMUNICATIONS OFFICE

By Luisa Maria Jacinta C. Jocson, Reporter

THE Maharlika Investment Corp. (MIC) is hoping to organize itself along the lines of a unit investment trust fund to steer the sovereign wealth fund towards a “sectoral and tactical” approach in investing.

“I’m going to be proposing a structure where it’s going to be a unitized fund. What I’ve presented at least to the advisory board is a sectoral approach and a tactical approach,” MIC President and Chief Executive Officer Rafael Jose D. Consing, Jr. said in an appearance on ANC late Wednesday.

“In the tactical approach,… you can create an MIF for infrastructure, an MIF for energy. So (co-investors) that have very specific objectives can then invest in those,” he added.

Mr. Consing has said that he targets a doubling in the MIC’s seed capital to P250 billion over the next two years.

Under the law creating the Maharlika Investment Fund (MIF), the P125-billion initial funding will be provided by the Land Bank of the Philippines and Development Bank of the Philippines, which will supply P50 billion and P25 billion, respectively. The National Government is also being counted on for P50 billion.

The MIC has an authorized capital stock of P500 billion.

Mr. Consing said he plans to tap domestic and overseas funding to raise the MIC’s capital.

“You’ve got both institutional and retail investors, so they’re coming in at the same price. This is not going to be like an initial public offering (IPO), because they’re not actually buying shares, they’re buying participation in unit trust funds,” he said.

He cited the need to address energy issues to attract more investors.

“Of the pain points investors have identified… Number one is the cost of energy; and number two is the need for their products to be acceptable in more developed economies (through the greater use of) mostly renewable power,” he said.

“One of the things we want to do is distributive generation, meaning create renewable capacity or renewable energy for ecozones directly,” he added.

Mr. Consing has also floated proposals for agro-forestry industrial urbanism projects.

“What it is is creating clusters making use of idle government land, turning them into clusters to (create) a ‘mega ecozone,’” he said.

“Within that, develop agricultural facilities where you basically put together the farmers and those that process their products to reduce their logistics cost and similarly reduce the need for middlemen. The benefits of that are improved climate, cleaner air and the generation of carbon credits we can sell; from there we can generate additional capital to reinvest,” he added.

Mr. Consing also said townships within the mega ecozones will allow people to live where they work.

The MIC is focusing its investments on tourism infrastructure, agro-urbanism, energy security, and digital infrastructure.

It is expected to be operational before year’s end.

Solar seen filling shortfall in hydro output during El Niño

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By Sheldeen Joy Talavera, Reporter

THE Department of Energy (DoE) said power supply shortfalls resulting from El Niño’s impact on hydropower are expected to be filled by new solar power plants.

Our challenge here in El Niño is the need to run all our sources of power that are available to us during this period,” Energy Secretary Raphael P.M. Lotilla said in a briefing on Thursday.

“We are not depending on hydropower plants precisely because there has been an advisory from PAGASA to prepare for the El Niño. That is why we are not using the Angat power plant for now,” he said.

PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), the government weather service, forecasts a moderate El Niño, possibly intensifying in the coming months. 

The Angat hydroelectric power plant in Bulacan was shut down on Nov. 6 and is due to return to service on Jan. 6. It is undergoing major repairs and rehabilitation of its penstock.

Irma C. Exconde, director of the Electric Power Industry Management Bureau, said the bureau is assuming hydroelectric power plants will be derated 70% during the dry spell, equivalent to 300 megawatts (MW) of dependable capacity.

“We have been monitoring hydropower plants because of the preparations for El Niño and we have assumed a 70% deration, particularly the large ones in Luzon and Mindanao,” she said.

Ms. Exconde said the bureau does not expect red or yellow alerts “because of the power plants coming in 2024.”

Yellow alerts are issued when reserves fall below a designated safety margin. Red alerts are raised when the supply-demand balance deteriorates further, signaling the possibility of rotational brownouts.

“The assumption (is that) forced outages (will be within acceptable limits) with no red and yellow alerts for next year. This also assumes an El Niño lasting until the second quarter of 2024,” she said.

Solar power plants entering operations next year will be “favorable under an El Niño scenario,” according to Ms. Exconde.

This includes solar power projects in Pangasinan, Subic, Batangas, and Pampanga which have a combined capacity of 702 MW.

The DoE has reported that wind, natural gas, and solar dominate the pipeline of indicative projects, or those currently in the pre-development stage, as of August. These indicative projects have capacities of 34,080.50 MW, 7,987.60 MW, and 7,811.86 MW, respectively.

Despite the low risk of power interruptions, Mr. Lotilla said coal-fired power plants sometimes do not work well in hot temperatures.

“That’s why we cannot assume that there will be no interruptions. But we should try to minimize the interruptions by making sure that there are alternative plants that can come in,” he said.

Spot power prices fall in early Dec.

THE average electricity spot market price dropped in early December, the Independent Electricity Market Operator of the Philippines (IEMOP) said, adding that the downtrend is expected to continue next month.

“Our average price for December is P3.90. Last month, it was P4.12 per kilowatt hour. In October, it was around P6.60, so the trend is downward,” IEMOP head of trading operations Isidro E. Cacho, Jr. said in a briefing on Thursday.

The December price will be more or less the price until January, he added.

As of Dec. 10, the average supply system-wide fell 0.73% to 18,712 MW while demand increased 0.65% to 13,032 MW.

The IEMOP said average price at the Wholesale Electricity Spot Market (WESM) on Luzon fell to P3.89 per kilowatt hour (kWh) in the first two weeks of October, from P4 per kWh in November.

Supply was 12,912 MW, down 2.03%, while demand climbed by 0.74% to 9,286 MW.

In the Visayas, the average electricity spot market price dropped to P4.62 per kWh during the period, from P5.14 per kWh in November.

IEMOP reported that supply was at 2,413 MW, up 3.61%. Demand was 1,865 MW, up 0.76%.

The WESM price in Mindanao declined to P3.17 per kWh, from P3.67 per kWh a month prior.

Supply increased 1.32 % to 3,386 MW while demand rose 0.16% to 1,881 MW.

The spot market serves as the venue where energy companies can buy power when their long-term contracted power supply is insufficient for their customers’ needs. 

Currently, the IEMOP is gearing up to launch commercial operations of the reserve market on Dec. 26.

The reserve market will facilitate the trading of ancillary services — the power reserves that the grid operator must maintain to ensure the reliability of the transmission system. — Sheldeen Joy Talavera

British chamber backs law vs agri smuggling, 5-year EO 10 effectivity

THE British Chamber of Commerce of the Philippines (BCCP) said it supports the passage of the proposed Anti-Agricultural Smuggling Act and the extension of Executive Order (EO) No. 10’s validity until 2028.

At a briefing on Thursday, BCCP Executive Director Chris Nelson presented the foreign chamber’s wish list for the Philippines next year.

EO 10, which reduced the Most Favored Nation tariff rates on pork, corn, rice, and coal as an anti-inflation measure, was due to expire at the end of the year. The Palace on Thursday announced the extension of the EO’s validity for a further year beyond Dec. 31.

“Obviously, we would have preferred it to be extended for the period of his (President Ferdinand R. Marcos, Jr.) presidency because it is an EO. But realistically, we understand that it’s going to be extended for (just) one year,” Mr. Nelson said.

“What we have tried to emphasize is that we as a chamber and the companies we bring in, try to make this a long-term relationship … so I think we would like it for a longer period. But… we understand that it may only be for another year,” he said.

The President had signed the EO on Dec. 10.

Under the EO, tariff rates for imports of pork were kept at 15% for shipments within the minimum access volume (MAV) quota and 25% for those exceeding the quota.

Meanwhile, the corresponding rates for corn remained at 5% for shipments within the MAV quota and 15% for those exceeding the quota. The rice tariff was set at a uniform 35% for all grain regardless of source. The previous 35% rate had applied originally to Southeast Asian rice. The EO retained the zero rate on imports of coal.

Mr. Nelson said that the importance of agriculture has been a key focus worldwide.

“One of the major impacts of the Russia-Ukraine conflict is on grain. Ukraine is one of the largest producers of grain in Europe. (The war) obviously had an impact and caused distortions in supply,” he said.

“I raise this point as if you look at agriculture, costs have a key impact on the consumer sector… I think what we can do is to supply pork, which will help in terms of the supply side, and then the security and inflation are going to be very important factors,” he added.

He said that it is the reason behind BCCP support for the proposed Anti-Agricultural Smuggling Act.

“Significant progress has been made. The House has passed its version, and the Senate has just passed (its measure) on third reading. As you will know, under your system, those two bills must be reconciled in bicameral session,” Mr. Nelson said.

He said that the chamber has consistently supported the passage of the measure to help with inflation, food security, food supply, the resiliency of Philippine agriculture, and the promotion of fair trade practices. — Justine Irish D. Tabile

Lumify signs on to upskill, certify IT-BPM employees

STOCK PHOTO | Image by Hack Capital from Unsplash

THE IT and Business Process Association of the Philippines (IBPAP) has entered into a tie-up with Lumify Work Ph to upskill and certify the industry’s workers, Lumify said.

In a statement on Thursday, Lumify — a joint venture between the Aboitiz group and Australia’s Edventure Co. — said it will provide training services with internationally recognized learning tools to professionals in the information and technology and business process management (IT-BPM) industry.

Lumify Country General Manager Gilbert Cadiang said he hopes the partnership will elevate the value of the IT-BPM Industry.

“Employees today and in the future need to be upskilled and re-skilled to remain relevant and adapt to the speed of technological change,” said Mr. Cadiang.

“I am looking forward to working as IBPAP’s Talent Development Partner and to establish our role as the premiere training provider in the IT-BPM industry,” he added.

IBPAP President and Chief Executive Officer Jack Madrid said he hopes that the partnership will help the industry pivot to high-value services, raise its global competitiveness, and create a sustainable learning ecosystem.

“In the era of evolving talent needs in an artificial intelligence (AI)-driven landscape, it is imperative to enhance and empower the workforce for the skills of the future,” said Mr. Madrid.

“This partnership with Lumify echoes our commitment to enable and equip the labor force with higher-value tasks as we drive the industry ahead in the era of innovation and AI,” he added.

IBPAP members will enjoy discounts on Lumify’s digital learning assets, customized webinars and digital workshops, access to Lumify facilities and instructors, and joint training needs analysis with clients.

Lumify’s training courses include IT service management, cloud computing, data analytics and AI, professional development, cyber security, project and program management, business analysis, business applications, agile and scrum tools, end-user applications, application and web development, and IT infrastructure and networks.

Lumify will also bring in expertise from partner vendors like Microsoft, AWS, Cisco, ISC2, and ISACA.

Aboitiz group, Lumify’s joint venture partner, said that the partnership helps the group provide professionals with agile and accessible high-quality IT training. 

“The world is changing quickly, and education needs to adapt. We need a modern way of training the workforce. These skills have never been more relevant and this style of teaching has never been more appropriate,” Aboitiz Impact Ventures President Jokin Aboitiz said. — Justine Irish D. Tabile

DA to pursue more private sector collaboration

FRANCISCO P. TIU LAUREL, JR. — PHILIPPINE STAR/JESSE BUSTOS

THE Department of Agriculture (DA) will seek out more opportunities to collaborate with the private sector in the area of formulating policy and programs.

In a statement on Thursday, Agriculture Secretary Francisco Tiu Laurel, Jr. said the end goal is to effectively modernize agriculture.

“We’ve been stressing… the need to modernize the agriculture sector, not only to feed 118 million Filipinos but to ensure food security,” he said, speaking to the Philippine Council for Agriculture and Fisheries (PCAF).

Mr. Laurel added that such collaboration creates options for improving the agri-fisheries sector.

He said that private sector partners can assist the government in policy and project monitoring to “maximize the benefits derived from these interventions.”

“Over the years, the private sector has been an invaluable partner of the Department of Agriculture in the development process of the industry,“ he added.

The DA has said it will seek out more such partnerships to boost the productivity of farms and fisheries.

In a Special Order issued in October, the DA directed staff to organize events that will result in partnerships with the private sector or bring them in as technical partners.

PCAF is a policy arm of the DA assigned to take charge of partnership development. — Adrian H. Halili

NDC to invest P30.72B in 18 projects 

PHILIPPINE STAR/ RUSSEL PALMA

THE National Development Co. (NDC) is set to invest P30.72 billion in 18 projects which will address the economy’s current needs.

“We are transforming NDC into a niche investment platform that specializes in filling ‘gaps’ that the Philippines urgently needs to fill,” NDC General Manager Antonilo DC. Mauricio said in a statement.

Mr. Mauricio said NDC investing will focus on pioneering, developmental, sustainable, inclusive, and innovative projects.

He said key projects this year include the Philippine Innovation Hub, which will be the headquarters of the Startup Venture Fund; the Philippine E-commerce Platform; and the Philippine Artificial Intelligence Research Center.

He also cited Glovax’s Vaccine Manufacturing Plant, in which it will be investing P150 million. The plant is expected to be the first vaccine manufacturing facility in the Philippines.

“This project is urgently needed for vaccine self-sufficiency, providing cheaper vaccines to the poor, and preparing for the next pandemic,” Mr. Mauricio said.

He also cited NDC’s plan to invest P1.65 billion in Singapore-based Kacific Broadband Satellite group, which is planning to provide broadband satellite services to unserved and underserved areas through contracts with government agencies.

“The NDC investment in the Kacific group will allow NDC to pre-purchase frequency blocks at a lower price which will in turn be sold at lower-than-market prices to Philippine buyers over the next six years,” he said.

The NDC is also investing in the expansion of a composting facility of Davao Thermo Biotech Corp. and Australia’s Cyclion waste-to-energy project.

“There are over a hundred projects, but this is the shortlist. They are in varying stages of evaluation, approval, and release. The ones that I have (cited) are the ones nearing release,” Mr. Mauricio said.

“NDC’s unique charter allows it to act as a vehicle for investment in multiple sectors, with the advantage of entering into agency-to-agency agreements,” he added.

The One DTI (Department of Trade and Industry) Building was also one of the projects listed in a document from NDC. It is planning to invest P18.5 billion.

“Looking ahead at 2024, the NDC will continue to identify gaps where it can make its modest contributions to national development,” Mr. Mauricio said. — Justine Irish D. Tabile

Tourism recovery tied to expanded use of FTAs — ADB

PHILSTAR FILE PHOTO

FREE trade agreements (FTAs) can be leveraged to help Asia-Pacific tourism industries recover from the pandemic, the Asian Development Bank (ADB) said in a report.

“The tourism sector plays a significant role in the economies of Asia and the Pacific. In particular, island economies are highly dependent on tourism services for their GDP, exports, and employment generation. The COVID-19 pandemic made the sector’s vulnerability to such shocks quite clear,” the multilateral lender said.

In the Asia and Pacific region, tourism exports fell to $99.4 billion in 2021 from $486.1 billion.

“Tourism exports in Asia and the Pacific declined sharply during the COVID-19 pandemic. Southeast Asia was the worst affected subregion in absolute decline in tourism exports, followed by East Asia,” it added.

In 2019, Philippine tourism exports accounted for 10.3% of total exports, equivalent to $11.5 billion.

“Tourism exports in Hong Kong, Cambodia, Indonesia, Malaysia, the Philippines, Thailand, Taiwan, and Vietnam declined more than 90% in 2021 over 2019,” the ADB said.

“While tourism exports improved in some economies in 2021 after falling in 2020, many others continued declining even in 2021. These include Australia, Cambodia, Fiji, Indonesia, Japan, Nepal, the Philippines, Singapore, and Thailand,” it added.

The ADB recommended utilizing bilateral and regional level FTAs and cooperation agreements.

“The foreign direct investment (FDI) data suggest a lot of intraregional investment happening, but such investments are concentrated in only a few economies in this region,” it said.

“Therefore, economies in the region may want to consider making binding commitments for FDI in tourism services in future trade agreements to attract more FDI in this sector from partner economies,” it added.

It also noted that the region has “significant intraregional capital and human mobility” but there are no ample institutional cooperation mechanisms.

“Therefore, intraregional cooperation for tourism services led by governments, in discussion with industry chambers and private bodies, should be explored to enhance the tourist attractiveness of the region as a whole. Intraregional cooperation could involve capacity building, resource sharing, technology upgrade, and travel facilitation, among others,” it added.

Unilateral policies can also help make tourism services more resilient.

It cited policies to help ramp up investments in tourism infrastructure, developing alternative tourist destinations, utilizing digital tools to enhance tourism offerings, easier tourist visa policies, and investments in human resources and upskilling, among others. — Luisa Maria Jacinta C. Jocson

Philippines, US, Japan affirm resolve to boost their security partnership

PHILIPPINE STAR/VIDEO GRAB FROM NEWS 5

By Kyle Aristophere T. Atienza, Reporter

THE PHILIPPINES, United States and Japan have reaffirmed their commitment to strengthen their security partnership, according to the White House, after China’s water cannon attacks on Philippine vessels last week.

The US Defense chief also reiterated his country’s commitment to the 1951 Mutual Defense Treaty with the Philippines.

The national security advisers of the three countries had a call on Wednesday “to reaffirm their commitment to freedom of navigation and international law in the South China Sea and East China Sea,” according to a statement from the White House.

They also cited the importance of keeping the Indo-Pacific region stable.

The three countries, through US National Security Adviser Jake Sullivan, Japanese National Security Adviser Akiba Takeo and Philippine National Security Adviser Eduardo Año, expressed concerns over China’s recent “dangerous and unlawful” actions at Second Thomas Shoal and Scarborough Shoal in the South China Sea, which are both within Manila’s 200-nautical mile exclusive economic zone (EEZ).

Beijing should “desist from further provocative behavior” and honor a 2016 arbitral ruling that invalidated its expansive claims in the South China Sea, they said.

At the meeting, Mr. Sullivan “reaffirmed the US’ ironclad alliance commitments to both Japan and the Philippines,” the White House said.

The three also reaffirmed their commitment to coordinate in the coming months, citing their shared interests in a free and open Indo-Pacific region.

They “underscored the importance of enhancing trilateral cooperation and committed to continue implementing the initiatives they discussed at their June meeting.”

These initiatives include efforts to enhance defense and security capabilities, particularly on cyber-security, keep a free and open maritime order, enhance cooperation on humanitarian assistance and disaster relief, and maintain a free and equitable economic order, according to the statement.

Philippine President Ferdinand R. Marcos, Jr. earlier described the actions of Chinese coast guard and maritime militia ships against Philippine vessels at the weekend as aggressive and provocative, noting that they have only “further steeled” state determination to defend the country’s “sovereignty, sovereign rights and jurisdiction in the West Philippine Sea.”

The Sunday incident at Second Thomas Shoal, where a Chinese Coast Guard ship reportedly rammed a smaller Philippine resupply boat, followed China’s attempts on Saturday to prevent a Bureau of Fisheries and Aquatic Resources vessel from distributing supplies to Filipino fishermen at Scarborough Shoal, which Manila calls Bajo de Masinloc.

‘POINT A TO B’
The President, in his statement, reiterated that any foreign claim of sovereignty over Second Thomas Shoal is “baseless and absolutely contrary to international law.”

Scarborough Shoal is a “sovereign Philippine territory and an integral part of our archipelago,” Mr. Marcos said. “No one but the Philippines has a legitimate right or legal basis to operate anywhere in the West Philippine Sea,” he added, referring to areas of the South China Sea within the country’s EEZ.

The US was among the first countries to condemn the incidents, accusing China of using acoustic devices that incapacitated Filipino crew members.

The European Union, Australia, Canada, Denmark, Finland, France, Germany, Ireland, Japan, South Korea, the Netherlands, New Zealand and the United Kingdom also joined the chorus of concern.

After the incidents that Manila has described as “serious escalations on the part of China,” US Defense Secretary Lloyd J. Austin III had a phone call with his Philippine counterpart on Wednesday to express “US support for the Philippines in defending its sovereign rights in accordance with international law.”

Mr. Austin and Philippine Defense Secretary Gilbert C. Teodoro, Jr. discussed the unprovoked use of acoustic devices, water cannons and reckless maneuvers of Chinese ships at Scarborough Shoal and Second Thomas Shoal, “which caused a collision and damage to lawfully operating Philippine vessels in the Philippines’ EEZ,” the White House said in a separate statement.

During their call, Mr. Austin cited the Mutual Defense Treaty, which compels both countries to defend each other in case of an armed attack on their armed forces, vessels and aircraft.

“[He] reiterated that the Mutual Defense Treaty extends to both countries’ armed forces, public vessels, and aircraft — including those of their respective Coast Guards — anywhere in the Pacific, to include the South China Sea,” the White House said.

Mr. Austin also cited the professionalism of the Armed Forces of the Philippines “in the face of unlawful behavior,” it added.

Armed Forces of the Philippines (AFP) Chief of Staff Romeo S. Brawner, Jr. and AFP Western Command chief Alberto B. Carlos were on board the small wooden boat Unaizah Mae 1 when it was allegedly rammed by the Chinese Coast Guard on Sunday.

The Philippines said there were 46 Chinese vessels during the Sunday mission. The Philippine Coast Guard said it was the “largest number of maritime forces” that it has documented.

Two Philippine Navy-operated supply boats and Philippine coast guard escort ships were on their way to deliver food and other supplies to BRP Sierra Madre when Chinese coast guard and maritime militia vessels “harassed” them and “executed dangerous maneuvers” at close range.

A water cannon attack by Chinese Coast Guard vessel 5204 damaged the engines of a smaller Philippine boat, disabling the vessel and endangering the lives of its crew, the Philippines earlier said.

Joshua Bernard B. Espeña, who teaches international relations at the Polytechnic University of the Philippines, said the PCG vessels are way smaller — in size, tonnage, and firepower — and fewer than their Chinese counterparts.

“So there is likely guidance for PCG task force commanders not to go toe-to-toe with the Chinese Coast Guard,” he said in a Facebook Messenger chat.

“Operationally, the point of rotation and resupply missions is to get from point A to B,” he said, noting that firing back could have invited more Chinese vessels.

Senate resolution seeks term extensions for President, VP, Congress

SENATE PRIB

A SENATOR has filed a resolution seeking term extensions for the President and Vice-President under the 1987 Philippine Constitution, citing the need for policy continuity.

Senator Robin C. Padilla, who heads the committee on constitutional amendments, also wants to increase the number of lawmakers in both Houses of Congress and extend their terms.

“It is imperative to strike a balance between the need for policy continuity, which requires adequate time for lawmakers to fulfill their legislative agenda, and the need to prevent the accumulation of power, which may lead to political entrenchment,” he said in Resolution of Both Houses No. 5.

He also cited the need to synchronize the electoral cycles of the different branches of government “to improve administrative efficiency and enable a more coordinated implementation of government policies.”

Mr. Padilla noted that in 2022, the Philippines ranked 52nd of 167 countries in the Economist Intelligence Unit’s Democracy Index, with political culture, functioning of government and political participation being the most concerning issues.

He also cited historical data from the Asian Development Bank showing that in the past decade, political instability and frequent turnover of elected officials have been identified as major impediments to long-term planning and policy continuity.

Under his proposal, the President and Vice-President will be elected as joint candidates for a term of four years. They may not be elected for more than two terms.

A President who served for two terms will not be qualified to run for any elective positions. Anyone who succeeds the President or Vice-President can only run for these positions once.

Mr. Padilla said term changes for the executive positions “will ensure a balance between leadership stability and democratic continuity.”

“A joint candidacy for the President and Vice-President provides for an electoral landscape that will shift its emphasis from individual personalities to the unified policy agenda and will foster a more strategic and effective governance,” he added.

Mr. Padilla also sought to increase the number of senators to 54 from 24. Of these, 24 will be elected during national polls and 30 will be elected by qualified voters from each legislative region.

Under the proposed changes, senators elected ‘at large’ will have an eight-year term and can only serve for up to two consecutive terms. Regional senators will have a four-year term and can only serve for up to three consecutive terms.

Members of the House of Representatives will have a four-year term compared with three now, and can only serve for up to three consecutive terms, Mr. Padilla added.

All local officials except village chiefs will have four-year terms compared with three now and can only serve for three consecutive terms.

If Congress succeeds in amending the Constitution, the first elections will be held on the second Monday of May 2028, according to Mr. Padilla.

The House of Representatives this week revived Charter change (“Cha-cha”) talks to ease economic restrictions on foreign investors.

Senior Deputy Speaker and Pampanga Rep. Aurelio D. Gonzales, Jr. on Tuesday said a resolution seeking to change the Constitution would be filed next year.

The House in March passed a bill seeking to amend the 1987 Constitution through a constitutional convention. A similar measure in the Senate only reached Mr. Padila’s committee. — Beatriz Marie D. Cruz

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