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Amid talk of ICC warrant, Philippine ex-President Duterte returns to Manila, media report

FORMER PRESIDENT RODRIGO R. DUTERTE — PHILIPPINE STAR/JESSE BUSTOS

MANILA – Former Philippine President Rodrigo Duterte landed at Manila’s airport on Tuesday, local media reported, amid reports the International Criminal Court will issue an arrest warrant for him over the “war on drugs” that killed thousands during his term.

Duterte said on Monday in Hong Kong that he was ready to be arrested if the ICC issued a warrant.

GMA NEWS reported the Philippine national police chief and an Interpol representative were at the airport waiting for Duterte to arrive from Hong Kong. Reuters could not immediately confirm that report.

ABS-CBN reported Duterte arrived at Manila’s international airport on Tuesday morning in a social media post that featured a video of the former president. The authenticity of the video could not immediately be verified.

Reuters reporters at the airport had yet to see Duterte emerge.

As of Monday, the Philippines had not received an official communication from Interpol on an arrest warrant from the ICC, according to the government of Duterte’s successor, President Ferdinand Marcos Jr.

Duterte’s “war on drugs” was a signature policy after he swept to power in 2016 after vitriolic, crime-busting campaign vows to kill narcotics dealers.

Human rights groups claim that Philippine police and vigilantes under their direction murdered unarmed drug suspects on a massive scale on Duterte’s watch, allegations that authorities have denied.

The ICC has said it would pursue an investigation of suspected crimes against humanity.

While Mr. Duterte subsequently withdrew the Philippines from the ICC, the government under Mr. Marcos has indicated Mr. Duterte could be handed over.

“Our law enforcers are ready to follow what law dictates, if the warrant of arrest needs to be served because of a request from Interpol,” Presidential Communications Undersecretary Claire Castro told reporters on Monday. – Reuters

Trump’s ‘America First’ policies targeting South Korea, says acting president

REUTERS

SEOUL – South Korea’s acting President Choi Sang-mok said on Tuesday that U.S. President Donald Trump’s “America First” policies had started targeting his country.

Mr. Choi said discussions with the United States over tariff measures and stronger cooperation on energy and shipbuilding were beginning ahead of “reciprocal tariffs” set to take effect on April 2.

The U.S. President announced a global regime of reciprocal tariffs on all U.S. trading partners from April 2.

Mr. Trump has threatened to impose “all-out pressure” on South Korea, Mr. Choi said, citing his comments to the U.S. Congress where he singled out the key U.S. Asia ally for applying high tariffs.

Earlier this week, Choi ordered authorities to actively communicate with the Trump administration to resolve any misunderstanding about tariff rates.

“The government will only consider the national interest and respond with ‘a cool head and flexibility’, and will devote all our efforts to finding a mutual win-win agreement between South Korea and the United States,” Choi told a cabinet meeting on Tuesday.

Mr. Trump also wants to scrap a bipartisan law that provides subsidies for semiconductor chip manufacturing and production.

In the final weeks of the previous U.S. administration, the Commerce Department finalised more than $33 billion in awards including $4.7 billion to South Korea’s Samsung Electronics.

Separately, Mr. Choi also noted rising public concerns in South Korea over the risk of physical conflict ahead of an “important ruling” by the Constitutional Court. He said the government would deal sternly with any violent, illegal protests “without any tolerance.”

Police are preparing for the “worst-case scenarios” over safety concerns when the Constitutional Court rules on whether to oust or reinstate impeached President Yoon Suk Yeol.

Mr. Yoon’s  supporters and opponents have been taking to the streets to hold rallies, amid a political crisis triggered by the suspended president’s brief imposition of martial law last year. – Reuters

US transportation chief to meet with Boeing CEO on safety efforts

REUTERS

WASHINGTON – U.S. Transportation Secretary Sean Duffy said he plans to visit a Boeing factory in Renton, Washington, on Thursday to ensure the U.S. planemaker is maintaining the highest level of safety, six years after a deadly 737 MAX crash in Ethiopia.

Duffy will travel to Seattle with acting FAA Administrator Chris Rocheleau as the Trump administration has vowed stringent oversight of Boeing, also following a January 2024 mid-air panel blowout on a new Alaska Airlines ALK.N 737 MAX.

The pair are expected to meet with Boeing CEO Kelly Ortberg, who will testify on April 2 before the Senate Commerce Committee on the planemaker’s efforts to improve its safety culture and quality. They will also visit the 737 factory and meet with FAA inspectors.

Boeing did not immediately respond to a request for comment.

Duffy announced the factory visit on the sixth anniversary of the crash of Ethiopian Airlines flight 302 that killed all 157 people on board, including eight U.S. citizens, and led to changes in the 737 MAX’s design and pilot training.

“I met with several families of the passengers of flight 302 on February 25th,” Duffy said on X. “My door and this department are always open to them for answers and to help them navigate their grief.”

The FAA said the visit to the planemaker’s factory was “part of this administration’s commitment to ensure Boeing fixes its systemic quality control issues.”

Duffy said in January that Boeing needed “tough love.” President Donald Trump has yet to nominate a candidate for permanent FAA administrator.

In January 2024, former President Joe Biden’s FAA chief Mike Whitaker imposed a 38 planes per month production cap after a door panel missing four key bolts flew off the Alaska Airlines 737 MAX.

Whitaker said in January the tougher oversight of Boeing would continue indefinitely with the agency last year boosting inspectors at the factory.

Whitaker acknowledged last year that prior oversight “was too hands off” and said fixing Boeing’s safety culture could take five years. The FAA announced a new audit of Boeing in October.

In May 2022, the FAA approved a three-year renewal of a program that delegates some aircraft certification tasks to the planemaker, rather than the five-year renewal Boeing had requested. The approval will expire in two months. – Reuters

Indonesia’s central bank uses Ramadan sermons to preach on inflation

FREEPIK

MAJALENGKA, Indonesia – Waiting to break their fast during the Muslim holy month of Ramadan, clerics in the Indonesian town of Majalengka gathered for an unusual briefing on the subject of inflation, led by the country’s central bank.

The address by a central bank official and two Muslim clerics in the town’s Islamic center was part of Bank Indonesia’s strategy to enlist preachers to warn against overconsumption during Ramadan, which can trigger price pressures in a country with a history of runaway inflation.

Though inflation has been brought under control in the past decade as authorities beef up efforts to strengthen food distribution along the supply chain, the central bank is keen to spread its message about the need to keep prices stable.

“We hope you as the ulemas (scholars of Islam) can be mediators to convey the message that inflation management is our common task,” said Agung Budilaksono, the senior central bank official for Majalengka.

“Inflation must be managed, because it’s like blood pressure … If it’s too high, it will ruin your health in the long run and if it’s too low, you will get weak,” he told the clerics.

Ramadan ends with the Eid al-Fitr festival, which, like in other Muslim countries, typically marks peak demand in Indonesia, where Muslims make up the majority of the population of 280 million.

Islamic clerics are influential among the public in Indonesia’s remote areas and towns like Majalengka in West Java, about three hours from the capital Jakarta.

“People tend to want more during Ramadan, so maybe we need to remind them again that the point of fasting is to control our lust,” said Mohamad Padil, 53, one of the clerics listening at the forum.

Inflation once ran hot in Southeast Asia’s largest economy, but in 2024 was 1.57%, near the lower end of the central bank’s target range, while West Java’s rate was 1.64%.

The rate dropped further in the first two months of 2025 due to a large increase in subsidies for electricity prices, and economists predict it will remain within the central bank’s 1.5% to 3.5% target range this year.

The central bank has run other unconventional initiatives including a podcast on spending management and programs to foster entrepreneurship as well as boost local food supply.

At the nearby Islamic boarding school of Santi Asromo, it helped build a greenhouse for students to plant Chinese cabbage and water spinach, constructing a fish farm for the school next door. – Reuters

US wants no G7 Russia antagonism as allies fear blockage

FLICKR

MONTREAL/JEDDAH – The U.S. opposes language that could harm its efforts to bring Russia and Ukraine to the negotiating table, Secretary of State Marco Rubio said on Monday, as Washington wrangled with G7 allies ahead of a meeting this week, further alarming them.

The foreign ministers of the Group of Seven major democracies – Britain, Canada, France, Germany, Italy, Japan and the United States – will meet in the river resort of La Malbaie, Quebec on March 12-14 for the first time since President Donald Trump returned to power in January.

While the G7 meetings have been consensual since Russia’s membership was suspended in March 2014 in response to its annexation of Crimea, underscoring their steadfast backing for Ukraine, Trump has upended Western unity by drawing the U.S. closer to Moscow while heaping criticism on Kyiv.

According to four G7 diplomats, Canada had initially hoped the seven would agree on an overall statement ranging from the war in Ukraine to the Middle East and China and a second declaration that would outline the G7’s efforts to curb Russia’s so-called shadow fleet.

Shadow fleet refers to vessels used by Russia to move oil, arms and grains around in violation of international sanctions imposed on it over the Ukraine war. The vessels are not regulated or insured by conventional Western providers.

Almost two pages out of eight in the last G7 statement in November were focused entirely on Ukraine, mostly taking aim at Russia.

However, the diplomats said agreement on the full communique this time was proving very difficult, with some fearing that a compromise may not be found.

Two diplomats said the United States was seeking to remove references to sanctions and Russia’s war in Ukraine, while demanding tougher language on China.

Speaking to reporters en route to Saudi Arabia for talks with Ukrainian officials, Rubio said there are always sticking points, adding that Washington cannot sign off on anything that could impede bringing Russia and Ukraine to the negotiating table.

“We feel like antagonistic language sometimes makes it harder to bring parties to the table, especially since we’re the only ones right now that seem to be in a position to make talks like that possible,” he said.

He said he was “certain” they would eventually arrive at a document that was meaningful and unifying without “undermining our ability to bring both sides to the table.”

Three diplomats said the United States also opposed a separate statement on Russia’s shadow fleet.

Washington has already broken with allies at the United Nations and the World Trade Organization at the end of February, refusing to condemn the Russian invasion of Ukraine.

“The best case scenario is two statements. Plan B is one statement. But the Americans are blocking the maritime statement, so it’s not easy. Even what the Canadians thought was going to be easy is not in fact easy,” said one G7 diplomat.

The diplomats cautioned that talks were still ongoing to try to find a compromise. – Reuters

Zelenskiy in Saudi Arabia as US voices hope for Ukraine peace talks

Ukrainian President Volodymyr Zelensky speaks at the Shangri-La Dialogue in Singapore, June 2, 2024. — REUTERS

JEDDAH – President Volodymyr Zelenskiy met with Saudi Crown Prince Mohammed bin Salman ahead of talks between Ukrainian and U.S. officials that Washington hopes will deliver substantial progress towards ending Russia’s war with Ukraine.

During the meeting in Jeddah, the crown prince underscored the kingdom’s support for international efforts to resolve Ukraine’s crisis and achieving peace, the Saudi state news agency SPA reported early on Tuesday.

The United States, once Ukraine’s main ally, has upended its policy on the conflict in its stated pursuit of a rapid end to the fighting, engaging directly with Moscow while stopping military assistance and intelligence sharing for Ukraine, which Russian troops invaded at scale in 2022.

Grappling with the new approach in the White House, Ukraine has pushed for “pragmatic” relations after a disastrous Oval Office encounter between Mr. Zelenskiy and U.S. President Donald Trump descended into acrimony last month.

Saudi Arabia has played a mediating role since Russia’s invasion, including brokering prisoner exchanges and hosting last month’s talks between Moscow and Washington.

Talks on Tuesday between U.S. and Ukrainian officials are the first official session since Mr. Zelenskiy’s abortive White House meeting, and Trump’s Middle East envoy Steve Witkoff said he had high hopes.

“I think that we’re going over there with an expectation that we’re going to make substantial progress,” he said in an interview with Fox News.

Asked if he thought Mr. Zelenskiy would return to the U.S. to sign a minerals deal this week, Mr. Witkoff said: “I am really hopeful. All the signs are very, very positive.”

Secretary of State Marco Rubio struck a more cautious note, saying there were still details to be worked out on the minerals deal. He added that the talks could be a success without an accord being signed and stressed the need to gauge Kyiv’s readiness to make concessions to reach peace.

Under huge pressure from Mr. Trump, Mr. Zelenskiy has been at pains to show that Kyiv is committed to ending the war soon, despite failing to win the U.S. security guarantees that Kyiv sees as vital for any peace deal.

Mr. Zelenskiy has said he will not attend Tuesday’s talks with U.S. officials, and the Ukrainian delegation will include his chief of staff, his foreign and defense ministers and a top military official in the presidential administration.

“On our side, we are fully committed to constructive dialogue, and we hope to discuss and agree on the necessary decisions and steps,” Mr. Zelenskiy said in a post on X.

“Realistic proposals are on the table. The key is to move quickly and effectively.”

U.S. officials said they were planning to use the meeting in part to determine whether Kyiv is willing to make material concessions to Russia to end the war.

One U.S. official said: “We want to see if the Ukrainians are interested not just in peace, but in a realistic peace.”

Mr. Trump said on Sunday he expected good results out of the upcoming talks, adding that Washington had “just about” ended a suspension of intelligence sharing with Kyiv.

Mr. Rubio said Ukraine was already receiving all U.S. defensive intelligence. “All the notion of the pause in aid broadly is something I hope we can resolve … I think what happens tomorrow will be key to that,” he said.

On the eve of the talks, Russia launched air strikes targeting Kyiv and other parts of Ukraine, with the Ukrainian air force saying the country was under a threat of a missile attack.

 

FRAMEWORK FOR AN AGREEMENT

Mr. Witkoff, who has been arranging the talks, has said the idea is to “get down a framework for a peace agreement and an initial ceasefire as well”.

Mr. Zelenskiy has called for a truce in the air and at sea, as well as a prisoner exchange, in what he says could be a test of Russia’s commitment to ending the war.

Moscow has rejected the idea of a temporary truce, which has also been proposed by Britain and France, saying it was a bid to buy time for Kyiv and prevent its military collapse.

Mr. Zelenskiy has said Kyiv is ready to sign the minerals deal with the U.S., which would create a joint fund from the sale of Ukrainian minerals. Washington says it is crucial to secure continued U.S. backing.

With U.S. support in question, Mr. Zelenskiy has been urging his European allies to ramp up their support as Kyiv’s battlefield position deteriorates and it faces mounting pressure to retreat from Russia’s Kursk region.

Russia holds around a fifth of Ukraine’s territory, including Crimea which it annexed in 2014, and its troops are also pressing in the eastern Donetsk region, having ramped up drone and missile strikes on cities and towns far from the front.

Russia has launched 1,200 aerial guided bombs, nearly 870 attack drones and more than 80 missiles at Ukraine in the past week alone, Mr. Zelenskiy has said. – Reuters

CoreWeave inks $11.9 billion contract with OpenAI ahead of IPO

NEW YORK – CoreWeave, an artificial intelligence startup backed by Nvidia, has signed a five-year contract worth $11.9 billion with OpenAI ahead of its hotly anticipated stock market launch.

As part of the pact, CoreWeave will provide AI infrastructure to OpenAI, CoreWeave said in a statement on Monday, confirming an earlier exclusive report from Reuters.

The deal will give OpenAI a stake in CoreWeave, which will issue shares worth $350 million to the ChatGPT maker through a private placement at the time of its initial public offering.

Livingston, New Jersey-based CoreWeave, which is one of the hottest AI startups in the U.S., will not receive any proceeds as part of the share issue to OpenAI.

“CoreWeave is an important addition to OpenAI’s infrastructure portfolio, complementing our commercial deals with Microsoft and Oracle, and our joint venture with SoftBank on Stargate,” said Sam Altman, CEO of OpenAI.

The deal provides a major boost to CoreWeave ahead of its blockbuster share sale, which is expected to headline the U.S. IPO lineup for 2025.

The discussions with OpenAI come at a time when investor interest in generative AI is sky-rocketing. The AI boom, which has powered chipmakers such as Nvidia and other big tech firms, has driven a surge in global demand for infrastructure such as data centers and high-powered servers.

A successful IPO for CoreWeave could pave the way for other AI startups that have recently considered tapping public markets. Data center operator Switch has been weighing an IPO at a valuation of about $40 billion, including debt, Reuters reported last year.

 

MARQUEE IPO

Founded in 2017, CoreWeave provides access to data centers and high-powered chips for AI workloads, mainly supplied by Nvidia. It competes against cloud providers such as Microsoft’s MSFT.O Azure and Amazon’s AMZN.O AWS.

CoreWeave, whose customers include big tech companies including Meta META.O, IBM IBM.N, and Microsoft MSFT.O, is expected to target a valuation of more than $35 billion in its stock market listing, Reuters reported in November.

In its IPO filing earlier in March, CoreWeave reported revenue of $1.92 billion in 2024, compared with $228.9 million a year earlier. Its net loss widened to $863.4 million during the same period from $593.7 million in 2023. Roughly two-thirds of its revenue came from Microsoft, which is the company’s biggest customer.

CoreWeave has raised more than $14.5 billion in debt and equity across 12 financing rounds, according to data compiled by Reuters. Last year, CoreWeave raised over $7 billion in one of the largest private debt financing rounds in history, led by asset managers Blackstone BX.N and Magnetar.

Morgan Stanley, JPMorgan Chase, and Goldman Sachs are the lead underwriters for CoreWeave’s upcoming stock market flotation. CoreWeave’s shares are expected to trade on the Nasdaq under the symbol CRWV. – Reuters

Philippine central bank says still on easing cycle, April cut on table

BW FILE PHOTO

MANILA – The Philippine central bank is still on an easing cycle and could cut rates at its April meeting, Governor Eli M. Remolona Jr. said on Tuesday.

The Bangko Sentral ng Pilipinas (BSP) unexpectedly kept its key interest rate steady in February after three consecutive 25-basis-point cuts in previous reviews, citing uncertainties over global trade policies. — Reuters

FDI net inflows inch up 0.1% in 2024

Net inflows of foreign direct investments into the Philippines fell by 85.2% to $110 million in December from $743 million in the same month in 2023. — PHILIPPINE STAR/EDD GUMBAN

By Luisa Maria Jacinta C. Jocson, Reporter

NET INFLOWS of foreign direct investments (FDI) into the Philippines inched up by just 0.1% in 2024 but plunged in December to its lowest monthly tally in 11 years, amid uncertainty in global trade, data from the central bank showed.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed FDI net inflows edged higher to $8.93 billion in 2024 from $8.925 billion in 2023, ending two straight years of declining inflows.

The 2024 FDI tally was also the highest in two years but below the BSP’s forecast of $9 billion.

2024 Net FDI level highest in 2 years

Investments in equity and investment fund shares rose by 13.1% to $2.7 billion in 2024 from $2.39 billion in 2023.

Net foreign investments in equity capital climbed by 42.4% to $1.54 billion last year from $1.08 billion in 2023.

Placements increased by 4.3% to $2.17 billion, while withdrawals fell by 37.1% to $628 million.

BSP data showed these placements mainly came from Japan (38%), the United Kingdom (35%), the United States (10%), and Singapore (8%).

Investments were mostly channeled into manufacturing (68%), followed by real estate (12%), and information and communication (5%) industries.

Meanwhile, net investments in debt instruments stood at $6.23 billion, down by 4.7% from $6.53 billion in 2023.

Reinvestment of earnings likewise declined by 11.2% to $1.17 billion from $1.31 billion.

DECEMBER SLUMP
In December alone, FDI net inflows plunged by 85.2% to $110 million from $743 million in the same month in 2023.

Month on month, inflows likewise fell by 88% from $922 million.

December saw the lowest FDI net inflow in 11 years or since the $102.16 million recorded in December 2013.

“While nonresidents’ net equity capital investments rose, FDI declined due to increased debt repayments by resident corporations to their nonresident direct investors,” the BSP said.

The higher debt repayments brought net investments in debt instruments to an outflow of $19 million in December, a reversal of the $618-million inflow in the same month in 2023.

Reinvestment of earnings declined by 14.7% year on year to $80 million in December from $94 million a year ago.

On the other hand, net investments in equity capital other than the reinvestment of earnings jumped by 58% to $49 million in December from $31 million in the previous year.

This as equity capital placements dropped by 19.4% to $185 million, while withdrawals slid by 31.5% to $136 million.

By source, the bulk of equity capital placements in December came from Singapore (42%), followed by Japan (23%), and the United States (16%).

These were invested mainly in information and communication (40%), manufacturing (20%), financial and insurance (13%), construction (9%), and real estate industries (8%).

Meanwhile, investments in equity and investment fund shares went up by 3.3% to $129 million in December from $125 million.

“The sharp decline in net FDI inflows in December is concerning, as it suggests both short-term financial pressures on local firms and potential shifts in investor sentiment toward the economy,” Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said.

He said the higher debt repayments suggest resident firms are “prioritizing deleveraging over reinvesting capital, which may reflect tighter financial conditions or concerns over profit margins.”

“Policy uncertainty and global economic risks may have dampened investor sentiment, leading firms to delay or scale down expansion plans in the Philippines,” Mr. Rivera added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the slump in investment flows could be due to uncertainties from the protectionist policies by US President Donald J. Trump.

This may have “encouraged more investments and jobs in the US rather than outside the US that could reduce FDIs globally,” he added.

Prior to assuming office in January, Mr. Trump had announced his plans to impose tariffs on major trading partners, such as China, Canada and Mexico, as well as an across-the-board reciprocal tariff on all countries that tax US imports.

Mr. Ricafort also cited tensions between China and the Philippines as well as weather disturbances that could have disrupted investment activity.

“The drop in FDI could also reflect competitiveness challenges, such as high operating costs, infrastructure bottlenecks, and concerns about regulatory stability,” Mr. Rivera added.

For the coming months, Mr. Ricafort said investment flows could be supported by the implementation of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act.

“This could make foreign investors become more decisive in locating in the country amid enhanced incentives for foreign investors,” he added.

Further interest rate cuts by the US Federal Reserve and BSP could also lower financing costs and attract more FDIs in the country, Mr. Ricafort said.

Despite the surprise policy pause in February, the BSP has said it is still in easing mode.

BSP Governor Eli M. Remolona, Jr. has said there is a possibility of up to 50 basis points of rate cuts this year. The central bank kept the key rate steady at 5.75% last month, citing global trade uncertainties.

“Higher global interest rates make borrowing more expensive, discouraging new investments,” Mr. Rivera said.

Mr. Rivera noted that countries like Vietnam and Indonesia may have attracted more FDI “due to stronger incentives or more favorable business environments.”

“Investors may be waiting for clarity on key economic reforms, tax policies, and regulatory frameworks before committing capital,” he added.

On the other hand, Mr. Ricafort said the tariff war would continue to weigh on FDI inflows in the coming months.

“(These) all encourage foreign investors to locate in the US to avert higher import tariffs and create more jobs in the US as part of Trump’s America-first policy,” he added.

The central bank expects to end 2025 with a $10-billion net FDI inflow.

The BSP noted that its FDI data are distinct from the investment data of other government sources as it covers actual investment flows.

“In contrast, the approved foreign investments data published by the Philippine Statistics Authority are sourced from Investment Promotion Agencies. These represent investment commitments, which may not necessarily be fully realized in a given period.”

Thrift banks to request lower MLR after RRR cut

BW FILE PHOTO

THRIFT BANKS will ask the Bangko Sentral ng Pilipinas (BSP) to lower the minimum liquidity ratio (MLR) for the industry to 16%, as the reserve requirement ratio (RRR) cut takes effect later this month.

“I’m sure they will be open to that. Especially now that we have a 0% [RRR] already. So, let’s see. We will continue to probably request from them (the BSP),” Chamber of Thrift Banks (CTB) President and CARD SME Bank Vice-Chairperson Mary Jane A. Perreras told reporters on the sidelines of the CTB General Membership Meeting on Friday.

Last year the BSP rejected the thrift banking industry’s call to reduce the MLR, saying there was no need. It noted the 20% MLR was “appropriate,” as it ensures that thrift banks “have adequate liquid assets to withstand potential stress events while continuing to meet their clients’ funding needs.”

“During the pandemic it was at 16%. Now they have brought it back to 20%. So hopefully they can bring it back even if little by little,” Ms. Perreras said.

In April 2020, the BSP lowered the MLR for stand-alone thrift banks, rural banks and cooperative banks to 16% from 20% to help these lenders meet clients’ demand for funds during the pandemic.

This regulatory relief measure expired at the end of 2022, bringing the MLR back to 20%.

Ms. Perreras said the BSP could reconsider its earlier stance due to the expected increase in loan volume after the RRR cut takes effect.

The RRR for thrift lenders will be reduced by 100 basis points to 0%, effective March 28. The RRR is the portion of reserves that banks must hold onto to ensure they can meet liabilities in case of sudden withdrawals. When a bank is required to hold a lower reserve ratio, it has more funds to lend to borrowers.

“That (RRR cut) will increase the volume of loans, hopefully. Because there will be more liquidity that will be in the market. And we’re still also hoping that after the RRR is reduced to zero, the MLR could be reduced next,” she said.

Ms. Perreras said a reduction in MLR would further boost lending.

“We’re hoping that maybe that would be next. Because that is much better for us, especially for banks to be able to lend more… I’m sure they have reasons why they are keeping it at 20%. But we hope that they would also reconsider our request,” she said.

THRIFT LOANS
Meanwhile, Ms. Perreras said loans disbursed by thrift banks could hit around P900 billion this year, driven by the RRR cut and increased lending to small businesses and the agriculture sector.

“I think this growth will continue this year. Especially that now, we have a zero-reserve requirement (ratio). So, that loan portfolio, we expect that to be growing because we have more liquidity to do more loans outside,” she said.

In 2024, thrift banks disbursed loans worth P770 billion, Ms. Perreras said in a speech on Friday. This was around 15% higher than the P667.63-billion loans in 2023.

She told reporters that the sector’s net income and assets could grow by 6-7% this year.

However, cybersecurity issues continue to pose a risk for the sector.

“I think most of the banks are experiencing this, but because of the numerous solutions providers that are going to be very helpful for all the banks, not only the big banks but the big and the small banks, I think we will try to really fight this off,” Ms. Perreras said.

The thrift banking industry’s total assets grew by 6% to P1.1 trillion in 2024 from P1.04 trillion in 2023.

“Total capital reached P174 billion up by 10.7% from P157 billion. Capital adequacy ratio (CAR) is a strong 17.88%, very much above the 10% minimum required CAR. Nonperforming loan ratio remained manageable at 6.66%,” Ms. Perreras added.

This year, the CTB is looking at increasing loans for small businesses, as well as agricultural firms, which are typically affected by natural calamities.

“We have a lot of disasters and usually the affected sector is agriculture. So, while we are still working on development and making this a bigger sector. We will also look at the other sectors like the small and medium enterprises,” she said. — Aaron Michael C. Sy

Pharma industry eyes 9% growth this year

Illustration photo shows various medicine pills in their original packaging in Brussels, Belgium, Aug. 9, 2019. — REUTERS/YVES HERMAN/ILLUSTRATION

By Justine Irish D. Tabile, Reporter

THE PHILIPPINE pharmaceutical industry is targeting at least 9% growth this year amid the implementation of the universal healthcare law, an industry group said.

“The growth is estimated at 9%. The increase is driven by requirements in the implementation of the universal healthcare law,” Philippine Pharmaceutical Manufacturers Association (PPMA) President Higinio P. Porte, Jr. told BusinessWorld.

In particular, he said that the industry is banking on the implementation of the universal healthcare law’s outpatient drug benefit program.

“The outpatient drug benefit will be rolled out this year, wherein outpatients visiting health centers or public hospitals once given prescriptions will be provided vouchers that they can redeem in public hospitals and accredited drugstores,” he added.

The PPMA currently has 75 members, of which 45 are manufacturers and traders of drug products. Other members include major suppliers of raw and packaging materials, medical machines, and services.

Last year, the local pharmaceutical market was estimated at P285 billion, representing a 5% growth from the P270-billion market value in 2023.

If the 9% projection is realized, it means the local pharmaceutical market will reach P310 billion in market value this year.

However, only 34% of the estimated total market value in 2024 are products manufactured locally, according to Mr. Porte.

Although there are improvements in the approval of certificates of product registration (CPR), he said the lengthy process remains a concern for the sector.

“Although the delays in CPR and licenses approval significantly improved, about half of applications are beyond Citizens’ charter,” he said. “These delays have a great impact on the launches of new products both locally manufactured and imported.”

Sought for comment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the reason must be because of the economies of scale in other countries.

“The global supply chain [for pharmaceutical products] is strong. India, which is a source for many countries, already has economies of scale,” he said in a Viber message.

“They offer the best global technologies at the lowest possible cost or price, benefiting developing countries,” he added.

However, he said that there is an opportunity to increase the local share of manufacturing amid changes in the global supply chain and worldwide distribution.

“Let’s see if Trump’s higher tariffs, reciprocal tariffs, and trade wars would adversely affect the global supply chains and worldwide marketing or distribution,” said Mr. Ricafort.

Last month, US President Donald J. Trump said that he will impose 25% or higher tariffs on pharmaceutical imports with plans to increase it over the course of a year, along with his plans to impose tariffs on vehicle and semiconductor chip imports, Reuters reported.

The US is the largest market for most Indian generic drugmakers, accounting for 31% or $8.7 billion of the industry’s overall exports last year.

Mr. Ricafort said that the Philippines can be an attractive market for global pharmaceutical giants since it has the 12th largest population in the world.

“There are still opportunities to produce or manufacture in the Philippines for the local and export market, but that would require more investments in research and development and other high-tech facilities,” he added.

Last year, President Ferdinand R. Marcos, Jr. proposed the idea of establishing pharmaceutical economic zones in the Philippines to serve as one-stop shops to make the drug application process more accessible and efficient.

“We are still at the developing stage of our pharma parks, of which we have already established one in Tarlac,” said Philippine Economic Zone Authority (PEZA) Director-General Tereso O. Panga.

“In addition, PEZA looks forward to the groundbreaking of ZEN Industrial, the first Active Pharmaceutical Ingredient manufacturing facility in the Philippines,” he added.

Mr. Panga said that the primary objective of the pharma zones is to enable the Philippines to have a stronger pharmaceutical manufacturing footprint and increase access to affordable medicines.

World Bank says PHL needs reforms in education, health

Students walk to school, March 3, 2025. — PHILIPPINE STAR/RYAN BALDEMOR

THE PHILIPPINES should focus on reforms that will improve learning and health outcomes, as well as boost private sector competitiveness to sustain economic growth, a World Bank official said on Monday.

“I see the Philippines has good opportunities. But of course, [it] will also need to invest in reform efforts and continue boosting with reforms and opening up its market,” World Bank Country Director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu said on Money Talks with Cathy Yang on One News.

He said these reforms are needed for the Philippines to sustain growth amid global uncertainty.

He pointed to reforms that would improve health and learning outcomes, enhance competitiveness of the private sector, boost community resilience and address gaps in infrastructure.

The Philippines has seen low learning outcomes, especially after the strict lockdowns during the coronavirus disease 2019 pandemic.

“We see that at the age of 10… Almost 90% of them are having difficulty in comprehending what they read. This, of course, is an area that we are focusing very much on improving educational outcomes,” Mr. Mustafaoğlu said.

A World Bank report previously showed that around 91% of 10-year-olds in the Philippines cannot read and understand an age-appropriate text, which is known as “learning poverty.”

Mr. Mustafaoğlu also noted that a child born in the Philippines today will be able to achieve only around 52% of their productive potential by age 18 due to the lack of education and adequate health services.

The Philippines is seeking a $600-million loan from the World Bank to fund a project aimed at improving learning outcomes in public schools.

“We are focusing on improving regulatory business environments, its implementation, deepening financial markets that both provide access to finance but also stability, and also firm entry into the markets to create more product firms and help them grow,” Mr. Mustafaoğlu said.

He said the World Bank is also prioritizing funding projects that will support resilient communities amid climate risks, as well as projects that will address infrastructure gaps.

“We all know that the Philippines suffers from infrastructure gaps, both in terms of physical renewable energy and digital transformation,” Mr. Mustafaoğlu said.

Asked about the possible impact of the global trade war on the Philippines, he said the economy is still expected to be one of the top performers in the region.

“If you look at its growth performance over the past decade, it did very well and also it created jobs. It is a good opportunity for its future. It is a young population… We expect the Philippines to continue growing in the next years,” Mr. Mustafaoğlu said

“And in that sense, it is likely to achieve its upper middle-income status by 2026.”

The World Bank expects the Philippines to be the second-fastest growing economy in the Southeast Asian region until 2026.

The Philippines is expected to grow 6.1% this year, just behind Vietnam at 6.6% and ahead of Cambodia (5.5%), Indonesia (5.1%), Malaysia (4.5%), Laos (3.7%), Thailand (2.9%), and Myanmar (2%). — A.R.A. Inosante

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