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Governance is the tie-breaker

President Marcos signed the P6.793-trillion 2026 national budget on Jan. 5, signaling strong intent by vetoing P92.5 billion in unprogrammed appropriations. It was a decisive move to protect our fiscal trajectory and restore market discipline. However, capital markets act much like banks evaluating borrowers: they do not judge intent based on a single transaction. They judge consistency.

Institutional investors are now watching what comes next. Scrutiny is fixed on the remaining P150.9 billion in unprogrammed funds — specifically, whether its utilization will strictly adhere to the release conditions and transparency commitments laid out by the government. They want to know if technocratic efficiency can survive the weight of recurring political noise.

Six months into the unresolved flood control controversy, governance scandals continue to drag sentiment. While our investment-grade ratings remain intact, anchored by a commendable fiscal consolidation plan, both the World Bank and S&P Global Ratings have cited corruption concerns in trimming growth forecasts. Even as manufacturing purchasing managers’ index edged up to 50.2, Bangko Sentral ng Pilipinas data show foreign direct investment net inflows dropped 25.8% year on year to $320 million, dragged by lower debt flows.

These macroeconomic pressures are not unique to the Philippines. Elevated global interest rates, ongoing trade tensions, and regional supply chain shifts have also made capital more expensive and selective across emerging markets. We must also acknowledge the structural realities: Vietnam and Indonesia often beat us on “hard costs” like subsidized electricity and logistics.

But this structural disadvantage is exactly why governance is nonnegotiable.

The government’s recent pivot to shift its primary metric from investment pledges to actual “realization” is the correct strategic move. The private sector has long clamored for shovels in the ground rather than signatures on a press release. Likewise, operationalizing “green lanes” for strategic investments is a vital counter-move to our high operating costs. If we cannot be the cheapest place to do business, we must be the fastest.

Yet a green lane fails if it leads to a toll gate of corruption. Speed cannot bypass integrity. If an investor chooses Vietnam for cheap power, they might choose the Philippines for transparency, but only if we offer it. When fundamentals are tight, governance becomes the tie-breaker.

So what must happen?

The vetoed P92.5 billion, welcomed by FINEX and other business groups, must not stand alone. The remaining P150.9 billion must be guarded by strict adherence to clear and legal release “triggers,” independent validation before disbursement, and full public reporting. However, safeguards on paper are insufficient. To bridge the trust gap, we urge the adoption of a Unified Transparency Dashboard covering the entire P6.793-trillion budget, granting the public and markets real-time, granular data access from the National Treasury down to the last mile of implementation. Crucially, this standard of integrity must extend to the “Anti-Epal” provision under Section 19 of the 2026 General Appropriations Act, which must move from intention to strict enforcement to ensure public funds are never again treated as campaign war chests.

A CALL FOR SUSTAINED PARTNERSHIP
In response, the business sector must remain the vigilant partner it has always been. We are not passive observers or mere political watchdogs; we are active technical evaluators. This commitment underpins the FINEX thrust for 2026: to catalyze confidence by leading with capital, integrity, and innovation.

We stand ready to deepen our collaboration with government, multilaterals, and industries to advance fiscal prudence, institutional credibility, and a modern capital market. Specifically, we continue to support the operationalization of the shift from pledges to “realization.” We can provide data on the specific regulatory bottlenecks, ranging from local government unit permits to national requirements, that continue to stall capital flows. Beyond regulatory feedback, we are prepared to work in collaboration to identify and champion targeted investments that need prioritization, spanning education, healthcare, infrastructure, food security, climate resilience, and technology in underserved areas. Simultaneously, we strongly advocate for a broad initiative to reduce frictional costs in our capital markets. Just as importantly, we support the aggressive digitalization of the Bureau of Customs and Bureau of Internal Revenue to solve corruption as an efficiency problem. Furthermore, as the CREATE MORE Act is implemented, we must advocate for clear, unchangeable rules on incentives to end “interpretation risk.”

In all these areas, the private sector offers its expertise to benchmark performance, ensuring that policy intent translates into credible execution.

THE LONG GAME
The 2026 budget execution will be watched closely: by investors, capital markets, and business leaders deciding where to place their next ASEAN investment. The veto was the first move. What matters now is the disciplined, unglamorous work of credibility-building.

Capital flows favor three conditions: efficient allocation, transparent execution, and credible oversight. Every peso transparently accounted for sends a message: this government is serious, capable, and stable.

In markets, credibility is the only currency that compounds. Let’s ensure we are investing it wisely.

The views expressed herein are the author’s own and do not necessarily reflect the official policy or position of FINEX.

 

Carlo Enrico B. Lazatin is the 2026 president of the Financial Executives Institute of the Philippines (FINEX) and the Philippine Finance Association (PFA). He is the president and CEO of DES Financing Corp. He advocates for fiscal transparency and closer collaboration between policymakers and capital markets to strengthen the Philippines’ investment climate.

January power bills may climb on RE fees, weak peso

PHILIPPINE STAR/ MICHAEL VARCAS

MANILA ELECTRIC Co. (Meralco) expects a slight uptick in electricity rates in January, as higher generation costs driven by peso weakness and the start of renewable energy (RE) fee collection may outweigh lower spot market prices.

“We are still awaiting the billings from our power suppliers but very initial indications show that there may be minimal movement in the electricity rates this month,” Joe R. Zaldarriaga, Meralco vice-president and head of corporate communications, said in a statement on Thursday.

He said the depreciation of the peso is putting upward pressure on generation charges, as a significant portion of power supply costs is denominated in US dollars. The peso closed at P58.79 a dollar on Dec. 29, weaker by P0.145 from its P58.645 close on Nov. 28.

Generation charges typically account for more than half of a customer’s monthly electricity bill.

Meralco said it is hoping that lower spot market prices will help cushion the impact of higher generation costs. During the December supply period, the average price in the Wholesale Electricity Spot Market (WESM) fell 15.4% month on month to P2.98 per kilowatt-hour (kWh), driven by a higher supply margin.

Adding to the potential rate increase is the collection of the green energy auction allowance, which amounts to an additional P0.0371 per kWh. The charge will appear as a separate line item in customers’ electricity bills starting this month.

Last month, the Energy Regulatory Commission approved the application of the National Transmission Corp. to collect the allowance, which serves as an incentive for renewable energy projects that were awarded contracts under the government’s previous green energy auctions.

“Nonetheless, we remain optimistic that the decrease in demand and consumption of customers will help manage the electricity bills this January,” Mr. Zaldarriaga said.

In December, Meralco’s overall electricity rate declined by P0.3557 per kWh to P13.1145 per kWh from P13.4702 per kWh in November, due mainly to lower transmission and generation charges.

Meralco is the country’s biggest power distribution utility, supplying electricity to Metro Manila and nearby provinces. Its franchise covers 39 cities and 72 municipalities, serving about 8 million customers.

Beacon Electric Asset Holdings, Inc. is Meralco’s controlling shareholder. Beacon is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

Nick Reiner’s high-profile lawyer quits as public defenders take over; arraignment postponed

LOS ANGELES — A high-profile defense lawyer representing the son of slain Hollywood filmmaker Rob Reiner against charges that he murdered his parents abruptly withdrew from the case on Wednesday and was replaced, for the time being, by public defenders.

The surprise change in defense attorneys, which was not immediately explained, unfolded at a court hearing where Nick Reiner, 32, had been expected to enter a not-guilty plea in one of the most shocking celebrity homicide cases in Los Angeles history.

Instead, the arraignment was postponed for the second time in three weeks. Los Angeles County Superior Court Judge Theresa McGonigle rescheduled the proceeding for Feb. 23 and ordered the defendant to remain held without bail.

The development marked the latest twist to the disquieting demise of Rob Reiner, a beloved Hollywood figure who gained fame by co-starring in the 1970s hit television comedy All in the Family and later directed a spate of popular films. He was also a prominent Democratic Party activist and donor.

Alan Jackson, a former prosecutor turned criminal defense attorney whose clients have included a number of onetime show-business luminaries, including disgraced film producer Harvey Weinstein and actor Kevin Spacey, announced in court on Wednesday that he was quitting the case but gave no immediate reason.

“We feel we have no choice but to withdraw as counsel,” Mr. Jackson told the judge, adding that the public defender’s office was ready to step in to replace him, a move that the judge immediately approved.

‘PRINT THAT’
Speaking to reporters outside the courthouse after the hearing, Mr. Jackson did not elaborate on his withdrawal, but said of his former client, “pursuant to the law in California, Nick Reiner is not guilty of murder. Print that.”

District Attorney Nathan Hochman, appearing separately, countered: “We are fully confident that a jury will convict Nick Reiner beyond a reasonable doubt of the brutal murders of his parents.”

Public defender Kimberly Greene shed little additional light on the switch in defense teams, telling reporters that such changes were not uncommon. She added that she had spoken with Nick Reiner for about 30 seconds on Wednesday morning and that “he was understanding that there would be a change in counsel.”

A spokesperson for the Reiner family told Reuters by telephone: “They have the utmost trust in the legal process and will not comment further on matters related to the legal proceedings.”

Nick Reiner, dressed in brown jail garb, spoke only when the judge asked if he agreed to waive his right to proceed with the arraignment on Wednesday and have it postponed for nearly seven weeks.

“Yeah, I agree with that,” he answered.

He is charged with two counts of first-degree murder in the fatal knife attack on his parents — actor-director Rob Reiner, 78, and photographer-producer Michele Reiner, 70. Their bodies were found on the afternoon of Dec. 14 inside their West Los Angeles mansion. Prosecutors have said the pair was killed early that morning.

Authorities have disclosed few details about the circumstances of the crime and offered no explanation for what may have precipitated the killings. Autopsies found both victims died from “multiple sharp force injuries.”

If convicted as charged, Nick Reiner would face life in prison without the possibility of parole, or the death penalty.

The son was widely reported to have quarreled with his parents while the three were attending a holiday party hosted by comedian Conan O’Brien the night before the couple were found slain.

Nick Reiner, who has publicly acknowledged a years-long struggle with drug addiction and periods of homelessness, had lived in a guest house on his parents’ property. He was arrested near a downtown Los Angeles park several hours after their bodies were discovered.

The killings stirred an outpouring of dismay from Hollywood figures who Rob Reiner had worked with for decades as an actor, director, and screenwriter, as well as within Democratic Party circles, where he was active in various political causes.

He and his wife, married in 1989, were found slain hours before a planned evening gathering with former President Barack Obama and Michelle Obama, according to the former first lady. — Reuters

Stephen Miller: Portrait of Donald Trump’s ideologue-in-chief

STEPHEN MILLER — GAGE SKIDMORE/WIKIMEDIA

During a recent interview with CNN host Jake Tapper, the White House deputy chief of staff, Stephen Miller, laid out what appears to be the core of the new ideology driving US foreign policy: the notion that might is right. Or, as he put it: “We’re a superpower. And under President Trump, we are going to conduct ourselves as a superpower.”

Miller was referring to the Trump administration’s ambitions to take control of Greenland, if necessary by force. “We live in a world in which you can talk all you want about international niceties and everything else,” he told Tapper. “But we live in a world, in the real world … that is governed by strength, that is governed by force, that is governed by power.”

The 40-year-old Californian is one of Trump’s most trustworthy advisers and also one of the longest serving, having joined Trump’s first campaign in January 2016. While the president’s first administration had a revolving door of different appointees, many of whom who barely lasted a year, Miller is one of a handful of advisers to serve in both Trump’s first and second terms.

The two reportedly have a close working relationship, meeting daily along with Trump’s chief of staff, Susie Wiles, to go through Trump’s diary and review the executive orders to be signed. Having started out as a speechwriter, Miller’s position has evolved to focus more on interpreting the president’s ideas and executing them as policy initiatives. He is also understood to be a key liaison point between the White House and Capitol Hill, where he briefs lawmakers on Trump’s plans.

ORIGINS OF AN EXTREMIST
Miller’s extreme ideas did not come out of nowhere. In contrast to the vice-president, J.D. Vance and secretary of state, Marco Rubio, whose ideologies have evolved significantly to be in line with Trump’s agenda, Miller has had a long history of supporting radical America First style policies.

While in high school in Santa Monica, Miller is said to have complained about students having to pick up rubbish, saying janitorial staff should do it instead. As a 16-year-old he contributed an article to a local website, criticizing his fellow Hispanic students for a lack of language skills.

While at Duke University, where he studied political science, he contributed a number of articles to the college website, attacking multiculturalism and championing right-wing issues. He was also part of a group at Duke, Students For Academic Freedom, that criticized what they saw as political bias among faculty staff. These ideas would resurface in his attack on universities as a Trump administration official.

Moving to Washington, Miller first worked as an aide to then Republican representative Michele Bachmann before taking a job with Republican senator Jeff Sessions as press secretary. One of his main focuses was in developing critiques of immigration, collaborating with groups such as the Federation for American Immigration Reform and the Center for Immigration Studies.

This is where he developed the ideas that have formed the backbone of the Trump administration’s anti-immigration policies, including the now notorious family separation policy, by which children were often taken from their parents — who were subject to prosecution for attempting to cross the US southern border illegally. The policy was judged to be so harsh that the UN openly condemned it as cruel and unnecessary.

Immigration has been one of the main focuses of Miller’s work in Trump’s second term. He is understood to behind the decision to deploy immigration and customs enforcement agents en masse on the streets of US cities with power to detain and deport suspected illegal immigrants. Other radical policies bearing Miller’s hallmark are the plan to end the American policy of birthright citizenship, in contravention of the 14th amendment to the US constitution.

But then many of the policy ideas he espouses have brought Miller into conflict with American constitutional law. He has publicly declared that in some circumstances it should be permissible to suspend a person’s habeas corpus right to a trial before they can be imprisoned and he has questioned the power of the judiciary to hold the administration to account over executive decisions on matters such as deportations and due process.

PERSONALITY POLITICS
If relatively unknown during Trump’s first term, Miller’s profile has grown considerably in the first 12 months of the second Trump administration. A YouGov poll conducted in September 2025 found that 50% of respondents had heard of him and he had a popularity rating of 18%.

But if he is disliked and feared by many on Capitol Hill, as well as among the wider public, Miller has an ideological ally and staunch supporter in his wife Katie, who achieved instant fame on Jan. 3 after tweeting a map of Greenland with the US flag superimposed on it, accompanied by the word “SOON.”

Within hours the US president had voiced his intention to intervene in Greenland for reasons of national security and to secure access to its huge reserves of mineral resources.

Like her husband, Katie worked in the first Trump administration, at the department of homeland security. She once told a reporter that even the administration’s separation policy was not a problem for her, claiming: “DHS sent me to the border to see the separations for myself, to try to make me more compassionate, but it didn’t work.”

She now runs The Katie Miller podcast, which she established as a “place for conservative women to gather online.” Among other things, it provides a regular and uncritical platform for administration officials.

But the Millers’ growing public profile could prove to be a double-edged sword for the Trump administration. Despite saying out loud what many on the far-right of the Republican party want to hear, their apparent extremism is increasingly a focus for Trump’s critics. California’s democrat governor Gavin Newsom — generally thought to be preparing for a presidential run in 2024, has taken to referring to Miller as Voldemort, the personification of evil in the Harry Potter novels.

All of which is unlikely to resonate well with the independent voters that the Republicans desperately need to win over if they are not to lose vital ground in November’s midterm elections.

THE CONVERSATION VIA REUTERS CONNECT

 

Natasha Lindstaedt is a professor in the Department of Government, University of Essex.

February rate cut still possible despite December inflation uptick, analysts say

Bangko Sentral ng Pilipinas main office in Manila — BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) could deliver a sixth straight 25-basis-point (bp) cut next month to provide economic stimulus as inflation is likely to be within target this year despite an expected pickup.

“We continue to believe that the Monetary Board will cut its reverse repo rate by a further 25 bps at its meeting next month, in spite of the upside surprise in December CPI (consumer price index), as supporting growth remains more pressing,” Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco and Asia economist Meekita Gupta said in a commentary on Thursday.

“Governor Eli Remolona said on Tuesday that, as things stand, the bank is more inclined to hit the pause button in February, but at the same time he acknowledged that the door remains open for at least one more reduction. Note that the Q4 GDP (gross domestic product) report is due weeks before the next Board meeting and, should we see no real improvement from Q3’s abysmal 4% rate, then further easing would be almost a given,” they said, adding that they expect growth to have picked up to 4.7% last quarter.

Headline inflation picked up to 1.8% climb in December from 1.5% in November. For 2025, the CPI averaged 1.7%, the slowest clip seen in nine years or since the 1.3% in 2016. This was a tad higher than the Bangko Sentral ng Pilipinas’ (BSP) 1.6% full-year forecast but below its 2%-4% target.

Inflation may accelerate to 2.1% this year, “with risks tilted slightly to the upside,” Mr. Chanco and Ms. Gupta said. This is well below the BSP’s 3.2% forecast.

The Monetary Board will hold its first policy review for 2026 on Feb. 19. It has so far slashed benchmark borrowing costs by 200 bps since it began its easing cycle in August 2024, bringing the policy rate to an over three-year low of 4.5%.

BSP Governor Eli M. Remolona, Jr. said on Tuesday that they could consider another cut next month’s meeting, but noted that the current policy rate is already “very close” to where they want it to be, signaling an imminent end to their easing cycle.

He said only weaker-than-expected growth would prompt them to deliver more than one easing move this year.

Meanwhile, DBS Senior Economist for ASEAN Han Teng Chua sees room for two 25-bp reductions this year amid dismal economic prospects.

“Our baseline projection is for one more cut beyond February to the neutral rate of 4% to address downside risks to growth,” Mr. Chua said in a commentary.

However, expectations of further monetary easing have put pressure on the peso, especially with the BSP signaling that it would not heavily intervene in the foreign exchange market. On Wednesday, the peso fell to new record low of P59.355 per dollar. — Katherine K. Chan

Weak November job data deemed ‘alarming’

SMSUPERMALLS.COM

THE RISE in November unemployment indicates a loss of momentum sufficient to outweigh the pickup in holiday hiring, raising concerns about the health of the broader economy, analysts said.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the data indicate “a mixed labor market, not a collapse but a loss of momentum.”

He added that while unemployment fell slightly month on month from October on the strength of holiday hiring, “the fact that it is still higher than a year earlier, despite the seasonal boost, suggests underlying weakness.” 

“This reflects slower economic growth, weather disruptions, and cautious hiring, meaning seasonal demand helped only partially. The labor market is stabilizing aftershocks, but not strengthening, which is a warning sign if growth and investment do not pick up,” Mr. Rivera said.

The November 2025 Labor Force Survey confirmed a persistent pattern of fragile job generation, according to Sentro ng mga Nagkakaisa at Progresibong Manggagawa (SENTRO).

On Wednesday, the Philippine Statistics Authority (PSA) reported an unemployment rate of 4.4%, against 3.2% a year earlier.

“This outcome is particularly alarming because it comes at the start of the Christmas season, when stronger consumer demand should normally translate into more hiring,” the group said. “If jobs are weak during Christmas, the economy is clearly underperforming. The failure to generate robust employment during a peak season highlights the fragility of current growth.”

It added that Philippines continues to lag most ASEAN economies, which are reporting unemployment rates below 3%, leaving the Philippines an outlier alongside Indonesia.

“Domestic job creation is falling behind the region,” SENTRO said. 

Adding to the concern is the decline in job quality. Manufacturing continues to shed jobs, while wage and salary employment has slipped. More workers are moving into self-employment or into unpaid family work.

“We are not just creating fewer jobs — we are creating worse jobs,” SENTRO said, warning that this trend signals rising vulnerability and informality in the labor market rather than the expansion of stable, productive employment.

Jose Enrique A. Africa, executive director at think tank IBON Foundation, told BusinessWorld that the trend is “super-problematic.”

“Growth is slowing, the jobs market is weakening, and real incomes or wages are likely falling despite inflation moderating, all of which explains why poverty and hunger are growing,” Mr. Africa said.

National statistician and PSA undersecretary Claire Dennis S. Mapa said that while employment increased in the first 11 months of 2025, the rise is not as significant as last year’s growth.

On the December 2025 outlook, he told reporters that “possibly there will be a higher increase in employed persons compared to December last year. We will be seeing it in February.”

Asked whether the slowdown in infrastructure spending due to the flood control corruption scandal might have affected employment data, Mr. Mapa said there was no clear impact yet “based on the numbers.”

“We will see when we report the Q4 GDP on Jan. 29, because that will show the value of production in construction,” he said. — Erika Mae P. Sinaking

SEC OKs LUECO direct public offering

BW FILE PHOTO

THE SECURITIES and Exchange Commission (SEC) has approved La Union Electric Company, Inc.’s (LUECO) direct public offering (DPO), making it the second issuer to register under a framework for power generation and distribution firms.

In a Dec. 27 meeting, the Commission En Banc made effective LUECO’s registration statement covering 2.35 million shares, subject to the company completing remaining requirements, the SEC said on Thursday.

LUECO will offer up to 352,950 common shares to the public at P772 each, potentially raising P251.4 million. Proceeds will fund capital expenditures, business expansion and facility and equipment upgrades. The subscription period runs from Jan. 12 to Jan. 16, with shares to be issued by Feb. 6.

Penta Capital & Investment Corp. is serving as the sole underwriter.

LUECO’s franchise covers San Fernando City and the La Union towns of Bauang and San Juan. Its distribution system includes two substations: Bauang at 20 megavolt-amperes (MVA) and Poro at 67.5 MVA as of end-2024.

The offering complies with the Electric Power Industry Reform Act, which mandates that generation companies sell at least 15% of common shares to the public. — Alexandria Grace C. Magno

Disney says Zootopia 2 is China’s top Hollywood film ever

Zootopia 2 (2025)
Zootopia 2 (2025)

WALT DISNEY Co. said Zootopia 2 has overtaken 2019’s Avengers: Endgame to become the biggest Hollywood film ever released in China when measured in local currency.

The animated sequel has grossed about 4.25 billion yuan, the company said in a statement on Monday. That translates into $610 million. It was released in theaters on Nov. 26 in China, the world’s second-largest movie market.

The film’s breakout performance has turned into a broader cultural moment in the country. Fans have flocked to cinemas carrying Zootopia-themed merchandise — from plush toys to handbags — while some screenings have even welcomed moviegoers with pets. Zootopia 2 reclaimed the top spot at the Chinese box office over the first weekend of 2026, dethroning Disney’s Avatar: Fire and Ash which opened Dec. 19.

A surge in demand for animated blockbusters including Zootopia 2 and local hit Ne Zha 2 has helped lift China’s overall box-office revenue in 2025 by 20% to 51.8 billion yuan, even as other releases struggle to attract audiences.

Animated films generated nearly half of last year’s box-office revenue, with 57 titles grossing more than 25 billion yuan, according to a report by Maoyan. While repeat viewings by fans helped boost sales for Ne Zha 2 and Zootopia 2, local films earning less than 1 billion yuan saw a sharp decline, the report said.

Family-friendly films are also doing well in the US, with A Minecraft Movie from Warner Bros. Discovery, Inc. and Disney’s Lilo & Stitch ranking in the top two spots domestically. — Bloomberg

How a scandal is hitting the Philippines’ star economy

STOCK PHOTO | Image from Freepik

THE Philippines’ economy has often struggled to get credit for its solid performance in the past decade. Now, a massive corruption scandal is sapping growth at precisely the wrong time and making for an unhappy start to the year.

With Asia likely to find the going harder in 2026, Manila needs to find its footing quickly. As officials try to frame their message, terms like “goldilocks” and “sweet spot” ought to be banished. When the central bank chief uttered those words in August, the outlook was promising: inflation was receding, the expansion was ticking along, and interest rates were on the way down. Growth was headed for another respectable annual increase and poised to outperform Malaysia, Singapore, Indonesia, and even China.

That narrative has been undermined by revelations that billions of dollars allocated to flood control projects had been misused, and in some instances, vanished. Now, the task before the Philippines is to restore confidence — if policymakers and their political masters can. The scandal has sparked outrage across a nation highly vulnerable to deadly typhoons and flooding.

Testimony at a Senate inquiry in September suggested widespread collusion between government engineers, politicians, and private building contractors, who allegedly pocketed hefty kickbacks. Much of the state-funded infrastructure was found to be defective, or, in some cases, not even built. Losses may amount to more than a trillion pesos ($17 billion), according to one official estimate. At that magnitude, it would surpass the $10 billion in ill-gotten wealth allegedly amassed by the late Ferdinand Marcos — father of the current president — and his cronies during his dictatorship.

Forty years into the democracy era that followed the elder Marcos’s ouster, Filipinos vote freely for leaders. But they failed to shake an underlying problem. The archipelago routinely scores poorly in global corruption indices, sharing the neighborhood with places like Panama and Sierra Leone.

That alone didn’t stop years of rapid economic development, especially since the turn of the century. It sometimes looked like commerce and politics, the latter dominated by jockeying among a handful of powerful families, were on different planets. The point was that things were generally getting better. While the country missed the 1980s and 1990s’ boom in manufacturing supply chains, it plowed ahead in services.

And when it comes to shortcomings in governance, the Philippines is hardly the only sinner. Despite some improvement from the Suharto era, when corruption in Indonesia reached epic levels and the autocrat’s children controlled vast monopolies, malfeasance still bedevils the nation. Former Malaysian Prime Minister Najib Razak sits in prison for crimes related to investment fund 1MDB. China and Vietnam launched crackdowns on wrongdoing.

But it isn’t often that you see such an impact as the fracas that’s rocking the Philippines. Growth slowed dramatically in the third quarter. Gross domestic product rose just 4% in July to September, compared with a year earlier, well down from the 5.5% clocked in the prior three months. Spending slumped, and investment and construction contracted. Officials attributed the downdraft to stricter guidelines before cash was released for public works.

While it’s commendable that contracts get greater scrutiny, business confidence has been shaken. The peso was one of the worst performers last year, weakening about 2% against the dollar, in contrast to the strong gains notched in Malaysia and Thailand. The benchmark index fell more than 7%.

Will any of this improve in 2026? The starting point isn’t great. Overall, growth in Asia will probably slip to 4.1%, according to the International Monetary Fund, from an estimated 4.5% last year as the region faces challenges from US tariffs. Times will feel harder in the Philippines, which has become accustomed to doing better than regional peers. It was a star coming out of the pandemic, clocking an expansion of almost 8% in 2022, the year Ferdinand Marcos, Jr. was elected.

The president inherited a thriving economy. At the time of his victory, there were fears that the country would slide back into authoritarian rule and turn away from the US, with which it has a close security partnership. Those concerns were misplaced. But this scandal will be a blight on his record.

As 2025 drew to a close, Filipinos marked the passing of Juan Ponce Enrile, a former defense minister and political chameleon who turned against Marcos’s father. In that rupture, Enrile joined with then army chief Fidel Ramos, who later served as president. Obituaries of Ramos, who died in 2022, pointed to economic reforms that countered the “sick man of Asia” epithet that had dogged the nation.    

Every economy catches cold. But the country’s contemporary ills come at a particularly inopportune moment.

BLOOMBERG OPINION

Peso rebounds on ‘somewhat hawkish’ BSP hints

PHILIPPINE STAR/JOVANNIE LAMBAYAN

THE PESO on Thursday recovered from its all-time low close as market players digest the latest policy signals from the Bangko Sentral ng Pilipinas (BSP) chief.

The local unit closed at P59.17 versus the greenback, jumping by 18.5 centavos from its record-low P59.355 finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s session stronger at P59.30 versus the dollar, which was already its worst showing against the greenback. Its intraday best was at P59.01.

Dollars traded increased to $1.648 billion from $1.317 billion on Wednesday.

The peso was supported by “somewhat hawkish” sentiment from BSP Governor Eli M. Remolona, Jr., Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The dollar-peso ended lower on higher buying interest for the peso as market players gauged the recent statement from the BSP signaling the end of their easing cycle,” a trader likewise said by phone.

On Tuesday, Mr. Remolona said they could consider another rate cut at the Monetary Board’s Feb. 19 meeting but noted that the current policy rate of 4.5% is already “very close” to where they want it to be, signaling that their easing cycle is about to end.

The BSP has cut rates by 200 basis points since August 2024.

For Friday, the trader sees the peso moving between P59 and P59.30 per dollar, while Mr. Ricafort said it could range from P59 to P59.25. — Aaron Michael C. Sy

When marital strife lands in HR’s lap

I’m the human resources (HR) manager at a medium-sized enterprise. This week, an employee’s wife claims her cheating husband is withholding financial support. She requests that the husband’s salary be paid directly to her. I declined the request for legal reasons. Now, I’m agonizing with that decision as I reflect on sympathizing with the wife. Please advise. — Red Lantern.

I’m not sure how you declined the wife’s request. But you’re right. That’s a legal issue. But what about the ethical component? In today’s complex world of modern employment, HR often finds itself acting as much more than just a recruiter, engagement promoter, or policy enforcer, among others.

From time to time, the personal crisis of an employee’s private life spills into the professional realm. This includes a marital dispute, with an aggrieved spouse claiming the employee’s salary. This is an ethical tightrope walk that requires a strictly policy-driven management response that most companies don’t have.

So, how do we resolve the matter for your future guidance? First things first. Anyone in HR should understand the absolute separation between a worker’s marital life from their employment contract. This is one reason why many organizations don’t require the marital status of job applicants to be disclosed prior to employment.

Doing so could be seen as discrimination under labor regulations, or violations of privacy, or fair employment practices.

ABSOLUTE SEPARATION
The basic principle that must guide HR is the absolute separation of an employee’s marital issues from their employment contract. The company has a contract with the employee, the husband, to compensate him for work rendered. Therefore, the salary is the property of the individual who performed the labor.

The wife’s emotional agony — her husband’s infidelity and financial distress — is deeply valid from a human perspective, but it is legally irrelevant to the employer-employee relationship. HR is not a family court, morality advocate, or marriage counselor.

Its mandate is strictly defined by employment law and company policy.

The single most critical factor in this scenario is the law governing the payment of wages. As a general rule, an employer is legally obligated to pay an employee’s full wages directly to that employee unless there’s a court-issued garnishment ruling, legal support order, government-mandated deductions, or any legally valid assignment of wages.

That means you’re legally right in declining the employee’s spouse if you gave those reasons. Doing otherwise would expose your organization to significant risks, including breach of employment contract.

I’m not sure how you declined the wife’s request. However, HR must project an unequivocal, yet sensitive refusal based on legal constraints, including the Data Privacy Act. You must explain that the company is legally barred from intervening in an employee’s personal finances.

In other words, HR must decline the wife’s request but do it respectfully.

HANDLING THE ALLEGATIONS
The husband’s alleged infidelity must be handled separately and with extreme caution. Unless the cheating involves a coworker and has led to a demonstrable disruption of the workplace — such as creating a hostile work environment, violating anti-harassment policies, or breaching a conflict-of-interest rule (like an affair with a direct report), it is generally considered a private matter.

HR must resist the temptation to investigate issues of morality. Doing so sets a dangerous precedent, intrudes upon employee privacy, and distracts from the company’s core business. HR may want to explore the following key questions:

Did the husband violate the company’s Code of Conduct? Has his alleged infidelity negatively impacted his job performance or the work environment? If the answer to these questions is no, the husband’s infidelity remains off-limits for disciplinary action. Therefore, a well-managed HR response includes the following:

One, ensure strict confidentiality. You, as the HR professional, must ensure the matter is not discussed with anyone else within the company, including the husband’s boss, unless absolutely necessary for legal compliance or to alert management on its adverse effect on work performance.

Two, direct the matter to legal channels. HR may advise the wife to seek proper legal intervention to obtain the necessary court order that would grant her access to his wages. This reframes the problem from an HR issue to a legal one.

Three, offer counseling to the husband. The husband may be given optional access to the company’s legal or counseling assistance program to help him manage the personal stress and financial fallout without forcing HR to act as a therapist or legal advisor.

In conclusion, HR must be ready to act on any matter involving a cheating employee and a salary dispute if such private conduct spills into workplace violations. This is a reminder of the blurry line between an employee’s private life and professional obligations. The path forward is clear, though difficult — legal compliance must always outweigh sympathy.

 

Consult your workplace issues with Rey Elbo for free. E-mail elbonomics@gmail.com or DM him on Facebook, LinkedIn, X or via https://reyelbo.com. Anonymity is guaranteed.

November misery index drops to 3-month low

The Philippines’ adjusted misery index slid to 15.8% in November, the lowest in three months when it logged 15.7% in August. This reflected easing inflation and underemployment rates during the period. The index, which now incorporates adjusted underemployment rate* alongside inflation and unemployment rates, offers a broader measure of economic discomfort. Originally developed by economist Arthur Okun, the misery index serves as a proxy for economic distress. A lower reading typically signals better economic health, though structural issues may still persist beneath the surface.

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