How PSEi member stocks performed — June 16, 2023
Here’s a quick glance at how PSEi stocks fared on Friday, June 16, 2023.
PSEi may go up with expected BSP rate pause
By Adrian H. Halili
PHILIPPINE share prices may rise this week with markets expecting the central bank to keep the key rate steady at its policy meeting on Thursday.
“The local market remains at attractive levels and we may still see bargain-hunting next week that can help it extend its gains,” Japhet Louis O. Tantiangco, senior research analyst at Philstocks Financial, Inc., said in a Viber message at the weekend.
The Bangko Sentral ng Pilipinas (BSP) is widely expected to keep the policy rate unchanged at its meeting on Thursday.
“If the policy rates are unchanged, it may help the market advance further,” he said. “Investors are also expected to watch out for other catalysts that would point to a positive outlook for our macroeconomic and corporate fundamentals.”
The benchmark Philippine Stock Exchange index (PSEi) went up by 0.72% or 46.92 points to end at 6,508.34 on Friday. The broader all-share index rose by 0.66% or 23.04 points to 3,467.11.
Week on week, the PSEi inched up by 0.02% or 1.19 points.
Most sectoral indices advanced, led by services which rose by 2.11% or 31.62 points to 1,529.15. Property went up by 1.76% or 46.38 points to 2,668.36, while industrials gained 0.5%or 46.01 points to 9,247.32. Holding firms added 0.44% or 28.78 points to 6,449.43.
On the other hand, mining and oil slid by 0.31% or 31.46 points to 9,826.50, while the financial index fell by 0.13% or 2.52 points to 1,843.21.
The index advanced for a second straight day on Friday as markets anticipate a pause on local policy rates on June 22 to match the US Federal Reserve’s rate pause, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.
All 15 economists in a BusinessWorld poll held last week predicted the BSP to keep the policy rate at a near 16-year high of 6.25%.
The BSP’s policy-setting Monetary Board paused its tightening cycle last month after raising rates by 425 basis points since May last year.
The Fed kept interest rates unchanged at 5-5.25% on June 15, but signaled that borrowing costs could still rise by as much as half-a-percentage point by year-end amid a strong US economy and inflation that has not cooled as much.
The next Federal Open Market Committee meeting is set for July 25 and 26.
Stock prices could go up as traders try to find bargains so as not to miss out, Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message.
Mr. Tantiagco placed the local bourse’s immediate support at 6,400 and resistance at 6,600, while Mr. Arce put support at 6,430 and resistance at between 6,523 and 6,593.
Peso may trade sideways after 2-week high close
THE PHILIPPINE PESO is expected to trade sideways this week ahead of the central bank’s policy setting meeting on Thursday.
It strengthened on Friday as the dollar declined against most currencies, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message at the weekend.
The dollar index , which measures the currency against a basket of other major currencies, was last down by 0.8 to 102.11. Earlier in the session, the index dropped to 102.08, a five-week low, Reuters reported.
Mr. Ricafort said recent signals that the BSP could begin cutting the key rate by the first quarter of next year had also boosted the peso.
“With inflation starting to go down, the outlook is that possibly next year, there could be a shift in the (BSP) monetary policy stance,” BSP Deputy Governor Francisco G. Dakila, Jr. said on Thursday.
The peso closed at a two-week high of P55.86 a dollar on Friday, strengthening by 8.5 centavos from a day earlier, data from the Bankers Association of the Philippines’ website showed.
It was the peso’s best close since May 26. Week on week, the currency appreciated by 19 centavos.
The peso opened at P55.82 a dollar, weakened to as much as P55.888 and appreciated to as much P55.73.
Dollars traded rose to $969.15 million from the $729.5 million on Thursday.
Mr. Ricafort expects the peso to trade sideways before the BSP policy meeting.
All 15 economist in a BusinessWorld poll last week expected the central bank to keep the key rate at a near 16-year high of 6.25% on June 22.
This could be the second straight meeting that the BSP will leave interest rates untouched. The central bank has raised borrowing costs by 425 bps since May last year.
A currency trader said the peso might weaken against the dollar as the BSP mirrors the US Federal Reserve’s signal that it could still tighten policy amid a strong US economy and inflation that hasn’t cooled as much.
The Fed paused its aggressive tightening campaign at its meeting last week after hiking policy rates by 10 times straight. It has raised borrowing costs by 500 bps to 5-5.25%.
However, at a news briefing at the end of the policy meeting, Fed Chairman Jerome H. Powell signaled there could be two more 25-bp rate increases this year as US inflation remains sticky.
Back home, inflation for May cooled to 6.1% from 6.6% in April, though it was faster than 5.4% a year earlier.
This was the 14th straight month that the consumer price index was above the central bank’s 2-4% target for the year.
The trader expects the peso to trade at P56 to P56.30 a dollar this week, while Mr. Ricafort expects it to trade from P55.55 to P56.05. — Aaron Michael C. Sy
Business chamber bats for regulatory streamlining to realize RCEP potential
THE Philippine Chamber of Commerce and Industry (PCCI) said more government support is needed in the form of streamlined regulation and infrastructure if businesses are to maximize the benefits of the Regional Comprehensive Economic Partnership (RCEP) trade deal.
“In joining the RCEP, we have to work hard to maximize our gains from it. We have to improve our competitiveness by streamlining regulatory compliance and ensuring that government business services are in step with these streamlined procedures,” PCCI President George T. Barcelon said in a statement on Sunday.
“Inputs to production such as transport, logistics and power must be lowered to a competitive level at par with our ASEAN neighbors. Telecom and internet connectivity must be made available in all areas of the country,” he added.
RCEP officially took effect for the Philippines on June 2. The trade deal, touted as the world’s biggest free trade agreement, involves the ten ASEAN members, Australia, China, Japan, South Korea, and New Zealand.
Mr. Barcelon said work needs to be done in terms of product standards and quality laboratories if agriculture and manufacturing are to benefit from RCEP.
“For the Philippines, laboratories to test quality standards should be put up in areas that are readily accessible and available to producers,” Mr. Barcelon said.
“Governments of the RCEP member-countries must be able to work on reducing non-tariff barriers, or at least agree on a uniform quality standard for food and other manufactured products across the region,” he added.
Mr. Barcelon said the National Government, the departments of Agriculture and Trade and Industry (DTI) should allocate more funding for the agriculture and food industries and to high-value crops amid the lowering of tariffs with the onset of RCEP.
“DTI’s important role in promoting our country as an investment destination and export promotion must be supported with more budget and resources,” Mr. Barcelon said.
“Further opening market access for export commodities and skilled professionals will have a beneficial effect across the economic sectors — from the agri-industry to manufacturing, to the services,” he added. — Revin Mikhael D. Ochave
Meat imports up 3.78% in first 5 months
MEAT imports rose 3.78% year on year in the five months to May, driven by higher shipments of chicken, buffalo meat, lamb, and duck, according to the Bureau of Animal Industry (BAI).
The BAI said import volume amounted to 478 million kilograms of meat and meat products in the first five months.
Chicken imports, which accounted for 36% of meat imports overall, totaled 172.62 million kilos, up 32.25% from a year earlier.
Some 55.18% or 95.26 million kilos came in the form of mechanically deboned meat (MDM). Chicken MDM imports rose 293.89% during the period.
Brazil supplied 99.57 million kilos of chicken, followed by the US (58.20 million) and Canada (6.68 million).
The Department of Agriculture recently lifted a ban on poultry products from the Netherlands and the US state of Minnesota after these locations were declared free of H5N1 Highly Pathogenic Avian Influenza.
Buffalo meat imports rose 41.56% year on year to 22.67 million kilos, while lamb imports rose 39.15% to 384,417 kilos. Duck imports rose 581.42% to 139,753 kilos.
Lower import volumes were recorded for pork, beef, and turkey.
Pork imports — mostly offal and pork cuts — fell 8.66% year on year to 229.20 million kilos. This is equivalent to 47.92% of all meat imports.
Spain was the primary source of pork with 66.65 million kilos, followed by Canada (36.60 million kilos) and Brazil (31.26 million kilos).
Imported beef and turkey meat also dropped 15.38% to 53.21 million kilos and 64.23% to 89,889 kilos, respectively.
Brazil supplied 148.61 million kilos of meat, followed by the US (78.52 million), Spain (67.22 million), and Canada (43.72 million).
Last month, the Meat Importers and Traders Association asked the government to impose a 5% tariff across the board on all meat and edible offal imports for the next five years.
The group proposed the 5% tariff as the executive order (EO) setting the current tariff rates for imported pork is set to expire by the end of 2023, at which time they would revert to 30% for shipments within the minimum access volume (MAV) quota and 40% for shipments in excess of the quota.
At present, the pork tariff is set at 15% for MAV shipments and 25% for those in excess of the MAV, following EOs issued by presidents Rodrigo R. Duterte and Ferdinand R. Marcos, Jr. — Sheldeen Joy Talavera
PEZA says Cebu investments in excess of P275 billion to date
THE Philippine Economic Zone Authority (PEZA) said investments in Cebu have exceeded P275 billion to date.
PEZA Director General Tereso O. Panga told the annual general membership meeting of the Mactan Export Processing Zone Chamber of Exporters and Manufacturers on June 14 that PEZA locators in Cebu have generated P275.3 billion worth of investment to date, $5.9 billion worth of average exports a year, and created 232,076 jobs.
Mr. Panga added that PEZA locators in Mactan island, such as those in the Mactan Economic Zone (MEZ) I and II, Cebu Light Industrial Park, Jpark Island Resort and Waterpark, and Mactan Newtown, remitted P267 million in tax payments last year from the 2% gross income tax share of the Lapu-Lapu City government.
“With this continuous positive performance, we are anticipating an upturn in the economy especially within the province. At the same time, we are looking at welcoming strategic and big-ticket investments from various industries to locate in Cebu,” Mr. Panga said.
Mr. Panga said new investment pledges in Cebu province include Autoliv Cebu Safety Manufacturing, Inc., which is planning an expansion project at a 2.6-hectare area in northern Cebu, as well as Taiyo Yuden Philippines, Inc., which has shown interest in registering a new and expansion project in MEZ.
For 2023, the PEZA targets 10% investment approval growth from a base of P140.7 billion worth of approved investment last year.
PEZA-approved investments in the first five months rose 153.74% to P48.027 billion.
Meanwhile, Mr. Panga told reporters last week in Taguig City that the PEZA is asking the Fiscal Incentives Review Board (FIRB) to issue a resolution that would allow locators to offer work-from-home (WFH) arrangements for up to 30% of their employees.
Mr. Panga added that the Labor department is set to issue an official position paper supporting the PEZA’s proposal.
“We are arguing that we be allowed as much as 30% (WFH) since that is something permissible. Our locators are really for hybrid workplaces,” Mr. Panga said.
“We just need the FIRB resolution. I don’t think we will need a law to allow us to do WFH because what we are proposing is something permissible. You have to keep pace with the economies that fully support WFH,” he added.
In September, the FIRB issued a resolution that allowed PEZA-registered IT and business process outsourcing firms to implement 100% WFH and still enjoy fiscal incentives if they shift their registration to the Board of Investments. — Revin Mikhael D. Ochave
DICT, PPP Center sign deal to collaborate in developing infotech projects
THE Department of Information and Communications Technology (DICT) and the Public-Private Partnership (PPP) Center of the Philippines have signed an agreement to support the development of ICT infrastructure and projects.
The memorandum of agreement signed on Wednesday is expected to fast-track ICT infrastructure development and project implementation.
The two sides agreed on a framework for collaboration in terms of project assistance, capacity building, and formulation of PPP policy and guidelines for ICT, the PPP Center said in a press release.
“Catalyzing digital acceleration and bridging the digital divide require tremendous collective effort. But we need not take the digital transformation journey alone,” Information and Communications Technology Secretary John Ivan E. Uy said in a statement.
“Joining forces, we will deploy services that will create more opportunities for Filipinos, to ensure that no one gets left behind,” he said.
At present, the PPP Center is helping the department review PPP project concept notes and proposals such as the Fiber-enabled Free Public Internet Access Project and the Design, Build and Operate of an underground fiber optic conduit network at the Philippine National Railway from San Fernando, La Union to Sorsogon.
The PPP Center and DICT have also been working on the Regional Ring project which aims to provide government network access at all government agencies and public places in Marinduque and Ilocos Norte.
“DICT will also extend their assistance to implementing agencies that are developing IT projects, and to help them evaluate unsolicited proposals,” PPP Center Executive Director Ma. Cynthia C. Hernandez said. — Justine Irish D. Tabile
Substandard steel bars destroyed
THE Department of Trade and Industry (DTI) ordered the destruction of P18.8 million worth of substandard steel bars after they were found non-compliant with government standards.
In a statement over the weekend, the DTI said that 136 bundles of deformed steel bars were cut to pieces on June 7-9 at a steel mill in Laguna.
The Bureau of Philippine Standards (BPS) had conducted a surprise factory audit on March 20. The DTI did not identify the company involved.
“After the products were cut into non-commercial lengths, the same were transferred to the company’s smelting facility for reprocessing,” the DTI said.
The DTI said that samples taken from the steel bars showed that the products failed to meet Philippine National Standard 49:2020.
“Sub-standard products must be destroyed immediately to ensure that these products are not distributed in the market for the purchase of unknowing consumers,” Trade Secretary Alfredo E. Pascual said.
“Our country is located within the Pacific Ring of Fire and the DTI needs to be extremely vigilant and has to intensify our surveillance, monitoring, and enforcement of technical regulations for construction materials, especially for cement and steel products,” he added.
According to the DTI, the BPS conducted the surprise audit after the reported sale of steel bars under an unregistered logo. — Revin Mikhael D. Ochave
How sustainable supply chains enable business transformation
Supply chains underscore sustainability and serve as the core of an organization’s ESG-related goals and objectives. With this in mind, supply chain leaders are taking the necessary measures to safeguard resources while identifying new opportunities to drive results.
EY teams conducted a global supply chain survey, the EY Supply Chain Sustainability 2022 Report, which polled respondents from countries like Argentina, Canada, and the US for insights from the retail, technology, and agriculture sectors. The findings indicate that several executives have long-term goals for sustainable supply chains, but only some have the acumen, programs, and technology to assess their progress. Some challenges included costs and a need for a strong business case to justify expenditures.
According to the US Environmental Protection Agency, more than 90% of an organization’s greenhouse gas emissions and around 50% to 70% of its operating costs are attributed to supply chains. As such, executives can clearly realize significant sustainability-related benefits to greening their supply chains in the long term.
The study discovered that eight in 10 supply chain leaders are gearing their initiatives toward more sustainable operations. They are increasing efforts toward decarbonization, proper use of natural resources, ethical sourcing, and fair trade. They are also trying to increase innovation, lessen risk, and realize a greater return on investment for ESG-related initiatives.
In the Philippines, many manufacturers, retailers, and local governments have taken steps to reduce plastic use in favor of more environmentally friendly materials. For example, several cities have implemented ordinances banning the distribution and/or use of single-use plastics for onsite dining. Several cities have also banned the distribution of plastic bags in their establishments.
With the Philippines counting as a significant contributor to the plastic problem, accounting for 750 thousand metric tons of plastic waste entering the ocean in 2010, the Philippine Alliance for Recycling and Materials Sustainability (PARMS) and its member companies have committed to the Zero Waste to Nature, Ambisyon 2030 (ZWTN 2030) initiative. The initiative aims to divert waste from landfills by recycling materials and resources, supported by strategies and a roadmap with specific implementation timelines and targets to ensure that none of the industrial or post-consumer packaging waste generated by PARMS members ends up in nature by 2030.
In addition, with the government’s passage of Republic Act No. 11898, also known as the Extended Producer Responsibility (EPR) Act of 2022, obliged enterprises established their own EPR programs for the EPR registration deadline in February. With the Act now being implemented, there is greater anticipation that the country will see a significant increase in its overall recycling rate. While the EPR Act initially covers plastic packaging, the coverage will gradually expand to encompass other materials as well.
This article will delve deeper into the most salient insights from the report with the aim of supporting executives in achieving their sustainability-related goals.
LACK OF TRANSPARENCY AND ROI-BACKED SUSTAINABILITY EFFORTS
The demand for supply chain-related visibility has increased with the burgeoning expectations of employees, regulators, and stakeholders. Consumers are becoming more mindful of ESG-related matters, such as sustainable sourcing, organizational health, and work conditions.
The report showed that supply chain visibility was a top priority that year for executives, compared to it being a second priority for previous years. In addition, there is a crucial need to assess risks and plan for disruptions and crises. However, only 37% of respondents reported end-to-end supply chain visibility.
Collaboration programs, data analytics, and digital tools can help businesses set KPIs and establish overall governance. Organization-wide visibility is a comprehensive initiative, and companies can use it to assess program effectiveness, track resources, and understand labor conditions. Management can also capitalize on technology to identify and home in on operational efficiencies.
Notably, the report revealed that 33% of organizations lack a business case for sustainable supply chains, whereas almost half of the respondents reported that their companies have difficulties in measuring sustainability-related returns. Consequently, lacking a solid business case could lead to a shortage of financial support for long-term efforts.
FOCUS ON END-TO-END SUPPLY CHAIN TRANSFORMATION
As much as 61% of businesses reported that cost savings and efficiency were primary motivators for undergoing supply chain sustainability initiatives. Even so, financial gain was not the only benefit.
According to Andrew Winston from a Harvard Business Review Whiteboard Session, organizations should prioritize four elements to concretize return on investment for supply chain sustainability:
1. Cost reduction. Improve operational efficiency, lessen material waste, and minimize carbon footprint.
2. Revenue growth. Assess how sustainable supply chains influence market share, profitability, and stock price.
3. Supply chain risk management. Create long-term sourcing strategies and manage compliance and regulatory risks.
4. Intangibles. Delve into sustainability’s relationship with brand reputation, customer loyalty, and talent retention.
Moreover, 55% of supply chain executives expect improved operational risk management in the next three years, whereas 31% already reported more efficiency and productivity. Regarding long-term returns, 54% of respondents said they expect an increase in share price or other benchmarks of shareholder value.
TAILOR-FIT SUSTAINABILITY-RELATED INITIATIVES
Executives must determine how sustainable supply chains fit into their business strategies. Businesses can structure their efforts by identifying how supply chains enable their goals. Deploying technological capabilities to improve visibility can boost supplier and stakeholder engagement. Organizations can broaden their RoI metrics to include intangible impacts and sustainability results.
Given the ever-changing nature of the global market, companies need to go beyond standard business-case drivers such as customer loyalty, market share, and revenue. Enterprises should adopt an end-to-end approach, focusing on cross-functional collaboration, planning, and distribution to identify new opportunities.
C-LEVEL CONSIDERATIONS
Around 10% of respondents stood out in terms of progress in sustainability-related areas, and their organizations are realizing considerate benefits. One thing they have in common is their considerable focus on transparency. More than half (57%) of this group have public-facing sustainability goals. In terms of material gain, almost half of these trailblazing leaders have already reported a better employee experience.
Compared with other respondents, these executives are reaping financial gains despite focusing less on cost-saving measures. At least 25% have reported increased revenue from their supply chain sustainability initiatives, while 43% expect an increased share price in the next three years. Lastly, the data show they are more likely to use sustainable supply chains to protect their corporate brand.
Supply chain sustainability has become increasingly important as global market expectations evolve. Organizations are starting to identify financial and nonfinancial opportunities of ESG-related efforts, and executives who know which KPIs to prioritize are already reaping the benefits.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
Benjamin N. Villacorte is a partner from the Climate Change and Sustainability Services team of SGV & Co.
Hosting Afghans in transit to US not a security threat to PHL — analysts
By Beatriz Marie D. Cruz, Reporter
A REQUEST from the American government for the Philippines to host Afghan nationals while their US immigration applications are being processed should not be seen as a security threat but as a humanitarian act by a country that prides itself in its hospitality, analysts said on Sunday.
Chester B. Cabalza, founder of the Manila-based International Development and Security Cooperation, said “receiving Afghans as a host country for their Special Immigrant Visas should not be construed as tall order from the Americans,” noting that the Philippines is a treaty ally of the US.
“As part of the international community, we help other nationalities in distress as long as they will not become a threat to national security,” he said via Messenger chat.
“It will not become a threat as long as we take control of the situation and enforce our own laws on them. We have done the same thing with the Chinese, Israelites and Vietnamese before in their diasporic struggles.”
Hansley A. Juliano, a political economy researcher studying at Japan’s Nagoya University’s Graduate School of International Development in Japan, said, “The Philippines is actually already a bit late on hopping on this, especially as many other countries with closer ties to pre-fall Afghanistan has facilitated supporting the migration and asylum of Afghan refugees.”
“However, we do need to be very transparent about how this is being done,” Mr. Juliano said in a separate Messenger chat.
Philippine Foreign Affairs Secretary Enrique A. Manalo, speaking at a Senate hearing on Friday, said they received the request from the US in October last year.
“We received in a concept note from the US government [containing] a request for the Philippines to allow Afghans formerly employed by the US government and their qualified dependents to temporarily stay in the Philippines to process their SIV (Special Immigrant Visa) applications with the US embassy in Manila,” he said.
Mr. Manalo said the Afghans will be traveling with valid passports and undergo “rigorous security vetting and background checks.”
All costs will be shouldered by the US government.
The Philippine government will set mobility and other restrictions for the transients as well as the schedule of arrivals in batches.
US Ambassador to the Philippines Jose Manuel G. Romualdez told senators that up to 60,000 Afghans are applying for an SIV and that the US is proposing to send up to 1,500 per batch to the Philippines.
The Afghans are either still in their homeland while some are already in neighboring Pakistan, Mr. Romualdez noted.
WORKERS
In 2021, the US withdrew its troops from Afghanistan after a 20-year presence leading an international military coalition that kept the ulta-conservative Taliban at bay.
After the international forces and diplomatic missions left, the Taliban immediately returned to power, putting at risk the lives of Afghans employed under the US and other foreign governments and organizations.
“Receiving refugees as a humanitarian accommodation is innate in the Philippines and with Filipinos… as part of the international community,” Mr. Cabalza said.
A labor group on Sunday also urged the Philippine government to agree to temporarily take in Afghan nationals, citing reports of human rights violations against workers in the Central Asian country.
“The Federation of Free Workers (FFW) remains alarmed by reports of rampant human rights abuses, including infringements on women’s rights, persecution of religious and ethnic minorities, and arbitrary detention of activists and journalists,” it said in a statement.
“As the situation unfolds, the FFW continues to extend its solidarity to Afghan workers who are facing challenges in their fight for equality of employment and occupation under International Labor Organization (ILO) Convention 111.”
Under the ILO Convention, all human beings, regardless of race, creed, or gender, have the right to “pursue material well-being and spiritual development in conditions of freedom and dignity of economic security and equal opportunity.”
“Despite the opposition of Vice President Sara Duterte-Carpio and other government officials, the FFW has consistently expressed deep concern over the deteriorating humanitarian crisis in Afghanistan,” it said.
Security expert Rommel C. Banlaoi said the government should not rush into agreement and must do “further assessment if accepting them will serve our national interests.”
During the Senate hearing, Defense Secretary Gilbert C. Teodoro clarified that the Afghans should not be classified as refugees.
“Basically, they’re not displaced. They’re in their homeland right now. They have not applied for political asylum or any other thing.”
Mr. Teodoro said that the Afghans will only be considered refugees if their visas are denied and they are not repatriated.
Ms. Duterte-Carpio has opposed the proposal, citing threats to security and sovereignty.
Education Undersecretary Michael Wesley Poa quoted a position paper signed by Ms. Duterte-Carpio, saying, “It seems that the vetting process may be done by the US. We think it is interference to our exclusive determination of who can enter into our country.”
Mr. Juliano said equating the entry of foreign nationals to human security issues is dangerous, as it may create xenophobic or anti-immigration sentiments among Filipinos — themselves a people of migrants.
“This same framing has been the bad faith talking points of rightwing and racist parties throughout Europe and North America,” he said.
The US embassy has not replied to an e-mail seeking comment. — with John Victor D. Ordoñez
PHL looks to Japan, US on maritime security sans ASEAN united front
THE PHILIPPINES is doing well in pursuing stronger maritime security partnerships with the United States and Japan given the lack of a united front within the Association of Southeast Asian Nations (ASEAN).
Lucio B. Pitlo III, a research fellow at the Asia-Pacific Pathways to Progress Foundation, said in a Facebook Messenger chat that the growing ties between the three countries may be a result of the failure of the 10-member southeast Asian bloc to take concrete actions on security issues in the region.
“These minilaterals may present an expedient workaround to the difficulties of regional organizations like ASEAN to take a common stand on security issues, given varying risk assessments and relations with and influence of major powers in their security and foreign policy calculation,” he said.
ASEAN members Philippines, Vietnam, Brunei, and Malaysia along with China and Taiwan hold different and in some cases overlapping territorial claims over the South China Sea.
China and ASEAN have yet to finalize a code of conduct in the disputed waterway after negotiations started in 2002 following the signing of the non-binding Declaration on the Conduct of Parties in the South China Sea.
The national security advisers of the three countries — Eduardo Año of the Philippines, Jake Sullivan of the US, and Akiba Takeo of Japan — held their first talks on June 16 in Tokyo, discussing regional security issues, including those involving the South China Sea, and ways to boost their trilateral cooperation.
The three security advisers said in a joint statement that “…they reiterated the importance of peace and stability across the Taiwan Strait.”
They agreed to conduct combined maritime activities and advance trilateral defense cooperation based on the recent progress between the US and the Philippines, such as the four additional locations identified under their Enhanced Defense Cooperation Agreement, and between Japan and the Philippines in discussing frameworks to enhance and facilitate reciprocal visits of defense and military officials.
They also reaffirmed the importance of three-way joint trainings among the three countries’ coast guards that was held in early June.
“Regular patrols with like-minded partners are naturally important and beneficial for Manila’s desire to maximize its efforts towards maritime security and territorial defense,” geopolitical analyst Don Mclain Gill, who teaches foreign relations at the De La Salle University, said in a Facebook Messenger chat.
Mr. Gill said the Philippines should further deepen its relationship with the US and Japan by pushing their three-way partnership to go beyond the area of maritime security.
“Manila must also forward proposals for a trilateral development and economic cooperation framework, which aligns with the visions of all three countries towards a free, open, prosperous, and rules-based Indo-Pacific,” he said.
“Hence, the trilateral must not just stop at joint patrols, rather, it must be considered to be a foot on the door for more opportunities to explore.”
Chester B. Cabalza, founder of the Manila-based International Development and Security Cooperation, said pursuing naval and coastal partnerships with other countries is important for a coastal nation like the Philippines, which is struggling to contain China’s aggression at sea.
Mr. Cabalza said the insights and “best practices” that the Philippines can gain on coastal and naval defense from the stronger and “strategic” countries are “contributory to Manila’s short and long term strategies aimed at attaining interoperability and defense capability.”
The experts expect China, which claims more than 80% of the South China Sea, to react aggressively to the three countries’ partnership.
“Definitely, China will always be on its offensive guard in encircling their maritime interests in the South China Sea,” Mr. Cabalza said. “Or Beijing will furthermore boost its naval and coast guard diplomacy to address its maritime insecurity with Manila which they successfully did recently.”
Mr. Gill said it is also palpable for China to react negatively towards such developments “given its regional exclusionary desires.” — Kyle Aristophere T. Atienza
Judge’s inhibition in De Lima case a win for fairness
A JUDGE’s inhibition in the remaining illegal drug case of detained former Senator Leila M. de Lima upheld her right to an impartial court, according to a human rights lawyer.
“In fairness to the presiding judge, inhibition does not necessarily mean that the judge is indeed partial, but it becomes a prerogative in case a litigant doubt his impartiality,” Ephraim B. Cortez, president of the National Union of Peoples’ Lawyers, said in a Viber message.
“Because according to the Supreme Court, a ‘judge must be like Caesar’s wife — above suspicion and beyond reproach’.”
On June 15, Muntinlupa Regional Trial Court Branch 256 Presiding Judge Romeo S. Buenaventura granted the June 13 motions of Ms. De Lima’s former aides to stop handling the case after it was discovered that he is the brother of Emmanuel S. Buenaventura, who had helped execute the affidavits testifying against her.
Ronnie P. Dayan, one of the former aides, had since recanted his statement. He said he was coerced by the late former Oriental Mindoro Rep. Reynaldo T. Umali to testify against Ms. De Lima.
The judge’s brother used to lawyer for Mr. Umali, which they said created a conflict of interest.
Mr. Cortez noted the judge had just received evidence in relation to Ms. De Lima’s petition bail and not yet the main evidence for the illegal drug case, which means there is no sign of a violation against the former lawmaker’s right to due process.
He said there might be a slight delay in the case since the case will be re-raffled to another judge, which would then lead to another court hearing.
Last week, Ms. De Lima appealed the court’s denial of her bail plea. The Muntinlupa court had rejected her motion for bail saying it could not overlook testimonial evidence against the former senator.
The former lawmaker’s lawyers said the court should have used the basis of probable cause instead of relying on the evidence of guilt being strong in deciding on the bail plea.
Four witnesses have retracted their testimonies against the former lawmaker. They all claimed to have been coerced by the previous administration. The court dismissed a separate illegal drug trafficking case against Ms. De Lima and Mr. Dayan on May 12, citing reasonable doubt.
“Senator De Lima will have another chance to confront the witnesses against her and to present evidence to refute those presented by the prosecution,” Mr. Cortez said. — John Victor D. Ordoñez