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Conference, exhibit are highlights of 2023 Philippine Tropical Fabrics Month

NICKOLAS NIKOLIC-UNSPLASH
NICKOLAS NIKOLIC-UNSPLASH

SINCE 2012, every January is celebrated as Philippine Tropical Fabrics (PTF) Month with the aim of promoting textile production using natural textile fibers, technologies, and industries in the Philippines. This is done in order to revitalize the local textile industry, provide inclusive growth through the generation of livelihood for Filipinos and to provide materials that nurture and promote a truly Filipino textile brand. PTF contain natural textile fibers from pineapple leaf, abaca, banana, and Philippine silk, which are produced, spun, woven, or knitted, and finished in the Philippines.

With the theme “Pushing Boundaries for Sustainable, Competitive, and Inclusive Philippine Textile-Garment Industry,” this month’s activities include the launching of the Bamboo Textile Fiber Innovation Hub (BTFIH) in La Union on Jan. 13 and the Silk Innovation Hub in Negros Occidental on Jan. 18; the Philippine Textile Industry Stakeholders’ Conference on Jan. 26; the 4th Philippine Silk Summit on Jan. 27; and the opening of the “Philippine Tropical Fabrics Exhibition” in the Batasan in Quezon City on Jan. 31.

Leading the celebration annually is the Department of Science and Technology-Philippine Textile Research Institute (DOST-PTRI). Public officials and employees are also directly involved in the promotion of PTFs as their uniforms — as per Republic Act 9242 — must use fabrics containing at least 5% by weight of either abaca leaf sheath, banana pseudostem, and pineapple leaf, or 15% by weight of silk.

For more information on the events, visit ptri.dost.gov.ph or e-mail ptri.tips@ptri.dost.gov.ph.

Digital payment systems top BSP agenda in 2023

BW FILE PHOTO

THE Bangko Sentral ng Pilipinas (BSP) said its work program for 2023 will focus on the launch of new digital payment streams, while undertaking preparatory measures ahead of the rollout of a Central Bank Digital Currency (CBDC), Governor Felipe M. Medalla said in his New Year’s message.

“This year, we are targeting to launch other digital payment streams, such as InstaPay Debit Pull and Request to Pay. We also aim to issue a merchant acquiring and aggregation licensing framework and a cooperative oversight framework,” Mr. Medalla said.

According to the BSP, the licensing framework is intended to support the digitalization of merchant payments, which account for about 70% of monthly retail payments in the Philippines.

The cooperative oversight framework will help deter regulatory arbitrage due to inefficiencies and inconsistencies in the regulation of various supervisory authorities.  

“We have also started the conduct of a pilot wholesale CBDC or central bank digital currency, a major capacity-building activity for both the BSP and the financial industry,” Mr. Medalla said, adding that this will help facilitate cross-border transactions.

CBDCs are issued as central bank liabilities. Since 2021, the BSP has been reviewing use cases for wholesale CBDCs through its Project CBDCPh, which studies the potential risks and use of CBDC payment transactions for financial institutions.

Mr. Medalla also added that the bank will take steps to improve the central bank’s reserve management.

“In keeping with our Sustainable Central Banking strategy, we plan to be a signatory to the United Nation Principles for Responsible Investment (PRI),” Mr. Medalla said.

PRI aims to incorporate environmental, social, and corporate governance factors into investment decision-making. Financial institutions participate by becoming signatories to the PRI’s six key principles. 

“We also are looking at developing a Responsible Investment Charter, which will guide the integration of sustainability tests with financial assessments,” Mr. Medalla said.

He added that the central bank will seek to prevent sharp falls in dollar reserves.

The Philippines’ dollar reserves rose to $96.01 billion at the end of December from $95.12 billion a month earlier, the BSP said.

“On financial inclusion, we have launched the Credit Risk Database Project, which will produce a credit scoring model for small and medium enterprises (with the aim of reducing dependence on collateral),” Mr. Medalla said.

The BSP also proposes to add gold buying stations in Butuan, Camarines Norte, General Santos City, and Cagayan de Oro City.

“We will also further carry out our clean note policy and our coin recirculation program through our coin deposit machine project and we will soon see that these machines will actually be strategically located given our partnership with the private sector in this regard.”

The central bank will continue to lobby for the Bank Deposits Secrecy Bill and the Financial Accounts Regulation Act, while also supporting the passage of the Digital Payments Bill.

The proposed Financial Products and Services Consumer Protection Act, also known as the Financial Consumer Protection Act, aims to incorporate financial inclusion, financial education, good governance and effective supervision in one law that protects financial consumers.

Meanwhile, the Bank Deposits Secrecy Bill will equip regulators with the necessary tools to detect fraud, irregularity, or unlawful activity.

“I am confident with all the talent that we have in this institution that this is the year we kick things off and realize our vision — from our targets under the Digital Payments Transformation Roadmap to our sustainability objectives to our plans and process improvements for the organization,” he added.

The BSP has set a digital payments target of 50% of all transactions and financial account ownership of 70% of all adults. — Keisha B. Ta-asan

Quit call for cops with drug ties may aid impunity

PHILIPPINE STAR/JOHN UNSON

By John Victor D. Ordoñez, Reporter

THE GOVERNMENT of President Ferdinand R. Marcos, Jr. should enforce the law and prosecute top generals with illegal drug links instead of asking them to quit, human rights experts said at the weekend.

“Courtesy resignations will not solve anything,” Ephraim B. Cortez, president of the National Union of People’s Lawyers, said in a Viber message. “Those involved in drugs within the Philippine National Police’s (PNP) ranks should be investigated, publicly identified and prosecuted.”

National police chief Rodolfo Azurin, Jr. on Thursday quit his job after Interior and Local Government Secretary chief Benjamin “Benhur” C. Abalos, Jr. urged top cops to resign and help cleanse their ranks of the “deep infection” of the illegal drug trade.

“We in the uniformed service are trained and prepared and are expected to prioritize public service over public interest,” he separately told a news briefing streamed live on Facebook. He said he expects most colonels and generals to heed the quit call.

He said he would allow himself to be evaluated and assessed by a committee created by the president to determine if he was in any way involved in the illegal drug trade, or if he had been tolerating rogue cops.

He said his resignation would be considered an application for his retirement, adding that he supports the Interior chief’s call to “rid the PNP of misfits and scalawags.”

Mr. Marcos last week said the Interior secretary’s call was part of his plan to solve the country’s illegal drug problem.

“We have to identify who’s really involved and who are the cops who cannot render police service because they are associated with drug lords,” he told a press briefing streamed live on Facebook.

Police spokesperson Jean S. Fajardo on Saturday denied there was a destabilization plot by the Armed Forces of the Philippines after top police officials resigned last week.

Fides M. Lim, a human rights advocate and convenor of the political prisoner group Kapatid, said the quit call would probably foster impunity.

“Name names, suspend and investigate the top law enforcers who have become the most notorious lawbreakers,” she said in a Facebook Messenger chat.

Mr. Abalos on Wednesday said filing cases against ranking police officers would take too long and delay accountability.

Justice Secretary Jesus Crispin C. Remulla in November vowed to prosecute more top-level police officers responsible for drug war killings. 

He said he wanted to extend the Witness Protection Program to police officers who are willing to testify on extralegal killings committed under the anti-illegal drug campaign.

At least 25 policemen have been charged with murder in connection with Mr. Duterte’s anti-illegal drug campaign, Mr. Remulla told the UN Human Rights Council in November. An inter-agency task force on extralegal killings had investigated at least 17,000 cops.

Data released by the Philippine government in June 2021 showed that at least 6,117 suspected drug dealers had been killed in police operations. Human rights groups estimate that as many as 30,000 suspects died.

“Instead of enforcing the law, Mr. Abalos is in fact aggravating impunity by protecting these top hoodlums in uniform who are made to tender courtesy resignations while 12,000 to 30,000 victims of ex-President Rodrigo R. Duterte’s failed drug war still cry out for justice.”

Mr. Abalos earlier said those who submit courtesy resignations could continue working while their records were assessed by the committee. The resignation of those found questionable would be accepted.

“If you’re not involved, there’s nothing to worry about,” he told a news briefing, adding  that those who refuse to quit were deemed “questionable.” “This is the only way to cleanse the ranks in  a fast manner.”

“It’s difficult to fight a war when it’s your ally that will shoot you in the back,” Mr. Abalos said.

He said law enforcers had seized about P10 billion worth of illegal drugs in 24,000 drug operations last  year. About 30,000 drug suspects were arrested in the first 100 days of Mr. Marcos.

Police had killed 46 drug suspects during illegal drug operations under the new administration, Mr.  Azurin, who was appointed police chief in August, said in November.

Mr. Marcos told police in August to temper their use of force while enforcing the law. Mr. Abalos said in July the drug war would be “as intensive as before.”

The Philippines accepted more than 200 recommendations from the United Nations Human Rights Council in November, investigating extralegal killings during its deadly drug war.

More than 30 member-states of the UN body urged the Marcos administration to do something about the extralegal killings and rights abuses in its anti-illegal drug campaign.

PEZA OIC endorsed for permanent post by industry groups amid leadership row

INDUSTRY GROUPS have thrown their support for the permanent appointment of Tereso O. Panga, currently the officer-in-charge (OIC) of the Philippine Economic Zone Authority (PEZA), following a leadership dispute that has roiled the agency.

In letters addressed to President Ferdinand R. Marcos, Jr., the industry groups backed Mr. Panga in order to settle any doubts about PEZA leadership and facilitate the entry of foreign direct investment (FDI).

Expressing their support were the Information Technology & Business Process Association of the Philippines (IBPAP), the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), the Philippine Ecozone Associations (PHILEA), the Cavite Export Zone Investors Association, and the Mactan Export Processing Zone Chamber of Exporters and Manufacturers.

“We firmly believe that Mr. Panga will be an asset on your economic team and in your aim to industrialize the country and in support of the Department of Trade and Industry’s (DTI) science, technology, and innovation-driven industrialization strategy,” SEIPI said in its letter. 

“By appointing the right people to take the helm of the agencies involved in attracting foreign investment, together with policy coherence, and a constant implementation of the ease of doing business, we can truly improve our FDI ranking in the Association of Southeast Asian Nations (ASEAN) region,” it added.

According to IBPAP, Mr. Panga plays an “important role” in attracting more investors to the IT and business process management (IT-BPM) sector.

“We believe that Mr. Panga will enable the PEZA to deliver its mandate of stimulating countryside development through the establishment of more IT parks in new growth areas outside the metropolis as ready locations for IT-BPM companies,” the IBPAP said.  

PHILEA said that Mr. Panga could help the economic team industrialize the Philippines.

“(Mr. Panga)… has consistently been very supportive of our industry and ultimately the economic growth of our country.”  

Aside from being OIC, Mr. Panga concurrently serves as PEZA’s deputy director general for Policy and Planning. He replaced former PEZA Director General Charito B. Plaza. 

The top position at PEZA has been in contention since last year after Ms. Plaza questioned Mr. Panga’s assumption of the OIC role. The PEZA Director Generalship is a Presidential appointment.

In connection with the leadership row, four PEZA employees recently filed a complaint with the Ombudsman against Mr. Panga for alleged usurpation of authority and violation of the Code of Conduct and Ethical Standards for public officials and employees.

The complainants alleged that Mr. Panga’s reorganizing of PEZA led to the firing of contractual employees and the demotion and reassignment of others to remote ecozones after being identified as “supporters of Ms. Plaza.”

PEZA has called the allegations “baseless, malicious, and unfounded” adding that Mr. Panga will reply to the claims once he receives a copy of the complaint from the Ombudsman. — Revin Mikhael D. Ochave

House told not to stick its nose in foreign affairs

PRESIDENT Ferdinand R. Marcos, Jr. shakes hands with Chinese President Xi Jinping during a welcome ceremony at the Great Hall of the People in Beijing on Jan. 4, 2023. — COURTESY OF THE OFFICE OF THE PRESS SECRETARY WEBSITE

By Beatriz Marie D. Cruz

POLITICAL analysts on Sunday criticized the Philippine Speaker for allegedly meddling in foreign affairs, which they said should be the exclusive purview of the Executive branch.

“Foreign policy is still very much the purview of the Executive, unless the House of Representatives will initiate laws to support activities and policies relating to the agreements signed,” Herman Joseph Kraft, a political science professor at the University of the Philippines (UP), said in an e-mail.

Speaker Ferdinand Martin G. Romualdez was among those who accompanied President Ferdinand R. Marcos, Jr. during his state visit to China last week.

He later told state radio the trip had been “highly successful because there were many engagements at different levels.” 

His office did not immediately reply to a Viber message seeking comment.

Mr. Romualdez, the president’s first cousin, also met with Li Keqiang, chairman of the standing committee of the National People’s Congress, China’s legislative body.

He said the meetings had led “to a better rapport” between the two nations. “Upon the instruction of our president, we shall engage our counterparts at the Parliament and our Congress and our Senate level,” he said last week.

Mr. Kraft said the working relationship between Philippine and Chinese lawmakers would “largely be consultative and symbolic and will depend on the foreign policy direction of the Executive, or in the case of China, the Communist Party.”

The Speaker’s growing presence in international engagements is “rarely done because they are expected to stay in the country and manage alliances/politics within House, said Hansley A. Juliano, a political economy researcher studying at Nagoya University’s Graduate School of International Development in Japan.

He also cited the need to assess the independence of the Legislature. “Executive domination of the Legislature has been pretty normalized in hot-button issues, and the supermajority that was normalized under ex-President Rodrigo R. Duterte and Marcos belies any attempt at independence and criticism.”

Aries A. Arugay, professor and chairman of the UP Political Science Department, called foreign policy under the Marcos government a “family affair.”

“Why are there other voices louder in terms of foreign policy, other than the president and the Foreign affairs Secretary?” Mr. Arugay said.

Aside from Mr. Romualdez, also accompanying Mr. Marcos to China were First Lady Marie Louise Liza A. Marcos and presidential sister and Senate foreign relations committee chairperson Senator Maria Imelda “Imee” R. Marcos.

“It seems like they all have good intentions,” Mr. Arugay said by telephone. “But you know, good intentions are not enough.”

Foreign policy with a country as powerful as China needs a “sophisticated, coherent approach,” he added.

 Mr. Marcos has invited Mr. Xi to visit the Philippines, which Mr. Romualdez called “forthcoming because they actually enjoyed each other’s company and that of the respective first ladies.”

Mr. Romualdez had also told state media Mr. Marcos had managed to convey to the Chinese head of state the concerns of Filipinos “in an atmosphere of mutual respect and equality.”

But analysts said the success of the president’s state visit to China depends a lot on whether China would act on their agreements.

“It’s one thing to wish and claim that they did that, but it’s another thing to actually see it translated to Chinese geopolitical strategy,” Mr. Juliano said.

“Pleasantries can be exchanged and hidden in official communiques, but we have to acknowledge that the Chinese economic machine is currently being built, at Xi’s direction by maintaining Chinese primacy over mainland and maritime Asia,” he added.

Mr. Arugay said China chooses to engage with the Philippines bilaterally because of its “glaring power asymmetry.” “Rather than talk about the South China Sea issue with the Association of Southeast Asian Nations multilaterally and other relevant parties, China would rather talk individually because it is playing to its advantage, because of its sheer size and power.”

Mr. Xi has vowed to “find a compromise” to ease tensions in the South China Sea,  Mr. Marcos said on Wednesday after meeting with the Chinese leader in Beijing.

In a video released by the presidential palace in Manila, Mr. Marcos said he had spoken with his Chinese counterpart about the plight of Filipino fishermen at sea, who are frequently driven away by the Chinese Coast Guard.

China claims more than 80% of the South China Sea, which is believed to contain massive oil and gas deposits and through which billions of dollars in trade passes each year. It has ignored a 2016 ruling by a United Nations-backed arbitration court that voided its claim based on a 1940s map.

The Philippines, which is being backed by the United States and its allies in ensuring freedom of  navigation in the South China Sea, has been unable to enforce the ruling and has since filed hundreds of protests over what it calls encroachment and harassment by China’s coast guard and its vast fishing fleet.

Lawyer’s group urges courts to fast-track cases of detained drug suspects

PHILIPPINE STAR/ JOVEN CAGANDE

A VOLUNTARY organization of human rights lawyers and law students that provides free legal assistance to the marginalized sector has called on local courts to fast-track cases against detained drug suspects who have been awaiting trial for years.  

“For the nameless and disadvantaged, the right to speedy trial and disposition of cases is an illusion, such that if it becomes a reality for a few lucky ones,” the National Union of People’s Lawyers (NUPL) said in a statement on Saturday.  

The NUPL cited a Last Piñas City trial court’s swift acquittal of the son of Justice Secretary Jesus Crispin C. Remulla from drug charges as a sign that Philippine courts are capable of resolving cases in a timely manner.  

The court dismissed the illegal drug possession charges against the younger Remulla, which were filed less than three months ago, due to lack of evidence of him knowing he had received marijuana.   

The Justice chief earlier said he would not meddle or interfere in his son’s legal proceedings. 

NUPL said courts should also afford the same timely and immediate justice to suspects who do not have prominent names.  

The Commission on Audit has noted in a 2019 report that the congestion and overpopulation in Philippine jails was due to the increasing number of drug-related suspects and the slow progress of cases in court.   

At least 6,117 suspected drug dealers had also been killed in police operations, according to data released by the Philippine government in June 2021.  

The Justice secretary earlier told the United Nations Human Rights Council that his agency aims to raise the success rate of criminal prosecution in the Philippines, which he acknowledged was prone to delays.  

“Indeed, the swift, expedient and orderly administration of justice should be accorded to all,” the NUPL said. — John Victor D. Ordoñez

Groundwork to improve business conditions not in place as Senate RCEP trade deal approval looms

ILOCOSNORTE.GOV.PH

By Alyssa Nicole O. Tan, Reporter

PHILIPPINE approval of a key regional trade deal could come before the government puts in place the needed groundwork to prepare domestic industries for heightened competition, with agriculture still holding out for safeguards and protections, analysts said.

“The Philippines needs to first get its house in order before plunging itself into the trade partnership,” Victor Andres C. Manhit, president of the Stratbase ADR Institute, said in a text message to BusinessWorld, referring to the Regional Comprehensive Economic Partnership (RCEP) trade deal currently held up in the Senate.

“While there is no argument that being part of the trade deal is theoretically good, much will depend on how the Philippines will position itself,” he added. “If the country has no competitive advantage in trade, it will end up being more of an importer, thus worsening its situation right now.”

Senator Maria Imelda Josefa Remedios R. Marcos, who chairs the Senate’s foreign relations committee, expects RCEP to lead to a surge in imports.

“Let us stop denying that there will be difficulties and sacrifices,” she said during a hearing on RCEP in December. “Of course, this will happen because this will lead to bulk imports.”

She called for “transitional safeguards,” telling the Departments of Agriculture, Environment and Natural Resources, and Trade and Industry, as well as the Bureau of Customs to ensure that preparations are in place by the time the deal is signed.

“At the point of signing, not at some mythical future date,” she said. “We cannot get into an arrangement where we are completely bereft of any skills or powers.”

Mr. Manhit said that the effect of the deal will depend on the current administration’s ability to create an environment conducive to improved productivity.

“The Philippines should be able to stabilize the availability of export commodities and continue to increase its production to cater to the growing demand both from RCEP member and non-member states,” he said.

“Likewise, the Philippines needs to emphasize sustainability, anchored on transparency… social, and governance principles across trade value chains, particularly for export products, as most countries assess them before entering long-term trade partnerships,” he added.

Anthony A. Abad, Trade Advisory Services chief executive officer and Abad Alcantara and Associates senior partner, told BusinessWorld by phone that improving the domestic environment should not be the determining factor in ratifying RCEP.

“The domestic safeguards are things that should have been done even with no RCEP, so if there is a deficit in the number of farm-to-market roads, road systems, or railways that will facilitate the movement of goods, that should have been in place decades ago,” he said.

“If the farmers are having a hard time because of the taxes that they have to pay, then you have to simplify their tax system,” he added. “Don’t burden them. You keep saying that you want us to export, but you burden us with all kinds of rules and bureaucratic requirements. They have to be removed.”

All the elements that go into the cost of doing business, Mr. Abad said, will have to be factored in, citing financing, energy, and the cost of labor, among others.

Meanwhile, Roy S. Kempis, retired Pampanga State Agricultural University professor, said that agriculture “needs to transform from being production-oriented and in many cases subsistence, into agribusiness that adheres to the tenets of entrepreneurship employing outputs of science and technology research.”

More entrepreneurs, he added in a Viber message to BusinessWorld, are needed in the agriculture industry.

He said that currently, agriculture “is not ready to compete in the world market.”

Federation of Free Farmers National Manager Raul Q. Montemayor said that the Philippines has lagged in making its agricultural sector productive and competitive, even as competitors have surpassed it in terms of reliability, quality, and pricing.

“This is precisely the problem with RCEP,” he told BusinessWorld in a Viber message. “It will take a comprehensive assessment of our strengths and weaknesses and a reformulation of our production, processing, and marketing strategies to make our agriculture sector productive and competitive, not only for the export market but more importantly for our economy.”

“The government will have to commit to the necessary investments and sustain its support for extended periods,” he added.

The current situation, Mr. Abad said, highlights the long-running neglect of the agricultural sector, but “RCEP is the one that will provide us the impetus, force us to reform, and plug us into the digital world and the legal world.”

He said, however, that farmers should be considered assets in the export effort rather than “welfare cases.”

“We tend to look at agriculture as hopelessly stuck in 18th or 19th century technology. That’s unacceptable. Even if there were no RCEP, somebody must be doing something to make our agriculture 21st  century,” he said.

“If it’s not being done, then there’s something wrong with our governance, in our prioritization,” he added. “Whatever it is, the RCEP creates the market for us to supply the goods and services, and the things that are being touted or being claimed to be the domestic safeguards are actually the things that should have been done decades ago, so that our agricultural sector will not be so backward and so poor.”

Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet told BusinessWorld via Viber that the Philippines can only compete if it learns from the experience of larger economies.

“We (need to) follow what the big economies did before opening up their local markets,” he said.

Asian Institute of Management Economist John Paolo R. Rivera, in a Viber message, said that the Philippines should strive towards “good governance, accountability, and total quality management,” calling them keys to becoming a preferred market for RCEP.

The RCEP started taking effect in the various jurisdictions on Jan. 1. Participants include the 10 members of the Association of Southeast Asian Nations, Australia, China, Japan, South Korea, and New Zealand.

The Philippines and Myanmar are the only remaining countries that have yet to formalize their participation in RCEP.

Ms. Marcos has established a technical working group to complete a committee report on RCEP ratification. The committee expects to report it out to plenary once sessions resume on Jan. 23.

Foreign investors’ choice of Asian manufacturing base seen as critical for PHL export prospects 

ANFLOINDUSTRIALESTATE.COM

FOREIGN INVESTORS are in the process of reviewing the locations of their Asian manufacturing bases, and their decisions will be critical for developing the Philippine export sector, Trade Secretary Alfredo E. Pascual said.

Mr. Pascual told reporters in chance remarks recently that the ongoing global review of supply chains “is a notion that we are capitalizing on, to attract investors that have production operations in China to locate alternative production operations in the Philippines. They’re already in Taiwan or Japan or Korea; we want them to consider operations here.”

“We will provide an alternative supply source for their components and inputs to their assembly operations. The idea for a country like the Philippines, to be able to build up a large export volume; (is to) target participation in the global value chains of vehicles, electric vehicles, appliances, and various types of products,” he added.

“We develop exports through FDI, not internally. Look at Vietnam, look at Thailand… The export products coming from our neighboring countries are produced by factories put up by foreign investors… It could be our country eventually, (that can serve) as the production base for our export market,” Mr. Pascual said.

The pandemic disruptions in China as well as the Russia-Ukraine war have roiled global supply chains, leading many manufacturers to reconsider their options in their choice of an Asian base of operations.

Mr. Pascual said foreign investors will help provide technology, capital, and new markets to the Philippines.

“The foreign invest(ors) we are trying to attract here… have a built-in market (and) already have the technology. It is a matter of setting up the factory here, employing our people… That’s the approach that I am trying to push for. We integrate trade, industry and investment,” Mr. Pascual said.

“How do we develop our Philippine-based industry? You need investors. Investment is not just finance, it is also the technology and management, and more importantly, market,” he added.

Mr. Pascual also said that competitive domestic businesses are critical.

“We need to build a domestic base, the bread-and-butter line domestically, to support our foray into the export market. We cannot jump straight to exports. You need to be able to develop the production capability, the quality, and improve the productivity so you can be competitive in pricing,” Mr. Pascual said.

The Philippine Statistics Authority (PSA) said in a preliminary estimate that exports rose 20% to $7.7 billion in October. The PSA is set to release November 2022 export data on Jan. 10. — Revin Mikhael D. Ochave

Economic concerns a bigger threat to Marcos gov’t than military internal squabbling

AN UNEXPECTED change of command at the military took place Saturday with the reappointment of General Andres C. Centino as chief of staff of the Armed Forces of the Philippines. — ARMED FORCES OF THE PHILIPPINES

THE ADMINISTRATION of President Ferdinand R. Marcos, Jr. could face threats of political instability more from economic concerns that affect ordinary citizens than internal bickering among the military, according to analysts.   

“An economic crisis triggers political instabilities since any crises have an impact on the income and welfare of specific sectors and groups in a society,” Philip Arnold “Randy” P. Tuaño, dean of the Ateneo School of Government, said in a Viber message.   

“We have witnessed economic crises in the past, and all of them have had political effects,” he said.   

Chester B. Cabalza, a national security expert, noted that economic risks are affected by global events and developments.   

“Economic crisis could be triggered by uncontrolled external factors caused by mismanaged macroeconomics including prolonged recession and inflation brought by a pandemic, wars, and economic sanctions,” he said in a Messenger chat.  

“These could affect the microeconomics and widen poverty gaps, unemployment, crimes and violence,” he added.  

Inflation in the Philippines hit another record high in December at 8.1%. Last month, the Philippine government lowered its economic growth target for 2023 to 6.0% to 7.0% from 6.5% to 7.5%. Manila’s target was more optimistic than that of the World Bank, which expects the country’s economic expansion to slow to 5.7%.  

“The domino effect of the global recession could also cripple the political stability of ruling political elites if it espouses cronyism, monopoly, corruption, and greed,” Mr. Cabalza said.   

Halsey A. Juliano, a political economy researcher, said that “usually,” an economic crisis only triggers political instability “if the public sees political engagement as something that directly impacts their economic life.”  

If people feel that their quality of life is not worsening – “even if it’s not improving” — they do not tend to rock the boat, he said.   

Mr. Tuaño of Ateneo said the ouster of two sitting presidents before — the late dictator Ferdinand E. Marcos, father of the current Philippine leader, and Joseph E. Estrada, who was implicated in corruption scandals — should be a lesson for the government today.  

The military-backed uprisings were named after the capital region’s major thoroughfare called EDSA, on which thousands marched during the two events.   

On Saturday, reports of alleged “destabilization moves” by members of the Armed Forces of the Philippines (AFP) circulated on messaging apps and social media platforms.   

An unexpected change of command at the military took place Saturday with the reappointment of General Andres C. Centino as AFP chief of staff.  

Deputy Minority Leader France L. Castro said in a statement on Sunday that the alleged “squabblings” within the AFP might trigger a destabilization plot.  

“The supposed reason of the squabbles is Republic Act No. 11709, a law enacted by former President Rodrigo Duterte in April last year that, among others, set a fixed term of three years for eight of the most senior AFP officers, including the chief of staff and the commanders of the Army, Air Force and Navy,” Ms. Castro said.  

At the change of command ceremony, Mr. Centino discussed the new law, underscoring that it “seeks to strengthen the capabilities of the AFP and enhance its professionalism.”  

“As we strive to put this law into effect, we as an organization cannot afford to remain or to be divided and squabbling on how its interpretation stands to benefit one over the other and lose focus on what is best for the armed forces as a whole,” he said.   

Jan Robert R. Go, who teaches political science at the University of the Philippines, said any calls for regime change via extraconstitutional means may not prosper “at this point” because the president and vice president “have consolidated their ranks” especially among the critical sectors — the political elite and the military.   

“But once these are shaken, then probably we can see a different scenario or possibility.” — Kyle Aristophere T. Atienza with a report from Beatriz Marie D. Cruz 

 

Revving for growth

As the transition into the new normal continues and the economy looks to rev up, it’s important for leaders to leave the pandemic mindset behind — that of caution and risk aversion — and adopt a bold mindset of optimism and growth. While 2022 was a good year of recovery, companies must place a greater focus on sustaining growth while continuing to prioritize the health and wellness of their people. In the current business landscape, those who will find success will likely be those who act first and do so the fastest. 

INCLUSIVE GROWTH WITH HUMANS AT THE CENTER
In the face of ongoing change, business leaders need to transform their processes as well as their organizations in order to grow. In a setting where there is tremendous competition for talent and high levels of burnout, successful transitions of any kind must start with people. In line with this, business leaders must take purposeful action to manage people through the transformation journey. 

Workers across industries are now increasingly evaluating possibilities based on higher income, greater flexibility in when and where they work, and better company culture. According to the 2022 EY Work Reimagined Survey, as much as 43% of employees say that they are likely to leave their workplace in the upcoming year, citing these reasons. Organizations need to reconsider their workforce planning now more than ever if they want to recruit and keep a diversified pool of top talent.

For companies to succeed as the talent war heats up, it is crucial that they place more emphasis on purpose, rewards, wellbeing, and belonging. To remain competitive, companies have to thoughtfully respond to evolving employee expectations and incorporate them into future talent programs and strategies. This includes programs relating to mobility and immigration, the challenges of which were intensified by the pandemic. Companies must also reassess their immigration policies and build a strategy that can align with their business goals while managing workforce expectations.

With human capital at a premium, the current experience-driven economy necessitates that businesses focus on their people as the key to delivering long-term value for any business. Organizations and their chief human resource officers (CHROs) will also need to rethink their workforce development programs to retain, train and nurture people with the right technical and behavioral skills required to meet the needs of the future. By identifying skills gaps, developing learning programs for reskilling, curating learning experiences and nurturing a culture of curiosity, organizations will be better positioned to make the training investments necessary for continuous learning.

However, it should be noted that placing humans at center does not just refer to employees — both employees and customers or clients should be at the core of any business tactics and long-term goals. In strategizing for growth, every choice, use of technology, and creation of a good or service must be seen through the eyes of the customer. Companies have significant opportunities to change the emphasis from an employee value proposition to human value proposition by developing new programs and solutions that prioritize the needs of the people first while still meeting stakeholder expectations. This ultimately paves the way for wholesome profits and a better working world.

OPPORTUNITIES IN ESG
Sustainability and environmental, social and governance (ESG) cannot be excluded from the discussion of transformation and growth. Sustainability is focused on future generations, while ESG concerns are a matter of transparency for all stakeholders. Investors, employers and even the community increasingly hold companies responsible for a balanced ESG strategy capable of supporting strategic vision and corporate purpose. Though it was previously mentioned that 43% of employees surveyed in the above cited Work Reimagined Survey are open to leaving their companies for new roles, that figure drops to 12% if employees believe their company is positively impacting the world. 

As an example, the EY organization set a target to significantly reduce its carbon emissions and become net zero by 2025. It was one of the first professional service organizations to achieve carbon negativity as of October 2021, which means it is now reducing total emissions and either removing or offsetting more carbon than it is emitting. By achieving the status of carbon negative, EY demonstrates its commitment towards accelerated climate action and sustainability.

As businesses start reopening and expanding, they also have to be prepared for additional regulatory compliance in the form of the Philippine Securities and Exchange Commission (SEC) requiring publicly listed companies (PLCs) to submit their annual sustainability report. Focusing on these ESG practices and factors is beneficial to both individual companies and investors, as it promotes the harmonization of management practices and calculates returns and risks to ensure the sustainable financial performance of organizations.

For leaders to embed sustainability at the heart of decision-making, they have to prioritize strategic goals while also taking business and sociopolitical contexts into account. They have to set clear targets aligned with a purpose-led strategy, and build a more robust approach in analyzing opportunities and risks from environmental and social changes. Last, they will need to instill discipline in reporting and non-financial performance management as a basis for continued adaptation.

FROM RECOVERY TO SUSTAINED GROWTH
The new era of work requires enterprises to embrace greater flexibility and develop their workforces as well as prioritize ESG as the new norm.  While economic conditions may seem somewhat despondent currently, we still believe that the global economy is ready to rev for growth, with companies taking the hard-earned lessons of the past few years and transforming them into performance drivers and new business opportunities.

While the journey ahead will still be challenging, it is imperative that we keep our eyes on the vision of building and restoring long-term value to our businesses as we continue to move towards a world of sustainable growth beyond the pandemic. Let us look to the rest of 2023 with renewed strength, optimism, and clarity of insight.

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. 

 

Wilson P. Tan is the chairman and country managing partner of SGV & Co.

Over 11,000 families affected by Brooke’s Point flooding 

BROOKE'S POINT MIO

MORE THAN 11,000 households in Brooke’s Point have been affected by last week’s flooding due to rains from a low pressure area (LPA), the local government reported on Sunday.   

The southern Palawan town’s information office said all 18 villages or barangays have been hit, with 11,247 families needing assistance.  

This covers about 61% of the municipality’s population of 18,478 households composed of almost 74,000 individuals.   

The local government said a full assessment of affected families is still ongoing while the delivery of relief goods is challenged by damaged infrastructure.   

An initial report from the local engineering office show 48 infrastructure assets were damaged with cost estimated at P28.56 million.   

The low pressure area (LPA) was already out of the Philippine area as of Saturday evening, but was expected to continue bringing rains to the southern part of Palawan on Sunday, according to state weather agency PAGASA.  

Moderate to heavy rains were also expected in the Visayas and Mindanao, the central and southern parts of the Philippines.  

“The movement of the LPA continues to be erratic, and there is still a possibility that it will reenter the Philippine area in the coming days,” PAGASA weather forecaster Grace Castañeda said during Sunday’s weather bulletin.   

The northeast monsoon, meanwhile, would bring rains in the northern mainland Luzon. — MSJ 

Bill filed for inclusion of Constitution as a subject in high school

A SENATOR has filed a bill seeking to include the Philippine Constitution as a subject in the high school curriculum, noting the need to enhance nationalism and ensure citizens are aware of both their rights and duties.  

“A nationalist mindset must be instilled in Filipino learners who will contribute to a strong Philippine economy, grounded in their commitment to the nation,” Senator Jose “Jinggoy” E. Estrada, who chairs the Senate Committee on National Defense and Security, Peace, Unification and Reconciliation, said in a statement on Sunday.  

Senate Bill 1443 or the proposed Mandatory Constitutional Education Act seeks to develop a course for secondary school students in all public and private schools.  

The goal is to cultivate an appreciation and exercise of democratic values, as well as foster understanding and practice of active citizenship and participation in government processes.  

It also seeks to equip students with constitutional knowledge for future analysis and involvement in public issues.  

“The development of technical-based skills in learners with the prioritization on the fields of science, technology, engineering, and mathematics must be strengthened alongside the fundamentals of nationalism and patriotism which will be engrained in the inclusion of (the) Constitution in the curriculum for secondary levels,” Mr. Estrada said.   

The Department of Education, in collaboration with concerned government agencies and constitutional experts from the academe, will be mandated to develop the course and training plan for teachers. — Alyssa Nicole O. Tan

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