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Buckle up for a volatile year of Trump-Xi, Taiwan and Kim

TAIWAN’s flag is lowered during a daily ceremony as China conducts “Justice Mission 2025” military drills around Taiwan, in Taipei, Taiwan, Dec. 30, 2025. — REUTERS/ANN WANG

By Karishma Vaswani

THIS is the season when columnists turn to prophecy, and then congratulate themselves a year later for getting some of it right. I’m afraid I’m about to join the club. 

As I predicted at the end of 2024, Asia in 2025 revolved around three main forces: the blossoming bromance between President Donald Trump and China’s Xi Jinping, rising pressure on Taiwan, and a newly emboldened Kim Jong Un drawing closer to both Moscow and Beijing.

These dynamics will only get more obvious in 2026. The region is heading into an increasingly precarious year, with deepening tensions that will have a cascading effect on all of us.

TRUMP-XI BROMANCE COULD GO SOUR
On the surface, Trump and Xi appear to have found a new warmth — but it’s fragile. Xi was the winner of the trade war in 2025, which means Trump is going into this next year on the back foot. That won’t be lost in Washington, no matter how loud the bluster.

While the rapprochement has been welcomed by markets, a lot could go wrong. They will have the opportunity to meet as many as four times in 2026, providing multiple occasions for relations to head south.

And even if they don’t, they’ll likely remain tense, according to a 2026 forecast for US-China relations from the Berlin-based Mercator Institute for China Studies. Almost three-quarters of respondents, comprising China experts and observers, see relations deteriorating across the board, from military and trade ties to technology.

That’s despite Trump’s most recent decision to allow Nvidia Corp. to sell advanced chips to China, watering down years of national security safeguards. Washington says Nvidia’s top products will still be restricted, but the move gives Beijing access to semiconductors at least a generation ahead of its best technology.

CHINA-JAPAN RELATIONS
Tokyo has become more vocal about the link between its own security and stability in the Taiwan Strait, a position Beijing views as provocative. The Chinese leader will see how much he can push Trump on Taiwan, the self-governed democratic island Beijing claims as its own. That will make Taipei more vulnerable.

TAIWAN WILL FEEL THE HEAT EVEN MORE
President Lai Ching-te has his work cut out. He’ll need to navigate a politically gridlocked legislature while trying to pass a $40-billion supplementary defense budget aimed at modernizing the military and strengthening deterrence to defend against the rising threat from China. The island has already pledged to lift defense spending to 5% of gross domestic product by 2030, up from over 3%. But more money alone may not be enough. 

US intelligence sources believe that Xi wants the People’s Liberation Army (PLA) to be capable of an invasion by 2027. However, many military strategists suggest a full-scale invasion then is unlikely, as China’s economy grapples with a slowdown and the PLA reels from corruption probes and purges. They point to quarantine or blockade scenarios instead. 

Beijing, which has vowed to take control of Taiwan through peaceful means but has refused to rule out doing so by using force, has ramped up military and political pressure in recent years to assert its claims.

The PLA conducted a second day of live-fire military drills to Taiwan’s north Tuesday, while China’s gray-zone tactics — warplanes crossing the median line, naval patrols circling the island, cyber and information warfare — are now near-daily events. These will almost certainly continue in 2026. 

KIM GETTING MORE CONFIDENT
North Korea is among the most serious risks on Asia’s security landscape. A 2025 briefing from the US Defense Intelligence Agency notes that Pyongyang has now developed an intercontinental ballistic missile capable of reaching the continental US.

Kim has repeatedly rejected denuclearization negotiations since the most recent talks in 2019 with Trump broke down. The North Korean leader views nuclear weapons as a guarantor of his security and has no intention of renouncing them. He’s also being emboldened by his deepening ties with Russia and steady support from China, which is changing the calculus on the peninsula.

South Korean officials have hinted at the chance of a summit with the North in 2026, something unimaginable over a year ago. This gives Kim leverage he’s been looking for to potentially get sanctions relief, or extract tacit approval from the US that denuclearization has been a failure and that he can go ahead and continue with his nuclear weapons program. Expect more missile launches, diplomatic theater and other attempts to hijack the geopolitical agenda.

Asia in 2026 is not on the brink of war. But the region will be more volatile than it has been in recent memory. Buckle up.

BLOOMBERG OPINION

Peso may trade in tight range to open the year amid holiday-thinned liquidity

COLLAGE OF BWORLD PHOTO AND FREEPIK

THE PESO could move within a limited range to open 2026 amid a lack of catalysts, with activity likely to be driven by positioning and entities keen to take advantage of bargains to secure their dollar requirements.

On Dec. 29, the last trading day for 2025, the local unit closed at P58.79 versus the greenback, depreciating by eight centavos from its P58.71 finish on Dec. 26, 2025.

Year on year, the peso depreciated by 94.5 centavos or by 1.61% from its P57.845 close at end-2024.

Philippine financial markets were closed on Dec. 30, Dec. 31, and Jan. 1 for Rizal Day and the New Year holidays.

The peso will likely continue to move sideways when the market reopens on Friday as players seek fresh leads, a trader said in a text message.

“There could still be some accumulated though residual seasonal increase in OFW (overseas Filipino workers) remittances and conversion to pesos to finance Yuletide- and New Year-related holiday spending, though offset by some bargain hunting by some importers and others with requirements for US dollars,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. He expects the peso to move between P58.65 and P58.95 per dollar on Friday.

Meanwhile, the US dollar advanced on Wednesday, erasing earlier declines after a stronger-than-expected labor market reading, Reuters reported.

The dollar index, which measures the greenback against a basket of currencies, rose 0.27% to 98.50.

For the year 2025, the dollar was down more than 9%. — AMCS

Analysts weigh impact of stock exchange’s one-share trading rule

REUTERS

By Alexandria Grace C. Magno

THE Philippine Stock Exchange’s (PSE) proposal to adopt a one-share board lot and revise run-off and trading-at-last rules could broaden retail participation, though analysts warn the changes may also lead to fragmented liquidity, execution challenges and higher operating costs for brokers.

“In theory, allowing investors to buy a single share improves accessibility and aligns the PSE with global practices, especially as digital platforms attract younger, smaller-ticket investors,” Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message.

“However, the trade-off is a higher risk of fragmented and choppy trading, as order books may become crowded with very small orders that add noise rather than depth,” he added.

In December, the PSE released proposed changes that would standardize the minimum lot size at one share for all listed securities, regardless of price. The move will effectively abolish the odd-lot market and lower the minimum capital required to buy any stock, as part of the exchange’s broader trading system upgrade.

Mr. Arce said overall participation might rise, but liquidity quality could initially deteriorate, particularly in thinly traded stocks where wider bid-ask spreads and sharper price movements are more likely.

“Much will depend on how brokers implement minimum order value policies and how quickly market participants adapt their order-routing and aggregation strategies,” he added.

Under the proposed amendments, the revised board lot will reduce the minimum investment for any security to its market price.

“The proposed board lot will allow investors to trade a single share of a security and effectively reduce the minimum investment for any security to its market price, making stock market investing more affordable and accessible to retail investors,” the PSE said.

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said a uniform board lot would also shift all trades to the regular market, removing inefficiencies tied to odd-lot transactions.

“Trading participants are allowed to set a reasonable minimum order value, so the rule change is a win-win for both brokers and small investors,” he said in a Viber message.

By consolidating liquidity into the regular market, the proposal could eliminate price distortions and wide bid-ask spreads that typically characterize odd-lot trades, Mr. Colet said.

To address concerns from trading participants whose business models may not suit a one-share structure, the PSE said brokers could impose minimum order values when accepting client orders. This provision is meant to offset higher processing costs from handling many small-value trades, especially for firms focused on institutional clients.

The exchange said any minimum order value must be implemented without exceeding commission limits under existing laws and regulations.

Mr. Arce noted that while the change could help attract first-time investors and incremental retail activity, it is not a complete solution to boosting market participation.

He noted that if brokers set minimum order values too high, accessibility gains could be diluted, while setting them too low might create operational inefficiencies and weaker per-trade economics.

“Over time, the reform could shift retail behavior toward more frequent but smaller trades, which may boost headline trade counts but not necessarily value turnover,” Mr. Arce said.

BDO Securities also said it does not expect major issues from the proposed changes, particularly in terms of retail participation, noting that removing odd lots could boost transaction volumes without lifting peso turnover value.

“Overall, the Philippine stock market has not been performing well, which has led retail investors to other types of investments outside the PSE,” it said.

It added that institutional clients generally view odd-lot trades as immaterial, but brokers will need to update systems to support the framework. These upgrades “will entail added costs, which will vary from broker to broker.”

The board lot proposal coincides with the PSE’s migration to Nasdaq Eqlipse Trading. The exchange said it completed a detailed gap analysis comparing Nasdaq Eqlipse Trading with PSEtrade XTS across operational, functional and regulatory requirements.

One identified gap involves trading during the run-off or trading-at-last period. Under PSEtrade XTS, incoming orders are rejected if the counterparty order price is more favorable than the established closing price.

The PSE noted that under Nasdaq Eqlipse Trading, orders priced at the closing price will be accepted and matched at that level, even if existing orders are priced more favorably. This lets more trades go through at the close, without disadvantaging investors whose orders are executed at the closing price.

Mr. Arce said the combined impact of broker-level minimum order values and revised run-off trading rules could complicate execution for institutional and end-of-day rebalancing trades.

“In the medium term, the success of these reforms will hinge on calibration — how minimum order values are set, how brokers adapt execution models and how effectively the PSE balances inclusivity with market efficiency as it transitions to a more technologically advanced trading environment,” he said.

Queen Camilla describes being assaulted by man as a teenager

BRITAIN’S Queen Camilla has described for the first time fighting off an attack by a man on a train when she was a teenager, speaking in an interview with the BBC in which she recounted how furious the assault had left her.

“When I was a teenager, I was attacked on a train… I remember at the time being so angry,” she said during a discussion broadcast on Wednesday about violence against women.

“I was reading my book and you know this boy — man — attacked me, and I did fight back.”

She said she did not know the man who attacked her.

Camilla, 78, has for many years championed charities and causes that seek to end sexual and domestic violence and to support victims. The assault was first reported in September when a book about the royal family was serialized in the Times newspaper, but had not previously been confirmed by Buckingham Palace.

“I remember getting off the train and my mother looking at me and saying “Why is your hair standing on end and why is the button missing from your coat?’” she told the BBC.

“I was so furious about it and it’s sort of lurked for many years.”

The book said the incident happened on a train to Paddington Station in London when Camilla was about 16 or 17 years old, and she responded by taking off her shoe and using it to hit him in the genitals.

When she arrived at Paddington, she pointed the attacker out to an official and he was arrested, the book said.

Camilla did not confirm those details in the interview.

The queen is the second wife of King Charles, who ascended the throne in 2022. — Reuters

Minimum wages raised in most Philippine regions

Commuters wait for public transportation along Ortigas Extension in Cainta, Rizal, Sept. 14, 2022. — PHILIPPINE STAR/ WALTER BOLLOZOS

THE PHILIPPINE government has wrapped up most of its 2025 regional minimum wage reviews, leading to a round of pay increases for workers across the country, the Department of Labor and Employment (DoLE) said.

Fourteen regional wage orders covering private sector workers were issued last year by Regional Tripartite Wages and Productivity Boards, the agency said in a statement.

These covered the National Capital Region (NCR), Cordillera Administrative Region (CAR), Ilocos Region, Cagayan Valley, Central Luzon, Calabarzon, Mimaropa, Western Visayas, Central Visayas, Eastern Visayas, Zamboanga Peninsula, Northern Mindanao, Soccsksargen and Caraga. The increases ranged from P20 to P100 daily.

The NCR kept the highest minimum wage level nationwide, with daily rates ranging from P658 to P695. Other regions approved more modest adjustments, reflecting differences in local economic activity, cost of living and productivity conditions.

Separate wage orders were also issued for domestic workers. DoLE said 11 wage orders covering domestic workers were released in the CAR, Ilocos Region, Cagayan Valley, Central Luzon, Mimaropa, Western Visayas, Central Visayas, Eastern Visayas, Northern Mindanao, Soccsksargen and Caraga. These orders granted monthly minimum wage increases ranging from P300 to P2,000.

DoLE estimates that more than 4.5 million minimum wage earners in private establishments directly benefited from the wage adjustments in 2025. About 755,000 domestic workers were also covered by the revised rates.

“Wage orders were issued in consultation with workers and employers to ensure balance between protection and needs, reasonable returns on investments and employment generation,” the agency said.

It added that about 8 million full-time wage and salary workers earning above the minimum wage could also benefit indirectly. These adjustments may trigger wage distortion corrections at the enterprise level.

DoLE defines wage distortion as a situation where a mandated wage increase reduces or eliminates established pay differences among employee groups within the same company.

Separately, DoLE confirmed that the National Wages and Productivity Commission has affirmed the wage orders for Northern Mindanao, which will take effect on Jan. 16. These include a P39 daily minimum wage increase for private sector workers, to be implemented in two tranches, and a P500 monthly increase for domestic workers.

Once fully implemented, minimum daily wages in Northern Mindanao will range from P485 to P500. Monthly pay for domestic workers in the region will rise to P6,500.

Meanwhile, wage boards in the Davao Region and Bicol Region are expected to begin their wage review processes in January and February, respectively.

DoLE said wage-setting decisions continue to rely on consultations with labor and management groups, alongside assessments of regional economic conditions, productivity trends and employment levels.

Beyond wage setting, DoLE said the National Wages and Productivity Commission and wage boards have reached more than 28,000 micro, small and medium enterprises through productivity and gain-sharing programs. A portion of these firms had begun executing productivity-based action plans as of November 2025. — Erika Mae P. Sinaking

Tariffs, China, and the dollar: What Wall Street got wrong in 2025

A WALL STREET subway stop sign is seen in New York. — REUTERS/SHANNON STAPLETON/FILE PHOTO

By Jamie McGeever

ORLANDO, Florida — This was one of the most topsy-turvy years in living memory for financial markets, as US President Donald Trump tore up the economic playbook that has shaped the multilateral, globalized world for decades.

The president’s strategy may have been well telegraphed, but its impact on markets, growth, and policymaking turned out to be very different from what most Wall Street analysts had expected.

The global trade war of 2025 should not have come as a surprise. Trump campaigned on making American manufacturing great again.

“I love tariffs,” Trump said at a rally in Las Vegas two weeks before the election. “I can make anybody do anything through the use of tariffs.”

Trump said he would force countries around the world to pay for “ripping off” the US with “unfair” trade practices — and he did just that on April 2, so-called “Liberation Day.”

Despite months of warning, analysts and investors were still caught flat-footed by the chaotic rollout of a host of sky-high tariffs.

The S&P 500 lost nearly 15% in the three days after Liberation Day, only to recoup most of that in the next few days once Trump delayed some of the more extreme elements of his flagship policy.

Yet even after Trump’s partial rollback, the trade landscape has been transformed. The effective US tariff rate on imports at the end of last year was around 2.5%. It is now nearly 17%, according to The Budget Lab at Yale, the highest since 1935.

What is perhaps most surprising is how little most markets seem to care.

The S&P 500 was expected to end this year at 6,500 points, according to the consensus forecast in Reuters’ 2024 year-end poll. That implied a rise of around 9%. The index is on track to gain twice as much, making a push for 7,000 points.

DOLLAR’S HISTORIC SLUMP
Want to find the biggest forecasting flub of the year? Look no further than the US dollar. The greenback plunged 12% against a basket of major currencies in the first six months of 2025, its worst start to a year since President Richard Nixon took the US off the gold standard and began the era of free-floating exchange rates more than half a century ago.

That wasn’t supposed to happen. Trump’s protectionist tariffs and onshoring were expected to be inflationary and thus liable to keep monetary policy relatively tight. That, in turn, would support foreign inflows into the US and strengthen the dollar, or so the consensus view held.

But the rally never materialized, in large part because many global investors balked at Trump’s controversial policy agenda and trimmed their dollar exposure.

Foreign investors still wanted exposure to the US tech boom and artificial intelligence revolution, so they piled into US equities, but — in a break from the recent past — they hedged the currency risk.

As a result, this year featured a rare phenomenon: a Wall Street boom and a dollar slide.

THE YUAN ALSO RISES
The Chinese yuan — and, in many ways, China itself — was another major forecasting miss.

Analysts’ consensus view early in the year was that Beijing would retaliate against Washington’s tariffs by depreciating the yuan to boost exports, especially given the deflationary pressures bearing down on China’s economy.

But the yuan moved in the opposite direction, at least against the dollar. China’s currency was set to end this year at its strongest level against the greenback in 14 months, a whisker away from the all-important 7.00 yuan per dollar level.

This appreciation hasn’t tanked China’s export market, however. While the country’s shipments to the US have dropped nearly 20% this year, exports to the rest of the world have more than made up for this, pushing China’s 2025 trade surplus above $1 trillion and disproving yet another economic rule of thumb. Rather than focus on boosting domestic demand, China appears as wedded as ever to an export-led growth model.

TRUMP’S SHADOW
Last but not least, there is the Federal Reserve.

A year ago, futures markets were pricing in only one full quarter-point interest rate cut in 2025, but the Fed delivered three, all coming in the last four months of the year.

Cynics might put this dovishness down to the intense political pressure bearing down on Chair Jerome Powell from the White House. Yet, if political interference is to blame, markets didn’t appear overly concerned.

Fed independence is supposedly the cornerstone of the US financial system, but Trump’s actions have elicited barely a peep from investors, barring some ructions in May when Trump indicated that he might fire Powell.

Indeed, US equities, the dollar, and 10-year Treasuries all rose in the second half of the year even as the president’s shadow over the Fed lengthened.

For now, investors seem to be getting used to Trump’s new economic playbook. Will that change next year? Many of the issues that dominated 2025 — worries over trade, an AI bubble, rising public debt, and central bank independence — are still very much in the 2026 mix. It could be another topsy-turvy year.

REUTERS

Note: The opinions expressed here are those of the author, a columnist for Reuters.

A sober look at the New Year

Every new year arrives with noise. Fireworks, countdowns, slogans about fresh starts. As business leaders and managers, we are expected to sound upbeat, to rally people around new goals and bold plans. I understand why. Optimism sells. It motivates. It makes people feel lighter after a long and difficult year. But after decades of working with organizations, both here and abroad, I have learned to be cautious of this ritualized optimism. The new year also has a flip side, and ignoring it can be costly.

I have always found it useful to begin the year not with grand promises but with a quiet inventory. What is broken? What is fragile? What might get worse before it gets better? This may sound pessimistic, but it is actually an act of responsibility. Leaders who only talk about hope risk blinding their teams to real constraints. In business, hope without realism quickly turns into frustration.

Globally, the mood is far from simple. Inflation may be easing in some markets, yet costs remain stubborn. Supply chains are still exposed to conflict, climate shocks, and politics. Technology continues to move fast, especially with AI, but adoption gaps are widening. Some firms are racing ahead, while many are quietly struggling to keep up. This unevenness matters. When leaders declare that the new year will be a breakout year, they often forget that not everyone starts from the same line.

In the Philippines, the contrast is even sharper. On paper, growth numbers look decent. Consumer spending is holding up. Yet talk to business owners, managers, or even government staff, and you hear a different story. Budgets are tight. Hiring is cautious. Projects move slowly. Decisions are delayed because approvals take time, or because people are simply exhausted. I have seen teams enter January already tired, carrying unfinished work from the previous year, expected to act as if everything has magically reset.

This is where realism becomes a leadership skill. A new calendar does not erase old problems. Backlogs do not disappear. Weak systems do not suddenly improve because of a resolution slide in a town hall. When leaders acknowledge this openly, something interesting happens. People relax. They feel seen. The pressure to perform optimism fades, and honest conversations begin.

There is also value in what some might call healthy pessimism. Not the kind that complains endlessly, but the kind that plans for things to go wrong. I often tell executives that pessimists build buffers. They ask what happens if revenues fall short, if a key person leaves, if a policy shifts, if technology fails. Optimists assume smooth sailing. Pessimists design lifeboats. In uncertain times, lifeboats matter more than slogans.

In management, the start of the year is when targets are set. Stretch goals are fashionable. They look good on paper and in board decks. But stretch goals without clear trade-offs create silent damage. Teams cut corners. Managers burn people out. Ethical lines blur. When results fall short, blame travels downward. A more grounded approach asks harder questions. What can we realistically deliver with the people and tools we have? What should we stop doing to protect what truly matters?

Leadership also means managing expectations, not just performance. In the Philippines, we are culturally inclined to say yes, to avoid disappointing others. This tendency becomes stronger at the start of the year, when everyone wants to sound cooperative and positive. Yet leaders who never say no in January often spend the rest of the year explaining delays and failures. Realism early on saves relationships later.

I have also noticed that personal new year habits spill into organizations. Individuals promise to be more productive, healthier, more disciplined. By February, guilt sets in. The same happens in companies. Big transformation programs are launched, only to stall quietly. A leader who accepts that change is slow, uneven, and sometimes boring is better equipped to guide it. Progress measured in small steps may lack drama, but it lasts.

None of this means abandoning hope. It means grounding hope in evidence. It means admitting that some years are about defense, not expansion. Some years are about fixing leaks, not building towers. In my own work, there were years when survival and learning mattered more than growth. Those years were not failures. They were preparation.

As the new year unfolds, I encourage leaders to balance optimism with clear-eyed judgment. Speak about risks as openly as opportunities. Allow teams to express doubt without being labeled negative. Reward honesty over cheerleading. In doing so, you build trust, and trust is a far stronger asset than motivational quotes.

The new year does not owe us success. It offers time. What we do with that time depends on how honestly we see the road ahead. Realism may not sound inspiring, but in the long run, it is what keeps organizations standing when the initial excitement fades.

The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX.

 

Reynaldo C. Lugtu, Jr. is the founder and CEO of Hungry Workhorse, a digital, culture, and customer experience transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation. He teaches strategic management and digital transformation in the MBA Program of De La Salle University.

rey.lugtu@hungryworkhorse.com

NNIC records over 50M passengers in 2025

REUTERS

NEW NAIA Infra Corp. (NNIC) said it handled 52.02 million passengers in 2025, with holiday travel driving overall growth at the Ninoy Aquino International Airport (NAIA).

“Managing higher passenger volumes requires both infrastructure and close coordination,” it said in a statement on Thursday. “The focus has been on improving flow, reducing bottlenecks and ensuring the airport can handle peak demand more effectively.”

December alone saw 4.86 million passengers, with 2.37 million international travelers and 2.5 million domestic passengers. Despite the surge, airport operations remained stable, the company said.

It did not provide comparative year-ago figures.

NNIC credited operational improvements introduced last year for the smooth handling of passengers. These include new biometric immigration gates, upgraded passenger processing systems and enhanced terminal facilities.

Data from the Manila International Airport Authority (MIAA) showed NAIA’s passenger volume for January to September 2025 rose 3.96% to 38.86 million from a year earlier. Domestic traffic grew 3.29% to 20.75 million, while international passengers increased 4.74% to 18.11 million. Over the same period, MIAA recorded 218,086 flights, down 0.6% from 2024. — Ashley Erika O. Jose

Tatiana Schlossberg, granddaughter of JFK, dies of rare form of leukemia

TATIANA SCHLOSSBERG, granddaughter of the 35th US president, John F. Kennedy (JFK), died on Tuesday after revealing in a November essay that she had been diagnosed with a rare form of leukemia. She was 35.

Her passing was announced by her family in a social media post from the John F. Kennedy Presidential Library and Museum.

“Our beautiful Tatiana passed away this morning. She will always be in our hearts,” the family wrote.

Ms. Schlossberg was a climate change and environmental journalist and the second child of JFK’s daughter, former US diplomat Caroline Kennedy, and the designer-artist Edwin Schlossberg.

In a New Yorker essay published in November, Ms. Schlossberg said she had been diagnosed with acute myeloid leukemia with a rare mutation, a cancer of the blood and bone marrow.

At the time, she also criticized her cousin Robert F. Kennedy, Jr., the US health secretary, for being a vaccine skeptic and cutting funding for cancer research. — Reuters

Rejecting worker ideas without creating hatred

There are individuals and teams that continue to create unwanted ideas that border on folly as if they’re testing management sincerity. Exactly how do we manage ideas without making them feel we are too harsh in declining their work? — Quiet Fox. 

First rule of the game? Don’t use unkind words, even if you’ve just received costly to implement or impractical suggestions. It’s difficult, but there’s always a way of deciding on each and every case by following certain guidelines that you’ve formulated when you started promoting, soliciting and receiving ideas.

If not, it’s not too late for you to adjust, change or even create new rules.

In today’s fast-paced business world, many dynamic organizations rely heavily on employee creativity and initiative. Chief executive officers know their managers can’t do it alone. The solution depends much on the active contribution of an army of employee problem solvers.

Linus Pauling (1901-1994), one of the greatest scientists of the 20th century, said: “The best way to have a good idea is to have a lot of ideas.” In other words, quantity precedes quality. That also means tolerating silly ideas under certain limitations.

For people managers, the challenge is delicate: how can you reject ideas without discouraging future contributions or creating resentment among employees?

BALANCING ACT
You have to do it with a mix of empathy, transparency and strategic communication. Rejecting an idea need not be a negative experience. When handled correctly, it can strengthen trust, motivate employees to keep contributing and foster a culture of collaboration. Here are some key strategies to achieve that balancing act:

One, make the process easy for the workers. How easy it is for an employee to submit an idea? Can it be done on a piece of paper or via e-mail with a brief explanation, that could be understood in less than five minutes? How about using a QR code or any internally developed app?

​Two, pass the screening process to a triage. This alone insulates top management from harm. Acknowledge receipt within 24 hours. Authorize a three-person small management committee composed of a leader, supervisor and manager for each department. Let them do the cost-benefit analysis as many, ordinary workers aren’t skilled on it.

Three, separate the idea from the employees. Reject the bad idea from the contributor. However, be respectful. Regardless of your industry, be like Toyota that has the ideal, long-term two pillars of “Continuous Improvement” and “Respect for People,” which can’t be separated from one another.

Four, give credit and ownership to the right worker. The sponsor is the worker who’s doing the task every day and is undoubtedly the closest person to the issues. They know how to make things easy for them without sacrificing product quality and quantity. They must be allowed to witness the experimental process, with the help of their leaders, acting as coaches.

Five, implement right away after a successful pilot test. This applies if the idea requires zero, if not minimal investment. If you’re confident, do a company-wide rollout with the condition that it’s for further evaluation. If successful, write the standard operating procedure and circulate it with other stakeholders.

Six, be clear and specific about the rejection. Vague rejections are breeding grounds for confusion and disappointments. By simply saying, “That won’t work” at the outset leaves employees feeling dismissed and undervalued. Instead, explain why the idea cannot be implemented at that time.

Or you may say, “the idea is sound, but at this stage the cost outweighs the benefit.” Also, you may rethink the process to salvage something from an employee’s idea. At times, even weak ideas often contain a usable fragment.

POSITIVE CULTURE
The setting of your feedback can greatly influence how it’s received. For ideas that may be sensitive or disappointing, a private conversation is often the best option. This prevents embarrassment, protects morale and reinforces trust. Public rejections, especially in team meetings, can unintentionally discourage participation and generate resentment.

After rejecting an idea, it’s essential to reinforce a positive culture of idea-sharing. Make it clear that the employee’s contributions are valued and that future suggestions are welcome.

A simple statement like: “Even if this particular idea won’t move forward, I really value your perspective. Please continue bringing ideas to the table.”

Communication is not just about words. Tone, body language and facial expressions play a crucial role in how a message is received. Leaders should maintain a calm, neutral tone and avoid defensive or dismissive gestures. A sincere, approachable demeanor communicates respect and keeps the interaction constructive.

Finally, maintain a record of rejected and submitted ideas for future use. It demonstrates organizational commitment to innovation. Employees can see that their contributions are acknowledged and tracked, rather than discarded.

Lastly, if management only listens to “perfect” ideas, it will never hear the good ones.

Here’s wishing you fewer resolutions and better direction this New Year.

 

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

CEBR: Philippines to be 24th largest economy by 2040

The Philippines is expected to become the 24th largest economy globally by 2040, according to the latest edition of the World Economic League Table. Published by London-based think tank Center for Economics and Business Research (CEBR), the country’s gross domestic product (GDP) is projected to hit $1.5 trillion. This represents a nine-rank improvement from the country’s 2025 ranking of 33rd among 190 economies.

PHL market may kick off 2026 on cautious note

BW FILE PHOTO

PHILIPPINE STOCKS may start 2026 moving mostly sideways as trading activity is expected to remain thin due to the holidays and as the market awaits developments on the National Government’s budget for the year.

On Dec. 29, the last trading day for 2025, the bellwether Philippine Stock Exchange index (PSEi) dropped by 0.21% or 12.72 points to end at 6,052.92. Meanwhile, the broader all shares index increased by 0.24% or 8.58 points to 3,473.24.

Year on year, the PSEi was down by 7.29% or 475.87 points from its end-2024 finish of 6,528.79.

Philippine financial markets were closed on Dec. 30, Dec. 31, and Jan. 1 for Rizal Day and the New Year holidays.

As trading resumes on Friday, the market is expected to start the year on a quiet note amid the holiday lull, F. Yap Securities Investment Analyst Marky Carunungan said.

“For the first trading day of 2026, we expect the market to trade cautiously with a slight downside bias given a thin holiday liquidity and lingering uncertainty around the delayed signing of the 2026 budget,” he said.

“While broader fundamentals point to a gradual recovery later in the year, near-term sentiment may still remain fragile until there’s clarity on fiscal execution.”

Executive Secretary Ralph G. Recto said on Tuesday that President Ferdinand R. Marcos, Jr. and his team are reviewing the 2026 General Appropriations Act (GAA) and the changes made by lawmakers. Mr. Marcos is expected to sign the GAA on Jan. 5, forcing the country to operate on a reenacted budget in the first few days of 2026.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said players could take cues from how other stock markets performed over the Philippine bourse’s three-day trading break.

“There is a chance for a start-of-the-year rally, depending on forecasts, especially on reform measures on anti-corruption and further improving governance standards — especially if these priority reform measures are taken seriously,” Mr. Ricafort said.

Meanwhile, for this year, analysts said the PSEi could continue to struggle to find its footing as economic uncertainties linger.

“There’s a chance that the market could rise to around 6,600-6,700 if we see decisive action on governance issues as well as a sustained trend of GDP (gross domestic product) growth above 5%. Conversely, there’s a risk of the index revisiting 5,600 or lower if economic growth stalls or fresh governance concerns emerge,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said.

“We expect the index to tread sideways between the 6,000 and 6,400 range as a multitude of headwinds, such as the slowdown in manufacturing activities, softer consumer spending, and tightening infrastructure disbursements which could taper economic growth once again,” AP Securities, Inc. Equity Research Analyst Shawn Ray R. Atienza added. — Alexandria Grace C. Magno

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