National leadership and our collective future

August 7, 2022 | 5:52 pm

FORMER President Fidel Valdez Ramos re-enacts the famous jump for joy he did on February 25, 1986 in the 2011 EDSA People Power Revolution Anniversary celebrations. — BW FILE PHOTO

(In view of the recent passing of former president Fidel V. Ramos, Introspective is reprinting a tribute column from Jan. 11, 2010.)

Our country is at a crossroad. Results of the May elections, an orderly transfer of power, and no less, the person who will occupy the country’s CEO position, will define the course of our collective future for at least the next six years.

There have been worrisome declines in objective indicators of global competitiveness, governance and transparency, economic freedom, and credit rating since 1998 (see World Economic Forum: Global Competitiveness Index, www.weforum.org;Transparency International: Corruption Perceptions Index, www.transparency.org; The Heritage Foundation: Index of Economic Freedom, www.heritage.org; and Standard & Poor’s, www.standardandpoors.com). While it may be argued that there are factors that contributed to this decline beyond the control of the national leadership, say, economic tsunamis like the Asian and global financial crises, such consistent RELATIVE declines over such an extended period compared to peers outside and within our neighborhood, cannot but be attributed to leadership failure — if not to malign, then benign, neglect.

It has not always been this way, and more importantly, needs not be. For example, can there be good reason for us to be ranked 144 out of 183 in a World Bank report released two weeks ago on ease of doing business, even below Pakistan, Bangladesh, the West Bank, and Gaza, and down there with troubled countries Zimbabwe and Afghanistan? Or worse, continue on a downward descent?

Assuredly none. I earlier wrote about a study that my LBT colleague and I did for the World Bank Growth Commission (chaired by Nobel Prize winner Michael Spence) on the political economy of reform during the Ramos years (https://openknowledge.worldbank.org/handle/10986/28020).

In it, we looked at what it took the Ramos administration to successfully push for reform (in telecom demonopolization, water privatization, and oil deregulation) working against strong special interests (e.g., from affected businessmen, labor constituencies, political ideologues) and using instruments, both formal and informal, at the disposal of the presidency in an environment of weak, lethargic, or sometimes obstructive/compromised institutions, including an underdeveloped and poorly motivated bureaucracy.
It finds, no surprise, that leadership matters crucially.

The personal qualities and experience of the leader for the most difficult job in the country matter much. His ability to think strategically; the clarity of this national vision and its articulation; his ability to attract, inspire, manage, and forge cohesion in a first-class team; his ability to build coalitions and political consensus and educate the public and get their support to overcome obstacles and persevere; and other leadership attributes and management skills come out as elements for success in pushing reforms in a difficult terrain.

Mr. Ramos has had preparation for leadership at an early age. A West Point graduate with degrees in Engineering and an MBA, he honed his executive skills over decades within the military and civilian bureaucracies and his political skills in dealing with politicians and the public in areas of peacekeeping and development. As former Finance Secretary Roberto de Ocampo quipped explaining his successes upon receiving the Finance Minister award from Euromoney in 1996, “A finance secretary has many key decisions to make; not least of them, which president to serve.”

The case studies as well showed the importance of timing. A new president has six years to make a difference. He and his team cannot solve everything in one go — indeed some problems may be so intractable, or be met with overwhelming political opposition, that if he started on them first, he would have sown the seeds, and demonstrably shown, abject failure early on, in what may become the signature of his administration.

He needs to hit the ground running, and score early, and impressive, victories that build confidence and get the public fully behind him for more difficult items down the road of his reform agenda. During the Ramos administration, the immediate problem, and opportunity, was getting the economy on track after debilitating outages that saw GDP contract by 0.6% — to put back the lights both literally and in terms of business confidence. This was achieved in a record time of 15 months, thanks to Ramos’ no-nonsense leadership and empowerment of known achievers: Energy Secretary Del Lazaro, recruited from a distinguished career in the private and briefly in the public sector, and NPC President Sonny Viray, a PhD in Electrical Engineering and dean of the UP College of Engineering.

Such a victory set the stage for reviving investments and rallying public support behind other reforms to improve global competitiveness, including bringing to the next stage, the trade and investment liberalization started earlier, deregulation, privatization/public-private partnerships, fiscal consolidation, that has contributed importantly to the resilience of the Philippine economy even during the Asian crisis and the more recent global financial tsunami. The improvements in objective indicators of competitiveness and governance/transparency, economic freedom, and credit rating since 1992 are a matter of record as have been their deterioration since 1998.

The take-away from all this is not that our country is doomed to take one step forward, and then two steps backward, but that it is possible to reverse the decline. For our next CEO, improving fiscal performance, side by side with a well thought-out and executed infrastructure and social spending program, including through transparent public-private partnerships, would be a good place to start. Our collective future depends on it.

Romeo L. Bernardo was finance undersecretary from 1990-96. He is a trustee/director of the Foundation for Economic Freedom, Management Association of the Philippines, and FINEX Foundation. He is Philippines principal adviser to Globalsource Partners

globalsourcepartners.com

romeo.lopez.bernard@gmail.com

Getting the diagnostics right

August 7, 2022 | 5:50 pm

SOURCE: MILLENNIUM CHALLENGE CORPORATION
HTTPS://WWW.MCC.GOV/RESOURCES/STORY/STORY-CDG-CHAPTER-3-GUIDELINES-FOR-CONSTRAINTS-TO-ECONOMIC-GROWTH-ANALYSIS

(Part 1)

On Aug. 4, the Philippine Statistics Authority (PSA) announced that Philippine inflation hit 6.4% in July, the fastest year-on-year growth in four years.

Fast-rising inflation has exacerbated poverty and affected household spending all over the country. But at the same time, this inflation is not a result of a “hot economy.” In fact, we are still at the critical stage of recovering our economy and returning to pre-pandemic levels of income and output.

In short, the administration needs a solid, coherent plan. The goal is not just to arrest immediate inflation and mitigate its negative impact, but to bring about sustained economic growth in the Philippines following the pandemic-induced recession and a high fiscal deficit.

In this regard, a central question that Ferdinand Marcos, Jr.’s state of the nation address (SONA) should have answered is: What is the President’s diagnosis of the main problems plaguing our country? What are the binding constraints on the economy? And how did he arrive at the diagnosis?

In his SONA, the President said that we face “difficult times.” and “we will continue to find solutions.” With respect to the economy, he enumerated a number of proposed measures wherein he highlighted “sound fiscal management.” But clarity is lacking as to what underpins these proposals, and whether these proposals are most responsive to the binding constraints.

Instead of assessing the country’s current economic situation and the policy recommendations, this piece (Part 1) will focus on explaining how to do the growth diagnostics approach. This policy tool comes from a 2005 paper by Ricardo Hausmann, Dani Rodrik, and Andres Velasco, entitled “Growth Diagnostics.”

The paper informs readers, particularly policy makers and economists, on the relevance of doing diagnostics to identify an economy’s binding constraints. It is likewise a critique of the Washington Consensus (WC), a set of wholesale, if not second-best, policy recommendations supported by the International Monetary Fund and the World Bank. The WC failed to deliver sustained higher levels of investments in many emerging economies.

Hausmann et al. argue that a growth diagnostics approach is needed towards narrowing the policy interventions that are most appropriate to removing the major barriers to investments. Setting the ambitious goal to solve all problems or distortions all at once (like the WC) is unrealistic. The arguments of Hausmann et al. are summarized below.

There are four typical reform strategies, which Hausmann et al. argue are inferior to the growth diagnostics approach.

The first is “wholesale reform,” in which all issues are simultaneously eliminated. This is practically impossible. In the first place, policymakers lack the relevant information regarding all the distortions in order to do wholesale reform. In the second place, pursuing reforms everywhere stretches and exhausts institutional capacity.

The second is “do as much reform as you can, as best as you can,” which is the prevailing approach and is a laundry-list approach to reform. This simply goes for whichever reforms seem to be doable, relying on the idea that the more areas are reformed, the better, and that any reform is good. This is faulty because we cannot be sure that any given reform taken on its own can be guaranteed to be good, due to numerous other issues which it might interact with. For example, a doctor can prescribe medicine that is in itself good for the patient, but when taken in combination with other drugs, it could have contraindications and lead to increased harm.

The third is the second-best reform, which prioritizes reforms that lead to positive second-best effects. But it is often difficult to forecast second-best interactions before they happen. Despite being aware of possible negative effects of the interaction of doable reforms, we cannot at the outset predict what the costs are. The full transaction costs of a controversial reform, for example, only emerge after the fact.

The fourth criticized strategy is: If the second-best interactions cannot be ascertained, reformers may opt to target the biggest distortion. But this doesn’t guarantee that the reforms with the biggest impact on economic welfare and growth will be worked on first. Biggest distortions do not necessarily correspond to achieving the biggest net benefits for society. (Take for example, the higher corporate income tax, relative to similarly situated countries in the region. One can concede that this is a big distortion. But investors themselves do not consider the higher tax as the most binding constraint.)

We cannot thus afford to undertake what Hausmann et al. call a “spray-gun” approach, which has too many targets. As worldwide experience has shown, it is not only ineffective; it also leads to unintended adverse consequences, making the situation worse.

Besides political, capital, time, and resources are finite. Hence these limited resources are better used to work toward the most important reforms.

The solution is to focus on the most binding constraints, or the principal problems, which provide the most “bang for the reform buck.” This approach focuses on the bottlenecks directly. These are the obstacles that if not cleared, would make the economy grind to a halt. Overcoming these obstacles brings about a large magnitude of benefits for society, the economy, or the sector.

Determining binding constraints is not a simple task. The growth diagnostics approach uses a problem tree (Figure) to look at the proximate determinants of economic growth (e.g., savings, innovation, infrastructure, etc.) rather than the specific problems.

Using the problem tree requires answering the following questions: What keeps growth low? What hinders the flow of productive investments? Is the main problem the low return to economic activities or the high cost of finance?

If the main problem revolves around low return to economic activities, is it due to risks in the macroeconomy like inflation or narrow fiscal space? Or is it about low social returns like insufficient investment in complementary factors of production such as human capital or infrastructure? Or is it due to poor access to technology? Or poor property rights and contract enforcement, labor-capital conflicts, or learning and coordination externalities?

Or is low growth mainly explained by inadequate access to finance? Are there problems with the domestic financial markets or external markets? If it’s a problem of poor domestic markets, is this due to fiscal deficits or poor intermediation?

After doing a process of elimination, we can separate the non-binding from the binding constraints. Once we know where to focus, we find the associated economic distortions whose removal will make the biggest contribution to alleviating the constraints on growth. Then we can proceed to choosing the appropriate policy or intervention. However, this does not yet determine the exact sequencing of policy interventions. Once the primary binding constraint is adequately addressed, we return to the problem tree framework for the next challenge.

To illustrate the use of the growth diagnostics framework, let’s apply this to the case of the Philippines. In 2010, when President Noynoy Aquino’s term began, the binding constraint was the narrow fiscal space due to the previous administration’s politicized spending and reluctance to pass further tax reforms. To resolve this, the Aquino administration successfully pushed for the passage of the sin tax reforms, which increased, simplified, and improved the excise tax regime.

The sin tax reforms relaxed our fiscal space. However, it was still necessary to further increase taxes to finance high spending for infrastructure. During the Aquino term, infrastructure spending was low and became a binding constraint.

The Duterte administration addressed the issue of low infrastructure spending, inadequacy, and deterioration of infrastructure by legislating the comprehensive tax reform program. This resulted in the country’s highest tax effort since the Ramos administration. These reforms upgraded our creditworthiness and enabled the financing of infrastructure and other public goods.

Moving forward, we ask: What are the binding constraints hampering growth in the Philippines today? A wholesale reform strategy will only waste our resources. In the same vein, a misdiagnosis can possibly further constrain our growth. Is the binding constraint the “high cost of finance” or the country’s rising debt? Is it low social returns, arising from the COVID-19 pandemic? Is the health system or the education system impeding growth and investments? Does infrastructure remain a binding constraint? Or have the macro risks like the threat of narrowing fiscal space and high prices emerged as a binding constraint?

The challenge thus is to define a narrow target of policy interventions that are responsive to removing the most binding constraints.

The next piece will focus on Marcos Jr.’s economic policy priorities and the policies needed to address the binding constraints.

(To be continued.)

The authors belong to Action for Economic Reforms.

Sri Lanka has defaulted. Will Pakistan be next? Lessons for the Philippines.

August 7, 2022 | 5:48 pm

Last April, the Sri Lankan government announced that it was defaulting on its debts, making it the first sovereign nation to default since the pandemic started. The island republic has depleted its cash reserves. The Sri Lankan people face a shortage of food, fuel, medicines, and electric power. At least 500,000 Sri Lankans have fallen into severe poverty in the last year alone. All these have led to civil unrest and the resignation and subsequent retreat of President Gotabaya Rajapaksa to the Maldives.

Pakistan is showing all the signs of going Sri Lanka’s way. With debts amounting to well over $125 billion (71.3% of GDP), the south Asian nation has only $7 billion in cash reserves. Pakistan is facing a cash crunch. It tried to borrow from China and Saudi Arabia to pay for the importation of its basic essentials, but both turned cold, spooked by the risk.

Pakistan had no choice but to turn to the IMF for a $6 billion bailout. The lifeline will likely come, albeit with stiff conditions. Pakistan will have to remove all fuel subsidies to save cash. This will severely impact the Pakistani people who are already suffering under the weight of 21.3% inflation.

Making matters worse is the rapid devaluation of the Pakistani Rupee which fell by 34% in the last year. The devaluation has made imports more expensive — a difficult situation since Pakistan is dependent on imports for its food, medicines, and other essentials. As it stands, food prices have become unreachable for most Pakistanis. Medicines are becoming scarce. The country suffers from frequent power outages to save fuel. Public anger is rising and people are taking to the streets.

Calls for the resignation of Pakistan’s Prime Minister, Shehbaz Sharif, are getting stronger by the day. But Sharif blames his predecessor for his country’s woes.

How did Pakistan get to this point?

Pakistan’s downfall has been in the making for 70 years. It has undergone one economic crisis after another since separating from India in 1947. In the last 30 years alone, the IMF has had to bail it out 13 times.

At the heart of Pakistan’s problems is political instability and the lack of continuity. Ousting incumbent Prime Ministers is a standards affair such that none of Pakistan’s past 22 Prime Ministers have finished their term.

Typically, the sitting Prime Minister would spend the first years of his/her term undoing the policies of the predecessor, only to be ousted before real reforms can be instituted. Case in point, in 1978 Muhammad Zia-ul-Haq banned labor unions and censored media. When Benazir Bhutto came to power, she spent the better part of her term legalizing unions and restoring freedom of the press. Immediately after, she was ousted by Nawaz Sharif. This has been Pakistan’s pattern for decades.

This pattern led to a chain of consequences that have proven disastrous. Necessary reforms do not gain traction; Prime Ministers become more concerned with staving-off power grabs than instituting real reforms; reforms, whenever instituted, tend to be populist; political instability leads to policy instability; foreign investors stay away; lack of investments leads to a sluggish manufacturing sector and import dependence; low productivity leads to low national revenues which forces the country to depend on loans to sustain itself.

Exacerbating matters is Pakistan’s “war brokering” business. Pakistan has been a breeding ground for militant groups who can be hired for a price. For instance, the Mujahideen fighters were contracted by the United States to resist Russian forces in Afghanistan in 1979. The Pakistani government also accepted some $1.2 billion a year for the US to use its roads, ports, railways, and airspace as it battled the Russians in Kabul. War brokering and militant group outsourcing has been mainstay in Pakistan’s economy even today.

Involvement in wars (even if not their own) contributed to Pakistan’s image as an unsafe and turbulent economy. Investors and tourists stay away, depriving the country of precious dollar revenues.

While the country languishes in dire straits, in comes China offering generous loans for the development of infrastructure. It proposed the development of the Gwadar Port which is strategically located in the Arabian Sea.

China used its debt trap strategy to gain control of the Gwadar Port. How does it work? First, China lures weak nations into acquiring massive loans for the development of infrastructure. Second, China imposes stiff terms designed to cause the borrower to default. Interest rates could reach 4% per annum as compared to 1% from development lenders such as the ADB. Chinese debt duration usually spans 10 to 15 years whereas it is typically 30-years with others. All construction suppliers, labor, and engineers are sourced from China, causing the funds to flow back to the mainland, not the host country. Third, when the country defaults, China takes over the asset and treats it like its sovereign property, using it for sole purpose.

Pakistan owes China some $24.7 billion. And since it defaulted on its debt obligations, China now occupies and controls the strategic Gwadar Port.

So, what are the lessons for the Philippines?

1. We must never allow ourselves to be import dependent since it makes us vulnerable. Self-sufficiency in food and basic essentials is a must for national survival. This means we must work towards a manufacturing and agricultural resurgence as soon as possible.

2. We should maintain strong financial fundamentals which include manageable debt levels, strong forex reserve positions, and manageable current account balances. The government must avoid populist policies like giving out subsidies, especially in a time when belt tightening is needed.

3. No matter how strong political rivalries may be, our laws and policies should always serve the national interest, not political agendas.

4. Continuity in policies across administrations is critical.

5. Steer clear from Chinese debt traps.

Pakistan’s situation is lamentable and our hearts go out to the Pakistani people for their sufferings. May this crisis serve as an impetus for political and financial reforms which are vital for Pakistan’s recovery.

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Facebook@AndrewJ. Masigan

Twitter @aj_masigan

The K-pop wave in the COVID surge

August 7, 2022 | 5:47 pm

vlcsnap-2022-08-07-15h20m15s020 — A SCREENGRAB of “Permission to Dance” video by the K-pop group BTS.

Omigod, we are so late for the queue-up for the free COVID booster shots!

Actually, the Glorietta Malls open at 10 a.m. on Saturdays (and Sundays), and it is only 10:30 a.m. — not so late, really, but why are there throngs wanting to get in? Up the escalator to the 2^nd floor of Glorietta 4, we are shocked to see the snaking lines of maybe close to a thousand people hugging the security railings, backing up to Glorietta 3. You can proceed to the SM wing on this same floor, the security guard says (maybe because we were evidently Seniors), and we emerge upon the satellite Vaccination Center of the Department of Health (DoH) for Makati City.

At the Vaccination Center, there are about 150 people — DoH staff and patients — in a space of about 300 square meters. We are registered, vaccinated, and out in half an hour. The DoH nurse tells us they are expecting less than 700 vaccinees for the Pfizer shots available today. What are the thousands of people outside lined up for? They are not queueing for COVID Booster shots!

What are you in line for, we ask a young man garbed in a loose shirt and tight white pants, short hair combed forward in K-pop style bangs almost covering his eyes. We are queueing for the K-pop store, he says excitedly. Why, what’s there? There’s a sale today, 20% off on all items, but people are really wanting to buy limited edition CDs of K-Pop icons, with free exclusive photo-albums — P2,900 a pop, for these K-pop collectibles!

In a phone interview the day after, the K-pop store manager claimed they had 3,000 customers on the day of the sale, while since their soft opening a month earlier, they have had an average of 1,000 customers a day spending an average of P1,000 per head on the all-K-pop items that the store carries.

What is this K-pop craze that has young people queueing for hours to spend P2,900 on a BTS CD album? Meanwhile, K-pop idol Jason Wang of the Masterz boy band sang at the SM MOA Arena the evening before the CD sale, to a hysterical full-packed audience who bought tickets at swooning prices, ranging from P2,500 to P12,500 (depending on the seating) — it must be crowd hypnosis!

What is the face of this “fandom” (the die-hard fans, collectively, in all their ardor)? What has inextricably bound them to the image, perhaps, of what they can be, or what they want to be — especially in these fragile times of the unrelenting COVID pandemic and the political and economic turmoil all over the world?

At the Glorietta Mall, the queue moved so slowly (like maybe every 30 minutes only) because the K-pop store allowed only 10 customers in the small store due to the COVID requirement of social distancing. A special uniformed security guard at the small entrance strictly monitored this. And yet the waiting crowd was very patient, disciplined, and quiet. How old are you, we asked the young man with the K-pop bangs? Twenty-five, John said. A dozen places ahead of him, a young woman named Marsha said she was 27. But of course! K-Pop fans cannot be too young, else how can they afford those expensive shows and K-pop memorabilia?

K-Pop fans are not limited to young working adults of 20-30 years, our dachshund Sandy’s astute veterinarian said authoritatively. In fact, there is no age barrier to being a rabid fan (no offense meant on the use of the word “rabid”). Our 40+ and groovy vet says he has been a fan since 2012, when PSY’s “Gangnam Style” video was first released on YouTube. According to BBC News, “Gangnam Style” broke YouTube’s maximum view count limit of 2,147,483,647 views, causing YouTube to rewrite this limit, which now stands at 9.22 quintillion.

And so, this “oldie” (and someone who is not yet a K-pop fan) just had to watch the boy band BTS perform their first hit, “Dynamite” (YouTube Official MV: 1,535,120,651 views; it premiered on Aug. 21, 2020). The seven “boys” look like teens (although their bios on Google show that they range from 26 to 29 years old today — the same general age of those lined up at Glorietta for the K-pop store sale). Against this oldie’s preconception of “macho,” they all look effeminate, what with little hoop earrings on each earlobe, plucked eyebrows, and pink lipstick. And the de rigueur bangs of the K-pop hairdo made them somewhat androgynous. Their dance moves are slowed hip-hop, bodies undulating with the repetitive music reminiscent of rapping, but languid and stretched — yes, the slow arching and then the abrupt jerks of the K-pop dance might suggest the tension of passion building then bursting into climax.

Blackpink is the highest-charting female Korean act on the Billboard Hot 100, the first female Korean group on Forbes’ 30 Under 30 Asia (2020); the first Korean girl group to win an MTV Music Video Award (2020), and lauded by former South Korean President Moon Jae-in as a global K-pop phenomenon helping spread K-pop content worldwide (2021). The four Blackpink members are Jisoo, Jennie, and Rosé who are all 25 years old, and Lisa who is 29 years old today, but they all look like teens, just like the BTS boys. Their choreography is innocently playful, but urgingly sensual in the swiveling of hips and dipping low — much like the nubile flirtation of a child-lover Lolita. Cute, and teasingly “male-gaze-ready” one observed. The lyrics of their song “Forever Young” are in American English, unabashedly borrowing from Cyndi Lauper’s “Girls Just Wanna Have Fun” (YouTube Official MV: Blackpink — “Forever Young,” 214,897,665 views since June 21, 2018).

Perhaps the appeal of K-pop is that the “idols” seem to be frozen in time at that perfection of youth, while they cope with their angst and frustrations in detached surrender, as seen in their moves and their songs. Some foreign critics decry that K-pop music has lost its cultural integrity by its outright Westernization, forgetting the charm of mixed Korean and English lyrics, and going all-English (as the BTS band does in “Dynamo”), and dressing all-Western garb, as in distressed jeans and hang-loose get-ups. But that is precisely the secret of K-pop’s marketing success — that it has global reach and has captured universal demand.

“K-pop has played a large role in transforming the South Korean economy. Over the course of 30 years, K-pop has grown tremendously. Not only did the popularity of musical groups increase, but the economy of South Korea also improved. Professor Kim Seiwan from Ewha Women’s University says that based on official estimation, K-pop generates about $10 billion for the country each year. One group that is extremely successful and whose popularity continues to increase is BTS. In 2018, the Hyundai Research Institute (HRI) reported that BTS accounted for an estimated $3.54 billion of the South Korean GDP. This number has increased even higher in recent years,” says an article the International Socioeconomics Laboratory, socioeconlabs.org.

South Korean president Moon has brought BTS to speak before the UN General Assembly in New York three times in the last five years — an inspired break with tradition to draw emphasis on the role of the youth in sustainable development. At their latest “guesting” before the august UN General Assembly on September 2021, Kim Nam-joon, the BTS leader, said, “I’ve heard that people in their teens and 20s today are being referred to as COVID’s lost generation. But I think it’s a stretch to say they’re lost just because the path they tread can’t be seen by grown-up eyes” (YouTube: BTS Speech at the 75^th UN General Assembly; 3,578,547 views as of Sept. 21, 2021). They expressed their faith in young people’s ability to imagine a better world despite the pandemic. “Life goes on. We must live on.”

And thus we “oldies” understand those throngs of young people, passionate for K-pop for knowing their angst and reinforcing their determination to survive and thrive despite life’s trials.

“Permission to Dance” was the song and dance message of K-pop/BTS on behalf of the youth, before the UN General Assembly.

Amelia H. C. Ylagan is a doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Blinken commits US to defending Philippines against armed attacks

August 7, 2022 | 11:09 am

060822_PBBM-Marcos-with-US-blinken-04_kjrosales — President Ferdinand Marcos Jr. welcomes US State of Secretary Antony Blinken during a courtesy call at the Malacañan Palace on Saturday, Aug. 6, 2022. Photo by KJ ROSALES/PPA POOL/ The Philippine Star

MANILA – Secretary of State Antony Blinken assured the Philippines on Saturday that the United States would come to its defense if attacked in the South China Sea, seeking to allay concerns about the extent of the US commitment to a mutual defense treaty.

In meetings in Manila dominated by discussion on simmering US-China tensions over the Taiwan visit of US House of Representatives Speaker Nancy Pelosi, Mr. Blinken said a 70-year-old defense pact with the Philippines was “ironclad”.

“An armed attack on Philippine armed forces, public vessels and aircraft will invoke US mutual defense commitments under that treaty,” Mr. Blinken told a news conference.

“The Philippines is an irreplaceable friend, partner, and ally to the United States.”

Mr. Blinken was the most senior US official to meet new President Ferdinand Marcos Jr, the son of the late strongman who Washington helped to flee into exile in Hawaii during a 1986 “people power” uprising that ended his two-decade rule.

In opening remarks to Mr. Blinken, Marcos sought to downplay the diplomatic flare-up over Taiwan and said he believed Ms. Pelosi’s trip “did not raise the intensity” of a situation that was already volatile.

“We have been at that level for a good while, but we have sort of got used to the idea,” Marcos said.

The Philippines is a fulcrum of the geopolitical rivalry between the United States and China and Marcos faces a tricky challenge in balancing ties between the two major powers.

He will also face domestic pressure to stand up to China in the South China Sea, without angering its leadership.

US-Philippines ties were shaken by predecessor Rodrigo Duterte’s overtures towards China, his famous anti-US rhetoric and threats to downgrade their military ties.

On Saturday, Philippines foreign secretary Enrique Manalo said President Joe Biden had invited Marcos to Washington, and both sides were working on a suitable date.

Mr. Marcos has not been to the United States in more than a decade, due largely to a contempt of court order for his refusal to cooperate with a Hawaii court, which in 1995 ordered the Marcos family to return $2 billion of missing state wealth to victims of abuses by the state under his father’s rule.

Marcos Jr and mother, Imelda, also face a $353 million fine.

The U.S. embassy in Manila has said heads of state have diplomatic immunity.

Mr. Manalo said Washington was an important ally, but concerning nearby Taiwan he told Mr. Blinken the Philippines “looks at the big powers to help calm the waters”.

“We can ill afford any further escalation of tensions,” he said. – Reuters

Superstar Villain Cherie Gil, 59

August 6, 2022 | 8:39 am

“Ladies and gentlemen, the one and only superstar: Miss Lavinia Arguelles!”

This was how Cherie Gil’s character was announced onstage in the film Bituing Walang Ningning (1985). Cherie Gil (née Evangeline Rose Gil Eigenmann), arguably one of the finest Filipino villainesses onscreen, died yesterday, Aug. 5.

The news was broken by talent manager Annabel Rama on Aug. 5 via social media. “Cherie Gil just passed away at 5PM today. Please pray for her (praying emoji),” a Facebook post blared in capital letters. This was later confirmed by two Instagram posts by her nephew, Sid Lucero (né Timothy Eigenmann). In one, with a picture of his aunt, he said, “I love you;) big hug 🙂 #bugluv”. People commented with their messages of condolences.

Ms. Gil had left the Philippines for New York in February this year. In posts on her Facebook page in July, she had shown a picture of her shaved head with surgical stitches, along with a few lines from 1 Corinthians 13:4 (“Love is patient, love is kind”). After her death, her sons, Jay Eigenmann and Raphael Rogoff, posted on Instagram that their mother had been diagnosed with a rare form of endometrial cancer in October last year. “It was her request that her diagnosis be kept private, and as a family we supported her in this decision,” their statement said.

“Cherie fought bravely against her illness, with grace and strength. Despite her struggles she always managed to exude courage and never lost her trademark sass, wit, and infectious humor, or her larger-than-life personality. She spent her last days surrounded by family and loved ones,” they said. “In the end, there are no words — only love. Cherie lived with all her heart.”

SHOWBIZ LINEAGE

Born to crooner Eddie Mesa and actress Rosemarie Gil on June 21, 1963, Cherie Gil’s fine patrician looks and her entertainment pedigree made her a shoo-in for show business. Her parents had already set a formidable trail in the industry, while her brothers, fellow actors Michael de Mesa (né Michael Edward Gil Eigenmann) and Mark Gil (né Raphael John Gil Eigenmann, deceased 2014) had already picked up acting. Together, and then with the children in the third generation — including celebrities Ryan, AJ, and Geoff Eigenmann (from her brother Michael); the aforementioned Sid Lucero, Gabby, Andi, and Max Eigenmann (from her brother Mark)* — the Eigenmann family, using different names and assuming multiple identities onscreen, would become one of the country’s more formidable showbiz dynasties, known for a dedication to their craft.

Ms. Gil is survived by her parents, a brother, numerous nephews and nieces, and three children: Jay Eigenmann (with actor and comedian Leo Martinez), and Bianca and Raphael Rogoff (with violinist Rony Rogoff).

CAREER

Prior to her big break in Elwood Perez’s Problem Child (1980), Ms. Gil recalled in an Instagram post: “I’ve been asked numerous times how many years I’ve been in the business. Frankly, I don’t know exactly as with the ‘which came first, the chicken or the egg’ anecdote, I’m not really sure when it all started.’” The post was accompanied by a picture of a young Cherie, according to her, singing Carole King’s “I Feel The Earth Move” on a show called Super Young Stars. “I did start as a singer and host after all!,” she said. “I was so sure that was the song because I vividly remember my dad standing behind the cameras conducting to the rhythm of my favorite tune. I practiced over and over again to only make a mistake and start over.”

“I don’t know if I got paid for it though as I was having so much fun anyway as I recall!” she wrote. “When you love your job, it don’t feel like a job at all.”

Her looks and bearing would have been enough for a lucrative modelling career (as seen in a 1970s advertisement for Citrobelle, a brand of facial cleanser), but drama was in her blood. In a short span of time, Ms. Gil proved her versatility, jumping from roles of aristocratic enfants terribles in the aforementioned Problem Child and Oro Plata Mata (1982), and in between playing an actual degenerate in Ishmael Bernal’s Manila By Night (1980; for which she was nominated Best Actress during the Gawad Urian Awards). She could do camp (playing the gorgon Valentina in Darna: Ang Pagbabalik in 1994), and comedy (spending years in the comedy sketch show Champoy in the 1980s).

Her skill would be recognized in multiple awards: for Sonata (2013), she won as Best Actress at the 2015 ASEAN International Film Festival and Awards (AIFFA), and for Mana (2014), she won Best Lead Actress in a Foreign Language Film at the Madrid International Film Festival, and the Ani ng Dangal Award from the National Commission of Culture and the Arts (NCCA) in 2016.

“What a role!” Ms. Gil said of her work in Manila By Night, during an interview with BusinessWorld High Life in 2015. “I felt, wow, I must be really Bernie’s favorite,” she laughed. “I think the sense of having the androgynousness made him feel that I was the one who could play Kano. I grew up with my brothers, so I could get into character easily. It was a dream role — a dream role.”

Outside her roles as cold and calculating women on the big and small screens (she was a favored telenovela villain), she brought nuanced performances onstage. She played Maria Callas in Master Class (2010), and in her capacity as founder of My Own Mann Productions, she played Vogue editor Diana Vreeland in Full Gallop (2014). “Theater is an actor’s medium — the best training ground,” she told High Life.

SETTING A STANDARD

She achieved mainstream fame in Bituing Walang Ningning, where she played an established diva about to be upstaged by a younger supplicant, played by frequent co-star, Sharon Cuneta (herself formidable enough with her own showbiz and political connections, as well as an adoring fanbase that dubbed her “Megastar”).

According to the same High Life story, titled “PriMadonna” (juxtaposing her with pop star Madonna, who was in Manila for the first time when the interview was conducted), Ms. Gil had bagged the role when she took a break from the cinema and sang in clubs. This movie cemented her place in Filipino pop culture: in it, she splashes her rival in the face with a glass of water after haughtily declaring: “You’re nothing but a second-rate, trying-hard copycat!” This line would either be copied word-for-word in drag shows, or referenced in several other movies. Ms. Gil set a standard for Philippine cinema’s contrabidas (villains).

Ms. Cuneta’s virginal ingenues were the perfect foils for Ms. Gil’s polished villains. They played rivals in Kailan Sasabihing Mahal Kita (1985), Bakit Ikaw Pa Rin? (1990), and Ngayon At Kailanman (1992), among other films.

LOVE

In the film Sana’y Wala Nang Wakas (1986), they played friends, a testament to the real-life bond between the two stars. In an Instagram post, Ms. Cuneta told Ms. Gil in a comment, “I want to thank you for being my ‘better half’ in ALL of our movies together. You are my one and only Cherie. There is no one like you. You have been such a big part of my career and every bit of success God has blessed me with… I have always loved you and will always love you.”

While looking every bit a cold sophisticate, Ms. Gil was full of real-life warmth. During an event for the press rounds of Full Gallop, she had told this reporter, “You have got style.” In another press conference for the play, she told BusinessWorld about her similarities with the similarly glamorous and misunderstood editor. “She loves the tango; I love the tango. She’s a wonderful mother, and I would like to think I’m a wonderful mother.”

She lowered her voice when she remembered parallels between herself and her character. “The times when I found myself in my deepest misery, in my lowest. And you’d have to get up again.”— Joseph L. Garcia

In the name of the Father

August 6, 2022 | 7:47 am

By Menchu Aquino Sarmiento

MOVIE REVIEW

Maid in Malacañang

Directed by Darryl Yap

The Big Reveal in the controversial and much-talked-about Maid in Malacañang (MIM) comes in Chapter 8, also titled “Maid in Malacañang.” All the months of buzz had it that this account of the last 72 hours of Pamilya Marcos Sr. in the Palace, would be told from the POV of three faithful kasambahay (maids) who were there and saw it all. Turns out, it is Senator Imee Marcos, the creative and executive producer, who is the real “Maid in Malacañang.”

The movie has 10 chapters, so try to be awake for this one. Chapter 8 features Imee’s (played by Christine Reyes) big heart-to-heart with her dad (Cesar Montano) as they await the US contingent which will escort them to Ilocos Norte — or so they think. In another effortful attempt to humanize him, Marcos Sr. croaks his concern that all the “little people” working for them as domestics might become collateral damage as the People Power crowd outside the Palace walls grows increasingly restive. Then, he warmly praises Imee, his “genius girl,” for always serving him and the nation selflessly, and to the best of her ability, dubbing her the true “Maid in Malacañang.” In turn, she assures him that history will judge him rightly: not as a monster, but as a true soldier and loving leader of the Filipino people. So, that’s what this is really all about.

When Imee was quoted last June, as saying: “Ang importante, ’yung maahon namin ang pangalan namin, ang apelyido namin, na ’yung legacy ng tatay ko babalikan at titingnan ng maigi. ’Yun ang importante. (What is most important is that we clear our family name, that my father’s legacy will be re-examined truthfully and fairly. That is foremost.)” And that’s exactly what she set out to do in this movie.

MIM opens and ends with mahjong. The tiles might symbolize the forces amassing against them. In the opening Singapore hotel lobby sequence, Imee, with a baby on her hip, looks on with consternation, as the players shuffle the red tiles. Note: wala siyang yaya o bodyguards (she has no nanny or security) — so much for the stories about PAL’s flight schedules gone haywire just to bring her expressed breast milk to her firstborn Borgy while she holidayed in London, and of hordes of her close-in security disrupting performances in London’s West End. Anyway, the red mahjong tiles might symbolize Defense Secretary Juan Ponce Enrile, General Fidel V. Ramos, and the Reform the Armed Forces (inexplicably renamed the Military Reform Movement in the film) who have mounted a military coup against them. She rushes back to their hotel room where Borgy, a budding psychic or just a little war freak, is drawing military helicopters and tanks. She’s just in time for a phone call from her father the President who tells her to return immediately to Manila. In any crisis, he needs his “genius girl” by his side.

Imee’s being indispensable to Marcos Sr. is repeatedly stressed. A larger Olympian origin story prevails: Imee sprang like Athena from Marcos/Zeus’ head. They are like-minded, kindred spirits. She is his confidante, consigliere and rightful heir-apparent. Upon her arrival from Singapore, she enters a large foyer crammed with unsealed balikbayan boxes, packed to the brim with wads of cash. With Imee away, her siblings failed to distribute these tokens of appreciation for all those poll-watchers and teachers who had ensured Marcos Sr.’s win in the Snap Elections. Imee frets over the delay: “Paano na tayo uulit? (How can we call on them to help us out again?)” That’s meant to counter reports like Los Angeles Times’ March 1986 story, that for their Great Escape, Pamilya Marcos brought “22 crates containing $1.2 million in Philippine pesos, apart from $7.7 million in cash and valuables into their suitcases when they fled to Hawaii last month, according to a US Customs Service inventory made public Monday.”

Marcos Sr. immediately summons Imee to a closed-door meeting, leaving Imelda (Ruffa Guttierez) and her siblings waiting in the hallway. Notwithstanding the Office of the President’s vast communications and intelligence resources, the maid Biday (Beverly Salviejo) is tasked with giving Imee the current situationer. Her turgid-tongued Bisayan accent guarantees easy laughs. For comic relief throughout the film, Salviejo fluctuates between Ilocano, Bisaya, and Batangueño accents. The absurdity of Manang Biday giving intelligence briefings might lull us into forgetting about the dreaded NICA (National Intelligence Coordinating Agency), which is now part of the even bigger and more powerful NTF-ELCAC (National Task Force to End Local Communist Armed Conflict).

Despite the millions of pesos literally lying around the Palace, and dozens of uniformed kasambahay protected by countless PSG (Presidential Security Group) to do their bidding, MIM would have us believe that those evil Cory supporters surrounding Malacañan for the last two days made it nearly impossible for them to go out and replenish their dangerously low food supplies. After just two days, Pamilya Marcos with their guards and retainers, were in danger of starving to death. Wala pa kasing Grab o Food Panda noon. (They couldn’t order online delivery back in 1986.) Youngest sister Irene’s (Ella Cruz) hubby Greggy Araneta, of the billionaire clan, returns from a grocery run with a tiny paper bag. His car was supposedly bombed. The kasambahay must resort to begging for food scraps from kind-hearted neighbors living around Malacañan. The director-scriptwriter Darryl Yap is unable to keep up this farce with a straight face. He can’t resist showing that the last breakfast of Pamilya Marcos and household is caviar on melba toast.

Yap’s forte is over-the top comedy, not historical retelling. His concession to straight drama is to insert a hysterical rant at the end of every sober narrative chapter or sequence. Christine Reyes plays Imee as perpetually on the edge, her face as tightly clenched as fingernails scraping across a blackboard. To show her concern over her father, Imee imagines another assassination attempt on him. She claims there had already been seven such, right in the Palace, as well as 12 previous coup attempts. There’s no record of these though in the Official Gazette.

Imee is overcome by paranoia, demanding to see the IDs of random PSG while shrieking in their faces: “Ilocos o Leyte?” (Ilocos province or Leyte province). Taking a page from the Faye Dunaway-Mommie Dearest school of acting wire hanger scene (a queer camp favorite), she vents her suspicions on the dialysis nurse, and hurls trays of medicine about, in search of poison. “You’re too nice!” she yells at her nonplussed father. Unlike the ruthlessly scheming and grasping halves of the Conjugal Dictatorship they have been portrayed to be, this ultimate power couple took off their shoes and tiptoed along the hallway to their bedroom, just to avoid disturbing the kasambahay Santa (Karla Estrada) who had fallen asleep there, believe it or not.

In the interest of equal time, Imee’s brother, here called Bonget, and younger sister are given their own moments of high (melo)drama too. For Bonget, whom Imee ridicules for playing toy soldier and never taking off his army fatigues (“You can’t wear that during the press con,” she warns him), it’s a teary exchange with dear old dad. He’s remorseful about his clubbing days and party boy ways. He just wants daddy to be proud of him, and is ready to lay down his life fighting for his family. Awww… The only bed scene in the movie is shared between Bonget and his mother. He assures her that even if they have to leave now, they will return, and the camera ominously closes up on the sole of a rhinestone-bedazzled sandal with the catalogue no. IRM 2022.

The bit in the trailer where Marcos the dictator thoughtfully asks if he was a bad person is in Irene’s (Ella Cruz) sequence. The actress has shown in interviews that she can really turn on the waterworks which she does so straight off in the film. It’s just one long tiresome whine from there, even as her dad explains that the powerful hate the Marcoses because they are poor provincial hicks — with a Congressman (Mariano Marcos) and a Supreme Court Justice (Norberto Romualdez) as their immediate ancestors. Inured to all the untrammeled hysteria and cringe-worthy drama, we are ready to doze off. If only Yap had the buxom Ms. Cruz take off her top, as the more nubile of his Vincentiments Facebook page YouTube starlets are wont to do when their emotions run high, that might wake us up enough to pay attention.

The director-writer’s and producers’ true sentiments about the Malacañan kasambahay are made clear in the chapter titled “Palamunin” (Worthless Freeloaders). Here, the help are instructed to pack up their belongings and wear street clothes in preparation for the fall of Malacañang to an angry mob. Manang Lucy (Elizabeth Oropesa) praises Marcos for his refusal to respond with violence against the rallyists or the putschists, and exhorts the hired help to die for their masters. There is a chorus of weeping as the kasambahay cannot imagine an existence other than servitude. The stupid servant continues to be a staple in Philippine performing arts.

As the take-charge panganay (eldest daughter), Imee orders her husband Tommy to phone the US Embassy to come and get them (“para sunduin na tayo.”) as though despite the yellow T-shirted, torch-bearing mob from a pre-WWII Frankenstein movie who had wandered inside the Palace, Pamilya Marcos had decided to leave Malacañang of their own volition. Robin Padilla has a cameo as a loyal officer who sees them to safety. That surreal scenario is like the popular Vincentiments “Kung Puede Lang” shorts, where the protagonist acts out his fantasies in his head — mostly anti-social cursing, threatening mayhem, and disrobing. In MIM, the fantasy is that on Feb. 25, 1986, it was Pamilya Marcos’ choice to leave the Palace with a US military escort, while his successor Corazon C. Aquino, her hair mockingly done up with curlers, played mahjong (this time with yellow tiles) with the Carmelites.

Despite MIM’s attempts to portray Marcos Sr. as a kindly, ailing, misunderstood dotard, history shows it was he, not his “genius girl,” negotiating with the US during the Pamilya Marcos’ final days in Malacañang, and shortly before they were hustled out by the US Air Force:

“At 15:00 PST (GMT+8) on Feb. 25, 1986, Marcos talked to United States Senator Paul Laxalt, a close associate of the United States President Ronald Reagan, asking for advice from the White House. Laxalt advised him to “cut and cut cleanly,” to which Marcos expressed his disappointment after a short pause. In the afternoon, Marcos talked to Enrile, asking for safe passage for him and his family, and included his close allies like General Ver. Finally, at 9 p.m., the Marcos family was transported by four Sikorsky HH-3E helicopters to Clark Air Base in Angeles City, about 83 kilometers north of Manila, before boarding US Air Force C-130 planes bound for Andersen Air Force Base in Guam, and finally to Hickam Air Force Base in Hawaii where Marcos arrived on Feb. 26. When he fled to Hawaii by way of Guam, he also brought with him 22 crates of cash valued at $717 million, 300 crates of assorted jewelry with undetermined value, $4 million worth of unset precious gems contained in Pampers diaper boxes, 65 Seiko and Cartier watches, a 12 by 4 feet box crammed full of real pearls, a three-foot solid gold statue covered in diamonds and other precious stones, $200,000 in gold bullion and nearly $1 million in Philippine pesos, and deposit slips to banks in the US, Switzerland, and the Cayman Islands worth $124 million, which he all amassed during his dictatorship.

“Initially, there was confusion in Washington as to what to do with Marcos and the 90 members of his entourage. Given the special relations Marcos nurtured with Reagan, the former had expectations of favorable treatment. However, Reagan was to distance himself from the Marcoses. The State Department in turn assigned former Deputy Chief of Mission to Manila, Robert G. Rich Jr. to be the point of contact. The entourage were first billeted inside the housing facilities of Hickam Air Force Base. Later on the State Department announced the Marcoses were not immune from legal charges, and within weeks hundreds of cases had been filed against them.”

At maniwala po kayo sa Wikipedia, iyan po ang tunay na pangyayari. Bow. (And you can believe Wikipedia: that’s what really happened. Word.)

MG Mall of Asia joins MG Philippines’ nationwide dealership network, and is the first MG dealership to feature a unique MG ‘Carffé’ coffee shop

August 6, 2022 | 6:00 am

MG Mall of Asia (MG MOA) is the latest dealership to join MG Philippines’ continuously expanding nationwide dealership network, bringing the total number of MG dealerships up to 42. MG MOA is strategically located within the SM Central Business Park in Pasay City: a bustling, mixed-use, commercial and lifestyle locale. SM Mall of Asia is also ranked among the largest shopping malls in the world; it attracts a plethora of visitors who now also have a chance to see the latest MG vehicles up close and personal at the new MG MOA dealership.

The lifestyle-themed MG MOA facility offers a 2-car display floor and is located along Marina Way—one of the major arteries within the SM Mall of Asia complex. MG MOA operates under Philadelphia Business Initiatives, Inc. (PBII.)

One unique facet of MG MOA is that it features an MG “Carffé” which is a play on the words “car” and “café.” MG MOA, aside from showcasing the latest MG vehicles, also makes designer coffee brews available for purchase. Clients can choose to enter MG MOA with the intent to buy and enjoy a cup of coffee and, while doing so, can choose to take a tour around the display floor to learn more about the latest MG cars and offers. The MG Carffé has likewise been adopted in many global MG markets including Europe, greater Asia, Australia, the Middle East, and South America. The MG Carffé located at MG MOA is the first of its kind in the Philippines, while other local MG dealerships begin to ramp-up with MG Carffé’s of their own.

“Through our partnership with SM Mall of Asia, we believe that we are offering a unique experience and true value for our MG customers,” says, Mrs. Jessica Lee-Sy, President of PBII.

“We have partnered with Yardstick Coffee to bring you the best MG experience. You may view our cars whilst you drink coffee and enjoy our scrumptious pastries.”

From left to right: Jessica Lee-Sy, President, Philadelphia Business Initiatives, Inc._ Atty. Alberto B. Arcilla, President and CEO, MG Philippines_ Rex Impuesto, Sales Manager, MG MOA.

Interested clients may also opt to take their preferred MG on a test drive at MG MOA, with demo units readily available. “Not only can our customers view our cars and enjoy excellent coffee, but we have a designated test drive site where customers can test run our units right there,” says Mrs. Lee-Sy. Clients who purchase their units from MG MOA and are in need of aftersales services can bring their units and direct their concerns to MG Greenhills: MG MOA’s sister branch, which likewise operates under PBII.

MG MOA offers the latest promos available from MG Philippines on all locally available MG vehicle units, and offers dealer-specific freebies on new car purchases. MG MOA also fulfills MG Philippines’ host of after sales complements, including 5-year or 100,000km (whichever comes first) vehicle warranty; MG HERO Services, which provides 24/7 roadside support through the MG Philippines hotline (+632 5328 – 4664); and the My MG mobile app which allows clients to easily schedule vehicle servicing appointments from the convenience of their smart devices. Customers can also use the My MG App to reserve genuine spare parts and even book a visit from MG Philippines’ Mobile Garage service caravan that provides MG owners with vehicle home service for major technical issues.

The addition of MG MOA strengthens MG Philippines’ nationwide dealership portfolio with a fresh, new location that is geared to reach a wider audience and will bring the MG brand closer to even more Filipinos.

Visit MG Motor Mall of Asia, located along Marina Way at the SM Mall of Asia complex in Pasay (located opposite the entrance of IKEA.) MG MOA’s operating hours are daily from 9:00am to 9:00pm. Contact MG MOA via their official Facebook account, mgmallofasia.

To learn more about MG Philippines, visit MGMotor.com.ph and follow their official Facebook (OfficialMGPhilippines) and Instagram (mg_philippines) accounts.

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July inflation rose 6.4%, highest since October 2018

August 5, 2022 | 6:30 pm

Jeepney Driver — A jeepney driver receives payment from a commuter in Metro Manila. — PHILIPPINE STAR/WALTER BOLLOZOS

Headline inflation quickened to its fastest pace in nearly four years in July, mainly due to soaring prices of food and higher transport costs. Preliminary data from the Philippine Statistics Authority (PSA) showed the consumer price index (CPI) at the national level climbed 6.4% year on year in July, from 6.1% in June and 3.7% a year ago. This was higher than the 6.2% median estimate in a BusinessWorld poll conducted last week. It also settled at the upper end of the 5.6-6.4% forecast range of the Bangko Sentral ng Pilipinas (BSP) for that month.

July was also the fourth consecutive month that inflation went above the BSP’s 2-4% target range. The July inflation print was the fastest growth in 45 months, or since the 6.9% logged in October 2018. Month on month, inflation picked up 0.8%. Stripping out seasonality factors, month-on-month inflation inched up by 0.6% in July. In the seven months to July, inflation averaged 4.7%, lower than the 4% seen in the same period a year ago. This was also lower than the BSP’s revised 5% inflation forecast. At a press briefing on Friday, National Statistician Claire Dennis S. Mapa said that the July inflation was fueled by soaring prices of food and non-alcoholic beverages, transport, and restaurant services. “Out of 13 commodity groups, eight of them showed a faster increase in prices in July,” Mr. Mapa said. Accounting for almost 40% of the theoretical Filipino consumer basket, prices of food and beverages accelerated 6.9% year on year in July from 6% in June. The food-alone index surged 7.1% annually last month from 6.4% in June. Prices of meat rose 9.9% in July from 8.1% in June, while fish and other seafood jumped 9.2% from 6.7% the previous month. Flour, bread, and other bakery products also went up 6.8% from 5.7% previously. Alcoholic beverages and tobacco also increased 8.5% from 7.8%. Transport, which accounts for nearly a tenth of the total consumer basket, likewise rose to 18.1% year on year in July from 17.1% in the prior month. A hike in jeepney fares took effect in July, which pushed the price of other passenger transport by road up 7.1% from 2.7% in June. This was partially offset by lower prices of gasoline (45.4% from 53.9%) and diesel (91.3% from 92.5%). In July, oil companies cut pump prices for gasoline by P11.1 per liter, and diesel by P12.95 per liter. Other commodities that saw increases were restaurants and accommodation services (3.4% in July from 2.8% in June); recreation, sport, and culture (2.2% from 1.9%); clothing and footwear (2.5% from 2.2%); furnishing, household equipment, and routine household maintenance (3.1% from 2.9%); and personal care, and miscellaneous goods and services (2.8% from 2.6%). Meanwhile, information and communication, education services, and financial services steadied at 0.5%, 0.6%, and 0%, respectively. On the other hand, the index of housing, water, electricity, gas, and other fuels slowed to 5.7% in July from 6.6% the previous month. Health also eased to 2.4% from 2.6% the month prior. Inflation as experienced by the poor households, under 2012 prices, rose 5.9% in July, faster than the 5% in June and 4.4% last year. UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed the higher inflation rate in July due to the supply chain disruptions caused by the Ukraine-Russia war and ongoing pandemic. “The main driver that I see is the higher fuel prices translating to higher inputs and/or transport costs. We also see further pass-through effects of, as mentioned, elevated fuel costs due to higher global crude oil prices,” Mr. Asuncion said in an e-mail interview. He expects the inflation rate to remain elevated, with a 5% forecast for the third quarter. “We still see inflation rising to 5.1% this 2022 and that third quarter 2022 inflation print may be seen still above 5%. Nevertheless, with easing global oil prices, (inflation) may ease further but remain elevated,” Mr. Asuncion said. In a Viber message, Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said the hike in jeepney fares and daily wages, coupled with the sharp depreciation of the peso, were likely the key drivers of higher July inflation. The minimum fare in traditional jeepneys was raised to P11 from P9 and P10 starting last month. Modern public jeepneys also hiked minimum fares covering the first four kilometers to P13 from P12. “Our full year estimate is still at 5.2% with headline print likely to peak close to 7%,” Mr. Neri said. The BSP raised interest rates by a total of 125 basis points (bps) so far this year, including a surprise off-cycle hike of 75 bps last month, as it sought to contain broadening inflationary pressures. BSP Governor Felipe M. Medalla earlier signaled they were ready to hike rates by 25 or 50 bps at its Aug. 18 meeting. “The BSP is prepared to take all necessary policy action to bring inflation toward a target-consistent path over the medium term,” it said. — MIUC

What makes Parkway Corporate Center unique among other green office buildings?

August 5, 2022 | 5:58 pm

One of the important lessons that the COVID-19 pandemic has reinforced is that the health and wellbeing of employees should be a top priority – because they are, after all, the backbone that keeps a company going.

An important factor in prioritizing employee wellbeing are work spaces found in green building developments. While many developers are already going towards this direction – with 35 percent of the new offices in Metro Manila seen to acquire green building certifications from 2022 to 2025, according to Colliers Philippines – Parkway Corporate Center in Filinvest City, Alabang is still a cut above the rest.

Parkway Corporate Center, a LEED-certified office building, is situated in Filinvest City, the first CBD in the country that is both a LEED Certified Neighborhood and recipient of PhilGBC BERDE 3-Star Certification.

Long before the pandemic, Parkway Corporate Center has been forward-thinking, foremost, with its location in Filinvest City, which is a LEED (Leadership in Energy and Environmental Design) Certified Neighborhood and a recipient of PhilGBC BERDE 3-Star Certification. Filinvest City is the first central business district in the Philippines, and one of the largest in SouthEast Asia to earn such recognition and surpass the world’s most rigorous sustainable neighborhood rating system.

Parkway Corporate Center’s strategic location already makes it an ideal address as it provides professionals with mobility, and easy accessibility to lifestyle and essential establishments: lifestyle centers like Festival Mall, Westgate, and Commerce Center, luxury hotels such as Crimson Hotel to essential establishments including public and private hospitals like Asian Hospital, Ospital ng Muntinlupa, and government institutions like the Research Institute for Tropical Medicine.

Spacious and fully equipped meeting rooms at Parkway Corporate Center are designed for business meetings and corporate events.

But apart from its location, Parkway Corporate Center is also progressive in its design and modern amenities. It is designed by one of the country’s top architectural firms, H1 and Design to give the building a modern look and premium to your business. Within the building, workers can enjoy its modern features and amenities which include an elegant lobby for a dignified welcome to your employees and clients, modern business centers for productive meetings and other functions, high-speed elevators, the Podium Deck Garden where employees can relax, take a quick breather, socialize, and enjoy the fresh air while getting the best view of the Filinvest City skyline.

Select unsold units at Parkway Corporate Center are available for leasing.

Now ready for occupancy, Parkway offers flexible and combinable office units to suit each business’ office space requirements or to make office expansion easier. It ranges from typical units of 36 square meters, corner units of 55 square meters to 252 square meter units. Adding to its business-friendly terms, business owners or investors may opt to fully own an office unit or lease certain unit/s at Parkway.

So for business owners or investors who are looking for office spaces that offer everything that companies and employees need to boost work productivity while supporting their health and wellbeing can find all that and more at Parkway Corporate Center.

To know more, visit parkwaycorporate.com.

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Pag-IBIG members save record-high P38.82B in H1 2022, up 23%; MP2 surges to P19.40B up 47%

August 5, 2022 | 5:43 pm

Pag-IBIG Fund members collectively saved P38.82 billion in the first six months of the year, an increase of P7.23 billion or 23% compared to the P31.59 billion collected during the same period last year. This set a record for the highest amount saved by members with the agency for any January to June period.

“I am happy to note Pag-IBIG Fund’s excellent performance in its members’ savings collections. Our strong collections mean that we have funds to finance our programs and continue providing affordable home and cash loans for our members. This is our contribution to the call of President Ferdinand R. Marcos, Jr. to resolve the country’s housing backlog and provide a better life for Filipinos,” said Secretary Jose Rizalino L. Acuzar, who heads the Department of Human Settlements and Urban Development (DHSUD) and the 11-member Pag-IBIG Fund Board of Trustees.

Driving the double-digit growth is the continuing popularity of the agency’s voluntary Modified Pag-IBIG 2 (MP2) Savings. MP2 Savings amounted to a record-high P19.40 billion in the first half of the year, growing 47% from the P13.23 billion collected during the same period last year.

Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy Moti, meanwhile, attributes the agency’s record-high collections to the trust of members in preferring to save with Pag-IBIG Fund, and the support of the business community for the proper and on-time remittance of their employees’ Pag-IBIG Savings.

“The continued growth of our members’ savings is truly remarkable. We are grateful to the business community for responsibly remitting the Pag-IBIG contributions of their employees on time, and to our members for their continued trust in saving with Pag-IBIG, particularly in the MP2 Savings. Should the upward trend in our collections hold, we expect another record-high in terms of total members’ savings by the end of the year. More importantly, with our robust fiscal position, we are confident that we can continue to finance the increasing demand for our loans while keeping interest rates low. This is one of our ways of bringing Tapat na Serbisyo, Mula sa Puso to our members,” Moti said.

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NG debt rises to record P12.79 trillion

August 5, 2022 | 5:39 pm

The National Government’s (NG) outstanding debt rose to a record-high P12.79 trillion at the end of June, beating the previous high of P12.76 trillion in April.

Preliminary data from the Bureau of the Treasury (BTr) showed outstanding debt inched up by 2.4% from end-May’s P12.49 trillion “due to the net issuances of domestic and external loans as well as currency adjustments.”

Year on year, the debt stock jumped by 14.6% from P11.16 trillion.

The BTr said the debt pile has risen by 9.1% since the year started, after the government borrowed P1.06 trillion more.

Of the outstanding debt, the bulk or 68.5% was obtained domestically, while the rest was from foreign creditors.

As of end-June, outstanding local borrowings reached P8.77 trillion, higher than the P8.67 trillion logged in May.

The BTr attributed the increase to the P96.3 billion it borrowed through government securities, as well as the P5.36 billion impact of peso depreciation against the dollar.

The peso depreciated against the greenback from P52.412 as of end-May to P54.970 as of end-June, the BTr said.

Domestic debt was 10.4% higher than the P7.94 trillion a year earlier, and 7.3% higher than the end-December 2021 level of P8.17 trillion.

Most of the domestic debt stock still came from government securities with P8.77 trillion in June, up 18.5% year on year, and 1.2% month on month.

Meanwhile, outstanding external debt jumped by 24.7% year on year to P4.02 trillion at end-June. It inched up 5.1% month on month, and increased by 13.1% from the end-December 2021 level.

Broken down, it consisted of P1.8 trillion in foreign loans and P2.23 trillion in global bonds.

“The increment in external debt was attributed to the impact of local currency depreciation against the USD amounting to P186.94 billion and the net availment of external financing amounting to P43.18 billion; offsetting the P35.72 billion effect of net depreciation against the US dollar on third-currency denominated obligations,” the Treasury said.

Meanwhile, overall guaranteed debt rose month on month by 3.6% to P413.93 billion as of end-June, but 5.6% lower than the P438.6 billion as of June 2021.

This was attributed to P9.34 billion in net availment of domestic guarantees and the impact of local currency depreciation amounting to P10.44 billion.

“These offset the effect of third-currency fluctuations amounting to P4.60 billion and net repayments on external guarantees amounting to P0.97 billion,” the BTr said.

The government borrows from local and external sources to help fund a budget deficit capped at P1.65 trillion this year, equivalent to 7.6% of gross domestic product.

The country’s debt level reached 63.5% of gross domestic product (GDP) at the end of the first quarter, from 54.6% as of end-2020 and 39.6% as of-end 2019.

It is expected to steadily drop to 61.8% by end-2022, and to 52.5% by 2028. — Diego Gabriel C. Robles

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