How PSEi member stocks performed — January 20, 2023
Here’s a quick glance at how PSEi stocks fared on Friday, January 20, 2023.
Peso seen to move sideways vs dollar
THE PESO may continue to move sideways this week as investors await the US Federal Reserve’s next move.
The local unit closed at P54.54 per dollar on Friday, strengthening by nine centavos from its P54.63 finish on Thursday, Bankers Association of the Philippines data showed.
Week on week, the peso strengthened by 35 centavos from its P54.89 finish on Jan. 13.
The peso opened Friday’s session weaker at P54.75 per dollar. It dropped to as low as P54.83, while its intraday best was at P54.44 against the greenback.
Dollars exchanged went down to $1.0458 billion on Friday from $1.2496 billion on Thursday.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the peso rose on the back of a broadly weaker dollar as traders expect a 25-basis-point (bp) in the Fed’s next monetary policy meeting.
A trader likewise said in a Viber message that the peso is “moving along with regional currencies as emerging markets [are] benefiting from weaker dollar and investors looking for yield pickup.”
The greenback was mostly on the defensive last week, as a slew of data from consumer spending to business activity and inflation across major economies highlighted an increasingly fragile outlook for US growth, Reuters reported.
Against a basket of currencies, the dollar slipped 0.05% to 102.005. The dollar index has lost about 1.4% so far in January, having fallen nearly 8% in the final three months of 2022, when investors began factoring in a higher chance of the Fed slowing down the pace of interest rate rises.
With much top-tier data out of the way now, investors are waiting for the first Fed meeting of the year to see if it raises interest rates by 25 bps or 50 bps as it did in December after four straight 75 bps increases. The market is eagerly pricing in another step down in its tightening policy.
The US central bank last year raised borrowing costs by 425 bps, bringing the fed funds rate to 4.25-4.5%. The first Fed meeting for this year will be held from Jan. 31 to Feb. 1.
For this week, the peso “may continue to trade sideways as the market awaits more clarity on the Fed’s policy action,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a report.
Mr. Asuncion added that the release later this week of the Philippine’s gross domestic product (GDP) for the fourth quarter of last year “could bolster market sentiment” if it comes out better than their expected 2% quarter-on-quarter estimate.
Economic growth likely slowed in the last quarter of 2022 as rising prices resulted in slower holiday spending, analysts said.
A BusinessWorld poll of 23 economists yielded a GDP growth median estimate of 6.8% for the fourth quarter and 7.5% for the full-year 2022.
The fourth-quarter estimate is slower than the preliminary figure of 7.6% in the third quarter. It is also slower than the 7.8% seen in October-December 2021.
Mr. Asuncion expects the peso to move from P54.50 to P55.50 per dollar for this week, while Mr. Ricafort gave a narrower forecast range of P54.35 to P54.85 and the trader sees the peso moving between P54.25 and P55.25. — A.M.C. Sy with Reuters
PSEi to stay at 7,000 level ahead of GDP report
THE MAIN INDEX may move sideways this week and remain at the 7,000 level as investors await the release of full-year 2022 gross domestic product (GDP) data and corporate earnings.
The 30-member Philippine Stock Exchange index (PSEi) went down by 5.39 points or 0.07% to close at 7,056.52 on Friday, while the broader all shares index lost 3.82 points or 0.1% to 3,682.86.
Week on week, the PSEi went up by 104.98 points or 1.51% from 6,951.54 on Jan. 13.
“The local market has already been rallying for the past five weeks, driven by optimism towards the local economy’s prospects for 2023,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“This past week however, the local market is seen to be having a hard time getting past its 7,000-7,100 resistance range as selling pressures strengthen while new catalysts are yet to be found,” Mr. Tantiangco added.
Online brokerage 2TradeAsia.com said in a market note that bulls drove trading last week amid an improving inflation outlook, which could boost corporate earnings.
For this week, analysts expect the local bourse to remain at the 7,000 level as the market awaits fresh leads.
“[This] week, the local market may continue to test the 7,000-7,100 resistance range. For catalysts, investors may look towards our upcoming fourth quarter and full-year 2022 GDP data,” Mr. Tantiangco said.
“Strong GDP figures may raise expectations that fourth quarter or full-year 2022 corporate earnings will also be robust, which in turn may help the market get past its current resistance range,” he added.
The Philippine Statistics Authority is set to release fourth-quarter and full-year 2022 GDP data on Jan. 26.
The economy expanded by 7.6% in the third quarter of 2022, bringing the nine-month average to 7.7%.
Finance Secretary Benjamin E. Diokno said last week that the economy likely expanded “much faster” last year versus the government’s 6.5-7.5% goal.
He added that the Philippines will likely grow by around 6.5% this year, even with a potential global economic slowdown.
“The rally slowing towards the end of the week implies that some consolidation is in order, especially if no broad-based catalyst manifests in the coming week,” 2TradeAsia.com said. “Only time will tell with full certainty whether the recent rally back to 7,000 has legs or not. The more important question, at least to strong hands, is whether there are catalysts that can be exhausted in the medium-term to fund a jump towards 7,500.”
“The recent hawkish signals from the Federal Reserve, despite the moderation in the US’ inflation, may weigh on sentiment however,” Philstocks Financial’s Mr. Tantiangco said.
He placed the PSEi’s immediate support at its 10-day exponential moving average and resistance at 7,000-7,100, while 2TradeAsia.com put immediate support at 6,700 and resistance at 7,150-7,200. — J.I.D. Tabile
SteelAsia, Chinese group to build P108-billion integrated facility
STEELASIA Manufacturing Corp. said it entered into an agreement with a Chinese steelmaker to construct a P108-billion integrated steel facility at a location yet to be decided.
In a statement over the weekend, SteelAsia said that the facility will produce three million tons of liquid steel for construction, automobile, appliance, and shipbuilding applications.
The deal between SteelAsia and Baowu Group was a product of the three-day visit of President Ferdinand R. Marcos, Jr. to China in early January.
SteelAsia Chairman and Chief Executive Officer Benjamin O. Yao and Baowu Group Zhongnan Iron and Steel Co. Senior Vice-President Li Huaidong signed the deal.
Baowu was formed from the merger of the BaoSteel Group and Wuhan Iron and Steel in 2016.
“This project will spawn new industries and wean the country from its perennial dependence on imports. It will generate about 2,000 jobs, including for professionals who in the past have had to work abroad and leave their families,” Mr. Yao said.
Baowu will send a team to the Philippines next month to jointly explore with SteelAsia possible locations for the plant.
SteelAsia operates six manufacturing plants in five locations: Bulacan, Batangas, Cebu, Davao, and Misamis Oriental.
The company is scheduled to open a seventh plant this year, in Compostela, Cebu. The new plant will increase its annual capacity to 3 million metric tons (MT) from 2 million MT. — Revin Mikhael D. Ochave
Maharlika fund billed as means of addressing power, food security
By Beatriz Marie D. Cruz
SPEAKER Ferdinand Martin G. Romualdez said on Sunday that the Maharlika Investment Fund (MIF) bill will help address rising electricity and fuel prices.
“Filipinos cannot wait. We have to bring down the cost of electricity, the cost of power, the cost of oil,” Mr. Romualdez told Manila-based reporters at Zurich, Switzerland.
Mr. Romualdez was at the World Economic Forum in Davos last week, where President Ferdinand R. Marcos, Jr. had sought to attract interest in Maharlika from potential investors.
The bill has generated backlash because of the proposed sources of the fund’s capital. The bill had originally designated the two major government pension funds as suppliers of capital to the fund, but these provisions were withdrawn, at one point leaving the Bangko Sentral ng Pilipinas (BSP) as the main funder from its own profits.
Albay Rep. Jose Ma. Clemente S. Salceda, who chairs the House ways and means committee, said in an interview with ANC that the latest version of the bill has removed the BSP as a funder.
Michael Henry LI. Yusingo, a lawyer and policy analyst, said that the House version of the bill endorsed to the Senate cannot be revised.
“The House can withdraw that, revise it by repeating the process, and then endorse the revised bill to the Senate. Alternatively, a senator can file his own bill incorporating those revisions,” Mr. Yusingco said via chat.
The current MIF bill proposes government-owned and -controlled corporations (GOCCs) as funders, which Albay Rep. Edcel C. Lagman said could crowd out some basic services funded from GOCC profits.
“It must be recalled that dividends from GOCCs have been used for budgetary support. These dividends must not be parked in long-term contingent investments as they are urgently needed for immediate utilization to address the requirements of basic services like education, health, employment, food security and infrastructure,” Mr. Lagman said in a statement.
Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said by phone, “Those who are tasked to manage (the fund) are incentivized but if they lose, who foots the bill?”
IBON Foundation Executive Director Jose Enrique A. Africa said in a Viber message, “The worst-case scenario would be the fund attracting dubious private investors who perceive the fund as having political advantages from being so eagerly pushed by high government officials predisposed to self-interested interventions.”
“You do not have to gamble this much (and) take on such a huge risk,” Mr. Peña Reyes said, citing foreign direct investment (FDI) channeled into exports as an alternative.
“That’s what our neighbors in ASEAN are doing. They are able to export more because they are able to attract more FDI. And we have the potential also to do that, if only we had the political will,” Mr. Peña-Reyes said.
Mr. Africa added, “The haste with which it is evolving to adapt to public criticism is actually a little suspicious and raises the question (asking) why the administration is in such a hurry to create a Maharlika fund in whatever form.”
Senator Juan Miguel F. Zubiri told DWIZ radio on Saturday that a counterpart measure has been filed in the Senate by Sen. Mark A. Villar, chairman of the Senate Banks, Financial Institutions and Currencies committee.
Sen. Sherwin T. Gatchalian, who chairs the Senate ways and means committee, told DZBB on Sunday that funding sources remain the Maharlika bill’s main sticking point.
“My main concern is where the funds for the Maharlika Investment Fund will come from,” Mr. Gatchalian, told DZBB on Sunday.
“There should be substantial funding for the investment fund in order to have a large return.”
Mr. Romualdez called on the Senate to work out all their concerns on the bill.
“For all those senators who may have contrary thoughts, just read the bill and deliberate it in the Senate and let’s take it from there,” he said.
DPWH seeking China grants for Visayas, Mindanao bridges
By Arjay L. Balinbin, Senior Reporter
THE Department of Public Works and Highways (DPWH) is hoping to obtain “grant assistance” from the Chinese government for bridges in the Visayas and Mindanao.
“I have had active discussions with them,” DPWH Secretary Manuel M. Bonoan told BusinessWorld on Friday on the sidelines of the ceremonial opening of the Binondo-Intramuros Bridge linear park and pedestrian stairs project.
He said that the grants being proposed will be for bridges outside the capital region. The Chinese government has provided various grants for projects in the capital, including $75 million for the Binondo-Intramuros Bridge and the Estrella-Pantaleon Bridge during the previous administration.
“We are trying to get some more grant assistance for other bridges like in Bohol and Mindanao,” Mr. Bonoan said.
He added that one of the bridges being proposed for a Chinese grant is the one connecting Panglao Island and Tagbilaran City in Bohol to ease access to a top tourist destination.
“There is an existing bridge that we built, so we are going to request a more permanent structure that will connect Panglao island and Tagbilaran,” Mr. Bonoan said.
The project is expected to cut travel time from Tagbilaran City seaport to Panglao Island to 15 minutes from 45 minutes during peak periods.
The Philippines and China have a current agreement for the China Aid Localized Project for Davao River Bridge or Bucana Bridge, a coastal road intended to provide an alternate route to the Pan-Philippine Highway in southern Davao City, which has been experiencing heavy road congestion.
During the recent visit of President Ferdinand R. Marcos, Jr. to Beijing, the two governments signed an updated memorandum of understanding on the Belt and Road Initiative and the framework agreement on bridges crossing the Pasig-Marikina River and the Manggahan Floodway Bridges Construction Project.
Chinese President Xi Jinping and Mr. Marcos also discussed loan agreements for Philippine infrastructure development.
“Both sides will further strengthen infrastructure cooperation with big projects such as the Davao-Samal Island Bridge. Both sides will explore means to further strengthen cooperation, at the locations to be mutually agreed, with the purpose of promoting innovative economic development and maintaining stability in production and supply chains,” they said in a joint statement on Jan. 5.
According to the Finance department, the cumulative loan commitments with China for ongoing Philippine projects now stand at $1.06 billion after the recent signing of loan agreements worth $201.8 million.
DBM considering ‘green’ standards for gov’t procurement
THE Procurement Service (PS) of the Department of Budget and Management (DBM) is planning to impose a green public procurement (GPP) standard to ensure that the government spends in a sustainable manner.
“The establishment of an inter-agency technical specifications review committee is one of the reform initiatives we spearheaded to take government procurement to a sustainable track,” PS Executive Director Dennis S. Santiago said in a statement.
The committee will be formed to implement GPP and assess, review and evaluate the sustainability of common-use supplies and equipment technical specifications.
The specifications will need to comply with Philippine and international standards, as well as address environmental, social and economic aspects of government purchasing.
“Under a GPP regime, the government shall procure goods and services with reduced environmental impact throughout their life cycle,” the DBM said.
Budget Secretary Amenah F. Pangandaman said that integrating “green choices in public procurement puts the Philippines closer to its ultimate goal of ensuring sustainable management and use of natural resources by 2030.”
“GPP provides the opportunity for government agencies to infuse environmentally-friendly parameters and requirements in the products that we procure, and in the process avoid the use of toxic substances; prioritize alternative green materials; reduce energy and water consumption during use; and recycle at the end of the useful life of the product,” Mr. Santiago added.
Apart from the PS, the committee will also include the departments of Environment and Natural Resources, Trade and Industry, Science and Technology, Information and Communications Technology; and Energy. — Luisa Maria Jacinta C. Jocson
Pushback to ‘holiday economics’ centers on disadvantages for no-work, no-pay employees
PROPOSALS to enact a “holiday economics” measure will help prop up tourism as a pillar of the recovery, analysts said, but such a policy could be negative for employees who are not paid on days they do not work.
Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said that the proposed measure will provide a boost for the ongoing recovery from the COVID-19 pandemic.
“The (possible) endemicity of COVID is going to help ease the mobility restrictions we had and that would welcome development especially for (the tourism sector), since we would have more tourists come in,” Mr. Peña-Reyes said by phone.
The practice of so-called “holiday economics” seeks to create long weekends, moving national holidays closer to Saturday or Sunday if necessary in order to stimulate travel and help tourism drive the recovery.
Mr. Peña-Reyes added that developing the industry will in turn attract more foreign visitors, creating a knock-on effect for exchange rates.
“We have a limited domestic market, so it would be very beneficial for us to get more revenue from outside,” he said.
Last week, House Assistant Minority Leader Arlene D. Brosas said that day laborers will earn less under such an arrangement.
“This will be a problem for workers who only receive their salaries on a daily basis because that would mean a deduction from their salary,” Ms. Brosas said.
Lawrence B. Dacuycuy, an economics professor at De La Salle University, said holiday economics can be billed as a “strategic move to promote spending and improve (worker’s) well-being.”
Mr. Dacuycuy called for creative and flexible ways to galvanize the economy. “We have to find ways to… outplace inflation in terms of economic growth,” he said via e-mail.
Mr. Peña-Reyes acknowledged the disadvantages to workers that are not in regular employment. “It would not be such a problem if you are formally employed because you are paid anyway (regardless of holidays). But those who might be in more precarious employment situations, (that would mean) no work, no pay for them,” he said.
Deputy Minority Leader France L. Castro added that moving the commemoration of a holiday from its actual date risks eroding the spirit of the holiday.
“We must value the actual date of a particular event in our history (and take this as an opportunity to) reflect the significance of those dates,” Ms. Castro of ACT Teacher’s Party-list said.
Mr. Dacuycuy countered that “If we’re able to instill patriotic or essential values in each of us, it really does not matter when a particular historical event or person is celebrated.”
“Of course, some of us focus on the special meaning of such events, while others would like a paid day off,” he added.
Mr. Dacuycuy said that “institutions need to undertake studies that will formally assess the contribution of such a measure to economic output.” — Beatriz Marie D. Cruz
PHL-Israel trade not seen sufficiently developed to warrant FTA
THE PHILIPPINES and Israel have not yet reached the point in their trade relationship that warrants a free trade agreement (FTA), Ilan Fluss, Israel’s ambassador to the Philippines, said.
“(An FTA is) always interesting, but you need to have a certain level of trade between the countries in a variety of areas to make it interesting for both countries. I think we’re not there yet,” Mr. Fluss said on the sidelines of an event organized by Digital Pilipinas in Makati City last week.
Mr. Fluss said the Philippines and Israel are set to convene a joint economic commission (JEC) meeting in the second quarter of 2023 to discuss more business and investment collaboration.
“This will be an opportunity for the two governments to sit down and discuss how (we can introduce) more tools to do more business together,” Mr. Fluss said.
In June, the Philippines and Israel signed a memorandum of understanding creating the JEC.
According to Mr. Fluss, interest in investment and collaboration centers on agricultural technology, digitalization, water management, financial technology, and cybersecurity.
“Israeli companies are here (and) seeing a lot of interest. We’re trying to get more Philippine companies to come to Israel, to identify opportunities in Israel, because the two economies complement each other,” Mr. Fluss said.
“The Philippines is a vast island country (with) a lot of challenges (and) needs. Israel is a small country, but has a lot of technology and best practices that it can share with the Philippines. I think that it just makes sense to work together,” he added.
Mr. Fluss said that the investment promotion and protection agreement (IPPA) signed by the Philippines and Israel in June 2022 has yet to be ratified by Israel’s parliament, which was newly elected in November.
“The Philippines went into elections. And then in Israel… we also went into elections. We need to ratify this agreement. Our parliament is convening again. So hopefully this will be ratified,” Mr. Fluss said.
The Department of Trade and Industry has said that the IPPA provides opportunities to tap investment in life sciences and healthcare, water technology, high technology and semiconductors, cybersecurity, financial technology, and defense.
Bilateral trade in goods between the Philippines and Israel was $323 million in 2021, higher than 2020 levels but lower than the pre-pandemic total of $338 million in 2019. — Revin Mikhael D. Ochave
Digital government: Creating real connections
(First of two parts)
As people increasingly look to the government to defend their lives and means of subsistence during times of crises, most recently under the pandemic, public policy and the provision of services are now under unprecedented pressure. There is widespread demand among citizens for more digitally enabled public services, and many of them want more control over how these services are provided. However, a sizable portion of the populace lacks the ability or resources to use digital services.
To better understand how people’s lives are changing in the connected world, EY launched a new research study with over 12,000 working-age respondents called Connected Citizens. This global study looked at what these respondents value, their top concerns, and how they feel about the impact of technology. The study then aimed to examine their expectations of the function of the government, the provision of public services, and the nature of the interaction between those in power and those under it.
TECHNOLOGY IN A MORE PERVASIVE ROLE
The increased use of technology in daily life has been one of the most noticeable changes catalyzed by the pandemic. It changed how people work, play, shop, study, and socialize in mere months. According to the study, a majority anticipate using technology even more in the future than they would have otherwise. As much as 64% of the respondents anticipate that the pandemic will result in an increase in the use of technology.
Although governments worldwide have sped up the process of digitalizing many public services, many still fall behind private sector offerings like online banking and shopping in terms of anticipated gains in service delivery (although healthcare services are viewed more positively). Over half of the people globally (53%) believe that governments and public services have used digital technology to successfully combat the pandemic. This shows that governments still need to make progress in their digital transformation before they can live up to the expectations of the citizens they serve.
We are seeing similar trends in the Philippines, where the government is increasingly focused on implementing and sustaining digital transformation strategies to bring about a true e-government that would strengthen connections with citizens by using digital and technology to achieve economic transformation and more efficient delivery of services to citizens. However, both government and stakeholders alike need to understand the deeper issues around technology in order to truly make the most of it.
BROADER CONCERNS REGARDING TECHNOLOGY IMPACT
Despite the prevalence of technology, the study found complex attitudes towards it. Most respondents (72%) believe it improves life and will be necessary in the future to help address ever-more complicated challenges. However, there are concerns about its broader effects.
Growing socioeconomic inequality.
The most disadvantaged people frequently lack the resources to access new technology and the digital literacy skills necessary to use it. Another issue is the use of algorithms for decision-making, which some believe may be biased. Nearly a third of people worldwide (32%) believe that not all segments of society will equally benefit from technology. And 34% believe that people who are already wealthy and powerful gain more influence as a result of technology.
Diminished human interaction.
Concerns have been raised about how using communication technology can affect social cohesion, with 32% believing that technology will cause people to feel less connected to their community. Some of the most vulnerable groups may experience increased isolation in a more virtualized society where there is less physical interaction.
Digital security and personal privacy.
The quantity and variety of data produced and the rate at which it is gathered will grow as more people and devices are linked. This creates public anxiety over personal privacy and a lack of choice over how data is used. More than 4 out of 10 people oppose the sharing of data with both the government and the business sector, while 72% oppose government selling their personal information to the private sector.
Additionally, governments can do more to explain the advantages of data sharing and reassure the public that it will be used responsibly. The study reveals some support for data use when people are aware of the use case, and if it presents advantages for them personally or for society as a whole. This is especially true when it comes to matters of public health. For instance, 52% of people worldwide favor utilizing personal data to track and prevent disease, while 47% support using it to set priorities for healthcare.
Building trust in government institutions will be crucial in increasing the effectiveness and efficiency of government operations as well as utilizing public efforts to help design and provide better services. The study shows that citizens are willing to participate more in the delivery of public services in the future, with more than a third identifying more performance transparency as one of their top priorities to improve public service quality. Additionally, 42% said they would like to have a greater say in how public services are delivered in their community.
THE SEVEN CITIZEN PERSONAS
With the study showing how complicated global citizen beliefs, values, needs, and behaviors are, understanding these identities can assist governments in forging more reliable ties with their constituents. It identified seven different citizen personas through survey data analysis: Diligent Strivers, Capable Achievers, Privacy Defenders, Aspirational Technophiles, Tech Skeptics, Struggling Providers, and Passive Outsiders.
Diligent Strivers are young proactive self-improvers keen to advance in life. They expect seamless digital government services to help them achieve their aims, are comfortable sharing their data with governments, and strongly believe in equal opportunities.
Capable Achievers have an older age profile and are independent, successful and satisfied with their life. Pragmatic technophiles who embrace digital innovation, they trust governments to use their data appropriately but worry about it getting into the wrong hands.
Privacy Defenders tend to be older, independent and comfortably off. They value technology and the benefits it provides them, but are extremely cautious when it comes to sharing their personal data with governments or private companies.
Aspirational Technophiles are younger, well-educated city-dwellers. Motivated by success and new opportunities, they incorporate technology and data into every facet of their lives. They are excited by the potential for new digital innovations to empower people and improve society.
Tech Skeptics are older, on lower incomes and relatively dissatisfied with their lives. Distrustful of governments and skeptical about the benefits of technology, they tend to be opposed to data sharing, even with a clear purpose.
Struggling Providers are younger and tend to be in low paying, less secure work. They are above-average users of welfare services and are ambivalent toward technology, lacking the access and skills for it to significantly impact their lives.
Passive Outsiders have lower levels of income and education. Detached from the connected world around them and generally reluctant to embrace change, they are relatively ambivalent on data sharing but tend to feel the risks outweigh the benefits.
The attitudes each persona has toward technology and their level of access and comfort with digital services are significant. Despite being representative of the online population, the survey participants vary in their comfort level while utilizing new technologies on their own. This indicates that governments should shift away from a one-size-fits-all approach towards service delivery and increase the level of personalization to improve public policy design, deliver more efficient and effective public services, and deepen the relationship between government and citizens.
For instance, Struggling Providers, who would require the most assistance, would likely be unable to utilize services and miss opportunities if some services can only be accessed through digital channels. This leads to a worsening of the structural inequality they already experience.
We have seen this ourselves during the pandemic particularly in the education sector where students were given the option to participate in online classes, yet a significant percentage did not have access to devices or the internet and had to resort to analog options such as printed learning modules.
In the second part of this article, we discuss four key areas government can focus on to better engage with the public: inclusive digitization, responsible data use, innovative and agile policymaking, and public participation and engagement.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinions expressed above are those of the author and do not necessarily represent the views of SGV & Co.
Marie Stephanie C. Tan-Hamed is a strategy and transactions partner, EY Parthenon partner and PH Government and Public Sector leader of SGV & Co.
Experts: New security adviser indicates strong military lobby
By Kyle Aristophere T. Atienza, Reporter
ANALYSTS on Sunday said the appointment of an ex-military general and former Duterte Cabinet member to the National Security Council under President Ferdinand R. Marcos, Jr. showed a strong military lobby in the government.
“The military bloc obviously is really interested to keep its hold or control over important Cabinet positions that are concerned with defense and security,” Arjan P. Aguirre, who teaches political science at the Ateneo University, said in a Facebook Messenger chat.
“The national security adviser post is one of those key positions that for them should be held by a person whose interests are aligned with the short- and long-term agenda of the military bloc opting to operate in a particular administration,” he added.
Earlier this month, Mr. Marcos appointed Eduardo M. Año, a retired general of the Philippine Army, as his national security adviser, replacing Clarita A. Carlos, a political scientist and retired University of the Philippines professor.
The appointment of Mr. Año, who also served as Interior secretary under former President Rodrigo R. Duterte, “tells us of how effective the military bloc has been these past years in aligning themselves with the ruling coalition and making themselves useful in the defense and security Cabinet portfolios,” Mr. Aguirre said.
Mr. Año as head of the National Security Council will advise the President on security and foreign policy issues.
Ms. Carlos has said forces who wanted her out of the government had been besmirching her reputation since she got appointed — a claim that Mr. Marcos denied on Saturday.
“She felt that there were people who were moving against her in government,” he told reporters. “I kept telling her, I don’t really think so.”
“I guess she just found it too much. She didn’t enjoy her time in government which, you know, if we think about it, it’s not really surprising because that’s not her natural habitat,” the president said. “Her natural habitat is the academe. And so now, she will be in a think tank, which is perfect for her.”
Ms. Carlos, 76, is reportedly headed to the policy and budget research department of the House of Representatives.
During her stint at the council, she vowed to veer away from the US concept of national security, which she said has a military bias. She said national security should also focus on the “economic life” of Filipinos.
The previous government had been criticized for using militarist solutions to national problems, including the global coronavirus pandemic.
“Whatever motivated this change was either politics or a loss of confidence,” Kiefer Zachary Hipe, a military historian, said in a Messenger chat.
“What this says about our security sector depends on the genuine reason for these changes,” he said. “If it was competency-based, then we can assume that they are trying to align the sector to the ever-growing developments in the region.”
“If it was politics, then it shows that opportunism heavily thrives in the defense and security sector.”
Mr. Hipe said the military has kept its strong influence on the government even after the ouster of a military-backed dictatorship in the mid-1980s and restoration of democracy.
“[People Power] showed that military-supported changes have weight,” he said. “But the military remains subservient to political patronage.”
Chester B. Cabalza , a national security expert, doubts Ms. Carlos was removed from the post because she didn’t come from the military.
Mr. Cabalza said she had overseen for years the academic training of future top officers of the Armed Forces and select government bureaucrats, noting that she served as president of the National Defense College of the Philippines from 1998 to 2001.
“Therefore, she has been part of the wider defense and security sector.”
Last week, Ms. Carlos said she felt Mr. Marcos “made a difficult decision in letting me go.” “That’s how I read the situation. I should know if I have lost his confidence,” she told ABS-CBN News.
“Regardless of the complexity of internal and external security threats on the ground, the adviser must be skillful in commanding the giants in the military based on field experience,” Mr. Cabalza said.
Food security, insurgency and external defense issues remain the top security threats confronting the country.
The South China Sea dispute is among the Philippines’ external security concerns. On Saturday, the Philippine Coast Guard (PCG) said the Chinese Coast Guard on Jan. 9 drove away a Filipino fishing vessel at the Second Thomas Shoal, which is within the Philippines’ exclusive economic zone.
This was days after Mr. Marcos met with Chinese President Xi Jin Ping in China, where the latter vowed to find a solution to avoid tensions in the disputed waterway.
“The national security adviser should be a thinker and doer at the same time,” Mr. Cabalza said. “He should provide more solutions to complex problems in our national, regional and global security.”
Congress to tackle top bills as sessions resume
THE PHILIPPINE Congress resumes sessions on Monday after a month-long holiday break, with lawmakers vowing to work double time in passing priority bills of the Marcos government.
Bills that seek to hasten the country’s digital transformation such as the proposed E-Governance Act will top the list of priorities of the House of Representatives, Speaker Ferdinand Martin G. Romualdez said in a statement on Sunday.
“We will expedite the passage of these measures to implement the pronouncements of President Ferdinand R. Marcos, Jr. in Davos, Switzerland on his desire for the country to catch up with other nations in digital evolution,” he said.
House priorities this year also include 11 other measures that the Executive and Legislative branches had agreed on in October during a meeting of the Legislative-Executive Development Advisory Council (LEDAC), Mr. Romualdez said.
These were among those mentioned by Mr. Marcos in his first state of the nation address (SONA) in July.
“These measures are components of the President’s agenda for prosperity, which we fully support,” Mr. Romualdez said.
Senate Minority Floor Leader Aquilino Martin “Koko” D. Pimentel III said about half of 20 pending committee reports in the Senate have been acted on.
“We have unfinished and new business which we can tackle in plenary of about only 10 committee reports,” he said in a Viber message.
The senator said the Senate should prioritize measures that seek to boost farm output and address military concerns about their ranks and promotions.
Apart from the E-Governance bill, the House would also work on an enabling law for the natural gas industry and changes to the Electric Power Industry Reform Act, Mr. Romualdez said.
Also topping House priorities are bills on pensions, land use, defense, government rightsizing, budget modernization and a proposed Department of Water Resources.
Setting up the Negros Island Region, magna carta for Filipino seamen and a proposal to establish regional specialty hospitals would also be prioritized, he added.
The House approved 19 priority bills during its first five months. Two of them, the SIM Registration Act and postponement of village and youth council elections, have been signed into law.
Before Congress went on a break last month, it passed on final reading the Maharlika Investment Fund bill, which Mr. Marcos pitched at the World Economic Forum in Davos, Switzerland last week. — Beatriz Marie D. Cruz with Alyssa Nicole O. Tan and JVDO