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PAGCOR on track to hit gaming revenue target

PHILSTAR FILE PHOTO

THE Philippine Amusement and Gaming Corp. (PAGCOR) said gross gaming revenue (GGR) is on track to hit the $7-billion target for 2025 despite restrictions imposed on online gambling.

“These numbers affirm the Philippines’ place as one of the fastest-growing and most important gaming markets in Asia,” PAGCOR Chairman and Chief Executive Officer Alejandro H. Tengco said.

PAGCOR said in a statement on Tuesday that it booked GGR of $3.8 billion in the first half, keeping it on pace to beat the full-year target.

Mr. Tengco cited the rapid rise of electronic gaming as a driver of growth but added that “oversight must evolve to ensure integrity and player protection.”

The online gambling industry is under intense public scrutiny, leaving the government weighing options like an outright ban or higher taxation.

Finance Secretary Ralph G. Recto said last week that the government is proposing an online gaming tax, alongside policy options to limit access to gambling platforms.

PAGCOR has said that it generated P41 billion from electronics games and P28 billion from other online betting platforms between January and July. 

PAGCOR’s measures to address concerns about regulating the industry include a ban on betting using credit cards or cryptocurrency.

Mr. Tengco reiterated his position of shedding the regulator’s role as a casino operator.

“PAGCOR’s dual role has served its purpose, but as the industry matured, it became clear that… a referee cannot also be a player on the same field,” he said.

PAGCOR noted that such a decoupling will require approval from the Governance Commission for Government-Owned and -Controlled Corporations (GCG), which is now reviewing such a restructuring.

The GCG has said that results of the study will be presented to the GCG sitting En Banc within the year.

Once approved, the study will be submitted to the Office of the President, it added.

Mr. Tengco said employees of PAGCOR-run Casino Filipino will be protected through redeployment or hiring by privatized operators. Otherwise, he promised competitive retirement benefits once Casino Filipino is privatized.

He noted a “serious problem” with Casino Filipino, which is projected to incur losses of more than P5 billion. — Aubrey Rose A. Inosante

PHL urged to move up copper value chain

REUTERS

THE PHILIPPINES needs to move up the copper value chain by investing in higher-value downstream activities rather than simply mining ore, a PwC official said on Tuesday.

Angelo Estrera, Asia-Pacific leader for Business Model Reinvention at PwC, said in a presentation at the 23rd Management Association of the Philippines International Chief Executive Officer Conference: “We’re literally just digging it out and shipping it. We are not putting any value at it. The opportunities (lie in moving) to processing, refining, manufacturing — you will capture millions downstream.”

He noted the strong prospects for copper, which currently accounts for less than 1% of gross domestic product (GDP).

“We’re sitting on $1 trillion worth of copper, gold, and nickel, zinc, and silver reserves. (These will be key commodities) for the energy transition and yet 5% has only been explored,” he said.

Mr. Estrera said a “copper corridor” can drive future growth but will require the development of proper regulation, infrastructure, and investment, innovation, talent, and technology.

“The Philippines has the fourth-largest reserves; however, 94% is very low-grade copper,” he said, noting that exports generated $3.1 billion in 2024.

Mr. Estrera cited the case of Australia, which generated $2.4 trillion in resource export revenue over the past decade, accounting for about 12.2% of its GDP. Australian resource companies employed 1.2 million workers and $143 billion in corporate taxes during the period.

Separately, Mr. Estrera noted that the business process outsourcing (BPO) industry faces significant risks and significant upside as well.

The industry accounts for 9% of GDP, employs 1.8 million and generates $38 billion in revenue, he said.

“A lot of analyst reports will say anywhere between 40% to 80% of the BPO industry can be disrupted.  Let’s even just say 50% (to use a) round number. What does that mean? 5% of GDP gone, 1 million unemployed. It’s a pillar of our economy right now,” he said.

However, Mr. Estrera also cited a Singapore Economic Development Board estimate that AI can make up 12% of Philippine GDP. — Aubrey Rose A. Inosante

PCCI says continued detention of FNI chairman eroding investor confidence

THE Philippine Chamber of Commerce and Industry (PCCI) said the delayed release of Global Ferronickel Holdings, Inc. (FNI) Chairman Joseph C. Sy is harmful to the investment climate.

“The continued detention of Joseph Sy despite an order for his immediate release is undermining the national image as a destination for foreign investment not only for the Philippine mining industry but for the whole business community,” the PCCI said in a statement on Tuesday.

FNI said in a disclosure on Tuesday that the Regional Trial Court (RTC) of Taguig ruled that Mr. Sy’s continued detention had no legal basis.

“Every day the Bureau of Immigration (BI) defies this order, it will send the wrong signals to potential investors,” the PCCI said.

According to the business group, Mr. Sy chairs the PCCI Mining Industry Committee.

“The integrity and credibility of this massive effort (to attract investment), which requires huge capital mobilization and takes at least five years to execute, is put at risk if the court’s order for Sy’s release is delayed,” the PCCI said.

“Already, the Philippines is suffering in other sectors such as tourism due to the uncertainties in the business environment as a result of inconsistencies in policy implementation and adherence to the rule of law,” it added.

Mr. Sy was detained by the BI on Aug. 21 over allegations he is an “overstaying alien” despite prior rulings on his citizenship, including by the Department of Justice and the Supreme Court.

According to FNI, the Taguig RTC has issued a writ directing the release of Mr. Sy from detention.

“This ruling constitutes a judicial affirmation that Mr. Sy’s continued detention had no legal basis and upholds his fundamental rights as a Filipino citizen,” FNI said in a disclosure. — Justine Irish D. Tabile

JICA signals readiness to support PHL railway, road, bridge projects

PHILIPPINE STAR/MICHAEL VARCAS

THE Japan International Cooperation Agency (JICA) said it stands ready to further support Philippine railway, road, and bridge projects if the Philippines puts forward suitable proposals. 

“JICA will continue to support the Philippine government’s projects for railways, roads and bridges. Specific projects of course, will purely depend on the Philippine government’s request and discussions with JICA,” JICA Senior Representative for Economic Growth Keisuke Fukui said in an e-mail.

Currently, JICA is funding the North-South Commuter railway project, the Metro Manila Subway project, the rehabilitation of Metro Rail Transit Line 3 (MRT-3) and the extension of Light Rail Transit Line 1 (LRT-1).

JICA is also pursuing transport modernization technical cooperation projects with the Department of Transportation (DoTr) and Metropolitan Manila Development Authority.

“These projects show JICA’s development philosophy of combining hard infrastructure and soft support through technology transfer,” Mr. Fukui said.

Noting Japan’s strengths in construction technology, JICA continues to provide support to ensure the sustainability of its projects through capacity development of Filipino partners, particularly in operation and maintenance, he said.

JICA pointed to the 30-year railway masterplan as a model for modernizing the transportation system.

In 2023, the DoTr said JICA committed 300 million yen to develop the 30-year railway master plan, whose objectives include making Philippine rail lines compliant with international standards. 

The masterplan’s completion timeline has yet to be determined, Mr. Fukui said, though last year JICA said the target completion date is 2026. — Ashley Erika O. Jose

DoE overhauls EV classification system 

PHILSTAR FILE PHOTO

THE Department of Energy (DoE) said it updated the system for classifying electric vehicles (EVs) to harmonize the categories and reduce the administrative burden of regulating the segment.

In a department circular dated Sept. 4, the DoE amended the EV Recognition Guidelines to provide detailed criteria for classifying vehicles as battery EVs, hybrid EVs, plug-in Hybrid EVs, light EVs, range-extended EVs, and fuel cell EVs.

The DoE said that the framework aims to ensure consistency across EV technologies and provides clear guidance for industry and regulators.

“The issuance of this policy is a critical step toward building a more organized, accessible, and future-ready EV market in the Philippines,” Energy Secretary Sharon S. Garin said in a statement.

“By harmonizing our EV recognition guidelines, we are reducing administrative burdens, increasing transparency, and accelerating EV adoption nationwide,” she added.

Citing the Land Transportation Office, the DoE noted growing momentum in EV adoption, with 29,715 EVs registered in the first seven months, surpassing the full-year total of 24,286 in 2024.

EV registrations now accounts for nearly 5% of new vehicle registrations. — Sheldeen Joy Talavera

DENR requests 7% increase in 2026 budget

PHILSTAR.COM/DOMINIQUE NICOLE FLORES

THE Department of Environment and Natural Resources (DENR) said it will seek a budget of P26.1 billion in 2026, up 7%, to address priorities like climate change and reforestation.

It told the House appropriations committee that funding wish-list includes P20.5 billion for the DENR central office, P3.3 billion for the Environmental Management Bureau, P1.8 billion for the Mines and Geoscience Bureau, P1.9 billion for the National Mapping and Resource Information Authority, P294 million for the National Water Resources Board, and P149 million for the Palawan Council for Sustainable Development.

The DENR said its areas of focus next year include climate risk, regreening forests, preserving biodiversity, water security, air quality, and sustainable mining.

The DENR also targeted 4,164 barangays for assistance in establishing materials recovery facilities and 72 local government units to be assessed on their waste management practices.

The DENR also hopes to generate P577 million in fees and charges from agreements to develop and manage protected areas.

It will seek to further develop a Natural Capital Accounting (NCA) Information System to improve the process of assigning value to natural resources. The NCA is a component of the National Adaptation Plan 2023-2050. — Andre Christopher H. Alampay

Stringent biosecurity checks set for live freshwater prawn imports

PHILIPPINE STAR/ MICHAEL VARCAS

THE Bureau of Fisheries and Aquatic Resources (BFAR) said it plans to assign a panel to conduct biosecurity checks on live imports of giant freshwater prawn to protect the aquaculture industry.

The panel will also vet the health of the imported prawn and the management practices of breeding facilities. The vetting will result in the issuance of a Certificate of Compliance.

Importers must be in possession of a License to Operate as Importer from the BFAR, apart from the usual Sanitary and Phytosanitary Import Clearance, filed at least five working days beforehand. 

Possible violations associated with non-compliance include smuggling, endangering food security, and unauthorized selling. Violators are liable for fines of between P300,000-P500,000 and eight years’ imprisonment.

Live imports are typically meant to provide stock for the aquaculture industry.

The BFAR will conduct consultations on the planned measures on Sept. 17-19. — Andre Christopher H. Alampay

DA touts fair prices for farmers if NFA procurement expanded

PHILIPPINE STAR/MICHAEL VARCAS

THE Department of Agriculture (DA) said expanding the National Food Authority’s (NFA) procurement activities will ensure that more farmers receive fair prices for their rice or corn.

Agriculture Secretary Francisco P. Tiu Laurel, Jr. said in a statement issued by the DA that such reforms will form part of the DA’s suggested amendments to the Rice Tariffication Law of 2019.

Undersecretary for Operations and Agri-Fisheries Mechanization Roger V. Navarro said more NFA procurement guarantees fair prices for farmers, especially during the wet season.

The NFA purchases grain at higher prices than private traders, though budget and storage constraints limit it to procuring only a fraction of the harvest. Private traders can undercut the NFA price because the availability of imported rice erodes any leverage enjoyed by farmers selling their palay (unmilled rice).

Giving the NFA authority to purchase corn will strengthen feed production and benefit the poultry and livestock industries, Mr. Laurel said.

Yellow corn is a key component in animal feed, accounting for 46% of livestock feed and 62% of poultry feed.

Mr. Laurel added that the procurement of rice processed via government-funded Rice Processing Systems (RPS) will ensure markets for farming cooperatives.

“We must make these multi-million-peso facilities work for the farmers they were meant to serve,” he said. — Andre Christopher H. Alampay

Service exports, not manufacturing, viewed as PHL’s competitive edge

PHILSTAR FILE PHOTO

THE PHILIPPINES needs to focus on developing its service workforce, with services viewed as the Philippines’ real source of comparative advantage in Southeast Asia, HSBC said.

“I think the Philippines’ unique value proposition is its people, the soft skills,” Ines Lam, associate director for Asia economics at HSBC, said at the 23rd International CEO Conference on Tuesday at Shangri-La The Fort.

She cautioned against “chasing after manufacturing like all other Southeast Asian countries.”

While manufacturing remains an integral part of any economy, she said the Philippine talent pool can be leveraged in the face of the turmoil caused by US tariffs.

“I think it is important that the Philippines does not lose this and instead focuses on developing this in response to these new trade dynamics and new paradigm,” she added.

In particular, she said the Philippines should seek to provide something new and improve its offerings in terms of business process outsourcing.

“That will help the Philippines stand out in this world,” she added.

Asked to comment, Management Association of the Philippines President Alfredo S. Panlilio said that manufacturing should also be highlighted, calling it equally important.

“I do not completely agree that you shouldn’t focus on it. I think we should try to have companies invest because when you say manufacturing, they invest in the country,” he told reporters on the sidelines of the event, noting that manufacturing investments are long-lasting.

“Services, yes, we need to upskill, but there are threats like technology, or if somebody says, ‘I can charge less,’” he said.

He said that focusing on services does not result in a balanced economy.

Meanwhile, Ms. Lam said the Philippines is relatively insulated from the impact of the US tariffs, as its economy is driven by domestic demand.

However, she said large unknowns remain with regard to US trade policy.

“The first unknown is we have a court case going through in the US right now” questioning the legal basis for the Trump tariffs.

Should the courts rule the tariffs illegal, the trade deals that countries have been negotiating with the US could be invalidated.

At the same time, the US government may also have to refund the billions of tariffs it collected.

“Imagine the chaos and the disruptions that we will have to go through when that happens,” she added. — Justine Irish D. Tabile

PHL shares edge up on bargain hunting, Fed bets

BW FILE PHOTO

PHILIPPINE SHARES inched higher on Tuesday on bargain hunting and mounting expectations that the US Federal Reserve will deliver its first rate cut for this year at its meeting next week.

The Philippine Stock Exchange index (PSEi) increased by 0.34% or 20.85 points to close at 6,122.71, while the broader all shares index rose by 0.23% or 8.81 points to end at 3,691.59.

“Philippine stocks cautiously edged higher on bargain hunting as investors step in to support prices following [Monday’s] drop,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.

“The local market rose backed by the positive cues from Wall Street. This comes amid mounting hopes of a Fed rate cut in their meeting this month following the US’ dismal August jobs report,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a market report.

Wall Street’s main indexes gained on Monday on expectations that the US Federal Reserve could lower borrowing costs soon, Reuters reported.

Investors are expecting multiple rate cuts this year after a troubling nonfarm payrolls report on Friday confirmed a weakening US job market. The report, which had dragged down Wall Street in the previous session, has stoked fears of a potential slowdown in the world’s biggest economy.

Traders have fully priced in at least a 25-basis-point (bp) interest rate cut when the Fed wraps up its two-day policy meeting on Sept. 17, with interest rate futures reflecting a 10% chance of a 50-bp cut, according to CME Group’s FedWatch tool.

The Fed has kept its target rate at the 4.25%-4.5% range since December 2024.

Mr. Tantiangco noted that trading activity remained low on Tuesday, which shows weak market confidence. Value turnover increased to P6.23 billion on Tuesday with 1.99 billion shares traded from the P5.72 billion with 2.7 billion shares exchanged on Monday.

Almost all sectoral indices closed in the green on Tuesday. Mining and oil jumped by 2.1% or 234.95 points to 11,384.34; property climbed by 1.65% or 40.71 points to 2,500.37; services rose by 0.64% or 14.05 points to 2,196.28; financials increased by 0.28% or 5.81 points to 2,029.6; and holding firms edged up by 0.21 point to 5,049.72.

Meanwhile, industrials fell by 0.92% or 84.38 points to 8,997.84.

“The sector counters were mostly higher, except for industrials which was weighed down by index heavyweights Jollibee Foods Corp., Metro Pacific Investments Corp. and Universal Robina Corp.,” Mr. Garcia said.

“Ayala Land, Inc. was the day’s top index leader, climbing 3.9% to P29.30. Globe Telecom, Inc. was the main index laggard, falling 2.99% to P1,523,” Mr. Tantiangco added.

Advancers outnumbered decliners, 111 to 85, while 60 names were unchanged.

Net foreign selling dropped to P215.89 million on Tuesday from P340.8 million on Monday. — Alexandria Grace C. Magno with Reuters

Ex-DPWH engineer tags senators in anomalous flood control programs

CONGRESSMEN quiz former Public Works engineers Henry Alcantara, JP Mendoza and Brice Ericson Hernandez at a House of Representatives hearing investigating bogus flood control projects. — PHILIPPINE STAR/MIGUEL DE GUZMAN

A FORMER Department of Public Works and Highways (DPWH) engineer has accused two senators of complicity in anomalous flood control projects in Bulacan province, as Congress continues its parallel probes into a multibillion-peso infrastructure scandal.

At a House of Representatives hearing on Tuesday, former Public Works Assistant District Engineer for Bulacan Brice Ericson Hernandez claimed that Senators Jose “Jinggoy” P. Estrada and Emmanuel Joel J. Villanueva had benefitted from questionable flood mitigation projects.

“While I was in detention, I had time to think and decided to reveal some of what I know about the flood control projects,” Mr. Hernandez said in Filipino.

He was cited in contempt and detained at the Senate on Monday after allegedly lying during his testimony before a Senate committee investigating dubious flood control projects. The House and Senate have launched separate inquiries into alleged large-scale corruption involving engineers, contractors and politicians.

Mr. Hernandez alleged that Senator Estrada was linked to P355 million worth of flood control projects in Bulacan this year, while Senator Villanueva was tied to P600 million worth of projects in 2023.

He claimed the lawmakers had received a 30% cut from the projects. “My boss said that the commitment here is 30%,” he said, referring to funds for the construction of flood-mitigating structures in the province’s creeks and rivers.

Mr. Hernandez presented photos showing stacks of P1,000 and P500 bills on tables inside a private residence, which he said represented cash prepared for people involved in the alleged transactions. “We were simply ordered to handle the money, and we made sure to segregate it,” he said, though he did not identify the final recipients.

He also showed a photo of Senator Estrada with Bulacan Chief Engineer Henry C. Alcantara, as well as screenshots of exchanges between Senator Villanueva and Mr. Alcantara.

Mr. Alcantara, however, told lawmakers the messages were unrelated to flood control projects. “As I recall, he was just following up with me about the request to the Secretary — for multipurpose buildings in the villages,” he said in Filipino.

SENATORS PUSH BACK
Both lawmakers strongly denied Mr. Hernandez’s allegations.

“I categorically and vehemently deny the claims made by Brice Hernandez,” Senator Estrada told reporters in a Viber group chat. “I challenge him. Let us take a lie detector test before the public so that everyone will know who is telling the truth.”

“Talk is cheap — I’m ready to prove that what he’s saying about me are all lies.”

He later told reporters he intends to file criminal charges against Mr. Hernandez. “Yes, I will file a case against him, (but) I still need to talk to my lawyers,” he said.

Senator Villanueva also rejected the claims. Speaking during the Senate plenary session, he said: “I will repeat this, I have never been involved in flood control projects. I won’t say that I categorically deny this accusation, because I have receipts.”

He suggested he was drawn into the controversy because of supposed “evidence” provided by DPWH Bulacan employees.

Some lawmakers have called for an independent inquiry. Party-list Representatives Leila M. de Lima, Percival V. Cendana, and Jose Manuel “Chel” I. Diokno, along with District Representatives Arlene J. Bag-ao (Dinagat Islands) and Cielo Krisel B. Lagman (Albay), filed House Bill No. 4453 on Tuesday to create a commission composed of legal experts, auditors, and representatives from business and civil society groups.

“Because in our view, these ongoing investigations — both in the Senate and the House — are very sensitive,” Ms. De Lima told reporters. Congressional probes may face conflicts of interest, given allegations implicating lawmakers themselves, according to the bill’s explanatory note.

Executive Secretary Lucas P. Bersamin earlier said an executive order creating an independent body to investigate the projects had been submitted to President Ferdinand R. Marcos, Jr.

SENATE CUSTODY DISPUTE
Mr. Hernandez remains under Senate custody despite testifying before the House. Senate President Vicente C. Sotto III said the former DPWH official will be held at the Philippine National Police (PNP) Custodial Center in Camp Crame under the supervision of the Senate’s Office of the Sergeant-at-Arms (OSAA).

“To make sure he is safe but still in custody of the Senate, the Speaker and I agreed to place him in the PNP Custodial Center but under the supervision of the Senate OSAA,” Mr. Sotto said.

Mr. Hernandez was earlier cited in contempt at the Senate after denying allegations that he frequented casinos and had won millions of pesos.

The controversy stems from President Marcos’ revelation in August that more than 6,000 flood control projects launched since 2022 lacked key details. About P544 billion has been allocated for flood control since then, with P100 billion cornered by contractors.

The Department of Budget and Management (DBM) said it is introducing “safeguards” in the 2026 budget process to prevent similar anomalies.

“In our budget call for next year, we will already introduce safeguards especially for DPWH. We will separate them, there will be a special book,” Budget Secretary Amenah F. Pangandaman told a Senate budget hearing.

She said proposed DPWH projects must now be coordinated with local governments and include detailed engineering designs and work programs. The DBM is also expanding digitalization and exploring artificial intelligence tools to flag irregularities.

DPWH, which has one of the biggest proposed allocations in the 2026 national budget at P881 billion, is under review following concerns raised by Secretary Vivencio “Vince” B. Dizon and Ms. Pangandaman about irregularities in its budget proposal.

The allegations have fueled public outrage, given the persistent flooding in many parts of the country despite massive government spending. The probes are expected to intensify in the coming weeks as both chambers of Congress confront evidence implicating political figures. — KCLB and Adrian H. Halili

Funding woes stall F-16 deal as upgrades pushed

Photo shows F-16 fighter jets from last year’s "Thunder" US-Philippines joint military exercise at Basa Air Base. The United States announced on Tuesday that it had approved the sale of $5.58 billion worth of 20 F-16 fighter jets and related equipment to the Philippines, reinforcing its support for the treaty-bound ally amid rising tensions with China. — PHILIPPINE STAR/WALTER BOLLOZOS

By Erika Mae P. Sinaking

THE PHILIPPINE government’s plan to acquire 20 F-16 fighter jets from the US remains stalled due to funding constraints, officials said on Tuesday, even as Manila deepens its defense cooperation with Washington and other partners to address growing security challenges.

At the two-day Manila Strategy Forum in Parañaque, Philippine Ambassador to Washington Jose Manuel D. Romualdez confirmed that the $5.5-billion deal, which received in-principle approval from the US in April, has yet to move forward.

“The last time I heard, it’s been on hold, mainly because of funding,” he said. “At the end of the day, a lot of it boils down to the money, the availability of the funds.”

He noted that the Armed Forces of the Philippines (AFP) has other priorities under its modernization program. “I think at this point, the AFP has other priorities which they feel are much more important,” he said, though talks on the fighter jets remain open.

Philippine Navy spokesman for the South China Sea Roy Vincent T. Trinidad said the military modernization is structured in phases, with each branch submitting its own procurement plans.

“The modernization program is a multi-year program,” he told BusinessWorld. “The major services have already submitted their modernization plans. The details… are with the Department of National Defense.”

Some acquisitions under the current phase are expected by 2026, though he did not confirm if the F-16s are included.

The forum also highlighted regional issues, including maritime security and supply chain resilience. US Ambassador MaryKay Carlson said ties with the Philippines are in “hyperdrive,” citing President Ferdinand Marcos, Jr.’s state visit to Washington in 2023 as a turning point.

“When President Marcos took over… We’ve seen an upward trajectory that has been faster, stronger, better, more with each passing day,” Ms. Carlson said.

Former US envoy John Negroponte, co-chairman of the US-Philippines Society, pointed to Manila’s 2016 arbitral victory over China as a milestone. “The initiative of the Philippine government to challenge China’s nine-dash line was a very forceful and courageous action,” he said.

On economic ties, Mr. Romualdez said energy and digital infrastructure remain top priorities for cooperation. He cited efforts to reduce power costs and expand digital systems as central to the Marcos administration’s investment agenda.

The envoy also noted that Taiwan’s stability is closely tied to the welfare of Filipino migrant workers. “Our main interest in Taiwan is the fact that there are hundreds of thousands of Filipinos working there,” he said, adding that diplomacy remains Manila’s first line of defense.

Ms. Carlson said humanitarian relief remains another pillar of the alliance. “After the recent flooding and typhoons in July, the US committed $500,000 in immediate emergency relief and sent a dedicated airlift capability to assist,” she said.

Meanwhile, Philippine Defense Secretary Gilberto C. Teodoro, Jr., speaking at a separate forum in Seoul, urged China to halt its nuclear buildup and adhere to the Nuclear Non-Proliferation Treaty (NPT).

“We call upon nuclear weapon states, most especially in this region — China — to undertake concrete measures to reverse the recent increase in stockpiles, reduce the risk of nuclear conflict and maintain strategic stability,” he said.

A June report by the Stockholm International Peace Research Institute (SIPRI) estimated China has 600 nuclear warheads, adding about 100 per year, and could rival US and Russian arsenals by decade’s end.

Mr. Teodoro said the Philippines remains committed to global disarmament but warned that Beijing’s actions undermine trust. “We have tried the path of cooperation, the path of negotiations, the path of even accommodation to no avail,” he said. “For dialogue to be effective, it must be coupled with trust.”

His remarks come amid worsening tensions in the South China Sea, where Philippine and Chinese vessels have clashed repeatedly in disputed waters. Manila has accused Beijing of harassment through water cannons and dangerous maneuvers.

A 2016 tribunal ruling invalidated China’s sweeping claims, but Beijing has rejected the decision and continues to build military outposts in contested areas.

“China has no business policing that area, much less erecting any permanent structure in that area,” Mr. Teodoro said.

Meanwhile, the Philippine Navy said its second Miguel Malvar-class guided missile frigate arrived from South Korea on Monday. The vessel was welcomed off Zambales by BRP Jose Rizal and the Coast Guard’s BRP Gabriela Silang.

The 118-meter warship will undergo final checks before being commissioned as BRP Diego Silang. Built by HD Hyundai Heavy Industries Co., Ltd., it is part of a P28-billion contract signed in 2021 for two corvettes.

“The second Miguel Malvar-class frigate will enhance the Philippine Navy’s operational readiness, maritime domain protection and capability to uphold a free, secure and rules-based international order,” the navy said.

Manila has increasingly relied on Seoul as a supplier of defense equipment, with additional contracts signed for at least 10 naval ships.

Mr. Romualdez said despite challenges in major acquisitions such as the F-16s, the alliance with the US and partnerships with other allies show the Philippines’ modernization efforts are “very much stable, sustainable, and expanding.”