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The Vietnamese economy overtakes the Philippines: From economic strategies to governance and flood control

LANDMARK 81 the tallest building in Vietnam. — STOCK PHOTO | Image by jet dela cruz from Unsplash

By Cesar Polvorosa, Jr.

(First of two parts)

In 1975, North and South Vietnam reunited after decades of devastating war and emerged with its GNI per capita at just around $100. In stark contrast, the Philippines — then regarded as one of Southeast Asia’s leading lights posted a GNI per capita of roughly $400 or quadruple that of Vietnam. Fast forward to nearly 50 years later, the hierarchy has reversed. In 2024, Vietnam’s GNI per capita reached $4,490, overtaking the Philippines’ $4,470 for the same year. The gap is expected to widen to around $100 in Vietnam’s favor by 2025. Using GDP per capita (PPP), a measure of real living standards, the divergence is even more striking: for 2025, Vietnam is projected at $17,480 which is far above the Philippines’ $12,913 (IMF World Economic Outlook, April 2025).

I remember visiting the Vietnamese refugees at the Bataan Refugee Camp during a field trip of our UP Development Studies class decades ago and I can’t help but ask: how did Vietnam accomplish this remarkable transformation, and what major factors prevented the Philippines from keeping pace? The answer lies in contrasting development models, foreign investment strategies, governance quality, demographic trajectories, education systems, and the political economy of reform. More recently, the comparison also extends to how both countries respond to global disruptions such as the Trump administration’s tariff shock and to long-term resilience challenges like flood control, climate change, and corruption.

DIVERGENT ECONOMIC MODELS
Vietnam pursued an export-oriented manufacturing strategy which has proven significantly more successful over the past half century than the Philippines’ service-heavy, remittances-dependent model. Export performance alone tells a compelling story. Vietnam’s exports amount to an astonishing 105-107% of its GDP, making it a true export powerhouse in Asia. The Philippines, by contrast, has exports equivalent to only a paltry 27-32% of GDP.

Vietnam’s industrial transformation has been anchored by major multinational investments, most notably Samsung, which has turned the country into a critical global electronics manufacturing hub. Beyond foreign giants, Vietnam is nurturing its own champions. Its first fully electric vehicle manufacturer, VinFast has begun exporting EVs to the United States and Canada, symbolizing the country’s ambitions to climb the technological ladder.

The Philippines’ path has been dramatically different. Instead of manufacturing, its growth pillar had been Overseas Filipino Workers (OFWs) and the Business Process Outsourcing (BPO) sector. In 2024, the country’s 2.2 million OFWs sent home $38.5 billion in remittances, which is an extraordinary lifeline that supports millions of households. The BPO sector added another $38 billion in service exports in 2024, with forecasts of $40 billion in 2025. These inflows fuel consumption but do not necessarily spark industrial deepening or lay the foundation for economic diversification.

The contrast is sharp: Vietnam built factories while the Philippines built call centers. These choices continue to shape the trajectory of both economies.

FDI AND THE INVESTMENT CLIMATE
A major platform of Vietnam’s success has been its sustained ability to attract foreign direct investments (FDIs). From 2010 to 2023, Vietnam accumulated $168 billion in FDI inflows which far outpaced the Philippines’ $107 billion. Vietnam’s transformation began with the Doi Moi reforms of 1986, which shifted the country from central planning to a market-oriented economy 11 years after reunification. These reforms created a stable policy environment, encouraged industrial clustering, improved infrastructure, and transparency.

The Philippines, meanwhile, has been stifled by regulatory inefficiencies, bureaucratic red tape, and infrastructure deficits. Although the Philippines has recently introduced reforms to liberalize sectors and improve competitiveness, its overall investment environment still lags. The Philippines ranked 95th out of 190 economies in the former World Bank Ease of Doing Business Index, compared with Vietnam’s 70th. While the Philippines scores higher in some measures of economic freedom, Vietnam outperforms in property rights security which is essential consideration for foreign investors. In the successor 2024 World Bank Business Ready Report, Philippines only scored 48 vs 65 of Vietnam under Business Entry (ease of registering and starting LLCs).

Vietnam’s aggressive pursuit of reforms allowed it to embed itself deeply in global supply chains, while the Philippines has struggled to break free from its structurally narrow economic base.

THE ELUSIVE UPPER MIDDLE-INCOME STATUS
Both countries are on the cusp of achieving Upper Middle-Income Country (UMIC) status, defined by the World Bank as economies with GNI per capita of at least $4,516 (Atlas method, 2024 threshold). With Vietnam at $4,490 and the Philippines at $4,470 in 2024, both stand within striking distance. By 2025-26, both are expected to cross this important milestone.

Yet the symbolism differs. For Vietnam, UMIC status crowns decades of export-driven transformation after its war devastation. For the Philippines, it represents a long-delayed ascent after many false dawns over the past decades due to political disruptions, uneven reforms, and governance setbacks.

SHORT-TERM ISSUES: THE TRUMP TARIFF SHOCK
Global uncertainty intensified dramatically in 2025 when US President Donald Trump announced sweeping tariff increases under his “Liberation Day” policy. On June 2, the US raised steel tariffs from 10% to 25% and slapped punitive 46% reciprocal tariffs on Vietnamese exports. As of Aug. 7, the US imposes a standard 20% tariff on most imports from Vietnam with a 40% penalty for transshipped goods. In exchange, Vietnam agreed to zero tariffs on many US products and expanded market access. The agreement restored business confidence and preserved Vietnam’s core competitive advantages of low labor costs, strong infrastructure, and reliable manufacturing ecosystems.

The Philippines faced its own tariff shock. The Trump administration imposed a 19% tariff on the country from early August. While smaller than Vietnam’s initial hit, the Philippines lacked negotiating leverage and strategic visibility in Washington. The relatively modest tariff did not reflect strength; it reflected the country’s diminishing relevance in America’s trade calculus.

For the Philippines, the economic risks are multi-layered: reduced export competitiveness, weakened investor sentiment, downward pressure on the peso and potential strain on remittances (the US is the largest source).

Both Vietnam and the Philippines now face a challenging reconfiguration of supply chains, and the full effects of the tariffs will only be clear after implementation. In the short term, these shocks will likely moderate growth prospects.

(To be continued.)

 

Cesar Polvorosa, Jr. is professor of Economics and International Business at a Canadian University. He is an occasional contributor to current affairs publications including the Philippine Star and Interaksyon. His literary publications in North America and Asia have been anthologized.

Venus Williams, Gwendoline Christie among 2026 Pirelli Calendar stars

GWENDOLINE CHRISTIE — PIRELLICALENDAR.PIRELLI.COM

LONDON — Actors Tilda Swinton, Isabella Rossellini, and Gwendoline Christie are among the models starring in the 2026 Pirelli Calendar, which photographer Sølve Sundsbø says looks at the human connection with nature.

The 52nd edition of “The Cal” features famous faces interpreting elements like tennis star Venus Williams posing with a fiery design, model Eva Herzigova underwater, and singer FKA Twigs covered in sand.

“The main point for me was the casting, to work with women that I could relate to, both in terms of age and in terms of having worked with them already,” Norwegian-born Mr. Sundsbø told Reuters.

“We wanted to work with sensuality, we wanted to work with women, we wanted to work with nature… then you have to find a way of doing that, that doesn’t feel derivative of things that’s gone in the past, but has echoes of what the calendar has been before.”

The Pirelli calendar was first published in the 1960s with a limited run and has usually been gifted to the Italian tire maker’s clients.

In recent years, it moved away from featuring images of barely dressed models to more artistic themes, featuring celebrities.

“It has moved with the times and changed and expressed beauty and society in different ways,” Ms. Christie, whose 2026 calendar theme is ether, said. “I love that progressiveness.”

Completing the 2026 calendar cast are actors Luisa Ranieri, Du Juan, and Adria Arjona, model Irina Shayk, and fashion designer Susie Cave. — Reuters

PLDT revives REIT listing plan for ePLDT unit

WIKIMEDIA COMMONS/PATRICKROQUE01

PLDT Inc. is exploring strategic options for its data center business, with the real estate investment trust (REIT) listing now back on the table, its chairman said.

“We want to reduce our debt. I think we are in for tougher times ahead and it is best that we create some liquidity for PLDT,” PLDT Chairman and Chief Executive Officer Manuel V. Pangilinan told reporters.

The company is in talks with a multinational group for a possible acquisition of stake in

VITRO, Inc., the data center unit of the PLDT Group under ePLDT, Inc.

“The process continues. Off and on, I think we probably need a partner now. We are willing to sell a minority stake in our data center,” he said. “Or possibly do a REIT. That’s being considered. Because we want to reduce our debts. I think we’re in for tougher times ahead. And it’s best that we create some liquidity for liquidity. We don’t want to see a credit downgrade for PLDT.”

PLDT had previously announced plans to finalize the sale of a minority or 49% stake in VITRO to a foreign entity for over $1 billion after talks with Japan’s Nippon Telegraph and Telephone Corp. (NTT) failed to progress.

In August, Mr. Pangilinan said the company had resumed talks to sell a stake in its data center business.

ePLDT is currently negotiating with several companies to sell 49% of its data center business, valued at $1 billion.

REITs are companies that own real estate-related assets, generating income from properties like land, buildings, and real estate securities. They are created to provide an alternative to illiquid real estate investments, offering a liquid asset class. Publicly traded property stocks, such as REITs, enable investors to access real assets.

Earlier this year, PLDT inaugurated VITRO Sta. Rosa, its 11th data center amid its goal to continue expanding its data center business.

The facility, located on a five-hectare site in Sta. Rosa, Laguna, is said to be the country’s largest data center campus, with a capacity of up to 50 megawatts (MW). Across all sites, VITRO data centers have a combined capacity of nearly 100 MW.

The company also said it is moving closer to building its 12th and largest data center. The facility will rise in General Trias, Cavite, and will have a capacity of up to 100 MW — double that of VITRO Sta. Rosa.

PLDT posted a third-quarter attributable net income of P6.93 billion, down 28.26% from P9.66 billion in the same period last year, as higher expenses offset revenue growth.

It reported revenues of P53.71 billion, slightly up from P53.36 billion a year ago, while expenses rose to P42.36 billion from P39.62 billion.

Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., holds a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

India allows 1.5 MMT of sugar exports

REUTERS

MUMBAI — India allowed sugar exports of 1.5 million metric tons (MMT) in the new season, the government said in a notifice, as a decline in the diversion of sugar for ethanol production is expected to leave a larger domestic surplus.

Higher exports from the world’s second-largest sugar producer could pressure benchmark New York and London futures, which are hovering near five-year lows.

Exports will help reduce sugar stocks in the country and support local prices, benefiting producers such as Balrampur Chini Mills, EID Parry, Dalmia Bharat, and Shree Renuka Sugars.

A 1.5-MMT export quota has been shared among operating sugar mills on a pro-rata basis, based on their average sugar production over the last three seasons, the government said in the notifice.

All grades of sugar are permitted for export.

India was the world’s second-largest sugar exporter in the five years to 2022/23, with shipments averaging 6.8 MMT annually.

But a drought led the government to ban sugar exports in 2023/24, and it allowed only 1 MMT to be shipped overseas last year.

India’s net sugar output for the 2025/26 season that started on Oct. 1 is estimated at 30.95 MMT after diverting about 3.4 MMT for ethanol production, up 18.5% from last year, according to the Indian Sugar & Bio-Energy Manufacturers Association (ISMA).

ISMA last week demanded New Delhi allow exports of 2 MMT of sugar in the new season. The industry body had earlier expected a diversion of 4.5 MMT to 5 MMT of sugar for ethanol this year, but only 28% of the total allocation for the biofuel went to sugar-based ethanol, with the remainder allocated to feed-based ethanol plants.

Sugar mills can export their allocated quota, either directly or through merchant exporters or refineries, until Sept. 30.

Mills that do not wish to use their export quota may surrender it by March 31, after which the government will reallocate the unused quotas to other mills.

India also removed its 50% duty on the export of molasses, the government said. — Reuters

Rate of one-month BSP debt paper slips further at auction

BW FILE PHOTO

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) one-month securities fell on Friday amid strong demand.

Total bids of the BSP 28-day bills reached P​​129.481 billion, more than the P100 billion auctioned off but below the P131.672 billion in tenders last week. The BSP awarded the entire P100 billion.

This led to a bid-to-cover ratio of 1.3x, according to a result summary posted by the central bank on its website.

Accepted rates were 4.95% to 5.049%, wider than 4.975% to 5.07% in the previous auction. This brought the average rate of the one-month securities to 5.0156%, down by 1.8 basis points.

The BSP did not offer the 56-day bills at Friday’s auction for the third week in a row. It last put up for sale both the 28-day and 56-day BSP bills on Oct. 24.

At the Oct. 24 auction, the total offer volume for both tenors stood at P85 billion, with bids hitting P125.798 billion.

The central bank uses the BSP securities and its term deposit facility to mop up excess liquidity in the financial system and to better guide short-term market rates toward its policy rate.

The BSP bills also contribute to improved price discovery for debt instruments while supporting monetary policy transmission, the regulator has said.

The central bank started auctioning off short-term securities weekly in 2020, initially offering only a 28-day tenor and adding the 56-day bill in 2023.

In August, BSP Governor Eli M. Remolona, Jr. said they are gradually shifting away from the issuance of short-term debt to manage liquidity as they try to boost activity in the money market.

Data from the central bank showed that about 50% of its market operations are done through its short-term securities. — Katherine K. Chan

Q&A: ‘We’ll bring in some more Fuji flavor’

Open-top freedom on Clark International Speedway — PHOTO BY KAP MACEDA AGUILA

Mazda PHL President Steven Tan tells us what’s next for Fan Festa here

By Kap Maceda Aguila

IT CERTAINLY felt like a final canto. The Mazda Fan Festa 2025 drew to a close recently with a well-attended event at its usual haunt, the Clark International Speedway. For those unfamiliar, the Mazda Fan Festa is a branded event that has its roots in Japan. Conceived for the market there beginning in 2016 by Mazda Motor Corp. Brand Experience (or BX) Promotion Division General Manager Eri Fujimoto, Fan Festa is a smorgasbord of everything Mazda — bringing together classic cars way back from its rotary engine days, merchandise of all kinds, after-market parts and services, and, yes, delicious food.

The Philippines has the distinction of being the only country in the world outside of Japan to carry the “Mazda Fan Festa” branding for its own events which, though not as grand in scale as Japan’s, do justice to the Fan Festa name as it attracts a growing number of Mazda owners, their families, and other fans to partake of their love for the Hiroshima-headquartered marque.

“Velocity” spoke exclusively to Mazda Philippines President Steven Tan on the sidelines of the fourth Mazda Fan Festa Philippines round for the year. Here are excerpts from our chat.

VELOCITY: How would you compare this season’s Mazda Fan Festa versus last year? What are some of the things you’re looking forward to for next year?

STEVEN TAN: This season, compared to the previous year, we expanded in two areas. We previously had only one Fan Festa (branded event). This year, we have converted all four (race) weekends into Fan Festa. In hindsight, just thinking about it, (it may have been) too many. However, incorporating all the races into a Fan Festa was probably the best decision we made this year. It gave us some things to think about. We’re thinking that for next year, we’ll cut down the four Fan Festas to two, (and) reserve the two remaining weekends as very track-focused days.

Those won’t be called Fan Festa?

Those will not be called Fan Festa, and those will very likely be run at the Batangas Racing Circuit (BRC)… The Fan Festa is most suitable to be in Clark because of the track, the facility, the hotels. But as for the BRC, I’ve gotten feedback from the drivers that they have a soft spot for it, and so they kind of miss that. (The BRC) is a very different track; it’s narrower, more technical. For some of the race drivers, they really like the challenge of the BRC. It’s a more back-to-grassroots type of circuit. So therefore next year, we’re going to go 50/50. (At BRC) it will be just all-out racing, less of the festival type of elements from Fan Festa. Every year we try to experiment to get a really nice balance.

How do you see Fan Festa Philippines itself evolving though, if you’ll skew it that way?

This year, Fan Festa has given us the opportunity to learn about what we want to be. Who is Fan Festa? What does he want to do? We are of the opinion that Fan Festa is best done with Mazda owners, Mazda drivers, Mazda family, Mazda friends. Fan Festa works best with people familiar with the family, the community. And so therefore the job is to expand it further. In the past two years, we’ve kept it to the drivers and the community, and so we kept it really small. And then we went to Japan at Fuji Speedway twice, and we realized that maybe the way to do this to expand the happiness and joy given that Clark could handle up to a thousand guests. Right we’re hovering between 300 to 400 registrations up from maybe 150 before, and that requires some more attractions. Why should they be here?

There will be more festivities, more food stores, more things to do, more things for the family, like how the Fuji experience is. So, I think that Fan Festa for next year will be more (focused) on owners, friends, drivers, and still have track experiences, whereas the Batangas Racing Circuit events will be focused on driving.

Are you looking at bringing more elements or flavor of the Japan Fan Festa into our own edition?

We’re going to bring some of the flavor, like you said, over here. And you know, we will never be able to, never in a thousand years, get to the 25,000 fans (attending it). Number one, it’s Fuji Speedway — not to diminish Clark which has a very high standard. You can see that the Clark Speedway is expanding into tourism. So this is a great place to build our Fan Festa base. It will always be here. Right now we’re starting to see some families in. I love to see more families and the community. The races will still be very serious, but they will be entertaining to the fans that come in.

Building healthy communities

FREEPIK

Access to quality healthcare remains a challenge in many parts of the Philippines, particularly in Geographically Isolated and Disadvantaged Areas (GIDA). From remote barangays to densely populated urban communities, underserved populations continue to face barriers that compromise both their health and dignity.

Since its founding in 2003 as the social responsibility arm of the Pharmaceutical and Healthcare Association of the Philippines (PHAP), the PHAPCares Foundation has been working with government agencies, patient groups, civil society organizations, and member companies to expand access to healthcare services for poor and disadvantaged Filipinos. Among its partners is Johnson & Johnson (J&J) Philippines, which shares PHAPCares’ mission of building healthy and resilient communities.

“At Johnson & Johnson, everything we do is guided by our credo, which affirms that good health is the foundation of vibrant lives, thriving communities, and forward progress,” said Johnson & Johnson Philippines General Manager Su Yen Gan. “Our partnership with PHAPCares opens more opportunities and maximizes our reach to achieve our goal of building healthier communities and putting a healthy mind, body, and environment within reach. We look forward to continuing this collaboration, especially in underserved communities, to improve access and affordability and advance better health for all.”

The acronym J&J CARES represents the company’s corporate social responsibility strategy in the Philippines, anchored on three pillars: Community and Advocacy, Recognition and Empowerment, and Shared Interests.

“We believe that advocacy becomes more meaningful when it’s rooted in a deep understanding of and involvement in the community,” Ms. Gan explained. “Recognition and empowerment, when intertwined, create an environment where individuals feel valued and capable — fostering a culture of mutual respect and shared success. We may have diverse backgrounds and roles, but we all share a common interest in the well-being of our communities.”

This year, J&J Philippines continues to implement CSR initiatives that respond to pressing community needs. Beyond charitable contributions to partner NGOs and government agencies, the company’s volunteer programs include coastal clean-ups, blood donation drives, plastic waste collection, tree planting, and educational initiatives such as teaching, mentorship, and assembling care kits for students, nurses, and community health workers.

All J&J employees are encouraged to participate in these efforts. Guided by the company’s principles, each employee is entitled to five days of volunteer leave annually to contribute to causes that promote public health and community well-being.

For instance, more than 500 J&J Philippines employees recently gathered for the J&J CareCommunity Day, where they assembled 600 care kits for CARE International Philippines, an NGO providing emergency relief and long-term poverty alleviation programs. The event also featured interactive sessions and personal messages of hope and appreciation for frontline health workers.

The two-day celebration forms part of J&J CareCommunity, the company’s global social platform that champions nurses and community health workers to advance access to quality care worldwide. Over the past three years, J&J CareCommunity has reached 2.3 million health workers, helped 1 million new nurses enter the US healthcare system over the past decade, and trained 40,000 hospital and operating room staff in resource-limited settings in 2023 alone. That same year, J&J employees contributed 30,000 volunteer hours to community health programs across various countries, including the Philippines.

Recognizing the World Health Organization’s warning that climate change poses a fundamental threat to human health, J&J also upholds a long-standing commitment to environmental sustainability, grounded in its purpose to profoundly impact health for humanity.

“We know that healthy people need a healthy planet,” said Ms. Gan. “To support both environmental health and the resilience of our business, we are taking action to improve the environmental footprint of our operations and value chain, while partnering with others to advance sustainable healthcare.”

The path to equitable healthcare in the Philippines demands intention, compassion, collaboration, and innovation. The research-based pharmaceutical industry reaffirms its commitment to work hand in hand with partners like J&J to bridge the gap between access to quality healthcare and the communities that need it most.

 

Teodoro B. Padilla is the executive director of Pharmaceutical and Healthcare Association of the Philippines, which represents the biopharmaceutical medicines and vaccines industry in the country. Its members are at the forefront of developing, investing and delivering innovative medicines, vaccines, and diagnostics for Filipinos to live healthier and more productive lives.

Bad Bunny wins five Latin Grammys with Super Bowl show ahead

WIKIMEDIACOMMONS/THENEWLIONKING

PUERTO RICAN star Bad Bunny and Argentine hip-hop duo Ca7riel & Paco Amoroso each won five Latin Grammy awards in Las Vegas on Thursday, cementing Bad Bunny as an industry titan while thrusting the lesser-known act into the spotlight.

Bad Bunny won album of the year for Debí Tirar Más Fotos, a tour de force mixing styles from Afro-Caribbean to salsa that netted him 12 nominations. He also won for best urban/urban fusion performance, best reggaeton performance, best urban music album, and best urban song.

The awards only burnish his reputation ahead of his wider introduction to English-speaking America and a worldwide audience as the halftime performer of the Super Bowl in February, a choice that rankled some US traditionalists including President Donald J. Trump, who said he had never heard of Bad Bunny.

The rapidly growing Latin music sector generated a record $1.4 billion in 2024, making up 8.1% of total US music revenue, according to the Recording Industry Association of America, which said it was shaping the culture faster than any other genre.

Bad Bunny, 31, whose real name is Benito Antonio Martinez Ocasio, has also received six nominations for the regular Grammys to be awarded on Feb. 2, including for the major categories of record, song, and album of the year. He was the first Latin artist to be nominated in the three major categories in the same year.

In winning album of the year, Bad Bunny was honored over industry luminaries such as the Spaniard Alejandro Sanz and Cuban-born Gloria Estefan.

Sanz, however, won two awards: record of the year for “Palmeras En El Jardín,” and best contemporary pop album for ¿Y Ahora Qué? That raised his career total to 24.

Estefan still took home the award for best traditional tropical album for Raíces.

Karol G claimed song of the year, with “Si Antes Te Hubiera Conocido” winning over the Bad Bunny title song from his album.

BREAK WITH TRADITION
In September the National Football League  (NFL) announced Bad Bunny would headline the Super Bowl halftime show on Feb. 8, 2026, when he is likely to become the first such act to perform entirely or mostly in Spanish. In 2020, he made a guest appearance at the halftime show headlined by Jennifer Lopez and Shakira, helping boost his meteoric rise.

While the NFL is embracing the genre, and the entertainment dollars that come with it, American football’s break with tradition was poorly received by some fans including Mr. Trump, who called the choice of Bad Bunny as halftime entertainer “absolutely ridiculous.”

“I never heard of him. I don’t know who he is. I don’t know why they’re doing it — it’s, like, crazy,” Mr. Trump told Newsmax in October.

Bad Bunny, who has criticized Mr. Trump’s aggressive immigration enforcement, supported Mr. Trump’s opponent Kamala Harris in the 2024 election.

“Brother, this is always a special moment for me. And I get just as nervous as the first time. That means that what I do matters to me,” Bad Bunny, who had won a total of 12 Latin Grammys in previous years, said upon taking home the first televised award of the night.

He later performed “Weltita,” a single from the album, with the backing band Chuwi.

Ca7riel & Paco Amoroso had 10 nominations and won for best pop song, best alternative music album, best alternative song, best short form music video, and best long form music video.

Paloma Morphy, a 25-year-old Mexican, won best new artist after her debut album Au, which won over listeners with catchy melodies. — Reuters

How PSEi member stocks performed — November 14, 2025

Here’s a quick glance at how PSEi stocks fared on Friday, November 14, 2025.

How minimum wages compared across regions in October

(After accounting for inflation)

Inflation-adjusted wages were 19.2% to 26% lower than the current daily minimum wages across the regions in the country in October. Meanwhile, in peso terms, real wages were lower by around P80.61 to P144.68 from the current daily minimum wages set by the Regional Tripartite Wages and Productivity Board.

How minimum wages compared across regions in October

PHL holds naval drills with US, Japan 

THE PHILIPPINE frigate BRP Jose Rizal, US destroyer USS John Finn and Japanese landing ship JS Osumi during a joint naval drill back in September. — BW FILE PHOTO/ARMED FORCES OF THE PHILIPPINES

By Kenneth Christiane L. Basilio, Reporter

THE Philippines held joint naval drills in the contested South China Sea with the US and Japan last week, the Philippine military said on Sunday, just over a week since China unveiled its most advanced carrier.

In a statement, the Philippine military said its frigates BRP Jose Rizal and BRP Antonio Luna were joined by the US aircraft carrier USS Nimitz and its accompanying warships for a two-day exercise from Nov. 14 to 15 alongside the Japanese destroyer JS Akebono in the disputed waterway.

“These engagements highlight not only the Philippines’ steadfast resolve to defend its maritime domains but also its shared commitment with partners to strengthen deterrence, enhance interoperability and uphold freedom of navigation under a rules-based international order in the Indo-Pacific,” the armed forces said.

Last week’s anti-submarine warfare and maritime domain awareness drills were the eighth round of what the Philippines calls “multilateral maritime cooperative activities” (MMCA) this year, and the 13th since its inception.

“The continuing MMCA series reflects its commitment to safeguarding the nation’s sovereign rights and advancing collective defense readiness alongside trusted partners,” it said.

The USS Nimitz carrier strike group has been in the South China Sea since late October, when the US Pacific Fleet reported that a fighter jet and a military helicopter crashed during “routine operations.”

The crashes, which happened within 30 minutes of each other, took place in one of the world’s most contested waterways, where tensions between the Philippines and China continue to simmer over contesting sea claims.

The multinational exercises took place more than a week after China unveiled its third and most advanced carrier by far, which analysts said could embolden Beijing to become more assertive in the disputed waterway and may challenge US naval dominance in the contested region.

The 316-meter Fujian is expected to extend Beijing’s naval reach and strengthen its power projection in the Pacific, they said, as maritime tensions with the Philippines and its allies escalate over contesting claims.

“The Fujian attests to China’s growing naval ambitions to project muscular power and assert its 10-dash line claim,” said Chester B. Cabalza, founding president of Manila-based think tank International Development and Security Cooperation, referring to Beijing’s sweeping and disputed claim over much of the South China Sea.

China now operates three aircraft carriers, with its first two modeled on older Soviet-era designs, as it works to close the gap with US naval might in the region.

Commissioned in early November, the Fujian is capable of carrying more than 50 aircraft, ranging from advanced fighter jets and early warning system planes. The ceremony was held in the military stronghold of Hainan province facing the South China Sea and was attended by Chinese President Xi Jinping.

“The new carrier is definitely part of Beijing’s power projection strategy,” Sherwin E. Ona, a security analyst and associate professor at the De La Salle University, said in a Facebook Messenger chat.

A People’s Liberation Army (PLA)-Navy spokesman said last week the Fujian is expected to make “regular appearances” at sea. China asserts sweeping control over the South China Sea, where tensions with the Philippines and other claimant states persist despite a 2016 ruling by a United Nations-backed court that voided its overreaching claim.

Manila has described China’s actions in the waterway as coercive and escalatory, while Beijing insists its operations are meant to defend its sovereignty.

“Fujian empowers the PLA-Navy to intensify surveillance, assert air superiority and increase gray-zone pressure against its regional rivals,” Raymond M. Powell, director of SeaLight, a maritime transparency group focused on the South China Sea, said in a Facebook chat.

“Its operational presence will further embolden China to escalate confrontations,” he added, noting the Fujian will allow China to further complicate Philippine resupply operations.

While it marks a “very significant step,” Mr. Powell noted it will still take “many years” before China’s aircraft carrier could rival those of the US Navy.

Fujian has a full-load displacement of over 80,000 metric tons and is equipped with an electromagnetic catapult system similar to the USS Gerald R. Ford, the US Navy’s most advanced aircraft carrier.

“It provides the PLA-N with the ability to launch bigger and heavier aircraft. It also allows for more air wings compared to the first two carriers,” Mr. Ona said.

Still, the new aircraft carrier will undergo “in-depth test verification” as many of its systems and technologies are being trialed for the first time, a Chinese navy spokesman said. The ship was “independently designed and built by China,” based on a report posted on the Fujian provincial government, the carrier’s namesake.

“It’s still limited if you compare it with the US Navy’s capability. However, it reinforces its regional power projection, especially in the South and East China Seas, said Mr. Ona.

China could be building its next aircraft carrier already, with construction happening at a dry dock in Liaoning province in the country’s northeast, according to a South China Morning Post report.

ASYMMETRIC WARFARE CAPABILITIES
Mr. Cabalza said this military buildup will become more apparent as the Philippines enter into more defense agreements with Western and Asian powers.

The Southeast Asian nation has stepped up efforts to push back against China’s sweeping sea claims by expanding its web of alliances beyond the US, its long-standing treaty ally. It has forged visiting forces agreements with Australia, New Zealand, and most recently, Canada, alongside a similar deal with Japan.

The Philippines should focus on shoring up its asymmetric warfare capabilities by investing in unmanned systems like drones to counter China’s naval might in the region, Mr. Powell said.

“Ukraine’s example proves that with adaptable, affordable tech and smart tactics, a smaller military can impose real costs on a more powerful aggressor and make large conventional platforms much less effective,” he said.

“Manila needs multi-faceted strategy from coastal and naval modernization, expansion of alliance systems and management, to increased dialogue with Beijing as both countries will play influential roles next year,” Mr. Cabalza said.

Mr. Ona said Philippine forces should also ramp up its joint naval patrols and exercises with allies in the South China Sea to bolster deterrence in the waterway.

PSEi may extend slide as flood scandal escalates

BW FILE PHOTO

By Alexandria Grace C. Magno

PHILIPPINE STOCKS may continue to fall this week as persistent political turmoil and soft economic data keep risk appetite subdued, analysts said.

“Local equities slumped to a five-year low as fresh controversies emerged from the flood-control scandal,” online brokerage 2TradeAsia said in a note.

The Philippine Stock Exchange index (PSEi) dropped 2.49% to 5,584.35 on Friday, its weakest close since May 2020. The broader all-share index declined 4.1% to 3,260.26.

Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said the market remains on a downtrend, with the index now trading at levels last seen during the pandemic. “Negative developments continue to sustain the bearish sentiment,” he said in a Viber message.

He expects the bourse to stay under pressure this week, as a weak macroeconomic backdrop is further undermined by political noise. Signals of deteriorating confidence followed a 4% economic growth in the third quarter — the slowest in more than four years — and continued weakness in foreign direct investment (FDI).

Growth last quarter fell well short of the market’s expectation of above 5%, dragged by corruption allegations involving infrastructure spending that dampened sentiment. Net FDI inflows dropped 40.5% in August to $494 million, bringing the eight-month total to $5.179 billion, down 22.5% year on year.

“The bourse could move down further as investors contend with lingering corruption issues,” Mr. Tantiangco said. “Offshore worries — including concerns about stretched AI (artificial intelligence) valuations and fading hopes for US rate cuts — may also add to the pessimism.”

Political tensions escalated late last week after former Party-list Rep. Elizaldy S. Co published a list of projects he claimed the President had ordered inserted into the 2025 budget. Mr. Co later alleged that cash deliveries linked to the P100-billion allocation reached Forbes Park and Malacañang, urging an Ombudsman probe into President Ferdinand R. Marcos, Jr. and former Speaker Ferdinand Martin G. Romualdez, Sr.

Analysts said the market needs a strong positive catalyst to break its downtrend.

Technically, the PSEi has fallen below 5,600, a key support level. “If the market is unable to get back above the said line, it will be considered as its immediate resistance while next support is seen at 5,400,” he added.

2TradeAsia said investors might stay on the sidelines as the index trades below levels last seen during the coronavirus lockdowns. “Funds may pause until a firmer base emerges,” it said, pegging support at 5,400 and resistance at 5,800.

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