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GOCC subsidies fall nearly 50% in Sept.

PHILSTAR FILE PHOTO

SUBSIDIES provided to government-owned and -controlled corporations (GOCCs) fell 49.48% year on year in September, the Bureau of the Treasury (BTr) said.

Budgetary support provided to state-run firms amounted to P9.2 billion in September.

Month on month, GOCC subsidies rose 14.78%.

State-owned firms receive monthly subsidies from the National Government to support their daily operations if their revenue is insufficient.

In September, the National Food Authority (NFA) topped the subsidy list with P3.43 billion or 37.29% of the total.

This was followed by the National Irrigation Administration (NIA) which received P3.23 billion, and the Philippine Fisheries Development Authority (PFDA) with P955 million.

Other GOCCs on the subsidy list were the Philippine Crop Insurance Corp. (P443 million), the Philippine Heart Center (P184 million), the Philippine Coconut Authority (P134 million), the National Kidney and Transplant Institute (P124 million), and the Philippine Children’s Medical Center (P116 million).

GOCCs obtaining subsidies of less than P100 million were the Cultural Center of the Philippines (P91 million), the Light Rail Transit Authority (P74 million), the Philippine National Railways (P63 million), the Lung Center of the Philippines (P59 million), the Intercontinental Broadcasting Corp.-13 (P46 million) and the Philippine Rice Research Institute (P46 million).

Also receiving subsidies were the Development Academy of the Philippines (P40 million), the Philippine Institute for Development Studies (P28 million), the National Dairy Authority (P25 million), the Center for International Trade Expositions and Missions (P20 million), the People’s Television Network, Inc. (P18 million), the Sugar Regulatory Administration (P17 million), and the Metropolitan Waterworks and Sewerage System (P14 million).

GOCCs with subsidies amounting to P10 million or less were the Aurora Pacific Economic Zone and Freeport Authority (P10 million), the Philippine Institute of Traditional and Alternative Health Care (P8 million), the Southern Philippines Development Authority (P7 million), the Subic Bay Metropolitan Authority (P6 million), the Philippine Tax Academy (P5 million), the Philippine Center for Economic Development (P5 million), and the Zamboanga City Special Economic Zone Authority (P4 million).

GOCCs receiving no subsidies were the Land Bank of the Philippines, the Small Business Corp., the National Electrification Administration, the National Housing Authority, the National Power Corp., the Bases Conversion and Development Authority, the Philippine Health Insurance Corp., the Philippine Reclamation Authority, the Tourism Infrastructure and Enterprise Zone Authority, and the Tourism Promotions Board.

In the first nine months, GOCC subsidies totaled P79.45 billion, down 24.50% from a year earlier.

The NIA had the most subsidies in the first nine months with P27.76 billion, followed by the NFA with P12.11 billion.

Finance Secretary Ralph G. Recto has said that GOCCs are expected to generate P157 billion in remittances this year, with 53 remitting P116.84 billion as of September. — Aubrey Rose A. Insane

Philexport calls for more export promotion funding

PHILEXPORT.PH

THE government needs to allocate more funding to export promotion and small business development, the Philippine Exporters Confederation, Inc. (Philexport) said.

In a statement over the weekend, Philexport President Sergio R. Ortiz-Luis, Jr. urged the government not to reduce public spending on export promotion after corruption issues stalled infrastructure projects.

He called investment in export promotion and MSME development “badly needed,” with the potential to “help revive the slowing economy.”

He called cutting down on government spending “unwise.”

“The government spending that was cut was probably the ones that were lost to (corruption in flood control) anyway, so they don’t really go to the economy,” he said.

“We are hoping that (much) of this budget that was lost may go to… investing in exports… and to the SMEs,” he added, noting that the government has been playing ‘lip service’ for the last few years to such segments of the economy, which is “why we are being left behind by our neighbors,” he said. “Our budget for exports is practically nothing.”

He has said that the lack of funding makes it hard for exporters to participate in major trade fairs, with only a handful of companies participating, compared to delegations of over 200 from Malaysia and Thailand.

“We’re sort of plodding along, and we’re still growing a little. Unfortunately growing a little means we’re being left behind by our competitors in ASEAN,” he said.

He noted small businesses have been pulling out of the organization.

“Before, our membership in Philexport was usually growing… For the first time we are receiving resignations for the reason that they are closing shop, and many of these are the small ones that are affected by all these headwinds that we’re all facing now,” he said.

“We would like to really find new markets for them, and we need assistance really from the government, and we have not seen it yet,” he added.

“Unfortunately, while the Department of Trade and Industry has been doing commendable work, it is operating on a very limited budget to carry out the heavy task of export and small-business development,” he said.

“I don’t expect (developments from) the US at this point in time…So, we would like the government to spend the budget on the (overseas postings of trade officials) to help exporters develop these markets,” he added. — Justine Irish D. Table

Collateral damage: How climate impacts financing

IN BRIEF:

• Central Philippines has again experienced extreme flooding, marking a significant escalation from historical patterns.

• Major floods can significantly increase the losses banks face from unpaid loans—especially when the property securing that loan, like a car, is damaged.

• As climate impacts worsen, Loss Given Default (LGD) estimates must be reviewed and/or adjusted to also reflect the increasing severity and frequency of future scenarios, such as extreme and recurring flooding events, on top of existing information.

Another Super typhoon, Uwan, is upon us even as communities try to recover the extreme flooding in the central Philippines from Typhoon Kalmaegi (Tino). These events are a significant escalation from historical patterns. Streets and communities that were previously considered safe were inundated, highlighting a new and expanded risk profile for these areas.

Internationally, extreme flood events have produced striking images of vehicles piled on streets or even lodged in trees, as well as significant river debris after flood surges. Such scenes have been reported following extreme floods in parts of Italy and Spain.

When a disaster strikes, damage to people and property is obvious. This article explains how major floods can significantly increase the losses banks face from unpaid loans — especially when the property securing that loan, like a car, is damaged. We’ll also discuss how banks must adapt their financial planning to prepare for this new reality.

This article intends to provide applications to Expected Credit Loss (ECL) modelling under IFRS 9 focusing on the Loss-Given-Default (LGD) dimension, and outlines practical adjustment approaches for banking risk management and modelling teams.

HOW FLOODED CARS INCREASE FINANCIAL RISK FOR BANKS
Motor-vehicle loans form a material slice of the Philippine consumer-loan market; according to the Bangko Sentral ng Pilipinas (BSP), motor-vehicle loans accounted for 29% of consumer loans in May 2025. When flooding inundates parking lots, highways or neighborhoods, vehicles become immediate loss magnets: damage to engines, electronic systems, interiors and structural components ensues. In major floods, vehicles may float away, collide or pile up, turning them into urban flood drifters.

Consequently, collateral that underpins vehicle-loan exposures can suffer abrupt impairment, potentially prolonging time to recover or causing a potential reduction in recoverability amount of loan collateral in the event of default. For banks subject to IFRS 9, this means LGD assumptions may need urgent review.

HOW FLOODING MAY ELEVATE LGD
Under IFRS 9, LGD represents the proportion of a loan’s exposure at the time of default that a lender expects to lose, and this is usually expressed as a percentage of the total exposure at the date default occurs. While LGD is influenced by the recoverable value of pledged collateral, it also reflects potential losses on any unsecured portion of the loan.

In consideration of climate risk events such as frequent super typhoons in a particular geography, here’s how a bank’s potential loss worsens:

• The collateral becomes worthless: A flood-damaged car, especially up to the engine or dashboard, is often declared a “total loss” worth almost nothing on the resale market.

• Repo costs go up: It costs more to tow, clean, and legally process a damaged vehicle, especially when recovery services are overwhelmed after a disaster.

• It takes longer to get any money back: The whole process of getting the car, processing insurance, and selling it at auction gets bottlenecked. The longer it takes, the less that “future money” is worth to the bank today.

• Everyone is selling at once: When thousands of cars are flooded in the same area, insurance gaps are exposed and the market for used cars and salvaged parts is saturated. This drives prices down, making it even harder for the bank to recover financially.

This results in conventional LGD considerations, built on historical default data, no longer being reflective of current and prospective market conditions. As climate impacts worsen, these parameters must be reviewed and adjusted to reflect the increasing severity and frequency of future climate scenarios, not just past events.

ILLUSTRATIVE CALCULATION
To illustrate the magnitude of potential LGD shifts following a severe flood event, consider a typical financed vehicle loan of about P700,000. The vehicle might have an initial market value of P1 million, and the lender could expect to incur around P50,000 in costs related to repossession and sale if the borrower were to default.

Let us assume:

• We are two years into a five-year loan when the borrower defaults

• For purposes of simplicity, that the FMV follows a straight-line depreciation rendering the vehicle pledged as collateral to have a FMV of P600,000 as of that time

• The collateral net recoverable value would be P550,000 after deducting costs to sell from FMV

• The outstanding loan balance at the end of year two is P450,000

Under normal circumstances, this would imply an LGD of 0%, as the recoverable amount, P550,000 is greater than the outstanding loan amount at default or Exposure at Default (EAD) of P450,000.

POST-SEVERE CHRONIC FLOODING CONSIDERATIONS
When a severe flood event submerges the vehicle and causes substantial engine or interior damage, the collateral value can plummet. Assume the resale value falls by about 60% — a stylized but conservative assumption drawn from studies indicating that flood-damaged or “salvage-title” cars typically lose 60-70% of their value.

This can potentially alter our assumptions to:

• Vehicle pledged as collateral to have a FMV of P240,000 (P600,000 reduced by 60% flood induced damage)

• The collateral net recoverable value would be P190,000 after deducting costs to sell from FMV (which currently conservatively assumes costs to sell remain the same)

Under severe chronic flooding circumstances, this would now imply a much higher LGD of 42%; as the recoverable amount, P190,000, is now much less than the outstanding loan amount at default or EAD of P450,000.

This simplified example underscores how quickly loss severity can escalate when collateral is physically destroyed or when markets for recovery and resale are impaired. While the exact figures will vary depending on insurance coverage, vehicle type, and the availability of salvage buyers, the directional effect is clear: catastrophic flooding can transform a once moderately secured exposure into one with very limited recoverable value.

RECOMMENDED ACTIONS FOR RISK TEAMS
Organizations can update risk models and governance in response to these events by taking practical action:

• Triage impacted accounts: Isolate vehicle-loan exposures within the affected zones. This can be achieved by overlaying geospatial flood data and insurance claim registries with the bank’s own portfolio data (e.g., branch geography). This assessment must account for both the borrower’s registered home address and their place of work, as vehicles may be at either location during a flood event.

• Segmentation by risk factors: Impacted accounts should be stratified based on key risk parameters. This includes differentiating exposures by vehicle age, loan-to-value (LTV) ratio, insurance coverage status, and the location’s specific flood-zone designation (e.g., high-risk vs. moderate-risk zone). High-risk sub-segments should be flagged for enhanced LGD adjustments.

• Collateral haircut calibration: The core of the adjustment involves recalibrating collateral values. Using empirical damage-curve studies and industry data on salvage or “total-loss” values, teams should apply conservative, evidence-based “haircuts” to the collateral value for the impacted segments.

• Scenario analysis and stress testing: Beyond immediate adjustments, banks must use this event as a basis for forward-looking scenario analysis. Teams should run simulations for moderate and severe future flood scenarios to quantify the incremental impact on IFRS 9 lifetime ECL provisions and overall capital adequacy.

• Enhanced disclosures: In line with IFRS 7 Financial Instruments: Disclosures and IFRS 9 Financial Instruments, banks must disclose the key judgments, model changes, and sensitivities related to natural disaster risk. This transparency is critical for explaining how these risks are integrated into LGD and ECL calculations and, ultimately, into capital and provisioning plans.

KEY CONSIDERATIONS FOR BANKS
With global greenhouse gas emissions remaining unabated, the increase in average temperatures means that climate change-induced extremes in the Philippines will continue to rise in frequency and severity. It is therefore critical that banks adopt a more systematic approach, recognizing these climate-related physical risks not as isolated operational events, but as fundamental credit-risk drivers that materially affect ECL assumptions under IFRS 9.

This evidence-based assessment cannot be limited to collateral-driven impacts on LGD, such as in the auto-sector. It must also address how these events affect the Probability of Default (PD) of their clients. Crucially, banks can no longer rely only on historical climate events; they must look forward, integrating future climate projections that model events with a magnitude and frequency far exceeding previous experiences.

By doing so, banks can better align their models with the emerging reality of climate-driven losses, resulting in more robust provisioning, deeper risk insight, and greater stakeholder confidence in their resilience.

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 authors and do not necessarily represent the views of SGV & Co.

 

Bonar A. Laureto is a Sustainability Principal and Melisa Turingan is a Sustainability Senior Manager, both of SGV & Co.

Meralco tops Taiwan champ to revive EASL campaign

EASL.BASKETBALL

MERALCO, sparked by new addition Sina Vahedi, recharged its bid in the East Asia Super League (EASL) with an 85-76 payback win over Taiwan champ Taoyuan Pauian Pilots on Saturday night in Ilagan City.

Iranian Mr. Vahedi, the Continent’s premier playmaker, whipped up a storm in his much-awaited debut as the Philippine club’s Asian import, rifling in 22 points, seven assists and two rebounds as the Bolts broke through in front of delighted home fans after a 0-2 start in Group B.

Mr. Vahedi, who was named to the FIBA Asia Cup’s All-Star Five after Iran’s bronze medal finish last August, missed out on the Bolts’ opening back-to-back losses on the road to Japan’s Ryukyu Golden Kings (72-81) and the Pilots (72-82), due to visa issues.

“I’m so happy to finally join the team and win the game,” said the 6-foot-1 Iranian, who was adjudged Player of the Game in the match played at the Capital Arena.

The Bolts stormed to an 11-2 tear to set the tone for the victory at the expense of the erstwhile spotless Taoyuan (2-1) that pumped life back to their playoffs drive at 1-2 behind the second-running Golden Kings (1-1).

Puerto Rican reinforcement Ismail Romero matched Mr. Vahedi’s 22-point output and hauled down 14 rebounds as Rondae Hollis-Jefferson turned in 15 markers, 10 boards, and seven assists in a milestone night that saw him join the EASL’s 200-point club.

RHJ previously played for TNT in the opening season.

Ange Kouame, who took the place of the sick Justin Brownlee as Meralco’s naturalized player, contributed to the team’s interior defense and logged three points and four rebounds in a solid debut.

Meralco will try to make it two in a row on Nov. 15 when they take on the Macau Black Bears at the Cebu Coliseum. — Olmin Leyba

The scores:

Meralco 85 – Vahedi 22, Romero 22, Hollis-Jefferson 15, Newsome 14, Quinto 3, Kouame 3, Banchero 2, Almazan 2, Hodge 2.

Taoyuan 76 – Millner 19, Lu 17, Artino 15, Brown 9, Li 7, Kuan 5, Pai 2, Lin 2, Morrison 0, Dieng 0, Cheng 0.

Quarterscores: 23-14; 43-30; 66-50; 85-76

Canino, Bacojo clinch IM rankings in Ozamiz tourney

MARK JAY BACOJO (left) and RUELLE CANINO — FACEBOOK.COM/NCFPCHESS

THE PHILIPPINES’ Ruelle Canino and Mark Jay Bacojo came through with podium finishes and earned International Master (IM) titles in the 6th ASEAN Individual Chess Championships-Gov. Henry Oaminal Cup at the Asenso Misamis Occidental Resort and Aquamarine Park in Ozamiz over the weekend.

Ms. Canino drew with Mongolian Batpelden Buyankhishig in 56 moves of a Queen’s Gambit and ended up at second in the women’s class with 6.5 points behind eventual champion Evgenija Ovod of Russia with seven points.

Mr. Bacojo likewise drew his duel with Munkhdalai Amilal in 71 moves of a Sicilian Defense and took No. 3 with six points in the open division that was won by Indian V S Raahul with seven points in this tournament, supported by the Philippine Sports Commission.

Vietnamese Nguyen Quoc Hy was second with 6.5 points.

Apart from the WIM title, the 17-year-old Cagayan de Oro native, who will be part of the country’s Southeast Asian Games-bound team in Thailand next month, also earned a Woman Grandmaster (WGM) norm plus an impressive 99.6 rating points that should hike her 2110 rating to 2209.6.

And it could have been a WGM title outright had Ms. Canino found a way to cash in on a pawn edge and beat the Mongolian World School Chess Under-17 champion in that critical final round duel.

“I tried but I’m happy with my results in this tough tournament,” said Ms. Canino, who thanked Far Eastern University (FEU) chairman Aurelio Montinoa and athletic director Mark Molina for their backing.

The 19-year-old Mr. Bacojo, a FIDE Master and an FEU psychology student, came from being ranked 24th out of 41 participants to win bronze after racking up four straight wins starting in the fifth round.

He capped it with a shock win over Vietnamese GM Tran Tuan Minh in the penultimate round that precipitated his dazzling Houdini act in the final round that saw him crawl his way out of a losing position and into a stalemate after Amilal unraveled in a frantic time scramble.

“I was lucky in the last round,” said Mr. Bacojo, who gained 39.4 rating points that should propel him from 2298 to 2337.4. — Joey Villar

NU pounds out five-set win vs UST

NATIONAL UNIVERSITY LADY BULLDOGS — FACEBOOK.COM/SHAKEYSSUPERLEAGUE

Games on Saturday
(Rizal Memorial Coliseum)
1 p.m. – FEU vs Adamson
3:30 p.m. – UST vs NU

NATIONAL UNIVERSITY (NU) earned a gritty 15-25, 25-23, 25-17, 13-25, 15-12 win over fierce rival University of Santo Tomas (UST) to move to the brink of a historic four-peat in the 2025 Shakey’s Super League (SSL) Preseason Unity Cup over the weekend at the Rizal Memorial Coliseum.

The Lady Bulldogs flaunted their championship pedigree when it mattered most with a 5-0 closeout to erase a 10-12 deficit in the final set for a gutsy win in Game 1 of their best-of-three finals.

Incoming UAAP rookie and former juniors MVP Sam Cantada fired 18 points on 16 hits and two aces to lead the way for NU, which will look to seal its fourth straight SSL title on top of three UAAP titles next Saturday at the same venue.

Adamson and Far Eastern U are also to dispute the bronze medal in a one-game showdown next week.

Ms. Cantada, who just returned to fold from a national team stint in the Asian Youth Games in Bahrain, drew solid support from veteran Cham Maaya with 14 points on eight blocks including the game-sealing swat on ace spiker Angge Poyos.

Kaye Bombita and Vange Alinsug added 11 and nine markers, respectively, in the back-and-forth duel that lasted two hours and 39 minutes.

“I just told them we have to focus on the process and not the result. Every time we do that, we tend to forget a lot of steps and we’re always in a hurry kaya nagkaka-problema kami,” said new coach Regine Diego, who took over from Sherwin Meneses.

“Once we tried to focus on everything as steps, sa pasa muna, isa-isa, then it got better in the end.”

It’s the ninth straight win in as many games for the powerhouse Lady Bulldogs, now with a chance to extend a dynasty even with the graduation of its championship core led by multiple MVP winners Bella Belen and Alyssa Solomon.

Sans the power duo, it wasn’t a walk in the park with NU needing to dig itself out of a 13-25 humiliation in the fourth set.

Smelling blood in the deciding frame, the Golden Tigresses pounced to a 12-10 cushion off a Regina Jurado hit only for the Lady Bulldogs to prove that they’re the three-time champions for a reason.

Ms. Poyos’ 21 points went down the drain for the 2023 UAAP and SSL runner-up. The efforts of Ms. Jurado (12), Marga Altea (11) and Xyza Gula (10) also proved insufficient for the Golden Tigresses, who now face a must-win duel next weekend to force a rubber match.

Meanwhile, University of the Philippines drubbed Ateneo, 23-25, 25-16, 25-23, 25-16, to claim fifth place while St. Benilde swept San Beda, 25-10, 25-20, 25-14, to take seventh. — John Bryan Ulanday

Mitchell’s big second half propels Cavaliers past Bulls

DONOVAN MITCHELL — NBA.COM

DONOVAN MITCHELL scored 26 of his game-high 29 points after halftime and De’Andre Hunter added 29 points to lift the host Cleveland Cavaliers to a 128-122 win against the Chicago Bulls on Saturday night.

Cleveland overcame a 19-point deficit to stretch its winning streak to four games. The Cavaliers scored the last 12 points of the game — including a run of eight straight from Mitchell — after Tre Jones swished a pair of free throws to put Chicago ahead 122-116 with 1:47 remaining.

Mitchell shot 9-for-14 in the second half, including 5-for-7 from long range.

Isaac Okoro scored 19 points to lead seven Bulls in double figures, while reserve Jalen Smith had a double-double of 18 points and 11 rebounds.

Cleveland rallied back into the game with a 40-point third quarter, capitalizing on a brief absence from Chicago’s Josh Giddey, who appeared to roll an ankle, as well as some Bulls’ defensive lapses.

One gaffe came in the closing seconds of the quarter, when Chicago fouled Cleveland forward Evan Mobley near the rim after he barely had control of the ball after a court-length pass.

Mobley contributed 24 points and eight rebounds, while teammates Jaylon Tyson (17 points) and Jarrett Allen (11) also scored in double figures.

Giddey and Kevin Huerter chipped in 15 points each for Chicago, with Giddey grabbing nine rebounds. Jones scored 17 points, Ayo Dosunmu added 14 and Patrick Williams had 11.

The Bulls went 33-for-36 from the free-throw line compared to 19-for-26 for the Cavaliers.

Chicago rolled to a 72-56 halftime lead after outscoring Cleveland 43-24 in the second quarter.

The Bulls shot 56.1% (23 of 41) in the first half, including a 10-for-14 barrage from long range that featured a 3-for-3 effort from both Okoro and Smith. Williams added two treys.

Mitchell, who entered the game averaging a team-best 30.9 points, was 1-for-10 from the floor for three points before the break.

Saturday marked the first meeting between the Cavaliers and Bulls since the offseason trade that saw Chicago ship Lonzo Ball to Cleveland for Okoro. The

Cavaliers showed a tribute video for Okoro, who spent his first five NBA seasons with the organization, during an early stoppage in play.

Cleveland has won seven straight against Chicago at Rocket Arena and is 12-1 over the teams’ past 13 meetings overall. — Reuters

Rebuilding the Warriors

There was a time when the Warriors made basketball look inevitable. They were poetry in motion framed with threes raining without conscience. Today, they are an echo of their storied past, still competent but unconvincing in their attempts to lean on muscle memory. Even as Stephen Curry continues to defy age, the changes in and around him have made his contributions seem less significant. And the result, needless to say, leaves much to be desired: a 5-5 slate reflective of their mediocrity.

It would be easy to dismiss the Warriors’ ostensible lack of distinction as a natural offshoot of the passage of seasons. After all, the National Basketball Association is littered with examples of dynasties not necessarily collapsing but corroding; the fall from grace is slow, even imperceptible, and then clear to all and sundry. At the same time, therein lies a deeper irony: Their system became a template for modern hoops, and naturally inspired an evolution against which it now strains.

Certainly, the league learned from the Warriors, adapted, and moved on. The Nuggets, for example, layered pace and space (and, of course, selflessness care of Nikola Jokic) with size and athleticism. The imitators have surpassed the originators. Still, the blue and yellow persist with stubborn dignity. They have not imploded, merely eroded, and their professionalism endures. Head coach Steve Kerr is trying to stretch the system again with longer leashes for the likes of Jonathan Kuminga and Moses Moody alongside Curry and Draymond Green.

The balance has been uneasy at best. Rebuilding on the fly is an art form few can manage; reimagining prosperity while it occurs is even rarer. And so the Warriors drift in a liminal space between recollection and transition. They’re too experienced to start from scratch, but too flawed to stay the same. Under the circumstances, it’s fair to argue that there is no more dynasty to speak of. In its place is a quixotic search for one final brush with greatness.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and human resources management, corporate communications, and business development.

Major US air traffic staffing shortages snarl thousands of flights

STOCK PHOTO | Image by L.Filipe C.Sousa from Unsplash

WASHINGTON — Major air traffic control staffing shortages snarled thousands of flights on Saturday as the government shutdown caused mounting travel woes and raised alarm among airline officials.

The Federal Aviation Administration (FAA) said there were air traffic control staffing issues affecting 42 airport towers and other centers and delaying flights in at least 12 major US cities — including Atlanta, Newark, San Francisco, Chicago and New York. Flights crossing six different high-traffic areas were also facing delays.

Some 1,500 flights were canceled, and 6,000 flights were delayed on Saturday, compared with Friday when 1,025 were canceled and 7,000 were delayed.

Airline officials privately said the number of delay programs made it nearly impossible to schedule and plan many flights and expressed alarm about how the system would function if staffing issues worsen.

FLIGHT REDUCTIONS TO INCREASE ON TUESDAY
The FAA instructed airlines to cut 4% of daily flights starting on Friday at 40 major airports because of air traffic control safety concerns. The shutdown, which has reached a record of 39 days, has led to shortages of air traffic controllers who, like other federal employees, have not been paid for weeks.

Reductions in flights are mandated to rise to 6% on Tuesday and then hit 10% by Nov. 14.

The air traffic absences prompted the FAA to impose ground delay programs at nine airports on Saturday, with delays averaging 282 minutes for flights at Atlanta, one of the busiest US airports.

The cuts, which began on Friday morning, include about 700 flights from the four largest carriers: American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.

The four airlines canceled about the same number of flights on Saturday, under the FAA mandate, but were forced to cancel additional flights due to air traffic control staffing issues.

Earlier this week, FAA Administrator Bryan Bedford said 20% to 40% of controllers had not been showing up for work over the previous several days.

During a US Senate debate on Friday, Senator Ted Cruz blamed the shutdown for air traffic control concerns. Mr. Cruz, a Texas Republican who chairs the Senate Commerce Committee, said he has been told that since the shutdown started, pilots have filed more than 500 voluntary safety reports about mistakes made by air traffic controllers because of fatigue.

TALKS TO END SHUTDOWN LOOK POSITIVE
Senate Majority Leader John Thune said on Saturday that bipartisan talks to end the shutdown had taken a positive turn, but the workday ended with no deals announced. The Senate is to try again with a rare Sunday session.

During the government shutdown, 13,000 air traffic controllers and 50,000 security screeners have been forced to work without pay, leading to increased absenteeism. Many air traffic controllers were notified on Thursday that they would receive no compensation for a second consecutive pay period next week.

US Transportation Secretary Sean Duffy said it was possible he could require 20% cuts in air traffic if more controllers stop showing up for work. “I assess the data,” Mr. Duffy said. “We’re going to make decisions based on what we see in the airspace.”

The Trump administration has cited air traffic control problems as Republicans try to pressure Senate Democrats to back what they call a “clean” government funding bill with no strings attached. Democrats blame the shutdown on a Republican refusal to negotiate over health insurance subsidies that will expire at the end of this year. — Reuters

China’s factory-gate deflation eases in Oct. as consumer prices rise

People walk on a promenade in Shanghai, China, July 10, 2025. — REUTERS/GO NAKAMURA

BEIJING — China’s producer price deflation eased in October and consumer prices returned to positive territory, data showed on Sunday, as the government steps up efforts to curb over-capacity and cut-throat competition among firms.

Despite the improvement in headline numbers, analysts warn that deflationary pressures on the world’s second-largest economy are not yet over, and the government may have to roll out additional policy measures to spur demand.

“Demand remains weak, but a rebound in CPI (consumer price index) indicates that supply-side policies are having an effect, and the supply-demand balance in many industries is improving,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.

“The future trend of inflation will depend on how much demand-side policies are strengthened.”

The producer price index fell 2.1% in October from a year earlier, National Bureau of Statistics (NBS) data showed, compared with an expected 2.2% decline in a Reuters poll of economists. The index has remained negative since October 2022 and dropped 2.3% in September.

NBS statistician Dong Lijuan said capacity management in key industries has narrowed year-on-year producer price declines. In coal mining and washing, the price drop narrowed by 1.2 percentage points (ppts), and price falls in photovoltaic equipment, battery, and automobile manufacturing narrowed by 1.4 ppts, 1.3 ppts, and 0.7 ppts, respectively.

Consumer prices edged up 0.2% from a year earlier, reversing a two-month decline and beating the estimate for no change.

Against the previous month, CPI rose 0.2% in October after rising 0.1% in September and compares with a forecast of no change.

Core inflation, which excludes volatile prices of food and fuel, was up 1.2% year on year in October, quickening from the 1% increase in September and hitting a 20-month high.

Food prices fell 2.9% year on year, after dropping 4.4% in September.

The October price figures indicate that government efforts to rein in excessive competition have helped stabilise prices, but lukewarm domestic demand and geopolitical tensions continue to cloud the business outlook.

“It is too early to conclude the deflation is over,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. “We need to  wait for a few more months of data to judge if the deflation dynamic has changed fundamentally.”

DEFLATIONARY PRESSURES LINGER
China’s economic growth slowed to its weakest in a year in the third quarter, and the youth unemployment rate remained elevated despite a dip in September.

Policymakers have refrained from aggressive stimulus this year, with the central bank keeping interest rates steady for five months, partly due to resilient exports following a trade truce with the United States.

China has recently unveiled some fiscal and quasi-fiscal policy support measures, but analysts remain divided on whether the central bank will implement further easing measures, such as interest rate cuts, by the end of the year.

Last month, China’s state planner said 500 billion yuan ($70 billion) in new policy-based financial instruments has been fully allocated, and China has allocated 200 billion yuan in special local government bonds to support investment in some provinces.

China’s economy is on track to meet the government’s target of around 5% growth this year, but producer deflation, as well as downbeat factory activity and an expected contraction in exports in October, indicate waning growth momentum.

A Reuters poll in October showed China’s consumer price inflation will stay flat this year, well below the government’s target of around a 2% increase.

Chinese leaders have signaled a sharper shift towards supporting consumption over the next five years, as limited room for investment and trade tensions have exposed vulnerabilities, although measures may take time to yield results. ($1 = 7.1230 Chinese yuan renminbi). — Reuters

Taiwan is not alone, vice-president says after breakthrough Europe trip

PEOPLE AND CARS can be seen passing Taipei 101 in Taipei, Taiwan, April 17, 2025. — REUTERS/ANN WANG

TAIPEI — Taiwan is not alone and has more and more friends around the world and will continue to show the world its resolve, Vice-President Hsiao Bi-khim said on Sunday after returning from a landmark diplomatic-breakthrough trip to Europe.

While Taiwan foreign ministers on occasion visit Europe and other parts of the world that have no formal ties to Chinese-claimed Taipei, it is rare for an official as senior as the vice president to do so, given the risk of backlash from Beijing against the host nation.

Ms. Hsiao spoke at the Inter-Parliamentary Alliance on China’s annual summit, held in the European Parliament in Brussels.

Ms. Hsiao, speaking at the airport upon returning home, said Taiwan’s international situation has been extremely difficult but Taiwan has never backed down, because it should have the chance to participate in the international community.

“Taiwan is not alone. We have more and more like‑minded friends around the world who are willing to walk with us,” she said.

“And we will continue, with confidence, pragmatism, and firm steps, to show the world Taiwan’s resolve, goodwill, and the power of our democracy.”

China refuses to speak to President Lai Ching-te and his administration, saying he is a “separatist.”

China’s mission to the European Union (EU)condemned Ms. Hsiao’s visit, saying it was a serious interference in China’s internal affairs, and severely undermined political mutual trust between China and the EU.

China views democratically governed Taiwan as its own territory and has never renounced use of force to “reunify” with the island. Taiwan’s government says it has the right to engage with other countries and that China has no right to claim the island or to dictate Taipei’s actions.

Former Taiwan President Tsai Ing-wen is visiting Berlin to address a conference this week.

Writing on her Facebook page late Saturday before leaving, Mr. Tsai said Ms. Hsiao going to Brussels was of “extraordinary significance for Taiwan.”

“As President Lai Ching-te has stated, Taiwan stands as a trusted partner in the international community. We will steadfastly stand with Europe and other like-minded partners.” — Reuters

New Zealand authorities send extra fire planes to battle 1,100-hectare wildfire

STOCK PHOTO | Image by Kerin Gedge from Unsplash

WELLINGTON — New Zealand authorities said on Sunday that extra aircraft were being sent to fight an out-of-control wildfire that has burnt through around 1,100 hectares (4.2 square miles) of national park in the country’s central North Island.

Firefighters began battling the fire in Tongariro National Park, a popular hiking spot, on Saturday afternoon and around 40 hikers had to be airlifted to safety. However, firefighting efforts were suspended overnight for safety reasons.

Fire and Emergency New Zealand said on Sunday that more firefighting planes were being sent to the area, taking the number of aerial assets involved to eight helicopters and three planes.

“Because of the terrain and extent of the fire, air attack is more effective at this stage than bringing in additional ground crews across most of the fireground,” Fire and Emergency New Zealand assistant commander Craig Gold said in a statement.

Nine hikers were evacuated from the national park on Sunday morning, state-owned Radio New Zealand reported, citing a Department of Conservation spokesperson.

Fire and Emergency New Zealand said an aerial reconnaissance on Sunday would confirm the extent of the fire. Depending on what it showed, it was expected to take a full day of operations to bring the fire under control.

The agency said it would have six fire trucks and five tankers on the ground battling the blaze. — Reuters

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