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Trump’s UN envoy pick Waltz says US needs strong voice to counter China

U.S. and Chinese flags are seen in this illustration taken, April 24, 2024. — REUTERS

WASHINGTON/UNITED NATIONS – The United Nations needs reform and the United States must have a strong voice to counter China, Mike Waltz, U.S. President Donald Trump‘s pick to be his U.N. envoy, said on Tuesday, adding that he is “confident we can make the U.N. great again.”

Mr. Waltz – a retired Army Green Beret and former Republican lawmaker from Florida – is one of the last major Trump nominees awaiting likely confirmation by the U.S. Senate. He appeared before the Senate Foreign Relations Committee on Tuesday as part of that process. A White House official, speaking on condition of anonymity, said the U.N. post would not be cabinet-level.

“We should have one place in the world where everyone can talk, where China, Russia, Europe, the developing world can come together and resolve conflicts” Mr. Waltz told the committee. “But after 80 years, it’s drifted from its core mission of peacemaking. We must return to the U.N.’s charter and first principles.”

His remarks largely echoed what Mr. Trump has said about the world body. U.N. Secretary-General Antonio Guterres announced in March that he was seeking ways to improve efficiency and cut costs as the U.N. turns 80 this year amid a cash crisis.

“The U.N. has ballooned to over 80 agencies with overlapping missions that waste resources and, if confirmed, I’ll push for transparency, like what we’re seeing in the Secretary-General’s UN80 reform plan calling for a 20% staff cut,” Mr. Waltz said.

He said U.N. peacekeeping plays an important role, but also needs reform.

Washington is the U.N.’s largest contributor – followed by China – accounting for 22% of the core U.N. budget and 27% of the peacekeeping budget. The U.N. has said the U.S. currently owes a total of $2.8 billion, of which $1.5 billion is for the regular budget. These payments are not voluntary.

The United States was also one of the world’s largest humanitarian aid donors, but the Trump administration has slashed billions of dollars in foreign assistance, including to U.N. agencies.

 

‘BLOCK AND TACKLE’

Mr. Waltz was Mr. Trump’s national security adviser until he was ousted on May 1 after he was caught up in a March scandal involving a Signal chat among top Trump national security aides. Mr. Trump then promptly nominated Waltz as his U.N. ambassador.

“The use of Signal was not only authorized, it’s still authorized, and highly recommended,” Mr. Waltz said on Tuesday. He later clarified it was not authorized for sharing classified information and that no classified information had been shared in the March Signal chat.

Mr. Waltz repeated long-held U.S. criticisms of the U.N. – that Washington pays too much at the 193-member world body, that it is anti-Israel and that China is building too much influence.

“We have to block and tackle Chinese influence,” Mr. Waltz said. “America must have a strong voice and, if confirmed, I’ll work with Secretary (of State Marco) Rubio to challenge this influence.”

Since beginning his second term in January, Mr. Trump has maintained the wary stance on multilateralism that was a hallmark of his first term between 2017 and 2021.

So far, Mr. Trump has stopped U.S. engagement with the U.N. Human Rights Council, extended a halt to funding for the Palestinian relief agency UNRWA and ordered a review of the U.N. cultural agency UNESCO. He has also announced plans to quit the Paris climate deal and the World Health Organization.

When asked about Mr. Waltz’s confirmation hearing, U.N. spokesperson Stephane Dujarric said on Tuesday: “Our message to all member states is: if you’re not fully pleased with what’s going on in this organization, engage with the other member states in this organization.” – Reuters

US National Guard unit was ‘extensively’ hacked by Salt Typhoon in 2024, memo says

PIXABAY

WASHINGTON – A U.S. state’s Army National Guard network was thoroughly hacked by a Chinese cyberespionage group nicknamed “Salt Typhoon,” according to a Department of Homeland Security memo.

The memo obtained by Property of the People, a national security transparency nonprofit, said the hackers “extensively compromised” the unnamed state Army National Guard’s network between March and December 2024 and exfiltrated maps and “data traffic” with counterparts’ networks in “every other US state and at least four US territories.”

The National Guard and the Department of Homeland Security’s cyber defense arm, CISA, did not immediately return messages. News of the memo was first reported by NBC News.

Salt Typhoon has emerged as one of the top concerns of American cyber defhen Coatesenders. U.S. officials allege that the hacking group is doing more than just gathering intelligence; it is prepositioning itself to paralyze U.S. critical infrastructure in case of a conflict with China. Beijing has repeatedly denied being behind the intrusions.

The memo, which said it drew on reporting from the Pentagon, said that Salt Typhoon’s success in compromising states’ Army National Guard networks nationwide “could undermine local cybersecurity efforts to protect critical infrastructure,” in part because such units are often “integrated with state fusion centers responsible for sharing threat information—including cyber threats.” – Reuters

Nvidia’s resumption of AI chips to China is part of rare earths talks, says US

FILE PHOTO: The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith/File Photo

WASHINGTON/BEIJING/HONG KONG – Nvidia’s planned resumption of sales of its H20 AI chips to China is part of U.S. negotiations on rare earths, Commerce Secretary Howard Lutnick said on Tuesday, and comes days after its CEO met President Donald Trump.

“We put that in the trade deal with the magnets,” Mr. Lutnick told Reuters, referring to an agreement Trump made to restart rare earth shipments to U.S. manufacturers. He did not provide additional detail.

Nvidia said late on Monday that it is filing applications with the U.S. government to resume sales to China of its H20 graphics processing unit, and has been assured by the U.S. it will get the licenses soon.

The planned resumption is a reversal of an export restriction imposed in April that is designed to keep the most advanced AI chips out of Chinese hands over national security concerns, an issue that has found rare bipartisan support. It drew swift questions and criticism from U.S. legislators on Tuesday.

The decision “would not only hand our foreign adversaries our most advanced technologies, but is also dangerously inconsistent with this Administration’s previously-stated position on export controls for China,” Democratic Representative Raja Krishnamoorthi, ranking member of the House of Representatives Select Committee on China, said in a statement.

Republican John Moolenaar, chair of that committee, said in a statement he would seek “clarification” from the Commerce Department.

“The H20 is a powerful chip that, according to our bipartisan investigation, played a significant role in the rise of PRC AI companies like DeepSeek,” Mr. Moolenaar said, referring to a Chinese startup that claims to have built AI models at a fraction of the cost paid by U.S. firms such as OpenAI. “It is crucial that the U.S. maintain its lead and keep advanced AI out of the hands of the CCP.”

Shares of Nvidia, the world’s most valuable firm, closed up 4% and were nearly unchanged in after-market trading. Nvidia had estimated that the curbs would cut its revenue by $15 billion.

Nvidia’s plan to resume sales has set off a scramble at Chinese firms to buy H20 chips, two sources told Reuters. The chips that Nvidia will resume selling are the best it can legally offer in China but lack much of the computing power of the versions for sale outside of China because of previous restrictions put in place by Trump’s first administration and then President Joe Biden’s administration.

But critically, H20 chips work with Nvidia’s software tools, which have become a de facto standard in the global AI industry.

CEO Jensen Huang, who is visiting Beijing and set to speak at an event on Wednesday, has argued that Nvidia’s leadership position could slip away if the company cannot sell to Chinese developers being courted by Huawei Technologies with chips produced in China.

The significance of the shift depends on the volume of H20 chips that the U.S. allows to be shipped to China, said Divyansh Kaushik, an AI expert at Beacon Global Strategies, a Washington-based advisory firm.

“If China is able to get a million H20 chips, it could significantly narrow, if not overtake, the U.S. lead in AI,” he said.

 

CHINA IS CRUCIAL

“The Chinese market is massive, dynamic, and highly innovative, and it’s also home to many AI researchers,” Mr. Huang told Chinese state broadcaster CCTV on Tuesday.

China generated $17 billion in revenue for Nvidia in the fiscal year ending January 26, or 13% of total sales, based on its latest annual report.

Internet giants ByteDance and Tencent are also in the process of submitting applications for H20 chips, the sources familiar with the matter said. Central to the process is an approved list put together by Nvidia for Chinese companies to register for potential purchases, one of the sources said.

ByteDance and Tencent did not respond to a request for comment. Nvidia declined to comment on the approved list system.

Asked at a regular foreign ministry briefing in Beijing about Nvidia’s plans to resume AI chip sales, a spokesperson said: “China is opposed to the politicization, instrumentalization and weaponization of science, technology and economic and trade issues to maliciously blockade and suppress China.”

China halted exports of rare earths in March following a trade spat with Mr. Trump that has showed some signs of easing. It dominates the market for rare earths, a group of 17 metals used in cellphones, weapons, electric vehicles, and more.

Mr. Huang’s visit is being closely watched in both China and the United States, where a bipartisan pair of senators last week sent the CEO a letter asking him to abstain from meeting companies working with military or intelligence bodies.

The senators also asked Huang to refrain from meeting with entities named on the United States’ restricted export list.

Rival AI chipmaker AMD also said the Department of Commerce would review its license applications to export its MI308 chips to China; it plans to resume those shipments when licenses are approved, it said. Its shares gained 7% in trading on Tuesday. – Reuters

Trump sets 19% tariff on Indonesia goods in latest deal

REUTERS

WASHINGTON/BRUSSELS – President Donald Trump on Tuesday said the US would impose a 19% tariff on goods from Indonesia under a new agreement with the Southeast Asian country and more deals were in the works as he continued to press for what he views as better terms with trading partners and ways to shrink a huge US trade deficit.

The pact with the relatively minor US trading partner is among the handful struck so far by the Trump administration ahead of an August 1 deadline for tariffs on most US imports to rise again. The accord came as the top US trading partner – the European Union – readied retaliatory measures should talks with Washington fail.

As that deadline approached, negotiations were under way with other nations eager to avoid more US levies beyond a baseline 10% on most goods that has been in place since April.

Trump’s roll-out of the policies has often been chaotic. His moves have upended decades of negotiated reductions in global trade barriers and roiled international financial markets and economic activity along the way.

Based on Trump tariff announcements through Sunday, Yale Budget Lab estimated the US effective average tariff rates will rise to 20.6% from between 2% and 3% before Trump’s return to the White House in January. Consumption shifts would bring the rate down to 19.7%, but it’s still the highest since 1933.

Trump outlined an Indonesia deal similar to a pact struck recently with Vietnam, with a flat tariff on exports to the US roughly double the current 10% and no levies on US exports going there. It also included a penalty rate for so-called transhipments of goods from China via Indonesia and a commitment to buy some US goods.

“They are going to pay 19% and we are going to pay nothing … we will have full access into Indonesia, and we have a couple of those deals that are going to be announced,” Trump said outside the Oval Office. Trump later announced on his Truth Social platform that Indonesia had agreed to buy $15 billion of US energy products, $4.5 billion of American farm products and 50 Boeing BA.N jets, though no time frame was specified.

TRUMP: INDIA TALKS MOVING SAME WAY
Indonesia’s total trade with the US – totalling just under $40 billion in 2024 – does not rank in the top 15, but it has been growing. US exports to Indonesia rose 3.7% last year, while imports from there were up 4.8%, leaving the US with a goods trade deficit of nearly $18 billion.

The top US import categories from Indonesia, according to US Census Bureau data from the International Trade Centre’s TradeMap tool, last year were palm oil, electronics equipment including data routers and switches, footwear, car tires, natural rubber and frozen shrimp.

Susiwijono Moegiarso, a senior official with Indonesia’s Coordinating Ministry for Economic Affairs, told Reuters in a text message: “We are preparing a joint statement between US and Indonesia that will explain the size of reciprocal tariff for Indonesia including the tariff deal, non-tariff and commercial arrangements. We will inform (the public) soon.”

Trump had threatened the country with a 32% tariff rate starting August 1 in a letter sent to its president last week. He sent similar letters to about two dozen trading partners this month, including Canada, Japan and Brazil, laying out tariff rates ranging from 20% to 50%, plus a 50% tariff on copper.

Speaking in Pittsburgh on Tuesday, Trump said he favored blanket tariffs over complicated negotiations, but his Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick were keen to land more trade agreements.

Upon his arrival back in Washington, Trump told reporters that letters would be going out soon for many smaller countries, suggesting they would face a tariff of “a little over 10%.”

The August 1 deadline gives targeted countries time to negotiate about lower tariff rates. Some economists have also noted Trump’s pattern of backing off his tariff threats.

Since launching his tariff policy, Trump has clinched only a few deals, falling short of earlier promises to land “90 deals in 90 days.”

So far, framework agreements have been reached with the United Kingdom and Vietnam, and an interim deal has been struck with China to forestall the steepest of Trump’s tariffs while negotiations continue between Washington and Beijing.

Trump said talks with India were moving “along that same line,” adding, “We’re going to have access to India. And you have to understand, we had no access into any of these countries. Our people couldn’t go in. And now we’re getting access because of what we’re doing with the tariffs.”

EU READIES RETALIATION
The breakthrough with Indonesia came as the European Commission, which oversees trade for the EU, prepared to target 72 billion euros ($84.1 billion) worth of US goods – from Boeing BA.N aircraft and bourbon whiskey to cars – for possible tariffs if trade talks with Washington fail.

Trump is threatening a 30% tariff on imports from the EU from August 1, a level European officials say is unacceptable and would end normal trade between two of the world’s largest markets.

The list, sent to EU member states and seen by Reuters on Tuesday, pre-dated Trump’s move over the weekend to ramp up pressure on the 27-nation bloc and responded instead to US duties on cars and car parts and a 10% baseline tariff.

The package also covers chemicals, medical devices, electrical and precision equipment as well as agriculture and food products – a range of fruits and vegetables, along with wine, beer and spirits – valued at 6.35 billion euros. – Reuters

Cash remittances up 2.9% in May

Cash remittances coursed through banks increased by 2.9% to $2.658 billion in May, the Philippine central bank said. — REUTERS/DADO RUVIC/ILLUSTRATION

By Luisa Maria Jacinta C. Jocson, Senior Reporter

MONEY SENT HOME by overseas Filipino workers (OFWs) rose by an annual 2.9% in May, although the monthly haul was the lowest in 12 months, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Cash remittances coursed through banks jumped by 2.9% to $2.658 billion in May from $2.583 billion in the same month a year ago, the central bank said on Tuesday.

It was also the lowest level of monthly remittances in 12 months or since May 2024.

Overseas Filipinos’ Cash Remittances

May remittance growth also slowed from the 4% pace in April, when cash remittances reached $2.664 billion.

Money sent home by land-based workers went up by 2.8% to $2.12 billion in May from $2.06 billion in the same month a year ago.

Remittances from sea-based migrant workers jumped by an annual 3.1% to $536 million in May.

“The increase in cash remittances drove an increase in personal remittances as well,” the BSP said.

Personal remittances, which include inflows in kind, rose by 3% to $2.97 billion in May from $2.88 billion in the previous year.

Broken down, remittances from workers with contracts of a year or more increased by 2.8% to $2.29 billion, while those with contracts of less than a year jumped by 3.4% to $590 million.

FIVE-MONTH PERIOD
In the first five months, cash remittances grew by 3% to $13.77 billion from $13.37 billion in the comparable year-ago period.

This as remittances sent by land-based workers climbed by 3.3% to $10.94 billion in the January-May period, while sea-based workers’ remittances edged higher by 2% to $2.82 billion.

The United States was the top source of remittances in the five-month period, accounting for 40.2% of the total.

This was followed by Singapore (7.4%), Saudi Arabia (6.4%), Japan (5%), the United Kingdom (4.6%), the United Arab Emirates (4.2%), Canada (3.3%), Qatar (2.9%) Korea (2.8%) and Taiwan (2.7%).

Personal remittances increased by 3% to $15.34 billion at end-May from $14.89 billion a year prior.

“The slower global economy amid Trump’s tariffs could have slowed down OFW remittances volume recently,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., likewise noted the increased uncertainty due to tariffs.

“The tariff move adds to geopolitical and trade uncertainty, which may deter foreign direct investment (FDI),” he said.

US President Donald J. Trump first announced the initial round of tariffs it planned to impose on its trading partners in April.

Earlier this month, Mr. Trump sent out notices with the updated tariff rates it plans to impose.

“The imposition of a 20% tariff on all Philippine exports to the US starting Aug. 1, 2025 by President Trump is expected to have significant and multifaceted effects on the Philippine economy,” Mr. Ravelas added.

The Philippines was hit with a 20% reciprocal tariff, higher than the 17% announced in April.

“For the coming months, protectionist policies by Mr. Trump, particularly stricter immigration rules could weigh on some OFW remittances, especially from the US,” Mr. Ricafort said.

Mr. Trump has vowed mass deportations, which he says are needed after high levels of illegal immigration under his predecessor, Reuters reported.

Mr. Trump’s recently passed “One Big Beautiful Bill” also imposes a 1% excise tax on remittance transfers from the United States to other countries, effective after Dec. 31, 2025. This was lower than earlier proposals of a 3.5% levy.

The tax was also initially aimed at non-US citizens but now applies to any remittance sender.

“Trump’s threats of higher tariffs and other America-first policies could also slow down global trade, investments, employment including some OFW jobs, and overall world economic growth, thereby could also indirectly slow down the growth in OFW remittances,” Mr. Ricafort added.

This year, the central bank is projecting remittances to grow by 2.8%.

World Bank says job reforms to drive PHL growth to nearly 7%

People fill out application forms at a job fair in Valenzuela City, June 27, 2025. — PHILIPPINE STAR/MIGUEL DE GUZMAN

REFORMS to enhance job creation and quality could propel Philippine economic growth to close to 7% and transform it into a middle-class economy by 2040, the World Bank said.

“To stay on a path to upper middle-income status and to realize the national ambition of a middle-class society free of poverty by 2040, the country needs a new wave of reforms. Faster, broader, deeper,” World Bank Country Director for the Philippines, Malaysia, and Brunei Zafer Mustafaoğlu said.

In its maiden launch of the Country Growth and Jobs Report for the Philippines on Tuesday, the World Bank said that it is “feasible” for economic growth to accelerate to 6.8% by 2040, along with ramping up employment and wages.

“The implementation of the set of reforms recommended in this report is estimated to increase annual gross domestic product (GDP) growth to 6.8%, create over 5.1 million additional jobs, and boost real wages by 12.9% by 2040,” according to the report.

World Bank models show the Philippines growing by an additional 1.4 percentage points (ppts) if its recommended reforms are implemented.

Broken down, economic growth could increase by 0.78 ppt annually through reforms aimed at productivity and human capital; by 0.45 ppt through deeper capital reforms; and by 0.18 ppt by boosting labor force participation.

The report has about 45 actionable recommendations, with the reforms focused on those three main pillars.

The World Bank said reforms are needed to boost project infrastructure investment, especially in connectivity.

“In an archipelagic economy like the Philippines that has spent so much in connectivity infrastructure, keeping restrictions to inter-island transport, the form of cable path restrictions, is sort of a big distortion, a big cost,” World Bank lead economist for Brunei, Malaysia, the Philippines and Thailand Gonzalo J. Varela said.

“Lifting restrictions to inter-island shipping, domestic shipping, is something that is also going to help the economy grow, and a lot of the growth happens at local levels.”

The multilateral institution also recommended policies to lower entry barriers for businesses; open domestic shipping to lower inter-island transport costs; and strengthen service delivery by local government units.

“Ensuring that local governments have the capacity to deliver the key services that they are mandated to deliver is also going to be crucial,” Mr. Varela added.

To further mobilize private capital, there is also a need to support small and medium enterprises and multinational companies linkages and deepen capital markets.

“The Philippines has received more foreign direct investment in the last few years, and we are yet to see that small and medium enterprises are connecting to these multinationals, that they are gaining from that connection as suppliers, gaining productivity,” he said.

FASTER GROWTH
With these reforms implemented, growth can further accelerate. “What it does is it brings that baseline that we had estimated at 5.4%, closer to that Philippine Development Plan target,” Mr. Varela said.

“It means that if these reforms are implemented by 2040, the Philippine economy would be 24% larger than it would have been otherwise,” he added.

The government is targeting 5.5-6.5% GDP growth this year and 6-7% from 2026 to 2028, according to latest Development Budget Coordination Committee  estimates.

Under the Philippine Development Plan, the government had placed an upper bound of 8% on economic growth targets until 2028.

“To achieve its goal of becoming a middle-class society, the Philippines needs to sustain annual growth of 6-10% for decades,” the World Bank said.

It noted that though job quality remains a concern despite an increase in the number of jobs.

“Despite impressive gains, productivity growth remains weak. Job creation has tilted heavily toward non-tradable sectors, while the tradable economy — so critical for long-term growth and innovation, is shrinking,” Mr. Mustafaoğlu said.

“Top firms are not expanding fast enough. Competition is limited and too many workers remain in low-quality, low-wage jobs.”

The latest data from the local statistics agency showed the Philippines’ unemployment rate went down to 3.9% in May from 4.1% in April, with the number of individuals in the labor force hitting an all-time high of 52.32 million.

“The middle-class society by 2040 national ambition is not a utopia. It is something that is achievable if there is a commitment, both from the public sector to double down on reforms, and from the private sector to innovate and compete,” Mr. Varela said.

Based on the World Bank’s latest income classification, the Philippines still remains a lower middle-income economy, narrowly missing the threshold to achieve upper middle-income status.

The Philippines posted a record gross national income per capita of $4,470, only $26 shy of the World Bank’s upper middle-income threshold of $4,496-$13,935.

ARTIFICIAL INTELLIGENCE
Meanwhile, the World Bank also flagged the impact of disruptive technologies such as artificial intelligence (AI).

“Some jobs in the Philippines are at risk of technology displacement. AI exposure and AI’s potential complementarity can affect employment. The Philippines has slightly fewer jobs comprising routine tasks than its peers,” according to the report.

“However, the Philippines is more exposed to AI’s displacement effect than other East Asia and the Pacific countries due to its higher engagement in cognitive services sectors, such as contact centers in the IT-BPO sector.”

Mr. Varela said these technologies are “fast moving” and so far, they have yet to see displacement in the implementation of AI.

“At the moment, that is not yet happening. The sector is looking at it very carefully, but neither in the Philippines nor in other countries that have a large share of the economy and productivity, we see that these are at the moment being displaced.”

“What AI will do is it will create new jobs, similar to what we saw with other technological changes that created some new jobs and displaced others.”

Mr. Varela said it will be crucial to have labor market institutions that facilitate the movement of people across sectors and activities.

“It’s also having the skills to do that. So, there’s an agenda on skilling and upskilling workers… science, technology, engineering, mathematics, are also going to be increasingly important with AI.”

Mr. Mustafaoğlu said that there is a “very good opportunity” for the Philippines to benefit from the shift to AI.

“It has a young population, and things are happening a lot in the case of Asia and the East Asia region. If we can take that opportunity to actually benefit from this new development of AI and integrate AI and technologies in a way that firms increase their capability… and the economy continues to benefit and grow.”

“That will also attract FDI (foreign direct investment), because when you have those capabilities, foreign firms will also come and invest here with new technologies,” he added. — Luisa Maria Jacinta C. Jocson

Marcos greenlights record P6.8-T 2026 budget

President Ferdinand R. Marcos, Jr. has approved the proposed P6.793-trillion national budget for 2026. — NOEL B. PABALATE/PPA POOL

By Chloe Mari A. Hufana, Reporter

PHILIPPINE President Ferdinand R. Marcos, Jr. on Tuesday approved the proposed P6.793-trillion national budget for 2026 that the Executive branch will submit to Congress later this month.

The national expenditure program (NEP) reflects the government’s commitment to boosting education and driving inclusive economic growth, Palace Press Officer Clarissa A. Castro told a news briefing.

The Department of Budget and Management (DBM) said in a separate statement on Tuesday that the proposed 2026 budget is higher by 7.4% from this year’s budget of P6.326 trillion.

The proposed P6.793-trillion budget is equivalent to 22% of the country’s gross domestic product (GDP). Economic managers are targeting 6-7% GDP growth for 2026 through 2028.

The 2026 NEP is expected to be submitted to Congress within 30 days after the opening of the regular session on July 28.

Budget Secretary Amenah F. Pangandaman said the details of the budget proposal are still being finalized.

Allocations for key sectors, such as education, defense, and agriculture, will increase for next year, she said in a Viber message.

“The President himself sat down with the different agencies to ensure that all our priorities are aligned towards our common goal of achieving our vision of a Bagong Pilipinas,” Ms. Pangandaman said in a separate statement.

The DBM said that it had initially received budget proposals totaling P10.101 trillion but had to cut these due to “limited fiscal space and the fiscal consolidation strategy.”

The DBM said it had considered budget submissions based on several criteria: alignment with the Philippine Development Plan 2023-2028; “shovel-readiness”; absorptive capacity of agencies; and prioritization of programs that deliver the “highest value and impact.” It also took into consideration the implementation of sustainable practices and the government’s fiscal space when evaluating the proposals.

The Marcos administration is targeting to gradually cut the fiscal deficit from 5.5% of GDP in 2025 to 4.3% by 2028.

By expense class, the DBM said the largest share of next year’s proposed budget will go to maintenance and other operating expenses at P2.639 trillion to support the implementation of government programs and projects.

Personnel services expenditures will increase by 16.8% to P1.908 trillion next year, representing 28.1% of the proposed NEP. This covers salaries, benefits, and the creation and filling of government positions.

Only P1.296 trillion will be allotted for capital outlays to fund priority infrastructure projects. Financial expenses will receive P950 billion to cover government financial obligations.

Of the total budget, National Government agencies will receive P4.305 trillion (63.4%) while local government units will get P1.35 trillion (20%). Government-owned or -controlled corporations (GOCCs) will be allocated P188.3 billion in subsidies or equity support as well as net lending assistance.

Reinielle Matt M. Erece, an economist at Oikonomia Advisory and Research, Inc., said an ample national budget can drive economic growth.

“This is as the government plays a role in empowering households through assistance and development programs as well as in developing infrastructure to support productivity,” he said via Viber.

However, Mr. Erece noted the impact of an increasing budget would depend if it increases productivity.

“If it does, we may expect debt burden to slowly go down as better economic conditions may also result in higher tax revenues if businesses and households are earning well,” he said.

“In addition, reducing red tape and improving government efficiency are ways for the government to reduce costs and needed borrowings and be able to focus more on developmental and social programs.”

Jose Enrique “Sonny” A. Africa, executive director of economic think tank IBON Foundation, said the 7.4% increase in the proposed 2026 NEP is “too small for the bold response needed in the face of the continuing domestic economic slowdown and mounting global turmoil.”

“The government has to spend more and on the right things for the stability that really matters in agriculture, Filipino industry, and social services for all those in need,” he said in a Viber chat.

“A narrow-minded avoidance of progressive taxes places the burden of fiscal consolidation on the poor and middle-class through higher consumption taxes and inadequate social services, made worse by spending skewed towards pork barrel projects, inappropriate infrastructure, and bloating debt service.”

BSP preparing new guidelines for smaller ‘digital-centric’ banks

BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) is planning to issue a draft circular within the year to establish guidelines to assess the “digital centricity” of smaller banks.

“We just want to provide a level playing field because there are digital banks, and there are also digital-centric conventional banks. So, we need to level the playing field, that’s why we also would require some more capital from those doing the work. So, the guidelines will also be issued for that,” BSP Deputy Governor Chuchi G. Fonacier told reporters on Tuesday.

She added the draft circular could be released within the next few months.

The circular will set the regulatory requirements for thrift banks, rural banks, and cooperative banks to be in line with those of digital banks through a “phased” implementation, she said in a speech at the Chamber of Thrift Banks (CTB) Convention 2025.

Ms. Fonacier said the circular will “ensure proportionate application of prudential requirements applicable to a digital bank, as determined by the BSP.”

“It still is for consideration by the Monetary Board, so we’re still currently drafting,” Ms. Fonacier said.

CTB President and CARD SME Bank Vice Chairperson Mary Jane A. Perreras said the thrift banking industry still needs to beef up its financial position before its members are ready to increase their capital to the same level as digital banks.

“There is a difference between digital banks and thrift banks. Digital banks can go without the brick-and-mortar branches because they are digital. So, their cost is maybe much smaller than traditional banks,” she told reporters.

Ms. Perreras said she is hopeful the industry will be able to digitalize by next year.

The minimum capital requirement for digital banks is currently set at P1 billion.

For thrift banks, they need to have at least P1 billion in capital if their head office is in Metro Manila, P500 million for those in Cebu and Davao, and P250 million for those in other areas.

Rural banks need to have a capital of P50 million to P200 million depending on the number of branches, while cooperative banks need to have a capital of P10 million.

“We have to digitalize to be able to come up with better, innovative products for our customers,” Ms. Perreras said.

Asked if most of the industry is financially ready to go digital, she said: “They are preparing. But you can’t say that they are fully prepared.”

The BSP has been closely monitoring entities operating like a digital bank or those that have a digital-centric model, even approaching some players to apply for the appropriate license after the moratorium on digital banking licenses was lifted at the start of this year.

The central bank in January lifted a three-year moratorium on digital banking licenses, allowing four more players to operate in the country from the current six.

Meanwhile, Ms. Fonacier said the central bank is still planning to release the guidelines on the ethical use of artificial intelligence (AI) in the financial sector.

It was initially supposed to be released in the first half, but Ms. Fonacier said the central bank still needs to do more research on best practices.

“This will cover key areas such as ethical AI deployment, continuous improvement in AI’s accuracy when making financial decisions, and rigorous management of algorithmic bias,” she said. — Aaron Michael C. Sy

CA orders ERC to act on SMGP’s price adjustment plea

SAN MIGUEL GLOBAL POWER

THE COURT OF APPEALS (CA) has directed the Energy Regulatory Commission (ERC) to act on the request for price adjustments filed by San Miguel Global Power Holdings Corp. (SMGP) in 2022.

In a disclosure to the Philippine Dealing & Exchange Corp. on Monday, SMGP said it had received a copy of a CA resolution dated June 27, which partially granted the joint motions for price adjustments filed by the company’s affiliate and subsidiary, South Premiere Power Corp. (SPPC) and Sual Power, Inc. (SPI), respectively.

SPI was formerly known as San Miguel Energy Corp. SMGP did not release a copy of the resolution but quoted a portion of it.

“The Energy Regulatory Commission is directed to immediately implement our decision dated June 27, 2023 and, without further delay, act on the motions and make the necessary computation and breakdown of the appropriate amount for payments to petitioners… pursuant to their joint motions for price adjustments with Manila Electric Company (Meralco),” the decision read.

The appellate court also ordered the ERC to submit proof of its compliance with the resolution within 30 days of notice.

The case stemmed from the joint motions filed in 2022 by SPPC and SPI with Meralco, seeking temporary price adjustments under their 2019 power supply agreements (PSAs) to recover higher fuel costs due to “a change in circumstances.”

In August 2022, SMGP sought relief from the ERC to recover part of P15 billion in losses suffered by the units.

The ERC initially denied the petitions, citing the fixed-rate nature of the PSAs. SPPC and SPI then elevated the matter to the CA, which reversed the ERC’s ruling on June 27, 2023, citing “grave abuse of discretion.”

Asked for comment, ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said they had yet to receive a copy of the resolution.

In a March interview, Ms. Dimalanta said SMGP’s units had filed two motions claiming a total of P34 billion in incremental fuel costs.

The CA ruling follows the Supreme Court’s final decision last year denying the ERC’s motion for reconsideration and upholding the price adjustments sought by SMGP’s units.

SMGP, the power arm of conglomerate San Miguel Corp., maintains a diversified energy portfolio across conventional and renewable sources.

The conglomerate led the country’s power generation sector in 2024, accounting for 22.44% of the national grid. — Sheldeen Joy Talavera

From art to fashion to film: Ortigas Art Fest has it all at GH Mall

PAINTINGS by Raul Roco, Jr., exhibited at the East Wing Atrium. — BRONTË H. LACSAMANA

THE Ortigas Art Festival (OAF) is back to bring art to a wider audience, mounting its exhibits for the first time in GH Mall, Greenhills, San Juan City.

The festival’s 8th edition runs until July 24 at the east and south wings of GH Mall, featuring paintings, sculptures, photographs, fashion showcases, film screenings, and dance performances, as well as a wide range of educational workshops.

“Our mission has always been to bring art closer to people and people closer to art. ‘Art for all’ is our guiding principle,” Renato R. Habulan, OAF head curator, said at the festival’s opening on July 10.

“We believe that by making art more accessible, we’re helping artists grow, helping communities connect, and creating meaningful cultural experiences for everyone,” he added. “We think Greenhills is a great venue for this.”

Helen Mirasol, OAF’s founding consultant, explained that their journey over the past eight years has been one marked by expansion and inclusivity.

“Besides being free to both exhibitors and the viewing public, this festival has been innovative. Every year saw additions until we became the multifaceted festival that we are today,” she said.

This year, OAF occupies multiple venues inside GH Mall: the East Wing Atrium, the South Wing Atrium, the fourth floor Tech Hub, and the Promenade Cinema.

Some notable exhibits include those of Totong Francisco, grandson of National Artist Carlos “Botong” Francisco, and of Raul Roco, Jr., son of the late Senator Raul Roco, Sr. Also on view is a fashion design exhibit by designer Chynna Mamawal, and a photo exhibit bringing together photos by Born in Film, Redlab, and many more.

The East Wing Atrium has works from Angono artists, the Linangan Art Residency, the Ortigas Foundation, the San Juan Artists, Shine Vitto Galerie from Mindoro, and Pasig City artists.

The South Wing Atrium showcases exhibits by galleries like Art Circle, Art Point, Jean & Jaz Gallerie, and Nami Art, spanning paintings, mixed media, and analog photography.

Up at the Tech Hub, mallgoers can join workshops, artist talks, forums, and pop-ups. Some events lined up include a Watercolor Pop-Up Art Fair by the Philippine Guild of Watercolorists and a talk by Linangan’s Manny Garibay.

Meanwhile, the Promenade Cinema is screening acclaimed Filipino films for free, in collaboration with the Film Development Council of the Philippines (FDCP). An upcoming screening to catch is Thy Womb on July 18 at 7 p.m.

Finally, The Learning Tree, Halili School of Dance, and UPeepz bring the rhythm and grace of movement to the Atrium stage.

The Ortigas Art Festival runs until July 24 at GH Mall, Greenhills, San Juan City. Admission is free. For the full festival schedule, follow the Ortigas Art Festival on Facebook or visit ortigasmalls.com. — Brontë H. Lacsamana

Pru Life UK named International Life Insurer of the Year-Philippines at the 2025 Insurance Asia Awards

Pru Life UK Head of Brand & Integrated Marketing Communications Kathryn Cajucom (middle) and Assistant Manager for Corporate Communications Lalaine Almazan (right) received the International Life Insurer of the Year-Philippines recognition from Insurance Asia Awards.

Pru Life UK has claimed its fifth straight victory as International Life Insurer of the Year – Philippines at the recent 2025 Insurance Asia Awards, once again proving its reputation as a leading insurer in the country.

The Insurance Asia Awards is the premier awards programme for the insurance sector in Asia Pacific. It aims to celebrate and honour the region’s most outstanding insurance companies for their innovation and significant impact on customers’ lives.

“Winning the International Life Insurer of the Year – Philippines title for the fifth consecutive year is a testament to our dedication to excellence and inclusive growth. Over the past year, Pru Life UK has continued its focus on improving our business performance, while also empowering and accelerating value for our employees, customers, shareholders and communities,” said Kathryn Cajucom, Vice President and Head of Brand and Integrated Marketing Communications.

Maintaining customer trust

Pru Life UK attributes its recent victory to the unwavering support of its customers and partners. Throughout the years, the company has rolled out various initiatives to strengthen financial inclusion and to innovate its services to meet their needs.

These include extending financial protection to all Filipino communities—regardless of faith, background, or income—with PRUTerm Lindungi, Pru Life UK’s first life protection plan in the Philippines that is compliant with Islamic laws. The company’s expanded Madrasah initiatives have also provided more Filipinos access to its tailored solutions for diverse cultural and religious needs.

In addition, Pru Life UK introduced easy and secure cashless payment options to allow a more seamless and convenient experience for its customers. Its PRULink Global Tech Navigator Fund enables customers to participate in dynamic growth opportunities within the global technology sector.

“These initiatives play an important role in our growth. To date, we have insured over two million lives,” said Cajucom.

Keeping employees delighted

Fostering employee well-being and development is also among Pru Life UK’s key priorities.

In the past year, the company opened the PRUHouse head office, aimed at enhancing collaboration and promoting a customer-centric culture.

“Our people remain our greatest asset. In the past year, we have also reinforced our commitment to employee welfare through well-being initiatives and career development support, ensuring that our workforce remains motivated, resilient, and equipped to meet future challenges,” said Cajucom.

Pru Life UK has grown its workforce to more than 40,000 dedicated professionals and expanded its network to over 200 branches and general agencies nationwide.

Cultivating a sustainable future

On the sustainability side, Pru Life UK has stepped up its climate resilience approach. As part of this effort, it launched learning sessions and a comic book that highlights the impact of climate change on Filipinos’ mental health and financial resilience.

“We recognise that sustainable growth requires collective action, and we will continue to collaborate with partners, communities, and stakeholders to protect the planet and make a positive difference for generations to come,” said Cajucom.

“Once again, we are grateful to Insurance Asia Awards for this honour. We will use this accomplishment as an inspiration to continue delivering impactful work that empowers Filipinos,” added Cajucom. 

 

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MPTC eyes September start for Vietnam expressway expansion

HANOI HIGHWAY BOT STATION — BW FILE PHOTO

METRO PACIFIC Tollways Corp. (MPTC), through CII Bridges and Roads Investments Joint Stock Co. (CII), is targeting to begin the expansion of the nearly $1.6-billion Ho Chi Minh City – Trung Luong – My Thuan Expressway by September, a company official said.

“These types of projects are typically subject to competitive bidding; the government has chosen to accelerate progress and intends to appoint CII directly as the investor,” CII Director of Capital Management Le Trung Hieu said during a briefing on Tuesday.

The project is set to cover about 96 kilometers of expressway linking Ho Chi Minh City to My Thuan via Trung Luong, according to the company, which cited the toll road as a key infrastructure project aimed at boosting transport connectivity in southern Vietnam.

The project also includes additional works on the northern segment of the My Thuan 2 Bridge in Tien Giang Province.

The majority of the project’s capital expenditure (capex) will be disbursed between 2026 and 2028, Mr. Hieu said, adding that this year’s allocation will fund site preparation and initial works.

“We don’t need a lot of capex this year — just enough to kickstart the project,” he said.

MPTC, the tollway arm of Metro Pacific Investments Corp. (MPIC), holds a 45% stake in CII, which has been tapped to directly implement the 39.8-trillion Vietnamese dong (VND), or about $1.53-billion, second phase of the expressway, following a special directive from the Vietnamese government to expedite project development.

CII said the expansion project is considered a Group A special-level road transport facility, which includes an estimated VND 23.5 trillion in construction and equipment costs, VND 4.4 trillion for land clearance, and VND 4.8 trillion in loan interest during construction.

CII is funding the project through a capital structure composed of 15% equity and 85% loans, with an average loan interest rate of 10.75% per year.

MPTC’s involvement in CII is part of the company’s ambition to expand its toll road assets overseas.

MPIC is one of three key Philippine subsidiaries of Hong Kong-based First Pacific Co. Ltd., alongside Philex Mining Corp. and PLDT Inc.

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

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