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US tariff letter still pending; Go tapped to make announcement

Office of the Special Assistant to the President for Investment and Economic Affairs Secretary Frederick D. Go — PHILIPPINE STAR/KRIZ JOHN ROSALES

THE PHILIPPINES continues to await its own tariff letter from the US after Washington announced rates for many Asian neighbors, the Palace said, adding that Secretary Frederick D. Go will make the announcement when Washington notifies Manila.

“There is still (no tariff rate),” Palace Press Officer Clarissa A. Castro told reporters at a briefing, in response to a query about a tariff letter from Washington.

She said Mr. Go, the special assistant to the President for investment and economic affairs will explain the deal negotiated with the US once the letter arrives.

“Once there is a letter, (Mr. Go) will make the announcement and explain it to the media,” Ms. Castro added.

Many regional neighbors have received tariff letters from Washington, notifying them of their negotiated tariff rate, many of which were little changed from the initial reciprocal tariffs announced in early April.

Trade negotiations with Washington, in which Mr. Go served as the co-leader of the Philippine delegation, are subject to a confidentiality agreement.

US President Donald J. Trump sent out tariff letters to Japan and South Korea earlier this week, announcing both their rates on social media as 25%. He also sent similar letters to Myanmar (40%), Laos (40%), Indonesia (32%), Malaysia (25%), and Thailand (36%).

On April 2, the White House initially announced “reciprocal” tariffs of 24% on Japan, 25% on South Korea, 44% on Myanmar, 48% on Laos, 36% on Thailand, 32% on Indonesia and 24% on Malaysia. The Philippines had initially been assigned a rate of 17%.

The reciprocal tariffs were suspended pending negotiations with various trade delegations, while a 10% tariff was applied in the interim to most trading partners, including the Philippines.

Vietnam has since been assigned 20% as one of the first two countries to conclude a trade deal with the US, alongside the UK.

Mr. Trump said changes to the tariffs charged on trading partners take effect on Aug. 1, though he was open to further negotiations. — Chloe Mari A. Hufana

PHL ‘stands to benefit’ after US barely budges on region’s tariffs

By Justine Irish D. Tabile, Reporter

THE PHILIPPINES may benefit from the tariffs the US announced on Monday for some Asian trading partners, with Manila possibly being treated more favorably when its own tariff rate is announced, ING said.

“President Trump’s new tariffs are higher than expected for most Asian economies. Moreover, most countries will face additional tariff rates on transshipments,” Deepali Bhargava, ING regional head of Research for the Asia-Pacific, said in a note issued on July 8.

“The new announcements are silent on Singapore, India, and the Philippines, which might stand to benefit from tariff concessions if negotiations progress favorably,” it added.

On Monday, US President Donald J. Trump said the US sent letters to 14 countries regarding their updated tariff rates, which will take effect on Aug. 1.

These are Japan (25%), South Korea (25%), South Africa (30%), Kazakhstan (25%), Laos (40%), Malaysia (25%), Myanmar (40%), Tunisia (25%), Bosnia and Herzegovina (30%), Indonesia (32%), Bangladesh (35%), Serbia (35%), Cambodia (36%), and Thailand (36%).

“While there is some respite in terms of reciprocal tariffs being pushed out by about three weeks, most countries are now facing higher or similar rates than those announced on Liberation Day,” ING said, referring to the reciprocal tariffs initially announced in Washington in early April.

ING noted that only three of the countries covered in the latest announcement received lower tariffs compared to Liberation Day levels. Many of them range from 35-40%, against the 20% Vietnamese goods are set to be charged after it became one of only two countries to conclude an early trade deal, the other being the UK.

“These tariffs may reflect Trump’s growing frustration with stalled negotiations with certain countries like Japan, South Korea, Thailand, and Malaysia, which all received a higher or unchanged tariff rate,” ING said.

ING sees the announcement as a signal of a broader strategy targeting Asia’s trade links with China.

“The letters indicate that transhipped goods will be subject to higher tariffs, but there’s no mention of the rate that’ll be applied,” it said.

“Interestingly, countries like India, Singapore, and the Philippines, which are not on the new tariff list, may be closer to finalizing trade deals with the US, potentially giving them a competitive edge,” it added.

According to ING, the Philippines’ tariff concessions from the US will be key to growth of its electronics exports, noting that the US accounted for 17% of its total exports last year.

“A significant portion — about 53% — of these exports are electronic products, a sector in which the Philippines competes directly with countries like Vietnam and India for US market share,” ING said.

“Given this context, any reduction or concession on the current 17% reciprocal tariff rate would give the Philippines a competitive edge, particularly in electronics, and strengthen its position against regional peers,” it added.

Asked to comment, Semiconductor and Electronics Industries in the Philippines Foundation, Inc. President Danilo C. Lachica said: “Most of our neighbors have higher reciprocal tariffs except for Singapore at 10%.”

Last month, he said semiconductor and electronics exports have been improving and may match 2023 levels, to about $46 billion by year’s end.

In the first five months, electronics exports increased 0.9% to $17.798 billion, according to preliminary data from the Philippine Statistics Authority.

Electronics Industry Association of the Philippines President Earl Lawrence S. Qua said even though the higher rates imposed on other countries in the region could give the Philippines a competitive edge, the 20% rate Vietnam received from the US remains a concern.

“The bigger the delta is between the Philippines and Vietnam, the better. Vietnam is the country we are compared to the most,” he said via Viber.

When it concluded its trade deal, Vietnam’s 20% rate was much lower than the initial 46% announced in April.

The US-Vietnam deal also set a 40% tariff on transshipped goods, reflecting the use of Vietnam as a point of origin by Chinese manufacturers.

Foreign Buyers Association of the Philippines President Robert M. Young said that if the Philippines is able to secure a tariff lower than its competitors, it will help attract investment from countries with higher tariffs.

“This is a plus point for the Philippines, not so much in selling price competition (as the Philippines will still be on the higher price level), but more on the possibilities of these economies relocating their production to the Philippines, thus creating jobs and livelihood,” he said.

He added that a low US tariff could serve as a “growth engine” for many ailing industries.

Asked which other sectors could benefit from lower tariffs, he said, “other manufactured products that need to import most of their raw materials… needing more advanced machinery and more technology.”

“The food sector can benefit as well, I think … Textiles and wearables will have a breather if we stay at 10%. But with a 17% tariff, it will be uphill to compete,” he said.

After the tariffs announced in early April were suspended, most trading partners were assigned a provisional 10% tariff pending the outcome of negotiations.

“Cambodia and Bangladesh have lower costs than Vietnam. Therefore, we can see that even with their tariffs of 36% and 35%, it remains a challenge for us,” he added.

Zambales, Pangasinan set for hydrogen resource exploration

DOE

THE Department of Energy (DoE) said sites in Zambales and Pangasinan have been designated for possible hydrogen exploration, pending the President’s approval for the award of the first service contracts.

At a briefing on Wednesday, Demujin F. Antiporda, assistant director at the DoE’s Energy Resource Development Bureau, announced plans for initial surveys of two pre-determined areas (PDAs).

The surveys will generate baseline geological and environmental data to guide explorers.

“By screening these areas, the survey will help guide service contractors in prioritizing locations for more comprehensive exploration,” Mr. Antiporda said. “In essence, it lays the groundwork for what approaches to take in the pursuit of developing clean and sustainable energy resources.”

He said the surveys will seek to detect surface indicators like hot springs, ophelitic rocks, and permeations associated with natural hydrogen generation.

“The DoE aims to reduce exploration risks, streamline technical studies, and ensure alignment with safety and environmental standards,” Mr. Antiporda said.

The DoE considers hydrogen a clean alternative fuel that can be used as an energy carrier to store, move, and deliver energy from other sources.

The DoE’s technical team conducted field assessments of the Mangatarem Hot Spring in Pangasinan, and the Botolan Hot Spring and the Nagsasa Seeps in Zambales.

The survey also seeks to support ongoing research by the Philippine Nuclear Research Institute (PNRI), which identified San Antonio, Zambales as having “the highest natural hydrogen gas seep ever recorded.”

The PNRI study found that the Nagsasa seep in San Antonio, Zambales emits over 800 tons of natural hydrogen annually, with the potential for even greater subsurface reserves.

The two PDAs were part of the 2024 Philippine Bid Round, covering an estimated 134,096 hectares and 96,439 hectares, respectively.

“The Philippines is the first country to introduce a policy framework for the exploration of native hydrogen,” Mr. Antiporda said.

“(The service contracts are with) the Office of the President right now, and we are in constant communication with them regarding all the requirements,” he said.

Meanwhile, the DoE said it will conduct training on native hydrogen exploration, a specialized course for technical participants, later this year.

“We also want to build the country’s technical capacity to explore and develop (our own) energy resources,” Mr. Antiporda said. “This means equipping our scientists, engineers, and technical personnel with the skills, tools, and training needed to conduct advanced research and fieldwork in emerging energy frontiers such as the native hydrogen.” — Sheldeen Joy Talavera

Organic pesticide developed by D&L unit approved for cocolisap

PHILSTAR FILE PHOTO

THE Philippine Coconut Authority (PCA) said it approved the use of a domestically developed organic pesticide against the Coconut Scale Insect, also known as cocolisap.

Chemrez Technologies, Inc., said its CropGuard spray offers an alternative to the trunk injection of systemic insecticides, particularly neonicotinoids.

“While effective in the short term, trunk injection entails significant risks, including long-term tree damage, disruption of beneficial insects, and potential chemical residues in coconut products,” according to Chemrez, a unit of D&L Industries.

It noted that the use of trunk-injected synthetic pesticides may invalidate the organic certification of coconut farms.

“This not only disqualifies farmers from accessing the premium organic market but also jeopardizes livelihoods and disrupts entire rural economies that depend on organic coconut production for income, sustenance, and export revenue.”

The PCA said that as of May 30, 516,962 coconut trees were affected by cocolisap in the Calabarzon, Bicol, Western Visayas, Eastern Visayas, Zamboanga Peninsula, Northern Mindanao, Caraga, and Bangsamoro regions.

In tests conducted in collaboration with the PCA and the University of the Philippines-Los Baños, Chemrez said CropGuard is recommended for two sprays 15 days apart.

“CropGuard also acts as an insect repellent, discouraging feeding and egg deposition,” it said. — Kyle Aristophere T. Atienza

Council announces seizure of smuggled rice in Talisay, Cebu

BUREAU OF CUSTOMS FACEBOOK PAGE

THE Anti-Agricultural Economic Sabotage (AAES) Council said 20,526 sacks of smuggled rice valued at P38 million have been apprehended in Talisay City, Cebu.

The council said its enforcement group had inspected warehouses at a site known as the Kimba compound on suspicion of containing smuggled agricultural products in violation of the AAES Law.

On June 20, the group discovered that the area occupied by River Valley Distribution, Inc. (RVDI) contained substantial stocks of rice.

“The RVDI failed to account for about 20,526 sacks weighing approximately 863,345 kilos with an estimated value of P38 million,” the council said in a statement on Wednesday.

As such, the Court of Tax Appeals issued a seizure order on July 8.

“The goods were inspected, examined, and found to be illegal,” according to the AAES Council Chairman, Secretary Frederick D. Go.

“This decisive action sends a strong and clear message to economic saboteurs: the government stands united and shall be relentless in its efforts against such illegal activities,” according to Mr. Go, who is also a senior presidential economic adviser.

According to the council, the Department of Justice’s Special Team of Prosecutors is planning to file economic sabotage charges in connection with the Cebu operation.

“This operation underscores President Ferdinand R. Marcos, Jr.’s strong commitment to safeguarding food security and upholding the rule of law,” it added. — Justine Irish D. Tabile

LGUs ordered to develop coastal ‘greenbelt’ zones

Volunteers from JCI Davaoeña Daba-Daba — a leadership organization of young Davaoeña achievers and active citizens — are immersed in mangrove planting at the Aboitiz Cleanergy Park.

THE Department of Interior and Local Government (DILG) has issued a memorandum directing local government units (LGUs) to create or rehabilitate coastal greenbelt zones.

In a memorandum circular, the DILG said LGUs are in the best position to implement localized strategies to establish and manage coastal greenbelts as “frontliners in disaster risk reduction and climate adaptation.”

LGUs were tasked with assessing areas that can be declared coastal greenbelt zones and working with civil society groups in rehabilitation plans.

Coastal towns should lead to the removal of illegal structures within easement areas, according to the circular.

Coastal greenbelt zones are natural or planted strips of mangrove and beach forest vegetation. They serve as the first line of defense against coastal hazards, according to Oceana Philippines.

“The necessary tools and frameworks are now in place, and it is up to those on the frontlines to implement them,” Oceana Philippines Vice-President Rose-Liza Eisma Osorio said. — Kyle Aristophere T. Atienza

CAB seeks expanded air deal with Australia

REUTERS

THE PHILIPPINES is seeking to expand its bilateral air service agreement with Australia, the Civil Aeronautics Board (CAB) said.

CAB Executive Director Carmelo L. Arcilla said the Philippines has requested to double its current seat allocation to 60,000.

Mr. Arcilla said the air talks between the Philippines and Australia are scheduled for Friday.

The Department of Transportation has said it is working to expand air service agreements with Australia, the US, Thailand, the UK, Uzbekistan, Qatar, Ethiopia, India, Oman and the Seychelles.

The government plans to expand airline operations and serve new destinations in response to growing travel demand.

Last year, budget carrier Cebu Pacific put Australia on its wish list for a possible air service agreement expansion due to strong demand.

Cebu Pacific has said that seat entitlements to Australia are fully allocated among the Philippine carriers, hindering airlines from expanding services to Sydney, Melbourne, Perth, and Brisbane.

Both Cebu Pacific and flag carrier Philippine Airlines operate flights to Australia.

The CAB said in June that it is also working on code-sharing agreements with South Korean and Japanese carriers to expand connectivity between Manila and the US.

A third-country code-sharing agreement involves carriers in two countries selling flights on a third country’s airline.

It is also working to obtain a third-country code-sharing agreement with Japan to make it possible for US airlines to operate in the Philippines. — Ashley Erika O. Jose

DEPDev calls 10% tariff positive outcome, but sees retention of 5-6% as best case

DEPDEV.GOV.PH

A 10% US tariff for the Philippines will be a “good scenario,” though an even better one where the US charged some Philippine goods even lower rates would be the best case, the Department of Economy, Planning and Development (DEPDev) said.

“Right now, it’s a 10% rate for all. If that is retained, that will still be a good scenario for us. But if we can go back to the previous one where we were enjoying 5 to 6%, then of course that would be best,” Undersecretary for Policy and Planning Rosemarie G. Edillion told reporters Wednesday.

The Philippines had been assigned a 17% tariff on April 2, though the US has since suspended the “reciprocal tariff” pending negotiations. In the interim, a 10% rate applies to most trading partners.

On Monday, US President Donald J. Trump started sending tariff letters to 14 countries, with the new rates taking effect on Aug. 1.

Japan and South Korea were assigned tariffs of 25%. Also notified were Myanmar (40%), Laos (40%), Indonesia (32%), and Malaysia (25%)

Ms. Edillion said it is “difficult to ascertain” the new Philippine rate after mixed results for Asian trading partners in the initial round of tariff letters.

“We have determined that there will be a small net gain for us (at the 17% reciprocal tariff),” she said. We hope (the new rate) will still be favorable.”

Vietnam has since concluded a trade deal at a  20% tariff, making it one of two countries to conclude a trade deal with the US, the other one being the UK.

Palace Press Officer Clarissa A. Castro has described the Philippine position in tariff negotiations as “good.” — Aubrey Rose A. Inosante

PCC considering changes to divestment rules

THE Philippine Competition Commission (PCC) said it is considering new guidelines for parties required to divest holdings in competition rulings, as well as the system of overseeing compliance with such orders.

“These guidelines will provide stakeholders with clear and substantive guidance in situations where structural remedies and independent trustees overseeing compliance may be critical during the negotiation and implementation stages,” the PCC said in its 2024 Annual Report.

“These efforts will build on the PCC’s Guidelines on Merger Remedies, which were published in 2024, and are aimed at ensuring transparency and effectiveness in resolving competition concerns,” it added.

In 2024, the PCC Mergers and Acquisitions Office (MAO) received 29 notifications with a combined transaction value of over P809 billion, of which 17 were approved.

“The sectors with the most transactions included transportation and storage, financial and insurance services, electricity, gas, steam, and air-conditioning supply, and wholesale and retail trade (including repair of motor vehicles and motorcycles),” the PCC said.

According to the report, the MAO received six notifications from the transportation and storage sector worth P66.519 billion and six from the financial and insurance sector worth P63.046 billion.

Five notifications emerged from the electricity, gas, steam, and air-conditioning supply sector worth P194.78 billion and four from wholesale and retail trade worth P120.329 billion.

There were also three notifications from the information and communication sector worth P248.913 billion and three from real estate activities valued at P34.158 billion.

Meanwhile, one notification each emerged from the mining and education sectors valued at P67.35 billion and P14.017 billion, respectively.

Since 2016, the PCC has received 317 notifications involving a combined transaction value of P6.659 trillion.

The PCC is also planning to revise and update its rules on expedited merger review as the moratorium on the acceptance of notifications under expedited review draws to a close.

“The revised rules will allow the PCC to expedite reviews of certain transactions with minimal competitive risks, ensuring the efficient use of its resources while maintaining rigorous oversight of more complex cases,” the PCC said.

The commission is also looking at the introduction of fees for certain services provided by the MAO “to optimize the allocation of the agency’s limited resources.” — Justine Irish D. Tabile

Input VAT refund developments under CREATE MORE

The CREATE MORE Act ushered in changes to certain documentary requirements for VAT refund claims. Beyond compliance lies a jungle of possibilities and challenges — where does your business stand? Dive into this article to uncover recent updates and explore the intricacies of securing VAT refunds amidst a sea of change.

CREATE MORE has generally adopted the same standards from the old VAT refund laws, including the following: 1. the grant or decision should be made within 90 days from the date of the submission of the application, and 2. the application will be subject to a risk assessment. However, it also introduced a new recourse for denied VAT refund claims — request for reconsideration prior to proceeding to judicial appeal, i.e., filing with the Court of Tax Appeals.

With respect to supporting documents, CREATE MORE also codified that certified true copies (CTC) of invoices, receipts, and other documents required under the rules can now be submitted to support the taxpayer’s claim — a welcome development as this gives claimants more flexibility, as opposed to the previous rules which required the submission of original documents. Moreover, VAT zero-rating will apply to the sale of goods and services to an export-oriented enterprise (EOE) whose export sales are at least 70% of the total annual production of the preceding year.

As such, Revenue Memorandum Circular (RMC) 37-2025 was issued to clarify the amendments. It includes new checklists for claiming a VAT refund pursuant to Section 112(a) of the Tax Code for: (1) claims covering the period prior to April 1, 2025; and (2) those covering taxable period starting April 1, 2025.

For claims covering the period prior to April 1, 2025, the requirements generally remain the same save for some minor changes and added requirements: adjustments to the new Annexes numbers, flexibility to submit CTCs of the invoices or receipts; GIS of the claimant must again be submitted but the Articles of Incorporation and By-laws/DTI registration are no longer required; and if applicable, the Certificate of Accreditation issued by the Department of Energy (DoE) for manufacturers, fabricators, and suppliers of renewable energy.

For claims covering taxable periods starting April 1, 2025, the following new requirements are included:

(1) If the sales from the preceding year do not meet the 70% threshold, a copy of the notification from the Export Marketing Bureau (EMB) and a certified copy of the schedule or evaluation sheet from the EMB containing the result of the validation of export sales and inward remittances for the taxable year covered by the claim;

(2) Proof of delivery, service contract or any acceptable document to prove that the goods or services are delivered or rendered to a resident local EOE for the manufacturing, processing, packing in the Philippines, which goods are subsequently exported, and photocopies of proof of remittances;

(3) Proof of delivery to bonded manufacturing warehouses of EOEs and photocopy of the permit or license to operate as a bonded manufacturing warehouse for goods subsequently for export; and

(4) Copies of Registered Business Enterprise-supplier’s sales invoice together with the filed 1600VT or BIR form 0605.

Considering that only CTCs of the invoices or receipts are now required, the rules specify that these should be signed by the taxpayer-claimant’s president, proprietor, or head of finance or accounting. These officials may assign other signatory/ies who are knowledgeable in the accounting and/or custodianship of the documents. In that case, a notarized Secretary’s Certificate, Partnership Resolution, or Special Powers of Attorney designating the representative together with a copy of their valid company ID must also be submitted.

In the context of VAT refunds, compliance with these requirements should be carefully sought. As emphasized in a Court of Tax Appeals (CTA) case, entitlement to VAT refund is one matter, while compliance with the documentary and evidentiary requirements is another.

From my experience, one of the reasons certain refund items are denied is because of alterations to the invoices or receipts. If the alterations are not properly supported, they are considered tampered with and not qualified as documentary proof.

In practice, to support the alterations, a certification confirming the authority of the person countersigning the alteration should likewise be submitted. However, examiners often differ in how they treat computer-generated receipts and invoices. In some cases, claims have been denied due to manual alterations on computer-generated invoices even if they are accompanied by a certification of the authorized signatory because the examiner prefers that the invoices or receipts be reprinted entirely. In contrast, other applications were not required to reprint invoices but were still denied because the certification lacked a copy of the signatory’s ID.

In CTA cases, the validity of countersignatures on altered receipts and invoices depends on whether the signatory is authorized, whether the signature matches the signature of the authorized representative, and whether there is sufficient proof of such authority. These cases did not distinguish between computer-generated and manually issued invoices or receipts, nor did they clearly define what constitutes valid proof of authority or sufficient certification.

As may be noted, the rules are unclear regarding the required treatment of alterations in invoices or receipts. This lack of clarity poses challenges, especially for first-time applicants who may be unfamiliar with the unspoken preferences or varying interpretations of examiners. It is possible that an application may not be successful at one instance and the taxpayer claimant may need to file another application at the risk of another denial to determine the preference of the examiner, which is revealed only after the claim has been denied.

While the imposition of such requirements by the government is understandable to ensure that only eligible claims are granted, a greater degree of clarity and uniformity would benefit all stakeholders. Clear and consistent rules not only encourage voluntary compliance among taxpayers but also reduce the risk of legal disputes, ultimately building greater confidence in the system. Furthermore, such transparency fosters a more investment-friendly environment, particularly for investors who rely on VAT zero-rating and refunds as part of their financial strategy. As we look to the future, enhanced guidance will be essential in supporting compliance and ensuring the efficient processing of claims. Together, let’s advocate for clarity that empowers both businesses and the government, paving the way for a more robust and fair tax landscape.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Rowelle Sheena Juarez-Ayson is a manager at the Tax Services department of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 8845-2728

rowelle.sheena.juarez@pwc.com

Philippine Defense chief rules out US as factor in China’s ‘expansionist’ agenda

DEFENSE SECRETARY GILBERTO C. TEODORO, JR. — DND

By Kenneth Christiane L. Basilio, Reporter

CHINA’S aggressiveness in the Indo-Pacific is rooted in long-standing strategic ambitions independent of any US policy, and the region’s challenges stem from Beijing’s own expansionist agenda, the Philippines’ top defense official said on Wednesday.

The Philippines and China have had a series of run-ins and heated exchanges in the busy waterway of the South China Sea over the past two years, including an incident in June last year when a Philippine sailor lost a finger.

“The aggressiveness of China has been several years in the making,” Defense Secretary Gilberto C. Teodoro, Jr. said in an interview at the Reuters NEXT Asia summit in Singapore.

“China’s design for the region does not depend on any American leader,” Mr. Teodoro said, replying to a query whether US President Donald J. Trump’s style and stance had served as a catalyst for China’s actions.

“It depends on its own plan of action in the region, its own expansionist activities, its own need to control the area.”

While acknowledging that US policies influence regional dynamics, Mr. Teodoro said China’s actions were “pre-determined” by its leadership, regardless of who was in power in Washington.

Despite rising tension in the major regional flashpoint of the South China Sea, Mr. Teodoro dismissed fears that conflict was on the horizon.

“The prospect of war is not imminent,” he added. “I believe it is remote, but that would entirely depend upon the internal conditions of China.”

China’s embassy in Manila did not immediately respond to a request for comment.

China claims almost the entire South China Sea, despite overlapping claims by Brunei, Indonesia, Malaysia, the Philippines, Vietnam and Taiwan.

Mr. Teodoro said Manila was focused on deterrence, backed by diplomacy.

“You can’t have diplomacy without a credible deterrent force, and what we are doing is merely putting a stop, as best as we can, to the illegal incursions of China, which I do not think any country in the world supports,” he said.

To boost its external defense capabilities, the Philippines is investing billions of dollars to modernize its military, and part of that plan is to acquire multi-role fighter jets.

While submarines were on the wish list, Mr. Teodoro said they were not a priority at the moment, with the focus on weaponizing and building infrastructure to maintain current platforms.

Mr. Teodoro rejected the notion that the Association of Southeast Asian Nations (ASEAN) had failed to respond to China’s actions, given that the 10-nation Southeast Asian bloc has been working on a code of conduct with Beijing to avert confrontations in the South China Sea.

“It is obvious that ASEAN countries are wary and worried about China’s activities. If not, there would be no call for a code of conduct in the South China Sea.”

“It doesn’t take a rocket scientist to be very concerned about what is happening.”

Since Philippine President Ferdinand R. Marcos, Jr. took office in 2022, Manila has grown increasingly vocal in its opposition to China’s actions in the South China Sea, while significantly strengthening ties with traditional ally the United States, and like-minded partners, such as Australia and Japan.

Mr. Teodoro believed it would be difficult for any future leader to reverse current policy because it has strong public backing. President Marcos’ single six-year term ends in 2028.

“I feel that any leader in the future, in the face of what China is doing, and in the face of public opinion… and there is a distrust, not of China, but of the Chinese government in what they are doing. So, it would be hard for any leader to reshape that narrative,” he said.

DEEPER PHL-JAPAN TIES
The remarks followed a meeting between senior military officials from the Philippines and Japan on Tuesday, where they reinforced bilateral defense cooperation, as Manila weighs a proposal from Tokyo to transfer used destroyer ships seen as reinforcing the Southeast Asian nation’s maritime security capabilities.

In a statement on Wednesday, the Philippine military said that Japan Maritime Self-Defense Force Rear Admiral Ikeuchi Izuru met with Armed Forces of the Philippines (AFP) Vice-Chief-of-Staff Lieutenant General Jimmy D. Larida in Manila for a courtesy visit.

The military officials discussed “mutual concerns” over persisting “regional maritime challenges,” the Philippine military said, as both countries grapple with China’s increasing assertiveness in the South China Sea.

They also talked about possible joint military exercises and exchanges in the future, it added.

“The visit served as a platform to reaffirm both nations’ shared commitment to maintaining peace, stability, and freedom of navigation in the Indo-Pacific region,” the AFP said.

Like the Philippines, Japan has been embroiled in a dispute with China over the Senkaku Islands, which lies close to key shipping lanes and is believed to be rich in marine resources.

Mr. Izuru’s visit to Manila highlights the deepening relations between the Philippines and Japan’s forces and underscores their need to enhance military operability amid “evolving security dynamics” in the South China Sea region, the AFP said.

The Japanese navy official’s visit came on the heels of Japan’s offer to transfer its used Abukuma-class destroyers to the Philippines, helping shore up Manila’s maritime security capabilities amid China’s persistent presence at disputed reefs and atolls in the South China Sea.

The Philippine Navy on Tuesday said that it will send a six-man team to Japan in August to inspect the Japanese destroyer ships being offered. Mr. Teodoro has said that Manila is factoring in the costs of integrating the warships to its fleet and system interoperability.

SCS MEASURES
Meanwhile, a coalition of Philippine lawmakers filed multiple proposals at the House of Representatives on Wednesday aimed at bolstering the country’s claims in the contested South China Sea (SCS).

Among the raft of measures filed include a resolution urging Manila’s Department of Interior and Local Government to reassess sister-city and province agreements with China, and a bill seeking to integrate lessons on the Philippines’ claim in the disputed waterbody in the education curriculum.

“These measures serve as a reminder that we have not forgotten the West Philippine Sea (WPS),” Party-list Rep. Jose Manuel “Chel” I. Diokno told BusinessWorld in a Viber message, using the Philippine name for parts of the waterbody falling within Manila’s 200-nautical mile exclusive economic zone.

Filed by the so-called “West Philippine Sea bloc,” the grouping of six congressmen said they filed the measures to help reinforce Manila’s claims in the disputed waterway.

House Resolution No. 39 calls for a government investigation into sister-city agreements between the Philippines and China, with a view to terminating those deemed detrimental to Philippine interests.

The Philippines has 29 such agreements with China, according to the resolution.

“We should reassess sister-city agreements with certain Chinese cities to ensure that no undue interference or influence is taking place at the local level,” said Mr. Diokno.

Meanwhile, House Bill No. 1625 aims to enhance public awareness of the Philippines’ claims in the South China Sea by integrating education content on the country’s exclusive economic zone, sovereign rights and entitlements, while also including the impact of China’s encroachment on the disputed waterway, according to a copy of the measure shared to reporters.

“This fight for our sovereignty is not just limited to the seas. It also extends into our schools, our homes and into the halls of Congress,” Party-list Rep. Percival V. Cendaña told BusinessWorld in a Viber message.

“This is a battle for the hearts and minds of our citizens and future generations.”

The Chinese Embassy in Manila did not immediately reply to a Viber message seeking comment.

The lawmakers also filed House Bill No. 1626, which seeks to declare July 12 — the day the Permanent Court of Arbitration voided China’s expansive claims in the South China Sea — as a special working holiday.

“July 12 is not just a date. Commemorating it as National WPS Victory Day is a reminder that international law is on our side,” Party-list Rep. Leila M. de Lima said in a statement, using the abbreviation for the Philippines’ exclusive economic zone. — with Reuters

OVP spox says no confidential funds in 2026 budget

VICE-PRESIDENT Sara Duterte-Carpio, in this Aug. 27, 2024 photo, attended the deliberations on the proposed 2025 budget for the Office of the Vice-President at the House of Representatives in Quezon City. — PHILIPPINE STAR FILE PHOTO/MIGUEL DE GUZMAN

THE OFFICE of the Vice-President (OVP) on Wednesday said that it would no longer seek confidential and intelligence funds for its 2026 budget, its spokesperson said, amid questions over Vice-President Sara Duterte-Carpio’s 2022 secret fund expenditure.

“There are no confidential funds, we did not request that,” OVP Spokesperson Ruth B. Castelo told reporters, as the Department of Budget and Management (DBM) hiked the OVP’s budget to P903 million from the initial P803.6 million the agency allocated for 2026.

Ms. Castelo added that the almost P100-million increase will be used for the hiring of more personnel and the purchase of information technology (IT) equipment to improve its office functions.

“We requested for additional personnel services — of course, there is a cost to the additional employees — to fulfill the functions and other IT equipment,” she said.

Party-list Rep. Renee Louise M. Co said that the VP must first prove her innocence before granting the OVP a budget increase for 2026.

“We want accountability, not just delicadeza. Confidential or not, we cannot entrust the larger budget to VP Sara because the identity of Mary Grace Piattos and other corruption anomalies are still unanswered,” she said in a statement.

“Either prove her innocence in the impeachment trial first or resign from the OVP before a budget increase can be justified.”

The House of Representative had held an inquiry over Ms. Duterte’s alleged misuse of confidential funds allocated for the OVP in 2022 and the Department of Education, when she sat as its secretary in 2023.

This is also among the charges against Ms. Duterte when she was impeached by more than 200 congressmen last February. She has denied any wrongdoing.

Her other ouster charges include unexplained wealth, and plotting the assassination of President Ferdinand R. Marcos, Jr., his wife and the Speaker. Her impeachment trial awaits in the Senate.

Meanwhile, Ms. Castelo added that the Commission on Audit (CoA) had given the OVP an unmodified audit opinion for its 2024 annual audit report.

“Unmodified opinion means that the financial statements were fairly presented. It is honest, it’s transparent,” she said, noting an 85.6% utilization rate for its 2024 budget.

The OVP said that state auditors had affirmed that financial statements within the 2024 Annual Audit Report were “accurate, reliable, and compliant with applicable laws, regulations, and accounting standards.”

An unmodified opinion is given when auditors conclude that the financial statements, as a whole, are free from material mis-statements, which could arise from either error or fraud.  — Adrian H. Halili

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