How PSEi member stocks performed — January 3, 2025
Here’s a quick glance at how PSEi stocks fared on Friday, January 3, 2025.
Peso may move sideways vs dollar before US jobs, PHL inflation reports
THE PESO may move sideways against the dollar this week following stronger-than-expected US data and as the market awaits the release of key economic reports in the coming days.
The local unit closed the shortened trading week at P58.20 per dollar on Friday, weakening by 29 centavos from its P57.91 finish on Thursday, Bankers Association of the Philippines data showed. Philippine financial markets were closed for holidays on Dec. 30, Dec. 31, and Jan. 1.
Week on week, the peso slumped by 35.5 centavos from its P57.845-a-dollar finish on Dec. 27.
The peso dropped on Friday following strong US initial jobless claims data, a trader said in a phone interview.
The local unit weakened against a broadly stronger dollar on expectations that the US Federal Reserve will stay hawkish, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
For this week, the main market drivers will be the latest US nonfarm payrolls data as well as the December and full-year 2024 Philippine inflation report, the trader said.
The trader sees the peso moving between P58 and P58.40 per dollar this week, while Mr. Ricafort expects it to range from P57.90 to P58.40.
The number of Americans filing new applications for unemployment benefits dropped to an eight-month low two weeks ago, pointing to low layoffs at the end of 2024 and consistent with a healthy labor market, Reuters reported.
The report from the Labor department on Thursday added to a recent raft of upbeat economic data, including consumer spending, in reinforcing the Federal Reserve’s projections for fewer interest rate cuts this year. Labor market resilience is keeping the economic expansion on track.
Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 211,000 for the week ended Dec. 28, the lowest level since April. Economists polled by Reuters had forecast 222,000 claims for the latest week. — AMCS with Reuters
Stocks may rise further before key economic data
PHILIPPINE STOCKS could extend their climb this week as trading volumes normalize and as the market awaits the release of key economic data.
On Friday, the Philippine Stock Exchange index (PSEi) rose by 0.81% or 53.42 points to end at 6,603.81, while the broader all shares index increased by 0.8% or 30.38 points to 3,785.48.
Week on week, the PSEi went up by 1.15% or 75.02 points from its 6,528.79 close on Dec. 27.
“Local gauges were little changed during the two-day trading week, with most participants returning from the extended holiday break,” online brokerage firm 2TradeAsia.com said in a note.
Philippine financial markets were closed for holidays on Dec. 30, Dec. 31, and Jan. 1.
“The local market has been showing positive signs after bouncing from its support at 6,400 last Dec. 20, 2024. The market has been up five out of the last six trading days. It also managed to get past its 10-day exponential moving average, which has been considered as a dynamic resistance. However, as seen in the first trading week of the year, trading is still thin, implying tepid conviction,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
For this week, the market’s movement will depend on key economic reports, he said.
“Eyes are going to be on the Philippines’ December inflation data as this will provide clues on the BSP’ (Bangko Sentral ng Pilipinas) policy outlook. An inflation print within the BSP’s 2.3%-3.1% forecast range forecast, especially one biased to the lower end, may give sentiment a boost this week. Investors are also expected to look forward to the country’s November 2024 labor force survey for clues on the strength of the local economy,” Mr. Tantiangco said.
The Philippine Statistics Authority will release December and full-year 2024 inflation data on Jan. 7 (Tuesday) and the November labor force survey results on Jan. 8 (Wednesday).
“Investors may also monitor the performance of the local currency against the US dollar. An appreciation of the peso may help lift the market while a depreciation is expected to lead to the opposite,” he added.
Mr. Tantiangco put the PSEi’s support at 6,400 and resistance at 6,800.
For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort placed the market’s support at 6,500 and resistance at 6,635-6,820.
Meanwhile, 2TradeAsia.com pegged the PSEi’s immediate support at 6,400-6,500 and resistance at 6,700.
“‘Cloudy with a chance of rain’ has been thematic of the last few weeks of 2024; markets went into 2025 with umbrellas out and risk aversion at full mast… The plays for 2025 are set against a backdrop of numerous uncertainties in the macroeconomy but with excellent valuations at the corporate level. As such, a lot of the central themes for the year are likely sector-locked and/or story-specific to preserve returns amidst swings in the macroeconomy,” it added. — Revin Mikhael D. Ochave
Exporters vying with biodiesel for dwindling coconut supply
By Adrian H. Halili, Reporter
THE biodiesel industry is competing for the limited supply of coconuts, crowding out exporters of products like coconut oil and coconut water, industry officials said.
“The recent increase in the country’s biodiesel requirement may possibly divert more coconuts for domestic consumption,” Romeo I. Chan, chairman and chief executive officer of Axelum Resources Corp., told BusinessWorld via e-mail.
He sees a possible erosion of volume available for export, while acknowledging “the positive benefits for the environment (from biodiesel use), better fuel efficiency and higher copra prices,” Mr. Chan said.
“We also need to caution that this may potentially erode the competitiveness of the export sector, which produces high-value coconut products and generates dollar flows for the country,” he added.
In October, the biodiesel fuel blend was raised to 3%, or B3, on order of the Department of Energy. The government plans to increase the biodiesel blend to B5 in the next three years.
“In the end, we believe this necessitates a delicate balancing act to manage its broader impacts,” Mr. Chan said.
The US Department of Agriculture has reported that El Niño could dampen coconut oil exports due to declining production.
Exports are projected to drop to 900,000 metric tons during the 2024 to 2025 market year, from 1.14 million MT the prior year.
Confederation of Coconut Farmers’ Organizations of the Philippines, Executive Director Charles R. Avila said that the increased requirement for coco-diesel may not be adequately supplied by the industry, citing limited yields due to the age of Philippine coconut trees.
“The legally expected increase in biodiesel blend is one thing. Coconut production, however, is clearly on the decline by easily 15% year on year, so it cannot be expected to meet the demand without sacrificing exports,” Mr. Avila told BusinessWorld via Viber.
Axelum’s Mr. Chan expects coconut production to be flat this year.
Coconut production hit 14.89 million metric tons (MT) in 2023, against the 14.93 million MT posted a year earlier, according to the Philippine Statistics Authority.
“There is no substitute for a serious planting or replanting program,” Mr. Avila said.
In 2023, President Ferdinand R. Marcos, Jr. ordered the Philippine Coconut Authority (PCA) to draft a plan to rehabilitate the coconut Industry, including planting 100 million coconut trees by 2028.
Under the Philippine Coconut Industry Development Plan 2024-2034, the replanting project is expected to increase coconut output by 4.7 billion nuts annually, valued at P33.1 billion, by 2034.
This year, the PCA aims to plant 15.3 million trees, followed by 25.4 million yearly between 2026 and 2028.
Mr. Avila said that coconut farmers should have a bigger role in the government’s replanting efforts.
“We can dream of greater exports and a thousand more uses of coconut products — but the evidence mounts that the only sure thing is the government denying the coconut farmers their constitutional right to participate in programs affecting their welfare and development, which, of course, is a sure formula for ultimate failure,” he added.
Green energy industry urges no delays in auction round
THE Philippine Solar and Storage Energy Alliance (PSSEA) has urged the Department of Energy (DoE) to ensure that the fourth round of green energy auction (GEA-4) goes ahead with no delays this year to reassure investors.
“The industry strongly urges the Department of Energy… to relentlessly pursue its net zero emission goals by ensuring the implementation of the contracting round for solar in the first quarter of 2025,” the alliance said in a statement at the weekend.
The GEA program establishes the framework for facilitating timely investments for new and additional renewable energy (RE) capacities, to ensure the adequate supply of RE under a competitive process.
The program is designed to help the Philippines achieve its renewable energy goal which is to increase the RE share of the power generation mix to 35% by 2030 and 50% by 2040.
The government had planned to conduct two auction rounds last year but had to postpone.
“The one-year gap in the scheduled auction has already caused jitters for potential investors,” the PSSEA said.
“Any further delay on the upcoming (GEA-4) will have significant impact on the commitment of funders and partners,” it added.
GEA-4 is designed to cover integrated renewable energy and energy storage system (IRESS), an energy solution that combines renewable energy technology with energy storage systems.
Energy storage systems help address the intermittency of renewables such as solar and wind by storing excess energy when it is available and releasing it when the grid needs it.
Investors are awaiting the auction round for floating, rooftop, and land-based solar, the PSSEA said.
“The additional installations resulting from the auction will increase the share of solar in the energy mix, and the fulfillment of the government promise to hold yearly auctions will greatly improve the credibility of this administration in its commitment to the transition goals,” it said.
The PSSEA said that IRESS could provide a short-term solution and encourage the building of additional solar capacity.
“We urge the DoE to remain steadfast in its commitment to renewables and introduce storage solutions to the 2025 auction schedule,” the alliance said. — Sheldeen Joy Talavera
Rice traders capturing tariff cut savings
By Adrian H. Halili, Reporter
AS DROUGHT and typhoons continue to disrupt rice production, the need to lower the price paid by the public for the staple grain remains pressing, with the government resorting to lowering the tariffs on imported rice to 15% from 35% until 2028. But who exactly is capturing the benefits of the lowered tariffs?
“Traders are capturing the value of cheap tariffs. They may be affected by supply issues from rice exporting countries, but once imported rice is available from these sources, traders directly and immediately benefit from lower tariffs,” Roy S. Kempis, director of the Center for Business Innovation at Angeles University, said via Viber.
However, farmers and industry groups have remained wary and cautioned about the influx of imported rice and the impact on domestic production when much of the value is cornered elsewhere in the supply chain.
Federation of Free Farmers National Manager Raul Q. Montemayor has said that the beneficiaries of lower tariffs are mainly importers, wholesalers and retailers.
In June, President Ferdinand R. Marcos, Jr. signed Executive Order (EO) No. 62 which lowered tariffs on imported rice.
“The tariff savings on rice are not being passed on to the public. All of these indicate that business sense informs many traders as well as retailers to increase prices jointly while keeping the same amount of rice in the market,” Leonardo A. Lanzona, an economics professor at the Ateneo De Manila, said via Facebook chat.
Former Agriculture Secretary William D. Dar said lower tariffs could bring down prices in the long run.
“At present although there is a little drop in rice prices, over time it will definitely lower prices eventually,” Mr. Dar said via text message.
“The importers and traders are not flooding the market, hence there is little decrease in rice prices. They are ones that benefitted most in the lowering of tariffs instead consumers. The reduction in rice prices should have been insignificant,” he added.
The Department of Agriculture has said that the tariff cuts on imported rice could lower grain prices by about P5 to P7 per kilogram at retail.
University of Asia and the Pacific Center for Food and Agribusiness Executive Director Marie Annette Galvez-Dacul said via Viber that the goal of dropping rice prices to the expected range has not been fully realized.
That range is estimated at P44-49 per kilo, assuming P34 per kilo landed cost, Ms. Dacul added.
As of Dec. 11, the average price of imported well-milled rice was P40 to P52 per kilogram, lower than the P42 to P53 range a month prior, according to the Department of Agriculture (DA).
Agriculture Secretary Francisco P. Tiu Laurel, Jr. has said that the full impact of the lowered tariffs will be felt by January.
“If international rice prices continue to ease, the peso remains stable, and tariffs stay low, we would most likely see the price of well-milled rice decline further in the coming months,” Mr. Laurel said in a recent statement.
The government’s intent in lowering tariffs has been for the savings to reflect in retail prices, thereby dampening growth in inflation, of which food makes up the largest component.
Inflation accelerated to 2.5% in November from 2.3% a month prior, amid increasing prices of vegetables, meat and fish, according to the Philippine Statistics Authority.
Food inflation at the national level accelerated to 3.5% in November from 3% a month earlier.
On the other hand, rice inflation slowed to 5.1% from 9.6% in September. However, it remained the top contributor to inflation, accounting for 17.7% to the overall consumer price index.
In response to persistently high rice prices, the DA expanded the Rice-for-All program to more outlets, with the aim of supplying well-milled rice at P40 per kilo.
The Philippines imports rice and other agricultural commodities to address gaps in domestic production and to tame food prices.
According to the US Department of Agriculture, the Philippines is the world’s top rice importer, projected to ship in about 5.4 million metric tons (MMT) of rice next year amid increasing demand and lowered tariffs.
In its December Grain: World Markets and Trade report, the USDA said 2025 imports will be driven by expectations of a smaller rice crop.
On the sidelines of a House of Representatives hearing, Mr. Laurel said the tariff regime on rice is subject to review.
“If after four months rice prices remain elevated then we would have to maintain (tariffs). The next review is in February, then after that June,” he added, noting that EO 62 provides for a review to account for possible changes in global prices and supply.
Mr. Laurel has said that the DA would propose to raise rice import tariffs once retail prices fall to about P42-P45 per kilo.
“Putting the tariff back to 35% will not lead to higher prices but will only reduce traders’ profits, and it will increase tariff collections that are supposed to go to farmers,” Mr. Montemayor added.
TARIFFS FUND LOCAL RICE PRODUCTION
The government funds rice industry modernization programs from import tariff collections, with tariffs supporting the Rice Competitiveness Enhancement Fund (RCEF).
Mr. Montemayor said that the expanded RCEF has yet to address specific problems or needs of farmers in particular locations.
“Farmers must be given the freedom to choose the variety of seed, brand of machinery, types of fertilizer and other assistance provided. We have to monitor whether these interventions actually increase yield, profitability and competitiveness,” he added.
RCEF is intended to boost rice production and support farmers through the distribution of farm machinery, seed, training, and financial assistance. It is funded by import tariffs, as authorized by the Rice Tariffication Law of 2019 or Republic Act No. 11203.
The President has signed Republic Act 12078, amending the Agricultural Tariffication Act, which tripled the annual allocation of RCEF to P30 billion and extended the fund’s term until 2031.
Mr. Laurel has said that the full impact of the increased funding for RCEF will be felt by 2026.
Weather-related occurrences continue to affect production, keeping the Philippines reliant on imports.
According to DA estimates, palay or unmilled rice production for 2024 will fall to 19.3 MMT due to the dry conditions brought by El Niño and the various typhoons during latter part of the year.
“With all the natural disasters and the potential reduction of palay production this year, we need to sustain lower tariffs. There is no alternative. If you remove this lower tariff now then you will see rice prices spiral,” Mr. Dar said.
He added that the Philippines needs long-term solutions to improve rice production.
“We need to (utilize) 1.3 million hectares of unirrigated land… in an accelerated manner. (With proper irrigation investment), we can start planting rice earlier to avoid the typhoon months,” he said.
Among the DA’s flagship projects is the construction of solar powered irrigation systems, which are projected to add about 180,000 hectares to the stock of irrigated farmland.
“Technological solutions applied in a big way will boost productivity and income of small farmers,” Mr. Dar said.
More EPIRA reforms needed to cut electricity costs — advocacy
THE House of Representatives must pursue more “comprehensive” reforms to the law that liberalized the energy industry, according to an advocacy group, citing the need to reduce power costs.
Legislators need to amend the 2001 Electric Power Industry Reform Act (EPIRA) that “uphold the rights of energy consumers to fair rates, reliable services, and transparent decision-making processes” to make electricity cheaper,” according to Nic Satur, Jr., chief advocate officer of Partners for Affordable and Reliable Energy (PARE).
“Meaningful reforms must prioritize transparency, accountability, consumer participation as an ex officio member in regulating agencies and the delivery of affordable and reliable energy,” he said via Viber.
“Empowering consumers to actively participate in rate-setting, policy formulation, and energy-related cases will ensure that our voice, grassroots experiences and insights contribute to a more equitable and efficient energy sector,” he added.
Amendments to the 24-year-old power law are among President Ferdinand R. Marcos, Jr.’s legislative priorities. The House last year approved a bill rationalizing the government’s power assets management body, which Speaker Ferdinand Martin G. Romualdez touted as an amendment to EPIRA.
“We believe this measure falls short of addressing the core issues of high electricity rates and inefficient power delivery,” Mr. Satur said.
Aside from making the energy industry more transparent and letting consumer groups have a say in power rate-setting, he said legislators should also look at sanctioning weak power companies.
He attributed mounting electricity costs to “mismanaged electric cooperatives,” delayed grid projects, and unplanned shutdowns, while citing system loss charges, the generation rate-setting process, and pass-through taxes as the reasons behind “frequent price hikes.”
“Congress should impose stricter and higher penalties on underperforming companies and agencies across power generation, transmission, and utility distribution,” he said.
Mr. Satur said he and other energy advocates “remain cautiously optimistic” that legislators will pass comprehensive power sector reforms before the 19th Congress steps down in June. — Kenneth Christiane L. Basilio
GOCC subsidies up over 81% in November
SUBSIDIES extended to government-owned and -controlled corporations (GOCCs) rose 81.65% year on year in November, the Bureau of the Treasury (BTr) said.
The BTr reported that budgetary support to GOCCs amounted to P12.23 billion in November.
Month on month, GOCC subsidies rose 2.21%.
State-owned firms receive monthly subsidies from the National Government (NG) to support their daily operations if their revenue is insufficient.
The National Irrigation Authority (NIA) received the top subsidy for November with P6.84 billion, followed by the National Food Authority (NFA) with P3 billion, and the National Electrification Administration (NEA) with P900 million.
The NIA was the top GOCC recipient in the first 11 months.
Receiving at least P200 million in subsidies were the National Power Corp. with P248 million and the Philippine Children’s Medical Center with P211 million.
The Philippine Heart Center (P168 million), the National Kidney and Transplant Institute (P163 million), the Social Housing Finance Corp. (P127 million), and the Philippine Coconut Authority (P87 million) rounded out the list.
Receiving less that P100 million were the Light Rail Transit Authority (P72 million), the Lung Center of the Philippines (P70 million), and the Development Academy of the Philippines (P57 million).
At least P50 million in subsidies were granted to the Philippine Rubber Research Institute (P55 million), the Cultural Center of the Philippines (P38 million), the Philippine Institute for Development Studies (P21 million), and Aurora Pacific Economic Zone and Freeport Authority (P20 million).
In the P20 million or less category were the People’s Television Network, Inc. (P18 million), the Philippine Institute of Traditional and Alternative Health Care (P17 million), and the Metropolitan Waterworks and Sewerage System (P16 million).
Those granted subsidies below P15 million were the Intercontinental Broadcasting Corp. (IBC-13) (P12 million), the Subic Bay Metropolitan Authority (P9 million), and the Center for International Trade Expositions and Missions (P9 million).
Also on the subsidy list were the Philippine Tax Academy, the Credit Information Corp., and the Tourism Promotions Board (P5 million each), while the Zamboanga City Special Economic Zone Authority and the Philippine Center for Economic Development received P4 million and P3 million respectively.
GOCCs that did not receive subsidies for the month included PhilHealth, the Tourism Infrastructure and Enterprise Zone Authority, the Sugar Regulatory Administration, the Power Sector Assets and Liabilities Management Corp., the Philippine Postal Corp., and the Philippine Fisheries Development Authority.
Also receiving no subsidies were the Bases Conversion and Development Authority, the Philippine National Railways, the National Housing Authority, the Small Business Corp., the Philippine Crop Insurance Corp., the Philippine Deposit Insurance Corp., the National Home Mortgage Finance Corp., and the Bangko Sentral ng Pilipinas.
In the first 11 months, subsidies totaled P129.44 billion, down 15.43% from a year earlier.
During the period, the National Irrigation Administration took in P67.05 billion or 51.80% of the total, followed by PhilHealth (P9.60 billion) and the NFA (P8.26 billion).
In the 11 months, PhilHealth subsidies declined 81.08% from a year earlier.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the subsidies reflect the impact of the budget deficit, in the wake of the adverse weather, which put pressure on the National Government (NG) to provide more assistance to calamity zones.
He also cited the preparations for the May 2025 midterm elections, in view of the need to expedite some government projects especially infrastructure and other programs before the election ban sets in.
PhilHealth only received subsidies twice in 2024, in June (P260 million) and September (P9.34 billion).
PhilHealth was allocated zero subsidies in the 2025 budget, signed by President Ferdinand R. Marcos Jr., but reported a P150 billion surplus and P280 billion total reserves as of October. — Aubrey Rose A. Inosante
EU-funded project seeks improved MSME compliance with sustainable trade standards
THE International Trade Centre launched last month a climate competitiveness project aimed at helping micro, small, and medium enterprises (MSMEs) comply with trade-related climate change measures, the Philippine Exporters Confederation, Inc. (Philexport) said.
In a statement over the weekend, Philexport said that the European Union-funded project aims at strengthening the understanding of the role trade plays in adapting to climate change.
Under the project, the ITC will organize capacity building and training opportunities for Philippine MSMEs in building climate competitiveness and resilience.
Michaela Summerer, associate expert at ITC Green and Inclusive Value Chains Section, said that the capacity building includes sustainability standards and certifications, managing resources efficiently, carbon reporting, and business continuity in light of climate change, among others.
“I see the green economy where we have an overarching theme that comes — how it links overall and is very closely linked to the green transition, sustainability initiatives… Renewable energy is also closely linked to resource efficiency but also how to approach this on a national level and be mindful about the sourcing of energy and cost-effective practices,” she said.
“In the light of working with MSMEs and market access, I think we have a lot of different sustainability initiatives not only from the EU coming. So definitely a key area for ITC to work with you on climate change adaptation,” she added.
In a separate statement, Philexport said that addressing climate risks can unlock growth in the $14-trillion market for green technologies by 2030.
Citing a report by the World Economic Forum and the Boston Consulting Group, Philexport said that the market for green technologies and solutions is estimated at more than $5 trillion in 2024 and nearly $14 trillion by 2030.
This spans alternative energy (49%), sustainable transport (16%), and sustainable consumer products (13%).
The report also said that delay in action will lead to firms falling behind more proactive competitors and miss out on opportunities tied to climate leadership.
“Sustainability frontrunners are positioned to create clear advantages in a range of areas, including deeper talent pools, top-line growth, saving cash and carbon, reduced regulatory risk, and lower cost of capital,” Philexport said.
Since 2000, climate-related disasters have already inflicted over $3.6 trillion in damage, the report said.
“Climate risks and opportunities are no longer a peripheral concern; addressing them is a critical component of a company’s overall corporate strategy. Physical and transition risks and opportunities increasingly impact all aspects of corporate strategy,” it added. — Justine Irish D. Tabile
Shaping the future with confidence
IN BRIEF:
• Confident CEOs are better equipped to navigate macroeconomic and geopolitical changes, driving bold strategic actions.
• Embracing emerging technologies and data-driven strategies enhances organizational resilience and market positioning.
• Geopolitical dynamics in regions like ASEAN present significant opportunities for investment and growth.
In today’s rapidly evolving business landscape, CEO confidence plays a pivotal role in shaping strategic decisions and driving organizational success. Confident CEOs are more likely to take bold action in response to macroeconomic and geopolitical changes, technology shifts, and market disruptions. This article explores how CEO confidence, coupled with an understanding of geopolitical dynamics, can create a competitive edge and foster long-term growth.
THE IMPORTANCE OF CEO CONFIDENCE
CEO confidence is a critical factor in making proactive and strategic decisions. Confident executives are more willing to invest in innovation, expand into new markets, and pursue high-reward opportunities while managing greater risks. This confidence stems from a deep belief in their company’s abilities and market position, enabling faster and bolder strategic choices.
The latest EY-Parthenon CEO Outlook Survey of 1,200 global executives revealed that the most confident CEOs are better prepared to adapt to macroeconomic, geopolitical, and industry changes. They are more likely to engage in mergers and acquisitions (M&A) and reassess key performance indicators (KPIs) to align with evolving market conditions, positioning their companies for future opportunities and growth.
EMBRACING EMERGING TECHNOLOGIES
Confident CEOs recognize the transformative potential of emerging technologies, particularly artificial intelligence (AI). AI can automate processes, enhance decision-making, and create innovative products and services. By leveraging AI, companies can improve efficiency, accuracy, and reliability in their operations, freeing up resources for more strategic activities.
For example, an AI-driven payroll chatbot can address employee payroll questions efficiently and accurately, providing quick and accessible answers. This not only reduces the burden on employers but also enhances the employee experience. The implementation of AI in payroll management demonstrates how technology can streamline complex processes and drive significant improvements in organizational performance.
In the hiring landscape, which presents various opportunities for deceitful practices, machine learning algorithms are becoming increasingly adept at analyzing vast amounts of data and detecting patterns of potential fraudulent behavior. Blockchain technology also holds the promise of creating secure, immutable records of hiring candidates’ employment histories, education, and credentials. Through the power of data and technology in hiring candidates with verified profiles, companies can enable a more secure and reliable recruitment process. Across payroll, labor and employment law, and mobility, teams can work together collaboratively to meet workforce compliance needs wherever they are. Global processes, technology, and data models are smoothly integrated, providing a single, cohesive, high-quality service.
In addition, AI can help redefine organizational resilience by enabling companies to anticipate disruptions and fortify operations. In order to adapt, businesses are utilizing AI to transform their approach to Business Continuity Management (BCM), enabling proactive risk assessment, dynamic planning, and adaptive response strategies, ensuring organizations are better prepared for disruptions. AI-driven simulations and continuous learning from exercises and real events refine BCM plans while organizations navigate challenges such as resource requirements, data reliability, and ethical decision-making.
GEOPOLITICAL DYNAMICS AND OPPORTUNITIES
Geopolitical dynamics, particularly in regions like ASEAN, present significant opportunities for investment and growth. The recent ASEAN Summit highlighted the region’s efforts to attract foreign investment and trade by leveraging their relatively neutral geopolitical positions. Investment in ASEAN has increased significantly, with foreign direct investment (FDI) inflows reaching $230 billion in 2023.
Western multinational companies are likely to continue investing in ASEAN amid global supply chain diversification efforts. Middle-income economies in Southeast Asia are particularly attractive due to favorable business environment characteristics such as government stability, institutional predictability, and a skilled labor force. Chinese companies are also expanding their presence in the region to reduce supply chain exposure to geopolitical risks.
NAVIGATING DISRUPTIONS AND CAPITALIZING ON OPPORTUNITIES
CEOs must navigate a complex landscape shaped by emerging technologies, changing customer behaviors, and macroeconomic uncertainties. To capitalize on these opportunities, CEOs should take the following actions:
1. Rethink strategic assumptions. Regularly revisit and update strategic assumptions to ensure alignment with the external environment. This involves monitoring key indicators, staying abreast of geopolitical and industry developments, and reassessing customer needs.
2. Develop a virtual doppelgänger. Leverage AI and advanced analytics to create digital twins that cover the entire business. A digital twin is a virtual model of the physical versions in functional teams, such as an end-to-end supply chain, enabling data-driven decisions using real-time data, and improving agility in both sensing and responding to disruptions. Digital twins can serve as a cornerstone of a company’s digital strategy, where data from various sources and systems — from Internet of Things (IoT) sensors to signals from GPS devices, for example — is connected to create a virtual replica, reflecting the same parameters and financial targets. Predictive analytics can forecast future market movements and inform decisions about which assets to hold, sell, or acquire.
3. Enhance cross-functional collaboration. Encourage cross-functional teams to participate in portfolio reviews, ensuring strategic decisions are informed by a comprehensive understanding of the company’s capabilities and market position.
4. Scan, focus, and then act. Establish a culture within the organization that encourages employees at all levels to stay informed about emerging technologies and changing market dynamics. CEOs and all decision-makers need to understand how each development is likely to unfold in the year ahead (scan), assess the impact of each development on specific business functions (focus), and provide considerations for how the company can successfully manage them (act).
5. Enhance customer engagement and insights. Develop sophisticated systems for gathering and analyzing customer data to anticipate shifts in behavior and preferences. This might include implementing advanced analytics tools, conducting regular customer surveys, or creating customer advisory boards to maintain a direct line of communication with key stakeholders.
6. Build agile and resilient business models. Design organizational structures and processes that can quickly adapt to changing market conditions. This could involve diversifying supply chains, creating flexible work arrangements, or developing scenario-based strategic planning processes to prepare for various geopolitical and economic outcomes.
CONFIDENTLY SHAPING THE FUTURE OF STRATEGIC GROWTH
Confident CEOs who embrace emerging technologies and leverage geopolitical opportunities are well-positioned to lead their organizations to new heights. By continuously optimizing their portfolios, incorporating flexibility in deal structures, and using scenario planning, CEOs can confidently make informed and resilient strategic decisions.
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 author and do not necessarily represent the views of SGV & Co.
Wilson P. Tan is the chairman and country managing partner of SGV & Co.
NSC reorganization necessary amid growing external threats — analysts
By Kyle Aristophere T. Atienza and Chloe Mari A. Hufana, Reporters
PRESIDENT Ferdinand R. Marcos, Jr.’s move to reorganize the National Security Council (NSC), which saw the removal of Vice-President Sara Z. Duterte-Carpio and former presidents, is seen as necessary, security analysts said, noting this may be driven by geopolitical factors, particularly the Philippines’ increasingly complex relationship with China.
Mr. Marcos struck a balance between having more views at the table and trimming down the number of people who can access intelligence information due to a foreign aggressor that is likely working with local elites, said Joshua Bernard B. Espeña, who teaches international relations at the Polytechnic University of the Philippines.
He was referring to China, which claims the South China Sea almost in its entirety including waters within the Philippines’ exclusive economic zone (EEZ).
“We consider the streamlining of views filtered by the chief executive. The fewer voices, the quicker one can decide especially in times of crisis management,” he said in a Facebook Messenger.
On Jan. 4, Chinese Coast Guard’s ship dubbed “The Monster” brought its “intrusive patrol even further east from Scarborough Shoal.”
“It is now asserting China’s claim of jurisdiction just 50 nautical miles from the Philippines’ main island of Luzon,” Raymond M. Powell, a fellow at Stanford University’s Gordian Knot Center for National Security Innovation, posted on his X (formerly Twitter) account.
“The Monster” weighs 12,000 tons, 5 times more than the Philippine Coast Guard’s two largest ships, according to Mr. Powell.
The Chinese Embassy in Manila did not immediately respond to a Viber message seeking comment.
This followed the discovery of a suspected submersible drone from China in the central Philippines as the new year started.
The Philippine Navy is currently conducting its investigation to determine the origin and purpose of the sea drone, Xerxes A. Trinidad, chief of the Armed Forces of the Philippines Public Affairs Office, said in a statement last week.
Executive Order (EO) No. 81 reorganized the NSC by removing past presidents and the vice-president as members, citing the need to streamline its composition.
But Mr. Espeña said having past presidents at the table may also enable the government to have “historical insights” into security matters.
“The more views at the table, the deeper insights the chief executive can have on national security decision-making, especially in making and executing a grand strategy,” he said.
“The point is to strike a balance especially if certain views of the vice-president and former presidents are advantageous for national security interests,” he explained.
Mr. Espeña said Mr. Marcos “made a good decision” in trimming down the intelligence cycle “to deter pro-Chinese views in the official lines of communication at the trade-off against diversity of views.”
Mr. Espeña said the president, still, can invite and gather insights from former presidents despite their removal from the NSC.
“But I suspect that the incumbent government wants to keep the intelligence cycle as tight as possible since a devil’s advocate is not tantamount to one with treacherous views.”
Executive Secretary Lucas P. Bersamin at the weekend clarified that “at the moment, the vice-president is not considered relevant to the responsibilities of membership in the NSC.”
“Nonetheless, when the need arises, the EO reserves to the President the power to add members or advisers,” he added in a statement.
The NSC, which was established in 1950, said the reorganization was a response to the changing times, citing the need “to further enhance the formulation of policies affecting national security.”
“The NSC is, first and foremost, an advisory body to the President, and its composition is always subject to the authority of President,” National Security Advisor Eduardo M. Año said in a statement.
He noted that previous presidents such as Ferdinand E. Marcos, Sr., Corazon C. Aquino, Fidel V. Ramos, and Gloria Macapagal-Arroyo reorganized the composition of the NSC to meet the President’s requirements and changing conditions.
“Hence, the purpose of reorganization is to enhance the formulation of policies relating to national security so that actions and decisions thereon by the Presidents rests on sound advice and accurate information,” he said.
“It is also premised on the need for timely and coherent action to address current and emerging threats to national security,” he added.
Chester B. Cabalza, founder and president of the Manila-based think tank International Development and Security Cooperation, said the pragmatism of the move “boils down to the rationale that not all past presidents and vice-president are knowledgeable of national security.”
“Trust is very important in the community of defense and security,” he said.
Mr. Cabalza earlier told BusinessWorld that China may support politicians in their political campaigns amid growing tensions in the South China Sea.
Chinese intrusions into Philippine waters have prompted Manila to gradually shift to an external security orientation, launching the Comprehensive Archipelagic Defense Concept (CADC) last year to put focus on the country’s maritime zones.
Josue Raphael J. Cortez, a diplomacy instructor at the De La Salle-College of St. Benilde’s School of Diplomacy and Governance, said the president’s move may be due to the Duterte family’s alliance with the Chinese government.
“In cognizance with the continuous militarization of the disputed territories, the Chief Executive might be wary of engaging the VP in discussions pertinent to the matter,” he said in a Messenger chat.
Ms. Duterte’s father, former President Rodrigo R. Duterte, notably pursued closer ties with Beijing during his term from 2016 to 2022, softening Manila’s stance on the South China Sea disputes and securing billions in pledges for loans and investments.
Mr. Cortez added the vice-president’s removal may also reflect the “nuances in today’s security landscape” as other government personnel or agencies, and private people, may be appointed members of the NSC.
“Given that security challenges today are not merely state-centric anymore and now involve nonstate actors, then hearing their perspectives in the body is undoubtedly vital,” he said.
Ms. Duterte’s removal can also be due to the soured relationship with Mr. Marcos, he said, which saw a once formidable alliance that led to their 2022 victory devolve into political tension.
From a global perspective, the move would not have a direct effect on Manila’s international partnerships, he added.
“However, of course, we need to be pragmatic enough that the Chinese Communist Party and China as a whole may view this as a propaganda geared towards ensuring that pro-China people in the public sector are being undermined in light of our tensions with them.
POLITICALLY MOTIVATED
Ateneo Policy Center fellow Michael Henry Ll. Yusingco, on the other hand, said the move reeks of partisanship.
“National security should be beyond partisan politics. But every president has failed to de-politicize national security,” he said in a Messenger chat.
“The President certainly has the authority to reorganize the NSC but never for partisan reasons. In fact, there can only be one reason for a public official or any person for that matter to be excluded from the NSC,” he added.
Mr. Marcos needs to prove that the vice-president “is a verified threat to our national security,” Mr. Yusingco said.
“The only way for the Pre(sident) to convince the public that this was not a partisan political move is for him to demonstrate that the VP is a national security threat,” he explained.
“No other rationale will make this move reasonable or appropriate,” he added. “Simply asserting his authority to do reorganize the NSC just reinforces the suspicion that the exclusion of the VP is politically motivated.”
Former Bayan Muna Rep. Neri J. Colmenares said the move to reorganize the NSC “reflects the intensifying power struggle between the country’s dominant political dynasties ahead of the mid-term elections.”
“This is not just about national security — this is about political survival,” he said in a statement.
He said the NSC reorganization might signal deeper problems within the administration.
“Their removal may also indicate fears of a possible rift within the military establishment, which could have serious implications for the country’s stability.”
Ms. Duterte’s expulsion from the NSC further diminished her role in Mr. Marcos’ government, as she had previously resigned from the presidential Cabinet, leaving her education minister post and deputy leadership of the country’s anti-insurgency task force.
Hansley A. Juliano, who teaches political science at the Ateneo, while the NSC reorganization may make sense in the long run in terms of the President’s security policy, it may set a bad precedent for making security issues a bipartisan concern.
“Foreign policy is institutionally a bipartisan concern: the expectation is that foreign affairs need to remain stable/consistent even when regimes change,” he said via Messenger chat.
“It’s what is good for business and labor migration after all.”
Under the new EO, NSC members are the Senate President; Speaker of the House of Representatives; Senate President Pro-Tempore; Three Deputy Speakers to be designated by the Speaker; Majority Floor Leader of the Senate; Majority Floor Leader of the House; Minority Floor Leader of the Senate; Minority Floor Leader of the House; Chairpersons of the Senate Committee on Foreign Relations, Senate Committee on National Defense and Security, Peace, Unification and Reconciliation, and Senate Committee on Public Order and Dangerous Drugs.
Also part of the council are the chairpersons of House Committee on Foreign Affairs, House Committee on National Defense and Security, House Committee on Public Order and Safety; Executive Secretary; National Security Adviser; Secretaries of Department of Foreign Affairs, Department of Justice, Department of National Defense, Department of the Interior and Local Government, Department of Labor and Employment, Presidential Communications Office; Chief Presidential Legal Counsel; Head of the Presidential Legislative Liaison Office; and other government officials and private citizens appointed by the President.
The Director-General of the National Intelligence Coordinating Agency (NICA), the Chief of Staff of the Armed Forces of the Philippines (AFP), the Chief of the Philippine National Police (PNP), and the Director of the National Bureau of Investigation (NBI) shall attend the meetings of the council “as may be necessary to advise and assist in its deliberations,” Malacañang said.
The Governor of the Bangko Sentral ng Pilipinas (BSP) may also be invited to participate in the NSC, it added.
The NSC’s executive committee is now composed of the President as chairperson, with members composed of the Executive Secretary, Senate President or his representative, Speaker of the House of Representatives or his representative, National Security Adviser, the secretaries of the Department of Foreign Affairs, Department of Justice, Department of National Defense, Department of the Interior and Local Government, and other members or advisers designated by the President. — with a report from Kenneth Christiane L. Basilio
PHL envoy bats for deployment assistance, job credential boost for Filipinos in Canada
PHILIPPINE Ambassador to Canada Maria Andrelita Austria called for more pre-deployment assistance programs, particularly for overseas Filipino workers (OFWs) based in Canada and boost their employment credentials to help them secure quality jobs in the country.
“Philippine Ambassador to Canada Maria Andrelita Austria noted the robust Filipino diaspora in Canada and highlighted the need to empower them, especially through more responsive programs on pre-deployment, assistance-to-nationals and diaspora engagement,” the Philippine Consulate in Toronto said in a statement on Jan. 4, citing a migration forum at the Chelsea Hotel in Toronto on Dec. 8.
At the same forum, Philippine Migrants Rights Watch co-chairperson Carlita G. Nuqui cited the need to mitigate the social costs of migration and to improve assistance programs for migrant Filipino workers.
The Canadian government last year flagged a need to fill a gap in its healthcare industry due to its increasingly aging population.
Christopher Bott, First Secretary, Migration at the Canadian Embassy in Manila in November urged Filipino healthcare workers looking to work in the northern American country to consider cities outside major ones.
“There is still a great demand for workers in what I would say are critical sectors in Canada, things like in the construction industry, especially in healthcare still,” he earlier told a form in Quezon City.
This comes even as Canada imposed stricter immigration policies in a bid to reduce temporary residents to 5%.
Migrant Workers Undersecretary for Policy and International Cooperation Patricia Yvonne M. Caunan earlier said the Philippines posted over 6,000 OFWs in Canada last year. This is on track to equal or overtake more than 8,500 OFWs deployed in 2023.
Ms. Caunan noted that there are on-going talks on signing memorandums of understanding with five Canadian provinces, with Nova Scotia up for first.
Money sent back home from OFWs rose by 2.7% in October, the slowest growth in four months, according to the Bangko Sentral ng Pilipinas.
Data from the central bank showed that cash remittances increased to $3.08 billion in October from $3 billion in the same month a year ago. — John Victor D. Ordoñez