BWorld 814, Global growth and changing share in GDP

Global growth and changing share in GDP

August 12, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/08/12/690794/global-growth-and-changing-share-in-gdp/

 

Last week the Philippine Statistics Authority (PSA) released three important pieces of data: GDP performance in the second quarter (Q2) of 2025, which was 5.5%; the inflation rate in July, which was 0.9%; and the unemployment rate in June, which was 3.7%.

 

The GDP growth of 5.5% was the third fastest among the top 50 largest economies in GDP size that have reported their Q2 data so far. This is next to Vietnam and Taiwan that both grew by 8%. India has yet to release its Q2 data and it will likely be higher than the Philippines’.

 

The inflation rate of 0.9% was a six-year low for the country, and similar to Singapore’s 0.8%. It was lower than Malaysia’s 1.1%, Taiwan’s 1.5%, South Korea and India’s 2.1%, Indonesia’s 2.4%, Vietnam’s 3.2%, and Japan’s 3.3%.

 

Our unemployment rate of 3.7% was similar to Hong Kong’s 3.5% and lower than Indonesia’s 4.8% (March, no June data is available yet), or China’s 5% and India’s 5.6%.

 

The government’s economic team deserves praise as they are able to sustain the growth momentum while keeping unemployment and inflation rates at low levels. I quote here from the press statements of three Cabinet Secretaries.

 

Finance Secretary Ralph G. Recto stated that: “The back-to-back good news — low inflation rate, vibrant labor market, and strong GDP growth — are very encouraging…. tuloy-tuloy po kami sa aming trabaho hangga’t ang ginhawa ay hindi lang nakikita sa datos, kundi nasa hapag, nasa bulsa, at nasa kinabukasan ng bawat pamilyang Pilipino. (We will continue with our work until the ease and relief is not only seen in the data, but also on the table, in the pocket, and in the future of every Filipino family).”

 

Budget Secretary Amenah F. Pangandaman optimistically projected that: “We anticipate growth to accelerate in the second half of the year and settle within the 5.5% to 6.5% target range by the end of the year, driven by strong domestic demand and sustained public investment.”

 

Economics Secretary Arsenio M. Balisacan summarized: “Our continued economic expansion reflects not only the success of our policies, but also the resilience, creativity, and determination of the Filipino people.”

 

I have compared the average Q1-Q2 growth of 2025 over the last two years, for major economies that have Q2 data already. The Philippines has the third fastest growth so far, while South Korea, Germany, and Austria are the laggards (see Table 1).

 

I was personally expecting growth of 6% in Q2, and other economists projected growth of 5.7-6%. What prevented the country from growing faster than 5.5%? To figure this out, I checked the PSA time series quarterly data from 2000 to 2025. I chose a five-year interval for both GDP demand side and GDP supply side.

 

On the demand side, household consumption was 77% of total GDP in 2005, and this declined to 71% in 2025. But while household consumption is still the largest component of GDP, its growth is decelerating. Government consumption, on the other hand, is rising, from 11% in 2005 to 17% in 2025, and growth is high at 14% in 2025. Investments or gross capital formation also increased its share, from 17% in 2005 to 24% in 2025, but growth is decelerating.

 

On the supply side or industrial origin, there has been a decline in Agriculture, fishery and forestry (AFF), from 14% in 2005 to 8% in 2025. Industry also declined, from 31% to 29%, while the services sector keeps expanding, from 55% to 63% over the same period. Growth in both AFF and Industry is low while growth in services sector is high (see Table 2).

 

It is redundant to state this over and over again, but we have to keep growing fast, and we must attain an annual growth of 6% or higher for a decade at least. Both the industry and AFF sectors must grow faster than their recent performance, while the services sector only need to retain its high growth level.

 

More growth means more job creation and lower unemployment, more supply of goods and services, which all lead to lower inflation.

PhilStar 54, Stable electricity, prices and growth

Stable electricity, prices and growth

ENERGY, INFRA AND ECONOMICS - Bienvenido Oplas Jr. - The Philippine Star 

August 14, 2025 | 12:00am

https://www.philstar.com/business/2025/08/14/2465256/stable-electricity-prices-and-growth

 

The most expensive water is no water. The most expensive food is no food. The most expensive electricity is no electricity. Blackout is ugly and discomforting, anti-business and anti-people.

 

I checked global data on power outages, I saw at the World Bank database, one item there is “Firms experiencing electrical outages, % of firms.” For Asia, latest data in 2024: China 3.7 percent, S. Korea 4.7 percent, Malaysia 22.3 percent. Latest data 2023: Singapore 0.1 percent, Hong Kong 3.9 percent, Indonesia 12.7 percent, Vietnam 43 percent, Philippines 43.9 percent. Latest data 2022: Bangladesh 71.4 percent, India 19.9 percent, Saudi Arabia 2.7 percent. No data implying incidence of power outages is zero are Japan, United Arab Emirates, Qatar.

 

For America and Europe, latest data in 2024 unless specified: Canada 31.4 percent, US 25.2 percent, Belgium 33.5 percent, Sweden and Turkey 32.7 percent, Spain 18.8 percent, UK 14.3 percent, Italy 9.6 percent. France 29.5 percent (2022), Mexico 28.4 percent (2023), Germany 21.3 percent (2022).

 

It is surprising to learn that one-fourth of US firms have reported power outages, nearly one-third in Canada and France. In Philippines and Vietnam, more than two-fifth while only less than one-twentieth in China, Korea and Hong Kong.

 

Causes of power outages or fluctuation can come from generation (insufficient supply), transmission, distribution problems. Our power system should have resilience in these three sub-sectors of energy.

 

Last week Aug. 7, I attended the Energy Regulatory Commission turnover ceremony between outgoing chair Monalisa Dimalanta and incoming chair Nino Juan. Then we proceeded for the press conference.

 

During the question-and-answer session, I asked Mr. Juan: “As a consumer, I prefer stable electricity, no blackout even at higher prices because blackout means our refrigerator, aircon, lights can easily be damaged, will have to use candles, risky for fires. Another consumer wants cheap at all cost even with unstable supply, that if prices go up, ERC should impose price control, like the existing secondary price cap at WESM, and even a tertiary price cap if possible. Between the two of us, whom will you take side?”

 

Chair Juan nodded then replied that we need balance. There are many factors from the generation to transmission, distribution side that affect prices but we need stable electricity. He added that in off-grid areas like islands where people rely on gensets and Napocor’s SPUG, many consumers are willing to pay high just to have no blackout, P11 or P12/kwh in generation alone.

 

Recently there were lots of reports and stories about many electric cooperatives (ECs) having rates that are “cheaper than Meralco,” the National Electrification Administration (NEA) released the numbers as NEA is the main political protector of ECs, giving them lifeline money and subsidies for their losses and wastes and money taken from taxpayers.

 

Even assuming that the NEA narrative is true, price is a secondary factor for the welfare of consumers, power stability is their primary concern. Last Saturday I was in western Pangasinan, blackout there 6 a.m. to 6 p.m., many people were outside their houses because there was no light, no electric fan or aircon inside. Many coffee shops, convenience stores were closed, no aircon and lights. Blackout is ugly.

 

The ERC produces two important metrics (among many) that measure power stability or instability: the system average interruption duration index (SAIDI) measured in minutes in a year, and the system average interruption frequency index (SAIFI) measured how many times in a year a power interruption occurs. The lower the index, the better, the more stable the power supply is.

 

I took two metrics, scheduled maintenance and power supply or grid-related outages like supply deficiency, plant tripping, transmission maintenance, etc. I compare the performance of private distribution utilities (DUs) like Meralco with ECs in the same province or geographical area.

 

For scheduled maintenance in 2023, Meralco’s SAIDI was 51 minutes while Batangas EC (BATELEC) 1 was 257 minutes (or 4+ hours) and BATELEC 2 was 1,386 minutes (23 hours). In SAIFI, Meralco’s was 0.3 while BATELEC 2’s was 6.3.

 

For power supply, Meralco’s SAIDI was only 26 minutes while BATELEC 1’s was 2,676 minutes (47 hours or nearly two days) and BATELEC 2’s was 1,819 minutes (30 hours). In SAIFI, Meralco’s was only 1.4 while BATELEC 1’s was 10.7.

 

At these numbers, even assuming true that BATELEC 1 and 2’s prices are cheaper than Meralco, the damage to appliances and food in the ref, the inconvenience of enduring candles and heat, the high cost of running gensets, the cost of businesses shutting down for several hours in a day or a week are much higher.

 

In Cebu, the private DU Visayan Electric Co. (VECO) SAIDI in 2023 for scheduled maintenance was 163 minutes (nearly 3 hours) while Cebu EC 1 (CEBECO 1) was 1,761 minutes (29 hours). In power supply, VECO’s SAIDI was 7.6 minutes while CEBECO’s was 311 hours (5 hours). And VECO’s SAIFI was 0.5 while CEBECO’s was 4.4.

 

NEA is a costly bureaucracy. In 2020, it received P12.87 billion subsidy, most of it given to wasteful or losing ECs. That year, the mother agency Department of Energy (DoE) received only P1.32 billion, ERC received P0.58 billion. In 2024, NEA received P3.02 billion while DOE got P2.61 billion and ERC got P0.91 billion.

 

NEA should go and spare the taxpayers of continued subsidy yearly. All ECs should become corporations, monitored by SEC and not NEA.

 

Meanwhile, I will attend the AmCham 8th Annual Energy Forum today at Marriott Hotel, Newport Pasay City. The theme is comprehensive, “Navigating Conventional, Renewable, and Emerging Technologies and Developments in Achieving Energy Security” and among the speakers are Energy Secretary Sharon Garin, Sen. Sherwin Gatchalian and Rep. Mark Cojuangco.

BWorld 813, Declining inflation and challenges for the economic team

Declining inflation and challenges for the economic team

August 7, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/08/07/689919/declining-inflation-and-challenges-for-the-economic-team/

 

This week saw a number of good reports in public finance and price stabilization published in BusinessWorld: “Government rightsizing bill signed into law” (Aug. 5), “DBM reluctant to reenact ‘most corrupt’ 2025 budget” (Aug. 5), “Philippine wholesale price growth eases to 3% in June” (Aug. 5), “Stocks go up as inflation cools to near 6-year low” (Aug. 5), “Inflation cools further in July to 0.9%” (Aug. 6), “Bank lending jumps to four-month high in June” (Aug. 6).

 

The “Government Optimization Act,” RA 12231, formerly called the National Government Rightsizing Program, is a long-overdue piece of legislation because the expenditure side of the budget remains the bigger problem than the revenue side, which is why our annual budget deficit and public borrowings remain high — at least P1.5 trillion a year. There is unnecessary redundancy in the bureaucracy that contributes to ever-rising public spending.

 

Congress and the President should have opted for a large reduction in National Government personnel as programs and personnel in local governments keep expanding too. But the President opted for optimizing the services of those who are already hired. Which should imply that new hires should be kept to a minimum.

 

Perhaps the biggest positive economic news this year, so far, is the low inflation rate of only 0.9% for July 2025, just a notch higher than the 0.8% in October 2019 and the 0.7% in April 2016.

 

We went from having the highest inflation rate in East Asia in 2023 at 6%, to 3.2% in 2024, and now it is on the way to possibly 1.8% this year. In contrast, countries in North and South America and Europe have had inflation rates above 2% this year (see table).

 

Accompanying the State of the Nation Address (SONA) by President Ferdinand R. Marcos, Jr. last week, the Department of Finance (DoF) released a statement enumerating some economics positives achieved by the administration. It said that, 1. the Philippines is among the fastest-growing economies in Asia; 2. labor force participation is at an all-time high; 3. prices remain stable, especially for low-income households; 4. the Philippines has achieved the highest revenue effort in 27 years, on track with fiscal consolidation; 5. the deficit and debt remain at manageable and sustainable levels; 6. concessional, strategic, and transparent financing for the Build Better More Program; 7. the Philippines sustained high credit ratings, proof of strong investor confidence; and, 8. laws were passed to boost investments, create jobs, and generate revenues.

 

I concur with the DoF assessment, but I will add that the national spending side needs more control because we need to create a fiscal buffer in case of another economic and health calamity which will require another round of high borrowings.

 

So far, the economic team is gaining headway to build momentum for the next three years, the second half of the Marcos Jr. administration. New challenges for them, I believe, are the following:

 

Finance Secretary Ralph G. Recto has to produce more revenue from the Bureau of Customs, from the mandatory remittances of government corporations, and from the privatization of government assets and enterprises. The CBK hydro plant privatization proceeds would be a good start next year.

 

Budget Secretary Amenah F. Pangandaman has to operationalize the Government Optimization law and Open Government Partnership (OGP) to have a leaner bureaucracy and more transparent budgeting and monitoring.

 

Economics Secretary Arsenio M. Balisacan has to work closely with the infrastructure team so that economic planning and public spending can deliver more tangible and physical results, not just social services that tend to go on forever and lead to more state-dependence instead of self-reliance by the people.

PhilStar 53, Coal power plants and inflation control

Coal power plants and inflation control

ENERGY, INFRA AND ECONOMICS - Bienvenido Oplas Jr. - The Philippine Star 

August 7, 2025 | 12:00am

https://www.philstar.com/business/2025/08/07/2463585/coal-power-plants-and-inflation-control

 

Last week, there was one irresponsible report that came out saying that Department of Energy (DOE) Secretary Sharon Garin has overridden the Department of Environment and Natural Resources (DENR) by granting an exemption on new coal plants to a Meralco Power Gen (MGen) project, the Atimonan One Energy (A1E).

 

This is fake news for two reasons. One, DENR has nothing to do with issuance of permits or moratorium to power plants, DENR only issues environmental clearance certificate (ECC) to proposed energy projects, among others.  Two, A1E is not a new or “greenfield” coal project, it is an old project that has ECC from DENR several years ago.

 

I saw the MGen statement on this, short and direct. They said that “Secretary Sharon Garin has reaffirmed the A1E project’s status as a committed project, consistent with the DOE’s earlier position that the project is not covered by the 2020 Coal Moratorium Policy. We assure our stakeholders and partners that the A1E project remains fully compliant with all applicable environmental laws, rules, and regulations. Aligned with the country’s efforts to ensure energy security and affordability.”

 

Reports like the above are part of the continuing anti-coal campaign and climate alarmism drama worldwide, including the Philippines.

 

In 2024, our coal power generation was only 79.4 terawatt-hours (TWH). In contrast, coal generation of other countries were much larger: 98 TWH by Malaysia, 113 TWH by Taiwan, 127 TWH by Australia, 153 TWH by Vietnam, 188 TWH by S. Korea, 228 TWH by Indonesia, 301 TWH by Japan, 712 TWH by the US, 1,518 TWH by India and 5,828 TWH by China.

 

Or our coal generation full year in 2024 was equivalent to only five days coal generation of China, about four months of Japan’s and nearly half-year of Vietnam’s.

 

Countries that experienced fast average growth of at least four percent yearly over the last decade, 2014-2024, are those that have high coal expansion of 4-162 TWH per year: Philippines, Malaysia, Vietnam, Indonesia, India and China. We need to this energy and growth momentum to keep creating more jobs for our people.

 

Yesterday, I attended the media briefing by the Independent Electricity Market Operator of the Philippines (IEMOP). I checked the energy mix for July 2025 billing and compared it with first quarter (Q1) January-March and Q2 April-June 2025 average energy mix.

 

The share of coal to total power generation has fluctuated from 55 percent in Q1 to 59 percent in Q2 and 54 percent in July. The share of gas has increased from 17.7 percent in both Q1 and Q2 to 21 percent in July. The share of geothermal is generally flat at 8.4 percent, hydro also fluctuated from 10 percent in Q1 to 7.6 percent in Q2 and 10.5 percent in July.

 

The share of intermittent wind + solar combined declined from 5.8 percent in Q1 to 4.9 percent in Q2 and four percent in July. Pumped hydro and battery share is flat at 1.2 percent.

 

This is despite the fact that coal is only 41 percent of total installed capacity, solar at 9.6 percent  and wind at two percent of total capacity, data as of end-July 2025.

 

Last Tuesday, the Philippine Statistics Authority released the July 2025 inflation data, only 0.9 percent and nearly a six-year low. Coal providing 54 percent and gas giving another 21 percent, both account for 75 percent of total power generation and prices at the Wholesale Electricity Spot Market (WESM) remained low at P4/Kwh from May-June-July period. Which contributed to declining inflation of 0.9 to 1.4 percent over those three months.

 

We need more conventional energy sources like coal to stabilize power supply, continue energizing our rising industry/manufacturing and services sectors, and keep overall consumer prices stable.

 

Visayas grid has experienced “yellow alert” from Friday to Tuesday this week except last weekend, usually at 6-8 p.m. where electricity demand is high, lights are on in houses, shops and streets while solar output is zero on those hours. Again, solar that constitutes nearly 10 percent of our total installed capacity is producing zero at night and little during cloudy-rainy days like the two-week habagat just a week ago.

 

MGen has small expansion plan for their coal plants in Iloilo and Cebu while Aboitiz Power also has coal expansion plan in their Cebu plant. These are all “brownfield” projects, meaning expansion of existing coal plants with valid ECC from DENR. Those additional  capacity should come online fast, help save the Visayas grid especially the Cebu, Negros and Panay islands and sub-grids from the threat of blackout.

 

The economic team keeps inviting foreign investments, encouraging existing ones to expand. But if those investors see that the yellow alert, even red alert keep coming every year, a number of them will not come or expand. Energy limitation has become economic limitation. Energy policies translate to economic and investment policies.

BWorld 812, The heroic role of gas plants in cheaper electricity

The heroic role of gas plants in cheaper electricity

August 5, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/08/05/689367/the-heroic-role-of-gas-plants-in-cheaper-electricity/

 

A number of non-truthful statements against gas plants especially liquefied natural gas (LNG) came out recently. These include that: a.) gas plants are responsible for recent higher Meralco electricity prices; and, b.) gas plant costs are driving up electricity prices globally and cause more hardship to households.

 

I said “non-truthful” because there are numbers and facts that disprove the above narratives. I compared the electricity rates from July 2022 — the start of President Ferdinand R. Marcos, Jr.’s administration — to July 2025, the last billing period. Here we go.

 

Meralco’s total electricity rates collected increased from P9.75 per kilowatt-hour (kWh) in July 2022 to P12.64/kWh. This increase was due mainly to: a.) a lower distribution refund rate, and, b.) a higher generation charge from pass-through of higher Malampaya prices and the Energy Regulatory Commission (ERC) denial or inaction on requests to adjust charges due to Change in Circumstance (CIC) claims.

 

The LNG plants in Batangas — jointly owned by Aboitiz Power (AP), Meralco Power Gen (MGEN) and San Miguel Global Power (SMGP), the Excellent Energy Resources, Inc. (EERI) and South Premier Power Corp. (SPPC or the Ilijan plant) — have nothing to do with the higher prices this year. And there was even a decline in the Meralco distribution charge from 2022 to 2025 by nearly 4 centavos/ kWh (see Table 1).

 

Here are the numbers for the two reasons for the increase that I mentioned.

 

On (a.): in July 2022, Meralco residential customers got a refund of P1.80/kWh in the distribution charge due to distribution rate true-up. The total refund of P48.2 billion was completed in May 2023. In July 2025, the distribution refund rate covering the latest true-up was lowered by the ERC to P0.205/kWh. So there was an “increase” of P1.596/kWh in distribution adjustments which constitutes 55% of the P2.89/kWh increase over three years.

 

On (b): the generation costs of First Gas Sta. Rita and First Gas San Lorenzo, both owned by FirstGen (not affiliated with Meralco), increased by P1.988/kWh and P2.806/kWh, respectively, over the same period. Both power plants account for about 30% of the generation supply.

 

The ERC denial of, or inaction on, requests for price adjustment based on CIC claims forced the power suppliers — SPPC, Sual Power Inc. (SPI), and ACEN — to terminate their fixed price Power Supply Agreements (PSAs) with a total contracted capacity of 1,310 megawatts. Meralco was then forced to enter into emergency PSAs, which were more expensive by about P1.32/kWh than the PSAs that were terminated.

 

I asked Meralco for more data on the PSA between it and EERI. They replied that the generation cost of the EERI gas plant under the PSA with Meralco would have been lower if the ERC had acted on Meralco’s PSA applications filed in 2021. After conducting a competitive selection process (CSP) in 2021, Meralco and its counterparty suppliers (EERI and Masinloc Power) asked for ERC approval of the two resulting PSAs totaling 1,800 MW — but the ERC did not act for two years. So the power suppliers terminated the two PSAs in March 2023 after the lapse of the long-stop date. Meralco then conducted another CSP in 2024, a period of higher inflation (the Philippine inflation rate was 6% in 2023 and 3.2% in 2024). The offered prices of the 2024 winning power suppliers were P2+ per kWh higher than the winners of the 2021 CSP.

 

So the PSAs of the Meralco “sister companies” — EERI and SPPC/Ilijan — with a combined capacity of 2,400 MW, are not the main drivers of the increase in the total rate. Rather, these PSAs helped augment the supply in the grid to avert power supply shortages and bring down the cost of electricity.

 

Blaming gas plants for driving up electricity prices globally and causing more hardship to households is an idea that I find far out. Many countries, both industrialized and industrializing, are using more gas power. From 1985 to 2024, the expansion in gas power generation in terawatt-hours (TWh) among selected countries was as follows: the USA, from 314 TWh to 2,005 TWh; Mexico from 7 TWh to 222 TWh; Canada from 7 TWh to 109 TWh; Iran from 14 TWh to 340 TWh; Egypt from 9 TWh to 193 TWh. In East Asia the increase was as follows: China from 1 TWh to 321 TWh; South Korea from 0.1 TWh (or 100,000 MWh) to 176 TWh; and, Malaysia from 2 TWh to 74 TWh. Globally it increased from 1,426 TWh to 7,001 TWh.

 

The share of gas to total power generation for many countries has been rising. Looking at the numbers from 1985 to 2024, the USA’s gas share rose from 12% to 43%, Mexico’s from 7.5% to 62%, the UK’s from 1% to 30%, South Korea’s from 0.1% to 28%, and Taiwan’s from zero to 42%. There has been  a significant expansion in GDP size of many countries as they used more hydrocarbons like gas to produce electricity over the past four decades (see Table 2).

 

The Philippines’ gas generation of only 18 TWh in 2024 was equivalent to only seven weeks of gas generation in Thailand, five weeks in South Korea, three weeks in Japan and China, and only three days in the US. It is so small and yet some climate-obsessed activists want to discontinue the expansion of our gas power capacity.

 

The Philippines should have expanded its gas power generation by four times (4X) to be at the level of Malaysia, or 7.6 times to be at the level of Thailand in 2024. The climate activists should turn their anti-gas noise and drama on the USA, Russia, Iran, Saudi Arabia, China, Japan, and Korea. It is very likely that these countries will laugh at these activists.

 

I hope that AP, MGEN, and SMGP will continue their LNG partnership and further expand the Philippines’ gas capacity. More power from stable, dependable sources means there is less threat of blackouts and lower prices of electricity.

US-China 5, China investing more in ASEAN countries

See these recent reports re China business in ASEAN countries.

VN attracts many CN tourists,

Tourism: Vietnam records 1.68 million foreign visitors in August

10/09/2025

https://the-shiv.com/tourism-vietnam-records-1-68-million-foreign-visitors-in-august/

Arrivals from Asia reached 1.36 million, led by China with 414,247 visitors, up 5.9 percent month-on-month and 34.9 percent higher year-to-date...

 

SG attracts many CN students, 

As Singapore grows in popularity with Chinese students, universities roll out Mandarin-taught programmes

Ang Hwee Min, 29 Jul 2025

https://www.channelnewsasia.com/singapore/nus-ntu-china-students-mandarin-courses-qs-ranking-5262711

China Power: Washington's loss, Beijing's gain as Chinese students shun the US for Southeast Asia?

Bong Xin Ying, 16 Apr 2025

https://www.channelnewsasia.com/east-asia/chinese-students-southeast-asia-boost-beijing-soft-power-5066591

MY and ID attract many CN investors, 

China is wooing Malaysia and Indonesia with mega investments. Is the plan working?

The high-speed trains running in Indonesia following a US$7.3 billion Chinese investment in Southeast Asia’s first high-speed rail, Whoosh.

Derrick A Paulo, Pearl Forss, 30 May 2025

https://www.channelnewsasia.com/cna-insider/china-global-south-mega-investments-malaysia-indonesia-asean-pivot-5158541

PH? PH attracts US typhoon missiles aimed at CN, ewww.

While our ASEAN neighbors focus on growth, investments, tourism, education with CN.

 

Remember the brouhaha of reports that many CN students enrolled in Tuguegarao city?

Successful anti-CN war mongering by the paid hacks here of the CIA, Pentagon.

 

The good thing is that PH businesses realize the value of CN trade. As I showed in my column (table 2) last Tuesday, Jan-July 2025 imports from CN was 28.5% of total, up from 19.8% in Jan-July 2022, https://www.bworldonline.com/opinion/2025/09/09/696985/on-declining-inflation-and-on-the-philippines-import-partners/.

On a separate note, I note here some important political changes in Asia, Europe:

Sept 7, Japan PM Shigeru Ishiba resigned.

Sept 8, PH Senate Pres. Chiz Escudero resigned.

Sept 9, France PM François Bayrou resigned.

Sept 9, Nepal PM Khadga Prasad Sharma Oli resigned.

Sept 10, many parts of France burning, "Block Everything" movement.

Also popular US conservative commentator Charlie Kirk was assassinated.

----------------

See also: 

US-China 2, Trump-Biden debate and TW, SCS, June 29, 2024

US-China 3, Dr. Francisco "Dodong" Nemenzo on the SCS territory dispute, June 30, 2024

US-China 4, Comparison of military strengths, September 29, 2024

BWorld 811, SONA 2025 and a ‘classless’ society

SONA 2025 and a ‘classless’ society

July 29, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/07/29/688011/sona-2025-and-a-classless-society/

 

Yesterday, President Ferdinand R. Marcos, Jr. delivered his fourth State of the Nation Address (SONA). Since this column was submitted several hours before the SONA was held at 4 p.m. Monday, I have looked back on some of the President’s pronouncements in his last three SONAs, focusing on public finance and fiscal economics.

 

“Disbursements for 2022 to 2023 will be maintained at… P4.955 trillion and P5.086 trillion, respectively… P5.402 trillion or 20.7% of our GDP in 2024 to P7.712 trillion or 20.6% of GDP in 2028.” — First SONA, July 25, 2022

 

“The essential tax measures under our Medium-Term Fiscal Framework, such as… excise tax on single-use plastics, VAT on digital services, rationalization of mining fiscal regime, motor vehicle user’s charge/road user’s tax, military and uniformed personnel pension.” — Second SONA, July 24, 2023

 

“Tax and non-tax revenue collection has also become more efficient, in pace with our rejuvenated economy. Notably, for the past two years, our GOCCs have remitted dividends to the National Government with a combined tally exceeding their contributions in 2022.” — Third SONA, July 22, 2024

 

I checked on the fiscal performance from 2022-2024, then the fiscal targets for 2025-2028. Actual disbursements were P5.16 trillion in 2022, P5.34 trillion in 2023, and P5.92 trillion in 2024. The disbursement targets are P6.08 trillion in 2025, then P6.63 trillion in 2026, P6.97 trillion in 2027 and P7.47 trillion in 2028.

 

This means that government has been overspending or overshooting its targets in disbursements since 2022 that will continue until 2028.

 

No revenue targets were mentioned in SONA 2022 to 2024. The numbers on revenues from the Bureau of the Treasury (BTr) and Development Budget Coordination Committee (DBCC) are: P3.54 trillion in 2022, P4.42 trillion in 2024, P4.98 trillion in 2026, and P5.91 trillion in 2028.

 

The budget deficits are as follows: P1.61 trillion in 2022 (from P1.67 trillion in 2021), P1.51 trillion in 2024, P1.65 trillion in 2026, and P1.55 trillion in 2028.

 

Last week the BTr released the cash operations report for June 2025. I compared the cumulative January-June data with previous years and saw some good and bad news.

 

The good news is that on the revenue side, the “Other non-tax” revenue that refers mainly to higher mandatory remittance of government-owned and -controlled corporations (GOCCs), has significantly jumped from almost zero in previous years to P115 billion in 2024 and P69 billion in 2025. This is better called the “Recto effect.” Finance Secretary Ralph G. Recto ordered the GOCCs to raise their mandatory remittances to the Treasury from 50% to 75% and it went well.

 

The bad news comes from the revenue side. The Bureau of Customs (BoC) has seen poor collections in 2024 and 2025, nearly as flat as the 2023 level. New BoC Commissioner Ariel Nepomuceno has a heavy burden — to significantly raise the customs collections, mainly by addressing the considerable levels of smuggling and illicit trade in many sectors, from tobacco to petroleum to gadgets.

 

The bigger piece of bad news is on the spending side. Both National Government (NG) and local government units (LGUs) spending are jumping up simultaneously, instead of NG spending rising moderately if not remaining flat as more functions and revenues go to the LGUs.

 

The result is inevitable — the budget deficit in 2025 is back to 2020 and 2021 levels during the time the lockdown dictatorship led to a huge decline in revenues while expenditures for subsidies jumped high (see the table).

 

Budget Secretary Amenah F. Pangandaman has pushed measures for spending transparency and responsibility, like the Open Government Partnership (OGP) and the Government Optimization Act, formerly the National Government Rightsizing Program bill, that became a law.

 

The big problem in fiscal economics is often on the spending side and not so much on the revenue side. As a clear example — in April the various agencies submitted a total budget wish list of P10 trillion for 2026, even if the DBCC expenditures target is only P6.6 trillion to control the deficit and borrowings.

 

There are two specific expenditures that I want to mention — infrastructure and flood control projects of the Department of Public Works and Highways (DPWH), and the military and uniformed personnel (MUP) pension.

 

The Philippines, Luzon in particular, has just experienced 12 straight days of rain, from July 17 to July 28, when this column went to press. Heavy rains occurred on July 18 to 25, Friday to Friday, that led to a “classless society” — no classes (for elementary to college levels) were held for six days straight. There was a lot of flooding in many cities, municipalities, and barangays. Meaning that of all the trillion plus pesos worth of flood control projects by the DPWH, many are ineffective or perhaps non-existent. Big reforms and accountability are needed here.

 

The southwest monsoon or “habagat” plus three consecutive storms over the past two weeks have caused 30 deaths and affected 5.57 million individuals from 1.54 million families across 6,053 villages in 17 regions. The data is from the National Disaster Risk Reduction and Management Council or NDRRMC.

 

The MUP pension fund, which averaged P120 billion/year from 2021-2024, increased to P144.7 billion in 2025, and is targeted at P217 billion in 2026, a 50% increase in just one year. This is patent abuse of taxpayers. Those personnel do not contribute to their own pensions, they take home their salaries with no pension deductions unlike government doctors and nurses, government lawyers and engineers, government teachers and professors, and others who contribute monthly for their future pension.

 

The President had already mentioned the need for reforms of the MUP pension in his SONA 2023. There should be follow-up measures to reform this anti-taxpayers policy.

PhilStar 52, SONA 2025 and energy security

SONA 2025 and energy security

ENERGY, INFRA AND ECONOMICS - Bienvenido Oplas Jr. - The Philippine Star 

July 31, 2025 | 12:00am

https://www.philstar.com/business/2025/07/31/2461931/sona-2025-and-energy-security

 

Let me review what President Marcos has said in his four State of the Nation Address (SONA) on energy policy.

 

“Our search for new power sources should always be with an eye to improving the energy supply mix between traditional and renewable sources…. In the interim, natural gas will hold the key…. In the area of nuclear power, there have been new technologies developed that allow smaller scale modular nuclear plants and other derivations thereof.”

 

– First SONA, July 25, 2022

 

“We finally have a unified national grid, with the interconnection of the Luzon, Visayas and Mindanao grids. The “One Grid, One Market” will enable more efficient transfers and more competitive pricing of electricity throughout the country.”

 

– Second SONA, July 24, 2023

 

“The energization of the Mindanao-Visayas Interconnection is a defining moment not only for the power sector but for the entire country…. The “unified Philippine grid” is a fulfillment of this dream… patuloy tayo sa padadagdag ng mga imprastraktura ng kuryente na magpapababa ng presyo sa kalaunan.”

 

– Third SONA, July 22, 2024

 

“Naririyan pa rin ang mga problema sa enerhiya na damang-dama ng bawat Pilipino, kagaya ng: tatlong milyong kabahayan na wala pang kuryente; palagiang brownout; at ang mataas na presyo ng kuryente…. Kaya, binibilisan nating mabigyan ng koneksyon at pinapalakas pa lalo ang kakayahan ng ating gumagawa ng kuryente.”

 

– Fourth SONA, July 28, 2025.

 

The President has emphasized three things: bigger power generation, balance energy mix and nationwide grid interconnection. He even mentioned the need for nuclear power in his first SONA.

 

The three problems of many non-electrified places and houses, occasional brownout, and higher electricity prices have one common denominator:  insufficient power supply and generation (plus their distribution and retail supply) relative to power demand. So we must keep expanding power generation, balance between traditional thermal sources (coal, gas, oil) and renewables like hydro, geothermal, solar and wind.

 

The two-weeks of on-off rains (July 17-29) due to southwest monsoon or “habagat” plus three storms have led to a “classless” society, no classes from elementary to college for more than a week.

 

I checked data from the Independent Electricity Market Operator of the Philippines (IEMOP), for the billing period June 26 to July 25 in 2023, 2024, 2025. My hypothesis was that solar and wind output and percent share to total generation would decline because  monsoon season is known for dark sky, little or zero sunlight even during daytime, and non-windy. So it was coal that carried the burden of giving 24/7 electricity to many households during the dark weeks.

 

The data disproved my hypothesis. The share of coal to total power generation declined from 62.1 percent in 2023 to 61.8 percent in 2024 and 55.6 percent in 2025. And the share of solar plus wind increased from 2.4 percent in 2023 to 3.6 percent in 2024 and 4.2 percent in 2025. Rising but still small overall, so what energy source covered for the decline in coal share? Hydro? Geothermal?

 

Not hydro or geothermal. It was natural gas, the share has increased from 15.1 percent in 2023 to 16.6 percent in 2024 and 20.2 percent in 2025. Wow.

 

And the good guys in the room are South Premier/Ilijan and Excellent Energy Resources Inc. (EERI) LNG plants in Batangas, jointly owned by Meralco Power Gen (MGEN), Aboitiz Power (AP) and San Miguel Global Power (SMGP). Towards end-May and full month of June, July onwards, 2,500 MW of LNG power came in full force.

 

Last Tuesday Meralco released its first half 2025 consolidated core net income (CCNI). Huge, P25.5 billion, which is 10 percent higher than P23.2 billion of H1 2024. Big contribution came from MGen, their share to total CCNI increased from 27 percent in 2024 to 37 percent in 2025 or P9.4 billion out of the P25.5 billion.

 

Another good thing going for MGen is the approval and reaffirmation of the Department of Energy (DOE) that Atimonan coal is a committed project even before the  Greenfield Coal Moratorium Policy of the DOE in 2020.

 

That Atimonan coal in Quezon province is a beautiful project. It is modern, an ultra-supercritical (USC) and high-efficiency low-emissions (HELE) technology that can deliver 1,200 MW to the Luzon grid.

 

In a press statement, MGen president and CEO Emmanuel Rubio is bullish when he said that: “We welcome the DOE’s reaffirmation of the Atimonan Energy project’s non-coverage from the coal moratorium policy…. our investment in Atimonan will help address today’s needs while preparing for tomorrow’s opportunities. We will employ advanced and efficient technologies to ensure our operations support economic and societal development – all while adhering to the company’s commitment to sustainability.”

 

Two birds, LNG and coal, with one brain. Rubio joined MGen only in July 2024 so in his 12 months performance as head of the company he has delivered (a) more electricity both in Luzon grid via Ilijan and EERI and in Singapore via Pacific Light Plant, (b) more revenue and profit for the mother company and (c) secured the go signal to proceed with Atimonan coal. I think the guy is a finance genius.

 

A 55-percent share to total power generation means coal remains the backbone of the Philippines to remain bright, have lights and aircon for households and companies. I hope that AP and SMGP will also expand their existing coal portfolio via brownfield investment. We just need more electricity, whether from conventional or renewables, for our energy security. Then President Marcos can report in his fifth or sixth  SONA, that the number of non-electrified houses is down to insignificant number.