BWorld 828, On IPRI 2025, power exchange, and the energy mix

On IPRI 2025, power exchange, and the energy mix

October 21, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/10/21/706798/on-ipri-2025-power-exchange-and-the-energy-mix/

 

On Oct. 15, the Property Rights Alliance (PRA, US) — a sister free-market think tank of the Tholos Foundation of which I am among the international fellows — released the International Property Rights Index (IPRI) 2025, holding its global launch in Brussels, Belgium at the EU Parliament. The report was authored by Dr. Sary Levy-Carciente, a Hernando de Soto Fellow, and edited by Lorenzo Montanari, Executive Director of the PRA.

 

The IPRI is composed of three core components: Legal and Political Environment (LP), Physical Property Rights (PPR), and Intellectual Property Rights (IPR). I included the results for 2025 and the results of the previous three years in the accompanying table. The Philippines is not faring well mainly due to our low score in LP, meaning the legal and institutional issues that cover the extent of corruption, among other factors. So far, we are at similar level as Vietnam. (See Table 1.)

 

The ongoing large-scale corruption scandal involving just the Department of Public Works and Highways (DPWH) and not including — yet — many other departments with their own skeletons in the closet, is adversely affecting the country’s investment environment, credibility of other reform programs especially in fiscal economics, and the public’s declining respect for both the Executive and Legislative branches.

 

CALAMITIES AND POWER EXCHANGE

There have been many strong storms then big earthquakes (especially in Cebu and Davao) this month alone. There is a need for energy independence of certain island-provinces in case the transmission lines and cables serving the Panay-Negros-Cebu, Leyte-Bohol sub-grids, and the Mindanao-Visayas grid, are damaged or destroyed.

 

I checked the power exchange among the three grids in Luzon, Visayas, and Mindanao. Last September (and likely until early October), Visayas was importing more power from both Luzon and Mindanao.

 

Last month, the Luzon to Visayas transfer occurred 86% of all time while that of power from Mindanao to Visayas occurred 92% of all time (see Table 2).

 

Visayas has recently been importing power almost 24/7, but power demand in both Luzon and Mindanao is also rising. Within the Visayas, Cebu and Panay islands are coal-powered and they export extra power to Negros which has zero coal and plenty of solar power.

 

Anti-coal sentiment, especially from the multilaterals like the United Nations and ADB continues through their Energy Transition Mechanism (ETM) program — see these reports in BusinessWorld: “DoE, UN agency studying impact of energy transition on coal industry” (Sept. 3), “Power plant retirement to be eligible for carbon credits” (Oct. 13), “DoE clarifies coal moratorium rules; allows new capacity only in exceptional cases” (Oct. 17).

 

The ADB’s anti-coal sentiment should inspire them to move their headquarters from the Philippines (which uses coal for 55% in total power generation) to Myanmar or Nepal which use coal for only 4% and 7% of their total generation, respectively.

 

I bumped into the president and CEO of Meralco Power Gen (MGEN), Manny Rubio, and I asked him about the recent pronouncement by the Department of Energy (DoE). He optimistically replied that “The DoE’s clarification of the coal moratorium provides a pragmatic approach to balancing the country’s energy transition with the realities of our supply reliability. By allowing limited exemptions for off-grid areas, industrial own-use, and critical mineral processing, the policy recognizes the need for dependable baseload power in regions still facing transmission and supply constraints.”

 

This week the Energy Regulatory Commission (ERC) held a press conference about their accomplishments over the last two months and their targets until end-2025. Among the papers released by the ERC that caught my attention was the increase in the Feed in Tariff Allowance (FIT-All) in our monthly electricity bill to 20.73 centavos/kWh, to be collected starting next month.

 

The FIT-All rates in centavos per kWh were: 18.3 in 2017, 22.3 in 2019, 9.8 in 2021, zero in 2023, 8.4 in 2024, and 11.9 until this October. See Table 2 of this column last week, “Coal for energy security, infrastructure for energy resilience” (Oct. 14).

 

So, an increase from 11.9 to 20.7 centavos/kWh next month is high and most of this will go to wind and solar-eligible plants. The owners of these plants are not the ordinary rich, but the super-rich conglomerates that own no coal plants (which are cheap, stable, and reliable energy sources).

 

In a few years, we will pay not just FIT-All but also GEA-All in our monthly electricity bills, especially to huge offshore wind farms under the green energy auction (GEA) program. This GEA-All will be much higher than FIT-All. One ADB estimate quoted by a friend and fellow columnist Myrna Velasco showed that offshore wind will charge P12-P15/kWh.

 

If this number is correct, compared with the current WESM average price of P4/kWh, then the GEA difference will be P12-15 minus P4 equals P8-11/kWh multiplied by their GWH generation. That guaranteed high price GEA minus WESM price will be the GEA-All and we will pay more for electricity.

 

The anti-inflation policies of the economic team and the Bangko Sentral will be cancelled by the expensive wind projects and lobby. Woe unto us consumers.

PhilStar 64, Keep VAT, cut business costs and cut MUP pension

Keep VAT, cut business costs and cut MUP pension

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

October 23, 2025 | 12:00am

https://www.philstar.com/business/2025/10/23/2481801/keep-vat-cut-business-costs-and-cut-mup-pension

 

Three recent reports in The Philippine Star caught my attention: “Fiscal reforms to steer ‘A’ credit rating – DBCC” (Oct. 20), “Ralph Recto stays as DOF chief, says Palace” (Oct. 21) and “MUP pension budget hiked by over a third” (Oct. 21).

 

The first story is good; we should keep aiming for an upgrade in credit ratings from the current “BBB+” to “A.” The second story implies that some wicked groups want to head the Department of Finance (DOF) and are seeking Secretary Ralph Recto’s position, but President Marcos said no. The third story should alarm taxpayers: the Military and Uniformed Personnel (MUP) did not and still do not contribute to their own pension funds while in active service. When they retire, all their benefits will be shouldered again by taxpayers.

 

Then there are three good recent reports in BusinessWorld: “DOF vows to address businesses’ tax concerns” (Oct. 16), “Growth goal still ‘attainable’ — DBM” (Oct. 17) and “Philippines likely to hit low-end of 2025 GDP target – Balisacan” (Oct. 17).

 

For me, these are all good reports because the DOF is listening to and acting on valid concerns from the business community, both households and corporations which constitute about 80 percent of total GDP. The target growth for the full year 2025 of 5.5 percent to 6.5 percent should be kept despite the impact of the series of strong storms and earthquakes that damaged many private properties and public infrastructure, as well as the demoralizing effect of continuing corruption scandals at the DPWH and other departments.

 

So, I still support the economic team — Finance Secretary Recto, Budget Secretary Amenah Pangandaman, Economic Secretary Arsenio Balisacan and Presidential Investment Adviser Frederick Go — in their persistent work and economic optimism.

 

The Philippines’ GDP growth in the first and second quarters (Q1 and Q2) of 2025 is 5.5 percent; Q3 data will be released on November 8. Around the world, so far, only four countries — all in Asia — have released their Q3 2025 GDP performance. Their Q3 and average Q1–Q3 growth rates respectively are as follows: Vietnam 8.2 and 7.8, Malaysia 5.2 and 4.7, China 4.8 and 5.1 and Singapore 2.9 and 3.8.

 

So, if the Philippines grows between 5.5 and 6.0 percent in Q3, the average Q1–Q3 will be around 5.6 percent, lower than Vietnam but higher than Malaysia, China and Singapore.

 

About the brain-dead proposal that the government should abolish the 12 percent VAT to help consumers and reduce the inflation. I say brain-dead because their proposal does not include a corresponding plan to have large-scale spending cuts, like the abolition of some agencies or certain welfare and subsidy programs. We cannot have large-scale tax cuts unless accompanied by large-scale spending cuts.

 

My view on this is that VAT can be reduced from 12 percent to 10 percent or lower, but only if coupled with (a) the abolition of VAT exemptions (they pay zero VAT) for many sectors and (b) spending cuts elsewhere. VAT cannot be reduced unless these two accompanying measures are done either simultaneously or phased in a year or two before or after the VAT cut.

 

Our 12 percent VAT or sales tax is among the highest in East Asia, along with China’s 13 percent and Indonesia’s 12 percent. Other neighbors have lower rates: 10 percent in Japan, South Korea, Cambodia, Laos, Malaysia and Vietnam; nine percent in Singapore; seven percent in Thailand; five percent in Taiwan; and zero in Hong Kong.

 

Many sectors pay 12 percent while several sectors pay zero. This is wrong and distortionary. Once you exempt one sector from VAT payment, other sectors will also lobby hard for similar privileges and produce all sorts of bleeding-heart arguments and overall public finance conditions suffer.

 

The only sectors that should have zero VAT are raw agricultural and fishery products, like kangkong, kamatis, and tilapia — and imported materials for personal use, like pasalubong shoes and clothes for family members, to avoid hassle and corruption in the international airport arrival area for Filipinos.

 

The MUP (AFP, PNP, PCG, BFP, BJMP, BUCOR and NAMRIA) should pay for their own pensions someday when they retire, and not take everything from taxpayers. The MUP pension in the budget is P111 billion in 2024, P145 billion in 2025, and P198 billion in 2026, as proposed by the House of Representatives.

 

For me, this is a scandalous figure. Government doctors and nurses, teachers and educators, lawyers and engineers, agriculturists and local government personnel, among others, did not seek this kind of corrupt setup. They contributed to their own pension while in active service.

 

In addition, there is no “indexation” of retirees’ pensions from the existing salaries of active personnel among non-MUPs. MUP indexation is horribly unfair to taxpayers. A retired police or military general who retired 10 years ago with a monthly pay of, say, P50,000, but whose current counterpart now earns P200,000, will also get P200,000 per month — tax-free — not the P50,000 that was their last salary.

 

We need to cut waste, excess and abuse in the public sector. Taxpayers are not forever milking cows. Either they will try to under-declare taxes as the government remains wasteful, or they will join the waste by declaring themselves poor and entitled to endless subsidies and freebies.

BWorld 827, Coal for energy security, infrastructure for energy resilience

Coal for energy security, infrastructure for energy resilience

October 14, 2025 | 12:03 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/10/14/704914/coal-for-energy-security-infrastructure-for-energy-resilience/

 

Last Friday, Oct. 10, I attended the press conference of the Department of Energy (DoE) with Secretary Sharon S. Garin and several DoE undersecretaries speaking. Many topics were covered — from the planned expansion of waste-to-energy, the expansion of use of electric vehicles, power restoration in storm-ravaged Masbate, and the damage to the power supply from the 6.9-magnitude earthquake in Cebu province. And as the press conference was ongoing, another earthquake, this one with a magnitude of 7.4, hit the Davao region. The power situation was monitored there in real time.

 

I saw the efforts and hard work of the people in the DoE in trying to restore power as soon as possible by coordinating with the concerned institutions, both public and private, like the generation companies, the National Grid Corp. of the Philippines (NGCP), the distribution utilities and electric cooperatives, and then informing the public of their actions. Thank you, DoE, for your service.

 

On Oct. 6 the Independent Electricity Market Operator of the Philippines (IEMOP) released the September composite prices at the Wholesale Electricity Spot Market (WESM) for the October billing. It was only P3.04/kilowatt hour (kWh), and in Luzon in particular, it was only P2.57/kWh. But low WESM prices do not mean low electricity prices because there is an adjustment for the price differential between the feed-in tariff-eligible renewable energy (RE) at a high price vs the low WESM prices. The lower the WESM prices, the higher the feed-in tariff or FIT allowance will be in our monthly electricity bill.

 

I notice and applaud the round-the-clock updates from the NGCP, made during the prolonged monsoon rains (habagat) and the tropical storms last July, the recent typhoons in southern Luzon, then the earthquakes in Cebu and Davao. Because of these updates, I knew which sub-stations were not available, which ones were restored, which provinces and electric cooperatives had power, and so on.

 

Yesterday at 4 a.m., the NGCP released an update after another earthquake, this time with a magnitude of 6.0, hit Cebu again at 1 a.m. The Daanbantayan transmission line was affected but restored by 2 a.m. Thank you, NGCP, for the regular updates and good public information.

 

Also last week, Ember (UK) — an RE lobbyist — released a report that RE had overtaken coal in world power generation in the first half of 2025. Many international media outlets reported that wind and solar have displaced coal as the main source of power generation in the world.

 

This is not true.

 

Until 2024, global coal generation was 10,613 terawatt-hours (TWh) vs wind and solar generation which produced 4,623 TWh. As a share of total generation last year, coal had 34% while wind and solar had only 15% (see Table 1).

 

There is no way that wind and solar can overtake coal. At the ASMODIUM 2025 forum at De La Salle University Manila last Saturday, Oct. 11, Rolando “Don” Paulino, Chief Engineering and Projects Officer of Aboitiz Power, correctly observed that “Renewables would continue to be intermittent — if there is no wind or sun, you will not have electricity. There needs to be a proper energy mix. There needs to be funding now on power plants, a range of fossil-based, gas, and renewables.”

 

I bumped into my former boss from back when I was working at the House of Representatives in the 1990s, former congressman and former finance secretary Gary Teves. I asked him about the role of coal in our energy security, he said that, “In terms of preventing power intermittency and lowering overall cost, coal would still be preferred, especially if the country is trying to grow industries like manufacturing which require large amounts of affordable and consistent power… Instead of ambitious renewable energy targets, the government must aim to increase overall power generation regardless of where power will come from.”

 

Yesterday I attended the Meralco press conference announcing the October 2025 billing. After a P0.185/kWh decline last September, there will be an increase of P0.233/kWh for October. The speakers were Meralco spokesperson and Head of Corporate Communications Joe Zaldarriaga, and Head of Utility Economics Larry Fernandez.

 

Mr. Fernandez explained that the increase was mainly due to a higher generation charge. This in turn was affected by the peso’s depreciation. About 59% of Meralco’s non-WESM supply is dollar denominated. For the First Gas plants, the share is 99% (even supposedly indigenous Malampaya gas is 100% priced in dollars). For all other power supply agreements, the dollar share is 48%.

 

In Table 2, I compared the rates of the various charges in our monthly electricity bill. The generation charge this year is higher, mainly for the reasons mentioned above. But there are price rollbacks like the rate refund/reset.

 

Messrs. Zaldarriaga and Fernandez explained the infrastructure reserves and redundancies that Meralco has prepared to make their facilities and distribution lines strong and resilient. Nice.

PhilStar 63, DOF collections and DOJ leadership

DOF collections and DOJ leadership

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

October 16, 2025 | 12:00am

https://www.philstar.com/business/2025/10/16/2480108/dof-collections-and-doj-leadership

 

MANILA, Philippines —  As the country’s corruption scandals continue to unravel, the economy suffers. See for instance these reports in The STAR this month: “Customs bribery a major barrier to investment in Philippines — US report” (Oct 8), “CPBRD warns of risks to long-term fiscal stability” (Oct. 12), “BIR chases billions from online sellers” (Oct. 14), “BIR sees lower tax collection due to DPWH fiasco” (Oct. 15), “DOF: Tamed spending due to corruption slowing growth” (Oct. 15).

 

The Bureau of Customs (BOC) and the Bureau of Internal Revenue (BIR) are the key tax-collecting agencies of the Department of Finance (DOF). These two bureaus on the revenue side have their share of public suspicion of corruption aside from huge agencies on the spending side like the DPWH, DepEd, DSWD and DOH.

 

DOF Secretary Ralph Recto has confirmed that the BIR’s collections have declined in August-September, that such downturn in revenues could serve as an early warning of slower economic growth. This will be reflected in the coming third and fourth quarter 2025 GDP performance.

 

Secretary Recto also revealed that the Philippines was poised to receive an upgrade in credit rating from “BBB+” to “A-” from S&P this year but this may not happen due to the continuing corruption scandal over flood control and related public infrastructure projects.

 

The DOF’s revenue collection function is partially crippled by our tax system that imposes high tax rate then giving exemption to certain sectors which defeats the purpose of revenue collections. For instance, the 12 percent value added tax (VAT) on sale of goods, food and services. The Philippine Retailers Association (PRA) has urged the government to impose VAT on goods sold through e-commerce platforms as many of these transactions remain untaxed while the traditional and physical retailers collect VAT, which raises the prices of their goods and make them more expensive compared to e-commerce retailers. I support the PRA here.

 

Senior citizens like me and people with disability (PWD) are also exempted from VAT in our purchases of food in restaurants and bars, hotel stay, plane fare, bus fare and boat fare, medicine purchase, and so on. And I notice that there are many fake PWD people – young, no obvious physical defect, maybe they have heart and kidney problem, eye or hearing defect, etc. But unlike the physically crippled, the blind, deaf and mute, those young people can still work like normal adults.

 

Exempting those PWDs and seniors like me from VAT payment while our VAT rate remains the highest in East Asia is highly distortionary in revenue collections.

 

I believe that the VAT rate should instead be brought down from 12 percent to 8-10 percent, then remove all VAT exemptions including purchase by seniors like me. This will remove the distortions in taxation, even raise overall VAT collections as the tax base is expanded, and the corrupt practice of many young people with fake disability getting VAT exemption is ended.

 

DOJ leadership

 

The Department of Justice (DOJ) needs a new secretary after Boying Remulla moved to be the country’s Ombudsman or chief anti-corruption investigator. Among the names that were floated to possibly succeed him is DOJ Undersecretary Jesse Hermogenes Andres.

 

I know Usec Jesse because he is also a fellow alumnus of the UP School of Economics, then he went to UP College of Law. Among his functions as DOJ Usec are: in-charge of the Law  Enforcement Cluster —  the National Prosecution Service, National Bureau of Investigation, Anti-Money Laundering Council, Anti-Terrorism Council, National Committee on Intellectual Property Rights and National Intelligence Board.

 

Last year, he briefly did two concurrent functions, as head of the Inter-Agency Council Against Trafficking and as OIC chairperson and CEO of the Energy Regulatory Commission (ERC). I am familiar with many energy issues especially the power and electricity sub-sector and from what I heard, Usec Jesse has dispensed some important reforms and decisions in his brief stint of less than two months as ERC chairperson.

 

He also held a Usec position two decades ago, as chief of staff with Usec position of then vice president Noli de Castro (2004-2010). He also held various corporate and government positions in the past.

 

In my vocabulary as an advocate of minimal government, government (anywhere in the world) has limited functions to protect the citizens’ three basic and natural rights: right to life, right to private property, and right to liberty.

 

The so-called right to education until college, right to health including non-infectious diseases, right to housing, right to monthly government allowance and so on, are not part of natural rights. They are modern inventions as societies and economies graduate from subsistence to abundance and prosperity. Such artificial “rights” are very often the main cause of persistent and annual budget deficit, leading to ever-rising public debt and needing ever-expanding taxes.

 

The rule of law – the law applies equally to unequal people, no one is exempted and no one can grant an exemption – requires both philosophical/judicial understanding and physical infrastructures of enforcement. Rendering fair and equal application of the law to all people is the height of justice administration.

 

I believe that Usec Jesse has the wisdom and the balls to render fair application of the rule of law in the country. May he be the next DOJ Secretary.

BWorld 826, Philippines’ nuclear energy towards industrialization

Philippines’ nuclear energy towards industrialization

October 7, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/10/07/703201/philippines-nuclear-energy-towards-industrialization/

 

Last week, on Oct. 2 and 3, I attended the second “Philippines International Nuclear Supply Chain Forum 2025,” organized by the Department of Energy (DoE) and held at Grand Hyatt Manila, BGC, Taguig City. As I expected, it was a very informative forum, with new international data and initiatives laid and discussed.

 

Nuclear power is a powerful and stable source of electricity to energize and sustain many industrialized and industrializing countries in the world. Despite the hysteria by many environmentalist and climate groups, world demand for nuclear power is rising, with nuclear generation rising from 2,226 terawatt-hours (TWh) in 1994 to 2,818 TWh three decades later in 2024, with the expansion led by the US, Russia, China, and South Korea.

 

But the share of nuclear power in total generation worldwide has declined from 17% in 1994 to 9% in 2024. This is not because the world turned more towards wind-solar power, but towards coal. In 2024 for instance, the total generation share of coal in various countries was: India, 75%; China, 58%; Indonesia and the Philippines, 61%; Vietnam, 50%; Australia, 45%; and Japan and South Korea, 30%.

 

In terms of capacity of reactors that are currently operating, the US leads the world, followed by France then China (see the table).

 

But when the reactors currently under construction (37,990 megawatts, MW) plus planned reactors (48,256 MW) and proposed reactors (174,850 MW) in China become operational, China will overtake the US and France combined in a decade or so.

 

Other Asian nations pursuing more nuclear power are the following: Bangladesh, which has two reactors under construction (2,400 MW), plus two planned reactors (2,400 MW); Saudi Arabia, which has two planned reactors (2,800 MW), Indonesia, also two planned reactors (500 MW); and Vietnam has four in the works (1,000 MW).

 

The Philippines intends to have nuclear power plants producing 1,200 MW by 2032. On Oct. 2, Energy Secretary Sharon S. Garin issued Department Circular (DC) No.  2025-10-0019, “Framework for the Integration of Nuclear Energy in the Country’s Generation Mix to Implement the Clean Energy Scenario Under the Philippine Energy Plan 2023-2025.” The 10-page document sets five Guiding Principles: energy security, environmental sustainability, grid harmonization and integration, competitive pricing, and public health protection. It set that the pioneer nuclear power plant will be treated as a baseload facility and granted priority dispatch in coordination with the DoE, the Independent Market Operator, and the System Operator regardless of the nuclear technology deployed.

 

During the opening of the nuclear forum, DoE Director and Technical Secretariat Head of the Nuclear Energy Program Inter-Agency Committee (NEP-IAC) Patrick T. Aquino said that

 

“The NEP-IAC aims to transition from preparatory activities to implementation-ready frameworks, keeping the Philippines on track to deliver its first nuclear-generated kilowatt-hour by 2032.”

 

Good moves there, Ms. Garin and Mr. Aquino.

 

Among the foreign officials I saw at the forum were Eleonore C. Rupprecht, Counsellor and Trade Commissioner of the Canadian Embassy, and Ricardo Luis Bocalandro, Ambassador of Argentina.

Over the coffee break, I talked with two friends who had been with me during the Philippines Nuclear Trade Mission to Canada in March 2024 — Lino Bernardo of Meralco Power Gen (MGEN) and Nicole Yazon of Aboitiz Power (AP). Both are graduates of the UP College of Engineering. I asked them about their respective companies’ preparations for going nuclear.

 

Mr. Bernardo, who is president and CEO of MThermal, said that MGEN — MThermal’s parent company — is developing their human capacity. “We have sent our engineers to various foreign institutions with nuclear expertise to learn about multiple aspects of nuclear build and operations, particularly in the area of safety. USTDA (the US Trade and Development Agency) recently awarded Meralco with a grant to fund a feasibility study on the potential use of small modular reactors (SMRs) for a clean and secure energy source in the Philippines.”

 

Ms. Yazon, who is the Senior Assistant Vice-President for Strategy of AP, said that they support the government’s move to nuclear power as “part of a balanced energy portfolio to achieve energy security, grid reliability, and affordability. We are actively working with the NEP-IAC; we need strong government support through long-lasting policies and incentives that can span multiple administrations to mitigate the investment, commercial, technology, and environmental risks inherent to nuclear energy.”

Good.

 

When it comes to the Philippines’ energy security, I consider AP, MGEN, and SMC as our heroes against blackouts and energy backwardness. This is because they have thermal power plants (coal and gas powered), and soon, nuclear. Only thermal plants can provide 24/7, 365 days a year of baseload supply, the continuous electricity that is needed to power the country’s aspirations for industrialization and sustained high economic growth. I do not look positively on the other energy conglomerates that demonize coal and nuclear power.

PhilStar 62, Low inflation and unemployment, high spending and budget deficit

Low inflation and unemployment, high spending and budget deficit

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

October 9, 2025 | 12:00am

https://www.philstar.com/business/2025/10/09/2478456/low-inflation-and-unemployment-high-spending-and-budget-deficit

 

Despite the overall economic pessimism in the country today due to continuing corruption scandals affecting both the executive and legislative branches, there are glimmers of economic optimism we should look forward to. I am referring to the low inflation and low unemployment rate of the country.

 

This week, the Philippine Statistics Authority (PSA) released the inflation figure for September 2025 of only 1.7 percent, then the unemployment figure for August 2025 of 3.9 percent, both low levels and hence, good news.

 

I computed the average inflation for January-August 2025, in Asia: Japan 3.4 percent, Vietnam 3.3 percent, Cambodia 3.0 percent, India 2.9 percent, Pakistan 2.3 percent, South Korea 2.0 percent, Taiwan 1.8 percent, the Philippines 1.7 percent, Hong Kong and Indonesia 1.5 percent, Malaysia 1.4 percent, Singapore 0.8 percent, Thailand 0.1 percent, China -0.1 percent. China has deflation, Japan is the new “inflation capital” of East Asia, and the Philippines is back to a low-inflation regime.

 

Inflation over the same period in America: Brazil 5.2 percent, Mexico 3.9 percent, US 2.7 percent, Canada 2.0 percent.

 

In Europe: Turkey 36.6 percent, Russia 9.6 percent, Romania 6.1 percent, Poland 4.1 percent, Netherlands 3.4 percent, UK and Austria 3.3 percent, Belgium, Czech Republic and Greece 2.6 percent, Spain 2.5 percent, Germany 2.2 percent, Italy 1.7 percent, France 1.0 percent.

 

So our inflation this year is midway among Asian countries, lower than those in America and Europe except France.

 

I also computed the average unemployment rate in January-August 2025. Several countries in Asia do not have monthly unemployment, they have quarterly like Singapore, Thailand and Vietnam, while Indonesia has March data only. Here is the average for Asia: India 6.1 percent, China 5.2 percent, Indonesia 4.8 percent, the Philippines 4.1 percent, Taiwan and Hong Kong 3.4 percent, Malaysia 3.0 percent, S. Korea 2.7 percent, Japan 2.5 percent, Vietnam 2.2 percent, Singapore 2.0 percent, Thailand 0.9 percent. Australia has 4.2 percent.

 

Average unemployment rate over the same period in America: Canada 6.8 percent, Brazil 6.3 percent, US 4.2 percent, and Mexico 2.6 percent.

 

In Europe: Spain 10.9 percent, Sweden 9.2 percent, Turkey 8.3 percent, France 7.5 percent, Germany 6.3 percent, Italy 6.2 percent, Belgium 6.1 percent, Poland 5.3 percent, UK 4.6 percent, Netherlands 3.8 percent, Russia 2.3 percent.

 

So, our unemployment rate this year is midway among Asia and America and lower than Europe. In addition, our labor force participation rate is 64 percent average this year. LFPR is an indicator of people’s optimism or pessimism about the jobs market. If they think they can find a good job or the business environment is good, they go out to look for jobs or start a new business, and LFPR goes up to 64 percent or higher. If people think there are not enough good paying jobs, they either stay home or pursue other studies and training and LFPR goes down to around 63 percent or lower.

 

So these are two good things we can console ourselves with. The private sector remains resilient overall in creating more jobs and producing more goods and services that stabilize overall consumer prices.

 

The economic team — Finance Secretary Ralph Recto, Economics Secretary Arsenio Balisacan, Budget Secretary Amenah Pangandaman, Special Assistant to the President for Investment and Economic Affairs Frederick Go, along with Bangko Sentral Governor Eli Remolona Jr. — deserve public support for the various policies they laid down minus imposing price control of important commodities.

 

Our third quarter  2025 GDP performance will be released a month from now. The first country in the world to report its Q3 2025 is Vietnam, another whooping 8.2 percent growth. Their Q1-Q3 2025 average growth is already 7.8 percent.

 

The average Q1-Q2 2025 growth in East Asia is as follows: Taiwan 6.7 percent, the Philippines 5.5 percent, China 5.3 percent, Indonesia 5.0 percent, Malaysia 4.4 percent, Singapore 4.3 percent, Thailand 3.0 percent, Japan 1.5 percent, South Korea 0.3 percent.

 

The rest of G7 industrial countries, their Q1-Q2 average growth are as follows: US 2.0 percent, Canada 1.8 percent, UK 1.6 percent, France 0.7 percent, Italy 0.6 percent, Germany 0.2 percent.

 

I am hoping for a 6.0 percent Philippine growth in Q3 but a more realistic number is between 5.5 and 6.0 percent. Still this is a good achievement compared to many East Asians, all of G7 and the rest of North America and Europe.

 

About the ongoing corruption scandal at the DPWH and involving many legislators both at the House of Representatives and the Senate, the culprit is a culture of waste, non-accountability and disregard for the overall fiscal condition of the country.

 

Prior to the lockdown period of 2020-2021, our average budget deficit in 2018-2019 was only around P0.6 trillion a year. During lockdown years it jumped to P1.5 trillion a year. From 2022 to 2024, it still averaged at P1.5 trillion a year despite the absence of any economic or virus crisis.

 

Many agencies went on a spend-spend-spend culture. New subsidies were created without abolishing old and non-performing subsidies. PhilHealth has returned funds to the National Treasury this year. President Marcos Jr. has recognized that it was a mistake and is incorporating a P53-billion funding allocation for 2026.

 

The President should prioritize reducing the outstanding public debt which is now approaching P18 trillion from only P8 trillion in 2019. He should do large scale spending cuts, tight fiscal discipline across many agencies and departments.

 

When agencies feel the tightness in funding, they will be forced to be more responsible, more accountable and less corrupt in spending.