PhilStar 48, On the DBCC’s revised economic and fiscal targets

On the DBCC’s revised economic and fiscal targets

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

July 3, 2025 | 12:00am

https://www.philstar.com/business/2025/07/03/2455005/dbccs-revised-economic-and-fiscal-targets

 

The Development Budget Coordination Committee (DBCC) issued revised macroeconomic and fiscal targets for 2025-2028 last week, June 26. The DBCC is chaired by Budget Secretary Amenah Pangandaman, with Finance Secretary Ralph Recto, Economic Planning Secretary Arsenio Balisacan, Executive Secretary Lucas Bersamin and Bangko Sentral Governor Eli Remolona as members.

 

I compare here the DBCC targets in June 26, 2025 vs. their targets in Dec. 2, 2024, respectively.

 

In GDP growth, 5.5 to 6.5 percent in 2025 then six to seven percent in 2026-2028, downwards from six to eight percent from 2025-2028 in previous targets.

 

In inflation, two to three percent in 2025 and two to four percent in 2026-2028, vs two to four percent in 2025-2028.

 

For the fiscal program: Revenues at P4.52 trillion in 2025 to P5.91 trillion in 2028, lower than previous targets of P4.64 trillion in 2025 to P6.25 trillion in 2018.

 

Expenditures at P6.08 trillion in 2025 to P7.47 trillion in 2028, lower than previous targets of P6.18 trillion in 2025 to P7.62 trillion in 2028.

 

Budget deficit at P1.56 trillion in 2025 or 5.5 percent of GDP to P1.55 trillion in 2028 or 4.3 percent of GDP. These are higher than previous targets of P1.54 trillion in 2025 or 5.7 percent of GDP to P1.37 trillion in 2028 or 3.7 percent of GDP

 

So the growth targets are seen to be lower while government spending and deficit are seen to be higher. Not a good revision but at least the adjustments are more realistic and more honest. The major factors for these changes are external – US tariff hikes announced last April, the Israel-Iran war in June and US involvement, the temporary spike in world oil prices, continued high US interest rates, and Russia-Ukraine war when they were expected to have mellowed.

 

For GDP growth in the first quarter (Q1) 2025, only 5.4 percent when expectation was 5.8 percent or higher as it was an election campaign period. Nonetheless growth is expected to be higher in Q2 2025 to reflect belated spending in April-May by politicians and households, among other factors.

 

Our inflation has mellowed to 1.4 percent in April and 1.3 percent in May, thanks to price monitoring and supply expansion measures by the economic team. But the oil price spikes in June during the Israel-Iran war have ticked prices to go up. Nonetheless, low inflation must have boosted consumer confidence and help pull up household spending which constitutes 74 percent of GDP. I see about six percent growth in Q2 2025.

 

For the fiscal situation, one indicator of non-rosy performance this year is data from the Bureau of Treasury for the period January-May: budget deficit jumped from P326 billion in 2023 to P405 billion in 2024 and P524 billion in 2025.

 

Same period January-May, expenditures rose from P1.92 trillion in 2023 to P2.26 trillion in 2024 and P2.48 trillion in 2025. Our interest payment alone for our public debt rose from P230 billion in 2023 to P322 billion in 2024 and P357 billion in 2025. Or an average of P2.4 billion a day interest payment alone this year, huge.

 

Revenues are slowing down: P1.59 trillion in 2023, P1.85 trillion in 2024 and P1.95 trillion in 2025. The BIR has a steady increase revenues but the BOC collection is flat at P381 billion in 2024 and 2025. Has smuggling and illicit trade got worse this year?

 

The economic team and DBCC members must work more on reining in public spending, cut subsidies that are supposed to be temporary and not permanent, national agencies should devolve more functions to LGUs which now have more share from the national tax, not duplicate in rising spending with LGUs.

 

On the non-tax revenues, one innovation made by Secretary Recto is he requested government-owned or -controlled corporations (GOCCs) to raise their mandatory remittance to the national government of their earnings the previous year from 50 percent (RA 7656, Dividend Law of 1993) to 75 percent.

 

Many GOCCs and government banks complied. So far the Land Bank of the Philippines (LBP) has the highest remittances to the national government, P32 billion in 2024 and P33 billion in 2025, hats off to my UPSE 1984 batchmate, LBP president Lynette Ortiz.

 

Recently, the Power Sector Assets and Liabilities Management Corp. (PSALM) made a dividend remittance of P8.96 billion to the National Treasury. This is a good development and rather surprising for me because I see that PSALM was getting P8 billion a year in subsidy in recent years, mainly because several electric cooperatives in Mindanao do not pay PSALM for the power supply they get from the hydro plants there.

 

The DBCC and the economic team should work on long-term privatization of many government assets like land and poorly-performing GOCCs. Privatization does not abolish those corporations, there is only transfer of ownership from government to private corporations and unburdening the taxpayers of continued subsidies.

 

All proceeds from privatization should be used to retire some public debt, reduce the debt stock to reduce our annual debt servicing, both principal amortization and interest payment. No earmarking of privatization proceeds to any government agency or program no matter how bleeding heart the arguments are. Proceeds should go to reduce the public debt.

BWorld 804, Greenfield investments and growth

Greenfield investments and growth

June 26, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/06/26/681380/greenfield-investments-and-growth/

 

Last week, on June 20, the UN Conference on Trade and Development (UNCTAD) released the World Investment Report (WIR) 2025. I downloaded the Excel files for inflows, outflows, instock, outstock of foreign direct investments (FDI) of all countries, mergers and acquisitions by country and by sector, and so on.

 

One table that caught my attention was “greenfield FDIs by country destination.” Greenfield investments are new (thus “green”) facilities like office buildings, manufacturing facilities, etc. cross-border from the ground up.

 

The Philippines has been catching up with some East Asian neighbors in this since 2023 — it was larger in this metric than South Korea, Hong Kong, Taiwan, and Thailand in 2023. But in overall FDI inflows including expansions for “brownfield” (old, existing) investments, these economies are ahead of the Philippines.

 

Global greenfield FDI from 2022 to 2024 was generally flat at $1.3 trillion. But for some Asian nations — India, China, Japan, Malaysia, the Philippines — there was a big jump over the last two years. Those with flat or declining trends were Singapore, Vietnam, Indonesia, South Korea, Thailand, Hong Kong, and Taiwan (see the table).

 

 

Except for Japan and Thailand in the list of top countries when it comes to attracting FDIs, many Asian nations had seen fast growth of 4.4% and above in 2024.

 

The Philippines’ economy has gained momentum between 2023 and 2024 and likely into 2025 to 2028 or beyond. The government economic team is on the right track despite what the detractors and pessimists say. The hike in greenfield FDIs in the last two years was several times higher than from 2020 to 2022.

 

The economic team — led by Finance Secretary Ralph Recto, Presidential Investment Adviser Frederick Go, Budget Secretary Amenah Pangandaman, Economics Secretary Arsenio Balisacan, and Trade Secretary Ma. Cristina Roque — should continue with economic and business liberalization, with increasing the ease of doing business, and investment promotions abroad especially in Europe where degrowth has become the trend and not the exception for many countries there.

PhilStar 47, Hydrocarbons, pumped storage hydro and economic growth

Hydrocarbons, pumped storage hydro and economic growth

 

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

June 26, 2025 | 12:00am

https://www.philstar.com/business/2025/06/26/2453279/hydrocarbons-pumped-storage-hydro-and-economic-growth

 

There are a number of good developments in the Philippine energy sector recently. Consider these reports in The Philippine STAR written by Brix Lelis:  “DOE: Drilling operations begin at Malampaya field” (June 21); “Meralco, Gokongweis expand power supply deal” (June 24); “MGen inks supply deals with D&L unit” (June 25); “DOE seeking Chinese expertise on battery storage facilities” (June 25); “‘Philippines, Tiger Cub economies to ignite global oil demand’” (June 25).

 

We need more hydrocarbons, oil and gas energy to power the Philippines’ high growth trajectory. The number of vehicles especially large trucks and buses that transport heavy loads and millions of passengers will need more oil. The number of companies and households that need more electricity will need more gas to augment our coal, hydro and other renewables generation.

 

About the Department of Energy’s (DOE) plan to get State Grid Corp. of China (SGCC) support in deploying battery storage systems to reinforce the country’s transmission network, this is good. I saw partly SGCC’s sophistication in grid operation, maintenance and innovation. As I mentioned earlier in this column, I saw last April the Fengning pumped storage hydro (PSH) plant in Hebei province that serves as ancillary service (AS) or peaking plant, owned by SGCC. I also saw China’s modern road infrastructure like many road tunnels under big and long mountains, plus the high speed train. The Fengning facility is the largest PSH  plant in the world at 3,600 MW (300 MW x 12 units).

 

But there is potential danger of over-capacity of PSH under the DOE plan because while the average demand for regulating reserves in Luzon is only around 700 MW, the DOE’s Green Energy Auction Plan (GEAP) 3 for PSH as AS is targeting 6,100 MW for Luzon at high price. Examples are Ahunan Power’s Pakil PSH of 1,400 MW at P5.46/kwh, and Olympia Violago’s Wawa PSH of 800 MW at P5.36/kwh.

 

AS are standby plants, they do not run 24/7 like baseload hydro. If baseload hydro will charge P5-P6/kwh, that is good and competitive. But PSH as AS and charging P5+/kwh is expensive, meaning more expensive electricity for the consumers someday.

 

The DOE should not target very high AS at high prices. DOE should instead target more baseload plants including big hydro, big nuclear, big coal and gas plants. These plants are priced at market rates whether with captive or competitive customers.

 

Last week June 18, Meralco PowerGen Corp. (MGEN) through its subsidiary PacificLight Power Pte Ltd (PLP) has successfully completed and commissioned a 100 MW Fast Start AS facility on Jurong Island, Singapore. I saw the PLP’s LNG power plant last November along with some local media, it is impressive. Huge LNG plant occupying a  small land area and offering stable electricity at competitive prices to Singapore businesses and households.

 

MGEN president and CEO Emmanuel Rubio optimistically said: “This milestone reflects our commitment to investing in high-efficiency, future-ready technologies that address both reliability and sustainability challenges. Through PLP, we are proud to contribute to Singapore’s energy security while expanding our regional footprint with innovation at the core.”

 

Also last week, I bumped into the vice president for corporate affairs of Aboitiz Power, Suiee Suarez. I asked about their company’s innovation in thermal and hydrocarbon plants, he said that “AP invests in innovations like AI and digital twin technologies leading to improved operational reliability through predictive analytics and proactive maintenance activities. The resulting gains in plant availability and efficiency translate to better service to our customers thereby helping boost economic activities across the country.”

 

About the International Energy Agency (IEA) report that Philippines along with Indonesia, Malaysia, Thailand and Vietnam as “Tiger Club Economies” are poised to roar forward and capture a growing share of global oil demand growth through 2030. That is another good news for us. The IEA is notorious for RE lobbying, it is slowly realizing that the world cannot modernize without hydrocarbons and fossil fuels. The ASEAN-5 is growing fast, will continue growing fast in the short- to medium-term.

 

Fast growth before was something like 6.5 to 10 percent a year, now 4.0 to 6.0 percent can be considered fast.  Europe is growing at -1 to 3 percent a year, degrowth is the trend not the exception.

 

We need to go back to the old school, conventional energy use – more hydrocarbons, more petroleum, more fossil fuels. We need more petrochemicals, from paint to nylon to plastic, courtesy of crude oil. We need more ammonium fertilizers, courtesy of natural gas. We need more cement, courtesy of coal. Aside from power generation function of oil, gas and coal.

 

Meanwhile, I want to thank the barangay police CCTV monitoring team of Barangay San Antonio, Makati City. The other day our dog slipped out of our door and walked outside. After looking for him for more than an hour, I gave up and went to the CCTV monitoring team. Team leader Gilbert Gapasin guided me and through the many CCTVs in the barangay playing back, I was able to find our dog. Hats off, barangay officials. Thank you.

BWorld 803, 10 points about online gambling

10 points about online gambling

June 24, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/06/24/680857/10-points-about-online-gambling/

 

Online gaming like online music, online food delivery, and online lectures and seminars, has become more popular in the Philippines. There are positive and negative effects of the proliferation of these online transactions. Here is my list of 10 important points about online gambling.

 

1. It has grown big in revenues. It reached P112 billion in 2024, with e-games and e-bingo accounting for P48.8 billion. And in the first quarter of 2025 alone, gross gaming revenues (GGR) reached P104.1 billion, with the e-games and e-bingo segment contributing P51.4 billion. This data comes from the Philippines Amusement and Gaming Corp. (Pagcor).

 

2. News about gambling addiction, dirty money, and calls for outright bans have surfaced at more pronounced levels. See these reports in BusinessWorld this year: “Filipinos battle addiction amid online gambling boom” (Jan. 14), “PHL urged to monitor dirty money risks from online gambling, crypto” (Feb. 25), “Pagcor warns BSP regulation could hold back e-gaming growth” (Feb. 27), “Proposed local online gambling ban to hurt NG revenues” (March 4), “Pacific Online weighs expansion amid PIGO uncertainty” (May 2), and, “E-games dislodge casinos as Pagcor’s top earners” (May 7).

 

3. What was previously casual digital entertainment has expanded into a wide ecosystem that includes among others: mobile gaming with in-app purchases, online betting and digital casinos, play-to-earn platforms and crypto-integrated games, and remote gambling services including e-sabong and international POGOs.

 

4. This evolution has driven innovation and economic activity but it also created new risks especially for less-mature members of the population. These include: lack of consumer awareness, with many users unable to distinguish between entertainment and gambling; financial risk and addiction that can lead to overspending, debt accumulation, and addictive behaviors, especially among low-income users or minors; and, fragmented regulation, with existing regulations being either outdated or inconsistent across sectors, leaving users exposed to predatory practices and non-compliant operators.

 

5. New regulations should include: clear distinctions made between entertainment and gaming and gambling so that distinct and not uniform regulations can apply; having age and identity verification, with mandatory user verification to protect and exclude minors and enforce age-appropriate access; and, consumer protection mechanisms like limits on spending, self-exclusion options, behavior monitoring tools, and transparency in digital game design.

 

6. Pagcor, which is at the same time the regulator and one of the gaming players seems to have a good cash flow. Among the dozens of government-owned and -controlled corporations (GOCCs) and government financial institutions (GFIs), Pagcor was No. 4 in 2024 when it came to cash flow (see Table 1).

 

7. Proposals for outright prohibition or banning online gambling are not advisable as they will only lead to illegal gambling — underground, unregulated, and non-transparent so victims cannot complain. Government regulatory oversight on consumer safeguards would be gone, and government revenues would decline and approach zero. With regulatory oversight, licensing fees and taxes can be collected to support public infrastructure and public campaigns on digital literacy and responsible use.

 

Data on dividends remitted to the National Government show that Pagcor dividends are declining. I am not sure if this is an indicator of there being more illegal platforms and/or that other players are becoming more dominant (see Table 2).

 

8. Gambling is here to stay. It is part of human nature and is enjoyed by most people. This includes fun betting among friends, young kids betting on spider fighting and having fun in Timezone, the adult passion for cockfighting, and even deriving pleasure from potentially dangerous or risky behavior like drinking, smoking, vaping, downhill cycling, mountain climbing, sky jumping, etc.

 

9. Appropriate regulation is the middle ground between illegal and legal-but-unregulated gambling, one that recognizes the widening digital economy and ease of participation, respects people’s desire for entertainment or an itch for quick money. Regulation protects vulnerable and gullible players, and respects government regulatory authority. Cross-sector collaboration among regulators, fintech providers, gaming companies, civil society, and the players themselves can help attain ethical and safety standards.

 

10. Like taxation of “sin products” (alcohol, tobacco, sugary drinks, mining products), appropriate regulatory fees and tax rates should prevail over nanny-state taxation that goes through the roof and which tends to drive people to patronize underground or illegal, unregulated activities and players.

China industrialization

I googled the following, results from wiki, my summary and discussion:

1. Longest bridges in the world. Of the Top 10, 5 are in CN,  #1 is Danyang–Kunshan Grand Bridge in CN 164.8 kms long, #10 is Metro Manila Skyway system with 39.8 kms. #11 is US.

Longest sea-crossing bridge in the World is HK-Macau-Zuhai bridge, 55 kms. When the Cavite-Corregidor-Bataan bridge is finished with 32 kms, it will be the 2nd longest in the world.

2. Largest hydro power plants in the world. Of the top 10, 5 are in CN, #1 is Three Gorges Dam (3GD), 22.5 GW. 1 from US, #10 Grand Coulee in the US, 6.8 GW. There are 38 hydro plants that are 3.0 GW or larger, 17 of these from CN, 8 from BR, 4 from RU, 2 each from US and CA.

PH largest hydro plants are CBK in Laguna with 0.8 GW then San Roque in Pangasinan with 0.4 GW.

CN will build an even bigger hydro plant, the Yarlong Zangbo (YZ) project in Tibet, 60 GW or nearly 3x the 3GD which is currently the largest in the world. The YZ is projected to be finished by 2040, or 15 years construction. Construction of 3GD was 20 years, 1992-2012.

3. Longest road tunnels in the world. Of the top 10, 4 are in CN. #1 is Lærdal Tunnel in Norway, 24.5 kms. There are 443 tunnels that are 5.0 kms or longer, zero from the US, more than half from CN alone.

In terms of hard infra, CN is a powerhouse, US is far 2nd or 3rd. Which speaks of countries’  backward linkages – manufacturing and production of huge volume of cement, steel, cables, etc. US is good in services like Hollywood movies, NBA, Amazon deliveries etc. But US is far behind CN in industry and manufacturing.

Now Kennon road going to Baguio is closed again to vehicles after a week+ of rains, a number of landslides, rockslides that block the road or slice the road. If you build tunnels across hills and mountains, no danger of landslides. Only possibility of tunnel collapse during earthquakes but it's an eng'g problem with eng'g solution, the strength and stability of tunnels against strong earthquakes.

The longest tunnel I saw in Hebei province was 5+ kms. 2 tubes meaning the other side is separated by a wall, 1 tube is 2 lanes. Well paved, well lighted, and there is internet even in the middle of long tunnels, I could send messages and photos while our van was inside that tunnel.

Very mature eng'g skills, high prodn volume of cement, steel, electrical cables, etc needed to build long tunnels, and hundreds of long tunnels. CN has such capacity no other country can do, not even the US, JP, UK, DE, FR, etc.

BWorld 802, On oil price shocks and inflation, growth and wage coercion

On oil price shocks and inflation, growth and wage coercion

June 17, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/06/17/679426/on-oil-price-shocks-and-inflation-growth-and-wage-coercion/

 

The Israel-Iran war is now five days old, and the immediate impact is a crude oil price hike. From an average of $61-$62 per barrel from early April to early June 2025, West Texas Intermediate (WTI) crude quickly jumped to $68-$73 per barrel from June 13 onwards. The war looks like it will last for several weeks or months, so elevated world oil prices will be with us.

 

I checked data on the previous wars in the Middle East, the oil price hikes that followed, and the inflation rates of G7 countries and selected Asian nations at the time. China and Vietnam do not have inflation data from the 1970s so I removed them from the list.

 

Four periods that had oil price shocks are covered: 1.) 1974, mainly as a result of the big Yom Kippur war in October 1973, which saw Israel fighting against Egypt and Syria; 2.) 1979-1980, mainly a result of the Iran civil war, and political instability in Saudi Arabia and Syria; 3.) 1999-2000, mainly due to the Palestinian intifada vs Israel, civil wars in Indonesia, Liberia, and Yugoslavia, the First Russo-Chechen War, and the India-Pakistan war; and, 4.), 2011, which saw civil wars in Libya (when Khadaffy was toppled), Syria, Lebanon, and the Iraq insurgency.

 

All G7 countries experienced high inflation during those four periods except Canada in 1979-1980, and Japan in 2000 and 2011. The Philippines and other Asian nations also experienced higher inflation on those periods except in 2000 (see Table 1).

 

So, if the current price of $68-$73 per barrel remains for several weeks and months, the Philippines’ inflation rate can quickly jump from 1.4% in April and 1.3% in May, to 1.8-2.5% in June-July onwards. The economic team should prepare contingency measures for this possibility.

 

LEGISLATED WAGE HIKE AND THE ECONOMIC TEAM

See these recent reports in BusinessWorld: “House approves P200 wage hike bill” (June 5), “Labor condemns failure of minimum wage bill despite willingness to compromise on P100 hike” (June 12), “Economic managers warn wage hike bill to slash GDP growth” (June 12).

 

I say “bravo” to the government’s economic team — Cabinet Secretaries Frederick Go, Ralph Recto, Arsenio Balisacan, Amenah Pangandaman, and Ma. Cristina Roque — for taking a clear position about the dangers of legislated wage hike, instead of going through the regional wage negotiations.

 

I checked recent data on wages in Asia and GDP growth over the past three years, and the simple comparison yielded a not-surprising result: economies with high wages — above $2,500/month at purchasing power parity (PPP) values — grew slowly, from 0.7% to 3.4%, while economies with lower wages — below $2,500/month — had higher average growth, from 4.5% to 7.8% with the exception of Thailand (see Table 2).

 

Here are six facts about wages and employment that socialist-leaning activists do not or cannot comprehend.

 

1. Employment in private enterprises is a private contract between employees and employers, not between employees and government or NGOs, media, and academics.

 

2. Wage is a function of productivity, not the number of kids a worker has, and not the number of legislators and NGOs making noise about wage intervention.

 

3. Productivity varies within the same corporation, so workers doing similar jobs in the same corporation have varying wages and benefits.

 

4. The most degrading experience for people is not being hired at all, and not being “exploited” by employers; so the real minimum wage is zero, not P600/day or so.

 

5. The most liberating environment for workers is having plenty of jobs available, including ease of hiring themselves and creating jobs for their friends via entrepreneurship.

 

6. “Easy to hire and easy to fire” is consistent with expanding jobs opportunities; “hard to fire” leads to hard to hire unless workers are highly productive and can use machines and robots to replace other workers.

 

The Philippines’ wage-setting at the regional wage boards and tripartite meetings among government, employers, and labor unions is itself a violation of wage as a function of productivity but it is a good compromise.

 

Congress has erred in attempting to legislate a big wage hike nationwide and ignoring the role of productivity as a determinant of wage adjustments. But Congress has redeemed itself by not passing the bill for bicameral approval and ratification.

 

The economic team is correct in opposing a legislated wage hike; the detractors and socialist-leaning activists are wrong. My unsolicited advice to the latter — they should try being entrepreneurs themselves and very likely they will behave and reason out as the current employers are. 

PhilStar 46, Energy security during rainy, stormy months

Energy security during rainy, stormy months

 

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

June 19, 2025 | 12:00am

https://www.philstar.com/business/2025/06/19/2451539/energy-security-during-rainy-stormy-months

 

Two weeks ago the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) declared the official rainy season for the country, normally June to November.

 

Rainy season means higher output for hydroelectric plants but lower output for solar plants as solar hates shade from clouds, rains and trees. Like last year, the share of hydro in total power generation rose from 3.3 percent in May to 5.4 percent in June 2024, while solar share declined from 3.5 percent in May to 3.2 percent in June. The share of wind also declined from 0.6 percent in May to 0.3 percent in June. For a combined share of 3.5 percent of total generation from wind-solar, they are dangerously unreliable to power the Philippines’ fast economic growth.

 

We also have frequent flooding as we do not have enough lakes, dams, weirs and other water catchments and storage. And there are more storms that can topple electrical posts and even towers, so grid stability and security are needed.

 

Last June 13, there was a press conference at the Department of Energy (DOE) with outgoing Secretary Raphael PM Lotilla and OIC Secretary Sharon Garin as speakers. I was not able to attend because I was out of town that day. But if I have to assess a performance in a grade of 1.0 to 5.0, one as excellent and five as failure, I will give Secretary Lotilla’s three years a 1.75, equivalent to cum laude honor in UP. Let me explain.

 

Almost perfect 1.0 grade because he laid a good legal and international preparations and foundation for the Philippines doing nuclear energy soon. And there was almost no blackout, at least in the Meralco area, just frequent yellow-red alerts in the grid. Nearly 3,000 MW of new capacities were added the last three years.

 

But I have to add 0.75, so 1.75 grade, because there are so many wind-solar coming in, especially the super-costly offshore wind, that he approved. I believe that when those birds-killing wind blades and wind plants become more rampant in our sea someday, both generation charge and transmission charge will shoot up, they are too far away from Metro Manila and other commercial-industrial zones where power demand is high.

 

Acting or OIC Secretary Sharon Garin has both legislative and executive experience in continuing the great work done by Mr. Lotilla, especially in preparing for nuclear energy. Ma’am, let us start with refurbishing and reviving the Bataan Nuclear Power Plant. That 620-MW plant if running at 85 percent capacity factor can produce about 4,600 GWh of electricity yearly, larger than the roughly 4,000 GWh combined output of wind-solar last year.

 

This week the Energy Regulatory Commission (ERC) inaugurated more Retail Aggregation Program (RAP) contracts. The RAP program helps smaller consumers like households and micro businesses enjoy lower electricity costs when they are aggregated and get direct retail electricity supply (RES) contracts with certain generation companies.

 

ERC chairperson Monalisa Dimalanta optimistically said that “through RAP, more Filipinos are taking charge of their energy destiny, bringing us closer to true energy democracy.”

 

Among the RAP participants that ERC inaugurated this week is the MPower-DMCI Homes partnership. MPower is Meralco’s local RES while DMCI Homes has several big residential condos and they also participated in the Competitive Retail Electricity Market (CREM) and RAP programs.

 

Speaking of stronger, reliable and resilient grid especially during the stormy months, the National Grid Corp. of the Philippines (NGCP) just finished its annual stakeholder consultations nationwide to discuss the Transmission Development Plan (TDP) 2025-2050.

 

NGCP president and CEO Anthony Almeda said that “the TDP is essential to NGCP. It outlines… ongoing projects and grid plans including indicative project timelines, regulatory updates, the proposed integration of renewable energy sources, and smart grid technologies to enhance efficiency.”

 

Also last week there was the APAC Energy Capital Assembly 2025 in Singapore. Among the speakers was Meralco PowerGen (MGen) president and CEO Emmanuel Rubio who discussed MGen’s evolving portfolio of big renewables like MTerra Solar and diversified energy sources. He emphasized that this will “ensure both profitability and sustainability as complementary goals, building an energy system that delivers both low-carbon future that remains affordable and reliable for all.”

 

Another energy company that similar to MGen has both large renewables and thermal plants is Aboitiz Power (AP). I chanced upon AP’s vice president for corporate affairs Suiee Suarez and he says that “for us in AP, energy security means reliability (power supply without interruption, current and future), resilience (capacity of the grid and power plants to withstand and recover from both anticipated and unforeseen disruptions in supply) and efficiency (keep continuous supply while minimizing energy consumption) in the energy system.”

 

Meanwhile I have two short greetings. One, congrats to Canada Embassy in Manila led by Ambassador David Hartman.They will hold the annual Canada Day this coming June 26. It is the anniversary of the Canadian Confederation which occurred on July 1, 1867.

 

Two, congrats to my batchmates from UP School of Economics (UPSE) Batch 1984, Lynette Ortiz and Gladys Cruz-Sta Rita. Lynette is the president of Land Bank of the Philippines (LBP) and LBP has remitted to the National Treasury P32 billion in 2024 and P33 billion this year. Gladys is former president of National Power Corp. and now vice-president for investment management group (power) of the Maharlika Investment Corp.

 

Lynette and Gladys will be awardees of the 2025 UP Alumni Association (UPAA) Distinguished Alumni Awards. Lynette in Community Empowerment in Countryside Growth and Development, and Gladys in Good Governance in Public Utility Development and Hydraulic Resource Stewardship. 

BWorld 801, On trade expansion and fiscal consolidation

On trade expansion and fiscal consolidation

June 12, 2025 | 12:02 am

My Cup Of Liberty

By Bienvenido S. Oplas, Jr.

https://www.bworldonline.com/opinion/2025/06/12/678619/on-trade-expansion-and-fiscal-consolidation/

 

The US tariff escalation policy generated heavy public discussions and fears last April, but these have simmered down recently. There are winners and losers in the non-disruption in trade, and there are also winners and losers in trade disruption. In conventional economic trade theory, there is “net gain” (gainers and winners outnumber losers) in free trade which at the optimum implies zero tariffs and very few non-tariff barriers.

 

Last Tuesday, June 10, I attended a forum called “The US-China Tariff Trade War: Implications for the Philippines” at the AIM Conference Center in Makati, organized by Leverage International (Consultants), Inc. Among the panelists were Mike Toledo, Chair of the Chamber of Mines of the Philippines; Dr. Jess Arranza, Chair of the Federation of Philippine Industries; and Ruth Yu Owen, Chair of the Energy Committee of the Management Association of the Philippines. Jose Luis Yulo was the forum chairman and moderator.

 

I liked Mr. Toledo’s discussions on the mining export ban and the need for mining processing after a 10 year transition and preparation period, Metro Pacific Investments Corp.’s corporate farming, and Terra Solar projects; Mr. Arranza’s talk about the economic damage caused by smuggling and illicit trade on Philippines industries; and Ms. Owen’s talk on solar energy where she also recognized the need for coal and gas plants for baseload power generation.

 

Later in the afternoon, my former boss (and former Congressman, and former Finance Secretary) Gary Teves talked about macroeconomics and trade and he emphasized that we should focus on measures where we have control, like our own economic and trade policies, and not on events and policies abroad over which we have little control. I support that.

 

Then Congressman Joey Salceda talked about “Ruthless Ricardianism,” referring to David Ricardo’s theory of comparative advantage, but now in the context of the “ruthlessness” of a trade and tariff war. As usual he produced a lot of numbers and finance-related policy measures.

 

During the open forum, I briefly commented that when I checked the monthly trade data from the World Trade Organization (WTO), China, which is supposed to suffer a decline in exports actually experienced an expansion in exports.

 

Looking at the comparative January to April period, China’s exports increased from $1.084 trillion in 2023 to $1.10 trillion in 2024, and $1.169 trillion in 2025. In particular, their exports increased from $288.1 billion in April 2023, to $291.9 billion in April 2024, and $315.7 billion in April 2025.

 

In the accompanying table are the total exports for the first quarter of this year (many countries have not reported their April 2025 data yet). Like China, Hong Kong, Taiwan, Thailand, Vietnam, and Singapore also experienced a sustained increase in exports, as did the Philippines but with a very small margin increase. The US, UK, and Mexico also showed marginal increases.

 

In contrast, many countries experienced a decline in exports, or remained steady, neither increasing or declining: Japan, South Korea, India, Malaysia, Germany, the Netherlands, France, Spain, Poland, Brazil, Canada, and Australia (see the table).

 

PHILIPPINES’ FISCAL CONSOLIDATION

Last Monday, June 9, the economic team held a big Investment Coordination Committee-Cabinet Committee (ICC-CC) meeting at the Department of Finance (DoF). Finance Secretary Ralph G. Recto, as ICC-CC Chairperson, led the deliberations on the proposed and modified Official Development Assistance (ODA) and Public-Private Partnership (PPP) projects submitted for the committee’s approval.

 

Also present were Economics Secretary and ICC-CC Co-Chairperson Arsenio M. Balisacan, Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman and Undersecretary Joselito R. Basilio, Trade Secretary Ma. Cristina A. Roque, Agriculture Secretary Francisco P. Tiu Laurel, Jr., Public Works Secretary Manuel M. Bonoan, Monetary Board member Romeo L. Bernardo, and PPP Executive Director Ma. Cynthia C. Hernandez, among other government officials.

 

For me, fiscal consolidation implies a reduction in certain spending and an expansion in revenues, tax and non-tax revenues so that the annual budget deficit and public borrowings can be controlled. Having more PPP infrastructure projects and less ODA is a good way to attain fiscal discipline and consolidation.

 

Last week, on June 4, the Government Optimization Bill, formerly called National Government Rightsizing Program was passed and ratified by the Bicameral Committee and now awaits the President’s signature. DBM Secretary Pangandaman was understandably happy with this development as the soon-to-be law will create a more efficient and responsive government.

 

Three weeks ago, on May 21, I was one of several NGO leaders invited by the DBM for the “Macroeconomic Insights for National Action: An Economic Dialogue with Civil Society” held at Luxent Hotel in Quezon City. While one transport NGO leader proposed another oil tax to discourage car usage and to shift more people to using bicycles and the mass transport system, I spoke to disagree because of the inflationary impact of any energy tax hike.