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Key MUP pension reform clause out

Key MUP pension reform clause out

THE House of Representatives on Tuesday approved on second reading a bill that seeks to reform the pension system for Philippine military and uniformed personnel (MUP), but removed a key provision requiring active personnel to make mandatory contributions.

During the Tuesday plenary session, lawmakers approved through voice vote House Bill No. 8969 or the proposed Military and Uniformed Personnel Pension System Act.

Albay Rep. Joey Sarte Salceda, who chaired the ad hoc committee on the MUP pension system, said the latest version is “fiscally, politically, and morally acceptable.”

“For active and retired personnel, the structure of the pension system was preserved in full,” he said.

Mr. Salceda said lawmakers had accommodated the request of  Defense Secretary Gilbert C. Teodoro, who had earlier objected to the mandatory contributions for all active personnel and the removal of the full indexation of pensions to the salary increase of active personnel.

“(Mr. Teodoro) is now more or less satisfied,” he added.

Lawmakers approved an amendment to the bill which would require only new entrants to contribute to the pension fund.

Under the bill, new entrants would contribute 9% of their salary, while the National Government counterpart is set at 12%.

During the plenary, lawmakers also agreed to restore the full indexation of MUP pensions. This amendment was proposed by House National Defense and Security Committee Chairman and Iloilo Rep. Raul C. Tupas.

Mr. Teodoro had earlier objected to the provision in the committee report that capped the indexation of the MUP pension at 50% of the salary increase of active personnel.

The bill would also authorize the President to adjust pensions during “adverse” fiscal or economic conditions.

However, Finance Secretary Benjamin E. Diokno had previously insisted that there is a need to overhaul the MUP pension system, noting that there is a risk of “fiscal collapse.”

“It will not qualify as a reform if indexation will continue and the active members will not contribute. We have to reduce the fiscal impact of the MUP’s pension program and the contribution of active members will greatly help in managing that,” Mr. Diokno said last month.

At present, all MUP do not contribute to their pension fund, which is fully funded by the National Government.

Under the measure, all MUPs would be guaranteed a 3% annual adjustment of their base pay over 10 years. Mr. Salceda said this is “already a sacrifice willingly made by the MUP given the historical salary rate increase of 12%.”

The bill also creates the MUP trust funds, composed of the Armed Forces of the Philippines (AFP) Trust Fund and the Uniformed Personnel Services Trust Fund.

Lawmakers also agreed to include the residual assets of the AFP-Retirement and Separation Benefits System (RSBS) as one of the funding sources for the AFP Trust Fund.

Mr. Salceda said the AFP will infuse at least P44 billion in assets to the fund.

“I trust that the AFP will be true to its word in contributing assets to the AFP Pension Trust Fund. I especially look forward to having the assets of the RSBS infused right away,” he said.

Compulsory retirement for MUP would be set at 57, or upon accumulation of 30 years of active service, whichever comes later. For key military officers, they can retire upon completion of tour of duty or upon relief by the President.

All MUP killed or wounded-in-action resulting to total permanent disability would be deemed compulsorily retired.

“The reform reduces the unfunded liabilities of the MUP pension system from estimates of as high as P14 trillion to just P3.4 trillion,” Mr. Salceda said.

Hansley A. Juliano, a political science professor from the Ateneo de Manila University, raised concerns over the possible misuse of MUP trust funds.

“The trust fund is the bigger source of contention since many instances of fund creation by the government has been at risk of improper usage,” Mr. Juliano said via Messenger chat.

The MUP pension program covers members of the AFP, Philippine National Police , the Bureau of Jail Management and Penology, Bureau of Fire Protection, Philippine Public Safety College, the Philippine Coast Guard, and Bureau of Corrections.

The bill is under the Legislative-Executive Development Advisory Council’s list of 20 priority measures sought for approval by December. — Beatriz Marie D. Cruz

#Key #MUP #pension #reform #clause

NEDA sees nickel resources as key to green transition

THE PHILIPPINES needs to better exploit its nickel resources to advance its transition to green industries, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said.

“The Philippines could also leverage its favorable position in the green metals industry regarding the green transition. The country is a top supplier of nickel, which is integral in manufacturing electric vehicle batteries,” he said in a pre-recorded speech at a Philippine Institute for Development Studies conference.

The Mines and Geosciences Bureau reported that metal output grew 8.06% by value in the first half.

Nickel ore and nickel byproducts generated P57.32 billion, accounting for almost half or 46.57% of the industry’s total.

The Philippines “is also one of the top cobalt producers in the world and possesses a steady supply of copper,” he added.

In the first half, copper output rose 6% to 133,072 dry metric tons.

Mr. Balisacan said going green and digital will be an “integral strategy” for the economy.

“The challenge now lies in simultaneously harnessing the green transition and digitalization for sustainable development. This process, called ‘twin transition’ or ‘dual transformation,’ entails the integration of digital technologies and the adoption of green processes for sustainability,” Mr. Balisacan said.

Between 1990 and 2018, global greenhouse gas emissions more than doubled in the Asia-Pacific region, he said.

“Digitalization and a green transition are interconnected because digitalization plays a significant role in accelerating such a transition and mitigating the effects of climate change,” he added.

Citing the World Economic Forum, digital solutions could “reduce global emissions by 20 percent by 2050.”

Mr. Balisacan said that the digital economy has “contributed significantly to the country’s income in the last five years.”

The digital economy’s gross value added was about 9 to 10% of gross domestic product.

“The sector is also an important source of jobs for Filipinos, constituting around 12-13% of the country’s workforce,” he said.

“Digitally deliverable services accounted for 77.8% of the country’s services exports and 54% of services imports in 2021,” he added. — Luisa Maria Jacinta C. Jocson

#NEDA #sees #nickel #resources #key #green #transition

Peso down vs dollar on bets for US Fed holding key rate

THE PESO depreciated against the dollar on Monday on expectations that the US Federal Reserve will hold its key rate at its meeting this week.

The local currency closed at P56.866 versus the dollar on Monday, weakening by 5.1 centavos from Friday’s P56.815 finish, data from the Bankers Association of the Philippines’ website showed.

The local unit opened Monday’s session at P56.80 per dollar. Its intraday best was at P56.74, while its weakest showing was at P56.875 against the greenback.

Dollars traded fell to $821.1 million on Monday from the $1.06 billion on Friday.

The peso weakened due to expectations that the Fed will keep its benchmark rate steady in its meeting this week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso weakened further amid expectations of hawkish policy cues from the US Federal Reserve in their meeting this week,” a trader likewise said in an e-mail.

A Reuters poll of 97 economists conducted on Sept. 7-12 showed 95%, or 94 economists, predicted the US central bank would hold the federal funds rate at the current 5.25%-5.5% during its Sept. 19-20 meeting.

The Fed raised interest rates by 25 basis points (bps) last month, bringing its benchmark overnight rate to a range between 5.25% and 5.5%.

It has hiked rates by a cumulative 525 bps since it began its tightening cycle in March last year.

The peso was also dragged down by higher global crude oil prices on Monday, Mr. Ricafort added.

Reuters reported Brent crude futures rose 71 cents or 0.8% to $94.64 a barrel by 0622 GMT while US West Texas Intermediate crude futures were at $91.55 a barrel, up 78 cents or 0.9%.

Both benchmarks have climbed for three consecutive weeks to touch their highest levels since November and are on track for their biggest quarterly increase since Russia’s invasion of Ukraine in the first quarter of 2022.

For Tuesday, the trader said the peso could recover due to a potentially stronger euro zone inflation report.

The trader sees the peso moving between P56.70 and P56.90 per dollar on Tuesday, while Mr. Ricafort expects it to range from P56.75 to P56.95. — Aaron Michael C. Sy

#Peso #dollar #bets #Fed #holding #key #rate

Shares dip as investors await key policy meetings

LOCAL STOCKS closed lower on Monday as investors await fresh leads ahead of the policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) later in the week.

The Philippine Stock Exchange index (PSEi) went down by 1.77 points or 0.02% to end at 6,124.57 on Monday, while the broader all shares index dropped by 10.94 points or 0.33% to close at 3,309.24.

“The local bourse saw a slight decline,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message, citing “a lack of a strong catalyst” while investors wait for the BSP and Fed meetings.

“Philippines shares traded quietly to start the week, as investors await the main event this week, which is the [Monetary Board’s] policy-setting meeting on Sept. 21,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

BSP Governor Eli M. Remolona, Jr. said on Thursday that a policy rate hike might be unlikely if there were no further supply shocks after the acceleration in August inflation.

Previously, the BSP extended its policy hold for three straight meetings, keeping the key policy rate at 6.25%.

A BusinessWorld poll last week showed 14 of 17 analysts expecting the Monetary Board to keep benchmark rates steady during its sixth policy meeting for the year on Thursday.

Meanwhile, Mercantile Securities Corp. Head Trader Jeff Radley C. See said in a Viber message that “investors continue to stay on the sidelines and increase their cash position until the announcement of the Federal Reserve.”

The Federal Open Market Committee will hold its policy review on Sept. 19-20, a week after the release of the US consumer price index (CPI) report.

The Federal Reserve raised borrowing costs by 25 basis points (bps) in July, bringing the US central bank’s target to the range of 5.25% to 5.5%, Reuters reported.

It has hiked rates by a total of 525 bps since it began its tightening cycle in March last year.

Back home, sectoral indices were split on Monday. Mining and oil went down by 89.53 points or 0.85% to 10,396.08; financials dropped by 13.12 points or 0.73% to 1,773.81; and services lost 4.22 points or 0.28% to 1,490.34.

Meanwhile, property gained 10.18 points or 0.4% to 2,512.77; holding firms rose by 6.01 points or 0.1% to 5,865.33; and industrials increased by 2.51 points or 0.02% to 8,792.39.

Value turnover declined to P3.64 billion on Monday with 549.70 million shares changing hands from the P9.07 billion with 1.55 billion issues seen on Friday.

Decliners outnumbered advances, 121 versus 58, while 52 names closed unchanged.

Net foreign selling dropped to P419.26 million on Monday from P2.48 billion on Friday. — Sheldeen Joy Talavera with Reuters

#Shares #dip #investors #await #key #policy #meetings

Shares inch higher as market awaits key US data

Shares inch higher as market awaits key US data

PHILIPPINE SHARES inched up on Monday ahead of the release of August US consumer price index (CPI) data that could affect the US Federal Reserve’s policy decision this month.

The benchmark Philippine Stock Exchange index (PSEi) went up by 10.80 points or 0.17% to end at 6,233.74 on Monday, while the broader all shares index rose by 3.22 points or 0.09% to close at 3,363.45.

“Philippine shares were bought up as investors look to a fresh new batch of economic data that could influence price action activity. For the week ahead in the US, investors are looking forward to key inflation data,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Local stocks moved sideways with no major catalyst to move the market either way. Investors also opted to stay on the sidelines, anticipating the release of US CPI data, which is expected to provide clearer insights into the direction of US monetary policy,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.

August US CPI data will be released on Wednesday.

The US CPI rose 0.2% in July, matching June’s gain. On an annual basis, the CPI advanced by 3.2%.

The US central bank raised borrowing costs by 25 basis points (bps) in July, bringing its target rate to a range between 5.25% and 5.5%.

It has hiked rates by 525 bps since it began its tightening cycle in March last year.

The Federal Open Market Committee will hold its policy meeting on Sept. 19-20.

“Meanwhile, it’s going to be a relatively quiet week for us here in the Philippines. The only economic data due for this week is the remittances [report],” Mr. Limlingan added.

The Bangko Sentral ng Pilipinas (BSP) is scheduled to release July remittance data on Friday.

In June, cash remittances coursed through banks inched up by 2.1% to $2.81 billion from $2.75 billion in the same month last year, BSP data showed.

For the first six months of 2023, cash remittances rose by 2.9% to $15.79 billion.

Sectoral indices were split on Monday. Mining and oil climbed by 188.54 points or 1.87% to 10,266.96; industrials went up by 94.04 points or 1.06% to 8,910.16; and services rose by 4.17 points or 0.27% to 1,538.10.

Meanwhile, financials fell by 5.20 points or 0.29% to 1,788.26; property declined by 2.77 points or 0.1% to 2,586.13; and holding firms dropped by 4.32 points or 0.07% to 5,979.78.

Value turnover went down to P3.62 billion on Monday with 639.89 million shares changing hands from the P3.85 billion with 445.34 million issues seen on Friday.

Decliners outnumbered advancers, 103 to 95, while 41 names closed unchanged.

Net foreign selling rose to P504.93 million on Monday from P347.89 million on Friday.

For this week, Mr. Vistan placed the PSEi’s support at 6,120 and resistance at 6,350. — S.J. Talavera

#Shares #inch #higher #market #awaits #key #data

The key to office sustainability

The key to office sustainability

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By Maricris Sarino-Joson

THE pandemic has been disruptive to the Philippine economy. Many businesses closed, the economy suffered, and a lot of Filipinos lost their jobs. These factors adversely affected the office market starting in 2020. The vacancies increased across Metro Manila and as a result, rents corrected.

The years 2020 and 2021 were indeed unsettling for the office market. The good news is that we are starting to see some positive trends, with the number of vacated spaces gradually declining and rents in major business hubs starting to recover as we have been recording sustained transactions across Metro Manila.

But what the coronavirus disease 2019 (COVID-19) has ultimately taught us is to be more mindful of our health, whether in public spaces, at home or at work. The health crisis highlighted the need to be in a safe and healthy space, that we shouldn’t let our guard down when it comes to health, and that being in a clean and constantly sanitized environment is a must in a post-COVID world.

For office spaces, there is definitely no compromise. Companies must ensure that employees continue to enjoy the perks of a collaborative workspace, while maintaining their overall health.

This only strengthens the argument for sustainable and healthy office spaces, especially that anti-COVID protocols have been lifted and we are all trying to thrive in a new, hopefully better, normal.

Colliers has seen major occupants, including multinational corporations taking up space in these high-quality, sustainable and healthy office towers. Major information technology and business process management companies are also looking for these office spaces as they encourage employees to gradually return to the traditional office setup; and to heed global management’s directive of occupying sustainable office spaces.

With close contact amongst employees no longer an issue given the availability of healthy workstations and meeting rooms, Colliers believes that taking up spaces in these buildings contributes to fostering a more collaborative work environment.

Colliers sees an estimated 57% of new office supply in Metro Manila from 2022 to 2024 likely secured Leadership in Energy Environmental Design (LEED), WELL or Building for Ecologically Responsive Design Excellence (BERDE) certifications.

In our view, benefits such as 35% lower carbon emissions, 40% lower water use, 50% lower energy use should encourage more companies to locate in a green or sustainable building. Practicing green architecture can translate into energy savings as well as lower construction costs. Colliers believes that these savings are likely to entice more firms to locate in high-quality and sustainable office towers across Metro Manila.

In 2009, Quezon City implemented a Green Building Ordinance which required the design, construction and retrofitting of buildings, other structures and movable properties to meet minimum standards of green infrastructure that would be eligible for incentives.

Colliers is optimistic that other local government units (LGUs) will follow suit, as these would provide landlords with enough incentives to develop more green buildings.

In our view, there should be a strong public-private partnership in promoting a more aggressive development and utilization of sustainable office spaces across the Philippines.

Occupiers are now more discerning with design considerations. Sustainable features such as filtered air circulation, lowered density ratios, and high glass ratios for natural lighting are among occupiers’ key considerations when choosing a new location.

Other long-term benefits of having sustainable workspaces include a 15% reduction in operational costs due to energy savings (which will likely outweigh the 15% increase in capital expenditure).

Colliers believes that product differentiation plays a crucial role in ensuring that buildings are appropriate to the needs of the tenants as more options are available in the market and as more landlords pursue sustainable developments.

Developers should be aggressive in highlighting their building certifications and should actively chase occupants that are on the lookout for these sustainable office towers. Aside from offering sustainable office spaces, landlords may consider bundling other concession such as fit-out allowance to entice new and long-term tenants.

Among the sustainable buildings completed across Metro Manila from 2022 to the first half of 2023 include Studio 7, Makati Commerce Tower, and NEX 54.

From the second half of 2023 to 2026, we expect the completion of 1.1 million square meters (11.8 million square feet) of new and sustainable office space, providing enormous options to potential tenants. The additional supply will come from M3 Corporate Center, Hudspace (GH Tower), Pioneer House BGC, Camaro Square, and Columna.

Outside traditional office buildings, developers should ramp up construction of more sustainable office towers to capture demand from large occupiers that put a premium on sustainability.

At present, most of these developments are concentrated in Metro Manila but developers outside the capital region have also started to take the sustainable route to office development.

Colliers Philippines believes that these healthy, sustainable office towers play an important role in reigniting interest in the Metro Manila office market post-pandemic. Tenants now see the need to be in these office spaces while developers are actively capturing demand in the market.

We definitely see the urgency to be in these office towers. Being in a sustainable office space used to be a “nice-to-have,” now it is a “must-have.”

For now, we can conclude that when it comes to office leasing and development, sustainability is everyone’s responsibility.


Maricris Sarino-Joson is the director for office services-landlord representation at Colliers Philippines.

#key #office #sustainability

Manufacturing at scale in PHL seen as key to lowering cost of medicine

Manufacturing at scale in PHL seen as key to lowering cost of medicine

AYALA Healthcare Holdings, Inc. said local manufacturing at scale will be instrumental in lowering the overall cost of medicine, as will digitalizing the drug regulator.

Paolo Maximo F. Borromeo, the company’s president and CEO, was citing recommendations made by the Private Sector Advisory Council (PSAC).

The PSAC had proposed the digitalization of the Food and Drug Administration to expedite drug approvals; and to provide support for medicine to be manufactured in the Philippines.

According to Mr. Borromeo, Philippine manufacturers cannot as yet compete on scale with rivals from other countries.

“We were not able to give them much investment and attention before, so we were not able to make them big; therefore, we don’t have the right level of scale to be competitive,” he told BusinessWorld on Friday.

“Indonesia, Thailand, or India have scale. You can be more competitive with scale. Traditionally, we find it hard to compete with imports,” he added.

Mr. Borromeo said the government can help scale up domestic drugmakers by giving them preference in procurement and making it easier for them to export.

“The government already provides incentives and other benefits to local manufacturers, but we need a little bit more. One is in finding partners for procurement. When there is government procurement for medicine, they should encourage procurement from local manufacturers,” he said.

He said the government should also make it easier for exporters to obtain permits and clearances in aid of helping Philippine manufacturers achieve scale.

“We have a lot of local manufacturers who want to export; they have a lot of products they want to sell outside of the country, but there are really many steps and barriers for our manufacturers to export,” he said. — Justine Irish D. Tabile

#Manufacturing #scale #PHL #key #lowering #cost #medicine