FLASHPOINT!

Continued from A1 a phone call between the US defense chief and Teodoro.

In the call, Austin reiterated US commitment to the defense of Filipino public vessels in the vital sea lane.

Secretary Austin noted with concern the PRC’s [People’s Republic of China] recent coercive and risky operational behavior directed against Philippine vessels operating safely and lawfully in the South China Sea, including around Second Thomas Shoal (Ayungin),” the US DOD stressed.

The PCG earlier reported that some CCG vessels had “constantly followed, harassed and obstructed” its ships when it undertook a naval operation with the Armed Forces of the Philippines Western Command on June 30 off Ayungin Shoal.

In the report, it said two People’s Liberation Army Navy vessels were also sighted near the shoal.

US planes on the shoal?

MEANWHILE, the Chinese Embassy in Manila claimed that the US deployed military planes and warships during the August 5 incident in Ayungin Shoal.

C hinese Embassy Deputy Chief of Mission Zhou Zhiyong made this public in a news forum at Kamuning Pandesal Bakery in

Quezon City early this week.

Z hou echoed Beijing’s attacks on Washington, D.C., and cited the latter’s “unglorified role” in the water cannoning incident near Ayungin Shoal, which it calls Ren’ai Reef.

In the recent incident, the US took a hands-on approach to deeply engage in the whole process. It was the US who egged on and supported the Philippines to overhaul and reinforce the ‘grounded’ ship in Ren’ai Reef and even dispatched military aircraft and vessels in support of the Philippine side,” the Chinese diplomat said. S ought for comment, US Embassy in Manila spokesperson Kanishka Gangopadhyay said, “I’m not going to comment on military operations, except to say that all of our military activities in the Philippines are conducted in full coordination with our Philippine allies.”

Joint resupply mission eyed

AS this developed, legal and security experts urged the Philippine government to undertake a joint patrol with like-minded allies in its next resupply mission to the BRP Sierra Madre

Former Supreme Court Senior Associate Justice Antonio Carpio said the Philippines can follow the examples of Malaysia and Indonesia, which continued their survey and naval drills in their exclusive economic zone (EEZ) in the SCS, together with the US and Australia, despite warnings from the CCG.

We can have joint patrols with the US at the same time [in the next resupply mission to the Ayungin Shoal]. We can calibrate it. Remember, Malaysia and Indonesia were able to survey and drill despite warnings from the Chinese Coast Guard that the area falls within the nine-dash line. They sent their Navy together with the survey ship and the drilling ship, and, at the same time, the US and Australia conducted naval drills in the same area, that’s for Malaysia. For Indonesia, the US aircraft carrier Ronald Reagan happened to pass by,” Carpio explained. He made the statement in a forum on August 10 organized by the Stratbase ADR Institute, in partnership with the United States Institute of Peace.

The Americans are there. They did the favor to the Malaysians and Indonesians without a defense treaty. And the Australians also did the same to Malaysia. Why are they doing this? Because they want to preserve freedom of navigation.... We can do all these things. It’s up to us if we have the political will,” Carpio stressed.

Maximizing sea patrols

THE former Supreme Court Senior Associate Justice said the Ayungin Shoal, where the Sierra Madre is aground in the WPS, is one of the “flashpoints” in the PhilippinesChina relationship.

Ayungin Shoal is about 20 nautical miles from Mischief Reef. The Arbitration Tribunal ruled that Mischief Reef is a low-tide feature forming part of the Exclusive Economic Zone of the Philippines. Despite this, China illegally reclaimed Mischief Reef and converted it into the largest air and naval base of China in the Spratlys. Because of Ayungin Shoal’s proximity to Mischief Reef, China wants to seize Ayungin Shoal from the Philippines,” Carpio said.

Similarly, Stratbase President Professor Dindo Manhit urged the Philippine government to maximize joint patrols and have like-minded allies shepherd Philippine vessels in its next resupply mission.

“As our military outpost, we should not be deterred from sending supplies, from improving that facility [BRP Sierra Madre]. What’s happening now [is that], they’re [China] stopping us from moving forward. Our supply ships should really push through.... This is where we can maximize joint patrols and be shepherded by allies and friends during the resupply. Not to cause war but simply to exercise our own rights based on international law. Our military facility is within our EEZ,” he noted.

M anhit added: “The stronger statement by our President is really welcome and now we hope it turns into stronger actions and generates enough support and alliance from partners. I’ve always believed that to ensure stability, you need to bring people together to define and protect what is our Philippine EEZ.”

Moreover, former United States Air Force official and security expert Col. Raymond Powell said that one leverage the Philippines can use in dealing with an “extremely large and aggressive country like China” is its partnerships with like-minded allies.

Powell, also a fellow at the Gordian Knot Center for National Security Innovation at Stanford University, said the Ayungin Shoal, including the BRP Sierra Madre, is the most vulnerable outpost in the entire SCS and needs to be reinforced.

“It’s vulnerable not just because of how few people are there and their inability to defend themselves but the fact that their outpost is deteriorating and will ultimately succumb to time and the weather and the elements. That will happen unless the Philippines, with its US allies, are able to come up with some other solution to repairing or replacing, somehow lifting, circumventing and defeating the ongoing Chinese blockade,” Powell explained.

‘False’ claim CARPIO, in a statement posted by the Stratbase ADR Institute in its Facebook post August 16, disputed Zhou’s claims that the Potsdam Declaration and the Cairo Declaration stated that “all territories Japan has seized from the Chinese, including those of Nansha Islands and Xisha Islands, shall be restored to China.”

W hat the 1943 Cairo Declaration stated, Carpio said, is that “all the territories Japan has stolen from the Chinese, including Manchuria, Formosa and the Pesca- dores, shall be restored to the Republic of China,” and that “Japan will also be expelled from all other territories which she has taken by violence and greed.”

The Cairo Declaration “never mentioned the ‘Nansha Islands’ [Spratlys] or the ‘Xisha Islands’ [Paracels]. The Spratlys and the Paracels fell under the phrase ‘Japan will also be expelled from all other territories which she has taken by violence and greed,’ which phrase never identified to what country these other territories would be restored,” Carpio stressed.

He also noted that the 1945 Potsdam Declaration stated that the “terms of the Cairo Declaration shall be carried out and Japanese sovereignty shall be limited to the islands of Honshu, Hokkaido, Kyushu, Shikoku and such minor islands as we determine.”

Carpio stressed that the Potsdam Declaration merely reiterated the Cairo Declaration and never mentioned the Nansha Islands or the Xisha Islands.

What is definitive is what transpired in the 1951 San Francisco Peace Conference that formally ended the Pacific War. The motion of the USSR to award the Spratlys and the Paracels to China was defeated by a vote of 46 to 3, with one abstention. Thus, the San Francisco Peace Treaty merely states: ‘Japan renounces all right, title and claim to the Spratly Islands and to the Paracel Islands.’ There is no mention to what country the Spratlys or the Paracels would be awarded,” Carpio pointed out.

A lso, he said that the 1952 Treaty of Taipei between Japan and the Republic of China merely recognized the San Francisco Peace Treaty.

Thus, the Treaty of Taipei states: ‘It is recognized that under Article 2 of the Treaty of Peace with Japan signed at the city of San Francisco in the United States of America on September 8, 1951 (hereinafter referred to as the San Francisco Treaty), Japan has renounced all right, title and claim to Taiwan (Formosa) and Penghu (the Pescadores) as well as the Spratly Islands and the Paracel Islands.’ There is no award of the Spratlys or the Paracels to China because the Treaty of Taipei obviously could not deviate from the San Francisco Treaty to which Japan was a party,” Carpio pointed out.

• Editor: Vittorio V. Vitug A3

Australian PM sets Sept visit to Philippines

By Samuel P. Medenilla

AUSTRALIAN Prime Minister Anthony

Albanese is set to visit the country next month to seek closer cooperation with the Philippines on economic and defense affairs.

In a news statement released on Friday, the Presidential Communications Office (PCO) confirmed Albanese would be in the country on September 7 and 8 for an official visit.

He is scheduled to meet with President Ferdinand R. Marcos Jr. on the second day of his visit to discuss possible cooperation on defense and security, trade, economic development and maritime affairs.

“It follo ws a series of high-level en - gagements earlier this year between the Philippines and Australia, underscoring the shared commitment by both nations to advance the trajectory of their multifaceted partnership,” PCO said.

Last Ma y, Australian Foreign Minister Penny Wong and Marcos met in Malacañang, where they talked about possible partnerships to help in the country’s security and economic transformation.

PCO noted Albanese’s visit is a significant milestone since it is the first visit in the country by an Australian Prime Minister since 2023.

T he President first met with Albanese d uring the Asia Pacific Economic Cooperation (APEC) last year.

GSIS posts ₧61-B net income, 20-fold increase for H1 2023

THE Government Service Insurance System (GSIS) reported a net income of P61 billion for the first half of the year, a 20-fold increase from the P3 billion in the same period the previous year.

The marked growth in profitability from January to June 2023 was driven by strong revenues and an improvement in the revenue-to-operating expense ratio at 2 percent from the 5 percent ratio last year.

Administrative and operational expenses grew by 10 percent, largely due to the increase in claims and benefits.

“Although these expenses have grown, the rate of increase was slower,” GSIS President and General Manager Wick Veloso noted. “A key factor in keeping expenses under control has been the careful management of operational costs.”

In the first half of the year, administrative and operational expenses were recorded at 2.6 percent, down from 4.9 percent in the same period last year, well below the legal threshold of 12 percent.

Veloso also announced that the fund life of the pension fund was now at 2058 or 35 years, which was achieved through enhanced data analytics and sustained

By Patrick V. Miguel

MEMBERS of church group devotees of the Black Nazarene filed charges against drag performer Pura Luka Vega for the latter’s recent “controversial” acts. In a joint affidavit-complaint filed at the City Prosecutor Office of Manila, members of the Hijos Del Nazareno (HDN) accused Vega of violating the Revised Penal Code and the Cybercrime Prevention Act.

HDN cited violations of Article 201 of the Revised Penal Code and R.A. 10175, Section 6 (Cybercrime Prevention Act of 2012).

The petitioners claimed that Vega committed acts that “offend any race of religion,” with regards to Article 201 of the RPC that prohibits “immoral doctrines, obscene publications and exhibitions and indecent shows.”

HDN added that Vega also transgressed “with the use of information and communications technologies,” under the Cybercrime Prevention Act.

“Anyone can file against the drag performer on the basis of existing laws that may have been violated,” Catholic Bishops’ Conference of the Philippines executive secretary Fr. Jerome Secillano told the B usiness M irror investment returns.

In a text message, Fr. Secillano added that although CBCP is “not a party” to the petition, they still recognize the right of the petitioners to do so.

Vega allegedly committed other kinds of “blasphemy,” other than the viral video impersonating the Black Nazarene, said HDN technical adviser Alex Irasga.

“Madamikamingnakitanapagpapatunay na mataas ang antas ng paglapastangan.

“A lengthier actuarial life allows us to meet our obligation of providing timely benefits to our members and pensioners. As a financial institution, we focus on growing our members’ contributions through strategic investment opportunities,” Veloso explained.

GSIS is showcasing its commitment to the nation’s growth story by investing in vital sectors, such as real estate, infrastructure, food, energy and mining. Total investment in the domestic sectors has reached P1.2 trillion for the first half of the year. Global investments also rose 8 percent to P204 billion.

As of end-June 2023, the total assets of the GSIS stood at P1.6 trillion, posting an 8 percent increase from last year.

Veloso outlined the GSIS’s future strategies, highlighting an investment approach focused on the 4Ps—Pabahay (housing), Power (energy), Pagkain (food), and Pagamot (healthcare).

“These sectors are at the heart of the government’s socioeconomic agenda, and investing in them is an investment in the Filipino people,” Veloso said.

Umabot nga siya sa pag-produce ng mga panyo. May nakita na kami na mukha niya nakalagay sa halip na ng Nazareno,” said Irasga.

(We saw a lot proving a higher degree of blasphemy. It reached to a point that they were producing handkerchiefs with his face imprinted instead of the Nazarene).

In addition, in some of Vega’s social media posts, the performer impersonated Jesus Christ through photos and videos, the complainants said.

In the affidavit, HDN wrote, “As a Catholic congregation and devotees of the Black Nazarene, Pura Luka Vega’s acts and actuations constitute a direct attack on our Lourd, our God and savior, Jesus Christ.”

Asked why they filed the case in the first place, Irasga said,“Nagtampokamisakanyang paglapastangansaatingpanginoonatsaating mahal señor Hesus Nazareno.”

(We resented the blasphemy towards our God and our beloved señor Jesus Nazarene.)

However, Irasga said they are ready to forgive Vega should the latter execute a formal apology.

He added that they are willing to retract the case against Vega if an apology is made for the alleged “blasphemous acts.”

“Kayakaminagsampangkaso[kasi]ayaw namin maging precedent at maging normal nakalakaranitosahinaraharap,” he said.

(We filed a case because we don’t want this to be precedent and normal to the society.)

As of this writing, Vega has been declared “persona non grata” in Cebu, Dinagat Islands, Occidental Mindoro, Laguna, Bukidnon, General Santos City, Floridablanca in Pampanga, Toboso in Negros Occidental, and in the city of Manila.

By Lorenz S. Marasigan

HE

T

Land Transportation Office (LTO) said of the Quezon City Regional Trial Court Branch 215 in issuing a on the award of

By Cai U. Ordinario

DESPITE the economy’s recent lackluster performance in the second quarter and the hawkish pause of the Monetary Board (MB) on Thursday, the Bangko Sentral ng Pilipinas (BSP) believes there is still room to hike interest rates.

In a television interview on Friday, BSP Governor Eli M. Remolona Jr. said there will be some recovery in GDP performance in the third quarter on the back of improved government spending.

It can be noted that Government Final Consumption Expenditure (GFCE) contracted 7.1 percent in the second quarter, the lowest since the first quarter of 2011 when it contracted 15 percent.

“I think we have room to hike without contracting the economy. Something we call the neutral or the natural rate of interest is closer to 4 percent in real terms and if our projections are right, we will be at 3.25 percent in real terms for the neutral interest rates. So we have room to hike,” Remolona said.

Q2 Gdp

and MB pause, BSP chief sees room to hike interest rates

Remolona said the recent pause on monetary tightening was “the prudent thing to do” for the MB, considering that the data was “going in different directions.”

He stressed that the monetary authorities’ decisions on whether to keep, cut or raise key policy rates are data-dependent.

This also means that the decision of the United States Federal Reserve is of lesser concern to the BSP relative to market expectations.

“It’s not as important as people think. What we find is that sometimes we do intervene, but what we find is more effective than intervention is forward guidance. So we give the market a better idea of what we’re thinking about down the road and that’s what seems to be more effective, that’s what seems to be more effective in stabilizing the peso,” Remolona said.

On the peso, Remolona said, “there is more than usual” volatility in the Philippine peso at the moment. But he said this is mainly due to a strong dollar rather than a weak peso. He said the Thai Baht and the Malaysian

Ringgit have already weakened against the greenback along with the Philippine peso in the past few days.

“I think there’s some amount of risk aversion going on in the currency markets partly because of the Fitch downgrade of the US and partly because of the minutes of the FOMC [Federal Open Market Committee]. The minutes, as you know, are more hawkish than the actual decision of the FOMC,” Remolona said.

Local supply chain

MEANWHILE , local supply chain issues are also part of the data that the Monetary Board are considering during this time. Sticky inflation has plagued the country and peaked in January 2023 when inflation hit 8.7 percent.

However, the increase in commodity prices has slowed to 4.7 percent in July, giving the BSP confidence that it is now on track to attain the inflation target range of 2 to 4 percent by the fourth quarter—or earlier, according to BSP Deputy Governor

Zubiri to economic team: In viewing wage hike, focus on labor drain, not just inflation

By Butch Fernandez

AMID warnings by economic managers that a legislated wage hike would be inflationary, Senate President Miguel Zubiri advised them to take the long view and consider the more alarming problem of the country losing its best workers to overseas jobs because of substandard pay and benefit packages locally.

“Wala na tayong workers. Most of our skilled workers [have gone] abroad. Most of our best welders and electricians are all in Saudi Arabia, the Middle East,” Zubiri reminded members of the Development Budget Coordination Committee (DBCC) at a recent budget briefing they conducted for senators.

He renewed his call for a P150 increase in the minimum wage that he said can help retain skilled workers in the country. The legislated wage hike, which will come on the heels of the Metro Manila wage board order mandating a daily hike of P40 effective July 16, 2023, will have national application if approved, and will be the first time Congress enacts such a law since passing the measure creating the regional

Chiong

tripartite and productivity wage boards two decades ago.

Zubiri was responding to a statement made by Finance Secretary Benjamin Diokno, indicating that a shortage of skilled workers in the country compels the government to hire Chinese workers.

“And why, your Honors, [is there a shortage]? Because to be honest, they don’t feel that they can survive with the salaries that we have here in the Philippines,” the Senate President said.

“I know you came out already publicly stating that you guys are against legislative wage hikes, but I’ll be honest with you, Secretary, kawawang-kawawa po ang ating mgakababayan,” he added.

The wage board recently approved an increase of P40 in the minimum wage of workers in Metro Manila, bringing the total to P610 a day. For the rest of the country, the minimum wage rates stayed the same.

“Angmasamapa,‘yungP40 wage hike ay sa Metro Manila lang.SaaminsaMindanao, it has not moved. Do you know what the daily wage earner in her (Budget Secretary Aminah Pangandaman) province earns?

P340. What can you buy with P340 for a family of five?,” asked Zubiri.

“The cost of rice is the same. The cost of energy is even more expensive in Lanao del Sur. Yung Jollibee, McDonald’s, pareho ang presyoniladoonatditosaManila. My point is, I think we also need to look into the possibility that we increase the wages of our people a bit,” he continued.

While Zubiri acknowledged Diokno’s concern that raising minimum wages will have an adverse effect on inflation, this can be addressed by focusing efforts on reducing energy and food costs.

“What we need to focus on is our energy sector, which is the most expensive. Isatayosa pinakamahal. Kayalahatnginvestors,unangunaangtanongnila,bakitangmahalngkuryente mo? Yan ang kailangan nating pababain, ang food cost and electricity cost,” he said.

The lawmaker from Bukidnon said that large conglomerates that have registered huge net incomes such as JG Summit (P9.5 billion, first half of 2023); Ayala Corp., up by 55 percent; Philippine Airlines, P13.6 billion record net income; and Megaworld, surging by 71 percent in the first half of

Francisco Dakila Jr.

Remolona said, nonetheless, that the BSP is already “within striking distance” of the inflation target this year and will certainly hit it in 2024 and 2025.

“The supply shocks can have effects on expectations. So we try to moderate those shocks by working on the demand side for the same commodities and for a broader range of commodities. So it’s a balancing act,” Remolona said.

“We try to figure out how strong the lagged effects are, how expectations are evolving. So the trick is to avoid the second round effects that work through expectations,” he added.

On Thursday, the MB decided to again maintain its key policy rates, the third pause since May 2023, in the hopes that the third time could work as a charm to boost the economy and allow inflation to further moderate.

The MB decided to keep the interest rate on the BSP’s overnight reverse repurchase facility at 6.25 percent. The interest rates on the overnight deposit and lending facilities were also retained at 5.75 percent and 6.75 percent, respectively.

Remolona said the decision of the MB took into consideration weaker GDP growth in the second quarter.

2023, can all afford to pay an increase in minimum wage.

“I hope that you can agree that maybe we can find a number that is acceptable because I’ve spoken to Frederick Go, I’ve spoken to Megaworld Kevin Tan, I’ve spoken to a lot of the Taipans and they’ve said kaya nila.Pwede,pwede,”Zubiri stated.

“Pero ang ating mga workers, Mr. Secretary, are in the rut. Can we give them a bit of a fighting chance? I truly believe if you put in the effort to help our workers, we will have more productivity and maybe we can entice more of them (skilled workers abroad) to come home,” Zubiri said.

The Senate President also said that in his discussions with American companies who wanted to invest in the Philippines, he bared they were appalled to learn about the wage rates in the country and that they want to come here and pay Filipinos decent wages.

With the present minimum wage rates, he told Diokno that they will really find it difficult to find skilled workers for infrastructure projects of the government because “they’re comfortably located abroad.”

“The lack of quality jobs is also because of the lack of quality skilled workers that we have. They are all leaving. The diaspora that we’re seeing now is because of the low wages, and I’m not talking about minimum wage. Dapat pati yung middle income dagdagan din sila,” he continued.

in fight vs airport reforms’ opposers, lists accomplishments as MIAA chief

THE camp of former Manila International Airport Authority general manager Cesar Chiong on Friday vowed to “fight all the way” to clear his name, and push for muchneeded reforms at the airport to give the public a better flying experience and trigger economic growth, especially through tourism.

Chiong became the subject of an anonymous complaint after implementing a plan to reassign 285 personnel to enhance airport services and efficiency.

T he complaint does not involve any corruption issue and not one of the affected employees was terminated and majority or 201 of the re-assignments came from the airport police department whose reassignments were done pursuant to the security requirements in the four passenger airport terminals at Ninoy Aquino International Airport (Naia) and were all recommended by the Airport Police Department chief and the assistant general manager for Security and Emergency Services.

The Ombudsman initially suspended him and his co-accused, OIC-assistant general for Finance and Administration Irene Montalbo, but dismissed them from the service early this week.

Chiong’s camp, in a statement said, it is worth noting that Chiong’s predecessors reassigned even larger numbers of personnel without facing any legal repercussions.

Former M/Gen. Jose Angel Honrado (Ret.) reassigned 646 employees, while Eddie Monreal reassigned 397 personnel during comparable periods, Chiong said in his petition with the Court of Appeals filed long before the dismissal decision of the Ombudsman.

Furthermore, nearly 800 airport personnel have rallied behind Chiong and Montalbo by signing a manifesto, saying “only now have they experienced transparent and honest management in the agency.”

Early into his stint last year, Chiong made significant changes to enhance the airport experience for the public. He removed X-ray machines obstructing terminal entrances and eliminated security guards flagging vehicles before accessing the ramp. These unnecessary measures incurred extensive costs amounting to hundreds of millions of pesos annually, while exacerbating the public’s frustrations.

Additionally, Chiong and Montalbo successfully collected outstanding receivables totaling billions of pesos, paving the way for the financial stability of the authority. MIAA’s cash balance, which stood at P5 billion in July 2022, has now surged to approximately P15 billion, and the authority is now debt-free.