Palace, lawmakers vow budget reform By Samuel P. Medenilla & Jovee Marie N. dela Cruz
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ISRAELI MINISTER PRAYS AT FLASHPOINT HOLY SITE AS OFFICIALS SAY 33 AID-SEEKERS KILLED IN GAZA
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RESIDENT Ferdinand Marcos Jr. gave assurances on Monday that no public funds will be “lost, misplaced or stolen” in the proposed national budget for 2026 and succeeding years as he keeps a closer watch on its preparation in Congress. While he recognized the constitutional power of lawmakers to pass the legislated national budget, the chief executive said the Executive Branch of the government also has a crucial role in its crafting through the National Expenditure Program (NEP). “Our job is to provide a plan
and ask Congress for funding so that we can do every [project] we want to do. And people’s money is not lost, wasted, or stolen. That’s all we’re after,” Marcos said in Filipino in the third episode of his video blog, which was released last Monday. Several lawmakers, including Senate President Francis “Chiz” Escudero, opposed Marcos Jr.’s statement in his fourth State of the Nation Address (Sona) last week, that he is open to vetoing the entirety of the proposed 2026 General Appropriations Act (GAA) and use a reenacted budget instead if its provisions are not aligned with the priorities of his administration.
The Makabayan bloc at the House said Marcos Jr.’s pronouncement is an attempt by the President to usurp the “power of the purse” of Congress. Marcos also vetoed P200 billion in unprogrammed appropriations of the 2025 budget, which he attributed to unauthorized insertions from some lawmakers, leaving some of the priority initiatives of his administration without any budget or underfunded. Some of the insertions, he said, would have been funded through loans. Marcos also pointed out that the 2025 budget caused “reputational” damage to the Philippines since Congress removed most of
the funds for some foreign-assisted projects, which he did not disclose. “We need to bring that back because foreign-assisted projects are important. And then it also ruins our reputation [if those are left unfunded],” Marcos said. Marcos has approved the proposed P6.793-trillion 2026 NEP, which is higher than the P6.326trillion 2025 GAA.
House reforms budget process
THE House, meanwhile, is set to implement wide-ranging reforms in the national budget process, beginning with the abolition of the so-called “small committee,” See “Palace,” A12
BusinessMirror A broader look at today’s business
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Tuesday, August 5, 2025 Vol. 20 No. 296
P25.00 nationwide | 2 sections 24 pages | 7 DAYS A WEEK
By Cai U. Ordinario @caiordinario
ILIPINO households are cautiously optimistic about the Philippine economy, reason enough for them to have low consumer confidence, according to BMI, a Fitch Solutions Company. See “Confidence,” A2
SC: PEZA FIRMS NOT TOTALLY EXEMPTED FROM PAYING VAT By Joel R. San Juan
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@jrsanjuan1573
HE Supreme Court has clarified that businesses registered with the Philippine Economic Zone Authority (Peza) are not completely exempt from paying Value-Added Tax (VAT). In a 14-page ruling penned by Associate Justice Japar Dimaampao, the Court’s Third Division also held that the VAT exemption of Peza-registered companies would depend on whether the cross-border doc-
trine and destination principle apply. The cross-border principle provides that no VAT is charged on goods or services intended for use outside the country of the taxing authority. However, if the goods are used outside the ecozone but still within the Philippines, the cross-border principle does not apply. Instead, the destination principle applies, which states that goods are taxed in the country where they are consumed. “Indeed, the situs of VAT is See “SC,” A2
FLOOD CONTROL FAIL The collapsed P91.4-million flood control structure in Barangay Candating, Arayat, Pampanga, is seen on Monday, August 4, 2025—nearly a year after it gave way on August 17, 2024. The project, implemented by the Department of Public Works and Highways (DPWH), is now under scrutiny for possible lapses in construction and oversight. NONOY LACZA
Cost of shipping to US seen to keep rising By Andrea E. San Juan
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GLOBAL YOUTH SUMMIT 2025 INSPIRES A GENERATION The Mall of Asia Arena came alive as 33,600 young changemakers—on-ground and online—united for the Global Youth Summit 2025, a vibrant celebration of leadership, creativity, and purpose. Empowering talks from Jessica Sy, Winwyn Marquez, Teacher Georcelle, Edward Barber, and Jessica Soho sparked meaningful conversations, while dynamic performances by the NU Dance Company, Matthew Ifield, Over October, and Hori7on kept the crowd energized and inspired. (L-R) SM Supermalls’ Assistant Vice President and SM Cares Program Director for Children and Youth Royston Cabunag, SM Supermalls’ Executive Vice President for Marketing Joaquin L. San Agustin, SM Supermalls’ Assistant Vice President and Champion for the Youth Hanna Carinna T. Sy, The Philippines’ Most Awarded Broadcast Journalist Jessica Soho, Global Peace Foundation Asia and the Pacific Regional Representative Dr. Ingill Ra, Bless Microfinance Corporation President and CEO Marie Beatrice Mendoza, and Global Peace Foundation Philippines Executive Director Leonard Faustino. SM SUPERMALLS
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HIPPING rates to the United States are seen to continue rising for Philippine traders in August, especially for air freight, on the back of the frontloading of exports ahead of the implementation of the US tariffs, the typhoon season, and the last-quarter holidays, according to the report published by Dimerco, a global logistics service provider. “With a 19-percent US tariff on Philippine goods taking effect soon, shippers are rushing to export before the deadline, which is driving up rates to the US,” Dimerco noted in its report. The report showed that air freight rates for Philippine ship-
ments bound for the United States will continue to increase this month. Meanwhile, capacity is on an upturn, meaning, market is picking up but demand of space can still be met by current supply. Air freight rates to Asia and Europe, however, remain stable in August. For Philippine shipments bound for Asia, capacity is soft, meaning supply is more than demand while capacity for shipments bound for Europe is on an upturn. As for ocean freight rates, the logistics firm noted that rates are seen to remain stable in August, but it warned that importers may already start stocking up for the holiday season from September to December. The report added: “Vessel delays
or rerouting may occur during this period due to the ongoing typhoon season.” The global logistics firm also pointed out that the monsoon season may disrupt Asia supply chains. “Heavy rainfall in regions like South Korea, the Philippines and Vietnam is disrupting logistics operations,” the Dimerco report noted. As such, delays in flights, port handling and trucking are expected. With this, the global logistics firm said shippers should improve cargo protection to avoid water damage, as well as to maintain close coordination with local partners. “Disruption risk remains high throughout August as extreme
weather patterns continue across the region,” the report noted. Kathy Liu, VP for Global Sales and Marketing at Dimerco Express Group explained that with the updated US tariffs set to take effect, “Shippers are unsure how to plan their shipping schedules.” “This is especially true for key manufacturing and transit hubs such as Singapore, India, Taiwan, and China, where final tariff announcements are still pending,” added Liu. At the same time, she noted that August is peak typhoon season in South China, Hong Kong, Taiwan and the Philippines, which may cause delays and flight rescheduling in these areas. Explaining the ocean freight See “Cost,” A2
PESO EXCHANGE RATES n US 58.3920 n JAPAN 0.3967 n UK 77.6614 n HK 7.4391 n CHINA 8.1179 n SINGAPORE 45.3002 n AUSTRALIA 37.7329 n EU 67.6938 n KOREA 0.0420 n SAUDI ARABIA 15.5666 Source: BSP (August 4, 2025)