Category: Business Mirror

A MEMBER of the House Committee on Economic Affairs is pushing Congress to permanently ban goods made through forced labor, saying the Philippines should not wait for trade penalties from the United States to act against what he called ‘modern-day slavery.’

Albay Rep. Raymond Adrian E. Salceda is seeking the immediate passage of House Bill 10848, or the Act Prohibiting the Trade of Goods Produced Wholly or in Part with Forced Labor and Providing Penalties Therefor, which would establish a permanent statutory ban on the entry and trade of forced-labor goods in the Philippines.

‘This is not simply about avoiding tariffs or protecting our exports. There is a moral issue when we allow products made through forced labor and exploitation to enter our market. When we buy and trade these products, the suffering of other people becomes part of our supply chain,’ Salceda said.

His call comes after the Office of the United States Trade Representative determined on June 2, 2026, that the Philippines, along with other economies, had failed to impose and effectively enforce a prohibition on the importation of goods produced through forced labor.

The United States subsequently imposed an additional 12.5 percent tariff on Philippine products, subject to specified exemptions. The additional duties took effect on July 24.

Salceda, however, stressed that the proposed legislation should not be viewed simply as a measure to address the US tariff.

‘Even if there were no tariff, this is still a law worth passing. We should prohibit products made through forced labor because we believe exploitation is wrong, not merely because another country is asking us to,’ he said.

The Executive Branch has already established an inter-agency mechanism to investigate imported goods suspected of being produced through forced labor.

Salceda said, however, that administrative action must be reinforced by legislation that provides a clear and permanent legal framework.

‘Fair trade requires fair labor. Otherwise, responsible businesses and workers are effectively being penalized for doing the right thing,’ he said.

Under HB 10848, the importation of goods produced wholly or partly through forced labor would be expressly prohibited. The measure would also authorize the Bureau of Customs to exclude and forfeit such goods, impose corresponding penalties, and institutionalize permanent inter-agency coordination for implementation and enforcement.

Salceda said the proposed ban would also protect Filipino businesses and workers from unfair competition.

He noted that companies that pay fair wages and comply with labor standards should not be forced to compete with cheaper products whose low costs are driven by the exploitation of workers.

Salceda said forced labor is not merely a Philippine-US trade issue but a global problem affecting supply chains across industries.

The US Department of Labor’s latest published list identifies 204 goods from 82 countries and areas that it has reason to believe are produced using child labor or forced labor. These include agricultural products such as sugarcane, cotton, coffee, rice and fish, as well as manufactured goods such as garments, textiles and footwear.

The International Labor Organization estimates that 27.6 million people were living in forced labor on any given day in 2021, an increase of 2.7 million from 2016.

Forced labor in the private economy generates an estimated $236 billion in illegal profits each year, with traffickers and other perpetrators earning close to $10,000 per victim annually, according to the ILO.

While Salceda acknowledged the economic impact of the additional US tariff, he said protecting Philippine exporters and jobs should be pursued alongside stronger labor protections.

‘Of course, we want to protect Philippine exporters, Filipino jobs, and our competitiveness in the US market. A 12.5 percent additional tariff has real consequences for our industries,’ Salceda said.

But he maintained that the tariff should not be the primary justification for the legislation.

The law, he said, would send a broader message that Philippine trade policy will not tolerate exploitation and that economic growth should not come at the expense

of workers’ rights.

‘Trade should create prosperity without sacrificing human dignity. No cheaper product, higher profit, or commercial advantage can justify forced labor. The Philippines should be unequivocal on that principle, and our laws should be equally clear,’ Salceda said.

AUTOMOTIVE giant Toyota Motor Philippines Corp. (TMP) accounted for P23.66 billion in customs duties and taxes collected by the Bureau of Customs-Port of Batangas (BOC-POB) from January to July, making it the district’s largest import revenue contributor during the period.

The remittances represented 16.4 percent of the port’s total revenue collection for the first seven months of the year, according to BOC-POB data.

TMP’s contribution came as the company reported weaker financial results, with net income falling to P8.4 billion as revenues declined 15 percent to P115.4 billion.

‘While TMP’s remittances for the period eased compared to the same period last year, it reflects broader macroeconomic headwinds and demand softening stemming from the energy crisis experienced during the first seven months of 2026,’ the company said in a statement.

The vehicle manufacturer said it remained the primary revenue contributor to the Port of Batangas despite ‘market adjustments.’

Its import and trade operations are supported by the Batangas Vehicle Center, located near the port, as well as its status as an Authorized Economic Operator Level 2-certified company. The Port of Batangas recorded the highest collection among the BOC’s 17 collection districts from January to July, according to BOC-POB District Collector Carmelita Talusan.

The port’s performance formed part of a broader increase in customs collections during the period. In July alone, the BOC collected P95.848 billion, 12.5 percent higher than the P85.180 billion recorded a year earlier and 5.2 percent above its P91.070-billion target.

The Port of Batangas collected P23.290 billion in July, the highest among the BOC’s 17 districts and the largest single-month collection in its 69-year history.

TMP’s remittance for the first seven months of the year was equivalent to roughly one-sixth of the port’s total collections during the period.

The Philippines ranks 43rd out of 47 economies in an index measuring which countries are positioned to profit from artificial intelligence. The score is 21 out of 100. Granted, the Association of Southeast Asian Nations (ASEAN) as a bloc is not a leader in the AI boom. The Philippine score of 21 is not much worse than Thailand’s 27, Vietnam’s 25, or Indonesia’s 23.

What separates the Philippines from other Asian economies ranked above it is that those countries dedicated recent years to cultivating the sectors where AI generates value: semiconductor fabrication, cloud and data-center infrastructure, pipelines of skilled technical workers, and strategic roles within global chip supply chains.

The Philippines instead devoted that same period to protecting its call center operations.

Regional trade figures for the past year illustrate the gap in real terms. Electronic exports from Taiwan, South Korea, Singapore, and Malaysia expanded at double-digit rates, driven by global demand for artificial intelligence hardware and advanced semiconductor packaging. Philippine electronic exports grew too, but at a fraction of that pace, an assembly sector still weighted toward legacy microchips rather than the high-density computing components the AI buildout actually requires.

In the 1930s, France poured enormous resources into the Maginot Line, an extensive network of fortresses strung along the German frontier. Its purpose was to ensure that the trench warfare that never moved in World War One could not be repeated. Heavy artillery positions, subterranean barracks, and overlapping kill zones with every element calibrated to win a repeat of the previous conflict this time around. The fortifications themselves performed excellently. The problem was that the Wehrmacht simply walked around the Line through Belgium and overran France in roughly six weeks. The defenses were intimidating, but they had been engineered for a war that no longer existed.

The Philippine business process outsourcing (BPO) sector functions as the nation’s own Maginot Line. Erected over roughly 20 years to counter the competitive threat of cheaper English-speaking labor pools elsewhere that actually loomed at the time, the strategy delivered a decisive victory. Today the industry directly supports approximately 1.8 million jobs, generates close to US$40 billion in annual export earnings, and contributes somewhere a generous percent of national GDP. No competing low-cost destination managed to knock the Philippines off its call-center dominance. Against the threat it anticipated, the country triumphed completely.

Artificial intelligence is not attacking from that direction. The bulk of Philippine BPO income still flows from contact-center and customer-experience work, the exact segment where AI chatbots and automated voice agents are progressing most rapidly and at a lower marginal cost. Unlike its human counterparts, software does not quit, miss work in bad weather, or need health insurance. The barricades raised to repel the previous generation of competitors were never engineered to withstand this one.

India provides a good comparison, not because it is insulated from disruption, but because it constructed multiple layers of defense. Alongside its outsourcing base, India fostered the growth of Global Capability Centers dedicated to software engineering, product design, and higher-complexity business processes, creating alternative employment for workers whose routine tasks were automated. The Philippines possesses similar positions in specialized healthcare BPO and premium-tier customer support, where regulatory requirements and the need for more flexible human judgment keep full automation in check.

Yet these segments represent only about 20 percent of the industry’s total activity. The rest remains established in repetitive customer-experience and back-office functions, fully AI exposed, with no second line of defense. Without India’s deeper bench of engineering talent to absorb the workers automation displaces, the Philippines has little to redeploy them into.

None of this should have come as a surprise, and that fact strips away any credible excuse. The trajectory of AI-led automation in call center operations has been plainly visible for years, debated openly at every industry gathering that cheered the sector’s expansion. Developing a deeper technical ecosystem to absorb displaced workers, the Philippine counterpart to India’s Global Capability Centers, was a policy option that was always on the table and ignored. Instead, the existing fortress received more reinforcement: higher walls along a border no adversary intended to cross.

France lost in 1940 despite exhaustive preparation, because that preparation was aimed with total certainty at a threat that had already changed. The Philippines has constructed something genuinely impressive in BPO, building an exceptionally successful economic specialization around labor arbitrage. But AI changes the value of labor arbitrage itself. The question it now faces is whether being impressive against yesterday’s threat carries much value against the one bearing down today, and how many years it is prepared to lose finding out the answer.

The Energy Regulatory Commission (ERC) is allowing the National Grid Corporation of the Philippines (NGCP) to complete the Amlan-Dumaguete 138-kiloVolt (kV) transmission line project by March 2027.

‘NGCP’s prayer to reconsider the Commission’s directive requiring NGCP to complete the project on or before September 5, 2024, and to reconsider a new estimated time of completion on March 31, 2027 is granted,’ the ERC’s 20-page order stated.

NGCP was also ordered to pay permit fees amounting to P14,167,262.59.

As of February 2026, the said project has achieved a 64-percent progress rate.

‘In view of the foregoing circumstances and the issues raised by NGCP in its motion for partial reconsideration and supplemental motion, and taking into consideration the operational need to ensure adequate transmission support for the affected areas, the commission finds it reasonable to adopt March 31, 2027, as the revised target completion date of the Amlan-Dumaguete 138kV transmission line project,’ the ERC ruled.

The NGCP said it encountered several challenges in the implementation of the project, particularly delays executing the writ of possession, issues with the local government, and difficulties in obtaining the necessary permits and clearances.

The same ERC order stated that NGCP may carry out the Siaton-Bayawan 138-kV transmission line project ahead of the commission’s approval only after it has secured a certificate of energy project of national significance from the Department of Energy (DOE).

Moreover, the ERC ordered NGCP to submit a detailed quarterly progress report of the projects.

‘The NGCP shall implement all necessary measures to mitigate the operational impact of the project delay on the affected distribution utilities [DUs], particularly with respect to maintaining system reliability and addressing N-1 contingency concerns,’ the ERC said.

Last month, the NGCP said it is on track to complete 10 projects worth P30.88 billion this year. If successful, these additions will bring the company’s total completed projects for the year to 15, with a combined value of approximately P38 billion.

The projects that are up for completion in the second half of the year are the relocation of steel poles along Hermosa-Duhat 230-kv transmission line, Nabas-Caticlan-Boracay transmission line, Luzon voltage improvement project-3, New Antipolo 230-kV substation, North Luzon substation upgrading project 1, Tuguegarao-Lal-lo 230-kV transmission line, Amlan-Dumaguete 138-kV transmission line, Panay-Guimaras 138-kV interconnection, Mindanao substation expansion 4, and Nasipit substation bus-in project.

For families looking at commercial property as a long-term investment, lasting value is closely tied to the economic activity around it. Beyond location, what matters is the strength of the businesses, workforce, infrastructure, and daily activity that create sustained demand and support the asset over time.

At LIMA Estate, that economic base is already established. More than 200 foreign and domestic manufacturers and over 75,000 employees generate a steady flow of business and daily activity across the estate, creating demand that extends beyond industrial operations. Biz Hub at LIMA Estate brings commercial activity into the center of that economy, creating space for businesses to serve the companies, employees and communities that make up the estate.

‘LIMA Estate has significantly evolved from its original industrial purpose, and that evolution has created new demand within the estate,’ shared Rafael Fernandez de Mesa, President and CEO of Aboitiz Economic Estates and Aboitiz Land. ‘Biz Hub at LIMA Estate was the natural next step in the masterplan, creating the commercial district the community benefits from today in response to an ecosystem that has already grown around our industrial base.’

Industrial activity creates economic value that extends beyond the factory floor. As companies operate, they bring employees, suppliers and business activity into the estate, creating demand for the everyday needs of a growing business and residential community.

LIMA Estate functions as a self-sustaining economic system, where industry, services, and community converge within a single operating environment.

Biz Hub at LIMA Estate is positioned within this existing flow of economic activity. Its commercial district gives businesses a place to serve the companies, employees and communities that have already made LIMA Estate part of their daily lives.

This is part of the estate’s broader evolution into a business and community destination outside Metro Manila, where industrial activity provides the economic base for a wider range of commercial uses.

LIMA Estate’s industrial base is supported by a growing ecosystem around work, learning, living, and business. Residential communities such as The Villages at LIMA Estate, Campo Verde, and Summer Hills sit close to employment centers, while Batangas State University-LIMA Campus and Edustria help develop talent for the businesses operating within the estate. LIMA Tower One and Holiday Inn and Suites Batangas Limapark further support enterprise and business activity.

Retail, recreation, and mobility complete the daily ecosystem, from The Outlets at LIMA Estate and LIMA Exchange to The Golf Range at LIMA Estate and the Red Link Hub electric transport network. Together with the LIMA Gateway exit to the STAR Tollway, these elements make LIMA Estate a place where people can work, live, study, conduct business, and spend time within the same connected environment.

For families looking to diversify their holdings beyond traditional urban centers, Biz Hub at LIMA Estate offers commercial land within an economy that is already operating at scale. Its underlying demand comes from the businesses, workforce, residents, suppliers, and visitors that move through the estate every day.

That activity gives the district a broader base of commercial demand, while LIMA Estate’s growing mix of industry, services, housing, education, and community amenities continues to deepen the ecosystem around it. For investors, this creates an opportunity to hold commercial property within a functioning business district rather than one dependent on future development alone.

The proposition is reinforced by Aboitiz Economic Estates’ experience in developing and managing large-scale industrial estates and the infrastructure that supports them. For families taking a long-term view of their assets, Biz Hub at LIMA Estate offers commercial land anchored by an established economy, with the scale and institutional foundation to remain relevant as the surrounding district grows.

The healthcare sector is becoming more technology-enabled. From artificial intelligence and automation to digitally supported clinical and administrative processes, technology is changing how healthcare organizations operate and how care is supported across borders.

However, technology does not replace the need for people with healthcare expertise. If anything, it makes their expertise even more valuable. This is why the Philippines continues to play an important part in global healthcare operations, with the country serving as one of the world’s leading sources of healthcare professionals, particularly nurses.

For Omega Healthcare, an AI-driven healthcare solutions company that combines advanced automation with deep healthcare expertise, the strength of the Filipino healthcare workforce is one of the reasons we continue to invest in the country. As healthcare organizations adopt new technologies, we see opportunities for Filipino clinicians to apply their expertise beyond traditional settings while supporting healthcare organizations beyond the country. More Than a Talent Pool

What makes Filipino healthcare professionals valuable is not simply the size of the workforce, but the strong clinical foundation they bring to their work. They can understand complex clinical situations, apply sound judgment, and think critically while being able to communicate effectively and adapt to a wide range of processes and environments.

These capabilities allow them to navigate the demands of healthcare operations while maintaining the quality and care expected in the industry. All of these are essential as technology takes on a greater role in healthcare, where tools and systems may support the work, but clinical expertise and human judgment remain at its core.

Investing in Filipino Talent

Seeing the value and potential of Filipino professionals is why we continue to invest in their development. Our approach goes beyond preparing employees for their current roles. We provide role-specific and client training, along with opportunities to build leadership capabilities so they can continue advancing their careers within the organization. Our High Potential program, for example, identifies employees who demonstrate the potential to grow into roles across operations, quality, and training.

The USRN Academy is another example of this investment. It gives qualified PHRNs the opportunity to pursue USRN licensure, followed by clinical capability and client-specific training, allowing them to build on their existing experience and prepare for new opportunities. For us, investing in talent is not simply about building the skills we need today. It is about giving Filipino clinicians opportunities to grow with us and build meaningful careers in healthcare, even beyond the bedside.

Continuous Growth in PH

Our investment in Filipino talent is matched by our continued growth in the country. In 2025, we expanded our Philippine workforce across Manila and Cebu from 2,200 to 3,000 employees, representing a 36% increase. We also opened a new facility in Ortigas to support our growing operations.

We plan to build on this momentum in 2026. We are targeting a workforce of 4,000 to 5,000 employees and broaden our healthcare services and operations. These developments reflect the increasing scale of our work in the country and our confidence in Filipino talent and their capabilities.

As healthcare continues to change, the role of healthcare professionals will change with it. For Filipino clinicians, this can mean more opportunities to apply their clinical expertise in new settings, gain experience with different healthcare systems and standards, and build careers beyond traditional clinical roles. For us, we want to make the most of the talent already here and help Filipino professionals find new ways to contribute to healthcare.

The Philippine automotive market struggled to entice consumers to purchase new cars in January to July mainly due to geopolitical tensions, but its performance in the previous month gave the sector a much-needed shot in the arm.

Data from the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and the Truck Manufacturers Association (TMA) showed that vehicle sales reached 241,725 units in the seven-month period, down 10.2 percent from 269,207 units a year earlier.

Car companies heaved a sigh of relief in July, however, as Campi-TMA members sold 37,319 vehicles during the month, just a tad below the 38,295 units recorded in July 2025 and 0.6 percent higher than June’s 37,079 units.

‘With this…growth, the industry is riding on a good momentum. We are hopeful that the positive trend will continue for the remainder of the year,’ Campi President Jose Maria Atienza said.

Despite the July improvement, most vehicle categories recorded weaker sales compared with last year. Passenger car sales fell 11 percent to 47,856 units from 53,767 units. The segment accounted for 19.8 percent of total industry sales.

Sales of commercial vehicles, which accounted for 80.20 percent of the market, declined 10 percent to 193,869 units from 215,440 units.

Within the commercial vehicle segment, Asian utility vehicles and multipurpose vehicles posted a 7.9-percent drop to 43,706 units from 47,452 units. Light commercial vehicles slid 10.4 percent to 144,652 units from 161,388 units.

Light-duty trucks and buses plunged 14.2 percent to 3,388 units from 3,948 units, while medium-duty trucks and buses dropped 12.3 percent to 1,770 units from 2,019 units.

Heavy-duty trucks and buses saw the sharpest contraction, with sales plunging 44.2 percent to 353 units from 633 units a year earlier.

Toyota Motor Philippines Corp. led Campi-TMA member brands in July with 17,797 units. Mitsubishi Motors Philippines Corp. followed with 6,271 units, while Suzuki Philippines Inc. recorded 1,689 units.

Electric performance

The clearer shift in the market was in electrified vehicles (xEVs), with sales continuing to expand rapidly even as the overall market remained below last year’s level.

Sales of xEVs-covering battery electric vehicles (BEVs), hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs)-reached 38,286 units in January to July, 136.4 percent higher than the 16,195 units sold in the same period last year.

Their share of total industry sales consequently more than doubled to 15.84 percent from 6.02 percent.

July alone accounted for 7,086 xEV sales, up 161.8 percent from 2,707 units a year earlier and 3.6 percent higher than June’s 6,843 units.

Atienza said xEVs accounted for 29.5 percent of the market in July, up 18 percentage points from the same month last year.

‘The shift to electrification continues to accelerate, with xEVs accounting for 29.5 percent of the market last July. This is up 18 points from same month last year,’ he said.

HEVs remained the largest electrified-vehicle segment for the seven-month period, with sales rising 55.9 percent to 20,716 units from 13,290 units.

BEV sales, meanwhile, jumped 300.3 percent to 10,476 units from 2,617 units, while PHEV sales surged 2,363.2 percent to 7,094 units from just 288 units.

For July alone, HEVs accounted for 41.83 percent of xEV sales, followed by BEVs at 35.56 percent and PHEVs at 22.61 percent.

The figures cover BEVs, HEVs and PHEVs recognized by the Department of Energy as of August 10.

More than one in six construction establishments and projects monitored in Metro Manila were initially found non-compliant with occupational safety and health standards (OSHS), the Department of Labor and Employment (DOLE) reported.

The regional office recorded an initial OSHS compliance rate of 83.09 percent following this year’s High-Impact, High-Visibility Inspection (HIHVI) among construction establishments and projects in the National Capital Region.

DOLE-NCR conducted 52 inspections, 698 monitoring activities and eight joint monitoring inspections covering 15,692 construction workers.

Of the establishments and projects monitored, 580 were found compliant with OSHS while 118 were initially identified as non-compliant.

The findings prompted the regional office to stress the need for sustained inspection, corrective action, technical assistance and monitoring in the construction sector.

‘The accomplishment particularly highlights the continuing importance of occupational safety and health enforcement in the construction industry,’ DOLE-NCR said in its report.

The 118 establishments and projects initially found non-compliant will undergo corrective measures through formal examination by an authorized labor inspector.

DOLE-NCR said compliance cannot be treated as a ‘one-time’ accomplishment because construction activities, working conditions, equipment, work locations and hazards may change as projects progress.

The joint monitoring and inspection activities were conducted with the Construction Industry Authority of the Philippines, Bureau of Fire Protection, Department of the Interior and Local Government and Department of Public Works and Highways.

DOLE-NCR reminded employers and contractors to establish occupational safety and health systems, including construction safety and health programs, designation of OSH personnel and provision of personal protective equipment.

Employers were also reminded to install safety signs, barricades and safe scaffolding and observe electrical safety, lockout/tagout procedures and safe lifting and crane operations.

Other requirements include emergency preparedness, first-aid and medical facilities, sanitary and welfare facilities, safe access and egress, and other site-specific hazard controls.

On general labor standards, DOLE-NCR reminded employers to provide applicable wages, including overtime, holiday and premium pay, as well as rest periods and statutory benefits.

Construction workers should also be covered by the Social Security System, PhilHealth and Pag-IBIG, while employers must maintain proper employment records and comply with other applicable employment conditions.

As a follow-through to the inspection, DOLE-NCR held a forum where construction workers were briefed on social protection programs and benefits from Pag-IBIG Fund, the Employees’ Compensation Commission, SSS and PhilHealth.

Introduction: We have come a long way, but are we there yet?

It has been more than a decade since RR No. 2-2013, or the Philippine TP Regulations, was formally established. Much has changed since then-from the audit techniques introduced under Revenue Audit Memorandum Order No. 1-2019 to BIR Form 1709, which requires certain taxpayers to disclose their related-party transactions. There is certainly an intention on the part of the tax administration to go after MNEs and domestic enterprises that may be taking advantage of related-party relationships to reduce their tax payments.

However, while we have come a long way, we still have a lot of catching up to do. While neighboring ASEAN members are already implementing their own versions of Pillar Two, the Philippines is only beginning to move in this direction. In August 2025, the BIR also presented draft regulations for a formal Advance Pricing Agreement program.

These are significant developments and, if I may say, long overdue. But the bigger question remains: Is the Philippines ready?

APA: A welcome development toward a more mature TP framework

An Advance Pricing Agreement (APA) is an arrangement between a taxpayer and the tax authorities to determine in advance how transactions between related companies will be priced for tax purposes. While prevalent mostly for cross-border transactions, it can also be entered into domestically through a domestic APA.

Controlled transactions covered by an APA generally cannot be audited by the BIR for a period of five years. Therefore, an APA provides tax certainty, especially for complex intercompany transactions. It also helps prevent double taxation since the contracting parties-or jurisdictions-are bound to respect and implement its provisions.

Among these benefits, I would like to emphasize the first one: tax certainty.

Transfer pricing involves considerable professional judgment. Taxpayers and the BIR may arrive at different conclusions despite evaluating similar facts and circumstances. They may disagree on the characterization of the entity, the most appropriate transfer pricing method, the tested party, whether domestic or regional comparables are appropriate, or even the arm’s-length outcome.

A taxpayer can therefore prepare extensive documentation today, only to discover several years later during an audit that the BIR has taken an opposing position. If transfer pricing is inherently judgment-driven, certainty may be just as important as having the right rules.

An effective APA program could provide this certainty and prevent burdensome and lengthy disputes. It could also allow the BIR to focus more resources on tax collection and other responsibilities that matter, while greater predictability could mean a great deal to investors considering the Philippines for their next ventures.

But an APA should not be viewed simply as another addition to the BIR’s transfer pricing arsenal. Its success should ultimately be measured by whether it makes the tax system more predictable and efficient.

The bigger question: Are we modernizing tax administration-or simply adding more compliance?

The continued development of Philippine transfer pricing is certainly welcome. But modernization should not automatically mean more compliance, more assessments, or more burden on taxpayers. If an APA program represents the next stage of Philippine transfer pricing, the more important question is whether our tax administration is ready to implement it efficiently.

The draft RR indicates that the program shall be administered by an Advance Pricing Arrangement Division, meaning that the BIR will establish a separate team to handle APAs. I wonder, however, how feasible this would be, knowing fully well that establishing a transfer pricing team is already a difficult feat considering the scarcity of resources. Adding another team could mean reallocating the limited manpower currently available across different divisions.

Another consideration is the timeline. The draft RR states that the BIR will endeavor to conclude APAs, whether UAPAs or BAPAs, within 12 to 24 months. Even in mature tax jurisdictions, it generally takes an average of three years to finalize a single bilateral deal. The proposed timeline is optimistic and may be difficult to achieve given the resources and coordination required.

I also have reservations about the procedures. These arrangements require sophisticated transfer pricing practices, careful functional and economic analyses, and, particularly for bilateral APAs, coordination between tax authorities. Considering where we currently stand in the development of our transfer pricing practice, I am quite worried about how these challenges could impact taxpayers hoping to avail themselves of the program.

An APA that requires years of negotiation and creates additional compliance issues for taxpayers would only defeat one of the primary purposes for which it was established: tax certainty.

The government undoubtedly has a legitimate responsibility to protect the Philippine tax base. However, better tax administration should not simply mean imposing additional requirements on taxpayers already within the system. As our tax rules become increasingly sophisticated, equal attention should be given to improving collection efficiency, simplifying compliance, reducing unnecessary administrative friction, ensuring consistency in the application of tax rules, and broadening the tax base.

This should also be viewed from an investment perspective. Businesses consider not only tax rates and incentives, but also tax certainty, compliance costs, predictability, and the risk of prolonged disputes when deciding where to invest or expand. A sophisticated tax regime may lose some of its appeal if it comes with greater uncertainty and administrative burden.

A stronger tax system should not only be better at collecting taxes. It should also help create an environment where there is more economic activity from which taxes can sustainably be collected.

If implemented properly, an APA should not become another layer of compliance, but rather a mechanism that provides certainty, prevents lengthy disputes, allows the BIR to use its resources more efficiently, and strengthens investor confidence.

4. Final thoughts: The real ‘next big move’

APAs could represent an important milestone in Philippine transfer pricing. But simply introducing an APA mechanism does not automatically bring the Philippines to the level of more mature TP jurisdictions. The real measure of success will be how it works in practice.

Can it provide certainty? Can it prevent lengthy disputes? Can it be administered efficiently? And can it improve the investment environment rather than simply add another layer of compliance?

The Philippines does not have to choose between protecting its tax base and remaining attractive to investors. A mature tax system should be capable of doing both.

Perhaps the Philippines’ next big move in transfer pricing should not simply be adopting more sophisticated rules, but building a system that taxpayers can understand, tax authorities can administer efficiently, and investors can trust.

The author is a Senior Manager of the International Tax and Transfer Pricing Unit of Du-Baladad and Associates (BDB Law) (www.bdblaw.com.ph).

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal, or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at joannelesley.padilla@bdblaw.com.ph or call 8403-2001 local 310.

Londoners are facing historic levels of subsidence risk after five successive heat waves dried out the clay soil on which much of the city is built.

Insurance claims tied to subsidence-a phenomenon associated with bouts of hot, dry weather that shrink the soil and destabilize the foundations on which buildings stand-hit a record last quarter, according to data provided by the Association of British Insurers. On average, households claimed £20,000 ($27,200) for the risk, more than in any previous quarter and a 15 percent jump from the same period in 2025, the ABI said.

Laura Hughes, head of general insurance at the ABI, says the upward trend is likely to continue. ‘We expect to see more subsidence cases because of the hot weather,’ she said in an interview.

Londoners have taken to social media to express their dismay. On Reddit, people offered personal accounts telling of ‘horrendous cracking’ in their homes, and ‘doors sticking’ due to subsidence. One said it was ‘genuinely scary’ to discover that their kitchen had moved as the foundations of the home shifted.

Another Reddit user described the response of a structural engineer they contacted for help. ‘Before I could finish explaining he laughed and said, ‘You and 20,000 other people in southeast London’,’ the person wrote.

‘It’s crazy, what’s happening now,’ said Otso Lahtinen, chief executive of Geobear, an engineering firm that’s regularly called in to repair damage caused by subsidence. ‘It’s the new norm, and it seems it will happen more often in the next 20-30 years.’

Data provided by Aviva Plc show that the areas of London that are most at risk are some of the UK capital’s most sought after, namely the boroughs of Westminster, as well as Kensington and Chelsea. While subsidence has been affecting homes in the British capital for decades, climate change is making it worse. London clay is especially sensitive to fluctuations in moisture, expanding when wet and contracting when dry.

The threat of subsidence in the UK is concentrated in and around London as well as in parts of the southeast. In the four years through 2025, insurance payouts for subsidence damage soared roughly 90 percent to reach a record £297 million, according to data provided by the ABI.

The most vulnerable properties are Victorian or Edwardian homes that were built directly onto the upper layers of London clay. By contrast, modern office buildings in the City of London and Canary Wharf have much deeper foundations and are therefore less exposed to such risks.

Subsidence is part of a long list of heat-related challenges to which the UK is now struggling to adapt. Over the past months, extreme heat has forced schools to close, led bus drivers to go on strike, and seen banks relax in-office work requirements to protect staff from unbearably hot commutes. Most of England has been gripped by drought and the country’s hospitals have shown signs of buckling under the strain.

London Mayor Sadiq Khan has warned that the city will need to turn to private investors to help fund the cost of dealing with the impact of rising temperatures. His office estimates that London now faces an annual bill as high as £36 billion into the 2050s in order to prepare the city for what climate change has in store.

‘The impact that climate change is having is undeniable,’ said Hughes of the ABI.

Subsidence can devalue a property by an average of 20 percent to 25 percent, according to the Federation of Master Builders. In some cases, homeowners prefer to cover the cost themselves rather than wade through complicated claims processes. The traditional engineering fix for subsidence damage, known as underpinning, can cost anywhere from £20,000 to more than £100,000.

The development represents a particular risk to insurers, with subsidence claims making up an ever larger chunk of the payouts they need to make to customers.

The phenomenon poses ‘a significant challenge for UK home insurers,’ says Cherry Chan, a partner at Deloitte. The consultancy has warned that UK home insurers risk losses in 2026 due in part to the trend.

Along with flash floods and wildfires, subsidence is becoming ‘an increasingly material climate-related risk,’ Chan said. It requires that insurers display ‘careful consideration in long-term exposure and risk management strategies.’

Extreme weather patterns in 2026 ‘will not only impact more new claims in this year, but could cause claims deteriorations for unsettled subsidence claims reported in the past,’ she added. That includes 2025, which was a so-called surge year for subsidence impacts.

Fresh estimates from the British Geological Survey indicate that under what is known as the RCP 4.5 emissions scenario-reflecting a trajectory that closely aligns with current climate policies-1.8 million properties, or about 5 percent of the UK total, are ‘highly likely or extremely likely’ to be susceptible to shrink-swell subsidence by 2070. Under a higher emissions scenario, the figure rises to 4.2 million, or 11 percent, of British properties. Areas most at risk are densely-populated parts of London, Kent and south-east of England.

The development has the potential to lead to ‘increased insurance premiums, depressed house prices and, in some cases, engineering works to stabilize land or property, replacement of utility pipeworks and unstable transport infrastructure,’ according to the BGS.

Geobear, which tackles subsidence by injecting resin under buildings, says it’s received more homeowner inquiries this summer than ever before. It says insurance clients have confirmed a similar trend, with one telling Geobear it had received 180 claims on a single day, which is significantly more than normal.