OVER 10 DEPARTMENTS FACE BUDGET CUTS By Bernadette D. Nicolas @BNicolasBM
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ORE than 10 departments are set to face possible budget cuts next year, including the Departments of Health (DOH), Trade and Industry (DTI), Labor and Employment (DOLE), and Information and Communications Technology (DICT). This, despite the 2020 proposed national budget increasing by 12 percent at P4.1 trillion, compared to P3.66 trillion for 2019. Interestingly, the Department of Budget and Management (DBM), which submitted the 2020 National Expenditure Program (NEP) or the
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proposed national budget to Congress on Tuesday, is leading those departments with slashed budgets. Data from the 2020 NEP showed DBM proposing a P2.33-billion budget for itself next year, down by 35.96 percent or P1.31 billion from its approved 2019 budget of P3.64 billion. In contrast, the Department of Transportation’s proposed national budget for 2020 is more than double than what was allotted in the 2019 national budget. From P69.4 billion this year, it will rise by 111.8 percent or P77.6 billion to reach P147 billion. The data on the budget allocations per department already included the automatic appropriations. Coming in second after DBM in
terms of budget reduction is the Office of the Ombudsman, the budget of which is being cut by 32.99 percent. The proposed 2020 budget for the office is P3.15 billion, significantly lower than its budget this year of P4.7 billion. Also suffering double-digit cuts are the DICT and other executive offices, with a decrease of 27.85 percent and 25.89 percent, respectively. The proposed 2020 budget for DICT is P5.15 billion, far from its approved budget this year at P7.14 billion. Other executive offices also got P50.89 billion, a P17.78-billion drop from their P68.67-billion budget this year. See “Budget cuts,” A2
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Thursday, August 22, 2019 Vol. 14 No. 316
China wants Philippines to stop all online gaming
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HINA wants the Philippines to stop all forms of online gambling, as it continues cracking down on a practice it says causes illegal outflow of money.
While China appreciates the move to halt the issuance of new licenses, “we hope the Philippines will go further and ban all online gambling,” China’s Foreign Ministry Spokesman Geng Shuang said, according to the transcript of his August 20 briefing posted on the
web site of its Philippine Embassy. The comments are the latest signal that China is mounting pressure on Southeast Asian nations in its effort to stamp out online gambling, which it says causes hundreds of millions of yuan to illegally flow out of its economy. Online and phone
betting has exploded in countries such as the Philippines and Cambodia over the last few years due to demand from gamblers in mainland China. The Philippine regulator, the Philippine Amusement and Gaming Corp. (Pagcor), said on Monday that
₧9B
Expected revenue in 2019 from the offshore gaming industry, according to Pagcor. More than 50 Philippine offshore gaming operators have received licenses since 2016, and the industry employs about 138,000 workers, most of them from China it won’t halt existing online casinos but will stop accepting applications for new licenses at least until the end of the year to review concerns about the burgeoning sector. Chinese state news agency Xinhua reported on Sunday that Cambodia’s Prime Minister Hun Continued on A2
Borrowings shrink 66% in June ’19
See “Borrowings,” A2
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Dar’s ‘Mission Impossible’: Rebuilding a damaged agricultural sector
Rene E. Ofreneo
LABOREM EXERCENS
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ILLIAM DAR, the new Secretary of Agriculture, has one of the most difficult jobs in President Duterte’s Cabinet: stop the downhill slide of a broken agricultural sector. Agriculture’s share in the GDP is now a measly 8 percent, and yet its contribution to employment is still around 25 percent. In 1980, agriculture accounted for 25 percent of the GDP, and over 50 percent of employment. Poverty is deepest and widest in the countryside. This explains why rural insurgency in the Philippines, one of the world’s longest, has persisted. Continued on A7
Tax reform part 2 is not anti-incentive, says DOF
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SLOW PORK SALES A meat vendor in Metro Manila arranges various cuts at his stall on Wednesday (August 21). An informal poll showed vendors reporting declines in pork sales since news reports broke of a mysterious disease killing hogs in Rizal province. On Wednesday, the Department of Agriculture announced more measures to control the spread of the unidentified disease. Story on page A2. NONIE REYES
World Bank warns of ‘invisible water crisis’ By Cai U. Ordinario
External borrowings
EXTERNAL borrowings, meanwhile, surged 166.31 percent to P14.365 billion in June 2019 from P5.394 billion in June 2018. However, June 2019 foreign borrowings contracted 80.77 percent from the P74.699 billion recorded in May 2019.
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By Bianca Cuaresma
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HE national government’s gross borrowings contracted 66.43 percent in June, according to data released by the Bureau of the Treasury (BTr) showed. Data showed the country’s gross borrowings at P53.709 billion in June 2019, significantly lower than the P159.982 billion posted in June 2018. Gross domestic borrowings, which continued to account for the bulk of the government’s loans, reached P39.344 billion in June this year. This is a contraction of 74.55 percent from the P154.588 billion posted in June 2018. Domestic borrowings in June was also 22.72 percent lower than the P50.908 billion posted in May 2019. These borrowings were composed mainly of treasury bills worth P19.344 billion and fixed-rate treasury bonds amounting to P20 billion in June 2019. There were no retail treasury bonds secured in June.
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HE world is facing an invisible water crisis due to poor quality found in polluted areas globally, according to the World Bank. In the report, titled “Quality Unknown: The Invisible Water Crisis,” the Washington-based lender said the combination of bacteria, sewage,
chemicals and plastics in water is a threat to the economic and overall well-being of people. The report named India, Japan, Lebanon, Morocco, Niger, Nigeria, Pakistan, the Philippines, Senegal, Turkey and Gaza among those already experiencing unsafe levels of nitrates in drinking water. “Clean water is a key factor for economic growth. Deteriorating water
quality is stalling economic growth, worsening health conditions, reducing food production, and exacerbating poverty in many countries,” said World Bank Group President David Malpass. “Their governments must take urgent actions to help tackle water pollution so that countries can grow faster in equitable and environmentally sustainable ways.” See “Water crisis,” A2
@BcuaresmaBM
HE Department of Finance (DOF) on Wednesday allayed fears of businessmen that firms will no longer get tax incentives under the Package 2 of the Comprehensive Tax Reform Program (CTRP). “ The fear-mongering about the removal of incentives should stop. Package 2 will actually give superior incentives for the right reasons, such as the creation of good jobs, investment in research and development, and expansion in the countryside among others,” said Finance Undersecretary Karl Kendrick Chua. “These types of activities will be able to claim additional deductions, which will reduce companies’ tax liabilities,” he added. Chua cited an example under the provisions of the CTRP 2, where the government will allow an additional deduction of up to 50 percent on direct labor expense. This means that for every job created, companies may deduct up to 150 percent of direct labor expense, compared to just 100 percent in the present regime. Chua said this particular incentive would benefit work force-heavy industries like manufacturing and the IT-BPO sector, and encourage new investors to create jobs.
Skills upgrading
ANOTHER incentive under Package 2 is that companies that invest in upgrading the skills of their
“The fear-mongering about the removal of incentives should stop. Package 2 will actually give superior incentives for the right reasons, such as the creation of good jobs, investment in research and development, and expansion in the countryside.”—Chua
Filipino employees may receive an additional deduction of up to 200 percent of the cost of their workers’ training, or double the 100-percent deduction given now. “Incentives are meant to encourage positive behavior, and we want to make sure our incentive system benefits firms whose activities are beneficial to the Philippines like job creation and training,” Chua said. From 2015 to 2017, the Philippines gave away an estimated P1.12 trillion in tax incentives and exemptions to a select group of 3,150 companies, according to the DOF. Among the other deductions firms may access under the DOFproposed incentive system includes up to an additional 50 percent on top of the 100-percent deduction now allowed on the purchase and use of inputs from domestic suppliers. This, the DOF said, will benefit local industries and producers. Up to an additional 100 percent or double the current 100 percent may also be deducted on research and development costs by R&D firms. See “Tax reform,” A2
US 52.3080 n JAPAN 0.4906 n UK 63.4444 n HK 6.6682 n CHINA 7.4186 n SINGAPORE 37.7294 n AUSTRALIA 35.3707 n EU 57.9573 n SAUDI ARABIA 13.9473
Source: BSP (20 August 2019 )