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Thursday, March 16, 2017 Vol. 12 No. 155

Manila, Beijing to sign more investment deals $47.21B C

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hinese Vice Premier Wang Yang is due to arrive today (Thursday) to flesh out—via grants and investment commitments— the revitalized Manila-Beijing ties triggered by President Duterte’s state visit to China last year. Wang, upon arrival at the Ninoy Aquino International Airport, will proceed to Davao City to meet Duterte and his Cabinet. While there, Wang will sign the agreement to import the equiva-

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lent of 10,000 metric tons of Philippine agricultural products amounting to more than $1 billion, including pineapple, banana, durian, avocado, coconut, mango, dragon fruit, mangosteen, marang,

The value of PHL-China bilateral trade in 2016

rice coffee, cacao, fish, chicken and duck meat, among others. Wang, China’s third-highest official, is also scheduled to formalize the letter of intent (LOI) for some $10 billion worth of Chinese projects that will be registered with the Board of Investments (BOI). This information is contained in a paper, Phil-BRICS Strategic Studies Inc., dated March 12. The paper said Wang will also hand over $1 billion in donation Continued on A2

Digital banking: The future of lower remittance costs »A6-A7

Can we get out of ‘extravism’? Rene E. Ofreneo

laborem exercens “Would you tell me, please, which way I ought to go from here?” Alice asked. “That depends a great deal on where you want to get to,” the Cat said. “I don’t much care where,” Alice said. “Then it doesn’t matter which way you go,” the Cat said. —Lewis Carroll, Alice in Wonderland.

GOLFING BUDDIES Remy Martin Marketing Manager Michael Soon (from left), Auto Nation Group Chairman Greg Yu, Auto Nation Group President Felix Ang, Security Bank Director Babes Simpao and TW Steel General Manager Danny Perreras pose for the cameras following the signing of a partnership agreement at the MercedesTrophy Sponsors’ Night. The invitational golf tournament scheduled to begin this month. ALYSA SALEN

‘Fast-track construction of common train station’

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hirteen influential business and industry groups are urging the “expeditious” completion of the long-delayed common station linking Light Rail Transit Line 1 (LRT 1), Metro Rail Transit Line 3 (MRT 3), and the proposed MRT 7. In a statement released on Wednesday, foreign and local businessmen said the project is facing possible delays due to a House panel review of the project. “We fully support the memorandum of agreement [MOA] executed among the train operators of LRT 1, MRT 3 and MRT 7, and the Department of Transporta-

tion [DOTr] agreeing to the intersection of Edsa and North Avenue in Quezon City as the location of the common train station,” the groups said in the statement. The DOTr and Department of Public Works and Highways (DPWH), along with SM Prime Holdings Inc., San Miguel Corp. (SMC) and Light R ail Manila Corp.—the LRT 1 operator owned by Ayala Corp. and Metro Pacific Investments Corp.—and their affiliates signed a MOA in January to finally move forward with the project. Even as construction is still scheduled to begin by yearend, the House Committee on

PESO exchange rates n US 50.3570

Transportation is proposing to shift the DOTr’s contribution to the project, pegged at P2.8 billion, to the private sector. This was after House Speaker Pantaleon D. Alvarez groused at the P2.8 billion to be shouldered by the DOTr, for the portion that will house the platform and concourse of the LRT 1 and MRT 3. “We agree that the grand common station to serve commuters in all train line—LRT 1, MRT 3 and MRT 7—be undertaken by the government through the DOTr, except for the respective areas assigned to the private stakeholders and concessionaires,” the groups said.

“The government, by undertaking the common station and underwriting its cost, would facilitate the implementation of this longdelayed project,” they added. The DOTr had explained earlier that the cost has increased, given that the size of the station proposed now is double that of the original design in 2009. The project had been in limbo for eight years, starting in 2009, when SM Prime agreed with the government for the station to be located near SM City North Edsa. After additional delays in implementation during the transition

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ne of the unresolved policy debates in the tussle between Environment Secretary Regina Paz L. Lopez and the Philippine Chamber of Mines revolves around the contribution of the mining industry in the economic growth and development of the country. Past DENR documents under various administrations tell us that mineral development does not only bring in dollars for the country; the industry also helps hasten industrial development, for the minerals themselves constitute the raw materials for industrialization. However, records show that from the time the Spaniards found gold in the country in the 16th century up to the present, very little higher-value processing of the minerals (gold, copper, iron, nickel, etc.) has developed in the country. Philippine mining is essentially an extract-and-export industry. Dig the ores, refine them a bit (meaning remove the impurities in the ores), and then ship out everything raw to China and other countries. After a while, some of the exported ores come back to us in finished but more expensive forms, as imported industrial products. The unequal outcome from this production-trading arrangement is amply demonstrated in the history of copper mining. In the 1960s and 1970s the Philippines became Asia’s biggest copper ore producer. And yet, in these decades, Japan, utilizing imported Philippine copper, also became the world’s biggest exporter of copper-based products. Continued on A11

See “Common train station,” A12

n japan 0.4389 n UK 61.2140 n HK 6.4832 n CHINA 7.2834 n singapore 35.5804 n australia 38.0598 n EU 53.4086 n SAUDI arabia 13.4325

Source: BSP (15 March 2017 )

A2 Thursday, March 16, 2017

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Manila, Beijing to sign more investment deals Continued from A1

for the rehabilitation of areas devastated by the 6.7-magnitude earthquake that struck Surigao in February. The temblor killed six people a nd inju red more t ha n 10 0, prompting a declaration of state of calamity, as damage to infrastructure was extensive. Duterte’s friendly attitude toward Beijing was rewarded when China promised to give the Philippines an “economic renaissance”. In the first two months of 2017 alone, official data showed over 250-percent increase in Chinese visa applications to the country. This happened after China promised to send 2 million Chinese tourists to the Philippines this year. On March 7 the Chinese Ministry of Commerce sent Minister Zhong Shan to the country for the 28th Joint Commission on Economic and Trade Cooperation. Among those signed were agreements

to ensure the implementation of various projects. Three priority projects totaling P170 billion were signed: The Chico River Pump Irrigation Project; New Centennial water Source-Kaliwa Dam Project, and North-South Railway-South Line valued at $3 billion to be launched this year. China will also assist the Philippines with grants for the construction of two bridges over the Pasig River—the Binondo-Intramuros and Estrella-Pantaleon bridge—to help ease Manila traffic. Other projects signed were: ■ capacity-building programs for rice experts and aquaculture; ■ establishing alert mechanism and undertaking prompt notification on the incidence of plant and animal diseases; ■ developing protocols governing the handling and resolution of cases of detection and noncompliance; ■ ex panding the sca le of agricultural trade; and

■ identifying possible locations of the proposed Philippine-China Industrial Park, among others. The investments eyed by Chinese firms amounted to more than $10.4 billion, which are hoped to generate 11,500 jobs, according to Trade Secretary Ramon M. Lopez. The Chinese official noted that although the Philippines in 2016 posted a 6.8-percent growth in GDP, besting its regional peers, challenges to its economic growth remain, such as infrastructure bottleneck, poor agriculture productivity and low foreign investment, among others. Shortly after Duterte met with President Xi Jinping in China in October 2016, the two countries exchanged working teams of economic and trade missions to implement the consensus of the visit. Chinese officials from the Ministry of Commerce, National Development and Reform Commission and Ministry of Agriculture visited the country in 2016.

‘Improve budget use before hiking taxes’ Asia. However, in terms of personal income taxes, the tax efficiency rate is pegged at only 6.2 percent, far from Vietnam’s 25.1 percent, the highest in the Asean region,” he said. The minority bloc is also calling for the full implementation of Republic Act 9335, or the lateral attrition law. “This law provides penalties and rewards against officials of

the Bureau of Internal Revenue [BIR] and Bureau of Customs [BOC]. Unfortunately, this law is dormant. Without the attrition law, the widening gap between government spending and revenue stands defenseless to the inefficient-tax collection,” Suarez said. He added that the goals of the tax package would be “vulnerable” if the attrition law remains inac-

tive. Earlier, Speaker Pantaleon D. Alvarez urged the DOF to strictly implement the lateral attrition law, which provides for a system of reward and punishment for the BOC and the BIR depending on their performance. The BOC and the BIR are both under the DOF headed by Finance Secretary Carlos G. Dominguez III. “In the attrition law, there

Last December Asian Infrastructure Investment Bank (AIIB) President Jin Liqun met with Duterte and Finance Secretary Carlos G. Dominguez III and other government officials. Jin confirmed that the initial two projects that the AIIB will cofinance in the Philippines with other multilateral lending institutions are the Metro Manila Flood Management Project and the Edsa Bus Rapid Transit System. In January Dominguez, leading a Cabinet delegation to China, proposed a total of 40 infrastructure projects. Of these, 15 are to be financed and 25 are to be supported for feasibility studies. Dominguez discussed w ith his Chinese counterpart a list of projects to be funded by available Chinese credit facility and potential private-sector investments from China. These include projects in the downstream oil industry, aviation, including aircraft parts

manufacturing, waste to energy through gasification, shipbuilding, ship-repair facility, integrated steel facility, cross border e-commerce, big-data analysis, creative industries, electric vehicles and export promotion. Currently, China and the Philippines are working together on a guideline to ensure all of these programs will be carried out in an open, transparent and orderly manner in accordance with Philippine laws and regulations. Chinese data show its bilateral trade with the Philippines reached $47.21 billion in 2016, a growth of 3.4 percent, while trade with Asean slipped by 41 percent in the same year. The $10-billion business deals to be signed involve five Chinese firms that presented their LOI to the BOI for the establishment of their businesses in the country. These Chinese companies are the Aviation Industry Corp. of the China International Aero-Development

Corp., Liaoning Bora Enterprise Group Co. Ltd., Huili Investment Fund Management Co. Ltd., Dalian Wanyang Heavy Industries Co. Ltd. and YiDingTai International. The Chinese government also intends to fully fund two drugrehabilitation centers, Chinese Ambassador to the Philippines Zhao Jianhua said. “The rehabilitaiton centers will cost around 50 million yuan, and the Pasig River bridges are around 500 million yuan. We will make the bridges not just convenient for transportation but to make them iconic—a symbol of Philippine and China’s friendship,” the envoy said. The two drug-rehab centers, also to be funded via Chinese grants, will have 150 beds each. One of the centers will be in Mindanao. Wang is slated to be in the country until March 19. He is the highest-ranking official of China to visit the Philippines since the restoration of diplomatic relations last year. With Catherine N. Pillas

target collections. The attrition law, which was enacted during the term of thenPresident Glor ia Macapaga lArroyo, seeks to improve the revenue collection performance of the BIR and the BOC through the creation of a rewards and incentives fund and of a revenue performance evaluation board. Under the law, BIR and BOC

officials and employees who fall short of their collection targets by at least 7.5 percent would be dismissed from service, while those who go beyond expectations would be given incentives. If revenue collections exceed the target by 30 percent or below, the law guarantees that 15 percent of the excess will form part of a rewards fund.

Continued from a12

is a provision punishing them through removal from office for not hitting their target revenues,” Alvarez said. Accord i ng to A lva rez, t he previous administration failed to implement the law, which provides for a system of reward and punishment for officials and employees of the BOC and the BIR who meet and fail their

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NPA waiting for truce order By Marvyn N. Benaning Correspondent

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HE New People’s Army (NPA) is still waiting for instructions from the Central Committee of the Communist Party of the Philippines (CPP) on how to reinstate its unilateral cease-fire. NPA Spokesman Jorge Madlos, in a statement issued late on Tuesday, said the NPA National Operations Command (NOC) “welcomes and supports the March 12, 2017, joint statement issued by the negotiating panels of the National Democratic Front and the government.” The joint statement reaffirmed the commitment of the two parties to continue the peace negotiations that had been suspended after President Duterte ordered the government panel to go home, after scrapping his unilateral cease-fire and declaring the termination of the peace talks. Duterte also declared the scrapping of the Joint Agreement on Safety and Immunity Guarantees (Jasig) after the NPA informed the government panel on February 1 that it was lifting its unilateral cease-fire effective on February 10. Madlos said the NPA announcement was triggered by the failure of the government to stop the deployment of soldiers as Peace and Development Teams of Internal Peace and Security Plan Kapayapaan in more than 500 villages nationwide. Moreover, Duterte failed to release more than 400 political prisoners as he had promised, while the NPA was releasing six soldiers, policemen and paramilitary men under its custody, he added. Until the orders for the reinstatement of the unilateral cease-fire is made, Madlos reiterated, “the NPA is ready to confront and counter the offensives of the Armed Forces in order to defend the people, especially the peasant masses and minority groups, from the abuses being perpetrated by the military.” Madlos also disclosed that “since President Duterte’s order on March 9 to ‘flatten the hills’, the military has become even more frenzied in its war against the NPA.” Last Saturday the Air Force conducted aerial strikes against rebel positions in Cabuyuan, Mabini, Compostela Valley, using at least three MG-520 helicopter gunships as ground troops raked the barangay with automatic fire. At least 75 families, comprised of 200 individuals, were forced to evacuate owing to the attack, Madlos said. “For two days now, the Air Force has been conducting bombing runs in Barangays Gawang, Tee and Andavit in Datu Salibo, Maguindanao, using FA-50 jetfighters and MG-520 helicopter gunships. At least 3,000 families have been forced to evacuate their homes to escape the bombings and militarization of their communities,” Madlos added.

Editor: Dionisio L. Pelayo • Thursday, March 16, 2017 A3

Alvarez: Purge of pro-life congressmen in May

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By Jovee Marie N. dela Cruz

@joveemarie

HE much-threatened and long-awaited purge of pro-life congressmen has been put off again as Speaker Pantaleon D. Alvarez said on Wednesday he will declare vacant the positions of House leaders who voted against the death-penalty bill when session resumes in May. A lvarez made the announcement a d ay before Cong ress goes on brea k from March 16 to May 2.

According to Speaker, he will implement the same policy in the bill lowering the minimum age of criminal responsibility to 9- from

15-years-old, even if it means losing support from some leaders of Lower Chamber. Meanwhile, he said all political parties have already submitted the list of pro-capital punishment members who will replace the antideathpenalty leaders. “We have asked the respective parties to submit their nominees. Well, if I’m burning bridges, so be it. I can’t do anything about it,” he added. Earlier, House Majority Leader Rodolfo Fariñas said the supermajority will give their full support to Alvarez. “The greater sentiment is we need to implement [the removal] because if we not we may lose the discipline in the chamber,” he said.

The Lower Chamber’s leaders who voted against capital punishment and may lose their positions are Deputy Speaker Gloria Macapagal-Arroyo and committee chairmen Party-list Reps. Carlos Isagani Zarate of Bayan Muna (Committee on Natural Resources), Antonio Tinio of ACT Teachers (Committee on Public Information), Emmi de Jesus of Gabriela (Committee on Poverty Alleviation), Michael Velarde Jr. of Buhay (Committee on Overseas Workers Affairs) and Sitti-Djalia-Hataman of Anak Mindanao (Committee on Muslim Affairs); Liberal Party R e p. V i l m a S a ntos - R e c to of Batangas (Committee on Civil Ser vice and Professional Regulation), Nationalist People’s Coalition Rep. Evelina Escudero of

Sorsogon (Committee on Basic Education and Culture), Liberal Party Rep. Henedina Abad of Batanes (Committee on Government Reorganization), Liberal Party Rep. Jose Christopher Belmonte of Quezon City (Special Committee on Land Use) and Liberal Party Rep. Kaka Bag-ao of Dinagat Islands (Committee on People’s Participation). Commission on Appointments member Liberal Party Rep. Josephine Ramirez-Sato of Occidental Mindanao may also lose her seat in the powerful body. Alvarez used to be an ally of former President Arroyo, who appointed him secretary of the then-Department of Transportation and Communications during her watch.

Duterte wants written cease-fire pact with NPA Solons call By Cielito M. Reganit Philippines News Agency

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RESIDENT Duterte late on Tuesday said the government is again engaged in dialogues with the Communist Party of the Philippines-New People’s Army-National Democratic Front (CPP-NPA-NDF), but stressed that parameters for a cease-fire would be clearly set. In his speech before the first general assembly of the League of Municipalities of the Philippines (LMP), the President said back-

channel talks have been revived despite sporadic clashes between government forces and communists rebels. “We are talking to the communists, I’m still biding my time. There’s a backchanneling. I’m not supposed to talk about it because it’s backchanneling. But I have certain conditions or demands that we have to agree upon,” Duterte said. However, he said parameters for a cease-fire should be clearly set in a document that would bind both parties. “I want a cease-fire [agreement]

that is written… and the parameters clearly shown where we are going and what should be done in case of failure,” the President said. “We have to play fair for everything, but it is still a little vague until now. I cannot expound on it further. But we have some must-do in order to achieve peace,” Duterte said. The President made the statement a day after the government panel, led by Secretary Jesus Dureza, and NDF leaders agreed to resume negotiations by the first week of April. Negotiations were stalled after both sides lifted their respective

unilateral cease-fires in early February, with the NPA making the first move. Last week Duterte ordered government forces to use all its assets in an all-out war against the rebels following the ambushkilling of four policemen by suspected NPA members in Bansalan, Davao del Sur. On Monday Dureza announced that the government is expected to meet with the communist panel in April after successful backchannel talks held on March 10 and 11.

Air Force’s new fighter jets conduct overflight missions over Mindanao

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FTER their successful familiarization overf light and tour in the Visayas, the Air Force’s brand-new FA-50PH “Golden Eagle” jet fighters started the Mindanao leg of their overflight in Mindanao on Wednesday morning. The overflights took place at 10 a.m. over the airspace of Cagayan de Oro, Butuan and Surigao cities, said Col. Antonio Francisco, Air Force spokesman. The FA-50PHs earlier undertook overflight missions over Mactan, Catbalogan, Calbayog, Kalibo, Iloilo, Bacolod and San Carlos, all in the Visayas, last week. “The overflight missions will also serve as a great avenue to train pilots and allow them to be acquainted with various aspect of flight missions, such as the country’s different terrains, weather and possible areas of interest,” Francisco earlier said. Overflights will also demonstrate the Air Force’s combat capability to the public. At least six FA-50PHs are now in service, with another six awaiting delivery. The 12-plane order from

GOLDEN Eagle

Korea Aerospace Industries (KAI) is worth P18.9 billion. The FA-50PH has a top speed of Mach 1.5, or one-and-a-half times the speed of sound, and is capable of being fitted with air-toair missiles, including the AIM-9 “Sidewinder” air-to-air and heatseeking missiles, aside from light automatic cannons. The FA-50PH will act as the country’s interim fighter until the Philippines gets enough experience of operating fast jet assets and money to fund the acquisition of more ca-

pable fighter aircraft. The FA-50PH design is largely derived from the F-16 “Fighting Falcon” and they have many similarities: use of a single engine, speed, size, cost and the range of weapons. KAI’s previous engineering experience in license-producing the F-16K was a starting point for the development of the FA-50PHs. The aircraft can carry two pilots in tandem seating. The high-mounted canopy developed by Hankuk Fiber is applied with stretched acrylic, providing the pilots with good vis-

ibility, and has been tested to offer the canopy with ballistic protection against four-pound objects impacting at 400 knots. The altitude limit is 14,600 meters (48,000 feet), and the airframe is designed to last 8,000 hours of service. There are seven internal fuel tanks with capacity of 2,655 liters (701 US gallons), five in the fuselage and two in the wings. An additional 1,710 liters (452 US gallons) of fuel can be carried in the three external fuel tanks. Trainer variants have a paint scheme of white and red, and aerobatic variants white, black and yellow. The FA-50PHs use a single General Electric F404-102 turbofan engine license-produced by Samsung Techwin, upgraded with a full authority digital engine control system jointly developed by General Electric and KAI. The engine consists of threestaged fans, seven axial stage arrangement and an afterburner. Its engine produces a maximum of 78.7 kN (17,700 lbf) of thrust with afterburner. PNA

for end to ERC probe

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EVERAL congressmen recently called for the termination of an ongoing congressional investigation involving the Energy Regulatory Commission (ERC) following the alleged suicide of ERC Director Jose Francisco Villa Jr. House Minority Leader Danilo E. Suarez of the Third District of Quezon made the motion for the conclusion of the hearings on Monday, noting that the two committees may have already exhausted questions pertaining to the said suicide. Suarez’s motion was backed by several other congressmen, including Deputy Speakers Gwendolyn F. Garcia of the Third District of Cebu and Partylist Reps. Sharon S. Garin of AambisOWA Harry L. Roque Jr. of Kabayan and Rodel Batocabe of Ako Bicol. In calling for an end to the investigation, Suarez also noted that the amounts involved in the projects in question “are too small”, and that Congress should instead focus on “the sensitivity of the ERC as an institution.” The hearings, being conducted jointly by the House of Representatives’s Committees on Energy, and on Good Government and Public Accountability, have centered on the possible role of ERC Chairman Jose Vicente Salazar regarding alleged pressure on Villa in connection with the procurement process for a P300,000 audio-visual project. Salazar had denied exerting pressure on Villa, adding that he had personally handpicked the late ERC official to head the agency’s bids and awards committee (BAC). The Commission on Audit (COA) had earlier cleared Salazar in connection with the said project. According to the COA report, no contract was signed and no government funds were released for the project. Jovee Marie N. dela Cruz

Economy

A4 Thursday, March 16, 2017 • Editors: Vittorio V. Vitug and Max V. de Leon

Meralco seeks ERC okay for ‘smart’ power meter project By Lenie Lectura

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@llectura

he Manila Electric Co. (Meralco) is seeking approval from the Energy Regulatory Commission (ERC) to implement starting June this year its Advanced Metering Infrastructure (AMI), a major project of the utility firm that will help customers manage their energy usage, thereby resulting in savings. “Subject to the necessary capital expenditure [capex],” Meralco asked the commission in its March 10 application that “the AMI project be approved, and Meralco be allowed to deploy the basic AMI services under the terms and conditions in this application starting June 1”. In order for Meralco to implement the project, it needs to install smart meters within AMI-activated areas for all new and reconstructing Meralco customers. Within AMI-activated areas, Meralco will replace the electric meters of existing customers. AMI meters will be mandatorily deployed to residential and nonresidential customers. These smart meters are capable of detecting outages when the power to the meter is lost. The smart meter will transmit the outage information to Meralco’s head-end system via AMI. Depending on the nature of the outage, the customer shall be informed of the power outage and the cause of such through Web portal and the customer’s preferred channel. For widespread outages, notifications shall be sent via social media. Meralco will also make available an online Web portal to provide a consumption-monitoring and reporting mechanism for AMI customers. With this portal, customers can access their present consumption, previous billing and historical monthly consumption, among others. The smart meters is just one of the three major components of the AMI. The other two are the communication infrastructure and the implementing systems. These two are vital in transmitting the data from the smart meters to Meralco’s network in order for it to deliver the AMI services. Meralco will also offer AMI supplemental services, such as prepaid electricity under K-Load, net metering, demand response, advance outage management, home area network, electric vehicle supply equipment management, smart streetlights, management of distributed energy resources and distribution automation-infrastructure support. These supplemental AMI services also need the green light of the ERC. “Meralco’s AMI deployment strategy [aims] to scale up AMI quickly and efficiently to maximize customer and utility benefits,” Meralco said. To efficiently expand the AMI coverage, Meralco will take the existing coverage areas as starting points. From Manila, Makati, Mandaluyong, Pasig and portions of Rizal, Meralco will be activating adjacent cities, such as San Juan, Quezon City, Taguig, Marikina, Pasay, Caloocan and Pateros, as AMI-covered areas. “This concentric expansion will continue until coverage of Metro Manila is completed in regulatory year [RY] 2019 and the whole franchise in RY 2022,” it said. From the identified coverage areas per RY and the proposed meter installations and replacement, Meralco will be activating an estimated total of 3 million customers and targeted points within the distribution network by 2024. Meralco said it will inform and educate customers on what AMI is all about and its benefits.

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Proposed Subic-Clark Railway project listed in forthcoming PHL-Japan trade, infra talks

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By Cai U. Ordinario

@cuo_bm

he Philippines and Japan are set to begin a new round of discussions on trade and infrastructure late this month, according to the National Economic and Development Authority (Neda). The high-level meeting, which will take place in Tokyo, is part of the commitments of Japanese Prime Minister Shinzo Abe when he visited the country in January. Neda Secretary Ernesto M. Pernia said the discussions will include

finalizing the projects to be funded by the Japanese government. “[The discussions will be] similar to what we did with China in January,” Pernia told reporters. “It’s the Japan infrastructure development and economic cooperation and its

₧35.044B The estimated cost for the construction of the 65-kilometer cargo and passenger railway that will traverse the Subic-ClarkTarlac Expressway and the Subic Freeport Expressway first meeting is on the 26th.” One infrastructure project that could be discussed in the meeting is the hotly contested Subic-Clark Railway project, which is being eyed for funding by both the Chinese and Japanese governments.

T he P35.0 4 4 bi l l ion wor t h project involves the construction of a 65-kilometer cargo and passenger standard gauge railway. Envisioned to be a “speed train”, the project will traverse the SubicClark-Tarlac Expressway and the Subic Freeport Expressway. “The project will connect Subic to the major economic hubs in Central Luzon. The project can decongest Metro Manila by transferring portions of business activity to Clark and Subic,” the Neda documents stated. On the trade side, it is known that the Philippines has a bilateral trade agreement with Japan, the Japan– Philippines Economic Partnership Agreement (Jpepa). The Jpepa agreement was signed in Helsinki in 2006 and was ratified by the Philippine Senate in 2008.

In 2015 the Department of Agriculture (DA) said the Philippines is seeking to bring down tariffs for sugar once a review of the Jpepa begins. Based on figures from Japan Customs, tariffs for cane sugar range from 18.9 percent to 26 percent. A g r ic u lt u re Undersec ret a r y Segredo R. Serrano said the Philippine government is also asking Japan to lower tariff for other ag r icu ltura l products, such as processed food, fish products and tropical fruits, including bananas, mangoes and pineapples. In 2007 the DA estimated that the Philippines would earn some $419 million in potential revenues from farm exports under the Jpepa. The department said the amount represents the tariff cuts due that will be implemented under the free-trade scheme.

Mobile phones remain ‘king’ First tranche of P2.8-B DOTr of PHL information economy fund released to Clark airport C I N the age of the Internet, mobile technology remains “king” for the country’s information economy (IE). The Philippine Statistics Authority (PSA) said around 15.4 percent of firms use cellular mobile phones to conduct business, compared to the 11.1 percent who use the Internet for e-commerce. Across regions, the Autonomous Region in Muslim Mindanao—where not a single business has used the Internet—reported the highest use of mobile phones for business. “The ARMM [at] 33.3 percent reported the highest business transaction via cellular mobile phone, and the lowest was in Eastern Visayas at 2.2 percent,” the PSA said. However, the PSA added the use of mobile-phone technology is declining since in 2010, as only around 16.1 percent used cellular phones when conducting business. The PSA’s survey data showed there were 4,251 establishments classified as part of the IE in 2013, an increase of 78.7 percent, from 2,379 in 2010. About 98.8 percent of the IE firms used computer and other hardware in their business operations. This was higher than the 97.5 percent reported in 2010. All establishments under the content and media sector reported 100-percent computer and other hardware usage. This is slightly higher compared to the 98.5 percent reported by the information and communications technology (ICT) sector. Meanwhile, of the 371,520 IE employees, 46.6 percent used computer routinely at work in 2013, lower than that the 48.5 percent, or 303,882 employees, recorded in 2010. Those in the content and media sector at 68.1 percent

had a higher percentage for this indicator compared to those in the ICT sector at 44.6 percent. Data also showed that around 26 percent of establishments in 2013 maintained a web site. This is lower than the 38.7 percent posted in 2010. The content and media sector at 26.6 percent had a higher percentage with web site than those in the ICT sector at 25.9 percent. The data was obtained from the 2013 Survey of Information and Communication Technology conducted in 2014. Cai U. Ordinario

Group to Duterte, CCC: Sustain climate justice initiative under Paris Agreement By Elijah Felice Rosales @alyasjah

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non-profit group working on sustainable-energy solutions and fair climate policy has urged the administration to sustain its momentum in implementing initiatives toward climate justice, following the approval of the Senate concurrence of the Philippines’s accession to the Paris Agreement. In a news statement released on Tuesday, policy group Institute for Climate and Sustainable Cities (iCSC) said the responsibility now switches back to the Office of the President to execute whatever plan it has in compliance with the climate-change treaty. “The baton has been passed back to the Executive branch to implement the Paris deal,” said Renato Redentor R. Constantino, executive director of iCSC. Constantino challenged officials from what he called as “dormant offices”, such as the Climate Change Commission (CCC), “to wake up and act on the sense of urgency conveyed by President Duterte and Sen. Loren B. Legarda”. “The CCC has been on hibernation when it comes to the energy

policy review. The review is a critical first step to updating the country’s nationally determined contribution [NDC] to global climate action, yet, it has remained in limbo since July 2016,” Constantino said. He added the commission was given the opportunity to raise funds for adaptation projects and the transition to a more sustainably powered economy, even as it seems the agency has fallen asleep since the beginning of the year. In a news briefing in Malacañang on Tuesday, CCC Vice Chairman Frances Veronica D. Victorio proudly announced the country will be given access to financial support and technologies needed for climate initiatives now that it has ratified the Paris Agreement. “So, if we are part of the treaty, we are guaranteed financial support for capacity building,” Victorio said. The commission vice chairman revealed the Paris Agreement assigns developed countries, which contribute most to the world’s carbon emission, to fill in the $100-billion mobilizing floor fund. However, Victorio admitted the climate-change treaty does not have a strong mechanism in demanding

countries to comply with their duties. “It’s really a name-and-shame game here,” she said, “that’s why we’re focusing on transparency [measures instead].” With this, there are doubts if developed countries can truly come up with the mobilizing floor fund since contributing to it is somewhat voluntary, according to Victorio. The last—and, perhaps, the best—thing the country can do is to fight for stronger compliance in the negotiating table, she said. “We need to start…asking for the developed countries to be more transparent in their support and to really show us that they are [fulfilling] their obligations,” Victorio added. T he Pa r i s A g reement w a s signed by Duterte on March 1 despite having misgivings in some of its key provisions. The landmark deal aims to slow global temperature rise and keep it well below 2 degrees Celsius this century. It also mandates parties to submit a report on their NDC every five years, highlighting the mitigation and adaptation initiatives their country implemented in response to climate-change crisis.

LARK, Pampanga—The Department of Transportation (DOTr) has released the first tranche of the P2.8-billion fund to the government-run Clark International Airport Corp. (CIAC), setting off the first salvo for the implementation of Clark airport’s new terminal building project. Alexander O. Cauguiran, CIAC president and CEO, said the transfer to CIAC of the first tranche amounting to P6.6 million from the P2,893,080,000 project fund from the DOTr, will be used for hiring four consultants through negotiated procurement. “Thankfully, this huge development will definitely move us forward in realizing CIAC’s plans to accommodate the growing number of passengers at Clark airport,” Cauguiran said. The preconstruction activity funds have been released to CIAC for the procurement of consulting services on the detailed engineering and design and construction management services for the new terminal building of the Clark International Airport (CRK). The DOTr was appropriated some P800 million and P2.09 billion in the General Appropriations

Act (GAA) of 2015 and 2016, respectively, for the CRK project’s first phase this year. Earlier, the DOTr and CIAC entered into a memorandum of agreement for the downloading of said funds for three horizontal civilworks projects, which are components of the Clark airport project. The CIAC chief also said the process of bid and award of contract, except for unforeseen obstacles, may be completed by the third quarter of this year. “For transparency, design consultants will assist CIAC and the DOTr in reviewing and finalizing the terms of reference, design drawings and related bid documents,” Cauguiran added. The construction of a new Clark airport terminal“the first of four design phases” for domestic and international travelers with an 8 million-passenger capacity—is included in CIAC’s Master Development Plan and will be finished before the term of President Duterte ends, he said. This is part of the Duterte administration’s “Build, Build, Build ” infrastructure development thrust in the next five-anda-half years. PNA

No airport terminal fee charge for OFWs beginning April 31 By Recto Mercene @rectomercene

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he Manila International Airport Authority (Miaa) and air carriers operating at the Ninoy Aquino International Airport have signed a memorandum of agreement (MOA) that will exempt all overseas Filipino workers (OFWs) from paying the so-called international passenger service charge, commonly referred to as terminal fee, at any point of sale abroad beginning on April 30. Under the revised integration project, OFW exemption shall be honored upon face-to-face purchase of tickets from airline ticketing offices or agents overseas. “As they buy their ticket from a ticketing office, travel agency or ticketing outlet, one has to state or declare that he is an OFW for exemption to be recognized,” Miaa chief Ed Monreal said. “The selling agent may or may not ask for a proof of entitlement during transaction. The OFW, however, shall be able to present one during check-in upon his departure from Manila,” he added.

The inclusion of the terminal fee into the cost of airline ticket was implemented in February 15, 2015, but was met with opposition from OFW sectoral and advocacy groups. The OFWs were also required then to go through a refund process in Manila to claim the P550 charged to them by default for tickets bought online or abroad. This claim is anchored on Section 35 of Republic Act 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, which mandates exemption of migrant workers from payment of travel tax and airport fee upon showing of proof of entitlement by the Philippine Overseas Employment Agency. Even the proof of entitlement has been expanded under the new agreement to include documents under the Balik Manggagawa exemption, which includes valid employment contract or most recent pay slip, among others. Previously, only the Overseas Employment Certificate is honored as proof of entitlement. The new rule shall also pave the way soon for online purchase of tickets for OFWs.

Agriculture/ Commodities BusinessMirror

A5

news@businessmirror.com.ph Editor: Jennifer A. Ng • Thursday, March 16, 2017

Piñol: SRA must suspend new rules on fructose imports

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By Jasper Emmanuel Y. Arcalas

@jearcalas

he implementation new guidelines regulating the entry of imported high fructose corn syrup (HFCS) should be deferred by the Sugar Regulatory Administration (SRA) pending consultations with soft-drink makers, according to Agriculture Secretary Emmanuel F. Piñol.

Piñol said the SRA did not consult stakeholders, such as soft-drink makers, before it issued Sugar Order (SO) 3, which put in place additional requirements that must be met by importers of HFCS. “There’s a problem with SO 3 of the SRA because it regulates the importation of HFCS, which Coca-Cola uses in producing its soft drinks. Now, Coca-Cola and Pepsi Cola appealed to me, saying they were not properly consulted,” he said. “I have recommended to President Duterte to authorize me to hold in abeyance SO 3 pending proper consultations with stakeholders,” Piñol added. The SRA is a government-owned and -controlled corporation (GOCC) attached to the Department of Agriculture (DA). Its administrator is appointed by the President, while the DA chief serves as ex-oficio chairman of the SRA Board. Citing the top honcho of Coca-Cola Femsa Philippines Inc. (CFPI), Piñol said using other types of sugar would entail the overhaul of the company’s machines and equipment, as these were designed to use HFCS. Piñol said he met with CFPI, a Mexicobased company, and the Mexican ambassador on March 13 to discuss SO 3 and HFCS imports. In February the SRA issued SO 3 after farmers and millers complained that they were losing some P10 billion a year due to the unregulated entry of HFCS imports being used by local beverage and food producers. SO 3 specified the guidelines for the issuance of clearance for the release of imported HFCS and chemically pure fructose. “HFCS is a type of sugar and/or that its importation affects the balance of supply of sugar in the country,” SRA Administrator Anna Rosario V. Paner said in SO 3. “The unregulated importation of HFCS displaces the use of locally produced sugar and, thereby, negatively affects the balance of production, threatens the livelihood of industry workers and impedes the growth of the sugar industry,” Paner added. Piñol said he was not present during the meeting when the SRA board made a decision to regulate the entry of HFCS in the country. However, he said his ex-oficio

chairman alternate, Agriculture Undersecretary Segfredo R. Serrano, attended the SRA board meeting on February 17. “Serrano agreed with the position of the SRA, but I think the flaw there is that the other stakeholders, such as Coca-Cola and Pepsi, were not consulted. These companies are actually big businesses in the Philippines, so it’s important to hear their side on the impact [of SO 3],” he said. “I’m not disregarding the recommendation of my undersecretary [Serrano], but when Coke and Pepsi Cola presented their side, I think their concerns were legitimate. [Beverage firms] should be given enough time to make adjustments in the [production] process,” Piñol added. Piñol also said CFPI had complained to him that the company’s soft-drinks inventory would be good for only five days. “Their importation of HFCS will [soon] arrive at the ports, but they cannot release it unless SO 3 is held in abeyance,” he said. The DA chief also warned that regulating the entry of HFCS could become a “sore point” in the trade relations between Beijing and Manila as the bulk of HFCS imports come from China. Earlier, Paner said the volume of HFCS imported last year, pegged at 285,000 metric tons (MT), which is equivalent to some 5.7 million 50-kilogram bag, was the highest since 2013. Paner said this displaced nearly 30 percent of the market share for locally produced refined sugar. “There has been a lot of excess corn in China, so the price of HFCS went down and then China exports to us at zero duty,” Paner said. “That’s why the price of sugar is dropping, because there’s so much supply due to the importation of HFCS”. Piñol said he would convene the SRA board on March 23 to discuss HFCS importation and the possible suspension of SO 3. CFPI had tried to ask the Regional Trial Court in Quezon City to issue a temporary restraining order against SO 3. In a ruling issued on March 10, the court denied CFPI’s petition. The company argued that some of the provisions of SO 3 undermine their right to import HFCS, while giving the SRA arbitral power “to interfere and place unnecessary restrictions in importing HFCS”.

‘Lack of funds hurt govt bid to hit rice-sufficiency goal’

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he Department of Agriculture (DA) said it would have to delay its target of achieving rice sufficiency by another year, as it does not have enough funds to bankroll necessary interventions to prop up output. Agriculture Secretary Emmanuel F. Piñol said it would be difficult for his department to hit its rice-sufficiency goal by 2019 sans an increase in the budget of the DA. “We have to make adjustments because of the nonavailability of funds. What will I do if there’s no budget to avail irrigation systems and other planting materials?” Piñol said in an interview with reporters on March 14. He said, however, that House Speaker Pantaleon D. Alvarez had promised to increase the budget of the DA for next year. Earlier, Piñol said he would need at least P400 billion to hit the rice-sufficiency goal in two years. To boost rice output, the DA is targeting to establish solar-powered irrigation systems, procure hybrid-rice seeds and provide postharvest facilities. Of the proposed budget, Piñol said P50 billion would be allocated for a program aimed at expanding farmers’ access to affordable loans.

“What the DA is asking is just about one-third of the budget of the Department of Education and less than half of the budget of the Department of Public Works and Highways,” he said in an earlier interview. “Our current budget now is even smaller than the budget given to the Pantawid Pamilyang Pilipino Program,” Piñol added. The DA has an approved budget of P45.29 billion for this year, 7.46 percent lower than the agency’s 2016 budget of P48.94 billion. Data sent to reporters on March 15 showed that the government’s rice production target for this year is 18.57 million metric tons (MMT), 5.33 percent higher than last year’s output of 17.63 MMT. The 18.57-MMT target production this year would translate into a 90 percent self-sufficiency ratio (SSR), according to data from the DA. Next year the DA’s goal is to harvest 20.34 MMT of paddy rice, from 4.84 million hectares. SSR is the extent to which a country’s local production of commodities is adequate enough to meet the demand of the whole population, according to the Philippine Statistics Authority. Jasper Emmanuel Y. Arcalas

TheBroa

Business

A6 Thursday, March 16, 2017

Digital Bankin of lower remi I

By Bianca Cuaresma

@BcuaresmaBM

N 2016 just under $27 billion fresh foreign-currency earningswere pumped into the local economy in the form of the remittances sent home by Filipino migrant workers to their families and loved ones.

Each year in the past decade, the volume of remittances continued to grow in significant amounts. The growth continued amid global political and economic shifts that hounded economies in the countries hosting millions of overseas Filipino workers (OFWs). Remittance projections grew bleaker, particularly last year, when salaries of Filipinos deployed in the Middle East came under threat due to the sudden unprofitability of oil firms. The latter re-

sulted from the persistent decline of global oil prices as producers stubbornly stuck to supply targets. However, OFWs surpassed expectations, again. With the total volume of money sent back home growing by 5 percent at the end of 2016, OFW remittances proved higher than the government’s 4-percent projection for the year. The central bank particularly reported a 12.7-percent increase in remittances from the Middle East, driven by growth in cash sent from

The Philippine peso gains most in three months on remittance inflows. In photo, overseas Filipino workers still processing their documents at the Philippine Overseas Employment Administration office in Ortigas. NONOY LACZA

Filipinos in Qatar, Kuwait, Oman and the United Arab Emirates. This drive of the Filipinos abroad to send money back home for their families has been one of the pillars of the consumptiondriven local economic growth. Philippine economy, which has been growing around a rough average of above 6 percent in the past five years, can credit OFWs for maintaining the momentum of GDP growth. A local analyst said a good measure of how important remittances are to a country would be to measure remittances as percent of its GDP. Last year the remittances sent by Filipino migrant workers accounted for roughly 9.8 percent of the country’s total output, ranking 29th in the world with the highest remittance-to-GDP ratio as per World Bank’s data.

Costs

HOWEVER, the volume of remittances sent by Filipino migrant workers could be larger, if fees to send money to the Philippines

were significantly cut. Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor Espenilla Jr. shared latest data with the BusinessMirror, saying the cost to send remittances home has already been slashed by about half since 2008. In particular, citing World Bank figures, Espenilla said that as of the fourth quarter of 2016, the cost of sending a standard amount of $200 from the US to the Philippines has dropped to 4.67 percent, compared with the baseline 8.9 percent in 2008. The BSP senior official said the Philippines’s remittance fees are currently cheaper than other neighboring countries, including Vietnam’s 4.73 percent, Bangladesh’s 4.84 percent, Indonesia’s 8.44 percent, China’s 8.7 percent and Thailand’s 11.24 percent. Based on the 2016 cash-remittance volume, reducing money-transfer costs by even 0.05 percent could give an average of roughly an additional $1.35

billion more in remittances, or about P67.3 billion in recent foreign-exchange terms. These remittance fees in the country are projected to come down further with the advent of a more efficient electronic money scheme in the Philippines through the central bank ’s National Retail Payments System (NRPS) initiative. “[The] BSP has taken a strategic approach of promoting open competition among banks and non-banks in the remittance business,” Espenil la told the Busin essMir ror . “ T h i s h a s generally resulted in more alternatives, better quality, and lower remittance costs notwithstanding effects of de-risking. Remittances continue to grow strongly over time.”

NRPS

ESPENILLA, BSP deputy governor for the supervision and examination sector, added: “We expect remittance costs to further

decline as the NRPS, promoting inter-operable digital payments, gain traction this year.” The NRPS, which has been in the works since early last year, was formally launched in 2015. The new system aims to usher the shift of consumers’ way of transactions in the country from the traditional cash and checks to electronic means. T he B SP s a id t he t a keof f point for the NRPS is that the competition has created a very fragmented market with each having its own solution, resulting in a situation of difficulty in transacting with one account to another account because of the fragmented structure of the retail payments system. The NRPS aims to directly address market segmentation b y c reat i ng a cent ra l i n f rastructure that is accessible to all industr y players, much like a shared highway for stakeholders to deliver their services on a common and level playing field.

aderLook

sMirror

www.businessmirror.com.ph | Thursday, March 16, 2017

A7

ng: The future ittance costs Shift

ONE of the biggest players in the digital money-transfer industry said the potential shift of the practice of transferring money from informal couriers to a more efficient electronic scheme could help bridge gaps, lower costs and speed up the process along the way. “There is big demand for an efficient money-transfer system in the Philippines. It reduces friction and time,” PayMaya Philippines COO and Managing Director Paolo Azzola told the BusinessMirror. “Our business at Smart Padala and PayMaya are proof of that.” Azzola explained the first condition showing demand is that 86 percent of households don’t have a deposit account (as per the BSP 2014 Consumer Finance Survey). “Second, as much as 36 percent of cities and municipalities still don’t have a bank branch presence,” he said. “An efficient money transfer system can help bridge the gaps, and help fuel economic growth.”

Azzola said the company and other players support the vision of the NRPS being pushed by the BSP, which aims to make at least 20 percent of all transactions to be done electronically by 2020. “Toward that end, we are making continuous improvements to our digital financial service platforms, on top of more ubiquitous presence, more services for customers and more enticing promotions.” Azzola added research from the industry predicts the transformation of the sari-sari stores as a touchpoint for multiple financial services for consumers. “A c t u a l l y, we a re a l re a d y seeing this happen with Smart Padala,” Azzola said. “Our partner-agents are doing not only remittance ser v ices but a lso bills payments, load selling and, to a limited extent, micro loans disbursement for a partner.”

Guidelines

THE central bank has expanded the guidelines covering nonbank remittance agents, such as mobile finance agents, just this year. There is also the updated oversight framework that includes provisions to prevent money laundering, as well as to uphold certain standards of consumer protection. “Security-wise, we have empowered our PayMaya customers to block their accounts and cards via the app immediately in case of loss or fraud,” Azzola told the BusinessMirror. “A l l our platfor ms are protected by multiple security levels as we are a licensed financial institution.” A lso last year, the r i se of v i r t u a l c u r re nc ies — bitcoins, in its most popu lar for m— prompted t he cent ra l bank to rev iew its potentia l use in money-t ra nsfers in a remittance-heav y economy. Virtual currencies are a form of digital money that is not issued by the central bank. Unlike electronic money that is backed by cash for the entirety of its value, bitcoins are not backed by any commodity but by the mere ability of its holder to exchange them for goods. “On one hand, we know that it can improve the efficiency of remittance transactions and lower cost of remittance businesses,” Espenilla said. “ That is one good reason to not close our mind to it right away.” As such, just last month, the central bank issued a formal regulator y framework for the exchanges of virtual currencies operating in the country.

Pioneering

THE Monetary Board said it has decided to adopt a formal regulatory framework in recognition of the rapid growth of virtual currency-based payments and remittance transactions. These transactions are estimated to be at around $6 million per month for certain major players, data from the central bank show. Under the new set of rules, the BSP considered virtual currency exchanges as companies offering money or value-transfer services. As such, the basic requ irements for rem it t a nce and transfer companies such as

registration, minimum capital, internal controls, regulatory reports and compliance with the Anti-Money Laundering Act and its implementing rules and regulations, shall apply to virtual currency exchanges. The central bank ’s move to regulate this type of innovation is a pioneer in Asia. “We’re a world leader in the remittance business but, perhaps the last leg of development would be to get both senders and end users familiar with technological developments, like sending money through secure apps of banks,” a local analyst said.

Challenges

DESPI TE loca l developments and innovations to bring down the cost of sending money from overseas to the Philippines, international protectionist policies in banks abroad still post a challenge to remitting money at low costs. T h e c e nt r a l b a n k e a r l i e r blamed so-called derisking practices as one of the culprits behind the temporary contraction in remittances. These “derisking practices” are the set of policies implemented by financial institutions abroad aimed to restrict or terminate certain operations to lessen exposure to risks. The international financial institutions’ decision to cut ties with certain account holders or conduits usually affects Filipino migrant workers’ bank accounts or Filipino banks’ ties with international banks. This makes it harder for OFWs to find ways to send money back home. “Derisking behavior by major international banks continues to pose a major challenge to the provision of remittance services,” the World Bank said in a recent report. “Complaining that remittance transactions are prone to the risk of money laundering and other financial crimes, banks have been closing the correspondent banking accounts of many money-transfer operators [MTOs].” World Bank data showed that over the past two years, 84 accounts of 32 Philippine remittance providers (including both banks and MTOs) were closed by 33 foreign banks in 13 major remittance-sending countries. Also in its survey, the World Bank said MTO account closures by banks could have “obvious adverse impact on remittance costs and access to remittance services in rural and remote regions.”

Monitoring

ESPENILLA told the BusinessMirror that the central bank is still “closely monitoring” developments in derisking practices worldwide and how these could affect Filipino migrant workers down the line. “It’s not necessarily an existential threat to the industry at this point, but its still definitely making it hard to open or retain correspondent accounts in some countries abroad,” Espenilla said. “This creates inconvenience and higher cost of remittance.” BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo also said earlier

there are three interrelated consequences identified with the disruption in the money chain brought by derisking processes. These include the increase in the cost of remittances, the shift toward informal channels and financial exclusion. “This move decreases the reliability, certainty and safety of remittances, which is recognized as a greater antimoney-laundering/ CFT risk and may increase the vulnerability of financial systems,” Guinigundo added. In turn, the shift to informal channels lessen the possibility of accessing a broader range of financial ser vices from the formal financial ser vices prov iders, resulting to so-called financial exclusion.

Targets

IN 2016 sources of remittances to the Philippines include the

United States, Saudi Arabia, UAE, Singapore, the United Kingdom, Japan, Qatar, Kuwait, Hong Kong and Germany. Remittances from the Middle East grew the fastest in 2016, coming from a low base due to the oilprice slump that started in 2015. Remittances from Asia also rose albeit at a slower pace of 7.4 percent due to transfers from workers in Singapore, Japan, China and Taiwan. Remittances from the Americas, meanwhile, increased only by 3.8 percent, with the US being the major contributor posting a 6.2-percent growth. Contrastingly, remittances from Europe fell by 8.4 percent as remittances from the UK, Italy and the Netherlands decline. The BSP said the decline in remittances from London may be partly blamed to the depreciation of the pound sterling against the US dollar.

Land workers still dominate most of the remittances sent home, bringing in $21.3 billion and a growth of 7.6 percent last year. Sea-based workers, meanwhile, brought in $5.6 billion in 2016, declining 3.8 percent from last year’s volume. The BSP blames the decline of sea-based workers’ remittances to the stiffer competition in the supply of seafarers, particularly from East Asia and Eastern Europe. Fol low i n g it s re cord - h i g h volu me in 2016, t he cent ra l bank earlier said remittances to the Philippines are projected to hit $1.1 bil lion higher than that of the prev ious year—register ing yet another a l l-time high for remittances. This still represents a 4-percent growth expectation for money transfers, unchanged from the government’s growth projection of remittances seen last year.

The Regions

A8 Thursday, March 16, 2017 • Editor: Efleda P. Campos

BusinessMirror

news@businessmirror.com.ph

University head in Pangasinan faces graft charges before Ombudsman

Consumer group enjoins DOE, LGU, PNP to go after illegal LPG supplier

INGAYEN, Pangasinan—For disbursing for himself “extraordinary and miscellaneous expenses” (EMS) beyond what is allowed by law, the president of the Pangasinan State University (PSU) here is now facing graft charges before the Office of the Ombudsman.

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By Orly Guirao | Correspondent

In a complaint filed before the antigraft body, Dr. Francisco G. Posadas, an associate professor of PSU, accused Dr. Dexter Buted of “blatantly violating pertinent laws on the use of public funds, an act tantamount to abuse of authority, grave misconduct and malversation of public funds” as defined under Republic Act 3019, otherwise

known as the Anti-Graft and Corrupt Practices Act. Posadas presented evidence that included findings by the Commission on Audit (COA) that Buted had claimed reimbursements for EMS of P1 million in excess of what is allowed under Section 39 of the General Appropriations Act (GAA) of 2015. Under the GAA, Buted, who holds

the rank of a department undersecretary, is entitled to P108,000 in extraordinary expenses and P72,000 in miscellaneous expenses. However, the COA found the state university president had claimed EMS reimbursements of P1,180,000, in excess of P1 million. The reimbursements were made within a year after Buted’s assumption of the post in December 2014, the COA report said. Posadas claimed in his complaint that as early as September 22, 2015, Buted had already used P120,000 of his EMS, but he still continued to claim additional reimbursements up to December of that year. The complainant informed the antigraft body that Buted was able to claim reimbursements “without supporting documents, such as official receipts,” to justify the expenses. Posadas submitted copies of the vouchers and corresponding checks

covering the reimbursements from June to December 15, 2014. In its annual audit report, the COA asked Buted to “submit a detailed accounting of the excess amount” of the reimbursed fund, but Buted allegedly only issued a certification on the expenses. Posadas said the PSU head maneuvered the releases of his EMS beyond what is allowed by law by “arbitrarily relieving” the school’s chief administrative officer who had refused the sign the reimbursement voucher and designating an ally as replacement. Stripped of his regular duties and functions, the relieved administrative officer was transferred to another post on a “floating status”. Posadas also informed the Ombudsman that he had earlier filed a complaint with the Civil Service Commission regarding Buted’s “arbitrary policies”. Posadas claimed he was one of several faculty members who were

“unlawfully dropped from the rolls” for refusing to “toe-the-line”. Earlier last year, the education committee of the House of Representatives summoned Buted to shed light on a controversial issue involving the university’s on-the-job (OJT) training program. A batch of graduating humanresource management students had complained they were deployed for OJT in a factory in Laguna, where they were made to do menial jobs as laborers. One of the students was hospitalized as he nearly died because of severe chemical intoxication. Sources said the House Education Committee will look into the report which Buted was asked to submit to the body. Posadas asked the Ombudsman to place Buted immediately under preventive suspension to “prevent tampering of evidence and intimidation of witnesses”.

Maria del Carmen: The house in Lucena City built by baked macaroni By John Bello | Correspondent

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N Lucena City a new kid on the block is beginning to draw crowds of urban food enthusiasts. The restaurant is simply, but quaintly called Maria del Carmen (House of Baked Mac), named after its chief handson operator Maria del Carmen Ingles-Guevarra. Mac, of course, is the good old macaroni which the restaurant bakes just right tasty and the raison d’être for macaroni lovers. If you are on a food hunt in the city and happen to pass by Enverga Street in Barangay 1 near Libra Bakery and Manny Flowershop and just across Danix Suarez Beauty Salon, the smell from this new little restaurant will draw you in to sniff around what’s cooking or brewing. The lady of the house, Madel, is on hand, with her ready charm and smile to put you at ease. Once you are comfortably seated, you will be readily provided a menu of the house’s select offering and baked mac, the house’s apparent best seller, is on the menu and easily stares at you and seduces you to try for your first bite. Your first bite certainly decides for you the next time around you are on a food hunt in the city. Maria del Carmen (House of Baked Mac) has just had its soft opening on February 8, which happens to be Madel’s birthday. “Right now, we are already luring quietly and building

BUSINESS partners Police Senior Supt. Dionardo Carlos and Madel Ingles-Guevarra at Maria del Carmen Restaurant

on our clientele composed of office employees, students, walk-ins, various young urban professionals. They mostly come in through word of mouth from those who have tasted our food offering,” Madel said. Madel does not go for the hard-sell as her way of doing business. She relies in the goodwill and satisfaction her customers get to enjoy in their dining experience at Maria del Carmen. She does not even depend on her “connection” with well-known personalities. (Madel once dabbled in media work.) “Since day one of the opening, I have not invited any politician to come in and dine. I don’t even advertise in print or radio. I just

rely on the word of mouth of my friends and satisfied customers to tell about my place and the kind of food and service I offer,” she said. Maria del Carmen began as a home-delivery service. Madel said her simple baked mac is just an original ingenious homebased concoction of macaroni with various ingredients and simply baked at home and sold and delivered house to house or to various offices. “But it all really originated from my mom who set up an eatery called Fiesta Palabok ni Tita Armi. It was located along Granja Street in an old garage of former Lucena City Mayor Ruben Palileo and lasted from 1990 to 1993. My mom’s

passion for cooking various dishes and her perseverance and industry in running that eatery is branded in my memory,” Madel said. Her mother died two years ago, on January 22, 2015, without knowing two of her children will be following her footsteps. Madel said her younger sister Riza Mari Ingles had once delivered her home-baked mac to the fish sellers at the public market. “She could not locate the man who ordered the macaroni so she decided to sell it to the various fish stall holders and went home with the baked mac all sold out.” Now Riza Mari has her own family and runs her own successful food business in Pampanga named Hello Café (Sea Story Restaurant). “One day, it came to me that I have to make it on my own. I decided to cook up my own kind of baked mac and started on a home-delivery business. It caught on and several of my suki started to order on various occasions, like baptisms, birthdays, graduations or Christmas parties. I decided to put up my own puwesto near the Lucena City Hall, just across Maryhill College. I named it Hut Le Rapsa and it catered mainly to passers-by, to students of the nearby Maryhill College, to employees at the city hall and to my friends and acquaintances from Lucena and Tayabas. It was there that then Police Supt. Dionido Carlos, an old friend during my years in the media industry, passed

by and sampled my baked mac. The quiet but no-nonsense police officer who later became Quezon police director and now PNP spokesman, immediately liked it and on the weekends he came home to Lucena from his various police assignments in Manila or elsewhere, he would head to my small Hut Le Rapsa eatery and order his favorite? What else, but baked mac,” Madel said. One day the police officer made a business proposal. He wanted to open a food business and wanted Madel’s baked mac on the menu. At first, she did not seriously consider Mr. Carlos’s proposal. He kept asking and finally, last November, she finally decided to give it a good try. They agreed on a simple set-up for their business partnership venture: Carlos would provide the startup financial muscle and Madel would actually run the business, starting with building the place. Since its soft opening, Maria del Carmen has been attracting a steady stream of satisfied customers. Aside from the favorite baked mac, other tasty favorites include french toast, waffle, potato fries, longsilog, Korean ramyun, chocoo, buko pandan shake, strawberry milk shake and others. All are priced fairly. On February 14 Maria del Carmen was the surprise scene of an actual romantic proposal from Marvin Marasigan, an engineer, to his fiancée.

By Charles R. Pepito Correspondent

EBU CITY—As the nation observes Fire Prevention Month, a consumer group has lauded Cebu authorities for their successful operation against illegal refilling of butane canisters with liquefied petroleum gas (LPG), which poses extreme fire hazard. Closing down illegal LPGrefill businesses is solving only a fraction of the problem, the National Coalition of Filipino Consumers (NCFC) said. “It is like going after the small-fry, the tsinelas-wearing peddlers, while the big fishes, the suppliers, go scot-free, laughing their way to the bank,” said BenCyrus G. Ellorin, a former journalist turned NCFC safety campaigner. The group is drawing parallels between the campaign against illegal LPG refilling and the antidrugs war. The NCFC, however, lauded the raids done by the Department of Energy in Cebu (DOE-7), the Provincial Disaster Risk Reduction and Management Office and the Criminal Investigation and Detection Group of the Philippine National Police (PNP), on February 24 in an LPG-refilling facility at Uldog Street, Barangay San Roque, Talisay City. The raid resulted in the arrest of 10 persons and confiscation of over 11,000 butane canisters, with about 8,500 of these canisters illegally refilled with LPG. Butane canisters are not designed to store LPG, a mixture of butane and propane. Explosion of illegally refilled canisters had been blamed for several serious fires, not just in Cebu, but all over the country. Illegally refilled canisters are used for cooking because they are cheaper, “ just like cooking gas sold in retail,” the NCFC said. But the danger it poses on the community, especially those in informal settlements, is enormous. The consumer group lauded DOE–7 Director Antonio Labios and DOE-7 legal officer Russ Mark Gamallo for their efforts in implementing DOE Order 01-0001, or the Liquefied Petroleum Gas Rule, which prohibits the retail of LPG using butane canisters. The NCFC is enjoining authorities to address the problem down to its roots—big LPG suppliers who engage in the illegal trade by supplying these illegal LPG-refilling plants.

PayMaya, Oxfam team up to restore communities affected by Typhoon Lawin

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aymaya Philippines, the pioneer and leader in digital financial services, has collaborated with international aid organization Oxfam to help provide disaster-relief assistance to communities affected by Typhoon Lawin (international code name Haima) through a financial inclusion program. The program deals with the rapid disbursement of financial assistance through PayMaya accounts with reloadable payment cards to more than 2,000 farmers and other citizens affected by Lawin. They can use these PayMaya cards to pay for basic needs, such as food and medicine, from groceries and other physical stores that accept card payments. For added convenience, they

can also download the PayMaya app and link it to their cards to monitor their balance and transactions. Once they have the app, the can transfer money to other PayMaya users and access more services, such as bills payment. They can also directly buy prepaid load and data within the app, which is more affordable than the regular retail price. Beneficiaries can also reload their PayMaya at any of the more than 15,000 stations nationwide, including Smart Padala Centers, 7-11 with Cliqq Kiosks, Ministop with Touchpay Kiosks, 2Go outlets, SM Business Centers, Shopwise, Wellcome, Robinsons Departments Stores, Union Bank ATMs and online banking via BDO. “The power of digital payments

BENEFICIARIES being briefed about the benefits of PayMaya cards, and how these can play a role in restoring their livelihood after Typhoon Lawin.

is not just for commerce, but more important for making a difference in the lives of Filipinos. We, at PayMaya, take a deep sense of fulfillment in bridging Oxfam to its beneficiaries in Cagayan, Isabela and Apayao, so that help gets faster where it is most needed,” said Orlando B.Vea, President and CEO of Voyager Innovations and PayMaya Philippines. The project is in partnership with People’s Disaster Risk Reduction Network of Cagayan, Citizen’s Disaster Response Centre of Apayao and Center for Emergency Aid and Rehabilitation of Isabela. “As disasters become stronger and more frequent due to climate change, we hope that this digital platform will encourage families to access financial services

and save money as a means of preparing for future disasters,” Oxfam Country Director Richard Mawer said. Lawin, internationally known as Haima, destroyed P2.5 billion worth of infrastructure and crops when it struck northern Luzon in October 2016. It was the strongest typhoon to hit the country last year, leaving 14 people dead and 10,000 homeless. Enterprises, such as Unilever, and LGUs, including cities of Balanga and Muntinlupa, are joining the cash-lite future with PayMaya. These entities are using the platform and services of PayMaya to disburse financial support and grants to their employees, partners, students and other beneficiaries.

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Rapporteur ‘disappointed’ UN rights panel divided on Myanmar commission

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United Nations expert on Myanmar said she’s “disappointed” at the lack of “appetite” at the Human Rights Council to back her call for the creation of Commission of Inquiry into alleged crimes against the Rohingya minority. Special rapporteur Yanghee Lee, speaking to The Associated Press after addressing the 47-member council in Geneva on Monday, said she’s hearing of a difference of opinion “within even the European Union” about the best path forward in dealing with rights abuses in Myanmar. “I am afraid I have been a little bit disappointed because I don’t think there is an appetite or a push for a Commission of Inquiry from the normal sponsors of the resolution” and by countries that are the “normal players” in calls for such investigative bodies, Lee said. She said a domestic investigative panel focusing on Rakhine state was “flawed”, and another led by former United Nations Secretary-General Kofi Annan didn’t have an all-encompassing mandate. Lee has been denied access to parts of Myanmar that she hoped to visit, and expressed concern about violence affecting civilians in Kachin and Shan states. Based in part on her 12-day trip

to Myanmar in January, a 25-page report issued by her office this month cited “continued and escalating violence” in those and other states, and said Lee had been told ‘the situation is currently worse than at any point in the past few years.’” Myanmar’s military, under international pressure over alleged abuses against members of the country’s Muslim Rohingya minority, has said official investigations failed to substantiate most accusations. Lee said she’s been “hearing of the discovery of mass graves and things of that nature”, and appealed to the Myanmar government to let investigators like her “leave no stones unturned.” “If these allegations are indeed exaggerated allegations, everyone needs to know,” she told the AP. “If these allegations are true, I think Myanmar needs to know because this will be the obstacle to them fully reforming and transforming into a fully democratic society.” The estimated 1 million Rohingya in Buddhist-majority Myanmar face official and social discrimination, and are mostly seen as immigrants from neighboring Bangladesh living illegally in the country. Many fled their homes during communal violence in 2012, and over 100,000 live in refugee camps. AP

El Niño seen nearing, threatening Asean anew

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BLOOMBERG PHOTO

N El Niño may develop by July, as forecasters worldwide predict the pattern that can disrupt global weather is set to return this year.

Yanghee Lee, special rapporteur on the situation of human rights in Myanmar, delivers her report, during the 34th session of the Human Rights Council, at the European headquarters of the United Nations in Geneva, Switzerland, on Monday. AP

Groups urge Thailand to act on torture, disappearances

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ights groups are urging Thailand’s government to enact legislation banning torture and forced disappearances as its human-rights record comes under United Nations review. Tuesday’s review in Geneva by the United Nation Human Rights Committee came shortly after Thailand’s legislature unanimously ratified a UN treaty against forced disappearances. But groups, such as Human Rights Watch, said Thailand needs domestic laws explicitly prohibiting torture and forced disappearances to effectively comply with the treaty. Last month Thailand’s legislature failed to pass a bill against torture and enforced disappearances, saying it needed more study. The UN expressed concern over the matter, which is to be discussed at Tuesday’s review of Thailand’s compliance with a civil and political-rights treaty ratified in 1996. “I don’t think they’re trying enough. Ratification of international law is not enough,” said Pornpen Khongkachonkiet, director of the Cross Cultural Foundation, a Thai antitorture organization. “They need to do things domestically.” Other issues up for UN review include the transparency of Thailand’s legal system and its free speech record. The UN will issue recommendations to Thailand at the end of March. “We have repeatedly expressed concern that due to lack of legislative framework, any crime of enforced disappearances might continue with

no accountability or legal redress,” said Laurent Meillan, acting regional representative of the Office of the UN High Commissioner for Human Rights in Southeast Asia. “We are hopeful that after the review, efforts will be made to reintroduce the bill in its current form.” The proposed legislation would have set mandatory sentences for those found guilty of torture or abduction. It would force officials to let family members know where a suspect is being held, and create an independent committee to locate and aid abducted persons. The bill also includes measures against torture. Rights groups accuse Thailand’s military government of throwing political prisoners in military prisons and torturing them. Thailand has ratified UN treaties against torture, and the government vigorously denies it tortures prisoners. Since 1980, the UN has recorded 82 cases of enforced disappearances in Thailand. In one case, Somchai Neelapaijit, a Thai Muslim lawyer and human-rights activist, was dragged from his car at night by five policemen in 2004; his body was never found. Though government officials were linked to his abduction, no one was ever prosecuted and last year the police declared the case closed. “The government needs to take swift and concrete action to enact a law that severely penalizes torture and enforced disappearance,” said Brad Adams, Asia director at Human Rights Watch. “After years of waiting, more promises are simply not enough.” AP

Editor: Max V. de Leon • Thursday, March 16, 2017 A9

Six of eight climate models predict El Niño thresholds may be reached by July, with all showing steady warming in the central tropical Pacific Ocean over the next six months, the Bureau of Meteorology said on its web site on Tuesday. The bureau maintained a “watch” for the weather pattern, indicating a 50-percent chance of it forming this year. Less than a year after the end of one of the strongest El Niños on

record, forecasters around the world are predicting it may make a comeback. The previous event dried up rice fields across Southeast Asia, hurt cocoa crops in Ghana and sugar cane in Thailand. Should El Niño return, it will be the first time the Pacific has swung from warm to cool and back again over a three-year span since the early 1960s. The central Pacific is predicted to continue to warm, with neutral conditions likely for

53%

The probability that El Niño will emerge between October and December, according to the US Climate Prediction Center the southern hemisphere autumn, Australia’s weather bureau said. From June onward, this warming is forecast to approach or surpass El Niño thresholds, it said. Models have lower accuracy when forecasting through the southern hemisphere autumn than at other times of the year, according to the bureau. El Niño may cause drier-than-

normal conditions in Southeast Asia to develop around July to August and last through the end of the year, according to Kyle Tapley, senior agricultural meteorologist at MDA Weather Services. Areas that may be driest will be Sumatra and Malaysia, he said. “With it being only a weak El Niño, it looks like at this point it wouldn’t lead to extreme dryness,” he said in an interview in Singapore on Tuesday. “But some slightly below normal rainfall will be expected during the second half of the year.” There’s a 53-percent chance El Niño will emerge between October and December, up from 50 percent last month, the US Climate Prediction Center said last week. Japan sees a 40-percent chance of the pattern forming from spring through summer. Bloomberg News

Vietnam listing bonanza charms bulls as stock rally intact

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ising foreign-direct investment, quickening economic growth and a privatization program that’s boosting the size of the market have offshore investors optimistic there’s more juice left in Vietnam’s stocks rally. The benchmark VN Index is up 7.7 percent this year, following an advance of 15 percent in 2016, and reached a nine-year high on February 23. While the market has lacked direction since then, fund managers are still buying: Asia Frontier Capital Ltd. CEO Thomas Hugger said the market will “continue to do well” and he “would add to existing positions”. Hugger, whose Asia frontier fund has returned 30.5 percent over the past year and beaten 92 percent of its peers, said he’s favoring infrastructure, real-estate and consumer-discretionary stocks. James Bannan, a fund manager at Coeli Asset Management SA in Malmo, Sweden, said he’s “positive” on Vietnam. Coeli Asset only invests in the country’s consumer shares and has recently increased its holdings in Mobile World Investment Corp. and Phu Nhuan Jewelry JSC, he said. Shamoon Tariq, vice chief investment officer at Tundra Fonder AB in Stockholm, said his company had around $70 million in Vietnam equities and is looking

77%

The increase posted by VN Index this year

to increase this as new companies are floated. Industrials, financials and selective-consumer and realestate stocks should do well this year, he said. A flurry of new listings is generating global interest in Vietnam. Novaland Investment JSC, Saigon Beer Alcohol Beverage Corp. and Vietjet Aviation JSC have debuted on the market in the last few months, while Vietnam National Petroleum Corp. is expected to join the bourse this year. The VN Index rose 0.2 percent as of 9:18 a.m. in Hanoi. The new entrants contributed more than half of the 58-percent jump in market capitalization over the past 12 months, with the benchmark gauge rising 25 percent during the period. The total value of listed Vietnamese stocks is now equivalent to 32 percent of GDP, approaching the 39 percent ratio in emerging-market Indonesia. Prime Minister Nguyen Xuan Phuc said in January limits on

foreign ownership of banks would be raised as early as this year. That followed the partial divestment of Vietnam Dairy Products JSC, the country’s largest company, last December. The wave of new listings, initial public offerings and state sales will continue through 2017, Vietnam Asset Management Ltd. wrote in a January 13 report. Accelerating economic growth should also buoy the market, with Vietnam’s GDP expansion staying on a generally upward trajectory in recent years as its neighbors declined or stalled. The country’s economy will expand 6.5 percent in 2017, according to the median estimate of economists surveyed by Bloomberg, while the government is forecasting growth of 6.7 percent. Notwithstanding the demise of the Trans-Pacific Partnership (TPP) trade agreement, which the World Bank forecast would have delivered an 8-percent boost to Vietnam’s GDP by 2030, the country’s low-cost work force and proximity to good-quality ports continues to lure manufacturing investment. Disbursed foreign-direct investment has risen for five straight years, climbing 9 percent to a record $15.8 billion in 2016, according to official data. Samsung Display Co.

received an investment certificate last month to spend $2.5 billion, expanding its facilities in the northern province of Bac Ninh. Even without the TPP, “the Vietnamese story is still strong given its ability to attract low-cost manufacturing jobs,” Asia Frontier’s Hugger said. “This is reflected in the recent announcement by Samsung to expand their operations.” There are still risks on the horizon. Higher US interest rates, a rise in trade protectionism, the direction of China’s yuan and the Vietnamese market’s relatively low liquidity remain concerns for foreign investors, said Le Nguyet Anh, the Ho Chi Minh City-based head of research at ACB Securities JSC. Still, a favorable flow backdrop as Pakistan leaves MSCI Inc.’s frontier markets gauge looks set to increase Vietnam’s importance to offshore investors. The country’s stocks are also still relatively cheap, with a 12-month price-to-earnings ratio of 13.4, compared with 17.2 and 14 in its frontier-market peers Morocco and Argentina. “Vietnam still has good value to express in terms of valuation and growth,” said Federico Parenti, a Milan-based fund manager at Sempione Sim Spa. “Dividends are pretty high and the potential is still there.” Bloomberg News

A10 Thursday, March 16, 2017 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Benham Rise is ours

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efense Secretary Delfin N. Lorenzana’s disclosure that Chinese survey ships lingered for months in Benham Rise last year has set off alarm bells that call for immediate action to prevent further incursion by our giant neighbor into the country’s territorial waters. This resource-rich underwater plateau off the coast of Aurora is ours. There’s no point arguing about this fact. And it does not need a genius to figure out that China’s survey ships are there to spy on our natural resources, which is alarming. Benham Rise officially became part of the Philippines in 2012 after the UN Commission on the Limits of the Continental Shelf ruled that, under the UN Convention on the Law of the Sea (Unclos), this 13-million-hectare undersea landmass was contiguous with the country’s continental shelf and, hence, fell under its exclusive economic zone. The ruling that awarded Benham Rise to the Philippines as part of its exclusive economic zone and extended continental shelf means the country has the exclusive rights to explore and use the resources in this undersea landmass. Of course, other countries can exercise innocent passage and territorial navigation, but they can’t stay or establish any structure in the area. It is, therefore, incumbent upon the Philippine government to oversee ships of other countries sailing in this area to protect our territorial interests. What is worrying, however, was Beijing’s reaction to Lorenzana’s disclosure. A statement issued by the Chinese Foreign Ministry said the Philippines couldn’t claim Benham Rise as its own territory despite it being part of the country’s 200-nautical-mile exclusive economic zone. The statement acknowledged that in 2012 the United Nations Commission on the Limits of the Continental Shelf approved the submission of the Philippines in 2009 with respect to the limits of its continental shelf in the Benham Rise region. This enables the Philippines to carry out exploration and development of natural resources in the area. “But it does not mean that the Philippines can take it as its own territory.” Technically, China’s statement is correct because no country can own the high seas in the same sense as land. But the government must assert the country’s sovereignty over Benham Rise, which is undisputedly part of Philippine territory. In light of China’s incursion into our territory, the government must scale up scientific study and exploration of the undersea region. As we have exclusive rights to explore and exploit its natural resources, we need to determine its economic potential. For example, studies conducted by the Department of Environment and Natural Resources indicated that Benham Rise has large deposits of methane in solid form. Huge methane hydrate or methane ice deposits in Benham Rise could turn the Philippines into a naturalgas exporter. Natural gas is a fossil fuel used as a source of energy for heating, cooking and electricity generation. It is also used as fuel for vehicles and as a chemical feedstock in the manufacture of plastics. We agree with the clamor that the government must protect Benham Rise from foreign intruders. But the more important question remains: How can the Philippines establish its presence over Benham Rise? The sooner the Duterte administration can come up with an effective strategy, the better we can protect and develop Benham Rise as a rich source of alternative energy, marine resources, and possibly, a tourism destination. Since 2005

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OUTSIDE THE BOX

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ince the first week of 2017, the Philippine Stock Exchange Composite Index (PSEi) has traded within the range of 7,123 and 7,402—less than 4 percent between top and bottom. The average top and bottom range has been between 7,200 and 7,300 for an average weekly closing at 7,240. Assuming that we end this current week without a move out of the range, that will be 11 weeks stuck in a holding pattern. It is unusual for a financial market to trade this way for a long period. Yes it has happened before in 2010, 2011, and particularly, at the bottom in 2009. But there is some dissimilarity that is unique to what we are currently experiencing. But that is not the point. Two weeks ago, I explained that this sort of range movement comes when buyers do not want to be left behind if the market is going to boom

higher and, therefore, come in at the support area. Sellers do not want to be left holding the doomsday bag and come in at the resistance area. Eventually, one side or the other breaks—buyers starting to buy at the top resistance or sellers starting to sell at the bottom support. Simply put, this trading range is no big deal. Either the clouds will blow away and the sun will shine or the rains will come. However, it is a big deal if you are tasked to report and expected to understand what is happening on a daily basis.

Journalism has not changed in the past 100 years, back when newspapers had to compete ferociously for readership. “Sex sells” and “If it bleeds, it leads” were the by-words to this day. The ultimate headline would have been “Prostitute’s Body Found in Congressman’s New Car”. Sex, crime, politics and even a wealth angle all for good measure. But now information is so widely available, even that lurid story is not enough. The press and media are expected to be able to explain on all topics, like a physician who can quickly diagnose that a virus or bacteria caused your fever. During these past 11 weeks, the PSEi has been up, down and unchanged all due to the anticipation of a US Federal Reserve interestrates increase, depending on which day you picked up the newspaper. If true, then local stock-market investors should not be trusted with anything sharper than a wooden spoon. They are a danger to themselves and others. Some stock-market analysts and many commentators are not investors and traders. They do not

Real-estate sector: ‘Busy as a bee’

Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug

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Politics and the stock market

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Businesswise

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his is how foreign tourists aptly describe construction activities in and around the Philippine metropolis today, and rightly so.

Although the Philippine Stock Exchange (PSE) property index at the moment does not reflect such optimism—down by 23.16 percent to 3,252.66 (as of March 14, 2017)— bullish bias in the real-estate industry remains in the long term. Stocks rise and fall depending on so many factors, but what is keeping the industry’s resilience is the strong demand for a piece of property both vertically and horizontally. But if you’re in the stock market, confidence both in the near and long term stays. Its index—which has been moving sideways for the past month or so—is composed of 15 property stocks. Ayala Land Inc. (ALI) with 36.19 percent weight on

it is considered the most significant. Next is SM Prime Holdings Inc. with 17.58 percent. Analysts believe that, technically, while the index could be making a downturn triangle chart pattern, a breakout looms, considering that all gauges are pointing up. In an interview I did for Forbes Magazine sometime back, SM President Harley T. Sy said the country’s real-estate industry has “so much to hope for.” SM’s capability to deliver in spite of domestic and global challenges is due to what he calls “the positive results regularly turned in by our core businesses. We intend to maintain this healthy level of performance; thus, we are committed

to challenge ourselves further and to continue seeking opportunities for added growth and expansion.” Consider this: Last November the 11-month foreign direct investment of $6.973 billion already exceeded the $6.7 billion updated 2016 goal set by the Bangko Sentral ng Pilipinas, even as the government tries to reach a $7-billion FDI this year. Among the equity capital inflows recorded last year were those contributed by the arts, entertainment and recreation; construction activities; financial and insurance; manufacturing; and, most notably, real estate. Industry players have used these indicators as their bases for predicting that the country’s real-estate industry will continue to fly this year. They see the ever-changing realestate tastes of Filipinos with most prospective buyers experiencing increases in their purchasing powers. Developers tailor their project ideas to fit the needs and wants of their customers by offering them world-class advances in real estate. If every Filipino who toil overseas saves for the future home of their respective families, an upsurge in demand for middle-income housing is forecasted, particularly

understand the personal dynamics of pressing the “Buy” or “Sell” button. But even those that do understand are pressured by this culture of “instant analysis”. That is why you so often hear comments that the market is moving on “politics”. But it is not politics that move financial markets. It is policies. The Philippines has not had a government policy on mining since 2010 and the Mining Index has fallen by more than 50 percent with some issues down 80 percent from when investors thought the government might get its act together in 2011. Karl Marx’s paraphrased quote is “Religion is the opium of the people”, dulling our senses to reality. He was wrong about that also. Politics is the mind-numbing drug of choice. Our stock market is moving sideways for the moment because investors are trying to understand where government economic policies are headed.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

in the expanses of Central Luzon, Calabarzon, Western and Central Visayas, where 48 percent of the country’s overseas Filipino workers (OFWs) reside. We’re not even talking here of the 10 percent of the assessed 10.2 million Filipinos now employed and residing overseas. Another positive indicator is the sustained rise in the quantity of possible patrons, with 2 million Filipinos departing for greener pastures overseas yearly. A strong demand for condominiums planned as forays into the rental market will continue due to the fact that business absorption is still centered in Metro Manila. Traffic is a major factor, too, inspiring workers to rent units within their places of work, preferably in the country’s central business districts. The government is also currently engaged in teaching OFWs how and where to invest their hard-earned cash. They mostly favor assets, which passively generate for them decent dividends. These are in real estate, particularly condominiums and condotels. For comments and suggestions, e-mail me at mvala.v@gmail.com

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Compromising tax liabilities

The indispensable water Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Benedicta Du-Baladad

Tax Law for Business

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tax compromise is an agreement whereby the taxpayer offers to pay something less than what is due and the government accepts it as a full settlement of his tax liability.

In compromise, there is meeting of the minds of the taxpayer and the government, lacking of which, there is no compromise to speak of. A compromise offer to pay P1.5 billion in settlement of a P30-billion tax liability, for example, remains to be an offer until accepted. Since compromises effectively condones, waives the collection of taxes, or gives away revenues belonging to the government, any tax compromise not in accordance with the law is a ground for graft and corruption or even plunder. But who can compromise tax liabilities? Under the law, only the commissioner of Internal Revenue can enter into tax compromises. He has the sole authority to compromise taxes and nobody else. Not the president. Not even the secretary of finance. Notwithstanding the authority to compromise granted to the commissioner, in actual practice, applications for compromises undergo a very strict and rigid process involving many layers of technical evaluation and approval. It is a long and tedious process, understandably, because it involves giving away government funds. What can be compromised? Liabilities arising from violations of the Tax Code are of two nature—the criminal liability and the civil liability. Most violations of the tax code carry with it a penalty for civil, as well as criminal liability. The civil liability pertains to the unpaid taxes plus surcharges and penalties. The surcharge is a 25-percent penalty, or 50 percent in fraud cases, added to the tax unpaid. Interest penalty is at 20 percent per annum, and could run up to 40 percent per annum for delinquent accounts. The criminal liability, on the other hand, is imprisonment ranging from one year to 10 years. The civil liability is separate and independent from the criminal liability. One is not dependent on the other. A conviction of one does not imply a conviction of the other, neither is the acquittal of one a bar to the filing of a case on the other. Thus, when we talk of tax compromise, we talk of two separate liabilities to compromise. And these are governed by different rules. As a general rule, the civil liability cannot be compromised. There are only two exceptions. First, when the assessment is considered to be of doubtful validity, in which case, the commissioner can compromise to not less than 40 percent of the basic tax. And second, when the taxpayer is financially incapable to pay the liability, in which case, it can be compromised to not less than 10 percent of the basic tax. The law allows compromises lowerthan-the-above rates but the approval

of a collegial board called the National Evaluation Board composed of the four deputy commissioners and the commissioner is required. The same is true for all compromises, where the basic tax involved exceeds P1 million. Examples of doubtful validity are jeopardy (or harassment) assessments issued without the benefit of audit, or arbitrary assessments issued without any factual and legal basis. Examples of financial incapacity, on the other hand, are bankruptcy or the business has ceased to operate, or when there is impairment of capital by at least 50 percent, or when the taxpayer has no other source of income. The rule for the criminal aspect, on the other hand, is the reverse. The general rule is all criminal liabilities can be compromised. There are only two exceptions, i.e., first, when a case is already filed in court and, second, when the case involves fraudulent acts (Section 204, Tax Code). Fraud is a willful intent to evade taxes. It consists of deception, intentional wrongdoing, willfully and deliberately done or resorted to in order to evade the payment of taxes. It is a frame of mind manifested by a series of actions leading to the evasion of taxes. Considering that fraud is a serious crime, the proof needed to convict must be actual, beyond reasonable doubt, supported by clear and convincing evidence and is never presumed. Using fake stamps to evade the payment of excise taxes, if clearly proven, is a fraudulent act that is beyond the authority of the Bureau of Internal Revenue commissioner to compromise. A mere signal to compromise a criminal liability for tax evasion will destroy order and discipline in the payment of taxes. Thus, if an act constitutes a clear case of tax evasion, done willfully with intent to evade the payment of taxes, and the liability is clearly established, there is no room for tax compromise, both on the criminal aspect and the civil aspect. The taxpayer must be prosecuted and brought to court, and the amount due the government must be collected in full inclusive of penalties.

The author is the managing partner and CEO of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of WTS Global. 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 dick.du-baladad@ bdblaw.com.ph or call 403-2001 local 300.

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or the next three Sundays of Lent, Saint John provides the gospel narratives proper to catechumenal initiation and important to the renewal of our baptismal vocation. In our Lenten pilgrimage, we now pause with the Samaritan woman at Jacob’s well to reflect on Jesus Christ’s irreplaceable role for our salvation (John 4:5-42).

With the samaritan woman and the disciples Water is a precious gift of God: Paradise is pictured as watered by a four-pronged stream (Genesis 2:10); the patriarchs and their families traveled from well to well saluting these sources of life-giving water with shouts of joy (Numbers 21:1718); and the Promised Land correspondingly is a land that “drinks in rain from the heavens” (Deuteronomy 11:11). Water as a bearer of life is a symbol of salvation and of the messianic gifts (Isaiah 12:3; Ezekiel 47:1). In the meeting between Jesus and a Samaritan woman by the well of Jacob in Sychar, Samaria, this spiritual significance of water surfaced with

definitive clarity. The endless need and toiling for water is represented by the woman; the disciples too as in a subplot represent the preoccupation with physical food. The woman is led step by step to the realization that she needs living water that quenches thirst so that it never reoccurs, a water “gushing up to eternal life”. She discovers that she is spiritually thirsty and does not want to be restricted to the physical level where the only water is the one drawn from the ground. She wants water she can drink anytime and anywhere. Leveling up, Jesus next uncovers the fact that no husband or man has put life into her, making her

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fruitful: the gods of Babylon the Samaritans brought from the exile were no husbands! She is a woman still looking for a true husband—the marriage imagery now illustrates her need for the true intimacy with God. And that does not depend on which mountain one worships, but on Jesus who alone can say “I am” the truth and the life and the living water, the Messiah.

Jesus as the living water

The thirsty seeks water, but here water is seeking the thirsty—to give life, the life everlasting. Asked for a drink, the woman who dared to exchange words with Jesus, encountered the awaited Messiah who gave her living water. Tapping into His ultimate identity as the Word of God, Jesus put into her God’s love and life. And to the disciples, asking Jesus to eat, was revealed that His food, His life, is to do the will of the Father; for this He came “down from heaven” (John 6:38). But unlike the woman, the disciples were simply astonished and kept silent, without questioning and pursuing further what they do not know yet. Jesus talked to the woman to invite her to do the will of God who sent Him. And He invited His disciples, as well, to see, in faith and hope, “the fields ripe for the harvest”. There are

Can we get out of ‘extravism’? Dr. Rene E. Ofreneo

LABOREM EXERCENS Continued from A1

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atin American economists have a word for this pattern of mineral exploitation and development: “extravism” or the overwhelming focus of the State on the extraction of resources for export (as imposed on the continent by the Spanish and Portuguese colonizers during the 17th to 19th centuries). Today they describe the policy pattern as one of “neo-extravism”, defined as follows: “…activities which remove large quantities of natural resources that are not processed [or processed only to a limited degree] for export. Extravism is not limited to minerals or oil. Extravism is also present in farming, forestry and even fishing.” (Alberto Acosta, “Extravism and neo-extravism: two sides of the same curse”, in Beyond Development: Alternative Visions for Latin America, 2013). But why have the former colonies, upon acquisition of political independence, failed to graduate beyond resource extraction and exportation, that is, create more wealth by transforming what nature has given them into higher-value, higher-technology finished products? One answer is political—the elite leaders, especially the greedy and those with authoritarian tendency,

easily succumb to the temptation of getting quick money through the “abundance of resources”. This “resource curse”, also called the “Dutch disease”, is often blamed by some analysts as the reason the Philippines and other developing countries have failed to industrialize. These countries have remained producers of cheap primary products and importers-consumers of expensive finished industrial goods. However, the curse does not only lead to industrial stagnation. It can also become a dark plague, as illustrated in the way Philippine forests disappeared. Greedy politicians and their business partners harvested the Philippine forests from the 1950s to the turn of the 21st century as if there is no tomorrow. Armed with logging and timber export licenses,

these politicians and businessmen succeeded in reducing the country’s forested lands at breakneck speed, from 50 percent of the country’s forested total (15 million hectares), as of the 1940s to roughly 6 percent (2 million hectares) by 2000s, per a 2009 study by the Ateneo’s Enviromental Science for Social Change. Another explanation for the failure to get out of the extravist development framework and to shift policy focus to higher industrialization is the predominance of neo-liberal economic thinking among economic planners and policy-makers. This thinking frowns on the State fasttracking industrial development at a higher level. The economic technocrats formulate economic programs and measures based mainly on the imagined “comparative advantage” of a labor-surplus developing country, such as the production of labor-intensive but low-technology products, for example, sewing garments or assembling rubber shoes for export. Part of the neo-liberal economic thinking is the assumption that growth can only come about with the liberalization of the investment regime for foreign capital. The explanation here is that government economic interventionist role is now reduced in a deregulated economic environment while capital for megaprojects can only come from mega corporations or transnationals. Hence, large foreign investors are encouraged to come in to undertake the large-scale exploration of minerals in

China schools investors on two-tier leadership structure By Junheng Li Bloomberg View

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nvestors trying to make sense of China’s National People’s Congress (NPC) last week and its relation to the more important 19th Party Congress to be held later this year should familiarize themselves with an old saying: “The mountains are high and the emperor is far away.” Orders from Beijing are often ignored in the cities and provinces. Instead, important decisions, such as whether and how to restructure the debt of insolvent local governments and state-owned enterprises, are made locally. Officials on the ground decide whether to actually shut down excess capacity in stateowned enterprises and whether to risk an increase in unemployment because some enterprise or industry (think coal mining, steel and solar panels) has become nonviable, a

drain on the public finances and/ or an environmental danger. It’s for those reasons that China’s leadership was largely unable to meet the goals of 18th Party Congress of 2012, which sought to move the nation away from an unsustainable economic development model driven by explosive growth in corporate and local government debt, exports, capital expenditures and the production of often environmentally damaging physical goods to a “greener” one driven by lower leverage and domestic demand for services. The problem was that the plan gave little regard to the disastrous “grow at any cost” mind-set of local and provincial authorities. Many markets benefited. In 2016 China imported 33 percent of the world’s total dry bulk commodities, followed by a Japan at a distant second at 8 percent and India at 6 percent. Home values skyrocketed,

fueled by the central bank’s looser monetary policies. Power may be more centralized under General Secretary Xi Jinping than it has been since Deng Xiaoping—or even Mao Zedong. Xi is the chair of an unprecedented number of committees that span every important aspect of political, military, economic, social and cultural decision-making. Indeed, Xi has been granted the designation of “Core Leader” of the Party, an honorific only ever bestowed before on Mao, Deng and Jiang Zemin. Yet, current developments suggest that even though power is centralized, it is not sufficiently securely held enough for Xi to truly focus on the economy. Global investors are intrigued by the opportunities held by the sheer size of China’s markets. But rather than dealing with economic issues, Xi’s domestic focus is still carrying out the anticorruption campaign

Power may be more centralized under General Secretary Xi Jinping than it has been since Deng Xiaoping—or even Mao Zedong. Xi is the chair of an unprecedented number of committees that span every important aspect of political, military, economic, social and cultural decision-making. Indeed, Xi has been granted the designation of “Core Leader” of the Party, an honorific only ever bestowed before on Mao, Deng and Jiang Zemin.

that was launched following the conclusion of the 18th Party Congress. No local government leader is willing to pursue economic reform or much of anything else for which there isn’t ample officially sanctioned precedent.

Internationally, Xi has also focused on regional political and geopolitical issues. His pro-globalization speech at the World Economic Forum in Davos earlier this year wasn’t about economics but about regional and geopolitics. The economy was, at best, fourth in the list of priorities. The 19th Party Congress may, at last, enable Xi to consolidate power to the point that he can give the economy the attention it has been denied but badly needs, and bolstering the confidence of international investors. Of the seven members of the Standing Committee of the Central Political Bureau of the Communist Party of China—the supreme decision-making body in China— as many as five could be replaced “peacefully” at the 19th Party Congress, because they have reached the informal age of retirement of 68. Xi is 64 and PRC Premier Li Keqiang

many workers in His Father’s field. The woman and the other Samaritans who received His words were the first fruits; the woman herself left her water jar, the physical dimension of life no longer preoccupies her, and became an instrument to draw to Jesus many others, who must however see for themselves and finally find out what they want: for Jesus to stay with them. All the followers of Jesus, nourished by Him, must participate in the mission of salvation; all can receive now the divine life, no more waiting and making do with substitutes. Alálaong bagá, at the well of Jacob the woman and the other Samaritans encountered Jesus, God’s living water for His people. And they experienced communing with God in Jesus, a personal intimacy that remains. Jesus is the ultimate evangelizer, but he wants his followers to bring others into contact with him. Like the well, the liturgy is the privileged place where we gather because there the living water springs up abundantly; where the Word of God is proclaimed and the Spirit stirs up faith, nourishment and communion. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.

the name of economic growth and development. How many times have we been warned about the outflow of foreign capital if the country becomes too strict about mining rules? So can the Philippines get out of extravism? Obviously, the answer shall be determined by the nation’s readiness to embrace a new model of economic development. As one author puts it, the resource curse is not a fatal destiny but a policy choice, made mainly by either greedy political leaders or ill-informed economic technocrats. The challenge is how to transform natural and human resources into a blessing for the benefit of all. In Indonesia the policy answer came in the form of resource nationalism, translated into specific policies of no exportation of raw mineral ore and no license given to mining investors with no industrial and community-development program. However, in other countries, the policy challenge is seen in a much broader way. For example, Bolivia and Ecuador link the task of achieving a leap in industrialization using natural resources with the implementation of two other primordial tasks—caring for the environment and meeting the needs of the people in an inclusive and sustainable manner. The overall goal is to insure buen vivir or living well for all. Now, under the Duterte administration, can the government develop its own version of buen vivir for the Filipino people?

is 61. Only one of the five, Wang Qishan, who oversaw most of the corruption purge, is a clear ally of Xi. That means by the end of 2017, Xi could at last achieve the kind of control that would permit him to focus on the economy. There is another dimension to Xi’s political control and tenure. No general secretary of the Communist Party since Mao has served more than two terms of five years each. Xi’s first term started on November 12, 2012. According to established norms, Xi would have to retire in 2022, both because he will have served two terms as general secretary and because he will be 70 years old. If he currently has any designs on staying in office for longer than that, he could try to persuade the Party to let Wang Qishan stay on as a member of the PSC beyond the age of 68. This will definitely be an NPC worth watching.

2nd Front Page BusinessMirror

A12 Thursday, March 16, 2017

www.businessmirror.com.ph

‘Improve budget use before hiking taxes’

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By Jovee Marie N. dela Cruz

@joveemarie

awmakers on Wednesday urged government agencies to improve their absorptive capacities before calling for the passage of the Comprehensive Tax Reform Program (CTRP).

In a news briefing, Minority Leader and Lakas Rep. Danilo E. Suarez of Quezon said for the past six years the government failed to spend about P1 trillion of the appropriated budget due to the poor absorptive capacity of government agencies. “Eight months in the Duterte administration, we are not sure whether the absorptive capacity of these agencies has already improved. Given the government’s track record on inefficient budget spending, it does not make sense to impose additional taxes now,” Suarez said. The lawmaker from Quezon said his position is also the position of the 18-man minority group. “The minority reiterates the need for government agencies to improve their absorptive capacity before pushing for a comprehensive tax reform. We need not rush, most especially if we are not yet capable of spending the appropriated budget efficiently,” he added. On Tuesday, following Suarez’s motion, the House Committee on Ways and Means has created a technical working group to further study the CTRP. The Department of Finance -backed tax reform package seeks to exempt those earning P250,000 and below from personalincome tax. However, the tax proposal also

includes the imposition of excise tax on fuel, as compensatory measure for the foregone revenues due to the lowering of income tax. The DOF also proposes a staggered increase of P6 per liter of diesel, kerosene, and liquified petroleum gas to be imposed within a three-year period. The CTRP is also imposing excise taxes on vehicles. The bill also includes the relaxation of the Bank Secrecy Act, taxing the Philippine Charity Sweepstakes Office numbers’ game and lotto winnings. “We agreed to support the bill in theory, but we were hesitant with respect to its practical aspects and implementation. The [tax package] highlights the reduction of personal income tax rates,” Suarez said.

Stringent measures

Suarez, meanwhile, said he will suggest to the committee and the DOF a “revenue neutral” period for two years. “During this period, the government should only spend what it earns.” The minority leader said the government needs to implement stringent measures to ensure timely and efficient tax collection. “For example, the Philippines has one of the highest personal income and corporate tax rates in Continued on A2

A panel of lawyers from the Bureau of Internal Revenue, led by Manila BIR Regional Director Arnel Guballa (second from right), swore before Manila Prosecutor Edward Togonon (right) in the campaign against tax cheats in Metro Manila. UDY ESPERAS

B.I.R. files P300-K tax case vs 3 cigarette retailers

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HREE cigarette retailers in Binondo, Manila, were slapped by a total of P304,240 tax-evasion case by the Bureau of Internal Revenue (BIR) for selling cigarettes without tax stamps on Wednesday. Officials of BIR RDO No. 31 of the Revenue Region No. 6 headed by Regional Director lawyer Arnel Guballa have personally filed the charges at lawyer Edward Togonon, City Prosecutor of the Manila City Prosecutors Office.

Charged with cases of unlawful possession or removal of articles subject to excise tax without payment of tax, in violation of section 263 of the National Internal Revenue Code of 1997 were Samson Bargan Sy of Dongnanya Mini Mart, Kareene Villanueva of Keisha Mart and Henderson Jacla of Min-Shun Trading. Guballa said the appraised value of the seized cigarettes from the three establishments were estimated to have a total

of P 304,240, and their estimated basic excise tax liabilities based on the values were at P56,610. He further added that the three cigarette retailers were all registered taxpayers of RDO 31, and they have been conducting surveillance on the operations of the stores. The said actions were made after the BIR had been receiving reports that the three retailers were selling cigarettes without the required internal-revenue tax stamps as

mandated under existing tax laws, rules and regulations. “We have immediately seized and confiscated the cigarettes on the said stores, which have been found not bearing any required tax stamps. They will face tax-evasion charges before the court,” Guballa said. BIR, meantime, reminded the public to pay their taxes properly and on time because the revenue department continues to strengthen its Run After Tax Evaders program. Paul Ang

DOT positions foodfest as premier Mighty willing Southeast Asia gastronomic event to pay ₧3B By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

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HE Department of Tourism (DOT) has launched a monthand-half long food festival that will be highlighted by the three-day Madrid Fusión Manila (MFM), the premier gastronomic event in Southeast Asia. From March 11 to April 30, Flavors of the Philippines 2017 will be showcasing the best Filipino food, drinks, and more in over a hundred venues nationwide. The Flavors festival kicked off with the Paella Gigante Festival on March 11 at the Greenbelt Gardens in Makati, which saw over 20 of the country’s most popular chefs cook giant paellas for charity. In a news statement, Tourism Secretary Wanda T. Teo said this year’s Flavors of the Philippines festival “is a longer, grander and more delicious food journey nationwide. It will be an all-in-one enriching celebration of Philippine history, arts, culture, tradition, literature and music through the language of food”. She added that the festival “aims

The festival aims to present the Philippines to all food lovers in the world as a hub for different flavor profiles, while establishing our country as a center of culinary excellence in Asia.”—Teo

to present our country to all food lovers in the world as a hub for different flavor profiles, even those of foreign origins, while establishing our country as a center of culinary excellence in Asia”. She enjoined the public to take their palates “across our more than 7,600 tropical islands and discover why Filipino food is the next big thing on the global travel stage”. Flavors of the Philippines is a month-and-a-half long cultural and food festival that celebrates the evolution, heritage and diverse offerings of Filipino cuisine. Activities include tutorials in native cuisines, local food festivals, gourmet fairs, dining with celebrity chefs, specialized menus in restaurants, roving food trucks, food tastings, bar crawls, cook-off challenges, food bazaars and farmers’ market

Common train station. . . period to the Aquino administration, it was decided that the station will be moved nearer to the TriNoma mall, reportedly due to savings to the government of P 1.4 billion compared to the earlier agreement. The current

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proposal will be between the two malls. The statement was issued by the American Chamber of Commerce of the Philippines, Australia-New Zealand Chamber of Commerce of the Philippines Inc., Canadian Chamber

tours set in captivating destinations. There will also be activities that enable participants and guests to immerse themselves and interact with local communities during these food trips. For her part, DOT Director for Market Development Verna Esmeralda Buensuceso said at the Paella Gigante Festival: “The New York Times and Condé Nast Traveler magazine published that the Philippine cuisine is becoming a major food trend in the world. We believe Madrid Fusion Manila and Flavors of the Philippines have been instrumental in promoting Philippine cuisine to more foodies worldwide.” Cook ing of the 10 -foot-w ide paella over firewood and coal was led by Chef Mikel Arriet of the soon-toopen Anya Hotel and Spa in Tagaytay, of Commerce of the Philippines, European Chamber of Commerce of the Philippines, Financial Executives Institute of the Philippines, and the IT and Business Process Association Of The Philippines. These groups were also joined by the Japanese Chamber of Commerce of the Philippines, Korean Chamber of Commerce of the

and assisted by the LTB Philippines Chefs Association board of directors, which included Fernando Aracama (Aracama), J. Gamboa (El Cirkulo), James Antolin, Sito Senn (La Tasca), Carlo Miguel (71 Gramercy), Jerome Valencia, and Gilbert Pangilinan (Cerveceria), among others. The annual affair is hosted by Ayala Malls, with proceeds of the sale of the paella and other food items going to Sociedad Española de Benificencia, a non-governmental organization running programs for the elderly. For the complete list of participating establishments nationwide and schedule of activities and events, go to flavorsofthephilippines on Facebook and Instagram, and @ FlavorsOfThePHL on Twitter. MFM (www.madridfusionmanila. com) will be held on April 6 to 8 at the SMX Convention Center in Pasay City. The theme for the third serving of the MFM is “Our Sustainable Gastronomic Planet”, with Michelin-starred chefs headlining the international gastronomy congress, along with a diverse array of food, liquor, and agricultural products featured in the international gastronomy expo. Philippines, Makati Business Club, Management Association of the Philippines, Philippine Association of Multinational Companies Regional Headquarters Inc., the Philippine Chamber of Commerce and Industry and the Semiconductors and Electronics Industries in the Philippines Inc. Catherine N. Pillas

to settle case C

By Joel R. San Juan

@jrsanjuan1573N

igarette manufacturer Mighty Corp. has accepted the offer of President Duterte to pay at least P3 billion as settlement for unpaid tax obligations. This was disclosed on Wednesday by Justice Secretary Vitaliano N. Aguirre II in an ambush interview with reporters, where he said the offer was made in a letter addressed to Duterte by Mighty Corp. owner Alexander Wongchuking. In his letter, Wongchuking signified his agreement to the offer to pay P3 billion, which will be used to build hospitals in Basilan and Jolo, Sulu, as well as improve the Mary Johnston Hospital in Manila. Aguirre said the amount cited in the letter was the original offer of P3 billion made by the President, who later on corrected the amount to at least P15 billion. Despite the settlement offer, Aguirre said the government could still pursue the tax-evasion cases against Mighty Corp., adding that only when the tax-evasion charges are filed with the Department of Justice (DOJ) can the settlement offer be entertained. He said the DOJ would also issued lookout bulletin order against other executives of the tobacco firm after earlier issuing a similar order against Wongchuking. Wongchuking presented himself last week to the National Bureau of Investigation, but was not arrested, as initially ordered reportedly by the President. Aguirre said the businessman could not be arrested in the absence of a case filed against him. On Tuesday Aguirre ordered the preventive suspension on Mighty Corp.’s importation, following several raids on its warehouses early this month. The Bureau of Customs and the Bureau of Internal Revenue earlier confiscated 11,044 master cases of Mighty cigarettes worth P215 million in General Santos City, and 62,200 master cases valued at P1.98 billion in San Simon, Pampanga. Last week the BOC seized three more containers carrying Mighty cigarettes in the Port of Cebu and in Tacloban in an operation led by Commissioner Nicanor E. Faeldon himself. Mighty Corp. was able to secure a temporary restraining order from the Manila Regional Trial Court Judge Tita Alisuag against the raids. In response, the BOC filed an administrative case against Judge Alisuag before the Supreme Court.