Businessmirror may 23, 2018

BMReports

Culinary tourism takes a hit as probe unearths how Buhay Carinderia ‘redefined’ TPB approval route

By Ma. Stella F. Arnaldo

@akosistellaBM Special to the BusinessMirror

Conclusion

G

MARICON EBRON (left), Tourism Promotions Board officer in charge for the deputy COO for Marketing and Promotions, is shown with self-styled celebrity chef Erwan Heussaff, who was chosen as brand ambassador for the controversial P80-million Buhay Carinderia project at the launch last April 11. Images from Buhay Carinderia Facebook Page

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2015 environmental Media Award leadership award 2008

overnment sources point to Republic Act 9184, otherwise known as the government procurement law, which allows government agencies alternative ways to buy supplies or secure services, one of which is through “Direct Contracting,

otherwise known as Single Source Procurement—a method of Procurement that does not require elaborate Bidding Documents because the supplier is simply asked to submit a price quotation or a pro forma voice together with the conditions of sale, which offer may be accepted immediately or after some negotiations.”

The same law further states that agencies may resort to Direct Contracting when: “a.)

Procurement of Goods of propriety nature,

which can be obtained only from the propriety source, i.e., when patents, trade secrets and copyrights prohibit others from manufacturing the same items; b.) When the Procurement of critical components from a specific manufacturer, supplier or distributor is a condition precedent to hold a contractor to guarantee its project performance, in accordance with the provisions his contract; or, c.) Those sold by an exclusive dealer or manufacturer, which Continued on A8

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Wednesday, May 23, 2018 Vol. 13 No. 221

n

NFA pushes ₧25/kilo buying price for palay T

By Jasper Emmanuel Y. Arcalas

@jearcalas

HE National Food Authority (NFA) is pushing for the increase of its buying price for palay to P25 per kilogram to salvage its wiped-out stockpile, having been unable to purchase its much-needed buffer stock volume from farmers during the summer harvest owing to its uncompetitive pricing.

TRAIN 2 reforms won’t cut jobs, revenue–experts

By Cai U. Ordinario

“More firms will be motivated to expand because of the rationalization of incentives which only 4,000 firms use.” –Edillon

@cuo_bm

E

CONOMISTS supported the rationalization of fiscal incentives and reduction of corporate income tax (CIT) under the second package of the Comprehensive Tax Reform Program (CTRP), saying the reforms are needed and will not cause substantial job or revenue losses.

In the first Committee on Ways and Means hearing for the CTRP’s Package 2 at the House of Representatives on Tuesday, the President’s economic team defended “TRAIN 2” by highlighting the benefits for government and the economy if it is passed into law.

Unionbank Chief Economist Ruben Carlo Asuncion, Action for Economic Reform Senior Economist Jo-Ann Diosana, and Ateneo Center for Economic Research and Development (ACERD) Director Alvin P. Ang said they supported the measure, provided it is carefully implemented.

“TRAIN 2 is going to be great if orchestrated effectively and properly. We know that the cur-

rent incentives landscape is outdated and needs to be attuned to the challenges of the time. I agree that incentives should be ‘transparent, targeted, time-bound and performance-based’,” Asuncion told BusinessMirror.

“DOF (Department of Finance) has maintained that TRAIN 2 is revenue-neutral. So, I do not expect any adverse impact on revenue collection from corporate taxes,” he added.

However, Dean Cid Terosa of the University of Asia and the Pacific School of Economics said TRAIN 2, specifically the rationalization of fiscal incentives, could lead to job losses, “particularly the jobs of the less economically privileged.”

See “TRAIN 2,” A8

PESO exchange rates n US 52.4100

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Two dimes to rub together

A source privy to the matter told the BusinessMirror the NFA submitted its proposal to hike palay buying price during the special meeting of the NFA Council on May 21.

However, discussions on the proposal were deferred to the next regular NFA Council meeting. “We are again requesting the [NFA] Council to allow us to increase our price. Because it has been always our priority to buy locally but we cannot purchase because of [farmers’] price consideration,” the source said.

Philippine statement delivered by Ambassador Teddy Locsin Jr. on May 15, 2018, at the side event on the Contribution of Migrants to Sustainable Development at the Fourth Round of Negotiations, Global Compact for Safe, Orderly and Regular Migration at United Nations Headquarters, New York.

See “NFA,” A8

Continued on A6

Teddy Locsin Jr.

free fire

‘I

am pleased to join Special Representative to the SecretaryGeneral Mme. Louise Arbour once again, in this side event of the Global Migration Group on the contribution of migrants to sustainable development through remittances and investment.

Fuel excise tax suspension on $80/barrel eyed

By Bernadette D. Nicolas @BNicolasBM

T

HE government is ready to suspend the collection of excise taxes on fuel if global oil prices reach $80 per barrel, according to Malacañan Palace. “ What I know is that excise taxes will be suspended if they reach a cer tain amount. If I’m not mistaken, $80 [per barrel], so we are ready if oil prices reach [as high as $100 per barrel] to suspend the collection of excise taxes on fuel,” Presidential Spokesman Harry L. Roque Jr. said on Tuesday when asked about the government’s contingency plan to protect the public from the impact of oil prices reaching $100 per barrel.

The Palace statement also came a day after Sen. Sherwin T. Gatchalian urged the Duterte administration to prepare ahead “in the event that crude prices reach the $100-per-barrel threshold in the global market.”

Gatchalian’s statement came weeks ahead of the meeting in June by the Organization of the Petroleum Exporting Countries (Opec), which controls 81.5 percent of the world’s proven crude-oil reserves.

On Tuesday gasoline prices went up by P1.60 ($0.031) per liter, diesel by

60 YEARS OLD Herbert Sy (from left), Vice Chairman, Super Value Inc. and Super Shopping Markets Inc.; Teresita Sy-Coson, vice Chairman, SM Investments Corp.; Elizabeth T. Sy, President, SMX Convention Specialist Corp.; and Hans Sy, president and CEO, SM Prime Holdings Inc. grace the ceremonial toast during the SM 60th Year celebration held at the Mall of Asia Atrium in Pasay City on Monday. NONOY LACZA P1.10 ($0.021) per liter and kerosene by P1 ($0.019) per liter.

Movements in the world oil market were cited as the reason for the price adjustment, said to be the highest since the start of the year.

As of press time, Brent crude price is already near $80 per barrel while Dubai crude is at $74.793 as of May 21.

Sen. Paolo Benigno A.“Bam”Aquino IV renewed his call to the government last Friday to suspend the implementation of excise tax on fuel.

Section 5 of Revenue Regulation 2-2018, which provides implementing guidelines for petroleum products under the Tax Reform for Acceleration and Inclusion (TRAIN) law,

states that: “For the period covering 2018 to 2020, the scheduled increase in the excise tax on fuel as imposed, shall be suspended when the average Dubai crude based on Mean of Platts Singapore (MOPS) for three months prior to the scheduled increase of the month reaches or exceeds eighty dollars [$80] per barrel.”

n japan 0.4720 n UK 70.4024 n HK 6.6776 n CHINA 8.2136 n singapore 39.1236 n australia 39.7320 n EU 61.8071 n SAUDI arabia 13.9757

Source: BSP (22 May 2018 )

A4 Wednesday, May 23, 2018 • Editor: Vittorio V. Vitug A2

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Transition body seeks more time to study BBL amendments

By Jovee Marie N. dela Cruz @joveemarie & Bernadette D. Nicolas @BNicolasBM

T

HE Bangsamoro Transition Commission (BTC) on Tuesday asked Congress for more time to study proposed amendments to the bill embodying the Bangsamoro Basic Law (BBL).

In an interview, House Speaker Pantaleon D. Alvarez expressed confidence that the issues or concerns about the provisions of the proposed law would be resolved in accordance with the stakeholders.

Alvarez made the statement after emerging from a closed-door meeting with the BTC and the government’s peace panel, or the GRP. The Speaker is also optimistic that the measure would be passed before Congress takes a break at

the end of the month.

“The GRP has proposals and the BTC asked for three days so they can discuss [such],” Alvarez said.

He said among the matters discussed during the meeting were proposed amendments to various provisions of the current draft of the BBL, and added, “I believe we can come to an agreement on these issues.”

However, Alvarez refused to divulge the specific issues, provi-

sions or objections raised during the closed-door meeting as “they [BTC] requested us to keep things between us in the meantime.”

The BTC is expected to meet again with House leaders on Monday to give their position on the objections raised over the BBL and the proposed amendments.

BBL as ‘urgent’

MAJORITY Leader Rep. Rodolfo C. Fariñas of the First District of Ilocos Norte, meanwhile, said the House would conduct another caucus after Monday’s meeting to discuss any agreement reached with the BTC on the BBL. On Monday Alvarez said he plans to request President Duterte to certify the BBL as an urgent measure to fast-track the approval of the bill.

Duterte has appealed to Congress to pass the BBL by May 30, as he emphasized the crucial role of the proposed law to maintain peace in Mindanao, amid threats posed by radical Islamic groups.

For its part, Malacañang said

Duterte will certify the BBL as urgent “anytime soon.”

“The President promised to certify it. I cannot absolutely guarantee that the version of the House will be certified, because I haven’t seen the text. But if it is in conformity with what was agreed upon, then there should be no problem. [He] should certify it,” Presidential Spokesman Harry L. Roque Jr. said in a briefing on Tuesday.

But Roque ruled out the possible meeting of the President with leaders of the House for the certification of the bill.

Last month Duterte assured the public that Congress would pass the proposed measure before the end of May.

Still within PHL

THE proposed BBL seeks to abolish the Autonomous Region in Muslim Mindanao (ARMM).

The measure, likewise, aims to establish a political entity, provide for its basic structure of government in recognition of

the justness and legitimacy of the cause of the Bangsamoro people, and their aspiration to chart their political future, through a democratic process that will secure their identity and posterity, as well as allow for a meaningful self-governance.

Under the bill, the Bangsamoro territory shall remain a part of the Philippines. The measure delineates the core territory of the Bangsamoro to be composed of: 1) the present geographical area of the ARMM; 2) the municipalities of Baloi, Munai, Nunungan, Pantar, Tagolan and Tangkal in the province of Lanao del Norte and all other barangays in the municipalities of Kabacan, Carmen, Aleosan, Pigkawayan, Pikit and Midsayap that voted for inclusion in the ARMM during the 2001 plebiscite; 3) the cities of Cotabato and Isabela; and 4) all other contiguous areas where there is resolution of the local government unit, or a petition of at least 10 percent of the registered voters in the area asking for their inclusion at least

two months prior to the conduct of the ratification of the Basic Law and the process of delimitation of the Bangsamoro.

To ensure the widest acceptability of the BBL in the core areas, a popular ratification shall be conducted among all the Bangsamoro within the areas for their adoption.

House Bill 6475 retains the central government’s power and control over defense and external security.

It provides that the defense of the Bangsamoro shall be the responsibility of the central government. The latter shall create a Bangsamoro Military Command of the Armed Forces of the Philippines for the Bangsamoro, which shall be organized, maintained and utilized in accordance with national laws.

The measure also calls for the creation of a Bangsamoro Police for law enforcement and maintenance of peace and order in the Bangsamoro, but it shall be part of the Philippine National Police.

Boracay closed until water quality improves–Cimatu E

NVIRONMENT Secretary Roy A. Cimatu stood pat on maintaining the current moratorium on tourism activities in Boracay until water quality in the island is back to its pristine state.

Speaking at the kickoff ceremony to celebrate the 2018 International Day for Biological Diversity at the National Museum of Natural History in Manila on Tuesday, Cimatu expressed his surprise on the Department of Environment and Natural Resources (DENR) personnel’s discovery of a septic tank and several sewer lines near the shores of Boracay.

The DENR, a member of the interagency Task Force Boracay, is taking

the lead in issuing notices of violations, show-cause orders and notices to vacate to violators of environmental laws in the island.

Cimatu narrated that DENR personnel used a high-tech gadget that works like x-ray machines—apparently referring to the ground-penetrating radar used by the Mines and Geosciences Bureau to detect pipes buried underneath the sands.

“How can we improve water quality if there are illegal sewer lines that are very near the shoreline? [They] are closer to the beach than the illegal structures,” he lamented.

Ideally, the sewer lines should be 50 meters away from the shoreline to avoid the incidence of contamina-

tions in case of leaks.

“When I asked how long it will take us to correct the problem, I was told it would take at least a year. So I said we will condemn these sewer lines that are near the shorelines,” Cimatu declared.

The DENR chief said many business establishments discovered to be disconnected to the sewer lines of the Boracay Island Water Co. and the Boracay Tubi System are now applying for sewer connections.

He said, however, that notwithstanding the applications, the DENR will continue to “scan” beaches to detect illegal sewer lines that discharge untreated wastewater into the beach to prevent water pollution.

Cimatu said he had also met with members of Task Force Boracay that include officials of the Tourism Infrastructure and Enterprise Zone Authority to inform all property owners and businessmen with establishments along the beach to construct their own sewage-treatment plants (STPs).

All other businesses in Boracay that maintain at least 50 rooms should also construct their own STPs from now on, Cimatu said.

“Unless the water quality improves and the standard is met, Boracay will remain closed,” he reiterated.

High coliform level

THE environment secretary said

recent water sampling still revealed a high measurement of coliform in some of the beaches that exceed acceptable levels.

“That is why I am not keen on recommending to reopen Boracay— unless the quality of water [there] improves,” he noted.

Nevertheless, Cimatu said he is confident that the six-month closure of the “island paradise” will be enough to address some of its pressing environmental problems, with the support and cooperation of all stakeholders.

According to him, businessmen in Boracay support the idea of constructing their own STPs, while owners with rooms that are less than 50

may opt to form a cluster to jointly construct and operate an STP to treat their wastewater.

The DENR chief said the last month of the closure period will be dedicated to observing the quality of water of the island, especially public beaches. Cimatu, however, is confident that upon its reopening, local and foreign tourists will be surprised of the “all-new and improved” Boracay.

“I don’t want to [talk] ­about it now.

Just wait for its reopening,” he said.

‘Lolong’ and conservation

THE celebration was highlighted by the turnover of the life-size replica of “Lolong” by the National Museum to the DENR-Biodiversity Management Bureau (BMB).

Lolong was the largest saltwater crocodile to be captured alive. It measured at 6.17 meters (or 20 feet, 3 inches) and weighed 1,075 kilograms (2,370 pounds), making the reptile one of the largest crocodiles ever measured from snout to tail.

DENR-BMB Director Crisanta Marlene Rodriguez formally accepted the deed of donation from Jeremy Barns, the director of the National Museum, during a simple ceremony.

The life-size replica is made of fiberglass, although the preserved body of Lolong is now one of the exhibits at the Gallery 1 of the museum. Barns said another replica of Lolong would be turned over to the Bunawan, Agusan del Sur, local government unit.

During his speech, Cimatu underscored the importance of conserving and protecting the country’s rich biodiversity, not only because of its importance in ensuring the survival of threatened species, but also because of the regulatory services of wildlife habitats, such as wetlands.

He disclosed that the number of wetlands on Boracay Island has decreased from nine to just four. Most of the wetlands, he averred, could no longer be found. “These wetlands are important because they serve as catch basins. Because the wetlands are gone, Boracay experiences flooding,” he told reporters.

According to Cimatu, Boracay is rich in biodiversity, but is now threatened because of unsustainable tourism practices. He cited as an example the endemic flying foxes, the population of which continues to dwindle because of the fruit bats’ failure to mate and reproduce due to the disturbance caused by tourism activities.

The secretary said protecting the country’s rich biodiversity is important because of their many benefits, such as the shells that make the Puka Shell Beach unique and special.

“The sands [there] are colder than other beaches, because Puka shells insulate the sand, making the beach colder,” he confirmed. Jonathan L. Mayuga

Economy BusinessMirror

www.businessmirror.com.ph

Editor: Vittorio V. Vitug • Wednesday, May 23, 2018 A3

Lack of drivers’ database stymies ‘Pantawid Pasada’

IN this January 15 file photo, jeepneys are tested by the Land Transportation Office as part of its “Tanggal Bulok, Tanggal Usok" campaign, which seeks to apprehend smoke-belching vehicles to help cut air pollution in Metro Manila. The Department of Transportation said on Tuesday it could not yet roll out the "Pantawid Pasada" program as it is still in the process of completing its database of drivers. NONIE REYES

By Jovee Marie N. dela Cruz

T

@joveemarie

he Department of Transportation (DOTr) on Tuesday admitted that the lack of a drivers’ database has delayed the implementation of the “Pantawid Pasada” program under the Tax Reform for Acceleration and Inclusion (TRAIN) law.

During the hearing of the House Committee on Ways and Means on the second package of the Comprehensive Tax Reform Package (CTRP) or TRAIN 2, Transportation Undersecretary Thomas M. Orbos of the Lone District of Quirino told lawmakers that the agency is still gathering its database to determine the number of beneficiaries, which include drivers and operators of public-utility vechicles (PUV).

“We are still securing the drivers database from stakeholders themselves,” Orbos said.

It the same hearing, Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Martin B. Delgra III said the program is targeting to benefit 400,000 to 500,000 PUV drivers in the country.

“We are also trying to generate drivers database through drivers academy program of the LTFRB that we have started last year and we are still doing it until now. We’re now looking at 400,000 to 500,000 drivers covering the same number of public-utility vehicles that are registered in our system,” Delgra added.

The Pantawid Pasada program, which is provided for in TR AIN

1, is expected to mitigate the impact of the new tax-reform law on PUV drivers.

Citing the Department of Budget and Management (DBM), Finance Undersecretary Karl Kendrick T. Chua said the government has until end of the year to spend P900million budget for the program.

“I think there’s about P900 million that is valid up to December 2018. If they dont use it, according to the DBM, it is cash based, so it could be voided. They have to speed up the implementation,” Chua added.

House Committee on Ways and Means Chairman Dakila Carlo E. Cua of the Lone district of Quirino directed the transportation agency to submit a report to the committee next week on how it will implement the Pantawid Pasada program.

Earlier, Cua warned the Department of Finance (DOF) that it will be difficult for the lower chamber to pass another taxreform law being pushed by the Duterte administration if the social benefits included in the initial phase of TR AIN 1 won’t be fully implemented.

Under the TRAIN law, the government shall implement the Pantawid Pasada program, a social assistance project for commuters and public transport, and the jeepney modernization program to ease the impact of the oil excise tax increases on commuters and the land-transport sector.

Besides the Pantawid Pasada, the TRAIN provides for additional unconditional-cash transfers to low-income earners amounting to P2,400 for 2018, and P3,600 for 2019 and 2020. The DOF said P4.3 billion has been released in the first quarter, which forms part of the total of P 25.7 billion allocated for UCTs for 2018.

The law also provides for a “Pantawid Kuryente” to help small power consumers in missionary electrification areas.

Party-list Rep. Carlos Isagani T. Zarate of Bayan Muna said the failure of the DOTr to implement the Pantawid Pasada program due to lack of data points to the “government’s criminal neglect of the people’s welfare.”

“They should not have implemented the TRAIN in the first place and this gives further reason to repeal the TRAIN law,” Zarate said.

Features of TRAIN 2

The ways and means panel has started on Tuesday discussing several bills which aim to reduce corporateincome tax and modernize fiscal incentives under TRAIN 2.

TRAIN 2 aims to lower corporate-income tax to 25 percent, from 30 percent and to harmonize fiscal incentives.

Party-list Rep. Antonio L. Tinio of ACT Teachers said the government should first address several issues concerning the implementation of TRAIN 1. Tinio also said, only big corporations will be the “biggest winners” with TRAIN 2.

“It’s true that tax incentives on both foreign and local investment, requires an overhaul. As the DOF itself has noted, the government gave away P301 billion in incentives to foreign and local investors in 2015 alone. The incentive reforms proposed in TRAIN 2 are meant to plug those leakages,” Tinio added.

“However, what the government takes back with one hand, it will give away with the other.

The question is, to whom? The DOF itself avers that TRAIN 2 will be revenue-neutral. W hatever revenues the government recovers through incentive reform, it intends to give away in the form of the proposed lower corporate income-tax rate,” he said.

More poor Filipinos buy bottled water–PSA poll

M

ORE Filipinos, especially the poor, are buying mineral water or obtaining water from other sources due to lack of availability or cost, according to the Philippine Statistics Authority (PSA).

Based on the 2017 Annual Poverty Indicators Survey, the PSA said 4 in 10 families, or 38.6 percent of households, have their drinking water obtained from water-refilling stations.

The PSA added that only 2 in 10 families (20.3 percent) have their drinking water piped into their dwelling, while 12 percent obtained their drinking water from tube wells or boreholes.

“Results show that there are some families who are unable to access sufficient quantities of drinking water either because it is not available from source [5.7 percent], water is too expensive [1.4 percent], or water source is not accessible [1.1 percent],” the PSA said.

Obtaining potable water from refilling stations are more common for the upper 70 percent of the population compared to the bottom 30 percent, or families belonging to

the poorest three deciles.

For the poorest, their most common potable water sources are water-refilling stations at 17.6 percent of households; tube wells/boreholes, 17.2 percent; piped into their dwellings, 12.3 percent; and, piped into yards/plots, 10.2 percent.

For the upper 70 percent, waterrefilling stations are their primary source with 47.5 percent households getting potable water from these establishments; piped into their dwellings, 23.7 percent; and 9.8 percent obtaining water from tube wells/boreholes.

Meanwhile, almost all, or 95 percent of Filipino families, have improved sources of drinking water. Improved water resources, according to the World Health Organization (WHO) and the United Nations Children’s Fund (Unicef), are those that have potential to deliver safe water by nature of their design and construction.

Improved water resource classifications are being used in the Updates and Sustainable Development Goal (SDGs) Baselines for 2017.

“Improved drinking water sources

per WHO and Unicef include piped water into dwelling, piped into yard/ plot or neighbor and public tap/stand pipe,” the PSA said. “It also includes non-piped drinking water sources like tube well/borehole; protected well and spring; rainwater; tanker truck/cart with small tank; water refilling station and bottled/sachet water.”

The PSA added that water from an improved source may still be unsafe for drinking due to handling contamination. Improved source, however, is different from safe source.

SDGGoal6targetstoensuretheavailability and sustainable management of water and sanitation for all. It aims to achieve universal and equitable access to safe and affordable drinking water for all by 2030, among other targets.

The SDGs or Global Goals is a set of 17 socioeconomic goals that 193 United Nation member-countries like the Philippines committed to meet by 2030. The goals are composed of around 169 targets and over 300 global indicators. The SDGs were adopted in September 2015. Cai U. Ordinario

DOE wants Pinoys to tap renewable-energy sources

T

he Department of Energy (DOE) is soliciting comments from industry stakeholders on a proposed policy that allows consumers to choose renewable energy (RE) as their source of power.

“The Department of Energy is hereby requesting all interested parties to submit their comments on the draft circular on GEOP [Green Energy Option Program]. The deadline for submission of comments is on or before May 28,” the agency said in a notice posted on its web site.

The proposed circular considers various options for end-users to contribute in the development and utilization of RE resources in the most “cost efficient and sustainable manner.”

Under the GEOP, electricity consumers with a monthly average peak demand of 100 kilowatt (kW) and above, for the past 12 months may opt to participate in the program.

Those with average peak demand below 100 kW may participate in the GEOP after the DOE, in consultation with the National Renewable Energy Board and industry stakeholders, determines the readiness of the market and that the technical requirements and standards are already met.

The program is voluntary. As such, consumers may opt to not avail of the GEOP, participate in the GEOP through its distribution utility (DU), or directly contract with a supplier of RE. The proposed rules also said

that an end-user that opted to contract with am RE supplier may revert to be supplied by the DU, subject to conditions. The DOE will also allow an end-user who reverted to being supplied by the DU to go back to the GEOP. If the end-user GEOP participant will revert to being a captive customer, the end-user shall inform the DU at least three months prior to the expiration of the GEOP contract with its RE supplier.

The DOE was mandated by Republic Act 9513, or the Renewable Energy Act of 2008, to establish a Green Energy Option program and provide end-users with the power to choose RE as their source of electricity. Lenie Lectura

Ceza: ₧5B required for Port Irene development PPA registers slight drop in Q1 profit

By Elijah Felice E. Rosales @alyasjah

T

HE Cagayan Economic Zone Authority (Ceza) needs P5 billion for the development of Port Irene that, if utilized to the fullest, can make the region a premier docking site for trade goods coming from East Asia.

In an interview with reporters on Tuesday, Ceza Administrator and CEO Raul L. Lambino said they are looking for a partner from the private sector that will invest on the development of Port Irene, Cagayan, which currently serves as an entry point for construction materials from China, South Korea and Vietnam.

The largest investment by far on the seaport was the P5.4-billion breakwater rolled out by the previous administration.

“In Port Irene, the breakwater was put there by the previous administration— Ceza’s largest investment by far on that dock—amounting to P5.4 billion. We would be needing at least another P5 billion to develop the wharves, new piers and dredging on Port Irene,” Lambino said.

He added the Ceza is currently reviewing the master plan and existing studies on Port

Irene to identify what is needed to bring about the port’s full potential as a seaport.

Lambino said one thing is for sure: Port Irene’s docking site must be improved, its facilities must be enhanced and its base must be expanded to increase the port’s capacity.

According to him, Port Irene is underutilized because its pier is only about 180 meters in size. For it to be fully operational, it must be widened to at least 300 meters.

A South Korean firm in April offered to bankroll the expansion and modernization of Port Irene. Fairbridge Overseas Development Inc. expressed interest to develop Cagayan’s connectivity jewel in a bid to unlock the full potential of the seaport.

Fairbridge is looking to dredge Port Irene’s navigational channel, develop its existing piers and wharves and fortifying its breakwater, as well as repairing its storm-torn portions. Lambino and the South Korean firm’s President Kim Myung-hwan signed a memorandum of understanding drawing the scope of the project.

Apart from Port Irene, the Ceza chief said they are also in the process of fully utilizing the Cagayan North International

Airport in Lal-lo.

“On the Cagayan North International Airport, we are also updating our master plan there,” he said. “We are thinking of putting additional taxiway, or another strip of runway to make it a truly world-class international airport that would cater the biggest available commercial planes.”

As of present, there are no direct flights yet to the airport, only chartered flights, according to Lambino. This is because the facility is still applying for certification to land direct flights. Planes headed to Lal-lo have to pass through licensed airports, such as those in Tuguegarao City, Laoag in Ilocos Norte and Clark in Pampanga.

The Ceza’s revenue for the first quarter also grew by 76.6 percent to P86 million, from P48 million during the same period last year. The economic zone operator gained higher collection from licensing fees, passport fees, processing fees, sewerage fees, rent income and seaport system fees.

Its total revenues from the previous year amounted to P234 million. The Ceza is working to make P283 million this year, according to Lambino.

By Lorenz S. Marasigan @lorenzmarasigan

S

TATE-OWNED Philippine Ports Aut hor it y (PPA) saw prof its dropping slightly during the first three months of the year, owing to increased expenses on port infrastructure development.

Jay Daniel R. Santiago, the general manager of the agency, said the group’s net income for the first quarter of 2018 reached only P2.26 billion, a 4-percent decline from P2.36 billion a year prior due to high expenses on repair, maintenance, and dredging.

During the same comparative periods, total revenues grew by 9 percent to P3.78 billion, from P3.48 billion, thanks to increased collection on storage and layup, and a 26.6-percent growth in fund management income.

Its expenses, however, rose by a faster 37.03 percent to P1.52 billion from P1.11 billion.

“We have been injecting so much investment in our ports in support of the ‘Build, Build, Build’ program of the Duterte ad-

ministration,” Santiago said.

Among the areas where ports are being improved include Puerto Princesa, Eastern Leyte, Ilocos Norte, Occidental Mindoro, Batangas and Ozamiz.

Locally funded port development projects being carried out include 45 projects in Luzon wherein seven have already been completed, 19 are ongoing and another 19 projects are for procurement; 19 for the Visayas where three have already been finished, eight are ongoing and eight are for procurement; and 40 for Mindanao where five have been delivered, 21 ongoing and 14 under procurement.

“Once completed, these projects will definitely boost our revenues and eventually our income all anchored on faster turnaround of vessels and cargoes in our ports,” Santiago added.

The agency is bullish that it can hit its target gross income of P16.18 billion for 2018, as some of the port development projects start to go online this year to accommodate the demand of the increasing economic activity this 2018.

A4

Wednesday, May 23, 2018

The World BusinessMirror

Xi Jinping can make or break any deal between Trump, Kim

D

onald J. Trump and Kim Jong Un will meet next month to negotiate a deal that could avert nuclear war. But the ultimate success of any agreement hinges on someone else: China’s President Xi Jinping.

As North Korea’s largest trading partner, China’s enforcement of United Nations sanctions helped bring Kim to the negotiating table while also shielding his regime from Trump’s warnings of “fire and fury.”

Now that Trump and Kim are meeting, Xi can support any deal that is good for China and undermine anything that goes against its interests.

China already appears to be using that leverage in discussions on trade.

Last week Trump said Xi “could be influencing” Kim to take a harder line with the United States after North Korea threatened to walk away from the summit.

The US and China last Saturday declared a truce in their ongoing

trade spat, paving the way for a greater focus on North Korea.

“China must continue to be strong & tight on the Border of North Korea until a deal is made,” Trump said on Twitter on Monday.

“The word is that recently the Border has become much more porous and more has been filtering in. I want this to happen, and North Korea to be VERY successful, but only after signing!”

China faces a difficult balancing act. It has repeatedly called for talks between the US and North Korea to avoid a war or regime collapse, which could devastate its economy and lead to a refugee crisis or potentially US troops on its border.

On the other hand, China wants to avoid draw ing Nor th

K ore a c loser to t he US a nd South Korea, exacerbating its ow n secur it y concer ns.

China ‘indispensable’

Ahead of the unprecedented summit, Xi has inserted himself into the discussion.

Kim has visited China twice in recent months to meet with Xi, while Trump has also spoken by phone with the Chinese leader.

Moon Jae-in, South Korea’s president, is scheduled to meet with Trump at the White House on Tuesday.

“Even if the US and South Korea try to weaken China’s impact in the negotiation process, Xi and Kim’s recent two meetings have proved that China and its support are indispensable,” said Yue Li, senior fellow at the Pangoal Institution, a Beijing-based think tank. “Even though it won’t sit at the negotiating table in Singapore, China plays a role as a stabilizer in this region.”

China possesses a unique combination of carrots and sticks that could help a deal succeed or cause it to unravel.

The country’s economic leverage over the North—China supplied 85 percent of North Korea’s $3.47 billion in imports in 2015— means it will be critical to any

economic inducements offered as part of the deal.

Sanctions hope

Already China has appeared to give Kim hope of easing sanctions against his regime that curb fuel imports and ban exports of everything from seafood to coal.

On a trip to Beijing in March— Kim’s first outside the country since taking power in 2011—Xi told him that China has made a “strategic choice” to have friendly ties with North Korea, and they would “remain unchanged under any circumstances.”

“If relations with the US deteriorate or China’s not happy with the US approach to negotiations, there are many ways it could quietly ease up on implementation and enforcement without formally violating the sanctions,” said Michael Kovrig, senior adviser for Northeast Asia at the International Crisis Group and a former Canadian diplomat stationed in Beijing.

‘Guarantor’

Internationally, there are high hopes that China will play a positive role.

“China can be a guarantor to North Korea that if they give up their nuclear capacity, the United States will not be in a position to harm them,” United Nations Secretary-General Antonio Guterres told Bloomberg in an interview on May 10. “And for the United States, China can also be a guarantor that if there is an agreement, that the agreement is effectively implemented by the North Koreans.”

Still, any efforts at mediation are hindered by China’s complex and at times difficult ties with both the US and North Korea.

While China sided with Pyongyang in the Korean War and has a mutual defense treaty, it’s unclear how Beijing would act in a conflict—particularly if North Korea kicked things off.

China also has to contend with the longstanding tendency of both the US and North Korea to walk away from negotiations, not to mention the volatile personalities of Trump and Kim. “It can’t ensure compliance from either side,” Kovrig said. “It has leverage and influence over North Korea, but ultimately can’t force it to implement. Beijing has even less influence over US policy and President Trump.”

China’s interests

Still, China has a strong interest in shaping any potential deal. In particular, it’s likely to want a reduction in the United States troop presence and an increase in trade with North Korea to help revive its ailing northeast economy.

Home sales in the Chinese border city of Dandong are already surging on hopes trade between the two countries might increase.

China also shares the goal of denuclearizing the Korean Peninsula. China would suffer from any deal that eliminates North Korea’s long-range missiles capability of hitting America while allowing the US to maintain deterrence against the regime’s nuclear weapons and short-range missiles, according to Zhang Liangui, a former professor at the Chinese Communist Party’s Central Party School.

“In this case, the US and its allies will be free from nuclear attack but North Korea’s surrounding countries like China would be affected,” Zhang said. “This scenario isn’t likely, but we need to beware.” Bloomberg News

Trump’s new Iran plan counts on help from allies he spurned

P

resident Donald J. Trump’s new, more aggressive strategy toward Iran depends on getting help from United States partners—the very allies he spurned in withdrawing from the 2015 nuclear accord with Tehran.

With a speech on Monday, Secretary of State Mike Pompeo filled in details of an Iran strategy that has so far consisted of walking away from the 2015 accord that restricted the country’s nuclear program in exchange for the lifting of some economic sanctions.

His 12-point list of demands called for Iran to acquiesce to the US virtually across the board.

Th e n e w v i s i o n i s Tr u m p - s t y l e diplomacy—a promise to “crush” Iranian operatives and impose the “strongest sanctions in history” unless the Islamic Republic abandons all nuclear development and gives up what the US considers its malign role across the Middle East.

Any company doing business with Iran will be held “to account” through sanctions the US plans to implement within months.

The conundrum for Trump and Pompeo: After fracturing alliances and disregarding diplomac y in favor of quick ac tion, the White House won’t be able to put that sanctions regime fully in place, or curtail Iran’s regional role, without the participation of the five other nations that forged the deal with Iran. And there’s little sign they want to go along.

No one else

“It’s really tough to have an international sanctions regime that doesn’t include anyone else,” said Suzanne DiMaggio, director of the Iran Initiative at the New America Foundation. “It’s shocking how they would move forward with a policy announcement that really has no clothes.”

The administration envisions a“maximum pressure” campaign similar to the one that has strangled North Korea’s economy but in an environment where there is far less unity.

Moreover, Pompeo’s speech didn’t mention Russia or China, two partners in the original nuclear accord that could help Iran weather tougher sanctions. Along with the US, others in the deal included France, the United Kingdom and Germany.

“The challenge is converting that pressure into policy outcomes, and that takes diplomacy,” said Michael Singh, managing director of the Washington Institute for Near East Policy and a former senior director for Middle East affairs under President George W. Bush. “We’ve never tried to erect this sort of sanctions regime amid a really sharp strategic divergence with our closest allies.”

Defiant speech

Pompeo was defiant in his speech, reciting a litany of Iranian behaviors that have vexed American leaders for decades.

He insisted Iran give nuclear inspectors unfettered access to the country and stop funding rebels in Yemen. It must cease any uranium enrichment and withdraw its forces from Syria. Funding of Hezbollah and Hamas must end.

“It’s not a pipe dream to ask the Iranian leadership to behave like a normal, responsible country,” Pompeo wrote on Twitter hours after his speech. “Our asks are simple.”

Well before Pompeo spoke, European leaders suggested that the US approach won’t work.

The European Union is studying ways to protect its companies from the sanctions and keep intact the 2015 accord, known as the Joint Comprehensive Plan of Action, without the US. Bloomberg News

www.businessmirror.com.ph

briefs Australian archbishop convicted of child sex-abuse cover-up

NEWCASTLE, Australia—An Australian archbishop on Tuesday became the most senior Roman Catholic cleric in the world convicted of covering up child sex abuse and faces a potential two years in prison when he is sentenced next month.

Magistrate Robert Stone handed down the verdict against Archbishop of Adelaide Philip Wilson in Newcastle Local Court, north of Sydney, following a magistrate-only trial.

Wilson, 67, had pleaded not guilty to concealing a serious crime committed by another person—the sexual abuse of children by pedophile priest James Fletcher in the 1970s.

Stone told the court that Wilson had concealed the abuse of two altar boys in the Hunter Valley region, north of Sydney, by Fletcher by failing to report the allegations to police. AP

Hawaii volcano generates toxic gas plume called laze

PAHOA, Hawaii—The eruption of Kilauea volcano in Hawaii sparked new safety warnings about toxic gas on the Big Island’s southern coastline after lava began flowing into the ocean and setting off a chemical reaction.

The molten rock started pouring into the sea over the weekend. It’s been generating plumes of lava haze or “laze” as it interacts with seawater.

It’s just the latest hazard from a weeks-old eruption that has so far generated earthquakes and featured gushing molten rock, giant ash plumes and sulfur dioxide. The eruption has destroyed more than 40 buildings forced more than 2,000 people to evacuate.

On Monday lava entered and then stalled on the property of a geothermal plant near one of Kilauea’s new volcanic vents. Officials earlier this month removed 190,000 liters of stored flammable gas from the plant to reduce the chance of explosions. AP

Foreign media arrive for N. Korea nuke site closing

WONSAN, North Korea—A small group of foreign journalists arrived in North Korea on Tuesday to cover the dismantling of the country’s nuclear test site later this week, but without South Korean media initially also scheduled to participate.

Pyongyang is allowing the limited access to the site to publicize its promise to halt underground tests and launches of intercontinental ballistic missiles. It unilaterally announced a moratorium ahead of a summit between leader Kim Jong Un and President Donald J. Trump scheduled for June 12 in Singapore.

The eight South Korean journalists were excluded because Pyongyang has cut off high-level contact with Seoul to protest an exercise with the United States military—a protest the North’s media reiterated on Tuesday, saying saber rattling and dialogue don’t mix. AP

Najib questioned over 1MDB; task force seeks to recover assets

The Malaysian Anti-Corruption Commission questioned former Prime Minister Najib Razak over 1Malaysia Development Berhad (1MDB), as a special task force hones in on recovering assets from the troubled state fund.

The commission is compiling evidence and reaching out to two important witnesses to build a case on SRC International, a former unit of 1MDB, Mohd Shukri Abdull, chief commissioner at the anti-graft agency known as MACC, said on Tuesday. He declined to name the witnesses. Mohd Shukri expects charges to be filed “very soon.”

Malaysia’s new administration came to power earlier this month in a shock victory and quickly reopened investigations into the 1MDB fund.

That includes figuring out if any of its money ended up with Najib, who once chaired its advisory board, and reaching out to global investigators who had probed alleged embezzlement and money-laundering activities in recent years. Bloomberg News

A6 Wednesday, May 23, 2018 • Editor: Angel R. Calso

Opinion BusinessMirror

www.businessmirror.com.ph

editorial

Focus on food safety

E

very month scores of Filipinos are victimized by food poisoning. Just last week reports said two siblings in a town in Davao del Sur died, while four others were hospitalized, allegedly because of food poisoning. In April 19 people, mostly children, suffered stomach disorders after eating rice noodles served at a town fiesta. Two months prior to that incident, some 33 athletes and coaches were downed by food poisoning during the Davao Regional Athletic Association meet.

What is common in these cases is that the food served was mass-produced and was prepared hours before it was consumed.

Obviously, there were lapses in the food preparation process.

While these lapses may seem trivial to some, they have resulted in the hospitalization and even death of some of those affected by food poisoning.

According to the World Health Organization (WHO), food safety is a significant public health issue. The WHO said some 1.8 million people die as a result of diarrheal diseases and most of these cases can be attributed to contaminated food or water. More than 200 known diseases are transmitted through food, according to the WHO. The WHO introduced the five keys to safer food poster in 2001.

These five keys incorporated all the messages of the 10 golden rules for safe food preparation under simpler headings that are more easily remembered. The core messages of the five keys to safer food are: keep clean, separate raw and cooked, cooked thoroughly; keep food at safe temperatures; and use safe water and raw materials.

To keep food clean, the WHO said those who will prepare it must wash their hands before handling food and often during food preparation; wash hands after going to the toilet; wash and sanitize all surfaces and equipment used in food preparation; protect kitchen areas and food from insects, pests and other animals. The WHO also recommended separating raw meat, poultry and seafood from other food; the use of separate equipment and utensils, such as knives and cutting boards for handling raw food; and storing food in containers to avoid contact between raw and prepared food.

To kill dangerous microorganisms, the WHO said food must be cooked thoroughly, especially meat, poultry, eggs and seafood.

Soups and stews must be boiled. For meat and poultry, the WHO said juices should be clear and not pink in color. Also, cooked food must be reheated thoroughly.

The WHO advised handlers not to leave cooked food at room temperature for more than two hours, to keep cooked food piping hot prior to serving, and to not thaw frozen food at room temperature. Handlers were also told to use safe water, select fresh and wholesome food, to choose food processed for safety, such as pasteurized milk, and to wash fruits and vegetables.

WHO’s recommendations may sound simple but many people continue to disregard these tips. In a tropical country like the Philippines, food tend to spoil easily, so shortcuts should be avoided if handlers want to ensure that the dishes would not make their guests or customers ill. Aside from the harm that it would cause to consumers, serving spoiled food could also result in irreparable damage to the reputation of restaurants and caterers.

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Two dimes to rub together Teddy Locsin Jr.

Free fire Continued from A1

‘R

emittances account for 9.8 percent of our GDP. In 2016, 10 million overseas Filipinos remitted $29.9 billion.

This grew by 5.3 percent in 2017, to $3.3 billion. That is far higher than the official development assistance we received, which in 2015 stood at a mere $15.71 billion. However, the true scale of remittances, including unrecorded flows through formal and informal channels, is believed to be even bigger.

“Remittances are perhaps the most tangible link between migration and development. Since they are private flows from overseas Filipinos to their families back home— who are mostly in rural and agricultural areas—they directly augment the income of recipient households.

They enable families to put their children through school, allow for investment in food, housing and health, and allow for entrepreneurship and small businesses—all of which have a positive effect on economic growth and high social return. In the various regional and global financial crises—from the Mexican Debt that contributed to toppling a US-backed dictatorship through the Asian Crisis of 1997, yet another Latin American crisis, the Russian crisis and the global financial crisis of 2007-2009 when our friends on Wall Street played fast and loose with other people’s money—remittances allowed Philippine governments to adopt

imperative and expensive protective measures to buffer the financial system. In all these crises, the Philippine economy performed the best in what was the worst of all possible situations. Remittances repeatedly saved the Philippines from the turmoil of international financial crises, which would have threatened the stability of its region. Without remittances we would not have today the fast-growing economy in the fastest-growing region in the world.

“Leveraging remittances and their investment potential is crucial to our fulfillment of the SDGs. More than shield against shenanigans, it is fuel for progress.

Our Philippine Development Plan recognizes that.

“The Plan provides that households receiving remittances need to be encouraged to put these to more productive use and invest cash transfers from abroad in business activities in the country. A broader base for micro, small and medium-sized

enterprises [MSMEs] development will thus be created.

“The Plan also strengthens the effectiveness of financial inclusion initiatives by focusing on the efficient delivery of microfinance and microinsurance products and services. These include economic and financial-literacy activities that will encourage Filipinos to participate in economic governance and harness the investment potential of remittances toward innovative financial instruments, such as personal equity and retirement funds or insurance products.

“To that end, our Central Bank has a flagship program on Diaspora Investment [DI] that develops, enhances and promotes new financial instruments and services for overseas Filipinos.

“Yet, the full development potential of remittances continues to be hampered by high transaction costs. If you go by the existing average transaction cost of 4.7 percent for remittances to the Philippines, then that translates to $1.55 billion lost to transaction fees. Consider for a moment the investment potential of that amount.

“New financial technolog y should help lower the transaction cost of remittances, but so far has not done so. This needs to be examined, along with data gaps on remittances that prevent evidencebased policy-making. This calls for strengthened collaboration with the private sector; particularly financial institutions and money transfer operators.

“That is why we strongly support Objective 20 of the draft Global Compact on Migration [GCM], as it gives the appropriate focus to

the importance of Target 10.c1 and of remittances to migration, and highlights the work of the Ifad 2 and the Global Forum on Remittances, Investment and Development [GFRID].

“That is also why we have initiated—together with Algeria, Guatemala and Madagascar—a UN General Assembly resolution declaring June 16 as International Family Remittances Day. We hope that you can all support this initiative. Those who gave their hard-earned wages for their countrymen’s safety deserve the latter’s highest praise, utmost gratitude and fullest support.”

A brilliant statement

A statement from another panel member emphasized the need for peer-to-peer discussions between regulatory agencies of the different countries involved in the migration process because anti-money laundering regulators, for example, add to the cost of the remittance transactions by adding layers of control to address nonexistent threats. That’s my take on his take, anyway. To which I added, speaking of peer-topeer discussions, I would strongly propose that we involve the real stakeholders in this process, which is to say the banks and specifically the owners of the big banks engaged in remittances. I am a firm believer in personal commitment enhanced by personal advocacy and initiated by personal involvement in the issue and I don’t think any parties can play as significant a role as the owners of banks. No, not corporate banking officers who will just use the occasion to junket at company expense and really have no say in See “Locsin,” A7

PCSO earned ₧20.8 billion in just 4 months Florante S. Solmerin

FACT IS MIGHT!

C

ongratulations to the two Lotto winners of P126.1 million of the Grand Lotto 6/55 last Saturday (May 19), the latest in the long list of millionaires produced by the Philippine Charity Sweepstakes Office (PCSO).

The winning numbers are 12-5510-05-43-19.

The two winners bought their tickets from two different Lotto outlets in Binan and Calauan in Laguna. May they use their winnings wisely to better their lives. May they

also continue to exhibit charity in all that they do.

For the information of the public, from the P20 that you pay for your jackpot ticket, P6 automatically goes to the Charity fund of PCSO. Whether you win or not, you are assured

that there is an existing fund that you and other people may benefit from in times of need for financial assistance for matters, such as medication, hospitalization, operation, dialysis treatment, chemotherapy and many others that form part of PCSO’s charitable services.

PCSO’s funds do not come from the people’s tax and it is not included in the General Appropriations Act (GAA). The agency’s funds are solely derived from its gaming activities or the patrons of Lotto, Digit Games, Keno, Sweepstakes and the flourishing Small Town Lottery (STL).

To encourage bettors, 55 percent of the total fund earned by PCSO from its lottery games are allotted for the Prize fund, 15 percent for the agency’s Operating fund and 30 percent for the Charity fund.

In April PCSO’s revenue from its games has already reached P20.8 billion. It earned nearly P8 billion from STL alone.

If this pattern of revenue generation continues under the leadership of PCSO General Manager Alexander F. “Mandirigma” Balutan and Chairman Anselmo Simeon Pinili, it is likely that earnings will exceed P55 billion for 2018.

As Balutan said, “leadership by example” together with bravery, compassion and transparency is needed by the agency to help our countrymen in need, especially the less fortunate ones. nnn

Once again, we would like to remind everyone to be cautious and not to trust social-media pages that use See “Solmerin,” A7

Opinion BusinessMirror

www.businessmirror.com.ph

Co-op building, fuel discounts can prevent fare hikes Michael Makabenta Alunan

on the contrary

D

ue to rising fuel prices, jeepney transport groups are seeking fare hikes, which must be addressed urgently through systematic targeted fuel discounts and a fast-track cooperative-building program for multiple benefits. Otherwise, allowing fare hikes will trigger disastrous consequences like a price spiral on all commodities on top of an existing inflationary situation that could worsen the poverty problem. n A demand from the man on the wheel? Rightfully, the driver on the wheel deserves some relief, as he is hit the most with fuel-price hikes, while his operator is not affected, as he gets a “fixed boundary income” regardless of increasing fuel prices or whether the driver has fewer passengers or not.

Operators can only justify increases in their boundary income during fare hikes, and rightfully so, perhaps. Thus, jeepney groups seeking fare hikes are led by their operators, who want to increase by 25 percent the minimum fares from the current P8 to P10, plus P2 every succeeding kilometer and an additional P1 price surge during rush hours.

A driver cannot complain much, as he does not own the means of livelihood—the jeepney, which he shares with another driver for an operating time of 12 to 16 hours a day.

He also faces mounting daily traffic problems as more private cars are sold every year. Last year 415,000

four-wheeled vehicles, mostly cars, were sold, a bulk of which ended up in Metro Manila.

Few will deserve fuel discounts.

Some free-market purist friends abhor giving out subsidies, claiming this only distorts market pricing. On the contrary, government intervention is necessary for free markets to operate effectively and ironically, if we go by what increasingly popular economist Ha-Joon Chang says in his book 23 Things They Don’t Tell You About Capitalism.

Records show jeepneys only account for 4 percent of total vehicles, so subsidizing this few with substantive fuel discounts will not really be much of a burden. In short, it is wiser to offer even a temporary substantive but “targeted fuel-discount system” solely for jeepneys, as they serve the poor, whose situation will worsen with fare hikes.

Perhaps, both the government and oil companies can have a cosharing arrangement. The government raises so much in excise taxes

Award-winning technologies MAIL

This refers to the BusinessMirror article “Invention program reaches Tawi-Tawi youth” published on April 29, 2018.

The Technology Application and Promotion Institute of the Department of Science and Technology (DOST-Tapi) would like to convey our appreciation to the BusinessMirror for complementing the news article we had for the two winning technologies in the 45th International Exhibitions of Inventions in Geneva, Switzerland, namely: Biotek-M Dengue Aqua Kit and Portable Smart Surface System.

We would like to inform you

Solmerin. . .

continued from A6

the PCSO’s logo and name without the agency’s permission to deceive the public. There are people, even ones belonging to the media, who immediately believe what they hear or read. They are quick to criticize the agency without verifying the socialmedia page’s reliability.

The PCSO’s official web site is www.pcso.gov.ph. The PCSO’s official social-media pages under the Office of the General Manager are Mandirigma Kawanggawa (Facebook Page) and http://facebook.com/ mandirigma83 (Facebook Community Page). We are also on Twitter at @pcso_ogm The PCSO is only one of the many entities that crooks are fond of using in creating fraudulent pages. Their objective is simple—to mislead.

An example would be giving the

that DOST-Tapi, as the marketing arm of the DOST, is in charge with the promotion of technologies, and as such, we have several accomplishments, as well as activities, lined up for the year that may be worthy of publication. You may wish to refer to our web site tapi. dost.gov.ph for news articles and updates of activities. Please feel free to lift the featured news. However, we would like to respectfully request that you make reference to the DOST-Tapi official web site and cite the same in your future press releases.

For any information regarding DOST-Tapi’s activities, programs and projects, you may wish to contact Ms. Pierre Sonia S. de la Corte and Mr. Jund Rian A. Doringo at 838-1127 or 837-2071 locals 2167/2157, or e-mail us at tapi.dost@yahoo.com or acu.tapi@ qmail.com .

Edgar I. Garcia Director Department of Science and Technology Technology Application and Promotion Institute “winning combination numbers” of the PCSO’s lottery games, such as Suertres, but they use the term Swertres, the illegal gambling game based from PCSO gaming products. This modus operandi usually takes place through text messages, and many people fall prey into deceptions, such as the simple request for load credits, or they are asked to deposit money in a bank account in exchange for the “winning” numbers. This is foolish!

Another kind of deception is the creation of social-media pages using the PCSO logo and name without the agency’s permission. The racketeers post about raffles, giveaways of cars, house and lots, gadgets and others.

Others also create a social-media page using the PCSO’s name and logo to defame the agency. Pages like these do not garner likes and followers, as their ill intentions are instantly evident.

E-mail: fetad@yahoo.com.

from fuel, and can thus absorb the costs of these discounts.

Similarly, if oil firms can give 5 percent or about P3 per liter now in gasoline discounts through creditcard promo tie-ups, for instance, why not much more for jeepneys. They can add up more discounts as part of their corporate social responsibility, this time giving back to the sector, which has been buying fuel, oil and lubricants from them without any institutionalized patronage refund in the form of meaningful services. n Co-ops gain P5 per liter in VAT exempts alone. A more sustainable and lasting price-absorbing strategy is for the government to fast-track the transformation of transport groups (jeepneys, tricycles and UV express) into cooperatives to optimize the benefits they can get from cooperatives.

Once converted into cooperatives, these jeepney groups can enjoy taxexemptions. Thus, on value-added tax exemptions alone, at current diesel prices of P42 per liter, exemptions from the 12-percent VAT alone already amounts to about P5 per liter, which already approximates Piston’s earlier demand for a P6-per-liter discount, or better than Pasang Masda’s earlier demand for a P4 or 50-percent increase in the minimum fares, from P8 to P12.

A fare hike will trigger demands from labor groups, etc., and worsen poverty, particularly among poor residents residing in the city outskirts.

Effectively, what they earn just goes all to food and transport and nothing left for other needs. n P3 per liter rebates through co-ops. Oil firms are willing to set up gas stations for transport groups

and offer additional P3 per liter in price rebates, provided transport groups transformed first into cooperatives.

Some oil companies prefer cooperatives owing to their higher repayment track record of 97 percent, compared to the 32 percent low repayment rates of jeepney associations in past government financing programs. The gas stations can be built to service clusters of transport cooperatives Worse, some oil companies had past experiences with transport groups that did not only take their due margins, which is justified, but did not return the entire capital costs of fuel inventory, much more failed to allow the recovery of the capital invested in building the gasoline stations. n P4 to P12 per liter more in savings from maintenance. The Department of Transportation’s transport modernization mandates a “clean fleet management,” which necessitates clean air emissions and consolidation.

With a package of interventions through best maintenance practices and a combination of technologies, a minimum of 10-percent to 20-percent increase in mileage or fuel savings equivalent to over P3 to P7 per liter can easily be realized.

Pasig-Mandaluyong- Quiapo Jeepney cooperative Chairman Ruben Vasquez and Manager Sonny Letrodo observe that they spend 6.8 liters per round trip of 34 kilometers, or 5 km per liter, but with maintenance, mileage improved to 5.6 liters per round trip, or 17.65-percent mileage increase to 6.07 km per liter.

Proper preventive maintenance

Wednesday, May 23, 2018 A7

by itself will not only result in fuel savings but will also avoid the costlier maintenance expenses once engines break down from passenger overload and long 14-hour operating time. n No DOTr maintenance policy yet. Although maintenance is vital, more so as jeepneys still believe in many myths and engine malpractices that can only be corrected through education, the DOTr does not have yet a maintenance policy. And yet, Section 21 of the Clean Air Act mandates the DOTr to implement emission standards through inspection and maintenance. It already has the Motor Vehicle Inspection Service, but has no maintenance policy or program.

Some DOTr officials have long been ignoring consulting with knowledgeable technical people immersed on the ground with mechanics who have more superior practical know-how than people in academe.

One such fellow is Gerry Manila from another jeepney cooperative still undergoing application, who was exposed as early as 9 years old and could even overhaul a jeepney engine when he was 12.

Without preventive maintenance, jeepneys undergoing 14 hours of average operating time and high passenger loads are likely to suffer breakdowns often, thus affecting daily amortizations of the modernization financing. This is causing shivers to banks as vehicle manufacturers can only offer warranties for three years, leaving a gap of four years against the financing of seven years.

In short, maintenance, which is still the missing link, will address this huge warranty gap. The costs of warranties can be lowered to be

limited only to the “friction zones” like engine wear and tear. The body, even if exposed to rain, sun and wind, will not break down, more so the underchassis that can even last 50 to 100 years, so focus must only be on engine maintenance, which will cost probably no more than P100,000 to cover the four-year warranty gap. In short, the cost of maintenance can be inputted into the financing equation to guarantee the ideal conditions all the way, even beyond amortization periods.

Cooperative building must therefore be fast-tracked. This brings us to the strategic importance of cooperatives for jeepneys, to maximize all the benefits and privileges by riding on modernization. Unfortunately, there are still too many policy and procedural barriers to Coop entry, which can be resolved through workshop technical consultations, which concerned groups have been requesting, but often ignored. n Transport research continues. These transport groups are willing to learn and experiment on their own, at their cost, without government help. These efforts are their contributions to the unimplemented Section 15 of the Clean Air Act on Pollution Control Research, the results of which are the supposed content of seminars in compliance with Section 11, mandating the government to make available all the information, techniques, maintenance practices and technologies on pollution control. The same seminars are supposedly required under Section 46 to complement penalties on smokebelching violators.

E-mail: mikealunan@yahoo.com.

Global Forum on Transparency and Exchange of Information for Tax Purposes

Addressing tax havens

Information. Compliance with these agreements is monitored through the process of peer review. Phase One of this peer review is the enactment of local legislation to implement this exchange of information on request. Phase Two is the actual exchange of information in practice.

Of course, there are other exchange of information (EOI) agreements and Tax Information Exchange Agreements in place with other jurisdictions, mostly bilateral international agreements. The United States, for its own purposes, adopted the Foreign Account Tax Compliance Act, which requires foreign financial institutions to report directly to the Internal Revenue Service financial transactions of US persons.

Accordingly, the Philippines adopted Republic Act 10021 on March 8, 2010, otherwise known as the “Exchange of Information on Tax Matters Act of 2009.” In its declared policy, “the government shall comply with or commit

to the internationally agreed tax standards required for the exchange of tax information with its tax treaty partners to help combat international tax evasion and avoidance and to help address tax concerns that affect international trade and investment.

The government shall likewise adopt measures and procedures to enhance cooperation with other countries in the efficient collection of taxes, consistent with the international understanding to ensure the payment of taxes due the respective taxing jurisdictions of the treaty partners.”

Under this law, the Commissioner of Internal Revenue is “authorized to inquire into the bank deposits and other related information held by financial institutions of a specific taxpayer or taxpayers subject of a request for the supply of tax information from a foreign tax authority pursuant to an international convention or agreement on tax matters to which the Philippines is a signatory” (Section 3). This provision establishes another exemption from the bank secrecy law.

“Once the bank account information is shared with the foreign partner, the BIR [Bureau of Internal Revenue] is able to use the information for its own domestic purposes.”

Under Section 4, foreign tax authorities may also have access to income-tax returns of specific taxpayers subject of a request for exchange of information pursuant to an international convention on tax matters to which the Philippines is a signatory. Thus, an EOI Unit is in place within the BIR. The Philippines has been rated as “Largely Compliant” during the 2015 Ratings.

frankly, diplomats like ourselves do not have two dimes to rub together on issues involving huge fund transfers, and our reports to capital are hardly ever read and certainly never influence policy outside foreign affairs. This idea of expanding the dialogue to include those who frankly are the only ones with the money to talk excited everyone. So the big banking families should be getting invitations to involve themselves in global financial issues that, frankly,

the impecunious should stay out of.

There you go.

After the adjournment, I talked to panelists about the new generation of banking owners I have observed in the Philippines—young, energetic, full of ideas and open to more—who should be involved rather than impecunious diplomats. They agreed.

If you don’t have money, shut the f__k up. Experts you can hire to tutor you. The ones with the money should speak. Major developments

in migrant remittances, one panelist observed regarding his country, were unilaterally done by the big guns, the owners and not thinkers, least of all diplomats.

Dennis B. Funa

INSURANCE FORUM

O

ne of the international participations of the Insurance Commission is the Global Forum on Transparency and Exchange of Information for Tax Purposes, under the auspices of the Department of Finance. The Global Forum is a multilateral framework and an initiative to address tax-related transparency and information exchange among the different tax jurisdictions.

It concerns itself with tax evasion, tax havens, offshore financial centers, tax information exchanges, double taxation and money laundering. It was founded in 2000 with 32 member jurisdictions and reorganized in September 2009 with 90 member jurisdictions, following a call from Group of 20 to strengthen the standards. It operates under the auspices of the Organisation for Economic Co-operation and Development (OECD). As of 2018, it has 147 member jurisdictions, the European Union and 15 observer intergovernmental organizations. Among the observers are the Asian Development Bank, the International Monetary Fund, and the World Bank. The idea was originally conceived during the 1996 G7 Lyon Summit to address harmful tax practices.

The Global Forum has adopted two agreements on exchange of information for tax purposes, the Exchange of Information on Request and the Automatic Exchange of

Locsin. . .

continued from A6

bank policies, we should engage the owners—the big guys and gals. And while we need peer-to-peer regulators to be engaged, as well, I would recommend this to be limited to central bank governors and finance ministers, and none of their underlings who are equally powerless and insignificant. I observed that,

According to a 1998 OECD report, tax havens “erode the tax base of other countries and undermine the fairness of tax systems, diminishing global welfare.” It also abets tax evasion. Some also offer financial secrecy where assets and income can be hidden. A tax haven is “a country that offers foreign individuals and businesses little or no tax liability. Tax havens also share limited or no financial information with foreign tax authorities. Tax havens do not require residency or business presence for individuals and businesses to benefit from their tax policies.” On the other hand, tax haven status benefits the host country “by drawing capital to their banks and financial institutions, which can form the foundation of a thriving financial sector.” OECD has identified three indicators of a tax haven: a) no or nominal taxes; b) protection of personal financial information; and c) lack of transparency. To illustrate, the US corporatetax rates have been reduced to 21 percent under the Tax Cuts and Jobs Act of 2017. And yet, tax avoidance remains a temptation where the taxes in tax havens may be in the single digits.

Some well-known tax havens include the Bahamas, Belize, the British Virgin Islands, the Cayman Islands, Monaco, the Isle of Man, Mauritius and the Channel Islands.

Dennis B. Funa is the current insurance commissioner. Funa was appointed by President Duterte as the new insurance commissioner in December 2016.

E-mail: dennisfuna@yahoo.com.

1. Target 10.c by 2030, reduce to less than 3 percent the transaction costs of migrant remittances and eliminate remittance corridors with costs higher than 5 percent.

2. International Fund on Agriculture and Development.

2nd Front Page BusinessMirror

A8 Wednesday, May 23, 2018

House panel okays ₧1.16-B fund for Dengvaxia vaccinees’ needs

T

By Jovee Marie N. dela Cruz

@joveemarie

HE House Committee on Appropriations on Tuesday approved the P1.161billion supplemental budget for 2018 for those who received Dengvaxia, as the government’s way of mitigating the possible health damage to them of the controversial vaccine under a massive, hasty program that is now the subject of a criminal case.

Sen. Richard J. Gordon, chairman of the Blue Ribbon Committee, shows the panel report on the Dengvaxia issue at a recent Kapihan sa Senado forum. ROY DOMINGO

Rep. Karlo Alexei B. Nograles of the First District of Davao, panel chairman, said the supplemental budget will cover much-needed stand-by medical aid for Dengvaxia vaccinees victims.

According to Nograles, tapped for the supplemental budget is the entirety of the money refunded to the Philippine government

by French pharmaceutical firm Sanofi Pasteur, makers of the controversial anti-dengue vaccine.

“This committee will send it to the

floor...I plan to have this approved on the floor by next week, for second and third reading. We still have to send it to the Senate,” Nograles said.

The lower chamber plans to approve House Bill (HB) 7449, or the proposed Supplemental Budget for 2018, using Sanofi ’s refund for the unused vials of the Dengvaxia by the end of the month, or before the 17th Congress concludes its second regular session and goes on break on May 30.

T he supplement a l budget, based on the proposal submitted by the Department of Health (DOH), shall fund the following programs or activities: P945.82

million for the medical assistance program, which includes a s si st a nce for ad m it te d pa tients in hospitals and for outpatients; P78.29 million for the assessment and monitoring of Dengvaxia vaccinees; P70 million for the supplies and medicine; and P67.59 million for human resource deployment.

The DOH said their allocation of P945.8 million for medical assistance is enough to last four to five years, covering measures meant to take care of vaccinees

end palay procurement target of 300,000 MT. However, the Department of Budget and Management has only given the NFA a palay procurement funding of about P1.7 billion, just enough to purchase 100,000 MT, according to officials.

Since the start of May, the NFA has only been able to purchase about 8,394 50-kilogram bags of palay—only about 2 percent of its target 509,900 50-kilogram bags for the month.

Historical data from the NFA showed that the grains’ agency’s palay procurement from January to May may sink to a six-year low level.

The NFA posted the lowest five-month palay procurement in 2014, when it was only able to buy about 7,329 MT of palay as traders dangled high buying prices amid lower production caused by El Niño. “If we are able to increase our buying price to P25 then we can exceed our high-end procurement targets of 300,000 metric tons or even hit around 500,00 metric tons,” the source said.

“When we adjusted our palay buying price in 2008 from P11 to P17, we were able to buy more than 600,000 metric tons. Our warehouses were overflowing. So, once we increase our buying price even at just P20 or P22, for sure we will be able to procure 100,000 metric tons

of palay,” the source added.

At a 300,000-MT palay procurement target, the NFA plans to purchase about 178,190 MT during the country’s main harvest seasons which runs from September to December.

The source revealed that the NFA projects that the average farm-gate price of palay would remain above the P17-per-kilogram level until the end of the year.

“We are doing ever ything just to procure. We are even doing outside-the-box strategy. But we are unable to purchase a lot of volume because of uncompetitive price,” the source said.

“The price is the main consideration of our farmers. The current ex-farm price averages more or less around P20 to P21 per kilogram, which is way higher than our current P17 buying price. We can only buy palay from far-flung areas and in small barangays,” the source added.

The average farm-gate price of unmilled rice continued to go up and rose to a 32-month high of P20.96-per-kilogram level during the first week of May, according to data from the Philippine Statistics Authority (PSA).

Figures from the PSA show that the average farm-gate price of the staple during the period was 9.05 percent higher than the previous year’s price of P19.22 per kg.

Priority

NFA. . .

Continued from A1

“We proposed to increase it to P25 but it is up to the NFA Council if they want to trim it down to P20 or P22. But we would really push for an increase even if it is minimal,” the source added. In an interview with reporters on Tuesday, NFA Spokesman Rex Estoperez revealed that the NFA’s current rice stockpile has been totally wiped out.

“We are zero,” Estoperez said when asked on the latest status of the NFA’s rice inventory.

“We have no local procurement right now because of the [farm-gate] prices.

We haven’t received yet any additional increases in our support prices. Therefore, we are still buying at P17, while farmers are opting to sell their harvest to the traders,” Estoperez explained.

Data obtained by the B usiness M irror showed that as of May 17 the NFA has only purchased 65,001 50-kilogram bags of palay, or about 3,250.05 metric tons (MT) since the start of the year.

The figure is just 3.25 percent of the NFA’s low-end palay procurement target for the year of 100,000 MT. The NFA has set a high-

“This committee will send it [proposed supplemental budget] to the floor by next week, for second and third reading.”

—Nograles

Despite the depletion of their buffer stock, Estoperez said the NFA will still give priority to resuming the sale of affordable rice in the local market to arrest the increasing prices of the staple, as ordered by President Duterte, once its imports arrive.

“That is our priority, which was the instruction of the President to the NFA administrator—to stabilize the price and supply in the market,”he said.“Once we stabilize the prices in the market then that is the time that we will establish our buffer stock.”

Estoperez said they expect retail prices of rice in the domestic market to decline once the NFA resumes selling their P27- and P32-per-kg variants. “Definitely, [the prices will decline] once our imports arrive because we will sell the volume immediately to the market,” he said.

Bidding

Meanwhile, five Southeast Asian companies are likely to secure the contract for supply of 250,000 MT of rice as Manila seeks to revitalize its depleted stockpile.

The NFA made the pronouncement following an open-tender bidding in Quezon City, where the majority of the winning bidders came from Thailand.

Four Thai rice exporters were prospective

who experience adverse effects.

The health department said the Dengvaxia ID cards being earmarked in the supplemental budget will be sturdier than the Dengvaxia cards released by the agency in January.

In April 2016 the Philippines became the first country in the world to launch a mass antideng ue i noc u l at ion prog ra m using Deng va xia, a relatively new drug. More than 800,000 schoolchildren were covered by the program, which the Aquino administration justified as necessary, amid the rapid rise in dengue incidence.

However, in November 2017, Sanofi revealed in a report to regulators that further assessment of the trials had shown t h at wh i le Deng v a x i a i s ef fec t ive i n prevent i ng repeat cases among those previously aff licted with dengue, it could have serious adverse effects on the sero-negatives—those who never had dengue—once they do get infected with the mosquitoborne disease.

The program was suspended after Sanofi admitted the risks of a severe case and hospitalization could last up to the fifth year after immunization. suppliers for six of the seven lots the NFA auctioned off, which reached a total 212,500 MT. These companies include: Asia Golden Rice Co. Ltd., which may supply a total of 58,500 MT after becoming the lowest bidder for Lots 2 (25,000 MT) and 3 (33,500 MT) at $461.75 per MT and $465.04 per MT offers, respectively while Ponglarp Co. Ltd. could be the supplier for Lot 4, which is 36,000 MT, after offering $463.5 per MT. Furthermore, Capital Cereals Co. Ltd. may supply a total of 43,000 MT of rice after giving the lowest offer for Lots 5 (18,000 MT) and 6 (25,000 MT) at $463.45 per MT and $463.1 per MT bids, respectively.

Meanwhile, Thai Hua Co. Ltd. could be declared the supplier for the 75,000-MT Lot 7, which is to be discharged at Manila port, after offering $463.1 per MT. On the other hand, Singaporean firm Olam International Ltd. bid out the lowest offer for Lot 1 (37,500 MT) at $463.1 per MT. The NFA pegged the reference price per metric ton at $498.25 per MT. It allotted P6.5 billion for the 250,000-MT open tender.

The prospective winning bidders will be subjected to a post-qualification evaluation this week to determine the final winning bidders. The winning bidders would then be issued a notice of award and notice to proceed next week.

www.businessmirror.com.ph

TRAIN 2. . .

Continued from A1

Terosa said the framing of TRAIN 2 as being pro-rich could stem from the fact that the cut in corporate income taxes will not directly benefit workers but only companies.

“It can be considered pro-rich becauseTRAIN 2, particularly the reduction of corporate income tax, directly benefits capitalists and corporate owners.

The poor and the unemployed, however, can indirectly benefit if jobs and interrelated activities will be spurred by TRAIN 2,” Terosa said. “TRAIN 2 will directly benefit investors, businessmen, capitalists, and the like. The rationalization of tax incentives, even if non-negotiable, can lead to job losses particularly the jobs of the less economically privileged,” he added.

Still, he agreed with other economists, including Socioeconomic Planning Secretary Ernesto M. Pernia, that while a lower CIT could cut government’s revenues, such can be compensated for by the rationalization of fiscal incentives. This means even government spending for basic and social services, including its ambitious infrastructure program in the medium term, will not suffer fiscal constraints with the reduction in corporate taxes.

“The government plans to fill the gap with loans given the better credit standing of the country. Also, the government hopes that lower corporate taxes will spur more activities and consequently more revenues from taxes in those activities,” Terosa said.

Rationalization of incentives

Diosana said the rationalization of tax incentives could also encourage companies to hire regular employees to continue receiving incentives, which AER proposes should be included in the criteria for granting incentives nationwide.

These can be accompanied by other performance indicators such as adoption of inclusive business activities and value-added production, as well as using cleaner, energysaving, and other relevant new technology.

Job creation in relation to the rationalization of tax incentives is also something that even Neda Undersecretary for Planning and Policy Rosemarie G. Edillon supported.

In an interview on the sidelines of the House committee hearing, Edillon said the removal of incentives will not lead to significant job losses, as only 4,000 out of 900,000 establishments are accessing these incentives.

Based on partial information submitted to the Neda, these firms generated some 2.5 million jobs in 2015. However, based on the amount of wages paid, the Neda estimated that this only makes up 6.3 percent of total compensation of all employees recorded in 2015.

“There will be more firms who will be motivated to expand because of the rationalization of incentives which only 4,000 firms use. Job generation can even be turned into a performance-based indicator moving forward,” Edillon said.

Trade Secretary Ramon M. Lopez also told reporters on the sidelines of the hearing that incentives are not the only reason the country attracts investments. The country has a highly educated and talented work force, which many firms here and abroad consider as assets, he said.

In fact, despite granting incentives for the past 50 years, the Philippines remains a laggard compared to its neighbors in the Asean in terms of attracting foreign direct investments, Finance Undersecretary Karl Kendrick T. Chua said.

Culinary tourism takes a hit as probe unearths how Buhay Carinderia ‘redefined’ TPB approval route Continued from A1

does not have sub-dealers selling at lower prices and for which no suitable substitute can be obtained at more advantageous terms to the government.”

But under the same law, the supplier is also required to post a performance bond “prior to the signing of the contract...as a measure of guarantee for the faithful performance of and compliance with his obligations under the contract...in such form and amount as specified in the Bidding Documents.”

Government sources familiar with the project explained that what made Buhay Carinderia Redefined possible was TPB Board Resolution 157, series of 2018, which authorized and approved the “allocation and disbursement of the budget for the Phase 1 of the Project amounting to 80 million plus value-added tax (VAT ) and other taxes based on savings to the 2017 corporate operating budget.” The board resolution, which the sources stressed was

prepared by the TPB’s Legal Department, was adopted on March 14, 2018, and signed by then-Secretary Wanda Corazon T. Teo, chairman of the TPB; COO Montano; lawyer Mark Steven Pastor, representing the Department of Transportation; Consul General Leo M. Herrera-Lim of the Department of Foreign Affairs; Trade Undersecretary Nora K. Terrado; board member Vanessa L. Suatengco [representing the accommodations sector]; and board member Eduardo M. Pelaez (tourism estates sector).

MOA signed but not ratified by board

Under present rules followed by the TPB, a board resolution is approved by “majority plus one ” of the members, and since there are 11 members of the board (five government representatives including the Secretary, and five private sector representatives), the board resolution was carried because six of them approved it. Prior to

Montano’s term of office, however, a government source pointed out, the TPB board “valued more the privatesector signatures,” when approving a project or sponsorship. In the case of Buhay Carinderia, only two privatesector representatives signed the board resolution.

An interesting sidelight to this is the disclosure of one board member who said, “when I started questioning the project, [name of board official] told me, ‘if you won’t sign it, don’t attend the [board] meeting.’ And so I didn’t.” Said board member asked this reporter not to identify the board official, who he said appeared furious that he was questioning the project.

After the present board approved the project, TPB lawyers drew up a memorandum of agreement between the agency and Marylindbert. The MOA was signed by Montano and Legaspi, while Garate of TPB’s finance department certified that P80 million in funds were available for the project.

The MOA was dated March 15, 2018,

a day after the TPB board approved the project through a resolution.

TPB sources confirmed, however, the MOA between the agency and Marylindbert itself. was not approved by its board. “The contract will be subject for audit by COA [Commission on Audit], at the same time, the implementation of the project,” said one source. But a separate source pointed out, under the former COO (Domingo Ramon C. Enerio III), the board was more strict when it came to approving projects. “The board approves the policy framework and budget first for the project. Then it ratifies the contract also,” the source said.

The same source pointed out that Marylindbert failed to post a performance bond before it undertook the project, in direct violation of government’s procurement law. The event organizer received three checks amounting to P80.64 million, two of which were released before the project was launched in public; then the third check, six days after the project launch.

The disbursements also contravened the provisions of the MOA, which provided that the TPB would disburse the P80 million in four tranches: P12 million plus valueadded tax (VAT) upon signing the contract and submission of the “calendar of events and media plan” [or 15 percent of P80 million plus VAT for the first tranche; P28 million plus VAT, upon submission of the “program flow, program content, exhibit layout, content mechanics and communications plan [or 35 percent of P80 million plus VAT]” for the second tranche; P32 million plus VAT upon submission of “final creatives for merchandising [or 40 percent of P80 million]” for the third tranche; and lastly, P8 million plus VAT upon submission of “end of event/project report [or 10 percent of P80 million plus VAT].”

The bulk of the P80-million project budget was accounted for by media guesting on radio and TV (P10 million), as well as “PR feature articles in major broadsheets and magazines” (P40.15

million). The rest of the budget would go to“D-Day staging two days [eyeballs to eyeballs] for P5.75 million, a regional audiovisual production “to be included in the 12 other regions” [P4.35 million], AVP “to be included in the other Major TV Production for airing in December and major TV networks and TFC” for P5.35 million, among others.

And yet, aside from the media write-ups and airings on network TV news about the launch of the Buhay Carinderia Redefined project launch in April, none of the above had yet to be completed, which makes the release of the entire amount for the project even more suspicious.

This kind of irregularity, current DOT chief Romulo Puyat said, was something she was not “comfortable” with. And as such, she has requested the COA main office, in a letter to its chairman Michael G. Aquino, to look into Buhay Carinderia Redefined and other TPB projects. At the moment, all TPB projects are suspended until the COA issues a clearance.