Businessmirror September 06, 2019

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A broader look at today’s business

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Friday, September 6, 2019 Vol. 14 No. 331

Cheaper food to pull down inflation–PSA 1.7% I By Cai U. Ordinario

@caiordinario

NFLATION could decelerate further in the coming months due largely to the expected drop in rice prices and base effects, the government and local economists said on Thursday.

On Thursday, PSA data showed that inflation slowed to a 35-month low of 1.7 percent in August. It is the slowest since September 2016, when inflation was at the same level. Barring shocks, National Statistician and Civil Registrar Dennis S. Mapa told reporters in a news

briefing that inflation could remain at this level in the coming months. “Our expectation is that [the rate] will most probably be around 1.7 percent [and] it could still go down. Of course, depending on the shocks, it could go up. But our assessment is that it would normalize

at this level,” Mapa said. Ateneo Center for Economic Research and Development Director Alvin P. Ang said inflation could still go down to around 1 percent in the next two months. It can be noted that inflation peaked in September and October 2018 at 6.7 percent. This could

Inflation for August, as reported by the PSA. It is a 35-month low—the slowest since September 2016, when inflation was at the same level usher in high base effects and lead to lower inflation rates. Ang said, however, that the Philippines is not in danger of experiencing deflation or negative inflation. He also said low inflation will not have a negative impact on GDP. See “Inflation,” A2

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BIENNIAL REVIEW OF TAX PERKS PITCHED BY D.O.F. By Bernadette D. Nicolas @BNicolasBM

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AX incentives given to companies must be reviewed every two years through a system like the regular mining audits of Mining Industry Coordinating Council (MICC), the Department of Finance (DOF) said. The DOF said on Thursday it is necessary to have a system like MICC, which had made it a practice to conduct regular audits of mining companies once every two years beginning 2017 since the country has been “too generous” in giving away tax incentives to a select group of companies. “Incentives are called as such because they are there ostensibly to encourage firms to operate in an industry we want to develop, reinvest their earnings, train their people, create quality jobs, invest in less developed areas or places recovering from conflict or calamity, and

House OKs Package 4 of CTRP; panel clears property valuation bill By Jovee Marie N. dela Cruz

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@joveemarie

HE House of Representatives has approved on second reading Package 4 of the Duterte administration’s Comprehensive Tax Reform Program (CTRP), governing taxes on so-called passive income and those imposed on financial intermediaries and the products they offer: on savings and investments; and debt and equity instruments. The measure is expected to be approved on third and final reading next week. Also late Wednesday, the House Committee on Government Reorganization endorsed for plenary

PESO EXCHANGE RATES n

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Pifita a blow for equity

See “CTRP,” A2

See “Tax perks,” A8

Govt infra delays seen in VoPI’s July decline

approval the CTRP’s Package 3 reforming real property valuation. This, explained Finance Assistant Secretary Antonio Lambino II at the BusinessMirror Coffee Club Forum on Thursday, was meant to put on the national government the political burden of revising upward the property valuations while allowing local government units (LGUs) to derive profit from such. THOUGH viva voce voting, members of the lower chamber passed late Wednesday on second reading the proposed Passive Income and Financial Intermediary Taxation

so on,” said Finance Secretary Carlos G. Dominguez III in a statement. “Every peso granted as a tax incentive is a peso off the budget that could have otherwise been spent on infrastructure, health, education or social protection programs that benefit all, and not just for a few,” he said. “It, thus, behooves the government to perform a regular audit of these companies to see if these beneficiary-firms have indeed made use of their incentives to make an overwhelmingly positive impact on society. Otherwise, the government would not be doing its job of finding out on a regular basis if these incentives are being put to good use by the favored companies.” Finance Assistant Secretary Antonio Joselito G. Lambino II explained that the DOF wanted this kind of review every two years in order to make the modern incentive system performance-based.

TAXING JOB Antonio Joselito Lambino II, assistant secretary at the Department of Finance, gestures as he fields questions on tax reforms and the impact of the rice trade liberalization, among others, at the BusinessMirror Coffee Club Forum in Makati City on Thursday. Listening is BusinessMirror Publisher T. Anthony C. Cabangon. See related stories on the Comprehensive Tax Reform Program (CTRP) at left and on page A8; and on rice trade liberalization on A5. ROY DOMINGO

ELAYS suffered by the government’s infrastructure projects in the first semester caused the output of the manufacturing sector to contract in July 2019, according to the National Economic and Development Authority (Neda). Data released by the Philippine Statistics Authority (PSA) on Thursday showed the manufacturing sector’s Volume of Production Index (VoPI) contracted 8.1 percent in July 2019 from a 10.1-percent growth in July 2018. The Value of Production Index (VaPI) also contracted 7.3 percent in July 2019 from a growth of 11.1

US 52.1290 n JAPAN 0.4900 n UK 63.8841 n HK 6.6488 n CHINA 7.2959 n SINGAPORE 37.6600 n AUSTRALIA 35.4269 n EU 57.5296 n SAUDI ARABIA 13.8988

See “Infra,” A8

Source: BSP (5 September 2019 )


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