“She’s got experience, but it’s bad experience.”—Republican Donald Trump, making the case against Democratic rival Hillary Clinton that the former senator and secretary of state is little more than a career politician who has squandered opportunities to address the domestic and international problems she’s now pledging to tackle as president. AP
media partner of the year
United nations
2015 environmental Media Award leadership award 2008
“There’s something he’s hiding.”—Hillary Clinton, on Donald Trump’s refusal to release his tax returns, breaking with decades of presidential campaign tradition. The Republican said he can’t release his tax returns because he is being audited. AP
“Let no one doubt that we are going into politics without weapons.”— Rodrigo Londono, top commander of the Revolutionary Armed Forces of Colombia, after the leftist rebel group formally signed a peace accord with the Colombian government. AP
BusinessMirror A broader look at today’s business
www.businessmirror.com.ph
n
Thursday, September 29, 2016 Vol. 11 No. 355
MINING FIRMS SAY USE OF TOTAL ECONOMIC VALUE TOOL ILLEGAL
DENR shifting to TEV in assessing miners
T
INSIDE
By Jonathan L. Mayuga
@jonlmayuga
he Department of Environment and Natural Resources (DENR) would soon look into the merits of mining projects using the Total Economic Value (TEV) tool, although, this early, miners are already saying this is against the law.
Cash and carry: all you need to know about travel money
P25.00 nationwide | 4 sections 28 pages | 7 days a week
Shimon Peres witnessed Israel’s history, and shaped it
Bravo: “Under the Constitution, you cannot impair contract obligations.”
Continued on A2
Environment Secretary Regina Paz L. Lopez announced the planned shift to the TEV, after she revealed that 20 more operating mines face suspension based on the findings and recommendation of the audit See “DENR,” A2
IN this June 30, 1981, file photo, Labor Party leader Shimon Peres casts his vote near his house in Ramat Aviv. AP/Castelnuovo
life
A
t every corner of Israel’s tumultuous history, Shimon Peres was there. He was a young aide to the nation’s founding fathers when the country declared independence in 1948, and he played a key role in turning Israel into a military power. He was part of the negotiations that sealed the first Israeli-Palestinian peace accord, garnering a Nobel Peace Prize. He was welcomed like royalty in world capitals.
d1
dustin johnson: most feared player at ryder cup
See “Peres,” A2
Shimon Peres Former Israeli president TIMELINE
1934- Szymon Perski is
born in Vishneva, now Belarus
1947- Peres joins Haganah, a
Jewish paramilitary organization, the predecessor to the IDF. He serves as the head of Israel’s navy during and after the War of Independence (1948-49)
sports
c1
Print Philippines 2016 Printing Industries Association of the Philippines (PIAP) opens the printing exhibit and conference “Print Philippines 2016” at the
SMX Convention Center in Pasay City. Gracing the opening ceremony are (from left) PIAP Director Lito Alcodia, Printwell Inc. VP Robert Yam, PIAP Director William Sia, PIAP Second Vice President Albert Co, PIAP President Milagros San Juan, PIAP Auditor Soledad Aldave, PIAP Director Joseph Yam, PIAP PRO Celso Viray and PIAP Director Felisa Lajara. ALYSA SALEN
PHL plunges in WEF competitiveness ranking By Catherine N. Pillas
Luz: “It is, of course, disappointing to experience this fall, in spite of all efforts to improve.”
@c_pillas29
D
espite efforts to improve the country’s competitiveness, the Philippines’s ranking in the annual global competitiveness index of the World Economic Forum (WEF) fell 10 notches to 57th. In the 2016 WEF Global Competitiveness Report, the Philippines’s performance declined in eight of the 12
PESO exchange rates n US 48.2650
monitored “pillars.” The WEF survey was conducted before the election period and covered 138 countries. Last year the country was ranked 47th. “It is, of course, disappointing to experience this fall, in spite of all efforts to improve competitiveness. Our score dropped minimally from 4.39 to 4.36 out of seven, but it was enough to bring us down by countries,” Guillermo M. Luz, private
sector cochairman for the National Competitiveness Council, said in a statement. “The world is so competitive that even small changes make a big difference in ranking,” Luz added. According to the annual survey of competitiveness, the Philippines ranked the worst on “goods market efficiency,” under which fall the indicators of burden on customs procedures; See “WEF,” A2
1959- Peres is first elected to the Knesset, beginning his parliamentary career, which continues for 48 years 1977- Succeeds Yitzhak Rabin as the leader of the labor party
Former Israeli President Shimon Peres is in critical but stable condition after a stroke. Shimon served as prime minsister twice and was president from 2007– 2014. In 1994 he won the Nobel Peace Prize for his role in negotiating the Oslo peace accords with the Palestinians
1934- After migrating to Tel
Aviv with his family, Peres studied in an agriculture school
1953- Peres is appointed as
the director general of Israel’s Ministry of Defense, at the age of 29
1974- As minister of defense,
Peres oversees the recovery of the IDF after the Yom Kippur War. He also supervises the disengagement of Israli forces on the Egyptian front, leading to a peace settlement between Israel and Egypt
1984- Peres serves his first term as Prime minister for two years. In 1986 Peres exchanges his role with Yitzhak Shamir to become minister of foreign affairs
Government roles
1994- Peres, alongside Yitzhak Rabin and Yasser Arafat is awarded the Nobel Peace Prize for his efforts in the Oslo Accords
1970-74: Minister of transport and communications
Source: Britain Israel Communications and Research Centre, AP Graphic: Tribune News Service
Peres held a variety of government roles, not limited to the following: 1959-65: Deputy defense minister 1969-70: Minister of immigrant absorption
1984-86: Prime minister 1992-95: Minister of foreign affairs 2007-14: President
n japan 0.4806 n UK 62.8603 n HK 6.2241 n CHINA 7.2367 n singapore 35.5073 n australia 36.9999 n EU 54.1389 n SAUDI arabia 12.8696
Source: BSP (28 September 2016 )
News
BusinessMirror
A2 Thursday, September 29, 2016
DENR...
‘TEV is scientific’
The “scientific and accurate” TEV system, as described by Lopez, would help guide the DENR in making decisions whether to allow or stop a mining operation. According to Lopez, while mining companies rake in profits from their operations, the state, which is theoretically the owner of the natural resources, is not getting enough. Worse, she said, people in the communities are suffering because of the environmental damage. “People on the ground do all the sufferings, the environment, livelihood. How are we benefiting here? What are we losing here?” Lopez, an environmental advocate, said. Using the TEV scheme, the DENR will monetize the benefits from mining and match it against the relevant costs. “We will monetize the benefits from mining. Then we will monetize the destruction…land, water, [impact to] health,” Lopez said. Lopez added that if the cost outweighs the benefits, it follows that
WEF...
Peres...
continued from A1
teams. The DENR had already suspended 10 operating mines since Lopez took over the helm of the agency in June. The audit criteria include environmental, social and biodiversity considerations on top of the physical or technical aspect in assessing mining operations. The TEV is a cost-benefit analysis scheme that refers to the value derived by people from natural resources compared to losing them.
LOPEZ: “I would like to work with mining companies, the ones that want to continue to exist.”
the project should be scrapped.
‘TEV is unconstitutional’
Dante Bravo, president of Global Ferronickel Holdings Inc., told the BusinessMirror that for existing projects, imposing the TEV will be unconstitutional. According to Bravo, a lawyer, aside from not being specified under the Philippine Mining Act of 1995, the government will be violating the Constitution in imposing TEV as a means of evaluating existing projects. “Under the Constitution, you cannot impair contract obligations,” he said. He said for new mining projects, mining companies may need to study it on a case-to-case basis. “If the impact of the TEV will be minimal, say for nickel, it will most probably not apply,” he said.
What TEV?
Ronald Recidoro, vice president for legal and policy of the Chamber of Mines of the Philippines (COMP), said there is a need to get more de-
tails about Lopez’s proposal. “We want to know more about her idea of TEV,” he said. Recidoro added that the COMP, which represents mining industry’s big players is willing to cooperate with the government and will continue to adhere to the highest standard of responsible mining. “If we are invited to talk about TEV, then we might sit and talk and ask more about her idea,” Recidoro said. The COMP earlier came up with a statement criticizing the DENR for “changing the rules of the game,” referring to the conduct of the mining audit. Recidoro also chided the DENR for what he described as erroneous announcement, which gives investors a wrong impression of mining companies that were not really suspended but were merely issued “show cause orders” for minor violations. “What we are saying is this— the announcement is affecting investors’ confidence and has impact on the stock market,” he said. The COMP decried the results of the mine audit, which Lopez announced on Tuesday. According to Lopez, based on the findings and recommendations of the audit teams, only 11 of the 41 operating mines are seen fit to continue their operation, after 20 more mines were found to have failed environmental standards, bringing to 30 the number of operating mines facing suspension. Experts from various fields, headed by academic institutions,
conducted TEV in three mining areas in Palawan, Bicol and Mindoro, and found out that the costs outweigh the benefits. In all three studies, Lopez said farmers, fishermen, and even those living in the communities suffer the effects of the mining operations in terms of lower agricultural and fisheries production, and the cost of having health problems.
diversion of public funds, irregular payments and bribes. For the eighth consecutive year, Switzerland was ranked as the most competitive economy in the world, narrowly ahead of Singapore and the United States. Following them is the Netherlands and Germany. For Management Association of the Philippines President Perry Pe, the drop in competitiveness is not an indicator of failure on the
part of government. “I think the drop does not cover the Duterte administration yet, which has been in power for just about three months,” Pe said. “And each country has gotten better. You will note that the basis for the ranking drop were failures on bureaucratic red tape, ease of doing business, infrastructure and tax reforms. Reforms here by the current administration are just being secured,” he added.
Lopez after irresponsible miners
Lopez reiterated that she is only against irresponsible mining and is willing to work with mining companies that are responsible enough to give communities what they are due. “I would like to work with mining companies, the ones that want to continue to exist,” she said. To do the TEV, Lopez said the DENR would tap experts, including agriculturists, foresters, marine biologists, health and tourism, to monetize the cost and the benefits. To do this, she said the DENR would have to establish a baseline data, identify the major impacts, quantify it and then do the math.
‘Shallow’ programs
Lopez also said mining companies operating in the Philippines can do better than sponsoring scholarship programs, or medical missions, as part of their social development and management programs. Such programs, according to the DENR chief, are in fact, “shallow.” She wants mining companies to implement programs that would really help alleviate poverty.
continued from A1
number of procedures to start a business; and effectiveness of antimonopoly policy to name a few. The country ranked 99th out of 138 countries in goods market efficiency, down from 80 last year. Another pillar on which the Philippines fared badly was in Technological Readiness, where it garnered a ranking of 83rd, again down from the 68th spot last year. Under technological readi-
www.businessmirror.com.ph
ness, indicators that had the worst rankings include percentage of population that are Internet users and fixed broadband Internet subscriptions. Completing the trifecta of pillars where the Philippines had the biggest declines on is institutions. This dropped from the 77th spot last year to 91st this year. Specific indicators under institutions that did poorly include strength of investor protection,
continued from A1
But only at the end of a political career stretching more than 60 years did Peres finally win the widespread admiration of his own people that had eluded him for so long. He died at 93 on Wednesday, his son, Chemi, confirmed at the hospital where Shimon Peres had been treated for the past two weeks. Peres began a new chapter at age 83, assuming the nation’s presidency following a scandal that forced his predecessor to step down. The job cemented Peres’s transformation from down-and-dirty political operator to elder statesman. “After such a long career, let me just say something: My appetite to manage is over. My inclination to dream and to envisage is greater,” Peres told The Associated Press in an interview on July 15, 2007, moments before he was sworn in as president. He said he would not allow his age, or the constraints of a largely ceremonial office, to slow him down. “I’m not in a hurry to pass away,” Peres said. “The day will come that I shall not forget to pass away. But until then, I’m not going to waste my life.” Prime Minister Benjamin Netanyahu issued a statement mourning the passing of Peres. He said he will convene his Cabinet for a special session later in the day. Former President Bill Clinton and Democratic presidential nominee Hillary Clinton said they had “lost a true and treasured friend” with the death of Shimon Peres. Former Presidents George H.W. Bush and George W. Bush also issued statements of mourning, as did former British Prime Minister Tony Blair. As president, Peres tirelessly jetted around the world to represent his country at conferences, ceremonies and international gatherings. He was a fixture at the annual World Economic Forum gathering in Davos, Switzerland, where he was treated like a rock star as the world’s rich and powerful listened breathlessly to his every word, on topics ranging from Mideast peace to nanotechnology to the wonders of the human brain. He also became Israel’s moderate face at a time when the nation was led by hardline Prime Minister Benjamin Netanyahu. Peres sought to reassure the international community that Israel seeks peace, despite concerns over continued settlement construction in the occupied West Bank and the paralysis of negotiations under Netanyahu. Still, while Peres never tired of speaking of peace, he tended to avoid strident criticism of Netanyahu. It was his 1994 Nobel Prize that established Peres’s man-of-peace image. He proudly displayed the prize—which he shared with Israeli Prime Minister Yitzhak Rabin and Palestinian leader Yasser Arafat—on the desk of his presidential office. As foreign minister, Peres secretly brokered the historic Oslo interim peace accords with the Palestinians, signed at the White House on September 13, 1993. Accepting the award, he told assembled dignitaries that “war, as a method of conducting human affairs, is in its death throes, and the time has come to bury it.” Despite the assassination of Rabin, the breakdown of peace talks, a second Palestinian uprising in 2000, wars in Lebanon and Gaza, and Netanyahu’s continued reelections, Peres maintained his insistence that peace was right around the corner. “I’m sure I shall see peace in my lifetime. Even if I should have to extend my life for a year or two, I won’t hesitate,” he said in a 2013 interview marking his 90th birthday. Peres was born Shimon Perski on August 2, 1923, in Vishniev, then part of Poland and now in Belarus. He moved to prestate Palestine in 1934 with his family, where he changed his surname to Peres, or songbird, in Hebrew. Relatives who remained in Poland, including his grandfather, a prominent rabbi, were killed when Nazis set a synagogue on fire during the Holocaust. Peres often spoke lovingly of his grandfather
in speeches. The actress Lauren Bacall was a cousin. Still in his 20s, Peres rose quickly through the ranks of Israel’s prestate leadership, and served as a top aide to David Ben-Gurion, Israel’s first prime minister, after independence in 1948. Peres once called Ben-Gurion “the greatest Jew of our time.” At 29, he served as director of Israel’s Defense Ministry, and is credited with arming Israel’s military almost from scratch. He later worked with the French to develop Israel’s nuclear program, which today is widely believed to include a large arsenal of bombs. Still, he suffered throughout his political career from the fact that he never wore an army uniform or fought in a war. Peres was elected to the Knesset, Israel’s parliament, in 1959, serving in nearly all major Cabinet posts over his long career. As finance minister, he imposed an emergency plan to halt tripledigit inflation in the 1980s. He also was an early supporter of the Jewish settler movement in the West Bank, a position he would later abandon. But he had trouble breaking into the prime minister’s post, the top job in Israeli politics. He was hampered by a reputation among the public and fellow politicians as both a utopian dreamer and a political schemer. He ran for prime minister in five general elections, losing four and tying one, in 1984, when he shared the job in a rotation with his rival Yitzhak Shamir. His well-tailored, neck-tied appearance, swept-back gray hair and penchant for artists and intellectuals seemed to separate him from his more informal countrymen. He never lost his Polish accent, making him a target for mimicry. One of the lowest points of his political career came in 1990, when he led his Labor Party out of a unity government with Shamir’s hardline Likud on the strength of promises from small factions to support his bid to replace Shamir. At the last minute, several members of Parliament changed their minds, approving a Shamir government without Peres and Labor. The incident became known in Israeli political lore as Peres’s “stinking maneuver.” Rabin scorned him as a “relentless meddler” and in 1992 replaced him as party leader. The two eventually repaired their relationship and worked together on pursuing peace with the Palestinians. After Rabin’s assassination by a Jewish ultranationalist opposed to Israel’s peace moves, Peres became acting prime minister. But he failed to capitalize on the widespread sympathy for the fallen leader and lost a razor-thin election the following year to Netanyahu. In one famous incident, an angry Peres rhetorically asked a gathering of his Labor Party whether he was a “loser.” Resounding calls of “yes” rained down on him. Peres would later blame a wave of suicide bombings for his defeat. He described his visit to the scene of a deadly bus explosion in Jerusalem, where people started screaming “killer” and “murderer” at him. “I knew that I lost the election,” he said. He suffered another humiliation in 2000 when he ran for the presidency, a largely ceremonial position elected by Parliament. Peres believed he had wrapped up the election, but the ultra-Orthodox Shas Party broke a promise to him and switched its support to Likud candidate Moshe Katsav. Peres was a loser once again. Even so, he refused to quit. In 2001 he took the post of foreign minister in a unity government led by his rival Ariel Sharon, serving for 20 months before Labor withdrew from the coalition. In Peres’s final political defeat, Labor overthrew him as party leader in 2005, choosing instead the little-known Amir Peretz. Peres subsequently followed Sharon into a new party, Kadima, serving as vice premier and maintaining that post under Sharon’s successor, Ehud Olmert. AP
BMReports BusinessMirror
news@businessmirror.com.ph
Thursday, September 29, 2016
A3
Stakeholders relieved common station finally a go By Lorenz S. Marasigan @lorenzmarasigan
W
hile the construction of a multibillion-peso facility that will link three overhead rail systems in Metro Manila will disrupt a road-development project and increase congestion in the shorter term, the said infrastructure will help ease train-commuting woes in the long run.
All of the stakeholders in the common-station deal—SM Prime Holdings Inc., Universal LRT Corp., Ayala Land Inc., Light Rail Manila Corp., the Department of Public Works and Highways, and the Light Rail Transit Authority—agreed on Wednesday to build a single station between SM
North Edsa and TriNoma, ending what officials called as a sevenyear deadlock plagued with legal tussles. But while they agreed to build a common alignment to connect the Light Rail Transit (LRT) Line 1, the Metro Rail Transit (MRT) Line 3 and the future MRT 7, specific
details on how to execute and who will fund the deal will still have to be threshed out. “I tried to get some informal consensus. We hope to have the formal groundbreaking before the end of this year. Once the groundbreaking has been done then you can start counting based on engineering design. Completion will take about two-and-a-half to three years,” Transportation Secretary Arthur P. Tugade said in a media briefing on Wednesday. Detailed engineering and design, according to Transportation Assistant Secretary for Legal Affairs Leah Merida-Quiambao, is being undertaken by the department. “The designs are being done as we speak right now; we just have a couple of remaining issues to be resolved. We’ve had considerable progress with the design,” she said on the sidelines of the briefing. “It’s being done by the engineers of the department along with the consultations of the principals.”
Transportation Spokesman Cherie Mercado-Santos noted that the final cost of the common station will only be determined after the engineering and design have been finished. “We have to finalize the engineering details, but it shouldn’t be far from the estimate earlier,” she said. Former Transportation Secretary Joseph Emilio A. Abaya had pegged the cost of the common station at a range of P1.4 billion to P2.6 billion, depending on the location and the schematics. She added that this may cause a bit of a congestion in the North Edsa area, typical of construction activities on roads. “But we hope to minimize it as much as possible,” she said. W hen all parties agreed to bu i ld t he fac i l it y on m idd le ground—at the Paramount Building—a road-development project was affected. But, according to Quiambao, the public-works department was amenable to it.
The public-works agency initially planned to build an overpass in the area. But with the common-station deal, the department decided to build a depressed road instead. When built, the common station will provide easy access to both malls and major roads like Edsa, and will provide a common concourse or atrium to facilitate easy train-line transfer. The agreement signed will end the ongoing stay order issued by the Supreme Court against the transportation department from pursuing the project. To recall, SM Prime sued the previous transportation department for changing the location of the common station even with an existing naming-rights contract with the government. Former transportation officials decided to move the location due to its cost benefits. Executives of the stakeholders agreed that the issues should be ended, hence their agreement. “We will see some resolution to
this issue. We will really support what the new government is going to bring about to us,” SM Prime President Hans Sy said. For his part, Jaime Augusto Zobel de Ayala said: “Infrastructure is something that needs cooperation and coordination. I think it’s a pleasure for us to be one participant to this critical railway system.” Manuel V. Pangilinan, who chairs Metro Pacific Investments Corp., added that his company supports the government’s efforts of decongesting Metro Manila. “It is very difficult to say no to a fellow Bedan,” he said, referring to Tugade. “We have waited with uncertainty for the last six years. Now we are looking at fruition in two-anda-half to three years,” Tugade said. Such an agreement will also remove one of the roadblocks to the building of the MRT 7, a train system that will connect Bulacan to Quezon City. It is scheduled for completion by 2019.
PHL can ride on govt 10-point economic agenda to hit 10% GDP growth–british Envoy By Recto Mercene @rectomercene
espite a l l t he noise being made about the Philippines losing its ha rd- ea r ned econom ic edge because of President Duterte’s “unpredictability,” a European envoy on Tuesday said he sees the country potentially registering a 10-percent growth this year. British Ambassador to the Philippines Asif Ahmad said: “If all the right things happen, I see the economic growth here actually in double digits.” Asked if he means a 10-percent GDP (gross domestic product) growth, Ahmad replied: “Genuinely possible here.” “You’re touching on a 10-percent growth potential. Now, anybody would say that is superlative, if you can really get that, [but] this is a society that has a lot of investment to do, just imagine you built on Ofw [overseas Filipino worker] remittances, the consumer society here, boosting on real investment infrastructure, and essentials, that in itself will add 2 percent to 3 percent to growth,” said Ahmad, who was guest during China’s 67th National Day celebration at the Shangri-La Bonifacio Global City. “I’ve met almost everyone now who is in government. The one thing I endorse 100 percent is the 10-point economic agenda. And if you focus on that, that’s the story of the Philippines,” he said. President Duterte’s economic team presented the 10-point socio-economic agenda during a business forum in Davao City in June. The points presented were to continue and maintain current macroeconomic policies, including fiscal, monetary, and trade policies. Institute progressive tax reform and more effective tax collection, indexing taxes to inflation; increase competitiveness and the ease of doing business; accelerate annual infrastructure spending to account for 5 percent of GDP, with public-private partnerships playing a key role; promote rural and value-chain development toward increasing agricultural and rural enterprise productivity and rural tourism; ensure security of land tenure to encourage investments, and address bottlenecks in land management and titling agencies; invest in human capital development,
D
LIFE INSURANCE CONSCIOUSNESS WEEK Insurance industry leaders (from left) Toru Nakashima, managing director of the Foundation for the Advancement of Life and Insurance Around the World (Falia); Insurance Commissioner Emmanuel F. Dooc; George Mercado, Philippine Life Insurance Association Inc. (Plia) president; and Yoshitaka Masai, Falia director, field questions from the media at the launch of the Falia-Plia Financial Life Literacy Program. The industry is marking “Life Insurance Consciousness Week” in the first week of October, with a string of activities that aim to further boost financial literacy in the country and help Filipinos understand how life insurance can help them fulfill their goals. ROY DOMINGO
‘Govt losing ₧4B/year to cement smugglers’ By Joel R. San Juan @jrsanjuan1573
A
lawyer has urged his cellmate, Bureau of Customs (BOC) Commissioner Nicanor E. Faeldon, to investigate the problem of cement smuggling and to file charges against those behind it. In a news briefing on Wednesday, lawyer Argee Guevarra said he has written Faeldon to formally seek an investigation into cement smuggling, which he claimed could involve a dozen domestic companies. He said these companies should be subjected by the BOC to “exhaustive investigation,” as official
records would show these firms were able to declare very low freight charges of $8 per metric ton when the prevailing charges for similar and other shipments ranged from $19 to $22.90. Guevarra said the potential revenue losses of government for the year because of the undervaluation of cement freight
charges could run up to P4 billion. “We have submitted these to Commissioner Faeldon and urged him to go through all official records of the agency. We know that this is just the tip of the iceberg because our initial submissions may only form part of the bigger scheme, but enough to establish prima facie evidence to warrant the
This is just the tip of the iceberg, because our initial submissions may only form part of the bigger scheme.”—Guevarra
filing of cases of smuggling,” Guevarra said. Pending the outcome of the investigation, he said he is giving way to Faeldon to name the companies involved. The lawyer disclosed that he and Faeldon are far from just mere acquaintances, because they became prison mates for mutiny charges in the past. Guevarra claimed that he merely wanted to help Faeldon in pursuing good governance and stopping illegal activities in the BOC. “We will leave no stone unturned in the issue of cement smuggling. And just like in the rice smuggling, we are determined to file the necessary criminal charges against those responsible,” Guevarra said.
PHL eyes maritime-security cooperation with Vietnam By David Cagahastian @davecaga
P
resident Duter te said yesterday he would work for better cooperation with Hanoi in maritime security and law enforcement against illegal drugs when he makes a two-day official visit to Vietnam. “We will seek to identify emerging areas of partnership, particularly in the fields of maritime security and law enforcement. We shall also seek ways to advance collaboration in the campaign against illegal-drugs trade, consistent with the goal of realizing an Asean drug-free community,” Mr. Duterte said in his departure speech on Wednesday.
In a news conference in Malacañang, Foreign Affairs Spokesman Charles Jose said Duterte is prepared to discuss with Vietnam the territorial dispute in the South China Sea, some portions of which is being claimed by Vietnam. “The President will be prepared to discuss the South China Sea issue. If ever this will be discussed, this will be in the context of, of course, emphasizing the need or the importance of maintaining peace, stability, security in the region,” Jose said. “And it will be in the context of reaffirming our firm commitment to the peaceful settlement of disputes and our adherence to the rule of law,” he added. But Jose said the proposed joint exploration activities, which
was brought up during the Arroyo administration, between the Philippines, China and Vietnam in the South China Sea would probably not be discussed during Mr. Duterte’s two-day official visit to Vietnam. The President said the Philippines and Vietnam should have closer relations since they have mutua l concer ns, being both maritime nations. “As maritime nations with rapidly developing economies, we acknowledge the convergence of our strategic interests. Broadening cooperation and collaboration between the Philippines and Vietnam is the way forward. Solidifying our strategic partnership is key to further strengthening our
countries and the larger region we belong to,” he said. While in Vietnam, the President is scheduled to meet with Filipino and Vietnamese groups, and the Filipino community there. Mr. Duterte will be in Vietnam until September 29. His official delegation includes Foreign Secretary Perfecto R. Ya Jr. say; Trade Secretary Ramon M. Lopez; Justice Secretary Vitaliano N. Aguirre II; National Security Adviser Hermogenes Esperon; Sen. Alan Peter S. Cayetano; Sen. Francis G. Escudero; Presidential Communications Secretary Martin M. Andanar; Cabinet Secretary Leoncio B. Evasco, and; Philippine Ambassador to Vietnam Noel M. Servigon.
including health and education systems, and match skills and training; promote science, technology, and the creative arts to enhance innovation and creative capacity; Improve socia l-protection programs, including the gover nment’s Conditiona l Cash Transfer Program; Strengthe n i m p l e m e nt a t i o n o f t h e responsible parenthood and reproductive-hea lth law. Finance Secretar y Carlos G. Dominguez III said although the economy grew under the administration of President Benigno Aquino III, the policies of the previous administration failed to address poverty in the countr y. Ahmad believes the fundamental drivers “are there”, and it means a few core decisions to hurry up the economic charter changes, “which requires the liberalization that has been promised to go ahead.” At the same time, the UK envoy believes that the media reports, here and abroad, about extrajudicial killings and Mr. Duterte’s uncalled-for remarks about the United Nations and the United States are but distractions. “ The next 100 days is only that. It’s all political rather than substantive, the new administration is adjusting, the new Cabinet secretaries are getting used to their portfolio,” he added. To give substance to his positive outlook about the country, Ahmad said a big manufacturing investment is coming from the UK “but the company won’t allow me to say the date it will open.” “It’s very high-end, you know any country, if they invest in a neighborhood, they create 12,000 jobs. The reason why I always keep talking short is that the company is not quite ready, but when it comes, you know, you’ll recognize it.” Asked to elaborate on how the country should stick to its 10-point agenda, Ahmad said: “It requires using the credit ratings and ceilings that the Philippines has to raise per capita to just unlock the jam that the last administration did a lot of things to correct, where they had a real difficulty to get the money released.” He said he talked with Transportation Secretary Arthur P. Tugade and told him to “ram through the good projects and let things to happen.”
A rare collection of BusinessMirror
exclusives
When I Was 25, Generations, Executive Views, Model Executive, Envoys & Expats, The Broader Look, BM Reports Extra, etc. The BM Extra Magazine is a must-have publication that you’d surely want to see in your office, library, coffee shop, restaurant, living room, anteroom, etc. OUT SOON!
BusinessMirror www.businessmirror.com.ph
Asean
BusinessMirror
www.businessmirror.com.ph
European businesses planning expansion in Asean, confident of business perspectives Asean-EU Perspective
HENRY J. SCHUMACHER
E
uropean businesses are planning to expand their investment and operations in Asean as the region grows in global importance and Asean profits increase, according to the second annual European Union (EU)-Asean Business Sentiment Survey, which polled more than 200 executives from European companies around Southeast Asia. Key findings from this year’s survey include: Nearly three-quarters (74 percent) of European businesses project a rise in Asean profits for 2016 and almost three-quarters (74 percent) expect Asean’s importance to global revenues to increase over the next five years. As a result, European businesses are upping their investment in the region. Nearly two-thirds plan to expand operations and employment in the Asean region, and 85 percent are planning to increase their regional trade and investment. By contrast, less than half of European companies in China are planning to expand. European businesses in the region are keen to see strengthened ties between the EU and Asean. Almost two-thirds (66 percent) of European companies want a European region-to-region free-trade agreement (FTA) with Asean, and more than half (58 percent) feel they are at a competitive disadvantage without an overarching EU-Asean FTA. However, policy challenges for businesses still remain, impeding Asean from reaching its maximum economic potential—more than half (52 percent) of European businesses say that trade barriers are hampering supply-chain efficiency. Nearly half (44 percent) of European companies in Asean report facing unfair competition from local and regional incumbents, including stateowned and government-linked enterprises. Based on survey findings, the EU-Asean Business Council (of which ECCP is a member and is represented on the Supervisory Board) is calling for the acceleration of the process for an EU-Asean FTA and for a speedier conclusion to existing bilateral FTA negotiations; more frequent and regular interactions between EU and Asean governments and the private sector; and continued progress on trade liberalization among Asean member-states and with their external trading partners. Commenting on the results, EU-ABC Chairman Donald Kanak said: “It is clear that European business are optimistic and are investing for future growth in Asean. At a challenging time for the global economy, Southeast Asia is an economic bright spot and European companies are keen to invest in the region’s rapidly developing consumer market and increasingly integrated production base. The survey shows strong support for a substantive and meaningful EUAsean FTA to support sustained European investment in the region, and the EU-Asean Business Council urges leaders from the EU and Asean to work together toward that end, and in the meantime the rapid conclusion of bilateral FTA negotiations between the EU and Asean member-states.” Commenting on the survey, EU Ambassador to Asean H.E. Francisco Fontan said: “Southeast Asia is central to the EU’s global trade-negotiation agenda. As such, we welcome European businesses’ embrace of Asean as a center of global economic growth. Industry and government must work together more closely to fulfill our shared goal of ever closer economic ties between the EU and Asean.” This survey comes at the right time: Asean and the EU, two regional organizations with their own respective dynamics and histories, will celebrate the 40th anniversary of their formal relations next year, precisely when Asean itself will turn 50 years old. To make it even more exciting: the Philippines is chairing Asean in 2017!
Indonesia evacuates tourists after Mount Barujari eruption
I
ndonesian authorities are searching for several hundred tourists after Mount Barujari on Lombok island spewed a massive column of ash into the atmosphere and have evacuated more than 1,100 others, the country’s disaster agency said on Wednesday. The volcano, also known as the Child of Rinjani because it sits within the Mount Rinjani caldera, erupted without warning on Tuesday afternoon, delaying flights from airports on the islands of Lombok and Bali. The ash column reached 2,000 meters (6,560 feet). Disaster Mitigation Agency Spokesman Sutopo Purwo Nugroho said nearly 400 foreign and local tourists had been registered since Sunday to climb the mountain, leaving from Sembalun monitoring post, about 11 kilometers (7 miles) from
the volcano’s crater. There have been no reports of injuries from the eruption. Heronimus Guru, the deputy operations chief at Indonesia’s Search and Rescue Agency, said on Wednesday that about 120 tourists, mainly foreigners, had been located so far and were heading down the mountain. The eruption interrupted flights for several hours at Ngurah Rai International Airport in Bali and Lombok International Airport. Farms and trees around the 3,726-meter (12,224-foot)-high volcano were coated in a thin layer of gray ash, but nearby towns and villages were not in danger, Nugroho said. Rinjani is among about 130 active volcanoes in Indonesia. The archipelago is prone to volcanic eruptions and earthquakes because of its location on the Pacific “Ring of Fire.” AP
Editor: Max V. de Leon • Thursday, September 29, 2016 A5
‘Asean stocks still not expensive’
S
outheast Asian shares, some of the priciest in developing nations, still offer good value and political worries about the region are “overdone,” according to Mark Mobius. “They’re not really expensive in the environment that we’re in now,” Mobius, executive chairman of Templeton Emerging Markets Group, said in a live interview on Bloomberg’s Facebook page at the Bloomberg Markets Most Influential summit in Hong Kong. “Southeast Asia is benefiting from the growth of China and increasingly from the growth in India.” The 12-month price-to-earnings ratio for the MSCI South East Asia Index has risen from this year’s low of 12.5 in January to a 16-month high of 15.2 in August, amid a rally in emerging-market assets. It was 14.9 on Wednesday, compared with 12.5 for a measure of developingnation equities. Overseas investors pulled mon-
ey from the Manila bourse for 24 straight days through Tuesday, amid concern President Duterte’s abrasive style is deterring investors, while in Indonesia a disappointing tax amnesty has contributed to outflows. Investors are still pumping money into Thai equities even amid uncertainty over the health of the 88-yearold king, who has been a source of political stability throughout this reign.
No downside
“There are individual problems in each of the countries,” Mobius said. “There’s concern about Duterte in the Philippines, which I think is overdone. There’s concern about reforms in Indonesia and the political environment in Thailand. I don’t see downside anywhere.”
Ringgit falls toward weakest in three months on oil
M
alaysia’s ringgit approached a three-month low against the dollar after a decline in crude oil damped the outlook for the energy-exporting economy. The ringgit fell the most among emerging-market currencies after Brent crude slid almost 3 percent on Tuesday, before major producers meet in Algiers to discuss limiting output. Emerging-market currencies rose on Tuesday, as investors judged Hillary Clinton won the first US presidential debate, reducing the likelihood a Donald Trump election victory will roil financial markets. The US and China are among nations publishing manufacturing data in the coming week based on purchasing managers’ indexes (PMI). “The ringgit is weaker on the back of lower oil prices,” said Khoon Goh, head of regional research at Australia & New Zealand Banking Group Ltd. in Singapore. “With the first US presidential debate out of the way, the focus turns to the various PMI data due at the turn of the month, and next week’s US payrolls number.” The ringgit declined 0.3 percent to 4.1385 per dollar as of 10:05 a.m. in Hong Kong after depreciating to 4.1605 on September 21, the weakest level since June 27. The South Korean won gained 0.2 percent to 1,095.75 per dollar. The won has strengthened 6.9 percent in the past three months, the best performer behind the South African rand of 24 developing-nation currencies tracked by Bloomberg. “The won’s level has become burdensome and vigilance about possible intervention has risen,” Ha Keon-hyeong, an economist at Shinhan Investment Corp. in Seoul, wrote in a report. The currency is likely to trade in range of 1,094 to 1,102, he said. South Korean government bonds rose, with the 10-year yield dropping four basis points to 1.46 percent. Malaysian five-year bond yields were little changed at 3.24 percent. Bloomberg News
MOBIUS
There are individual problems in each of the countries.” —Mobius Foreign funds have pulled $351 million from Philippine shares this month and $300 million from Indonesia, while adding $525 million to Thai equities, exchange data
show. While they’ve come off highs reached in July or August, most of the region’s main share gauges are still up for the quarter. The Jakarta Composite Index advanced 7.5 percent, the SET Index rose 3 percent and the FTSE Bursa Malaysia KLCI Index increased 0.8 percent. Only the Philippine benchmark measure has fallen, dropping 2.8 percent. “I like the consumer sector in Southeast Asia because per-capita incomes are going up,” Mobius said. Bloomberg News
Alleged smuggler in Cambodia lectures reporters on ethics
A
N alleged timber smuggler in Cambodia has given journalists a lesson in ethics: People who take bribes should honor their commitments—or be prepared to die. Timber smuggling and bribery are both common in Cambodia, but a video posted on Facebook late last week appears to illustrate how ingrained both activities have become. The video clip was posted on a page calling itself the Siem Reap Post. It shows provincial logging tycoon Heng Samneang complaining that journalists in the northeastern province of Stung Treng to whom she was allegedly giving payoffs to keep her activities secret had instead informed the authorities, who then confiscated timber she was accused of trying to smuggle across the border to Vietnam. She said those who did not honor their promises would die in a car crash, though it was unclear if that was meant as a curse or a threat. A journalist in Stung Treng, speaking anonymously because of fear for his safety, confirmed to The Associated Press that he and his colleagues were aware of Heng Samneang’s alleged illegal activities, which had been going on for more than 10 years, and had received cash payments from her. He said officials in charge of regulating logging also were aware of her activities and, likewise, took payoffs. While some of Heng
Samneang’s shipments had been confiscated, she had never been arrested, he said. Environmental activists and experts say Cambodia has one of the highest rates of deforestation in the world, much of it due to illegal logging and corrupt land deals. The video clip of Heng Samneang, also known as “Yeay Proeung,” shows her outside what appears to be her office on an unknown date. She has burning joss sticks grasped between her hands, which she raises up and down in front of her head in an oathtaking ceremony. Heng Samneang is heard calling on the sky and earth as her witnesses for punishment for any journalist who betrayed her by informing the authorities of her activities. “All you journalists, be my witness,” she says. “While we are alive, we shall behave with honesty. If you have given your word to someone, you have to honor that promise or you will die in a car crash.” In the brief segment, she also tells the journalists that she does not keep all her income for herself, but shares it with them. The journalist, who spoke to the AP, acknowledged receiving money from Heng Samneang, but said it was just occasional payments of $15 to $20 treated as being for food or gasoline. The average annual income in Cambodia is about $1,000, though it is much lower in rural areas such as Stung Treng. AP
‘DESTROYING ENVIRONMENT IS KILLING’ In this file photo,
Vietnamese activists shout slogans and hold placards, reading “Destroying the environment is killing,” (left) and “Return clean seawater to us,” at a protest to urge Formosa Plastics Group to take responsibilities for the cleanup in Vietnam. Hundreds of Vietnamese fishermen have filed claims seeking compensation from a Taiwanese steel company that acknowledged its toxic chemicals caused a massive fish kill, a local priest helping the fishermen said on Tuesday. AP
TheBroa
Business
A6 Thursday, September 29, 2016
Govt tax proposals may impact poor, s By Jovee Marie N. dela Cruz
T
@joveemarie
HE poor Filipinos of this country are so wealthy they are targeted to pay additional taxes. That is, if proposals at the 17th Congress are approved and a new tax law is passed. This is the reason lawmakers are treading so lightly on such proposals. “We are currently studying it if it’s doable,” House Speaker Pantaleon D. Alvarez said. Representative Alvarez of Davao del Norte was referring to the proposal of the Department of Finance (DOF) to lower personal income tax (PIT). But to do so, an estimated P179 billion would be considered foregone revenues. Hence, the DOF is leaning towards imposing additional taxes on several commodities and remove the value-added tax (VAT) exemptions of senior citizens and persons with disabilities (PWDs). Liberal Party Rep. Romero Quimbo of Marikina said the government and Congress should study carefully what sector they really want to tax. “I’m not in total agreement with excise tax,” Quimbo told reporters on Wednesday. “I think we need to be very careful and be very precise in targeting the sector we want to tax.” The lawmaker also reminded reporters to “remember that this measure is being pursued as a compensating measure for revenue losses resulting from income-tax lowering.” “That’s the only justification I can see to support it,” Quimbo said. “But if ultimately the excise tax will affect the poor more than the rich, that’s not going to be acceptable.” According to Quimbo, the last thing the government wants “is to transfer the tax burden from the middle class—the sector that will benefit from income-tax reduction—to the poor, the ones who will shoulder [for example, the] bulk of the excise tax on fuel.” “That’s inequitable and not progressive,” he added.
Oppositions
LIBERAL Party Rep. Edcel Lagman of Albay said his group called “The Legitimate 8” is opposing the DOF proposal to remove VAT exemptions of the senior citizens and PWDs. “Definitely, I’m against the proposal,” Lagman said. This is especially not proper “after the signing of the Centenarian Act of 2016 that brings into focus the problems arising from an aging population.” “One of the measures [that] should help the elderly is tax exemption from VAT,” Lagman added. Meanwhile, Party-list Rep. Carlos Isagani T. Zarate of Bayan Muna said that the DOF should follow President Duterte’s instruction last August to lift antipoor and gender-biased taxes. “So the DOF should drop its proposal to increase taxes for oil products and expand the value added tax (VAT) base,” Zarate said. “This [proposal] would be counterproductive and would wipe out or, at the minimum, drastically reduce the benefits of lower income taxes. This proposal is patently antipeople and would definitely have an adverse effect on consumers.” Zarate added that he believes “higher taxes for oil would create a domino effect that would spike the prices of basic goods and services like water and electricity.” “Just imagine, how much a P10 increase in gasoline and P6 increase in diesel would affect the price of rice, fish and meat?” Zarate added.
The lawmaker also asked Finance Secretary Carlos G. Dominguez III to reconsider his agency’s proposal and look for other nontax means that would not hit the poor hard. “We can look at the national budget for other items that could defray the lost tax revenue from lowering income taxes,” Zarate said. He cited as example the Risk Management Fund, seen getting P30 billion. There is also the Comprehensive Automotive Resurgence Strategy, proposed to have a budget of $600 million, or P28.2 billion, according to Zarate. He also cited the Industry Competitive Fund, which may get P5 billion.
Long overdue
BUT according to Quimbo, the DOF’s tack to lower individual income tax rates is actually long overdue. Quimbo, who is also the House deputy speaker, said the income tax should be adjusted considering that the P500,000 a person earns, for example, amounts to P1.1 million today. Rosario Manasan, senior research fellow of the Philippine Institute for Development Studies (Pids), describe Quimbo’s view as the phenomenon of bracket creep. According to Manasan, the phenomenon results from “nonindexation to inflation of personal income-tax brackets.” “Simply put, bracket creep occurs when employees’ income increases over time as a result of inflation,” a statement from the state think tank said. “This pushes them to pay higher taxes, but their purchasing power remains the same.” According to the Pids, the Philippines has not adjusted its personal income-tax system since 1998. In the current setup, Quimbo said those earning P10,000 or less every month pay a 5-percent income tax, while those with annual earnings of P500,000 and above pay a 32-percent income tax.
The PIT
UNDER the DOF proposal, workers earning not over P250,000 annually will be exempted from paying a PIT should the 17th Congress approve its passage into law. However, to make up for the foregone revenues, the DOF bill will expand the VAT base by reducing the coverage of its exemptions. These exemptions include privileges granted for senior citizens and PWDs, adjustment of excise taxes imposed on petroleum products and restructuring the excise tax on automobiles. The latter, however, exempts buses, trucks, cargo vans, jeeps, jeepney substitutes and vehicles with special purposes. The finance department said the tax shall be computed in accordance with and at the rates established in two schedules. (See sidebars.) The proposed measures, if approved, will amend a dozen Sections and Title VI of Republic Act 8424, or the National Internal Revenue Code, as amended.
Offsetting measures
INCLUDED as offsetting measures are the imposition of higher taxes on petroleum products and eliminating certain exemptions from VAT. The bill seeks to repeal Section 4 of the Expanded Senior Citizens
2018 NEW TAX BRACKETS
2019 NEW TAX BRACKETS
For those earning every year:
For those earning every year:
n not over P250,000 will be exempted from paying tax;
n not over P250,000 will be exempted from paying tax
n over P250,000, but not over P400,000, would pay a fixed tax of 20
n over P250,000, but not over P400,000, would pay a fixed tax of
percent of the excess over P250,000
15 percent of the excess over P250,000
n over P400,000, but not over P800,000, would pay a fixed tax of
P30,000, with an additional 25 percent of the excess over P400,000
n over P800,000, but not over P2 million, would pay an excess tax
of P130,000, with an additional 30 percent of the excess over P800,000
n over P2 million, but not over P5 million, would pay a fixed tax of
P490,000, with an additional 32 percent of the excess over P2 million
n over P5 million would pay a fixed tax of P1,450,500, with an
n over P400,000, but not over P800,000, would pay a fixed tax of
P22,500 with an additional 20 percent of the excess over P400,000
n over P800,000, but not over P2 million, would pay an excess tax
of P102,500, with an additional 25 percent of the excess over P800,000
n over P2 million, but not over P5 million, would pay a fixed tax of
P402,500, with an additional 30 percent of the excess over P2 million.
n over P5 million would pay a fixed tax of P1,303,000, with an
additional 35 percent of the excess over P5 million
additional 35 percent of the excess over P5 million.
Act of 2010, as well as Sections 32-A and 33-A of the Magna Carta for PWDs. Section 4 of the Expanded Senior Citizens Act of 2010 provides VAT exemption for medicines, professional fees of attending physicians in all private hospitals, land mass transit, airfare, seafare, use of services in hotels, admission fees in theater and cinema houses, funeral and burial services for the death of senior citizens. Sections 32-A and 33-A of the
ing oils and greases, whether such additives are petroleum-based, per liter and kilogram, respectively, of volume capacity or weight, P10 (from P4.50); • Processed gas, per liter of volume capacity, P6 (from P0.05); • Waxes and petrolatum, per kilogram, P10 (from P3.50); • On denatured alcohol to be used for motive power, per liter of volume capacity, P6 (from P0.05): • Naphtha, regular gasoline, and other similar products of dis-
Magna Carta for PWDs provide tax incentives to a family of a PWD.
Petro-tax
ALSO under the bill, effective on January 1, 2017, excise tax will be imposed on petroleum products. These products include the following: • Lubricating oils and greases, including but not limited to, base stock for lube oils and greases, high vacuum distillates, aromatic extracts and other similar preparations, and additives for lubricat-
tillation, per liter of volume capacity, P10 (from P4.35). • Leaded premium gasoline, per liter of volume capacity, P10 (from P5.35); unleaded premium gasoline, per liter of volume capacity, P10 (from P4.35); • Aviation turbo jet fuel, per liter of volume capacity, P10 (from P3.67); • Kerosene, per liter of volume capacity, P6 (from P0.00); • Diesel fuel oil and on similar fuel oils having more or less the
aderLook
sMirror
www.businessmirror.com.ph | Thursday, September 29, 2016
a7
seniors and PWDs more than the rich Sections of Republic Act 8424 to be affected if proposed D.O.F. measures are approved
n Section 24: Identifies the rates of income tax on individual citizen and individual resident alien of the Philippines on certain passive income, on capital gains from sale of shares of stock not traded in the stock exchange and on capital gains from sale of real property n Section 31: Definition of taxable income n Section 32: Defines gross income and the items excluded from gross income and shall be exempt from taxation, like life insurance and gifts and bequests n Section 34: Identifies deductions from gross income n Section 35: Cites the allowance of personal exemption for individual taxpayers n Section 79: Provides for the income tax collected at source n Section 106: Cites the value-added tax on sale of goods or properties n Section 107: Provides for the value-added tax on importation of goods n Section 108: Cites the value-added tax on sale of services and use or lease of properties n Section 109: Identifies transactions, about 26 of them, exempted from the value-added tax, from sale of nonfood agricultural products to the sale or lease of goods or properties or the performance of services n Section 110: Identifies tax credits n Section 148: Under Chapter 5, which identifies excise tax on petroleum products, provides for tax on manufactured oils and other fuels holds,” it said. Meanwhile, the CPBRD said incremental revenues from excise tax on petroleum products may be used to beef up infrastructure spending, to upgrade mass transport system and to improve traffic management, among others. “On the positive side, incremental revenues from higher tax rates will help the government to address the unmet needs of the Filipino people. Also, higher fuel price could result in more prudent use of petroleum products, longer service life for roads and bridges, traffic decongestion and lower carbon emission,” it said.
Zero-VAT base
same generating power, per liter of volume capacity, P6 (from P0.00); n Liquefied petroleum gas, per liter, P6 (from P0.00); n Asphalts, per kilogram, P6 (from P0.56); n Bunker fuel oil, and on similar fuel oils having more or less the same generating power, per liter of volume capacity, P6 (from P0.00). The bill also said the tax rates shall be increased by 10 percent every year thereafter, effective January 1, 2018, through revenue regulations issued by the secretary of finance.
Revenue gain
BASED on the DOF’s proposed comprehensive tax-reform package earlier turned over to Dominguez by former Finance Secretary Cesar V. Purisima, an excise-tax increase on gas, diesel and other oil products would bring an estimated revenue gain of P178 billion in its first year of implementation. “Instead of increasing taxes or expanding the VAT, we hope that Secretary Dominguez would help us in scrapping VAT from basic services, like electricity, water, oil products, and even systems loss,” Zarate said. However, the Congressional
Policy and Budget Research Department (CPBRD) said the government should study carefully the proposal imposing excise tax on petroleum. The CPBRD, the lower chamber’s think tank said in its policy brief that a change in tax structure produces a change in consumer behavior. The emerging proposals to adjust excise tax on petroleum products are premised on the fact that most of the tax rates were set as early as 1996. “Several considerations must be taken into account in the process of reforming the tax system,” the CPBRD report said. For one, the CPBRD said the country’s excise tax must be comparable with those of memberstates of the Association of Southeast Asian Nations (Asean). Second, “The increase in the price of basic commodities as a result of higher taxes could diminish the purchasing power of consumers,” the CPBRD report said. While diesel is excise-tax free in the Philippines, other Asean member-states impose specific tax or ad valorem tax rates on the same product, the report explained. In particular, the peso equiva-
lent of excise tax on diesel in Malaysia and Thailand are P31.97 and P3.19, respectively. Prior to the enactment of the Reformed VAT, or RA 9337, diesel was taxed at P1.63 per liter. “Three, petroleum products are essential inputs to the production, processing and movement of goods. The transport sector uses up more than two-thirds of total petroleum products, followed by commercial and industry sectors. Four, importers and refiners of oil products are subject to value-added tax, in addition to excise tax. Being a price-based tax, the VAT automatically responds to inflationary changes, which the specific excise tax is not able to capture,” the policy body said. As reported by the Department of Energy, 68 percent of total oil consumption goes to the transport sector, 11 percent to commercial and 9.3 percent to industry Another important consideration is the impact of excise-tax increase on goods and services, the CPBRD added. “[To address this], the government must design well-targeted social protection—preferably direct subsidy—to mitigate the impact of additional taxes on poor house-
THE DOF bill said the following sales by VAT-registered persons shall be subject to zero-percent rate: n The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); n The sale of goods, supplies, equipment and fuel to persons engaged in international shipping or international air-transport operations; provided that the goods, supplies, equipment and fuel have been sold and used for international shipping and air-transport operations; n Foreign-currency denominated sale; n Sales to persons or entities whose exemption under international agreements to which the Philippines is a signatory effectively subjects, such sales to zero rate; n Sale of gold to the BSP; n Direct exports by a registered export producer of exports products, or the sales of export products to another producer or to an export trader: Meanwhile, the bill said subject to the provisions of this act the following transactions shall be exempt from VAT: A. Sale or importation of agricultural and marine food products in their original state, livestock and poultry of a kind generally used as, or yielding or producing foods for human consumption; and breeding stock and genetic materials therefor. Products classified under this paragraph shall be considered in their original state, even if they have undergone the simple processes of preparation or preservation for the market, such as freezing, drying, salting, broiling, roasting, smoking or stripping.
Polished and/or husked rice, corn grits, raw cane sugar and molasses, ordinary salt and copra shall be considered in their original state; B. Sale or importation of fertilizers; seeds, seedlings and fingerlings; fish, prawn, livestock and poultry feeds, including ingredients, whether locally produced or imported, used in the manufacture of finished feeds (except specialty feeds for race horses, fighting cocks, aquarium fish, zoo animals and other animals generally considered as pets); C. Importation of personal and household effects belonging to the residents of the Philippines returning from abroad and nonresident citizens coming to resettle in the Philippines; D. Services subject to percentage tax under Title V; E. Services by agricultural contract growers and milling for others of palay into rice, corn into grits and sugar cane into raw sugar; F. Medical, dental, hospital and veterinary services, except those rendered by professionals; G. Educational services rendered by private educational institutions, duly accredited by the Department of Education(DepED), the Commission on Higher Education (CHED), the Technical Education and Skills Development Authority (Tesda)and those rendered by government educational institutions; H. Services rendered by individuals pursuant to an employeremployee relationship; I. Services rendered by regional or area headquarters established in the Philippines by multinational corporations, which act as supervisory, communications and coordinating centers for their affiliates, subsidiaries or branches in the Asia-Pacific region and do not earn or derive income from the Philippines; J. Transactions that are exempt under international agreements to which the Philippines is a signatory or under special laws, except those under Presidential Decree 529; K. Sales by agricultural cooperatives duly registered with the Cooperative Development Authority to their members; their importation of direct farm inputs, machineries and equipment, including spare parts thereof, to be used directly and exclusively in the production and/or processing of their produce; L. Export sales by persons who are not VAT-registered; M. Sale of real properties not primarily held for sale to customers nor held for lease in the ordinary course of trade or business; N. Sale, importation, printing or publication of books and any newspaper, magazine review or
bulletin, which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements; O. Transport of passengers by international carriers; P. Services of bank, nonbank financial intermediaries performing quasibanking functions, and other nonbank financial intermediaries; Q. Sale or lease of goods or properties or the performance of services other than the transactions mentioned in the preceding paragraphs, the gross annual sales and/or receipts do not exceed the amount of P3 million (from P1.5 million); R. Sale of power or fuel generated through renewable sources of energy, such as, but not limited to, biomass, solar, wind, hydropower, geothermal, ocean energy and other emerging-energy sources using technologies, such as fuel cells and hydrogen fuels.
Automobiles
THE bill also said there shall be levied, assessed and collected an ad valorem tax on automobiles based on the manufacturer’s or importer’s selling price, net of excise and VAT. Under the measure, if the net manufacturer’s price/importer’s selling price is P600,000, the excise tax will be 5 percent. If the net manufacturer’s price/importer’s selling price is P600,000 to P1.1 million, the excise will be 20 percent of net manufacturing/importation price. If the net manufacturer’s price/importer’s selling price is P1.1 million to P2.1 million, the excise will be 40 percent of net manufacturing/importation price. If the net manufacturer’s price/importer’s selling price is P2.1 million, the excise will be 60 percent of net manufacturing/importation price. The bill said the brackets reflecting the manufacturer’s price or importer’s selling price, net of excise and VAT will be indexed by the secretary of finance once every two years if the change in the exchange rate of the Philippine peso against the US dollar is more than 10 percent from the date of effectivity of this act. House Committee on Ways and Means Chairman Rep. Dakila Carlo Cua said the DOF proposal will be studied carefully in the lower chamber, as the offsetting measures will affect the poor. Lone Legislative District of Quirino representative Cua, meanwhile, said his committee will also consider the 25 bills filed at the lower chamber seeking to reduce the income tax imposed on individuals and corporations by amending the National Internal Revenue Code.
A8
The World BusinessMirror
Thursday, September 29, 2016 • Editor: Lyn Resurreccion
Explosion kills 19 in ‘illegal’ coal mine in northern China
B
EIJING—Chinese authorities blamed illegal-mining activities for a gas explosion at a coal mine that killed 19 people and left one other miner missing, Chinese state media reported on Wednesday.
Tuesday morning’s explosion occurred at a small coal mine when 20 miners were working underground in the city of Shizuishan in the northwestern region of Ningxia, the official Xinhua News Agency said. State broadcaster CCTV said the blast killed 19 people. Local officials said at a press conference early Wednesday that representatives of the company that owned the mine, the Linli Coal Mining Co. Ltd.,
were in the police custody, Xinhua said. Xinhua cited an initial investigation as showing that the blast was caused by illegal mining, but did not provide details. The company could not immediately be reached at its listed phone number, which rang busy. At the briefing, Wu Yuguo, the city’s vice mayor, said an excessive concentration of gas and the destruction of the mine shaft have hindered rescue efforts. AP
Across US, police officers abuse confidential databases
D
ENVER—The police officers across the country misuse confidential lawenforcement databases to get information on romantic partners, business associates, neighbors, journalists and others for reasons that have nothing to do with daily police work, an Associated Press (AP) investigation has found. Criminal-history and driver databases give officers critical information about people they encounter on the job. But the AP’s review shows how those systems also can be exploited by officers who, motivated by romantic quarrels, personal conflicts or voyeuristic curiosity, sidestep policies and sometimes the law by snooping. In the most egregious cases, officers have used information to stalk or harass, or have tampered with or sold records they obtained. No single agency tracks how often the abuse happens nationwide, and record-keeping inconsistencies make it impossible to know how many violations occur. But the AP, through records requests to state agencies and big-city police departments, found law enforcement officers and employees who misused databases were fired, suspended or resigned more than 325 times between 2013 and 2015. They received reprimands, counseling or lesser discipline in more than 250 instances, the review found. Unspecified discipline was imposed in more than 90 instances reviewed by AP. In many other cases, it wasn’t clear from the records if punishment was given at all. The number of violations was surely far higher since records provided were spotty at best, and many cases go unnoticed.
Dangerous info
AMONG those punished: an Ohio officer who pleaded guilty to stalking an ex-girlfriend and who looked up information on her; a Michigan officer who looked up home addresses of women he found attractive; and two Miami-Dade officers who ran checks on a journalist after he aired unflattering stories about the department. “It’s personal. It’s your address. It’s all your information, it’s your Social Security number, it’s everything about you,” said Alexis Dekany, the Ohio woman whose ex-boyfriend, a former Akron officer, pleaded guilty last year to stalking her. “And when they use it for ill purposes to commit crimes against you—to stalk you, to follow you, to harass you...it just becomes so dangerous.” The misuse represents only a tiny fraction of the millions of daily database queries run legitimately during traffic stops, criminal investigations and routine police encounters. But the worst violations profoundly abuses systems that supply vital information on criminal suspects and law-abiding citizens alike. The unauthorized searches demonstrate how even old-fashioned policing tools are ripe for abuse, at a time when privacy concerns about law enforcement have focused mostly on more modern electronic
Libyan general rejects UN-backed government
B
ENGHAZI, Libya—A powerful Libyan general whose forces recently captured several key oil facilities has rejected a UN-brokered government, and said the country would be better served by a leader with “high-level military experience.” In a series of written responses to questions from The Associated Press this week, Field Marshal Khalifa Hifter said his army only recognizes the authority of the Libyan parliament based in the east, which has also rejected the UN-backed government in the capital, Tripoli. Libya was plunged into chaos by the 2011 uprising that toppled and killed longtime leader Muammar Qaddafi, and for the last two years has been split by rival authorities based in the far east and in Tripoli, in the west. The two sides are deeply divided on Hifter’s future role in the country. In the east, Hifter is seen as the kind of strong, experienced military leader who can defeat Islamic extremists and restore order to the oil-rich North African country. In the west, where powerful Islamist militias hold sway, he is seen as remnant of the Gadhafi government—which he once served—and an aspiring strongman. He said little to put such fears to rest.
Blame game In this July 13 photo, retired New York Police Department Sgt. Ronald Buell (center), leaves federal district court in Manhattan. Buell received probation for selling National Crime and Information Center information to a private investigator for defense attorneys. At his sentencing, Buell said he hoped other officers would learn “to never put themselves in the position I’m in.” AP
14M The average daily transactions processed by state and local databases and the FBI-administered National Crime and Information Center
technologies. And incomplete, inconsistent tracking of the problem frustrates efforts to document its pervasiveness.
Questionable search
THE AP tally, based on records requested from 50 states and about three dozen of the nation’s largest police departments, is unquestionably an undercount. Some departments produced no records at all. Some states refused to disclose the information, said they don’t comprehensively track misuse or produced records too incomplete or unclear to be counted. Florida reported hundreds of misuse cases of its driver database, but didn’t say how often officers were disciplined. And some cases go undetected, officials say, because there aren’t clear red flags to automatically distinguish questionable searches from legitimate ones. “If we know the officers in a particular agency have made 10,000 queries in a month, we just have no way to [know] they were for an inappropriate reason unless there’s some consequence where someone might complain to us,” said Carol Gibbs, database administrator with the Illinois State Police.
Misuse persists
THE AP’s requests encompassed state and local databases and the FBI-administered National Crime and Information Center (NCIC), a searchable clearinghouse that processes an average of 14 million daily transactions. The NCIC catalogs information that officers enter on sex offenders, immigration violators,
suspected gang members, people with outstanding warrants and individuals reported missing, among others. Police use the system to locate fugitives, identify missing people and determine if a motorist they’ve stopped is driving a stolen car or is wanted elsewhere. Other statewide databases offer access to criminal histories and motor vehicle records, birth dates and photos. Officers are instructed that those systems, which together contain data far more substantial than an internet search would yield, may be used only for legitimate law-enforcement purposes. They’re warned that their searches are subject to being audited and that unauthorized access could cost them their jobs or result in criminal charges. Yet misuse persists.
‘Sense of being vulnerable’
VIOLATIONS frequently arise from romantic pursuits or domestic entanglements, including when a Denver officer became acquainted with a hospital employee during a sex-assault investigation, then searched out her phone number and called her at home. A Mancos, Colorado, marshal asked coworkers to run license plate checks for every white pickup truck they saw because his girlfriend was seeing a man who drove a white pickup, an investigative report shows. In Florida a Polk County sheriff’s deputy investigating a battery complaint ran driver’s license information of a woman he met and then messaged her unsolicited through Facebook. Officers have sought information for purely personal purposes, including criminal records checks of coworkers at private businesses. A Phoenix officer ran searches on a neighbor during the course of a longstanding dispute. A North Olmsted, Ohio, officer pleaded guilty this year to searching for a female friend’s landlord and showing up in the middle of the night to demand the return of money he said was owed her. The officer, Brian Bielozer, told
the AP he legitimately sought the landlord’s information as a safety precaution to determine if she had outstanding warrants or a weapons permit. But he promised as part of a plea agreement never to seek a job again in law enforcement. He said he entered the plea to avoid mounting legal fees. Some database misuse occurred in the course of other misbehavior, including a Phoenix officer who gave a woman involved in a drug and gun-trafficking investigation details about stolen cars in exchange for arranging sexual encounters for him. She told an undercover detective about a department source who could “get any information on anybody,” a disciplinary report says. Eric Paull, the Akron police sergeant who pleaded guilty last year to stalking Dekany, also ran searches on her mother, men she’d been close with and students from a course he taught, prosecutors said. A lawyer for Paull, who was sentenced to prison, said Paull has accepted responsibility for his actions. “A lot of people have complicated personal lives and very strong passions,” said Jay Stanley, an American Civil Liberties Union privacy expert. “There’s greed, there’s lust, there’s all the deadly sins. And often, accessing information is a way for people to act on those human emotions.” Other police employees searched for family members, sometimes at relatives’ requests, to check what information was stored or to see if they were the subjects of warrants. St i l l ot her sea rc hers were simply curious, including a Miami-Dade officer who admitted checking dozens of officers and celebrities including basketball star LeBron James. Political motives occasionally surface. Deb Roschen, a former county commissioner in Minnesota, alleged in a 2013 lawsuit that law enforcement and government employees inappropriately ran repeated queries on her and other politicians over 10 yea rs. T he sea rc hes were in retaliation for questioning county spending and sheriff ’s programs, she contended. AP
www.businessmirror.com.ph
HIFTER cited generals who went on to lead Western nations, as well as President Abdel-Fattah el-Sissi in neighboring Egypt, who led the military ouster of an elected Islamist president in 2013 and has presided over a sweeping crackdown on dissent. “Military people who were elected to lead their country achieved remarkable success,” Hifter said. Asked if he intended to seek the highest office, Hifter demurred, saying the country first needed security, political and social stability, and that he would not answer the question until that was achieved.
The UN-backed government is led by a presidential council headed by Fayez Serraj, an independent technocrat. It was supposed to present a new Cabinet to parliament for approval after lawmakers rejected the last one in August, but has yet to do so. Egypt has backed Hifter who, like el-Sissi, blames much of his country’s problems on the Muslim Brotherhood group. He says Tripoli has been “hijacked” by armed gangs, blaming disorder there and the expansion of rogue militias on Islamist factions.
Envoy accused
HIFTER has also lashed out at UN envoy Martin Kobler, accusing him of “meddling” in Libyan affairs after he allegedly sought to set up a meeting between Hifter and Serraj to discuss the makeup of the Libyan army. Both Hifter’s troops and forces loyal to the UN-backed government are battling the Islamic State (IS) group and other extremists. Militias from the city of Misrata, in the west, have driven IS militants out of most of their last urban stronghold, Sirte, with the help of US airstrikes. But there are concerns that victory against IS could bring renewed conflict between east and west. Earlier this month, Hifter’s forces accused a militia from Misrata of carrying out an airstrike that killed at least six women and a child near Sirte. The Misratans denied the allegations. Hifter’s forces also recently seized three key oil terminals— at Ras Lanuf, al-Sidra and Zueitina—from a militia allied with t he U N - bac ked gover n ment , drawing international condemnation. The US, France, Germany, Italy, Spain and Britain called on his forces to withdraw from the terminals, saying the Tripoli government is the “sole steward” of the resources and warning against “illicit oil exports.” AP
As Clinton cheers, Donald Trump digs in after debate
R
ALEIGH, North Carolina—A defensive Donald Trump gave Hillary Clinton plenty of fresh material for the next phase of her presidential campaign on Tuesday, choosing to publicly reopen and relitigate some her most damaging attacks. The day after his first general election debate, Trump blamed the moderator and a bad microphone and said he was holding back to avoid embarrassing Clinton. Next time, he threatened, he might get more personal and make a bigger political issue of former President Bill Clinton’s marital infidelities. Things are already getting plenty personal. On Monday night, Trump brushed off Clinton’s debate claim that he’d once shamed a former Miss Universe winner for her weight. But then he dug deeper the next day—extending the controversy over what was one of his most negative debate night moments. “She gained a massive amount of weight. It was a real problem. We had a real problem,” Trump told Fox and Friends about Alicia Machado, the 1996 winner of the pageant he once owned. The comments were reminiscent of previous times when Trump has attacked private citizens in deeply personal terms. Earlier this month he was interrupted by the pastor of a traditionally African-American church in Flint, Michigan, after breaking his agreement not to be political in his remarks. Though Trump abided by her wishes, he went after her the next morning on TV saying she was “a nervous mess” and that he thought “something was up.”
Key demographics
IN July Trump assailed the parents of Humayun Khan, a Muslim US soldier who was killed in Iraq in 2004, after the young man’s father spoke out against the Republican at the Democratic National Convention. “I watched her very carefully and I was
also holding back,” Trump said of Clinton, reflecting on the debate at an evening rally on Tuesday in Melbourne, Florida. “I didn’t want to do anything to embarrass her.” It’s unclear whether a Trump attack on Bill Clinton’s infidelities may help or hurt his appeal. But Trump’s latest comments about Machado were striking in that they came just as he was working to broaden his appeal among minority voters and women—key demographic groups he’s struggling to win.
Bad dreams
CLINTON aides on Tuesday acknowledged they’d laid a trap for Trump. “He seemed unable to handle that big stage,” said Clinton campaign chairman John Podesta. “By the end, with kind of snorting and the water gulping and leaning on the lectern that he just seemed really out of gas.” Clinton interrupted a discussion of foreign policy in the final moments of the debate to remind viewers that Trump had called Machado “Miss Piggy” and “Miss Housekeeping.” A video featuring Machado, a Clinton supporter, was released less than two hours after the debate finished. Aiming to capitalize on Trump’s renewed focus on a woman’s weight, Clinton’s campaign also dispatched Machado to tell reporters how she spent years struggling with eating disorders after being humiliated publicly by Trump. “I never imagined then, 20 years later I would be in this position, I would be in this moment, like, watching this guy again doing stupid things and stupid comments,” Machado said. “It’s really a bad dream for me.” Both campaigns knew the first debate, watched by some 80 million people, could mark a turning point six weeks before Election Day with Trump and Clinton locked in an exceedingly close race. AP
The World BusinessMirror
www.businessmirror.com.ph
Governor signs bill targeting ‘doctor-shopping’ for opioids
S
ACR AMENTO, California— California doctors will be required to check a database of prescription narcotics before writing scripts for addictive drugs under a legislation Gov. Jerry Brown signed on Tuesday that aims to address the scourge of opioid abuse. T he measure attempts to crack down on a practice known as “doctor-shopping,” in which addicts visit multiple providers to obtain prescriptions for addictive drugs. The action by the Democratic governor comes amid an intensifying national focus on the problems that stem from prescription and illegal opiates. The US Centers for Disease Control and Prevention says more than 165,000 people died nationwide from prescription opioid overdoses from 1999 to 2014, including 4,500 Californians who died in the last year of available data. California has maintained records of prescription histories by various means since 1939. The electronic database that exists today is an optional tool for physicians, dentists, nurse practitioners and others who write prescriptions. For 20 years, doctors’ influential lobby thwarted efforts to mandate that California prescribers review patients’ narcotic prescription histories, housed in the nation’s first drug-monitoring program. That changed this year following a move by state lawmakers to provide additional funding to staff and modernize the program, quieting the disapproval of most health associations. Pharmaceutical companies took no position on the bill. The new law, SB482 by Sen. Ricardo Lara, D-Bell Gardens, requires doctors and nurses to check the database for signs of abuse when initially prescribing narcotic painkillers, like OxyContin, Vicodin and Percocet, as well as steroids, sleep aids and psychiatric medications. They then have to revisit the database every four months for as long as the drug regimen is continued. Bob Pack has been advocating for such a mandate since his son Troy, 10, and daughter Alana, 7, were run down and killed in October 2003 by a drugged driver who also had been drinking. The woman was later found to be doctor-shopping. When Brown was the state’s attorney general, Pack persuaded him to move a warehouse of carbon-copy prescr ipt ion histor ies on l ine. Pack then focused on getting doctors to use it. “It’s too late for my family, but it’s going to help a lot of others—and that’s the whole point of this program and me pushing all these years,” Pack said. Medical boards will be responsible for enforcing the law, but there is no requirement for doctors to prescribe or withhold medication. “It can and will put some doctors in an uncomfortable position,” Pack said. The requirement will take effect six months after the Department of Justice certifies it is prepared to handle increased use of the program. “Our office is ready for universal use,” Justice department Spokesman Brenda Gonzalez said. There were nearly 165,000 users on September 15, Gonzalez said. More than 20 other states with similar databases require health-care providers to check them before prescribing addictive drugs. AP
Thursday, September 29, 2016
Canadian government OKs natural-gas project
T
ORONTO—Canadian Prime Minister Justin Trudeau approved on Tuesday a $27-billion liquefied natural-gas project on British Columbia’s northwest coast in a decision that’s considered a litmus test for a government that has vowed to do more for the environment. It is Trudeau’s first decision on a major energ y project. It comes ahead of some important pipeline decisions that will cause him problems from either industr y or environmentalists and aboriginals. “Helping to get Canada’s resources to market is a key responsibility,” Natural Resources Min-
ister Jim Carr said, announcing the decision alongside two other Cabinet ministers in Richmond, British Columbia. “At the same time, we said that economic prosperity must go hand in hand with environmental responsibility.” The proposed liquefied naturalgas processing plant by Petronas and other partners near Prince
Rupert, British Columbia, would ship 19 million tons a year of frozen, liquefied natural gas to markets in Asia. But the project has drawn criticism both for the carbon emissions it would cause and for the possible impact that the export terminal would have on the wild salmon habitat in the Skeena River estuary. Trudeau still faces decisions on Enbridge’s controversial Northern Gateway pipeline proposal that would bring oil to the Pacific Coast for shipment to Asia, as well as Kinder Morgan’s TransMountain pipeline expansion from Alberta to British Columbia. The government put in 190 conditions on the massive Pacific NorthWest LNG project, including environmental and fish protection. T he cond it ion a l ap prov a l doesn’t mean the massive project will be built. An increasing supply of natural gas has depressed
international prices for LNG, making the economics of the project less certain than they were when it was first announced in 2013. A spokesman for Pacific NorthWest LNG said on Monday any decision to begin construction would still have to go to the company’s shareholders if the Canadian government approved the plan. “It sure would be a great boost for the country if we can get these projects going,” British Columbia Premier Christy Clark said. “I don’t know when the market conditions might improve enough for these projects to go ahead but I do know that in China, India and Japan people are really hungry for a cleaner alternative to coal.” The project has drawn criticism both for the carbon emissions it would cause and for the possible impact that the export terminal would have on the wild salmon habitat in the Skeena River estuary. AP
A9
briefs
Attorney who stopped Vermont suspect 1 of 25 Carnegie Heroes
PITTSBURGH—A Vermont prosecutor who disarmed a woman accused of fatally shooting a social worker outside a state office building is one of 25 people being honored with Carnegie medals for heroism. The Carnegie Hero Fund Commission announced the medal winners on Wednesday. Fifty-year-old Scott R. Williams, the state’s attorney in Washington County, Vermont, was recognized for his actions on August 7, 2015, when authorities say he grabbed a .270-caliber hunting rifle from Jody Herring after witnessing her shoot Lara Sobel outside the building in Barre. Williams motioned for two men nearby to restrain Herring and then disabled the weapon, police and commission investigators have since determined. AP
Maduro: top U.S. diplomat to visit Venezuela soon CARACAS, Venezuela—President Nicolas Maduro said a top US State Department official would soon visit Venezuela in a bid to ease tensions between the two nations. Maduro’s announcement on Tuesday night came a day after he met with Secretary of State John Kerry on the sidelines of a peace ceremony in Colombia. It would be the second visit this year by Undersecretary of State Tom Shannon after a trip in June on a similar mission that has yet to produce any apparent breakthrough. Maduro said he also invited Kerry and that the US official said he would come if the effort at dialogue advances. AP
U.S. rights group says abuse rife in notorious Egypt prison CAIRO—Human Rights Watch says prison guards at a maximumsecurity facility in the Egyptian capital that holds political prisoners routinely abuse them in ways that may have contributed to some of their deaths. In a detailed report on Cairo’s infamous Scorpion Prison released on Wednesday, the USbased watchdog says authorities punish inmates by putting them in cramped cells, cut off access to families and lawyers and interfere with medical treatment. Joe Stork, the group’s deputy Middle East and North Africa director, says the prison “sits at the end of the state’s repressive pipeline, ensuring that political opponents are left with no voice and no hope.” AP
Sheriff’s office: Oil-pipeline protesters gather at 2 sites
In this September 25 photo, Joe Yanuskiewicz, of Plymouth, Massachusetts, plays a piano in a park in the North End neighborhood of Boston. A number of working pianos painted by local artists have been placed around Boston and Cambridge, each with a simple message to passersby: “Play Me, I’m Yours.” AP
Striking a cord! Bostonians hug pop-up painted pianos
B
OSTON—Bostonians are embracing the painted pianos that have popped up across the city and neighboring Cambridge in recent days. Celebrity Series of Boston placed 60 upright pianos decorated by local artists late last week. Each instrument bears a simple message: “Play Me, I’m Yours.” And play residents and visitors have. At historic Faneuil Hall’s Quincy Market food hall on Tuesday, a group of high-school students from Boston took turns singing and playing Adele’s “Hello” and other pop tunes while the tourist-heavy, lunchtime crowd largely went about their day. A few short blocks away, near a carousel along a grassy linear park, Somerville resident Zoë Madonna
found a bit more solitude to play Joni Mitchell’s “River” and later “Your Hand in Mine” by the Texas band Explosions in the Sky. “It sounds pretty good,” said the 23-year-old accordionist for a local band playing contra dance music. “There are a few sticky keys and you can’t really get a lot of sound out of it, but it’s not as out of tune as it’s going to be in a few days.” T he pianos, which w i l l be available until October 10, are part of a public art project by British artist Luke Jerram that’s been installed in 50 cities worldwide, including London, Hong Kong, São Paulo, Munich, New York and Los Angeles. The installation last came to Boston in 2013, and more than 500,000 people used them that year, organizers said.
Joy of performance
GARY Dunning, president of Celebrity Series Boston, hopes the installation helps spread the “joy of live performance” and shows people that “the arts are for everyone and that all people should have the opportunity to participate.” The pianos have been placed i n a l l of Boston’s 23 neighborhoods and around some of t he re g ion’s most re co g n i z able landmarks, from Har vard Square to the Boston Librar y and the gold-domed Massachusetts State House. At Fenway Park, a portrait of retiring Red Sox slugger David Ortiz graces a green-painted piano. L oc at ion s for t he pi a nos, as wel l as v ideos and photos people have shared from their
per for mances are on the Web. A mong the v ideo clips is Chinese piano v ir tuoso Lang Lang doing a rend it ion of George Gershwin’s Prelude No. 3 by the ref lecting pool of the Christian Science church on Fr iday. Members of the Boston Ballet also played music from their season opener—Le Corsaire—on Tuesday afternoon near the city’s famed Common. “Every time I see these things out, I’m amazed at the condition they’re in,” said Boston resident Cliff Sawyer, as he casually tapped out a melody on a piano in the busy retail district of Downtown Crossing. “Hate to say it, but some people just like to destroy stuff. It’s just the way it is.” AP
MANDAN, North Dakota— Authorities say people protesting the construction of an oil pipeline in North Dakota gathered on Tuesday at two construction sites on private property. The Morton County sheriff ’s office says about 300 protesters gathered along with 100 cars and a dozen horses at a construction site for the Dakota Access pipeline around 2 p.m. The state’s Bureau of Criminal Investigation is looking into reports of a possible assault on a construction worker and reports of protesters blocking workers from leaving the site and chasing them on horseback. Protesters later gathered for about an hour at another construction site. AP
Guatemala alleges fraud in food buys during disaster GUATEMALA CITY—Guatemalan authorities have broken up a group that sold the government millions of dollars’ worth of contraband corn and beans, some of it not fit for human consumption, an official said on Tuesday. Attorney General Thelma Aldana said the purchases were made in 2014, after the government made a disaster declaration because of heavy rains in some areas and drought in others threatened the food supply. The government spent $66 million on the grains, and those involved in the scheme allegedly cleared $5 million in profit. Among those arrested was former Agriculture Minister Elmer Lopez. AP
A10 Thursday, September 29, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Presidential apology
P
RESIDENT Duterte needs a set of assistants here and another set of assistants there to do his job well. And these people who work for the President are supposed to be the cream of the crop in their respective fields. The Chief Executive’s information people, for example, are there to feed him correct and accurate information. When they give the President something to announce, it is their duty to verify and double-check that information to ascertain its accuracy.
On Tuesday President Duterte publicly apologized to three people erroneously included in a “drug matrix” made public earlier. He said former Pangasinan governor and now Rep. Amado Espino, Rafael Baraan and Urbiztondo, Pangasinan, Board Member Raul Sison should not have been included in the matrix. “I think, somehow, we were negligent in counterchecking during the first report. So, to Espino, Sison and Baraan, I would like to apologize to you publicly, and I would say now, I’m very sorry,” the President said in a speech after inspecting a seized shabu laboratory in Arayat, Pampanga. “I cannot be perfect, and sometimes you are correct when you say that life is never fair,” he added. Although he opted for the “I’m responsible” approach and did not berate his people for screwing up big time, the incident mauled the President’s antidrugs policy. The erroneous drug matrix handed to the President by irresponsible underlings could adversely affect the administration’s war on drugs. Those who prepared the erroneous drug matrix should suffer the consequences of their incompetence. What they have done, or failed to do, for that matter, has harmed innocent people. Had they revalidated their information, the President’s underlings would not have wrongly accused innocent people as drug personalities. Worse, they placed the President in a bad light on the world stage. We understand the President taking all the blame for this serious blunder because, in his own words, “I was the one who announced it.” The Chief Executive’s mea culpa was premised on his desire to fulfill “my responsibility to let the Filipino people know who are the drug personalities that are destroying this country” through the menace of illegal drugs. Will the President face a crisis of confidence in his leadership because of this faux pas? That’s highly doubtful. Mr. Duterte has shown that he is the kind of leader who is responsible not only for his own behavior, but also for that of his officials and men. As such, he made a public apology, because it is the right thing to do. It’s not as if the Duterte administration is flawless, without blame or sin. On one hand, Mr. Duterte’s apology was refreshing in that it was unequivocal. No hedging. No defensiveness. The message was clear: Brave leaders don’t make excuses, they apologize. The mere act of saying “I’m sorry” on nationwide TV requires a good deal of courage. It’s a measure of character. The President did not point to his people for blame. He acknowledged that the erroneous drug matrix made public has caused others harm. And he took all the blame. The whole nation saw on Tuesday that we have a President who is willing to admit to all and sundry when he is wrong. This is laudable, because Mr. Duterte is putting honesty and honor above personal comfort or self-protection. In other words, the President will take the blame for things that happen on his watch. Mr. Duterte could be a model for how presidents should own up to mistakes. Since 2005
BusinessMirror A broader look at today’s business
The peso: It is SM’s fault John Mangun
T
OUTSIDE THE BOX
he last two months have been interesting and bizarre, as everyone, from President Duterte on down, offers an explanation on why the Philippine peso is depreciating. The idea that the US government might be selling pesos to embarrass the Duterte government is certainly a possibility.
Or maybe it is the Philippine government that is selling pesos in order to blame the US government for currency manipulation. Conspiracy theories are hard to follow. The best “Unified Theory” that attempts to bring both the peso and the stock market falling together is that major drug lords are selling their stock holdings and going into US dollars to protect their illgotten wealth. Back in the early 1980s, when I was doing investments for high networth clients, I kept hoping that
Demystifying the state of lawlessness Not martial law
Ariel F. Nepomuceno
✝ Ambassador Antonio L. Cabangon Chua
DECISION TIME
Founder
Publisher Editor in Chief Managing Editor Associate Editor News Editor City & Assignments Editor Senior Editors
T. Anthony C. Cabangon Jun B. Vallecera Max V. de Leon Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos
Online Editor Social Media Editor
Ruben M. Cruz Jr. Angel R. Calso
Creative Director Chief Photographer
Eduardo A. Davad Nonilon G. Reyes
Chairman of the Board & Ombudsman President VP-Finance VP Advertising Sales Advertising Sales Manager Group Circulation Manager
Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro
BusinessMirror is published daily by the Philippine Business Daily Mirror
HOM
Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025. (Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.
www.businessmirror.com.ph
Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila MEMBER OF
someone with a heavy ColombianSpanish accent and bodyguards carrying large duffel bags stuffed with cash would walk into my office. But drug lords rarely invest in stocks, preferring to spend their money on hot women and hot cars and big houses for both. Further, filling out the Bangko Sentral forms and listing “Need to get my money out of the country” as a reason for buying dollars probably won’t work. If that money laundering is done through informal channels, it would not show up in the peso-
dollar exchange rate, so that is unlikely also. Here is an alternate explanation that might account for some of the recent peso-dollar depreciation. Back in the day of Shoemart—not “SM”—department stores, the foreign-currency exchange booth was at the bottom of the escalator in the old Makati location. Beginning in September, there was usually a line on Saturdays, as families that received remittances from relatives and lola living in the US came to buy pesos. The currency-exchange booth was a service to customers who would then shop at Shoemart. But there was also another purpose. About this time every year, retail companies like SM begin setting up and funding Letters of Credit (LCs) to import all the Christmas goods. Rather than having to buy dollars and lose on the buy-sell spread, these retailers use the dollars they have exchanged for pesos to fund their LCs. But the amount of remittances is growing at least one-third of the rate of increase just two years ago.
L
ast September 2 a night market in Davao City was bombed, killing 14 people and injuring 71 others, angering the general populace and most especially President Duterte. Visibly affected by the violence and tragedy, our Chief Executive declared a nationwide state of lawlessness.
Both the Philippine National Police (PNP) and the Armed Forces of the Philippines went on red alert as a result thereof. The fact of grave public disorder, according to the Palace and its officials, can be confirmed by the National Intelligence Coordinating Agency and the PNP, given the rising number of killings and terrorist activities attributable to Muslim extremists, like the Abu Sayyaf and the ISIS. This is not the first time for such kind of declaration. An analogous action was done in 2006 by President Arroyo when she imposed a state of national emergency that led to several arrests of famous political and media personalities.
National paranoia
The declaration was criticized and heavily questioned immediately after its announcement by numerous sectors in Philippine
society—from politicians, academics, the business community, human-rights activists and other cause-oriented groups. Most of the attacks centered on the state of lawlessness as a precursor to martial law and the eventual suspension of the writ of habeas corpus; events which have scarred the nation so deeply that its mere mention sends shudders and shivers to those who have experienced its horrifying effects. The critics went on by saying that a state of lawlessness can pave the way to abusive practices and will trigger massive fear and even unrest among the citizenry. Worst of all, some legal luminaries opined that the actual call to which the President puts the AFP may not be reviewed judicially for the power to decide whether there is a need for this emergency measure belongs only to the President.
But quick to explain were the legal minds of Malacañang who articulated the difference between a state of lawlessness versus martial law and the suspension of the writ of habeas corpus. The Palace said the declaration was perfectly legal, and it simply relied upon Article 7, Section 18 of the Constitution, which states that the President, as Commander in Chief of the AFP, may call out the Armed forces to prevent or suppress lawless violence that was manifested in the Davao incident. It does not add any other emergency power to President Duterte. It was also never meant to be a preliminary stage prior to martial law, where civil and political rights could be suspended or curtailed in the interest of preserving peace and order. The AFP will be there to execute wider enforcement operations in addition to what the PNP is doing to suppress lawlessness. There will be no harassment, imprisonments, indiscriminate arrests, torture or violence of innocent people. Civil liberties will be preserved and continuously protected.
Parameters of state of lawlessness
Undoubtedly, martial law is clearly different from a state of lawlessness. Case law considers martial law as a stronger exercise of police power wielded by the President together with the military in order to preserve and
Yet, SM’s retail sales grew at 7.2 percent in 2015 over 2014. At this same time in 2014, the peso went from 43 to 45. In 2015 the move was from 45 to 47, and this year it is from 46 to 48. In 2014 and 2015, the peso then appreciated or flattened out going into the New Year. I could be wrong on this, since the peso has been in a negative trend since 2013. However, on the Philippine Dealing System (PDS)— where the peso is traded—there does not seem to be anything unusual. Further, currency speculation does not take place on the PDS cash market, but in the “forward” market, which has almost no volume. Based on the information I see, I do not believe the peso is under speculative attack, being effected by drug lords, or a result of what the President says. I think, it is because of the Christmas season. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
maintain public safety and good order. There are boundaries to what martial law can prohibit, suspend or remove, and these are compliance with the Constitution, the activities of Congress and the functions of the courts. It cannot automatically suspend the privilege of the writ, because suspension of the latter only applies to persons charged for rebellion or invasion. Both martial law or the suspension of the writ are not political issues but are factual in nature, and can be reviewed by the Supreme Court. Rightfully so, the 1987 Constitution puts many safeguards and buffers to prevent an arbitrary exercise of powers by Malacañang and the misallocation of authority or functions among the different branches of government. While the declaration of the state of lawlessness by the President is well intentioned, it would help if the terms, scope and limits by those tasked by law to carry it out are explicitly and unambiguously spelled out. The time limitation is also one crucial factor. In fact, many are asking, is it now over? Only with a clearly circumscribed declaration can this state of lawlessness be demystified, and the good result is that we have an educated and informed public who will now know what it really takes and how such declaration impacts their daily lives. For comments and suggestions: arielnepo.businessmirror@gmail.com.
Opinion BusinessMirror
opinion@businessmirror.com.ph
The economy under Duterte
Faith lived out Msgr. Sabino A. Vengco Jr. Val A. Villanueva
Businesswise
‘M
oney goes where money grows” is an oft-used cliché by investors wishing to park their disposable funds in a lesser-risk ventures. Most seasoned investors go to great lengths dissecting the pros and cons of a particular investmentinterest before they part with their hard-earned money, confident that the returns will be to their liking.
We’ve witnessed fairly recently the seeming disinterest shown by foreign investors in the local market, with most them either cashing in or cutting their losses as they withdraw from the local equities market. The peso, too, is taking a beating against the US dollar, plunging to 48, a seven-year low. The suspension of some mining companies by the Department of Environment and Natural Resources (DENR), led by staunch antimining advocate Regina Paz L. Lopez, also contributes to what makes the minerals industry wobbly these days. To think that the Philippines is one of the substantial contributors to the world’s mineral needs, especially nickel. Now, ratings agencies are one in saying they may revise the country’s investment grade downward. What does this all mean? Is the Philippines losing its luster as a safe place to grow money? Is the Duterte administration up to the task of improving on the economic gains of the Aquino administration? To be fair, at least the Asian Development Bank and the International Monetary Fund just raised the Philippines’s growth forecast this year to 6.4 percent from 6 percent, but this is mainly due to—again, as these two financial institutions say—the strong economic fundamentals painstakingly nurtured by the previous administration. Most a na lysts w it h whom BusinessWise has spoken attribute the sudden souring of investment interest in the country to “internal headwinds” caused by President Duterte’s acerbic tongue. They say the President has shown little patience for dissent, which is essential in a democracy. His penchant for hurling invectives and profanities to those he perceives to be against his controversial policies on drugs is hurting the overseas image of the Philippines. As Hillary Clinton succinctly puts it: “Words matter.” Indeed, the country suffers because President Duterte is putting his personal bias way above the country’s interest. His pronouncement to cut our economic ties from the US and the West, our traditional allies, in favor of China and Russia purportedly out of exasperation with US President Barrack Obama’s advice for him to conduct his war on illegal drugs “the right way” does not speak well of the country’s foreign policy. Why do you think private firms prudently cultivate their brand names? It’s precisely because they know it can either make or break them: A good name can spell profit. Wharton marketing professor David Reibstein explains that nations must learn to be conscious about how they are seen by others. Countries that purposely boost these perceptions could create a large economic benefit. Bu si nes sW i se t h i n k s M r. Duterte’s antics do not help the nation any.
Can a brand be created for nations?
More than four generations of Filipinos have come of age or are growing up with products such as Coke, Pepsi, Colgate and McDon-
alds, among other popular brands that have taken deep roots in the psyche and lifestyle of consumers worldwide. In building a positive image and sustaining goodwill for their respective brands, manufacturers and marketers continue to make huge investments in terms of funding, time and effort. Why do they advertise their products as superior to competition? Certainly, not to educate us! Investing over and over through the years on these deep-rooted brands ensures the heightened and persistent recall and patronage of consumers, which undeniably translate into profits for their makers. Colorado is known as the US’s ski country. The wide expanse of Montana makes it “big sky,” while Georgia is the “peach state”. The slogan “What happens in Vegas, stays in Vegas’’—one of the more famous taglines in modern tourism—clearly paints Las Vegas as an adult playground, where you can do what you want without anyone judging you. So successful was this advertising campaign that efforts by the state to sell itself as a familyoriented recreation center by showcasing the MGM Grand amusement park proved ineffective. Realizing the difficulty and near-impossibility of competing with the “happiest place on earth” that is Disneyland, Las Vegas went back to its earlier campaign. Along with the company that makes it, a product’s country- or city-of-origin usually has a direct and significant effect not only on its perceived quality, but on brand loyalty, association and awareness: Germany has BMW, MercedesBenz and T (Telekom); the US has Apple, Google, Amazon and Microsoft; France has AXA and L’Oréal; Japan has Toyota, Nikon, Uniqlo and Nintendo; the United Kingdom has Shell and Vodafone; Korea has Samsung and Hyundai… the list goes on and on. Brand awareness, brand loyalty, perceived quality and brand association—all of these comprise the equity of a brand. Brand equity is a marketing-industry phrase, which describes how the owner of a well-known brand name is able to generate more revenue from products with that brand name compared with products with less well-known names. Much like how a customer perceives a product he intends to buy, how our country is perceived as a good investment is typically affected by advertising, reviews, public relations, social media, personal experiences and other channels. In this era of globalization, Mr. Duterte must realize that, as President, he is our top diplomat, if not salesman. Anything he says and does impacts on the whole country, and no amount of spirited defense and context clarification by his avid supporters can change the way the world looks at us. Boorish behavior has no place in a civilized world. President Duterte has to exploit his huge political capital to really effect the needed change he has promised; as Obama says, “the right way”. He shouldn’t be the Pied Piper who will lead us all to perdition. For comments and suggestions, e-mail me at mvala.v@gmail.com.
W
Alálaong Bagá
e come to the Lord with joy, we bow down in worship, and we listen to His voice (Psalm 95:1-2, 6-7, 8-9). Real faith, even a little of it, can do marvels. But real faith is lived in a life of service according to the will of God and not in search of rewards (Luke 17:5-10).
Listening to the Shepherd’s voice
The responsorial psalm thrice calls the congregation to praise God: “Come, let us sing joyfully,” “Let us come into His presence with thanksgiving,” “Come, let us bow down in worship.” The initial invitation to prayer is followed by the invitation to enter into God’s presence as in the temple, there to bow down before God in worship singing psalms. What is assembled together is God’s own reverent community, acclaiming “the rock” of their salvation that provides t hem ref uge and protect ion. God is further referred to as the Lord Creator who made them His
people. And, finally, God is the shepherd and they are His flock. The Shepherd guides and takes care of His flock; the flock must hear His voice. It is vital for the flock to be guided by the voice of the Shepherd. Today the people gathered in worship do so to hear the voice of the Divine Shepherd. (Note that here follows a rare case when God’s own speech is quoted in a psalm.) God’s appeal is for His people to respond to Him with faith and trust, not in the tradition of rebellion, as their ancestors did in the wilderness when they were in Meribah and in Massah (Exodus 17:1-7; Deuteronomy 6:16). Despite the
Thursday, September 29, 2016 A11
fact that the people had witnessed God’s love and power in delivering them from the slavery in Egypt, they demanded still signs to prove the presence of God for them. God wants of His people today faith and obedience, not hardened hearts.
Obedience in faith
It is not quantity, but quality, that matters when considering faith. Answering the request from His disciples for an increase in faith, Jesus speaks about its nature, using the imagery of a mustard seed, which is reputed to be one of the smallest seeds. Jesus uses the image of the tiny seed to illustrate how only a little faith is needed to accomplish unusual and remarkable feats. One should be concerned in securing even a small amount of genuine faith; with such faith, hardly anything is impossible. Jesus’ depiction of a household is tailored to bring out the obligations of a servant, not so much the responsibilities of the head of the household. The servant is expected to do multitasking— plowing, tending sheep, preparing food and serving at table—without waiting for praises and special considerations. The followers of
Period to serve Letters of Authority Atty. Pierre Martin D. Reyes
Tax law for business
H
ere cometh the taxman. With the reported revenue collection falling below target and with the lifting of the suspension on tax audits, the Bureau of Internal Revenue (BIR) is expected to step up its investigations and assessments on taxpayers. It is, thus, important for taxpayers to ensure that the audit or examination of their books and other accounting records are made pursuant to valid Letters of Authority (LOA). Well-settled is the rule that all audits or investigations should be conducted with an LOA. In the case of Sony Philippines (G.R. No. 178697, November 17, 2010), the Supreme Court has said that “in the absence of such an authority, the assessment or examination is a nullity.” While the absence of an LOA renders the assessment null and void, will a belatedly served, LOA have the same effect? Moreover, will a belatedly served, but subsequently revalidated, LOA nullify the assessment? Based on existing regulations, the LOA must be served or presented to the taxpayer within 30 days from date of issue; otherwise, the said LOA shall be null and void unless revalidated. In Dakay Construction and Development Corp. (Court of Tax Appeals [CTA] Case 8265, December 10, 2014), the LOA was issued on October 22, 2008, but served only
on November 24, 2008, or on the 33rd day from its date of issue. The CTA Second Division ruled that an LOA served beyond the 30-day period does not automatically make it null and void if the same is revalidated. The Court noted that the LOA was revalidated, as can be seen on the face of the LOA with stamp “Revalidated on July 24, 2009”. In another case, the LOA was issued on September 25, 2009, but was served only on October 26, 2009, or on the 31st day from its date of issue. Thus, in Carmona (CTA Case 8484, May 28, 2015), the CTA First Division ruled that, in the absence of revalidation, the BIR has no authority to assess the taxpayer. Based on the foregoing cases, an LOA is not null and void even if belatedly served provided that the same is revalidated. It must be emphasized, however, that despite holding that an LOA served beyond
the 30-day period is null and void unless revalidated, the court did not go beyond as to apply the Sony case and state that the assessment shall, likewise, be invalid. The rule was so until the recent case of Dakay Construction and Development Corp. (CTA Case EB 1294, September 20, 2016). In the said case, the CTA en banc reversed the earlier decision of the CTA Second Division. The CTA en banc ruled that the 30-day period to serve the LOA on the taxpayer is a mandatory and due-process requirement. Thus, an LOA served beyond the prescribed 30-day period is invalid and has no force and effect. The court then unequivocally stated that, because of the belatedly served LOA, the audit or investigation conducted by the revenue officer was unauthorized, and that the assessment issued as a result thereof was, likewise, invalid. The court also added that while an LOA may be revalidated, such revalidation will not revive the validity of the LOA, as well as the authority of the revenue officer to conduct an audit or investigation of the taxpayer’s book and other accounting records if, on the first place, the LOA was issued beyond the mandatory 30-day period. The doctrinal value of this CTA en banc decision cannot be overstated. Clearly, a belatedly served LOA renders the assessment null and void, even if subsequently revalidated. Revalidation will not cure the defect occasioned by the failure
Clinton proves it pays to prepare
O
By Margaret Carlson | Bloomberg
View
n the biggest stage in politics, Hillary Clinton did to Donald Trump what 16 men failed to do in the primaries: She took command from the moment she strode over to shake Trump’s hand. In 2000 Representative Rick Lazio lost the New York Senate debate when he invaded her personal space. When she invaded Trump’s space, she set herself up for a win. Have times finally changed? Not really. Clinton still needs to work twice as hard for half the gains of a man, while obscuring her ambition and being pleasant. How many times has Trump been told he just has to be more likeable? Clinton was plenty appealing as she ate his lunch Monday night. It’s Trump who should have taken Republican National Committee Chairman Reince Priebus’ patronizing advice to smile more. She had done her homework, an activity Trump scoffs at. When there was an opening to question his position or his manhood—beginning with her claim that his vaunted success started
with a $14-million loan from his dad— she was ready. Trump’s aides were intent on furthering the line that he didn’t prepare for the debate and now we believe them. He went after her for staying off the campaign trail to get ready for their showdown: “I’ve been all over the place,” he said. “You decided to stay home, and that’s OK.” She was ready: “I think Donald just criticized me for preparing for this debate. And, yes, I did. And you know what else I prepared for? I prepared to be president.” A woman has to be careful not to
step over a blurry line that makes her seem too ambitious and in-charge. She found a way. He managed not to repeat his worst mistakes—no intemperate comments about Muslims or Gold Star families or his private anatomy—but he found new ways to offend, while displaying a lack of impulse control that could frighten the horses. Once Clinton rattled his huge, yet fragile, ego with her calm responses, he couldn’t stop himself from getting louder, more blustery, undisciplined and hectoring (even toward the moderator Lester Holt). She didn’t have to go all schoolmarm on him to do it because he did much of it to himself. On the Iraq War he kept insisting on the opposite of what’s on tape: he supported the war as the US was getting into it. When he repeated his chest-thumping whopper that he’d done President Barack Obama a favor by getting to the bottom of the birther rumor started by Hillary, she had one of her best comebacks of the night, reprising First Lady Michelle Obama,
Jesus cannot expect something different when they have fulfilled their duties faithfully; they have only carried out what they are supposed to do in faith. In doing what they should be doing, servants do not claim privileges or extra compensation. They should realize that they are but “unprofitable servants,” because they are not irreplaceable or indispensable, and there are other people who can do the work even better. Alálaong bagá, our faith in God is God’s gift to us and for which we pray and beg, and which we must look after by living it out. And it is so powerful, a little of it enables us to accomplish awesome deeds. In truth, we know that we do not earn it nor deserve it nor own it. In fact, we realize that we are ”unprofitable servants” in our relationship with the Almighty, because there are many other people who are more loving, patient, attentive, generous and obedient than we actually are. But we are the ones gifted with faith, and from whom faithful and generous service is expected. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audiostreaming on www.dwiz882.com.
to comply with the mandatory 30day period to serve the LOA on the taxpayer. This means that should the BIR wish to pursue its audit or investigation, it cannot do so on the basis of an expired LOA. A new LOA must be issued and served on the taxpayer within the mandatory 30-day period. Most significantly, it can be inferred from the CTA en banc decision that the failure of the taxpayer to receive the LOA, being a due-process requirement, shall, likewise, render the assessment null and void. A definitive ruling on this point should be forthcoming. In any case, given this CTA en banc decision, taxpayers should be more circumspect in receiving LOAs from the BIR. Taxpayers pay greater attention on the LOA’s date of issue. If the LOA is being served beyond the 30-day period, the taxpayer has all the right to refuse the same. The author is a senior associate of DuBaladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services (WTS) Alliance. The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at pierremartin.reyes@bdblaw. com.ph, or call 403-2001, local 311.
the most popular figure in politics today: when your critics go low, you go high. He left himself most open to attack when he spoke of his business practices, which, in calmer moments, he’s held up as his principal selling point, compared with hacks, such as Clinton, who have experience, but “bad experience.” He clung to the idea that an audit by the Internal Revenue Service (IRS) was preventing him from releasing his tax returns, even though the IRS itself has said that’s not an issue. Then, when Hillary pointed out that the info that is in the public record shows that he didn’t pay any taxes some years, he gave himself a pat on the back for being “smart.” He didn’t look quite as smart later, when he painted an apocalyptic picture of a “debtor nation” that needs “new roads, new tunnels, new bridges, new airports, new schools, new hospitals. And we don’t have the money, because it’s been squandered on so many of your ideas.”
2nd Front Page BusinessMirror
A12 Thursday, September 29, 2016
www.businessmirror.com.ph
Duterte ‘woos’ army as opponents warn of discontent in ranks F
ive months after his landslide election victory, President Duterte apparently can’t stop campaigning. Yet, rather than courting Filipino voters who put him into office, he’s now giving out handguns and G-Shock watches to soldiers. Mr. Duterte has given almost half his public addresses as President to a military audience—far more than his predecessors. The 71-year-old leader’s refreshed stump speech includes promises to double troop salaries, improve health care for soldiers and secure modern equipment. “Clearly, he is trying to curry favor,” said Joseph Franco, a research fellow at Nanyang Technological University in Singapore who previously worked for the chief of staff of the Armed Forces of the Philippines (AFP). “Duterte is aware that toying with the AFP would be a very bad idea.” President Duterte’s outreach to the military is drawing attention in a country where coup rumors come as regularly as monsoon rains, with political opponents warning of the risk of discontent in an army with deep-rooted links to main security ally the US. Ties between the nation’s civilian and military leaders, long a source of conflict, are key to prolonging a period of political stability that has made the Philippines one of Asia’s fastestgrowing economies.
‘Not happy’
One senator warning of a military backlash against the President is Antonio F. Trillanes IV, a staunch critic of Mr. Duterte who was jailed for more than seven years for his involvement as a naval officer in several attempted coups against former President Gloria Macapagal-Arroyo. “The officer corps are quite wary of the statements of President Duterte—they are not happy with the direction he is taking,” Trillanes said. Still, there are no signs of the kind of instability that led to a popular uprising that toppled former President Joseph E. Estrada in 2001. Last week S&P Global Ratings affirmed a stable outlook on the country’s “BBB” rating, the second-lowest investment grade, even as it noted the “predictability of policy-making” has diminished under President Duterte. Mr. Duterte isn’t worried about any attempts to remove him from office, in part due to his high popularity rating, National Security Adviser Hermogenes C. Esperon Jr. said in an interview. A poll
in July—the latest one available— showed he enjoyed the trust of 91 percent of Filipinos. Esperon confirmed that the administration has received reports of plots to oust President Duterte, but the groups mentioned don’t have the capability to topple the government, he said.
‘Feel honored’
“If, indeed, we prove that there is a destabilization attempt, in due time, we will come up with a statement,” Esperon said. “In my view, I don’t think there’s any plot from the military.” The armed forces appreciates Mr. Duterte’s outreach and hasn’t seen any signs of unease among senior officers, spokesman Brig. Gen. Restituto C. Padilla said by phone. “We feel honored that he prioritized visiting our men and installations,” Padilla said of Mr. Duterte.
Peso sinks
Mr. Duterte’s push for closer ties with the military comes as he leans on the police to crack down on drugs, a war that has led to thousands of deaths. The President routinely bolsters his tough-guy image with references to his tenure as mayor in the southern city of Davao, where he admitted to killing people. President Duterte’s frequent outbursts against critics of his lethal anti-drugs campaign—particularly the US—have spooked investors. The Philippine peso sank to a seven-year low on Monday and stocks extended declines on Tuesday, as global funds sold the nation’s stocks for a 24th straight day. The Philippine stock
President Duterte, wearing a pilot’s jacket, gestures with Defense Chief Delfin N. Lorenzana (second from right) and Armed Forces Chief Ricardo R. Visaya (second from left) at the Philippine Air Force headquarters in Pasay City on September 13. AP Photo/Bullit Marquez
index had climbed 0.3 percent at its noon break on Wednesday, while the peso was down 0.1 percent at the noon recess. While Mr. Duterte has a tendency to contradict himself at times, his anti-US rhetoric has increased after an expletive-laden tirade against US President Barack Obama earlier this month prompted their firstever meeting to be canceled. The Philippine leader has since called for an end to joint patrols in the South China Sea, and pushed for increased economic and military cooperation with China and Russia. Just this week, he said relations with Washington were reaching “a point of no return,” and he accused the US of manipulating the peso. Mr. Duterte’s comments don’t always mesh with the plans of the Philippine defense establishment, said Ashley Townshend, research fellow at the US studies center at the University of Sydney. “It’s telling that in the hours and days after some of these comments have been made, you have had the foreign minister and other senior advisers sort of scurrying to
make sure that their US partners are aware that they are not throwing out the US alliance,” he said. At home, the President has also reached out to communist rebels waging war against the government for almost five decades. He gave Cabinet posts to two political activists nominated by the National Democratic Front, the political wing of the insurgent movement, and freed more than a dozen other members ahead of peace talks that started in Oslo last month. “That issue is very sentimental and emotional to the armed forces, because not only resources were spent but also lives of soldiers and assets were lost,” said Rep. Gary C. Alejano, who also joined a failed coup against Arroyo in 2003. “It is dangerous, because you are now allowing the enemies of the state inside your house.” Mr. Duterte built an important bridge to the military establishment with the July appointment of former president and army chief Fidel V. Ramos as special envoy over the South China Sea dispute. Ramos, 88, played a crucial role in halting coup attempts
against Arroyo and former President Corazon C. Aquino.
‘Bigger issues now’
Yet, despite Ramos’s pedigree, his influence as a retired general is “persuasive at best, because he had become a politician and he is not in active command,” said Segundo E. Romero, professorial lecturer at the Ateneo de Manila University who used to help formulate defense policies for the government. “Military disaffection with Duterte will show if he orders soldiers to participate in the drugs war, sharing the blame for extrajudicial killings with the police,” Romero said. “The military will also balk at a sudden shift toward China without due consultation and institutional acceptance.” Alejano, the congressman and former coup plotter, said “only time will tell” whether Mr. Duterte can keep the military happy or the threat of a coup will increase. “If you have to compare the past uprisings and the reasons behind such uprisings, there are bigger issues now compared to before.” Bloomberg News
Timeline: Philippine coups and military adventurism since 1986
S
ome of President Duterte’s opponents are warning of discontent in the Philippine military over his outreach to insurgents and criticisms of key security ally the US. Despite no signs of instability, the Philippines is no stranger to uprisings, whether by soldiers or civilians. While some were successful, most failed.
Vice President Arroyo.
November 2007
December 1989
Philippine armed forces stormed a luxury hotel in Manila’s business district on November 29, ending another coup attempt by Philippine Navy officer Antonio F. Trillanes IV.
On December 1 rebel aircraft attacked the presidential palace while their comrades seized a government-run TV station, several military camps and occupied the Makati commercial district. More than 100 people were killed before they surrendered on December 8.
February 2006 President Gloria Macapagal-Arroyo declared a state of emergency on February 25 after uncovering a coup plot. Several military and police officials, as well as an opposition congressman, were arrested.
July 2003 On July 27 more than 300 junior military officers, led by Trillanes, took over a hotel in the Makati district. His group surrendered within the day.
January 2001 Street protesters forced President Joseph E. Estrada to resign on January 20 after his aborted Senate impeachment trial. He was succeeded by his
October 1990 The last coup attempt against President Corazon C. Aquino took place on October 4, when rebel soldiers raided an army base on the southern island of Mindanao. The rebels surrendered after two days.
August 1987 Soldiers, led by Col. Gregorio B. Honasan II, attacked the presidential palace in one of the most serious coup attempts against Aquino. More than 50 people died.
July 1987 Aquino’s government discovered another coup attempt in which members of the military plotted to take over the main airport in Manila. Four officers were court-martialed.
April 1987
Known as “Black Saturday,” more than 50 soldiers raided the army
headquarters near the capital. The rebellion was quashed the next day. One soldier was killed.
January 1987
About 100 soldiers, led by Col. Oscar Canlas, seized the main compound of GMA Network Inc., while other troops tried to capture an air force base in Cavite province south of Manila. At least one rebel soldier died.
November 1986
Aquino faced her second mutiny attempt when her government uncovered the “God Save the Queen” plot to unseat her, led by Juan Ponce Enrile, a former defense minister under Ferdinand E. Marcos.
July 1986 Less than six months after replacing Marcos as president, Aquino faced the first of at least nine coup attempts when about 500 soldiers loyal to Marcos took over the Manila Hotel, one of the most famous in the Philippines. The coup attempt ended without violence two days later.
February 1986 Backed by a military faction called Reform the Armed Forces Movement, surging street demonstrations helped force Marcos to step down as president after 21 years in power.