Agriculture chief asked to resign over rice import anomaly By Nestor Corrales INQUIRER.net 12:30 pm | Tuesday, December 24th, 2013
Agriculture Secretary Proceso Alcala FILE PHOTO MANILA, Philippines — Agriculture Secretary Proceso Alcala should resign over his alleged inaction on the anomaly involving the government’s importation of rice, a lawyer said Tuesday. Lawyer Argee Guevarra said that Alcala was the alleged mastermind and ultimate beneficiary of the anomaly. Guevarra claimed that on top of the 187,000 metric tons of rice import that was officially announced by the National Food Authority (NFA), the agency authorized the purchase of 187,000 metric tons more without prior approval by the Fiscal Incentive Review Board of the Department of Finance. “This is downright anomalous. The additional rice import did not have a budgetary cover,” said Guevarra over Inquirer Radio 990AM. Guevarra said the 187,000 metric tons of rice import, as reported in the State of the Nation of President Benigno Aquino III last July was not the correct figure because our actual importation was 205, 700 metric tons. “The adjustment of 10 percent might have gone to some other’s pocket,” he said.
The lawyer recounted that during the time of former President Gloria Macapagal-Arroyo, rice was imported at $710 and was sold at P18. He said, however, that during the Aquino administration, rice was imported at a lower price of $429.25 but sold at a higher price range of P28-36. Guevarra said the lack of transparency between the dealings of the Department of Agriculture and NFA has resulted in overpricing. “There is something fundamentally wrong,” he said. Meanwhile, Guevarra said that another 500,000 metric tons of rice would be imported by NFA for the victims of Supertyphoon “Yolanda” (international codename: Haiyan). “I don’t know where they find the heart and conscience to import another one and use the tragedy as an excuse,” he said. He said the agriculture secretary has announced before Yolanda struck the country that the DA has reached 97 percent of rice sufficiency. The secretary, however, after Yolanda said the government would need to import rice to address the shortage. Read more: http://newsinfo.inquirer.net/551665/agriculture‐chief‐asked‐to‐resign‐over‐rice‐import‐ anomaly#ixzz2oZ8lfufA Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook
Consumption of iron‐fortified rice advocated by PIA December 25, 2013
Koronadal City – The Region 12 office of the Department of Science and Technology (DOST12) is expecting more stakeholders in the region to promote the iron-fortified rice (IFR) as staple. This developed after the IFR captured the attention of government agencies, local government units (LGUs), rice millers, and dealers, and food chain business owners in forums, specifically dealing on the agency’s rice fortification program. Early this month, the DOST-12, and the Food and Nutrition Research Institute (FNRI) conducted forums in General Santos City, and in Tacurong City, Sultan Kudarat. The discussion gave emphasis on the scaling-up of the rice fortification program via technology transfer, rice fortification technology, technology transfer and business planning, and guidelines and policies on food fortification. The DOST’s flagship program, the Small Enterprise and Technology Upgrading Program (SETUP) was also presented. DOST-12 Director Zenaida Laidan, in her message, stressed that iron-fortified rice is one of the most significant ways to address malnutrition. Encouraged by the information they learned from the forum, the management of the CLG Enterprises in General Santos City signified its intentions to adopt extrusion technology in producing iron premix. The officers of the groups are proposing a project dubbed “Upgrading of Iron Rice Premix and Fortified Rice Production.” Based on the data released by the Bureau of Agricultural Statistics (BAS), and considering the ratio of one-gram of premix in every 200 grams, a distributor that owns a prototype machine for the production of premix with a capacity of 200 kilograms per batch could supply all the millers in the region, Laidan said. The IFR, a technology developed by the DOST-FNRI, contains six-milligram of iron premix per 100 grams of rice. Consumption of the IFR, according to the FNRI, could produce healthy red blood cells, improve physical and mental performance, prevents anemia, and strengthens body against infections.
Meanwhile, Engineer Felix Canoy, manager of National Food Authority (NFA) in Sultan Kudarat, noted that the taste and color of the FNRI-developed IFR are better than the previously developed iron-coated rice. FNRI assistant scientist Dr. Imelda Agdepa said that in the clinical trials conducted to the 173 schoolchildren over the period of six months, results showed greater increase in hemoglobin in children who consumed IFR than this who did not. In response to the support that the DOST-12 got for the popularization of the IFR, Laidan thanked the NFA, and other agencies that have contributed or have promised to back the program up. She also vowed continuous advocacy through conduct of forums, social marketing, as well as information, education, and communication campaigns for the commercialization of the IFR technology. Laidan added that fortification of rice will be implemented via mill enrichment and home enrichment. For home enrichment program, she explained that the iron premix will be made available through retail stores. This is aimed at making the iron-fortified rice available to the rural households and communities where access of mill-enriched rice is limited. http://www.mb.com.ph/consumption-of-iron-fortified-rice-advocated/
Government doles out P15,000 to 65 Zamboanga farmers Category: Agri-Commodities 24 Dec 2013 Written by Alladin S. Diega ZAMBOANGA CITY—The government gave roughly P15,031 each to 65 farmers in the Zamboanga peninsula region this year, state media reported. The Philippine News Agency (PNA) quoted the Department of Agrarian Reform (DAR) as having provided P977,000 in calamity assistance to the farmers in Region 9. The region consists of three provinces, namely, Zamboanga del Norte, Zamboanga del Sur and Zamboanga Sibugay. The report quoted DAR Regional Director Julita Ragandang as saying the farmer beneficiaries have suffered farm losses to floods brought about by inclement weather and storms. The news report on the PNA web site on Tuesday neither identified the source of the cash nor the farmer beneficiaries. But the report further quoted Ragandang as saying that the calamity-assistance program is being implemented in coordination with the Philippine Crop Insurance Corp., which provides insurance to farmers covered by the Comprehensive Agrarian Reform Program. The report further quoted Ragandang as saying the amounts allocated to the farmer-beneficiaries were intended to help them defray expenses in the rehabilitation of their damaged farms. The amount given to farmer-beneficiaries depended on the actual damages they incurred, the report said. Ragandang was quoted as saying that the financial assistance was handed out to farmers “on varied occasions” in November and the third week of December. Alladin S. Diega http://www.businessmirror.com.ph/index.php/en/business/agri‐commodities/24850‐government‐ doles‐out‐p15k‐to‐65‐zamboanga‐farmers
Justify NFA ‘door to door’ import scheme 7:02 pm | Tuesday, December 24th, 2013 7 9 0
The merits of a plunder complaint facing Agriculture Secretary Proceso Alcala and National Food Authority (NFA) administrator Orlan Calayag over the P457.2-million “overpriced” April 2013 rice importation and other alleged offenses are better left to the courts (“Plunder rap filed over rice import,” Second Front Page, 12/17/13). But we focus on the NFA’s decision in April 2013 to price the 205,700 metric tons from Vietnam on a “door-to-door” scheme against the usual “landed cost” pricing in place until 2012. In the latter, payment by the NFA was based on the weight of rice as evidenced by documents in the foreign port of loading, and not on the quantity in the port of discharge. Any “shortlanding” and losses were absorbed by the NFA, which nevertheless had recourse to partial or full recovery by filing a claim with the shipping company. It is very significant that from Commission on Audit (COA) reports, “spillages/shortlandings” represented 0.002 to .0082 of NFA imports from 2008 to 2010–a period marked by huge volumes of rice importations 10 times the April importation.
In the door-to-door scheme, payment is based on the volume delivered to the warehouses designated by the NFA. In effect the NFA is paying in advance for expected “shortages.” Moreover, the exporting country takes charge of domestic cargo-handling operations and delivery to the warehouses. Why? Again it is noteworthy that with the rice imports in 2012 (landed-cost basis), the NFA’s operating expenses for “handling, transportation and delivery,” obviously incurred for rice importation and palay purchases, reached P158 million based on the COA reports. Which is advantageous? From the actual benchmarks, as culled from COA reports, the NFA could have saved $1.3 million to $2.4 million if the landed-cost pricing had been adopted in April. We have been very supportive of this government’s rice sufficiency program. And consistent with the letter titled “Are rice price offers of 2 gov’ts reasonable?” (Opinion, 12/7/13), the NFA Rice Council is urged to disclose the justification for the adoption of the door-to-door policy. –MANUEL Q. BONDAD, email@example.com Read more: http://opinion.inquirer.net/68021/justify‐nfa‐door‐to‐door‐import‐scheme#ixzz2oZFDTelC Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook
Dahil sa climate change Produksiyon ng bigas bababa Ni Malou Escudero (Pilipino Star Ngayon) | Updated December 25, 2013 ‐ 12:00am 0 1 googleplus0 0
MANILA, Philippines - Nagbabala si Senator Loren Legarda sa tiyak na pagbaba ng produksiyon ng bigas sa bansa dahil sa climate change. Ayon kay Legarda, ang pagtaas ng temperatura ng mundo ay nakakaapekto sa produksiyon ng bigas at iba pang pananim. Ang kawalan anya ng “robust adaptation strategies” ng gobyerno ay may malaking epekto sa food security ng bansa sa hinaharap. Base sa pag-aaral ng Asian Development Bank noong 2009, ang bigas na inaani sa Pilipinas ay bababa ng 75 porsiyento pagsapit ng 2100 dahil sa kawalan ng mga “adaptation programs” sa climate change. “The typhoons, floods and droughts from 1970 to 1990 resulted in an 82.4% loss in total Philippine rice production,” ani Legarda, chair ng Senate Committee on Climate Change. Bukod sa pangangailangan na maging “rice sufficient” ang bansa, isa pa ring malaking problema ang pag-aaksaya ng kanin lalo na sa mga restaurant at fast food chains. PSN ( Article MRec ), pagematch: 1, sectionmatch:
Sa 2008 statistics ng Food and Nutrition Research Institute, ang bawat isang Filipino ay nagaaksaya ng average na 2 kutsarang kanin araw-araw. Kung pagsasama-samahin umano ang naaaksayang kanin, maari na itong makain ng nasa 2.6 milyong Filipino sa bawat taon. Isa sa solusyong nakita ng Philippine Rice Research Institute ay ang paggigiit ng “one-half cup” na serving size sa mga nasa food service industry. “Our citizens should also be conscious of their consumption of rice in their respective homes. The government’s efforts should be paralleled with support from the private sector and our citizens,” ani Legarda. http://www.philstar.com/bansa/2013/12/25/1271769/dahil-sa-climate-change-produksiyon-ngbigas-bababa
Coco farmers complain rights as UCPB shareholders on record illusory Category: Banking & Finance 24 Dec 2013 Written by David Cagahastian The coconut farmers whose ownership of shares of stock in the United Coconut Planters Bank (UCPB) has been voided by the Supreme Court (SC) sought clarification on their status as stockholders after the lender, which invited them to the special stockholders’ meeting last week, did not allow them to participate. The coconut farmers were invited to the special stockholders’ meeting on December 18 in Makati City, which was called to approve a board resolution increasing the authorized capital stock of UCPB to a maximum of P40 billion. They said their expenses in going to the special stockholders’ meeting were reimbursed but that they were not allowed to vote at the meeting to help decide on whether to approve the plan to increase the capital stock. Instead, the Presidential Commission on Good Government (PCGG), which is the sequestrator of shares of stock adjudged to have been bought using public funds, voted on the government’s 74percent stake in the lender and approved the increase in capital. Lawyer Domingo Espina, one of the petitioners in the Supreme Court case in which it was held that the government is the owner of the UCPB stocks held by the farmers, asked for clarification on the status of the coconut farmers as stockholders on record, in light of the “invitation” that was sent to them by UCPB to the special stockholders’ meeting on December 18. The SC ruled last January 24, 2012, in Philippine Coconut Producers Federation Inc. (Cocofed) v. Republic of the Philippines that the shares of stock distributed by the Philippine Coconut Authority (PCA) to about 1.4 million coconut farmers as their private property should be reverted to the government because the funds used by PCA to purchase these shares of stock are public funds. The coconut farmers are still the stockholders on record in the books of UCPB, but the UCPB regard them now as “beneficial owners” of the shares of stock, along with the rest of the coconut industry, with the government as the true owner of the shares of stock as declared by the SC decision. Espina said he received the notice of the special stockholders’ meeting, which prompted him to travel to Manila to attend. But he and several other coconut farmers felt left out as they were hosted at a function room at the Metro Club in Makati City while the actual stockholders’ meeting was being held at another room. He said his travel and hotel accommodations were reimbursed but he was not allowed to exercise his right as a stockholder on record.
“What is the stand of the bank regarding the farmers who are stockholders of UCPB? This is an official stockholders’ meeting and you invited me here. What is the legal significance of my visit here today?” Espina asked. UCPB Corporate Secretary Ildefonso Jimenez said that to date, the coconut farmers who were issued the shares of stock by PCA are still the stockholders on record, but the rights are already being exercised by the PCGG because of the SC decision. “The Supreme Court has declared that the shares are to be held by the Republic on behalf of the coconut farmers. The Republic is the owner, but its ownership is for the benefit of all the coconut farmers. That’s why the board of directors thought it prudent to invite the representatives of the coconut farmers because they believe that as beneficial owners of the bank, you still have a stake in what will happen to the bank,” Jimenez said in response to Espina’s question. David Cagahastian “Up to this point in time, the farmers are the registered stockholders but the right of the shares are being exercised by the PCGG as sequestrator of the shares,” he added. Chito Delorino, who was also invited to the special stockholders’ meeting, said the invitation to the coconut farmers seemed like an attempt to lend legitimacy to the stockholders’ meeting. Delorino’s father is a Cocofed member and he was sent to school as a Cocofed scholar.
Delorino said that the rights of the coconut farmers who are still the stockholders on record of UCPB and continue to hold stock certificates, such as the right to inspect, are no longer being recognized by UCPB. Jimenez refuted this allegation, saying that UCPB receives on almost a daily basis requests for verification on whether a certain stockholder is still a stockholder of UCPB, but such verification is always subject to the Supreme Court decision in Cocofed vs. Republic of the Philippines. http://www.businessmirror.com.ph/index.php/en/business/banking-finance/24863-coco-farmerscomplain-rights-as-ucpb-shareholders-on-record-illusory
Rubber in Tokyo drops to two-week low as China stockpiles jump Category: Agri-Commodities 24 Dec 2013 Written by Bloomberg News RUBBER futures fell to a two-week low after data showed stockpiles in biggest-consumer China expanded and shipments from Vietnam jumped, raising speculation supply may grow faster than demand. The contract for delivery in May on the Tokyo Commodity Exchange declined as much as 2.8 percent to ¥275 a kilogram ($2,635 a metric ton), the lowest level since December 6, and traded at ¥276 at 10:41 a.m. local time. The drop expanded losses this year to 8.8 percent. Rubber inventory monitored by the Shanghai Futures Exchange grew to 167,141 metric tons by December 19, nearing a nine-year high of 172,022 tons reached on November 21, data from the bourse showed. Exports by Vietnam increased 20 percent to 140,000 tons this month from a year earlier, data from General Statistics Office showed on December 23. “The market is weighed down by oversupply concerns,” said Kazuhiko Saito, an analyst at broker Fujitomi Co. in Tokyo. “Rising stockpiles in China signal demand from end-users is not strong enough to absorb a global glut.” Higher volatility in China’s money-market rates and difficulty in obtaining funds among some lenders also raised concerns the world’s second-biggest economy may slow down, curbing demand for raw materials, Saito said. The seven-day repurchase rate, a gauge of funding availability in the banking system, jumped to 8.84 percent on December 23, the highest level since June 20, according to a daily fixing from the National Interbank Funding Center. The commodity for May delivery on the Shanghai Futures Exchange lost 0.6 percent to 18,410 yuan ($3,033) a ton. Thai rubber free-on-board gained 0.4 percent to 83.65 baht ($2.55) a kilogram on December 23, according to the Rubber Research Institute of Thailand. Bloomberg News http://www.businessmirror.com.ph/index.php/en/business/agri‐commodities/24848‐rubber‐in‐tokyo‐ drops‐to‐two‐week‐low‐as‐china‐stockpiles‐jump
NegOcc farmers, fishermen get P4.3-M assistance from DA • •
Details Category: Agri-Commodities 24 Dec 2013 Written by PNA BACOLOD CITY—The Department of Agriculture has released P4.3 million in financial assistance to farmers and fishermen in Negros Occidental affected by Supertyphoon Yolanda. Beneficiaries are from the cities of San Carlos, Escalante, Cadiz, Victorias, Sagay, Silay, Himamaylan, La Carlota and Sipalay and the towns of Don Salvador Benedicto, Toboso, Calatrava, Manapla, Murcia, E.B. Magalona, Valladolid, San Enrique, Isabela, Hinigaran and Ilog. The farmers received 1,000 bags of rice seeds worth P1,200, which the DA distributed in coordination with the United Nations’s Food and Agriculture Organization (FAO). FAO coordinator Jacquelyn Pinat said their agency will monitor the progress of the rice seeds planted for the next 115 days, after which the farmers will be provided with P1.5 million worth of fertilizers. Affected fishermen received 1,600 pieces of marine plywood worth P928,000, and 400 marine epoxies amounting to P240,000. An additional 1,000 bags of rice seeds will also be distributed to other typhoon-affected Negrense farmers next year. The DA will also give 60 pump engines and 297 different farm tools. PNA http://www.businessmirror.com.ph/index.php/en/business/agri‐commodities/24847‐negocc‐farmers‐ fishermen‐get‐p4‐3‐m‐assistance‐from‐da
In PHL, a vortex of climate change and debt • •
Details Category: Top News 24 Dec 2013 Written by Samuel Oakford / Inter Press Service UNITED NATIONS—Since Supertyphoon Yolanda (international code name Haiyan) made landfall in the Philippines on November 8, the country has sent holders of its debt close to $1 billion, surpassing—in less than two months—the $1 million the United Nations has asked of international donors to help rebuild the ravaged central region of the archipelago. Even as the Philippines goes hat in hand to wealthier countries seeking disaster relief, it continues to diligently pay creditors in those same countries millions of dollars every day—much of it interest on debt that can be traced back to the administration of President Ferdinand Marcos. When President Aquino announced last week the staggering cost of rebuilding from the storm— the price tag of $8.17 billion and a pair of emergency loans to help meet that goal—distressed debt reduction campaigners in the country who have for many years called for a cancellation of illegal debts. “Every dollar of funding assistance will be used in as efficient and as lasting a manner as possible,” Aquino assured reporters. “The task immediately before us lies in ensuring that the communities that rise again do so stronger, better and more resilient than before.” Yet, every 12 months, the Philippines transfers to lenders nearly the same amount Mr. Aquino hopes to raise for reconstruction. And because Filipino law privileges the payment of debt over all other expenses, those installments could end up eating into rebuilding funds. Even before the storm, education and health-care spending in the country fell well short of global benchmarks; one in five Filipinos live in poverty and over 15 million are malnourished. As the storm’s damage became clear, Mr. Aquino rushed to the World Bank and Asian Development Bank (ADB), both of which quickly inked $500-million emergency reconstruction loans and several small cash grants of less than $25 million. “From now until December 2014 we will be preoccupied with critical immediate investments such as the rebuilding and repair of infrastructure and the construction of temporary houses,” Mr. Aquino said. But the Philippines suffers on average seven to eight typhoons annually and climate change models predict storms like Yolanda will become more commonplace in the future.
Emergency loans set a troubling precedent, especially in a country where 20 percent of government revenue already goes to debt servicing, said Tim Jones, senior policy and campaigns officer at the Jubilee Debt Campaign. “We think it is always a bad idea and unjust to respond to a disaster by lending money,” Jones told IPS. The UN Framework Convention on Climate Change prohibits climate-related investments from increasing the debt of a country. But the statute is ignored in emergency situations. If the tomorrow predicted by climatologists is already here, ask activists, what can be considered “critical immediate investments?” As financial and climatic “crisis” insinuates itself into the everyday, temporary measures that further indebt nations can easily morph into long-term palliative care for the world’s most vulnerable countries. “The logic of the loan, if there is any, is that the money is lent so the money can be repaid, and by definition that cannot happen in the context of a reconstruction loan,” Jones said. “What sticks in the throat even more is when the World Bank and ADB present these amounts as aid.” Though the Philippines has made progress in reducing its debt burden over the past decade—in large part due to one-time payments from wide-scale privatizations—the country may find itself in a similar state of climate-induced paralysis as soon as the next typhoon season. In 2008, the Philippine Congress suspended payments on 11 “illegitimate loans,” only to be reversed by then-President Arroyo, under pressure from the International Monetary Fund and fearful of interest rate repercussions. Again, in 2011, Congress attempted a debt audit, but Aquino quickly dismissed the committee chairman. “They don’t want a precedent to be set,” said Jones. Multilateral lenders, larger and more easily tracked than private bondholders, fear a forensic analysis of the debt could unearth billions in illegitimate loans, opening the floodgates for cancellation. Governments, for their part, fear that unilateral targeted defaults would be punished severely by investors. Both the World Bank and ADB have been financially supportive—through both grants and loans—of innovative cash transfer schemes and climate change mitigation programs in the Philippines. But neither would comment on questions of climate reparations or of a debt audit in any form. Rogier Van Den Brink, the World Bank’s lead economist in the Philippines, told IPS the country’s immediate needs were paramount.
“It is critical that reconstruction begins quickly to minimize the economic impact and more importantly to reduce the hardship for people, especially the poor and vulnerable,” said Van Den Brink. Though the loans offer grace periods of between eight and 10 years and yields barely above interbank rates, they are nonetheless debt, says Ricardo Reyes, president of the Freedom from Debt Coalition. “Filipinos are being asked to pay without any consultation,” Reyes told IPS. http://businessmirror.com.ph/index.php/en/news/top‐news/24873‐in‐phl‐a‐vortex‐of‐climate‐change‐ and‐debt
BPI sees inflation averaging 3 percent for 2013 Category: Banking & Finance 24 Dec 2013 Written by Genivi Factao Bank of the Philippine Islands (BPI) sees inflation averaging 3 percent for the full year 2013, rising to 3.5 percent by next year. BPI said the ill effects from the Supertyphoon Yolanda disaster will impact on the consumer price index for the next couple of months as supply side disruptions push the prices of commodities higher. “As such, we expect full-year 2013 inflation to crest the 3 percent level while 2014 inflation to settle at 3.5 percent,” the lender said. The Bangko Sentral ng Pilipinas (BSP), currently employing an inflation targeting framework, was not expected to raise interest rates next year as the projected increase in inflation will mainly be supply side driven. BPI said under the inflation targeting framework, the BSP will only resort to hiking interest rates if rising inflation rides on the back of demand side pressure. “We do not expect any changes to both the policy and special deposit account rate while the BSP may decide to maintain financial stability through the deployment of macro prudential measures as they see fit” the bank said. It added the previous year saw CPI inflation skirting the lower end of the BSP’s target of 3 percent to 5 percent as headline inflation averaged 3.2 percent for the full year, as food prices, comprising nearly half of the CPI basket, remained flat. “This trend of slow inflation carried over into 2013 with headline inflation prior to the Yolanda episode averaging 2.8 percent, with inflation dipping below the 3-5 percent BSP target for 7 out of the 10 months” the bank added. Meanwhile, Roberto F. de Ocampo, chairman of the Philippine Veterans Bank, said inflation will likely range from 3 percent to 5 percent next year. “GDP growth will be at the low-end of the government’s target, at 6.5 percent and the unemployment rate will be 7 percent to 7.3 percent,” he added. He forecasts the exchange rate to remain above P43 for each US dollar. Overseas Filipino workers (OFW)’s remittances will likely be over US$22 billion in 2014, de Ocampo said. http://www.businessmirror.com.ph/index.php/en/business/banking‐finance/24864‐bpi‐sees‐inflation‐ averaging‐3‐percent‐for‐2013
Number coding lifted on holidays By Jamie Elona INQUIRER.net 12:41 pm | Tuesday, December 24th, 2013
INQUIRER FILE PHOTO MANILA, Philippines – The Metropolitan Manila Development Authority reminded motorists that its Unified Vehicular Volume Reduction Program or number coding was lifted Tuesday and Wednesday as the country celebrates Christmas, a holiday. In a Twitter post, MMDA said, the number coding was lifted December 24 and 25 in the entire Metro Manila, including cities of Makati and Las Pinas. Christmas Eve has been declared a non-working holiday, while Christmas day itself is a regular holiday. The number coding will also be lifted on December 30 for the Rizal Day, a regular holiday; December 31, a special non-working day, as well as January 1. The scheme is automatically lifted during holidays. Read more: http://newsinfo.inquirer.net/551673/number‐coding‐lifted‐on‐holidays#ixzz2oZ8Tz4I3 Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook
‘Floating’ VAT for basic goods Cayetano says move will curb high prices By Norman Bordadora Philippine Daily Inquirer 9:48 pm | Tuesday, December 24th, 2013
Saying the government shouldn’t profit from the people’s misery, Sen. Alan Peter Cayetano has called for “floating rates” in the collection of the value added tax (VAT) to control skyrocketing prices whenever the costs of basic commodities go up. “Lowering prices or making sure that prices do not skyrocket should be a priority of this government. The Christmas gift I’m asking from this administration during this Christmas break is for them to study these proposals,” Cayetano told reporters shortly before the holidays. Cayetano proposed that Congress adopt a joint resolution that will either suspend the collection of certain taxes whenever costs go up or that will impose floating tax rates of 6, 9 and 12 percent depending on when costs go up or down. “I think the government should adopt this as a principle: that the government should not profit from people’s misery. Our taxes are all percentage taxes like the VAT,” Cayetano said. Conflict of interest “Whenever prices go up, the income of the government increases. So there’s a conflict of interest on the part of the government. On one hand, it wants prices to go down. On the other, it wants to increase the taxes it collects,” he added. Cayetano made the remark after the Manila Electric Co. announced a P4.15 power rate hike. A little over 70 centavos of the rate increase will mostly go to the government as taxes. The Supreme Court has since imposed a 60-day temporary restraining order on the rate hike.
Cayetano doesn’t expect his proposals to make a dent on the revenue collection targets of government. Not affected “The amount of taxes for 2014 won’t be affected because we are already exceeding projections. If the projected generation cost was P5.50 per kwh, we’re already at P9,” Cayetano said, referring to the recent power rate hike the Supreme Court stopped. “The P3.50 or P4 power rate hike also has an added incremental tax so we’re not decreasing the tax on the first P5.50; just on the increase. The same with petroleum products and other commodities,” Cayetano added. Cayetano said that while government could keep prices down by addressing the problem of hoarding among traders to create artificial shortages, it could also ease up the collection of taxes when prices become too steep for consumers. “The other way is simply to assure people that the priority of government is to keep prices down rather than collect taxes. As we saw in the case of the price of electricity, we saw that after it went up, the government even earned additional revenues,” Cayetano said. “While [the increase] was something it didn’t do, it also didn’t raise a howl,” Cayetano added. Cayetano said that during the Marcos dictatorship, the government suspended the tax on the importation of the liquefied petroleum gas after the cost of cooking gas became difficult to bear. “He made the importation tax-free to help the consumers,” Cayetano said. RELATED STORIES: Read more: http://business.inquirer.net/157631/floating‐vat‐for‐basic‐goods#ixzz2oZAIfU5g Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook
Interest payments on gov’t debt seen rising in ’14 By Michelle V. Remo 9:25 pm | Tuesday, December 24th, 2013
The government will spend more on interest payments in 2014 as it continues to rely on borrowings to partly fund its expenditure requirements. In the national budget for next year that President Aquino signed last week, the government earmarked P352.65 billion to pay interests on its outstanding obligations, up year-on-year by 5.6 percent. Despite the increase in interest payments, the Department of Budget and Management said the share of this expenditure item in the total budget declined. With the national budget for next year set at P2.265 trillion, interest payments would account for 15.6 percent. For this year, interest payments were estimated to account for 16.6 percent of the P2.006-trillion national budget. “The share of debt servicing will continue to go down,” Budget Secretary Florencio Abad told reporters earlier. The increase in the state’s expenditure program for next year would lead to a higher amount of budget deficit.
The government has set a budget deficit ceiling of P266.2 billion for next year, up by nearly 12 percent from the targeted ceiling for this year. With the economy expected to post another robust growth rate next year, the ratio of the government’s budget deficit to the country’s gross domestic product (GDP) is estimated to stay at 2 percent. Officials said a deficit-to-GDP ratio of 2 percent or lower was manageable and would help sustain the downtrend of the government’s debt burden. The government’s debt burden, or the ratio of outstanding debts to GDP, is seen to decline anew to 49.3 percent this year and further to about 47 percent next year. It peaked at over 70 percent in 2004 before declining continually to 51.5 percent last year. In the meantime, the Bureau of the Treasury, which is tasked to implement the government’s borrowing program, earlier expressed confidence that interest rates on government securities would remain benign next year.
National Treasurer Rosalia de Leon said the country’s favorable credit standing should help keep interest rates on Philippine government securities modest in 2014 despite the much-feared market volatility to be brought about by the anticipated withdrawal of the stimulus program of the US Federal Reserve. Read more: http://business.inquirer.net/157613/interest‐payments‐on‐govt‐debt‐seen‐rising‐in‐ 14#ixzz2oZB9TmfT Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook