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Disaster risk agency eyes sea rescue plan

THE Regional Disaster Risk Reduction and Management Council plans to craft a template for sea rescue operations in Region 6.

On Thursday, members of the council conducted a simulation exercise in Guimaras near the Iloilo Strait to see how agencies respond to a maritime incident.

Jose Roberto R. Nuñez, chairman of the agency and regional director of the Office of Civil Defense in Western Visayas, observed lapses, but said the participation of the concerned agencies should be commended.

The region plans to craft a template on sea rescue after the simulation exercise, which will be done in the entire region, Mr. Nuñez said.

After Guimaras, the simulation will be conducted next in Iloilo and all over the region, he said. The region also plans to form a task force on maritime response. — Emme Rose S. Santiagudo

Five of 70 convicts have surrendered

FIVE of about 70 felons from the Davao Region convicted of a heinous crime and who were illegally freed have surrendered, according to police.

The three convicts yielded after President Rodrigo R. Duterte said he would order the capture of felons who refuse to surrender “dead or alive,” police Captain Nolan P. Tagsip said at the weekend.

President Rodrigo R. Duterte has fired Nicanor E. Faeldon, head of the Bureau of Corrections, after he allowed the illegal release of about 2,000 felons convicted of heinous crimes for good conduct.

He also ordered his and other prison officials’ probe by the Ombudsman for corruption.

The Ombudsman has ordered the suspension of about 30 jail officials in connection with the botched release of ineligible prisoners. — Carmelito Q. Francisco

City goes after online travel agencies

THE city government has tightened the noose on online businesses, particularly travel agencies that are operating illegally.

Many online travel agencies continue to operate without permits, according to Marissa M. Torentera, acting head of the Business Bureau.

The local government are running after these illegal businesses that use the Internet and social media to advertise their services, Ms. Torrentera said.

Two weeks ago, the city government shut down an online travel agency for operating without a permit. — Carmelito Q. Francisco

BSP likely to cut policy rates this month

TARLAC — The central bank will cut benchmark interest rates as early as this month, with the regulator also studying when to implement further reductions to lenders’ reserve ratios.

BSP Governor Benjamin E. Diokno told reporters on the sidelines of an event here that the central bank’s planned cuts to interest rates “won’t reach November.”

“Could be October or September,” Mr. Diokno said.

The BSP chief added that they are still studying whether they will announce and implement the planned cuts to policy rates and big banks’ reserve requirement ratio (RRR) in one go or in different events.

The central bank’s Monetary Board holds policy-setting meetings every six weeks. Its remaining reviews for the year are scheduled on Sept. 26, Nov. 14 and Dec. 12.

The BSP has cut rates by a total of 50 basis points (bp) this year — by 25 bps each last May 9 and Aug. 8 — to 4.25% for the overnight reverse repurchase rate, 4.75% for overnight lending and 3.75% for overnight deposit, partially dialing back the 175-bp cumulative hikes triggered last year by successive multi-year high inflation that peaked at a nine-year high.

Mr. Diokno earlier said the central bank is looking to cut policy rates by another 25 bps as well as slash big banks’ RRR before the year ends.

He said the Monetary Board plans to “pre-announce” RRR moves on a quarterly basis to prepare the markets.

Currently, the RRR is at 16% for big banks and six percent for thrift banks following the phased 200-bp cut implemented after an off-cycle meeting last May. The reserve ratio of rural and cooperative lenders was also cut to four percent from five percent effective May 31.

Mr. Diokno has said he is committed to trim universal and commercial banks’ RRR to single digit before his term ends in 2023.

In an email on Friday, ING Bank N.V.-Manila Branch senior economist Nicholas T. Mapa said Mr. Diokno “has all but sealed the deal for a policy rate cut at the Monetary Board’s next meeting.”

“With growth of above 6% for 2019 fading away fast, the decisive move to cut borrowing costs to address now anemic capital formation would be a step in the right direction as the price objective is well in hand,” Mr. Mapa said.

“Meanwhile, we now bring forward our expectation for a pre-announced reduction in RRR to the 26th of September with Diokno charting out a series of 50 bps cuts to RRR, one at the end of October and another at the end of November. Diokno was quoted as saying he would like to announce RRR cuts “quarterly” and we foresee his next announcement to come at the end of this month,” he added.

On the other hand, in a report on Friday, The Hongkong and Shanghai Banking Corp. Ltd. (HSBC) Economist Noelan Arbis said the impact of the BSP’s previous RRR cuts on money supply has been “rather muted.”

“We believe there may be several reasons for this, including a wider trade deficit, greater government bond issuance, policy rate hikes in 2018, and the BSP’s liquidity absorption facilities. These drags on liquidity imply that continued RRR cuts will remain necessary to provide sufficient money supply for growth,” Mr. Arbis said.

Mr. Arbis said HSBC expects big banks’ RRR to fall to 11% by 2021, with the bank also forecasting that the BSP will cut its policy rate by at least another 25 bps and the RRR by another 100 bps by yearend.

“Moreover, we expect further policy rate and RRR cuts in 2020, providing a greater boost to money supply and bank lending domestically,” he said.

“That said, we expect subsequent RRR cuts to eventually translate into higher money supply growth and, by nature, higher bank lending growth… Inflationary risks would require the BSP to play a more active role in liquidity management as it cuts the RRR further. Preventing runaway prices would entail higher TDF (term deposit facility) offerings and greater BSP bill issuance at the first signs of demand-side driven inflation in order to mop up excess liquidity in the financial system,” Mr. Arbis added. — with a report from LWTN

House approves CITIRA on final reading

THE HOUSE of Representatives on Friday approved on third and final reading the second package of the government’s tax reform program, fast-tracking the administration’s plans to lower income taxes and slash the incentives of businesses.

On Friday, House Bill 4157 or the Corporate Income Tax and Incentives Rationalization Act (CITIRA) received majority of the votes in the House of Representatives, getting 170 votes in favor of the tax reform measure and only eight negative votes and six abstentions.

CITIRA is one of the 18th Congress’ priority bills after lawmakers failed to pass it before the close of the 17th Congress when the measure was still named the Tax Reform for Attracting Better and High-quality Opportunities or TRABAHO bill.

The approved bill aims to lower the current 30% corporate income tax (CIT) rate by two percentage points every other year until 2029 to bring it to 20%. The CIT in the Philippines is considered as one of the highest rates in Asia.

In a statement on Friday, House Committee of Ways and Means Chair and CITIRA’s principal author Albay 2nd District Representative Joey S. Salceda said:” By reducing CIT from 30 to 20%, we are mobilizing the dynamism and efficiency, productivity, and innovation of the domestic corporate sector. Based on SEC (Securities and Exchange Commission) Top 1000 in 2017, we expect to reinvest 87% of tax savings in business expansion, explore new product-market fits and RD (research and development).”

Mr. Salceda added that businesses can reapply to extend their incentives, but the approval will be based on their performance.

“There is no limit to reapplication effectively extending incentives life but based on performance. In the first three years, the NG (national government) intends to approve all eligible applicants but based on the new framework, it provides incentives for outcomes we desire — 50% more deduction for domestic labor, 50% more for domestic input purchases, 100% more for workers training, 100% more for RD, and to encourage capital outlay, 50% for reinvestment in manufacturing, accelerated depreciation of 10 years for buildings and five years for equipment and 100% more for infrastructure,” Mr. Salceda said.

The CITIRA also provides that investments in rural regions will have 10-year incentives as opposed to the five-year incentives granted in the National Capital Region.

The bill also grants the president the power to approve incentives if initiatives are part of the comprehensive sustainable development plan and will bring in at least $200 million in revenues.

The second tranche of the government’s tax reform program is seen to generate 1.5 million jobs, Mr. Salceda said, adding that the measure will add 1.1% to the country’s gross domestic product growth in the first year of implementation and another 3.6% annually from 2020-2030, while adding only 0.9% to inflation.

The House will transmit the measure immediately to the Senate.

Some of the lawmakers who opposed the measure on Friday said the CITIRA was prematurely approved.

Buhay Partylist Representative José Livioko “Lito” Atienza, Jr. said: “In any law that concerns taxation we should be very prudent…. We have passed this law hastily.”

“The rate of CIT is not one of the major factors that attracts or discourage investment,” Albay 1st District Representative Edcel C. Lagman said, adding that policy, infrastructure, and internet speed are more crucial to improving doing business in the Philippines.

GROSS-BASED SYSTEM
Meanwhile, the Department of Finance (DoF) is working on an interagency group to study the gross-based corporate income tax system following President Rodrigo R. Duterte’s suggestion that the shift could reduce corruption, its chief said on Friday.

Finance Secretary Carlos G. Dominguez III said the administration’s economic team and other agencies will be coordinating to study a shift to a gross-based tax system from the current net income-based system.

“There is a recommendation to form a group headed by the Executive Secretary, and participated in by the Department of Justice and the Development Budget Coordination Committee (DBCC) to study this issue,” Mr. Dominguez told reporters in a phone message.

The DBCC is composed of principals of the Department of Budget and Management (DBM), the DoF, the National Economic and Development Authority, the Office of the President and the central bank, with the DBM Secretary as the chair.

Mr. Duterte first mentioned this late last month during his speech in Romblon, saying it is difficult to cheat tax computations if it is based on gross revenues.

In a recent press briefing, Mr. Duterte reiterated this, urging the public and the media to “agitate” Congress to shift to a gross-based system.

“If we go gross…ano pa ba ang i-corruption mo sa gross (income)? ‘Pag nandiyan ‘yang resibong ‘yan, ‘yan na lang bayaran mo (How can you be corrupt when taxing gross income? Once you have the receipt, that is what you will have to pay for)… Agitate Congress, gross na tayo,” he said.

He added that getting rid of brokers in the Bureau of Customs will also reduce corruption within the agency. — G.M. Cortez with B.M. Laforga

Bureau of Immigration arrests 277 Chinese fugitives accused of fraud

THE Bureau of Immigration (BI) on Friday said that it arrested 277 illegal workers, many of whom were Chinese nationals working for illegal online gaming operations.

In a statement on Friday, the BI said that the alien workers were arrested in Pasig City on September 11. The raid’s original targets were four Chinese fugitives, who, according to BI Commissioner Jaime H. Morente, were wanted in China for large-scale fraud amounting to RMB100 million or over P700 million.

“We received an official communication from Police Attaché Chen Chao of the Chinese Embassy in the Philippines indicating that these Chinese fugitives engaged in an investment scam that victimized more than a thousand individuals, and has an estimated cost of damages amounting to more than RMB100 million,” he said.

The raid, which took place in Ortigas Center in Pasig City, led the BI to 273 other Chinese workers also accused of massive fraud. They were caught while engaged in illegal gambling operations.

“Upon verification with the Chinese government, we found out that the passports of these fugitives have already been canceled, making them undocumented aliens,” said BI’s Fugitive Search Unit (FSU) Acting Chief Bobby R. Raquepo in a statement.

The arrest was done in collaboration with the Presidential Anti-Corruption Commission (PACC), Philippine National Police (PNP)’s Integrity Monitoring and Enforcement Group (IMEG), and the Chinese Ministry of Public Security (MPS).

“These fugitives will be hunted, deported, and will be blacklisted, effectively banning them from re-entering the country,” Mr. Morente said. — Gillian M. Cortez

DOJ finalizes revisions of GCTA law, wants more control over BuCor

THE Department of Justice (DoJ) on Friday said it finalized the Implementing Rules and Regulations (IRR) of the Good Conduct and Time Allowance (GCTA) law and expressed its intention to exert more control over the Bureau of Customs (BuCor).

In a message to reporters on Friday, Justice undersecretary Markk L. Perete said its review committee, in partnership with the Department of the Interior and Local Government (DILG), finished revising the IRR of the GCTA Law. The revisions began after the public outcry against the alleged plan to release former Calauan Mayor Antonio L. Sanchez, a convicted murderer and rapist, last month.

“The Joint Review Committee has completed its work and submitted the draft IRR to the Secretaries of Justice and of the Interior and Local Government. Both will now review the draft IRR and decide on its promulgation,” he said.

More than 22,000 inmates have been released since 2014 under the GCTA law.

On the other hand, Justice Secretary Menardo I. Guevarra said that there is a need to review Republic Act 10575, which establishes the powers of the BuCor (an attached agency of the DoJ).

“I am beginning to think that the law itself that supposedly strengthened the BuCor (and consequently diminished DOJ control over it) may have to be reviewed,” he said.

The DoJ said that it will continue its efforts to reform the BuCor under the limitations of the current law; this includes creating an oversight committee.

“DoJ can only exercise administrative supervision over the BuCor instead of control,” said Mr. Perete about RA 10575. — Gillian M. Cortez

Duterte won’t fire BuCor officials who acted in ‘good faith’

PRESIDENT Rodrigo R. Duterte said he will not fire the officials of the Bureau of Corrections (BuCor) who have acted “in good faith” in implementing the Good Conduct Time Allowance (GCTA) law.

He said only corrupt officials will be fired.

“Even if it was regular or allowed, corruption was there. Setting aside all the legal infirmities there, even if it was allowed, corruption was present. Sabihin ko na lang sa inyo and everybody will have to go. Alam nila ’yan,” the President said on Thursday night during the inauguration of a government center and business hub in Bataan.

He added: “If it is done in good faith, ’di kita anuhin. Pero kung sabihin mo na bayaran, that is another story. I will hit you, not because the law was in limbo, but because of corruption.”

BuCor data showed that 1,914 prisoners convicted of heinous crimes had been released for good conduct.

The rules on parole are now under review after irregularities came up during a Senate investigation.

President Duterte fired Nicanor E. Faeldon as BuCor head after he allowed the early release of the ineligible prisoners.

Ombudsman Samuel R. Martires suspended 30 officials in connection with the illegal release of ineligible prisoners. — Arjay L. Balinbin

Defense calls for improvements in infrastructure and services in West Philippine Sea

THE Department of National Defense (DND) called for the improvement of infrastructure and basic services for military troops and civilians posted in the West Philippine Sea, specifically in the disputed Kalayaan Group of Islands.

“We need to further upgrade the monitoring floating and air assets of the Philippine National Police, the Philippine Coast Guard, and the Bureau of Fisheries and Aquatic Resources towards enhanced surveillance, reinforcement and other development capabilities in the country’s vast maritime range,” Defense undersecretary Cardozo M. Luna said in a forum.

Mr. Luna said that the country has the lowest funding for defense among the 10 member states of the Association of Southeast Asian Nations, “spending only 1% of its Gross Domestic Product on defense.”

“We hope that Congress finds wisdom to invest in more resources for our modernization efforts particularly at least 2% of our Gross Domestic Product towards developing the country’s defense posture,” Mr. Luna said.

The DND has sought the approval of its proposed P258-billion budget for 2020 from Congress.

Of the P183.3 billion proposed budget for the Armed Forces of the Philippines (AFP), P29 billion will be allocated to the Philippine Navy and P36.8 billion to the General Headquarters. The AFP modernization program has an allotted P25 billion from the General Headquarters budget.

Meanwhile, Jay L. Batongbacal, director of the University of the Philippines’ Institute for Maritime Affairs and Law of the Sea, stressed the strategic importance of the country’s waterways as used by the United States military before.

“China, the rising power, sees this as a potential threat because it regards its national security frontiers vulnerable in the area of the sea, particularly in the South China Sea, its southern coast… and it so happens we are in those areas,” Mr. Batongbacal said.

In a national security perspective, Mr. Batongbacal said that Philippine waterways and trade routes also pose a threat to security due to the free mobility given to the international traffic under the United Nations Convention for the Law of the Sea (UNCLOS).

“How do you defend for example, Manila, when enemy ships can just reach up through the Visayan and Sulu seas,” he added.

Mr. Batongbacal said that under the UNCLOS, we are “supposed to guarantee access through these areas through the rights of innocent passage and the right of archipelagic sea lanes passage.”

As a developing country, he said that protecting the waterways also poses a greater challenge due to a lack of resources, despite the military modernization efforts. — Marc Wyxzel C. Dela Paz

Government center and business hub opens in Bataan

PRESIDENT Rodrigo R. Duterte on Thursday inaugurated the Bataan Government Center and Business Hub, also known as “The Bunker.”

Bataan province is the first local government in the Philippines to house provincial and national offices in a single location, Malacañang said in a statement.

The Bunker, which was built through Public Private Partnership (PPP), will be home to government financial institutions and government agencies such as the Land Bank of the Philippines (LANDBANK), Development Bank of the Philippines (DBP), Veterans Bank, Bureau of Internal Revenue (BIR), Pag-Ibig Fund, Land Transportation Office (LTO), National Bureau of Investigation (NBI), Department of Science and Technology (DOST), Department of Trade and Industry (DTI), Land Registration Authority (LRA), 1Bataan ITS, and Bataan Negosyo Center, the Palace said.

In his speech, Mr. Duterte said: “I hope that this Bunker that we are inaugurating today will serve its purpose in helping the people of Bataan face the rapidly evolving modern complexities and challenges of everyday life.”

“It is in this light that I acknowledge the government officials of Bataan for their inspiring vision to build this hub that will facilitate the convergence of government offices, national government agencies, and other service providers as they engage the general public,” he added.

The President also noted that he recently signed a measure expanding the territory of the Freeport Area of Bataan (FAB) to create more investment opportunities for the province. The new law extends the Bataan freeport’s territory to include the rest of Mariveles outside the former Bataan Economic Zone and its municipal waters, as well as the alienable and disposable public lands and municipal waters of the expansion areas.

“It is my hope that you will continue to partner with other stakeholders even as you maximize the opportunities afforded by this institution, including the delivery of quality and responsive government services to our people in line with the Ease of Doing Business Act of 2018,” he said. — Arjay L. Balinbin

DBP now in charge of fund disbursement and management of peace agency’s socio-economic projects

STATE-OWNED Development Bank of the Philippines (DBP) partnered with the Office of the Presidential Adviser on the Peace Process (OPAPP) in fund disbursement and management.

According to a statement released on Friday, DBP’s Trust Banking Group is now in charge of disbursement management, fund acceptance and fund management for OPAPP’s socio-economic projects.

“We are absolutely on the same page with OPAPP in making sure that critical resources are tapped to work for the greater good, under the framework of a comprehensive peace process,” DBP President and Chief Executive Officer Emmanuel G. Herbosa said.

A Memorandum of Understanding (MoU) was recently signed, marking the official partnership between DBP and OPAPP.

Mr. Herbosa said the bank will continue to support social service programs and infrastructure projects in Mindanao.

Established in 1993, OPAPP oversees, coordinates, and integrates the government’s implementation of comprehensive peace process.

DBP’s assets stood at P667.91 billion in June, making it the eighth largest bank in the country in terms of assets.

The state-owned bank is largely meant to provide loans to infrastructure — including big-ticket items in the “Build, Build, Build” pipeline — and to assist small and medium enterprises, social services and community development, and the environmental sector.

“Consistent with the DBP and OPAPP mandates, this MoU augurs well for sustainable peace and the equitable development of Mindanao,” DBP Director Maria Lourdes A. Arcenas said in the statement. — Beatrice M. Laforga

PHL nickel miners hopeful of better ore prices

NICKEL miners in the country may expect improved prices for ore in the near term as Indonesia sets an exporting ban for the mineral next year.

Dante R. Bravo, president of the Philippine Nickel Industry Association, told reporters earlier this week the Indonesia export ban poses an opportunity for local miners, but noted the country may not be able to produce enough ore supply to meet the surge in demand.

“That’s exciting for the Philippine nickel industry, but we cannot definitely supply the gap that’s going to be left by the Indonesian ore ban,” he said.

“We’ll see. But as soon as the plans in Indonesia get operational…then we’re looking for basically three years of better prices for our ore,” he added.

Earlier this month, Indonesia released a decree ordering a nickel ore export ban starting Jan. 1, 2020, sooner than its previous target of implementing the ban in 2022.

A Reuters report said the advanced execution of the ban is aligned with the country’s intent of reserving ore for its growing smelting industries of nickel pig iron, stainless steel and electric vehicles battery nickel.

Mr. Bravo said with the doors open for new opportunities following Indonesia’s ore export ban, he hopes the Philippine government will soon lift Executive Order (EO) No. 79, which has been in place since 2012 to limit new mining permits until a new law is enacted.

“We hope by then we have the EO 79 already lifted so that we can also begin processing the mineral agreement and encourage investors to come in,” he said.

Mr. Bravo also said it is important for the cost of producing ore in the Philippines to stabilize to attract mining investors.

“You have to make it stable. Let’s say for the next two years… the price would really stay at that level. Whenever we go into value adding processing, there’s confidence in the investor that they can recover back their investment the soonest time possible,” he said.

He also flagged Administrative Order 2018-19 of the Department of Environment and Natural Resources (DENR), which limits areas where miners can conduct operations.

“We are limited by the mining area that the DENR set and things like that. We are limited also by the weather. So there are a number of factors,” Mr. Bravo said when asked about the expected boost in production for local miners by 2020. “I’m not saying minimal. But we’ll see.” — Denise A. Valdez with Vincent Mariel P. Galang

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