Home Blog Page 10127

Deutsche paints gloomy picture at investor gathering

FRANKFURT — Deutsche Bank pared back its revenue growth target on Tuesday, highlighting the tough task facing Germany’s biggest lender to revive its fortunes against a gloomy economic backdrop.

Deutsche’s management gave a presentation to investors on its restructuring which aims to shift the bank away from Wall Street to its home market of Germany as it seeks to draw a line under years of scandals and heavy losses.

But Europe’s slowing economy and action by the European Central Bank to cut borrowing costs is making it harder for Deutsche to grow.

The bank said it expected revenue at its core banking business to grow by just 1% in the run up to 2022, half the growth level estimated in July.

To arrive at that overall target, the bank cut growth forecasts for retail banking and wealth management to zero but predicted that its long-suffering investment bank would generate 2% more in earnings by 2022.

Deutsche said low interest rates would hurt its retail bank as well as corporate banking in the medium term, but predicted that stronger growth at its investment bank would partly make up for this.

The bank said it had taken steps to cope with low rates, including lending more and “selectively” passing on to customers the costs it faces for keeping cash at the central bank.

Deutsche stuck with its profitability targets and highlighted efforts to cut billions of euros in costs and spinning off unwanted assets.

Chief Executive Christian Sewing pointed to “significant progress” in recent months in turning around the bank in a statement ahead of the investor day.

Deutsche Bank’s shares, which have more than halved in value over the past two years, dropped slightly. They were trading down roughly 1% to €6.47 at 1235 GMT on Tuesday.

Andreas Thomae, a fund manager at Deka Bank, a Deutsche Bank investor, said the bank’s ability to grow was central.

“You have to give the bank about a year before you can pass judgment,” he told Reuters.

Deutsche said its bad bank — created to shed unwanted investments — was “running ahead of plan” and that its capital cushion would hold steady throughout its turnaround.

The European Central Bank had also cut the capital ratio requirement for the bank, following a review.

Earlier this year, the German government pushed for Deutsche to merge with rival Commerzbank. But the talks failed, leading Deutsche to announce a major revamp. — Reuters

SEC now accepting applications for revival of expired firms

THE Securities and Exchange Commission (SEC) is now accepting applications for expired corporations that wish to revive their registrations.

The corporate regulator said in a statement Wednesday it has published Memorandum Circular No. 23 on Dec. 6, or the rules on revival for corporations with expired certificates of registration, which took effect on the same day.

This follows the approval of a perpetual corporate term as granted by Republic Act No. 11232 or the Revised Corporation Code of the Philippines.

“Under the Guidelines, an expired corporation whose certificate of registration has been suspended or revoked for non-filing of reports may revive its existence, provided it shall file the proper petition and settle the corresponding penalties,” the SEC said.

The regulator requires expired corporations that intend to apply for revival to get the approval from a majority of its board of directors or trustees and of the outstanding capital stock or members.

Other regulatory requirements are copies of a corporation’s certificate of incorporation, articles of incorporation, revived articles of incorporation showing the proposed changes in its corporate term, general information sheet and audited financial statements as of expiration and other documentary requirements.

In the case of banks and other finance related corporations, the SEC requires getting a favorable recommendation from the appropriate government agency.

For those that had corporate names that have already been used by another existing corporation, the SEC simply requires the applying corporation to change its name.

However, those that have applied for re-registration before are not allowed to apply for revival anymore, as well as those whose registrations have been revoked for reasons apart from non-filing of reports.

Should an expired corporation be given a certificate of revival, it will have two years to comply with the Revised Corporation Code.

The certificate of revival to be issued by the SEC will have a perpetual corporate term unless the corporate chooses to specify the term.

“As part of the shift to perpetual corporate terms, the Revised Corporation Code allows an expired corporation to apply for the revival of its existence, together with all the rights and privileges under its certificate of incorporation and subject to all of its duties, debts and liabilities existing prior to its revival,” the SEC said. — Denise A. Valdez

Christmas Goodies (12/12/19)

Discovery Primea

GUESTS LOOKING to stage holiday gatherings at home may bring a taste of Discovery Primea with them through the Festive Take-Aways. Offered is a selection of roast dishes, platters, and sweet endings, available the entire month of December. Holiday favorites include Slow-Roasted US Beef Short Plate, Mediterranean Leg of Lamb, Callos a la Madrileña, and other roast dishes and platters. For sweet delights, Discovery Primea’s Signature Ensaymadas, Christmas Cookies, and Quezo de Bola Cheesecake, are the perfect treats. For inquiries and reservations, call 7955-8888 or e-mail primea.restaurants@discovery.com.ph.

Andrew Café’s

COMPLETE YOUR festive Yuletide spread with Andrew Café’s featured Christmas Cake — the Heavenly Holiday Buttered Bundt. The butter pastry brings a festive twist through an additional surprise infusion of a generous red velvet layer. It is drizzled with white chocolate ganache and topped with Swiss meringue butter cream in shape of the classic green holly leaf, with generous servings of glazed cherries and red and silver dragées. Visit the restaurant at the De La Salle-College of Saint Benilde Taft Campus, corner of Estrada and Leon Guinto Streets, Malate, Manila. Contact Andrew Café at 230-5100 local 1888 for pre-orders two days in advance.

M Bakery

M BAKERY has Christmas-inspired versions of the hit bakeshop’s classic treats, which can be ordered in advance for family gatherings, office parties, and gifts. There are Winter cupcakes, classic vanilla and chocolate cupcakes with vanilla buttercream and snowflakes design; Christmas cupcakes, classic cupcakes with vanilla buttercream and festive Christmas decorations; Holiday Piped cupcakes, classic cupcakes decorated with vintage holiday designs; and the Ornament Box consisting of one dozen assorted vanilla and chocolate mini cupcakes topped with vanilla buttercream and edible seasonal decorations. Other handmade desserts include Chocolate Crinkle cookies; Jammy Thumbprints, a twist on their classic pecan thumbprints cookies finished with raspberry jam; and Sno-Balls, buttery pecan cookies rolled in powdered sugar. For something more citrusy, M Bakery offers Iced Molasses, classic molasses cookies with orange or lemon glaze. Then there is the Gingersnap, the perfect combination of sweetness and spice. Customers can also choose from M-Bakery’s series of Christmas-themed cakes. Available for advance orders are the Snowman cake; Red Velvet cake, designed with white vanilla buttercream and decorated with a green border and festive holly confetti sprinkles; and Yule Log cake, available in red velvet, vanilla or chocolate with buttercream icing and finished with festive seasonal decoration. On top of all these, M Bakery is also opening a two-hour cupcake icing class on Dec. 21, with five to 10 participants for each class. Visit the store at Lower Ground, Unit #23 5th Avenue corner 28th Street, One Bonifacio High Street Mall, Bonifacio Global City or call 847-9829 or 0917-633-1718 to place advance orders.

New World Makati Hotel

New World Makati Hotel has Holly Jolly Holiday Hampers for worry-free gifting. Chock full of premium treats, the hampers come in deluxe and grand sizes for P4,288 and P6,888 nett, respectively. Guests can customize their hampers with an array of items such as pralines, mendiant, cookies, chocolates macadamia nuts, bourbon cake, cupcakes, nougat, Old English fruit cake, stollen bread, and more. For inquiries, reservations, and orders, call 8811-6888 or e-mail catering.manila@newworldhotels.com.

Diamond Hotel Philippines

Diamond Hotel Philippines has a catalogue of sweet and savory Christmas goodies. A go-to staple is the honey glazed leg of ham while a Filipino favorite is chicken relleno. There are also Porchetta or a traditional turkey with cranberry sauce and giblet gravy. For something sweet there are the hotel’s homemade panettone and a Christmas Log cake. For a take-home present, drop by the Lobby Lounge to pick up a box of seasonal delicacies, like French macaron, sea salt chocolate bonbons and artisanal pralines, or Christmas muffins. Then there are the Diamond Hotel’s Holiday Hampers, with gourmet food selections and gift items in elegantly wrapped baskets. To place an order for Christmas Goodies, Party Platters or Gift Certificates, call Diamond Hotel at 8528-3000 from 9 a.m. to 8 p.m., Mondays to Fridays; or e-mail restaurant_rsvn@diamondhotel.com.

New World Manila Bay Hotel

THE hotel has holiday goodies and sweets that are perfect as gifts. From chocolates, cookies and assorted treats, pack a basket full of holiday cheer at The Pastry Boutique. For bulk orders, place orders at least five days in advance. For details call 8252-6888.

Richmonde Hotels

The Richmonde Hotels have a trove of baked goodies for holiday celebrations and gifts. There is the Richmonde’s famous ensaymada which is available at all the Richmonde Hotels (Ortigas, Eastwood, and Iloilo) and also comes in ube flavor. Limited-edition holiday variants of salted egg and quezo de bola are for sale at Richmonde Hotel Ortigas. There is also the Richmonde Chocolate Cake which gets a holiday makeover. It comes in 4”, 6” and 8” sizes. Richmonde Hotel Ortigas has classic baked goods like Food for the Gods (P380/10 pcs), Revel Bars (P330/10 pcs), Rhum Cake (P170), Lemon Cranberry Pound Cake (P185) and assorted cookies of white cranberry, rocky road, and peanut butterscotch (P225/15 pcs). There is also freshly baked bread like Pistachio Double Cream Cheese, Banana Walnut, Cinnamon Cluster, Salted Swirl, and Panne Bianco. These baked Christmas goods are available until Jan. 10. Eastwood Richmonde Hotel’s holiday collection includes Santa’s Little Helper (cranberry oat cookies, P195/7 pcs), Christmas Sugar Cookies (P265/4 pcs), Richmonde Sampler (set of brownies, chocolate caramel sable, and peanut butter tart, P675), Avocado Sansrival Log Cake (P695), and a Gingerbread Wagon (P495). There are also Hockey Pies, a set of puck-sized pies with assorted flavors — matcha terrine, pecan maple, apple cinnamon crumble, and chocolate duo — priced at P185 for 4 pcs; the 8” Portuguese Pie (custard-filled croissant pie, P545); and the Honeycomb Brickle (chocolate-covered honeycomb, P365). For something savory, there is sourdough bread (P185) paired with Eastwood Richmonde’s home-made Liver Pâté, Tomato Jam, and Onion Marmalade (from P165 for 130g). These holiday goodies are available now until Jan. 5. Richmonde Hotel Iloilo has carrot cake which comes in 4”, 6” and 8” sizes (P325, P850, and P1,150, respectively); Choco Banana Loaf (P325) and Banana Walnut Loaf (P345); Fruit Tart Clafoutis (P1,050/8”), Vanilla Custaroons (P350/6 pcs), Handmade Napoleones (P495/6 pcs), Mini Cheesecake (P500/6 pcs), Pineapple Turnover (P350/6 pcs), and French Macarons (P500/6 pcs); and the custard-filled Iloilo Paris Bun (P250/6 pcs). These season’s treats are available until Jan. 5. For a nominal fee, all these can be packaged in holiday boxes trimmed with Yuletide ribbons. All orders must be placed in advance with a 50% deposit and a 48-hour lead time prior to pick up. To order from Richmonde Ortigas, call 8638-7777 or e-mail rhofbsec@richmondehotel.com.ph. To order from Eastwood Richmonde Hotel, call 8570-7777, or e-mail ecafebar@richmondehotel.com.ph. To order from Richmonde Hotel Iloilo, call (6333) 328-7888 or send an e-mail to rhireservations@richmondehotel.com.ph.

Bizu

BIZU has both sweet and savory treats this Christmas which one can order from the A Bizu Christmas Feast: The 2019 Christmas Catalogue. The savory items include Angus Rib-eye ready for carving and served with horseradish cream and au jus on the side; Whole Roast Turkey, stuffed with Bizu’s signature blend of crunchy apples, chestnuts, and sausages; and two Norwegian salmon dishes: Baked Salmon Rockefeller with creamy spinach and Parmesan, and Smoked Salmon Caviar, a terrine topped with dill cream cheese and black caviar. On the sweet side there are Macaron de Paris in flavors of the season Quezo de Bola, Salted Caramel, and Malagos Chocolate. Bizu Patisserie has also intricately assembled dessert towers resembling 12-inch-tall Christmas trees with either twining ribbons or edible ornaments in seasonal colors. The Macaron de Paris Tower contains up to 200 macarons filled with chocolate ganache; the Strawberry Tower is made from 160 strawberries; and the Truffle Tower contains 140 dark chocolate truffles dipped in white chocolate, with a gilded chocolate star as a topper. Then there are Bizu’s specialty cakes: Chocolate Caramel Cake, Strawberry Rose Cake, and Salted Caramel Cake. Bizu is also offering smaller cakes that are perfect as gifts: Orange Almond Butter Cake, Noisette and Raspberry Cheesecake. There are also boxed treats such as Salted Caramel Bonbons dipped in dark chocolate, handcrafted Nougats, and buttery Caramel Chews; Pretzel Joie dipped in both white and dark chocolate; and Mendiants, a traditional French confection made from Belgian chocolate in white, milk, or dark variants. To place orders, contact or visit any Bizu branch, with last orders for Dec. 24 to be made by Dec. 21 and last orders for Dec. 31 to be made by Dec. 28. For anything roasted, allot three days prior to ordering. All of the items in the 2019 Christmas Catalogue are available in store or visit www.shop.bizupatisserie.com to place an order online.

Marriott Hotel Manila

Marriott’s Christmas offers include cake in can which comes in various flavors such as Carrot Cake in Can (P550), Chocolate Fudge Cake in Can (P550), Dark Fruit Cake in Can (P450), and Banana Bread with Walnuts in Can (P450). The Marriott Café Bakery has opulent 120g Christmas Baubles (P300), truffles filled with salted caramel, strawberry or pistachio ganache and 30g Holiday Hemispheres (P70 for a set of two) which are hollowed milk and white Belgian chocolates. There’s also a Christmas Praline Selection (P550 for a box of 9), and 120g Christmas Chocolate Blocks (P300). Then there is the gingerbread: a 715g decorated Gingerbread Chalet (P780), a 60g Gingerbread Man (P65), and a 70g Gingerbread Carabao (P90). There is also spiced bread: 350g Cinnamon Wreath (P300), 350g Pecan Maple Leaf (P300) studded with pecans and maple frosting, the 250g Christmas Raisin Bread (P300) and 500g German Christmas Stollen (P500). There are rich chocolate cakes with a hint of citrus flavors such as the Lemon Hazelnut Praline (P900) and the Mango Vanilla Gianduja (P900); Chocolate Buche de Noel (P900). Other flacored cakes are Maracaibo Green Tea (P900), and Carabao Milk Cheesecake (P2,200). Christmas-themed chocolates include Santa Claus in Sleigh, Chocolate Christmas Tree, Big Belly Chocolate Santa, and Chocolate Christmas Elements. There are also Holiday Nougat Bites. Start filling up your Christmas baskets with these treats until Dec. 26. For Christmas party packages, the hotel has Whole Roasted Turkey (P6,680 nett) and Smoked Bone-In Ham (P5,700 nett) package that comes with sides dishes for 10 to 12 persons. Orders should be placed for a minimum of 48 hours. Packages are available until Jan. 1. Manila Marriott’s festive hampers make gift giving easy. Choose from a Grand Hamper (P4,888++), the Deluxe Hamper (P3,688++), or create your own hamper and fill it with handpicked items from Marriott Café Bakery. All are available until Jan. 1. For more information on Marriott’s Christmas offers call 8988-9999 or visit www.manilamarriott.com.

City of Dreams

CAFÉ SOCIETY at City of Dreams is offering Christmas favorites such as puto bumbong bread, Christmas cookies, fruit cakes, Panettone favorites, and other Christmas homemade items. Traditional Christmas hampers and create-your-own holiday hampers are also offered. At The Garage’s Chocol8, handcrafted chocolate Santa Claus confections and other playfully themed chocolate treats are available. Café Society’s and Chocol8’s sweets are offered until Dec. 31. For inquiries, call 8800-8080 or e-mail guestservices@cod-manila.com or visit www.cityofdreamsmanila.com.

Marco Polo Ortigas Manila

AS part of the hotel’s ongoing commemoration of its 5th anniversary, Café Pronto presents the latest addition to its Artisanal Chocolate Bar Series, the Golden Crunch which highlights the Albay region’s pili nut. Combined with salted caramel, it is enveloped in classic milk chocolate. This “gilded” snack is ideal for Holiday indulgence, or a take-away item for balikbayans to remind them of home. The Artisanal Chocolate Bar Series has three original variants, each featuring Filipino ingredients that are crafted carefully by the pastry and dessert chefs of the Marco Polo Ortigas Manila. Albay’s siling labuyo or “bird’s eye chili” shine in every bar of Chili Caramel; the citrus of dayap and calamansi are the focus in Zest & Zing; green mango and rice crispies are the highlights of Green Mango Delight. Each bar comes in bespoke, oil painting-inspired designs, making the individual bars a collector’s item. The whole Artisanal Chocolate Bar Series is available at Café Pronto at the ground floor lobby of the Marco Polo Ortigas Manila. For details call (+632) 7720 7720 or e-mail restaurant.mnl@marcopolohotels.com.

How PSEi member stocks performed — December 11, 2019

Here’s a quick glance at how PSEi stocks fared on Wednesday, December 11, 2019.

 

BoC collections dented by weak petroleum import volumes

THE Bureau of Customs (BoC) said it failed to meet its collection target for the 11 months to November due to lower import volumes for petroleum products as well as lower tariff rates.

Citing preliminary data, the BoC told the House Ways and Means Committee that in the first 11 months, it collected P591.1 billion, below the target of P622.3 billion.

According to BoC Deputy Commissioner Vener S. Bacquiran, volumes were weak for crude oil and petroleum products. He add that lower tariff rates of crude oil and other non-oil products also led to the revenue shortfall.

The committee inquired whether “too much movement” in BoC district collectors was a factor in the shortfall.

Mr. Bacquiran said the bureau “moves” district collectors every six months, adding that last year, the practice was to move them monthly.

“Do you think… you move people around too much? That’s why you are not getting the kind of results, people are not responsible for the results. There’s no ownership of results,” the committee’s chairman, Representative Jose Maria Clemente S. Salceda, said at the hearing.

Asked to provide a forecast for the year, Mr. Bacquiran said collections could fall short by P17 billion in 2019. — Genshen L. Espedido

DoT positioning Western Visayas for food tourism

By Emme Rose S. Santiagudo
Correspondent

WITH Western Visayas considered a possible focus of food tourism, the Department of Tourism (DoT) is now gearing up to promote the region’s farms as possible destinations.

During his visit in Iloilo City Friday for the fifth and last leg of “Kain Na! Culinary and Travel Festival,” Edwin R. Enrile, Tourism Undersecretary for legal and special concerns, said the food and farm products of Panay are varied and usually fresh from the farm or the sea.

“When you think about Western Visayas and Iloilo you always think about two things why people come here — the cuisine and the culture. You have the freshest ingredients, seafood, and all that,” Mr. Enrile said in an interview Friday.

Mr. Enrile attended the opening program of the three-day “Kain Na! Culinary and Travel Festival” at The Shops at Atria, Ayala Malls in Mandurriao, Iloilo City Friday.

“Kain Na,” which featured local ingredients and dishes prepared by the region’s chefs, cultural performances, farm tourism presentations, and the region’s produce, is the centerpiece of the DoT’s culinary tourism efforts.

Iloilo City Mayor Jerry P. Trenas and his son Miguel, a chef, also participated in the event via a cooking demonstration of an Ilonggo heirloom recipe, Lengua Escarlata.

“We are promoting Iloilo as a food tourism destination, as a place where we will find heritage recipes that have been handed down from generation to generation,” he said.

Mr. Enrile said the DoT in partnership with Ayala Malls and the Department of Agriculture organized the fifth and last leg of this year’s Kain Na! in Iloilo because of its promising food products.

“Iloilo has a variety of food available. ‘Yung sinasabi nga naming culinary tourism (what we call culinary tourism) is all about the local cuisine, local product, from farm to table. So kung magaganda rin nga ang produkto ng mga farm products (superior produce) will be reflected in the cuisine,” he said.

With the Jalaur River Multi-Purpose Project Stage II (JRMP II) project in Calinog, Iloilo now operating comes the potential for further agricultural development, Mr. Enrile said.

“Agriculture is really big here in Iloilo especially with the Jalaur Dam. That’s why for next year sabi namin magiging focus namin (we determined that our focus was) to promote farm tourism here in Iloilo and in Panay Island,” Mr. Enrile said.

He said the importance of the country’s culinary heritage is becoming apparent since Filipino cuisine is growing in prestige.

“It really reflects our own identity and I think more and more now na-appreciate na sa mundo ang (the world is appreciating) Filipino cuisine,” he said.

Banana exports up 41%; industry still lobbying to lower S. Korea tariffs

BANANA exports totaled 3.593 million metric tons (MT) in the first 10 months of 2019, up nearly 41% from a year earlier, the Philippine Statistics Authority (PSA) said.

According to preliminary PSA data, banana exports rose 40.79% year-on-year. In October, exports totaled 408,060 MT.

The 10-month total was close to the record 3.631 million MT in the same period of 2014.

Top markets for Philippine bananas include Japan, China, South Korea, Saudi Arabia, the United Arab Emirates, Iran, Iraq, Hong Kong, Singapore, and Malaysia. China accounted for the largest share with 1.288 million MT, up 42%, year-on-year. Japan took in 1.169 million MT, up 47, year-on-year, and South Korea 461,736 MT, up 40% year-on-year.

Philippine Banana Growers and Exporters Association (PBGEA) Executive Director Stephen A. Antig said for the major plantation firms which his organization represents, exports are actually on a downtrend year-on-year.

“In the case of the PBGEA members, volume for the last 9 months decreased by 8% compared to that of 2018. If the trend continues, total exports might be just about 110 million boxes by the end of the year. All told, this is not a good year for the industry,” he said in an e-mailed response, and noted that 110 million boxes is equivalent to 1.4 million MT, solely of the Cavendish variety. Top markets are Japan, South Korea, China, the Middle East, New Zealand, Singapore, Hong Kong, Malaysia, Mongolia and the United States.

He said the industry is beset by climate change, pests and diseases, drought, and flooding.

Banana growers are also pushing the government to intervene to lower South Korean and Japanese tariffs, which risk eroding the Philippines’ market share in those countries.

Philippine banana exports are levied a 30% tariff by South Korea and 8% to 18% by Japan. The industry’s target tariff for South Korea is 5% at most, a level it reckons will help the industry grow. — Vincent Mariel P. Galang

ADB lends over $23M for capacity building at PCC

THE Asian Development Bank (ADB) is lending the Philippines $23.3 million to expand the Philippine Competition Commission’s (PCC) capacity to promote greater competition.

ADB announced the approval of the loan at a briefing in its Mandaluyong City office yesterday, noting that this is the first loan directed at the PCC.

“This loan is the first of its kind. It’s the first time that a loan is designed for capacity building purposes, and with a very special topic which is the competition law,” ADB Philippines Principal Country Specialist Cristina Lozano said at the briefing.

The loan takes effect in January, which the PCC will use to build its institutional capacity; strengthen the technical skills of its staff and those in agencies also concerned with competition like the National Economic and Development Authority, Department of Justice and Office of the Solicitor General; and establish a center of excellence in competition law at the University of the Philippines.

Before the loan, the ADB was supporting the PCC through technical assistance which totaled “up to a million dollars” since 2016.

Ms. Lozano said the $23.3-million loan represents the “first phase” of the project, as the ADB may consider additional financing “once we can be more experienced in terms of implementation.”

The loan will have a 28-year term including a grace period of nine years.

“If it would be business as usual, meaning we won’t proactively develop the competencies, it would take us a long, long time before we can develop (competition) expertise… So we conceived this program, and it’s meant to hasten the development of competencies in competition law and policy,” PCC Chairman Arsenio M. Balisacan said, referring to the need for competition experts to improve market conditions in the Philippines.

He noted improved market conditions will help alleviate poverty as it will become “both attractive to investors and beneficial to consumers.”

Separately, Mr. Balisacan told reporters after the briefing that the PCC has been notified of the acquisition of Chevron Malampaya LLC’s stake in the Malampaya gas project by a unit of Udenna Corp.

Yung sa Malampaya… nasa sufficiency determination stage. So nag-submit na sila, pero tinitignan pa kung kumpleto yung mga papers… Pag nakumpleto na, will they start the Phase 1 (The documents for Malampaya are in the sufficiency determination stage… we’re still checking if they are complete… Once it’s complete, we can start the Phase 1 of review),” he said.

PCC approval is among the regulatory requirements to complete the sale and purchase agreement between Chevron and the Dennis A. Uy-led company. Udenna announced last month its acquisition of the 45% stake of Chevron in the deepwater gas-to-power project. Other stakeholders of Malampaya are Shell Philippines Exploration B.V. (45%) and Philippine National Oil Co. Exploration Corp. (10%).

Mr. Balisacan also said on Wednesday the PCC will announce its decision on San Miguel Corp.’s $2.15-billion acquisition of Holcim Philippines, Inc. “in a couple of days.”

“In the next couple of days… the MAO (Mergers and Acquisitions Office) will render its decision on the issue,” he said, referring to the anti-trust body’s review of the deal which started in August.

The PCC has said the acquisition by San Miguel may affect competition in markets for grey cement, clinker, ready-mix-concrete and aggregates in parts of the country. — Denise A. Valdez

PNR takes delivery of new rail cars from Indonesia

THE government took delivery Wednesday from Indonesia six new rail cars for the Philippine National Railways (PNR).

In a statement, the Department of Transportation (DoTr) said: “The first six DMU (Diesel Multiple Unit) rail cars will form two train sets for deployment on PNR’s FTI-Tutuban and FTI-Malabon routes starting Dec. 16.”

The two train sets will add 18 to 20 trips per day to those routes, according to the DoTr.

The department said the six new coaches are part of the 37 rail cars and three locomotives acquired by PNR from Indonesian firm PT Inka.

Kapag dumating na ang lahat ng mga bagon, inaasahang aabot sa 140,000 pasahero na ang maseserbisyuhan ng PNR at mas dadami pa ang biyahe dahil magiging 20 minutes na ang headway tuwing peak hours (when all the rail cars arrive, we hope the PNR can service 140,000 passengers and offer more trips, bringing headway down to 20 minutes during peak hours),“ the transportation department said.

Bukod pa rito, may paparating din na mga air-conditioning units (ACUs) na i-install naman sa mga existing railcar ng PNR (We are also expecting ACUs for installation on existing rail cars),” it added.

The arrival ceremony for the new coaches held in Manila Wednesday was led by Indonesian Ambassador Sinyo Harry Sarundajang, Transportation Secretary Arthur P. Tugade, and PNR General Manager Junn B. Magno.

The DoTr also announced last week a PNR line extension to further into Laguna province by adding five more stations after Calamba City.

The new stations are Pansol, Masili, Los Baños, College in Los Baños, and the International Rice Research Institute (IRRI). A new set of trains from Japan was also added.

The Japanese trains feature reclining and rotating seats, stowable tables, leg rests, and toilets, with capacity of 81 people.

“This is just the beginning,” Mr. Tugade said in a statement, adding that more rail lines will be added in other parts of the country.

Mr. Magno said: “With the holiday season in full swing, we might increase trip frequency the moment ridership improves,” Mr. Magno said. — Arjay L. Balinbin

Game changers in the digital economy’s taxation landscape

Generally, the power of taxation extends only as far as the territorial jurisdiction of a state. However, digitalization of the economy defies these boundaries as the goods and services of digital enterprises become accessible anywhere around the globe. Digitalization likewise reduces, if not eliminates, the need to maintain bricks-and-mortar shops in a specific market jurisdiction since the customers can easily conclude a transaction with just one click. This new normal in our way of doing business makes it harder for countries, including the Philippines, to impose the appropriate taxes on digital transactions, especially on those that do not have a physical presence in the archipelago.

The challenges brought about by digitalization were acknowledged as early as 2015, which resulted in the creation of the Base Erosion and Profit Shifting Action Plans by the Organization for Economic Co-operation and Development (OECD). More recently, the OECD/Group of Twenty (G20) Inclusive Framework was mandated to address these challenges by the end of 2020. Although the Philippines is not yet a member of this Inclusive Framework, it will be beneficial to know what is happening in the global setting, especially since the Bureau of Internal Revenue generally recognizes international practices and subscribes to OECD interpretations.

In June 2019, the G20 Finance Ministers and Leaders endorsed the Programme of Work, which lays down a two-pillar approach in an attempt to solve this challenge. Pillar 1 aims to create a new nexus and profit allocation rules, while Pillar 2 will provide the formation of a global base erosion mechanism.

To fast-track things, the OECD Secretariat developed the “Unified Approach” under Pillar 1, which was published in October for comment. This Unified Approach harmonized the commonalities of the three proposals submitted regarding the new nexus of taxation and profit allocation rules.

Under the Unified Approach, the new nexus rule will apply to all cases where a digital business is significantly involved in a certain country’s economy, even if it has no or limited physical presence in that territory. This approach gives the market jurisdiction a new taxing right on the transactions of an online income earner despite not having a bricks-and-mortar set-up. The new profit allocation rule also goes beyond the current transfer pricing rules, which are based on the arm’s length principle, by complementing it with a formula-based solution. This solution uses a three-tier profit allocation mechanism in determining the following amounts:

1. Amount A is the share of deemed residual profit allocated to market jurisdictions using a formulaic approach, (i.e., the new taxing right);

2. Amount B is a fixed remuneration for baseline marketing and distribution functions that take place in the market jurisdiction; and

3. Amount C is an additional profit that may be agreed upon when in-country functions exceed the baseline activity (marketing and distribution) compensated under Amount B.

Under the allocation mechanism, the computation of Amount A begins from the Multinational Enterprise (MNE) group’s profits, which can be sourced from its consolidated financial statements. For instance, if ABC Group’s profit margin is 20%, some of that profit margin will pertain to routine profits of about, let’s say 8%. This 8% will be not be included in the profits to be reallocated to the market jurisdiction.

At this point, the remaining 12% representing non-routine profits will be divided between the market jurisdiction and the other factors (e.g., trade intangibles, capital, and risk, etc.). For example, a social media business may generate non-routine profit not just from its customers’ data and valuable brand, but also from its innovative algorithms and software. Considering the practical difficulties of using conventional transfer pricing rules, the Unified Approach recommends that the deemed non-routine profit attributable to the market jurisdiction may be allocated using an internationally-agreed fixed percentage, which may differ across different industries or business lines. So, for this step, let’s assume that 50% is the agreed fixed percentage of the non-routine profits that will be reallocated to the market jurisdiction. The final step of this proposed approach would be to allocate the relevant portion of the deemed non-routine profit (6% in our example) among the eligible market jurisdictions to arrive at Amount A.

Amount B and Amount C are somehow interrelated. Since the taxpayers and tax administrations may argue that the marketing and distribution activities taking place in the market jurisdiction go beyond the baseline level of functionality, and therefore warrant a profit in excess of the fixed return contemplated under Amount B, or that the MNE group performs other business activities in a jurisdiction other than marketing and distribution, this additional profit pertains to Amount C.

The Unified Approach still has to address pending questions and issues, such as the differentiation for business models and the elimination of double taxation. It also needs to balance the cost of compliance and tax administration while ensuring that taxpayers fulfill their new obligations. The mechanism to address the complexity in the enforcement and collection of the proper tax from non-resident MNEs must also be developed. To address these questions and implementation issues, the Secretariat held public consultation meetings last month.

Since the Philippines is an emerging market for digital businesses, the government should consider our membership in the Inclusive Framework taking into account this game changer in the taxation of the digital economy. Meanwhile, our MNE groups in the Philippines should assess the impact of this Unified Approach, monitor its development, and prepare for its implementation once it is adopted by the end of 2020.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Mac Kerwin P. Visda is a Senior Tax Consultant at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network. Readers may call +63 (2) 8845-2728 or e-mail the author at mac.kerwin.visda@pwc.com for questions or feedback.

Banking on action: How ADB achieved 2020 climate finance milestone one year ahead of time

By Takehiko Nakao

AS they extend their power grids, build more roads and bigger cities, and cultivate forestland, developing countries in Asia and the Pacific are increasingly contributing to the global climate change problem. Two of the top three emitters of greenhouse gases are developing countries in Asia — the People’s Republic of China and India. At the same time, five Asian developing countries are among the top 10 most climate-vulnerable countries in the world. Across the region, livelihoods and economic growth are increasingly exposed to climate change impacts and disaster risk. Clearly, Asia and the Pacific must play a strong role in efforts to address climate change.

As the region’s development bank, the Asian Development Bank (ADB) is committed to remaining the partner of choice for climate action by our developing member countries. In 2015, as world leaders gathered in New York to launch the Sustainable Development Goals, ADB made a bold announcement — a commitment to double our climate investment to $6 billion annually by the end of 2020.

Coinciding with the call for action at COP25, the United Nations’ Conference on Climate Change, ADB has proudly reached this achievement one year ahead of time. ADB’s climate-related financing for 2019 comprises $1.4 billion for financing adaptation and $4.8 billion for mitigating climate change.

The feat is the result of a singular focus to integrate climate actions into our entire operations. ADB has introduced climate risk screening of our project portfolio, undertaken diagnostics on the critical infrastructure at risk in the region, and introduced new financing instruments such as contingent disaster risk financing for financial resilience. ADB is strengthening its investments in renewable energy and energy efficiency, sustainable transport and urban development, and climate smart agriculture. This has been accompanied by actions to enhance the transparency of our climate operations by publicly disclosing project-level information of our climate portfolio and enhancing capacity and technical assistance for delivery. The spirit of One ADB has underpinned this achievement, with the collaboration of our sovereign and non-sovereign operations and knowledge departments steering us toward this target. One example of the many that illustrates this is the Pacific Renewable Energy Program, which is providing an innovative blend of loans, guarantees, and letters of credit to encourage private sector investments in renewable energy. ADB’s treasury department also contributed to the endeavor by issuing green bonds amounting to $5 billion as an added financing mechanism.

In addition to scaling up its own climate financing, ADB has been working on new and innovative co-financing opportunities with public and private partners. For example. ADB has mobilized concessional financing from the Green Climate Fund (GCF) for nine projects worth a total of $473 million in grants and concessional financing.

Building on the momentum of our climate finance milestone, ADB is pursuing new and ambitious targets on climate change for the coming decade in our Strategy 2030 — cumulative climate financing of $80 billion from 2019-2030 and a commitment to make 75% of our projects climate-relevant by 2030. Furthermore, by steadily increasing shadow carbon price, which factors climate costs into our project economic analysis, ADB is reflecting the urgency of shifting to low carbon alternatives.

However, given the narrowing window for avoiding catastrophic climate change, mobilizing finance at the necessary speed and scale remains a huge challenge. The Nationally Determined Contributions of many countries have outlined the financing needed to achieve their climate ambitions under the Paris Agreement. According to one estimate, it is $4.4 trillion or $349 billion annually[1]. While there are no robust and comprehensive estimates available for the Asia and Pacific region, an assessment by ADB on Asia’s infrastructure needs found that $200 billion will be needed annually to address climate actions in energy, water, and transport[2].

Though national governments and development financing institutions should devote more of their financial resources, the bulk of climate financing will necessarily have to come from private investors. This highlights the need to deploy climate financing in a way that enables and mobilizes private sector finance. But the good news is that there is a robust, and growing, body of evidence that the benefits of climate action already far outweigh the costs — representing a significant opportunity for the private sector. For example, the New Climate Economy Initiative, to which I have contributed as a Commissioner, has found that investment in low-carbon growth is associated with a cumulative economic gain of $26 trillion until 2030. Meanwhile, a recent report by the Global Commission on Adaptation found that investing $1.8 trillion globally from 2020 to 2030 in five key areas — early warning systems, climate-resilient infrastructure, improved dryland agriculture, mangrove protection, and more resilient water resources — could yield $7.1 trillion in net benefits.

The provision of finance is just one part of the climate change puzzle — high technology, policy support, and capacity development to build better institutions are also critical. But by further scaling up collective actions on addressing climate change by national governments, development partners, and the private sector, we can greatly respond to the voices of younger generations and vulnerable populations across the world for bolder action that ensures our common future on a healthy planet.

 

[1] L. Weischer et al. 2016. Investing in Ambition: Analysis of the Financial Aspects in (Intended) Nationally Determined Contributions. Briefing Paper. Germanwatch e.V. and Perspectives Climate Group: Bonn. https://germanwatch.org/en/download/15226.pdf

[2] ADB. 2017. Meeting Asia’s Infrastructure Needs.

 

Takehiko Nakao is the President of the Asian Development Bank (ADB) and the Chairperson of ADB’s Board of Directors.

www.adb.org

Smoke Easy

During the Prohibition Era (1920–1933) in the United States, when the sale, manufacture, and transportation of alcoholic beverages was illegal throughout that country, illicit or hidden establishments emerged to illegally sell or serve liquor. Such a club or bar, called a speakeasy (or a blind pig or a blind tiger) became very popular among both the rich and poor.

Prohibition, it seemed, was more honored in the breach. Speakeasies became profitable businesses, and became milking cows for both organized crime syndicates and corrupt politicians and policemen. The law didn’t stand a chance against the natural inclination of people to indulge in a vice, in this case, letting loose (or drunk) on liquor.

Despite making illegal the manufacture and sale of alcoholic beverages, the industry persisted. It, in fact, survived Prohibition, which ended in 1933. Some speakeasies successfully transitioned to “night clubs” or supper clubs or cabarets, where all kinds of alcoholic beverages were served, cigarettes and cigars were sold, big bands played live, and patrons danced.

The experience with Prohibition in the US comes to mind in light of what appears to be an emerging Philippine government response to the twin issues of vaping (use of e-cigarettes) and medical marijuana. As for smoking itself (or the use of cigarettes and cigars), the rules are somewhat set, with periodic adjustments in tax and in permitted marketing practices. With respect to use, however, the only “regulation” is the executive order on a nationwide ban on smoking in public places.

The government, through Congress, is now working on similar “regulation” — via taxes and limitations on sale and marketing — for e-cigarettes. As for use, the executive order on a nationwide ban on smoking in public places is also being applied. As for the sale and use of cannabis for medical purposes, regulations were also set via legislation.

In considering new rules for these two relatively “new” industries, I look back to the revolutionary government of Emilio Aguinaldo in 1898 for its practicality. At this point, it is difficult to attribute more sinister designs on the part of government personalities then. However, the way that government acted particularly on the use of opium was groundbreaking during its time, at least in my opinion. And thus, I believe it deserves review and recollection.

I first wrote about this around 13 years ago, stumbling upon an essay by historian Ambeth Ocampo, who pointed out a decree signed by President Emilio Aguinaldo on November 20, 1898. The decree authorized the “limited and contained use” of opium (a prevalent recreational drug at the time) in Binondo, Albay, and Sorsogon.

In Aguinaldo’s time, opium use was deemed a public menace, but Aguinaldo had the practical sense and shrewdness to restrict and regulate and “tax” the vice rather than to prohibit it. The Aguinaldo decree (a presidential decree, if you may) issued to local officials reportedly stated:

“The service of LEASING opium-smoking establishments being in a state of NEGLECT on account of the state of war in which this territory found itself, but which is now under a form of government, it is urgently necessary to establish the same for the double purpose of RESTRICTING it as far as possible on account of the HARM it causes HYGIENE and PUBLIC HEALTH. With the concurrence of the TREASURY department, I hereby order the following:

“1st. Provisionally and until the government shall have AWARDED definitely at PUBLIC AUCTION, the lease of aforesaid service, which shall be effected shortly, after the proper proceedings which the case requires, the same is awarded to the Chinese: Francisco Bonifacio, Nubla Lim Chico, and Felipe Lim, residents of the district of Binondo, Manila, for a term of one month extendible.

“2nd. The same department shall authorize a provisional contract with aforesaid Chinese at the rate of P1,200 per month, limiting the same to the provinces of Albay and Sorsogon, district of Catanduanes.

“3rd. A copy of this decree shall be forwarded to the military and provincial chiefs of the provinces mentioned.

“I have the pleasure of referring the same to you for your information; you will immediately make the award to the Chinese contractors aforementioned and report to this office the date when it is effected; furthermore, you will please order the local chiefs of your jurisdiction to please publish this by posters in the local dialect and acknowledge receipt of the same.”

I may be wrong, but it would seem that this Aguinaldo decree can be considered the earliest form of explicit and official government approval for “vice” actually considered harmful to hygiene and public health. And this was done under the first “independent” Philippine republic, and with public bidding requirements and local zoning restrictions at that. Moreover, government was to earn from the “license” to operate it issued.

What puzzles me, however, is how Aguinaldo decided to provisionally award the opium “service” contracts to a select group of Chinese businessmen for a limited period of one month. I can only surmise that these men supported his revolution, perhaps even helped finance it, and to help them recoup their expenses, were given a limited and time-bound franchise to a profitable business.

So, going back to vaping and medical marijuana, perhaps sale or distribution should require government licenses, both national and local. Excise tax should be imposed by the national government on vaping, just like cigarettes. However, for medical marijuana, considering the use, perhaps it can be made tax-exempt.

But, in addition to taxation and requiring permits and licenses as well as production registration for items to be sold or distributed, local establishments like shopping malls and restaurants and bars can perhaps be made to apply and pay for local permits to build or put up designated “smoking lounges” to accommodate their smoking or vaping customers.

I raised this issue as early as 2018, before vaping became a government target, noting that in the same way that establishments must pay for permits to sell liquor, and separate permits to “serve” liquor, the same should apply to smoking and vaping. In this line, stores should be licensed to sell and distribute vaping equipment and liquids with FDA approval.

Manufacturers or importers of vaping equipment and cartridges should also pay excise taxes, much like producers of cigarettes and sweetened beverages. And places allowing smoking or vaping should pay for local permits to put up smoking lounges, subject to periodic health and sanitary inspection.

As I had written last year, I expressed the opinion that smoking or vaping should be freely permitted in private residences. However, it must be limited to designated, licensed lounges in public facilities and spaces, private and public offices, private commercial buildings, and tourism facilities like hotels and resorts, among others.

If Prohibition had its speakeasies, which later became legal and legitimate night clubs, our era can witness the emergence of properly licensed and regulated, comfortable if not luxurious, smoking and vaping lounges where adults 21 and above can hang, drink, eat, even play video games. Add bowling, billiards, and darts to that. These places should have proper partitions and ventilation for smokers, as well as garbage segregation particularly for cigarette butts, vaping cartridges, and other “smoking-related” items.

Total prohibition, particularly for vaping, simply won’t work. To prohibit vaping means to prohibit cigarette smoking as well. They are, at this point in the government argument, deemed practically the same. Both, without doubt, have harmful effects. Thus, the rules should apply equally to both. But, if government chooses to regulate smoking, then the same should work for vaping as well.

What is crucial, in my opinion, is how we implement the nationwide ban on smoking/vaping in public places, and how we go about creating spaces where people can legally indulge in their “vices” without causing harm to others.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.

matort@yahoo.com

ADVERTISEMENT
ADVERTISEMENT