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Azkals hold Thailand to 1-1 draw in Suzuki Cup match

By Michael Angelo S. Murillo
Senior Reporter
THE Philippine men’s national football team’s steady form in the ongoing 2018 AFF Suzuki Cup continued on Wednesday night as it held defending champion Thailand to a 1-1 draw in their battle of unbeaten teams in Group B of the tournament at the Panaad Park and Football Stadium in Bacolod City.
Found themselves behind early in the second half, the Philippine Azkals dug deep and stayed resilient and were accordingly rewarded when substitute Joven Bedic connected late in the match to level the count and hold such the rest of the way to force the draw, and for the two teams to share the spoils with a point each while also holding a share of group leadership heading into the final matches on Nov. 25 .
The Azkals had their chances in the opening half but could not complete them.
In the second half, the visiting War Elephants beat the Azkals to the draw and broke the nil-nil tie in the 56th minute care of Supachai Jaded.
The hosts scrambled to get the point back after.
In the 78th minute, Joven Bedic came in to replace Stephan Palla, a move that would pay dividends for the Sven-Goran Eriksson-coached Azkals as Mr. Bedic scored the equalizer three minutes later as he right-footed a shot from outside the box to find the bottom of the net.
The two teams tried to still go for the victory for the remainder of the contest but no goals were to come en route to the draw.
“I think we played well the whole 90 minutes and for me we were the better team for we created more opportunities. One-one is okay. We could have won it but I’m very happy of the performance of the team. I think they did well against a very good team,” said Mr. Eriksson after the game.
“If we play like this I think we can qualify for the semifinals and that is good for the future,” he added.
The draw pushed both Thailand and the Philippines to seven points after three matches, a point up from the third-running Singapore.
In the Suzuki Cup, the top two teams from each group at the end of the classification round advance to the crossover semifinals.
The Philippines faces off with already-eliminated Indonesia on Sunday while Thailand battles Singapore.

NFA to take applications for private rice import licenses

COMPANIES interested in the open rice importation program may start filing applications today, Agriculture Secretary Emmanuel F. Piñol said, noting that there is no need to wait for the passage of the rice tariffication bill to proceed with the implementation of the measure.
In a news conference on Wednesday, Mr. Piñol said that the National Food Authority (NFA), however, will be evaluating applicants based on their financial, warehousing and retailing capabilities.
“The purpose of the importation is to bring down the price of rice. Why would I wait for the bill? What if it takes long? We’ll be facing complaints if rice prices rise again,” Mr. Piñol said.
“There are guidelines on who are qualified to import. It’s going to be open but we will be very strict in the implementation of the evaluation… This will effectively weed out fly-by-night importers,” Mr. Piñol said.
Mr. Piñol said the 10% of the importer’s net worth is the volume cap, with sufficient warehousing to hold all the rice on order.
Mr. Piñol said he does not believe the imports will flood the market with rice as the importers will determine when to stop importing.
“According to our assessment, although some people fear a flooding of imported rice in the market, I don’t think that will happen. When the importers see large volumes on the market and the prices go down to a level where they cannot make money, they will stop importing,” Mr. Piñol said.
He noted that “the absorptive capacity of the market will set the cap.”
Mr. Piñol said that the NFA Council has yet to discuss the removal of the minimum access volume (MAV) next year, noting that such a move would be overtaken by rice tariffication.
Mr. Piñol said he does not want the NFA to be abolished as it can co-exist with rice tariffication.
“I am not in favor of the proposal to abolish NFA because it will effectively deprive poor families access to subsidized rice,” Mr. Piñol said. — Reicelene Joy N. Ignacio

Senate ‘worst-case’ is Jan. budget passage

THE SENATE is targeting passage of the proposed 2019 budget by Dec. 12, after the House of Representatives approved the measure on Tuesday, but the chamber also continues to hedge on the prospect of discussions extending to January and a re-enacted budget for the first month of 2019.
“It’s very difficult to be able to discuss intelligently and lengthily pertinent provisions of the budget at this short period of time. So the realistic scenario we are looking is that we can pass this in the Senate by Dec. 12,” Senate Majority Leader Juan Miguel F. Zubiri told reporters.
“(Dec. 12) is the best-case scenario. Worst-case scenario is we will continue (deliberations) when we return (in January),” he added.
The House of Representatives on Tuesday approved on third reading the P3.757 trillion national budget for 2019, ahead of its Nov. 28 deadline.
Despite the House approval, Mr. Zubiri said the prospect of a re-enacted 2018 budget, which is called for if Congress fails to pass the measure before the end of the year, will cover only January. He said Congress will also need to convene the bicameral conference committee after Dec. 12 once the Senate passes the bill.
“At the very least, the week of Jan. 14, 15, 16 is the ratification… Technically, we may have to have a re-enacted budget between two weeks to one month,” he said.
He is also proposing to the members of the Senate whole-day sessions on Dec. 6 and 7 to discuss the budget.
However, he added that many senators, such as Senate President Pro Tempore Ralph G. Recto and Senator Panfilo M. Lacson, are expected to have much to say on the items in the General Appropriations Bill.
“That’s why we’re making a realistic assumption that we might not finish the budget approval on Dec. 12. At the very best, we can approve on Dec. 12 for third reading, but the bicam will still be working during the break. Ratification will be when we come back on Jan. 14, 15, 16,” he said.
Mr. Zubiri said senators have conveyed their estimated timetable to Speaker Gloria M. Arroyo following their joint call with Chinese President Xi Jinping in Taguig City.
Asked about Ms. Arroyo’s reaction to the Senate’s timetable, he said, “she was quiet about it. She was hoping that we can pass it earlier.”
He added that Ms. Arroyo assured the Senate that the budget bill will be transmitted to the Senate on Monday, Nov. 26.
In a statement on Wednesday, House Majority Leader Rolando G. Andaya said the chamber respects the Senate’s timetable for passing the budget.
“Like any measures, the Senate reviews, and in the process rejects or accepts, the improvements and amendments we have made on the national budget,” he said.
“It is also in the same constructive spirit that we will treat and assess the Senate changes to the national budget when it is sent to a House-Senate conference for reconciliation,” he added.
On the possible delay in the passage of the 2019 budget, Mr. Andaya said the chamber is expecting that a re-enacted budget will be in force “during a short, interim period” and will not affect the operations of government. — Camille A. Aguinaldo

Firms ask Palace to clamp down on ‘exorbitant’ shipping

BUSINESSES have called on the President to order the Maritime Industry Authority (MARINA) to exercise its regulatory authority over shipping companies and clamp down on “exorbitant destination charges.”
In an open letter to President Rodrigo R. Duterte published in a newspaper on Wednesday, the Port Users Confederation of the Philippines, Inc. (PUCP) said it wants MARINA to be in charge of streamlining the fee structures of international shipping companies.
“We… recommend that an Executive or Administrative Order be issued authorizing MARINA to register and accredit local agents of international shipping lines and other similar enterprises, and strengthening its regulatory and supervisory functions, including the vetting of all shipping charges,” it said.
The PUCP said agents of international shipping lines are imposing “destination charges,” which are sometimes as high as 50 times the actual freight rate.
“These charges… escalate import costs of countless products, which Filipino consumers and businesses ultimately bear. This imposes hardship on families, and erodes the earnings and competitiveness of our enterprises,” it said.
These fees include container deposits, container cleaning fees, terminal handling costs and document fees, which the PUCP said requires review and rationalization from the MARINA.
“It is our humble opinion that MARINA can undertake regulation of the local agents of international shipping lines in order to streamline public services and remove excessive fees burdening consumers and businesses,” noting that shipping and freight forwarding agencies, including similar enterprises, fall under the jurisdiction of the agency.
MARINA was asked for comment on the group’s letter but had not provided any at deadline time.
Among the signatories in the PUCP’s letter are the Philippine Exporters Confederation, Inc. (PhilExport); Federation of Customs Brokerage Companies of the Philippines (FCBC) and Philippines Integrated Exporters, Inc. (PIE). — Denise A. Valdez

PHL signs new air deal with Switzerland

THE Philippines and Switzerland signed on Tuesday a new air services agreement allowing unlimited flights between the two countries except on the Manila-Zurich route.
Department of Transportation (DoTr) Undersecretary for Aviation Manuel Antonio L. Tamayo said in a message to reporters late Tuesday that airlines from both countries may now proceed under no restrictions on service, except for Manila-Zurich, where frequencies are restricted to seven a week, to be raised to 14 after a year.
Current limits on Manila-Zurich flights are three times a week.
“The delegations… agreed that the designated airlines of both parties may exercise unlimited direct flights with third and fourth freedom traffic rights between Switzerland and the Philippines, except to Zurich and Manila, for which 7 frequencies per week per side was agreed on. These will be increased to 14 frequencies each side one year after the date of signing of the Memorandum of Understanding,” he said.
The third freedom is the right to offer service between one’s home country and another country, while the fourth freedom is the right to offer service from another country to its home country.
“Switzerland is a key component for good air access to Europe and, aside from being a direct connection, (offers) possible fifth-freedom support or connections for at least 17 European, Middle Eastern, or Asian destinations with which the Philippines has air agreements,” the DoTr said in a statement.
The fifth freedom is the right to offer service between two foreign countries if the flight originates or ends in an airline’s own country.
Aside from air talks with Switzerland, the DoTr said it also signed a memorandum of understanding (MoU) with Thailand on Tuesday for a new air services agreement.
While the government refused to give details on the target frequencies and freedom rights for the new air deal, it said the MoU guarantees no restrictions on passengers and cargo capacity between the Philippines and Thailand.
“The agreement… is now aligned with ASEAN multilateral agreements opening up travel, tourism, and trade within and among the 10-country bloc,” it said. — Denise A. Valdez

DoLE to crack down on foreign-controlled recruitment agencies

THE Department of Labor and Employment (DoLE) said that it will look into recruitment agencies operating with dummy Filipino ownership that are in fact controlled by foreign nationals.
Speaking to reporters on Wednesday, Labor Undersecretary Jacinto V. Paras that DoLE will investigate licenses of recruitment agencies that are partly owned by foreigners, to monitor compliance with the 25% cap on foreign ownership set out in the 10th Foreign Investment Negative List issued by the previous government in 2015 and left unchanged in the 11th FINL issued in October.
“We’ll be looking at license holders, especially those whose stockholders and incorporators are foreigners,” he said.
On Wednesday, DoLE consulted recruitment agency owners regarding the operations of a task force against illegal recruitment and trafficking.
Philippine Overseas Employment Administration (POEA) Governing Board Private Sector Representative Estrelita S. Hizon said she backed a crackdown on foreign ownership beyond the allowed limits, which she said will act as a deterrent for agencies illegally operated by foreign nationals.
Ms. Hizon, who owns and operates a recruitment agency, said she wants a “two-year” phaseout period, noting that many recruitment agencies are owned by Philippine dummies be controlled by foreign recruiters.
“There are those who use a Filipino dummy but the ones behind are foreigners. That cannot be… We have a hard time because we’re following the rules,” she said on Wednesday.
Mr. Paras called the phaseout a drastic measure to completely halt foreign operation of recruitment agencies.
“The only way to eradicate (the practice) is through the moratorium proposed by the stakeholders,” Mr. Paras said.
On the other hand, the labor undersecretary also raised concerns over the “job seekers visa” offered by the United Arab Emirates (UAE) this year. He said this type of visa contradicts bilateral agreements of the Philippines with the UAE.
“The job seekers visa is contrary to the bilateral agreement,” he said, which contains worker protections that address Philippine concerns about trafficking.
He called on the Department of Foreign Affairs (DFA) “to make a representation… because we are coursing our deployments through the proper channels (set out in) the bilateral agreement.”
Mr. Paras said that a Filipino worker who is given a job seeker visa won’t be covered by the protections and benefits he is entitled to under Philippine law, to be provided by the recruiter.
“They will be under the control and direction of whoever is their employer there,” he said.
POEA Memorandum Circular No. 8, Series of 2018 issued in April states that foreigners are not allowed to directly hire Filipinos for overseas employment with exceptions given only to members of the diplomatic corps; members of international organizations; and heads of state/government officials with at least a deputy minister rank. — Gillian M. Cortez

Ayala Group announces purchasing agreement with El Nido farm cooperatives

THE AYALA GROUP will buy fresh vegetables from a cooperative in El Nido, Palawan with a view towards possibly supplying its resort network in northern Palawan, the Department of Agriculture (DA) said on Wednesday.
The DA, in a statement, identified the cooperative as Asosasyon ng mga Mangingisda at Magsasaka ng Munisipyo ng El Nido, Palawan, Inc. (AMMMEPI) with the partnership also aiming to revive the agriculture industry in El Nido.
The vegetables covered by the deal are bitter gourd (ampalaya), squash, okra, eggplant and string beans.
The Ayala Multi-purpose Cooperative (AMPC) also lent P250,000 in working capital at a 1% interest rate, payable quarterly over two years.
“Very soon the farmers’ co-op might supply vegetables to the Ayala hotels and resorts if the vegetables meet quality standards,” Lourdes B. Orosa, General Manager of AMPC, was quoted as saying in the DA statement.
Ayala Land Inc. unit El Nido Resorts group manages properties in northern Palawan include locations in El Nido and Taytay municipalities. The Ayala Land website lists the properties as Miniloc Island Resort, Lagen Island Resort and the newly-opened Pangulasian Island Resort in El Nido, and Apulit Island Resort in Taytay.
The DA said its local office assisted the co-op in organizing a harvest festival for Ayala Group under the department’s High-Value Crops Development Program. — Reicelene Joy N. Ignacio

House committee approves tax measures on passive income

THE HOUSE WAYS and Means Committee on Wednesday approved the bill simplifying the tax regime for financial investors, which forms part of the government’s comprehensive tax reform program (CTRP).
After a fourth deliberation, the unnumbered Substitute Bill, which proposes to be the ”Passive Income and Financial Intermediary Taxation Act of 2019,” which proposed to a flat rate of 15% on dividend income, among others, cleared the panel in less than 10 minutes.
Committee chair Estrellita B. Suansing of the 1st district of Nueva Ecija said she targets plenary approval of the bill ahead of the congressional break on Dec. 14.
“I am suggesting a plenary next week, so we can finish before the Christmas break,” Ms. Suansing told reporters in a chance interview after the meeting.
The committee also approved a measure increasing the excise tax on alcohol products while the chamber approved on third reading the Tax Amnesty Bill.
The final version of the substitute bill removed the 1,000-member requirement for collective investment schemes (CIS), which are entitled to tax exemptions in the measure.
“There was an agreement to keep the 1,000 participant requirement for a collective investment scheme to be exempted. We proposed to altogether remove that requirement which may be difficult to achieve,” Finance Undersecretary Karl Kendrick T. Chua said.
The bill defined a CIS as “an arrangement whereby funds are solicited from the investing public and pooled together for the purpose of investing, re-investing, and/or trading in securities or other assets.”
The measure previously provided an exemption for a CIS from the 5% gross receipts tax, other percentage taxes and value-added tax imposed under the National Internal Revenue Code, only if it gathers at least 1,000 members.
The DoF also proposed to reinstate the documentary stamp tax on certificates, which the committee deleted during the technical working group meeting.
“This includes all types of certificates and it is a major revenue source, as a way to offset the first proposed removal of the 1,000 exemption, we proposed to reinstate but instead of P50 we can lower to P40 per certificate,” Mr. Chua said.
The present system imposes a P30 documentary stamp tax on certificates, which include certificates or documents issued by customs officers, marine surveyors, and notaries.
Among the key provisions of the measure is a flat rate of 15% on interest on certain passive income as well as on cash and/or property dividends of individuals, who are currently levied 20% and 10%, respectively.
The same 15% rate will also be levied on interest on certain passive income of domestic corporations, down from the current 20%.
A 15% rate will also be imposed on the net capital gains for the taxable year on the sale of stock not traded on the Stock Exchange or any registered and licensed organized market. The rate covers both individuals and domestic corporations.
The Code currently imposes a 10% rate on net capital gains of more than P100,000 and 5% on gains less than P100,000. — Charmaine A. Tadalan

Plan ahead for a Merry Christmas

So much had been speculated and observed as to the effect of Republic Act 10963, otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Act, on inflation and the cost of basic commodities since it took effect this year. The lack of safety nets to counter the effects of inflation has been the source of much negative comment.
The positive impact of TRAIN on our wallets may only be a “pass-through” as prices of basic commodities and an unpredictable stock market continue to drain us financially, physically and mentally.
But wait! The TRAIN’s impact is not yet over as the close of the calendar year is barely five weeks away. Employers and employees may need to revisit how TRAIN could impact their most common concern at year-end — the annualization of withholding tax on compensation.
WHAT IS ANNUALIZATION?
Annualization is the process of determining the annual income tax due based on the total compensation earned, less all non-taxable earnings, including those from previous employer/s, taking into consideration the amount of taxes withheld, in order to arrive at the adjusted withholding tax due at year-end or as of Dec. 31.
WHAT ARE THE THINGS TO CONSIDER DURING ANNUALIZATION?
• BIR Form 2316 from previous employer
Employees with previous employers should provide their BIR Form 2316 from their previous employer to their current employer. Why? Because the current employer is required to consolidate the earnings from the previous and current employers for proper annualization of total earnings and taxes due for the calendar year.
This will also serve as reference in determining whether or not the employee has exhausted the P90,000 threshold for non-taxable 13th month pay and other benefits.
• Completion and implications of substituted filing survey
Section 51-A of the TRAIN provides that “individual taxpayers receiving purely compensation income regardless of amount, from only one employer in the Philippines for the calendar year, the income tax of which has been withheld correctly by the said employer (tax due equals tax withheld) shall not be required to file an annual income tax return. The certificate of withholding filed by the respective employers, duly stamped “received” by the BIR, shall be tantamount to the substituted filing of income tax returns by said employees.”
Substituted filing applies only to individuals who meet the above conditions, and whose spouse also complies with all the same conditions, or otherwise receives no income.
It is important to identify those employees qualified for substituted filing because there is a requirement to indicate in the alphalist whether or not an employee is qualified for substituted filing.
Those tagged as not qualified for substituted filing will be required to file personal income tax returns (BIR Form 1700 0r 1701, whichever is applicable) by April 15 of the following year.
When consolidating his earnings and taxes as indicated in the BIR Form 2316 issued by his respective employers for the year, the employee may note having a tax liability on his annual income tax return. Such tax liability can be settled by the employee on installment basis, i.e. the first 50% by April 15, then the next 50% by October 15, as provided in Section 56(A)(2) of the TRAIN.
Should the employee fail to file, this would be considered as non-compliance on the part of the employee and not of the employer.
OTHER EMPLOYER CONSIDERATIONS
• Impact of group health insurance per Revenue Memorandum Circular (RMC) 50-2018
The BIR issued RMC 50-2018 which provides clarifications on certain provisions of Revenue Regulations 8-2018 and 11-2018 implementing the Income Tax provisions of the TRAIN. One of the major concerns is the taxation of group health insurance paid by the employer for his employees. The RMC provides that “premium on health card paid by the employer for all employees, whether rank and file or managerial/supervisory, under a group insurance shall be included as part of other benefits of these employees which are subject to the P90,000.00 threshold. However, individual premiums (not part of group insurance) paid for selected employees holding managerial or supervisory functions are considered “fringe benefits” subject to fringe benefits tax”.
As of this time, there is no further clarification issued by the BIR on the said provision. Since employers are required to comply with the existing rules, this would mean additional taxable income on the part of the employee if the employee has exhausted the P90,000 non-taxable threshold.
• Issuance of BIR Form 2316 for taxable year 2018
As of this writing, the BIR has not issued any advisory on whether or not they will update the said form. It is hoped that the BIR will provide this soon so employers and tax practitioners will have ample time to study how to accomplish the form and to update their systems.
WHAT CAN EMPLOYERS DO TO REDUCE THE TAX IMPACT ON EMPLOYEES AT YEAR-END?
Most employers do interim annualization to project the annual tax due of their employees. Such a practice aids their employees in managing their Christmas holiday cash flow as well as the remittance of their taxes by spreading out the tax deductions/payments equally over the last two (or three) months of the year. Some employers remit these taxes in advance for the employees and eventually recover as a deduction in the succeeding payroll.
Whatever practice is being implemented by employers, it should be properly communicated to employees to manage expectations. Good employers plan ahead so that employees will have enough take-home pay during the most festive holiday of the year, and enjoy a Merry Christmas.
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.
 
Bernadette R. Fama-Absolor is a Manager at the Client Accounting Services group of Isla Lipana & Co., the Philippine member firm of the PwC network.
+63 (2) 845-2728
bernadette.r.fama@ph.pwc.com

Where to with IKEA, China?

Of the business developments in the last two days, what stand out — at least, in my opinion — are the commitment of furniture manufacturing giant IKEA to invest initially about P7 billion in putting up a Philippine store; and the government’s signing of more than 20 agreements with the People’s Republic of China on the occasion of the state visit of Chinese President Xi Jinping.
Between the two deals, many pundits will claim the IKEA investment is definite, with a local store set to open by 2020, while the China agreements are perhaps just a few notches above lip service. The latter, after all, are mostly Memoranda of Understanding, which may or may not result in actual or concrete investments or assistance from China in the future.
While these two developments appear independent of each other, I view them as intricately linked — with China as the common denominator — with respect to overall implication for the future of Philippine trade. China trades with its West by looking to its East, and we are smack in the middle of that. Meanwhile, we trade with Europe by looking to the West, and China is there in between. This, I believe, is a situation that we should exploit to our advantage.
The IKEA investment in a new store in the Philippines, touted to become the brand’s largest in the world in terms of size, may just be the start. That P7 billion investment, in dollar terms, is roughly $135 million. This is not really much, considering that it also includes “inventory” for the new store. The Philippines’ aim, in my opinion, should go beyond leased area and retail, and actually encourage IKEA to manufacture in the country.
This is for the simple reason that our people need work. And for what is touted to be a large investment, IKEA’s P7 billion is forecast to create only about 500 new jobs, and I guess consisting mostly of sales people and material handlers. Although the company also claims its investment will create spin-off jobs and business opportunities in logistics, food supply, transport, waste management, and security.
Long term, China can play a role in this, if its agreements with the Philippines can bear fruit. For one, a successful joint venture on oil and gas development between the Philippines and China can result in lower energy costs, which in turn can encourage more manufacturing; while successful cooperation in information and communication technology can boost e-commerce.
Successful infrastructure cooperation between the Philippines can also lead to new rail lines and thus boost logistics, while a joint project for industrial park development can provide for suitable locations for manufacturing facilities. In fact, it can make sense for IKEA to move some manufacturing in China to the Philippines, to bring products closer to the Southeast Asian market.
As of a year ago, IKEA reportedly owned and operated 415 stores in 49 countries, selling about 12,000 products. Its biggest market is reportedly still Germany, with 53 stores, and then the US, with 50 stores. It opened its first store in India last August, and it reportedly sees India as becoming its largest market in the future. Although the Philippine store that is opening in 2020 is still expected to be the largest in terms of size, so far.
trade
But targeting manufacturing — more than retail — is crucial to us. IKEA products are designed in Sweden, but they are all mostly made abroad, particularly in developing countries where costs are lower. A subsidiary in Southern Poland reportedly manufactures the wood-based products, but the particle boards used in production are supplied solely by a factory in Southern Sweden. To date, IKEA reportedly has over 16,000 employees across 50 sites in 10 countries to manufacture the 100 million pieces of furniture that it sells annually.
We need to become an IKEA manufacturer. In fact, we need to significantly boost manufacturing and industry if we want to sustain the economy’s growth and continue to provide for a growing population that is now over 100 million Filipinos. Investments from China and other foreign partners will play a big part in improving the countries’ capabilities in attracting business like IKEA to make products here.
I am uncertain how much IKEA produces in China, and how much of its Chinese production is exported abroad. But, about five years ago, one business report indicated that IKEA’s Chinese manufacturing produced mostly for the Chinese market. At the same time, to remain competitive in China, IKEA has had to rely on local sourcing to cut costs and sell at prices lower than in other markets. In this line, I am uncertain if manufacturing in China will be sustainable for them.
A recent report from CNN Business also indicate that IKEA is now under fire in China “for how it describes Taiwan, making it the latest in a string of global brands that have fallen foul of Beijing’s political sensitivities.” The public as well as state media have reportedly taken issue with IKEA packaging “that appeared to suggest that Taiwan is a separate country.” Given such non-business issues, perhaps it can consider doing some manufacturing here.
Meanwhile, we should also start exploring more products that can be made here and can be sold to China — either as raw materials, intermediate goods, or finished goods — that can eventually make their way to Russia and Europe. China is now our Asian gateway for these markets, and we should take advantage of our relations with Beijing to tap them. We need to get our goods into the high-speed train system that has been built that runs from China to Russia and Germany and back.
Two rails run the China-Europe route, running from Zhengzhou in Eastern China and through Central and Western China, and into Kazakhstan and Russia, and all the way to Poland and then Germany, particularly to the port city of Hamburg. Strong cooperation between Deutsche Bahn AG and China Railways starting 10 years ago has made this possible.
The two main rail lines are used by DB Schenker for freight, and are forecast to have carried around 90,000 containers between China in Europe this year. The project, reportedly the longest train connection in the world at 10,000 kilometers, started in 2008. Since then, freight has significantly risen in the last two years from 30,000 containers in 2016 and 80,000 containers in 2017, to 90,000 containers in 2018.
This train connection can now allow the Philippines and other Southeast Asia-based manufacturers to ship goods to China, which can then travel by land on rail — instead of mostly by sea — from China all the way to Poland and Germany. The freight rail is comparable to the ancient Silk Road that connected the East to the West.
For companies like IKEA that design in Sweden and manufacture in Poland, and with the biggest number of stores in Germany, this rail connection from Europe to China and back can provide a number of logistical and market advantages. The same with producers in the Philippines and other parts of Asia, but only if these see value in boosting relations with the “Middle Kingdom.”
 
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.
matort@yahoo.com

Please mind the curriculum gap

The ongoing academic year 2018-2019 is critical for Philippine higher education institutions as it is when they have to admit the pioneer batch of senior high school (SHS) graduates under the K-12 basic education reform program of the Department of Education (DepEd) into college. According to DepEd, of the more than 1.2 million graduates from public and private SHS’s in 2018, twenty-five percent (25%) or 300,000 learners will be able to obtain a college degree in the next four to five years. Factoring in the college completion rate of 30% as per Commission on Higher Education (CHEd), we are talking about 1 million (300,000/30%) learners entering college this year.
Reflecting on the situation, I could not help but ask, “How would these learners be any different from their predecessors? How would our newly minted college curriculum be more sensitive to what these learners bring and need?”
I am writing from the perspective of an accounting teacher who has handled classes in both SHS (the first and second batches) and college (intakes from the first batch of SHS graduates). In addition, I have conducted certification visits to feeder SHS’s of our university. Needless to say, my views are directed at the Accountancy, Business, and Management (ABM) strand of the academic track.
The main motivation behind this education reform is to ensure that graduates of our basic education system are at par with global standards. In more practical terms, the shift to K-12 aims to provide graduates with life skills in dealing with changes brought about by globalization, regulation, and technology. The reform is supposed to result in graduates who are prepared to analyze and solve problems, respond and adapt to changes, and internalize and live by the learning skills.
An important component of program management is monitoring and evaluation. DepEd Secretary Leonor Briones announced in July the plan to review the K-12 curriculum after two years of implementation. Responsive to feedback being received from the public, DepEd also welcomes inputs about the curriculum content.
Pondering upon the questions I posed earlier and appreciating the openness of DepEd to feedback have made me more enthusiastic about demystifying the concept of curriculum gap on this respect. Technical and complex as it may seem, the gap can be broken down into three sub-gaps: what to teach, how to teach, and whom to teach. For this article, I intend to delve on the first sub-gap, what to teach. Essentially, should shortcomings surface from this sub-gap, the learners are not to be blamed at all as this article focuses on content or subject matter.
The first shortcoming is the non-inclusion of basic partnership and corporation accounting in the curriculum. The non-inclusion is an oversight as this topic is necessary for learners to understand better financial statement analysis, which are covered in both Fundamentals of Accountancy, Business and Management 2 (FABM2) and Business Finance courses.
The second shortcoming is the non-inclusion of basic manufacturing accounting in the curriculum. This topic is integral for learners as they complete their capstone projects, which are usually on production of goods for sale.
The last shortcoming is the marginal regard for taxation, which was included only as a topic in FABM2. This topic may be enriched in college, but a deeper appreciation for preparing tax returns and eventually paying them early on is vital to honing responsible and honest business owners and taxpayers.
One suggestion to remedy the first two shortcomings is to re-plot the distribution of topics in FABM1 and FABM2. In line with outcome-based education, this may mean focusing on salient differences among basic financial statements of businesses according to activity (service, merchandising, and manufacturing) and according to ownership (sole proprietorship, partnership, and corporation).
The third shortcoming may be addressed by creating an additional basic course on regulatory requirements, which may include business permits, income and business tax returns, and remittances of mandatory payroll deductions to appropriate agencies.
Finally, I strongly suggest that DepEd create an alignment committee, with members representing entrepreneurs, the Bureau of Internal Revenue, the accountants, and the academe (SHS and college) to complement its own review process.
For now, let us be constructive in floating critical issues and providing creative recommendations concerning K-12 implementation. At the end of the day, we are all one in this noble endeavor of minding the curriculum gap.
 
Dr. Florenz C. Tugas is a full-time faculty member of the Accountancy Department of the Ramon V. Del Rosario College of Business of De La Salle University. He specializes in Basic Accounting, Auditing and Assurance, and Management of Information Technology courses
florenz.tugas@dlsu.edu.ph

Can a candidate be sold like a product?

By Tony Samson
THERE is a school of marketing that believes that a political candidate is no different from a can of sardines or a shampoo. It’s just another product to be sold. In a 1969 book on the 1968 US elections, author Joe McGinniss exposed the Madison Avenue techniques used to successfully push the election of the already once-defeated Richard Nixon as president. Since then advertising types and market researchers/pollsters have jumped into the political process.
The brand manager can offer segmented products using different selling propositions addressed to the mass market or the high-end counterpart, as in selling condos. There are cabinet-sized spaces near cemeteries (a quiet neighborhood) and two-floor units in plush zones with an atrium for the chandelier (it fits your image).
Can politicians also adjust their messages according to the audience?
The varying messages employed by advertising types to target different segments of the market, in terms of socio-economic clusters or lifestyle categories (single moms with one child), can be perceived in a political context as pandering to different groups. What results is the image of a dissembling candidate who has no real stand on any issues, and just trying to delight different sets of customers…like a stand-up comedian.
If product marketing has now embraced social media, should its political equivalent be left behind? The digital missionary will tell his client candidate that the world belongs to the “millennials” and that the median age of this country is 23 years old. This segment, the voting population from 18 to 28 years old, comprises 70% of the voters. (Who checks these statistics?)
It is perhaps a culture shock for the wizened political handlers to sit still for the slide presentation of one, who just started shaving, promoting a digital approach to campaigning. He refers to bloggers and “brand ambassadors,” and letting messages be defined by the community. This crowd-sourcing of desired product attributes is how digital marketers like Trivago with its consumer reviews of hotels, restaurants, and destinations have quickly replaced the travel agents. Is this the way to go in selling a candidate?
The reason why traditional political handlers balk at the digital approach is its cheekiness and air of certitude — really, you can deliver 8 million votes using this approach? Yes, sir, if they will all register and bother to vote. We are not sure of their passion.
The digital missionary explains the characteristics of the 18 to 28, maybe stretching to 33-year old millennials. Remember, this is the 70% chunk mentioned before — are you paying attention, Sir? She (we only use this gender for convenience, and there are more women in the demographics) has a very short attention span (six seconds). She only stays connected when she’s interested in a topic. She doesn’t even watch TV or read the printed newspaper. (You need to understand your voter, Sir.)
One difference between a product and a candidate is the role of the consumer. In the case of the product, it is the seller who gets money from the consumer. In politics, the product and the buyer switch roles. Guess where the flow of money starts and ends — from the product to the customer. Please don’t call it vote buying. It is now called “incentivation.”
The candidate and his handlers may feel more comfortable with the traditional approach, like dynasty politics, which still works. (As Arnold S, the Terminator, puts it — I’m old but not obsolete). This entails going to wakes, organizing meetings, and giving out T-shirts. But the candidate may put some money too on the digital side, just to keep up. But which option should weigh more?
Good advertising for a bad product can doom its prospects by enticing more customers to use the product and be disappointed or even infuriated with its consumption. When a bad candidate wins because of good marketing and a compelling brand promise (he will solve EDSA traffic), there is no opportunity for a refund or an exchange because of a bad fit or a torn pocket.
Thankfully, for the politician, the product may already be well known with a high profile on his past achievements or lack thereof. As they say in sales — caveat emptor. The buyer must indeed be wary of a candidate who insists — that’s all history now, let’s just move on. Okay, hold on, what other products are on the shelf?
 
A.R. Samson is chairman and CEO, TOUCH xda.
ar.samson@yahoo.com

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