National Government outstanding debt
THE NATIONAL Government’s (NG) outstanding debt rose to a fresh high of P15.89 trillion as of end-September, but the Bureau of the Treasury (BTr) said this level is still “manageable.” Read the full story.
PhilHealth TRO seen delaying projects with no firm funding
By Chloe Mari A. Hufana, Reporter
THE Supreme Court’s temporary restraining order (TRO) on the transfer of P29.9 billion from the Philippine Health Insurance Corp. (PhilHealth) to the Bureau of the Treasury could have an impact on government projects relying on unprogrammed funds, an economist said.
“This can even affect infrastructure as some funds can be diverted from programmed projects to unprogrammed but pressing projects,” Leonardo A. Lanzona, Jr., an economics professor at the Ateneo de Manila, told BusinessWorld via Messenger chat.
He added that the TRO could influence future transfers of reserves held by government-owned and -controlled corporations (GOCCs) to the Treasury.
Mr. Lanzona likened the PhilHealth fund transfers to former President Benigno S.C. Aquino III’s Development Acceleration Program, which the high court ruled against.
“All along there was already a precedent that should prevent such transfers,” he said.
In July, the Department of Finance said remittances from PhilHealth and other GOCCs to the Treasury facilitated the Department of Budget and Management’s release of P27.5 billion to settle claims by frontliners eligible for COVID pandemic allowances.
A provision in the 2024 General Appropriations Act allowed the DoF to issue Circular No. 003-2024, authorizing PhilHealth and the Philippine Deposit Insurance Corp. to transfer P89.9 billion and P110 billion, respectively.
These were intended to fund unprogrammed appropriations worth P203.1 billion in health, infrastructure, and social services.
Supreme Court Spokesperson Camille Sue Mae L. Ting said on Tuesday that the TRO on the last tranche of the PhilHealth fund transfer, worth P29.9 billion and due next month, is effective immediately.
The Court consolidated the petitions filed by 1SAMBAYAN Coalition, a group led by Senator Aquilino Martin D. Pimentel III, and another group led by Bayan Muna Chairman Neri J. Colmenares.
The three petitions were filed to stop the transfer of P89.9 billion from PhilHealth to the Treasury.
The TRO was issued after P60 billion in PhilHealth funds had been transferred to the Treasury in three tranches beginning May.
Ms. Ting said the court could still consider a plea for a status quo ante order, which could allow the return of the P60 billion to PhilHealth.
Former Party-list Rep. Renato B. Magtubo said the TRO “has no real effect” on the projects due to be funded by unprogrammed allocations.
These projects “will only be realized if there are additional funds collected by the National Government,” he told BusinessWorld via Viber.
Such project funding is contingent on the availability of funds even if they were granted appropriations,” he said.
World trade rebound expected to be subdued, services to outperform
INTERNATIONAL TRADE is expected to rebound by around 2% this year, underperforming the projected growth of global gross domestic product (GDP), the United Nations Conference on Trade and Development (UNCTAD) said.
In a briefing late Tuesday, UNCTAD Secretary General Rebeca Grynspan said that trade is no longer “the engine of growth that it was before.”
“Since 2008, this has been the case, and now (trade) growth, because of geopolitics and rising protectionism, is even weaker,” Ms. Grynspan said.
“Trade as a share of GDP reached 16% in 2008 but has stagnated since then. Geopolitical tensions, as I said, protectionism on the rise and policy uncertainty are dampening hopes for a strong trade revival,” she added.
She said that although trade is expected to continue growing at around 2%, it will grow below the rate posted by global GDP. In the Trade and Development Report released by UNCTAD last night, global GDP is expected to grow 2.7% for 2024 and 2025.
“After stagnating in 2023, international trade in goods and services is expected to rebound by 2-3% in real terms in 2024,” according to the report.
“Merchandise trade, which contracted 1.2% in real terms in 2023, was the main cause for the poor performance of the broad aggregate in 2023,” it added.
In contrast to this, trade in services grew 5% in real terms last year and is expected to grow more, Ms. Grynspan said.
“Services alone now make up to nearly 25% of global trade and are projected to grow further. Global trade is growing at around 2% per year, and services are growing at around 5% per year, so we can expect the share of services in global trade to continue rising,” she added.
In the Philippines, the Development Budget Coordination Committee (DBCC) projected exports of goods to grow 5% this year and 6% next year, with merchandise imports growing 2% in 2024 and 5% in 2025.
In April 2023, the DBCC said that service exports and imports are expected to grow 16% and 10% this year and 6-8% between 2025 and 2028.
The Philippine Statistics Authority reported that total external trade in goods was $133.11 billion in the first eight months, up 0.5% from a year earlier.
Exports were valued at $49.41 billion (up 2.3%), while imports amounted to $83.7 billion (down 0.5%).
Meanwhile, the Bangko Sentral ng Pilipinas reported that exports of services totaled $24.9 billion (up 11.4%) in the first half, while imports amounted to $17.7 billion (up 27.3%).
UNCTAD said it is seeing growth in trade between developing countries.
“South-South trade is growing much faster than global trade … South-South trade has more than doubled to $5.6 trillion by 2023, offering an opportunity for diversification and to reduce dependency on traditional partners, especially in the face of rising protectionism,” Ms. Grynspan said.
“South-South trade, together with the energy transition and the digital economy, are clear opportunities for developing countries to achieve sustainable economic development,” she added.
However, she said that to realize the opportunities, developing countries have to avoid commodity dependence.
“If we will stay only in the extractive industries, despite the fact that most of the reserves for the critical minerals needed for digital and for the digital and energy transition are in the developing countries, if we don’t take advantage of diversification and add value, we will continue in the vicious cycle of commodity dependency,” she added. — Justine Irish D. Tabile
PHL stocks recover as investors pick up bargains
PHILIPPINE SHARES rebounded on Wednesday as investors picked up bargains following the market’s decline, with sentiment also improving amid strong corporate results.
The Philippine Stock Exchange index (PSEi) rose by 0.55% or 40.26 points to end at 7,280.24 on Wednesday, while the broader all shares index went up by 0.48% or 19.27 points to close at 3,996.58.
“Late day buying sent the local market higher this Wednesday. Investors hunted for bargains with robust third-quarter and nine-month corporate results giving sentiment a boost,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
“Trading was tepid, however, as investors were still in a cautious mode amid lingering downside risks including the peso’s weakness and uncertainties over the US’ upcoming elections,” he added.
Value turnover declined to P5.5 billion on Wednesday with 742.78 million shares changing hands from the P6.17 billion with 565.64 million issues traded on Tuesday.
“Philippine shares managed to close in the green with some bargain hunting at closing despite Wall Street ending mixed as investors braced for key corporate earnings releases,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“Overall, investor sentiment remained cautious amid uncertainties tied to the upcoming US elections,” Mr. Limlingan said.
The Nasdaq scored a record closing high and the S&P 500 rose on Tuesday, while the Dow fell as investors digested a host of corporate earnings and awaited Google-parent Alphabet’s results that came after the market close, Reuters reported.
The S&P 500 climbed by 0.16% or 9.40 points to 5,832.92; and the Nasdaq Composite rose by 0.78% or 145.56 points to 18,712.75. Meanwhile, the Dow Jones Industrial Average Index fell by 0.36% or 154.52 points to 42,233.05.
Kamala Harris’ lead over Donald Trump dwindled in the final stretch of the US presidential contest, with the Democrat ahead by a single percentage point over the Republican, 44% to 43%, according to a Reuters/Ipsos poll published on Tuesday.
The three-day poll, completed on Sunday, showed the race effectively tied ahead of the Nov. 5 election. The poll had a margin of error of about three percentage points in either direction.
At home, the majority of sectoral indices went up on Wednesday. Financials rose by 1.08% or 25.78 points to 2,396.74; industrials climbed by 0.79% or 78 points to 9,930.87; services increased by 0.63% or 13.96 points to 2,225.78; and mining and oil went up by 0.21% or 18.28 points to 8,616.64.
Meanwhile, holding firms dropped by 0.09% or 6 points to 6,127.13; and property inched down by 0.08 point to 2,791.76.
Decliners beat advancers, 99 versus 88, while 58 names were unchanged.
Net foreign selling went down to P600.04 million on Wednesday from P933.59 million on Tuesday. — R.M.D. Ochave with Reuters
Peso inches up as market awaits US data, elections
THE PESO inched up against the dollar on Wednesday, with the market staying cautious before the release of key US data and the US election.
The local unit closed at P58.23 per dollar on Wednesday, strengthening by 4.5 centavos from its P58.275 finish on Tuesday, Bankers Association of the Philippines data showed.
The peso opened Wednesday’s session stronger at P58.20 against the dollar. It climbed to as high as P58.18, while its worst showing was at P58.33 versus the greenback.
Dollars traded went up to $1.24 billion on Wednesday from $1.17 billion on Tuesday.
“The dollar-peso mostly traded sideways amid some market caution as players awaited the results of the US elections, as well as US gross domestic product and US ADP employment data,” the first trader said in a phone interview.
The peso was also supported by the seasonal increase in remittances ahead of the long weekend, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. The market is closed on Friday for All Saints’ Day.
“The peso appreciated following the upbeat US job openings data, easing concerns of a weakening US labor market,” the second trader said in an e-mail.
For Thursday, the first trader sees the peso moving between P58.10 and P58.40 per dollar, while Mr. Ricafort expects it to range from P58.10 to P58.30.
The second trader said the peso could move from P58.10 to P58.35 per dollar. — A.M.C. Sy
Rice imports at 3.68 MMT year to date
PHILIPPINE rice imports totaled 3.68 million metric tons (MMT) as of late October, according to the Bureau of Plant Industry (BPI).
The BPI reported that in October, rice shipments totaled 380,541.58 MT as of Oct. 24, up from 163,217.40 MT a year earlier.
In June, the government lowered the tariffs on imported rice to 15% from 35% until 2028 through Executive Order No. 62 as an inflation-containment measure.
Agriculture Secretary Francisco P. Tiu Laurel, Jr. has said that the Department of Agriculture (DA) will meet with operators of large markets in Metro Manila next week to determine why rice prices remain elevated despite a drop in wholesale rice prices to P38 per kilogram.
He added that if wholesale rice prices were at P38 per kilo, the retail price of rice should be around P45 per kilo.
According to DA price monitors, as of Oct. 29, the retail price of imported regular-milled rice was between P45 to P48 per kilo, while well-milled rice was P45 to P55 per kilo.
The BPI reported that Vietnam remained the top supplier of rice as of late October, accounting for 79% of all imports in the year to date, or 2.91 MMT.
Thailand supplied 457,673.28 MT during the period, or 12.4% of the total, followed by Pakistan with 162,369.48 MT, or 4.5%.
It added that Myanmar and India shipped 114,766.75 MT and 22,039.04 MT of rice, respectively.
For October, the BPI issued 741 sanitary and phytosanitary import certificates with approved applicants seeking to import 597,306 MT.
As of late October, permits issued numbered 8,397 with applicants seeking to ship in 8.21 MMT.
The US Department of Agriculture projects Philippine rice imports to hit 4.7 MMT this year, upgrading its initial 4.6 MMT estimate. — Adrian H. Halili
Curbs lifted on transport of chicken from areas free of avian influenza
THE Department of Agriculture (DA) said it is now allowing the movement of broiler chicken for slaughter from areas without active cases of highly pathogenic avian influenza, or bird flu.
In Administrative Circular No. 9, the DA said that broiler chicken can now be transported from areas clear of the disease for slaughter, subject to meeting the requirements for transport.
The DA said these include obtaining a local shipping permit (LSP) and a veterinary health certificate.
“The broilers must be transported directly from the source farm to the designated location as specified in the LSP. Loading and unloading of broilers during transit is strictly prohibited,” the DA added.
United Broiler Raisers Association Chairman Elias Jose M. Inciong said that the regulation could possibly improve the ease of doing business for chicken farmers.
The DA previously required the concurrence of regional field offices or local government units before issuing veterinary health certificates for transport.
The DA said the previous rules posed an undue burden on the poultry industry by “adding regulatory hurdles and costs.”
It added that broiler chicken transported to areas with active bird flu cases will not be permitted to return to their place of origin.
“The trader shall implement the necessary precautionary measures to ensure that all vehicles and conveyances used for hauling are subjected to appropriate biosecurity protocols before and after shipment,” the DA said.
According to DA guidelines, broiler chickens are excluded from vaccination protocols due to their relatively short production cycles, and are deemed less prone to disease outbreaks.
Separately, the DA declared Leyte province free of avian flu in Memorandum Circular No. 44.
As of Oct 25, 53 municipalities across nine provinces have active cases of bird flu, according to the Bureau of Animal Industry. — Adrian H. Halili
Flexible power bill payments eyed for storm-hit consumers
THE Energy Regulatory Commission (ERC) said it is looking into proposals to provide relief for consumers in storm-hit areas, including staggered-payment schemes for electricity bills.
The statement issued on Wednesday follows a Presidential directive to avoid disconnections in parts of the country hit by Severe Tropical Storm Kristine.
In a statement, the ERC said it is “currently developing measures that would allow for staggered payment options for electricity bills” to provide relief for storm survivors.
President Ferdinand R. Marcos, Jr. ordered the ERC to enforce a moratorium on disconnections for the October-December period, according to a statement issued by the Presidential Communications Office on Tuesday.
Mr. Marcos specified measures like “flexible payment options to ease the financial burden on affected communities and support their recovery efforts.”
Jesse Hermogenes T. Andres, ERC’s officer-in-charge chairperson and chief executive officer, appealed to distribution utilities (DUs) to take similar measures.
“In consideration of the coming holiday season, DUs should observe a moratorium on the disconnection of electricity service of distressed consumers,” the ERC said.
The regulator also called on the National Grid Corp. of the Philippines, privately-owned DUs and electric cooperatives in areas affected by Kristine to assess the damage and fast-track the restoration of electricity.
Kristine brought heavy rain and strong winds to parts of the country, particularly Bicol, leaving some communities flooded.
Asked to comment, Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said such relief measures will be welcomed by power in the storm-hit areas.
“However, the President should also determine how to help distribution utilities and electric cooperatives which had their facilities destroyed or damaged as well, as flexible payment mechanisms for customers will certainly affect their month-to-month cash flow projections,” he said via Viber. — Sheldeen Joy Talavera
ARTA launches AI-powered electronic complaint system
THE Anti-Red Tape Authority (ARTA) said it launched on Wednesday an electronic complaints management system (e-CMS) to allow direct filing of complaints online.
At the Ease of Doing Business Conference, ARTA Secretary Ernesto V. Perez said that the e-CMS will also make use of artificial intelligence (AI) in receiving and handling complaints.
“As you know, ARTA has a twin mandate: one is to enable and capacitate all government agencies to comply with the ease of doing business law, and the second is to investigate and file charges in case of violations of the law,” Mr. Perez said.
“The e-CMS facilitates filing, sorting, managing, drafting resolutions, and tracking the status of public complaints,” he said.
He said that as the launch of the e-CMS is expected to increase the number of complaints the agency will be receiving. As such, ARTA is seeking more staff to handle the increased volume.
“Our proposal (is) to further strengthen the mandate of ARTA because, as we will be launching this e-CMS, we anticipate that we will be deluged with complaints and we do not have enough lawyers to handle them,” he said.
“We have a high turnover rate because our lawyers transfer to the private sector… So I hope that we are able to not only add lawyers but at least upgrade the salary grade of our lawyers,” he added.
At the conference, ARTA Deputy Director General for Legal Geneses R. Abot said ARTA has so far received 23,325 complaints since 2018.
“Out of those, 23,000, or 98.29%, were resolved or referred to different agencies… while the remaining 399 cases are still active,” he said.
“There is a steady increase in the number of complaints. As of October, we received 5,473, and the year is not yet over. We are expecting again an increase in 2025, which is why it is paramount for us to develop an e-CMS,” he added.
The e-CMS will also leverage AI capabilities, including natural language processing (NLP) and ARTABLE predictive features. The system then will automatically sort and store complaints to ensure that no issue is missed.
Apart from automation, the system will also make use of AI to generate queries based on user intent, analyze sentiment to gauge urgency, recognize entities to provide contextual relevance, and predict possible outcomes.
“With the full implementation of this system, we will be able to receive complaints 24/7, so we expect a large number of complaints that we will receive, and I hope our legal department will be ready for it,” he added. — Justine Irish D. Tabile
Indonesian official sees similarities with PHL plight in protecting women in conflict zones
THE PHILIPPINES and Indonesia have similar struggles in ensuring that women in conflict zones are protected and have an adequate say in negotiating peace, an Indonesian official said.
“I think both Indonesia and the Philippines still have a long way to go” to ensure affirmative measures are in place, according to Andy Yentriyani, chairperson of Indonesia’s National Commission on Violence against Women, said in a video call with BusinessWorld on Oct. 29.
She said in Indonesia, it is still difficult to win recognition for women’s leadership.
“In various conflicts where the community has a very hierarchical structure, where women do not possess any decision-making authority, it is very important to have affirmative measures in place,” Ms. Yentriyani said.
She noted some success stories where women made it to the negotiating table, citing Central Sulawesi, where female leadership resulted in a “more lasting peace” following episodes of inter-religious community violence.
She said that in Aceh, women have been involved actively in bringing communities together even under military rule.
“Their leadership currently also influences how the Aceh government is able to provide… protection for human rights and women’s rights,” she added.
Ermelita V. Valdeavilla, chairperson of the Philippine Commission on Women, said in a speech at the International Conference on Women, Peace, and Security in Pasay that the goal is gender parity in leadership.
She said such parity can be achieved “by adopting temporary quotas as provided in CEDAW (Convention on the Elimination of All Forms of Discrimination against Women); by accelerating women’s capacity development for peacebuilding; and by making resources available to women peacebuilders.”
The conference was organized in observance of the 25th anniversary of United Nations Security Council Resolution 1325, which called for increased women’s participation in conflict prevention, peace negotiations, and the protection of women’s rights in conflict zones.
Ms. Valdeavilla said that in 2023, “only 26% of peace agreements mentioned the women’s agenda.”
If women are only marginally represented in the negotiation and decision-making, this invisibility will persist, Ms. Valdeavilla said. — Aubrey Rose A. Inosante
BARMM gets P2B in foreign aid commitments for women, peace
AROUND P2.06 billion has been committed by foreign institutions to support women, peace and security in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), the Office of the Presidential Adviser on Peace, Reconciliation, and Unity (OPAPRU) said on Wednesday.
The Japan International Cooperation Agency (JICA) also invested P275 million to reduce mortality in births and increase birth registrations in the BARMM. The project will be implemented by the United Nations Population Fund.
“Most people in the BARMM do not have a birth certificate… and without (identity documents)… they will have a hard time being entitled to social protection like PhilHealth (Philippine Health Insurance Corp.), universal healthcare,” OPAPRU Secretary Carlito G. Galvez, Jr. said at a briefing.
“So JICA and the other donor partners came together (for) projects to improve the lives (of people in the BARMM),” he added.
The Japanese embassy also provided P189 million to fund the production of food for 10,000 farmers, Mr. Galvez said. This is expected to feed 15,000 children in the Bangsamoro.
On Sept. 27, JICA, the Korea International Cooperation Agency, and the US Agency for International Development pooled funds amounting to P1.6 billion to support maternal care for children of up to three years in the BARMM.
Government agencies must ensure that women are considered in their respective budget proposals, Budget Secretary Amenah F. Pangandaman said.
“When you prepare the budget, the primary purpose is to provide jobs, to give employment to the people. (I hope that) whatever the program, project, or activity, agencies make sure that women are included in budget proposals,” she told the briefing.
Ms. Pangandaman noted that 16.68% of the national budget in 2023 was allocated for gender and development, exceeding the 5% mandatory allocation for gender programs, projects, and activities.
However, only 0.51% of the 2023 budget for gender and development (GAD) went to women, peace and security agencies, Philippine Commission on Women (PCW) Chairperson Ermelita V. Valdeavilla told reporters.
Further, the GAD budget only had a 13% utilization rate in 2023, “indicating critical challenges in fully implementing GAD plans and programs,” the PCW said in its 2023 budget report.
For 2025, the government is allocating $1.7 billion (P98.97 billion) for the social protection of survivors, including programs for gender and development, internally displaced persons, and disaster relief assistance, Ms. Pangandaman said.
Around $178.9 million (P10.41 billion) is also earmarked next year for family health, immunization, nutrition, and responsible parenting projects. The Bangsamoro Umpungan sa Nutrisyon Program will also receive $2.8 million (P163 million) for 2025.
Ms. Pangandaman also noted that P800 million will be allocated next year for the expansion of the Pantawid Pamilyang Pilipino Program (4Ps) to pregnant and lactating women, which would also cover their children’s first 1,000 days.
During the recently concluded International Conference on Women, Peace and Security, ministers and representatives from over 70 United Nations member-states adopted the Pasay Declaration on Women, Peace and Security.
“The declaration highlights the several crucial dimensions, including the increasingly urgent nexus between climate, peace, and security,” Foreign Affairs Secretary Enrique A. Manalo told reporters. — Beatriz Marie D. Cruz
The EoPT Law: A guide to the classification and reclassification of business taxpayers
Staying compliant with tax regulations can be a daunting task for many entrepreneurs and business owners. With the signing of the Ease of Paying Taxes (EoPT) Law or Republic Act No. 11976, new classifications for business taxpayers have been introduced. This segregated approach not only seeks to streamline tax compliance but also aims to ensure that businesses of all sizes are treated equitably. Whether one is a budding startup or a well-established corporation, understanding these new classifications and how they impact your tax obligations is crucial. In this article, we delve into the specifics of Revenue Memorandum Order (RMO) No. 37-2024, exploring how the Bureau of Internal Revenue (BIR) is leveraging these changes to create a more efficient and fair tax environment for all.
RMO No. 37-2024 set forth the criteria in classifying business taxpayers into four categories: Micro, Small, Medium and Large Taxpayers. The classification is determined based on a taxpayer’s gross sales. A Micro Taxpayer is one whose gross sales for a taxable year is less than P3,000,000. A taxpayer is classified as “Small” if its gross sales for a taxable year is at least P3,000,000 but less than P20,000,000, while a Medium Taxpayer is one whose gross sales is at least P20,000,000 but less than P1,000,000,000. Finally, those whose gross sales exceed P1,000,000,000 are classified as Large Taxpayers.
The initial classification of taxpayers registered in 2022 and prior years will be based on the declared gross sales in their 2022 Income Tax Returns (ITR). On the other hand, those who have not filed their 2022 ITR or those registered in 2023 and 2024 before April 27, 2024 (i.e., the effectivity of Revenue Regulations No. 8-2024), will be initially classified as Micro taxpayers, unless they are Value-Added Tax-registered, in which case, they will be initially classified as Small taxpayers.
After April 27, newly registered taxpayers will be classified according to their declaration in their Registration Forms (BIR Form No. 1901 or 1903). The initial classifications will remain effective until reclassified. Taxpayers can view or inquire about their classification through the BIR’s Online Registration and Update System or ORUS (https://orus.bir.gov.ph/home).
To ensure that the tax obligations of businesses accurately reflect their current economic status and gross sales, the RMO provides a reclassification process which can be initiated by either the taxpayer or the BIR. Reclassification requests may be submitted by taxpayers manually to their home Revenue District Office (RDO) or through ORUS together with the required supporting documents. The new classification will take effect upon receipt of notification by the taxpayer from the BIR, subject to the final outcome of any ongoing audit/assessment.
In line with the objective of the EoPT law, the process for shifting from lower to higher reclassification is relatively straightforward, with manual requests processed and approved within the day, and requests made through ORUS automatically approved. On the other hand, requests for taxpayer’s reclassification from a higher to a lower level are processed within seven working days and require the approval of the Regional Director or Assistant Commissioner (ACIR) of the Large Taxpayers Services (LTS), as applicable.
The BIR’s ability to initiate reclassifications based on updated financial data ensures that taxpayer categories remain accurate and reflective of their current economic status. The reclassification can only be initiated every two years based on the taxpayers’ gross sales from latest ITR or VAT returns. RDOs/LT Divisions may recommend the reclassification if the current classification of the concerned taxpayer is found incorrect based on audit investigation findings, subject to approval by the Regional Director or ACIR-LTS. Validated or approved taxpayers for reclassification will be informed accordingly via registered mail, email or any other possible means.
It is important to note that taxpayers reclassified due to a BIR-initiated reclassification cannot request reclassification within the same taxable year, unless there are meritorious reasons duly verified by relevant information.
As the EoPT Law expanded the classification of taxpayers, the BIR can leverage these new classification to enhance the efficiency and equity of tax administration, and to better align with the modern economy and tax environment. By categorizing business taxpayers into Micro, Small, Medium, and Large based on their gross sales, the BIR can tailor its policies and procedures to better suit the needs and capacities of the various taxpayer groups. This classification allows for more targeted tax compliance strategies, ensuring that smaller businesses are not overburdened while larger entities are adequately monitored. Additionally, it is also worth noting the BIR’s use of digital platforms, such as the ORUS, which facilitates easier access to classification information and streamlines the reclassification process, thereby reducing administrative overhead and improving the taxpayer experience.
Evidently, RMO No. 37-2024 is expected to provide a defined classification criteria for businesses, as well as a standardized reclassification process for the guidance of the taxpayers and the BIR. Having these standardized processes will provide transparency on the roles and responsibilities of each party, help reduce taxpayer misclassification, promote fairness and prevent potential misuse of reclassification authority without justification.
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.
Caren Ann Marie Bacera is an assistant manager with the Tax Services group of Isla Lipana & Co., the Philippine member firm of the PwC global network.
caren.ann.marie.bacera@pwc.com