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Launchgarage bets on QC to lead Philippine tech innovation

Launchgarage, the country’s largest tech accelerator, last week organized the first Quezon City Tech Day, a community-building event aimed at bringing together and empowering the innovative startups of the nation’s largest city to solve some of its most complex problems.

As part of Philippine Startup Week 2019, Quezon City Tech Day served as both culmination of and launching point for Launchgarage’s efforts to turn their city into an innovation capital. CEO Jay Fajardo believes Quezon City’s startup scene, often lumped in with the rest of Metro Manila, doesn’t get enough attention.

Based in the largest city in the country (approx. 2.7 million citizens) and second biggest in terms of assets (roughly P68 billion in 2018), Fajardo envisions a thriving ecosystem that goes beyond the traditional formula that was once used to measure business and industrial centers. Today’s startup ecosystems put a huge emphasis on community and a healthy human resource potential from the grass roots. “When one looks at today’s startup ecosystems, they are defined not just by a tech culture but also by a creative culture. This creates a new type of innovation culture that will take us right into the fourth industrial revolution.”

Along their home in Calle Industria alone, Eastwood City’s riverside business hub, many of the country’s most exciting startups have set up shop. These include PayMongo, the Y-Combinator acceleratee that recently hauled in one of the largest recorded seed-stage investments in the Philippines earlier this year, and Dragon’s Nest, a newly established venture builder.

At Quezon City Tech Day, Jojo Flores, co-founder of Launchgarage and Plug & Play Tech Center (a Silicon Valley pioneer often touted as the largest accelerator in the world) expressed much delight and enthusiasm in light of the recent developments around the area. Flores claims that there is much potential in local startups, and that Launchgarage can help bring these products and services to the global market through their resources and extensive network. Local software industry veterans Joey Gurango and Jun Lozada were also present in the event.

Launchgarage, now in its fourth year of operations, has housed over 40 of the most recognizable companies in the Philippine startup industry. It began as a joint program with Kickstart Ventures before branching off to become its own entity in 2016. Since then, the accelerator has created measurable and integral impact through its services, events and partnerships forged in both the public and private sectors. Recently, EXPAND PH, an intensive four-week long market access program for Malaysian companies, was conducted in partnership with UnionBank and the Malaysia Digital Economy Corporation (MDEC). It was announced during the event that the collaboration with MDEC would continue for at least four more years.

From nightlife to tech life: Kumu’s Angelo Mendez on having fun at work

California-based Angelo Mendez first fell in love with the Philippines in 2006 when what was supposed to be a holiday turned out to be a six-month love affair with Manila’s underground art and music scenes.

Weaving through Manila’s club scene and spinning at destination spots like Boracay’s Juice Bar, Angelo’s entrepreneurial gears began to turn. Not even his return to San Francisco could stop the roots beginning to set in. “I packed up and left, but my love for the Philippines was already rooted and I knew I’ve always wanted to live here,” he said.

Today, Angelo is at the helm of live streaming platform Kumu, the fastest growing social media app in the country. Following his two-pronged journey as both a tech innovator and professional DJ, it seems it’s a role he was always meant to play.

By 2008, Angelo was reaping success in his own social media startup venture called Imeem which was the fastest growing website in the world in 2007. “We were a top ten site in a lot of Southeast Asian countries, but at that time there was no way to monetize these regions. I was sent out to Singapore to work with a few digital ad agencies. But in 2008 the market crashed and I decided to move back to Philippines full-time to build hotels and night clubs.”

From then on, Angelo’s journey as a marketing specialist, and eventually towards his role as a huge contributor to the growth of Kumu, had begun.

Angelo Over Pressure

Angelo is no stranger in building great things from scratch. Aside from his big roles in Sound in Color and Imeem, Angelo also developed the first 3D printed hotel room for Lewis Grand Hotel in Pampanga (which he also co-founded in 2008); created clubbing brand Black Market Manila in 2013; all leading to his role as head of programming in Kumu.

“Whether it’s throwing parties, building hotels, or DJing, I’ve always enjoyed creating. Coming up with concepts with my team and best friends and executing our ideas is exciting for me,” he said.

Aside from the fundamentals of entrepreneurship, what Angelo also learned from all his successful ventures is how to deal with pressure moments and how to find fun in everything he does. “You’re going to face a lot of pressure moments,” he shared. “How you deal with them can make or break you. I’ve always been a passionate person so learning to separate the passion from emotion and stay level-headed help a lot when venturing into the unknown,” he adds.

When asked how he exactly deals with work’s entailing pressure, he advises: “Don’t take yourself too seriously. It’s ok to mess up. Keep experimenting because eventually, something will stick.”

“Our office is loud and obnoxious to other people. But what I love most about being part of the KUMU team is that you can tell we’re having fun. It’s like a nightclub at the office,” he said.

Engaging a Fast and Loyal Following

As head of Kumu’s programming, Angelo is tasked to find new and exciting ways to make users feel welcome and extend loyalty to the brand. Angelo says it’s not too dissimilar to a previous project of his, Bad Decisions Wednesdays.

“When we started Bad Decisions in 2013, the entire Manila nightlife scene was entirely electronic dance music (EDM), and EDM copy cats that were generic and corny,” he said. “Black Market was trying to be an alternative venue. I asked my partners there to give me the worst night and let me do whatever I wanted, which ended up becoming Bad Decisions Wednesday. The whole point was: with everyone who goes out, there were a few outcasts who didn’t want to be part of that EDM scene and we were there to provide a venue where they could express themselves while listening to really dirty rap music. It was different and authentic and it showed especially in those early years,” he said.

Six years later, Bad Decision Wednesdays is still going strong.

“When we started KUMU, we knew that we were going up against companies where the perception was to have your photos faked to get ‘likes’,” he said. “Social media apps like that were everywhere at that time. We wanted to build a platform for Filipinos who wanted to have real conversations and be themselves- where they didn’t have to fake having a perfect life.”

And as time and again, Angelo succeeds in not only creating loyalty and excitement among its users, but also in providing them a welcoming community (or as they style it: kumunity) that supports each other and engages in campaigns, contents, and conversations. “Today, with over 1.5 million users in just over a year from launch, Kumu has become the safe space where Pinoys can be authentic, tambay and livestream to their hearts content.”

UCPB Peso Bond Fund bags Best Managed Fund Award for second consecutive year

The UCPB Peso Bond Fund was once again recognized as the Best Managed Fund for 2019 under the Long-Term Bond Fund using Pure Fair Value Profit and Loss Valuation (PESO-FVPL) category in the recent Chartered Financial Analyst (CFA) Society Philippines’ Best Managed Fund of the Year Awards.

“The back-to-back award is a testament to UCPB Trust Banking Group’s commitment to deliver consistent long-term capital growth for our investors,” UCPB FVP and Trust Banking Group Head Arturo I. Lipio, Jr. said. “The Best Managed Fund Award looks at long-term historical fund performance — both the risk and return aspects of the fund — and factors in the length of the investment period. UCPB’s robust investment and risk management process is critical to achieving consistent growth over the investment period. This ensures we provide our clients with the best possible returns while efficiently managing risks.”

UCPB Trust Banking Group FVP and Head of Trust Banking Group Arturo I. Lipio, Jr., and VP and Head of Investments and Portfolio Management Department Karen Khristine N. Jonas proudly showcase UCPB’s back-to-back Best Managed Fund Awards.

Given during the Philippine Junior Finance and Investment Summit 2019 held last Sept. 7, 2019 at the SMX Convention Center-Manila, the CFA Society Philippines’ Best Managed Fund Awards has been the global standard of excellence in the investment industry since it was launched in 2016. The CFA Best Managed Fund of the Year Awards recognizes excellence in managing investable funds based on their five-year, risk-adjusted returns. A total of 89 funds from 16 investment houses joined this year’s search. UCPB has received the award for two consecutive years.

“Our investment process employs a “top-down” approach which means our portfolio managers look at the macro economy first before focusing on the individual companies when making investment decisions. Our risk management processes, meanwhile, are integrated across the front, the middle, and the back office to ensure risks are understood and are managed to the fullest extent possible,” Vice-President and Investments and Portfolio Management Department Head Karen Khristine N. Jonas added.

The UCPB Peso Bond Fund is suited for individuals who would like to establish a long-term investment plan with relatively stable returns. For more information on the UCPB Peso Bond Fund as well as other UCPB investment products suited to your objectives, visit any UCPB branch near you or call the UCPB Trust Banking Group at (02) 8811-9515 and (02) 8811-9522.

IEMOP’s bright year as WESM operator

By Mark Louis F. Ferrolino, Special Features Writer

With its assumption of the operations of the Wholesale Electricity Spot Market (WESM) on Sept. 28, 2018, the Independent Electricity Market Operator of the Philippines (IEMOP) marked its first year with significant milestones and achievements. Despite some challenges, IEMOP was able to effectively carry out its mandate and laid down a good foundation for a bright future for the country’s power industry.

As IEMOP Corporate Communications Manager Eric Niño U. Louis shared in an interview with BusinessWorld, IEMOP’s first year journey was a combination of triumphs and challenges. It also involved the establishment of crucial programs and activities that would set up the rest of its milestones in the future, he said.

A new beginning

IEMOP’s assumption of WESM operations last year embodies the fulfillment of what the Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA), requires — the transition of WESM operations from its governing body, the Philippine Electricity Market Corporation (PEMC), to an independent market operator (IMO).

As an IMO, IEMOP carries out the mandate to pursue the WESM’s objective to have a transparent, fair, competitive, and reliable market for the trading of electricity throughout the country. It facilitates the registration and participation of generating companies, distribution utilities, directly-connected customers or bulk users, suppliers and contestable customers in the WESM; and manages the metering, billing, settlement and collection of spot trading amounts for the benefit of the market participants.

Moreover, IEMOP determines the hourly schedules of generating units that will supply electricity to the grid, as well as the corresponding spot market prices of electricity.

A progressive year

Although IEMOP has merely been operating WESM for a short span of time, it has accomplished a lot, igniting several initiatives in pursuit of competitive electric power industry.

Exactly a month after taking over the WESM operations, IEMOP was able to pay its loan with the state-run Power Sector Assets and Liabilities Management Corporation (PSALM) that was used for procuring the Market Management System (MMS), or the information technology-enabled trading platform, for the WESM.

In the matter of tax issues besetting the WESM and its participants, IEMOP sought for the Bureau of Internal Revenue (BIR) Rulings. To address various outstanding issues, IEMOP recommended the issuance of revenue memorandum circulars and proposed its designation as withholding agent for expanded withholding tax for WESM transactions.

Meanwhile, to assess the readiness of WESM stakeholders for the implementation of the enhanced WESM design and the commercial operations of the new market systems, the Parallel Operations Program (POP) was launched last April.

In the course of POP, assessment of the results of the scheduling, pricing and settlement processes was performed, as well as the assessment of market operator’s performance.

IEMOP has also been actively involved in strengthening its stakeholder communication and engagement initiatives. It conducts consultation meetings with partner organizations and WESM members, which it called “Kapihan.” This has served as a good platform for IEMOP to share its latest activities as an IMO and discuss updates on market operations and the new market systems. At the same time, it has served as an avenue for the stakeholders to voice out market-related concerns and issues.

Last April, IEMOP also held the first-ever Market Participants Update (MPU), arranged to apprise participants on market outcome, system performance and recent developments as well as to create discourse on relevant policy and operational issues in the WESM.

These engagements are critical for IEMOP to gain feedback from participants and use them to emerge as a more reliable and customer-responsive market operator than ever before.

“We know that the challenges can be addressed by knowing what the actual challenges we are facing, knowing and understanding what our goals are, gauging participants’ satisfaction on current services, and engaging them to obtain feedback on how to improve our processes and systems,” Mr. Louis said.

Moreover, IEMOP has also embarked on some initiatives that contribute to the growth of the country’s education. Last June, for instance, it signed a memorandum of agreement (MOA) with the Philippine Science High School (PSHS) for the Science Immersion Program (SIP) that equip the students with knowledge about the power industry and electricity market.

“We believe that IEMOP’s service is not limited to the industry, it also contributes to the growth of education of the country, at the same time, helping shape the future of our young and brilliant minds,” Mr. Louis said.

And as a testament to IEMOP’s unwavering commitment to uphold the culture of excellence, it has successfully fulfilled the requirements for certification of compliance with ISO 9001:2015 standard and ISO 27001:2013 standard.

A bright future ahead

Despite momentous milestones and achievements it has attained over the past year, IEMOP strives to improve the delivery of its services in the coming years by integrating technologies in its operations.

A significant part of this is the anticipated introduction of the new MMS and the Central Registration and Settlement System (CRSS), an enterprise system that serves as the main platform for the registration, metering and settlement processes of the WESM.

“So, we plan to have a more digital future. To use technology in our transactions, to streamline our processes by using user interfaces, thus, creating efficiency,” Mr. Louis said.

IEMOP, according to Mr. Louis, is also looking to introduce e-learning courses for trainings on its Web site, the development of a mobile application, and the utilization of cloud computing in its data exchanges.

“IEMOP will continue to become a partner of the trading participants and WESM stakeholders in ensuring the realization of EPIRA’s objectives to promote competition in the power industry by operating an independent market operator that pursues transparency, fairness and reliability in our market operations,” Mr. Louis said.

“Together with participants, we know that we will be able to achieve our objectives and we will be able to exceed their expectations. We will continue to strive and work hard to meet all of that — their needs, their requirements, and the EPIRA’s objectives. Of course, we will continue our relationship with the government and the entire power industry,” he added.

Early next year, IEMOP intends to formally operate WESM in Mindanao, which expected to provide the region a fairer and a more competitive electricity market.

Police: Vice President didn’t commit missteps

VICE President Maria Leonor G. Robredo did not commit “missteps” as President Rodrigo R. Duterte’s drug czar, Philippine police said yesterday, contradicting the presidential palace.

“We haven’t really noticed any report or missteps but in the continuing discussion, of course there is that exchange of ideas,” Philippine National Police (PNP) spokesman Brigadier General Bernard M. Banac told the ABS-CBN News Channel.

Mr. Duterte fired the opposition leader whom he put in charge of his deadly war on drugs late Sunday, days after her appointment. His spokesman Salvador S. Panelo earlier said Ms. Robredo “had it coming,” citing her missteps including meeting with officials of the United States Embassy and United Nations.

Philippine police have said they have killed about 6,000 people in illegal drug raids, many of them resisting arrest. Some local nongovernmental organizations and the national Commission on Human Rights have placed the death toll at more than 27,000.

PNP was open to Ms. Robredo’s suggestions so it can improve the campaign against high-value targets and promote community-based drug rehabilitation, Mr. Banac said in a separate statement.

Mr. Banac said five regions remained notorious for the illegal drug trade, namely Metro Manila, Central Luzon, Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon), Central Visayas and Western Visayas.

Also yesterday, Ms. Robredo’s co-head in the Duterte administration’s anti-drug drive yesterday dared her to divulge her findings on the campaign.

“I am personally encouraging VP Leni Robredo to make her revelations,” Philippine Drug Enforcement Agency (PDEA) Director-General Aaron Aquino said in a statement.

Mr. Aquino said he had no problem with the vice president reporting to the public what she had found out about the anti-drug campaign during her short stint.

Ms. Robredo had said she would reveal what she had uncovered while head of the Interagency Committee on Anti-Illegal Drugs.

Mr. Aquino said Ms. Robredo’s findings would help them improve the anti-illegal drug campaign.

Human Rights Watch on Monday criticized Mr. Duterte for firing the vice president “on ludicrous grounds.” It said the president was never even remotely sincere, and that his appointment of Ms. Robredo was a “total sham.”

Ms. Robredo this month said she had agreed to head the Duterte administration’s anti-illegal drug campaign, if only to stop the killings. She accepted the post against the advice of many of her party mates, who said the appointment might be a trap.

The opposition leader has vowed to enforce the state’s anti-illegal drug campaign within the bounds of the law. She said she would treat the drug problem not only as a crime, but also as a health issue. — Emmanuel Tupas, Philippine Star

Permits fast-tracked for energy projects

THE DEPARTMENT of Energy (DoE) has certified four new projects as nationally significant, adding to its list of projects that will enjoy a faster permitting process under a law that seeks to ensure energy security in the country.

The department identified the four entities with newly issued certificates of energy project of national significance (EPNS) as Galoc Production Co., Energy Development Corp. (EDC), Therma Marine, Inc. and Philippine Geothermal Production Company, Inc.

The department said it had issued as of mid-August EPNS certificates to 140 projects. Additions to the list were certified between Aug. 19 and Sept. 20.

“Out of 297 accepted applications, 140 were certified,” it said, adding that 157 applications remain under evaluation.

Philippine Geothermal’s Mt. Malinao geothermal project was the latest to be certified on Sept. 20, although the DoE has yet to release details of the venture. The others are Therma Marine, which is developing a hybrid power facility; EDC, with its Mahanagdong geothermal brine optimization plant; and Galoc, which is developing an exploration field.

The DoE said it had so far received a total of 368 EPNS applications, of which 43% are under evaluation, 38% with EPNS issuance, and 19% notified of non-compliance with documentary requirements.

The issuance of the certificate for nationally significant projects is stipulated in Section 5 (a) of Executive Order (EO) No. 30 s. 2017, which intends to establish a simplified approval process and harmonize the relevant rules and regulations of all government agencies involved in the permitting process.

EO 30 was signed by President Rodrigo R. Duterte in June 2017, while the Energy department issued the implementing rules and regulations in April 2018. The law created the Energy Investment Coordinating Council, which came out with the guidelines on how energy-related projects can qualify.

During the pre-development phase, the certificate entitles project proponents to all the rights and privileges provided for under EO 30, including action on the application within 30 working days.

A certified project will also be accorded presumption of prior approval, that is, it is presumed to have already complied with requirements of and permits from other government permitting agencies.

It will be deemed approved if no action is made five days after the lapse of the 30 working-day period for processing of the application. — Victor V. Saulon

Arbitration pushed for IP dispute resolution

THE Intellectual Property Office of the Philippines (IPOPHL) is making its alternative dispute resolution methods immediately available to reduce case backlog.

IPOPHL said in a statement Tuesday that arbitration, one of its out-of-court intellectual property dispute resolution methods, can now be immediately availed prior to the filing of a case.

Prior to this, mediation — which encourages companies to make concessions for a mutually beneficial solution — was made mandatory in October 2018. Parties went through this process first.

IPOPHL said that arbitration services as a result “failed to get momentum.”

“The reason often cited is that the rules were not enticing for parties to try arbitration. Parties may opt to submit to arbitration only after they fail to agree to a settlement in the mediation proceedings, after which parties would have already been exhausted, physically and resource-wise, to even consider arbitration,” the statement said.

IPOPHL said arbitration is being made immediately available to increase its use, as it gives parties the chance to choose between the two options right away.

“In business, time and cost are of the essence. Arbitration is emerging as a viable alternative for business players to resolve disputes as decisions, in some cases, can be made in less than a year. And less time on a case means more productive time can be spent on focusing on the business,” IPOPHL Director General Josephine R. Santiago said.

“With this additional alternative option to settle disputes, IPOPHL will also help in the declogging of its own dockets and that of the trial courts.”

IPOPHL said that opening up of the arbitration option is also in line with the office’s anticipation of increased intellectual property cases in the future as technological advancements make piracy and counterfeit goods more pervasive.

Philippine Dispute Resolution Center, Inc. (PDRCI) Assistant Secretary-General Francisco D. Pabilla, Jr. noted that businesses prefer arbitration instead of litigation because it affords companies confidentiality not usually granted by trial courts.

“No business would like the public to know that it is embroiled in a conflict. Although conflicts with other businesses or government agencies are ordinary ordeals in commerce, it may turn messy when it gets out into the public,” he explained.

Decisions from arbitral proceedings are recognized by courts.

Ms. Santiago said that the option can be successful only if trained IP professionals are available to provide the service, and if there is sufficient, sustained support from courts along with IPOPHL.

IPOPHL provides an initial training ground for intellectual property arbitrators through its partnership with PDRCI to provide lectures under a Mandatory Continuing Legal Education program. — J. P. Ibañez

Combined assets of the Philippines’ universal and commercial banks (U/KBs) reach P17.302 trillion in third quarter of 2019

THE COUNTRY’s biggest banks were less profitable last quarter even as growth in assets and capacity to absorb risky assets improved. Read the full story.

Combined assets of the Philippines’ universal and commercial banks (U/KBs) reach P17.302 trillion in third quarter of 2019

Banks show smaller returns in Q3 despite faster asset growth

By Lourdes O. Pilar
Researcher

THE COUNTRY’s biggest banks were less profitable last quarter even as growth in assets and capacity to absorb risky assets improved.

Combined assets of the Philippines’ universal and commercial banks (U/KBs) reach P17.302 trillion in third quarter of 2019

BusinessWorld’s 3rd Quarter Banking Report showed the combined assets of the 46 universal and commercial banks (U/KBs) operating in the country grew by 9.89% to P17.302 trillion in the July-September period from the P15.746 trillion in 2018’s comparable three months.

Asset growth in the third quarter was faster than the 9.71% notched in the second quarter as well as last year’s 9.87%.

Bank loans, which make up around half of big banks’ assets, totaled P9.504 trillion, 9.09% more than the P8.712 trillion recorded in 2018’s third quarter.

In terms of profitability, U/KBs’ 6.95% return-on-equity (RoE) was less than the 9.13% in the second quarter, albeit more than the 4.82% of 2018’s third quarter. RoE — the ratio of net profit to average capital — measures the amount that shareholders make on every peso invested in a company.

At the top in terms of assets and loans was BDO Unibank, Inc., followed by Metropolitan Bank & Trust Co. (Metrobank) and the Bank of the Philippine Islands (BPI).

Among banks with assets of at least P100 billion, the Philippine National Bank (PNB) topped in terms of growth, increasing 29.29% year on year. It was followed by Hongkong and Shanghai Banking Corp. Ltd.’s 23.83% and Asia United Bank Corp.’s 17.23% increases.

The same three months saw the Development Bank of the Philippines as the most aggressive lender, with a year-on-year growth of 34.54%, followed by those of PNB (19.44%) and East West Banking Corp. (17.65%).

In terms of deposits, BDO remained on top at P2.408 trillion while the Land Bank of the Philippines came in second at P1.742 trillion, ahead of BPI’s P1.622 trillion and Metrobank’s P1.578 trillion.

ASSET QUALITY DIPS
Soured debts held by the U/KBs rose during the quarter as nonperforming loans (NPL) hit P158.671 billion, 10.35% more than the P143.793 billion in the second quarter.

The Bangko Sentral ng Pilipinas (BSP) defines NPLs as loans that were left unpaid for at least 30 days beyond due date. These are considered bad loans as they have a slim chance borrowers would be able to settle such liabilities.

The NPL ratio — gross NPLs in proportion to total gross loans — worsened to 1.66% in the third quarter from 1.58% in the preceding three months.

Similarly, their nonperforming assets ratio — nonperforming loans and foreclosed properties in proportion to total assets, went up 0.75% from 0.74% the previous quarter.

As percent of total assets, foreclosed real and other properties steadied at 0.3% in the third quarter.

The banks’ coverage ratio — which is the ratio of the total loan loss reserves to gross NPL — went down to 107.97% in the third quarter from 113.2% in the previous quarter.

Nevertheless, this was more than enough to cover the entire value of bad loans held by big banks, with loan loss reserves totaling some P171.316 billion.

On the other hand, the U/KBs’ ability to absorb losses from risk-weighted assets improved as their median capital adequacy ratio (CAR) — a measure of bank solvency — rose to 20.03% from the 19.5% seen in the preceding quarter.

The ratio remains well above the regulatory minimum of 10% set by the BSP as well as the international minimum standard of eight percent.

BusinessWorld Research has been tracking the financial performance of the country’s U/KBs on a quarterly basis since the late 1980s using banks’ published statements of condition.

Tax bureau outlines 2020 priorities

THE BUREAU of Internal Revenue (BIR) has lined up priority programs and projects for next year which include a digital transformation program and its plan to develop a system for processing and storing electronic receipts and invoices.

For next year, the BIR plans to develop a system for real-time processing of e-invoices or e-receipts as well as an electronic platform for sales reporting where electronic invoices and receipts may be stored, according to its revenue memorandum Circular No. 123-2019.

“It (e-sales reporting system) will also generate reports on VAT (value-added tax) information of taxpayers for the processing of VAT refund applications under the enhanced VAT refund system of the BIR and for third-party matching on tax audits or assessments,” the circular read.

As part of digital transformation, the bureau will study the proposal to form its own data analytics unit next year.

“The priority programs… are undertakings that will significantly contribute not only to the attainment of the bureau’s revenue targets, but also to the implementation of the National Government’s new policy direction, particular with regard to the ease of doing business and data privacy,” BIR Commissioner Caesar R. Dulay said in the circular.

In compliance with Republic Act No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, BIR said it will simplify application forms and reduce the number of required documents in its frontline services, minimize processing time and limit the number of signatories to three, among others.

At the same time, it will continue its Run After Tax Evaders (RATE) program and the Oplan Kandado program to improve tax compliance “through an intensified enforcement action involving the closure of business establishments.”

The RATE program will enhance voluntary compliance by taxpayers as well as boost the public’s confidence in the tax system, it said.

For 2020, the BIR’s priority program list also includes a public awareness program, intensified audit and investigation of taxpayer’s compliance, as well as further broadening of the tax base.

It also said that it will prioritize upgrading of its national office building with modern facilities and infrastructure as well as aim for a 100% utilization rate of its budget. — B. M. Laforga

The Medical City chairman to appeal SEC decision

By Denise A. Valdez, Reporter

THE Medical City (TMC) Chairman Jose Xavier B. Gonzales will appeal the ruling of the Securities and Exchange Commission (SEC) which slapped a fine of at least P50.25 million on the hospital’s majority shareholders in relation to its ownership transfer.

In a text message to BusinessWorld on Tuesday, a representative of Mr. Gonzales said his camp “will appeal the ruling (of the SEC),” referring to the findings of the SEC special hearing panel that the shareholder group of TMC violated the Securities Regulation Code (SRC).

An emailed statement of Mr. Gonzales’ camp said he is dismissing the ruling of the SEC, saying the decision is “not in any way final and executory” and “maintains the status quo as they found no basis for criminal fraud.”

The SEC issued a press statement late Monday that its special hearing panel is charging Professional Services, Inc. (PSI) — the owner and operator of TMC — at least P50.25 million for what it called a surreptitious takeover” of the hospital’s ownership.

The shareholder group is composed of Viva Healthcare Ltd.; Viva Holdings (Philippines) Pre. Ltd.; Felicitas Antoinette, Inc. (FAI) and Fountel Corp.

The SEC said Viva Healthcare, Viva Holdings and FAI violated the SRC requirement that an entity buying more than 5% of a company must notify the issuer, the exchange and the SEC about such deal within 10 days.

It also said all three firms plus Fountel violated the SRC requirement that if a person or a group is buying at least 35% of a company, such plan must be disclosed and should initiate a tender offer to all shareholders.

The four companies likewise violated the requirement that the tender offer must contain all material facts, otherwise it will be considered “fraudulent, deceptive or manipulative.”

All these violations warranted a combined penalty that the SEC pegged at least P50.25 million.

The resolution outlining the details of the findings was issued by the SEC on Nov. 22. The shareholder group has 15 days from its receipt of the resolution to file a motion for reconsideration.

This development follows the SEC complaint filed by former TMC Chief Executive Officer Alfredo R.A. Bengzon, who is also the uncle of Mr. Gonzales, asking to suspend the company’s annual stockholders meeting last year due to issues arising from the company’s transfer of ownership.

Mr. Bengzon claimed his nephew was conniving with a group of foreign investors since 2013 to take over the hospital’s ownership without full disclosure to all stockholders.

In July this year, stockholders of TMC met to elect a new board of directors, going against Mr. Bengzon’s appeal, as the company gained favor from the Court of Appeals to do so in accordance to company by-laws.

FPH sells part of stake in MHE-Demag for P85M

FIRST Philippine Holdings Corp. (FPH) has divested a quarter of its stake in MHE-Demag (P), Inc. to its co-shareholder in Singapore.

In a disclosure to the stock exchange yesterday, the Lopez-led company said it raised P85 million from selling 175,000 shares in its operations of the materials handling equipment manufacturer to MHE-Demag (S) Pte. Ltd.

The shares were priced at P485.71 each and is equivalent to 25% of FPH’s stake in MHE-Demag (P).

It did not disclose the reason for the transaction, but noted it “does not foresee a material effect on its business with the disposition (of shares).”

The deal will be paid in cash and will close once the Deed of Assignment of Shares is completed.

On its website, MHE-Demag is described as an international joint venture of Jebsen & Jessen (SEA) Pte. Ltd. and Demag Cranes and Components GmbH and is based in Singapore. It is known for manufacturing and distributing industrial cranes and hoists, warehousing equipment, compact construction equipment and automated car parking systems.

It has presence across Asia Pacific, specifically in Australia, Brunei, Cambodia, Indonesia, Laos, Malaysia, Singapore, Myanmar, Papua New Guinea, the Philippines, Taiwan, Timor-Leste, Thailand and Vietnam.

In the Philippines, MHE-Demag operates under the manufacturing business unit of FPH through First PV Ventures Corp.

FPH is also involved in power generation through First Gen Corp.; power distribution through Panay Electric Co. and a minority stake in Manila Electric Co.; property through Rockwell Land Corp. and First Philippine Industrial Park, Inc.; and other ventures such as First Balfour, Inc. and First Philippine Properties Corp.

In the nine months to September, FPH posted an attributable net income of P9.6 billion to rise 35% from last year, driven by favorable foreign exchange rates and deferred income tax movements.

Shares in FPH at the stock exchange inched up 0.05 point or 0.07% to P76 each on Tuesday. — Denise A. Valdez

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