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Ideas to transform cities and transcend into a new era

By Jason Pomeroy

SOUTHEAST ASIA has historically been a complex antithesis of colonial trade hubs alongside rural agriculture that supported villages and its communities. When the Association of Southeast Asian Nations (ASEAN) was formed in 1967, the vast majority of the countries in the region were still involved in farming. Today, a different picture exists. While farming is still a mainstay in many ASEAN countries, rapid urbanization has taken over the region — often morphing from those original trading “entrepots.” By 2050, 75 percent of the global population are expected to live in urban city areas. With such a huge number of people set to migrate to the cities, new innovations need to be in place to support such a huge transformation in the region. Following are some ideas that may have the ability to help shape our cities:

SOCIAL
Since 2007, half of the world’s population has been residing in cities and this will rise to 75% by 2050. In the past, the physical fabric of cities — namely the street and square, used to be the foci for our social interactions. However, with technological advancement, we have increasingly withdrawn from public life to find refuge in our personal tech and mobile gadgets. In order to not lose sight of the simplest of social skills, we should re-embrace the great outdoors and foster a greater connection with the world. One example where we are trying to do this is the rejuvenation of the Kallang Precinct in Singapore where we are aiming to foster an appreciation for the outdoors through the sport, recreational programs and happenings in both public and semi-public spaces under, over and above ground, that will combine the old school “analogue” with the new world “digital.”

SPATIAL
Current world population density is 51 people per square kilometer. By 2050, it is projected to be 66 people to per square kilometer. This means more space is required per person. However, the heightened costs of land and real estate is making inner city living prohibitive to many. One idea is to use water as an alternative surface for urbanization. Water accounts for an unexploited 70% of the Earth’s surface, and with sea levels rising all over the world, there is an opportunity to address both the issue of both land prices and climate change related disaster. We could embrace water as a surface to allow communities, residents and cities to grow whilst rising with sea levels. The floating homes in the docks of Ijberg, Amsterdam, are a good example of water being used an affordable alternative to inner city Amsterdam living that can adapt to rising sea levels. Pomeroy Studio’s research project “Pod Off Grid” further explores this concept as self-sustaining zero carbon floating communities.

ENVIRONMENT
Cities cover only 2% of the World’s land area, and yet account for an astonishing 70% of greenhouse-gas emissions. Our daily fossil fuel consumption in the modern world is equivalent to filling 5 pyramids of Giza on a daily basis and then draining them every day. If we are to fight the consequences of our fossil fuel-burning past, we need to shape a carbon negative future and go beyond simply offsetting our everyday energy consumption to generating surplus clean energy by renewable sources. This is imperative if we are to sustain broader communities and have back up power for those times when Nature calls. The B House which we designed in Singapore is such an example of a Super Low energy eco-home which embraces renewable energy sources and generates such surplus to act like a power station. Such an ethos has been applied at a community scale in our affordable housing projects in the Philippines and Sweden also.

CULTURAL
Culture is slowly being eradicated through globalization and technological advancement. Whilst we move forward in a modern world where disruption is the order of the day, we need to take into consideration preserving the core elements of what makes us a people and a society with a history. What used to make up traditions and time-tested rituals has now been overtaken by global consumer brands. We need to ensure that the built environment is adaptable to social-cultural change, which seeks to remind us of who we are, and what we stand for. The Brick Lane Mosque is one proponent of this concept — having been home to successive protestant, Jewish and now Muslim religious communities. The layers of these cultures have been impregnated in the bricks and mortar and tell a tale of cultural appropriation in East London. Our concept for restoring the British colonial Secretariat Building in Yangon similarly seeks to tell a story to present and future generations of both a colonial past but a resolutely forward-looking Myanmarese art and culture scene.

ECONOMIC
We have witnessed a global shift over the last 200 years from industrial to technological and now digital driven economies. Such a shift has implications on the way we work and the places we work in. The hallowed grounds of Oxbridge colleges that espoused knowledge sharing are arguably models for the new digital workplace “campuses” that we see companies like amazon, Google and Facebook appropriate. Knowledge sharing, flexible working environments, co-working and collaboration are just some of the edicts to be found in the new digital workplace. Pomeroy Studio’s “Alice” green office building is such an example that forms a closed loop workplace eco system — fostering the talent of young Techno entrepreneurs and nurturing them to be the eventual Tech masters who will undoubtedly pass on their knowledge to the next generation within the state-of-the-art vertical campus.

TECHNOLOGICAL
In today’s world, it is easy to get caught up in technology; but how can we use technology to enhance our lives as opposed to it taking over our lives? If we want to continue enjoying life in cities and not live in dysfunctional urban habitats, then cities have to embrace technology in a more sustainable way that can enhance the “human experience” and not create an emotional disconnect. In my “Smart Cities” tv series, I found that successful smart cities aren’t necessarily about government-enabled technologies that do not engage its people; rather they are the cities that provide a platform for citizens to express their needs and desires, whereby technologies can be co-created between civil society, state, academia and the private sector for the greater good of the city and its people. We are delighted to be part of such a movement through our smart city research with various governments and private sector bodies (such as in BSD City, Indonesia).

Ultimately, these ideas may not succeed if they are driven through a top-down government-led approach, for fear of alienating civil society. Neither will they succeed if they are unqualified machinations of civil society’s wish list. But a balanced collaboration between top-down (state) and bottom-up (civil society) interests can work — as we see in smart and sustainable models like Amsterdam. It embodies a system where civil society can express thoughts and ideas; innovations can be tested by academic institutions to establish “proof of concepts”; concepts can be partially funded by the private sector, and governments may ratify and roll out programs that could provide the base from which smarter, greener built environments can be created. The spheres of influence held by Government, academia, civil society and the private sector should be free to collectively conjoin with a singular ambition to implement sustainable transformations in our cities.

 

Jason Pomeroy is an award-winning architect, academic, author and TV personality at the forefront of the sustainable built environment agenda. He graduated with Bachelor and Post-Graduate degrees with distinction from the Canterbury School of Architecture; received his Masters degree from Cambridge University, and his PhD from the University of Westminster.

Troo introduces new VUL product to market

TROO, the life insurance joint venture of EastWest Banking Corp. and Ageas, recently launched a new variable unit-linked (VUL) product.

This as EastWest Bank and Ageas celebrated the fourth anniversary of their joint venture, which offers life insurance to its bank customers and the Filinvest Group.

“To mark the anniversary, we’re launching Troo BuildWealth Limited Pay. Other exciting products are also in the making,” Dominik Smeets, Troo chief strategy and business development officer, said in a statement.

BuildWealth Limited Pay is described as the first real limited pay VUL in the Philippines. Customers are allowed to choose their payment period, whether three, five, seven or ten years.

BuildWealth Limited Pay is the third option in the VUL suite of solutions, “Grow your wealth, your way.” Similar to the first two options, it also combines life insurance with investment options.

Company officials expect the new insurance product will further boost growth for Troo to become a top 10 life insurance player in the next few years.

“From the start, Troo has been embracing the latest technology and digital solutions as a core of its daily business… We are the first insurance company in the world to put in place its end-to-end integrated IT platform in the cloud. This enables us to offer our customers a seamless experience and optimize our operations,” Hans Loozekoot, president and CEO of Troo, said.

Troo is also set to introduce the GoTroo customer engagement platform for mobile.

“GoTroo is integrated with our back-end systems. And it will give customers access to real-time information on their Troo policy. Additional innovative functionalities of the platform such as voice recognition for login and chat features are underway,” Mr. Loozekoot said.

For EastWest Bank Vice-Chairman and CEO, Antonio C. Moncupa, Jr., bancassurance is a key part of the bank’s growth strategy.

“We now offer a complete menu of financial services to every Filipino — whatever their needs may be,” he said.

Stocks likely to climb on bullish growth outlook

By Arra B. Francia
Senior Reporter

THE MAIN INDEX may continue moving higher in the coming week as investors count on increased spending to boost economic growth.

The 30-member Philippine Stock Exchange index (PSEi) rose 0.3% or 24.12 points to close at 7,983.98 last Friday.

On a weekly basis, it was up 0.18% or 14 points thanks to a 0.9% increase in holding firms and 0.2% uptick in property. This offset the 0.74% decline in services and 0.7% drop in industrials.

Turnover slipped by nine percent to P8 billion, while foreign investors were net sellers at P77 million on average for the week.

“While some have become less sanguine on economic growth prospects for the remaining semester of 2019, there is reason to believe improved opportunities are in store for the Philippines,” online brokerage 2TradeAsia.com said in a weekly market note.

2TradeAsia.com said the economy will gather enough momentum on the back of infrastructure spending, especially once authorities start awarding projects.

“All it takes is to get all other sectors in the economy working, especially for major pending economic bills.”

Abroad, investors are watching the US central bank’s next move as Federal Reserve Chairman Jerome Powell hinted at sooner-than-expected interest rate cuts to temper a potential economic slowdown due to its trade war with China.

“Whether or not this would be enough to pacify markets however depends on jobs improvement data where consumer and investment spending is largely anchored. Such plus side works well for equities, as it reduces pressure on borrowing costs while more will be prompted to seek higher alternative yields,” 2TradeAsia.com said.

The US-China trade war, however, may continue to keep investors on the sidelines. The US and China are set to meet at the G20 Leaders’ Summit from June 28 to 29, with US President Donald J. Trump promising to postpone his next round of tariff increases until then.

On a technical note, Eagle Equities Inc. Research Head Christopher John Mangun said the PSEi is looking “better and better.”

“This is the third week in a row that it has ended with gains which is quite impressive because of all the profit-taking that we saw last week,” Mr. Mangun said in a weekly market report.

“A break above this resistance level will confirm a breakout of its congestion area between 7,500 and 8,000 which it has been in since the beginning of the year. This is the optimum scenario and would signal to investors that the market rally to the upside has began,” he said.

Should the PSEi fail to break out of the 8,150 level, Mr. Mangun said it will still be in good shape if it stays above 7,900.

The analyst placed the market’s support at 7,840 to 7,900, with resistance from 8,000 to 8,150.

Trump’s swaps watchdog bows out leaving tough enforcement legacy

NEW YORK — When chairman of the US Commodity Futures Trading Commission Chris Giancarlo steps down next month, he will leave an unlikely legacy: a major crackdown on white collar misconduct.

The Trump administration appointee is set to leave the swaps watchdog on July 15 after the Senate confirmed his replacement Heath Tarbert, a Treasury official, on Wednesday. Giancarlo’s term expired in April but he has stayed on for the transition.

While regulators across the Trump administration have been pulling back from enforcement, the CFTC has bucked that trend. Giancarlo and his enforcement chief James McDonald have applied a playbook from the world of violent crime prosecution to transform the CFTC from an agency seen as cozy with industry to one with teeth, say lawyers.

“During my watch, the CFTC has been resolute in holding market participants to the highest standards of behavior. In fact, by any measure, enforcement has been among the most vigorous in the history of the CFTC, including more enforcement actions, more penalties, more accountability,” said Giancarlo.

During fiscal year 2018, the CFTC filed 83 enforcement actions, a 22% increase on 2016 and a 20% increase on 2015, agency data shows. Compared with 2017, a presidential transition year that typically sees enforcement slow due to staff turnover, 2018 enforcement actions jumped 69%.

Monetary penalties totaled around $900 million in 2018, higher than five of the eight years from this year to 2016.

“The really key thing with this current enforcement department and Jamie at the helm is aggressiveness,” said Matthew Kluchenek, a lawyer who represents clients in the CFTC’s crosshairs.

McDonald, 37, joined the CFTC in 2017 from New York’s Southern District where he prosecuted everything from public corruption to Bronx gang violence. He cut cooperation deals with junior gang members, offering them more favorable treatment in return for information that would help him convict bigger fish.

Now, McDonald’s targets are commodities firms, brokers, and their executives.

“What we’ve tried to do is open an entirely new avenue of information flowing into the commission. One of those avenues is through cooperating witnesses who have inside knowledge of the misconduct,” McDonald told Reuters.

By offering reduced penalties to firms and individuals who self-report lapses and cooperate in probes, McDonald has spurred executives to lead his team to other misconduct and offenders. Previously, the CFTC offered fewer incentives for firms to cooperate, making it harder for the small, resource-strapped agency to pursue big cases and hold executives accountable.

McDonald believes punishing individuals is a key deterrent. He applied his strategy when probing former trader Kamaldeep Gandhi, who admitted to manipulative futures trading practices. Gandhi agreed to cooperate and told the CFTC about others who were involved, according to McDonald.

“When you have a small agency and a small enforcement staff, you need to rely on deterrent effect and incentives,” said Laura Brookover, a former CFTC enforcement lawyer.

McDonald’s cooperation approach includes a two-phase settlement: offenders agree to cooperate in return for reduced penalties which are imposed once the cooperation is complete.

In March, McDonald said he would expand this program to include foreign bribery, an area the CFTC has traditionally left to the Department of Justice and the Securities and Exchange Commission.

The CFTC’s tough stance has caused some consternation among the industry, which had hoped for a lighter touch under Trump. They complain it is difficult to calculate potential penalties, raising questions over whether self-reporting and cooperation are worth the risk.

With Tarbert taking over the agency, it is also unclear if McDonald will be able to continue with the program. Tarbert told Congress in March he wants to invest in enforcement but does not believe in leniency. “Self-reporting can be useful, assuming it’s followed up with systematic self-correction,” Tarbert added. — Reuters

FOTON showers big discounts, freebies with ‘Kayang-Kaya’ promo

LOOKING for a new vehicle for both family and business travels this rainy season? FOTON Philippines makes owning one easy as the car and truck brand showers big savings and discounts with FOTON’s Kayang-Kaya Promo for the whole month of June.

“One vehicle could transform a small business, whether it may be for delivering cargo or moving people. This is why we continue to bring exclusive sales promotions closer to the public: to empower more businesses by allowing more customers to avail their own vehicles in the easiest, most affordable, and most convenient of terms,” announced FOTON Philippines President Rommel Sytin.

Valid for the entire month of June, the Kayang-Kaya promo highlights two offerings: Pay Low with the all-in low downpayment based on 20% discounted DP, and the Pay Light scheme with the low monthly amortization payable for 60 months.

“FOTON’s major edge from our competitors is the wide variety of vehicles that we offer. Whether for business or for private use, FOTON is ready to provide vehicles that are suitable for any form of need. From functional trucks, spacious commuter vans, and fully-capable SUVs, FOTON has the right ride for you,” Sytin added.

As the rainy season approaches, keeping your cargo safe and dry could be achieved with the Gratour TM. Aiming to provide small and medium enterprises a practical vehicle that can help transport supplies without compromising the quality of delivery and condition of the cargo, this truck is made available at P58,000 all-in low downpayment. Body configurations include dropside, and MPV that makes it capable of carrying a total of 14 passengers with its bench-type seats. Monthly amortization costs as low as P5,800.

For those who want a cargo mover that’s easier to maneuver in the narrow streets of the metro, the Gratour Midi Truck goes along the way. The cab of the Midi truck bears a resemblance to the Gratour MiniVan, but offers a wider array of body configurations such as dropside, MPV, Wing Van, F-Van, and Jeepney. All variants are priced at P48,000 all-in low downpayment, and could be availed at a low monthly amortization starting at P5,143.

Apart from these business haulers, FOTON’s Kayang-Kaya promo is also applicable to the freshest entry, and game-changer of the Gratour series — the Gratour iM6 MPV. Maximum comfort and convenience can be experienced inside the deluxe cabin of this seven-seater. Designed for more private and luxurious trips with the family or friends, the stylish Gratour iM6 could be driven home for as low as P65,000 all-in low downpayment promo, or P6,762 per month.

“To strengthen the worry-free ownership experience of our customers, we have also included notable freebies within these promos. Customers who would avail a FOTON vehicle through the all-in low downpayment deal will have their chattel mortgage fees, insurance with acts of nature, LTO registration plus floor matting, seat covers, and tint covered for free. For the low monthly amortization, FOTON will be shouldering the 3-year LTO registration of your vehicle,” added Sytin.

Apart from the Gratour series, the promo is also applicable to FOTON’s line of Cummins and Blue Energy Euro 4-powered passenger vehicles including the Toplander A/T SUV, 16-seater Traveller van, 19-seater Traveller XL, and executive Toano van. Perfect for transport service businesses, the 13/15-seater TransVan and high-roofed TransVan HR can also be purchased at low DP and low monthly payment schemes with this deal.

Sytin added: “The combination of versatility, power, comfort and total affordability of our vehicles makes up the name of our brand. With this, we will remain true to our commitment to empower more businesses and livelihood of the Filipinos through our products and services. Because we believe that with reliable companions, success could be reached in no time. Kayang-Kaya.”

FOTON’s Kayang-Kaya promo is valid until June 30. Interested clients may visit any of FOTON’s 27 dealerships and 7 Gratour Sales Outlets nationwide to see the vehicles up close.

For more inquiries, visit www.foton.com.ph or www.facebook.com/FOTONPhilippines.

PHL social spending lower relative to size of economy

THE Philippines lags similar-sized economies in spending on social protections and needs to improve their design and implementation, according to a study of state think tank Philippine Institute for Development Studies (PIDS).

“The Philippines spends lower on social assistance as a share of GDP, 0.7%, than the average of 1.5% by lower middle-income countries. There is still much to be done to increase the coverage for the Philippines to ensure that the poorest are adequately covered,” according to the study, A Public Expenditure Review of Social Protection Programs in the Philippines.

The authors, PIDS Research Fellow Charlotte Justine Diokno-Sicat and Research Specialist Maria Alma P. Mariano, said the government spent 5.8% of its total annual budget from 2009 to 2017 on social protection led by the Department of Social Welfare and Development (DSWD), which received the bulk of the funding.

“Regardless of the policy horizon or motivation of a social protection program, it is crucial to monitor and evaluate the efficiency and effectiveness of the program to be able to intelligently assess future policy direction,” they said.

“By being able to identify the contribution of programs to sectoral and societal goals and rightsizing the government (reviewing mandates/functions) to remove these overlaps and redundancies across NGAs (national government agencies), it would be easier to make social protection efforts more cohesive,” according to the study.

The study noted that Pantawid Pamilyang Pilipino Program (4Ps), Kapit Bisig Laban sa Kahirapan Comprehensive Integrated Delivery of Social Services (KALAHI-CIDSS) and Livelihood and Self-employed Programs (SLP) were the top three recipients of the budget share for social programs.

These were followed by the Department of Education’s School-Based Feeding Program (SBFP), the National Food Authority’s Rice Price Subsidy and Implicit Subsidy and the DSWD’s Supplemental Feeding Program. — Reicelene Joy N. Ignacio

Japan loan signing set for Mindanao highway development project

THE Department of Finance (DoF) expects to sign a $202.04-million loan agreement with Japan for the Road Network Development Project in Conflict-Affected Areas.

The signing is expected to take place during a meeting between Japanese and Philippine officials in New Clark City. It will be the eighth session of the high-level joint committee since March 2017.

The project involves building, rehabilitating and improving the 178.43-kilometer road network in the Autonomous Region in Muslim Mindanao (ARMM) and its neighboring regions, which is aimed to boost Mindanao’s economy and help alleviate poverty in conflict-affected areas.

The loan was pledged by the Japanese government on Jan. 18.

“The project will construct and improve access roads to arterial roads linking the main cities of Mindanao, thereby contributing to the revitalization of the regional economy, the reduction of poverty and the consolidation of peace in conflict-affected areas in Mindanao,” the Japanese Embassy in the Philippines said in a statement.

“This project will contribute to improve logistics, stimulate economic activity and strengthen access to the region with the construction and refurbishment of roads and bridges in the conflict-affected areas of Mindanao,” it added.

The participants will also discuss the progress of infrastructure projects funded by Japan in the Philippines under the administration’s Build, Build, Build program, according to the DoF.

The meeting will be chaired by Finance Secretary Carlos G. Dominguez III and Socioeconomic Planning Secretary Ernesto M. Pernia while the Japanese delegation will be led by Hiroto Izumi, Special Advisor to the Prime Minister.

Other loan agreements with Japan were signed between October 2016 and January 2019 worth a combined 398.82 billion yen.

The loans will be used to fund the Maritime Safety Capability Improvement Project for the Philippine Coast Guard (Phase II); the Harnessing Agribusiness Opportunities through Robust and Vibrant Entrepreneurship Supportive of Peaceful Transformation project; the Cavite Industrial Area Flood Risk Management Project; the Arterial Road Bypass Project (Phase III) in Bulacan; the New Bohol Airport Construction and Sustainable Environment Protection Project (II); the Metro Rail Transit Line 3 Rehabilitation Project; the Pasig-Marikina River Channel Improvement Project (Phase IV); the North-South Commuter Railway Extension Project (1st tranche of loan); and the Metro Manila Subway Project (Phase I).

Japan has provided the Philippines official development assistance (ODA) loans amounting to $6.13 billion as of 2018, based on data from the National Economic and Development Authority (NEDA). Grants from Japan meanwhile amounted to $106.76 million. — Reicelene Joy N. Ignacio

How PSEi member stocks performed — June 7, 2019

Here’s a quick glance at how PSEi stocks fared on Friday, June 7, 2019.

 

CTA upholds Standard Insurance ruling after denying BIR appeal

THE Court of Tax Appeals (CTA) denied for lack of merit the appeal of the Bureau of Internal Revenue (BIR) against the cancellation of the alleged P218.9-million tax deficiency of Standard Insurance Co., Inc. for 2001.

In a seven-page resolution on June 4, the CTA second division upheld its March 25 decision setting aside and cancelling the documentary stamp tax (DST) deficiency assessment against Standard Insurance as the prescribed period for the collection of the tax has lapsed.

“In sum, we found that no substantial argument was raised to merit reconsideration of our Decision promulgated on March 25, 2019,” the CTA ruled.

The BIR, in its motion for reconsideration, claimed that the court was mistaken in failing to consider the request of Standard Insurance to hold in abeyance the service and execution of warrants of distraint and/or levy and garnishment which justify the suspension of the prescriptive collection period.

“After a careful examination of petitioner’s motion for reconsideration, the Court finds that the issues and arguments raised in said motion had already been sufficiently passed upon and discussed by the Court’s Decision promulgated on March 25, 2019,” the court said.

According to the Tax Code, internal revenue taxes assessed may be collected within five years following the assessment. The court said that as the final assessment notice was received by Standard Insurance on May 5, 2004, the BIR had until May 5, 2009 to collect the tax.

It said that Standard Insurance had requested to hold in abeyance the issuance of warrants for collection in January 2005, which was granted by the BIR in a memorandum dated Jan. 24, 2005, but Standard claimed it “was not informed or notified” of the memorandum.

The court also noted that “no other written communication” was sent by the BIR to Standard Insurance other than its Jan. 31, 2017 decision denying its request for reconsideration.

“The issuance thereof was certainly beyond the five-year period to collect, which had expired on May 5, 2009. Consequently, the said assailed Decision can no longer be enforced as the same was already barred by prescription,” the CTA said.

“For such reasons, respondent’s defense that the prescriptive period provided for the collection of the assessed tax was suspended by the issuance of the said Memorandum has no leg to stand on,” it added.

The decision was written by Associate Justice Cielito N. Mindaro-Grulla and was concurred in by Associate Justice Juanito C. Castañeda, Jr. — Vann Marlo M. Villegas

CTA refers DoE-BIR dispute to Solicitor-General

THE Court of Tax Appeals (CTA) dismissed for lack of jurisdiction a petition by the Department of Energy (DoE) to reverse the decision of the Bureau of Internal Revenue (BIR) finding it liable for alleged excise tax deficiency worth P593.7 million.

In an 18-page decision dated May 16, the CTA third division said that while it has jurisdiction over disputed tax assessments, Presidential Decree No. 242 provides that the resolution of cases involving government offices, agencies, and corporations must be settled by the Secretary of Justice or the Solicitor-General.

It also cited a Supreme Court decision which noted that under Chapter 14 of Executive Order No. 292, or Administrative Code of 1987, stating that the Secretary of Justice, as attorney-general of the government and ex-officio legal adviser of all government-owned or controlled corporations, is expowered to settle cases involving questions of law.

The Solicitor-General, on the other hand, has the authority settle cases involving mixed questions of law and fact, or factual issues only, if the dispute is between or among government departments, bureaus, or corporations, to which it is the principal law officer or general counsel.

“The above-quoted jurisprudence is applicable to the present case considering that the subject disputed assessment is between the Department of Energy and the Bureau of Internal Revenue, both government entities. Thus, in light of the foregoing ruling of the Supreme Court, this Court has no jurisdiction over the present case,” the CTA ruled.

“Lack of jurisdiction of the court over an action or the subject matter of an action cannot be cured by the silence, acquiescence, or even by express consent of the parties. If the court has no jurisdiction over the nature of an action, its only jurisdiction is to dismiss the case. The court could not decide the case on the merits,” it added.

The CTA also ordered the decision to be forwarded to the Office of the Solicitor-General.

The DoE filed the petition following the tax assessment of the BIR over its alleged deficiency taxes on exported crude oil from service contracts operated by Galoc Production Company from June to December 2011 and for 2012.

It said in its first protest to the BIR that the “owner” referred under the Section 30 (A)(1) of the Tax Code, the basis for the tax assessment, refers to the service contractor and not the DoE which is “an agent or instrumentality of the State,” and does not own a mining claim or concession.

The BIR in its answer to the CTA petition, on the other hand, said DoE, “as owner of the mining claim,” is liable to pay the excise taxes on the export of crude oil from the Galoc Production Company in accordance with Section 130 (A) (1) of the Tax Code, which states that in case of indigenous petroleum, or other natural gases, excise tax shall be paid the buyer while excise tax on exported products shall be paid by owner, concessionaire or operator of the mining claim.

The ruling was written by Associate Justice by Associate Justice Erlinda P. Uy and was concurred in by Associate Justice Ma. Belen M. Ringpis-Liban. — Vann Marlo M. Villegas

Transforming the HR function through technology

With the fast-paced development of technology, the fourth industrial revolution is reshaping nearly every aspect of business. We often read about how technology and disruption are transforming critical business functions, and one such function that needs to keep up is human resources or HR. More and more, the HR function needs to explore how new solutions, trends and technologies (such as automation) can have a direct impact on productivity.

According to proprietary research by CareerBuilder, a global human capital solutions company, HR manager respondents who do not fully automate say that they lose 14 hours a week from manually completing tasks. HR managers are optimistic about the impact of automation and artificial intelligence (AI) on HR strategies. This is also corroborated in a survey by CareerBuilder, where 72% of respondents said that they “expect that some roles within talent acquisition and human capital management will become completely automated in the next 10 years.” HR automation is, indeed, on the rise with the top three automated functions: employee messaging (57%), employee benefits (53%), and payroll (47%). It is only a matter of time before automation drastically impacts on HR operations and becomes a catalyst of employee engagement.

USING TECHNOLOGY TO IMPROVE THE PERFORMANCE OF HR FUNCTIONS
Let us consider some examples of how aligning with current technological trends can help successfully initiate and implement HR strategies. Take recruitment and talent management for instance. With the increased interest among today’s workforce to shift towards mobile technology and social media, organizations are transitioning from posting on job search websites into social media.

Data shows that 79% of job seekers are likely to use job search portals, while talent acquisition leaders also consider online professional networks as an effective branding tool. HR managers are also increasingly aligning with this trend, where 72% of recruiters use LinkedIn to hire employees and 55% of organizations strategically use Facebook and Twitter for various HR purposes.

Aside from the impact of social media, organizations are also leveraging data analytics and cloud-based solutions to deliver improved HR services and gain better insights on trends affecting their employees. Small-scale organizations are beginning to adopt cloud technology for certain functions such as talent management, human resource management systems, workforce management, and payroll.

Organizations are also investing resources for social media tools and HR technology integration. In fact, two in five organizations say that their HR technology spending is on the rise. However, investment in HR technology is not always top of mind for some business leaders because of their intangible impact on the organization’s bottom line and employee productivity. Despite the digital disruptions transforming business today, many organizations have yet to adopt technologies for their core business or for support functions that include HR.

ROBOTICS AND THE FUTURE OF THE WORKFORCE
Other technologies expected to have a huge impact on HR are robotics and AI. With the advent of automated solutions that can handle clerical or repetitive work, there is need to plan ahead, look into possible job displacement, and manage employee transitions to new roles. The onset of the machine economy is set to displace parts of the workforce, with two-thirds of all jobs susceptible to being rendered obsolete by automation. This, however, varies depending on the rate of adoption of technology in specific countries.

According to research and advisory firm Forrester, automation could lead to a net job loss of 9.8 million or 7% jobs in the US alone by 2027. As a result, a new wave of jobs will develop and require a completely new skillset (e.g., data analyst, information security specialist). Employees consider this to be one of the biggest risks of automation, but are also optimistic about their perceived benefits in their everyday work. In fact, 9 out 10 workers seek to automate mundane tasks at the workplace.

Organizations must also be able to strike a balance for complementary working systems between technology and people. The key to achieving this balance is not to displace human workers by utilizing RPA, but to make them more effective in performing more strategic activities. There is also a need to build analytic capabilities into HR that will in turn support talent strategies in boosting organizational performance and productivity.

THE GIG ECONOMY AND REMOTE WORKING ARE RESHAPING THE WORKING WORLD
As traditional business processes evolve, we are seeing an increase in the freelance or gig economy and remote working, which have become acceptable practices. According to Upwork’s Future Workforce Report, nearly half of respondent companies utilize flexible workers. Surprisingly, 90% of hiring managers say that they are more satisfied with the skills of freelancers than their recent full-time workers. Companies are more likely to hire freelancers based on quality over cost. The US, the Netherlands and the UK lead the pack in embracing the gig economy, as these countries have a high share of self-employed individuals. A favorable policy environment was one factor perceived to have fueled the growth of the gig economy in these countries.

Remote work in the Philippines has recently been institutionalized with the passing of the New Telecommuting Act (Republic Act No. 11165) in early 2019. The law recognizes telecommuting, which allows employees to work in alternative locations via enabling technologies (e.g., internet, cellular phone, computer). Many multinational organizations and business process outsourcing companies have long adopted telecommuting due to the need to communicate regularly and deliver work across time zones.

Employers and employees both directly benefit from telecommuting arrangements by gaining more flexibility in office space utilization and lessening time and money spent traveling to and from the workplace. As technology advances further, telecommuting could become the new norm. Already, some organizations are shifting corporate spending from office space and utilities to subsidizing connectivity expenses of employees who work offsite. Ultimately, this will necessitate the review and updating of company people polices and local labor laws to make telecommuting more aligned with the future of work.

Situations such as road congestion and a shortage of or high costs for work space, and insufficient facilities (e.g. parking) mean that working from home can reduce costs for companies. Focus then can be given to managing employee discipline and maximizing productivity remotely, to ensure quality output that is comparable to the work produced in a traditional workplace.

Given the rapid adoption of technology, automation and new workforce behaviors, HR functions are pressed to catch up and leverage these new trends to adequately meet the needs of tomorrow’s global workforce, and to maintain their competitiveness through effective, strategic and technology-enabled HR processes.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

 

Aldwin Aris C. Gregorio is an Associate Principal of SGV & Co.

Analysts mull PHL options amid rights issues

By Arjay L. Balinbin
Reporter

ANALYSTS sought for comment on Sunday bared options for the government in responding to the call of the United Nations’ (UN) human rights experts for an independent investigation into human rights violations in the Philippines.

“For the moment, the government should take the call for what it is. The human rights experts are simply expressing an opinion. As I understand it, there is no official declaration yet from the UN. Hence, there is no need on the part of the administration to be alarmed or be defensive about it,” lawyer and senior research fellow Michael Henry Ll. Yusingco of the Ateneo Policy Center said in an email.

He added that the government, instead of “immediately expressing aversion” to the call, should “point out” that there is an existing office, which is the Commission on Human Rights (CHR), responsible for the issues being raised.

Also in an email, University of the Philippines Political Science professor Maria Ela L. Atienza said the government and President Rodrigo R. Duterte “may once again ignore this strongly-worded call from the UN human rights experts due to the high popularity ratings of the President and the recent success of senatorial candidates he endorsed in the May elections, which the government interpreted as people’s continued support for the war on drugs.”

She further said, “But the Philippines cannot stop the UN and other human rights bodies to have an independent probe into the killings as a result of the war on drugs.”

“With the UN and international media’s eyes on the Philippines, local rights groups, the Commission on Human Rights, and those who oppose the war on drugs have some external support for their continued work and advocacies.”

In a statement on Saturday, Presidential Spokesperson Salvador S. Panelo slammed the said 11 UN experts, saying that the Philippine judiciary “sees to it that the law is applied equally to all.”

He said the call by the UN special rapporteurs is an “outrageous interference on Philippine sovereignty.”

Mr. Yusingco said being “overly sensitive” on the matter makes the administration “look like it is hiding something and is afraid of being found out.”

He further said the Palace’s “quick reaction to reject the proposal does not portray an administration that has nothing to worry about.”

“The administration should have reserved its indignation against an investigation on the high number of drug war-related deaths when the UN itself calls for it. It is only in this instance when Philippine sovereignty is under threat.”

Also sought for comment, UP Political Science assistant professor Perlita M. Frago-Marasigan said via chat: “The administration has three possible options: first, it can subject itself to such investigation and, in the process, it can put to rest all claims that the Duterte government is above the law; second, it can reassert the sovereignty of the state and continue acting as though the government is above the law; and third, it can ignore it and create an alternative truth to tell.”

Ms. Atienza noted that despite the country’s withdrawal from the International Criminal Court (ICC), the Philippines remains an active member of the UN and is a “signatory to a number of declarations on human rights.”

For that reason, she said the “UN and other human rights groups, including groups in the Philippines, continue to express concern about the country’s human rights record.”

For its part, the CHR said in a statement on Saturday that the government should “give serious attention” to this move. “We believe that this call by the UN experts is the good opportunity for the government to address questions on the human rights situation in the country, instead of dismissing it again as propaganda. Let now an independent probe test the government’s commitment to the respect and protection of human rights, as well as international human rights standards, in the interest of the welfare of every Filipino,” it said.