How PSEi member stocks performed — November 13, 2019

November 14, 2019 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Wednesday, November 13, 2019.

Making rides safer is going to cost you

November 13, 2019 | 10:50 pm

By Rachel Rosenthal

YOUR MOTHER probably told you never to get in a car with a stranger. The multibillion-dollar global ride-hailing industry depends on your ignoring her. If they want to earn that trust, though, companies need to rethink the trade-off they’ve long made between safety and cost.

Around the world, passengers are now hailing more than 10.5 billion rides a year. Not surprisingly, some have ended in tragedy. Uber Technologies Inc. came under fire in India after a 26-year-old woman was raped by one of its drivers in 2014, and local rival Ola has faced a similar backlash. In the US, Lyft Inc. has been sued by multiple women who say drivers sexually assaulted them.

Last year, within the span of three months, two female passengers were murdered by drivers of China’s ride-sharing company, Didi Chuxing Inc. Didi’s Hitch carpooling service once was marketed almost as a cross between Uber and Tinder: a taxi service that let drivers and passengers rate each other by appearance. Didi halted Hitch in August 2018 after an outpouring of anger from state media, regulators and China’s version of #deleteuber.

Last week, Didi announced plans to restart Hitch on a trial basis in seven Chinese cities by the end of the month. The decision follows a “comprehensive safety review and product revamp,” as well as the introduction of a new women’s safety program that includes better “risk analysis” and an updated in-app security assistant. Didi plans to spend 2 billion yuan ($285.5 million) on safety measures this year, including more frequent use of facial-recognition technology — to ensure drivers are who they say they are — and a deeper review of abnormal driving patterns, as well as more regular safety tests for drivers.

But the key to the Hitch relaunch are new restrictions on the program. The service will be limited to trips under 50 kilometers (31 miles) and women can only ride between 5 a.m. and 8 p.m. By contrast, men can keep riding until 11 p.m.

While the company’s intentions are good, this is no solution. A sophisticated analysis of high-risk scenarios won’t help you if you’re stuck in the backseat within an inch of your life. And to assume that a woman will only be raped and murdered between the hours of 8 p.m. and 5 a.m. more than 30 miles from her pickup point seems a bit naïve.

What the ride-hailing industry in China and elsewhere really needs to do is reexamine who’s allowed to drive in the first place. It’s hard to say whether the measures Didi is now implementing would have screened out Zhong Yuan, the 28-year-old Hitch driver who was executed in August for murdering his 20-year-old passenger. After passing background checks and providing documentation, you can still become a Didi driver in 10 days or less.

Instead, companies should be raising the barriers to entry so they’re hiring fewer, better drivers. And if they won’t, governments should step in. In Malaysia, regulators now require aspiring drivers to pass written exams and health checks, and to register for specific permits. Roughly a third of applicants have failed the exam thus far, Transport Minister Anthony Loke said last month, and more than 20% of Grab drivers have reportedly quit to avoid complying with the stricter regulations.

Singapore imposed new rules earlier this year to bring ride-hailing companies closer in line with taxi operators. The regulations were proposed less than a week after my Bloomberg News colleague Yoolim Lee wrote about a Grab accident that left her with a broken neck and at risk of stroke. She estimated that, around the time of the incident, nearly half of private-hire drivers in the city didn’t have the proper license and shouldn’t have been driving. While fewer drivers doesn’t necessarily mean safer drivers, a steeper commitment at least means they have a lot more at stake to protect their livelihoods.

The genius of the gig economy is the ability to make money from underutilized, ubiquitous skills. Yet the model may have been taken too far. Just because you can make an omelet doesn’t mean you should run a diner. So why should you drive professionally just because you have a license?

Shrinking the supply of drivers will obviously make rides more expensive. But it’s worth judging the prospect of higher prices against the long cycle of the internet economy. The Web has made everything from academic research to air travel cheaper and easier to access. At the same time, quality goods and services can’t be free forever: We’ve seen this in the news business, where websites that once offered unfettered access to their journalism (including Bloomberg.com) have implemented paywalls. If fewer drivers means safer rides, that’s a price most people should be willing to pay.

BLOOMBERG OPINION

Burned

November 13, 2019 | 10:49 pm

Investors in the “vaping” industry may soon get burned and find their money going up in smoke. Pardon the pun, but that is precisely what will happen if the Executive or Congress — or both — make good the Department of Health (DoH) threat recently to completely ban the sale, importation, distribution, and use of electronic or e-cigarettes and other vaping instruments.

This is a major change since July, when DoH issued Administrative Order 2019-0007 to complement President Duterte’s Executive Order No. 26 that imposed a nationwide ban on cigarette and tobacco smoking in public places starting 2017. The AO expanded the coverage of EO 26 to include “vaping,” or the use of electronic nicotine and non-nicotine delivery systems.

As I had noted in a previous column, with the DoH order in July, e-cigarettes — whether or not they use nicotine — were put at par with regular cigarettes and were banned in all places where smoking was likewise prohibited: public areas like schools, workplaces, government offices and facilities, churches, hospitals, transport terminals, markets, and parks and resorts, among others. Containers of vaping products must also have graphic health warnings.

But unlike regular cigarettes, DoH ordered that businesses or entities that manufacture, distribute, import and export, as well as sell or trade online all types of vaping products must first secure permits from the Food and Drug Administration (FDA). Also, unlike regular cigarettes, a nicotine ban was practically imposed by prohibiting the sale of nicotine “shots” and nicotine “concentrates” used in vaping devices.

By end-October, however, and despite imposing stricter standards on vaping or electronic smoking vis-à-vis regular tobacco-based cigarette smoking, DoH is now calling for a complete ban on the sale and use of vaping products. This was after reports of deaths abroad linked to vaping. Locally, there have been reports as well regarding the ill-effects of vaping.

In a local news report, Health Undersecretary Eric Domingo was quoted as saying that vaping or using e-cigarettes was not a proven nicotine replacement therapy and could cause lung illness as well. Although he did not present any scientific data or research to back his claim. “If the DoH had its way, we would go for an outright ban,” he added.

He noted that vaping was unsafe and bad for one’s health, and that vaping “products [were] not good alternatives to normal or regular cigarettes.” He added there have been 1,604 recorded cases of EVALI or e-cigarette or vaping product associated lung injury in the US. And of this figure, 34 have resulted in death.

Well, Mr. Undersecretary, isn’t it that regular cigarette smoking is just as bad? Why else will the government increase taxes on cigarettes, ban cigarette advertising, require graphic warnings on cigarette packs, and impose other conditions on the sale and use of tobacco products? Why even impose a nationwide ban on smoking in public places if smoking was not just as bad? And how many deaths globally have been directly attributed to smoking? But why aim to ban only vaping and not all types of smoking altogether?

With the AO issued in July, it has become obvious that in the mind of DoH, there is no significant difference between cigarettes and e-cigarettes. Thus, the regulations and parameters for sale and use were put at par. Moreover, since regular cigarettes are heavily taxed precisely for their “negative externalities” as well as their high tax revenue potential, there were plans to do the same to vaping products.

From a business and investor perspective, putting regular and electronic cigarettes at par would appear to be an attempt to level the playing field, where one industry is not given any advantage by public policy or government regulation. On the other hand, putting them at par also negates whatever advantages there are in regarding electronic cigarettes as nicotine replacement therapy. Obviously, more scientific studies must first be presented to prove this.

But it remains uncertain still, at least to me, whether we should lump electronic cigarettes and vaping products with regular cigarettes, or should we categorize them like cigarette alternatives such as nicotine patches and nicotine gums, inhalers, nasal sprays, and lozenges? It is likewise confusing why vaping products are prohibited from using nicotine when it is still allowed in regular cigarettes, nicotine patches, and nicotine gums.

Isn’t it that the ultimate objective of regulation is the protection of public health? Since time immemorial, regulation plus taxation aimed to bring down smoking prevalence and promote public health. Reducing smoking prevalence aims to cut down smoking-related illnesses and smoking-related deaths. By doing so, we bring down health insurance costs and public healthcare costs. Taxes also raise revenues for the government.

This formula has been applied to regular cigarettes and the tobacco industry since the start of the republic. But there seems to be some impression now at DoH that it cannot work for e-cigarettes and vaping as well? Moreover, for the sake of “public health,” DoH prefers a complete ban on vaping but not on regular smoking? But aren’t both products equally detrimental to public health?

If the DoH will call for legislation to ban e-cigarettes and vaping, I believe it should do the same for all other types of “smoking.” No exceptions, no exemptions. This is given the simple fact that any kind of smoking is bad for public health. Local tobacco farmers will just have to shift to another crop, while tobacco and vape producers will just have to go into other businesses. And the government should just look for other sources of tax revenues.

I will strongly support DoH on an absolute ban on all types of smoking, as this will also address the “dirty” issues of littering and air pollution. It will also curb any corruption related to taxing tobacco; cut down smoking prevalence nationwide; put an end to all types of smoking-related illnesses and deaths; and, perhaps pave the way for a healthier population.

But for DoH to call for a ban only on e-cigarettes and vaping, and allow still the manufacture, sale and distribution of regular cigarettes and other tobacco products, and for Congress to follow through on that call, will simply “un-level” the playing field. There will be no significant impact on improving public health; will bring down tax revenue potential from tobacco alternatives; and, will invariably give unwarranted and undue advantage to the tobacco industry, which is in direct competition with electronic cigarettes and vaping products.

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

matort@yahoo.com

The Silent Scream: mental health awareness in the workplace

November 13, 2019 | 10:49 pm

A pop of paracetamol, a cup of coffee, a puff of smoke, binging on junk food or skipping meals — perhaps a reaction to what a person is feeling and perhaps, too, what can be normal in the workplace.

Whether office-based or fieldwork, the worker is vulnerable to behavior peculiarities leading to an unhealthy lifestyle or a poor frame of mind. Daily pressure points such as meeting work expectations and performance measures, satisfying demanding customers or bosses, workload overload or overlapping deadlines, shifting or extended work schedules, decision-making, and even commuting to/from work can result in a breakdown.

Dynamics of interactions at work can strongly affect how this worker is holding up. When there are no explicit agitations, no manifestations of anger, no violence captured within work premises or schedules, organizations would normally interpret their workplace to be harmonious and well. Perhaps it can be one indicator but not the sole measure. When one is harassed or bullied it may not be explicit or, worse, may be ingrained in the organization’s culture, especially in the absence of any related policy. Thus, such activities can be perceived as acceptable.

What an individual experiences at work may not resonate with everybody else in the organization. But the health and wellness of one can matter to everyone. The statistics on mental health are alarming. The World Health Organization (WHO) reports that:

• 154 million people suffer from depression

• One million from schizophrenia

• 877,000 people die by suicide every year

• 15.3 million persons with drug use disorders

The WHO has officially classified workplace burnout as an occupational phenomenon.

Burnout is a syndrome which results from chronic workplace stress that has not been successfully managed. Mental health is a catch-all term to describe any and all issues that may affect the mind. It includes a variety of mental disorders, addiction, neurologic disorders, and behavioral problems.

The Chief of the Labor and Employment Office of the Bureau of Working Conditions, Dr. Ma. Imelda Santos narrated in an interview with CNN Philippines on May 29 the components of the proposed policy of DOLE on Mental Health in the Workplace.

“…Employers are directed to develop appropriate policies and programs on mental health in the workplace designed to: raise awareness on mental health issues, correct the stigma and discrimination associated with mental health conditions, identify and provide support for individuals at risk, and facilitate access of individuals with mental health conditions to treatment and psychosocial support. [A] Mental Health Program includes capacity building, mental health promotion, and access to services.

“A mental health strategy improves the involvement of the workforce by avoiding psychological unwellness, promoting mental wellness programs, and supporting the people in the organization who are in the state of mental health problem or illness. It is expected that the adoption of workplace mental health promotion programs by more employers can exert a strong influence on improving the holistic health and well-being of workers which could readily translate to productivity. The DOLE shall issue its Mental Health Policy not later than Aug. 19 of this year,” she said.

Given the strong drive of the Government, organizations in different sectors are compelled to promote and ensure mental health in the workplace. Human Resources plays a pivotal role in the implementation of Mental Health awareness, policies and programs for the safety and well-being of all the people in the organization.

Should we all arrive at the same understanding that the organization’s success stems from its productivity, and productivity is the result of each worker’s output, then PEOPLE are the organization’s greatest resource and asset. As such, anything that can nurture all aspects of a person’s development and motivation has to be taken care of, including mental health conditions in the workplace.

Worth considering are the following strategies in promoting Mental Health in the Workplace:

• Encouraging active employee participation and decision making

• Clearly defining employees’ duties and responsibilities

• Campaigning for work-life balance

• Promoting a respectful and professional environment

• Right capacity planning for the employee workload

• Promoting the organization’s support for volunteerism.

• Teaching managers how to support people who are struggling with work/life balance or heightened work demands.

• Training senior staff on the signs and symptoms of mental health problems.

• Encouraging an active lifestyle, providing gym equipment or organizing Zumba and even a quarterly sportsfest.

• Opening the doors of every leader in the organization. Telling everyone that they are not alone, that even the leaders will listen to the lowest rank and file employee.

Let us not be numb to the silent cries in the workplace. Let us listen even if no one screams for help. Inclusion of mental health awareness in the workplace leads not just to strategic HR and success of an organization but more so, it can save a life… as it can also end a life unknowingly.

Joey Estevez is an MBA student at De La Salle University’s Ramon V. del Rosario College of Business. This essay was written as part of the requirement in his Strategic Human Resource Management class.

Exports, manufacturing, and electricity

November 13, 2019 | 10:45 pm

“Under a system of perfectly free commerce, each country naturally devotes its capital and labor to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole.”

— David Ricardo,
The Principles of Political Economy and Taxation (1821),
Chapter VII,
“On Foreign Trade”

Despite many stories of “slowing” growth and exports globally last year, many countries and economies actually registered significant improvement in exports, except for a few like the Philippines. The creation of the World Trade Organization (WTO) in 1995 was a big factor for global trade expansion as there are now globally binding rules with penalties to discourage countries and governments from continuing high protectionism. These are shown in the numbers in Table 1 — exports level in 1994 (pre-WTO) and 1995, then in succeeding decades.

The bulk of countries’ exports are manufactured products — machinery and transport equipment, chemicals, iron and steel, office and telecom equipment, circuits and electronic components, etc. And two countries really stood out in terms of a huge jump in manufacturing exports — China and Vietnam. China’s manufactured exports jumped 233x from 1985-2018 (or in just 33 years) while Vietnam’s jumped 12.5x from 2005-2018. If the WTO has data for 1985, very likely Vietnam’s expansion here would probably be at least 150x (see Table 2).

There are many factors that contribute to such huge expansion in manufactured exports by China, Vietnam, Thailand, Malaysia, and Indonesia over the past three decades. Like industrial, investment, and taxation policies. But beyond macroeconomic policies, often forgotten in economic and trade discourses are energy policies. Manufacturing requires lots of power, electricity that runs 24/7 with no blackouts even for a minute except during big natural disasters (see Table 3).

The bulk of such power sources are coal and natural gas, and oil for peaking plants. As countries slow down if not reduce their electricity generation, often in the guise of “saving the planet,” their manufacturing output and overall GDP growth also slow down. Like Germany, Japan, and the US.

The Philippines should do more to significantly expand its merchandise exports and manufacturing. It should have more free trade and globalization, and less protectionism and nationalism. It should have more power capacity, a huge expansion in electricity generation from fossil fuels like coal, gas and oil, even nuclear, and less reliance on intermittent, unstable, weather/battery/subsidy-dependent renewables like solar-wind.

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

Bidding for the business

November 13, 2019 | 10:42 pm

By Tony Samson

WHAT BANKS, management consultants, financial advisers, digital platforms, or ad agencies bidding for an account call a “pitch,” their prospective clients privately refer to internally as a “beauty contest.”

Suppliers do quarter turns to show their best side.

The hopeful bidder trots out credentials and awards it has won, what it has done for other clients in the guise of “case studies” (with a semblance of confidentiality maintained) and what it intends to do for its new prospect. Emphasis of the presentation is in the latter and the attempt to show an understanding of the business and the problems facing it, which are usually life-threatening.

Bidders and beauty contestants are very different.

Beauty contestants would never set out to deflate the egos of the jury. But this is what the bidders do right away. In the guise of research from focus groups selected for their animosity to the target company, the bidder weaves findings that can be summarized in one sentence: “your company sucks and needs help.” This is the equivalent of the “before” and “after” ads for beauty treatments: magnify pimples on the corporate face, the better to eliminate them with the expensive remedies presented. (You won’t even feel the pain of peeling skin.)

Seeming to diagnose a lingering illness, the bidder offers a cure if only the patient can accept the “transformation” and pay for it. The worst-case scenario makes any bitter medicine easier to prescribe.

But can the dire diagnosis turn off the patient? There is a possibility of that. Clue: The panel is already jotting down rating scores on the bidder after the situation analysis. (Who let these morons in?)

Presenters can read faces. Just because the “big idea” is flopping around and overturning furniture like a crazed elephant doesn’t mean it is possible to change gears and retreat through the narrow door. The visuals relentlessly lead to the dire conclusion. The hole is dug deeper and deeper. The scenery gets darker and muddier — management will be replaced by artificial intelligence.

Beauty contestants move through their paces with metronomic precision, not allowing dawdling and time wasting. Not so for bidders. While they are given a time limit of 30 minutes for presentations, they go slide after slide presuming the same enthusiasm from their audience as they devoted on the visuals. (I’m getting to the last slide.) Presenters worked on these slides for a week without sleeping. Let the smirking panel be inflicted the pain of too much information.

Bidders do not trot out on stage simultaneously as beauty contestants do to facilitate comparison and rating. Corporate contestants go in one after the other as similarities of the slides (and even the jokes) are inflicted on an increasingly tired panel. (What, three more to go?)

Because of the serial presentation, comparisons can only be made at the end when the first entries fade in a hazy soup. Rating is often done against some personal abstract standard — they look sleepy.

Careful planning ensures success. The evaluation panel is studied to find out which of the supposedly equal votes has more weight. The person asking the most questions (Is that the correct spelling of “singularity”?) is not the most important. The number of questions asked and the loudness of their delivery are inversely proportional to the decision-making weight in determining the winner. Thus, the quiet one asking not a single question needs to be watched — is he jotting down notes?

Body language is important. Here are some distress signals: Shifting in the seats, constant checking of the watch, checking the phone for stock prices, continuous texting of the man in the middle seat (the one facing the screen), and loud conversations going on among committee members while the hot stuff is being trotted out (Overheard: Do you really think we have a chance for a three-peat?) and long disappearances from the room.

It is a rule that the losers get the verdict earliest. Warm words don’t count — I liked your effort and the talents clearly on display in the pitch. The slides show an aesthetic taste for impressionism.

Is there a “but” coming down the pike? You don’t have to hold your breath to find out. Sometimes, there are no winners — we are re-evaluating the need for transformation. Maybe a different set of contestants will be called in… after a year.

Tony Samson is Chairman and CEO, TOUCH xda.

ar.samson@yahoo.com

Jail bureau seeks DoH help on medical staff

November 13, 2019 | 10:37 pm

JAIL OFFICIALS want the help of the Health department about its insufficient medical staff and equipment.

The national penitentiary only has 13 doctors nationwide, four of them assigned at the main jail in Muntinlupa City, Henry Fabro, jail hospital chief, told reporters on the sidelines of a regional conference on prison health.

Mr. Fabro said they would seek the help of the Health agency about additional doctors and in buying equipment. There are only four to five jail doctors for 18,000 inmates, he said. The national penitentiary only has about 40 nurses.

“We only have four doctors who are going around four shifts,” Mr. Fabro said, adding that the Health department’s Doctors to the Barrios program might help the bureau. “Maybe they could give us some.”

Meanwhile, Mr. Fabro said he could not confirm Senator Leila M. de Lima’s claim that 29 inmates at the national jail recently died, 10 of them allegedly due to pneumonia and tuberculosis and 14 from noncommunicable diseases.

The lawmaker, who is in jail for alleged drug trafficking while she was still justice secretary, wants the Senate to investigate the deaths, which allegedly happened in 17 days “due to lack of basic necessities and proper medical treatment.”

Mr. Fabro said among the main causes of death at maximum prison compound are heart attacks and chronic kidney diseases.

Justice Secretary Menardo I. Guevarra said jail officials could probe the matter on their own.

Meanwhile, Paul Borlongan, a medical officer of the Bureau of Jail Management and Penology, noted that as of 2015, the mortality rate in the country’s jails ranges from 300 to 800 yearly.

He said that they have a budget for medicines and the Health department also gives them drugs for noncommunicable diseases such as hypertension and diabetes. — Vann Marlo M. Villegas

Gov’t sees 38 flagship projects completed by end of Duterte’s term

November 13, 2019 | 10:33 pm

PRESIDENTIAL Adviser for Flagship Projects Vivencio B. Dizon said 35 such projects are under construction and 38 will be completed by the end of the government’s term, while rejecting an opposition Senator’s characterization of the infrastructure program as a “dismal failure.”

He added, however, that the government is not yet satisfied with progress on infrastructure, known as “Build, Build, Build.”

In a briefing at the Palace Wednesday, Mr. Dizon said government spending on infrastructure has undeniably increased.

“I just want to emphasize the point: Is Build, Build, Build a failure? Absolutely not, and the numbers speak for themselves. Construction is up; public spending on infrastructure is up, and this has led to faster economic growth. Are we happy with the progress? We could do better, and we admit that,” he said.

Mr. Dizon confirmed that not all the projects will be finished before President Rodrigo R. Duterte’s term ends in 2022 but added that he hopes the project pipeline will “create momentum” going forward even with works in progress left to future governments.

Senate Minority Leader Franklin M. Drilon called Build, Build, Build a “dismal failure” and claimed that only nine out of the total 75 flagship projects listed as of July have started construction.

Mr. Dizon, who is also the Bases and Conversion Development Authority (BCDA) President, clarified that Build, Build, Build consists of thousands of infrastructure projects, including some already finished. The list of 75 flagship projects has since been revised to 100 after more private sector-initiated projects were included last week.

He said a number of projects in the old list of 75 have been completed, including the North Luzon Expressway (NLEX) Harbor Link segment 10; the Governor Miranda Bridge in Tagum City; the Pigalo Bridge in Isabela; The Tarlac-Pangasinan-La Union Expressway (TPLEx) extension to Pozzurubio, Pangasinan; the Bohol Panglao International Airport; the Port of Cagayan De Oro passenger terminal; the Cavite Gateway container terminal; the Communications Navigation System/Air Traffic Management System; and New Clark City Phase 1A. These are not included in the list of 100 flagship projects.

About 70% of the projects are related to transport and mobility, with 38 set to be finished by 2022.

In addition to the 35 currently under construction, 32 will commence construction within the next six to eight months, while 21 are in the advanced stages of government approval and 12 are in the feasibility study stage.

Mr. Dizon added that the private sector will play a crucial role in the government’s infrastructure program, as approved public-partnership-projects (PPP) have exceeded those of any other administration. Of the revised list of 100, “Around 26 or 28” are PPPs.

“I think the private sector wants to help because it obviously means the economy will grow faster because it will benefit them… but we have to ensure that the PPPs are advantageous especially for the future,” he said.

The government is also trying to improve its processing of PPPs, which have traditionally been slow-moving. Mr. Dizon said that much has been done to improve the process. Other challenges include speeding up right-of-way acquisition.

“It’s still slow. We acknowledge that — it is still slow. We need to do it faster. We need to get these things done faster… obviously the biggest challenge for infrastructure is right-of-way,” he said.

The list of 100 flagship projects is still ”evolving,” Mr. Dizon said, as some new projects could be added or current ones could be removed. He added: “Nothing is final until there is a shovel in the ground.” — Gillian M. Cortez

House signals willingness to harmonize land use legislation with NEDA draft

November 13, 2019 | 10:32 pm

A DRAFT of the proposed National Land Use Act by the executive branch is expected to help a bill stuck in Congress make headway, paving the way for the two branches of government to arrive at a compromise version, a legislator said.

Deputy House Minority Leader Jose Christopher Y. Belmonte said the executive’s draft, now being finalized by the National Economic Development Authority (NEDA) for approval, will hasten the passage of the priority measure.

Mr. Belmonte said legislators are willing to make the necessary amendments on their version to improve its chances of passing. He added that the bill has been resisted by the Senate.

NEDA Director for Regional Development Staff Remedios S. Endencia said at the House that while there is no timeline for the draft’s approval, current amendments are focusing on implementing mechanisms.

“I don’t really mind, as one of the authors, tweaking (the bill) to compromise with what the Senate or Malacañang want, because this is a very important bill and it has been setting in the House,” Mr. Belmonte said during the organizational meeting of the special committee on land use at the House Wednesday.

Ms. Endencia said the draft has been discussed at several Cabinet meetings.

The measure was among the priority bills cited by President Rodrigo R. Duterte during his fourth State of the Nation Address on July 22.

House Bill No. 5240 was approved on final reading in that chamber but counterpart legislation has thus far failed to pass in the Senate.

Ms. Endencia, during her presentation, said that a national land use policy will provide better access to affordable housing, secure energy sources, protect prime agricultural land and water resources and lay down a proper management scheme for natural resources, among others.

NEDA’s draft contains a proposal for land use councils at national and local levels.

The national land use council will be chaired by the NEDA with its membership to include the Departments of Agriculture, Agrarian Reform, Public Works and Highways, Science and Technology as well as housing agencies.

However, Representative Teodorico T. Haresco Jr.. the vice chair of the special committee, said current proposals could be simplified further to minimize bureaucracy.

Ms. Endencia clarified that only a single office will be established to minimize budgetary pressures. — Beatrice M. Laforga

PHL targets Thai auto imports

November 13, 2019 | 10:31 pm

THE Philippines is considering retaliatory measures against Thailand’s automotive exports after a decade-long dispute over cigarette imports, Trade Undersecretary Ceferino S. Rodolfo said in a briefing Thursday.

Under the World Trade Organization (WTO) dispute settlement system, a country may impose countermeasures against a WTO member for non-compliance with the organization’s ruling.

Thailand has been filing appeals with WTO after it was found to have failed to comply with WTO’s ruling against its customs measures on Philippine cigarette exports.

The Philippines is studying either tariff or quantitative restriction (QR) measures on Thailand’s automotive exports.

“We are studying retaliation as an option that is allowed under the WTO… We are seriously considering and calculating our retaliatory rights on auto,” Mr. Rodolfo said.

Trade Secretary Ramon M. Lopez told reporters at a forum Wednesday that he prefers tariff measures.

“Tariff to me is preferred always. Kapag QR kasi (because if it’s a quantitative restriction), there are rent-seekers. Subject to corruption… and there’s no revenue but there is an impact on the price in the end,” he said.

“Whereas if it’s tariff, there’s a clear protection and there’s revenue.”

If the Philippines chooses to impose a quota or quantitative restriction, Mr. Rodolfo said, automotive import volumes above a particular threshold would be imposed a higher tariff.

Mr. Rodolfo said that retaliatory measures are usually placed on the same product, but the Philippines does not import a significant amount of cigarettes and tobacco from Thailand.

In this case, the WTO allows a “cross-sector” retaliation.

“If the complainant considers it impracticable or ineffective to remain within the same sector, the sanctions can be imposed in a different sector under the same agreement,” the WTO dispute settlement system said.

Mr. Rodolfo said that the department chose auto because of the volume of such Thai exports to the Philippines.

The Philippines first complained of Thailand’s fiscal and customs policies on importing cigarettes in 2008, a case that the WTO decided in favor of the Philippines in 2010.

The DTI will be requesting a meeting with Thailand to relay its plans, and give Thailand the opportunity to lift its non-compliant measures.

“We will file to exercise retaliatory rights before the end of the year,” Mr. Rodolfo said. — Jenina P. Ibañez

PHL wins $10M grant for calamity early-warning system

November 13, 2019 | 10:30 pm

THE Climate Change Commission (CCC) said it won a $10-million grant from the Green Climate Fund to establishing a multi-hazard impact-based forecasting and early warning system for natural calamities.

In a statement yesterday, the CCC said that the Incheon, South Korea based Green Climate Fund’s board has approved the Philippines’ first GCF proposal and will provide $10 million.

It said that the project aims to provide information on climate risks directly to local governments and communities.

“This is just the beginning. The CCC, as the National Designated Authority to the GCF, will remain determined to access more climate finance that can enable genuine and lasting resilience for our vulnerable communities,” Commissioner Rachel S. Herrera said in the statement.

The GCF was formed as a result of the United Nations Framework Convention on Climate Change (UNFCCC) and is the world’s largest climate finance mechanism for developing countries.

CCC said the expected project outcome is a science-based multi-hazard weather and risk information system and improved national and local capacities in implementing a people-centered warning system.

It said the grant will be channeled through the Land Bank of the Philippines, while the weather service, known by its acronym PAGASA, will be the lead implementing body, alongside the Department of Interior and Local Government, the Mines and Geosciences Bureau and Office of Civil Defense, among others.

As of October, the GCF has approved 111 projects worth $5.2 billion, with around 310 million people seen to benefit from increased resilience. — Beatrice M. Laforga

What you need to know about the US Tax ID Number or ITIN

November 13, 2019 | 10:29 pm

Comparable to our Bureau of Internal Revenue (BIR)-issued identification number, more popularly known as TIN, the US Internal Revenue Service (IRS) likewise issues an Individual Taxpayer Identification Number (ITIN), which is used as a tax processing number. The ITINs are issued to individuals who are required to obtain one under United States (US) tax law, but who do not have and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).

The main difference between the SSN and the ITIN is the eligibility of the taxpayer. An individual is only allowed to apply for an ITIN if he or she is not a US citizen or resident and not qualified to work in the US (e.g., the individual does not have a US work visa). Unlike SSNs, ITINs do not serve any purpose other than for US tax reporting; it does not authorize the individual to work in the US. Because of its nature, the validity of the ITINs expires, while SSNs are perpetual.

Filipinos who are not living or working in the US may still need to apply for an ITIN for the following reasons:

• They are required to file their US tax return in compliance with US tax laws;

• They are declared as the spouse or dependent of a US citizen or alien resident person required to file a return; and

• They are non-residents claiming a tax treaty benefit.

Take, for instance, those Filipinos who acquire properties in the US for personal investment, or business purposes. The transaction generally triggers tax reporting obligations with the IRS when these properties are sold or rented out. Therefore, even if Filipinos remain outside of the US and are classified as nonresidents, they are still required to file a US tax return to report income they derived from the US. Accordingly, to file their US tax returns, they need to apply for ITINs.

The application for an ITIN can be filed either in or outside the US. The applicant may opt to apply by: (1) mailing the required documents to the IRS; (2) scheduling an appointment at an IRS Taxpayer Assistance Center; or (3) applying through a Certifying Acceptance Agent who may or may not be based in the US.

Acceptance agents are persons (i.e., individuals, entities, or accounting firms) who have entered into formal agreements with the IRS, authorizing them to assist applicants in obtaining ITINs. The Acceptance Agent will submit the original or certified copies of the documents to the IRS on behalf of all applicants they are assisting. While the IRS does not impose a fee for issuing an ITIN, applications filed through an Acceptance Agent may be subject to service or transaction fees charged by the agent.

When applying for an ITIN, the individual must accomplish Form W-7, also known as the Application for an Individual Tax Identification Number, and attach his or her required documents, which generally include the US tax return and the applicant’s original or certified copies of documents (e.g., passports, national IDs) establishing identity and foreign status.

First-time ITIN applicants must complete and attach the Form W-7 to their tax returns that require the ITIN. Applications should be submitted on the due date of the filing of their US tax returns (subject to the applicable extensions).

After the ITIN application process is completed, applicants will receive a letter from the IRS assigning their tax identification numbers. ITINs are usually issued within seven weeks, but it could take up to 11 weeks, if requested during peak season from Jan. 15 through April 30. Applications mailed from abroad may take considerably longer.

Based on the IRS Advisory as posted on their website, all ITINs not used on a federal tax return at least once in the last three years will expire by Dec. 31, 2019. Thus, individuals who are required to file a US tax return by 2020 must verify the IRS instructions and guidelines available on the IRS website to prevent potential delays in the filing of their tax returns.

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.

Aniway L. Asi is a senior manager with the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network

(02) 8845-2728

aniway.asi@pwc.com

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