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Mother: Not just an input of GDP

The unpaid household chores and care work rendered by women is valued at 20% of the Philippines’ gross domestic product (GDP), according to Research Fellow Michael M. Abrigo of the Philippine Institute for Development Studies (BusinessWorld April 2, 2019). This is quantified at nearly P2 trillion. According to 2015 data, only 2% of males help out with the house and care work of their spouses and mothers (Ibid.).

The objective of the PIDS study: “We want to bring home the message that there’s value in housework, na hindi ibig sabihin nito na porke’t nasa bahay sila ay walang value ‘yung oras nila (it doesn’t mean just because they’re at home their time does not have value). We want to convert these time units into monetary units” (Ibid.).

The PIDS used the National Transfer Account (NTA) to check whether activities performed by women doing unpaid work translated to economic activity that contributes to GDP. The National Time Transfer Account (NTTA) measured the time spent on unpaid work by women (Ibid.). Impressive, but such algorithms have been used to quantify unpaid housework by women before — and have the components of that almighty GDP been revised to include such “intangibles” as this factor?

GDP has entrenched itself as the ultimate gauge for determining a country’s economic performance. Perhaps it can be said that the GDP formula is an “invention born of necessity”, for it achieved convenient acceptance as the measurement guide for the obsessive years of rehabilitation after the World Wars of the 1940s. The “brain” most credited for the development of the GDP measure was Simon Kuznets, the 1971 Nobel Memorial Prize in Economic Sciences “for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development.”

Kuznets (1901 – 1985), of Jewish-Lithuanian descent, was an immigrant to the United States after the Civil War in Russia that subsequently settled in communism as the political and economic ideology. After a doctorate in Economics from Columbia University, Kuznets worked for the National Bureau of Economic Research (NBER) and was professor in economics at the University of Pennsylvania, John Hopkins University and for the decade before his retirement, at Harvard University. Thus his directions were in econometrics, studying manifestations in identified and correlated indicators, as these are statistically monitored and empirically tested and vetted against theoretical cycles and expected trending.

Kuznets helped the U.S. Department of Commerce to standardize the measurement of GNP. However, he disagreed of its use as a general indication of welfare (only as a limited measure of production), writing that “the welfare of a nation can scarcely be inferred from a measure of national income” (Simon Kuznets, 1934. “National Income, 1929–1932”). He wanted to include the measurement of certain “intangibles” as part of GDP, (e.g. the cost of pollution) and particularly the value of unpaid housework — because he considered these as important components of production (www.econlib.org). Kuznets and sympathetic economists were “vetoed” by the “utilitarians” — those who wanted to include only measurable production. Since then, only quantifiable inputs are measured and imbedded in GDP.

The feminist movements, even mixed-gender rights groups, and independent-thinking academics have not ceased to question the inadequacy of GDP that did not include unpaid housework, mostly done by women, like cleaning, cooking, child or elder care. “Without a wife to tend to the children and the home, how would a male factory laborer have the time or the energy to fulfill his stereotypical role as the breadwinner,” a women’s rights group in India asked? (shethepeople.tv/news June 28, 2018). “Economists didn’t know how to count it when they created the GDP in the 1940s…there is complexity in assigning value where no money changes hands,” economists admitted. The reason they defined GDP as goods and services is because those are easy to measure” (marketwatch.com Jan 17, 2001). At the Beijing United Nations’ World Conference on Women in 1995, some 50 countries declared to have done time- use surveys, or planned to do them, in the effort to make GDP more relevant and “accurate”.

And the PIDS did its own time-use surveys to value the unpaid household chores and care work rendered by women in the Philippines. What do we do with that information? In the input-output balance of economic production, who should pay for this “unaccounted” estimated 20% of GDP? Sociologist Constance Gager must have half-joked when she said, “We might make a start by asking husbands to pay their wives who stay home an actual salary that’s taxable. Those taxes on that amount could help pay for other women whose husbands are not so wealthy” (Ibid.).

The Asian Development Bank analyzed the unpaid work of women in the Philippines: “There is a strong gendered division of domestic labor with women having primary responsibility for household and care work and a higher total work burden relative to men. In the Philippines, women provide 84% of the total household time allocated to child care. Gendered social norms contribute to women having greater responsibility for, and time commitments to, domestic and unpaid care work, and this has been slow to change despite women’s increased participation in, and time allocated to, paid work. Relatively high fertility rates continue to raise the demand for women’s unpaid labor, especially given the low provision of child care services” (ISBN 978-92-9254-403-4, adb.org 2013).

In the matriarchal society of the Philippines, the family, which is the core social unit, is ruled and nurtured by the women. There are about 28.5 million Filipino women between the ages of 15 and 64 (UN factbook Dec 4, 2015), which includes those in the child-bearing years and those who are already mothers of at least two generations. There were about 20 million households in the same census year 2010 (psa.gov.ph Aug 30, 2012), which number we could borrow to extrapolate the number of mothers, assuming there is a mother in each household of 5 persons.

A side story: a widow left with minor children is appointed by the courts as guardian and administrator of the children’s share in the deceased’s estate (half of the conjugal property goes to equal shares to the heirs — to the wife and each child). Among the duties and responsibilities of the surviving spouse is to feed, clothe, shelter, educate and keep the minor children healthy — all of which need money. Thus, the court would require that surviving spouse would make a yearly accounting of the expenses for rearing the minor children, deductible from the share of the children. That is ridiculous, a young widow said. She waived her right to be “reimbursed” for caring for her own children, orphaned too early. Scandalous and irreverent to charge for love.

No, the household chores and care work willingly rendered by women for their loved ones cannot be dehumanized and downgraded to a monetary value for exchange in the production line of capitalist GDP. Better to uphold mothers’ loving sacrifices by positive recognition in a Quality of Life or perhaps a Happiness Index.

Happy Mothers’ Day!

 

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

DMWAI Q1 earnings up 9%

D.M. WENCESLAO & Associates, Inc. (DMWAI) grew its earnings by 9% in the first quarter, thanks to strong revenues from its office leasing business.

In a regulatory filing, the listed property developer reported its net profit attributable to equity holders of the parent company stood at P507.1 million, higher than the P466 million recorded a year ago.

This was supported by a 12.6% growth in revenues to P596.6 million during the period, which was attributed to “higher office lease rates and increased percentage of residential project

Recurring revenues, which accounted for 83% of the total revenues, jumped 9% to P493.9 million. This included rentals from land, building, and common use service area fees.

By segment, leasing of land went up 4% to P255.2 million, while rentals of buildings rose by 16.8% to P193.5 million from P165.6 million.

Sale of residential condominiums increased ninefold to P100 million in the January to March period.

DMWAI said that even though no new commercial buildings are to be completed this year, the office leasing segment showed double-digit growth due to “solid underlying pricing of negotiated lease renewal rates.”

Aseana One, which was completed in 2012, saw a 40% year-on-year increase in average lease rates to P870 per square meter (sq.m.) from P620 per sq.m.

“Current and long-term trends continue to move our way and we are positioned to capture the opportunities behind them,” Delfin Angelo C. Wenceslao, chief executive officer of DMWAI, said in a statement.

“Our residential segment will remain the main growth driver for the rest of the year following the steady progress of our project completion and ongoing pre-selling activities. As of April 30, our pre-sales of MidPark Towers have reached P3.6 billion from P2.8 billion reported in mid-February. Growth momentum will also come from land sale,” he added.

During the quarter, the company began building two new projects, Parqal and MidPark Towers, which are both located in its flagship project, Aseana City in Parañaque City. — Vincent Mariel P. Galang

Choices have a cost

By Tony Samson

PAUL SAMUELSON, Nobel laureate in Economics, and the author of the basic textbook, Economics (first published in 1948 with at least 19 editions since then) which we used when I was taking up the course in college, explained economics simply as the allocation of scarce resources, using the famous two choices of guns and butter and the trade-off this process implies.

Behavioral economists too define the dismal science as one about making choices, introducing only emotions and imperfect information.

The consumer is always confronted with choices — lease or own, stocks or bonds, acquire or partner, produce or outsource, create or curate content, and the various permutations of combo meals.

The concept of “opportunity cost” puts a value on the discarded option. It deals with the quantified benefit that is lost in making a specific choice, the next best alternative foregone along with its present and future consequences.

The choices can be purely economic, as in taking early retirement at age 50 and getting a lump sum exit pay, especially if enhanced. The discarded option then is to continue working until mandatory retirement and the cost of foregone future payroll, bonuses, and health care coverage.

As in all economic theories, certain assumptions are implied in this not-so-theoretical choice of working or retiring. Is this a voluntary choice where either option can be realistically selected? Maybe, the operative theory is not opportunity cost but making the best of an inevitable situation, or what non-economists call, “putting lipstick on a pig.” Yes, it still farts.

And are choices reversible? If one opts to retire, can he six months afterwards decide to work again and make retirement the discarded option whose opportunity cost consists of unread books that must be written off and trips that can no longer be taken.

Choices are seldom equally accessible. Few, for example, are offered the choice between being a brain surgeon or a concert tenor. Opportunity cost is irrelevant when we are not eligible for either alternative due to a lack of talent or brains.

One TV program starkly illustrates the concept of opportunity cost. Choosing which briefcase to open is not much of an analytical process, except where one of the attaché girls is so fetching that she is left for last. Here is a perfect example of opportunity cost. Choosing among fewer and fewer briefcases provides instant feedback on the wisdom (or folly) in picking which to open. In the final selection between the previously selected case and the last one left on stage, the banker offers a known quantity to match against an unknown one. The host makes sure the contestant finds out the amount (and opportunity cost) of the lost option which can cause either jubilation or misery.

Choices too are seldom static. The relative values of two options may change with time as the foregone benefit becomes blurred. In selecting a life partner among eligible mates, the more desirable target may make her own selection — the handsomer one. The consolation prize one settles for may turn out to be the bigger prize when the original choice eventually becomes a weight lifter, at a circus. The cost of a foregone option seldom stays constant and can therefore be hard to quantify.

Once a choice is made, it is unproductive to look back and make calculations on the second choice. The unpicked choice ceases to exist and should no longer figure in any rational discussion except in hindsight. Is it useful to cry over and compute the price of spilled milk?

Robert Frost in 1916 wrote “The Road Not Taken.” He was not thinking of opportunity cost. It is not too fanciful to surmise that poetry here gave birth to an economic concept. The first lines introduce the economic dilemma: “Two roads diverged in a yellow wood/ and sorry I could not travel both/ and be one traveler…” Frost too understood the dynamics of taking one particular option — “knowing how way leads on to way/I doubted if I should ever come back.”

Elections too are about choices being made. Picking 12 (or eight) out of 76 names, not counting the 70 considered nuisances, and one who withdrew for health reasons means leaving out the rest. It is not certain what the costs (or benefits) are even after the terms of the declared winners end…and a new set takes their place. Some costs cannot be quantified even by economists.

 

Tony Samson is Chairman and CEO, TOUCH xda

ar.samson@yahoo.com

PAL operator trims loss in Q1 as fuel costs decline

AFTER a challenging 2018, local airlines are showing signs of recovery, with both Philippine Airlines (PAL) and Cebu Pacific recorded a growth in passenger volume during the first three months of 2019.

PAL Holdings, Inc., the listed operator of the flag carrier, trimmed its attributable net loss to P838.17 million during the January to March period, from the P1.11- billion attributable net loss it booked in the same period last year.

PAL’s consolidated revenues grew 7.2% to P39.27 billion, driven by the passenger volume increase brought by additional flight frequencies and new routes.

Consolidated expenses of the flag carrier were flat at P36.81 billion, with flying operations still the biggest contributor at P19.15 billion, albeit 3.4% lower than last year’s P19.82 billion.

PAL said the lower flying expenses was due to the decrease in jet fuel prices.

“Fuel costs dropped by 10.2% due to the decrease in average fuel price per barrel from $88.36 in 2018 to $85.04 in 2019 partially offset by the increase in fuel consumption as a consequence of increase in number of flights operated,” the company said.

Reservation and sales costs of PAL increased 17.9% to P444.41 million because of the higher credit card services fees and booking fees from the increase in passenger volume. Maintenance expenses also grew 8.2% to P5.12 billion due to the arrival of new aircraft that started in the second quarter last year.

Meanwhile, Cebu Pacific operator Cebu Air, Inc. reported its net income has more than doubled in the January to March period to P3.43 billion from P1.44 billion in the same period in 2018, thanks to higher passenger and cargo revenues.

Total revenues climbed 16% to P21.18 billion, driven by a double-digit growth in passenger, cargo and ancillary revenues.

Passenger revenues grew 14.6% to P2 billion for the January to March period.

“This increase was mainly attributable to the 8.5% growth in passenger volume to 5.289 million from 4.876 million last year as the Group added bigger A321 aircraft to its fleet. The increase in average fares by 5.7% to P2,965 for the three months ended March 31, 2019 from P2,805 also contributed to the increase in revenues,” Cebu Air said.

Cargo revenues rose 12.7% to P162.86 million, while ancillary revenues jumped 22.7% to P750.54 million.

The company saw an 8.4% increase in operating expense in the first quarter to P17.35 billion.

“The increase was driven by its expanded operations, growth in seat capacity from the acquisition of new aircraft and the weakening of the Philippine peso against the U.S. dollar…,” Cebu Air said in a regulatory filing.

The Philippine peso depreciated to an average of P52.36 per US dollar during the first quarter, versus the average of P51.49 per US dollar last year.

Flying operations expenses went up 3.8% to P7.173 billion for the three months, mainly due to the increase in pilot training costs.

“Fuel expense was also higher due to the 7.9% increase in fuel volume offset by lower average published fuel MOPS price of $76.50 per barrel for three months ended March 31, 2019 from $79.99 per barrel in 2018,” the Gokongwei-led carrier said.

Depreciation and amortization costs grew 29.9% to P2.24 billion due to the arrival of several new aircraft that started in 2018: six A321 CEOs (current engine option), three ATR 72-600 and one A321 NEOs (new engine option). — Denise A. Valdez

Hyundai Asia Resources hopes to decide on plant expansion before end-2019

HYUNDAI Asia Resources Inc. (HARI) said it will decide by yearend whether or not it will push through with a P5-billion plant expansion.

“We don’t have any definite decision yet. We’re still conducting all the studies,” HARI Chief Executive Officer and President Ma. Fe Perez-Agudo said in a May 1 interview in Taguig City.

“Hopefully we’ll see by the end of this year what our final direction will be,” she added.

In early 2018, the Korean car maker’s official Philippine distributor said it has allocated P5 billion over the next five years for assembly operations. This was expected to boost HARI’s capacity to up to 50,000 units annually.

Last year, HARI sold 35,401 units, down 6% from 2017’s 37,678 units. The company expects 2019 sales to grow by 13-27% to 40,000-45,000 units, amid easing inflation rate, increased government spending, and higher consumer spending due to the elections.

In the first three months of this year, HARI saw a 12.5% sales increase to 9,949 units, driven by the commercial and light vehicles segments and new passenger car models.

The company launched its first assembly center in Sta. Rosa, Laguna last 2017.

Trade Undersecretary for Industry Development and Trade Promotion Group Ceferino S. Rodolfo said the Philippines had been trying to entice the South Korea-based Hyundai Group to establish an assembly plant for e-vehicles in the country.

Negotiations for a free trade agreement with South Korea is expected to attract more Korean investments, according to Mr. Rodolfo.

The two countries are targeting to conclude negotiations by November. — Janina C. Lim

How PSEi member stocks performed — May 10, 2019

Here’s a quick glance at how PSEi stocks fared on Friday, May 10, 2019.

 

ERC reviewing norms for allowable levels of power plant outages

THE Energy Regulatory Commission (ERC) said it is reviewing the number of unscheduled outages that power plants are permitted over a year, which will seek to benchmark against the outage rate allowed in other jurisdictions have adopted.

ERC Commissioner Catherine P. Maceda said the agency has reviewed existing power supply agreements (PSAs) and it has provisions on outage allowance under the contracts forged between generation companies and distribution utilities.

“But we feel na ’yung beyond the outage allowance na nakalagay sa mga kontrata ay ’yun ho siguro karapat-dapat lang na hindi i-charge sa consumer kun’di du’n sa genco na hindi nakapag-deliver,” she said.

(But we feel that those that exceeded the outage allowance under the contract should not be charged on consumers, but on the generating company that failed to deliver.)

At present, the obligation to provide replacement power depends on the provisions of the PSA between a distribution utility and a generation company, and on the kind of outage that occurred.

The duration of the outage allowance in a year is also agreed between the contracting parties, including those for planned and unplanned outages.

Based on the ERC review, the maximum outage allowance ranges from 45 to 60 days on an annual basis. The agreed PSAs also provide for the cost arrangements if the outage is within the agreed number or beyond.

“We’ve mapped out all these contracts,” Ms. Maceda said.

The result of the review will be used in the rules on competitive selection process, which the ERC is drafting. Annexed to that draft is a template on PSAs.

“[The template will have] the minimum provisions that we expect to find in a power supply agreement, including provisions for replacement power, including provisions for how much allowance should ideally be,” she said, adding that the rules will include provisions on penalties.

“It’s ERC actually that can impose such sanctions and penalties,” she said.

“Again this is a template. The parties concerned under a free market principle are free to negotiate the specific terms of their agreement. But definitely, hindi na po manghuhula kung ano ang outage allowance na dapat i-develop. (there will be no guesswork involved in estimating the outage allowance) There’s already a basis,” Ms. Maceda said. — Victor V. Saulon

Toyota unveils new Avanza

Words and photos by Kap Maceda Aguila

PUERTO PRINCESA, PALAWAN — Toyota Motor Philippines (TMP) unveiled last Thursday the refreshed version of its popular multi-purpose vehicle (MPV), the Avanza. The new iteration banners a sportier look, reworked dashboard with a new infotainment system, and more safety features.

In her speech delivered on the first night of Toyota’s annual Road Trek media ride and drive, TMP First Vice-President for Brand and Product Planning Cristina Arevalo said: “This year, TMP is among the first in the Southeast Asian region to launch the new Avanza,” and called it “a vehicle choice for the young, starting families, or those on the lookout for the best value without sacrificing style. These are two most important factors that we kept in mind when bringing together its new form.”

The seven-seat Avanza was first introduced in the Philippines in 2006. Close to 100,000 units are currently in private and commercial use.

The newest Avanza receives a front-fascia reworking through new split-type LED headlamps and front fog lamps flanking its dark front grille. The Veloz and G variants are fitted with a pair of side mirror-integrated turn signal lamps. New alloy wheels, a sporty rear design, and a fin-type antenna complete the exterior changes.

A high-grade 6.8-inch touchscreen infotainment system, similar to the head unit found in the RAV4 and Camry, also finds its way to the new Avanza. It bears high-resolution K2 technology audio enabling two-phone hands-free and five-phone music streaming. Mirroring is also allowed with smartphones using the T-Link App; and accessory connectors are located in the front and back rows. The air-conditioning display is now digital.

“The best part is that in the 1.5-liter variants Veloz and G grade, customers will get the new features without any price increase,” added Ms. Arevalo.

The flagship Veloz model comes in an exclusive Dark Red Mica Metallic color. The Avanza is also available in Dark Blue SE, Black Metallic, Gray Metallic, Silver Mica Metallic, Beige Metallic, and White.

Suggested retail prices is as follows: 1.5 Veloz A/T (P1.065 million), 1.5 G A/T (P1 million), 1.5 G M/T (P957,000), 1.3 E A/T (P907,000), 1.3 E M/T (P864,000), and 1.3 J M/T (P731,000). The Avanza is available nationwide through TMP’s 69-strong dealership network.

Beverage industry to be audited over sugar tax collection shortfall

THE DEPARTMENT of Finance (DoF) said it will pursue an audit of the beverage industry after missing collection targets for Sugar-Sweetened Beverages (SSBs) in 2018, to validate whether users of highly-taxed corn syrup did indeed switch to sugar as claimed.

In a report on revenue performance under the Tax Reform for Acceleration and Inclusion (TRAIN) Act, the DoF said producers of SSBs have claimed that they stopped using High-Fructose Corn Syrup (HFCS) entirely since Jan. 1, 2018, with the effect that they paid the lower excise tax on sugar-sweetened products of 6% rather than the 12% prescribed for HFCS-sweetened products.

One way to verify whether such a shift to sugar took place, the DoF said in its report, is to check whether producers filed the necessary paperwork to reformulate their products to use sugar, the DoF said, adding that the Bureau of Internal Revenue (BIR) is currently auditing producers in cooperation with the Food and Drug Administration (FDA), with which reformulation applications must be filed before firms can legally market products after a switch in ingredients.

The DoF estimated the shortfall in SSB excise at P11.9 billion.

An even bigger drag on performance, the DoF said, was value-added tax (VAT), where the shortfall was P31.5 billion. It quoted the Bureau of Customs (BoC) as saying that only eight industries and government entities were the source of VATable imports. It identified the marginal sources of VAT as the power transmission and jewelry industries, as well as government entities like the Philippine Sports Commission, the Armed Forces of the Philippines, the People’s Television Network, the University of the Philippines, the National Museum, and the Bangko Sentral ng Pilipinas.

It said the main source of incremental VAT revenue was interest liabilities of the Philippine Deposit Insurance Corp.

It added than when “second-round consumption effects” are considered — the increased consumption caused by higher disposable income as a result of TRAIN — the DoF recouped more VAT from stores and restaurants, such that the VAT shortfall is effectively only P11.6 billion.

It said overall performance of VAT reflected the decline in marginal TRAIN-related items, missing targets by P68 billion in 2018.

Overall, the DoF said TRAIN-related revenue in 2018 beat the target by 8.1% at P68.4 billion, with the BIR beating its TRAIN target by P10.6 billion and the BoC missing the goal by P5.5 billion.

It said post-TRAIN income tax collections fell by less than expected — P111.7 billion, against the projected P146.6 billion, due to greater compliance, an increase in registered taxpayers and the creation of more jobs.

Also beating the targets were the auto excise tax, beating the goal by about P6.2 billion, tobacco excise, by P5.6 billion, and documentary stamp tax by P4.7 billion.

“Overall, TRAIN revenue exceeded its targets, providing additional public resources for infrastructure and human capital development programs. We expect the performance to be sustained in the coming years,” the DoF said.

BWORLD TEST: MG ZS AT Alpha

By Manny N. de los Reyes

MG is a British sports car maker that dates back to 1924. Its halcyon years were the 40’s through the 70’s, when it came out with some of the most iconic roadsters of the time. These included the immortal MG TC, TD and TF of the 40’s and 50’s, followed by the MGA, MGB, MGB GT coupe, and MG Midget from the 60’s through the 80’s.

Financial troubles saw the brand being transferred from one new owner to another in the 90’s, with various British companies (and even BMW in 1994) stepping in to try to save the marque with the octagon badge from insolvency.

It wasn’t until Chinese conglomerate Shanghai Automobile Industry, Inc. (SAIC) took over the brand in 2005 that MG experienced a renaissance. In 2011, the company, now called MG Motor, launched a new model, the MG 6, which became the first new-generation MG available in the UK since the MG TF more than half a century ago.

MG is now sold in Australia, China, South America, Thailand (where it quickly became a best-seller), South Africa, the UK — and now the Philippines, by Chevrolet’s local distributor, The Covenant Car Company. And the model that’s spearheading the British brand invasion is the MG ZS — a compact front-wheel drive crossover tailor-made for SUV-crazy Filipinos.

The MG ZS sports contemporary styling that features “London Eye” headlights with LED daytime running lights, a Mercedes-Benz-like “Stardust” grille, and LED taillights. Size-wise and in silhouette, the ZS is closest to the previous-generation Hyundai Tucson and the current Mazda CX-5, especially in the execution of the large upright grille and the rearward-pointing arrowhead-shaped quarter windows. Handsome alloy wheels are generously sized 17-inchers wrapped by 215/50 tires.

The ZS is powered by a smooth and vibration-free 1.5-liter naturally aspirated engine that produces 114 horsepower and 150 Nm of torque. Modern driver-assist features include a reverse camera, ABS, Cornering Brake Control, Brake Assist, Electronic Brakeforce Distribution, Hill Start Assist, Tire Pressure Monitoring System, and a Traction Control System.

Some might rue the use of a four-speed automatic instead of the more advanced five- or six-speed automatics, but given the sub-P1 million-peso price point, it’s an acceptable compromise. Besides, with traffic nowadays, it’s very rare we even reach fourth gear (in both manual and automatic gearboxes). And I’d take a four-speed auto over a droning and boring CVT or jerky dual-clutch manumatic (like in the old Ford Ecosports).

Inside, the ZS is liberally covered in soft-touch materials. The interior is comfortable and ergonomic, featuring easy-to-reach controls and abundant storage areas. It also sports an 8-inch LCD infotainment system with Apple CarPlay so you can stay connected while keeping both hands on the wheel. Build quality as well as fit and finish are surprisingly very high. There is absolutely no evidence (or even a hint) of cheap manufacturing or craftsmanship.

The top-of-the-line AT Alpha variant that we tested might represent a ton of value at P998,888 (the midrange AT Style goes for P868,888), but the ZS range actually starts at an irresistible P818,888. This is solid value for the money, even for a relatively new and unproven brand.

MG owners should have easy access to after-sales services, even as the dealer network is established, to ensure that all their needs are met. A string of independent, MG Philippines-accredited service outlets will be made readily accessible for MG owners, while a “Mobile Garage” service caravan, which comes online this January, will offer regular preventive maintenance servicing in the convenience of your garage.

MG Philippines is also implementing a host of other innovative service platforms including “One-Hour Max and Go,” which refers to a speedy, one-hour basic maintenance service procedure; a customer care hot line that is available 24/7; “MG HERO Services,” which offers 24/7 roadside assistance; and “Mobile Gadget,” which allows users to pair their MG to a proprietary smartphone app so that they can closely monitor their car’s running stats, and allow them to schedule an appointment online from the convenience of their phone for periodic maintenance. And on top of that, and every brand new MG car will come with a 5-year or 100,000-km warranty.

Priced like a subcompact crossover but sized closer to a compact SUV, the MG ZS has the space, performance, build quality, styling, and equipment to take on any of its size and price rivals — and come out the winner.

PHL rice imports seen dropping on strong inventories, production

THE PHILIPPINES is expected to reduce its rice imports due to ample inventories and increased production forecast for 2019/2020, the US Department of Agriculture (USDA) said.

In its Grain: World Markets and Trade report for May 2019, the USDA noted that it expects Philippine rice inventories to rise with better production, forecasting that in 2020, rice imports will decline by 100,000 tons to 2.7 million metric tons (MT).

“The quantitative restrictions on rice imports have been replaced with tariffs, with a tariff advantage for the Association of Southeast Asian Nations member countries,” it said.

This year, the Rice Tariffication act was signed into law. It aims to bring down the price of rice by importing foreign grain more freely. Tariffs that will be collected from the scheme will be used to fund upgrades to the rice industry.

According to the Philippine Statistics Authority (PSA), in the third week of April, the average farmgate price of palay, or unmilled rice, fell 1.12% from the previous week to P18.48/kg.

The average wholesale price of well-milled rice fell 0.25% week-on-week to P39.91/kg, while the average retail price of well-milled rice fell 0.25% from a week earlier to P43.68/kg. Expectations of cheap imports are pressuring domestic prices, affecting farmer incomes ahead of full-on importation.

In March, the agency estimated imports of rice of $82.860 million, up 668% from a year earlier.

The USDA said wheat imports to the Philippines are “projected unchanged at 7.0 million tons and remain at record-large (levels) with strong growth in both food and feed use.”

In March, the PSA estimated wheat imports of $148.479 million, up 51.3% from a year earlier. — Vincent Mariel P. Galang

CTA upholds Air PHL refund ruling

THE Court of Tax Appeals (CTA) affirmed a May 2017 decision ordering the refund of excise taxes paid by Air Philippines Corp. (APC) on its importation of aviation fuel worth P235.6 million.

In a 36-page decision on May 2, the CTA, sitting en banc, denied the appeal of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BoC) seeking to overturn a 2017 decision by the CTA second division, which ruled that APC is entitled to the refund of the excise taxes it paid between May 2003 and December 2004 for Jet A-1 fuel.

“After a judicious review of petitioners’ arguments and the record of the case, the Court En Banc finds no reason nor rhyme to modify much more reverse the assailed Amended Decision and Resolution of the Court in Division,” it ruled.

“It is evident that the arguments raised by both the CoC (Commissioner of Customs) and the CIR (Commissioner of Internal Revenue) have already been adequately addressed and passed upon by the Court in Division in the assailed Amended Decision and Resolution,” it added.

The court’s second division on May 8, 2017 ruled in favor of APC, saying the company satisfied all requisites for exemption from taxes pursuant to its franchise as it proved that the imported fuel was used for flight operations and other activities and that during the time of the importation, the Jet A-1 fuel was not locally available in reasonable quantity.

The CTA, in the decision, discarded the claim of the BIR and the BoC that APC failed to prove that the imported Jet-A fuel was not locally available in “reasonable quantity, quality, or price,” as the company submitted certifications issued by the Air Transportation Office (ATO) to support its claim.

ATO, according to its charter, is tasked to cooperate on any research and technical studies on “air navigation facilities including aircraft fuel and oil,” among others.

“The foregoing mandate negates the CIR’s contention that only the DoE (Department of Energy) could best determine the local availability in reasonable quantity, quality and price of the subject Jet A-1 aviation fuel,” the court said.

It also rejected the claim of the BoC that the court does not have jurisdiction over the allegedly erroneously-paid excise taxes of APC as the customs bureau has authority over matters involving duties and taxes on imported goods.

The CTA said that under the Tax Code, a taxpayer should file a claim for refund with the BIR within two years after its payment and no claim should be entertained in the specialized court unless the claim has been filed with the commissioner.

“Anent CoC’s contention that respondent committed intentional forum shopping, suffice it to say that the CoC is merely acting on a delegated authority given by the CIR. In fact, when the CoC failed to render a decision on respondent’s protest, and the 2-year prescriptive period under Section 229 of the NIRC (National Internal Revenue Code) of 1997, as amended, was about to end, that respondent filed its administrative claims for refund with the BIR, and subsequently with the CTA,” it said.

It also said that the Supreme Court previously said that when the two-year prescriptive period is about to expire, a taxpayer may not wait for the decision of the BIR “for purposes of judicial intervention.” “In fine, respondent cannot be faulted for complying with the mandated requisites under the law and taking the appropriate action to avoid the lapse of the 2-year prescriptive period.”

The decision was written by Associate Justice Esperanza R. Fabon-Victorino and concurred in by Presiding Judge Roman G. Del Rosario and Associate Justices Juanito C. Castañeda, Jr., Erlinda P. Uy, Cielito N. Mindaro-Grulla and Ma. Belen Ringpis-Liban. — Vann Marlo M. Villegas