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Ang expects to spend P10 billion for bus terminal

SAN MIGUEL Corp. (SMC) said it may spend around P10 billion for the construction and operation of a proposed bus and food terminal on the site of the former Pandacan oil depot.

During a media roundtable on Tuesday, SMC President and Chief Operating Officer Ramon S. Ang said the amount covers the overall cost to develop the terminal.

The Pandacan oil depot previously hosted the facilities of Petron Corp. Pilipinas Shell Petroleum Corp., and Chevron Philippines, Inc. The property is owned by the state-owned Philippine National Oil Co.

“(SMC) intends to submit an unsolicited proposal to the Department of Transportation for the construction and operation of a bus and foot (sic) terminal at the NLEX-SLEX Connector Road that will allow provincial buses and UV Express vans to drop off passengers to decongest traffic at the Epifanio Delos Santos Avenue,” the listed company told the stock exchange on Monday.

Mr. Ang earlier said that the terminal will be built over the Skyway Stage 3, a road currently being built by SMC’s unit, Citra Central Expressway Corp., which will connect the South Luzon Expressway from Buendia in Makati City, and North Luzon Expressway in Balintawak, Quezon City.

The planned bus and food terminal, according to Mr. Ang, will be similar to an “airport terminal” where safety and security is ensured.

The terminal is expected to open by December 2019.

To recall, in 2017 Mr. Ang bared plans to convert the oil depot into a food terminal where agriculture products will be sold at lower prices. — J.C.Lim

Microsoft, no longer open source ‘Great Satan,’ woos skeptics to push growth

IN 2014, Microsoft Corp. cloud chief Scott Guthrie wrote up a proposal to acquire GitHub Inc. Then he filed the plan away in a drawer. Every once in a while he’d take the plan out and look at it, and then return it to the cabinet.

Guthrie felt Microsoft just wasn’t ready to acquire the popular open-source company — a widely used digital hive where millions of software programmers collaborate on, share and store code. “We would have screwed it up,” Guthrie said. What’s more, developers — many of whom viewed Microsoft as public enemy No. 1 for its attacks on freely distributed open-source software — would have rioted.

“The open-source world would’ve rightly looked at us at the time as the antichrist,” he said. “We didn’t have the credibility that we have now around open source.” The company was still largely focused on its own software, completely created in-house and owned by Microsoft.

Since then, Microsoft has turned itself into one of the biggest developers of open-source software and has persuaded customers to trust applications built using rival tools and programs to Microsoft’s Azure cloud-computing service, boosting Azure revenue and usage. More than 60 percent of the company’s team that works with cloud-app developers were hired for their expertise in non-Microsoft programming tools or cloud services. A full version of the open-source Linux operating system is even being added to Windows. The efforts are bringing new software builders to the Microsoft camp.

Last June, Guthrie and Microsoft Chief Executive Officer Satya Nadella finally unveiled an agreement to acquire GitHub. While there was still some initial agita in the developer community and rivals gained some refugee users from GitHub, one year later the deal is noteworthy mainly for how little drama it’s caused. Most GitHub users just continued putting their code there.

“Some people were upset, but few, because Microsoft had spent years building up goodwill with the open-source community,” said Matt Asay, an Adobe Inc. senior director who is a longtime open-source developer and previous Microsoft opponent. “There was a knee-jerk sort of ‘remember, they’re the Great Satan’ reaction, but it was halfhearted.”

Appealing to a wider swath of developers is important for Microsoft’s growth prospects. Tools and software that help engineers write programs generate a small portion of Microsoft’s revenue, dwarfed by units like cloud services and Windows — but they lure users to the bigger businesses. Winning over software developers is key to getting them to write apps from games to business software that dovetail with Microsoft products or that are housed in Microsoft’s Azure cloud. Developers’ hearts and minds have also been key to Microsoft’s revived reputation as a technology leader.

“There are more developers today that Microsoft is being relevant to,” said S. Somasegar, managing director at Madrona Venture Group who spent 27 years at Microsoft, including running the developer division when it began increasing its focus on open source.

Five years ago, the company was far more insular. When Nadella took over as CEO in 2014, more than a decade of developer defections had left the company in a weak position. Microsoft had been unable to rally engineers to build apps for its phones and tablets. The biggest start-ups were built on open-source tools, and growing young companies like Uber Technologies Inc. and Airbnb Inc. chose Amazon.com Inc.’s cloud.

The mass defection of software developers represented a dramatic reversal of fortune for a company that was founded in 1975 as a developer tools company — Bill Gates and Paul Allen’s first products were languages meant to enable coders to program early home computers. Later on, the Windows operating system’s dominance meant everyone wrote programs for it. But even as video surfaced in the early 2000s of then-CEO Steve Ballmer working up a sweat onstage cheering for “developers,” the company was losing them in droves. The rise of internet-based computing and later mobile phones pushed programmers to other languages and mobile app stores. Microsoft executives termed the increasingly popular Linux and open-source tools a “cancer” and an anathema to the “American Way,” angering an entire community of engineers, including people like Asay.

“Our investments were really Windows-only,” said Julia Liuson, who runs Microsoft’s Visual Studio products, which are used to develop software, applications and web sites. By 2012, developers told her they no longer looked to Microsoft to provide them with programming languages and end tools. “You got this really clear sense that we were their past but not part of their future.”

After Nadella replaced Ballmer, Microsoft began releasing some key products — including one of Liuson’s Visual Studio programs — under an open-source license, so any programmer could use and make adjustments to it. Nadella also wanted to boost Azure usage by recruiting Linux devotees. They weren’t in a forgiving mood. Microsoft engineers frequently found themselves unwelcome at the table — literally. Liuson sent a delegation to a Linux conference a few years ago. When they sat down at the lunch tables, existing occupants scattered at the sight of their Microsoft badges, she said.

Microsoft tried to reboot the entire way it works with developers, starting with a basic but arcane part of the relationship — the reams of highly technical articles about products, which include sample code and blueprints for interested engineers. To overhaul these instruction manual-type documents, Guthrie brought back Microsoft veteran Jeff Sandquist, who had started his career in 1997 on the company’s telephone support hotline for software developers and decamped for Twitter Inc. in 2013. Upon his return, Sandquist worked to make the articles fresher and more accurate, with more technical depth. He bolstered Microsoft’s ability to write documentation for developers working with Java, Python and Linux — all of which had gained prominence as Microsoft’s tools faded. Without clear and compelling documentation for a wider array of systems, Microsoft couldn’t hope to gain credibility with developers, Sandquist said.

Next, Sandquist began to set up a team of experts who could reach out directly to cloud-app developers to get them to reconsider Microsoft. The company has always reached out to developers, but this time, in a Microsoft now embracing open source and trying to lure a wide array of engineers to use Azure, Sandquist’s new team would have to include top experts spanning the full range of non-Microsoft technologies.

“We hired a number of people where the first day they were using Azure was probably their second day at Microsoft,” said Sandquist, who is now general manager for developer relations.

Sandquist aimed to create a diverse team in several respects: expertise, gender, race and location — unlike many other technical teams, much of it is based outside the company’s headquarters in Redmond, Washington. He hired people like Emily Freeman, then a Washington DC-based ghostwriter for tech entrepreneurs, who underwent a “slightly more than quarter-life crisis” and switched to coding despite having no prior programming experience. With a baby daughter, she moved to Denver and learned the web application framework Ruby on Rails, ending up as a developer-relations expert. The role let her blend newly gained coding skills with her older talent for communication, she said, providing technical information to developers, answering their questions and relaying their needs and concerns back to her employer.

About two years ago she heard Microsoft was looking for people like her for its cloud advocacy team — experts in areas outside its core.

“Developers are skeptics by nature — the majority of people have started to take notice, but a lot of people are still in that phase where they still want a little more proof,” she said.

Some customers are talking notice. Adobe, where Asay works, is an Azure customer that uses Java and Red Hat Linux. So is Maersk, the shipping giant. Carlsberg, the beer maker, has some of its Azure applications running SUSE Linux, and the same goes for Coke One North America, which handles the technology for North American Coca-Cola bottlers. GitHub, which hosts code for companies large and small, will continue to be a barometer of developer feelings about its parent company. Since Microsoft’s deal for GitHub, other tech giants have also sought out ways to get closer to the open source community’s roots. When International Business Machines Corp. agreed to buy Linux developer Red Hat Inc. for $33 billion last year, it raised some similar concerns for developers, even though IBM has been working on Linux projects for two decades. In announcing the acquisition, IBM took pains to assure developers that it would remain committed to Red Hat’s open-source work. So far, Microsoft has done little to interfere with GitHub. Like Microsoft acquisition LinkedIn, GitHub has its own CEO and is run independently. The prevailing management ethos seems to be to try to add features users appreciate — for example, making some private code repositories free to host — while not messing with anything they did like. Last week, GitHub announced a system that lets people fund their favorite GitHub contributors — a sort of Patreon for coders.

GitHub CEO Nat Friedman has instructed his team that the needs of GitHub customers come first, even if they conflict with Microsoft’s desire to promote its other products. In November, Friedman went to his first AWS re:Invent, the flagship cloud conference of Microsoft’s biggest rival Amazon, to sit alongside Amazon cloud officials and meet with joint customers. He’s also inked a closer deal with Google Cloud. Still, rivals GitLab and Bitbucket, owned by Atlassian Corp., say many GitHub users have decamped for their sites: Bitbucket said the day after the Microsoft deal was announced was its biggest sign-up day ever, while GitLab says it gained about 113,000 code repositories that were moved from GitHub.

Friedman says his company has grown, too. In the almost 12 months since Microsoft’s $7.5 billion purchase of the site was announced, the number of registered developers that called the site home has risen to 36 million from 28 million.

There are customers who worry that, over time, GitHub will slip more into Microsoft’s shadow. Reza Zadeh, CEO of Matroid, an artificial intelligence company that competes with Microsoft, is still happily using GitHub — but Microsoft’s ownership does make him a little uneasy. He assumes in the future GitHub will be somewhat more aggressive about encouraging users to choose Azure.

GitHub will have to fight that tendency, CEO Friedman said.

“GitHub has to be neutral and GitHub has to be independent,” he said. “Developers want choice. GitHub can’t have any favoritism.” — Bloomberg

Happy Birthday Your Majesty!

ELIZABETH II, Queen of the United Kingdom, was born on April 21, 1926, as the eldest daughter of the then-Duke and Duchess of York, the future King George VI and Queen Elizabeth. Born during her grandfather George V’s reign, she was born third in line to the throne, then her father ascended the throne in 1936, after her uncle, King Edward VIII, abdicated to prevent a constitutional crisis in his desire to marry divorcee Wallis Simpson.

BusinessWorld attended the Queen’s Birthday Party at the Manila Polo Club earlier this week, organized by the British Embassy. The menu was traditional and included Welsh Rarebit, Toad-in-the-Hole, Cumberland Sausage Rolls, Roast Beef (more than 100 kilograms of it), and trifle, ice cream, cupcakes, and a birthday cake.

The British Ambassador to the Philippines, Daniel Pruce said in a speech, “We are here tonight to celebrate the 93rd birthday of Her Majesty Queen Elizabeth II. We pay tribute to her remarkable lifetime of service to the United Kingdom, first as Princess Elizabeth and then as queen since 1952.”

While the Queen was born on April, she officially gets two birthdays: her actual birthday and one usually in June. The tradition of celebrating official birthdays started with one of her ancestors, King George II. Apparently, the queen used to celebrate her birthday on the second Thursday of June, the same day as her father, George VI used to do. The monarch’s birthday has been usually celebrated in June, thanks to another modification by her great-grandfather King Edward VII, who was born in winter and wanted favorable weather for his own birthday celebrations. The schedule has changed since 1959, now she celebrates it on the second Saturday of June, which on this year falls on June 8. The day will be marked in the United Kingdom with the ceremony of Trooping the Color.

“Over the seven decades of her reign, she has seen many changes in the United Kingdom,” said the ambassador in his speech. In her lifetime, the Queen has seen a world war, several conflicts, the creation of the European Union, the transformation of the British Commonwealth, and several reforms in parliament. On more personal notes, there have been children, grandchildren, and great-grandchildren, as well as multiple marriages and divorces within her family. “The United Kingdom will remain a modern, diverse, dynamic country, proud of our past, confident about our future, open to and welcoming of the rest of the world. We will remain an active and energetic member of the international community, advancing prosperity, security, the rule of law, promoting sustainable growth and advocating the rights and principles that we believe in,” said Mr. Pruce. On the then-Princess Elizabeth’s 21st birthday, the future queen made a speech from Cape Town in South Africa. “I declare before you all that my whole life, whether it be long or short, shall be devoted to your service and the service of our great imperial family to which we all belong.” The British Empire is officially gone, replaced by the British Commonwealth. The Queen and her promise live on. — JLG

Peso may rise on dovish Fed comments

THE PESO is seen to strengthen against the dollar for the rest of the week following dovish remarks from the US central bank even as local inflation picked up slightly in May.

The local unit closed at P51.78 versus the greenback on Tuesday, 13 centavos stronger than P51.91-per-dollar finish on Monday and a six-week high as market participants priced in dovish pronouncements from the US Federal Reserve.

“Still possible for stronger peso with strong support at P51.50-51.70 levels, after some Fed officials (Powell, Bullard) already signalled openness for possible Fed rate cut,” said Michael L. Ricafort, Rizal Commercial Banking Corp. (RCBC) economist, in a text message.

On Tuesday, Fed Chair Jerome Powell said in a speech in Chicago that the central bank will “act as appropriate to sustain the expansion” amid robust labor market and inflation within its two percent target.

He added that the Fed is “closely monitoring” the effects of the trade negotiations between the United States and China.

This comes after St. Louis Fed President James Bullard said a cut in interest rates “may be warranted soon” to help re-center inflation at target and provide insurance in case of a sharper-than-expected decline in the economy.

“Regarding the statements from Powell, the market has already priced in or was already expecting the dovish stance from the Fed,” a trader said in a separate text message yesterday.

Meanwhile, RCBC’s Mr. Ricafort said there may be some “slight upward correction” towards the P52-per-dollar level after latest data showing a slight uptick in inflation and the upward correction in some global bond yields.

The Philippine Statistics Authority reported on Wednesday that inflation accelerated to 3.2% in May from the three percent tallied the previous month as well as the 4.6% recorded in May 2018.

The quicker inflation print, which was also faster than the three percent median in a BusinessWorld poll, was driven by higher prices of food and non-alcoholic beverage as well as water, electricity, gas and other fuel costs.

“(This may be) viewed as temporary due to relatively lower inflation base/denominator in May 2019 that led to slightly higher year-on-year inflation,” Mr. Ricafort said.

He added that price increases could start to ease again in the remaining months of the year due to base effects, especially in the third quarter to early fourth quarter.

“There is still risk-off sentiment in the market but generally emerging markets are somehow a place where investors are flocking to as countries being involved in the tensions are the big economies,” the trader added.

For the rest of the week, Mr. Ricafort expects the peso to trade between P51.60 and P52, while the trader said the local unit will likely range from P51.70-P51.90 today.

Local financial markets were closed yesterday for Eid al-Fitr. — Karl Angelo N. Vidal

Internet use lags in Visayas; urban-rural gap narrows — SWS

THE Social Weather Stations (SWS) polling organization said Internet usage remained unevenly distributed in the Philippines, with adoption rates among adults highest in Metro Manila and just over half of the capital region’s rate in the Visayas.

The March 2019 survey also noted that 56% of adults in urban areas are Internet users, down from 62% in the December survey. For rural residents the take-up rate was 38%, up from 37% in the previous quarter.

SWS said Internet users living in Metro Manila accounted for 64% of total residents, up from 59% in the previous quarter. Meanwhile, the take-up rate in Balance Luzon was 48%, down from 56% previously. The Mindanao rate was 39%, up from 32%, and the corresponding proportion for the Visayas was 34%, down from 35%.

The study, conducted in late March, had 1,440 participants. Internet usage among women was 50%, up from 49% a quarter earlier. Meanwhile, some 41% of male respondents said they were Internet users, down from 44%.

SWS found that Internet usage to be highest within the 18-24 age group, with a penetration rate of 86%, followed by the 25-34 cohort at 71%, and 35-44 at 55%.

SWS also reported that Internet use among university graduates was 79%, up from 77% three months earlier. The take-up rates for those with high school educations was 58%, down from 60% a quarter earlier. The corresponding rate for those with elementary-level educations was 33%, up from 31% in the previous quarter.

The survey was conducted through face-to-face interviews with respondents ages 18 years old and above. The study has a margin of error of plus or minus 2.6% for national percentages and plus or minus 5% each for Balance Luzon, Metro Manila, the Visayas, and Mindanao. — Vince Angelo C. Ferreras

Raw sugar output ahead of pace as HFCS usage slows

SUGAR production as of first week of May was up 5% year-on-year with just under four months to go in the crop year, the Sugar Regulatory Administration (SRA) said.

SRA said raw sugar production was 2.025 million metric tons (MMT) after the first week of May, up from 1.926 MMT a year earlier. This is equivalent to 40.52 million 50-kilo bags, compared with 38.52 million a year earlier.

The crop year for sugar starts this September and ends in August 2020.

Demand for raw sugar declined 15% to 1.408 MMT.

Total sugarcane milled fell 3.27% year-on-year to 21.305 MMT.

Refined sugar output fell 3.26% year-on-year to 731,318 MT.

The millgate price fell 10.57% to P1,494.01 per 50-kilo bag. The retail price was estimated at P45 to P50 per kilo.

The SRA has reduced its estimate for sugar production for the crop year 2018-2019 to 2.079 million metric tons from 2.225 MMT previously, with gross tonnage declining and favorable weather producing higher yields.

Early this year, SRA Board Member and Millers’ Representative Roland B. Beltran said that sugar production has been heavily affected by the importation of high fructose corn syrup (HFCS) over the years, and is now beginning to recover as beverage producers stepped up their adoption of domestic sugar to avoid higher taxes on HFCS.

The bulk of the imports of HFCS are from China. The Philippines was China’s biggest market in 2018, exporting 290,080 tons, or half of its export total.

It has been about two years since the SRA stopped approving import applications for HFCS amid worries the imports were depressing sugar prices. At the start of crop year 2016-2017, sugar prices were at P1,720.23 per bag, falling to P1,153.90 at the end of the period. — Vincent Mariel P. Galang

Courier firms enlisted in swine fever containment effort

THE Department of Agriculture (DA) said it is asking courier companies to stop accepting orders to deliver meat products from African Swine Fever (ASF)-affected countries.

In Memorandum Circular No. 7, series of 2019 issued June 3, Agriculture Secretary Emmanuel F. Piñol said the DA is “enjoining all courier services companies to stop accepting canned meat and meat products for shipment if the products came from… ASF affected countries.”

The 18 affected countries are Belgium, Bulgaria, China, the Czech Republic, Hungary, Latvia, Moldova, Poland, Romania, Russia, South Africa, Ukraine, Zambia, Mongolia, Vietnam, Cambodia, Hong Kong, and North Korea.

The Food and Drug Administration (FDA) has ordered a temporary ban on the entry of meat and meat products from ASF-affected countries. FDA Order No. 2018-133 also authorizes the recall and seizure of imported pork from these countries, in response to Department of Health (DOH)-FDA Order No. 2019-046.

In a news conference, Mr. Piñol said that he will be submitting to President Rodrigo R. Duterte on Monday a request for a three-month suspension of pork imports from countries at risk of also contracting ASF.

ASF high-risk areas are those “contiguous to countries which already have ASF cases.”

“I’ve been cautioned (about such a measure) but my answer is what if we are right? Ang problema natin diyan (Our problem with ASF is it’s) irreversible,” he said.

He also noted that there will also be emergency procurement of x-ray machines to inspect all arriving packages.

The Department of Transportation (DoTr) has also agreed to help prevent the entry of ASF by requiring vessels and airlines to certify that they carry no meat from affected countries.

The Bureau of Animal Industry (BAI) was also instructed to deploy 15 dogs trained to detect meat to all ports of entry — Vincent Mariel P. Galang

OWWA signs deal to promote wellness among OFW nurses

THE Overseas Workers Welfare Administration (OWWA) said it is mounting a push to improve the health and wellness of Overseas Filipino Workers (OFWs) and their loved ones, starting with overseas-deployed nurses.

OWWA said as part of its observance of Migrant Workers’ Day, June 5, it signed a memorandum of understanding (MoU) with the Philippine Nurses Association (PNA) to “coordinate efforts to promote health and wellness of OFWs and their families.”

“(T)his MoU will serve as a platform of partnership between the nursing professionals… to support health and medical interventions for OFWs and their families,” according to the MoU.

Under the agreement, OWWA will be responsible for making its programs and services available to OFW nurses and their dependents. It will also provide reintegration services for returning Filipino nurses and also offer psycho-social evaluations and counselling to OFW-nurses and their dependents if necessary.

PNA’s responsibilities under the MoU include providing guidance needed to conduct the Pre-Departure Orientation Seminar of OFW-nurses and also medical and psycho-social assistance to Filipino nurses and their families.

Also on Wednesday, the OWWA said in partnership with Facebook, it will expand its “Digital Tayo” online literacy program to workers in Hong Kong, Singapore, and the Middle East. The three are some of the top destinations for OFWs, with the Middle East accounting a majority of the total population of overseas-deployed workers.

The program was launched in 2018 as part of last year’s Migrant Workers Day observance. During the first year of implementation, the program trained over 140,000 OFWs in digital literacy.

OWWA Administrator Hans Leo C. Cacdac said in a statement Wednesday that the program with Facebook aims to educate OFWs on telling real news from fake.

“We’re glad to be expanding our digital literacy program with Facebook for OFWs based in Hong Kong, Singapore and the Middle East. Our shared vision is an empowered OFW community that would have critical skills to vet information they find online and consistently use privacy and safety tools available to them,” he said.

Facebook Head of Community Affairs for Asia and the Pacific Beth Ann Lim said in a statement on Wednesday, “Facebook will continue supporting OFWs and their families, to ensure they have a positive, safe and authentic experience on our platforms, wherever they are in the world.” — Gillian M. Cortez

Legislators urged to reduce Philippines’ dependence on coal-fired power plants

AN ENERGY think tank said it is seeking support from Congress to help contain the growth of coal-fired power plants in Southeast Asia, which it said make up the bulk of upcoming power projects.

In a statement Wednesday, the Center for Energy, Ecology and Development (CEED) said legislators should take part in the global effort to reduce coal consumption, citing its harmful effects on the environment.

“The vast majority of power projects in the pipeline are coal-fired, (which means) that (as) the rest of the world begins to become more conscious of the environment and the costs of fossil fuels, the Philippines is going in the other direction,” CEED Executive Director Gerry Arances was quoted as saying in the statement.

The group said dependence on coal as an energy source translates into harm not only to the environment, but also to consumers, as it results in a higher cost of electricity and negatively affects the health of communities in areas where coal-fired plants are located.

It said as of 2017, more than one third or 35.4% of the installed capacity of power plants in the Philippines remains coal-fired, while 18.3% are powered by fossil fuels.

Citing data from the World Energy Investment 2019 report of the International Energy Agency (IEA), CEED said the construction of coal-fired power plants has slowed worldwide, but the trend has not taken hold in developing countries in Asia.

In a statement accompanying the IEA report, it said the continued growth of coal plants in developing countries is commonly driven by the need to plug a “growing gap between soaring demand for power and a levelling off of expected generation from low-carbon investments (renewables and nuclear).”

“Without carbon capture technology or incentives for earlier retirements, coal power and the high CO2 emissions it produces would remain part of the global energy system for many years to come. At the same time, to meet sustainability goals, investment in energy efficiency would need to accelerate while spending on renewable power doubles by 2030,” IEA said.

Mr. Arances of CEED said, “The people who say (coal is cheap) only count the profits they make, not the costs to our foreign exchange reserves, the healthcare system as communities suffer from air pollution, and the high cost of electricity to end-consumers.” — Denise A. Valdez

CTA rules it lacks jurisdiction on Duty Free VAT case

THE Court of Tax Appeals (CTA) dismissed for lack of jurisdiction the petition of Duty Free Philippines Corp. (DFPC) seeking the refund of allegedly illegally collected value-added tax (VAT) for 2015 worth P142.9 million.

In a 15-page decision on May 30, the CTA special first division ruled that as DFPC is attached to the Department of Tourism under Republic Act (RA) 9593 or the Tourism Act of 2009 while the Bureau of Internal Revenue (BIR) is a sub-group of the Operations Group of the Department of Finance, the tax dispute must be settled by the Department of Justice (DoJ).

“Wherefore, in light of the foregoing considerations, the instant Petition for Review is dismissed for lack of jurisdiction,” the court ruled.

DFPC filed the petition in March 2017 following the alleged inaction of the BIR on its claim for refund of erroneously or illegally assessed and collected VAT.

The CTA cited Executive Order EO No. 292 or the Administrative Code of 1987 which stated that all disputes, claims and controversies between or among government agencies, offices, and corporations “shall be administratively settled or adjudicated.”

The EO added that all cases involving only questions of law shall be submitted and settled by the Secretary of Justice.

For cases involving mixed questions of law and fact or only factual issues, the Office of the Solicitor-General (OSG) is tasked to settle cases involving only government departments and offices of whom it is the principal law officer or general counsel while the DoJ will handle all other cases not falling under the OSG.

“(T)he parties herein are both public entities under the Executive Branch of the Republic of the Philippines, albeit there is no showing that their principal law officer or general counsel is the Solicitor General. Correspondingly, the subject dispute or claim is one falling under jurisdiction of the Secretary of Justice,” the CTA ruled.

The decision was written by Associate Justice Erlinda P. Uy and concurred in by Presiding Judge Roman G. del Rosario and Associate Justice Cielito N. Mindaro-Grulla. — Vann Marlo M. Villegas

CTA rejects BIR appeal on Deutsche Bank unit refund

THE COURT of Tax Appeals (CTA) denied for lack of merit the motion for partial reconsideration of the Bureau of Internal Revenue (BIR) over the P15.86 million tax refund granted to Deutsche Knowledge Services Pte. Ltd., a subsidiary of Deutsche Bank Group in Singapore.

In a six-page resolution, the CTA special second division ruled that Deutsche Knowledge established its claim for the refund of its unutilized excess input value-added tax (VAT) attributable to zero-rated sales for the second quarter of 2014, denying the appeal of the BIR.

“Clearly, there is no cogent reason to disturb the assailed Decision,” the court ruled.

The court on Feb. 12 partially granted the claim of Deutsche Knowledge, allowing only the amount of P15.86 million to be refunded out of the P27.1 million it initially claimed, saying it failed to substantiate some of its sales to foreign clients for the period.

In a motion filed on Feb. 28, the BIR claimed that the court was mistaken in ruling that the input tax refund claimed by the firms is attributable to zero-rated sales and the subject input VAT remained unutilized.

The CTA said that Section 112(A) of the Tax Code does not require the input taxes that are the subject of claims to be directly attributable to zero-rated sales. It also allows the allocation of the input taxes if they cannot be directly or entirely be attributed to the sales.

“Section 112(A) of the NIRC (National Internal Revenue Code) of 1997, as amended, only mandates that the input tax paid or incurred is attributable to a taxpayer’s zero-rated sales,” it said.

“It does not require that the input tax be directly attributable to petitioner’s zero-rated sales. Input tax that bears a direct or indirect connection with petitioner’s zero-rated sales satisfies the requirement of the law,” it added.

The CTA also said that the court previously ruled that even thought the claimed input VAT was carried over by Deutsche Knowledge in its succeeding quarterly VAT returns, “the same remained unutilized until it was deducted as ‘VAT Refund/TCC (Tax Credit Certificate’ claimed in its amended Quarterly VAT Return” for the second quarter of 2016.

It also added that the excess input VAT of P164.8 million as of the end of second quarter of 2016 is no longer included in the claim as it was carried over to the succeeding quarter.

The decision was written by Associate Justice Juanito C. Castañeda, Jr. and concurred in by Associate Justice Catherine T. Manahan. — Vann Marlo M. Villegas

Governing data with control and growth mindset

We are in the midst of a global “data evolution and revolution.” Data has been growing exponentially in volume and type. The abundance of data in the corporate world, on social media and the Internet of Things have made information very accessible with just a few clicks. What’s more, new actors such as “machine learning” heavily rely on data to learn and execute actions on its own.

Such growth requires a new breed of tools for users to be able to manage and govern data. When not managed properly, data tend to govern us — limiting us from harnessing its infinite potential. It’s as if we’re on the brink of the digital Wild West — where without the necessary sheriffs, data become vulnerable to the schemes of law-breaking citizens, to the detriment of data subjects and owners.

As a risk and compliance practitioner in a professional services firm and for banks, I have largely focused on the “control” perspective of handling data. Whether it be for privacy of personal data or information security of corporate data, it’s been an interplay of identifying key risks and implementing necessary controls. On the other hand, my business and decision making actor-enabler mindset as a consultant drives me to assess how data can be used to sustain and grow the business. With the wealth of data waiting to be analyzed, we have yet to unlock the valuable insights and perspectives they can bring!

With these perspectives, how do we consistently adopt the “control” and “growth” mindset on data? The key is data governance, which entails a shift in mindset from “data governing us” to “us governing our data.”

Forrester defines data governance as “the process by which an organization formalizes the fiduciary duty for the management of data assets critical to its success.” While there are varying definitions that try to encapsulate these concepts in one go, this definition highlights key linkages to the main tenets of (corporate) governance: fiduciary duty, management and (long-term) success.

Data governance enables both control and growth. It is about developing organizational capabilities anchored on effective leadership, mandate and culture to manage, protect and positively exploit enterprise data to achieve business objectives. Organizations are now increasingly focused on how to grow with data — emphasizing data as a strategic and enterprise asset. Growth use cases range from leveraging data to assess customer behavior for product design and offering, to real-time decision making on whether to make an investment or trade. Extending it further, we encounter the concept of “data monetization” where we get economic value from our data from a financial, exchange or product improvement perspective — subject to appropriate parameters considering risk, privacy and ethics.

If data is the new oil given its value for strategic and tactical decision making, then how do we govern data? We are not required to reinvent the wheel but rather leverage existing infrastructure and capabilities. Wherever we are in the data governance journey, we should consider the following components of data governance:

• Roles, responsibilities and organization: Accountability and ownership of data governance initiatives must be defined. Board and management level committees provide a collective view for data oversight and management. A strong executive sponsor should champion and drive it. In more mature organizations, Chief Data Officers are appointed to lead the data governance function while maintaining strong collaboration with other units. The concepts of “data owners” and “data stewards” must be established and clarified. Roles and responsibilities of data governance stakeholders are defined. More importantly, this component should highlight that data ownership rests more on the business and operations units, rather than IT (who are more of data stewards and custodians).

• Policies, processes and standards: To ensure the consistency of understanding and implementation of data governance principles, appropriate policies supported by procedures, standards and guidelines must be developed. These cover the data life cycle (from creation/acquisition/retention to retirement/destruction), data security dimensions (confidentiality, integrity and availability), data standards and data use. In most cases, these items are covered by information security and IT documents, but more emphasis and work are required to define data quality and data use for growth. For data standards, often taken for granted attributes such as the golden and single source of truth, naming conventions, character length, acceptable values and data formats are explicitly described.

• Change management and data culture: The renewed focus on data for control and growth will require organizational and mindset change. While the default response will be resistance or mere compliance, data governance champions must be clear and transparent in communicating the changes, their impact on employees, and the expected benefits for the organization and the individuals. Hesitation stems from the fear of being replaced or the inability to adapt, so change interventions such as capability-building should endeavor to address these. Also, articulating a consistent passion for a “data-driven and enabled culture” will slowly onboard everyone to the business case of good data, and the collective and individual contributions to make it happen.

• Data architecture: What data do we hold? Where are they and how do they flow from one entity to another? What are the relationships of these data to each other? Defining the data architecture provides the blueprint simplifying internal and external data sourcing and processing. Likewise, the conceptual, logical and physical data models are articulated and maintained.

• Data quality and metrics: We define the dimensions of data quality, how it applies to the organization and how to measure it. Data quality dimensions include completeness, accuracy, timeliness, consistency and uniqueness. Metrics to measure performance are defined such as the percentage of data with identified owners, number of mapped records from source, percentage of records with complete attributes, among others.

• Tools, technology and methodology: These refer to the supporting infrastructure enabling the foregoing components — to build data repositories, define data dictionary and glossary included. Specialized software to cover data quality, management and reference data are also available, allowing organizations to digitally trace the data life cycle from source to consumption, including processing in between.

Underpinning these dimensions are the critical aspects of defining the data strategy (aligned with business and IT), risk-based data security and privacy, and regulatory compliance.

Data governance for control and growth is a journey starting from the first step of establishing the framework, and sustaining the momentum as part of “business as usual.” Good data governance fits the organizations’ purpose and context and highlights data as a key business imperative. Once in place, data governance magnifies confidence and reliance on data and enhances the decisions we make out of it.

Are you ready to start your data governance journey?

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Alvin Dave M. Pusing is a senior manager with the Risk Consulting practice of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd., a Philippine member firm of the PwC network.

+63 (2) 845-272

alvin.dave.pusing@pwc.com

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