Facebook Instagram Linkedin X Youtube
Home Blog Page 10573

Distillers complain of unfair taxation compared to wine

DISTILLERS said the uneven taxation of alcoholic beverages puts them at a disadvantage to the wine industry and called for a “level playing field” as the next round of tax reforms make their way through Congress.

In a statement over the weekend, the Distilled Spirits Association of the Philippines (DSAP) said it “supports” the proposal to increase the excise tax on alcoholic products but is seeking fair treatment relative to other segments of the industry.

“We’re currently applying a progressive tax structure for distilled spirits. There’s no reason it can’t be done across categories in the alcohol sector/industry. We just need to look for the right balance,” DSAP President Olivia Limpe-Aw was quoted as saying.

House Bill 1026, written by Albay-2nd district Rep. Jose Ma. Clemente S. Salceda hurdled third and final reading on Aug. 20.

Meanwhile, Senate Bill No. 383, incorporating drafts put forward by the Department of Finance (DoF) and the Department of Health (DoH), has been filed by Senator Emmanuel D. Pacquiao.

Ms. Limpe-Aw, who is also the president and CEO of Destileria Limtuaco, Inc., said the DoF-DoH proposal “unfairly penalizes low- income consumers.”

She said wines will have an excise tax of P40 per liter while a bottle of gin sold for P94 will be taxed P32.66.

“Let’s compare: Ginebra San Miguel Gin will be sold at P94 a bottle under this proposed tax, so the tax is P32.66 or a tax burden of 34.74%. The most expensive wine — P600,000 — the tax is only P30/bottle, or a tax burden of 0.005%,” Ms. Limpe-Aw said.

Under the Senate bill, distilled spirits will have 25% ad valorem tax on the net retail price and another P40 specific tax per liter, which will gradually increase by P5 annually up to P55 in 2023, and then further rise by 10% yearly thereafter.

Meanwhile, the excise tax on wine will increase to P40 per liter next year for those containing 14% alcohol by volume and P80 for more than 14%, with an incremental annual increase of 10% starting 2021. There is no ad valorem tax in the bill.

She also added that even high-end distilled brands will have to pay higher excise tax when compared to wine.

“Let’s use P20,000/750 ml bottle as our base price to compare taxes: the tax per bottle for this distilled spirit is P2,996.91. That’s still more than 100 times compared to the P30 tax on a P20,000/bottle wine,” she said.

On the other hand, the wine industry said at a Senate hearing last week that the bill should not impose ad valorem tax on wine as it is the “healthier alternative.”

The bill also proposes a higher excise tax on sparkling wines and fermented liquor.

The excise tax on sparkling wine will include a P335 specific tax on bottles worth P500 or less and P937 for those worth more than P500. Next year, the taxes will be P328.99 and P921.15, respectively.

Meanwhile, fermented liquor excise taxes will rise from P40 next year to P45 in 2021, P50 in 2022 and P55 in 2023. Another 10% increase will be imposed every year thereafter. — Beatrice M. Laforga

House bill seeks incentives for OFW-owned businesses

A LEGISLATOR has filed a bill seeking incentives for Overseas Filipino Workers (OFWs) setting up businesses in the Philippines.

Makati City 2nd district Rep. Luis N. Campos Jr. filed House Bill 1440 which if passed will become the Overseas Filipino Workers Business Incentive Act of 2019.

It seeks to encourage OFWs “to invest in the establishment of enterprises towards the creation of decent work, production, and trade within the country.”

The measure will include a package of measures offering fiscal incentives, access to capital, training, marketing assistance and information, ease of doing business, and provide the institutional support necessary for overseas Filipino investors to contribute to the economy and to nation building.”

The incentives include a two-year exemption from all national and local taxes.

“The exemption shall be extended to six years if the OFW business is a pioneering business in the Philippines or if it will introduce and utilize state-of-the-art technology in its operations,” the bill read.

It also exempts from tariffs and duties any imported equipment worth less than P5 million used exclusively for the business. The exemption applies to initial exclusive use in their operations shall be exempt from customs tariff and duties for the first two years of the existence of the business.

This exemption for initial equipment imports will be withdrawn after two years, and the equipment may not be resold for five years.

HB 1440 also requires that the Overseas Workers Welfare Administration (OWWA) set aside funding for a credit facility for start-up OFW businesses, with the credit facility to be managed by the Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP).

Local government units will also be required to organize “express lanes” at their Business Permit and Licensing Offices for OFW businesses.

The measure assigns the OFW Business Council — composed of secretaries from the Department of Labor and Employment, Department of Trade and Industry, National Economic Development Authority, Department of Finance, Department of Interior and Local Government, and OFW representatives to draft the rules for accrediting OFW investors.

Mr. Campos said remittances can be tapped for entrepreneurial activity.

“There is an urgent need to start harnessing the remittances and savings into more productive endeavors, primarily through entrepreneurial or business activities. Business activities will augment the income of the OFW households and will generate much-needed local employment,” Mr. Campos said in his explanatory note. — Vince Angelo C. Ferreras

Six provinces agree to procure palay direct from farmers

AGRICULTURE Secretary William D. Dar said that six provinces have committed to buy rice from farmers during the harvest this month, including three provinces in rice country.

“We have requested our President to invite the top 30 rice-producing provinces… to participate doon sa pagbibili ng palay (in the purchasing of palay),” he said in a chance interview after a forum on Saturday.

“Mas lalo na itong (Most especially this) harvest starting September hanggang (up to) October ay nakiki-usap tayo at sana (we are asking that) they open up their hearts and minds at this point in time ay kailangan natin ng tulong nila (we need their help),” he said.

He noted that Isabela, which has allotted more than P400 million for procurement, while Nueva Ecija, and Ilocos Norte have both allotted P200 million for the rice value chain. Other provinces that have made commitments are Ilocos Sur, La Union, and Pangasinan.

They will be directly buying palay, or unmilled rice, from the farmers, then dry, mill, and sell to cities in Metro Manila, like Makati City, Quezon City, Mandaluyong City, and San Juan City. The Department of Agriculture (DA) regional offices will be monitoring the activity.

Procurement by local governments is intended to assist the National Food Authority (NFA) in procuring palay, or unmilled rice, the form in which farmers sell their grain. The NFA is currently holding 4.5 million bags of imported rice, and 6.4 million bags of palay in its warehouses, limiting its capacity to carry out its domestic procurement mandate.

“Nakausap na natin yung anim na (We have spoken with the six) provincial governments… at handa silang tumulong sa problema na ito (and they are ready to help in this problem). If all 30 provincial governments will buy that will be a big help to the rice farmers,” he added.

Mr. Dar said that other provinces who cannot finance their procurement can borrow from the Landbank of the Philippines (LANDBANK) or the Development Bank of the Philippines (DBP).

“Other provinces that are not financially sound can borrow money to buy needed dryers, and millers, from LANDBANK and DBP to engage in palay procurement, drying, milling and marketing operations,” he said in a statement.

Local government units (LGUs) can also pledge their internal revenue allotments as security for loans. — Vincent Mariel P. Galang

DoST touts food safety program as easing permit process

THE Department of Science and Technology (DoST) is pushing the benefits of its food safety program, which it said will help companies get on the permit and registration fast track.

In a briefing Friday, Science and Technology Secretary Fortunato T. de la Peña said that the DoST set up a Food Safety Consultancy Program to help food establishments and vendors learn about food safety policies and regulations.

While the DoST issues no permits to any businesses, he said the program can help certify firms seeking to obtain their license to operate from the Food and Drug Administration (FDA) and sanitary permits from their municipalities.

“We have been doing this (for a while) but we want to let this be known more,” he said in an interview with.

The program is a “framework of interventions” for the food industry, especially micro, small and medium enterprises (MSMEs), can use in order to ensure their compliance.

Mr. De la Peña noted that there are two components of the program: Food Safety Assessment and Food Safety Training.

“The first program component is the food safety assessment for our MSMEs which includes assistance on crop layout, food safety audit, training on good manufacturing practices (GMP)… and HACCP (Hazard and Critical Control Point Analysis System) labeling and packaging… The second component is the food safety training,” Mr. De la Peña said.

“We have helped a lot through this program,” Mr. De la Peña added.

Besides easier approvals of licenses and permits, establishments that undergo the program also experience reduced waste from production and increased productivity.

Last year, the DoST released its Unified Food Safety Training modules to its regional offices. The modules discussed basic food hygiene, food safety hazards, and GMP. — Gillian M. Cortez

DICT common-tower rules due by end-2019

THE rules governing the shared use of telecommunications towers will be issued within the year with a draft expected “in a few weeks,” the Department of Information and Communications Technology (DICT).

Secretary Gregorio B. Honasan II said the preliminary version of the common tower policy can be expected in September or October.

“We’re coming up with another meeting, after which we’ll have the first draft of the common tower policy,” he told BusinessWorld last week. “Within the year, sigurado yan [that’s for sure],” he added, referring to the timeline to complete the final rules.

The DICT started work on a new common tower policy last year after opposition to an earlier draft presented by Presidential Adviser Ramon P. Jacinto. This version limited the number of companies that may build towers, and barred network operators from building their own, which stakeholders contested.

In a stakeholders’ meeting last month, the department presented initial ideas that it wants to include in the policy, such as a requirement that towers be built within a certain from one another.

Other proposals are to require telcos to submit an annual tower rollout plan to tower companies, and subsidies for towers that will be built in missionary areas. Government support is also guaranteed only for towers that will be built by independent tower companies to facilitate infrastructure sharing.

While work on the policy is ongoing, the DICT is pushing for an accelerated tower rollout on the 2,500 sites it identified earlier this year.

“We will have the groundbreaking I hope before the end of September, for the first common tower in the Philippines,” DICT Undersecretary Eliseo M. Rio, Jr. said separately.

The chosen site has yet to be determined, but he said this is part of the department’s Accelerated Roll-out of Common Towers plan which the DICT presented in May.

“Ang target namin for this year is about 400 [We target to have about 400 towers within the year],” Mr. Rio added.

Under the accelerated rollout plan, the DICT listed 2,500 sites on DICT-owned and other government-owned properties. The lease on sites owned by the DICT is free.

Aside from building new common towers, Mr. Rio said the DICT also owns around 180 towers, which it is offering to tower companies to convert into shareable infrastructure. — Denise A. Valdez

Renewable energy plan under review as share of clean sources declines

RENEWABLE energy’s dwindling share in the country’s mix of power sources has prompted the government to review its program that was meant to help ensure energy security and improve access to clean energy, an official said.

Mylene C. Capongcol, director of the Department of Energy’s (DoE) Renewable Energy Management Bureau (REMB), said the National Renewable Energy Program (NREP), drafted in 2011, is up for review.

“(NREP) covers the planning horizon of 2011-2030. The target is to triple the capacity by 2030. At the time it was issued, 5,000 megawatts (MW) ang ating existing RE (renewable energy) capacity. The target is by end of 2030, dapat nasa (it must reach) 15,000 MW,” she told reporters.

However, she said that based on the DoE’s assessment, only around 7,000 MW had been added from 2011 to 2017.

“Malayo pa ang hahabulin (Catching up will take time),” she added.

Separately, the National Renewable Energy Board (NREB), a panel composed of members from the public and private sector, is looking at a longer time-frame for the new program.

“We’re targeting updated program by October,” Monalisa C. Dimalanta, chairman of the NREB board, told reporters.

She said what the board is doing is to re-evaluate the program to determine why the country failed to meet the target, and what additional work needs to be done.

“For the new NREP, we’re looking at the timeframe 2020-2040,” she said.

She said the program had been easy to implement for some technologies like solar energy, which requires a short gestation period before operation. She said solar projects have exceeded the installation target by more than three times.

“But for some technologies like geothermal, which is what we want to push further because we are rich in geothermal, there’s a long gestation period. We need to account for that gestation period as well,” she said.

Ms. Dimalanta said NREB was working closely with geothermal energy companies to understand the reason behind the slow uptake that led to the Philippines being overtaken by Indonesia as the world’s largest producer of the resource.

“That’s quite a bit disheartening, but that’s also challenging. It gives us the challenge on how we can go back to harnessing geothermal,” she said.

“Key challenge is really the exploration phase, the pre-development phase. It requires significant investment during [pre-development] period when you’re just drilling and looking for the resource, and you’re not earning anything,” she added.

Ms. Dimalanta has ruled out a feed-in tariff scheme that guarantees a fixed rate for RE output that is subsidized by consumers. The program has been previously offered for solar, wind, biomass, run-of-river projects.

She also noted that the share of renewables to the country’s energy capacity mix had dwindled.

“In the supply mix, [the target is] more than 30%, now [it’s] 23% as of last year,” she said. “Instead of increasing the share of RE in the supply mix, we’re reducing.”

She said the decrease can be explained by a bigger rise in energy capacity using non-RE technologies.

“The pie got bigger with the share of non-RE getting bigger. For RE, the increase was not proportional,” she said. — Victor V. Saulon

Redefining corporate rules

(Second of two parts)

In the first part of this article, we covered Republic Act 112321 or the Revised Corporation Code of the Philippines (RCC), which redefined the corporate rules to promote ease and flexibility in doing business, as well as take full advantage of technological innovation.

We also discussed the first two key provisions in the RCC, which make it relevant for the changing global business landscape. These were: (1) the relaxation of the minimum number of incorporators, and the residency requirement for incorporators and directors; and (2) the introduction of the One-Person Corporation (OPC). We will now continue with the other provisions in the RCC which are considered by many as significant changes highly beneficial to the Philippine business community.

ALLOWING PERPETUAL EXISTENCE AND REVIVAL OF CORPORATIONS
Under the old rules, the maximum corporate term is 50 years, unless extended for a maximum of 50 years (or sooner dissolved). The RCC, however, now allows companies to exist in perpetuity, unless majority of the stockholders elect to retain its specific term pursuant to the Articles of Incorporation (AoI).

Corporations with expired terms may also be revived under the RCC. The revival applies to their corporate existence, all their rights and privileges under the certificate of incorporation, and their existing duties and liabilities prior to the revival.

Certain types of companies, such as banks, pre-need and insurance, pawnshops and other financial intermediaries need favorable recommendation from the appropriate government agency for the revival.

While the RCC does not provide any exception to the revival of a corporation whose corporate life has expired, it appears that the SEC proposes to exclude the benefit of revival to corporations whose registration were revoked for reasons or causes other than the non-filing of reports.

Based on the draft rules on revival of corporations that the SEC has circulated, the regulatory body clarified that the revival applies only to corporations with expired terms, not to those whose registrations have been revoked due to fraud or continuous inoperation.

We hope that the final regulations will specifically address issues on corporate revival to erase any doubt on the ability of corporations whose registrations have been revoked to avail of the benefit of revival under the RCC.

INTRODUCING MEANS FOR DISPUTE RESOLUTION AND EMERGENCY ACTION
Intra-corporate disputes are inevitable but the RCC provides stop-gap measures to minimize, if not totally prevent, long-drawn intra-corporate disputes in court. Companies now have the option to include an arbitration clause in the AoI. Arbitration is an option to resolve issues between the corporation and its stockholders arising from the implementation of AoI or By-Laws or from intra-corporate relations.

With this new provision, all controversies can be referred to arbitration. However, the SEC still needs to formulate the governing rules, including the organization of an arbitral board.

The board of directors has also been given the prerogative to constitute an emergency board to undertake any emergency action sought to prevent grave damage to the corporation.

Vacancy in the board may be filled temporarily when the vacancy prevents the remaining directors from constituting a quorum and the remaining directors voted unanimously. The action of the temporary director shall be limited to the emergency action necessary and his or her term shall cease within a reasonable time from the termination of the emergency or upon the election of the replacement director. The SEC is expected to clarify in a separate issuance what may constitute grave, substantial, and irreparable loss or damage to the corporation that will necessitate the appointment of an emergency board.

TAKING ADVANTAGE OF TECHNOLOGY
From filings to notices to attendance in board meetings and voting, the law takes full cognizance of advances in technology.

AoIs and their amendments may now be filed electronically, fortifying the already established Company Registration System of the SEC.

The RCC allows written notices to be sent to regular stockholders through e-mail or such other means that the SEC will allow under its guidelines. A corporation may also specify in its By-Laws the manner of communication through notices of meetings are sent, including the extension or shortening of corporate term, increase or decrease of capital stock, and sale or other disposition of assets. Notably, shareholders may vote through any forms of remote communication such as videoconferencing or teleconferencing using available systems and computer applications or even in absentia. Voting in absentia may be done using any electronic voting platform that may be established.

Similarly, directors can remotely participate in meetings, provided they are given reasonable opportunities to participate.

In corporations vested with public interest, stockholders entitled to elect directors may do so either in absentia or remotely, even without specific provisions in the By-Laws authorizing such voting.

THE FUTURE OF THE BUSINESS LANDSCAPE
Aside from the ease of doing business, the RCC seeks to address various reform clusters, such as prioritizing corporate and stockholder protection, instilling corporate and civic responsibility, and strengthening the country’s policy and regulatory corporate framework.

As the law is new and regulations have yet to be fully formulated, the role of the SEC will be crucial in its proper implementation. The SEC has already informed registered companies that it will come up with piecemeal rules implementing the provisions of the RCC in lieu of consolidated guidelines.

The passage of the law brings much optimism and rightfully so. However, only time can tell how the RCC will be able to transform the business landscape in the short term and the whole economy in the years to come.

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

 

Cecille S. Visto is a Tax Senior Director of SGV & Co.

Citizen participation and deliberation in constitutional reform

By Michael Henry Ll. Yusingco

PATHOLOGIES in a constitution can emerge during its reign. These pertain to provisions in the constitutional text itself that may have been designed with good intentions but have eventually become debilitating to the political system it purports to govern.

The 1987 Constitution is not immune from having pathologies. Ideally therefore, Filipinos should not be averse to seriously pursuing constitutional reform.

However, any proposition to amend or revise the 1987 Constitution has always been controversial. In fact, past administrations have all failed to launch charter change initiatives. And the present one seems to be facing the same old hurdles as well.

In 1986, the Constitutional Commission formed by President Cory Aquino was working under a strict deadline, drafting a new charter to formalize the country’s transition from dictatorship to democracy. Today the circumstances are vastly different. Filipinos actually have the luxury of time to pursue constitutional reform.

For constitutional law scholars and practitioners, the active engagement of the people in the entire constitution-drafting process is a key factor in demonstrating the internal legitimacy of the outcome as well as securing for it the necessary external validation. Therefore, Filipinos must not contemplate, or even tolerate, an elite-driven and -dominated constitutional reform process.

Engagement is usually implemented via citizen assemblies wherein deliberative discussions relating to constitutional reform are facilitated. Deliberation in these assemblies means the open exchange of ideas and insights with participants willing to listen, reflect and, if warranted, change their views.

But the most crucial role of these deliberations is to give the people the platform to frame the issues that need to be addressed in the constitutional reform initiative. In a way, these assemblies reflect the moment when citizens actually take ownership of what their constitution should be.

Pertinently, the Barangay Assembly mechanism in the Local Government Code meets these prescriptions quite perfectly. For one thing, it is the most convenient way to gather ordinary citizens and give them the opportunity to speak out and be heard. And indeed, by statutory mandate the barangay is a “forum wherein the collective views of the people may be expressed, crystallized and considered.”

However, utilizing the Barangay Assembly to facilitate deliberations on charter change would require the participation of constitutional experts. In this regard, groups like the Philippine Constitution Association, the Integrated Bar of the Philippines, and the Philippine Association of Law Schools can be commissioned to provide warm bodies to assume the role of moderators.

These volunteers though will not only facilitate the discussion of the relevant constitutional issues, but they must also provide some basic education about fundamental constitutional principles to the participants of the Barangay Assembly.

The program can consist of interactive lecture-style sessions first, supported by pre-session reading materials assigned to participants, and then followed by a series of deliberation sessions.

The targeted output for each Barangay Assembly should be a position paper outlining pathologies in the 1987 Constitution and the concomitant remedial action that must be undertaken. These position papers can then be formally endorsed to Congress to be utilized as resource materials in the revision process.

congress joint session
PHILSTAR/MICHAEL VARCAS

With regards to the constitution-writing process itself, the proceedings of the drafting body, whether a Constituent Assembly or a Constitutional Convention, must be open to the public. The media must have full access to records and papers related to the drafting process. The key point here is that there should be complete and absolute transparency from day one.

Moreover, there must be mechanisms that will allow civil society organizations, business groups and academic institutions to submit proposals to the drafting body as well as for private individuals to be heard during formal sessions.

The drafting body must likewise put up a website wherein updates on the working draft and the writing process are posted. Allowing the public to comment on the progress of the draft itself in matters of substance and style and for the drafting body to respond to these concerns accordingly.

Note however that when the final draft is done, there should also be an appropriate amount of time to allow the public to reflect on whether to ratify or to reject the new constitution in the plebiscite. Filipinos must be given the opportunity to get their minds ready before making this big decision.

To conclude, according to the “Guidance Note of the Secretary-General: United Nations Assistance to Constitution-making Processes” (April 2009) — “Inclusive and participatory processes are more likely to engender consensus around a constitutional framework agreeable to all.”

Now that the administration has decided to take it slow with its charter change drive, the focus can be on the quality of the process, ensuring it is truly inclusive and participatory. Indeed, more effort can be exerted to make constitutional reform a genuinely deliberative and transformative exercise for all Filipinos.

Moreover, not being bound by an unreasonable schedule makes a huge difference. The long series of deliberations will ensure a high voter turnout in the plebiscite. More importantly, Filipinos will be coming to the voting booth understanding what their vote would mean for them and the future of the nation.

But whether constitutional reform will be commenced through the Barangay Assembly mechanism or not, Filipinos just cannot leave constitutional reform in the hands of politicians.

The infamous Resolution of Both Houses No. 15, a draft charter created by the House of Representatives under the auspices of former Speaker Gloria Arroyo, is a warning that cannot be ignored.

Dynastic politicians will not hesitate to hijack charter change to perpetuate themselves in their positions of power. And the only way to keep this mob in check is for Filipinos to be actively and intelligently engaged every step of the way.

In fact, if this administration truly envisions charter change as an initiative to improve the lives of Filipinos, then they must prevent political elites from railroading the constitutional revision effort. Filipinos must keep in mind that the drafting process described here is preferable because the engagement of the people in the deliberation and drafting stages will ultimately be felt as a true act of collective decision-making. It will foster in Filipinos that sense of ownership over charter change which most likely did not happen for the 1987 Constitution.

 

Michael Henry Ll. Yusingco, LL.M is a non-resident research fellow at the Ateneo Policy Center of the Ateneo School of Government.

‘Life, death, and the best of us’

The title of this essay does not belong to me. It is Tony La Viña’s. It is the title of his Rappler essay (Jan. 6. 2016), which gave tribute to diverse people whose deaths gave meaning to him and others.

In an act of remembrance on the fourth death anniversary of my wife Mae (she passed on Aug. 30, 2015), I found meaning in re-reading an essay I wrote for BusinessWorld titled “Celebrating life” (Jan. 18, 2016). In this piece, I quoted Tony’s “Life, death, and the best of us.” Tony wrote: “But when those deaths are meaningful because of the lives that were led and the people who loved them grieved and carried their loss with such dignity and love, there is something to celebrate there.”

In “Celebrating life,” I likewise quoted two friends, sociologist Randy David and economist Noel de Dios. Both of them lost loved ones recently — Randy lost his wife Karina in May 2019; Noel lost his elder brother Lito in December 2018. Randy’s and Noel’s messages have an immediate palpability in light of their current sorrow and bereavement. And theirs are indelible words.

In his Philippine Daily Inquirer column titled “Time, lastingness, and gratitude” (Jan. 3, 2016), Randy wrote about the “intimation of mortality.” Without being explicit, Randy had a foreboding of what Karina’s fragile condition would lead to. A foreboding nevertheless does not mitigate the shock and anguish of losing a beloved wife.

In the wake of Mae’s passing, Noel wrote me a private message. I would like to think that it is a message for everyone; hence, I quoted him in my own essay. Said Noel: “We ought to strive to see as much of the compelling movie of Life as we can — even though one knows one can never see the absolute end.”

I also read Noel’s tribute to his brother Lito (whom he fondly calls Gio) which The Philippine Reporter titled “Lito de Dios: My Brother’s Big Heart.” (Feb. 22, 2019). Here, Noel narrated the life of Gio and their closeness.

The part of Noel’s story that was perhaps the most interesting and intriguing to me was about the brothers’ involvement in the revolutionary movement in the early 1970s. In particular, Noel asked: “But where we used and fooled? Were we willing participants in the deception ourselves? How I wish I could I could have had time to discuss this matter at leisure and dispassionately with Gio, the same way we discussed things when he would come home on weekends from seminary. I can imagine how much we might clarify things to ourselves. But alas, that will not happen now.”

I surmise though that the dark chapters in the movement’s history did not make Lito (or Noel) regret that episode in their life. As Noel said, “While the motives and methods of some in the underground Left leadership may be debated, I don’t think the idealism of the many of the youth at the time… can be denied.”

For Lito (or Gio), as Noel described it, life was about the “aesthetic of love.” Noel concluded, “His love proved too big for his heart.”

Accordingly, we return to Randy’s column which I cited above and Noel’s note to me.

Randy ended his essay by quoting several lines from William Wordsworth’s ode, “Intimations of Immortality.” In particular,

Our birth is but a sleep and a forgetting:

The Soul that rises with us, our life’s Star,

Hath had elsewhere its setting,

And cometh from afar:

Not in entire forgetfulness,

And not in utter nakedness,

But trailing clouds of glory do we come

From God, who is our home:

Heaven lies about us in our infancy!

Life is colorful, and it contains many happy memories, even magical experiences, which we tend to forget as we near death. Our grief will not vanish all this.

Noel, surely not a Wordsworth but nevertheless a rare kind of poet, has a similar message in his note to me. To repeat: “We ought to strive to see as much of the compelling movie of Life as we can — even though one knows one can never see the absolute end.”

My wife Mae had a short life, but she celebrated life and had a meaningful life. She did not see the absolute ending of the “compelling movie of Life” But her signature smile would tell us that she had resolved that the ending would be a heavenly one.

 

Filomeno S. Sta. Ana III coordinates the Action for Economic Reforms.

www.aer.ph

The Duterte SONA and legacy: tail risks and politics

This is the continuation of my column last week sharing our presentation to international subscribers of GlobalSource Partners (globalsourcepartners.com) at a teleconference on July 23.

So how do we get from our estimate of 6% to government’s 7-8% growth target? I would describe 7-8% as aspirational, considering especially the current global trade environment that has dampened export growth. Although we said Build, Build, Build will add to domestic demand growth, there is high import leakage (40-60% per IMF). An example is cement where imports have grown by a Compound annual growth rate (CAGR) of 30% in the last three years. Also, as we said, all the building activity will aggravate strains on traffic, logistics, and power supply, not to mention that manufacturing plants have been operating at over 80% capacity for some time now.

So, growth will be 6%, maybe even 6.5%, inflation is under control especially with freer rice trade, and markets expect easier local monetary policies ahead consistent with the US Fed’s stance. For a time, there were worries about rising risks from the twin deficits, fiscal and external, in an environment of tightening global monetary and financial conditions. But these have subsided with the changed environment and, at the end of the day, we go back to the basic driver of both deficits which is domestic investment activity, both public and private, which are necessary to propel GDP growth to higher rates in the future. Also, the country has built up ample international reserves to serve as a cushion for higher current account deficits. Based on the IMF reserve adequacy computations, the Philippines has one of the highest ARA (Assessment of Reserve Adequacy) metric (1.83 as of June).

Let me add a word on the trade war. Exports, though still important, have not been big driver of Philippine growth. To illustrate, per our estimate, on a value-added basis, export earnings last year amounted to $35 billion or 11% of GDP compared with a total of $50 billion or 15% of GDP for remittances and BPO. Ten years ago, the comparative numbers were both around 14% of GDP. So, my prognosis is that while we will be affected, the overall impact will not drag growth in a major way. But neither is the Philippines expected to gain significantly from ongoing shifts in production bases. Competitiveness issues remain the key constraints in the short-term. (N.B. Since our July teleconference, trade war and global recession risks have intensified with new Trump tweets and tariffs.)

I will also add three tail risks, one is on the sustainability of Philippine Online Gaming Operator (POGO). The other is a possible power shortage, and the third is a key man risk.

First, the risk that the POGO game ends. There has been talk about Premier Xi Jinping asking for President Rodrigo Duterte’s help to do something about it, a strange request until one considers how closely the industry is perhaps tied to the Duterte administration’s China pivot. However, its continued growth, or even existence is vulnerable to change in the Chinese government’s sentiment, for example, less friendly relations with the next Philippine administration, or a crackdown on money laundering that could be initiated by Chinese authorities or multilateral watchdogs. A sudden stop would have adverse effects not only on direct employment but also on real estate prices, office space demand, and banking profitability. (N.B. POGO’s “game over” risks has increased considerably with progressively firmer diplomatic communications against it by the Chinese embassy since our July teleconference.)

My second tail risk is a power shortage. From a situation of surplus power forecast three years ago, the main grid — which includes Metro Manila services — suffered sporadic shortages and red and yellow alerts earlier this year due to unplanned outages/plant shutdowns and the El Niño drought. Reserves have grown thin due to delays in approvals of several power plants, a long story involving the Supreme Court, the Energy Regulatory Commission (ERC), weak oversight and slow regulatory response. While the ERC seems to be trying to clear the backlog, there is a tail risk that the thin reserves will grow even thinner should there be more delays before new plants come on stream to meet the growing power demand in line with GDP growth.

My third tail risk is a key man risk. If, for whatever reason, Finance Secretary Carlos Dominguez III drops out of the scene, all bets are off. Secretary Dominguez, a highly regarded business executive and technocrat, a classmate of President Duterte from kindergarten and his most trusted political ally and confidant for decades, is likely irreplaceable. Without Secretary Dominguez, it may be difficult to check populists measures that threaten macro stability.

I now come to my last topic, politics. Notwithstanding his international image as a despot, President Duterte is very, very popular locally. He enjoys the support of 85% of Filipinos nationwide and he drove the point home in his State of the Nation Address the other day by highlighting the fact that only 3% of survey respondents disapproved of him, the other 11% are “undecided.” Such approval ratings are historically unparalleled.

For a while, there were concerns that the President, with this much political capital and overwhelming influence over the country’s democratic institutions (Congress, the Supreme Court, constitutional bodies such as the Ombudsman, Comelec), and unrestrained in dealing with the media, the church, oligarchs, however he defines them, or anyone in the opposition, may try to do what it takes to change the Constitution and shift to whatever form of government that would keep him in power. At least based on what he said in his State of the Nation Address, he appears to have given up on the campaign promise to a shift to federalism (which his economic managers called “a fiscal nightmare.”) Not a word was mentioned on it during his speech and he told media afterwards that “I’m out of it.”

But he is clearly not a lame duck at this point. After the midterm elections, he has even stronger supermajority support in both houses of Congress. And, without the charter change distraction, the next one to one-and-a-half years would be good for the economic reform agenda. This is why I am very confident that the remaining tax reform packages will pass quickly.

After that, the last year, year-and-a-half of the presidency would be mostly about succession and positioning for the 2022 presidential elections. The Philippine Constitution limits the president’s term of office to a single six-year term. In one of our earlier reports, we observed that historically, only one incumbent, Cory Aquino, had succeeded in making her anointed successor, Fidel Ramos, win, and narrowly at that. History has not been kind to ex-Presidents who did not manage their succession well. Since 1986, one went into exile, one was under house arrest after being thrown out of office, one spent five years in a military hospital with a neck brace. The last president has several criminal cases hanging over his head.

President Duterte’s goal then for 2022 is to choose a successor who will keep him out of harm’s way. This is where his daughter and her HNP (Hugpong ng Pagbabago) party come in. The daughter is Davao Mayor Sara Duterte, who rose to fame decades ago by punching, on camera, a local government executive who went against her orders in an incident involving the demolition of shanties. Like the father, she is a very popular figure and the betting at present is that she will be the anointed one.

But it is too early to say who the “Presidentiables” will be in 2022, much less who will prevail. Random names I’ve heard include any of three Villars (ex-Senator Manny Villar, ranked richest in the Philippines by Forbes magazine, his wife Cynthia who topped the last senatorial race, and their son, current Public Works Secretary Mark), Senator Grace Poe (who ran and lost to President Duterte), and Senator Manny Pacquiao, the Pacman.

We need to bear in mind some history lessons from Philippine elections. One, in a multi-contested election, as has been recent history, a candidate without a clear majority can win. Winners have been surprises. Two, I am also reminded that “necropolitics” has defined presidential election outcomes on more than one occasion in the past. The story of both Aquino presidents. A third lesson from election history, unlike elsewhere, here it is not the early bird who catches the worm. It is the second mouse who gets the cheese.

And speaking of necropolitics, my political tail risk is the death of President Duterte in office. The President is 74 years old and rumored to be sick. His Vice-President, Leni Robredo, an opposition leader, has reportedly doubled her security detail to discourage any assassination attempt by those who may be adversely impacted by inevitable drastic changes. Even the more likely smooth assumption, as the Constitution mandates, could be disruptive — there will be changes in policy across a wide field, projects will be reviewed, there will be leadership changes across major departments.

To summarize: The key messages I would like to leave with you today are: 1.) the economy is doing well thanks to the economic team that has also been able to push for good economic reforms; 2.) the Build, Build, Build infrastructure program is moving forward with government spending reportedly up to 5% of GDP, a level that I think can be sustained through 2022; 3.) economic growth at 6% to 6.5% over the next three years is resilient but will be hard to sustain if higher than that; and 4.) on the political side… well, we don’t really know… the genius of the man is in keeping everybody guessing.

 

Romeo L. Bernardo was finance undersecretary during the Cory Aquino and Fidel Ramos administrations.

romeo.lopez.bernardo@gmail.com

What, no homework?

The “holistic approach” to child development was the reason for this jack-in-the-box treat for school children: House Bill (HB) No. 3611 filed by House Deputy Speaker Evelina Escudero proposes to remove homework as a requirement for Kinder to Grade 12 students and prohibit students from taking textbooks home in order to “lighten their physical burden” and to do academic activities solely within school premises; and HB No. 3883 filed by Quezon City Representative Alfred Vargas, which seeks to “promote and protect the physical, moral, spiritual, intellectual, and social well-being of the youth” and prohibits elementary and high school teachers from assigning take-home assignments to students for the weekend. Senator Grace Poe filed Senate Bill No. 966 to establish a no-homework policy for all primary and secondary schools in the country, according to a GMA News report on Aug. 30.

In the wake of instant fury from upset parents and incensed educators, Mr. Vargas clarified on CNN Philippines’ The Source on Friday last week that the initially imposed P50,000 fine and up to two years of imprisonment on teachers who violate the policy was “just mistakenly included in the bill.” CNN called it a “boo-boo.”

It was a boo-hoo-hoo how Department of Education Secretary Leonor Briones last Tuesday so readily expressed support for the lawmakers’ proposal to implement a “no homework” policy among kindergarten to Grade 12 students in the country. “Lahat ng mga lessons dapat during school hours. After that si parents na… Para ’yung mga bata naman ay may time mag-bond sa parents o maglaro o just to relax by themselves (All lessons should be during school hours. After that, the parents are in charge… so that the children have time to bond with the parents, or play or just relax),” Briones said in a report by Oscar Oida on GMA’s 24 Oras.

Ma’am Briones, your father was a school teacher, and you have always been in academe — at Silliman University and the University of the Philippines. Surely, in decades of living and breathing education, from being a student in childhood and youth and through college and doctoral to post-doctoral degrees, and in your career as a professor (to professor emeritus at UP College of Public Administration) you know that lessons are not taught just during school hours — how can you reverse yourself on this fact of life about learning?

Homework, or additional “research,” or supplemental work after, and above and beyond, class lectures, seat work, and recitations are an integral and necessary part of the meticulously calibrated, scientific design of education, to be guided and controlled by the syllabus and course outlines from basic to secondary school to collegiate, masteral and doctoral. For almost five centuries of the Philippine educational system, the Filipino child expected, needed, and accepted “homework” or outside-the-classroom work to supplement what was being taught in the schools. “Read pages so-and-so as your homework for tomorrow/next meeting” is the familiar closing remark of almost every teacher/professor to the class.

Homework is critical because there is specific classroom hours-per-semester and coverage of material to be complied with the DepEd. From experience, the teacher of a one-hour subject with classes held twice or thrice a week cannot physically comply with the requirements, and thus “extra work” or “make-up” must be assigned. Besides, the teacher must be able to mark and grade the student by the individually submitted assignments, aside from quizzes and exams, the latter being too late for both the teacher and the student to remedy. Recitation cannot go around adequately in a class of 30 to 45 pupils, especially if the pupils were not assigned “homework” to prepare for the next meeting for that subject.

That is another argument against the “No homework” proposal: the very high teacher-to-student ratio in primary and secondary education. DepEd Undersecretary Jesus Mateo said the teacher-student ratio improved from one teacher per 45 students in previous years to 1:31 for elementary and senior high school and 1:36 for junior high school. The current DepEd parameter limits the students to a maximum of 30 per class in kindergarten, 35 in Grades 1 to 3, and 40 in Grades 5 to 12, but there is pending legislation that would allow the class size at 35 to 50 students, according to a March 29 story of the Philippine Star. What perverse logic is there to “lessen the load” on Filipino students when there is not even enough instruction to them, thanks to the sorry teacher-to-student ratio, the dire lack of classrooms, and the un-updated textbooks and curriculum?

Some proponents of the no-homework proposal cite Sweden as the model of pupils being taught comprehensively enough during school hours, and thus no need for homework. But Sweden has a teacher-to-pupil ratio of 1:11.9 for primary and 1:13 for secondary levels. The US has 1:15.23 and 1:15.9 respectively (Education Statistics nces.ed.gov/1992) and Singapore has 1:15.2 for total both levels (2017 data.gov.sg 2017).

Now, let’s look at primary and secondary education in Singapore, extolled by the OECD (Organization for Economic Co-operation and Development) in 2014 as having the best educational system in the world. There, on top of homework, is the tradition of the “after-school program” voluntarily paid for by parents to tutor children after regular school hours. A 2012 report by the Asian Development Bank and the University of Hong Kong showed that 97% of all Singaporean students are enrolled in tutoring schools comparatively costing 80% of regular school tuition. The same drive for better education brings nearly 90% percent of South Korean primary students and about 85% of Hong Kong senior secondary students to after-school tutoring, according to the same study.

And here we are, cutting down on the preparation of our young students for life. Mr. Vargas, in proposing HB 3883, cited a 2018 study in South Africa that had argued “that homework is a burden for children and parents,” has caused the decline of family time, and even undermines learning interest,” according to a Rappler story on Aug. 28.

The Alliance of Concerned Teachers (ACT) reacted by chastising Congress to instead focus on reviewing the K to 12 curriculum. “We are not issuing homework to burden our students. It is demanded of us by the K to 12 program, so much (so) that our performance evaluation system ensures its implementation,” ACT was quoted as saying by Rappler. It is really hard to understand that after young students were meted out two more years in K to 12 before college, now, the 180-degrees noblesse oblige to lessen their load by no-homework! Of course, the students will be happy — they will have more time with their gadgets and social media, their curious minds trying out new and could-be dangerous other things. No, it will probably not be bonding with family — Mom and Dad are not home from work yet when children come home in the afternoon. Or the parents are working abroad.

Teacher’s Dignity Coalition said: “Our teachers are trained educators. We know the value of homework. It’s about discipline, responsibility, and continuity of learning,” quoted Rappler. That captures the exacting trade-off of no-homework. The molding of principles and values will be retarded with less training in responsibility and discipline that would have prepared our young students early on for the realities and challenges of adult life. In basic education, the child is ushered into community life outside the controlled environment of the home, where, in the classroom there are individual roles, responsibilities and deliverables under supervision and guidance of an authority who is not a parent. Up the educational ladder, performance is measured and marked, which builds the instinctive discipline to comply and abide by rules and earn “promotion” by the quality and quantity of incremental mental, emotional, and physical development in progress. School is a preparation for a career or profession, not only in terms of the curriculum vitae but in the ingrained values of discipline and responsibility learned above academics. And even in a job or a practice, there is always homework and continuing education!

Lawmakers should have done their homework on their dangerous “No-homework” proposal.

 

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

ahcylagan@yahoo.com

Science hasn’t found a ‘Gay Gene.’ So what?

FREEPIK/VECTORARTE

By Faye Flam

A NEW, massive study suggests five genes are weakly associated with self-reported same sex encounters. But the results, released last week by a group that included the Broad Institute and 23andMe, are underwhelming. The genes predicted less than 1% of people’s behavior. The researchers struggled at a press conference to tell reporters what the take home message was. We can assume that 23andMe won’t be offering a “gay gene” test any time soon.

But the result still has meaning, seen in the context of history. It’s the latest chapter in a scientific quest that got woven into a massive cultural shift. Science sometimes led, and sometimes followed.

Through most of the 20th century, mainstream psychiatry considered homosexuality a disease, and scientists studying sexual orientation did so to find a “cure.” That slowly changed, but by the 1990s, religious leaders had their own ideas, which held sway over much of the public. That’s where the roots of today’s findings started, when a National Institutes of Health geneticist named Dean Hamer set out to find the genetic basis of homosexuality.

When I interviewed him for a newspaper column in the early 2000s, he told me that he hoped finding a genetic bases for homosexuality could counter a pervasive argument coming from the then-powerful religious right that being gay was a choice — and a sin.

It was under this backdrop that Hamer, who is gay, set about to use science to get at the answer. He said he got warned that if he found any distinct genetic signatures, someone would abuse them for the purposes of discrimination, or worse.

He also got pushback from his fellow scientists who thought that what he was setting out to prove was already obvious. Of course being gay was at least partly genetic. The “gay is a choice” idea was a religious trope, not a scientific paradigm. But at the time, a well-organized group of right-wing evangelicals had pitted religion against science. Those on the side of science felt they had to fight back.

His study was tiny and limited compared to what’s possible today. He found a potential link on the X-chromosome, which got dubbed the “gay gene,” although Hamer considered it a misleading oversimplification. Hamer’s gene didn’t turn up in this new study — it is likely not a “gay gene” after all — but he deserves credit for setting the groundwork that made the new study possible. The project helped people recognize that sexual orientation was rooted in biology, and that same-sex love was part of the natural variation of human behavior — as well as in the behavioral repertoire of many animals, from manatees to mountain rams.

Most of the early studies on genes and homosexuality were done by gay men. The problem wasn’t so much that others didn’t care, but that they worried that their work would do more harm than good and didn’t want to be associated with genetic tests that might be put to bad use. And studying sexual orientation is tricky. There’s a difference between what people say they do, what they really do, and what they desire to do.

But eventually those early studies opened the way for mainstream, big science. The new study released last week was huge, using DNA samples and sexual behavior information from nearly half a million volunteers in the United States and UK and the best tools money can buy. Unlike many earlier studies, it also included subjects of both sexes.

The main findings came in two parts. In the first, the researchers were able to estimate that genes account for 8% to 25% in the variations in same-sex behavior among the subjects using a complicated technique that involved the relatedness of the volunteers.

The second part pinpointed specific genes. The five genes that were identified only make up 1% of genetic influence on same-sex behavior because they are only the tip of the iceberg. The rest of that genetic component may come from rare genes that were not detected, or by networked interactions between genes. And biology can include non-genetic influences as well — exposures to prenatal hormones and antibodies, for example, and so-called epigenetic effects.

Geneticist Michael White of Washington University, St. Louis, who has written about the genetics of sexual orientation, told me that the results are fairly similar to those linking genes to other behavioral traits — from intelligence to years of education to political affiliation. The genetic influences themselves are complex, and these are mixed up with other biological influences as well as environmental and cultural ones. But DNA tests that identify behavioral tendencies are coming. If, someday, someone tries to sell a test of probable sexual orientation, which people may want to test themselves or, possibly, their unborn children, we can only hope that the world is ready.

Seventy countries still criminalize homosexuality. That’s not likely to change because scientists find more genes influencing sexual orientation. Whether this new study had turned up five genes or 500, no result would justify persecuting people on the basis of their sexual orientation.

 

BLOOMBERG OPINION

1...10,57210,57310,574...14,270Page 10,573 of 14,270
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube