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Agus-Pulangi rehab named priority among China-funded projects

THE PHILIPPINES is seeking to fast-track a funding agreement with China for the rehabilitation of the Agus-Pulangi hydroelectric power complexes after the project emerged as one of its priorities during a meeting of both parties last week.
In a statement yesterday, the Department of Finance (DoF) said that the Philippine delegation, led by Secretary Carlos G. Dominguez III, met with its Chinese counterparts led by Commerce Minister Zhong Shan on Aug. 23 to discuss “the progress of the projects that, will be and are being, implemented with Chinese financing support.”
The DoF said that Mr. Dominguez “underscored” a “possible parallel financing arrangement between China and the World Bank for the rehabilitation of the Agus-Pulangi Hydroelectric Power Plants of the National Power Corp. (Napocor),” which he described as “a very important project that the Philippines wants to fast-track.”
Mr. Zhong said the Ministry of Commerce was “supportive” of the proposal, according to the DoF.
The Agus-Pulangi rehabilitation project was among those projects lined up for China financing after President Rodrigo R. Duterte obtained $9 billion worth of official development assistance (ODA) during his visit to Beijing in October 2016. Funding was only firmed up as part of the “second basket” of projects in September 2017.
The complex currently serves as Mindanao’s main power source.
Mr. Dominguez has said pursuing a rehabilitation will be timely as the region currently enjoys an oversupply of power.
Following the rehabilitation, the power plants are scheduled to be privatized.
According to the National Economic and Development Authority (NEDA), the rehabilitation is scheduled for 2020 and completed by 2022. The Power Sector Assets and Liabilities Management Corp. has yet to prepare a feasibility study for the project.
Of all the proposed projects to be funded by China, only the P3.69 billion partial financing of the Chico River Pump Irrigation Project has been signed, along with grants for the Estrella-Pantaleon and Binondo-Intramuros bridges, drug rehabilitation facilities in Mindanao, and assistance in the rehabilitation of Marawi City.
Apart from China and the World Bank, the DoF had also asked the OPEC Fund for International Development a participate in the project during a meeting here in May.
The DoF said in 2017 showed that the project could take about five years to complete, and would cost about P54 billion.
Mr. Dominguez also said that the government’s China Projects Task Force, which was created in April, “has been effective in monitoring and facilitating the preparation and implementation” of projects proposed for China’s Official Development Assistance (ODA) financing.
Socioeconomic Planning Secretary Ernesto M. Pernia said in June that the financing process with China is not moving as fast as those of other development partners, largely due to inexperience in dealing with Beijing.
Mr. Dominguez also welcomed the creation of the China International Development Cooperation Agency tasked to handle foreign aid. The agency was created in March.
“We look forward to working with them,” he said.
During the meeting, Mr. Dominguez was joined by Mr. Pernia, Budget Secretary Benjamin E. Diokno, Transportation Secretary Arthur P. Tugade, Public Works and Highways Secretary Mark A. Villar; Foreign Affairs Secretary Alan Peter S. Cayetano; Vivencio B. Dizon, President and Chief Executive Officer of the Bases Conversion and Development Authority; and Philippine Ambassador to China Jose Santiago L. Sta. Romana. — Elijah Joseph C. Tubayan

Chinese province to send business delegation to explore opportunities in the Philippines

By Camille A. Aguinaldo
HARBIN, HEILONGJIANG, CHINA — The Heilongjiang provincial government in China is planning to send a delegation to the Philippines next year or in 2020 to explore business opportunities.
At a symposium with Asian journalists in the province’s capital, Harbin, on Saturday, Heilongjiang Department of Commerce Director Li Leyu said the provincial government is willing to “propose or encourage” Harbin companies to invest or cooperate in the Philippines.
“As the foreign trade promoting department, my department… has reestablished a connection with the Philippines and we are trying to organize a group to visit next year or in 2020 to explore business opportunities,” Mr. Li said, speaking through a translator.
Heilongjiang, in northeastern China, has a population of almost 38 million and shares a border with Russia. The province leads China in the production of crude oil, mainly through China’s largest oilfield, Daqing.
Mr. Li said there used to be four or five Heilongjiang companies operating in the Philippines but they pulled out due to the shaky relationship of the two countries in the past.
“In the past there have been some zigzags in international relations between China and the Philippines. We used to have four or five companies in the Philippines and after that zigzag, they all came back,” he said.
Philippine-China relations hit a snag over the South China Sea maritime dispute following the arbitral ruling favoring the Philippines. With the change of government in 2016, President Rodrigo R. Duterte sought warmer ties with China.
A framework agreement is currently being formed between the Philippines and China in the planned joint exploration in South China Sea. Meanwhile, a high level Philippine delegation, including the country’s economic managers, visited Beijing to secure bilateral deals on China-funded infrastructure projects.
Mr. Li invited the Philippine government, organizations and companies to visit Harbin. He added that more Philippine products can also be introduced to Heilongjiang if demand develops for them.
According to the Pilipino Banana Growers and Exporters Association, China is currently the Philippines’ second-biggest export market for banana, the country’s number two agricultural commodity after coconut products.
June 2018 export data from the Philippine Statistics Authority show China ranked fourth in export shipments after Hong Kong, United States and Japan. Outbound shipments to China was valued at $729.77 million, comprising 12.8% of total exports for the month.
In the same month, China was the country’s biggest source of imports with a 21.4% share of the $7.04 billion total. Import payments to China hit $1.93 billion.
Mr. Li said Harbin companies specialize in the power and infrastructure sector, which could provide technological support to the Philippines.
“If the Philippines is in need of these kinds of investment in the power sector we would like very much to support our companies in doing these kinds of projects,” he said.

Tourism dep’t looking to accredit more agri-tourism ventures

THE Department of Tourism (DOT) hopes to develop more agri-tourism sites nationwide amid slowing growth in the farming sector.
The department has accredited about 100 such sites, some of which were promoted at the second Philippine Harvest event which sought to highlight organic produce and sustainable tourism.
Tourism spokesperson Benito C. Bengzon, Jr. said the department is currently finalizing a five-year farm tourism strategic plan, which calls for more such sites to be developed and promoted.
The plan hopes to raise farm revenue and “strategically also make people appreciate farm tourism in the Philippines,” Mr. Bengzon added.
Details of the program are set to be finalized by September, by which time the department hopes to release the target for farms it hopes to convert to agri-tourism ventures.
“Another thing we have to work on is to look at the existing potential farm tourism sites across the country. We have to do this with the Department of Agriculture (DA),” he added.
The DA will be responsible for identifying the farm sites.
“We have to talk to farmers and tour operators because they play the crucial role in whatever packages are commercially viable.”
One of the accredited sites, Amancio Farm Hotel in Isabela province, is considered a model that the department hopes to reproduce.
Starting as a 45-hectare multi-purpose organic farm in 2012, Amancio’s farm head Arnold F. Reyes told BusinessWorld that a hotel was built two years later when the farm started attracting visitors.
The hotel kitchen uses organic produce from the farm, human resources and marketing head Claire O. Pinera said.
“Even in the vicinity of the hotel, all we plant are vegetables,” Ms. Pinera said.
“We are promoting organic foods especially to our guests. Most of the time, they are unaccustomed to the taste. We are explaining the benefits that organic food gives them,” Ms. Pinera said.
The farm’s five-hectare pond supplies fish for direct consumption or for processing as buro, a fermented preparation of fish, rice and shrimp. The site also includes livestock, with carabaos supplying fresh milk to the hotel.
Coffee and black, brown and red rice are is also sourced from the farm.
Despite the small share of black, brown and red rice bring planted in the province, Ms. Pinera noted that growing health consciousness could point to a potential market for these varieties.
“We want to bring back the lifestyle from before when it comes to eating so that visitors can see what good organic food is doing in their bodies. Now, we are getting so many kinds of illnesses because of what we are eating.” — Anna Gabriela A. Mogato

DTI amends company name rules to boost ease doing business

THE Department of Trade and Industry (DTI) has updated the implementing rules and regulations of the Business Name (BN) Law to incorporate an industry benchmarking system while harmonizing it with the Ease of Doing Business (EoDB) Act of 2018, among other laws.
Department Administrative Order No. 08-07, published in one of the country’s dailies over the weekend, said the revision hopes “to provide streamlined requirements for processing BN applications and promote ease of doing business.”
Overhauling the 2010 revisions made on the IRR of the BN Act of 1931 or Republic Act 3883, the newly issued guidelines also aim to adjust disclosure rules in line with the Data Privacy Act of 2012 or Republic Act 10173 and the Freedom of Information rule under 2016-signed Executive Order No. 2.
“New DAO allows us now to transition from our legacy system into a stronger and more stable system we now refer to as BN NEXT GEN,” Trade Secretary Ramon M. Lopez said in a mobile message yesterday.
He added that the amendments make DTI the “first” to adopt PSIC. A benchmarking system, PSIC provides a detailed classification of industries.
On the EoDB law, the new guidelines removes the requirement for a signed application form for online registrants. Meanwhile, filers of disapproved online applications may seek reconsideration at any DTI office.
The new law also extended the early renewal filing period for certificates nearing expiration, to 180 days from only 90.
The standard information included in the Certificate of Business Name Registration has also been reduced in compliance with the Data Privacy law. Meanwhile, it added provisions to request for the authenticated or certified true copy of the CBN.
It also included refugees and stateless persons as eligible BN applicants.
Mr. Lopez added that amendment will make the system more transparent with inclusion of a QR code which is accessible to the public.
The Business Name Law makes it unlawful for any person to use or sign on any written or printed receipt, agreement or business transaction, any name used in connection with his business, other than his true name, or exhibit in plain view in the place of his business any sign announcing his firm name or business name, without first registering such other name, firm name or business name with the DTI.
Violators can be fined between P50 and P200, or imprisoned between 20 days and three months. — Janina C. Lim

Nickel Asia unit Taganito wins P2.9-M VAT refund

A UNIT of Nickel Asia Corp. has won a Value Added Tax (VAT) refund from the Bureau of Internal Revenue (BIR) worth about P2.9 million on more than P3 billion worth of zero-rated sales.
In an amended decision dated July 27, the Court of Tax Appeals (CTA) partially granted petitioner Taganito Mining Corp.’s (TMC) Petition to Review an earlier CTA ruling ordering the BIR to refund P2,863,631.56 to TMC.
“Accordingly, respondent is ORDERED to refund to petitioner the amount of P2,946,937.07, representing its excess/unutilized input VAT paid on its importation of capital goods with aggregate acquisition cost exceeding P1 million, which are attributable to its zero-rated sales for taxable year 2013,” the Amended Decision added.
In the CTA’s April 5, 2017 decision, TMC petitioned for a BIR refund of P8,326,025.84 in excess/unutilized input VAT. CTA partly granted the reduced amount of P2,863,631.56 in refundable input VAT.
In the amended decision, CTA said “Consequently, only the input VAT of P2,946,937.07 is attributable to the valid zero-rated sales of P3,242,247,906.69.”
BIR said about the court’s earlier ruling in granting the P2,863,631.56 refund that there was “no evidence” presented by TMC “to prove that the input tax on importation is directly attributable to export sales.”
TMC said it “complied with the substantiation requirements to prove that the input tax paid on its importation and domestic purchases of capital goods are directly attributable to its zero-rated sales for taxable year 2013.”
Based on Section 12 (A) of the Tax Code, the CTA declared that the law “does not decree that the input tax be directly attributable to petitioner’s zero-rated sales” and found BIR’s claim “bereft of merit.”
In the earlier ruling, TMC’s valid zero-rated sales amounted to P3,150,594,396.73, making the refundable input tax P2,863,631.56.
In the amended decision, the substantiated zero rated sales was changed to P3,242,247,906.69 after additional evidence provided by TMC showed it also had VAT zero-rated sales worth P91,653,509.96.
The CTA stated in its amended decision “the input VAT on importation of capital goods, which are undeniably necessary for the production of petitioner’s exports, are attributable to its zero-rated sales.”
TMC is one of Nickel Asia’s four operating mines and exports saprolite and limonite ore. According to Nickel Asia’s website, the Surigao del Norte-based mine is the “exclusive supplier of limonite ore to Taganito HPAL Nickel Corporation (THPAL), the Philippines’ second hydrometallurgical nickel processing plant.” — Gillian M. Cortez

TRAIN Law: Updating the Certificate of Registration

LIKE its fast-moving namesake, the effects of the TRAIN (Tax Reform for Acceleration and Inclusion) Law or Republic Act. No. 10963 continue to have impact on professionals and entrepreneurs.
The Bureau of Internal Revenue (BIR) has issued several regulations to implement the TRAIN Law, such as requiring certain compliance reports and submissions from taxpayers. These regulations have raised new concerns with taxpayers since non-compliance will have corresponding fines and administrative penalties.
Among the requirements of the BIR is for income payees to submit to their income payors a sworn declaration of their gross receipts/sales together with a copy of their Certificate of Registration (COR). Previously, sole proprietors, professionals or mixed-income earners whose gross receipts exceeded P1,919,500.00 were required to register as value added tax (VAT) covered persons. As such, the covered professionals and entrepreneurs must obtain a COR that reflects that they are VAT-registered taxpayers.
With the TRAIN Law, the ceiling for VAT registration has been increased to P3,000,000.00. Interestingly, this new threshold determines the difference between withholding tax rates of 5% and 10%.
Specifically, under Revenue Regulations (RR) No. 14-2018, if the gross income of the professional for the current year does not exceed P3 million, the withholding tax rate is 5%. If gross income is more than P3 million or the income payee is VAT-registered (regardless of amount), the withholding tax rate is 10%.
Moreover, except for VAT-registered taxpayers, the P3 million mark has also been identified as a point of reference for self-employed individuals or professionals availing of 8% tax in lieu of the graduated income tax rates under the TRAIN Law.
In particular, wholly self-employed individuals or professional practitioners whose gross sales and/or receipts do not exceed P3 million and/or are not VAT-registered taxpayers were given the option to avail of an 8% tax on their gross sales or gross receipts and other non-operating income in excess of P250,000 in lieu of the graduated income tax rates under the Tax Code.
As the P3 million threshold determines both the applicable withholding tax rate for individual professionals and the necessity of registration as VAT-registered taxpayer, the BIR has issued RR No. 11-2018, as amended. It provides that income payees have the responsibility to submit a Sworn Declaration of their gross receipts/sales together with a copy of the COR. The documents submitted will be used by income payors as the basis to determine the applicable withholding tax rate to individual payees in cases of payment of professional fees.
This requirement serves a practical purpose for the BIR as it abbreviates the process of determining the applicable tax rate. For example, a VAT-registered person will automatically be subjected to the 10% withholding tax rate.
Reference to Section 236 of the Tax Code reveals that the lawmakers have long considered the possibility that changes in taxpayers’ registered tax type and details may occur. In fact, under Section 236, taxpayers have the obligation to update their registration whenever applicable. The BIR, in Revenue Regulation (RR) No. 07-2012, or the Amended Consolidated Revenue Regulations on Primary Registration, Updates, and Cancellation, has also promulgated guidelines in the event of changes in the registered tax types and details of taxpayers. It provides that registered taxpayers are required to update their registration information with the Revenue District Office where they are registered whenever there is any change in tax type and details. Examples of updates include, but are not limited to, change of surname, change of address within same district office, or exemption status.
For this reason, taxpayers who opt to avail of the 8% income tax rate in lieu of the graduated income tax rates under the TRAIN Law must submit an updated COR considering that there is a change in their registered tax type.
However, under RR No. 8-2018, all existing VAT registered taxpayers, whose gross sales/receipts and other non-operating income in the preceding year did not exceed the VAT threshold of P3 million, have the option to update their registration to non-VAT. If qualified VAT registered taxpayers opt to update their registration to Non-VAT, it would be likely that they must also submit an updated COR to reflect the option that they made.
The obligation of updating one’s COR is not a new requirement considering that the previous Tax Code mandated the update if the status of a taxpayer changes. In fact, this requirement was also reiterated by the taxing authority in several issuances. We should all note that, in addition to bringing about tax reform for the country, the changes brought about by the TRAIN Law remind taxpayers to become more aware of their tax responsibilities at all times.
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.
 
Rosalie T. Lapuz is a Director at SGV — Financial Services Tax.

Q2 Growth: Old or New Normal?

THE one bright spot for the Philippines in the second half of the 21st century is its growth. The average growth rate of GDP in the last six years was 6.5%, which exceeded the 4.8% average growth under the Arroyo administration and thus was considered the “new normal.” The Duterte administration aimed to maintain or even exceed the new normal. The first full year of the Duterte administration managed a 6.7% GDP growth which exceeded the 6.5% norm. TRAIN 1, a feat of sorts, was signed in January 2018. One could, with reason, entertain the thought that the Duterte watch is poised to set a “new” normal of perhaps close to 7%. But the 6% GDP growth in Q2 is a three-year low and has renewed the conversation of revert to the old. Not because the 6% growth is to be sneezed at but because by mid-2018 the rainclouds are starting to gather. Inflation in July is 5.7%, and the BSP has responded with increases in the interest rate. The GDP growth for S1 is now 6.3%, which means that the economy has to grow at 7.1% in S2 to equal last year’s 6.7% or grow at 6.7% in S2 to reach the new normal level of 6.5%. Either 6.7% or 7.1% in S2 is now a tall order, given the contractionary pressure from the interest rate rise, the disruptions and floods due to inclement weather, the possible adverse fallout from TRAIN 2 on DFIs and ENDO and the looming headwinds from the tariff wars. Firms may prefer to batten their hatches and wait for sunnier days.
The 6% GDP growth itself owes to the no-growth in the Agriculture output (0.02%) despite no marked weather problem in Q2; a rising trade deficit due to slowing down of exports (13%) and a rising imports (19.7%) also mattered; the latter no doubt related to BUILDx3. There is no observable blip in consumption spending in S1, which could have been expected from TRAIN 1 personal income tax cut. The salient consumption blip came rather in the last quarter of 2017 (6.2%) which anticipated the TRAIN 1 vehicular tax increase. We hope that this dip is a one-off.
But the aspect that is worrying in the Q2 growth is the performance of the drivers: Manufacturing grew at 5.6% while Services grew at 6.6%. In other words, Services was driving the GDP! By contrast, in Q1 2018, Manufacturing grew at 8% while Services grew at 7%; likewise, in the first full year of Duterte’s watch, Manufacturing grew at 8.8% and services grew at 6.8 %. Manufacturing was the driver of GDP during the last six years.
Why is the change in the driver of interest? Because Services, not Manufacturing, was always the driver of GDP in Philippine growth of the old normal going all the way back to Marcos. It was the unique achievement of the Aquino administration that Manufacturing drove GDP (see Figure 1) below. This is the signature of the new normal.
The deeper reason is that this signature of the new normal makes for inclusive growth. It is now a canon in the annals of low-income country development that when Manufacturing drives growth, growth tends to be inclusive; when Services drives growth, it tends to be non-inclusive (see, e.g., Daway, Ducanes, and Fabella, 20161)! The relationship between growth drivers and inclusion is illustrated by the experience of the Philippines, China and Vietnam. Figure 2 gives the average growth of Manufacturing and Services from 1990 to 2010 for these countries.
Note that both in China and Vietnam Manufacturing led Services in growth; the opposite held in the Philippines. Now, contrast the poverty reduction performance of the same countries in the same period (Figure 3). The poverty reduction performance of both China and Vietnam dwarfs that of the Philippines for the same period.
This is consonant with the regression result of above-cited (Daway, Ducanes and Fabella, 2016). When Manufacturing drives GDP growth, growth tends to be inclusive. Thus, it is prudent to beware of Services being the engine of growth in low income countries! That is what happened in Q2 2018. Old habits die hard.
If the Duterte administration’s announced intention to renew Manufacturing especially in the regions sees fulfillment, it would leave inclusion as its legacy. The dip in Manufacturing in Q2 is a reminder that growth in the new normal is still fragile and its roots shallow. There are storm clouds in the global horizon which are beyond our control. The trepidation triggers in our own backyard are, however, our own making: the rising murkiness in the investment climate due to the CHA-CHA, especially the version issued by the Consultative Committee, the added uncertainty from TRAIN 2 and the ill-wind from ENDO. Q2 growth may be the first blush of this trepidation; investors may be deciding to stay on the sidelines and wait for more clarity and clemency.
The stakes are high. If we lose the investment battle, we lose the war. n
1 “Quality of Growth and Poverty Incidence in Low Income Countries,” available at https://www.academia.edu/34094141/Quality_of_Growth_and_Poverty_Incidence_The_Role_of_Manufacturing
 
Raul V. Fabella is a retired professor of the UP School of Economics and a member of the National Academy of Science and Technology. He gets his dopamine fix from hitting tennis balls with wife Teena and bicycling.

Low-carbon path

A previous piece showed that our greenhouse gas reduction commitment to the Paris climate treaty meant a gradual 2.02% annual reduction in fossil-based electricity generation, for a total reduction of 23.3% by 2030 compared to 2017 levels. The annual reduction required by this low-carbon path is only half the 4% natural attrition rate of coal plants, if they are retired at the end of their 25-year useful life. This provides the country with some flexibility.
Our commitment gives the Duterte administration a fossil-based generation ceiling of around 64,280 GWh by 2022, which was our level of fossil-based generation in mid-2016. Thus, if the Duterte administration, by the end of its term, brings down our fossil-based generation to the same level as the level when it assumed office, we can meet our Paris commitment.
WHAT ABOUT OUR GROWING ELECTRICITY REQUIREMENTS?
We definitely do not want to sacrifice national development and our power needs for the sake of meeting our Paris commitment. So, the real question is: if we took the low-carbon path and reduced our fossil-based generation by 2% per year, can renewable energy (RE) and energy efficiency cover the balance?
This piece will show that as of 2017, enough RE projects have already been approved by the DoE to cover the balance, with a few years to spare.
Thus, with the right policies, we can meet our growing electricity requirements and our Paris commitment too.
Let us first determine what this balance is.
Using the DoE’s load factor method in the DoE’s Power Development Plan 2016-2040, we estimate the DoE generation target to be around 118,000 GWh by 2022 and 182,000 GWh by 2030. Since a low-carbon scenario limits the Duterte administration to at most 64,280 GWh (54%) of fossil-based generation by 2022, this means that the balance of 53,720 GWh (46%) must be covered by RE.

CAN THE DUTERTE ADMINISTRATION PRODUCE 53,720 GWH FROM RE BY 2022?
As of end-2017, some 1,075 private sector RE projects had been submitted to the DoE. Of these, 869 projects had been approved (Table 1), while 206 were still pending.
The approved projects totaled 23,760 MW, good for an annual generation of more than 58,000 GWh based on very conservative capacity factor assumptions (35% hydro, 35% OTEC, 63% geothermal, 23% wind, 14% solar, and 27% biomass). As long as all approved RE projects as of 2017 are implemented on time, we can generate more than enough electricity for our national development goals and exceed our Paris commitment at the same time, with several years to spare.
Including the 206 RE projects still awaiting approval raises the potential annual generation to 68,000 GWh, far exceeding our low-carbon target of 53,720 GWh RE by 2022. Remember that these are just RE projects approved as of 2017. The Duterte administration has four more years to exceed its low-carbon targets.
With a further 10% reduction in electricity demand through energy efficiency, subsequent administrations can go for even more ambitious carbon cuts or GDP growth rates in the future.
OTHER BENEFITS OF A LOW-CARBON PATH
This low-carbon path will also 1) help the Philippines access climate-related international grants and financing; 2) reduce local pollution; 3) pull down the price of electricity as solar, wind and battery prices decline steadily; 4) open the country’s industrialization program to sunrise industries offering green investments and green jobs; 5) democratize the electricity sector as more rooftops are solarized; 6) improve the resilience as well as efficiency of our energy infrastructure through distributed generation; and 7) reduce financial and project risk through expansion in smaller increments.
RE PROJECT DELAYS DUE TO ENERGY SPECULATION AND RED TAPE
Sadly, some RE developers have dilly-dallied in finishing their projects. They are apparently more interested in reselling their service contracts to latecomers.
Worse, some of these speculators are also building coal plants, whose outputs are contracted out to electric utilities through long-term power supply agreements. And these plants are completed with little delay, especially today, with DoE’s EO 30 fast-tracking “projects of national significance.” Thus, RE projects are locked out of potential markets, while we are locked in for the next decade or more to coal plants which cause global warming, local pollution, volatile prices and other problems.
To foil these energy speculators, the DoE must insist on iron-clad contracts, clear milestones, performance bonds, and hefty penalties for delays in RE projects.
The red-tape problem, a common complaint, can be solved: the DoE should do the pre-feasibility studies and project specifications, collect all the necessary signatures, and package the projects itself. It can then auction off the packaged projects to the most qualified bidders who bid to finish them on time at the lowest cost.
DISMAL RESULTS FROM THE RE ACT
The Renewable Energy Act of 2008 is ten years old this year. Its implementation has been dismal.
The feed-in-tariff (FIT) system for big players was hobbled from the beginning by an ill-conceived high-risk “race-to-finish” approach which required developers to finish their RE project first before they can learn if they qualify for FIT or not. FIT participants regularly complain of delayed payments.
The net metering provision for small players was recast by electric utilities into an unattractive net billing system and saddled with barriers like permitting requirements, impact studies and unnecessary charges.
Other provisions like the renewable portfolio standards, renewable energy certificates and green energy options have languished, unimplemented after ten years.
Pres. Duterte should step in to ensure that Filipinos are not denied the full benefits from renewable technologies that are increasingly enjoyed by people in countries with better pro-RE policies.
 
Roberto Verzola is a Senior Fellow of Action for Economic Reforms. The German foundation Friedrich Ebert Stiftung published in 2017 his book Crossing Over: The Energy Transition to Renewable Electricity (second edition, PDF is online). He is currently president of the non-profit Center for Renewable Energy and Sustainable Technology (CREST).

Celebrating 70 years of diplomatic ties between the Philippines and Argentina

By José Néstor Ureta
TODAY, we celebrate 70 years of diplomatic relations with the Philippines that have seen, particularly since the return of democracy in both our countries, a path of constant growth in the ties between our peoples.
Since Aug. 27, 1948, Argentina and the Philippines have held numerous agreements on cultural cooperation, sports, trade, investment, political consultations and cooperation between both diplomatic academies. Other agreements are also in advanced stages like educational cooperation, exchange in tax matters and agricultural cooperation.
The Philippines is a special friend in Southeast Asia. The affinity between our countries goes back to our common colonial history. Hispanic culture and the Catholic faith continue to act in the idiosyncrasy and values of our peoples, notwithstanding the geographic distance of a hemisphere separating us.
We consider culture and education to be vital tools to promote mutual knowledge and bilateral cooperation. This year, our Embassy in Manila develops an important cultural agenda with various activities in the areas of film, dance, literature, photography and music.
Argentina gives great importance to South-South Cooperation. In this respect, we celebrate the excellent relationship between both countries, which has materialized in different and successful technical cooperation projects in recent years in the agricultural, forestry and livestock sectors, through the Argentine Fund for South-South and Triangular Cooperation (FO.AR). We hope to expand this cooperation in such critical areas as child mortality, gender-related violence and natural disasters.
We celebrate the excellent cooperation in agricultural sector. We must continue to work closely and explore new fields, such as production of organic rice, milk, dairy products and ecological fishing.
Economic cooperation and commercial exchange, although important, have not yet reached their full potential. There is plenty of room to increase and diversify trade flows between both countries.
We give importance to the relationship between our respective Diplomatic Academies, materialized from the cooperation agreement between our “Instituto del Servicio Exterior de la Nación (ISEN)” (Argentine Foreign Service Institute) and the Philippine Foreign Service Institute (FSI), signed in 2011. We promote the reciprocal diffusion of academic articles under the current agreement and we consider, first and foremost, the exchange of young diplomats from both countries.
We also consider sports cooperation as a tool to promote greater knowledge among our peoples and increase exchanges of sports technicians, athletes and also promote a positive agenda that can encourage work opportunities related to sports, within the framework of the bilateral MOU signed on Sept. 14, 2012. The promotion of soccer for children in peripheral regions of Manila developed by the Argentine Embassy is an example of the value we give to foster understanding and the development of activities that bring us closer in this area.
Tourism is one of the most important areas to raise awareness among our cultures and increase personal contacts. Even when our destinations are unknown to the general public, among the ASEAN countries, the Philippines is the largest source of tourists in Argentina and the flow of Argentine tourists in the Philippines is increasing. We must continue our efforts to impart to each other the exceptional natural beauty, architectural and cultural properties of both countries.
We consider ASEAN a key region in the growth dynamics of Asia in recent decades. Through a diverse, fruitful and mature relationship maintained with its member countries, Argentina identified a wide margin to advance in the relationship with ASEAN, both in terms of international policy issues and in relation to the increase and diversification of our trade with the region. In this regard, Argentina is particularly grateful for the support of the Philippines for signing my country’s accession to the Treaty of Amity and Cooperation in Southeast Asia (TAC) in Singapore on Aug. 2, 2018.
At the same time, I would like to highlight the special importance that MERCOSUR gives to ASEAN. Both regional blocs have worked hard to intensify interregional dialogue through the exchange of information and points of view of their respective integration processes. We need to deepen common efforts to identify areas of common interest for our future dialogues.
Another framework that finds us united with the Philippines in our joint cooperation is FOCALAE (FEALAC). Argentina considers FOCALAE (FEALAC) as a forum of great relevance in its relationship with the Asia-Pacific, in particular to promote dialogue between two geographically distant regions and that present a great cultural diversity. We are strongly committed in continuing to cooperate at both the public and private levels in the different subjects dealt with by the various working groups, as well as in the identification of new projects of interest.
The Philippines is a nation that we feel very close to, with which we share a similar aspiration and determination to build a better and fairer future for our peoples, within a framework of peace, prosperity and international security.
Argentina is firmly on the path to strengthen bilateral ties, so I reaffirm our country’s commitment to intensify our best efforts so that this cooperation can be transformed into a deep partnership based on trust, solidarity and complementarity.
The conditions are given, we must take advantage of them for the benefit of our peoples.
 
José Néstor Ureta is Argentina’s ambassador to the Philippines.

What does ‘move on’ really mean?

SYNTAX and grammar insinuate that “move on” is a verb in the imperative mood (a command), which is why there is a frightening ocean of meaning that separates the speaker from the spoken-to, by the very utterance of this. “Move on” is best just a resolution to be whispered to oneself as one would acknowledge one’s own wrong choices or actions, and plan what to do next. But it is an arrogant breach of personal boundaries when someone else tells another to “Move on,” especially if that other has been the victim of that someone who has caused pain and loss. It is the brutal last kick in the dust. It reeks too much of the despotic commands of oppressive martial law.
And yet “the eldest daughter of the former Philippine dictator Ferdinand Marcos has advised Filipinos to ‘move on’ and forget about the past, drawing angry rebukes…in a country that suffered under two decades of her father’s brutal regime. The daughter, Imee Marcos, 62, and the rest of the Marcos family have been enjoying a revival of sorts under the presidency of President Rodrigo Duterte, a self-professed fan of Ferdinand Marcos and his strongman ways” (www.nytimes.com/2018/08/22).
“How can those who were unjustly detained, tortured and murdered move on when there is (no) remorse… any act of atonement…acceptance and recognition of wrongdoing on their part?” Sen. Francisco “Kiko” Pangilinan, the opposition Liberal Party president asked (www.philstar.com/headlines/2018/08/23). He said the issue was never just between the Marcos family and the family of the late senator Benigno “Ninoy” Aquino, Jr. but “between the Marcoses and the entire nation that suffered immensely from the abuses, the greed, and the oppressive and tyrannical rule of Marcos the dictator.” For many, the atrociousness of Imee Marcos’s “move on” was that it was imperially commanded of the Filipino people on the 35th anniversary of Ninoy’s assassination, which had triggered the 1986 EDSA People Power Revolution that ousted Ferdinand Marcos.
“The millennials have moved on and, I think, people at my age should move on as well,” the dictator’s daughter was quoted as saying (Ibid.). In mainstream and social media, the youth protested and censured Imee for speaking for them. They shouted that they are aware the two-decade rule of Marcos was marred by killings, human rights abuses, disappearances and media repression, which the Marcos family has not acknowledged. Amnesty International estimated that 70,000 people were imprisoned, 34,000 were tortured and 3,240 were killed during martial law” (Ibid.).
Millennials ranted that they still suffer the consequences of Marcos’s authoritarian rule, citing the $10- billion plunder, the $28.3-billion debt from the World Bank/IMF that funded his “Build, Build, Build” infrastructure projects and the economic deprivation in those years that stunted development vis-à-vis our Asian neighbors (Ibid.). No, not even the youth agree with President Duterte that “Marcos was the best president the Philippines ever had” (GMA News Online, Feb. 10, 2016).
Now this: barely two weeks ago, Duterte announced that he was tired, and ready to step down “if the likes of Senator Francis Escudero or former Senator Ferdinand ‘Bongbong’ Marcos, Jr. succeed him in office” (http://www.gmanetwork.com/2018/08/15). Marcos lost to now Vice-President Leni Robredo by 263,473 votes — still being protested by Bongbong.
And in scary déjà vu, it was virally reported that Duterte fell very sick after that declaration (a rumor started by Communist Party of the Philippines founder, exiled Jose Maria Sison), and the nation was in anxiety about the leadership of the country, like when the illness of Ferdinand Marcos was kept secret from all. The chimera of a tumultuous power grab should Duterte go, gripped the nation’s throat — and tightened with Imee Marcos’ ominous follow-through: “Move on!”
“Move on” in this political scenario would probably be best paraphrased as “You lost. Surrender!” It means “Forget your past hurts, you had no reason to be hurt; revise your thinking and accept that the dictatorship of Ferdinand Marcos was good for the country, and agree to let the country be again governed and run in the way of what Marcos called his ‘benevolent dictatorship.’” Revise history.
The once-high profile Presidential Commission on Good Government (PCGG) created by President Corazon Aquino to run after the Marcos wealth has lost steam through the years, starting with Gloria Macapagal Arroyo, who moved it from the direct supervision of the President to the Department of Justice. Early in his term, Duterte called the PCGG useless and said it must be abolished (ABS-CBN News, July 26, 2017). In December the House approved 162-10, HB 7376 to abolish the PCGG and the Office of the Government Corporate Counsel (OGCC) and transfer powers to the Office of the Solicitor-General [OSG] (Philstar, May 15, 2018). But at the Senate, the counterpart bill was not approved, citing that the PCGG was a performing agency and could still bring in collections from the Marcos wealth (Rappler, June 13, 2018). A majority of the senators wondered how Solicitor-General Jose Calida, a known Marcos loyalist and one of the top campaigners for Bongbong Marcos as vice-president in the 2016 elections, could objectively and fairly supervise the recovery of the Marcos wealth (www.philstar.com/2018/05/15).
Of the estimated $10 billion plundered by Marcos, about $3.6 billion (P170 billion @$1 = P47.58) had been recovered by the PCGG as of the 30th anniversary of the EDSA Revolution, before Duterte assumed office (Rappler, Feb. 25, 2016).
Is there some chance to recover the balance of $6.4 billion from the Marcoses? Of course, P340+ billion (@$1 = P53.48 Aug. 24) cannot ever come in an avalanche, but that amount is one-third of the staggering P1.19 trillion to finance the fiscal deficit in next year’s budget. National Treasurer Rosalia de Leon herself said this is the first time the government’s borrowings will exceed the trillion mark, with P297.2 billion ($5.504 billion) to be foreign borrowing (The Philippine Star, July 10, 2018). This, at a time when the peso is depreciating rapidly, inflation is rising, and GDP is falling below targets.
But more than for the plundered wealth — which must be returned — insult cannot be heaped upon injury by the blatant disregard of the Filipino’s dignity and self-respect from Imee Marcos’s imperious “Move on!”
No, we will not move on until the Marcos debts — moral and material — to the Filipino people are paid.
 
Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.
ahcylagan@yahoo.com

PHL battles South Korea today for semifinal berth

By Michael Angelo S. Murillo, Senior Reporter

THE PHILIPPINE MEN’S NATIONAL BASKETBALL TEAM will take on defending Asian Games champion South Korea today for a spot in the semifinals. — PSC MEDIA

THE PHILIPPINE Basketball Association-backed men’s national team seeing action at the 18th Asian Games in Indonesia seeks to book a place in the semifinals when it collides with defending champions South Korea today.
To take place at the Gelora Bung Karno Basketball Hall in Jakarta at 11 a.m. (Manila time), the Philippines shoots for a spot in the next round and put itself in a position to move a step closer to winning its first Asian Games title since 1962, or at least wind up on the podium once again after a 20-year absence.
Composed of the core of the Rain or Shine Elasto Painters and backstopped by players from the other PBA teams, the Philippines finished second in Group D of the preliminary phase with a 1-1 record.
It routed Kazakhstan, 96-59, in its tournament debut on Aug. 16 before dropping a close one to China, 82-80, on Aug. 21, to surrender the top spot to the latter heading into the quarterfinals.
Against China, the Philippines was in prime position to win the contest but just did not get the breaks in the end to complete the task.
Filipino-American National Basketball Association player Jordan Clarkson had a stellar debut for the national team, top-scoring with 28 points to go along with eight rebounds and four assists.
Christian Standhardinger finished with 18 points for the Philippines while Stanley Pringle had 14.
While they rued the missed opportunity to cut down powerhouse China in said game, Philippine team coach Yeng Guiao said the loss was nonetheless something to take positive cue from in their preparation for their upcoming game.
“While we lost to China, I don’t consider it as a loss. I consider it as a victory for the Filipino people,” said Mr. Guiao following their game against China.
“The players gave their all and came very close to beating undeniably one of the top teams, if not the top, in the Asian Games,” he added.
He went on to say that they are expecting nothing easy from South Korea today and that they really have to “prepare hard” if they are to go deeper in the tournament.
GROUP A TOP TEAM
In South Korea, the Philippines is going to face a team that breezed past the competition in Group A, winning by an average margin of 38 points per game.
It beat host Indonesia, 104-65, then Mongolia, 108-73, and Thailand, 117-77, in that order to sweep its group assignments.
Naturalized player and former PBA reinforcement Ricardo Ratliffe has been leading South Korea with an average of 23.3 points and 13 rebounds per game while Junbeom Jeon has been good for 16.3 points.
As a team, South Korea has been shooting north of 40% from beyond the arc so far in the tournament.
Other quarterfinal matches today are Iran vs. Japan, Chinese Taipei against Syria, and China versus Indonesia.
The Philippines-South Korea will be shown live over ESPN5.

Aces improve to 2-0 with rout of KaTropa

By Michael Angelo S. Murillo, Senior Reporter
THE Alaska Aces raced to a 2-0 record in the Philippine Basketball Association Governors’ Cup after routing the TNT KaTropa, 125-96, in Sunday action at the Smart Araneta Coliseum.
Got off to a fiery start to open the contest, the Aces proved too hard to break for the KaTropa as they chalked up the win for early leadership in the standings of the season-ending PBA tournament.
Guard Simon Enciso got the Alaska fireworks going, knocking four triples inside the first five minutes of the opening quarter to help his team to 14-3 advantage.
The rest of the Aces picked up from there, establishing a 22-point cushion, 35-13, by the end of the first quarter.
In the second quarter TNT came out more aggressive, angling to narrow their deficit.
The KaTropa got to within 13 points, 46-33, with 4:50 to go in the frame.
But the Aces was quick to stop the bleeding thereafter with Mr. Enciso, import Mike Harris and Chris Banchero leading the way.
The Aces outscored the KaTropa, 22-6, for the remainder of the quarter to extend their lead to 68-39 by the halftime break.
TNT tried to claw its way back to start the third canto but Alaska was not to allow the KaTropa to get their way.
The count stood at 88-57 with 4:40 to go with the Aces on top.
When the third-quarter smoke cleared, the lead ballooned to 35 points, 103-68.
In the fourth quarter Alaska chose to play its bench but it hardly slowed down the motor of the Aces.
Alaska was ahead, 113-80, with 6:57 left in the game and held steady to the win after.
Mr. Enciso led Alaska with 30 points, going nine-of-12 from beyond the arc.
Mr. Harris had 16 points and 24 rebounds while Mr. Banchero finished with 15 points and 14 assists.
Import Stacy Davis, meanwhile, led TNT (1-3) with 26 points, 12 rebounds and seven assists with Troy Rosario adding 16 points.
“We were on fire as typified by Simon Enciso. I loved the energy of the team,” said winning coach Alex Compton following the game.
“Hopefully we get to sustain this kind of character in our next games,” he added.