Ryanair’s UK pilots vote to strike

August 9, 2019 | 12:02 am

DUBLIN — Members of Ryanair’s British pilot union voted on Wednesday in favor of strike action later this month in a dispute over working conditions, the British Airline Pilots Association (BALPA) said.

According to the union, there will be a two-day strike from Aug. 22, and a second strike from the early hours of Sept. 2 until just before midnight on Sept. 4.

In an email sent by BALPA to its members, the union said its members had sent a “very clear and powerful message to the company,” with 79.5% of the ballots cast backing the action.

“Notwithstanding the result of the industrial action ballot, BALPA remains committed to finding a negotiated and agreed settlement to the current trade dispute,” it said.

The decision to strike is a setback for management at Europe’s largest low-cost carrier, who in recent months said they had largely resolved an industrial relations dispute with pilots and cabin crew.

Ryanair said the strike action had the support of less than 30% of its pilots as only half were members of BALPA.

“This BALPA industrial action has no mandate from Ryanair pilots, is ill-timed just 10 weeks before Brexit, and will cause unnecessary disruption to customers holidays and travel plans,” the airline said in a statement.

“We have written to BALPA asking them to return to talks, and we apologize sincerely to customers for any uncertainty that BALPA’s ballot may cause them.”

Ryanair agreed in late 2017 to recognize unions for the first time, triggering a series of damaging strikes last year that ended when the airline signed collective labor agreements with several pilot unions throughout Europe.

But BALPA has said pilot union colleagues in Spain, Ireland, Sweden and Germany have made “little, if any, meaningful progress” in talks with Ryanair.

The budget airline’s Irish pilot union FORSA-IALPA is balloting members on possible strike action with results due by Friday.

The Irish union said there was “frustration and disappointment” among pilots over a lack of progress in ongoing pay talks with the company but did not say when strike action might take place.

Portuguese cabin crew union SNPVAC has given notice of five days of strike action from Aug. 21.

According to SNPVAC, the strike action is because Ryanair has not complied with a protocol signed last November, which the union said included holiday pay, 22 days of annual leave per year and full compliance with Portuguese parental law.

On Wednesday, the union said Ryanair would close its base at Faro International Airport in southern Portugal from next year with the loss of at least 120 jobs.

Ryanair told the union the decision to close the base, which operates 10 aircraft in summer, was part of wider planned cuts flagged last week due to weaker earnings, the grounding of the Boeing 737 MAX and concerns over Brexit, said SNPVAC director Fernando Gandra.

Last week, Ryanair said it had 500 more pilots and 400 more cabin crew than needed, with job losses will be announced in the coming weeks. — Reuters

ICTSI sells 30% stake in operator of Motukea container terminal

August 9, 2019 | 12:02 am

A UNIT of International Container Terminal Services, Inc. (ICTSI) is selling its 30% stake in a company that operates the Motukea Port, Papua New Guinea.

In a disclosure to the stock exchange Thursday, the Razon-led port operator said its unit ICTSI South Pacific Ltd. has entered into agreements with Noho-Mage Holdings Ltd. for the latter to acquire a minority stake in Motukea International Terminal Ltd. (MITL).

“This is in line with the Terminal Operating Agreement (TOA) entered by ICTSI and the PNG (Papua New Guinea) Ports Authority for the 25-year operation of the Motukea Port,” it said.

“The signing of the TOA, which provides that ICTSI South Pacific will own 70% while Noho-mage Holdings Ltd. will own 30% of MITL, was earlier disclosed to the Exchange last September 25, 2017,” it added.

Noho-Mage Holdings Ltd. is representing Tatana and Baruni communities from Papua New Guinea. The entry of Noho-Mage Holdings as a shareholder in MITL will ensure the representation of the communities from Baruni and the Tatana Island in the company’s board of directors.

Meanwhile, ICTSI said in a separate disclosure it received a partial repayment of 195.2 million euros from the Sudanese Ministry of Finance & Economic Planning for the delay in the company’s takeover of the South Port Container Terminal at the Port of Sudan last April.

“[D]ue to the ongoing political instability in the Republic of the Sudan and the failure of the Sudanese government to turn over the South Port Container Terminal at the Port of Sudan to ICTSI on or before…April 7…the Sudanese Ministry of Finance & Economic Planning earlier sent ICTSI a letter confirming the remittance of 195.2 million euros…,” it said.

It added the balance of the 410 million euros upfront fee of the refund bond will be paid to the company as soon as possible.

“ICTSI is in continuous discussion with the Sudanese Government for the repayment schedule of the balance of the upfront fee. ICTSI continues to reserve its rights under the Concession Agreement,” it said. — Denise A. Valdez

China yuan-fixing drama fades as central bank seen pursuing stability

August 9, 2019 | 12:02 am

THE YUAN steadied on Thursday after the central bank set the daily fixing stronger than analysts expected, providing some reassurance to traders rattled by a tumultuous week in markets.

China’s currency rose as much as 0.3% after the People’s Bank of China (PBoC) set its daily reference rate at 7.0039 per dollar. While that was the first time since 2008 that the fixing was weaker than 7, it tracked earlier moves in the spot rate and was stronger than the 7.0156 average estimate of 21 analysts and traders surveyed by Bloomberg.

China’s daily currency fixing has become a hotly watched event after a weak reference rate on Monday helped trigger the biggest loss in the yuan since 2015 and spark concern about a global currency war. The latest move comes after the PBoC took steps to calm sentiment toward the yuan, reassuring foreign companies that the currency won’t weaken significantly and planning to sell bonds in Hong Kong.

“China wants to prevent panic now,” said Gao Qi, a strategist at Scotiabank. “The PBoC will continue to send signals to stabilize the yuan in the near term.”

The yuan is down 3.7% in the past three months, and at its lowest since at least 2015 against a basket of currencies.

Further depreciation is still on the cards. US President Donald Trump has threatened to impose more tariffs on Chinese goods and the PBoC could loosen its monetary policy to aid growth. Central banks in New Zealand, India and Thailand all made surprise interest-rate cuts on Wednesday, stoking fears of a full-on currency war.

Yet China will be keen to avoid the experiences of 2015-2016, when a one-off devaluation spurred companies and individuals to yank money out of the country.

“I suspect the authorities will want to gain more comfort over the next few days and weeks that we’re not seeing a huge intensification of capital outflow pressures, before they possibly allow it to go a little weaker,” said Andrew Tilton, chief Asia Pacific economist at Goldman Sachs Group Inc. “Right now I suspect they want to desensitize the market to this magic number of 7, and make sure that they are not going to have a capital outflow problem.”

The risk is how the Trump administration responds to a weaker yuan. The US this week labeled China a currency manipulator, a formal designation which China rejects. The yuan may tumble to as weak as 7.7 in the event of an intensification of trade tensions, according to Societe Generale SA.

“The further it falls, the more likely the Trump administration will respond with more tariffs and other policies to target China,” said Ben Emons, managing director for global macro strategy at Medley Global Advisors in New York. “All of which points to even more downside in the RMB, which is then a problem for other emerging countries that compete with China,” he said, using an abbreviation of the yuan’s official name. — Bloomberg

2GO income falls in 2nd quarter

August 9, 2019 | 12:01 am

EARNINGS of 2GO Group, Inc. dropped by more than a third in the second quarter as costs grew mainly due to higher fuel prices.

The listed shipping and logistics provider posted an attributable net income of P102.3 million in the second quarter, down 36% from P159.66 million in the same period last year.

Total revenues grew 7% to P6.12 billion during the three-month period, but it was offset by rising cost of services and goods sold, which jumped 10% to P5.5 billion.

2GO swung to an attributable net loss of P189.37 million during the first half, from a profit of P199.39 million last year.

Six-month revenues went up by 5% to P12 billion, much of which was driven by stronger returns from the company’s non-shipping business.

2GO’s logistics and distribution business added P7.14 billion to the company’s total revenues in the first half of the year, an increase of 10% from last year due to the growth of its courier, e-commerce, coldchain and isotanks and distribution businesses.

However, shipping revenues slid 1% to P4.87 billion during the period on increased competition in the freight segment.

Non-shipping revenues accounted for 59% of the company’s revenue pie in the first half of the year, while the remaining 41% came from shipping revenues.

Cost of services and goods sold during the six-month period climbed 10% to P11.14 billion due to higher fuel prices.

“Fuel prices increased by 10%, and 2GO was impacted by a negative price variance of P139 million for the first half of the year,” it said in a regulatory filing.

2GO has three core business units, namely: 2GO Freight, 2GO Travel and 2GO Supply Chain.

For the year, the company said it wants to “expand and further enhance its service offerings” by improving the streamlining of operations and collaborations within its businesses units, investing in warehousing and logistics solutions and initiating synergies with its new shareholders. — Denise A. Valdez

Agility

August 9, 2019 | 12:01 am

“The only sustainable advantage you can have over others is agility, that’s it. Because nothing else is sustainable, everything else you create, somebody else will replicate.” — Jeff Bezos

We always hear in business conferences and public fora the need to be agile. Speakers from global companies like Facebook, Amazon, and Google trumpet their agile practices, while business executives nod and cheer in agreement.

Yet, these self-same executives lament at the fact that their companies remain to be traditional, that is, hierarchical, bureaucratic, and slow to respond to the market. One executive of a local conglomerate I spoke with said, “We always invite these big tech companies to speak in our leadership summits, but we remain to be the same traditional company”.

This is because of the gulf of a difference between the current state of companies in the country, and the idealized agile practices of global tech firms. This is compounded by the lack of understanding of what organizational agility is, and how to develop this company-wide.

Agility is the ability to understand, learn, think, act, and move quickly and easily. When it comes to business, there are four levels of agility that companies need to develop — individual agility, team agility, organizational agility, and leadership agility

Individual agility is the one skill that Google is looking for in an employee because the skills that one knows now will not be applicable in the future. Hence, agility enables an individual employee to unlearn and learn, explore, expose, adapt to changing situations, and work on mission-critical projects.

Learning agility and professional agility are two equally important components of individual agility. To learn quickly and easily requires critical thinking and creative skills — a disciplined process of actively conceptualizing, applying, analyzing, synthesizing, and/ evaluating information gathered from, or generated by, observation, experience, reflection, and reasoning.

On the other hand, professional agility requires listening, communication, and collaboration skills, apart from being resourceful and proactive in finding solutions to problems. They need to have the courage to fail fast and the empathy to work well in diverse teams.

When agile individual employees work together for a common goal, they become agile teams. A team is agile when team members work and organize their individual functions in order to be responsive and adaptive to the changing demands of the company.

We first saw this movement and philosophy in information technology (IT) departments, such as in agile software development, which refers to iterative development where requirements and solutions evolve through collaboration between self-organizing cross-functional teams. Now, this movement has caught up in all functions of a company such as agile HR, agile marketing, and agile manufacturing.

When departments and functions within a company are composed of agile teams, then the whole organization becomes agile. Organizational agility is the capability of a company to rapidly change or adapt in response to changes in the market. A high degree of organizational agility can help a company to successfully respond to the emergence of new competitors, the adoption of new industry-changing technologies, or sudden shifts in customer preferences.

To recruit, develop, and sustain agile employees and teams, leading to an agile organization, there’s a need for leaders to be likewise agile; hence, the emergence of agile leadership. This is the ability of a leader to lead well in a wide range of circumstances especially new, changing and ambiguous situations. It demands certain skills from a leader, such as systems thinking, strategic thinking, and complex problem-solving and agile decision-making.

With the interplay of individual, team, and leadership agility, it becomes part of the organizational culture. This is where the difficulty lies for large established companies. How can they be nimble and flexible amid the established bureaucracy and processes?

Large established companies can start with establishing an innovation team, reporting directly to the chief executive, tasked to take on innovation projects to explore new business models, optimize operations, and respond to customer needs. They will have all the qualities of agility, unencumbered by the company’s bureaucracy.

In parallel, the organization development group of the company can implement interventions to transform the company’s culture to an agile one, by making agility as the prime qualification for recruitment, and retooling the mindset and skills of its employees. More importantly, incumbent leaders of the organization should take it upon themselves to shake off their old mindset into an agile one; otherwise, they will be forced to adapt.

But all of these do not mean that the stability of the company will be compromised to give way to agility. Stability and agility are not opposite ends of a pole, but are complementary.

Reynaldo C. Lugtu, Jr. is CEO of Hungry Workhorse Consulting, a digital and culture transformation firm. He is the Chairman of the Information and Communications Technology Committee of the Financial Executives Institute of the Philippines. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at rey.lugtu@hungryworkhorse.com

Your Weekend Guide (August 9, 2019)

August 9, 2019 | 12:01 am

Cinemalaya 15

THE biggest independent film festival celebrates 15 years with the showcase of 10 full-length films and 12 short features until Aug. 13. Films will be screened at various venues in Cultural Center of the Philippines and Metro Manila, and at Ayala Cinemas and Vista Malls in Pampanga, Naga and Legaspi in Bicol, Bacolod, Iloilo, and Davao. For details, visit www.cinemalaya.org, www.culturalcenter.gov.ph, and the Cinemalaya Facebook page. Tickets and festival passes are available at the CCP Box Office (832-3704).

Ang Huling El Bimbo

FULL HOUSE Theater Company presents the final run of Ang Huling El Bimbo, a musical featuring the songs of the Eraserheads, until Aug. 15 at the Newport Performing Arts Theater, Resorts World Manila, Pasay City. The musical tells a story of friends who reunite after 20 years and look back on the things that brought them together and kept them apart. For tickets and schedules, visit TicketWorld (www.ticketworld.com.ph, 891-9999).

Rak of Aegis returns

THE hit Pinoy jukebox musical Rak of Aegis returns to the PETA Theater Center, with ongoing performances until Sept. 29. The show brings the songs of the Aegis band such as “Halik,” “Sinta,” and “Basang-Basa sa Ulan,” to tell the tale of a perennially flooded barangay. This latest production features a mix of original cast members including Aicelle Santos and Kim Molina, Isay Alvarez-Seña and Sweet Plantado-Tiongson, Robert Seña and Renz Verano, and Kakai Bautista and Neomi Gonzales. Tickets are available through TicketWorld (www.ticketworld.com.ph, 891-9999).

How to manage an unusually talkative CEO

August 9, 2019 | 12:01 am

We work for a small enterprise owned by a family corporation. Our concern is the constant babble of our CEO on his many ideas, sometimes giving us incoherent thoughts in our daily meetings. Many of his ideas are off-topic, if not bordering on braggadocio and showmanship. It’s always a waste of time listening to him. Whenever some of my colleagues tried to bring back the discussion to a higher level, our boss automatically regresses to his old, unproductive ways. Is there a cure for us? – Plastered.

A woman met with a lawyer and informed him about his plan to file a case of separation his husband. The lawyer asked: “Do you have any grounds?” She answered: “Yes, of course. We have an acre of land.” The puzzled lawyer continued asking her: “You don’t understand. What I want to know is do you and your husband have a grudge?”

The woman answered: “Well, we don’t, but what we have is a nice carport at home.”

The lawyer shook his head and said: “Madam, I’m sorry but I just don’t see any reason why you should separate from your husband.” The woman answered: “Honestly, it’s just that my husband can’t carry on an intelligent conversation, unlike before.”

Whether it’s in the office or at home, intelligent and productive communication is a constant concern for everyone. Part of the problem is that management and workers will always have different views on anything, which could lead to hours of endless debate, resulting in low productivity.

But you have a different case. Your CEO is a different breed. He talks too much and that is a factor in your unproductive daily meetings. Dr. Marty Nemko, the San Francisco Bay Area’s “Best Career Coach” says “(a) conversation isn’t a monologue. It’s a tennis game: back and forth with the ball in each court roughly half the time. Aim to talk between 1/3 and 2/3 of the time, in 5- to 60-second bits. If you’re often outside those ranges, you’ll probably want to change.”

Nemko says “(t)he cure for verbosity depends on its cause.” It could be psychological. It could also be a matter of style. Or the CEO is simply outgoing and talking is part of his nature. But since we don’t know the cause, maybe it’s safe to assume that your CEO wants to be in total control of the organization. Therefore, as employees, what can you do to manage your situation? Do the same thing. Do whatever is necessary that is within your control. There are several ways of doing just that:

One, suggest that the company agrees to a daily, 15-minute morning meeting. Start the stand-up, eyeball-to-eyeball meeting as soon as everyone has arrived on time. If not proceed just the same. Don’t wait for tardy workers or you’ll only penalize others. Timing is crucial. And the agenda must be fixed — to rediscover yesterday’s key issues and solutions and make them as part of everyone’s lesson. It is called “asaichi” in Japanese management.

Two, volunteer to summarize the key points in your first week of daily meeting. The summary must be sent via email. It must contain only three major points: Major problem or problems tackled, agreed solutions, and lessons learned. Everything may be limited to around 250 words in an easy-to-read format. Distribute the email to those concerned. Then, agree with other team members to do the same thing by rotation on a daily or weekly basis.

Last, suggest that the CEO facilitate the daily 15-minute meeting. Somehow, your CEO, if made aware of the meeting rules, may take the hint and possibly curb his talkativeness. Depending on your rapport and credibility with the CEO, give him enough tips on how to handle an effective two-way communication process with employees.

But what if the CEO rejects your whole idea? Or if he accepts but continues to require a department sit-down meeting in the afternoon? Then, the next best thing for you is to ask a lot of open-ended questions to your CEO during that afternoon. Somehow, the meeting could proceed to its logical and intellectual conclusion as soon as your boss starts to babble his way up again.

If this fails again, then find a way to slip onto the CEO’s desk the 1982 bestselling book The One Minute Manager by Kenneth Blanchard and Spencer Johnson. The book is a classic management text that outlines how to do a one-minute exercise in goal-setting, a one-minute session to praise employees (in public) and a one-minute reprimand for employees not doing well (in private).

If this is difficult to do, then reverse the situation by having a print copy of the book as a permanent fixture on top of your work table, like a paperweight. Perhaps the CEO can pick up on the message.

ELBONOMICS: Everyone must learn from the silence of intelligent people.

Send anonymous questions to elbonomics@gmail.com or via https://reyelbo.consulting

How PSEi member stocks performed — August 8, 2019

August 9, 2019 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Thursday, August 8, 2019.

Farmers wary of further palay price declines as traders reluctant to buy

August 8, 2019 | 9:41 pm

FARMERS have asked the government to address the steep decline in farmgate prices for palay, or unhusked rice, warning that the traders who buy from farmers are inactive in the market because they are stuck with expensive inventory from before the government allowed imports of cheaper foreign rice.

In a statement, the Federation of Free Farmers (FFF), citing data from the Philippine Statistics Authority (PSA) said the farmgate price for palay, the form in which domestic farmers sell their harvest, has declined 23% from their peak in September of P22.88 per kilogram (kg).

The FFF warned that prices could decline further with the harvest season about to start in September, because of the combination of ample supply and reluctant buyers.

“Many local traders cannot unload their stocks from the previous season due to the large volume of imported rice in the market. Unless they find a way to free up their inventories, they will either stop buying palay, or they will buy at much lower prices in order to cover for anticipated trading losses. Either way, farmers will end up carrying the bag,” FFF National Manager Raul Q. Montemayor said in a statement.

He estimated that farmers have foregone some P40 billion in revenue as of the end of June due to the falling farmgate price from peak levels, based on a harvest of 8 million tons of palay in the first half.

The government liberalized rice imports earlier this year, allowing more private entities to import rice while paying a tariff of 35% on grain from Southeast Asia.

Mr. Montemayor also asked the Department of Agriculture (DA) to start imposing additional levies on top of the 35% tariff, such as as safeguard measures and anti-dumping duties.

Farmers have claimed that tariffs generated by the Bureau of Customs (BoC) on rice imports are out of line with the landed cost of the volumes imported, suggesting widespread underdeclaration.

Underdeclaration means the proper tariffs are not collected, thereby shortchanging the Rice Competitiveness Enhancement Fund (RCEF), which is funded by tariffs.

Mr. Montemayor said if duties are imposed, it will result in more expensive imported rice, which will make domestic rice more competitive and make traders more willing to dispose of their stocks and resume purchasing.

He also added that this will not result in higher retail prices due to the large gap between the cost of imported rice and domestic rice prices.

BoC data, he said, suggests that imported rice is landed at P24 per kg including tariffs, but is sold at P35.

“At the moment, there is a lot of profiteering going on. Even if import prices go up because of the remedial tariffs, there is still room for retail prices to actually go down,” Mr. Montemayor said.

He also urged that importers be required to obtain certifications that their shipments are pest- and disease-free, and to secure food safety certificates before bringing in their shipments.

He said rice imports are only randomly tested for hard metals, chemical residue, and general food safety after arrival, and brought up the huge costs the industry might incur if a shipment should contain disease, pests or contaminants.

He said the tariffs the government hopes to raise for RCEF are small relative to the potential damage on the farm sector from competition from imports.

RCEF ”will help, but it is not the saving grace that some legislators are projecting it to be. RCEF is intended to improve the competitiveness of rice farmers by reducing their costs of production and increasing their yields. This will not happen overnight, nor is success guaranteed,” Mr. Montemayor said.

“Although RCEF funds can be used for mechanization, better seed, credit, training and extension, other interventions that are not funded by RCEF such as irrigation, fertilizers and pesticides, and marketing are equally important,” he said. — Vincent Mariel P. Galang

China to crack down on gambling, POGO exploitation

August 8, 2019 | 9:40 pm

CHINA signaled a crackdown on cross-border gambling after alleging that many its nationals working in the Philippine offshore gaming industry were recruited illegally.

The Chinese embassy also pushed back on the gaming regulator’s plans to confine Chinese offshore gaming workers, employed by firms known as Philippine Offshore Gaming Operators (POGOs), to designated “hubs,” saying that such plans may “infringe on the basic legal rights of Chinese citizens.”

“The Ministry of Public Security of China has taken many actions and will carry out more special operations aimed at preventing and combating cross-border gambling,” the Chinese Embassy in the Philippines said in a statement Thursday.

Gambling is illegal in China, and Chinese gamblers must travel overseas or visit special economic zones like Macau to gamble. In recent years, they have also been able to gamble online following the explosive growth of the country’s POGO sector.

It was not clear whether the Chinese also intend to restrict travel by gamblers overseas, which could hurt operators of physical casinos.

The statement from the embassy follows a proposal from Philippine Amusements and Gaming Corp. vice president Jose S. Tria, Jr. on Tuesday to confine POGO firms to designated hubs, which will be “self-contained.”

This came as the Bureau of Internal Revenue (BIR) continues efforts to increase collection of remittances, reporting on Thursday an initial P186 million in withholding taxes collected from Philippine Offshore Gaming Operators (POGOs) and some P170 million expected this month in tax payments from businesses employing foreign nationals.

The Embassy said Chinese citizens overseas must observe local laws and regulation and China prohibits them from engaging in illegal activities in foreign countries.

It said Chinese law allows the prosecution of Chinese companies or individuals overseas engaged in illegal activity.

“The casinos and offshore gaming operators (POGOs) and other forms of gambling entities in the Philippines target Chinese citizens as their primary customers,” the embassy said.

“A large number of Chinese citizens have been illegally recruited and hired in the Philippine gambling industry,” it added, noting some Chinese nationals are “cheated” in the process of being brought to work in the Philippines, entering with tourist visas.

It said the presence of overseas gambling hubs has also resulted in the illegal transfer overseas of “hundreds of millions of Chinese yuan every year” while increasing social problems in the Mainland.

It called the work conditions of some Chinese nationals “modern slavery.”

The President’s spokesperson Salvador S. Panelo said the Philippines will not allow the rights of Chinese to be violated, and encouraged China to file complaints against companies illegally employing Chinese citizens.

Senator Emmanuel Joel J. Villanueva, who chairs the committee on labor, employment and human resources development, supported the planned crackdown, which he noted is in line with his resolution to investigate POGOs.

“Earlier this week, we filed a resolution seeking an inquiry in aid of legislation on the influx of illegal foreign workers, especially in POGOs, and the impact of POGOs to the country’s economy, job generation efforts, peace and order, among other concerns,” Mr. Villanueva told reporters via mobile phone.

The Bureau of Internal Revenue (BIR) has been seeking to register POGO workers in order to effectively tax them, saying that it sent out 48 notices, directing POGOs to remit withholding taxes on the salaries of their foreign workers.

Finance Assistant Secretary Dakila Elteen M. Napao said out of the 48 notices, 22 companies replied or protested the tax assessment.

“The BIR, though, has already collected P186 million from the notices sent out and is set to collect another P170 million moving forward. This started last month and will be collected on Aug. 10,” Mr. Napao was quoted as saying in a statement Thursday.

Commissioner Caesar R. Dulay has said the BIR collected only P175 million in 2017 during the initial year of operation of POGO firms, rising to P579 million in 2018, and P789 million in the first half of 2019.

Finance Secretary Carlos G. Dominguez III said in a mobile phone message on Thursday that the BIR is “simply implementing the Tax Code, and requiring those earning Philippine-sourced income to pay income tax.”

Asked to comment, Unicapital Securities, Inc. Technical Analyst Cristopher Adrian T. San Pedro and Regina Capital Development Corp. Equity Analyst Rens V. Cruz II both said the property sector is expected to suffer the most in the crackdown.

“I think we have to monitor the property sector particularly (DD, MEG, ALI and SMPH) given this might have an impact in their office space revenues,” Mr. San Pedro told BusinessWorld via text message. He was referring to DoubleDragon Properties Corp., Megaworld Corp., Ayala Land, Inc., SM Prime Holdings, Inc.

“Moving forward I still expect the POGO industry to grow and help the influx of Chinese nationals in the country and assuming this will be the start of a more strict (period of) government regulation, I think this will be beneficial for the PH gov’t (for tax collections) and the property sector revenue (office space and residential) in the medium term.”

Mr. Cruz, likewise, sees the property sector, particularly “bigger developers” to be most affected, but noted that some companies have already begun preparing for a crackdown prior to the Embassy’s pronouncement.

“Obviously, the heaviest weight will fall upon the property sector, especially the bigger developers with a substantial portion of their income derived from POGO leasing. But even with an expected near-term pressure, there is still reason to believe it won’t be the worst-case scenario,” Mr. Cruz said in a separate text message.

“For starters, the existing restriction on foreign ownership applies to leasing too, leaving POGO to about 40% of the recurring income, at best. Second, local firms have pro-actively increased the share of domestic office and retailers to their portfolio, serving as a buffer against their POGO exposure. Developers have long acknowledged the volatile nature of their foreign business. There will be a substantial drag to the bottom line, for sure, if a blanket purge on POGO will happen, but most management were guarding against this specific scenario for quite some time.” — Charmaine A. Tadalan, Arra B. Francia

PAGCOR scrambles to contain damage from POGO ‘hubs’ proposal

August 8, 2019 | 9:40 pm

PHILIPPINE Amusement and Gaming Corp. (PAGCOR) Chairperson Andrea Domingo walked back proposals to relocate Chinese offshore gaming workers to “self-contained hubs,” saying that such communities will have ample amenities for residents and will be “safe” with no restrictions on their movement.

A PAGCOR vice president, Jose S. Tria, Jr., had proposed to relocate the online gaming firms, which are known by their regulatory classification as Philippine Offshore Gaming Operators (POGOs), to designated hubs.

The proposal drew a sharp rebuke from the Chinese embassy, which said such hubs could violate the rights of Chinese citizens working in the Philippines.

“When we refer to POGO hubs as self-contained communities, what we mean is that these hubs will have all the basic needs of the foreign employees of POGO,” Ms. Domingo told reporters in a text message.

Ms. Domingo said the hubs will serve as a “protection” for foreign workers while still allowing them to exercise their personal rights and freedoms.

“Nonetheless, they are free to go anywhere they want to without any limitation on their personal rights or liberties. The hubs are in fact being established for the protection of the foreign workers,” she said.

“The Chinese Embassy expresses its grave concern over such potential move by PAGCOR, which may infringe on the basic legal rights of the Chinese citizens concerned,” the Chinese Embassy said on its website.

“They will no longer be exposed to crimes being committed against them on the streets, they are assured of good working conditions and decent living quarters, and will be given their proper visas as there will also be other relevant government agencies setting up offices at the hubs,” she added. — Beatrice M. Laforga

Muntinlupa City to allow owners to redeem 310 seized properties

August 8, 2019 | 9:40 pm

MUNTINLUPA CITY has issued an ordinance allowing the owners of 310 forfeited real properties to redeem their land, which the city has determined cannot be used for government projects.

According to City Ordinance No. 19-004 approved on July 31, Muntinlupa authorized the city treasurer to accept payments of real property tax delinquency from owners of the forfeited property.

The 310 properties were advertised for sale in 2014, 2015, 2016, and 2017 but attracted no bids.

“Three Hundred Ten (310) real properties were forfeited in favor of the City Government of Muntinlupa which consists of lots measuring more or less one thousand (1,000) square meters, the sizes of which are not feasible for government projects and infrastructures,” the ordinance read.

“The Office of the City Mayor, through the Committee on Public Auction, recommended that the owners of the forfeited real properties be allowed to redeem their lots,” it added.

The registered owners of the property have one year from the effectivity of the ordinance to address the delinquency.

Owner are required submit a written request to the Office of the Mayor outlining their intention to redeem, and to fully pay the delinquent real property tax and penalties plus a 10% cost of sale.

The ordinance will take effect in 15 days after publication of the ordinance yesterday, Aug. 7. — Vann Marlo M. Villegas

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