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GoTyme Bank deposits hit P19 billion

GOTYME BANK reached P19 billion in deposits as of August, driven by improved customer acquisition.

The Gokongwei-led digital bank saw its customers surge by about 300,000 to 4 million in August, which drove the increase in its deposits, it said.

This puts it on track to reach its target to have P20-billion deposits and 5.2 million in customers by yearend.

“I think we had our biggest customer acquisition month in August. I think this third, fourth quarter we should average over that,” GoTyme Bank President and Chief Executive Officer (CEO) Nathaniel D. Clarke said.

With the bank continuing to onboard more new customers, he said he does not expect the impending entry of more digital lenders to have a significant impact on the industry.

The Bangko Sentral ng Pilipinas’ (BSP) policy-setting Monetary Board in August approved the lifting of the moratorium on digital banking licenses, allowing four more digital banks to operate in the country starting next year.

The four additional licenses may come from either new applicants or banks seeking to convert their existing license to a digital one.

“I don’t think it significantly changes the competitive dynamics because today, the cap of six has not prevented other new digital-first entrants,” Mr. Clarke said.

“To that end, we don’t see that the market will really change given that there’s been a workaround and we’re already playing in a market that has those players… If ever, it’s only going to serve for heightened awareness and faster adoption because there are more players that will make people aware — and comparison and competition is always good,” GoTyme Co-CEO and Chief Commercial Officer Albert Raymund O. Tinio added.

He said new entrants are also unlikely to affect their business significantly.

“We don’t believe it’s an issue of access to licenses. There are 450 [banks]. We think it’s all about executing well — offering a differentiated, beautiful customer experience, offering the right products, and making them accessible,” Mr. Tinio said.

It would also take these new players some time before they can launch their operations, he added.

“Maybe it will be quicker for some of the existing players because they already have operators, but a minimum of six months. So it’s not going to change. And it’s going to be harder. By then we have another three or four million customers,” Mr. Clarke said. 

SALARY LOANS, CREDIT CARD
Meanwhile, GoTyme Bank plans to boost its consumer lending business through a salary loan product following its acquisition of SAVii in May and the launch of a QR-based credit card, Mr. Clarke said.

The bank will roll out a limited, invite-only pilot of its salary loan product by December, he said.

“SAVii has their existing payroll salary loan. That’s their main [product]. They also do overall financial wellness with the employees of the companies they partner with, so they also give insurance and offer savings. Over time, we will strengthen that joint employee-employer proposition. But for now, we’ve started to support them with some receivables purchasing. So, we’re bringing some of their loans to our balance sheet,” Mr. Clarke said.

“There’s a good marriage between the accounts that SAVii serves and the enterprise accounts that we’ve currently gotten onboard in our survey. So, there’s an opportunity to provide leads across SAVii and GoTyme,” Mr. Tinio added.

Currently, the digital bank’s only loan product offering is a micro, small, and medium enterprise loan through its partnership with merchant payments solutions provider PayMongo Philippines, Inc.

Meanwhile, for the QR-based card, Mr. Clarke said GoTyme Bank will launch an employee-only pilot by yearend and then an initial rollout exclusively for its “best” customers by the first quarter of 2025.

The lender is also waiting for BSP approval for a virtual asset service provider license as it wants to launch investment and cryptocurrency features on its platform. Mr. Clarke said they hope to get the regulator’s green light before 2024 ends.

GoTyme Bank is a partnership between the Gokongwei group, which holds a 60% stake, and Singapore-based digital banking group Tyme, which has 40%. It is one of six online banks currently operating in the country. — Aaron Michael C. Sy

Owner of Harry’s Bar demands Venice tackle speeding boats and ‘damaging waves’

SPEEDING BOATS are a particular nuisance for Harry’s Dolci, a branch of the more famous Harry’s Bar which overlooks the Giudecca canal, as they make waves that splash customers. — CIPRIANI.COM

ROME — The owner of Harry’s Bar, a Venetian bar and restaurant frequented by Ernest Hemingway, has filed a legal complaint demanding city authorities do more to stop boats speeding through canals and causing damaging high waves.

Venice has long been threatened by flooding and “moto ondoso,” the erosion of its buildings by waves. To try and limit the waves, strict speed limits apply to boats within its waters of between five to 20 kilometers per hour.

Harry’s Bar owner Arrigo Cipriani says the speed limits are often ignored and poorly enforced, however.

“We filed a complaint with the authorities in charge of maritime traffic in Venice (…) about the state of the (canal) banks which are lapped by the waves and become slippery and unsafe,” he told Reuters.

Speeding boats were a particular nuisance for Harry’s Dolci, a branch of the more famous Harry’s Bar which overlooks the Giudecca canal, as they make waves that splash customers, he added.

Mr. Cipriani, 92, said he had suggested installing wooden barriers to keep his patrons dry, but the idea was rejected by city conservation and heritage authorities.

Michele Zuin, a city councilor in charge of water traffic, said he understood Mr. Cipriani and other entrepreneurs’ complaints, and the municipality was working to address their concerns.

He told Reuters there would be more speed checks.

“We are not starting from scratch, but we are improving the system,” Mr. Zuin said.

Mr. Cipriani’s father Giuseppe founded Harry’s Bar — which is just off the Grand Canal, near St. Mark’s Square — in 1931, with money an American named Harry Pickering had given him to pay off a loan.

Giuseppe Cipriani named the bar and his first son Arrigo (Italian for Harry) in Pickering’s honor.

Hemingway made Harry’s Bar his Venice headquarters and mentioned it in Across the River and Into the Trees, published in 1950. — Reuters

Bang & Olufsen unveils flagship store, new headphones

DANISH luxury audio brand Bang & Olufsen (B&O) is set to strengthen its presence in the Philippines with an updated flagship store.

At the unveiling of B&O’s newly renovated space at the Shangri-La Plaza mall in Mandaluyong on Sept. 24, Ferdinand Ong, owner of B&O’s official Philippine distributor Living Innovations, showed off the range of audio equipment that can be found at the showroom.

Mr. Ong told the media that while the 124-square-meter space has been there for almost eight years, the renovation allows them to “follow the global image of B&O reflecting Scandinavian design.”

“This year, we really committed to renovating it to be the best possible space ever so that the brand can showcase its products’ timeless design and beautiful acoustic experiences,” he said.

Of the wide selection of portable speakers and headphones on display, the latest is the Beoplay H100, a pair of headphones with high-quality sound and state-of-the-art noise cancellation. It has a scratch-resistant glass touch interface and detachable components. Available in the colors Sunset Apricot, Infinite Black, and Hourglass Sand, Beoplay H100 is priced at P115,000.

The flagship store’s most engaging section is the home theater, with speakers that have studio-grade sound calibrated to the room and listener’s position. Called the Beovision Theater, the setup can be paired with the 97-inch Beovision Harmony, a 4K OLED screen TV, that works seamlessly with the Beolab 50 and Beolab 90 floor-standing speakers.

Throughout the space, the Beosound Shape keeps visitors wondering if they are decor or speakers. The personalized wall-mounted system looks like an art piece, with a minimum of eight cube-like tiles mounted on the wall in various patterns and arrangements.

A notable thing to remember about all of B&O’s audio equipment is that their “cradle-to-cradle design has enhanced durability,” according to Soren Kokholm, head of B&O Southeast Asia.

“We want to make products that last for a very, very long time. We do it by ensuring that the products we make have a long life,” he said.

One example is their speakers, which have a platform inside that can be updated to new devices. “You can simply open up an old model, remove the module inside, and replace it with a new one compatible with your new device. When you invest in a B&O product, we promise you that you will have it for many, many years,” explained Mr. Kokholm.

“Instead of calling it sustainable, we look at longevity. And, of course, luxury.”

The Bang & Olufsen flagship showroom is on the mid-level of the 3rd floor of Shang-ri-La Plaza mall’s East Wing. — Brontë H. Lacsamana

ERC approves over 500 applications from generation facilities

THE ENERGY REGULATORY Commission (ERC) has approved over 500 generation facilities, issuing 414 certificates of compliance (CoCs) and 101 provisional authorities to operate (PAOs).

In a statement on Wednesday, the ERC said the approvals were made as acting ERC chairperson and chief executive officer Jesse Hermogenes T. Andres held his first commission meeting.

“These approvals are set to boost the capacities of generation facilities and improve the reliability and supply of electricity,” the ERC said.

CoCs are issued by the ERC to entities operating a power plant or other power generating facilities. Meanwhile, pending the issuance of a CoC, the ERC grants PAOs to enable a generation company to immediately operate its generation facility.

Mr. Andres formally assumed office last week, temporarily replacing suspended ERC chair Monalisa C. Dimalanta. — Sheldeen Joy Talavera

Precious parking

BW FILE PHOTO

First, it was the Boracay airport in 2010. Then came the proposed New Manila International Airport in Bulacan in 2019, now under construction. And finally, in 2024, the Ninoy Aquino International Airport (NAIA) joined the list. All three airports are now under the control of San Miguel Corp. (SMC), led by Chairman Ramon Ang. For now, it seems, Mr. Ang has his hands full with these three major projects.

As the SMC Chairman told a press conference in early September, “With our three assigned airports — Caticlan, NAIA, and Bulacan — eh sobra sobra na ’yun (that is more than enough). Let’s focus on making sure we can deliver the quality and the timeline that we promised.” And rightly so, as no other private entity currently operates more than two major airports in the Philippines.

SMC now faces the challenge of balancing resources and expertise across these three airports. While a significant amount of capital is flowing into the development of the Bulacan Airport, revenues are currently derived only from Boracay and now NAIA. Unsurprisingly, SMC’s first move after taking over NAIA was to increase service charges, starting with parking fees.

Through its subsidiary, New NAIA Infrastructure Corp. (NNIC), the new airport manager raised parking fees at NAIA starting Oct. 1. The standard fee for cars went up by 25% to P50 from P40 for the first two hours, with an additional P25 for each subsequent hour. Overnight parking fees saw a dramatic 300% increase: from P300 to P1,200 for cars; to P480 for motorcycles; and to P2,400 for buses.

For regular travelers like myself, the cost of parking at the airport for a five-day trip has now soared from P1,200 to P4,800. The previous rate seemed reasonable, but the new rate feels excessive. I reckon the new parking rates apply to all passengers, crew, visitors, and people dropping off or picking up passengers. Airport workers, including Customs and Immigration staff, I presume, park for free.

NNIC justified the hike by explaining that the increase was part of a broader effort to optimize airport operations. According to NNIC, the old parking fees inadvertently encouraged misuse of the airport’s limited parking space, leading to congestion. They claimed that many non-travelers took advantage of the low overnight rates. The steep rise, they said, would deter such practices.

While this rationale may seem plausible, I find it difficult to believe that non-travelers regularly parked at the airport simply because the rates were low. Given NAIA’s location, it’s unlikely that people would go out of their way to park there unless absolutely necessary. NNIC’s argument could be more convincing if it provided hard data to back up its claim.
Moreover, the airport compound is not that accessible, neither is convenient to ingress and egress. Also, commercial establishments and residences around the airport have their own parking facilities. In fact, it is the spillover from the airport that park at nearby commercial establishments like Newport Mall and not the other way around.

This move by NNIC mirrors trends observed in other countries when private investors took over public airports. For example, after London Heathrow was privatized in 1987, fees for landing, takeoff, and even parking were significantly increased to fund infrastructure improvements. Parking fees at Heathrow also vary, depending on the lot’s proximity to terminals.

The London airport also reportedly faced significant criticism when it raised parking fees by 60% over a few years, similar to the jump seen at NAIA. These fee hikes were justified by promises of improved services and infrastructure, though passengers often felt the pinch long before seeing tangible results.

Another example is the privatization of Fraport AG, the operator of Frankfurt Airport. After privatization, Fraport implemented a series of fee increases to finance terminal expansions and infrastructure upgrades. Similar to what we are seeing in NAIA, airport users initially balked at the parking and service fee hikes, but over time, Frankfurt Airport’s efficiency and passenger experience improved substantially.

In the Philippines, the current NNIC move suggests a similar pattern. While fee increases are immediately felt, infrastructure development and service improvements take time to materialize. NNIC’s plans to double NAIA’s capacity from 35 million to 62 million passengers annually, and to raise the number of flights from 40 to 48 per hour, are ambitious and could lead to long-term gains. However, as seen in global examples, such moves require heavy investments, which are often passed on to consumers through higher charges.

SMC’s concession for NAIA involves an upfront payment of P30 billion, with the government reportedly expecting it to generate around P900 billion over 15 years through yearly payments and revenue sharing. I am unsure about the payment formula, but with a P900-billion target for 15 years — assuming the news report I quoted was correct — then NAIA operations need to generate at least P60 billion yearly. Whether this pertains to revenue or profit, I don’t know. But just to compare, I believe that in 2023, NAIA reported revenues of about P12 billion.

As I have written before, the concern for most travelers and airport users isn’t who operates the airport, but rather the quality and cost of the services provided. The critical question now is whether SMC and NNIC will deliver on their promises of better airport facilities and a smoother travel experience. Historically, it’s common for privatized airports to increase fees early in their tenure, but the success of such efforts ultimately depends on whether passengers see real improvements.

Hitting the government’s revenue target will likely involve further price hikes in addition to the initial increases. By some estimates, NNIC may need to raise airport charges by up to 200% to meet its financial goals. Improvements are all meant to raise the standards of customer service and user satisfaction. But raising parking fees by 300% right at the start may not be the way to go as no improvement whatsoever has been done just yet.

For now, though, it seems that the era of expensive travel is making a comeback. And for those of us who rely on airport parking, the cost of convenience has certainly gone up. Perhaps we should get used to higher costs. After all, if the government doesn’t perceive particularly foreign travel as a luxury rather than a necessity, then why do we continue to tax it?

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com

UK’s oldest fine wine and spirits merchant is entering the auction business

BBR.COM

THE UK’s oldest fine wine and spirits merchant, Berry Bros. & Rudd, celebrated its 325th birthday last year, and announces today that it’s taking on a major new challenge: holding online auctions.

In an exclusive interview with Bloomberg, Geordie Willis, director of new ventures at the venerable central London retailer, reveals that the inaugural global sale for Berry Bros. & Rudd Auctions will launch later this month, bringing yet another auction choice to the world’s thirsty collectors.

“It will feature 500 lots of classics from Bordeaux, Burgundy and Champagne, and well-known names not just from the Old World,” Mr. Willis says. He declined to provide details of individual lots but promises “there will be wines dating back to the 1950s, and I hope some surprises.” Rare spirits will be included, too.

Entering the auction business has been on the management team’s mind for some time, Mr. Willis says, the latest innovation for the company whose historic, eye-catching headquarters at No. 3 St. James’s Street exudes Old World charm and could easily be a set in a Harry Potter movie. While several retailers in the US such as Zachys and Acker host auctions, Berry Bros. says it’s the first major merchant to do so in the UK.

“In a way the expansion feels quite natural,” says Mr. Willis, a member of the eighth generation of the Berry family, who masterminded the project and likes to describe the company “as a 325-year-old startup.” It was the first wine merchant to host a website back in 1994 and decades ago began orchestrating sumptuous wine dinners in its cellar at No. 3 St. James’s Street, where Louis Napoleon Bonaparte (Napoleon III) held secret meetings to plot his return to power.

Certainly, it has in place key auction essentials and behind-the-scenes logistics.

For example, for buyers and consigners, it will build on an existing client base in more than 100 countries as well as on its experience and success with Berry Bros. & Rudd’s fine wine exchange BBX, an online marketplace launched in 2010 for customers to buy and sell bottles from each other.

In addition, the company’s private client and cellar service division has long advised on how to collect and invest in wine, and when and where to sell it. And although it has long offered storage for clients’ bottles, in 2022 Berry Bros. opened a state-of-the-art warehouse in Hampshire’s Andover Business Park with a capacity for 14 million bottles, one of the largest fine wine storage facilities for private clients in Europe. The site is also carbon neutral, generating its own energy supply through solar panels and harvesting rainwater. Mr. Willis calls it “a massive advantage.”

“We see what’s in our warehouse, we see the demand,” says Mr. Willis. “The online auctions will complement BBX, whose platform works best for selling a small number of cases. It’s more complicated if you have a big cellar.”

Since 2011, Berry Bros. has even had an in-house authentication expert on hand, Philip Moulin, who oversees a specialist team to verify the provenance of bottles sold on BBX. They’ll also apply their skills to the new auction business, a necessity in a dark era of frauds and fakes.

There’s also its existing global reach, with outposts in Asia— Hong Kong, Singapore, and Tokyo — where Mr. Willis, as well as other auction houses, sees a huge audience. The company’s long-held relationships with the most important wineries offer potential future partnerships for direct-from-the-cellar sale exclusives.

It’s all part of remaining relevant in a changing market and expanding and innovating without destroying your brand image. That’s a difficult balancing act in today’s business world, and Berry Bros.’ auctions will obviously cater to the kind of clients the company specializes in.

The company has been especially adept at moving with the times in the past few years, even acquiring Hambledon Vineyard, England’s oldest commercial vineyard, in a partnership with Symington Family Estates of port fame last year.

It responded to the surge in luxury spirits sales — Berry Bros. reported 42% year-on-year revenue growth in the category this spring — by opening a dedicated standalone shop in April with about 1,000 spirits products. The next month it offered sake en primeur for the second year; sales were up nearly 1,000% in the year to March 2024.

But what about the state of the auction market it’s entering? It’s a mixed bag and a buyers’ market, according to Nick Pegna, worldwide head of wine for Sotheby’s, which reported a record $159 million in auction sales for 2023. He points out that current global uncertainty and declining wine prices generally are affecting auctions. Lower, more conservative estimates are the name of the game.

To obtain the best cellars to offer, competition is already fierce among well-established names — Sotheby’s, Christie’s, Bonhams, Zachys, Acker, and Hart Davis Hart — and newer niche companies like Baghera. All conduct live and online sales, while Willis says Berry Bros.’ auctions will be online only for now.

Arguably it’s a good time for online auctions. During the pandemic, auction houses were forced to pivot quickly to online, and this attracted a new cohort of younger collectors. Now about two-thirds of Sotheby’s auctions are online-only, for example, and a recent one in Hong Kong brought in $6 million.

Berry Bros. & Rudd’s added incentive is a highly competitive buyer’s premium at 20%, while the average for other houses is about 25%.

And the historic company is banking on the legacy of trust built into its brand, its expertise and level of attention to detail, and its role as a custodian of wine for its global customers. “We believe there’s an opportunity,” says Mr. Willis. — Bloomberg

Power Mac Center TriNoma is now an Apple Premium Partner store

POWER MAC CENTER (PMC) last week reopened its store in TriNoma mall in Quezon City as the latest Apple Premium Partner (APP) store in the country.

The TriNoma store is the seventh APP store in the Philippines, following the ones in Power Plant Mall (opened in 2022), Greenbelt 3 (2023), SM Mall of Asia (2023), SM Megamall (May 2024), The Annex at SM City North EDSA (September 2024), and Robinsons Magnolia (September 2024), Power Mac Center said in a statement.

PMC is the only Apple reseller in the Philippines that is authorized to open APP stores.

“The highest classification of Apple reseller stores globally, an APP store is distinctively minimalist, modern, and contemporary in design, in line with the global brand’s aesthetic. It also offers the complete experience — from retail to service to training — all accessible within the main floor,” it said.

“We have been scaling up efforts to open APP stores that conveniently offer everything our customers need to be more and do more with their new devices. With technology constantly redefining the way we communicate, conduct business, express creativity, and live life in general, we want customers to feel like Power Mac Center is the tech provider they can navigate all of it with,” Joey Alvarez, PMC director for Marketing and Product Management, said.

As part of the TriNoma branch reopening, Power Mac Center offered exclusive discounts on select devices and accessories, as well as service promos.

“There are also free group demos every Friday to Sunday on new tips and tricks about Apple devices,” it said.

PMC has also extended its “Miles and Milestones: The 30th Anniversary Raffle” promo until Dec. 31, it added. Customers can join by signing up for 1 Infinite, its loyalty program, and making a single-receipt purchase worth at least P30,000.

Power Mac Center has 100 locations nationwide, including retail branches, service centers, and training centers. The company is an Apple Premium Reseller, Apple Authorized Education Reseller, Apple Authorized Training Provider, and Apple Authorized Service Provider in the Philippines. — BVR

LANDBANK seeks approval of new charter by Q1 2025

PHILSTAR FILE PHOTO

LAND BANK of the Philippines (LANDBANK) is hoping senators will approve early next year a bill amending its charter to raise its capitalization to P1 trillion, which would boost its capacity to lend to its priority sectors, its president said.

“We’re really hoping that we could get it [approved] by the first quarter of 2025… to be able to really raise our capital, whether that be via debt or via equity and raising longer-term funding, which will allow us to meaningfully participate in long-gestation economic projects,” LANDBANK President Lynette V. Ortiz told BusinessWorld on the sidelines of a Senate Banks, Financial Institutions and Currencies committee hearing.

“One of the main components of this new charter is our ability to raise bonds and our ability to raise equity,” Ms. Ortiz said. “Those things take time. There’s due diligence and scoping of the market… so if we could get it (approved) by the first quarter of 2025, that would be great.”

Senator Mark A. Villar, who chairs the committee, wrapped up discussions on Senate Bill No. 2760, which provides for a new charter for LANDBANK, referring the measure to a technical working group. A counterpart bill is pending at the committee level at the House of Representatives.

The bill proposes to raise the state-run lender’s authorized capital stock to P1 trillion from the current P200 billion, with the government owning 70% of its outstanding capital stock at all times.

It said that P200 billion or 20% of LANDBANK’s capital stock will be subscribed to by the National Government, while P163.79 billion or at least 81.89% of the total subscription to be paid up by the state.

The Senate bill also grants the bank the authority to issue shares of stocks to private individuals and entities, with the aim to expand its investor base.

Under the proposed new charter, the bank will also be allowed to issue bonds up to an aggregate amount not exceeding 10 times its paid-in capital and surplus.

LANDBANK “shall provide banking services with a social mission of spurring countryside development by granting loans to finance the agricultural projects and national government’s developmental projects,” the bill said.

“Our main provenance has always been agriculture, but right now our focus is really the entire value chain,” Ms. Ortiz said, adding that they also support other sectors, particularly projects related to infrastructure and clean energy.

As of August, LANDBANK has lent about P727.87 billion to agriculture, fisheries and rural development projects, Ms. Ortiz said during the hearing.

Last week, the Senate approved on third final reading a measure that will replace the Development Bank of the Philippines’ current charter, raising its capital stock to P300 billion from P35 billion and also allowing it to conduct an initial public offering. — John Victor D. Ordoñez

Filinvest Land tender offer to start on Oct. 7

LISTED Filinvest Land, Inc. (FLI) has released the schedule of its planned voluntary tender offer via share swap that will make room for potential asset infusions into its real estate investment trust (REIT) company.

The tender offer period will start on the morning of Oct. 7 and run until noon of Nov. 27, the property developer said in a regulatory filing on Wednesday.

The cross date will be Dec. 9, while the settlement date will be on Dec. 11.

FLI recently announced a P1.87-billion capped voluntary tender offer via a share-swap deal in exchange for Filinvest REIT Corp. shares held by the property developer.

Once completed, the share swap will provide room for a “potential dividend-accretive asset infusion by FLI into FILRT.”

The tender offer consists of up to 1.87 billion FLI common shares. The FLI shares will be exchanged at P1 each.

The Gotianun-led property developer will exchange 0.32 FILRT shares for every one FLI share tendered.

FILRT’s public ownership will increase to 46.75% from the current 34.48% following the tender offer.

The REIT company’s public float will also be higher than the 33.33% minimum public ownership threshold set by the local bourse operator for REITs.

On Wednesday, FLI shares were unchanged at 82 centavos apiece, while FILRT stocks gained 0.99% or three centavos to P3.07 per share. — Revin Mikhael D. Ochave

Revenue losses from high — and faulty — tax rates on tobacco and vape products

FREEPIK

“And if you examine our tax collection spreadsheet through the years, there is one entry common in all eras, and that is the heavy reliance on sin taxes. So much so that in 1912, when we were already under American rule, alcohol and tobacco combined for almost P9 million of total revenue take of P31 million. In short, vices financed the virtues of democracy the Americans were preaching.” — Finance Secretary Ralph G. Recto, Secretary’s Hour Toast Remarks, April 30

The Department of Finance (DoF) and the economic team keep looking for new revenue sources while plugging leaks in existing tax revenues. The excise tax for “sin” products is among the problematic revenues in terms of lack of consistency.

While collections from alcohol and sweetened beverage products continue to rise or flatline, collections from tobacco and cigarettes continue to decline. From peak revenues of P176 billion in 2021 when the tax rate was P50/pack, it declined to P160 billion in 2022 when the tax rate was P55/pack, and further down to P135 billion in 2023 when it was P60/pack. The main culprit for the trend is the illicit trade or smuggling of tobacco products, which are sold by smugglers, criminal syndicates, and terrorist organizations at low prices that are on average half of the price of legal (taxed) tobacco.

This year, the tax rate is P63/pack and the January-July collection was P71 billion. If this trend continues, the projected full year revenues would be only P122 billion (see Table 1).

Aside from illicit trade, there is the technical smuggling — or misdeclaration as being of cheaper value — of vape products. The Bureau of Customs (BoC) estimates that the government loses at least P5 billion/year in revenue because of the smuggling and illegal selling of vape products. See these recent reports in BusinessWorld — “BIR urges online platforms to carry only vape products with tax stamps” (June 16), “Seized vapes could be entering market — BoC” (July 30) — and the Philippine Star — “Government losing P5 billion in taxes from vape smuggling, illegal sale” (June 20), and, “Cigarettes, vapes found with P7.2 billion tax liabilities in H1” (June 21).

One cause is the misdeclaration of products. Perhaps we are the only country in the world that differentiates between nic salts and freebase vape liquids.* Nic salt is taxed at P54.60 per milliliter (mL) while freebase is P63 per 10 mL. This is a significant loophole since illicit traders would just declare their products as freebase to avail of the lower tax rate. If declared freebase, they are taxed P63 per 10 mL or P6.30 per mL vs. nic salt at P54.60 per mL (see Table 2).

The government has no testing facility to distinguish between freebase and nic salt. There is a need to harmonize the tax rates for vape liquids and make it just one instead of two to close the loophole since most if not all vapes in the market are nic salts anyway.

Almost no taxpayer declares their products as being nic salt, and almost 100% are declared as freebase and the corresponding lower tax rates are paid. There is a potential 90% revenue loss for the government if taxpayers misdeclare their products. Vapor products should all be considered nic salt for taxation purposes unless otherwise proven to be freebase through certification from an accredited laboratory. Proposals to harmonize the rates of nic salt and freebase into a single rate are good but will take legislation. An administrative solution is to classify all vapor products as nic salt by default.

These and related topics were discussed in the Kapihan sa Manila Bay with Marichu Villanueva at Café Adriatico in Manila on Oct. 2. The theme of the Kapihan was “Status of implementation of Vape Law,” and the speakers were Bureau of Internal Revenue Commissioner Romeo Lumagui, Jr., BoC Chief Investigation Division Customs Intelligence Leon Mogao, Jr., President of the Philippines E-cigarette Industry Association Joey Dulay, and this writer.

*According to Red Box vape, “freebasing involves converting nicotine from its naturally occurring ‘salt’ state into a much ‘purer’ form. This conversion increases the potency without affecting the dose, which is why it is popular among vapers as it is a more cost-effective solution.” Meanwhile, according to Eco Vape, “nic salts are made by combining nicotine with an acid to create a more stable and absorbable form of nicotine. The resulting e-liquid is smoother to vape and can deliver a higher level of nicotine without the harshness that can be experienced with high levels of freebase nicotine.”

 

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com

Constructive criticism

FREEPIK

EVALUATING the actions or decisions of others can be either supportive or critical. Is there a way of providing even negative comments without being considered a meddler? Not all comments are fan mail, after all.

Can negative feedback be considered constructive criticism? Can customer complaints be helpful in customer service and inventory planning — Why do you always run out of Medjool dates?

Restaurants routinely leave a score sheet for customers to fill up. Ratings on food quality, speed of service, courtesy, and ambience are tracked. The reliability of the feedback is ensured by submitting replies digitally. Still, the comments seem slanted to dissatisfied customers — the food was delivered only after 45 minutes of waiting.

It is standard for basketball teams to review video tapes of losing games, maybe even filing away the text messages of the boss on the weak defense. (Were you writing a haiku while guarding the three-point shooter?) Post-mortems on defeats can be instructive, if it’s not for all the games. What is the point of a post-game review if no improvement on performance comes from it? A losing team on the skids can only hope to be more competitive in the next season, with a different set of players.

Letters to the editor are another form of feedback. They point out errors of fact or arguing a point with an opinion writer or reporter who promote fake news, even if this is unintentional. Still, there are perennial letter writers who see themselves as undiscovered columnists, sometimes not even bothering to contest anything that came out but simply spouting off irrelevant opinions. Posts on social media are quicker in providing criticism.

Political figures look out for their approval ratings as a form of feedback. Rising disapproval rates are confirmed by the staff — yes ma’am you must answer questions on your budget to show you are neither ignorant or simply arrogant. And try to get rid of the haughty scowl and the walkout.

A performance rating session for the corporate executive can be as stressful as a visit to the dentist. The fists clench tightly on the arms of the chair as someone in authority probes one’s performance history. In the case of this corporate dentist, no saliva suction is provided. Neither is there an opportunity to spit out blood into the basin where the swirling water takes it out of sight. Anxiety attacks can be expected.

Still, being given painful feedback by a critic on one’s failures and shortcomings is seen as an opportunity to improve. The problem lies in the diagnosis. Often, the examiner and examinee disagree. The session can only be fair if there is a symmetry of opinions. The ratee must be given a chance to give a rating of his boss — “Your instructions are often vague. You seem to enjoy intramural squabbles.” This type of rating is known as the 360-degree method. It solicits the opinion of the boss as well as the subordinates and peers in a full circle.

How about parenting? Does criticism have to be balanced with encouragement and support? (Hey, you didn’t get to the toilet in time, Kid.) Growing children need to acquire the right values through feedback and modeling by example.

Mentoring is a new form of providing constructive criticism on an individual basis. The mentor is not necessarily the boss of the mentee, so his guidance is more impartial. The evaluation does not affect performance rating which determines promotions, salary adjustments, and early retirements.

Are there individuals who just like to criticize?

There is the natural critic (or judge) that takes on everyone. Even in social circles and Viber groups, there is a “scold” that just lashes out with fully formed opinions, usually critical. (You’re wearing pants with wide cuffs that are no longer in style.) Opinionated individuals are not pleasant to be with as they have a view on any topic that comes up. And they back this up with dubious statistics and moral certainty.

Constructive criticism offers a prescription and a way of improving a situation. Sometimes, there is no remedy in sight and the object of the criticism simply shrugs off the advice and walks out the door.

 

Tony Samson is chairman and CEO of TOUCH xda

ar.samson@yahoo.com

John Amos, star of 1970s TV’s Good Times and Roots, 84

John Amos (R) and Jimmie Walker in a scene from Good Times. — IMDB

LOS ANGELES — John Amos, the US football player turned actor who was acclaimed for his roles in the 1970s TV series Good Times as well as the miniseries Roots, died on Aug. 21 in Los Angeles at age 84, his son Kelly Christopher (K.C.) Amos said.

Mr. Amos’ death, which was due to natural causes according to a press release, was not disclosed until Tuesday.

“It is with heartfelt sadness that I share with you that my father has transitioned,” his son said in a statement.

“He was a man with the kindest heart and a heart of gold … and he was loved the world over,” he added.

Mr. Amos played the dad, James Evans, for 61 episodes of the sitcom Good Times in the mid-1970s and also the older Kunta Kinte in the TV miniseries Roots, based on the 1976 novel about slavery by Alex Haley. He also played the TV weatherman Gordy Howard in The Mary Tyler Moore Show in the same decade.

Mr. Amos also had a brief professional football career in the 1960s.

While filming Good Times, Mr. Amos often advocated for a more authentic representation of the Black American family, criticizing the show’s writers for leaning in to racial stereotypes.

He was also a veteran of the 50th Armored Division of the New Jersey National Guard and honorary master chief of the United States Coast Guard. — Reuters

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