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What to see this week

6 films to see on the week of July 20-July 27, 2018
Mamma Mia 2

Mamma Mia! Here We Go Again

THIS SEQUEL to the musical hit featuring ABBA songs goes back and forth in time to retell the story of Donna’s relationships with Bill, Sam, and Harry whose conclusion was the point of the first film. In the sequel, Donna has passed away and her daughter Sophie refurbishes the Greek island resort Donna used to manage in her memory. At the same time, she is also pregnant and needs to learn how to take risks like her mother did as a young woman. Written and directed by Ol Parker, the film stars Amanda Seyfried, Meryl Streep, Lily James, Pierce Brosnan, Colin Firth, Stellan Skarsgård, Dominic Cooper, Julie Walters, Christine Baranski, Alexa Davis, Jessica Keenan Wynn, Jeremy Irvine, Josh Dylan, Hugh Skinner, and Cher. The Atlantic’s David Sims writes, “Here We Go Again is a viewing experience best described as a long nap on the beach while staying at a chain resort. It’s extremely pleasant, if a little lacking in imagination, and every so often, a waiter comes by to refill your drink.”
MTRCB Rating: PG
Billionaire Boys Club

Billionaire Boys Club

BASED ON the real Billionaire Boys Club in Southern California in the 1980s, a group of rich boys devise a get-rich-quick Ponzi scheme. Things end badly when their leader, Joe, and friend Jim murder the investor and con-man, Ron Levin. Directed by James Cox, it stars Ansel Elgort, Taron Egerton, Kevin Spacey, Emma Roberts, and Suki Waterhouse.
MTRCB Rating: R-13
The Ninth Passenger

The Ninth Passenger

A GROUP of students suffer the cruelty of a mysterious ninth passenger when they board a luxury yacht. Directed by Corey Large, it stars Alexia Fast, Jesse Metcalfe, Sabina Gadecki, Timothy V. Murphy, Veronica Louise Dunne, and Corey Large.
MTRCB Rating: R-13
Virtual Revolution

Virtual Revolution

IN A futuristic European city, people can immerse themselves in imaginary experiences for as long as they live through virtual reality technology — until, that is, a terrorist cell starts attacking in cyberspace. Directed by Guy-Roger Duvert, the film stars Mike Dopud, Jane Badler, Jochen Hägele, Kaya Blocksage, and Petra Silander. The Hollywood Reporter’s Justin Lowe writes, “Based on the template of massive multiplayer online role-playing games, sci-fi thriller Virtual Revolution is fairly ambitious for a first feature, so perhaps it’s telling that the most convincing scenes transpire within the movie’s virtual worlds, rather than throughout the principal narrative.”
MTRCB Rating: R-16
Inside

Inside

YOUNG, pregnant, and widowed, Sarah is trying to rebuild her life. One evening, she receives an unwelcome visitor who tries to snatch her unborn child. Miguel Angel Vivas directs this remake of the original 2007 French film. The film stars Rachel Nichols, Laura Harring, Stany Coppet, Andrea Tivadar, Craig Stevenson, and David Chevers. Rotten Tomatoes gives it a 23% rating. Brian Tallerico of RogerEbert.com writes, “This version of Inside is relatively tame. Sure, there are some stabbings but nothing like the washed-in-red aesthetic of the film that came before. To compensate for the lack of gore, Vivas resorts to cheap filmmaking techniques like herky-jerky camera movements and an overcooked score.”
MTRCB Rating: R-16
Jacqueline Comes Home (The Chiong Story)

Jacqueline Comes Home (The Chiong Story)

BASED ON the 1997 rape and murder case of the Chiong sisters from Cebu, the crime drama tells the story of Jacqueline and Marijoy who were dragged into a vehicle on rainy evening and never seen again. Directed by Ysabelle Peach Caparas, the film stars Meg Imperial, Donnalyn Bartolome, Ryan Eigenmann, Alma Moreno, and Joel Torre.
MTRCB Rating: R-13

ABB partners with First Quezon Biogas for facility

ABB Ltd. has partnered with First Quezon Biogas Corp. to help power the country’s first commercial biogas facility, the company said on Thursday.
“ABB is pleased to have been chosen as one of the technology providers for this important project. We are optimistic that our solutions will enhance the efficiency of the facility, and help it become a crucial contributor in efficiently distributing energy resources,” said Olivier Coquerel, president and country managing director of ABB in the Philippines, in a statement.
The biogas facility is being constructed in Candelaria, Quezon province. It will transform chicken manure, rice straws, and other agricultural waste into useable energy that can augment the load requirements of the Luzon grid, the company said.
ABB will provide technological solutions to ensure the smooth operation of the facility.
The company quoted First Quezon Biogas President Albert S. Alquiros as saying that the $9.7-million biogas plant is a means to help Candelaria town realize its zero waste objective, “as it will require some 20 tons of agricultural waste annually to maintain its operations.”
To ensure the operational efficiency of this landmark biogas facility, ABB said it had delivered and installed a unit of 2.5-megavolt ampere transformer, and housed it within its proprietary EcoFlex eHouse solution, which has been designed and tested to protect electrification products from harsh environments.
The company said the ABB EcoFlex eHouse was designed as an innovative solution to provide customers with efficient flexibility.
“Since it is modular in design, customers can choose to make use of one module only, or a combination of modules for larger applications, making it a smart and economical choice,” it said. — Victor V. Saulon

Managing your expectations in the zombie apocalypse

By Alexander O. Cuaycong and Anthony L. Cuaycong
UNDEAD LABS’ State of Decay was a certified critical and commercial hit upon its release in 2013. Best described as a third-person sandbox-cum-survival game simulating a community in the midst of a zombie apocalypse, it tasked you with finding resources, interacting with other denizens, and clearing out zombies in an effort to survive. And, on the whole, it proved to be a compelling experience, its flaws notwithstanding.
Fast forward five years, and Undead Labs is back with State of Decay 2. Fans of the original would be glad to note the familiar starting point, but with a twist. Again, you help your enclave mount a stand against zombies, but the “blood plague” makes the effort more difficult. It’s an illness that infects you via a mere scratch, and you’re compelled to retrieve samples from unique carriers in order to concoct a cure. The introduction of the kink underscores the game’s bent towards stealth as opposed to out-and-out action. At the same time, your thrust to build the community has you opting for playable characters with skills it requires to thrive.
As a followup title, State of Decay 2 boasts of equally outstanding qualities. From the get-go, the work that has been put into it is evident. Visually and aurally, it’s a massive improvement compared to its predecessor; it may lack the flair, vibrancy, and personality of contemporary competition, but it performs extremely well — with little to no hiccups in loading textures — and retains a smooth, consistent framerate.
While environments aren’t too detailed, they’re interesting to dive into, and the zombies that inhabit them look varied and distinct as opposed to copy/paste clones. Parenthetically, sound design is top notch, presenting depth and highlighting the proper mood as needed.
That said, State of Decay 2 falls a tad short in terms of gameplay. Similar to that of the first, its premise is simple: you run around, do missions and jobs, kill zombies, and strengthen the organization of the populace. Which, despite its tendency for repetition and predictability, is all well and good. Unfortunately, it gets bogged down by inadequate quality-of-life features. After the fairly interesting introductory segment, the game just basically leaves you to yourself, and in a manner that feels like it’s out to punish you.
For instance, State of Decay 2 requires that you manually carry supplies back and forth, and said supplies don’t stack. Meanwhile, whatever interest its weighting system generates is limited by its casual and uniform treatment of inventory; bulky items (i.e. gas cans) take up the same space as much-smaller ones (i.e. nails). Skills exist and serve to supplement your and other playable characters, but most of them are uninteresting; they either unlock crafting options or enhance efficiency in the performance of certain endeavors. Meanwhile, the community the game has you build and develop proves to be a drain on resources, leaving you to constantly balance cost with upkeep, a not-quite-interesting task given the lack of customization options.
Certainly, State of Decay 2 presents quite a few meaningful ideas. On the flipside, they aren’t always applied well. Dealing with survivors, scavenging food and resources, and staking out new bases for your budding community may provide sound premises for engaging gameplay, but they’re locked behind a number of tedious mechanics that needlessly slow the game’s pace to an elephant walk. Collectively, these issues make it difficult for you to give it another run-through even if its core gameplay is fine by design.
Overall, State of Decay 2 has more than enough to hold your attention, but its innate clunkiness may yet drive you away if you begin with heightened expectations. For fans of the open-world concept of survival horror, it should be long in engagement; the sequel pretty much delivers what the first game did, only with graphical updates as befit current-generation releases. Meanwhile, those new to the title would do well to dial down their prognoses and appreciate it as worthy of its pedigree.

State of Decay 2 2

Video Game Review

State of Decay 2
XBox One
THE GOOD

• Interesting exploration and scavenging work

• Compelling introductory sequence, with a solid concept to set the game up

• Engaging base building

THE BAD

• Very little customization available

• Tasks can be tedious and unenjoyable

• Off-putting grinding, with few exciting rewards on offer

RATING: 7/10

Singer Cliff Richard wins BBC privacy case

LONDON — Veteran British pop star Cliff Richard won a privacy case against the BBC on Wednesday after it broadcast live on television a police raid on his home, in a ruling the broadcaster warned threatened press freedom.
High Court Judge Anthony Mann said the BBC had infringed Richard’s rights in a “serious” and “somewhat sensationalist way” and awarded him at least £210,000 ($274,000) in damages.
The 77-year-old singer, who was never charged with any offence, was applauded by fans as he left court, and they sang his hit song “Congratulations.”
Britain’s first home-grown pop star later said senior managers at the BBC “have to carry the can.”
“If heads roll then maybe it’s because it was deserved,” he told ITV News. “It’s too big a decision to be made badly. It was nonsense.”
The BBC said it would consider an appeal, saying the ruling “represents a dramatic shift against press freedom and the long-standing ability of journalists to report on police investigations.”
Richard’s home was raided in 2014 as part of an investigation into an allegation of sexual assault involving a young boy dating back to the 1980s.
The BBC’s live coverage, including a helicopter, was picked up around the world, but the singer was never arrested or charged and was told in 2016 there was insufficient evidence against him.
“My life was effectively turned upside down and my reputation, worldwide, was unnecessarily damaged,” Richard said at the start of the case.
‘SORRY FOR THE DISTRESS’
The BBC heard about the investigation by South Yorkshire Police and cut a deal in which they agreed to delay breaking the story in return for a tip-off about the raid on Richard’s home.
The judge awarded £190,000 in general damages plus another £20,000 “aggravated damages” because the BBC nominated the story for a “Scoop of the Year” award, which it did not win.
Richard is also entitled to further sums for the financial impact of the case, which will be decided another time.
The police force has already agreed to pay Richard £400,000 after settling a claim.
In a statement, the BBC said it was “sorry for the distress Sir Cliff has been through.”
It admitted there were “things we would have done differently, however the judge has ruled that the very naming of Sir Cliff was unlawful.”
“So even had the BBC not used helicopter shots or ran the story with less prominence, the judge would still have found that the story was unlawful; despite ruling that what we broadcast about the search was accurate,” it said.
The ruling “will make it harder to scrutinise the conduct of the police and we fear it will undermine the wider principle of the public’s right to know”, it said.
‘SHOCKINGLY BAD’
“We don’t believe this is compatible with liberty and press freedoms,” the statement said, adding that it was “looking at an appeal.”
Tony Gallagher, the editor in chief of Britain’s best-selling The Sun tabloid, also railed against the “shockingly bad” ruling.
“Victory for (alleged) criminals and money-grabbing lawyers. Terrible for media,” he tweeted.
In the House of Commons, an MP suggested formally changing the law to make it illegal for the media to name suspects until they are charged.
But Prime Minister Theresa May, who looked into the issue in her previous job as interior minister, expressed scepticism.
She noted “there may well be cases where the publication of a name enables other victims to come forward and therefore, to strengthen the case against an individual.”
She said it was an “issue for careful judgement” in which both police and media must recognise their responsibilities.
Richard, who burst onto the pop scene in the late 1950s, is the third biggest-selling artist in British singles chart history, behind The Beatles and Elvis Presley.
His hits include “The Young Ones,” “Living Doll,” “Summer Holiday,” “Mistletoe And Wine,” and “The Millennium Prayer.”
There has been a wave of accusations of historical sex abuse against prominent figures in Britain since 2012, when the late BBC presenter Jimmy Savile was revealed to be a serial paedophile. — AFP

Davao City focuses on access to comprehensive, quality health services for all

Davao City is one of the country’s most progressive cities, thanks to its strong and forward-looking local government. The city’s dynamic approach to governance extends to the provision of a comprehensive range of high-quality health services.
“The first step we took was set the health agenda,” said Dr. Josephine Villafuerte, City Health Officer of Davao City, who spoke on behalf of Mayor Sara Duterte during the 2018 Health for Juan and Juana Forum. She explained that the Local Health Board consolidated the health programs and projects of the national government, private sector partners, civil society organizations and other stakeholders. It then looked at local concerns and issues relating to the health care system. “Based on these data, we developed a road map of interventions at the LGU [local government unit] level,” she added.
Dr. Villafuerte underscored the importance of appropriate health investments. “The Local Health Board drew up a health investment plan with significant consideration for capacity building of LGU health managers and localization of the Philippine Health Agenda,” she said. The city government prioritized access to various levels of care in well-defined and functional networks of health facilities. “Everyone, particularly those living in remote areas and Indigenous Peoples, should be able to access different levels of care in any barangay health station or primary health care facility,” Villafuerte stated.
One of the interventions is Byaheng DO30, which focuses on addressing 10 priorities through the implementation of 30 major programs and projects from 2016 to 2018. The 10 priorities are poverty alleviation; infrastructure development; solid waste management; health; education; agriculture; tourism; transportation planning and traffic management; peace and order; and disaster risk reduction and mitigation.
“Lingap para sa Mahirap provides indigent residents with financial assistance for hospitalization and dialysis, funeral and burial assistance, and medicines subsidies,” Dr. Villafuerte said. Lingap para sa Mahirap help desks are located in the Davao City Hall and Southern Philippines Medical Center (SPMC).
Tara Na is a community-based drug rehabilitation program being implemented by the city government through its City Anti-Drug Abuse Council (CADAC). The program allows drug dependents to undergo rehabilitation in their own barangay instead of a drug rehabilitation facility. “Tara Na aims to provide a holistic recovery program and facilitate reintegration of recovering drug dependents as productive members of society,” Dr. Villafuerte explained. The program also includes preventive education implemented through 11 partner academic institutions, faith-based groups, and NGOs. In partnership with the Department of Education, CADAC developed an anti-drug module for Grades 4 to 12 students enrolled in the DepEd’s Alternative Learning System (ALS), she added.
According to Dr. Villafuerte, Davao City was the first LGU to implement the Integrated Management of Acute Malnutrition (IMAM), a set of updated and scientifically proven protocols that can be used by health care providers to manage acute malnutrition in children six to 59 months of age. “IMAM has helped us lower the incidence of acute malnutrition in Davao City.”
Other health initiatives of the Davao City Government include a strict anti-smoking and liquor ban, a firecracker ban, a speed limit for all motor vehicles, a community-based teen center, a community-based HIV/AIDS rapid testing center, a child abuse hot line, Let’s Go Organic (a local movement of organic farming practitioners and advocates in Davao City), and scholarship programs for deserving medical students, among others.
 
Teodoro B. Padilla is the executive director of Pharmaceutical and Healthcare Association of the Philippines (PHAP). Medicine Cabinet is a weekly PHAP column that aims to promote awareness on public health and health care-related issues. PHAP and its member companies represent the research-based pharmaceutical and health care industry.
medicinecabinet@phap.org.ph.

Summary of statistical indicators on Philippine development

Summary of statistical indicators on Philippine development

How PSEi member stocks performed — July 19, 2018

Here’s a quick glance at how PSEi stocks fared on Thursday, July 19, 2018.

Finance dep’t studying carbon-emissions tax

THE DEPARTMENT of Finance (DoF) said it is studying the possibility of a tax for carbon emissions after it held an “exploratory” workshop yesterday.
Asked whether the DoF will propose such a tax within the current presidential term, Finance Undersecretary Karl Kendrick T. Chua replied: “Maybe. We’re just learning as much as we can because it’s a new tax. You know this is a global priority so it is something we want to learn and see if we are ready to propose a carbon tax.”
“So this is exploratory,” he said on the sidelines of the workshop in Manila.
The carbon tax was originally part of package five of tax reform proposals along with increased coal, tobacco, alcohol, and mining taxes, depending on whether the government needs to raise more revenue. Some of the taxes were included in the Tax Reform for Acceleration and Inclusion (TRAIN) law, or Republic Act No. 10963, which came into effect this year.
Mr. Chua added: “The government will always need revenue because the demands are increasing for infra(structure), health, social spending (and) for the environment.”
Senator Loren B. Legarda on Wednesday said that the country continues to depend on non-renewable energy, even after the passage of the Renewable Energy (RE) law of 2008.
The DoF’s Mr. Chua, however, said that this is because fossil fuels are not taxed accordingly.
“Diesel and bunker were taxed at zero excise, so that’s why… the way to promote renewables is not only to give incentives. [But] also to tax the alternative, because how else will you encourage the shift?” he said.
He said such taxes are in force in places like the UK, where the tax on diesel represents about 70-80% of the fuel’s retail price. In the Philippines, the tax is equivalent to 5% of retail.
He said added that the TRAIN law has addressed some environmental concerns.
The TRAIN law imposed a gradual P6 per liter tax in diesel and bunker fuel, starting with an initial P2.5 tax per liter this year, followed by P2 and P1.5 for the next two years.
The excise tax for coal was also increased to P50 per metric ton this year, and will be increased to P100 and P150 for 2019, and 2020, respectively.
“The law begins to address it. Over time, we hope it will make a dent as we increase it gradually,” Mr. Chua said.
After the first package was enacted in January, the government hopes to pass by the end of the year Package 1B, covering a general and estate tax amnesty, an easing of the bank secrecy law, and the increase in the motor vehicle user charge; as well as Package 2, which lowers corporate income tax and streamlines fiscal incentives.
The DoF also aims to submit to Congress this month the third and fourth package concerning property valuations and the tax on passive income, respectively. Mr. Chua also noted that Package 2+, concerning higher taxes on alcohol, tobacco, and mining, is already in the legislative mill.
“There will be at least six packages in Congress by August. So that’s a big load for Congress. So really, it depends on Congress when these will be passed,” he said.
“I’m really hopeful that at least they pass the three that are already in the hearing stage. So that’s the minimum that we hope Congress can pass this year. The rest can follow,” added Mr. Chua. — Elijah Joseph C. Tubayan

DTI signals robust growth in BoI-approved investment pledges

THE Department of Trade and Industry (DTI) said investment pledges approved by the Board of Investments (BoI) posted strong growth at midyear due to the country’s strong fundamentals as well as business and consumer confidence.
“I don’t want to preempt the (first-half) report but its close to about 28% growth,” Trade Secretary Ramon M. Lopez said in a speech on Wednesday during the Franchise Asia Philippines 2018 expo in Pasay City.
Mr. Lopez also cited the impact on investment of the effects of the Build, Build, Build program, which involves at least 705 infrastructure projects.
He declined to elaborate on the data but said the report will be released “soon.”
On the uncertainty created by tax reform proposals to rationalize investor incentives, Mr. Lopez said: “The incentives will be enhanced. From an income tax holiday, there will be other more relevant incentives for startup sectors that will be registered,” Mr. Lopez said.
In the five months to May, the BoI approved P206.61 billion worth of investment, up 18.42% from a year earlier, led by power and energy projects, transportation and storage, manufacturing, real estate, and water supply.
The BoI target for investment approvals is P680 billion for the year, up 10% from the record level achieved in 2017.
The Philippines has seven Investment Promotion Agencies authorized to grant tax and non-tax incentives to investors who establish businesses or expand existing ones.
Aside from the BoI, the other IPAs are the Philippine Economic Zone Authority, Clark Development Corp., the Subic Bay Metropolitan Authority, Authority of the Freeport Area of Bataan, BoI-Autonomous Region in Muslim Mindanao (BoI-ARMM) and Cagayan Economic Zone Authority. — Janina C. Lim

Household spending rises 5.9% in 2017 — PSA

By Carmina Angelica V. Olano
HOUSEHOLD SPENDING increased 5.9% in 2017 though 13 of 17 regions posted slower growth rates, according to data released by the Philippine Statistics Authority (PSA).
Household spending, which accounts for 68.9% of total expenditure, was P5.97 trillion in 2017, it said.
Per-capita household spending rose 4.2% to P56,936 in 2017.
Central Luzon posted the highest growth in per capita Household Final Consumption Expenditure at 6.0% to P66,390. However, this was slower than the 7.5% growth rate posted in 2016.
Davao Region (P47,477) and Western Visayas (P49,043) followed with growth rates of 5.4% and 5.3%, respectively, slowing from the year-earlier 7.1% and 5.5%.
Per-capita household spending growth in the National Capital Region slowed to 3.5% in 2017 from 5.6% a year earlier, but was the highest nationwide at P106,335.
Other regions that posted slower growth in household spending were Cordillera Administrative Region (2.7% from 3.8%); Ilocos Region (4.1% from 5.6%); Calabarzon (4.8% from 5.1%), Bicol Region (4.1% from 4.9%); Western Visayas (5.3% from 5.5%); Central Visayas (4.0% from 5.5%); Eastern Visayas (4.2% from 8.3%); Zamboanga Peninsula (2.9% from 4.4%); Northern Mindanao (2.7% from 4%); and Soccsksargen (3.3% from 4.5%).
Only four regions saw acceleration in per capita household spending growth — Mimaropa, Cagayan Valley, Caraga, and the Autonomous Region in Muslim Mindanao (ARMM).
Michael L. Ricafort, an economist with Rizal Commercial Banking Corp. (RCBC), attributed last year’s increase in spending to “improved household incomes amid growth in overseas Filipinos worker (OFW) remittances and improvement in overall employment prospects.”
“[T]he continued growth in employment in BPOs (business process outsourcing) and other services, [the] pick-up in manufacturing, [the] record high foreign direct investments… continued growth in local investment” resulted in the creation of more jobs and business opportunities, he said.
Angelo B. Taningco, an economist with Security Bank Corp., concurred, adding that “buoyant” spending on domestic tourism and the “relatively low” inflation helped push household spending higher last year.
Nevertheless, the economists noted the slower growth rates in per-capita household spending in most regions.
“[It] may have been partly related to sharper price inflation in these areas,” Security Bank’s Mr. Taningco said.
RCBC’s Mr. Ricafort said that the deceleration in growth for most regions was due to base effects after higher spending in 2016 due to the elections and faster growth in OFW remittances.
They expect household spending to continue growing this year, but rapidly-rising inflation might offset these gains.
“Household spending growth this year [will] be moderate, supported by income tax cuts and minimum wage hikes on one hand but dampened by stronger inflationary pressures on the other hand,” Mr. Taningco said.
Mr. Ricafort added: “Household spending growth could be faster in 2018 amid higher household incomes and spending power after the reduction of individual income taxes” which were brought about by tax reform.
However, he noted the emergence of inflationary pressures from higher “passed-on” prices for consumer-related goods such as fuel, sweetened beverages, electricity, and rice.
Headline inflation hit a five-year high of 5.2% in June, bringing the year-to-date average to 4.3%, closing in on the central bank’s 4.5% forecast for 2018.

Legislation expected soon to allow foreign participation in public works projects

SENATOR Sherwin T. Gatchalian said he plans to file a measure that would allow foreign contractors to participate in public construction projects in support of the government’s Build, Build, Build program.
“We will file a legislative measure to allow foreign contractors to participate in government projects,” he told reporters after the Senate hearing on foreign investment laws, noting reported delays in infrastructure projects due to limitations in the capability of domestic contractors.
“The direction is to build more infrastructure… In order to have simultaneous construction projects, foreign contractors should be allowed join government projects,” he added.
He said Commonwealth Act No. 541, which gives preference to Filipino or US contractors to handle the construction and repair of public works, also needs amending.
At the Senate hearing, Bases Conversion and Development Authority (BCDA) President and CEO Vivencio B. Dizon said foreign contractors may fast-track public construction projects and introduce innovative methods to the industry.
“The BCDA fully supports the position of NEDA (National Economic and Development Authority) and the government’s economic team to ease restrictions on the foreign investment negative list, especially in the area of public construction,” he said.
He said foreign contractors bring to the table “depth of expertise,” especially for larger infrastructure projects.
“It gives local players the additional know-how and technology… It is also good for the government because it obviously improves the construction timeline. We can build faster because of the use of these new technologies,” he said.
European Chamber of Commerce of the Philippines (ECCP) Executive Director Florian Gottein said lifting the restrictions against foreign contractors would spur interest from European companies to participate in the Build, Build, Build program.
“It makes it easier for us to promote the Philippines for the opportunities we see in the Philippines to those companies,” he said.
The 10th Foreign Investments Negative List (FINL) issued in 2015 sets a maximum of 25% for foreign equity in public works funded domestically, which means foreign contractors can only participate via joint ventures with Filipino-owned companies.
Contracts for the construction and repair of domestically funded public works are being considered for liberalization by Malacañang as per Memorandum Circular No. 16 issued in November. The government has yet to issue the 11th FINL. — Camille A. Aguinaldo

Geothermal industry hoping to retain perks TRAIN 2 might take away

THE National Geothermal Association of the Philippines (NGAP) will seek an exemption for renewable energy (RE) amid plans to rationalize investment incentives in the second package of the tax reform program.
During its general assembly on Thursday, members of the association said they hope to maximize the potential of geothermal development and preserve the status of the Philippines as a prime investment destination for geothermal energy developers.
“We need the incentives more than ever,” NGAP President Noel D. Salonga told reporters during the event.
Mr. Salonga, who is also an assistant vice-president at Energy Development Corp., said geothermal development has become more difficult as the remaining geothermal resources in the country are now smaller, deeper and more challenging for existing technology to tap.
“We used to have 200 megawatts (available for development) in the past and therefore economical to develop,” he said. “Now, it’s in the order of 20-40 MW.”
He said it was incorrect to view the industry as having gained “independence” and not needing additional support from the government.
In the meantime, he said research is being performed to reduce the cost of materials and drilling, which are main cost drivers for geothermal exploration.
“A lot of effort is now focused on technology development,” he said.
Republic Act No. 9513 or the Renewable Energy Act of 2008 aims to increase the use of renewable energy by institutionalizing the development of national and local capabilities in the use of RE systems, and promoting its efficient and cost-effective commercial application by providing fiscal and nonfiscal incentives.
The Tax Reform for Acceleration and Inclusion (TRAIN) law’s second package will repeal incentives currently enjoyed by RE proponents, namely the net operating carry-over, accelerated depreciation, tax exemption on carbon credits, tax credit on domestic capital equipment and cash incentives for missionary electrification.
The new law will also reduce the corporate income tax rate to 15% based on net taxable income, which is proposed to replace the 5% gross income earned tax in lieu of all taxes.
Duty-free importation of raw materials and capital equipment will be made to apply only to initial investments for the first five years.
Value-added tax (VAT) incentives and special realty tax rates will also be removed.
The income tax holiday will be applicable only for the first five years of commercial operations and for a period not exceeding three years.
In a statement during yesterday’s event, NGAP said that while it acknowledges that the second phase of TRAIN “as a needed reform to manage tax leakage, government should strike a balance between revenue generation and the long-term outlook for the development of a vital industry that powers the economy.”
It said the success of geothermal energy development “is intricately linked with effective government energy policies, predictable rules and regulations, simple and coordinated permitting process, and a competitive set of incentives that promote geothermal investments.”
“A sudden change in the existing fiscal incentives regime for the geothermal energy industry will affect investor confidence since investors seek consistency, predictability, and transparency,” it said.
NGAP is asking Congress to reconsider blanket approval in rationalizing the fiscal incentives and exempt the RE law from the tax reform’s coverage.
It said it was proposing a “targeted approach” in laying the foundation for future incentives across industries.
NGAP also pointed to the drop in the Philippines’ ranking among countries with the most installed geothermal energy capacity.
“Reclaiming the second spot will be a tougher challenge if TRAIN 2, as proposed, is passed by Congress. The risks involved in geothermal energy development with the high costs and uncertainties of exploratory drilling and associated works, plus the long gestation period from exploration to commissioning, make it difficult to attract and retain capable investors,” it said.
NGAP said the current cost of drilling and development is estimated to be around $5,000 per kilowatt-hour.
“Fiscal incentives are key in most investment decisions since they lower the cost of doing business,” it said. — Victor V. Saulon

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