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CTA affirms voiding of tax claim against mining firm

THE Court of Tax Appeals (CTA) denied for lack of merit a motion for reconsideration by the Bureau of Internal Revenue (BIR) on the cancellation of its assessment on the alleged P254.72-million tax deficiency of Coral Bay Nickel Corp. for January to March 2007. In a resolution on Feb. 6, the full court upheld its Aug. 14, 2018, decision affirming the said cancellation the previous year by CTA’s third division, which further cited as invalid a waiver which supposedly extends the period to assess Coral Bay of its alleged tax deficiencies. — Vann Marlo M. Villegas

Duterte skips EDSA rites but issues message

SKIPPING the EDSA People Power anniversary rites for the third time, President Rodrigo R. Duterte nevertheless issued a presidential message saying “I join the Filipino people in commemorating the 33rd Anniversary of the People Power Revolution.” The message also read in part, “As the entire nation prepares for the upcoming Midterm Elections this May, let us always remember how this historic revolution restored our power to collectively chart our future through the ballot.” For its part, the opposition Otso Diretso senatorial ticket, a number of them direct heirs to the People Power legacy, said, “Pilit ibinabalik ng kasalukuyang gobyerno ang madilim na bahagi ng kasaysayan na naranasan na ng mga Pilipino mahigit 30 taon na ang nakararaan.” (This government is forcing the return of a dark chapter in our history). On the eve of the People Power commemoration, Mr. Duterte also vowed, “I will really finish the war against drugs in three years time,” the remainder of his term. “My time now is the most dangerous for the drug addicts and pushers. I will never let this pass,” he also said in Cebu City that Sunday.

Fuel prices in ‘big time’ increase

OIL companies are implementing another “big time” price increase for petroleum products this week, with both gasoline and diesel rising by P1.45 per liter. In their advisories, the oil firms will be implementing the price hike at 6:00 a.m. on Tuesday, Feb. 26. The price of kerosene will also increase by P1.35 per liter. This week’s increase is the biggest so far this year for gasoline, beating the P1.40-per-liter rise on the second week of January. Diesel prices were highest this year during that same week when it reached P2.30 per liter. The Department of Energy (DoE) said oil-producing countries had been trying to correct the supply surplus situation and had agreed to cut back on output to bring both oil supply and prices to normal. “However, recent political events in Venezuela, along with the waiving on the sanctions on Iran expiring on April, caused prices to steadily increase affecting the local market,” DoE said.

More suspected cocaine found

MORE blocks of suspected cocaine were found on the shores of Aurora in Luzon and Davao Oriental in Mindanao on Sunday afternoon. The Philippine National Police (PNP) reported on Monday that a fisherman found a suspected cocaine “block” wrapped in plastic and tied with rubber off Dingalan, Aurora. In the municipality of Caraga in Davao Oriental, police found two such blocks of suspected cocaine. — Vince Angelo C. Ferreras

Batang Pinoy targets Visayan athletes in grassroots

THE Philippine Sports Commission (PSC) said it is on the lookout for new sports talents in this year’s Batang Pinoy 2019 Visayas Qualifying Leg, hosted by the city and province of Iloilo. “We would like to encourage the participation of provinces in the far-flung areas. We expect to discover young athletes and tap them as national athletes in the future,” PSC Governor Arnold G. Agustin said about the event, which opened on Feb. 23 at the Iloilo Sports Complex. Around 3,000 athletes from 72 local government units (LGUs) in the Visayas are taking part in this competition. Paul Ycasas, Deputy Head National Secretariat of PSC, said, “Some of the events are not played in Palarong Pambansa. That is why we emphasize giving more chance…particularly to provincial athletes to participate and gain experience.” “This is a very good program, starting from 15 years old and below, that’s the time when the children can choose whatever they want, whatever they want to play, and whatever they want to train,” Iloilo City Sports Director Moises Salomon Jr. said for his part. And Mayor Jose S. Espinosa III said, “The city of Iloilo is always supportive of this program because through sports we can (solve) the problem of drugs in the country.” — Emme Rose Santiagudo

Nation at a Glance — (02/26/19)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.
Nation at a Glance — (02/26/19)

Best rides for 2019

Year 2019 is poised to be an exciting year for the local automotive industry. Better market conditions are expected as consumers get used to the latest excise tax rates imposed on automobiles and as they have partly recovered from the impact of inflation surges, higher interest rates and inconstant oil prices last year.

New and redesigned cars, trucks and sport utility vehicles (SUVs), among others, that exemplify more advanced components are on the horizon this year. These vehicles, compared to their older versions, boasts of greater power and handling, more sophisticated and refined look, and improved safety features. From a number of recently launched automobiles and those coming our way in the months ahead, here are some worth noting:

Ford Ranger Raptor

This super truck is engineered with ultra-strength frame, giant bash plate, and an elevated design that allow it to thrive in different road conditions. Ranger Raptor is radiating a bolder and stronger look through its signature FORD block-letter grille, muscular haunches, frame-mounted bumper, and a tailgate that features an integrated bumper and 3D badging.

Inside Ranger Raptor are body-contoured sports seats carefully tailored for better body grip. Raptor stitching can be observed throughout the cabin, particularly on its steering wheel, soft top instrument panel, leather-wrapped shifter, and floor mats. A multi-intelligent instrument panel that displays performance information on a low-glare, high-quality flat screen is also available.

Ranger Raptor is setting a new standard of performance with its cutting-edge 2.0L bi-turbo diesel engine, carefully calibrated with Ford’s latest 10-speed auto transmission technology. It delivers more top-end power, more bottom-end torque, improved acceleration, and quicker gear changes.

Hyundai Reina

The all-new Hyundai Reina has generated a lot of buzz since it was launched to the local market by the Hyundai Asia Resources, Inc. (HARI). This subcompact stunner is tailored based on Hyundai’s fluidic sculpture design philosophy and is marked by hexagonal front grille, showcasing an urban elegance reminiscent of the Hyundai Modern Premium pedigree.

Reina comes with various safety features that are usually unavailable in most subcompact cars. It is equipped with dual airbags that provide significant occupant protection for both driver and front passenger, a speed-sensing auto door lock to keep doors secure, and an Anti-lock Braking System (ABS) that gives driver better control in maneuvering during slippery road conditions.

Under the hood of Hyundai Reina is a 1.4L gasoline engine with dynamic power of 95ps for quicker maneuverability in and around the city. It offers a more versatile and convenient driving experience through either a five-speed manual transmission or a four-speed automatic transmission.

Kia Soluto

Kia Soluto is the first all-new model showcased by Kia Philippines this year. This subcompact sedan is stylishly made to suit a perfect lifestyle. The electric side mirrors with LED side repeaters, chrome outside door handles, projector fog lamps, pole type antenna, and rear combination lamps are nice exterior touches that give Soluto a striking appeal.

The new Soluto features smart and useful details that capture the essence of the modern-day driving. These include an Android Auto and Apple Car Play compatible Audio System, an Audio Remote Control and a 2.8-inch LCD Cluster. For utmost comfort, Soluto is designed with comfortable seats and enough room to stretch, and is equipped with Rotary Temperature Control and 360° Rotatable Airducts.

Soluto is engineered with the highly efficient 95-Ps 1.4MPI gasoline engine, mated to either a four-speed automatic transmission or a five-speed manual transmission.

Mitsubishi Strada

Mitsubishi Strada is set to create another huge impact to the local market after Mitsubishi Motors Philippines Corporation (MMPC) unveiled its latest version. The all-new Strada embodies a stronger and tougher look of a modern pickup with its refreshed design. The high hood and functional LED lamps, harmonized with grille design, complement its sculpted body curves with contrasting sharp lines. The front-to-back character line expresses a sense of space and thickness of its overall body.

This powerful pickup comes with a larger interior space, equipped with a functional and modernized center panel and console. All variants of Strada feature 2-DIN Touch Screen monitor, tuner, MP3 player, USB, iPod-ready Auxiliary-in, Bluetooth with Mirror Link feature Multi-media system, and GPS Navigation System.

Refined to deliver an unmatched performance and off-road capability, Strada is powered by 2.4L 4 In-line 16 Valve DOHC Clean Diesel with Variable Geometry Turbo and MIVEC (Mitsubishi Innovative Valve timing Electronic Control System) 4N15 which gives a maximum output of 181 Ps/3,500 rpm and a maximum torque of 430 N-m/2,500 rpm.

Suzuki Ertiga

The new Ertiga exudes a distinctive exterior styling, featuring a taller and wider nose, a dynamic shoulder line, deeper curves, an aerodynamic body and refined chrome accents. It combines elegance and sturdiness that clearly differentiates it from other vehicle models under its segment.

Inside Ertiga is a world where sophistication meets utility. It has a flexible seating that can be easily adjusted to accommodate friends, family and large amounts of luggage. It also comes with user-friendly features such as bank note or coin holders, USB port and accessories socket, glove box, seatback pockets, accessories socket for second-row seat and ventilated cup holders, among others.

A powerful and efficient 1.5 petrol engine powers the new Ertiga which promises to deliver a smooth and powerful response, as well as high fuel efficiency. — Mark Louis F. Ferrolino

Understanding today’s car buyers

While new technologies have been transforming automobiles in many ways, consumers are also shifting their preferences in purchasing cars.

Cox Automotive released its latest Car Buyer Journey study last year on online marketplace Autotrader.com, shedding light on the current car shopping behavior of consumers. According to the study, 61% of the total buyers say they are driven by need in buying a new vehicle, while 39% are driven by want.

Most car buyers are undecided at the start of the shopping process, with only one in three buyers knowing exactly what vehicle they want to purchase at the beginning.

Car buyers also want to know the total price of the vehicle of their interest with 47% of buyers saying “that the total price of the vehicle is more important than the monthly payment.”

Moreover, the study further confirms the ongoing integration of online means in buying a car. The study found out that car buyers spend 60% of their time online. Furthermore, another study by Cox Automotive, entitled Future of Digital Retail Study, indicated that “7 in 10 consumers are more likely to buy from a dealership if they could start the process online.”

This online shopping is being done mostly using third-party sites, which amounts to 78% of the study’s respondents. Buyers visit third-party Web sites as their starting point. Yet the Future of Digital Retail Study revealed that with 89% of consumers wanting to sign final documents at the dealership, car buyers want to finalize their purchase in-store.

The Car Buyer Journey study also revealed that buyers are least satisfied with a long purchase process. Buyers are most satisfied with the test-driving process, garnering 77% of the population. However, only 46% of the respondents are satisfied with how long the process took. “Of the three hours average time spent at the dealership during the purchase process, half is spent negotiating or doing paperwork,” the study explained.

“Among buyers who were dissatisfied with how long the process took, Negotiations and Financing/Paperwork were the top 2 areas that took longer than they expected,” Cox Automotive’s research continued.

Multinational professional services network Deloitte also conducted its study regarding consumer trends worldwide, which was released just this year. In its Global Automotive Consumer Study, Deloitte found out that “consumers are questioning if autonomous vehicles are safe, which is causing some people to take a more cautious approach to the idea.” Electric vehicles, on the other hand, are gaining a growing demand in Asia-Pacific and the European Union.

The study also revealed a mixed opinion towards vehicle connectivity, with figures indicating Asian consumers embracing the idea more than Western counterparts. “Consumers may be reluctant to pay for connectivity” as they “differ on specific concerns around connectivity, including the security of biometric data generated and shared by connected vehicles.”

While ‘mobility revolution’ manifests itself in means such as ride-hailing, “[o]verall consumer behavior is proving difficult to change,” with many still preferring the status quo. Nevertheless, the younger generation has shown to embrace shared mobility. — Adrian Paul B. Conoza

Moody’s cites fiscal stability despite gap

By Melissa Luz T. Lopez
Senior Reporter
THE PHILIPPINES remains on solid fiscal ground despite a bigger budget deficit last year, Moody’s Investors Service said, citing stronger revenue collections.
“The wider fiscal deficit masks underlying stability when considering the Philippines’ fiscal strength,” Moody’s senior credit officer Christian de Guzman said in an e-mailed reply when sought for comment.
The Bureau of the Treasury reported a P558.3-billion fiscal deficit for 2018, substantially bigger than the P350.6-billion shortfall in 2017 and settling above the P523.7 billion programmed for the entire year. That placed the shortfall at an equivalent of 3.2% of gross domestic product (GDP), also higher than the three percent deficit ceiling set for the year.
The wider fiscal gap came as state disbursements reached P3.408 trillion, more than the P3.37-trillion program for the year and spelling a 20.7% increase from the P2.824 trillion spent in 2017.
Revenues totaled some P2.85 trillion, slightly exceeding the P2.846-trillion goal for the year.
IMPROVED METRICS
The bigger deficit does not ring alarm bells just yet, the global credit rater said, as it is accompanied by better metrics that reflect the country’s fiscal health.
Mr. De Guzman noted that the Philippines’ debt burden settled at 41.9% of GDP in 2018, improving from 42.1% a year earlier.
He added that debt affordability has been improving, with the ratio of interest payments to revenue down to 10.2% from 11%. Such trend has been sustained for the ninth straight year.
Moody’s noted that this was largely due to the implementation of Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which raked in additional revenues to support increased state spending requirements.
“This was made possible by the gains in revenue resulting from the implementation of TRAIN,” Mr. De Guzman explained.
“In the absence of revenue reforms such as TRAIN package 1, we may have seen an even wider deficit that would have had a more negative impact on the Philippines’ fiscal strength,” he added.
The TRAIN law was expected to generate an additional P63.3-billion revenues in its first year of implementation from the removal of some exemptions from value-added tax (VAT); increased tax rates for fuel, cars, tobacco, coal, minerals, documentary stamps; and new levies on sugar-sweetened drinks and cosmetic procedures, among others.
The Bureau of Internal Revenue missed its P2.074-trillion tax target by six percent, but bigger collections by other state agencies drove the revenue effort to 16.4%, the highest since 2007.
Moody’s affirmed the country’s credit rating at “Baa2” — one notch above minimum investment grade — with a “stable” outlook in July last year, as it flagged the need to collect more taxes given a “narrow” revenue base.
A higher credit rating makes it cheaper to borrow from foreign sources, as these vouch for a country’s ability to pay their loans.
The Philippines plans to borrow additional funds this year to support more aggressive spending, which will largely finance big-ticket infrastructure projects under the “Build, Build, Build” pipeline.
Finance Secretary Carlos G. Dominguez III told reporters on Friday last week that the budget balance remains “manageable” despite breaching 2018’s ceiling, saying the government was “confident” of staying within the deficit ceiling for 2019 set at P624.4 billion, equivalent to 3.2% of GDP.
Increased state spending is expected to propel growth to 7-8%, coming from a three-year low of 6.2% in 2018.

Economists see smooth transition at BSP helm

THE BANGKO SENTRAL ng Pilipinas (BSP) is broadly expected to remain a strong regulator despite the death last Saturday of its governor, Nestor A. Espenilla, Jr.
The 60-year-old central bank chief passed away on Feb. 23 after a battle with tongue cancer.
Mr. Espenilla announced on February last year that he was declared cancer-free after being diagnosed in November 2017.
He had taken intermittent medical leaves late last year, as he went through radiation therapy and chemotherapy.
The Monetary Board made the announcement in the wee hours of Sunday.
After a special meeting held Saturday, the body named Deputy Governor Maria Almasara Cyd N. Tuaño-Amador as officer-in-charge of the BSP, pending President Rodrigo R. Duterte’s appointment of a new central bank chief.
A ban on new appointments and reassignments for government employees will kick in next month ahead of the May 13 midterm polls.
Mr. Espenilla was to serve a six-year term until July 2023 after President Rodrigo R. Duterte appointed him to the post in July 2017.
He pledged a “Continuity Plus Plus” reform agenda, which meant building on the gains of his predecessor, former BSP Governor Amando M. Tetangco, Jr.
Market watchers expect the central bank to remain business as usual in terms of day-to-day operations, with protocols in place for continuity.
“BSP has done it well before. When Gov. Tetangco took the helm after Gov. (Rafael B.) Buenaventura passed away, BSP transitioned well,” Emilio S. Neri, Jr., lead economist at the Bank of the Philippine Islands, said when sought for comment.
The three deputy governors have taken turns serving as officer-in-charge of the central bank whenever Mr. Espenilla was away on medical leave, ensuring continuity at the helm of the monetary authority.
For his part, Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, noted that this would be “a test of how strong BSP, as an economic institution, has become.”
“2018 was a test for the Philippines amidst the uncertainties facing the world today. Somehow, with all the challenges, the Philippines managed a respectable growth and this, I can say, is a testament to the late governor’s type of leadership,” Mr. Asuncion said.
“It may not be perfect, but, I think, it was needed at the perfect time.”
Mr. Espenilla spent nearly three decades at the BSP, joining it in 1981. Prior to taking the governor’s seat, he served as deputy governor for bank supervision.
On monetary policy, observers expect the BSP to remain data-dependent.
“The gradual reduction in large banks’ RRR would likely remain on course and/or any cut in local policy rates amid easing trend in inflation is still possible, provided that inflation convincingly eases and subsequently sustains at the inflation target of 2-4%,” added Michael L. Ricafort, economist at the Rizal Commercial Banking Corp.
Under Mr. Espenilla’s watch, the central bank last year saw banks’ reserve requirement ratio (RRR) trimmed by two percentage points to 18%, which he pledged to bring to single-digit level by the end of his term to reduce the cost of money and keep the standard at par with the rest of the region. The year also saw benchmark interest rates rise by a total of 175 basis points to 4.25-5.25%, which was meant to rein in surging inflation.
A measure amending the BSP Charter, a key reform pending for two decades designed to strengthen the monetary authority, was signed into law just last week.
Market participants also celebrated Mr. Espenilla’s push to embrace digital payments, particularly via embracing the rapidly growing financial technology (fintech) space.
“His legacy lives on in every effort that we all do to serve the unbanked, uncarded and underserved Filipinos with digital financial services,” said Orlando B. Vea, chairman of the Philippine eMoney Association.
Malacañang, through Presidential Spokesperson Salvador S. Panelo, condoled with Mr. Espenilla’s family, citing his legacy of “making financial services closer to Filipinos.”
Under the National Retail Payment System, the BSP targets to shift cash-heavy transactions to digital avenues which, in turn, should help broaden access to financial services and spur increased economic activity.
The central bank is looking to lift the share of digital payments to 20% of total transactions from a measly 1% recorded in 2013, with the country still cash-reliant at present.
Over the past year, the BSP rolled out two automated clearing houses meant to process digital payments, namely the InstaPay and the Philippine Electronic Fund Transfer System and Operations Network. This also allows bank clients to send money across accounts and e-wallets from different banks.
Robinsons Bank President and Chief Executive Officer Elfren Antonio S. Sarte added that the late BSP chief “was at the forefront of creating a regulatory environment in support of a cash-light economy,” and put in place new rules that allow financial firms to pursue digital banking.
The Bankers Association of the Philippines also said in a statement that Mr. Espenilla’s legacy is the “stronger and more inclusive banking system” of the country.
Mr. Espenilla completed his BS Business Economics and Masters in Business Administration from the University of the Philippines, and took a Masters in Policy Science from the Graduate Institute of Policy Science in Tokyo, Japan.
He is survived by his wife Maria Teresita Festin Espenilla, three children and a grandson. Public viewing starts 3 p.m. on Feb. 25 at The Arlington Chapel at Aeternum (Bayani Road, cor. C5 Heritage Park, Fort Bonifacio, Taguig). — Melissa Luz T. Lopez
IN HIS OWN WORDS
Upon his appointment as BSP Governor in July 2017, Mr. Espenilla sat down with BusinessWorld for an interview.
Here are excerpts.
On why he stayed with BSP since 1981.

On how his tenure as BSP Governor will be different.

On his reputation as BSP’s “bad cop.”

Transport dep’t calls for groups to bid for Malolos-Clark railway

THE DEPARTMENT of Transportation is inviting groups to bid for the construction of the Malolos-Clark segment of the P777.55-billion North-South Commuter Railway (NSCR) project.
In a bulletin published in a newspaper on Saturday, the department said it has set the pre-bid conference on March 7 and the deadline for submission and opening of bids on May 10.
The contract consists of three packages: the first one for engineering works of the railway viaduct, four balanced cantilever bridges and two elevated stations; the second for railway viaduct, one extradosed bridge, two balanced cantilever bridges and one elevated station; and the third for railway viaduct, four balanced cantilever bridges and two elevated stations.
Interested parties may procure hard copies of bid documents per package for P50,000.
The train line from Malolos, Bulacan to Clark, Pampanga will be financed by a $2.75-billion loan from the Asian Development Bank (ADB). The open competitive bidding will adhere to ADB’s Procurement Policy, which requires bidders to come from any of ADB’s 67 member countries.
Qualified bidders are likewise required to have an average annual construction turnover of more than $1 billion per package, minimum available financial resources of $60 million per package and submit a bid security of $12 million per package. It must also have completed a project worth more than $500 million in the past 10 years.
The Malolos-Clark railway forms part of the P777.55 billion NSCR project, which consists of the 56-kilometer line from Calamba, Laguna to Tutuban in Manila, the 38-kilometer segment from Tutuban to Malolos, Bulacan and the 53-kilometer portion from Malolos to Clark, Pampanga.
Last year, the DoTr auctioned off the contract for the Malolos-Tutuban line of the NSCR, where Sumitomo Mitsui Construction Co., Ltd. won the contract. It broke ground on Feb. 15. — Denise A. Valdez

Construction of Metro Manila subway’s first three stations set to begin — DoTr

THE DEPARTMENT of Transportation (DoTr) has sealed the design and build contract for the first three stations of the Metro Manila Subway Project, which is scheduled to break ground on Wednesday, Feb. 27.
In a statement on Sunday, the department said it signed last week the deal for the first phase of the project with the Shimizu Joint Venture, which is composed of Shimizu Corp., Fujita Corp., Takenaka Civil Engineering Company Ltd. and EEI Corp. “The Shimizu Joint Venture will be pursuing the design and build of the subway’s partial operability section, which consists of its first three underground stations (Quirino Highway, Tandang Sora and North Avenue), tunnel structures, the Valenzuela depot, and the building and facilities for the Philippine Railway Institute,” it said.
On their Web sites, members of the group said they’ve been involved in several transportation projects, such as stations for the Tokyo subway line in Japan for Fujita as well as the Metro Rail Transit and Light Rail Transit in the Philippines for EEI.
Last week, DoTr officials went to Osaka, Japan to inspect the tunnel boring machines which will be used for construction of the subway. Transportation Secretary Arthur P. Tugade had said that he wanted the boring machines at the groundbreaking ceremony, “para makita ng mga tao na ito totohanan na ‘to [so people will see that the project will go ahead].”
While the public will have to wait till 2025 for full operations of the 36-kilometer subway, the government targets partial operations — covering the first three stations — in three years.
The completed system will have 14 stations from Mindanao Avenue in Quezon City to the Ninoy Aquino International Airport in Pasay City, making for a 40-minute ride from end to end. It will also have a provision for a 5-kilometer extension and two additional stations to eventually link to LRT-1. The DoTr said it also wants to connect the Metro Manila Subway to the common station being built on North Avenue, Quezon City and to the Makati City Subway.
Last March, the governments of the Philippines and Japan signed the first tranche of the P355.6-billion loan for the Metro Manila Subway Project. — Denise A. Valdez

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