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Senate to review ERC’s delay on PSALM petitions

THE SENATE will scrutinize the operations of the Energy Regulatory Commission (ERC) in its upcoming budget hearings in Congress due to the delays in its approval of petitions filed since 2015 by the Power Sector Assets and Liabilities Management (PSALM) Corp.
The PSALM said during Monday’s hearing by the Senate committee on energy that delays in ERC approval of its petitions have led to an additional P34.78 billion shouldered by consumers, equivalent to a power rate increase of P0.193 per kWh.
Under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA), PSALM is allowed to collect the charges from electricity consumers. It seeks approval from the ERC for the monthly amount to be charged.
Asked to explain, ERC Energy Regulation chief Alvin Jones Ortega said the agency has been following due process on the applications filed in their office. ERC’s lawyer Krisha Buela also pointed out that the regulatory agency was already reviewing its procedures to fast-track the pending applications.
“(The ERC) should improve its process. This coming budget season, of course we will see what happens in their operations. Every delay has costs. And those costs are being passed to consumers,” Senator Sherwin T. Gatchalian, who heads the committee, told reporters after the Senate hearing.
On another matter, the senator also sees the bill allocating the P204-billion Malampaya funds to cover universal charge as the fastest and simplest measure of reducing the cost of electricity rates in the country.
“Over the last two years, this committee has been looking for ways in reducing our electricity bills. We’ve been tackling different measures to effectively reduce the amount that our consumers pay on their electricity bill,” said Mr. Gatchalian.
“After a thorough study on the various bills being proposed in the Senate, the chair (sees) that this bill is one of the fastest, one of the simplest and one of the clearest ways of reducing our electricity bill,” he added.
Senate Bill No. 924 or the proposed Cheaper Electricity Bill Act, filed by Senate President Pro Tempore Ralph G. Recto in 2016, seeks to allocate the net national government share from the Malampaya natural gas project for the payment of the stranded contract costs (SCC) and stranded debts (SD) of the National Power Corp. (Napocor).
The bill also directs the Malampaya funds to be remitted to a “Special Trust Fund” to be administered by PSALM.
Based on the computations by PSALM, applying the P204-billion Malampaya fund would avoid an increase of P0.874 per kilowatt hour (kWh) in retail power rates. This would result in annual savings of P2,033.76 for an average household consuming 200 kWh monthly.
Mr. Gatchalian said the committee is now studying the proposed measure on precisely how much of the remaining Malampaya funds should applied for the purpose.
The Malampaya project is a joint undertaking of the national government and Shell Philippines Exploration B.V. on behalf of joint venture partners Chevron Malampaya LLC and PNOC Exploration Corp. The gas find is expected to run out around 2022 to 2024. — Camille A. Aguinaldo

Other markets eyed in World Coconut Congress

THE United Coconut Association of the Philippines (UCAP) will take part in the upcoming World Coconut Congress, as it seeks to tackle both supply and demand issues in the coconut industry.
UCAP President Dean A. Lao, Jr. in a press conference in Quezon City said the congress will provide a venue for stakeholders to develop their marketing and innovation strategies and for farmers to improve their practices.
Through the congress, Mr. Lao also said they “will try to find as much value-added market as [they] can.”
“Because a lot of the branding is done overseas, we want to bring it here. We want to encourage the people to be aware of [other local companies] who are doing a good job…” he told BusinessWorld.
UCAP Managing Director Marco C. Reyes said the industry should focus on improving raw materials and developing a marketing strategy to increase the earning capacity of the farmers.
“[Filipino coconut farmers] have the lowest yield [compared to other countries] at 46 nuts per tree a year. To increase the yield is to increase the income of our farmers,” he added.
“There is [also] demand from other countries [for what] we call emerging and non-traditional products. It offers very wide opportunities [so] we want to develop these products,” Mr. Reyes said.
UCAP Executive Director Yvonne T. V. Agustin said they expect coconut oil exports to reach almost 1 million metric tons (MT) this year.
Data from the US Department of Agriculture’s Foreign Agricultural Service projected that the country’s coconut oil exports are set to grow 3% by 2019, brought about by better copra supply and substitution.
In the first half of the year, Ms. Agustin said exports so far have reached around 414,000 MT. She said this is because of the new demand in emerging markets.
“Our main market is still the US and Europe. They account for 80% of our markets. But other markets are growing like Japan, Malaysia and Indonesia,” Ms. Agustin said.
“These [exporting countries] could be facing their own shortage so they have to buy from us. Maybe they re-export it or process it for themselves.”
Philippines Coconut Authority Division Chief III Rose B. Villaruel said the local coconut industry should not be too dependent on the export market. — A.G.A. Mogato

DTI makes fresh pitch on Japanese investments

THE Department of Trade and Investments is encouraging more investments from Japan, one of the country’s biggest sources of foreign direct investments until last year when fund flows started to plunge.
“The Philippines is on an economic breakout. It is the perfect time to invest and do business in our country, which has a 6.8% GDP growth and an 8% growth in manufacturing industry. We are the best country to invest in,” Trade Secretary Ramon M. Lopez was quoted in a statement on Monday.
The official was speaking at an event attended by over 400 Japanese manufacturing companies during a series of Investment Seminars on July 25-28.
Manufacturing is one of the priority industries under DTI’s Inclusive, Innovation-led, Industrial Strategy which covers and eyes other sectors for growth, including electronics, automotive, shipbuilding, aerospace, and furniture.
“We are very keen in engaging with Japan, especially on the aspect of manufacturing and innovation, and how we can work together to strengthen not only manufacturing but the MSMEs in their value chain as well,” Mr. Lopez added.
According to the official, Japan is the top source of foreign investments in the country and has been providing technical assistance that can facilitate more trade and investments through the Japan International Cooperation Agency and Japan External Trade Organization (JETRO).
However, preliminary data from JETRO also show that total January to March investments to the Philippines slumped $104 million, well below the $1 billion logged in the comparable period last year.
In 2017, Japan’s investments brought into the Philippines plunged 56.28% to $1.014 billion from $2.31 billion.
The Japan Chamber of Commerce and Industry had attributed this drop to uncertainty from ongoing legislative discussions over the second package of the Duterte administration’s tax-reform program. — J.C. Lim

SB Corp considering up to P1.7 billion for MSMEs

By Janina C. Lim, Reporter

SB Corp. President and Chief Executive Officer Ma. Luna Cacanando — SBGFC.ORG.PH

THE Small Business Corp. (SB Corp.) is considering up to P1.7 billion in funds to lend to micro, small and medium entrepreneurs this year, more than double last year’s funding.
President and Chief Executive Officer Ma. Luna Cacanando said the funds will be channeled through the Pondo sa Pagbabago at Pag-asenso (P3) Program.
The administrations’s flagship program, the P3 is established as an alternative source of financing to MSMEs and do away with the sector’s reliance on the informal 5-6 scheme.
According to the SB Corp.’s 2017 financial statement posted on its Web site, the P3 program released P840.61 million for MSMEs’ borrowing last year.
“We are keeping the momentum going, targeting the release of at least P1.7 billion in P3 loans by end 2018,” Ms. Cacanando said in a statement Monday.
The P1-billion annual fund allotted to the program is said to extend support to at least 40,000 micro enterprises serviced by more than 200 credit delivery partners across the country.
“For every P1 billion from the national government, each province will be allocated at least P10 million in P3 funds,” she said.
SB Corp. said it has 2,000 active SME borrowers nationwide and 154 partner financial institutions.
The agency’s shift of focus to lending is in line with Mr. Duterte’s recently signed Executive Order 58 which merges government-run guarantee funds with newly formed agency Philippine Guarantee Corp.
“We welcome this new development as a step towards more standardized policies and processes that will facilitate timely delivery of services to the public. It is very clear that the national government is trying to address the concerns of operational redundancies,” Ms. Cacanando said.
The agency added that it aims for MSMEs “to receive an increased share in the allocation of the country’s national resources and put into place actual measures to implement the laws developed and passed by Congress that are beneficial to the MSME sector.”

Group to bring campaign on mining safety to Baguio officials

THE Philippine Mine Safety and Environment Association (PMSEA) said it will embark on a campaign to deal with small-scale mining, beginning with efforts to promote mining safety to the local government of Baguio.
“We have had talks with the governor, the mayor, and we’re trying to tell him — I told him — ‘Look, you have to support us with this. You are allowing illegal operations,’” PMSEA president Walter William B. Brown said in a press conference in Quezon City on Monday, adding that the group will travel to Baguio on Wednesday to meet with officials there.
“Unless you show the people that you are willing to follow the law, our problem really is a problem of discipline.”
Mr. Brown also emphasized that small-scale miners are not at fault. “[That’s why we] buy their stockpile, we give time to take their goods out and if the government allows to take them out, we allow them to do so. We give them the chance to be integrated in our system,” he said.
“They don’t seem to understand what we’re trying to do but I feel that we have to offer them alternatives because they have no other place to go.”
Mr. Brown said each accredited mining firm is already deputized to manage its own operations and area to avoid further casualties.
“For one thing, it’s an obligation for an MPSA (Mineral Production Sharing Agreement holder) to police itself and its own area. If you don’t do it, you’re at fault, don’t blame the small-scale miner,” he said.
Mr. Brown reiterated that there is no need for new laws, given that there is enough legislation to regulate the industry.
“We have a good mining law, it’s just not implemented properly. In fact, we have one of the best mining laws in the world, but it’s not implemented,” he said. — AGAM

Taxpayer, are you surprised?

Plot 1: NEJ, the protagonist, heard unknown voices and odd footsteps. Convinced that her family’s house is haunted, she went to find a local priest, but failed. More antagonistic events ensued, and then the plot twist came: Grace and her two children are the ghosts, and the voices and odd footsteps they’ve been hearing are from living people. They only realized that they’ve been dead when they were being cast away by a séance hired by the new owners of the house.
Plot 2: TP, the protagonist, got to his corporate office early. He saw a mail envelope on his desk. It was from the Bureau of Internal Revenue (BIR). He briskly opened it. He read every word on the letter, sighed, then continued to read the numbers in Philippine pesos. There is no plot twist. He almost dropped the letter. He is being assessed for deficiency taxes. After all the clarifications, he paid the assessment accordingly.
Between these two plots, I prefer to watch Plot 1, and will even produce and direct it. It is actually the plot of a 2001 film, entitled The Others, directed by Academy award winner Alejandro Amenábar. The I-didn’t-see-it-coming feeling and the tinge of shock-of-your-life experience at the end are extremely entertaining. Plot 1, however, is not relatable as it is far from reality. Plot 2, on the other hand, is close to, if not completely, a reality.
To showcase the reality of Plot 2, the BIR recently issued Revenue Memorandum Order (RMO) No. 32-2018, prescribing the audit/investigation of individual and non-individual taxpayers with gross sales/receipts of P10 million and below. The audit/investigation shall be conducted by the Revenue Officers (ROs) of the Office Audit Section (OAS) of the Assessment Divisions in the Regional Offices. The thrust of RMO No. 32-20118 is to generate additional revenues by conducting audits for taxable year 2017 without field investigation by ROs who must submit the report of investigation within 90 days from the issuance of the Electronic Letters of Authority (eLA). Nevertheless, the RMO has the following policies: (1) the Electronic Letters of Authority (eLAs) shall be issued; and (2) that all existing policies and procedures for issuing assessment notices shall be strictly observed.
Letters of Authority (LOA), as described by the Supreme Court in MediCard Philippines, Inc. vs. Commissioner of Internal Revenue (G.R. No. 222743) is the authority given to the appropriate revenue officer assigned to assess functions pursuant to Section 6(A) of the National Internal Revenue Code (NIRC) of 1997, as amended. In this case, the Court emphasized the importance of the LOA in all assessments by expressly stating that an LOA cannot be dispensed with simply because none of the financial books or records being physically kept by the taxpayer were examined. The Court also ruled that a Letter Notice (LN) is entirely different and serves a different purpose than an LOA. An LN, which is issued to notify the taxpayer that a discrepancy is found based on the BIR’s RELIEF System as prescribed in Revenue Regulations (RR) No. 12-2002, as amended, cannot stand as an LOA. An LOA must still be secured because, in the absence of which, the assessment or examination is a nullity.
As for the policies and procedures for issuing assessment notices, these are delineated under RR No. 12-1999, as amended by RR No. 18-2013 and RR No. 7-2018 as follows:
The taxpayer shall be informed of the tax deficiency by the revenue officer who audited the taxpayer’s records. A Notice of Informal Conference (NIC) shall be sent to the taxpayer, giving the latter an opportunity to present its side of the case within 30 days from receipt of the NIC;
If the taxpayer failed to present his side, a Preliminary Assessment Notice (PAN) shall be issued to the taxpayer by the Commissioner of Internal Revenue (CIR) or his duly authorized representative. The PAN shows in detail the facts and the law, rules and regulations, or jurisprudence on which the proposed assessment is based;
If the taxpayer failed to reply or, in cases where no PAN is required, the Formal Letter of Demand and Final Assessment Notice (FLD/FAN) shall be issued by the CIR or his duly authorized representative; and
Then a Final Decision on a Disputed Assessment (FDDA) of the CIR or his duly authorized representative shall be issued to the taxpayer.
Pursuant to Section 228 of the Tax Code, as amended, a PAN shall not be required in any of the following cases:
When the finding for any deficiency tax is the result of a mathematical error in computing the tax appearing on the face of the tax return filed by taxpayer;
When a discrepancy has been determined between the tax withheld and the amount actually remitted by the withholding agent;
When the taxpayer who opted to claim a refund or tax credit of excess creditable withholding tax for a taxable period was determined to have carried over and automatically applied the same amount claimed against the estimated tax liabilities for the taxable quarter or quarters of the succeeding taxable year;
When the excise tax due on excisable articles has not been paid; or
When an article locally purchased or imported by an exempt person, such as, but not limited to, vehicles, capital equipment, machinery, and spare parts, has been sold, traded, or transferred to non-exempt persons.
The Supreme Court had already settled in the case of CIR vs. Metro Star Superama, Inc. (GR No. 185371) (https://cdasiaonline.com/jurisprudences/54034) the issue on the effect of failure to strictly comply with the notice requirements prescribed under Section 228 of the NIRC (https://cdasiaonline.com/laws/10608)and RR No. 12-99 (https://cdasiaonline.com/taxations/20841), as amended. The Court ruled that sending a PAN to a taxpayer to inform them of the assessment made is but part of the due process requirement in issuing a deficiency tax assessment, the absence of which renders nugatory any assessment made by the tax authorities.
As can be culled from the foregoing reality, the scenes in Plot 2 should be as predictable for any taxpayer being assessed by the BIR. The rules are settled. There is no plot twist. All characters are protagonists and contribute to the lifeblood of the nation — taxes. Hence, if I may ask: Taxpayer, are you surprised? The answer should be a resounding “No!”
 
Rhino T. Chua is a senior associate of the Tax Advisory and Compliance of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory, and outsourcing services firms in the Philippines.
Rhino.Chua@ph.gt.com
+63(2) 988-2288

A Development Puzzle: Granaries and Poverty

Why is it that top grain producers in the country differ widely in poverty incidence?
In this article, we compare four Luzon provinces with four Mindanao provinces. They ranked among the top in production and harvested areas in 2015. Why 2015? That was the latest year of official poverty statistics.
Findings:
1. The average poverty incidence of the Luzon granaries — Nueva Ecija, Isabela, Pangasinan, and Cagayan — was 17% in 2015. This was exceedingly lower than the average poverty incidence of 50% of the Mindanao granaries — North Cotabato, Bukidnon, Sultan Kudarat, and Maguindanao.
2. Production in Luzon is far higher in part due to high productivity as it has larger and higher percentage of irrigated areas than Mindanao: 83% of total rice areas versus 59%. Cagayan and Nueva Ecija are served by large dams, Magat and Pantabangan.
3. Luzon grows the high-yielding yellow corn for feeds than white corn: 93% vs. 60% for Mindanao.
4. Luzon leads in yield: 4.4 tons per hectare (ha) for rice and 4.6 tons for corn. These are higher than Mindanao’s at 3.6 tons per ha and 3.2 tons per ha.

There are merits in having irrigation when water supply is available and capital costs considered as well as farming yellow corn for feeds.
However, there are questions why the irrigated yields of Mindanao are far lower compared to Luzon: 4.0 tons per ha versus 4.7 tons per ha. The story is similar for yellow corn: 3.6 tons per ha vs. 5.4 tons per ha. Cultural practices are key.
Maguindanao has very high poverty (57.2%) because, among other reasons, it has low yields across the crops. Low productivity makes it the second poorest in the country.
Bukidnon is an enigma. It has relatively high yields for rice and corn but its poverty incidence is very high at 53.6% (fifth poorest) not that far from Maguindanao’s. It is higher than the Mindanao’s average of about 36%. The province also hosts large sugar (65,000 ha) and pineapple (24,000 ha) areas as well as poultry farms.
Why is this? Average landholding cannot be the factor as Bukidnon’s average is higher than North Luzon provinces. Are farm costs higher and farm prices lower due to lack of rural roads? Is tenancy high?
A Mindanao expert said that, perhaps, having more corn makes the province more poverty prone. Even if productive, the price swing during the harvest season may be more considerable for corn.
These questions deserve answers from the authorities
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
 
Rolando T. Dy is the Chair of the MAP AgriBusiness and Countryside Development Committee, and the Executive Director of the Center for Food and AgriBusiness of the University of Asia & the Pacific.
map@map.org.ph
rdyster@gmail.com
http://map.org.ph

National Security Strategy 2018

The government recently published a National Security Strategy (NSS) for the first time, prepared by the Office of the National Security Adviser (NSA) Hermogenes Esperon and quarterbacked by Undersecretary Vic Agdamag. President Rodrigo Duterte signed the document on May 16, which outlines the administration’s plans for a “secure, peaceful, modern, and prosperous Philippines.
In his message, President Duterte stressed that “We will bolster our position in the community of nations by strengthening diplomatic relations with our traditional allies, engaging non-traditional partners and pursuing an independent foreign policy that gives primacy to our national interest.”
The NSS flows through from the 2017-2022 National Security Policy (NSP) of the Duterte administration. The NSP is a comprehensive document that addresses national security concerns by calling for improvements in defense, intelligence, and law enforcement capabilities to address the communist insurgency, terrorism, violent extremism and protecting the country’s sovereign rights in the South China Sea (SCS).
We’ve named our Exclusive Economic Zone (EEZ) as the West Philippine Sea (WPS) as a protective measure by delineating its boundaries apart and distinct from the rest of the SCS in conformity with UNCLOS. This was acknowledged in the July 2016 landmark ruling of the Permanent Court of Arbitration in The Hague, which China refuses to acknowledge as it continues to claim the SCS in its entirety. President Duterte has pledged to raise the arbitral ruling with China at the right time.
NSS 2018 integrates the country’s major security policies, goals, responsibilities, and courses of action into a roadmap to attain the vision of a better Philippines in all respects for all Filipinos. It’s also a blueprint that points the way to better coordination, cohesion, and synchronization of government functions to improve efficiency and maximize the use of limited resources.
NSS 2018 articulates the national interest, conveys the State’s intentions, and rallies public support for government’s policies and programs. Congressional backing is crucial to its success in terms of enacting necessary legislation in a timely manner and provide appropriate funding.
The landmark document has 7 parts. Chapter 1 introduces the concept of national security and the overarching national security framework that shows the NSP and NSS as inseparable components. Chapter 2 provides an overview of the current strategic environment and highlights our national security priorities to address internal and security threats and challenges.
Chapter 3 discusses the national security framework, core values, and national interests underpinning the NSS. It begins with the definition of national security as “the state or condition wherein the country’s sovereignty and territorial integrity; the people’s wellbeing; core values and way of life; and the State and its institutions are protected and enhanced.”
This chapter cites 12 national security goals as the bases for government action:
• Guarantee public safety and achieve good governance.
• Mitigate the impact of health-related threats.
• Develop a dynamic, inclusive and sustainable economy.
• Achieve food and water security.
• Safeguard and preserve national sovereignty and territorial integrity.
• Heighten consciousness and pride in our heritage, culture and values.
• Promote human and ecological security.
• Achieve energy security.
• Ensure maritime and airspace security.
• Strengthen international relations.
• Provide strong cyber infrastructure and cyber security.
• Improve vital transportation infrastructure and port security.
Chapter 4 introduces two important components that will guide the strategy’s successful and sustained implementation.
First is the combined, balanced, and effective use of the instruments of national power, namely: political and legal; diplomatic; informational; intelligence; economic; military; and law enforcement. It aims to promote comprehensive and shared efforts in addressing current and future threats and challenges. Second is wealth creation and resource generation through: intensified human capital development, passage of national security legislation, appropriate funding for national security and the development of strategic industries.
The attainment of the 12-point national security agenda hinges on the successful execution of the strategic lines of action enumerated in Chapter 5. The action lines are designed to improve our defenses, capabilities, technologies, processes, partnerships and resources. A total of 109 strategic lines of action were identified following careful analysis of the strengths, weaknesses, threats and opportunities of the nation.
Chapter 6 tackles the necessity for an enhanced national security organization to successfully execute the lines of action. As such, the NSS endeavors to reinvigorate and streamline the existing national security structure for effective command and control and utilization of limited human and other government resources, by reorganizing the National Security Council (NSC); its Secretariat; the Cabinet Cluster on Security, Justice and Peace; the National Intelligence Board and the National Intelligence Committee.
The NSS concludes with Chapter 7 with a call for national unity because national security is everyone’s responsibility.
The Executive Summary ends on this note: “The NSS is still in its nascent stage and should be treated as a work-in-progress. Hopefully, this NSS will set the stage for the formation of a national consensus and national will toward the attainment of peace and prosperity across the country. To this end, the support and cooperation of the Filipino people are paramount.”
I have a personal stake in the NSS. Along with my colleagues in the Committee on National Security — Babes Flores, Ed Adan, Chuck Agustin, the late Fr. Archie Intengan, Art Lomibao, Vidal Querol, Enrique Galang — of the Philippine Council for Foreign Relations chaired by Ambassador Joe Romero, we assisted the Office of the National Security Adviser in formulating NSS 2018.
Of particular interest to me all these years has been “credible deterrence” that aims to strengthen our internal and external defenses. President Duterte has to-date approved defense spending to almost P300 billion, or four times more than the previous administration. He’s rolled up his sleeves to ensure that the elements needed to achieve the national security vision are met.
Unity and execution are crucial to success and NSS 2018 points the way forward. It requires from us a keen sense of nationhood; clear sense of common purpose; and a compelling sense of urgency to secure ourselves far into the future. Kayang-kaya kung sama-sama!
 
Rafael M. Alunan Iii served as Secretary of Tourism in the Corazon C. Aquino administration and as Secretary of the Interior and Local Government in the Fidel V. Ramos administration. He currently chairs the Committee on National Security of the Philippine Council for Foreign Relations.
rmalunan@gmail.com
map@map.org.ph
http://map.org.ph

When on-demand economy becomes on-demand culture

By Dennis Ng
IT’S A common experience for any diner in the Philippines: You tell the waitress the item you want to order from their menu, only to have her respond, “I’m sorry, sir. It’s not available.”
This scene — repeated daily across the archipelago — is emblematic of our attitude toward customer service.
If, in other countries, the customer is always right, in the Philippines, the customer is always resigned: She must simply accept however businesses choose to treat him as a fact of life, no different from the traffic that slows our commute or the rain that floods our streets.
Customer service in the Philippines is largely cosmetic.
Yes, front-line service professionals do use a wealth of pleasantries and honorifics, like “mam,” “sir,” or the common compound, “mamsir,” but the experience ends there. You get almost no say in what products or services are provided to you, how they are executed, or even when they will be delivered. Characters in video games may in fact have more choices than consumers in the Philippines.
But things are changing, slowly but surely.
The local media has documented the rise of on-demand platforms in the Philippines, such as short-term lodging marketplace Airbnb and ride-hailing app Uber (which, though gone from the country, has left an indelible mark on consumers).
While coverage on these tech companies has generally been very good, I do believe there is one major fact that has been overlooked. When journalists, and to a lesser extent bloggers, write about these on-demand platforms, they generally focus on how they are disrupting their respective industries.
For instance, they’ll document how Airbnb is affecting the local hotel industry, or how Grab (which acquired Uber in Southeast Asia) is impacting the taxi industry. But innovative companies like these have a much wider impact: They don’t just disrupt their own industries — they disrupt all consumer expectations.
While on-demand companies shift our expectations in several different categories, they have influenced our thought on one most of all: speed of service.
Before Airbnb, we had to content ourselves with booking a room or a home weeks, or sometimes even months, in advance of when we would actually check-in.
Before ride-sharing was introduced, we had to stand in street and catch the attention of passing cabs with the endless waving of our arms, or worse, call a dispatcher to request a taxi that might never come.
With the advent of Airbnb and Grab, we were happy to make spontaneous travel plans, confident we could get a comfortable room wherever we chose, or take our time with our colleagues, friends, or family, knowing there would be no hassle in getting a ride to your next destination.
These companies have triggered an eye-opening thought in Filipino consumers, like the apple that fell before Newton: If we can get a car or a house on-demand, why can’t we other products when we want them, too? This thinking most applies to the world of e-commerce as well as in-store purchases of large items.
When we buy something online, or go to a store to pick up something that cannot fit in a normal-sized vehicle, like a couch, we will wait, and wait, and wait. Check it for yourself: Go to any large e-commerce site that services the Philippines. Their average expected delivery time is more than a week, and that’s being generous. The situation for large, in-store items is just as bleak, and suffers from a kind of popularity tax: The busier a particular store is, the longer your delivery will take. The delivery of your office desk or queen bed may be not scheduled for weeks later, up to even a full calendar month away or more.
Prior to the arrival of the on-demand economy in the Philippines, we would have taken lengthy delivery times as a matter of convenience, but now we rightfully recognize it as a matter of fairness. We pay companies the full price for their products today. How, then, is it fair that we do not get to use these products until weeks later? The exchange of value needs to be far more symmetrical: We should be able to receive and use a product shortly after buying it.
It’s therefore the responsibility of business leaders in the Philippines to do everything in their power to expedite the delivery of their products to meet the growing expectations of Filipino consumers. They must evaluate every aspect of their operations — from how customers place orders to how they pack their products — to see where they can further streamline processes for quicker fulfillment.
As the founder of Mober, I’ve been more than happy to help many Filipino brands offer same-day delivery through our fleet of vehicles, for I know that no company can go it alone: It may very well be called the on-demand economy because it will require us to demand the most of ourselves and how we can serve others.
 
Dennis Ng is the founder and CEO of Mober, a mobile app that enables consumers and enterprises alike to enjoy the benefits of on-demand, same-day delivery.

Boring and predictable

By Tony Samson
In a perfect world for investors and economists a country that is boring and predictable happens to be the best candidate for a lasting investment commitment. Think of Switzerland and Singapore. These two countries hardly make the front pages of international news for wild swings in economic policies, sudden changes in leadership (their sound system seems to have the right speakers), or incidents involving high body counts.
Predictability, which is the first cousin of consistency and dependability in the enforcement of laws and their interpretation by the different agencies of government, generates planning scenarios where the worst case is limited to lower profits, and not the closure of business or the disappearance of the CEO.
The traits of boredom and predictability are ingrained in the rules which include the legal system of contracts and obligations, the business culture of punctuality and high service expectations, and simplicity in dealing with government rules and regulations.
Of course, tourism campaigns veer away from the predictable with their hint of adventure (more fun in the Philippines). They hew closer to the attributes of a blind date by promising variety (surprise me) and the promise of the unexpected. Would you like to have lunch with someone who is introduced as boring and predictable?
Even in a milieu where “disruption” in any seminar title ensures a full house, the source of the grating interruption is expected to come from competition, technology, or the rise of a new business model (like the sharing economy upsetting hotels and taxicabs). Disruption is not expected from the regulatory environment arising from changing bidding rules midstream, favoring one industry player over another, or closing a whole tourist area.
A reputation for predictability is earned. Countries need to display the art of being boring. Their news media do not feature corruption scandals, fraud involving a bank executive, political invectives, unidentifiable corpses on the streets, or even family feuds.
If there are unpleasant events covered, these are only reported when they happen in neighboring countries. Only other countries offer unpleasant surprises. People on the street of boring countries seem to know where they’re going and do not loiter aimlessly or knock on car windows to cadge tips for wiping these with wet rags. And to the question on what there is to do at night? Maybe dining out or watching an old play are on top of the list.
How does a country advertise its lack of excitement, especially of the wrong kind? Can it boast outright of its embrace of ennui? Can someone pitching for an acceptable sovereign risk win with a slogan of “we put you to sleep…soundly”?
The attractions offered by being boring and predictable have hardly been appreciated. Such attributes are seen negatively. Who wants to be described as unexciting and dull?
The ease of doing business implies that when you apply for some government permit (say, to open a restaurant) and you fulfill all the simple requirements in a prescribed format, you can have a ribbon-cutting ceremony in three days and serve your favorite lemon meringue cake. Meeting expectations routinely can be boring. Where’s the challenge of doing business where you need connections and an effective fixer to ease your way? What about pre-operating costs of wining and dining and maybe holding a raffle where everybody goes home happy?
Maybe, there’s too much attention in trying to make the country more exciting. Sure, backpackers like to be surprised. They long for adventure and postings of how big the cockroaches are — they even have teeth.
Never underestimate the power of boredom. Why, when a much-anticipated speech was brief, properly read, almost in a monotonous voice, free of random musings and stray expletives aimed at moving targets, devoid even of too many applause lines, the reception was overwhelming. Four stock trading days of green numbers that followed are reward enough.
Now, we no longer crave for civility and statesmanship. Simple boredom and predictability can be the new normal for the economy. We need to bridge the yawning gap.
 
Tony Samson is Chairman and CEO, TOUCH xda
ar.samson@yahoo.com

House gets lowest satisfaction rating since 2015

A SURVEY by the Social Weather Stations (SWS) showed that net satisfaction for both chambers of Congress slipped in the second quarter of 2018.
SWS’ Second Quarter 2018 Social Weather Survey indicated a “57% satisfied and 17% dissatisfied” result for performance of the Senate, while the House of Representatives (HoR) got 45% satisfied and 20% dissatisfied.
The HoR’s net satisfaction also fell from “good” to “moderate” with a 10-point drop from +35 in March 2018 to +25 in June 2018.
This is their lowest rating since December 2015, which stood at +15.
Net satisfaction in the House fell in all regions, from “good” to “moderate”.
The non-commissioned survey was conducted from June 27-30 with 1,200 respondents nationwide.
Party-list Akbayan Rep. Tomasito S. Villarin said anti-poor policies and issues are to blame for the decline in net satisfaction for congressmen, especially among the marginalized.
“Based on socio-economic classes, it is only the middle and upper classes that were satisfied due to higher disposable income due to reduced personal income taxes and lowered real property transfer taxes. The vast majority of the poor, both urban and rural, is rejecting the House for such anti-poor policies,” Mr. Villarin said in a Viber message to reporters,
He added, “The push for no-election and federalism also contributed to the decline which might translate into a rejection by the electorate of incumbents.”
SENATE
For the Senate, net satisfaction remained “good,” but was “down by 4 points from +45 in March 2018 to +41 in June 2018.”
This is the lowest rating since their good +41 in April 2016.
Senate Majority leader Juan Miguel F. Zubiri said maintaining a “good” rating “shows the importance of the Senate in terms of performance and accountability as well as independence in seeking the truth on many issues.”
Mr. Zubiri cited the Senate “leading the passage of the Strengthened Anti-hazing Law, Free Tertiary Education Law, Ease of Doing Business Act and the landmark Bangsamoro Organic Law to name a few…, as well as our stand against corruption and crime through the different Committee hearings headed by the Blue-ribbon, Health, Public Order and Security, Agriculture and many others.”
Senate President Vicente C. Sotto III, for his part, noted that the latest SWS survey was undertaken when the Bangsamoro law was “in the debate stage.”
Mr. Sotto said he believes that “the trust and confidence of our countrymen will be better in the months to come as far as the Senate is concerned.”
CABINET
Net satisfaction on the President’s Cabinet, meanwhile, was still within the “moderate” range, but fell from “+28 in March 2018 to +25 in June 2018.”
Of the respondents, 43% were satisfied while 18% were dissatisfied with the Cabinet.
This rating is their lowest in two years, since April 2016’s moderate +22.
Presidential Spokesperson Harry L. Roque Jr., in a press briefing in Malacañang on Monday, said, “We will strive to improve the delivery of services but I note also that in the SWS, virtually everyone in government got lower scores.”
He added that discussions on the outcome of the SWS survey “will probably be included in the next agenda meeting,” scheduled on Aug. 6, “on ways and means to communicate better the achievements of the Cabinet.”
The Supreme Court also retained its net satisfaction of “moderate” from March 2018, moving “from +20 (correctly rounded) in March 2018 to +19 in June 2018.” — Gillian M. Cortez

Andaya is new Majority Leader

CAMARINES SUR Rep. Rolando G. Andaya, Jr — CONGRESS.GOV.PH

CAMARINES SUR Rep. Rolando G. Andaya, Jr., assumed the post of Majority Leader of the House of Representatives (HoR) on Monday.
Capiz Rep. Fredenil H. Castro moved to elect Mr. Andaya, in place of Ilocos Norte Rep. Rodolfo C. Fariñas, and faced no objection.
Mr. Andaya then took his oath before the members of the HoR, officiated by Speaker Gloria M. Arroyo.
Following the election, Party-list Akbayan Rep. Tomasito S. Villarin raised that it be clarified who now constitutes the majority and minority blocs.
“Who now constitutes the majority, is it the 184 who voted for the Speaker or is there now a new majority beyond the 184?” Mr. Villarin said.
Mr. Villarin was referring to the 184 affirmative votes that Ms. Arroyo received during her election last July 23.
Based on House Rules, members who voted for the winning candidate for Speaker shall be the members of the majority.
The HoR, however, as of this writing, has yet to settle discussion on whether a new majority should be recognized.
During the proceedings, Mr. Castro, the presiding chair, acknowledged Rep. Danilo E. Suarez as Minority Leader, which was strongly opposed by Marikina Rep. Romero S. Quimbo.
“As far as the minority is concerned based on the voting last Monday, we are organized and we are ready to work,” said Mr. Quimbo, who was among those who abstained during the vote for a new Speaker.
He also pointed out that Mr. Suarez not only signed the manifesto in support of Ms. Arroyo, but also campaigned for her election.
Party-list Ako Bicol Rep. Alfredo A. Garbin, Jr., for his part, maintained the 17-member minority bloc will keep its position, arguing that House Rules “did not change and it will never change the membership status of each and every member regardless of whether you voted for the winning Speaker or did not participate in the election.” — Charmaine A. Tadalan

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