Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 11083

DoF signals opposition to VAT exemptions for fuel products

By Melissa Luz T. Lopez
Senior Reporter
THE Department of Finance (DoF) will oppose a fresh Senate proposal to exempt fuel products from value-added tax (VAT), noting that the focus should be on passing the rest of the tax reform packages before this Congress adjourns for good.
Finance Undersecretary Karl Kendrick T. Chua said Senate Bill 2163 filed by Senator Aquilino L. Pimentel III last week, which seeks to restore VAT exemptions for petroleum products, will run counter to the purpose of reducing the burden on low-income households.
“First of all, VAT is a tax on goods and services. When you buy, you pay the VAT. If we remove that, then typically those who buy — the richer one with cars — are going to get a tax break which we are not very comfortable about,” Mr. Chua told reporters on the sidelines of a business group’s meeting yesterday.
“We’re with him to help the people but we can do it differently. Instead of tax breaks, we give more subsidies to those who are in need and we have national ID to make sure they are given objectively.”
Targeted subsidies via the government’s Pantawid Pasada program for jeepney drivers as well as unconditional cash transfers will be a more effective response without sacrificing state revenue, Mr. Chua added.
On top of the 12% VAT, the government collects an additional P4.50 per liter excise tax on fuel products as part of the Tax Reform for Acceleration and Inclusion (TRAIN) law. The additional tariffs are implemented in tranches, starting with a P2.50/liter increase effective Jan. 1, 2018 and another P2/liter that took effect this year. A final increase of P1.50/liter will be implemented by Jan. 1, 2020.
TRAIN’s first year yielded higher tax collections in 2018 but were below target.
The Bureau of Internal Revenue (BIR) collected P1.961 trillion over the full year, against P1.781 trillion in 2017, though it was 4% short of the P2.044-trillion collection target for 2018.
Income tax and VAT collections fell compared to a year earlier, with the former due to adjustments in personal income tax rates under TRAIN. Mr. Chua also attributed the below-target collections to higher inflation, which likely dampened consumption, as well as an increase of input VAT claims extended to new investors.
However, Mr. Chua said that VAT collections will likely be on the rise as investment projects become operational and start turning out products and services.
“In general, together with BoC (Bureau of Customs) and other agencies and dividends, we are on the dot. That’s enough to fund the programs of the government last year and we are expecting BIR to be on the dot,” Mr. Chua added.
OTHER PACKAGES EYED
Beyond TRAIN, the Executive is now anticipating the passage of additional tax proposals to contribute to revenue.
“This week and the next, we are focusing on alcohol, tobacco and mining… We hope the Senate will advance deliberations so that we can have all of them approved before the end of the Congress in June,” Mr. Chua told members of the Nordic Chamber of Commerce of the Philippines during their general meeting yesterday.
“We are requesting also the Senate to look into the third and fourth packages, which are the property valuation and financial taxes.”
Apart from TRAIN, no other tax reform measures have been signed into law as of this writing. However, Mr. Chua noted that a separate bill offering a tax amnesty for delinquent taxpayers is now under review by Malacañang before the President’s signing into law.
The Senate Ways and Means committee is looking to approve the bill imposing higher excise taxes on cigarettes next week, as they look to open the measure to plenary debate just before Congress adjourns for the campaign period for the May 13 midterm polls.
The window is narrowing for the rest of the tax packages to see legislative action, as Congress will reopen only on May 20 for three weeks of session before the 17th Congress officially closes. If the bills do not pass, the DoF will have to re-file its proposals with the new Congress in July, which would restart the process at committee-level discussions in both chambers.
“The [packages] 2, 3 and 4 are slightly delayed but we hope the Senate will hear them soon. Our target is this year to get everything done,” Mr. Chua said.
The Duterte administration expects to raise P3.2 trillion in revenue this year while expenditures are pegged at P3.8 trillion to make room for increased infrastructure spending.

LLDA issues more violation notices in Manila Bay rehab

THE LAGUNA LAKE Development Authority (LLDA) issued cease and desist orders to four companies in the vicinity of Manila Bay and notices of violation to seven others after they were found non-compliant with environmental regulations.
The orders were issued during the meeting of the Metro Manila Council with the Department of Environment and Natural Resources (DENR) and the Department of Interior and Local Government (DILG) on Thursday.
The companies issued with cease-and-desist orders are Philippine Billion Real Estate Development Corp., HK Sun Plaza, Tramway Bayview Buffet Restaurant, and D Circle Hotel.
On the other hand, notices of violation for water pollution were issued to Sogo Hotel-Quirino, the Government Service Insurance System (GSIS), Peak Motors Phils Inc., Makchang Korean Restaurant, 2Blue Realty Corp., Cebuana Lhuiller Building, Robinsons Land Corp., and Rizal Park Hotel.
Likewise, Summit Ice Inc. was also issued a notice of violation for violations of Republic Act No. 4850 or failing to secure a permit and clearance from LLDA, along with the Philippine Billion Real Estate Development Corp., Smart Land Resources, Malate Bayview Mansion, Makchang Korean Restaurant, 2Blue Realty Corp, and the Cebuana Lhuilller Building.
Asked for comment, GSIS President Jesus Clint O. Aranas told BusinessWorld: “Upon receipt of the notice, we will immediately coordinate with the DENR to work towards total compliance. It comes as a surprise because we have quarterly self monitoring reports that we submit to the Laguna Lake Development Authority from the sample taken from our Sewage Treatment Plant. Please note that the STP is found to be compliant with LLDA regulations. Added to that the LLDA is under the DENR. If they have a new design for STPs we are more than willing to comply.”
A Robinsons Land representative requested that the company’s comment not be for attribution, but acknowledged that the company has sewage treatment equipment at its sites.
The LLDA’s jurisdiction covers Laguna de Bay, which is connected to Manila Bay by the Pasig River. Laguna de Bay is also connected to the Marikina River, giving it authority over establishments that may be dumping pollutants into the two rivers. It is also one of the agencies with day-to-day expertise in monitoring water quality.
Local Government Secretary Eduardo M. Año, who attended the council meeting at the Metro Manila Development Authority (MMDA) head office, told reporters in a chance interview that the government does not intend to disrupt the operations of the establishments but their owners should take the responsibility for achieving compliance.
“Actually, we don’t want to disrupt their businesses, it’s their own lookout to make their establishments compliant. We encourage them to do so in order not to disrupt economic activity. They should be responsible,” said Mr. Año in a chance interview with reporters.
Secretary Roy A. Cimatu of the DENR, LLDA’s parent agency, who was also at the council meeting, said his department will also release its own orders to establishments in Makati City and Malabon City.
“This is just the second round. We’re expecting many rounds. This is the only way to clean up the esteros and Manila Bay” Mr. Cimatu told reporters.
Mr. Cimatu added that the latest orders “are just on the part of the LLDA; the DENR will issue separate orders for Malabon and Makati.” — Vince Angelo C. Ferreras

DENR creates four field offices for Metro Manila

THE Department of Environment and Natural Resources (DENR) said on Thursday that it created four City Environment and Natural Resources Offices (CENROs) in Metro Manila to strengthen the implementation of environmental laws in the region.
“The creation of the four field offices in the DENR-NCR aims to strengthen the enforcement of environment and natural resources laws and promote focused and area-based operations,” DENR Secretary Roy A. Cimatu said in a statement.
The DENR said the North Metro Manila Field Office will be responsible for the cities of Caloocan, Malabon, Navotas and Valenzuela (CAMANAVA); the South Metro Manila Field Office will oversee Taguig, Parañaque, Las Piñas, Muntinlupa, and Pateros; the East Metro Manila Field Office will be in charge of Quezon City, Marikina and Pasig; and the West Metro Manila Field Office will cover Manila, San Juan, Mandaluyong, Makati and Pasay.
Except for the East office, a substation will be set up in all of the field offices to strengthen the rehabilitation of the Manila Bay, according to DENR.
“This brings the programs, projects and services of the Department closer to the public,” Mr. Cimatu said.
Each field office will have three sections: the monitoring and enforcement section to monitor compliance with forestry, wildlife and other environmental laws; the conservation and development section to undertake activities for protected areas and biodiversity, urban forestry, coastal resource and foreshore, and community relations development; and the permitting and regulation section for the issuance of permits and other requirements for forestry and wildlife.
The four field offices will be headed by a Chief Environmental Officer and a deputy and be directly supervised by the DENR Regional Executive Director for the National Capital Region. — Reicelene Joy N. Ignacio

CAB expects airline surcharges to fall amid declining jet fuel prices

THE Civil Aeronautics Board (CAB) expects the fuel surcharge collected by airlines to drop ahead of the travel-heavy dry season as the price of jet fuel continues to decline on world markets.
CAB Executive Director Carmelo L. Arcilla told reporters on Thursday while the final fuel surcharge will be announced on Feb. 15, the agency expects to reduce it to Level 2 for the months of March and April.
“Right now, we reduced from Level 4 to Level 3. We hope it will continue to (fall) because in general fuel prices are going down. Although they are still volatile — sometimes it will spike up — the general trend is going down,” Mr. Arcilla said in a chance interview on Thursday.
In December, the CAB announced a decrease in fuel surcharge for January and February to Level 3, or an additional P74-P291 for domestic flights and P381-P3,632 for international flights, depending on distance.
The price of jet fuel according to the International Air Transport Association (IATA) dropped 9.7% to $76.80 per barrel as of Jan. 25. At an exchange rate of P52.13 to the dollar, this amounts to P4,003.20 per barrel, or P25 per liter.
The approved CAB passenger fuel surcharge matrix allows a Level 2 implementation when the price of jet fuel is between P24 and P27 per liter, and Level 1 when it falls to between P21 and P24 per liter.
Once the price of jet fuel drops to P21 per liter and below, surcharges are cancelled.
Currently, Philippines Airlines and Cebu Pacific are collecting a Level 3 surcharge, which started in September. Both airlines recorded losses in the third quarter and aim to recoup expenses via the surcharge. — Denise A. Valdez

PHL tops Internet usage rankings in 2018

THE Philippines topped the global rankings for hours spent on the Internet, improving on its second spot a year earlier and displacing Thailand.
According to the Digital 2019 report by Hootsuite and We Are Social, Filipino users averaged 10 hours and two minutes a day on the Internet based on data from January 2018 to January 2019, versus nine hours and 29 minutes in the same period the previous year.
On top of a rise in Internet usage, the study also found growth in the number of users of social media globally and in the Philippines, despite trust issues that hurt the medium.
The report said the number of active social media users globally grew 9% year-on-year to 3.48 billion as of January 2019. In the Philippines, social media penetration rose to 71% from 63% a year earlier.
“Although social media came under increased scrutiny and saw diminished trust among users in 2018, people around the world are spending more time on social — the global daily average is now 2 hours and 16 minutes, or one seventh of their waking lives,” Hootsuite Chief Marketing Officer Penny Wilson said in a statement Thursday.
In terms of hours spent on social media, the Philippines again topped the list with four hours and 12 minutes, up from three hours and 51 minutes a year earlier. The top social media platform in the world continues to be Facebook with 2.3 billion monthly active users, followed by YouTube, WhatsApp, Facebook Messenger and WeChat.
But the study noted there has been an increased awareness among users of the negative impact of social media on mental health.
“Some users are shifting from being ‘always on’ their devices to more conscious, ‘intentional’ usage, helped by features that allow users to monitor usage. Brands will increasingly need to go beyond platform tactics, harnessing culture to ensure relevance,” it said.
It also noted that users are opting to use more private spaces such as Stories, Groups and messaging apps than the regular public feed, requiring brands to ensure a more personalized approach in content production to attract attention.
“In the wake of Cambridge Analytica and the fight against fake news, consumer trust in social media channels plummeted, while trust in experts, journalists, and immediate circles on social media increased. Building employee advocacy programs, one-to-one message at scale, and renewing customer communities will be key strategies for brands in 2019,” it said.
Ms. Wilson added, “Businesses must be respectful of their customers’ privacy, while still creating personal 1:1 connections via content that’s important, interesting and timely to the audience while being genuine and authentic to their brands.” — Denise A. Valdez

Cigarettes top fake-goods seizures amid rising taxes

CIGARETTES accounted for the bulk of the pirated and counterfeit goods seized by the government in 2018, setting new records in terms of value.
In a statement Thursday, the Intellectual Property Office of the Philippines (IPOPHIL) said the interagency National Committee on Intellectual Property Rights (NCIPR), where it serves as vice-chair, seized a total of P23.6 billion worth of fake goods, much higher than the 2017 level of P8.2 billion.
In 2018, cigarettes accounted for 85.81% of the value of the seizures or P20.25 billion.
Seized pharmaceutical and personal care products came in second in terms of value, with the 2018 haul amounting to P1.2 billion.
The NCIPR seized P821 million worth of fake handbags and wallets, while optical media came in fourth at P790 million.
The report noted that “value of fake goods confiscated by the government fluctuates every year and it depends on the class of goods and the market value of the original goods in the formal economy.”
IPOPHL Director General Josephine R. Santiago said that the report shows how illegal traders “are apparently shifting to heavily-taxed goods.”
Last year, Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) imposed a P5 or 17% tax increase on cigarettes in 2018 — P2.50 in the first half and another P2.50 in the second half.
Tobacco tax hikes are pending approval, under Package 2 of the tax overhaul policy and Senate Bills 1599 and 1605, with the proceeds to fund public health spending.
Ms. Santiago called on brand owners to get involved.
“Enforcement efforts should not end with seizures, but follow through with convictions of the perpetrators. Bringing them to justice, get the public to actively reject counterfeits,” she added.
In the wake of the 2018 seizures, NCIPR members such as the National Bureau of Investigation (NBI), the Philippine National Police (PNP), and the Food and Drug Administration (FDA) filed a total of 143 cases, while the PNP and FDA carried out 82 arrests in relation to these counterfeit goods.
The Bureau of Customs seized P11 billion worth of goods; the NBI P5.3 billion; the PNP P1.4 billion; the Optical Media Board at P790 million; and the FDA at P5.8 million.
Joint operations of PNP-Criminal Investigation Detection Group, Bureau of Customs, Bureau of Internal Revenue and Philippine Drug Enforcement Agency brought in P5 billion. — Janina C. Lim

Energy efficiency law seen dampening power plant demand

THE ENERGY SECTOR will play a big role in implementing the proposed energy efficiency and conservation law as about half of the thousands of megawatts that can be displaced with the adoption of the legislation will come from power facilities, an official of an industry organization said.
Alexander Ablaza, president of the Philippine Energy Efficiency Alliance, Inc. (PE2), said 45,900 megawatts (MW) are waiting to gathered through energy efficiency initiatives, of which about 23,000 MW are currently accounted for by power facilities.
“We have under our noses 45,900 MW to be harvested from anyone and anything that is using energy today,” he told reporters on Thursday.
Mr. Ablaza made the statement during the press briefing to introduce Water Philippines, a conference scheduled in March that, for the first time, includes renewable energy, and energy efficiency and conservation stakeholders.
The figure is only the minimum capacity that can be gathered through the law that is awaiting the President’s signature, he added.
“Roughly half of that is in the power sector,” he said. “We’re saying that potentially 23,000 MW of the 43,000 MW in the Philippine Energy Plan of new installed generating capacity can be deferred between now and 2040.”
Mr. Ablaza was referring to the 43,765 MW in required additional capacity that the Department of Energy (DoE) projected by 2040 using in its simulation an average annual economic growth rate of 5.7% and an assumed power reserve margin of 25% above the peak demand.
Based on the DoE’s forecast, about 25,265 MW of the required power capacity would come from baseload power plants, most of which are coal-fired facilities that operate continuously.
“This is universal across the globe, investing in energy efficiency is cheaper than the cheapest coal [power plant] on a per installed megawatt basis and, right now at parity, even cheaper than solar,” Mr. Ablaza said.
Earlier this month, the Bicameral Conference Committee convened to reconcile the disagreeing positions of Senate Bill 1531 and House Bill 8629. They then approved the Energy Efficiency and Conservation Act.
“PE2 positions civil society and private sector as partner of government for the long haul,” Mr. Ablaza said about his group’s role.
PE2 is non-stock, nonprofit organization of energy efficiency market stakeholders.
“We work with government to make sure that we do not repeat the mistakes of the last 28 years… (and) mainstream energy efficiency now as a resource in our energy mix,” he said.
Mr. Ablaza said that he hopes that when the Water Philippines conference takes place on March 20-22, the law will have passed.
The business-to-business conference will present the best water technologies and solutions for water supply, sanitation, industrial wastewater and purification. It includes renewable energy and energy efficiency sectors to bring together more than 500 exhibiting companies.
The event will showcase nine international and regional pavilions from China, European Union, South Korea, Malaysia, Singapore, Taiwan, Thailand, The Netherlands and the United States. — Victor V. Saulon

SRA asserts legal authority to oversee sugar importation

THE Sugar Regulatory Administration (SRA) has filed a resolution asserting its legal authority to regulate sugar imports amid proposals to liberalize the import rules governing the commodity modeled after rice tariffication.
The SRA cited Executive Order (EO) No. 18 series of 1986, which created the agency.
The EO outlines the policy of the state “to promote the growth and development of the sugar industry through greater and significant participation of the private sector and to improve the working condition of laborers.”
The SRA also cited Republic Act 10659 or the Sugarcane Industry Development Act of 2015 which authorizes the agency to “classify imported sugar according to its appropriate classification when imported at a time that domestic production is sufficient to meet domestic sugar requirements.”
“The Bureau of Customs (BoC) shall require importers or consignees to secure from the SRA the classification of the imported sugar prior to its release,” according to the law.
The resolution was filed as sugar industry stakeholders were gathering opposition to Budget Secretary Benjamin E. Diokno’s pronouncement to liberalize sugar importation, moving away from the quantitative restriction regime.
The resolution noted that the sugar industry contributes an estimated P96 billion to the national economy from the sale of raw sugar, refined sugar, molasses, and ethanol, and P5 billion in value-added tax payments on refined sugar. The industry also employs 720,000 workers in 20 provinces, including 82,000 farmers.
In a text message, SRA Board Member Roland B. Beltran said liberalizing sugar imports will endanger the industry.
“Our sugar production is enough for our domestic consumption. However, if we forecast tight supply for the crop year, we can always import sugar as we have done so in the past,” Mr. Beltran said.
“The idea of import liberalization of sugar will kill the sugar industry. It will deprive thousands of small farmers and sugar workers of their livelihood. The fact is that price of sugar remains stable, fair and reasonable. It is market-driven,” according to Mr. Beltran.
The Philippine Chamber of Commerce and Industry (PCCI) meanwhile said that liberalizing the importation does not mean the domestic sugar industry would die off.
“Because the local industry is finding itself in a position where the local price of sugar is higher than the imported price… I think the sugar industry can survive if it improves productivity. In the Philippines, the majority of farmers that own sugar plantations have five to 10 hectares, so if you talk about productivity with land that small, you cannot maximize it,” PCCI Chairman George T. Barcelon said in a phone interview on Thursday.
“I think over time, these farmers should form cooperatives and use more advanced technology and mechanization to improve their productivity so they can compete. We are now exporting because US gives us preferential rates on sugar but our production costs compared to the other sugar-producing countries are much higher. The local industry has been protected for decades. I think the protection given has gone on long enough and they should realize that in this era of globalization, everybody should be competitive.”
According to Mr. Barcelon, sugar will not flood into the Philippines even with liberalization.
“[With] the convenience of having local milling, I think they will survive…They have to improve their productivity and government must also provide them with proper infrastructure,” Mr. Barcelon said. — Reicelene Joy N. Ignacio

Labor turnover slows in third quarter — PSA

By Mark T. Amoguis
Researcher
LABOR turnover at large firms eased in the third quarter as hiring slowed, according to a report by the Philippine Statistics Authority (PSA).
Results of the PSA’s Labor Turnover Survey showed that the labor turnover rate — the difference between the rates of accession and separation within firms — settled at 0.9% during the three months to September, slower than the downwardly-revised 1.7% in the second quarter of 2018.
This means that for every 1,000 persons employed, large firms were hiring some nine additional workers on a net basis during the third quarter.
The rate of accession — which represents hiring by employers to either replace former employees or expand their workforce — stood at 9.5% in the third quarter, slipping from 11% in the previous three-month period.
The rate of separation — which covers terminations and resignations – stood at 8.6%, also down from 9.3% in the previous survey period.
Breaking down the accession rate, more people were hired in the third quarter due to business expansion at 5% compared to those who were employed as replacements for former employees at 4.5%.
For the separation rate, employee-initiated separation or resignations stood at 5.9% while the rate of employer-initiated separation or layoffs was 2.8%.
Michael L. Ricafort, an economist at Rizal Commercial Banking Corp. (RCBC), said “[H]igher inflation and interest rates, as well as the US-China trade war that slowed global trade and economic growth, may have adversely affected the labor turnover rate in the export/industry/manufacturing sector, leading to lower creation of jobs.”
The agriculture, forestry and fishing sector’s separation rate of 4.7% outpaced its accession rate of 4.3%, resulting in a labor turnover rate of -0.4%.
“Agriculture experienced the second-biggest damage in the third quarter of 2018 (after Supertyphoon Yolanda in late 2013)… after Typhoon Ompong hit Northern Luzon provinces that are the top producers of rice, corn, vegetables,” RCBC’s Mr. Ricafort said.
The industry sector also saw a negative net job creation rate (-0.1%) with a 12.2% separation rate and a 12.1% accession rate. Sectors that were net positives include mining and quarrying (0.6%) and electricity, gas, steam and air conditioning supply (1.1%).
Pulling down the Industry sector were negative turnover rates in construction (-0.8%); manufacturing (-0.04%); and water supply, sewage waste management and remediation activities (-0.03%).
“Slower exports growth and the proposed rationalization of fiscal incentives could have adversely affected employment prospects and the overall growth in the industry sector,” Mr. Ricafort said.
On the other hand, the services sector posted job growth as the 8.9% accession rate outpaced the sector’s separation rate of 7.5% — leading to a 1.3% turnover rate.
“The positive labor turnover rate for services in the third quarter 2018 may reflect the creation… as well as the continued shift to more, higher-paying jobs in the services sector (from the agriculture and industry sectors),” he said.
With the exception of negative turnover rates in real estate activities (-0.2%) and professional, scientific and technical activities (-4.5%), all areas were net positive. Leading performers were education (3.3%); wholesale and retail trade (2.5%); and financial and insurance activities (1.6%).
RCBC’s Mr. Ricafort expects 2019 to create more jobs in the country spurred by election-related spending and the proposed exemption of major government infrastructure spending from the election ban and the continued rollout of more big-ticket infrastructure projects.
“Easing inflation and lower local interest rates in the coming months of 2019 to fundamentally increase the disposable income of consumers, businesses, and the government, thereby enabling the creation of more jobs, as lower inflation entails lower financing costs for new investments and expansion projects that entail more job opportunities,” he added.

Master plan being drafted for Leyte copper processing zone

THE Board of Investments (BoI) said it is developing a master plan for the Leyte Ecological Industrial Zone (LEIZ) to establish a copper industry cluster in the area.
In a statement, the agency said Palafox Associates had been awarded the contract to develop the LEIZ master plan.
The master plan drafting process commenced last month and is targeted for completion in February 2020.
The master plan will identify areas in Leyte where copper processing and allied activities may be located.
The plan is a first step toward a feasibility study that will be used for investment promotion to attract developers and locators.
“The establishment of the LEIZ and development of a copper industry cluster in Leyte serves as our medium to long-term strategic economic objective consistent with the agency’s industry development mandate,” Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo said.
“This is a showcase project for the agency, filling in the value chain gaps and missing links and fully integrating the Philippine copper industry and its allied industries,” he said.
Mr. Rodolfo also said that industry clustering in the LEIZ is intended to bring down logistics costs and offer a steady power supply since Leyte hosts one of the biggest geothermal power plants in the country.
He also said that the plan hopes to attract carbon-neutral companies to ensure the conservation and protection of the environment.
The development of the LEIZ Masterplan is among the objectives enlisted in the Copper Industry Road map completed in 2012.
Part of government’s rehabilitation effort in the region after the devastation of typhoon Yolanda, the road map aims to promote the integrated development and competitiveness of copper and other related industries in the region.
The LEIZ is expected to spur economic activity in the area, thus creating more opportunities for micro, small and medium scale enterprises and job seekers. — Janina C. Lim

Position Paper of the UP School of Economics Alumni on HB 8858

We, alumni of the University of the Philippines School of Economics, express our grave concern over House Bill No. 8858, otherwise known as “An Act Expanding the Scope of the Reformation and Rehabilitation of Children in Conflict with the Law and Strengthening the Social Reintegration Programs.”
We likewise voice our serious concern over the Senate counterpart bills that are similar in content to House Bill 8858. These are Senate Bills 1603 and 2026.
We submit a position that is guided by reason, science and evidence. We also wish to provide economic insights into this issue.
The most critical and controversial provision in House Bill 8858 (and this also applies to the above-mentioned Senate bills) is the provision (HB Section 4) amending the current law, by lowering the minimum age of responsibility of children in conflict with the law from the current 15 years of age to 12 years of age. Further, HB Section 2 states that a child 12 years of age and above but below 18 years of age “who has acted with discernment…shall be subjected to the appropriate intervention and diversion proceedings…”
Allow us then to enumerate and explain the reasons why we object to the lowering of the minimum age of responsibility of “children in conflict with the law” (previously termed minimum age of criminal responsibility) to 12 years old.
1. DISCERNMENT
House Bill 8858 subjects the child who “acts with discernment” to “intervention and diversion proceedings.”
The standard dictionary definition of discernment is: “The act or process of exhibiting keen insight and good judgment.” The capability to discern thus goes beyond having access to full information and being rational. Discernment requires intellectual, psychological, and emotional maturity, which is a challenge to children and adolescents.
However, Section 22 of the existing law, which House Bill 8858 retains, is vague in its definition and determination of discernment, except to say that “the local social welfare and development officer shall conduct an initial assessment to determine the appropriate interventions and whether the child acted with discernment, using the discernment assessment tools developed by the DSWD” [Department of Social Welfare and Development]. Section 8 of House Bill No. 8858 seeks to add context through an amendment to “include identification of physical and mental health issues, substance abuse and family issues” in the assessment, although it is unclear if the presence of these issues will be considered as mitigating circumstances in determining the child’s discernment.
We wish to cite evidence drawn from studies taking into account brain and behavioral development in the Philippine context, which shows that the age of discernment for children is between 15 and 18 years old.
For reference, see: 1) Pamantasan ng Lungsod ng Maynila, “Beyond Innocence,”1997, a research commissioned by the Philippine government’s Council for the Welfare of Children and 2) Philippine Action for Youth Offenders, “Arrested Development,” 2002. “Beyond Innocence” sets the age of discernment for Filipino schoolchildren at 15 years old. “Arrested Development” establishes the discernment age of out-of-school children at 18 years old.
More recently, the Philippine Pediatric Society states in its position paper (undated) that: “Neuroscience research has proven that the brain does not fully develop until the age of 25.”
This is in agreement with Johnson Sara B., Blum, Robert W., and Gledd, Jay N., “Adolescent Maturity and the Brain: The Promise and Pitfalls of Neuroscience Research in Adolescent Health Policy,” J Adolescent Health, 2009 September 45(3): 216-221. To quote this journal article: “Longitudinal neuromanaging studies demonstrate that the adolescent brain continues to mature well into the 20s.”
This is the kind of evidence that informs the current legislation titled Juvenile Justice and Welfare Act of 2006 or Republic Act (RA) No. 9344, which states that a “child fifteen (15) years of age or under shall be exempt from criminal liability.” Further, RA No. 9344 says that a “child above fifteen (15) years but below eighteen (18) years of age shall likewise be exempt from criminal liability and be subjected to an intervention program, unless he/she has acted with discernment….”
Some quarters will point out that United Nations Convention on the Rights of the Child General Comment No. 10 (UN CRC GC 10) considers the minimum age of criminal responsibility at the age of 12 years as “internationally acceptable.” But in the same breath (paragraph 32), it says: “States parties are encouraged to increase their minimum age of criminal responsibility…to a higher level.” Moreover, in paragraph 33, the UN CRC GC 10 “urges States parties not to lower their minimum age of criminal responsibility to the age of 12.”
Clearly then, reducing the minimum age of criminal responsibility in the Philippines from the present age of 15 years old to the age of 12 years old is a serious retrogression. House Bill 8858 and Senate Bills 1603 and 2026 ignore the evidence drawn from the specific Philippine context and from neuroscience research, and they violate the spirit of the international convention.
2. CONSISTENCY OF LEGISLATION
Legislation concerning children and adolescents must be consistent with other laws. Philippine legislation and other rules are aware of the constraints on the intellectual, psychological, and emotional maturity of adolescents.
Examples abound. One cannot get married if he or she is under the age of 18 years old. And one must be at least 21 years old to get married without parental consent. A requirement for voting is that the citizen should be 18 years of age and above. The minimum legal age is 18 years old for any person to buy, sell, or smoke tobacco and alcohol products. In a word, the age of 18 years is the age of majority in the Philippines.
In short, House Bill 8858 and Senate Bills 1603 and 2026 contradict the intent and substance of other pieces of legislation that govern the behavior of adolescents.
Some make the fuss that House Bill 8858 and Senate Bills 1603 and 2026 distinguish the treatment as between adults and adolescents (from 12 years of age to below 18 years of age). Adolescent offenders who commit serious crimes will be placed mandatorily within a youth care facility or Bahay Pag-asa, while adolescent repeat offenders (not necessarily of serious crimes) shall undergo an “intensive intervention program” that includes placement in a youth care facility or Bahay Pag-asa (Sections 4 and 5 of HB 8858). By definition, the physical mobility of residents of these centers may be restricted pending court disposition of charges against them (Sections 4.s and 4.t of RA 9344). The existing law allows the imprisonment of not more than 12 years (as maximum penalty) but also authorizes institutional care and custody as part of a court-level diversion program (Sections 37 and 31.c.5 respectively of RA 9344).
3. EFFECTIVENESS AND EFFICIENCY
We question the effectiveness and efficiency of reducing the minimum age of criminal responsibility to 12 years old in deterring crime and participation of juveniles in criminal activities.
The proposal merely addresses the technique (or the technology) that uses juveniles as accessories to commit crimes. But criminals will adapt and will use a different strategy and technique in response to the change in the rule. In designing rules, we anticipate the change in behavior of subjects. Behavior has variations and can move towards different directions, depending on the rule design.
Like any other person, a criminal has a “feasible set of alternatives,” constrained by his human, financial and technological resources. In this case, lowering the age of criminal responsibility does not deter commission of the crime because the criminal will look for an alternative way to commit the crime. He can, for example, deploy other children who are below 12 years old to commit the crime!
Using children between the age of 12 years old and 18 years old to commit crime will not stop either. Consider their attributes: They lack discernment (based on the scientific evidence); they do not have full information about the law and its consequences; they do not make a calculus of the costs of criminal behavior; they are prone to increased risk-taking and novelty-seeking activities; they can be easily coerced to follow orders.
The design of the law therefore must avoid unintended perverse consequences. Strategic action requires focusing the work on capturing the head and the core of the criminal syndicates, not the minors.
It goes without saying that the effective strategy in discouraging crime is by increasing the probability of capture and conviction of criminals, making punishment and fines credible, and tackling the social and economic causes of crime.
4. FAIRNESS
To be sure, the main causes of crime, especially crimes against property where children are involved, include poverty, lack of education, and lack of productive opportunities or gainful employment. Thus, the majority of children who commit crime come from the poor. Yet, the statistics from the Philippine National Police (January 2002 to December 2012) show that children commit only two percent of the total number of crimes.
The predictable outcome of further reducing the minimum age of criminal responsibility is having more children from poor families being detained or imprisoned. A sledgehammer is being used to crack a nut, as it were, considering that the children account for a tiny fraction of total crimes. House Bill 8858 and Senate Bills 1603 and 2026 are fixated on an outlier in the system, but one which adversely affects mostly the poor.
5. SOCIAL NORMS
The field of law and economics recognizes how formal laws co-exist with social norms. Social norms are shared, observed and enforced by society in general, without need to resort to legalese. These social norms include the respect and care for the elderly or senior citizens and the children or juveniles.
Legislation must not undermine a social norm of the whole of Philippine society — the care and protection of children. Such a norm can partly explain why children are shielded from the commission of crimes (as shown by the statistics that children commit only a small fraction of crimes). Yes, even criminals cannot escape the social norms. As a custom or as a norm, making children become evil is simply not done.
Another example in the law that contradicts Filipino social norms pertains to the intent and use of the youth rehabilitation centers and Bahay Pag-asa. Ostensibly, they are for rehabilitation. But section 4.s and 4.t of RA 9344 design them as a place of detention when the law allows the physical mobility of children to be restricted pending court disposition of the charges. Will detention, particularly the involuntary type, serve rehabilitation and restorative justice?
Essential to Filipino social norms is the role of the family unit in the development of a child. Similarly, community spirit and cooperation are part of our social norms. In this light, the locus of rehabilitation and restorative justice is the family and the community; separating vulnerable children (those ages 12-15 years old with more impressionable minds) from their families, without providing proof that the alternatives offer greater opportunities for resolving the issues that caused the children to commit offenses in the first place, seems illogical. Detention in an impersonal center pushes children away from society, which is more likely to make them recidivist and turn them into hardened criminals.
Compounding the problem is the lack of Bahay Pag-asa facilities. According to the Juvenile Justice and Welfare Council (JJWC), only 35 of the 114 (the mandated number) Bahay Pag-asa facilities are fully operational. This means that a significant number of the detained juveniles will have to be transferred to prisons occupied by adult convicts. Accounts also reveal that some of the Bahay Pag-asa centers are “worse than prisons.” The Executive Director of JJWC told Philippine Star (Jan. 29, 2019) that some of the facilities have “subhuman conditions.”
Here, we can infer that politicians in local government units have a weak commitment to improving the infrastructure and service of the Bahay Pag-asa. The incentive is weak because the children in the Bahay Pag-asa, after all, do not vote, and their families are disempowered.
In conclusion, we appeal to the legislators in both the House of Representatives and the Senate to set aside or do away with House Bill 8858 and Senate Bills 1603 and 2026. They fail the criteria we have set, in terms of discernment, consistency of legislation, effectiveness and efficiency, fairness, and social norms.
The evidence and the science, together with the application of law and economics that we have learned from our profession and discipline, tell us that the bills’ controversial measures will result in worse outcomes for our children and our society.
In this light, we express solidarity with the concerned sectors of society, including the other professional associations, which have articulated well-argued positions and expressed opposition to the said bills.
Our position paper acknowledges that the existing legislation on juvenile justice has its weaknesses. For that matter, no law is perfect.
From our discipline, we are aware that the so-called first-best option does not necessarily produce the best outcome in the real world. Similarly, while the law is supposed to result in providing the most benefits for society, the minimum necessary condition is to ensure that the law will cause the least harm to our people. In this context, the Juvenile Justice and Welfare Act of 2006, despite its flaws, is an improvement, and it causes least harm in comparison to House Bill 8858 and the pending bills in the Senate.
We instead urge our legislators to affirm the implementation of the Juvenile Justice and Welfare Act of 2006 and seek ways to improve its practice by emphasizing restorative, not punitive, justice.
What we seek, to quote the late Senator Pepe Diokno, is “a nation for our children.”

Where the Philippines leads, the US now follows

One thing that astonishes many Americans (by which here meant citizen of the United States) is how close Filipinos feel towards the “land of the free.” Ride a taxi, listen to the radio, grab a bite at the nearest fastfood joint, read a newspaper, the similarities, the feel, of the US is palpable. Actually, all too real.
Thus, expectedly, the Pew Research Center reported in 2017 that: “Despite efforts by Duterte to build better relations with China, Filipinos’ attitudes toward China and its leader have not changed much since 2015.” Noting that the Philippines is actually the “most pro-Trump nation in Pew Research Center’s spring 37-country survey,” more importantly, “the Philippines still support the U.S. military presence in the region and say that the U.S. would defend them should they get into a conflict with China.”
Indeed, the general rule used to be that wherever the US goes, so goes the Philippines 2 or 3 quarters later.
In 1960, the US elected a charismatic young senator, war hero, and book author to the White House, transforming the latter into some sort of modern day “Camelot.” The Philippines five years later promptly elected a charismatic young senator, war hero (alleged), and lawyer to Malacañan, and turned the latter into some sort of “Malakas/Maganda fantasy.”
In 2000, the US sent the son of a former president to their nation’s highest office. In 2001, the Philippines would do the same, installing (then in 2004 electing) a daughter of a former president to such highest office.
In 2008, the US chose for president an unproven young senator, good at oratory but short in actual accomplishments. In 2010, the Philippines got Noynoy.
However, that was before. The Philippines now has seemingly reversed the situation: it leads and the US follows. But leads not in a good way.
In the years between 2010 and 2016, the state of governance, political discourse, and social interaction so deteriorated to the point of utter irrational incivility. People shrilly engaged each other in social media, and political positions became more entrenched the less logical that position became.
Alexandria Ocasio-Cortez? The Philippines has had nuttier, more unstable ideologues in public office and dominating social media way before AOC crashed into the public scene.
In matters of faith, cafeteria Catholics — supported by some complacent compliant clergy — insisted on their feelings (which they mislabel as “conscience”) rather than Church teachings.
Hence, as David Koyzis (“Liberalism and the Church,” First Things, June 2015) points out: “It is common these days to hear people claim to be spiritual but not religious. Mere spirituality leaves the ego in charge, and successful churches try their best to appeal to this ego. On the other hand, religion implies a certain binding (Latin: religare) of the person to a particular path of obedience not set by the person herself.”
In 2012, Mark Judge (“America has changed, but God hasn’t”) presciently described a country whose decline mirrored ours: “The truth is that America is now a leftist country. It’s Rachel Maddow and Jeremiah Wright’s country. You know that divorced fortysomething female neighbor of yours? The one who’s not half as bright as she thinks she is, and doesn’t know much about Libya or the national debt, but watches Katie Couric’s new show and just kind of didn’t like Romney because she, well, just kind of didn’t like him? America is now her country. It’s Dingbatville.”
Yet, to emphasize, it’s the Philippines blazing the way and not the US. The insanity, venom, and pettiness of the six years from 2010 culminated in one of the most bizarre, erratic, and vulgar Philippine election campaigns ever, resulting in Rodrigo Duterte as president. The US followed later with Donald Trump.
But the pettiness and selfish politicking did not end in 2016: the refusal to accept the results of the elections, the constant call for impeachment, and obstructionism by the opposition Liberal Party continued unabated; this to be mirrored 2 years later by the pettiness and selfish politicking (i.e., the refusal to accept the results of the elections, the constant call for impeachment, and obstructionism) by the opposition liberal Democrat Party in the US.
Perhaps it’s the huge diaspora abroad of the Philippines; perhaps it’s the inherent cosmopolitanism of the Filipino, enabling him to quickly and effortlessly absorb cultures, language, and attitudes of other countries. Perhaps it’s something else.
Whatever the reason, the Filipino definitely did not cause today’s sorry societal and political state. More likely it became a most predictive bellwether.
Earlier than everybody else, it internalized what would happen if cultures, faiths, and beliefs blended in one country by way of a politically correct multiculturalism (rather than integration or — even better — assimilation).
The result of such multiculturalism is the Philippines unfortunately proving (and which the US is following, unless it wakes up and starts leading again) that old dictum: a country that doesn’t stand for anything will fall for anything.
 
Jemy Gatdula is a senior fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.
jemygatdula@yahoo.com
www.jemygatdula.blogspot.com
facebook.com/jemy.gatdula
Twitter @jemygatdula

1...11,08211,08311,084...13,910Page 11,083 of 13,910
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube