How PSEi member stocks performed — May 22, 2018
Here’s a quick glance at how PSEi stocks fared on Tuesday, May 22, 2018.
PUV upgrades to be required for fuel vouchers
THE DEPARTMENT of Transportation (DoTr) said that it is preparing to issue fuel vouchers for public utility vehicle (PUV) drivers and operators affected by higher fuel taxes, and may restrict voucher eligibility to those who have modernized their vehicle fleets.
At the House ways and means committee hearing yesterday on the second package of the tax reform program, legislators raised concerns about inflation they claim was caused by the preceding package, known as the Tax Reform for Acceleration and Inclusion (TRAIN) law. The Finance department has said that the bulk of the fuel price increase is due to higher global crude prices, currently at about $77 per barrel.
Representative Dakila Carlo E. Cua (Quirino), who chairs the committee, requested the immediate implementation of the remaining social benefits program as provided for in TRAIN.
TRAIN provides for increased social spending to compensate for the higher taxes affecting the poorest members of the public, including cash transfers and fuel vouchers.
“I would like to take this opportunity to remind our colleagues in the Executive that the start of TRAIN 2 does not mark the end of TRAIN 1. I reiterate my call for the immediate implementation of the Social Welfare Benefits Program, among other social protection measures of TRAIN 1. With several sectors appealing to halt TRAIN 1, we must first demonstrate that TRAIN 1 works so that we can decisively move forward with TRAIN 2,” he said during the hearing.
Although the government has begun distributing P2.4 billion in cash transfers, the fuel vouchers to transport operators under the Pantawid Pasada program has yet to proceed.
“We’re still preparing the guidelines,” DoTr Undersecretary Thomas M. Orbos said.
He said the department is hoping to avoid a repeat of a previous fuel voucher program where about a third of the 179,000 recipients were found to have been ineligible.
“You have to understand that the modernization program is very integral here,” he said, indicating that operators who buy upgraded vehicles are a good proxy for the list of eligible recipients. “In the past implementations of the Pantawid Pasada program, we were not able to monitor the recipients because of the inaccuracy of the data at that time,” he added.
“There were 30-40% who were supposedly not on the list but availed of the program. It is not fair to those who are legitimate operators,” he added.
According to Finance Undersecretary Karl Kendrick T. Chua, there are about P800 to P900 million worth of allocations for the program under the 2018 budget, valid only until the end of the year under budget rules.
Mr. Orbos said that the department is studying the possibility of making the vouchers conditional upon public utility vehicle (PUV) operators’ participation in the DoTr’s PUV modernization program (PUVMP)
That way, drivers and operators will be incentivized to register under the Land Transportation Franchising and Regulatory Board (LTFRB), and shift to modernized jeepneys with EURO-4 compliant engines.
“We’re looking at a much bigger picture for the PUVMP. If it is simply a one-time assistance given to PUV operators through fuel vouchers, then that would be it. But we want to have value-added support mechanisms by which we would rather incentivize those who want to modernize under the PUVMP rather than having to support those who operate obsolete and highly polluting PUV fleets,” LTFRB Chairman Martin B. Delgra III said. — Elijah Joseph C. Tubayan
‘Third player’ best guarantee for improving telecommunications service, BMI says
REDUCED interconnection rates can improve the operating environment of telecoms, but a new entrant remains the best incentive for improving service availability and quality, BMI Research said.
BMI Research, a Fitch unit, said that lower interconnection rates could lower total costs for consumers but given that data connections will quickly replace legacy connections over the long term, a new entrant will still be needed for better competition and to challenge the duopoly of PLDT, Inc and Globe Telecom, Inc.
“Although decreased interconnect rates could lower total costs for subscribers and improve the operating environment for telecoms operators, strict capital and ownership requirements will continue to delay the bidding process for the third telecoms operator. On balance, a new entrant would provide the best incentive for improving service quality and accessibility of telecoms services,” BMI said.
“While the review will improve the operating environment for a potential third telecoms player and lower costs for 2G subscribers, data connections will rapidly substitute legacy connections in the long run, suggesting that more needs to be done to improve the telecoms operating environment for better service quality and competition,” it added.
“We still believe that the Philippines is in urgent need of a new telecoms operator to present competition to the duopoly and to motivate investment in enhancing telecoms infrastructure.”
The Department of Information and Communications Technology (DICT) has directed the National Telecommunications Commission (NTC) to reduce interconnection charges for both mobile voice and short messaging services (SMS) between telecommunications companies to reduce consumer costs and benefit the incoming “third” telecommunications player.
Interconnection charges currently amount to P2.50 for voice calls and P0.15 for SMS.
DICT Acting Secretary Eliseo M. Rio, Jr. said the department does not want to wait for the passage of a law that would remove interconnection charges.
The Senate passed on second reading the “Lifetime Cellphone Number Act” or Senate Bill 1636, allowing for users to retain their phone numbers even if they change network providers. The bill also includes a provision on the removal of interconnection fees.
BMI said the proposed cuts are positive. “We have a positive view of proposed reductions in interconnection fees if followed with decreases in retail prices, which will help lower total costs of ownership (TCO) for subscribers; the regulator did so when it reduced SMS retail prices from P1.00 ($0.02) to P0.80 ($0.015) after it slashed SMS access charges to P0.35 ($0.007) in 2011. Sharp declines in interconnection costs for both PLDT and Globe followed the most recent decrease in call interconnect charges in January 2017.”
The firm, however, said that the impact will be felt to a lesser extent in the Philippines compared with the impact of similar moves in India.
“The impact of the reduction on operators is less pronounced in the Philippines, as both players should have roughly equal volumes of originating and terminating calls/SMS, but the effect is more noticeable in India, for instance, as operators such as Reliance Jio have a significantly larger amount of outgoing call traffic, and benefit largely from lower costs of connecting inter-network calls,” BMI said, referring to Reliance Jio Infocomm Ltd., the new telco on the market. Reliance has challenged incumbent Indian operators Bharti Airtel Ltd., Idea Cellular Ltd., and Vodafone.
Mr. Rio had said that the earliest period for naming the “third player” is the end of August.
Among the existing requirements for the third player are: paid-in capital of at least P10 billion; experience in providing, delivering, and operating telecommunications services in the last five years; a congressional franchise not related to either PLDT or Globe.; and no uncontested liabilities with the NTC as of Jan. 31, 2018.
BMI has said that the capital requirement is a big hurdle for potential investors.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo
DTI urges removal of foreign ownership caps, focus on job creation
THE Department of Trade and Industry (DTI) said it wants nationality restrictions to be removed from investment rules to help the government shift its priority to creating more jobs.
“We see the imperative for and agree to the proposed removal of the nationality requirements… What is important is that jobs are created here in the Philippines for the Filipino people, regardless of ownership or market to be served,” Trade Secretary Ramon M. Lopez was quoted as saying in a statement Tuesday.
The speech was delivered during a Congressional hearing on the second phase of tax reform, which hopes to rationalize investment incentives while reducing corporate tax rates.
The DTI added that it is open to input from the business sector on the second package of the tax reform program but noted that these proposals ”should comply with the fundamental principles of focused, time-bound, performance-based and transparent incentives; and the recommendations or proposals must be supported by data.”
In addition, the DTI added that it is collaborating with the Department of Finance (DoF) to come up with unified estimates of the bill’s impact, and plans to conduct further consultations with stakeholders.
So far stakeholders have proposed to harmonize the taxes and fees which Local Government Units can impose and a reasonable transition period to the new regime.
Others have also sought clarification on the application of rules governing VAT exemptions, zero rating, and refunds for locators in economic zones. — Janina C. Lim
DoE forecast for peak power demand exceeded on May 17
PEAK power demand in Luzon has exceeded the Energy department’s forecast after hitting 10,688 megawatts (MW) on May 17, National Grid Corp. of the Philippines (NGCP) said on Tuesday as the system operator moves to fast-track a crucial transmission line project in Metro Manila.
NGCP said the Department of Energy (DoE) had earlier predicted power demand to hit a high of 10,561 MW this year, making the peak consumption so far this month the second straight year that the forecast has been exceeded. Power demand last year peaked at 10,054 MW, it added.
Officials of the company said the peak power demand comes as NGCP steps up the implementation of the San Jose-Quezon 230 kilovolt (kV) transmission line upgrading project.
The project is moving forward after the Quezon City government cleared the right-of-way corridor of seven transmission tower sites in barangays Baesa and Sangandaan.
In a statement, NGCP said the San Jose-Quezon Line 3 project is critical in widening the power corridor into Metro Manila and allow supply from power plants to feed the Luzon load center.
The project will also relieve the existing transmission line, prevent overloading, and will ensure NGCP maintains the line’s N-1 contingency, or the ability of the transmission grid to withstand a major power disturbance through redundancies in the grid system.
NGCP said its good relations with the Quezon City government allowed it to “rehabilitate and upgrade our transmission lines in the city which were previously inaccessible by our transmission line team.”
“Our efforts are now focused on expediting the project’s completion, and seeing a more reliable transmission power in the country’s biggest load center,” it said.
The company said through an agreement signed by NGCP and the Quezon City government, the latter had implemented the relocation of informal settlers living underneath the San Jose-Quezon transmission line in the two barangays and cleared the tower sites of dangerous improvements.
The move helped NGCP to secure the right-of-way clearances for its tower sites within the city.
It said respecting the right-of-way corridor of transmission lines and facilities will prevent unnecessary power interruptions, ensure swifter maintenance activities, and avert potential loss of life and property.
In the south, the grid operator has secured the Energy department’s support with the declaration of the Mindanao-Visayas interconnection project (MVIP) as one of national significance, allowing it to go through the permitting process faster.
It said: “We were able to rehabilitate and upgrade our transmission lines in the city which were previously inaccessible by our transmission line team. Our efforts are now focused on expediting the project’s completion, and seeing a more reliable transmission of power in the country’s biggest load center.”
On MVIP, it said: “We are thankful for this development. NGCP emphasizes the importance of this milestone project and we are determined to make our 2020 December commitment. This will certainly help us towards that goal.”
In April, the DoE issued the implementing rules and regulations (IRR) of Executive Order 30, which created in June last year the Energy Investment Coordinating Council (EICC) to streamline the regulatory procedures affecting energy projects of national importance.
Under the IRR, the processing of permits and licenses was given a maximum period of 30 days for projects declared as energy projects of national significance (EPNS).
The IRR outlines the scope of EPNS and the general framework for the processing of the EPNS applications.
The 30-day deadline starts from the submission of the complete documentary requirements to the relevant agencies involved in the permitting process.
It also highlights the application of the principle of presumption of prior approvals. This means that a holder of the “EPNS Certificate” is presumed to have complied with the requirements and permits from other government permitting agencies. — Victor V. Saulon
DENR to fast-track approvals for Boracay sewage treatment plants
THE Department of Environment and Natural Resources (DENR) said it has reached an agreement with private-sector Boracay stakeholders regarding the construction of sewage treatment plants for the resort island.
The DENR said it signed the agreement Saturday with the Boracay Foundation, Inc., the Boracay Chamber of Commerce of the Philippines and the Iloilo chapter of the Filipino Chinese Chamber Federation.
During the crackdown on Boracay businesses thought to be violating environmental rules, the DENR found drainage pipes connected to septic tanks directly discharging wastewater into the sea.
Environment Secretary Roy A. Cimatu said in a statement that to fast-track the construction of the sewage treatment facilities, it is exempting them from the construction moratorium declared on the island.
The municipality of Malay, which has jurisdiction over Boracay, has also started implementing Ordinance No. 207, requiring establishments with 50 or more rooms to install their own sewage treatment plants, while smaller establishments can share such facilities with neighbors.
Mr. Cimatu said that he would only recommend the reopening of the resort island once the coliform bacteria count in the water drops to acceptable levels.
A high coliform bacteria count indicates high levels of fecal contamination.
“Unless the water quality improves and is compliant with our standard, I will not allow the reopening of Boracay,” he said.
He added that he has ordered the Environment Management Bureau to remove sewage pipes along the beach.
“It’s been almost a month now, but there’s not much improvement in the water quality. The results of the water samples are very erratic,” Mr. Cimatu said.
So far, the DENR has discovered 33 sewage pipes discharging wastewater into the sea and removed three. — Anna Gabriela A. Mogato
PPA net profit falls 4% in Q1 following surge in dredging costs
THE Philippine Ports Authority (PPA) said first-quarter net profit fell 4% year on year to P2.259 billion despite increased revenue, which was offset by rising costs associated with improving and maintaining ports.
In a statement on Monday, the agency said expenses in the three months to March grew over 37% to P1.523 billion, amid a 644% surge in dredging expenses and a 117% rise in repairs and maintenance costs.
“Dredging as well as repair and maintenance costs comprise almost our entire expenses for the period, all aimed at making our ports efficient and more responsive to the demands of the times,” PPA General Manager Jay Daniel R. Santiago was quoted as saying.
Revenue was P3.783 billion in the first quarter, up 9% year on year, after a 183% rise in layup fees and 50% growth in storage fees. The PPA also realized an increase in fund management income of 26.6% to P30.41 million.
Mr. Santiago was quoted in the statement as saying the PPA is investing in ports to support the government’s “Build, Build, Build” infrastructure program.
Ports serving Puerto Princesa, Eastern Leyte, Ilocos Norte, Occidental Mindoro, Batangas and Ozamiz are currently undergoing redevelopment. PPA said there are 45 port improvement projects in Luzon, 19 in the Visayas and 40 in Mindanao.
“Once completed, these projects will definitely boost our revenue and eventually our income all anchored on faster turnaround of vessels and cargo in our ports,” the statement quoted Mr. Santiago as saying.
PPA has set a net profit target of P16.18 billion for 2018.
In March the PPA announced that it will be remitting its highest-ever dividend of P3 billion to the government, up 54%, driven by its earnings from ports in Manila. — Denise A. Valdez
Gov’t borrowing falls 2.44% in Q1
GOVERNMENT borrowing fell 2.44% in the first quarter, after domestic borrowing declined while foreign loans increased, the Bureau of the Treasury (BTr) said.
According to Treasury data, the government borrowed a total of P207.92 billion in the first three months of the year, slightly behind the pace for the annual borrowing target. The total for the quarter is equivalent to 23.41% of the P888.23-billion borrowing plan for 2018.
During the quarter the government borrowed P146.14 billion from external creditors, up 16.97% from a year earlier, after a dollar bond issue amounting to P102.68 billion.
The government also held its maiden renminbi bond float equivalent to P12.01 billion.
Domestic borrowing during the quarter declined 29.94% to P61.78 billion after a series of rejected bids at the Treasury auctions,
As a result, the BTr raised P43.77 billion from Treasuries, sharply lower than the P90 billion raised a year earlier.
The government has revised its borrowing mix to 65-35 in favor of domestic lenders, from 74-26 earlier this year and 80-20 in 2017.
In March, overall borrowing grew 23.05% year on year to P51.39 billion, with 69% from domestic sources.
The government hopes to finance a budget deficit of up to 3% of gross domestic product (GDP). — Elijah Joseph C. Tubayan
On South China Sea: Let us help our president
By Albert F. del Rosario
“CHINA lands bombers on SCS isles” were among the headlines that greeted us recently.
These landings took place in a reclaimed feature in the Paracel Islands which is within our neighborhood, bringing full militarization closer and working itself with certainty into our own backyard.
Following our earlier suggestions on what we may consider doing to advance our lawful position in the West Philippine Sea, we were again asked what else could be done.
As a reminder, the Philippine Constitution mandates our president to defend what is lawfully ours. Our government should also be mindful that as early as 2016, a Pulse Asia survey indicated that more than eight in 10 Filipinos took the position that we should assert our rights as awarded by the arbitral tribunal.
NEED TO REVISIT OUR FOREIGN POLICY
Since an early decision was made by the incumbent government to shelve the arbitral outcome, not only did we lose opportunities to advance our position, but we also found ourselves being thrown into reverse gear, thus allowing ourselves to be fully disadvantaged.
That said, is it timely for us to take stock of our situation? Should we be more helpful to our government as a proud people of a sovereign democratic nation? Would it make a difference if we all speak loudly, clearly, and with one voice in promoting our national security? For obvious reasons, we must do so.
Our government needs to listen to its people.
Our northern neighbor needs to listen to the Filipino people.
And finally, all our traditional partners and friends — who are waiting for a united voice — need to hear from us.
As we speak, to begin with, nearly all Filipinos will agree that our foreign policy should be revisited. Let us say so.
Is it high time for our government to assert our rightful position by utilizing the experience and diplomatic expertise of our DFA? If we believe this, let us say so.
Is it, moreover, high time for our government to assert our rightful position by relying on the skill, courage, and patriotism of our AFP who are capable of developing a credible minimum defense posture against any bully or aggressor, whoever that might be? If we believe this, let us say so.
As we had previously said, we are opposed to war — as we should be. But if threatened by the use of force, we should be ready to inflict, at the very least, a bloody nose on any attacker who is out to harm us.
For example, it is my understanding that this capacity, which may be delivered by Bramos Missiles, may be acquired by our AFP from India and would be a good starting point.
Should we then undertake to stand more firmly in defending what is ours thereby, upholding the future security of all our people? If we believe this, let us say so.
With the president’s thoughtful leadership and with the coordinated execution by our DFA and our AFP under Secretary Cayetano and Secretary Lorenzana, respectively, we can still do so.
FILIPINOS MUST TAKE A UNITED AND VOCAL STAND
What else can we do?
Solita Monsod suggests that all of us take a few minutes to write our president. I humbly suggest that we all ask him to be more proactive and assertive in defending what is ours.
Acting Chief Justice Antonio Carpio, a learned and patriotic advocate, believes that a diplomatic protest should be urgently filed and we should take our assertive and lawful stand to the doorsteps of our northern neighbor’s embassy. I fully agree with the aforementioned suggestions and trust that many others will share the same sentiment.
The president believes, however, that those of us who endeavor to speak in the spirit of being helpful are not prepared to sacrifice ourselves. It truly behooves us then to ask our leadership to have more confidence in our people.
To support our president, to secure our nation, and to ensure the future of all Filipinos, it must be believed that indeed there are those of us who are prepared to make the supreme sacrifice for our country, especially when called upon.
Finally, all of us want to be helpful; all of us must be helpful.
Let us therefore, respectfully convey to our president that we eagerly await his inspirational leadership by doing what is right.
Albert F. del Rosario is the Chair of ADR Institute. He is a former Secretary of Foreign Affairs and a former Philippine Ambassador to the United States.
Powering the manufacturing sector
During the first quarter of 2018, the industry sector was the fastest expanding supply-side growth driver, improving by 7.9% year on year. Manufacturing, in particular, expanded by 8%, higher than the 7.7% growth recorded in the same period in 2017. Nikkei’s Purchasing Managers’ Index also reveals that the country continues to have among the fastest-growing manufacturing sectors in the region — alongside Vietnam — recovering in April after a slow start this year as manufacturers were adjusting to higher input prices.
In another piece of good news, foreign direct investment (FDI) inflows rose by 52.6% to $1.5 billion for the first two months of 2018, continuing the sustained investment inflows. FDI reached a record-high $10 billion in 2017 during Duterte’s first full-year in office, signifying a vote of confidence on the country’s prospects. From being a laggard in the region in terms of FDI inflows, the country has already overtaken Thailand and Malaysia last year. Of these investment inflows, a third goes into the manufacturing sector.
This is a promising turnaround — after several government efforts to revive the sector — from when manufacturing has languished in the 1990s and 2000s. Manufacturing’s spillover effects are well recognized, with its potential to create jobs and generate investments in other sectors.
The government has come up with a Comprehensive National Industrial Strategy in 2012 and upgraded it to the Inclusive Innovation Industrial Strategy (i3s) in 2017, to boost the sector and strengthen linkages in the global and domestic value chains.
By 2020, the sector is expected to increase its contribution to 30% of the Philippines’ GDP by 2020 from the current 23.6% and is set to increase its share of employment by 6.4 percentage points to 15%.
With the exodus of foreign firms from China due to rising labor costs, and as the latter is transitioning towards higher-value manufacturing, the Philippines must take advantage of this window of opportunity.
Although the manufacturing sector is expected to sustain growth for the year, deeply entrenched issues which have deterred foreign investors from coming in, such as high power costs, poor infrastructure, and restrictive foreign ownership rules, must be addressed.
LOWERING ENERGY PRICES
Recently, Meralco announced that it has lowered power rates by P0.5436 per kilowatt-hour (kwh) in May due to lower generation and transmission costs (the former makes up around half of Meralco’s tariff).
This means that customers consuming 200 kwh will see a P108.72 decrease in their electricity bills. This is, of course, a welcome but unexpected development, since the increased demand during the summer months typically push electricity prices upwards. Consumers, who have been burdened with higher commodity prices in the last few months, can breathe a temporary sigh of relief.
Over the long term, however, lower power prices have to be sustained.
If the Philippines is to maintain its strong growth momentum and shift towards its goal of becoming a high-income country by 2040, electricity consumption is expected to grow by 4.3% annually. The installed capacity may also have to double to service the increased demand in the next 25 years.
Unfortunately, the current capacity is inadequate for the projected growth in electricity demand. One of the culprits behind this is the red tape in approving new projects — an issue which also beleaguers players in other industries and cuts across all sectors.
Starting a new power plant, for example, requires over 150 permits, hurdling through at least 12 government agencies, and takes around three to five years for a facility to become operational. A study by Dr. Ramon Clarete finds that cutting down red tape can reduce power prices by as much as 7%. Lowering power costs will undoubtedly be a big boost for a country with the highest electricity prices in the region, after Singapore.
REVERSING PREMATURE DEINDUSTRIALIZATION
The Philippines is suffering from premature deindustrialization, a phenomenon documented by Harvard economist Dani Rodrik, that is typically exhibited in developing countries which become service-oriented economies without being properly immersed in industrialization. The Philippines is deindustrializing at lower levels of per capita income compared to developed countries. This means that the country’s opportunities in the sector are running out earlier and at much lower income levels.
In a study by the Energy Policy and Development Program (EPDP), the authors find that higher power prices speed up deindustrialization. The study finds that higher power prices are associated with a downward shift in the share of manufacturing gross value added (GVA) and with manufacturing employment shares peaking at substantially lower levels of per capita income and declining at faster rates, which indicates that power prices are linked with structural transformation.
High power prices also skew the industry towards less power-intensive manufacturing and more labor-intensive operations.
In contrast, Indonesia, which has lower and more stable power costs as a result of heavy subsidy by the government, has a higher manufacturing GVA driven by more power-intensive industries.
The government’s ambitious target to turn our manufacturing sector into an important growth driver might be difficult without lowering the cost of electricity.
Weslene Uy is Senior Economic Research Associate at Stratbase ADR Institute.
How to maintain a trademark registration
To maintain a trademark registration with the Philippine Intellectual Property Office (IPOPHL), the registrant must use the mark in commerce and submit a Declaration of Actual Use. This is an affidavit that details information on the registered trademark and the goods and services it covers; the actual goods and services on which the mark is used; and where these goods and services can be bought within the country.
This declaration is submitted to the IPOPHL within three years from the filing date of the application, within one year from the 5th anniversary of the mark’s registration, and within one year from the expiration/renewal of the registration. It must also be supported by evidence showing use.
Examples of evidence to prove use are listed in the IPOPHL’s Trademark Regulations. These include labels of the mark, photographs of the goods bearing the trademark or of the establishment where services are rendered, advertising materials or brochures, and sales receipts or invoices. Online use is also allowed as IPOPHL accepts as supporting evidence downloaded pages from websites clearly showing that the goods are sold or the services are being rendered in the country.
One question regularly encountered is, must the owner show use for each of the listed goods and services? The answer is no. As long as the owner can show that the mark is used on at least one item in a particular class, then that is sufficient. So, in a multi-class registration, the owner must be able to prove use for at least one item per class. Classes that cannot be supported by evidence of use will be dropped from the registration.
Use must be within the country. For foreign owners of marks that cover services, the law appears to require them to have an establishment here. Otherwise, how would they be able to render service within the country?
But actual presence is not necessary according to the Supreme Court.
In W Land Holding v Starwood Hotels, the court recognizes the role of the Internet in advertising or promoting a brand. Here, the court agreed, to dismiss W Land’s petition for cancellation even if Starwood — whose trademark covers hotel and motel services — has no hotel in the country. Starwood though, runs a website where Filipinos can book reservations online, and this, according to the court, is enough to maintain the trademark registration.
But merely uploading the marks online together with their covered goods and services will not make the cut. According to the Supreme Court, online use, to be considered use in Philippine commerce, must result in an actual transaction. Or the posting is done to target consumers in a particular jurisdiction (in this case, the Philippines).
The intent to target consumers can be shown by the website having specific details about a particular jurisdiction.
For examples: the website may contain a local contact number; it may have a local version; it may be in a local language or has an option for switching into a local language; it may state whether domestic payment methods are available; or it may show prices in local currency.
If the mark is not used, a Declaration of Non-Use may be filed.
Unlike a declaration of use, a non-use declaration states the reasons why a trademark owner cannot use his mark. If the reasons are acceptable to the IPOPHL, the registration will be maintained despite the mark’s non-use.
For non-use to be excused, it must be because of something that is independent of the will of the trademark owner. The IPOPHL currently accepts the following excuses: if the mark cannot be used because of a requirement imposed by another agency that must be fulfilled first; if the mark cannot be used because of a restraining order or injunction; or if the mark cannot be used because it is subject of an opposition or cancellation case.
This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.
Kurt T. Yeung is Senior Associate of the Intellectual Property Department (IPD) of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).
kgyeung@accralaw.com
(02) 830-8000