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Briefs (03/25/19)

Loewe

Loewe opens first stand-alone store

LOCATED in Shangri-La Plaza, the new Loewe store spans 68 square meters and showcases the brand’s commitment to art and design. The store follows the Casa Loewe concept developed by the brand’s creative director Jonathan Anderson, who first introduced the concept in Omotesando before taking it to its fullest expression with the opening of Casa Loewe Madrid. Evoking the ambience of a stately home, the boutique features stucco walls and polished Campaspero limestone flooring, giving off a chic, modern vibe, which pays homage to the brand’s European heritage. The emerald canopy of translucent green stone conjures an image of modern Spain and references the captivating entrance to Loewe Madrid, which was designed by architect Javier Carvajal in 1959. Celebrating the past and present, Loewe selected pieces of modern and traditional art to accentuate the space, including a tapestry by master weaver and knitter John Allen. Known for his sense of color and ability to transpose snapshots of the British landscape into his works, the textile designer has collaborated with Loewe on multiple occasions, including the Spring Summer 2015 accessories collection. Lending a modern edge to Loewe Shangri-La Plaza are the original stools and chairs designed for the Fall Winter 2018 fashion show in Paris, an Akari E Light Sculpture by Japanese-American artist Isamu Noguchi, as well as specially designed, handmade geometric rugs and heirloom cider presses obtained after a tireless pursuit across Spain, Portugal and the South of France. A selection of leather goods, accessories and eyewear will be showcased in the store. The new Loewe store at Shangri-La Plaza is located at Level 1, Shangri-La Plaza East Wing, EDSA corner Shaw Boulevard, Mandaluyong City.

Ermenegildo Zegna unveils ‘All The World’s A Stage’

DIRECTED by Oscar-nominated Italian director Luca Guadagnino (I Am Love, Call Me By Your Name, Suspiria), “All the World’s a Stage” is a series of three character-based films shot in Milan that shows how Ermenegildo Zegna embraces the progressive attitude and versatility of modern menswear. Mr. Guadagnino’s series of portraits follows the private moments of three men. The international cast, reflecting contemporary masculinity, features Boyd Holbrook, star of Netflix’s Narcos, who embodies the freedom of identity that comes with Zegna casualwear. André Holland, star of Oscar-winning film Moonlight, sets the stage with his Su Misura look, defining his identity through his sartorial choices. William Chan, actor, singer and global face of Ermenegildo Zegna XXX, shows off the collection and how it elevates the refinery of tailoring and pairs it with the versatility of streetwear.

Yields on gov’t securities end flat

By Carmina Angelica V. Olano
Researcher
YIELDS ON government securities (GS) traded on the secondary market ended flat last week amid the risk-off mood following the US government’s dovish sentiments and local central bank’s decision to keep banks’ reserve requirements unchanged.
On average, GS yields went down by 7.75 basis points (bp) week on week, according to the PHP Bloomberg Valuation Service (BVAL) Reference Rates as of March 22 published on the Philippine Dealing System’s website.
“Most of the long-term local benchmark interest rates (PHP BVAL yields; with tenors of 5 years and longer) declined by 0.15-0.20 week-on-week, with some long-term tenors declining to new 1-year lows, partly due to renewed and surprise dovish statements from the US Federal Reserve…,” Michael L. Ricafort, economist at the Rizal Commercial Banking Corp., said in an email interview.
In its March 19-20 policy meeting, the Fed kept its rates steady, shifting to a dovish perspective. Most of its officials expect only one more rate hike through 2021, amid muted US inflation and an expected slowdown in the economy.
Mr. Ricafort noted comparable government bond yields in the US and other developed countries declined following the Fed’s dovish tone.
“The 10-year US government bond yield declined to 14-month lows at 2.50% levels, the 10-year German government bond yield declined to 0% (lowest since 2016), and the 10-year Japan government bond yield already negative, at -0.06% (lowest since 2016),” Mr. Ricafort said.
“Thus, local interest rate benchmarks similarly eased partly due to the interest rate differential dynamics with the US and other developed countries as some global investors search for higher yields in emerging markets such as the Philippines,” he added.
Meanwhile, analysts noted that yields in the local benchmark interest rates were higher at the short-end.
Mr. Ricafort said the one-month to two-year [notes] were slightly higher week-on-week by less than 0.10 [bp], “after the local monetary authorities left large banks’ reserve requirement ratio unchanged at 18%, contrary to some market expectations of a cut; while the key local policy rates were widely expected by the markets to be unchanged.”
“This resulted to a much flatter yield curve,” he added.
In a phone interview last Friday, BDO Unibank, Inc. chief market strategist Jonathan L. Ravelas also noted there were expectations of a reserve requirement ratio (RRR) cut, but this did not materialize.
On March 21, the Bangko Sentral ng Pilipinas (BSP) kept benchmark interest rates unchanged, which marks the third straight meeting that kept rates within 4.25-5.25% and the key rate of 4.75% still at a decade-high.
The BSP last slashed the RRR in March and May last year, bringing the mandatory reserves for big banks to 18% of their total deposits.
“The accelerated government borrowing pushed [short-term paper] rates slightly elevated,” BDO’s Mr. Ravelas said, citing the 364-day Treasury bill was offered at an annual rate as high as 6.1%.
Last March 18, the government made a partial award of the 364-day papers, accepting just P5.096 billion out of the P8-billion program and total offers amounting to P8.766 billion. The average yield climbed 3.3 bps to 6.052% from the 6.018% quoted in the previous offer.
Treasury bills (T-bills) climbed across the board, led by the 91-day T-bill with a 7.5-bp increase to 5.751%. This was followed by the one-year and 182-day T-bills’ 2.7-bp and 1.6-bp increase to 6.081% and 5.921%, respectively.
Bonds at the belly of the curve went down, except for the two-year Treasury bond (T-bond) yielding 6.049%, 4.3 bps higher than week ago levels.
The three-year and four-year T-bonds yielded 6.022% and 6.003%, down 2.7 bps and 9.6 bps, respectively. Similarly, the five-, seven-, 10-year papers yielded 5.991%, 5.981%, and 5.964%, which were 15.1 bps, 19.9 bps and 21.6 bps lower week on week.
Yields on longer-term debt papers also dropped, with the 20- and 25-year T-bonds yielding 6.104% and 6.32%, down 20.7 bps and 11.7 bps, respectively, from a week ago.
For this week, Mr. Ravelas expect yields to move sideways as the traders consolidate while waiting for the March inflation data to be released.
“If inflation continues to go down, yields have a downward potential,” he said.
The March inflation data is scheduled to be released on April 5.
Meanwhile, RCBS’s Mr. Ricafort expect yields of long-tenored notes continue to decline.
“Long-term local benchmark interest rates (PHP BVAL yields) could continue their easing trend/momentum [this] week, as seen recently, due to lower global government bond yields…that could prompt the search for higher yields by fund managers in emerging markets such as the Philippines,” he said.
Mr. Ricafort said local debt papers may attract foreign traders amid the easing inflation trend, as well as the possibility of monetary policy easing and RRR cut.
“The latest gains in the peso exchange rate, if sustained, could also help continue the easing trend in the long-term local interest rate benchmarks [this] week,” he added.

Optimism from steady BSP policy to sustain lift

LOCAL SHARES may edge higher this week, still supported by the central bank’s decision to keep interest rates steady last Thursday.
The Philippine Stock Exchange index (PSEi) clawed its way back to the 8,000 level after a month on Friday, ending 58.70 points or 0.73% higher at 8,013.42. It was up 2.76% on a weekly basis, following a 3.5% jump in holding firms and 2.5% increase in the property sector.
Turnover, however, dropped by 31% to P5.9 billion on average, indicating a cautious environment. Foreigners were net buyers for the week with a daily average of P312 million, 11% more than the preceding week.
“The general sentiment is still cautious but perhaps, the close above 8,000 last week will trigger some excitement which could propel it higher,” Eagle Equities, Inc. Research Head Christopher John Mangun said in a weekly market report.
Mr. Mangun said the PSEi would have to breach its next resistance level at 8,140 to confirm that the rally will keep going.
Online brokerage 2TradeAsia.com noted that the Bangko Sentral ng Pilipinas (BSP) and the Federal Reserve’s decision to keep rates unchanged will keep borrowing costs steady, which could translate to improved capex deployment.
OPPORTUNITIES
“This should prod investors to scout for investment opportunities, possibly in condo units that can be leased out, affordable housing, even franchising or store operations,” 2TradeAsia.com said in a market note.
“Similarly, those in capital-intensive industries would benefit, as infra-based projects are expedited.”
However, Mr. Mangun said concerns about the delay in enactment of the P3.757-trillion 2019 budget may be the biggest obstacle for the market to go higher.
“Analysts have already adjusted GDP (gross domestic product) growth targets because of this delay,” he noted.
Economic managers revised downwards economic growth target for the year to 6-7% from the original 7-8%. Growth could even slow to 4-2-4.9% this year if the budget were enacted as late as August. The growth target for the 2020 was also downgraded to 6.5% from 7.5%, while the growth targets for 2021 and 2022 remained at 7-8%.
“Because of the May elections, the passing of the budget could be pushed further,” Mr. Mangun added.
In the coming quarter, 2TradeAsia.com advised investors to consider sectors that would do well in the period surrounding the May 13 midterm elections, especially those in consumer and investment spending.
“Improved travel should also merit listed shares with tourism-related business models, either in accommodation or entertainment (gaming). Demand-driven summer season would also boost power or energy-related stocks,” the online brokerage said.
Mr. Mangun placed the main index’s support at 7,900-8,000, with resistance at 8,140-8,350. — Arra B. Francia

How PSEi member stocks performed — March 22, 2019

Here’s a quick glance at how PSEi stocks fared on Friday, March 22, 2019.
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Philippine Stock Exchange’s most active stocks by value turnover — March 22, 2019.
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Manila Water deal may lead to renewed use of Wawa Dam

By Victor V. Saulon
Sub-Editor
THE original proponent of a project that targets to deliver 500 million liters per day (MLD) said the recently signed memorandum of understanding (MoU) with Ayala-controlled Manila Water Co., Inc. is the initial step that could resolve legal hurdles blocking the development of the Wawa Dam as a water source.
“This is an important step towards resolving the legal impediment preventing the development of one of the most strategic water supply sources for Metro Manila,” said Anthony C. Violago, president of San Lorenzo Ruiz Builders & Developers Group, Inc., in a statement on Sunday.
Mr. Violago and his partner, shipping magnate Enrique K. Razon, Jr., plan to develop a water supply facility at the Wawa catchment area traversing the municipality of Rodriguez and the city of Antipolo, both in the province of Rizal.
The legal impediment involves water rights that Mr. Violago’s group raised in court against Metropolitan Waterworks and Sewerage System (MWSS). Reynaldo V. Velasco, the agency’s administrator, had said that he would allow the project only if Mr. Violago’s group withdraws the complaint.
On Friday, Manila Water disclosed that it had signed the MoU with Mr. Razon’s Prime Metroline Infrastructure Holdings, Inc. (Prime Infra).
Mr. Razon has proposed to invest and assume a controlling stake in the project through an 82% share ownership once he was convinced of its legal, commercial and financial viability, the antitrust watchdog Philippine Competition Commission (PCC) said in 2017.
In turn, Mr. Violago’s company will contribute the Wawa water permit, an application for water volume increase, and the water project in exchange for an 18% stake in it. PCC cleared the partnership on Dec. 19, 2017.
Wawa Dam was formerly the main water source for Metro Manila prior to the construction of Angat Dam.
Manila Water became the possible third partner in the project, which the groups describe as strategically located to serve the expansion areas of the east zone concessionaire.
Mr. Razon, who leads Prime Infra, said the project is “not an immediate fix, but rather a medium- to long-term solution.”
“Yet our project is one of the fastest and most sustainable ways to solve this current water crisis. If we don’t act now, this will be a recurring problem,” he said in the same statement that also quoted Mr. Violago.
The Prime Infra statement said talks continue between the company and Manila Water to start the project “at the soonest possible time, especially considering the current water crisis.”
Since early this month, Manila Water has been experiencing a water shortage of about 150 MLD, which it was trying to plug through a number of means, including advancing the operation of a new water treatment plant, a cross-border water sharing with Metro Manila’s other concessionaire, and the activation of deep wells. It previously said the water deficit would be “totally eliminated” in June.
The MoU between Prime Infra and Manila Water calls for them to cooperate in the possible development of the Wawa bulk water supply project. The agreement formalizes the formation of a technical team that will conduct a technical study, which will be reviewed and approved by the MWSS.
Prime Infra said that compared to Laguna de Bay and other similar water supply options, the project does not require an expensive treatment technology such as reverse osmosis. At the 500-MLD capacity, it can serve more than 500,000 households, it added.
Guillaume Lucci, Prime Infra president and chief operating officer, said he is optimistic that the project will start considering the government’s support for developing new water sources for Metro Manila and Rizal province.
“The proximity and water source quality of the Wawa catchment area will allow us to deliver first water no later than 2022. Because of the scale and life cycle cost of large dams, the public can be assured that we will deliver it in a cost-effective manner,” he said.

Sotto casts doubt on passing tax measures; terrorism bill top priority

SENATE President Vicente C. Sotto III said the bill updating the anti-terrorism law is the Senate’s top priority measure when session resumes on May 20, while expressing doubt about the passage of pending tax measures for the remainder of the 17th Congress.
“Anti-terrorism act is number one,” he told reporters on Thursday.
Asked about the chances of the Tax Reform for Attracting Better and Higher-Quality Opportunities (TRABAHO) bill as well as the proposed hikes on tobacco, alcohol, and mining taxes reaching third reading approval in the Senate, Mr. Sotto said in a text message to BusinessWorld on Saturday, “Hearings on those have not been completed. No comm(ittee) reports yet. Doubtful at this point.”
Congress is on break between Feb. 9 and May 19 for the 2019 midterm elections. It will resume on May 20 with only nine session days remaining.
Senate Bill No. 2204 seeks to address the gaps in Republic Act No. 9372 or the Human Security Act by redefining the term terrorist acts and removing the limitations of law enforcement agencies to prevent and to address terrorism. It was sponsored to the plenary on Feb. 6 by Senator Panfilo M. Lacson, chair of the Senate committee on public order and dangerous drugs.
Meanwhile, the TRABAHO bill and the proposed hikes in tobacco, alcohol and mining taxes remain pending in the Senate committee on ways and means. Committee chair Senator Juan Edgardo M. Angara conducted hearings on the bills last year and during the Senate’s Jan. 14-Feb. 8 session.
The House of Representatives passed on third reading last year House Bill 8083 or the TRABAHO bill as well as House Bills. 8677, 8618 and 8400, which seek to raise tobacco, alcohol and mining taxes, respectively.
Mr. Angara has said the Senate ways and means committee will come up with its report on the bill seeking to raise the excise tax on tobacco products when Congress resumes session in May.
Aside from the amendments to the Human Security Act, Mr. Sotto told reporters that the Senate’s other priority measures include the proposed Medical Scholarship Act, amendments to the Public Services Act, the proposed Mindanao Railways Authority, the Budget Reform Act, the National Transport Act, and the bill lowering the criminal age of responsibility.
“Some of them have been reported to floor so there’s a good chance that it will be passed on second and third reading. There are one or two of them, which are still being in the committee report level… It could still be passed in the first week of June,” he said.
The proposed Medical Scholarship Act and the Mindanao Railways Authority remain pending at committee level. Meanwhile, Senate Bill No. 1754 or the amendments to the Public Services Act, Senate Bill No. 1761 or the Budget Reform Act, Senate Bill No. 1284 or the National Transport Act and Senate Bill No. 2198 or the lowering of the age of criminality liability are awaiting second reading approval. — Camille A. Aguinaldo

CTA rejects bulk of SM Investments’ tax refund claim

THE Court of Tax Appeals (CTA) partially granted SM Investments Corp.’s tax refund claim from 2013, but drastically reduced the initial claim of over P1 billion to just P179.3 million.
In a 26-page decision dated March 4, the CTA special second division ruled that of the initial P1.17-billion tax refund claim of SM Investments, the company was only able to prove its entitlement for refund of excess creditable withholding tax (CWT) for 2013 in the amount of P179.3 million.
“In sum, the Court finds that petitioner was able to prove that it is entitled to its refund claim only in the total amount of P179,295,580.72. Hence, the partial grant of the instant Petition is in order,” according to the decision, written by Associate Justice Juanito C. Castañeda, Jr.
The court ordered the remainder of the claim disallowed in the absence of records reflectng its corresponding payments and for failure to prove that the corresponding payments were properly recorded.
Other CWTs were disallowed for not being fully supported by the original copies of pertinent documents.
The CTA said that when there is a discrepancy between the amounts shown in the financial statements and the amounts per certificate of withholding, “there is uncertainty as to whether the income payments indeed formed part of petitioner’s revenue in its return.”
“Petitioner did not offer any explanation or reconciliation of the difference that may be brought about by timing or revenue recognition difference,” it said.
The tax appellate court said it is strict in applying the “well-settled rule” that actions for tax refund or credit should be backed up with pieces of evidence entitling a taxpayer to an exemption that is scrutinized and duly proven.
“The burden is on the taxpayer to show that he has strictly complied with the conditions for the grant of the tax refund or credit. In the present case, petitioner failed to discharge its burden of complying with the substantiation and reporting requirements of its claim,” the CTA said.
Associate Justice Catherine T. Manahan concurred in the decision. — Vann Marlo M. Villegas

Senator calls for investigation into POGO workers’ registration, tax payments

SENATOR Leila M. de Lima has filed a resolution seeking an inquiry into the alleged noncompliance of some foreign gaming firms, particularly in the Philippine Offshore Gaming Operations (POGO) establishments, to ensure their workers are properly registered and taxed.
Filed on March 18, Senate Resolution No. 1030 called for the inquiry in the hopes of creating legislation “that would increase our capability to meet the increasing challenges in implementing our laws on resident foreign nationals.”
“Given the huge discrepancy between the number of foreign POGO workers in the Philippines and tax revenue from them, there is a need to document all foreign workers to ensure the legality of their presence and identify their taxpayer classification to accurately determine their corresponding tax liability,” Ms. De Lima said in the resolution.
The senator cited Finance Secretary Carlos G. Dominguez III’s estimate on March 6 in an interview with reporters that the government is losing P3 billion in tax revenue a month because of the nonpayment of personal income tax by foreign workers in the POGO sector.
According to the Department of Justice (DoJ), around 95,000 foreign nationals working in POGOs were issued temporary work permits by the Bureau of Immigration (BI) as of June 2018. Ms. De Lima warned that the lack of coordination among government agencies “could lead to serious issues, including those of criminality, national security, and possible abuse of our citizens by undocumented foreign nationals.”
A POGO takes bets and pays winners through an online gaming account. The Department of Finance (DoF) has expressed plans to compile a database of foreign workers hired by POGOs to ensure that they pay the correct taxes.
An interagency task force has also been formed to streamline the regulation of foreign workers. The task force is led by the Department of Labor and Employment (DoLE) and is composed of the DoJ, DoF, Department of Trade and Industry (DTI), Bureau of Internal Revenue (BIR), and Philippine Amusement and Gaming Corp. (PAGCOR). — Camille A. Aguinaldo

GOCC subsidies fall 13.8% in January

SUBSIDIES granted to state corporations declined in January, with the bulk of the subsidies going to the National Irrigation Administration (NIA), the Bureau of the Treasury said.
According to the Treasury’s cash operations report, overall subsidies remitted by the national government to government-owned and -controlled corporations (GOCC) hit P795 million, down 13.8% from a year earlier.
The government grants subsidies to state firms to cover operational expenses that are not supported by their respective revenues.
In January, more than half or 54.72% of the total budgetary support went to NIA, which received subsidies amounting to P435 million.
This was followed by state hospitals Philippine Heart Center, Philippine Children’s Medical Center and National Kidney Transplant Institute, receiving P74 million, P67 million and P50 million, respectively.
Of the 18 GOCCs which received state support in January, Aurora Pacific Economic Zone and Freeport Authority, Southern Philippines Development Authority as well as the Zamboanga City Special Economic Zone Authority received the lowest subsidies of P4 million each.
On the other hand, state financial institutions National Home Mortgage Finance Corp., Land Bank of the Philippines and Development Bank of the Philippines did not receive any budgetary assistance from the government during the month.
This year, the national government expects to provide P187.1 billion worth of budgetary support to GOCCs, up 20.5% from its cash-based equivalent in 2018. — Karl Angelo N. Vidal

DoLE moving to implement Japan deal to supply specialized workers

THE Department of Labor and Employment (DoLE) has issued guidelines for the deployment of workers to Japan under a latest bilateral agreement with Tokyo, a few weeks before a new Japanese law admitting new categories of workers with specialized skills takes effect in April.
In Department Order 201-19 dated March 22, the department outlined the occupations covered by the Memorandum of Cooperation with Japan’s Ministries of Justice, Foreign Affairs, Health, Labor and Welfare and the National Police Agency.
The two categories are Specified Skilled Worker (i) who will work in Japan for five years at maximum; and Specified Skilled Worker (ii) whose terms will be determined by contract as well as any extensions.
In December, the Japanese government signed into law its latest immigration policy for workers with specified skills. These occupations include care workers; building managers; machine parts and tooling workers; industrial machinery specialists; electric, electronics, and information workers; construction workers; shipbuilding and ship machinery workers; automobile repair and maintenance specialists; aviation workers; accommodations industry workers; agriculture, fisheries and aquaculture workers; food and beverage manufacturing workers; and food service specialists. The law will be effective on April 11.
“These guidelines shall cover the identified occupational categories of 25 December 2018 provided by the Basic Policy Operation of the System of the Status of Residence of ‘Specified Skilled Worker,’” according to the DO, signed by Labor Secretary Silvestre H. Bello III.
Qualified applicants for Specified Skilled Worker (ii) must be at least 18 years old; possess proof or evaluation of skills and knowledge in the specified skilled work fields they plan to enter employment in Japan; and a passport valid for six months before the intended date of departure.
Qualifications for Specified Skilled Worker (i) are identical to those of Specified Skilled Worker (ii) but also stipulate proof of proficiency in the Japanese language and for their line of work.
The Philippine Overseas Employment Administration (POEA) will send to the Japanese Ministries and Agencies the names of organizations or recruitment agencies authorized to recruit and place specified skilled workers.
Filipinos are considered one of priority nationalities under the new Japanese law, Mr. Bello saying that the Philippines will fill about 30% of the 350,000 worker quota. — Gillian M. Cortez

CTA rejects BIR appeal on drug store chain’s tax deficiency

THE Court of Tax Appeals (CTA) denied for lack of merit the motion for reconsideration of the Bureau of Internal Revenue (BIR) over the cancellation of the alleged tax deficiency of Central Luzon Drug Corp. amounting to P1.15 billion.
In a five page-resolution on March 6, the CTA special third division reiterated that it is necessary to issue a Letter of Authority (LOA) for a designated revenue officer to assess a taxpayer for its alleged deficiency.
The appellate court said that the authority RO (Revenue Officer) Josa C. Gomez was issued only through a Memorandum of Assignment (MoA).
“The record is bereft of any showing that a valid LOA was issued by respondent or the concerned Revenue Regional Director in favor of RO Gomez for the latter to continue the examination of petitioner’s books of account or accounting records for potential tax liabilities for the relevant period,” the CTA ruled.
“Being a product of an unauthorized tax audit/examination, the subject assessment predicated upon the findings of RO Gomez should be deemed a complete nullity and without any legal consequence, thereby warranting its cancellation and withdrawal,” it added.
According to the Tax Code, a valid LOA issued by the BIR Commissioner or Regional Revenue Director is necessary for an RO to “legally conduct a verification/audit of a taxpayer for potential deficiency taxes.”
The CTA in November last year canceled the tax assessment of Central Luzon Drug Corp. for 2009 for being assessed by an unauthorized officer.
In the motion for reconsideration, the BIR said its right to due process was violated when the CTA ruled on whether the revenue officer was authorized to conduct examination of the corporation’s tax liabilities.
It also argued that the deficiency tax assessment of the company should be upheld because Revenue Memorandum Order Nos. 8-2006 and 62-2010 allow heads of investigation office to issue a MoA in cases of reassignment or resignation of previously assigned officers in the LOA.
The court said the revised rules of the CTA allow it “to resolve not only the issues brought forth by the parties, but also those related or interwoven with the issues raised by the parties and even those are necessary to pass upon in order to achieve an orderly disposition of the case before it.”
The decision was written by Associate Justice Esperanza R. Fabon-Victorino and concurred in by Associate Justice Ma. Belen M. Ringpis-Liban. — Vann Marlo M. Villegas

DTI sees possibility of free trade negotiations with US later in 2019

THE Trade department said it might be possible for bilateral free trade talks with the United States to begin later this year, citing support for a deal from some US lobby groups.
“There may be a chance in the second half,” Trade Secretary Ramon M. Lopez told BusinessWorld on Thursday in Makati City.
“There are American groups that could help. Of course their Congress is independent so we can’t say,” he added.
In his opening statement at the US Senate Finance Committee delivered on March 12, US Trade Representative Robert E. Lighthizer noted ongoing trade negotiations with Japan, Europe, the UK and “several other countries.”
The Philippines and the US finally resolved last year a number of longstanding issues in their Trade and Investment Framework Agreement (TIFA).
A TIFA serves as a framework outlining key issues as a first step toward a free trade agreement.
The particular issues both countries settled were related to customs valuation, intellectual property rights, market access for Philippine agricultural products in the US, and automotive safety standards.
The Philippines noted progress in market access concerns for its mango, young green coconut, and carrageenan products.
Both countries also agreed to work on the improvement of cold chain facilities in the Philippines “to ensure observation of international guidelines and codes of practice for food hygiene adopted by the Codex Alimentarius Commission.”
The US also welcomed the Philippines’ intent to continue protecting geographical indications — labels indicating country of origin — by means of respecting prior trademark rights and not prohibiting the use of common names.
In the vehicle segment, both governments agreed to draw up a US work program in the context of the ASEAN-US TIFA on automotive standards issues.
The Philippines and the US also moved forward from technical and policy dialogues on the National Retail Payments System and other measures related to electronic payment services, including domestic retail debit and credit electronic payment transactions.
The Philippines has long been seeking a bilateral trade agreement with the US.
The Philippines currently avails of the US Generalized System of Preferences program which covers 5,057 products or some 47.7% of the 10,600 total US tariff lines. Of these, about 3,500 are open to developing nations.
The Philippines estimates that roughly $1.5 billion worth of its goods are shipped to the US duty free every year.
Bilateral trade totaled $27 billion in 2016, of which merchandise goods accounted for $18 billion and services, close to $9 billion. — Janina C. Lim

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