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Foreign casino operators go all in as they vie for Osaka license

OSAKA — In late July, a lavish fireworks display lit up Osaka’s skies in the finale to one of Japan’s most famous festivals, courtesy of a first-time sponsor: Macau casino operator Melco Resorts and Entertainment Ltd.
The company’s chief executive, 41-year-old billionaire Lawrence Ho, had only hours earlier met Osaka’s governor after a donation for natural disaster preparation.
Also in town was MGM Resorts International’s chief executive, Jim Murren. He didn’t bring a donation — just the Blue Man Group to entertain around 100 guests on a chartered boat.
The partying and pageantry were part of a concerted effort to convince Osaka who should operate one of Japan’s first casino resorts. Just days before, the country authorized the initial three licenses.
Thanks to strong local political support, an available site and a supportive business community, the western Japanese metropolis of 2.7 million is widely expected to become the first major city to host a casino.
“Tokyo has not raised its hand, Yokohama has not raised its hand — Osaka has raised its hand,” said Ed Bowers, MGM’s executive vice president of global development.
A huge new revenue stream is on the line for the casino operators, which also include Galaxy Entertainment Corp, Caesars Entertainment Corp, Genting Singapore Ltd and Las Vegas Sands Corp. An Osaka casino could generate $4 billion a year, Morgan Stanley says.
For Osaka, which has seen its wealth and power fade in relation to Tokyo, gambling could boost tourism and bring in much-needed money. It hopes to open a resort by 2024, but even after it picks an operator it must win government approval.
“I want to properly nurture the tourism industry in Osaka as one of its pillars,” Osaka Governor Ichiro Matsui told Reuters in an interview.
Interviews with dozens of casino executives, lobbyists and politicians depict sophisticated campaigns aimed at winning over a skeptical public, wooing local businesses and persuading officials.
And Osaka, eager to avoid even the appearance of corruption, has become more cautious in dealing with casino operators.
In July, the city reiterated a ban on officials’ attending parties, sharing meals or receiving gifts. It also prohibits officials from meeting casino representatives alone.
All told, at least eight major operators are courting Osaka. MGM, Sands and Melco have in recent years pledged to sink $10 billion into a resort.
DREAM ISLAND
Osaka wants to build a casino on a man-made site called Yumeshima, or “Dream Island.”
Yumeshima was built during Osaka’s 1970s boom times. Its bayside area was once a blue-collar district crowded with chemical factories and shipyards. But those companies moved production abroad.
The city was hit hard when Japan’s bubble economy popped, and politicians have for two decades tried with little success to revive both the waterfront and Osaka.
Still, with a four-fold surge in foreign tourists over the last five years — more than 11 million people visited Osaka in 2017, attracted by its rich culinary culture and wealth of nearby sights — casino operators see a fertile market.
“This is the greatest opportunity of my lifetime,” Melco’s Ho told Reuters by phone.
Executives from 11 casino companies have met Governor Matsui for “courtesy calls” 25 times between 2012 and May 2018, prefectural records show. Operators and other related companies have met Osaka officials 119 times since May 2017. Osaka declined to provide breakdowns of meetings by company.
HEARTS AND MINDS
Melco’s most recent donation to Osaka, reported by local media to total about 50 million yen ($450,000), wasn’t its first. Melco also gave money for victims of a June earthquake that killed four in Osaka, and for parts of western Japan devastated by flooding a month later.
The company declined to say how big those donations were; its fireworks sponsorship was worth about $9,000.
Ako Shiraogawa, Melco’s Japan president, told Reuters she reassured local officials the donations were not meant to curry favor. It was a coincidence that Ho met Osaka’s Matsui before the fireworks display, she said.
“It looks like we are doing too much,” Shiraogawa said. “But it just happened to be the same day as the festival.”
Like its Macau rival, MGM is building a bigger presence in Osaka, including an office. It says it is trying to win the “hearts and minds” of the city’s public and businesses. — Reuters

TRAIN TRAIN go away?

It always fascinates me whenever I hear my one-and-a-half-year-old daughter sings the famous children’s song “Rain, rain, go away, come again another day…” While her singing is an enchantment to my ears, it’s also sad because she cannot play outside because of the rain.
Apparently, there is a similar song that many are singing nowadays on the impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Law Package 1 or TRAIN 1. Have you heard about “TRAIN TRAIN go away”? This jingle seems to be the theme in recent headlines about the country’s taxation, as debates have been going back and forth on whether or not TRAIN 1 needs to be suspended.
The clamor of TRAIN 1 detractors hinges on the argument that it is “anti-poor”, particularly because the spike in commodity prices more than offsets the reduction in personal income tax. To be explicit, the excise tax adjustments on certain petroleum products, like diesel and gasoline increased transportation costs and also exerted a domino effect on the prices of commodities purchased by the consumers. Unfortunately, under TRAIN 1, the excise taxes will further increase in 2019 and 2020.
To make the situation worse, critics are pointing out that the surge in commodity prices aggravated the situation of the marginal income earners. Those who were exempt from the individual income tax even prior to the effectivity of TRAIN 1,such as minimum-wage earners, informal sellers, small-time contractors, and the unemployed, have been struggling to meet their basic needs due to their diminishing purchasing power because of TRAIN 1.
The advocates of TRAIN 1, on the other hand, remain steadfast that TRAIN 1 is not “anti-poor”, and that the main target of the upward change in excise taxes on diesel and gasoline are the rich, who have their own cars and who account for a significant chunk of consumption on fuel. Further, advocates say that the escalation of prices in petroleum products is not mainly due to TRAIN 1. Instead, the two major culprits causing price increases are: (1) the fluctuation of oil prices dictated by the international market, as affected by reduced production of oil by major countries and coupled with some political tensions that involve Middle Eastern oil producers; and (2) the weakening exchange rate of the peso.
In addition, the TRAIN 1 proponents contend that the government has countermeasures for the poor families affected by the surge in commodity prices. Among these measures are the Unconditional Cash Transfer Program intended for the 10 million households and individual beneficiaries and the Pantawid Pasada Program to benefit jeepney drivers. These programs aim to lighten the burden of poor families. TRAIN 1 supporters explain that, even when TRAIN 1 was being drafted, they identified programs to help the poor with their day-to-day consumption.
Perhaps the government should more patiently explain to the public why it believes that TRAIN 1 is not “anti-poor.” The problem, however, is that it may not be that easy to explain something to a person who is hungry and angry about his present situation. The government has a massive task of ensuring the actual implementation of its programs. Perhaps the results are not entirely felt by all the intended beneficiaries, and that is why critics easily point to TRAIN 1 as the reason for their miseries. It will be noted that TRAIN 1 took effect in January, and complaints have been aired for eight months now. Needless to say, the situation ought to have been resolved in no time.
Remember that we have seen only Package 1 of the proposed comprehensive tax reform program, and we are already in the midst of an unending debate on whether TRAIN 1 should stay or be suspended. There are other TRAINS approaching, and if these are not carefully drafted and fully explained to the public, we might end up quarrelling even more than we are right now. “Rain, rain, go away” is meant to be sung by children trying to drive away the gloom. If not resolved, the gloom associated with TRAIN 1 might lead us to hear even more clamor for TRAIN to go away.
 
Olivier D. Aznar is a lawyer and partner of the Tax Advisory and Compliance of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory, and outsourcing services firms in the Philippines. You may contact the author thru Vier.Aznar@ph.gt.com, or call us at tel. nos.
+63(2) 988-2288.

Gov’t considering penalties against XiamenAir

THE CHINESE AIRLINE whose disabled passenger jet caused the closure last Friday, Aug. 17, of a runway at the Ninoy Aquino International Airport (NAIA) apologized for that incident, even as Philippine officials mulled possible penalties against the company.
In a statement on Monday, XiamenAir said in part, “The continued thunderstorms have caused huge difficulties in the movement of the aircraft, causing the main runway at Manila Airport to be closed for more than 32 hours.”
A Xiamen passenger jet went off NAIA’s runway 06/24 on Thursday night amid heavy rains, causing the cancelation or delay of many flights and the airport’s overcrowding until the weekend.
“Xiamen Airlines apologizes to all the passengers affected by the incident and will do its utmost to assist,” the company also said.
In his press briefing on Monday, General Manager Ed V. Monreal of the Manila International Airport Authority (MIAA) said his agency cannot exactly “punish” the concerned airline, but said MIAA had already aired its concerns.
“We will definitely call their attention to follow the proper protocol….There might be some consequence, but I cannot qualify or quantify what penalties we will impose. But then again ang importante sa ganitong sitwasyon ay kooperasyon (what’s important during such a case is cooperation),” Mr. Monreal said.
He said MIAA met with an 11-man delegation from XiamenAir on Monday morning. He noted the airlines will pay for the costs brought about by the incident, but they have yet to compute the exact figure.
“There are a lot of losses…sequential and intangible expenses or losses,” Mr. Monreal said.
For his part, Presidential Spokesperson Harry L. Roque, Jr. said in a Palace briefing on Monday: “It’s not just an apology that we will ask for. We’re now conducting an investigation if there’s any liability on the part of the Xiamen pilot. That’s why he has been asked not to leave the country. That’s part of an ongoing investigation.”
An initial report by Air Accident and Incident Investigation Board the noted in part, “The Pilot in Command (PIC) or the captain is a Korean male, who is 50 years old and has a grand total time of 16,000 flying hours with 7,000 hours on the Boeing 737-800 aircraft type. The First Officer or the co-pilot is a Chinese male, 28 years old, with a grand total time of 950 flying hours and 750 hours on the Boeing 737-800 aircraft type.”
“The result of the drug tests were negative. We still await the result of the alcohol tests because it would take a long process, but we expect to have the results today. As we speak, there is an ongoing investigation and interview with the pilots and the cabin crew,” the report also read.
For its part, the Department of Tourism (DoT) said in a statement: “Our DOT-Airport Offices have been instructed to provide all possible assistance to those affected by this incident.”
“We will meet with airlines and airport authorities to further discuss the instances of Compensation for Delayed/Cancelled Flights and Delayed/Lost Baggage in the interest of all parties,” added the statement, which also extended DoT’s “sincerest apologies to all our local and foreign tourists inconvenienced by the Xiamen Airways plane mishap.”
For its part, the Management Association of the Philippines (MAP) urged the government in a statement on Monday to expedite the rehabilitation of the Manila gateway and the expansion of the Clark International Airport.
“The MAP urges the adoption of an airport complementation strategy whereby the existing NAIA and Clark international airports are developed and operated as an integrated system with the two airports complementing each other, ideally with an express rail link in place,” the business group said.
MAP also said: “We strongly object to the closing of NAIA — which we consider as a very drastic and counter-productive move. NAIA is a strategically located air gateway supported by a road system already in place and with proximately located rail and future subway lines to serve the needs of air travellers in Mega Manila and southern Luzon. Also, Manila’s first international cruise terminal is being planned to be built nearby in the next several years.”
“A city airport, such as NAIA, has the great advantage of convenient access, besides providing support to the local economy. Its benefits should not be neglected. Many metropolitan cities in the world recognize this reality. Their old city airports, instead of being phased out as previously intended in favor of newer large-capacity airports in the suburbs, are being upgraded. For example, Tokyo Haneda is being expanded to supplement Narita. Shanghai has its HongXiao in addition to Pudong, London City airport at the Canary Wharf, Reagan airport in Washington D.C., La Guardia in New York City. Even Bangkok is keeping Don Muang with Suvarnabhumi Airport.”
At the Senate, Senator Grace S. Poe-Llamanzares on Monday filed a resolution seeking an inquiry on the mishap.
Ms. Poe’s Senate Resolution No. 852 also cited the Air Passenger Bill of Rights, which provides benefits to passenger in times of flight delay or cancellations. The policy was issued in 2012 as a joint administration order of the then Department of Transportation and Communications (DoTC) and the Department of Trade and Industry (DTI).
At the House of Representatives, Quezon City Representative Winston T. Castelo told reporters in a press briefing, Monday: “I think Congressman (Cesar V.) Sarmiento of the Committee on Transportation will investigate (the incident) motu proprio on Sept. 5.” — Denise A. Valdez, with Camille A. Aguinaldo, Arjay L. Balinbin, and Charmaine A. Tadalan

Liza Maza resigns from Cabinet

NATIONAL ANTI-POVERTY COMMISSION (NAPC) secretary and convenor Liza Maza announced her “irrevocable resignation” in a press conference yesterday.
Ms. Maza cited as her primary reason is President Rodrigo R. Duterte’s cancellation of the peace talks with the National Democratic Front of the Philippines (NDFP).
“Pinakamahalagang dahilan ng aking pagbibitiw ay ang ganap na pagkansela ni Pangulong Duterte sa usapang pangkapayapaan sa pagitan ng GRP (Government of the Republic of the Philippines) at NDFP na kanyang ipinahayag noong ika-14 ng Agosto,” Ms. Maza said, reading a statement. (The most important reason for my resignation is President Duterte’s cancellation of the peace talks between the GRP and the NDFP, which he announced on Aug. 14).
She added: “Kinitil nito ang natitira kong pag-asa na magbubunga ang usapang pangkapayapaan sa makabuluhang repormang sosyo-ekonomiko at pulitikal na siyang magwawakas sa laganap na kahirapan at digmaan sa ating bansa. Ito ay tanda ng ganap nang pamamayani na kontra-reporma, kontra-mahirap at militaristang kaisipan at mga patakaran sa administrasyong ito.”
(This dashed whatever hopes I still had that peace talks will bear relevant socio-economic and political reforms that will put an end to the prevailing poverty and conflict in our country. This signals the predominance of the administration’s anti-reform, anti-poor, and militaristic mentality and policies).
Genuine change, Ms. Maza also said, “cannot happen when the old forces of fascism and corruption, and the defenders of elite and foreign interests, are consolidating their position in government. As such, I have found it best to resume fighting from among the masses for this genuine change.”
Ms. Maza’s departure marks the Communist Party of the Philippines’ break from Mr. Duterte’s Cabinet, after its other nominees, Social Welfare Secretary Judy M. Taguiwalo and Agrarian Reform Secretary Rafael V. Mariano, had earlier left the Cabinet following their rejection by the Commission on Appointments.
Ms. Maza had also earlier faced a long-standing double-murder case that her supporters criticized as harassment.
In a press briefing at the Palace on Monday morning, Presidential Spokesperson Harry L. Roque, Jr. said the Palace “thanks” Ms. Maza “for her invaluable services to the government for the past two years, even as we express our regret with her decision to leave in government.”
Mr. Roque also took exception to her remarks, saying, “The decision that she cited in her letter of resignation is the cancellation of peace talks. Again, we maintain, the President will only have peace talks with the communist if it is in the Philippines; if they will stop collection of revolutionary taxes; if they will momentarily, while peace talks are ongoing, commit themselves to refrain from resuming their insurgency and will stay in a designated camp where President Duterte has promised that he will provide for their provisions during pendency of the peace talks. In any case, contrary to what Liza Maza said, peace talks will continue but on a local level.” — Arjay L. Balinbin

Palace: Duterte ‘fine and well’

By Arjay L. Balinbin, Reporter
MALACAÑANG ON Monday disputed the claim of exiled communist leader Jose Maria Sison that President Rodrigo R. Duterte had been comatose since Sunday, Aug. 19.
“The President is fine and well in Davao [City], participating at the Kadayawan [Festival]. He will have a public appearance tomorrow with the League of Cities in Cebu City. As usual, Joma Sison does not know what he talks about,” Presidential Spokesperson Harry L. Roque, Jr. said in a press briefing at the Palace on Monday morning, Aug. 20.
He also said: “Well, that’s always wishful thinking on his part. But the President is here to stay. I don’t know if he can say the same thing about himself and about his movement — the longest running insurgency in the world.”
Last Sunday, Mr. Sison posted a photo of Mr. Duterte attending the national conference of his fraternity Lex Talionis on Saturday evening, Aug. 18, in Davao City.
“Those who saw him reported that the darkness of his face had become aggravated from its appearance the other day and that his walk and handshake had become more unstable. The latest report (still to be verified or negated) is that Duterte has gone into coma since the afternoon or evening of today, Sunday, August 19,” Mr. Sison said.
But Mr. Roque said: “He is healthy. I talked to former Secretary Vitaliano (N.) Aguirre II who was in the affair. He was fine. He’s stayed until 12. He was in very high spirits. He enjoyed the company of his brods in Lex Talionis.”
Whether the Palace will make the President’s medical exam results public, Mr. Roque said: “I will ask, but the President already said that he was given a clean bill of health. So, that’s actually making public, the results of his medical tests.”
Sought for comment, ruling party PDP-Laban president Senator Aquilino L. Pimentel III said in a mobile message: “The President is healthy. Why believe in a report (by) someone (who is) hundreds of kilometers away in Europe?”

Nationwide round-up

Transport group files P5M damage suit vs Nograles

A TRANSPORT group has filed a P5-million damage suit against Pwersa ng Bayaning Atleta (PBA) Party-list Rep. Jericho Jonas B. Nograles for his actions that supposedly led to the suspension of Grab Philippines’ (MyTaxi.PH, Inc.) P2 per minute charge.
In a statement on Monday, TNVS Drivers United said the Transport Network Vehicle Services (TNVS) drivers are the ones taking the hit from the Land Transportation Franchising and Regulatory Board (LTFRB)’s suspension of the P2 per minute fare component of Grab.
“Ngayon po, gumagawa na kami ng legal na hakbang para ipakitang hindi po kami magpapasindak sa mga pulitikong susubok sa aming pagkakaisa na mga TNVS drivers. Ikaw ang puno’t dulo ng paghihirap namin Congressman Nograles (We are now taking legal action to show that we won’t back down from politicians who threaten the unity of TNVS drivers. You are the root cause of out sufferings, Congressman Nograles),” the group said.
Mr. Nograles, in response to the charges filed before the San Mateo Regional Trial Court, said it is “nothing more than an act of desperation in retaliation to the recent LTFRB Order declaring the charges of Grab Philippines as illegal.”
The lawmaker also accused Grab of being behind the lawsuit.
“I call on the LTFRB to demand that Grab refund the Billions of Pesos in illegal charges, as ordered and without any further delay,” he added.
Grab, on the other hand, denied the accusation, saying it had no hand on the court case.
“Grab did not file this lawsuit against Rep. Nograles. Apparently, the lawsuit was filed by TNVS drivers who were greatly affected by the removal of the P2/minute fare component,” the ride-hailing firm said.
LTFRB suspended Grab’s P2 per minute charge on April 19 as a response to accusations from Mr. Nograles that the company is overcharging its customers.
Grab filed a petition in May to reinstate the fare component, but the LTFRB has yet to decide on the case.— Denise A. Valdez

DoJ warns against online site posing as gov’t procurement agency

THE DEPARTMENT of Justice (DoJ) has issued a warning against the Web site www.philippinesprojectawardcommission.info, which claims to be the “central procurement agency of the Philippine Government.”
The DoJ-Office of Cybercrime (DoJ-OOC), in a statement released Monday, said the site, already inaccesible as of yesterday, is posing as the Philippines Project Award Commission (PPAC) and its supposed authorized agents, Champs Court Business Consulting Agency Services, aim to defraud the public.
The DoJ-OOC said PPAC, through its site, “illegally conducts online public bidding, solicits money from foreign entities, and issues fake official receipts purportedly emanating from the Philippine government agencies,” among other fraudulent activities.
PPAC claims on its site that “The Commission may, by law, do anything to enter any transaction which it considers necessary or desirable for the proper performance of its functions.”
DoJ-OOC said the PPAC is not recognized by the government nor is it legally registered with the Securities and Exchange Commission.
“The general public is hereby advised to exercise extraordinary caution in conducting online transactions so as not to unwittingly fall prey to such other similar fake websites,” the DoJ said. — Gillian M. Cortez

Only gasoline up this week

THE MOVEMENT of oil prices will be mixed this week, with gasoline registering the only increase at P0.30 per liter (/L), oil companies advised on Monday. Diesel will be unchanged after last week’s increase by P0.25/L. Kerosene prices, meanwhile, will be reduced by P0.20/L. Last week, gasoline rose by P0.15/L, while kerosene was unchanged. For most of the oil companies, the price changes will take effect at 6 a.m. today. This week’s price adjustments come as the Department of Energy (DoE) told the companies to submit by Friday their implementation plan on its directive to start selling Euro 2 diesel, which is cheaper per liter by around P0.28 to P0.30 than Euro 4, currently what is widely sold in the market. The move is also meant to foster competition, thus allowing fuel prices to go down and ease the nationwide inflation rate, the (DoE) said. — Victor V. Saulon

Multi-response vessel #10

The BRP Cape Engaño, the last of 10 multi-role response vessel (MRRV) to be turned over by the Japanese government to the Philippines, arrives at Pier 13 in Manila on Aug. 20.

P25M worth of ecstasy drugs seized at NAIA

A PARCEL containing P25 million worth of the party drug ecstasy was seized at the Ninoy Aquino International Airport (NAIA) on Aug. 17, and the claimant was nabbed upon pick-up of the package. Bureau of Customs-Port of NAIA officers identified the claimant as Joan Loteia Reynoso, 42, a resident of Cavite City. The parcel from France was consigned to James Stanly and was sent by a certain Robeto Stanly. The 14,720 pieces of ecstasy were concealed inside the central processing unit of a desktop computer, which arrived at the Central Mail Exchange Center in Pasay City on Aug. 4. The illegal drugs and the claimant will be subjected to legal proceedings and will be turned over to the Philippine Drug Enforcement Agency for further investigation.

Ninoy

A statue of Benigno Simeon “Ninoy” Aquino Jr., who was assassinated at the Manila airport now named after him 35 years ago today, was unveiled on yesterday at the Heroes Park in San Fernando, Pampanga. The unveiling ceremony was led by Senator Paolo Benigno A. Aquino IV, his nephew. The late Aquino’s murder prompted a series of events that eventually led to the end of the Marcos martial law era.

Suspected drug trader Lim eludes arrest

BUSINESSMAN PETER Go Lim was not at his known residence in Cebu City when officers of the Mabolo police station and the police Criminal Investigation Branch served the warrant for his arrest yesterday, Aug. 20. CIB Deputy Chief Henrix P. Bancoleta said they will continue to monitor the house as well as other places registered to Mr. Lim, who is facing charges for his alleged involvement in the illegal drug trade. The arrest warrant was issued by the Regional Trial Court Branch 65, Makati City on Aug. 14. — Reports from The Freeman

Disputed P18-B resorts and casino project to break ground Aug. 25

THE CONTROVERSIAL P18-billion integrated resorts and casino project on Kawit Island will break ground on Aug. 25, Cebu City Executive Assistant to the Mayor Francisco “Bimbo” L. Fernandez said in an interview with the media yesterday. The project will be undertaken by the Gokongwei-led Universal Hotels and Resorts, Inc., (UHRI), which signed a Joint Venture Agreement (JVA) with the city government last Aug. 17. Opposition city council members have filed a case seeking to void the resolution authorizing Cebu City Mayor Tomas R. Osmeña to enter into a JVA with UHRI as well as a temporary restraining order on the project. — The Freeman
>> See related story on https://goo.gl/EYSS7u

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