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Budget talks delaying passage of service incentive leave bill

A BILL increasing worker’s service incentive leave (SIL) benefit to 10 days has been set aside for the moment while the Senate concludes budget deliberations, legislators from both chambers said.
“We are already in the period of interpellation for the Service Incentive Leave. Once we finish the budget deliberations, we will push for the measure to be taken up on the floor,” Senator Emmanuel Joel J. Villanueva told BusinessWorld in a phone message on Wednesday.
Senate Bill No. 1614, which proposes to increase SIL to 10 days with pay from the current five days, is awaiting second reading. Its counterpart measure, House Bill No. 6770 hurdled third reading on Aug. 29.
Cagayan 3rd district Rep. Randolph S. Ting, who chairs the House Labor and Employment Committee, said the passage of the measure will wait on the budget proceedings in the Senate.
“The problem is that the Senate is not yet done with the Budget,” Mr. Ting told BusinessWorld in a phone message. “That constraint will affect the scheduling of all concerns in the Senate.”
The Senate is expected to continue deliberations on the General Appropriations Bill for 2019 when session resumes on Jan. 14.
Congress will then go on break on Feb. 8 and resume on May 20, following the election period. The 17th Congress officially adjourns on June 7.
The Employers Confederation of the Philippines (ECOP) said the potential for increased paid leave will affect productivity and the cost of doing businesses.
“While ECOP does not begrudge increasing the grant of service incentive leave, it is concerned that any further reduction in the number of working days, particularly through additional paid leaves, impacts not only on productivity, but also on the cost of doing business and viability of micro and small enterprises,” ECOP said in a position paper.
ECOP proposed that the Department of Labor and Employment issue guidelines exempting small and micro enterprises based on each establishment’s financial condition.
Both versions of the bill exempt establishments that employ less than 10 people. The expanded SILL in both versions also does not apply to employees already entitled to paid vacation leave of at least 10 days. — Charmaine A. Tadalan

DTI bans sale of uncertified steel bars

THE Department of Trade and Industry (DTI) said it imposed new rules covering the product safety (PS) certification of certain steel bar products.
Administrative Order No. 18-08 published last week said the DTI will only allow the domestic distribution of deformed steel bars, rerolled steel bars and equal leg angle steel bars if these products come from plants certified by the Bureau of Philippines Standards (BPS).
“For safety, traceability and accountability purposes, only steel products sourced from steel manufacturing plants holding a valid PS Quality and/or Certification Mark License shall be permitted to be distributed, sold and used in the Philippines,” the DTI said in its order.
The PS licensing scheme is available to both domestic and foreign companies.
Compliance will be determined through an annual audit at the factory. Domestic companies will also undergo regular audits at their warehouses while foreign companies will likewise go through the process on a per-shipment basis.
The PS license is effective for three years and is subject to regular compliance monitoring. It may be withdrawn, suspended or cancelled any time if a company is found unable to pass the BPS’ evaluations.
Importers need to secure a statement of confirmation for each product and bill of lading to ensure that the shipment is sourced from a PS-licensed manufacturer.
Deformed steel bars and rerolled steel bars are used as concrete reinforcement for commercial, residential and industrial buildings.
Equal leg angle steel bars are also used for commercial, residential and industrial buildings but with wider application in trusses, sections and steel frame.
The Philippine Iron and Steel Institute (PISI) has asked the government to act on the proliferation of substandard and uncertified steel bars.
As of Aug. 28, the BPS oversees the certification of 88 various products. — Janina C. Lim

MWSS, NIA to jointly carry out key projects

THE Metropolitan Waterworks and Sewerage System (MWSS) and National Irrigation Administration (NIA) will share resources to better participate in the government’s infrastructure program, MWSS said.
In a statement, MWSS Administrator Reynaldo V. Velasco said he and NIA Administrator Ricardo R. Visaya had agreed to help solve the water and food security problems of their stakeholders through joint projects that include flood mitigation.
Mr. Velasco said the water supply in Metro Manila and nearby provinces remains adequate, but more sources need to be developed for water security in the agency’s coverage areas.
Of the water supplied to the MWSS service areas, 96% is sourced from the Angat-Umiray water system, 3% from Laguna de Bay and 1% from ground water, he said. The agency has not developed new sources in decades except for the Angat-Umiray system, he added.
MWSS is implementing several water infrastructure projects, including the Bulacan bulk water supply project and what is collectively named the “Angat Water Security Projects.”
Mr. Velasco said of the agency’s 46 cubic meters per second (cms) of water rights, 15 cms is from the NIA’s 36 cms water rights as called for under Resolution No. 03-0188 of the National Water Resources Board (NWRB).
The distribution leaves NIA with 21 cms equivalent to 1,814 million liters per day (MLD). NIA’s Bustos dam currently has a capacity of 600 MLD, leaving 1,214 MLD that can be tapped for potable water.
He said MWSS had recently entered into a memorandum of agreement with ITP-JV Co. to conduct a feasibility study on the use of the untapped water.
ITP-JV Co. submitted an unsolicited proposal to extract an average flow of 800 MLD, of which 400 MLD will augment the water supply of Bulacan, and 400 MLD will be used by MWSS.
The water extraction will be done in two phases, with the first one calling for the extraction of 250 MLD by 2020-2021. The second phase will extract 550 MLD, and will be completed by 2022-2024.
Mr. Velasco said the move is the first part of the agency’s “ABC Projects.” It will form part of the Angat-Ipo-Norzagaray water optimization plan.
The other components of the ABC Projects are the Bayabas dam project and the Candaba multi-purpose impounding dam. The Bayabas project is in Doña Remedios Trinidad, Bulacan.
The completion of these projects will provide the desired water security level for mega Manila for the next five to 10 years, he said.
For NIA, the projects mean sufficient water supply for irrigation as it fulfills its objective of agricultural productivity, economic growth and food sufficiency, MWSS said. — Victor V. Saulon

Senate approves bill extending TIEZA power to grant incentives

THE SENATE approved on third and final reading a bill extending the authority of the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) to grant incentives to tourism enterprises until Dec. 31, 2029.
Senate Bill No. 1616 was approved with 17 affirmative votes, zero negative votes, and no abstentions on Dec. 10. The bill seeks to amend Republic Act No. 9593 or the Tourism Act of 2009 to allow the implementation of the incentives scheme to tourism enterprises for another 10 years.
Under the current law, TIEZA has only until August 2019 to grant its incentives.
According to the bill’s committee report, the passage of the proposed measure was sought by the Senate Blue Ribbon Committee after it was revealed during its hearings in 2016 that TIEZA not granted incentives since 2009 due to the lack of Revenue Regulations issued by the Bureau of Internal Revenue (BIR).
After two Senate hearings on the issue, the BIR issued Revenue Regulation No. 7-2016. The revenue regulation noted that the incentive schemes are only effective until 2019 due to the 10-year limit provided in the law.
“While we should be glad that finally the BIR has acted and performed its duty by releasing a Revenue Regulation, we pause to realize the 10-year period granted for incentives in reality means a period much less than the ten years. The law was passed in 2009. So the incentives will end on 2019. This tells us that incentives can run for less than two years only. This is not what the Congress intended this to be,” Committee Report No. 169 stated.
The Senate panel then moved for the passage of the bill that removes the provision in the law which limits the grant of incentives within the 10-year period and extended the grant to Dec. 31, 2029.
The incentives TIEZA can grant to tourism enterprises include income tax holidays for a period of six years, a 5% preferential tax on gross income, exemptions on all taxes and customs duties on the importation of capital equipment, as well as the exemption of transportation equipment and spare parts from tariffs and duties.
TIEZA is also authorized to give preference to “large investments” that provide jobs and that involve local small and medium enterprises.
The bill’s counterpart measures in the House of Representatives, House Bill No. 7333 and House Bill No. 7535, remain pending at committee level. — Camille A. Aguinaldo

Tax court rejects P219-M Petron refund claim

THE Court of Tax Appeals (CTA) rejected for lack of merit Petron Corp.’s claim for a refund of P219.12 million worth of excise tax allegedly collected erroneously by the Bureau of Internal Revenue, ruling that a gasoline component imported by the company is subject to tax.
In a decision promulgated on Dec. 18, the CTA special second division ruled that Petron’s import of alkylate, a blending component in motor or aviation gasoline, is subject to excise tax under the Tax Code as it is similar to naphtha, a raw material used in making petrochemical products, and regular gasoline.
Section 148(e) of the National Internal Revenue Code of 1997 states that naphtha, regular gasoline, and other similar products of distillation as well as the by-products of processing of naphtha are subject to excise tax as soon as they are produced.
The Court concluded from the testimony of Petron’s witnesses that although alkalyte is formed through a different process, the raw materials in producing it are formed through distillation.
“Based on the afore-quoted law, excise tax shall attach to refined and manufactured mineral oils or motor fuels such as naphtha, regular gasoline, and other similar products of distillation as soon as they come to existence,” it ruled.
“As such, it is obvious that alkylate first undergoes the process of distillation, because it cannot come into existence without its raw materials, olefins and isobutane. Since it can be considered as a product of distillation similar to naphtha, alkylate is subject to excise tax, pursuant to Section 148(e) of the NIRC of 1997, as amended,” it added.
Petron was claiming a refund of the excise tax it paid from September 2012 to December 2012 worth P148.55 million and from February to July 2013 worth P70.61 million.
It claimed that alkylate is not among the petroleum products listed in the Tax Code and cannot be considered as motor fuel. It also said that it is not a product of distillation and is solely used as a blending component in making unleaded premium gasoline.
The CTA also cited its decision in a previous case also involving Petron in which it ruled that alkylate is subject to excise tax as it is an “intermediate or raw gasoline component that possesses properties, especially octane and aromatics that meet gasoline requirements.” — Vann Marlo M. Villegas

OFW regulator outlines exemptions to Iraq worker deployment ban

THE Philippine Overseas Employment Administration (POEA) said it will exempt certain classes of Overseas Filipino Worker (OFW) from the deployment ban to Iraq.
In Memorandum Circular No. 17, Series of 2018, the POEA said it will exempt from the ban employees of companies holding Iraqi government contracts, as well as OFWs working for the governments of member-states of the International Coalition, the United States, the United Nations, and other international organizations and non government organizations. OFWs who work as private staff to foreign diplomats in Baghdad and senior officials of the Iraq government are also allowed to return to Iraq.
The exemption also applies to returning workers living in Babil, Baghdad, Basra, Dhiqar, Karbala, Maysan, Mathunna, Najaf, Qadisiyah, Saladin, Wasit and other areas certified as safe by the Philippine Embassy in Baghdad.
The guidelines follow the issuance of POEA Governing Board Resolution No. 6 on Sept. 4, which incorporates input from the Department of Foreign Affairs (DFA).
“Under the selective Balik-Mangagawa (BM) Exemption Program proposed by the DFA to exempt returning workers from the current deployment ban imposed on Irag, the following guidelines are hereby issued for processing and deployment of returning workers,” the Memo Circular said.
Workers still covered by the deployment ban are newly-hired or returning household service workers and domestic workers; and newly hired or returning workers intending to live and work in no-go areas in Northern Iraq (Anbar, Nineveh, Kirkuk, and Salahuddin).
The DFA has notified the Department of Labor and Employment (DoLE) that it has lowered the Crisis Alert Level from 4 (Mandatory Repatriation) to 3 (Voluntary Repatriation).
According to the DFA, there are around 4,000 OFWs based in Iraq which includes 3,000 in the Iraqi Kurdistan region. — Gillian M. Cortez

US citizen-based taxation: A drawback for American expats

Under the citizenship-based taxation approach, a US citizen working or enjoying retirement in any country outside the US shall continue to be subject to US income tax. This rule signifies that individuals are taxed based on their citizenship irrespective of their place of residence. In other words, if an American is outside of the US at any time during the year and earned income abroad, US Federal law requires him to file his Individual Income Tax Return or Form 1040, to report his worldwide income, and to pay taxes to the Internal Revenue Services (IRS). This makes the US one of only two countries (the other being the African nation of Eritrea) implementing this tax regime; other countries tax worldwide income of residents, but not citizens living elsewhere. For American expats, this entails recurring tax obligations on top of evaluating the tax impact in the foreign country where they are assigned to work. So even if an American expat is working in a tax-free country, he or she is still required to file income tax returns with the IRS — an obligation which, surprisingly, some Americans working overseas seem to be unaware of.
Another trap among American expats is the false assumption of having escaped tax obligations due to the acquisition of citizenship of another country. Despite multiple citizenships, the same US tax rules will apply as long as the taxpayer remains a US citizen.
That being said, here are some important reminders on US tax filing of Americans residing abroad:
1. The tax filing deadline automatically extends to June 15. American citizens are allowed an automatic two-month extension to file their return without the need to request for an extension. For a calendar year return, the automatic two-month extension is from April 15 to June 15. The extension does not include the deadline for payment of taxes. Hence, payment of taxes after April 15 shall be subject to interest for late payment.
2. Americans can qualify to exclude all or a portion of their foreign earned income from US taxation. Although foreign earned income is required to be reported as part of the taxpayer’s gross income in the US, Section 911 of the US tax code allows the taxpayer to exclude these foreign earned incomes from taxation in the US. Generally, this rule aims to place US citizens abroad on equal footing with their foreign counterparts. The IRS allows a general exclusion of up to $104,100 in 2018 (or $102,100 in 2017), subject to annual adjustment of amount due to inflation. In addition, they may also either exclude or deduct costs for foreign housing.
3. US citizens can elect to deduct foreign income tax as an itemized deduction or claim foreign tax credits against their total US tax. The purpose of either election is to mitigate double taxation that would otherwise occur if both the IRS and a foreign country tax authority taxed the same income. In general, a credit is almost always better than a deduction because a credit reduces the taxpayer’s tax liability on a dollar-for-dollar basis. On the other hand, the value of a deduction is tied to the taxpayer’s marginal tax bracket, making tax savings only equivalent to the marginal tax rate.
4. Taxpayers need to make estimated tax payments. Per IRS guidance, taxpayers must generally pay at least 90% of their taxes throughout the year through withholding, estimated tax payments, or a combination of the two. If they don’t, they may owe an estimated tax penalty. To avoid penalties, individuals must pay estimated tax if they expect to owe tax of $1,000 or more when their return is filed.
5. Taxpayers must file informational forms for foreign accounts. If a taxpayer has a financial interest in (or a signature authority over) foreign or non-US banks, securities or other financial accounts, either business or personal, he or she must file FinCEN Form 114 or Report of Foreign Bank and Financial Accounts (FBAR). This form should disclose foreign accounts that hold an aggregate of more than $10,000 at any time during the calendar year.
6. State tax filing must be checked. Federal tax filing does not cover state tax obligations. Considering that tax laws vary greatly from state to state, it is mandatory that taxpayers check if they are required to file state income tax returns to the revenue department of the state(s) of either their residence or the place where income their was earned.
To err on the side of caution, it is advisable for US citizens who live and work abroad to seek assistance from tax advisors before proceeding with tax filing. From a long-term perspective, legislators may need to revisit the citizenship- based taxation system and consider a simpler and fairer alternative that would encourage Americans to work abroad and help them save more. In the meantime, US expats will have to contend with the current tax system to avoid incurring penalties, with the hope that the Federal tax code may someday be amended to their benefit.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
 
Aniway L. Asi is a senior manager at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.
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aniway.asi@ph.pwc.com

Technology’s story for 2018

By Shira Ovide
IT was another momentous year for the technology industry — not necessarily in a good way. Here is Bloomberg Opinion’s assessment of the eight biggest themes in technology for 2018 and what they tell us about the industry’s future.
Similar to 2017, a common thread in several of these themes is disillusionment about technology or the companies behind it. The list, in reverse order of importance:
8. Hopes and Fears for Driverless Cars: In the eight years since Google’s driverless car project first hit the news, much progress has been made, but there have also been some serious setbacks. Early this year, an Uber Technologies, Inc. automated car with a backup driver struck and killed a pedestrian — a tragic sign of how far autonomous transportation is from being ubiquitous, reliable and trusted. Tesla, Inc. and Google spinoff Waymo also struggled at times with driver-assistance technology and a new driverless taxi service, respectively. There’s promise for autonomous driving technology, but it will take years to come to fruition, and it may not be a transportation cure-all.
7. Tech Employees Find a Voice: Workers spoke out against their employers on important issues including Google’s work on a possible web search service for China, use of technology for military projects or law enforcement and payments made to executives accused of improper workplace behavior. The employee activity helped spur policy changes in some cases — or what critics called window dressing. Tech companies’ most valued assets are their employees, and now those people want more of a say in how their companies treat them and how they influence the wider world.
6. Good News/Bad News for Chips: Chipmakers grappled with a US-China trade battle that slapped tariffs on their goods, and there were fears of a crash after a five-year industry boom. In bright spots, there were advances in purpose-made chips from tech companies such as Amazon — good for market competition but bad for giants such as Intel. And TSMC reached a manufacturing milestone that showed the made-to-order chip company is the most important, largely unknown tech power. It’s clear that computer chips will be essential electronic brains for the future with computing everywhere, but the path there is tumultuous.
5. Uber’s Quieter Year (in a Good Way): Chaos was the norm for Uber in 2017, with repeated controversies over its workplace culture, legal and regulatory problems, boardroom divisions and the ouster of Travis Kalanick as CEO. What a difference a year and new boss make. New CEO Dara Khosrowshahi won some peace with regulators and employees and struck a deal to throw money at restive stockholders. Uber will never be completely free of crisis, and doubts remain about its viability. But Uber’s relative calm, and its path to a 2019 IPO, show how quickly a company in crisis can turn the page.
4. Money, Money Everywhere: With exceptions, it was another flush year for superstar young technology companies. Investments in tech start-ups are set to surpass $200 billion this year, according to PitchBook data, which would be the largest funding haul since the dot-com bubble. Tech IPOs broke out after a soft patch, and 2019 may bring listings from young guns such as Uber; Lyft, Inc.; Pinterest, Inc.; and China’s Bytedance Ltd. But China had a wobbly year for start-up investments, and some newly public companies faltered. The big fear: Elite start-ups founded since the financial crisis have never lacked for fresh cash and built their businesses accordingly. If money gets tight, things could get ugly.
3. China Versus US: The countries’ feud meant the industry was never free from the political winds. The White House intervened to reverse an effective corporate death penalty for China’s telecom-equipment maker ZTE Corp. US fears about China’s telecom-and-smartphone giant Huawei Technologies Co. led the US government to quash Broadcom’s proposed megamerger, and it sought to fan security concerns among Huawei customers. The arrest of a top Huawei executive is souring relations between the two countries. The developments showed the tech industry isn’t a harmonious sun but planets with separate orbits.
2. Cracks Widen for Big Tech: Simultaneously, the global technology superpowers were too powerful for their own good, and too vulnerable. There was a continued reckoning about the terrible downsides of popular internet hangouts such as Facebook and YouTube, and lawmakers in multiple countries questioned whether tech giants needed to be broken up or otherwise handcuffed. Inside China, the industry was roiled by clashes with the government. In the same year that Apple, Inc. and Amazon.com, Inc. each briefly reached $1 trillion in stock market value, growth hiccups hit those two, plus Facebook, Inc., Tencent, and other giants. It bears watching whether regulators seek limits on tech giants just as their power ebbs on its own.
1. Facebook’s Catastrophic Year: It’s hard to think of any big company in any industry that had a worse 365 days. There was the scandal over Cambridge Analytica, which epitomized Facebook’s years of lax privacy standards. Mark Zuckerberg acknowledged that use of Facebook’s social network hit a wall, and its advertising machine sputtered — sparking a record loss of stock market value. Important insiders fled, and the moral leadership of senior executives came under question inside and outside the company. The United Nations blamed Facebook for sowing ethnic violence in Myanmar; the company was a punching bag for lawmakers; and there were more ugly details about foreign propagandists abusing Facebook for mischief.
The company has done much to try to repair itself, but Facebook is the world’s ills reflected online and magnified. It’s not clear how Facebook recovers without a fundamental overhaul of its system of hands-off advertising, massive data collection and reward for attention-seeking. Facebook has weathered many storms in its nearly 15-year history, but this is the most intractable crisis period. Expect more shake-ups next year.
 
Shira Ovide is a Bloomberg Opinion columnist.

ARMM takes a bow, ends on a high note

By Amir Mawallil
BY the first quarter of 2019, the regional government we now call the Autonomous Region in Muslim Mindanao (ARMM) will cease to exist following a referendum in January.
In its place will rise a new regional juridical entity that will be called the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM).
BARMM is the result of decades of armed and peaceful struggle by the Bangsamoro for self-determination. With good governance, as well as full support from the national government, this new regional entity should be able to fulfill most — if not all — of the goals the Bangsamoro has fought so hard and so long to gain.
The existing ARMM was created in August 1989 under Republic Act No. 6734 during the Cory Aquino administration. Following the law’s 2001 revision, its coverage now includes the provinces of Maguindanao, Lanao del Sur, Basilan, Sulu, and Tawi-Tawi, as well as the cities of Marawi (Lanao del Sur) and Lamitan (Basilan). According to records, the region’s population was 3.78 million in 2015, a population that grows at a rate of 2.89% annually.
Before ARMM Governor Mujiv Hataman took the helm of the regional government in December 2011, the following served as the region’s chief executives: Zacaria Candao (1990-93); Lininding Pangandaman (1993-1996); Nur Misuari (1996-2001); Alvarez Isnaji (2001); Parouk Hussin (2001-2005); Zaldy Ampatuan (2005-2009); and Ansaruddin Adiong (2009-11).
While the Bangsamoro Organic Law (BOL) signed by President Duterte in July means ARMM’s demise, ARMM functionaries led by Hataman pushed consistently for the passage of the BOL and the creation of the BARMM.
“It will help end the decades-long armed conflict and violence in the region,” Hataman said during a gathering in Cotabato City in August.
The good governor and his team said the ARMM has its faults and limitations: in 29 years of existence, it was only in recent years that good governance and socioeconomic milestones were achieved.
The capacity for more consistent progress was compounded further by major peace-and-order problems in recent years. These conflicts were fueled by historical injustices committed against the Bangsamoro — and they prevented both public and private investments from flowing freely into the region. This resulted in a development imbalance between Moro and non-Moro provinces in Mindanao that widened perennially.
Under Hataman, the regional government started getting its house in order in 2012. It crafted a massive and strategic development plan for the entire region. The ARMM also set up databases and institutionalized data-banking for its line agencies — all unprecedented moves. Before Hataman, there were no clear lines or databases of information on the regional government’s policy decisions, and expenditures or development plans. There was no definite archive of documents upon which we could base future actions and decisions.
This initiative of setting up institutional systems within the bureaucracy earned the ARMM its first International Standardization Organization (ISO) certification in 2016. Earning an ISO certification meant the regional government reached international standards and requirements for its management systems. The scope of the certification included the provision of completed staff work for the governor’s issuances and engagements.
This observation that the ARMM’s improved governance makes a positive socioeconomic impact in areas within its jurisdiction is supported by hard and reliable data. These changes under Hataman’s stewardship were achieved despite major challenges the whole region struggled with in the recent years — from the Mamasapano clash in January 2015 to the Marawi Siege in May 2017.
Gov. Hataman recognized ARMM’s weaknesses and pushed for three reform pillars: good governance, peace and security, and socioeconomic development.
In terms of good governance, the ARMM’s drive to promote efficiency and effective administration among its local government units yielded significant results. Last year, 19 municipalities and one city in the region were conferred the Seal of Good Local Governance, under a program of the Department of the Interior and Local Government (DILG).
This year, 23 local government units (LGUs) in the region were conferred the 2018 Seal of Good Local Governance.
The ARMM also has the most number of local government passers among Mindanao’s regions. It should be noted that, in 2015, not one LGU in the region passed the Seal’s criteria. In 2016, only six of over a hundred LGUs in ARMM were given similar recognition.
Recognized by DILG through the Seal of Good Housekeeping Award in 2010, the ARMM continues to raise the bar of accountability and transparency for local government executives. The DILG conferred the award after a thorough assessment of LGUs’ performance, especially in four core areas: financial administration, disaster-preparedness, social protection, and peace and order.
Another major breakthrough of the Hataman administration was the establishment of the Regional Human Rights Commission. This came to fruition after more than 20 years of ARMM’s existence. This milestone is critical, especially in a region that was known for many human rights abuses in the past.
When Hataman took his oath as caretaker in charge of the ARMM in December 2011, one of the things the Department of Education’s Central Office commended the ARMM for was the regional government’s continuing data cleansing process that resulted in the delisting of hundreds of thousands of “ghost learners.” Many of these ghosts were literal ones.
Ghost employees are “employees” whose names are recorded on the payroll system. They do not actually work for the institutions in which they supposedly belong. These ghosts can either be real people who, knowingly or not, are placed on the government’s payroll despite their lack of involvement in the day-to-day business of governance. And more often than not, these fictitious people are also invented by dishonest employees.
Hataman took the lead in the ARMM, a region haunted not just by the burdens of its past, but also by the ghosts that gained a foothold in the region’s deeply rooted system of graft and corruption — a system Hataman sought to change.
ARMM has also been commended by the Government Service Insurance System (GSIS) on the settlement of more than P2 billion in accounts payable that burdened most of the region’s teachers — this was a burden for teachers in the region for years prior to Hataman’s assumption as OIC governor.
The region’s latest economic indicators, which were made available early this year, are impressive. For instance, its gross regional domestic product (GRDP) grew by 7.3% in 2017 from a dismal 0.3% in 2016.
Last year’s performance showed the highest growth rate achieved in the region’s history. It even surpassed the national growth rate estimated at 6.7% for the same period.
Statistics showed that the agriculture, hunting, forestry, and fishing sectors were the main contributors to the region’s record-breaking GRDP performance. That sector registered 15.5% growth in 2017 from a mere 4.3% in 2016. ARMM is predominantly agricultural, with a 56.4% share in the region’s economy.
Even as fighting in Marawi started in the second quarter of 2017, investment in ARMM kept growing, with P3.65 billion in total commitment in the first half of that year. The figures reported by the Regional Board of Investments were higher by almost 74%, compared to 2016’s total registration of P2.1 billion.
The ARMM, in the last seven years of the Hataman administration, has recorded more than P20-billion registered investments that generated thousands of jobs. These occurred through government initiatives that not only created jobs but ensured fair wages. The betterment of the people of the Bangsamoro region has been made by the ARMM through large-scale job creation and assured job security. Better investments within the ARMM revitalizes the region and makes an important contribution to the national economy as well.
Hataman said in his last public address on Dec. 19 that with the BOL, the Bangsamoro government will have more freedom to decide on vital matters for itself. This, in turn, will speed up service delivery and the implementation of projects. The BOL is the strongest symbol of triumph for the peace process. If the BOL is ratified, the Bangsamoro can close an old chapter of conflict and division.
Yes, the ARMM is closing its last chapter in the Bangsamoro region. But it is bowing out on a high note, with many good lessons and gains to turn over as both legacy and gift to the BARMM, which can and should build on this strong foundation.
This will send a clear message across the nation and the world: the strife in Mindanao is over. The Bangsamoro are fully prepared and eager to face a more prosperous future.
 
Amir Mawallil, a former Mindanao correspondent of BusinessWorld, is the director of the public information office of the Autonomous Region in Muslim Mindanao.

The necessity of lifelong learning

TWO Thousand Eighteen, how shall I describe you? Any reflective adult would probably say, as each year of their adult life draws to an end, that it was indeed “the best of times, the worst of times.” This year closes with no difference. It has been both good and challenging.
Every challenging period in one’s life demands a revisiting of the models by which we cope and operate. On a personal level, it could mean looking at one’s life plan relative to one’s priorities and goals. Take, for example, one 20-year-old male belonging to Generation Z for whom money and financial security was so much of an immediate goal (and given this person’s unique situation, arguably rightfully so) that he quit school in order to work.
It sounded good until he encountered the typical challenges of a sales job: high levels of mobility and social interaction, having to think on his toes in front of clients, the preparation and submission of reports even after work hours, and the sheer demand of increasing the number of prospects in order to increase the chances of closing more deals. Suddenly, the kind of life he was so used to — his program of appropriating a huge amount of time for church service, personal recreation, and friendly socializations — could not hold. Yet, this had always been his program for happiness, and it was no longer working for him.
On a professional level, it could mean looking at one’s job-related skills and competencies relative to the current business and corporate environment. One 50-ish female senior executive found herself leading a bunch of late Millennials and early-Generation Z supervisors and staff who, while passionate about their work and careers, have different skills sets, priorities, and sources of motivation from her. This younger generation is not motivated by career growth in the traditional sense (i.e., staying with a company for a long time and rising through the ranks). Rather, they are more interested in growing their skills and knowledge, building connections and networks, all the while maintaining an acceptable level of “work-life balance” or “work-life integration” where all elements seamlessly and joyfully meet.
Coming from a generation where hard work is equivalent to time spent (with a premium on unpaid hours clocked in as “malasakit”), where absolute obedience is expected when executing orders, where loyalty to the company and its owner override all other loyalties, and where public displays of anger and frustration were — in some milieus of the 1980s and 1990s — tolerated (if not accepted), this female senior executive found herself unable to get the results she wanted. Her style, while effective in her heyday, was no longer effective today.
While it would be easy — almost a cop-out — to say “it worked for me then, it should work today,” it might actually be unwise. Why? Because this new mindset, this new worldview is bound to stay a little longer than we would want.
On an entrepreneurial level, it could mean revisiting the new context for business and making the necessary adjustments. One male entrepreneur in his early 60s continues to think that the same laws and practices that were tolerated in the 1980s through the 1990s are still tolerated today. But the regulatory frameworks have changed. On employment, environment, taxation, and cultural trends alone, the changes are huge. Now, factor in the pressures of regional trade integration and globalization, and the competitive pressures are magnified.
Two Thousand Eighteen is just another year, like any year: it was difficult. But the difficulty, I suspect, was partly caused by our unwillingness, to a greater or lesser degree, to change, our paradigms of the world, learn new things, and acquire new skills and competencies. The change could demand that our businesses review its business model, for example, and learn to embed social and environmental standards and mechanisms, not as token philanthropic projects, but as part of business operations, in a world that is increasingly becoming mindful.
The change could demand that we continuously study and adopt management philosophies and styles that are more multistream (i.e., one that considers multiple forms of well-being for multiple stakeholders), and not just ones that are profit- or goal- (or worse, self-) oriented. The change could mean crafting a new life plan that reflects every priority area in our lives. All these in order to, at the very least, survive.
May 2019 be a time for new learning, and, beyond a life of survival, be a year of flourishing! Happy New Year!
 
Denver Bingski D. Daradar is an assistant professorial lecturer of the Management and Organization Department, Ramon V. del Rosario College of Business, De La Salle University.
denver.daradar@dlsu.edu.ph

The death of us?

I was born in the year of the First Quarter Storm. It was the same year that a 7.4 magnitude earthquake hit Luzon that killed 15 and injured 200, that Typhoon Sening left 575 dead in Camarines Sur, and that Typhoon Yoling ravaged Manila and killed 611. It was also that year that Pope Paul VI visited the Philippines and survived an assassination attempt.
That year, a constitutional convention was also called to revise and amend the 1935 Constitution, and a young constabulary officer led the New People’s Army in raiding the armory at the military academy. A Marcos was president, a Lopez was vice-president, a Laurel was House Speaker, and Roberto Concepcion was chief justice.
At the time, soft drinks, beer, and other beverages came in glass bottles. So did chocolate milk and pasteurized milk, which were sold in grocery stores. And people brought home groceries in boxes or brown paper bags. Processed food came either in a can or in waxed paper packaging, and “modern” supermarkets had only started using plastics for wrapping.
Over four decades after, the Philippines is now reportedly the third-largest contributor of plastic waste in oceans. And the culprit is mainly single-plastic products, according to the World Wildlife Fund. It noted on its website, “The low cost and convenience of plastic sachets, as well as inefficient waste disposal, has made the Philippines one of the world’s leading plastic polluters, with tremendous negative impacts on the environment.”
The UN Environment Programme (UNEP) also noted in its website, “our planet is drowning in plastic pollution,” and I believe that unless something drastic is done soon to better manage plastic production and plastic waste, mankind’s most important invention will also be its downfall. According to most accounts, the damage done in the last 50 years is severe.
“While plastic has many valuable uses, we have become addicted to single-use or disposable plastic — with severe environmental consequences. Around the world, one million plastic drinking bottles are purchased every minute, while up to five trillion single-use plastic bags are used worldwide every year. In total, half of all plastic produced is designed to be used only once — and then thrown away,” UNEP noted.
It added, “Researchers estimate that more than 8.3 billion tonnes of plastic has been produced since the early 1950s. About 60% of that plastic has ended up in either a landfill or the natural environment. We’re seeing some other worrying trends. Since the 1950s, the rate of plastic production has grown faster than that of any other material. We’ve also seen a shift away from the production of durable plastic, and towards plastics that are meant to be thrown away after a single use.”
It also said, “More than 99% of plastics are produced from chemicals derived from oil, natural gas and coal — all of which are dirty, non-renewable resources. If current trends continue, by 2050 the plastic industry could account for 20% of the world’s total oil consumption.” It also noted that by 2050, “our oceans could contain more plastic than fish.”
I truly believe that the present situation calls for stronger action from the national government, and more local governments, in restricting the production and use of single-use plastic, and in finding ways to better manage plastic waste production. This comes from the conviction that there will be no plastic packaging to throw and recycle if it was never produced and used in the first place.
It doesn’t seem like the plastic industry and businesses using them particularly for packaging can be expected to police and restrain themselves. Moreover, it can be easy enough for them to argue that if plastic was never used, then something else could have taken its place that could have resulted in just as much environmental damage or even worse. In addition, there is no actual data to prove that plastic bags can stay in landfills for hundreds of years considering that such bags have been in use only for about 50 years.
However, I still believe that plastic use is contributing significantly to environmental degradation, and that policies and regulations can still be calibrated to better manage plastics production and plastic waste management. One need only to look at our cities’ rivers and waterways, open canals, and bodies of water like Manila Bay to realize the damage caused by plastics.
Clean-up activities can only do so much. The same goes for efforts to make communities more aware of the damage caused particularly by single-use plastic and plastic packaging and limited recycling initiatives. Even limiting the use of items such as plastic bags cannot have as much positive impact as banning the production of certain plastic products altogether.
As UNEP noted, “From the 1950s to the ’70s, only a small amount of plastic was produced, so plastic waste was relatively manageable. By the 1990s, plastic waste generation had more than tripled in two decades, following a similar rise in plastic production. In the early 2000s, our output of plastic waste rose more in a single decade than it had in the previous 40 years. Today, we produce about 300 million tonnes of plastic waste every year. That’s nearly equivalent to the weight of the entire human population.”
We are now paying a steep price for our plastic addiction. Unless we curb this addiction, the cost to our environment will continue to go up. I understand that the world will have to accept, to some degree, the continued use of plastics. They have their benefits, admittedly. However, there should be better management of production and waste. And we should look into more technologies that will help in improving plastic production, recycling, disposal, and elimination.
 
Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.
matort@yahoo.com

US-PH friendship rings stronger in 2018

By Ambassador Sung Kim
MABUHAY Pilipinas! The holiday season is a time of celebration and reflection. Looking back over the past 12 months, 2018 was a fantastic year for the US-Philippines relationship. I’m proud of all that we accomplished with our Philippine friends and partners to improve livelihoods, spur greater trade and investment opportunities, and enhance peace and security.
Undoubtedly, the biggest success was the return of the three Balangiga Bells. I was privileged to witness their arrival at Villamor Air Base alongside our Filipino friends. Considerable efforts by many people made the return possible and demonstrated that we can achieve anything when we work together for a common purpose. As President Duterte proclaimed at the ceremony in Samar, the return “heralds a new and more vibrant chapter in our bilateral relations.”
My October visit to Marawi has been one of my most moving experiences as Ambassador. Seeing the devastation firsthand enabled me to better grasp the profound impact on people’s lives. From the onset of the siege, the United States has provided humanitarian assistance to the displaced and security assistance to the Armed Forces of the Philippines (AFP). In Marawi, I announced new funding under our Marawi Response Project to improve the lives of displaced families and host communities, bringing total US government assistance for the Marawi response to nearly P3.2 billion. We continue to stand by the people of Marawi as they rebuild their city and their livelihoods.
We made considerable progress on bilateral trade, including several achievements that resolved outstanding issues under our Trade and Investment Framework Agreement. Whether it was strengthening agricultural trade, funding supply chain development initiatives, or partnering on aviation infrastructure development, we’re working hard to become the Philippines’ top trade and investment partner. We are fortunate to have strong private sector partners leading the way, including over 600 companies in the American Chamber of Commerce.
Our ironclad military alliance was forged fighting shoulder-to-shoulder in World War II and Korea. This year, the Embassy partnered with the Philippine Veterans Affairs Office to award 91 Congressional Gold Medals to Filipino World War II veterans, some more than 100 years old. Their unbelievable acts of heroism and sacrifice were critical in the fight for freedom and democracy in the Asia-Pacific.
This security alliance, one of our oldest military partnerships, is now more important than ever. In 2018, we strongly supported the AFP’s modernization efforts — and the Philippines’ vital role in maintaining regional security — through the transfer of more than P1.8 billion in military equipment. The Philippines was the largest recipient of US foreign military financing in Asia. We also saw substantive progress with our Enhanced Defense Cooperation Agreement, which will enhance interoperability and the AFP’s disaster response capabilities. Together, we continue to fight terrorism, protect maritime spaces and freedom of navigation, and provide humanitarian assistance when disaster strikes.
Almost every Filipino I’ve met during my time here has some tie to the United States through personal experience, relatives, or friends. Hearing their stories, I’ve come to believe the unique strength of the US-Philippine relationship lies in the deep, longstanding bonds between our peoples. The human connection between us is unbreakable, linking our two nations’ past, present, and future.
After two years as Ambassador, I’m tremendously optimistic about the future of US-Philippine relations, thanks largely to the vibrant connections between our youth. This year, we celebrated the 70th anniversary of educational exchanges with the Philippines, which have sent 8,000 Filipinos to the United States and brought 1,000 Americans to the Philippines. Through exchange programs like the Young Southeast Asian Leadership Initiative, we continue to bring together dynamic American and Filipino youth to learn from each other and forge new collaborations. We are also enabling more Filipinos to prepare for global futures through study at US institutions and have even more education programs in store for 2019.
Every December is a special time, but this December has even greater meaning for me as it marks my two-year anniversary as US Ambassador to the Philippines. It is with great pride that I reflect upon a year of accomplishments. I’m confident 2019 has even greater things in store for us. To our Filipino friends, partners, and allies, Manigong Bagong Taon!
 
Sung Kim is the US Ambassador to the Philippines.

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