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Tax bureau moves to address businesses’ VAT concerns

By Elijah Joseph C. Tubayan
Reporter
THE 90-DAY deadline for processing value-added tax (VAT) refund claims now covers the actual payment of the amount, the Bureau of Internal Revenue (BIR) said.
This means that businesses and individuals claiming valid VAT refunds can get the cash payment from the BIR within 90 days.
Revenue Regulation (RR) 26-2018, signed by Finance Secretary Carlos G. Dominguez III and BIR Commissioner Caesar R. Dulay on Dec. 1, amended existing implementing rules and regulations of the VAT provisions under Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Act (TRAIN) that took effect a year ago.
The new regulation states that: “[t]he 90-day period to process and decide shall start from the filing of the application/claim for refund up to the release of the payment of the VAT refund… Provided that the claim/application is considered to have been filed only upon the submission of the official receipts of invoices and other documents in support of the application as prescribed under pertinent revenue issuances.”
Previously, the 90-day timetable ran up to the date of approval by the Commissioner of Internal Revenue or by his authorized representative of the recommendation report on the application of VAT refund claims, with the applicant not necessarily receiving the encashed VAT refund within that period.
The rule applies to zero-rated sales of goods or properties, zero-rated sale of services and all other claims for VAT refunds or credit of input tax.
The new regulation also said that the rule takes effect immediately.
“That’s good news for the taxpayers and more in keeping with the requirements of the TRAIN. We expect to see continuous improvements in the VAT refund system to show Congress that BIR is complying with the requirement of having an enhanced VAT refund system,” P&A Grant Thornton’s Tax Advisory & Compliance head Eleanor L. Roque said in a mobile phone message yesterday when sought for comment.
TRAIN — among several other adjustments in the tax system — shortened the processing time of VAT refund claims to 90 days starting 2018, from 120 days previously.
The new regulations also provided that all pending VAT refund claims as of Dec. 31, 2017 should be fully paid in cash by Dec. 31, 2019.

Quezon City kicks off 2019 with tax relief

THE QUEZON CITY government kicked off the new year by announcing relief for real property and business tax payers.
Specifically, the local government suspended a real property fair market value (FMV) hike until after 2019, is offering an amnesty for real property tax delinquencies, as well as exemption from audit of 2016, 2017 and 2018 books of account for those that pay 2019 business taxes that are at least 30% more than their 2018 payment.
The move comes amid elevated headline inflation and four months ahead of the May 13 local elections.
REAL PROPERTY TAX HIKE SUSPENDED
Ordinance No. SP-2778 Series of 2018 — signed by Mayor Herbert M. Bautista on Dec. 6 — states that collection of real property taxes based on SP-2556 Series of 2016 that raised Quezon City FMVs is “hereby suspended for two years, from the periods of 2018 and 2019”, ordering continued use of the lower 1996 FMVs.
The city government said that the ordinance was issued “to temper the effect of the significant increase in the prices of commodities on residents of Quezon City…” noting that inflation reached nine-year highs in the latter part of 2018.
The 2016 ordinance increases the FMVs of residential, commercial and industrial real properties by 400-733.33%, consequently raising tax payable by real property owners by 39-131%. New assessment rates, however, were cut to five percent for residential and 14% for commercial and industrial lands in order to temper the impact of FMV increases.
The updating of real property FMVs was planned in 2016 but was left unimplemented after the Supreme Court issued a temporary restraining order in favor of petitioners Alliance of Quezon City Homeowner’s Association, Inc. The high court lifted the injunction on Sept. 18 last year.
The city last adjusted FMVs in 1995, even as RA 7160, or the Local Government Code of 1991, requires adjustments every three years. This requirement is largely ignored, as local officials are elected very three years as well.
The city government projects an additional P700-million revenues in the first year of FMV hike implementation. Latest data from the Finance department’s Bureau of Local Government Finance showed that Quezon City contributed the most to total Metro Manila revenues in 2017, accounting for P15.161 billion of the National Capital Region’s P77.099-billion collections. Quezon City’s biggest tax source in 2017 was business tax with P9.204 billion followed by real property tax with P3.431 billion.
REALTY TAX AMNESTY
Ordinance No. SP-2779 Series of 2018, approved on Dec. 12, grants Quezon City residents condonation of payment of interest, surcharges, fines and other penalties on unpaid real property taxes on lands, buildings and machineries — except for those that have already been auctioned off, are being settled under compromise or similar agreements, and those with pending cases with the Quezon City Board of Assessment Appeal or in any regular court of law.
This amnesty, covering unpaid real property taxes up to 2018, runs from Jan. 1 to Oct. 30, 2019.
EXEMPTION FROM AUDIT
Ordinance SP-2780 Series of 2018, approved on Dec. 14, exempts those who have local business taxes payable in 2019 that are at least 30% more than the previous year from inspection and examination of their books of accounts “and other pertinent documents” covering calendar years 2016, 2017 and 2018.
This local business tax amnesty does not cover those with pending cases in courts of law or in administrative offices in relation to their business records.
The local law “shall make things easy, trouble-free, uncomplicated and simplify the procedure involved in payment of business taxes and… contribute to speedy, prompt facilitation of business permit and license renewal” and “will significantly… lessen the task of the employees of the Quezon City Treasurer’s Office whose invaluable time, effort and energy could be utilized and focused of other endeavors and activities geared towards revenue collection and mobilization.” — Elijah Joseph C. Tubayan

PCC leniency program rules take effect this month

THE Philippine Competition Commission’s (PCC) rules on its leniency program will take effect later this month, after the final version was published last week.
PCC Commissioner Johannes Benjamin R. Bernabe said the new rules were approved by its board, and will be effective 20 days after its Dec. 29 publication in two local newspapers.
“Hopefully, once people become familiar with the leniency rules, they will come forward,” Mr. Bernabe said in a phone interview last week.
The PCC is pinning hopes on its leniency program to speed up its preliminary inquiries and investigations on cartels.
Under the leniency program, the PCC offers whistle-blowers immunity from suit or reduction in fines in exchange for information and evidence about the reported anti-competitive agreement.
However, the ring leader of a cartel can only be granted a reduction of administrative penalties but never immunity to criminal liability.
Before any adjudication can start, applicants for the program will first have to apply for a marker which is seen to encourage cartel participants to compete against each other in providing information.
“A marker is necessary to protect an entity’s place in the queue for applicants under the Leniency Program and allows the entity an initial period of thirty (30) days within which to gather and submit information and evidence,” read the PCC-signed version posted on its website.
The applicant of the marker system must submit information on the alleged anti-competitive agreement; on the affected product(s); on the affected territory; the duration of the alleged anti-competitive agreement; and the reasons why the entity is eligible under the leniency program.
The PCC will also require information on the nature of the alleged anti-competitive agreement and information on any past leniency applications with the PCC and other competition authorities outside the Philippines in relation to the alleged anti-competitive agreement.
The PCC noted that the grant of leniency benefits is also conditional, hinged on the “continuing, full, and genuine cooperation” with the finality that has been reached in any and all cases initiated by the PCC in relation to the reported cartel.
Those found violating terms with the PCC will be stripped of the grant of a full immunity or declined a lower fine.
Those who will be found to have provided false, misleading or malicious information, data or documents will be fined with an amount not less than the penalty imposed on the violation of the entity complained of.
The leniency program is provided under Republic Act 10667 or the Philippine Competition Act of 2015. — Janina C. Lim

Fruitas eyes P2-B IPO by late 2019

By Arra B. Francia, Reporter
FRUITAS Holdings, Inc. (FHI) plans to push through with its P2-billion initial public offering (IPO) by the second half of 2019 to finance its aggressive store expansion.
FHI Chief Financial Adviser Calvin F. Chua said the fund-raising activity will support the company’s plan to grow at a clip of 150 to 200 stores annually.
“We’re looking to have an IPO sometime second half of next year… The proceeds will be used for store network expansion and upgrade of our facilities, and potential acquisitions. So we’re looking to further grow inorganically,” Mr. Chua said in an interview during the company’s media event in Quezon City earlier this month.
Established in 2002 with a single cart in Manila, FHI has since grown its network to about 950 stores across more than 20 brands, including Fruitas, Johnn Lemon, Juice Avenue, The Mango Farm, Jamaican Pattie Shop, Friends Fries, and The Mango Farm, among others.
Mr. Chua said the company has a bias for food brands when looking at inorganic expansion since it already manages several beverage brands.
“(It should be) something that we can grow fast. We get a lot of offers to takeover, but first of all we look at if it’s something that can be grown fast, and something that can be open to all classes of income. Kasi all of our products right now, it can serve all income classes,” Mr. Chua explained.
Once realized, this store expansion would double FHI’s store network in the next five years.
The company led by businessman Lester C. Yu further intends to grow its food park business, with three more potential sites in Metro Manila. FHI currently operates three food parks in Quezon City, namely 150 Maginhawa Food Park, Le Village, and Cascades.
Mr. Chua said they are also planning to expand the food park business to provinces near Metro Manila, noting that the company has an advantage since its brands already have some kiosks in several provinces.
“I think if you look at what we have it’s very different from a typical food park, plus we can bring our own brands. Our brands alone would serve as anchor tenants already. And because we are tenants ourselves, they trust that we will take care of them as tenants. That’s our unique selling point,” Mr. Chua explained.
FHI has engaged First Metro Investment Corp. and BDO Capital & Investment Corp. as the underwriters for the issuance.
Mr. Chua said the company generated P1.15 billion in revenues in 2017, translating to a net income of P173 million.
“This year we’re looking to grow strong double digit (in terms of revenues)… hopefully more than 20%,” he said, while adding that FHI is on track to beat last year’s net income for 2018.

Strong demand for condos, worker dorms seen this year

YOUNG professionals and employees of offshore gaming companies are expected to continue fueling the robust demand for residential condominiums and dormitories this year.
Colliers International Joey Roi H. Bondoc, manager for research at Colliers, said that employees of Philippine offshore gaming operators (POGO) and local professionals who are working in the central business districts (CBD) are looking for more residential units in the fringe areas of CBDs like Makati, Ortigas, and Fort Bonifacio.
“Colliers believes that a mix of demand from offshore gaming employees and local professionals is helping sustain the Metro Manila residential market, partly driving demand for other segments such as dormitories that cater to professionals and students,” he told BusinessWorld via e-mail.
The worsening traffic in Metro Manila is pushing young professionals to look for living spaces near CBDs.
For 2019, Colliers is expecting more residential condominium units and dormitories to be launched to cater to this demand.
“We believe that the demand for worker dormitories remains underserved. The need is also rising due to the worsening traffic situation in Metro Manila,” Mr. Bondoc said.
“Over the next 12 months, Colliers expects a more aggressive launch of worker dormitory projects especially in the Manila Bay Area to cater to growing number of employees in the business district as well as employees from the Southern Luzon provinces of Cavite, Laguna, and Batangas looking for halfway houses,” he added.
As offshore gaming companies expand outside of Metro Manila, particularly in Cebu, Pampanga and Laguna, residential projects in those areas will likely benefit.
Meanwhile, the luxury condominium market shows no signs of slowing, with Colliers noting it has “attractive rental yields in the region; relatively low prices; and sustained demand from affluent Filipinos, foreign investors, and offshore gambling firms.”
“The luxury market in the country’s capital is relatively small but demand has been stable over the past few years. The projects being leased out or sold to the secondary market continue to receive strong demand… The pent-up demand encourages mid-income condominium developers to scale up and construct high-end projects in emerging business districts such as the Manila Bay Area,” Mr. Bondoc noted.
However, Colliers said rising interest rates could dampen demand, particularly from the mid-income market.
“Rising interest rates which could dampen low to mid-income residential demand over the next 12 to 24 months. We believe that a volatile interest rate environment should entice local developers to be more open to partnering with foreign firms to develop horizontal and vertical residential projects,” Mr. Bondoc said. — Vincent Mariel P. Galang

Trina Solar mulls foray into minigrid business in PHL

By Victor V. Saulon, Sub-editor
TRINA Solar Energy Development Pte. Ltd. is looking at entering the minigrid business in the country and has tapped the services of lawyers to study the details of a regulation being drafted by government agencies covering the so-called “distributed power.”
“It’s actually a good market to penetrate. So that’s something that we are looking into. There are certain legal things that we need to abide with because I think for you to do that, I think you need to be certified to sell electricity,” said Junrhey Castro, Trina Solar country manager, in an interview after the company presented its plan in the Philippines.
“So there’s an RES (retail electricity supply) process. You need to be RES — there’s a certificate that you need to obtain,” he said, referring to the license being issued by the Energy Regulatory Commission (ERC) on entities that plan to sell electricity to “contestable” customers or those whose average monthly consumption in the past year reach a set threshold.
A minigrid or a microgrid acts as a single controllable grid and can connect and disconnect from the national grid to enable it to operate in both grid-connected or island mode. It has clearly defined boundaries.
“That’s a good part of the business and we’ve been looking into that. Actually what we have done is we’ve worked with another company who’s doing that business specifically. Though we are only supplying equipment to them. And we are giving technical advice, that’s already a good kickstart for us for that market,” Mr. Castro said.
“The grid is a big issue and if you can deliver products, services, basically the idea of that business is you become a utility provider on a small scale, a mini utility provider on the small scale,” Mr. Castro said.
For now, the company is looking into partnerships with local entities for projects that will give it a headstart in the minigrid business.
“We have to build a local company, where of course you have to abide with the 60-40 rule,” he said, referring to the limitation under Philippine laws that limit the ownership stake of a foreign entity to 40%.
Mr. Castro said it has started the process of creating a new company, which will have to be registered with the Securities and Exchange Commission.
“We have hired a legal lawyer to look into the technicalities of the draft and how we can penetrate into that market so we’re still on a discussion with them,” he added.
In the near term, Trina Solar is targetting to install 5-6 megawatts (MW) of solar rooftop energy systems in Filipino homes each year as it sets its sights on the local residential market.
“We have quite a bit of aggressive target in the Philippines,” Mr. Castro said. “Usually we are given the task of at least 10% market share.”
Mr. Castro, who is also Trina Solar senior sales head for Australia and Southeast Asia, said the installation would cover both residential and commercial market segments, and distributed as “a few kilowatts here and there.”
Trina Solar, which describes itself as a global leader in total energy solutions, recently launched its Trinahome solutions brand that focuses on residential consumers. The parent firm has previous projects in the Philippines but mostly industrial scale development.
Mr. Castro said Trinahome is a “plug and play” residential solutions that come with warranties and backed by an internationally bankable supplier.

Aboitiz property unit plans to launch projects in Pampanga, Davao

By Vincent Mariel P. Galang
ABOITIZLAND, Inc. is expanding its mid-market residential brand Ajoya in Pampanga and Davao City next year.
John A. Amon, AboitizLand vice-president for customer acquisition and innovation, said the company is launching new Ajoya communities in Acacia, Buhangin in Davao City and in Suclaban, Pampanga by the second quarter of 2019. The company is planning to launch a total of 400 units.
Mr. Amon told BusinessWorld via e-mail that the company is allocating a capital expenditure of P1.4 billion for the Davao project, and P2.7 billion for the Pampanga project.
This is part of the P7.5-billion capex the company has allotted for four Ajoya projects, including existing ones in Nueva Ecija and Tarlac.
AboitizLand expects P550 million in sales from the Davao development, and P450 million in sales from the Pampanga development.
Mr. Amon said the Ajoya brand generally targets professionals with families.
“The advancing professionals and their families live in the same house their parents gave them. With a growing family, they are beginning to feel the need for some improvements. They dream of a home that offers more than the usual — a home with a fresh and unique living experience, one that allows lasting connections and a truly enjoyable environment,” he said.
Mr. Amon said the Ajoya projects also cater the employees of business process outsourcing (BPO) companies, overseas Filipino workers (OFW) families, and the local residents.
The Ajoya brand is currently present in Cabanatuan, Nueva Ecija, and Capas, Tarlac. Both projects were launched in September 2018.
Ajoya Cabanatuan is a 19-hectare development in Barangay Valle Cruz with units ranging from 60 square meters (sq.m.) to 75 sq.m., and are priced between P3 million to P4.7 million.
On the other hand, the 13-hectare Ajoya Capas in Barangays Talaga and Estrada offers units ranging from 45 sq.m. to 60 sq.m., and are priced from P1.8 million to P2.5 million.
The Cebu-based property firm launched Seafront Residences in San Juan, Batangas in 2017.

After the holidays, some art to cleanse one’s palate


WHILE THE recent holiday nearly bankrupted us as we splurged on gifts and food and travel abroad, let’s usher in the New Year with new experiences that don’t break the bank — unless you buy a piece of good art (which is an investment!). Here is a list of some of the galleries in the metro that offer good Filipino art — and entrance is free (or very nearly).
THIS IS HOW TO BE A WOMAN OF THE WORLD
1335 Mabini
When we have a misogynist and bigoted President, artworks that champion women and feminism not only talk back to the current oppression, but enlighten everyone about the struggles that women face every day. The title of artist Nikki Luna’s solo exhibition called This is how to be a woman of the world is a direct quote from Duterte.
To raise awareness on the rights and plight of women and girls all over the world, Ms. Luna’s works feature the systematic violence — physical, emotional, and mental — that women experience.
For the exhibit, Ms. Luna cast women’s clothes in resin, “creating a wardrobe that tells the story of the violence done against them under regimes that traffic in abuse and misogyny. These vestments are a memorial to the way they have responded and resisted, a statement stripped of its fashion to lay bare the strength in vulnerability,” says an artist’s statement.
Among them are Senator Leila de Lima, who has been in detention since 2017, and has been the object of Mr. Duterte’s scorn; Judy M. Taguiwalo, who was arrested and tortured during Marcos’s Martial Law, was insulted by Senator Tito Sotto during a confirmation hearing in 2017 for being a single mother; Emma Sulkowicz, who lugged around a 50 lb. mattress around her university campus as an act of protest after being raped in her dorm; and Charlie Jean, a pregnant 15-year-old who was killed by police during a raid.
As an activist, the artist conducts art therapy workshops in conflict zones in the Philippines. Ms. Luna said in a statement: “I believe that art is something that you can share. It feeds your soul.”
“Art is a powerful tool. Art can tell peoples’ stories, retell history, incorporating the voices from the margins and continue sharing art to engage, provoke action and to promote healing in communities… It never crossed my mind not to speak of the injustice from the thousands of EJKs [extrajudicial killings], rape culture, misogyny under this administration. I will continue to use my art to show the lives of the people wronged by the system,” she said.
The exhibit is on view until Jan. 19 at 1335 Mabini gallery at Unit C1B Karrivin Plaza, 2316 Chino Roces Ave Ext., Makati.
AFTERWORLD OBLITERATION
Alliance Francaise de Manille
Alliance Française de Manille, in partnership with Centre Intermondes and 1335 Mabini Gallery, presents Afterworld Obliteration, a solo art exhibition by artist Dexter Sy.
The Philippine Artist Residency Program 2017 winner has shaped his own style, combining Persian rugs, painting, and ink and pen drawings. In France, he created works evoking the violence and terrorism that can hit both France and the Philippines. There are cut-outs in the form of robots representing evil, as robots are often perceived in Asia as destructive beings. The drawn parts represent hell and the victims of violence and terrorism intertwined with graphics from the tradition of Indigenous Filipino groups. The use of the Persian rug echoes the significant presence of the Muslim community in the Philippines, which makes up more than 20% of the population. His works also make use of Christian symbolism as Christianity is major religion in the Philippines.
The exhibition opens on Jan. 17, 6:30 p.m., and will run until Feb. 23.
CONTINUING SPIRIT: ALFRED ESQUILLO
Areté gallery
Thirty-seven works make up this retrospective show which celebrates 25 years of Alfred Esquillo’s art. Curator Renato Habulan chose works that “highlights Esquillo’s every aesthetic milestone,” according to the Web site of the Ateneo de Manila University’s Areté gallery. “Apart from winning paintings from national and international competitions, the exhibit also features his creative experiments weaving two canvases into mat patterns, his appropriation and face cut-outs of archival photos using different media, and his tragicomedy series.”
The opening of this special exhibition last November coincided with the launch of Mr. Esquillo’s self-titled book that chronicles his struggles and triumphs both in life and art.
The exhibit is on view until Jan. 20 at the Alicia P. Lorenzo, Elizabeth Gokongwei, and Ambeth R. Ocampo Galleries at the 3/F Ateneo Art Gallery, Arts Wing, Areté, Ateneo de Manila Campus, Katipunan Ave., Quezon City.
SA DAGAT AT BUNDOK
Metropolitan Museum of Manila
Artist Wynn Wynn Ong, best known for her stunning jewelry, presents the gems of the Philippines in the exhibition called Sa Dagat at Bundok. As the title suggests, the exhibit highlights the Philippines’ diverse fauna and flora and the country’s endangered and newfound species.
The exhibit is on view until February at the Metropolitan Museum of Manila beside the Bangko Sentral, Roxas Blvd., Malate, Manila. The museum is open Monday to Saturday, 10 a.m. to 5:30 p.m., and the admission fees are P100 for adults and students and P80 for Senior citizens and persons with disability.
TRANSPERSONAL, INSTRUCTIONS
UP Vargas Museum
“Transpersonal” means the transcendence beyond the physical identity, which then means that the exhibition on view until Feb. 1 at the UP Vargas Museum talks about metaphysical boundaries. Discussions include spiritual experiences: near-death phenomena, nomophobia (the fear of being without your phone), and political isolation.
The exhibit was part of an “evolving transnational research project that engages with public lectures, exhibition making, education, sonic scores and publishing in contemporary art,” according to the museum’s Web site..
The participants in the exhibition are Filipino and foreign intellectuals, artists, and members of the academe: Merlinda Bobis, Patrick D. Flores, Eisa Jocson, The Karrabing Film Collective, Dana Klisanin, Leslie Kulesh, Andy Lacey, Russ Ligtas, Raquel de Loyola, Elizabeth A. Povinelli, Mark Salvatus, Evelyn Taocheng Wang, Oreet Ashery, Revital Cohen & Tuur Van Balen, and César H. Villanueva.
Transpersonal, instructions was curated by Dr. Stephen Wilson in conjunction with the University of the Philippines, Visiting Professor Program.
The UP Vargas Museum is in the University of the Philippines Diliman campus in Quezon City.

PDS Group may raise listing target

THE PDS Group will be re-evaluating its listing target for 2019, possibly adjusting upwards the previously set P200 billion, a company official said.
“We base our target to some projections, because for [2018] we projected mga P189 [billion] for new listing. So the target was really for [2019] was set when we did our planning was P200 [billion],” said Ma. Theresa B. Ravalo, officer-in-charge of the PDS Group, the bond exchange’s infrastructure provider.
This comes after the Philippine Dealing & Exchange Corp. (PDEx) ended 2018 with a total of P256.39 billion in new listings, representing a 24% increase from the figure in 2017.
Ms. Ravalo said the total outstanding amount of bonds listed or enrolled in PDEx was expected to hit P1.045 trillion in 2018, 32% higher than the previous year’s figure.
“We have to re-evaluate it in the current condition primarily because of the presence of the bank bonds, so that’s the new ones that were recently approved by the BSP (Bangko Sentral ng Pilipinas),” she said, noting this drove up the total value of bonds.
Ms. Ravalo said between November and December around P65 billion was raised.
“We have to sit down, usually we do our re-evaluation mid-year because once we’ve set it that’s already been approved,” she said. “We hope it should be higher sana [than the original P200 billion target].”
“We’re also looking at bringing to the market additional instruments such as there’s perpetuals — perpetual bonds. That could be another source of funding, additional instrument that they could use for funding their requirements,” Ms. Ravalo said.
Factors that would be considered during the re-evaluation of targets would be the funding requirement of companies.
“One is the funding requirement of the industry, and another would be introduce new instruments because there might be some issuer who would like to access the market but the instrument that is available may not be catering to their funding requirement,” Ms. Ravalo said.
She cited for instance, the commercial papers issued by Phoenix Petroleum Philippines, Inc.
“This caters to a very specific need of the issuer because it’s shorter so if we don’t have this before in 2015 that increase will not be there because there is no instrument. So if it’s just the usual vanilla bond, the long-term bond, that would be too expensive for them [because] they want short-term,” Ms. Ravalo said.
Last week, Phoenix Petroleum listed its new commercial papers with an initial tranche of P7 billion of the P10 billion approved for its fund-raising program.
It was the second commercial paper-related listed for 2018, which happens to the 29th and last listing for the year. — Victor V. Saulon

BSP trims term deposit auction volume to P30B

By Melissa Luz T. Lopez, Senior Reporter
THE CENTRAL BANK has slashed the amount of term deposits it will auction off this week to the lowest level in over two years due to weaker demand from banks just before the holiday season wraps up.
The Bangko Sentral ng Pilipinas (BSP) will only offer P30 billion worth of term deposits for its first auction for 2019, which is the lowest level seen since the weekly offerings started in June 2016.
The auction volume was slashed for the second straight week coming from the P70 billion offered on Dec. 19 and P50 billion on Dec. 27. The amount is split equally at P10 billion each for the seven-day, 14-day and 28-day term deposits for today’s auction.
Banks wanted to park just P35.219 billion under the term deposit facility (TDF) last week, settling well below the amount the BSP placed on the auction block. The central bank even had to reject P6 billion worth of tenders and accepted only P29.219 billion as the interest rates sought by market players were too high.
More players wanted to maximize the interest rate corridor of the central bank and bid closer to the ceiling of 5.25%, driving average yields higher for both the one-week and one-month papers.
The TDF has been the central bank’s main tool to capture excess money supply in the financial system. By holding these weekly auctions, the BSP can usher market and interbank rates closer to its desired range of 4.25-5.25% by setting the standard for short-term instruments through the yields which they accept.
BSP Deputy Governor Diwa C. Guinigundo has said the higher bids from banks were expected, given that they have less excess cash as they service more withdrawals over the Christmas season.
“Yes, the volume may be reduced based on our liquidity forecasts indicating the higher demand for cash and less propensity to deposit with BSP these days. This is just normal market outturn,” Mr. Guinigundo said in a text message to reporters.
Financial markets will reopen today after a long weekend for New Year’s Day celebrations. The BSP has announced that clearing, settlement and treasury operations will proceed despite a government-wide holiday.

A very full theatrical calendar


LAST YEAR’s theater scene was lively and jampacked. This year is shaping up to be just the same, if not more.
First off, there is Reine Productions and Repertory Philippines presentation of Silent Sky, the critically acclaimed feminist production which was a hit in 2018.
Lauren Gunderson’s play focuses on the little known women who made big contributions to astronomy, focusing in particular on Henrietta Swan Leavitt whose work paved the way for better-known male astronomers like Edwin Hubble. Leavitt and her female colleagues in Harvard made their discoveries despite never being allowed to use the observatory’s refracting telescope.
Original cast members Cathy Azanza-Dy, Caisa Borromeo, Naths Everett, and Topper Fabregas will reprise their roles. Bibeth Orteza will join the cast in this production. Joy Virata again directs this production.
The show will run from Feb. 1-3 and 8-10 at the Carlos P. Romulo Auditorium, RCBC Plaza, Ayala Ave., Makati. For details contact Ria Pangilinan at 0917-537-8313 or e-mail riapangprojects@gmail.com.
Atlantis Theatrical Entertainment Group will once again present Angels in America Part One: Millennium Approaches in March. The production, directed again by Bobby Garcia, marks Atlantis’ 20th anniversary.
The play — the first of Tony Kushner’s epic two-part rumination on the AIDS epidemic — will run from March 22 to April 7 at the Carlos P. Romulo Auditorium.
After the success of Lungs, The Sandbox Collective will present Every Brilliant Thing, a one-woman show about depression. Like Lungs, it’s a Duncan Macmillan play.
Repertory Philippines will restage its original musical Miong, the life story of Emilio Aguinaldo, which was first presented in 1998 when the country celebrated the 100th anniversary of the declaration independence.
Written and originally directed by Rep’s artistic director Joy Virata, Ms. Virata will again direct Miong which features music by Ian Monsod and additional lyrics by Freddie Santos.
While Aguinaldo lived a very long life, the musical takes a look at his youth, from his birth into a middle-class provincial family to the declaration of independence on June 12, 1898, when he was just 29.
It will star Tim Pavino, Noel Rayos, Cara Barredo, Meynard Penalosa, and Elver Esquivel.
It will be presented at Onstage, Greenbelt 1, Ayala Center Makati from Feb. 15 — March 10. For more information, visit www.repertoryphilippines.ph.
Also in Rep’s lineup are Eric Chappell’s Father’s Day, about a troubled family (directed by Rep cofounder Baby Barredo) in March, and Ronald Harwood’s The Dresser, about an actor performing Shakespere’s King Lear and his constant companion, in May. It stars Teroy Guzman and Audie Gemora.
Rep will end the year with the musical The Quest for the Adarna, Luna Giño Inocian’s English adaptation of Ibong Adarna, featuring music by Rony Fortich.
While we’ve finally bid goodbye to PETA’s enduring musical Rak of Aegis, which made use of songs from the popular musical group Aegis, other productions that pay tribute to OPM (original Pilipino music) will return to the stage this year: 9 Works Theatrical and Globe Live’s Eto Na! Musikal nAPO!, Resort World Manila and Fullhouse Theater Company’s Ang Huling El Bimbo, both of which had successful runs in 2018, and Spotlight Artists Centre’s Dirty Old Musical, which was first presented in 2016.
Dirty Old Musical, which runs from Feb. 22 to March 23, is about an all-male band which was popular in the 1980s but had to disband because of problems between the members. Years later, the members — played by Robert Seña, Nonie Buencamino, Bo Cerrudo, Jett Pangan, and Carlo Orosa — get together for a concert to raise funds for an ailing member. Past their prime, the men find themselves dealing with issues about aging, and questions about the concert — Will the audience know them still and support them? Can they still do a concert? Among the OPM classics in the play are “Kastilyong Buhangin,” “Mag Exercise Tayo Tuwing Umaga,” and “Kay Ganda ng Ating Musika.”
For more information about Dirty Old Musical visit www.ticketworld.com.ph.
Eto Na! Musikal nAPO! tells the story of the beginnings of the popular singing group APO, focusing on less well known members, while Ang Huling el Bimbo tells the turbulent story of a group of friends using the music of the Eraserheads.
While no set schedule has been announced for the APO musical, it has been announced that it will be presented around February or March.
Meanwhile, Ang Huling El Bimbo will run throughout March at Resorts World Manila. Tickets are available at TicketWorld.
Broadway is well represented this year. For one, Upstart Productions, which was behind the production of Monty Python’s Spamalot in 2018, is set to produce Stephen Sondheim’s 1970 musical comedy Company, sometime this year, but there are no details as yet on when or where. First presented by Repertory Philippines in Manila in 1997, musical revolves around a man who has major commitment issues.
Atlantis will be presenting two Broadway hits: Beautiful: The Carole King Musical at the Meralco Theater in June; and Stephen Sondheim’s Sweeney Todd: The Demon Barber of Fleet Street at The Theatre at Solaire in October, which will star Lea Salonga and Jett Pangan.
There’s also the international touring production of Andrew Lloyd Webber’s The Phantom of the Opera to look forward to.
PETA’s line up includes a first on stage: Charot, which is an interactive comedy that will present the current political and social situations of the Philippines. The show will run from Feb. 1 to March 17 at the PETA Theater Center in Quezon City (tickets are available through TicketWorld).
PETA will also co-produce the re-run of Dulaang UP’s Kundiman Party, about a group of women joined together by their connections to an opera diva, who decide whether to get involved in politics.
The UP Playwrights Theater will present Rody Vera’s Nana Rosa, about the life of Rosa Henson, the first Filipina comfort woman to share her story publicly.
Meanwhile Tanghalang Pilipino will present Guelan Luarca’s adaptation of Shakespeare’s bloody drama, Coriolanus. Directed by Carlos Siguion-Reyna, and featuring Marco Viaña, it will run from Feb. 22 to March 17 at the Little Theater of the Cultural Center of the Philippines.
Tanghalang Pilipino will end 2019 with two original pieces: Katsuri, which is Bibeth Orteza’s Hiligaynon adaptation of John Steinbeck’s Of Mice and Men, and Lam-ang, a musical adaptation of the Ilocano epic poem Biag ni Lam-ang.

CTA denies BIR appeal over Fortune Tobacco’s P2.6-B case

THE Court of Tax Appeals (CTA) denied the Bureau of Internal Revenue’s (BIR) appeal to set aside an earlier ruling that cancelled a P2.6-billion tax deficiency assessment against Fortune Tobacco Corp. (FTC).
In a Nov. 14 resolution, the CTA Special First Division affirmed the earlier decision of the First Division to cancel the BIR’s P2.6 billion deficiency tax assessment against Fortune Tobacco arising from “improperly accumulated earning tax” (IAET) in 2009, as well as review the case.
The resolution, penned by Associate Justice Cielito N. Mindaro-Grulla, dismissed the BIR’s motion for reconsideration due to lack of merit.
The BIR had argued the FTC should not be allowed to file an appeal on the final decision on the tax assessment because the company had presented a new argument — the existence of a syndicated loan agreement — before the court to justify its tax exemption that was not raised during the administrative level claims.
“Even on the assumption that the syndicated loan agreement was not presented before the administrative level… the Court En Banc ruled that the failure to submit documents in support of the taxpayer’s administrative claim is not fatal to the judicial claim, as judicial claims are litigated de novo and decided based on what has been presented and formally offered by parties during the trial,” the CTA said.
According to the Tax Code, corporations are subject to IAET if “for the purpose of avoiding the income tax with respect to its shareholders” by allowing the earnings and profits to accumulate instead of being divided or distributed.
In its Aug. 15 decision, the CTA cancelled the alleged tax deficiency of FTC, despite not being included among those exempted from IAET under the Tax Code, as the corporation proved “reasonable needs” to accumulate its earnings due to the Syndicated Loan Agreement it entered with seven local banks.
In the loan agreement, FTC is required to maintain a certain financial ratio while paying P20-billion loan in five years.
“Thus, if the failure to pay dividends is due to some other causes, such as the use of undistributed earnings and profits for the reasonable needs of the business, particularly compliance with the covenants of the syndicated loan agreement in this case, such purpose would not generally make the accumulated or undistributed earnings subject to the tax,” the CTA said.
In its motion for reconsideration, the BIR contended that FTC accumulated P14.3 billion that gave the impression it did not need to observe the required financial ratios.
However, the CTA said that the appropriation was “merely ‘for standby capital’ and ‘to enable the Corporation to pursue its anticipated investments.’” — V.M. N. Villegas

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