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Merry and yummy meals

While the Christmas season abounds with gifts, it is also outpouring with feasts awaiting to reach our palettes and satisfy our hungers. An occasion as grand as Christmas merits a well-prepared Noche Buena consisting of delicious meals.

Warm start

Soups are a good way to warm up one’s appetite for Christmas dinner. There are many variants to choose from. BBC Good Food, in a recent post online, suggests between a creamy celeriac, hazelnut, and truffle soup, or a crisp chestnut, bacon and parsnip soup. Woman’s Day magazine, in its 50 Christmas dinner ideas posted on its Web site, suggests cinnamon-spiced sweet potato soup with maple croutons.

Macaroni salad, meanwhile, remains a standard meal every Noche Buena. Philippine food Web site Yummy.ph, in its post about Noche Buena menus, suggests that “instead of mayonnaise, try using cream cheese to make your macaroni salad extra flavorful and indulgent.” Potato salad is also another popular dish. If you want to put a crunchy twist to the otherwise mushy meal, it is advised to add crushed nachos to a mixture of cheese spread, cheddar cheese, mayonnaise, salsa, sweet corn, and black beans.

Grand feast

The appetite is just in time to delight in the main dishes after being warmed-up by starters.

For a meaty meal, you could opt between a Southern-style fried chicken, or a Pinoy-style buttery fried chicken. You could also choose between a sumptuous kare-kare made of ground peanut paste and paired with lots of greens; or a tender lengua that has a sauce made up of oyster, shiitake and button mushrooms mixed with sage, cream, and chicken stock. You could also make a twist to lechon kawali with a Lechon Macau recipe, where a crispy pork belly is rubbed with a mix of salt, Chinese five-spice powder, and sugar, then dried before it’s roasted.

The Christmas ham, as the centerpiece of the Christmas meal, definitely cannot be overlooked. While you could prefer the usual hamon, why not make it a little bit different? You could try glazing the ham with a home-made honey-rosemary glaze — a mixture of honey, dijon mustard, and dried rosemary. Or make it much tangier with making a compote from canned pineapple and apricot jam.

Food Network, in a list of “The Best Christmas Recipes” published on its Web site, also recommends several twists. While a ham coated with pineapple rings and cherries remains one of the classics, there is also a version where flaky pastry covers the salty ham, then topped with sweet pineapple sauce. There is also the “Millionaire’s Ham,” where the ham is spiced and candied by a mix of sugar, orange juice, cayenne pepper, salt, and pepper. Any of these could be complemented with side dishes like glazed brussels sprouts and potatoes or roasted celery root and carrots.

You could also prefer for a rib roast coupled by a mustard horseradish sauce. Another recipe has the prime rib stuffed with whole cloves of garlic and complemented with a thyme and red wine sauce.

Furthermore, pastas are a staple in a Christmas meal. Upgrading your pasta dish could add flair to your array of meals in the dining table. Yummy.ph pitches an impressive combination of spaghetti and meatball, where queso de bola could be used in place of Parmesan cheese. Chicken and pasta could also go well in laying out a tasty chicken bolognese lasagna.

Sweet treats

Of course, the Noche Buena will not be complete without some sweet treats to complete one’s Yuletide meal delight.

There’s the regular crema de fruta, a stack of “soft sponge cake, creamy vanilla custard, and fruit cocktail that is set in gelatin”. Broas or ladyfingers could replace the cake layer.

While a creamy yet healthful fruit salad fits in the menu, it would be nice to take the dessert to a different level by making a fruit salad refrigerator cake. Imagine the components of the much-loved dessert stirred into a gulaman mixture and stacked into a chilled cream layer that is then topped by eggnog cookies.

If you’re still looking for a high-end twist, why not consider tablea — an essential for a hot drink for a cold season — and create a delicious torte out of it? From circular pieces of cacao, a stack of mousse, meringue, and ganache can be formed.

The Christmas feast does not run out of options for menus on which families and friends will celebrate the 25th of December and even the first day of next year. With a lot of recipes to learn and try, the Christmas we’ll celebrate on our tables will be more worth savoring. — Adrian Paul B. Conoza

Five gifts for Christmas

The ongoing Christmas season once again sparks the spirit of giving around us. We look forward to receive gifts from our family, friends, and colleagues. At the same time, we begin to get anxious about what to give to those who are in our Christmas list.

Our shopping for presents this Christmas does not have to be that stressful. As we look for gift ideas or suggestions, we can narrow down our options by adopting the ‘4 gifts rule’. It simplifies one’s gift options into four choices: (1) You buy something that they want; (2) You buy something that they need; (3) You buy them something to wear and; (4) You buy them something to read. Plus, you could consider what are called experiential gifts.

Something they want

Try figuring out what they would want to receive based on their personalities and preferences. Kitty Elicay of Smart Parenting advises on an online article: “When they say they want something, listen, and take note. The look of joy on their face when they finally get their hands on something they’ve been hinting at… is even better than surprising them with a gift you’re not even sure they’ll want.”

Consider appliances such as audio systems or coffee brewers for dads. Gaming keyboards and/or mice or a gaming console would be a great gift for the grown-up child. An elegant handbag might be a delight for moms or sisters.

Friends and colleagues, meanwhile, might like a gift card that will allow them to shop for the things they really want. Human Resources magazine wrote on its Web site about a survey which indicated that “29% said gift vouchers were the most popular gifts from employers.”

Makeup kits or skin care products will surely be appreciated by your female pals. Your creative friends might like to have a calligraphy set to learn or practice the art of beautiful writing.

Something they need

It is also important that we look for items that our recipients need. It will be a gift worth giving.

For instance, a backpack will be a suitable gift for the family member who goes to school or work. Moms will benefit much with receiving cooking items.

Your friends and coworkers would love to have a new planner for the next year. New sets of notebooks or journals would be very much appreciated too.

Something to wear

We also look forward to new stuff to add to our wardrobes, especially when we realize that some of our clothes are beginning to wear out.

Try finding a new pair of shoes or a new necktie for dads. How about a cool pair of sneakers for the young guys? A necklace or an earring could further complement what your mom’s or sister’s outfits. New socks, with different designs to choose from, would be a delight for both adults and kids.

Friends might like a new jacket or sweater to suit rainy or cold weathers. Your office mates would appreciate a polo or a coat as an addition to their regular office wardrobe.

Something to read

To give something to read is a good way to live out the spirit of giving. You don’t merely give a material thing, but you also give the gift of knowledge.

It’s worth considering to give either self-help books, best-selling novels, or any book from an author your family members are following. Easy-to-read and interactive children’s books will also be a great gift for children to start the reading habit.

The latest graphic novel/comic book might fascinate your friends who are fans of superheroes or animé.

Books on personal development and leadership would be a thoughtful gift to inspire and motivate your colleagues. A new devotional, a new Bible, or a best-selling spiritual book are good choices that will nourish someone’s soul.

Something to experience

In addition to the previous four, also consider giving what are called ‘experiential gifts.’

“Experiential gifts evoke greater emotion than material ones and it’s that emotional intensity that makes us feel more connected to the giver,” Cassie Mogilner Holmes, an associate professor of marketing, was quoted in Forbes.com from a research she co-wrote in 2016 exploring these kind of gifts.

It could be movie tickets for the family or barkada, given that this season is a prime time for movies. It could also be a dinner at a restaurant, a trip to a museum, or viewing a concert or play.

There’s a myriad of gifts to consider for your loved ones, friends, and colleagues. That’s why it is very helpful to simplify your options and find what suits them best. — Adrian Paul B. Conoza

Global trade and the Philippine economy

Much talk has been made recently about rising trade tensions putting a hamper on global economic growth among businessmen and financial experts. Releasing a report in July, the World Trade Organization (WTO) recognized the international economic threats posed by trade restrictions among the G20, an international forum for the governments and central bank governors from 20 countries.

“This continued escalation poses a serious threat to growth and recovery in all countries, and we are beginning to see this reflected in some forward-looking indicators,” WTO Director-General Roberto Azevedo said in a statement.

In essence, trade barriers being erected by major economies around the world was jeopardizing the economic recovery of everyone and their effects are already starting to show. The WTO found that G20 countries introduced 39 new trade restrictions between mid-October last year and mid-May this year, double the rate in the previous period, affecting trade in iron and steel, plastics and vehicles.

“The marked increase in new trade restrictive measures among G20 economies should be of real concern to the international community,” Mr. Azevedo said, adding that more restrictions had been put in place in the weeks after the period under review ended.

In spite of this, emerging economies like the Philippines are rising to the occasion, defying naysayers and putting forward hope in a somber world. In Bloomberg’s New Economy global survey released last October, which interviewed 2,000 business professionals in 20 markets, it showed that 63% of respondents coming from emerging economies expressed confidence in the future of global trade, a far cry from the 36% of respondents from developed economies sharing the same sentiment.

Such a stark difference is not insignificant. Bloomberg Chief Economist Tom Orlik said that for emerging markets, the costs of looming tensions in international trade perhaps could be less than expected.

“If businesses retain that fundamental optimism about the outlook for trade, continued hiring and investment could propel growth forward, even as tariff barriers rise,” he said.

Technology, according to the survey, plays an integral role in keeping such economies afloat. Artificial intelligence, upskilling work forces, and adding improved professional courses could serve as the ballast from which countries could build a better future for global trade.

Over half (51%) of respondents for the Philippines believed that global trade will soon be restored. Three-quarters (76%) strongly believe that international trade will continue to grow in the next five years. Eighthy-four percent of respondents in the Philippines are already in the process of adopting new technologies.

This is despite the country’s merchandise trade deficit lingering above the $3-billion mark for the fifth straight month this year in August. Data from the Philippine Statistics Authority showed that while export growth that month posted its best performance for this year so far, and was the third straight month of positive performance, import growth also posted the slowest in five months.

Overseas sales of Philippine goods in August rose by 3.089% year-on-year to $6.163 billion, outstripped by an 11.034% hike in value of inbound foreign goods to $9.677 billion. The resulting $3.513-billion deficit in trade in goods was 28.393% bigger than the $2.737 billion recorded last year.

Year to date, exports slowed 2.049% to $44.908 billion while imports grew 15.043% to $70.911 billion, pushing the merchandise trade gap up 64.668% to $26.003 billion. The government has projected an export growth target of nine percent for 2018, while imports are targeted at 10%.

The country is in it for the long haul. In the 2018 Hinrich Foundation Sustainable Trade Index released, which measured the long-term trade sustainability of 19 Asian economies and the United States, the Philippines placed 10th, beating out countries like Malaysia and Thailand.

“The Philippines was a top performer among the low-income economies in the 2018 Index, outperforming the middle-income economies of Malaysia and Thailand in overall scores,” the Hinrich Foundation wrote on its profile report on the Philippines.

The Hinrich Foundation is a nonprofit organization that undertakes trade-related policy research and development work in Asia. It commissioned The Economist Intelligence Unit (EIU) to build the Sustainable Trade Index.

The Index uses 24 indicators to measure 19 economies in Asia and the US across the three recognized pillars of sustainability: economic growth, social capital, and environmental protection. It measures the readiness of each economy to participate in global trade in a way that creates sustainable growth and attracts foreign direct investment, and funding and support from multilateral development agencies.

And while the country has seen its economic pillar fall by six notches to where it was in 2016, it was recognized for its improvements on the social capital pillar, particularly because of an overall stagnation in the area across the region. Its ranking in the social pillar went up by eight spots from rank 19 in the 2016 report to rank 11 this year.

The Philippines was also recognized by the report as the most-educated population among low-income economies on the index.

“Inequality and political instability are on the rise across the region, a trend that transcends wealth and development status. The Philippines, however, was one of the few economies to increase its ranking on the social pillar in 2018,” the report noted.

“The country even outperformed middle-income countries like China, Thailand and Malaysia on the social pillar, outperforming its income-weighted position to deliver an impressive social pillar performance.” — Bjorn Biel M. Beltran

At the crossroads

The ongoing trade tension between the United States (US) and China — the world’s two largest economies — continues to intensify as they wrangle for global influence. The trade row has generated a ripple effect on the global economy, including the Philippines which is a long-time ally of the US and is currently trying to strengthen its economic ties with China.

So far, according to recent international media reports, the US has imposed three rounds of tariffs on Chinese goods, totaling more than $250 billion. This covers a wide range of consumer and industrial items, including handbags, rice and railway equipment. China, for its part, has struck back and has set tariffs on $110 billion worth of American goods. China’s list of products subject to levies includes chemicals, coal and medical equipment.

The trade war has already shown signs of economic strain. Some international firms have admitted that they are being harmed from global trade tariffs.

In Asia, according to Moody’s Investors Service, the escalating US-China trade tension will most likely hurt Asian exporters of electronic products to China, including that of the Philippines.

In a May statement, the credit rating agency said that Asia continues to rely on merchandise exports to generate economic growth, with manufacturing-based economies and the region’s two trans-shipment hubs — Singapore and Hong Kong — most reliant on trade.

“The region’s rising intra-regional trade linkages will increasingly define trade patterns in Asia, while the integration of the region in the global economy also shows in rising foreign direct investment (FDI), especially in manufacturing,” Moody’s Managing Director for Sovereign Risk in Asia Marie Diron was quoted as saying in a statement.

“Since the global financial crisis, Asia’s exports to the US and EU have remained largely flat as a percentage of GDP, but intra-regional trade has, by contrast, grown strongly,” Ms. Diron added.

Moody’s Vice-President and Senior Analyst Joy Rankothge, on the other hand, said that China, being at the center of Asia’s trade activity, takes part in shaping the region’s supply chains and is increasingly a source of demand for final goods from Asia, especially for consumption goods.

“Accordingly, the region is vulnerable to a further escalation in tensions between the US and China over trade and technology transfers. Additional US restrictions on Chinese exports, investment and purchases of technology supplies would have an impact the rest of Asia through supply chains,” Mr. Rankothge said.

Given this, further escalation of US-China trade war will leave Asia’s electronics sector the “most exposed.”

In the Philippines, the Philippine Statistics Authority (PSA) reported last October that electronic products continued to be the top exported commodity of the country in the first semester of 2018, with 55.7% share to the total exports. It posted a significant growth of 5.4% from $17.40 billion in 2017 to $18.33 billion in 2018.

The said commodity also remained as the top imported commodities in the same period, accounting for 26% of the total import bill. It increased by 16.9% from $11.53 billion in 2017 to $13.48 billion in 2018.

The PSA also noted that China was the country’s top trading partner in 2018, with total trade worth $14.08 billion or 16.6% of the total trade. Export-wise, the biggest sales came from electronic products at $2.35 billion or 57.3% of the country’s exports to China.

Meanwhile, UBS AG said last July that compared with other more open economies in the region, the Philippines is less likely to be affected by the trade war, but it noted that the dispute could still dampen growth prospects next year. — Mark Louis F. Ferrolino

Budget chief flags risk to spending

By Elijah Joseph C. Tubayan
Reporter
THE ECONOMY may not benefit as much from state spending — lately a key driver of gross domestic product growth — at least in the first half of next year due to an expected delay in enactment of 2019’s proposed P3.757-trillion national budget and the ban on public works ahead of the May mid-term elections, the head of the Department of Budget and Management told reporters on Tuesday.
Budget Secretary Benjamin E. Diokno said the government will likely see a five-month pause in the implementation of new projects, now that Congress plans to submit the proposed 2019 national budget for President Rodrigo R. Duterte’s signature on Feb. 7 and an April-May ban on public works ahead of elections.
Mr. Diokno said he expects Mr. Duterte to sign the 2019 General Appropriations Act (GAA) in “mid-March.”
“The delay in Congress’ approval of the budget will result in delayed implementation of new projects in 2019. No new projects can start until the 2019 GAA is passed and signed into law. Without our infrastructure budget of close to P1 trillion in 2019, expect our ‘Build, Build, Build’ program to slow down,” he said in a briefing.
“If you review the performance of the economy this year, it’s actually government spending and government construction which is contributing to growth. Can you imagine if there’s no construction? That will slow down growth; it will also slow down employment… they are the major drivers of growth, so can you imagine if there’s a slowdown?”
State spending contributed 11.8% to January-September gross domestic product (GDP), increasing by 13.1% year-on-year in that period, while public construction alone contributed 0.7% to GDP and grew 22.9%.
The government last operated on a reenacted budget in 2019 under then-president Gloria M. Arroyo, who is now Speaker of the House of Representatives.
Mr. Diokno said the government will not be able to front-load public works — a practice to avoid the rains in the second semester.
In order to achieve the government’s 7-8% GDP growth target for 2019, “[t]here will be a make-up plan… right after approval of the budget — assuming that there will be no severe rains because that’s… enemy number one of construction…” he added.
At the same time, such delay will not affect big existing projects that are covered by the Multi-Year Obligational Authority (MYOA).
“It’s the small projects that are not covered by the MYOA. What was released in 2018, they can already implement especially when you have already contracted it out,” said Mr. Diokno.
House deliberations on the proposed 2019 budget were stalled for about two weeks in August over lawmakers’ opposition to the Executive’s shift to a national budget based on the limited spending capacities of departments and agencies. The chamber approved the spending plan on final reading on Nov. 20.
Sought for comment, Bernardo M. Villegas, economics professor at the University of Asia & the Pacific, said in an e-mail: “I don’t think it (reenacted budget) will have any negative impact on growth.”
“The budget last year is big enough to support the expenditures for 2019,” Mr. Villegas explained.
“The bad habit is just a consequence of the Filipino culture of not doing things on time. There are always excuses for delays.”
For Filomeno S. Sta. Ana III, coordinator of think tank Action for Economic Reforms: “Budget re-enactment is bad practice.”
“It disrupts efficiency and effective planning. It also means less spending if the budget not approved is higher than the re-enacted budget,” Mr. Sta. Ana explained.
“Further, Executive can become arbitrary on the allocation of the re-enacted budget,” he added.
“One with a naughty mind cannot but wonder whether the re-enacted budget will be used for election purposes.”

Philippines’ top 1000 firms ride robust economic growth in 2017

By Leo Jaymar G. Uy
Research Head
THE COUNTRY’S top 1,000 corporations continue to post strong earnings in 2017 amid a backdrop of sustained economic growth.
Now on its 32nd year, BusinessWorld’s Top 1000 Corporations in the Philippines ranks private and public stock entities according to gross revenue using the latest available full-year audited financial statements, which for most companies on the list pertain to their 2017 performance.
The Top 1000 roster is based on parent-only financial statements, in which parent firms record only equitized earnings of subsidiaries. It also lists the country’s top 50 corporations based on consolidated financial statements.
Parent companies that made it to the list earned a cumulative P11.53 trillion in gross revenue and P1.33 trillion in net income in 2017, 11.7% and 6.4% more than in the preceding year.
Top 1000 Corporations in the Philippines: Comparisons of Sectoral Performance in 2017
The Top 1000 firms’ performance in 2017 compares to that of the overall economy’s 9.2% showing in 2017 based on current prices. To recall, the Philippine economy expanded by 6.7% based on constant 2000 prices, above the low end of the government’s 6.5-7.5% target range for 2017.
Retaining the top spot on this year’s list is Manila Electric Co. (Meralco). The power distributor made P275.42 billion in gross revenue and P271.9 billion in net sales, higher respectively by 9.9% and 10.5% from 2016. Its bottom line, however, was down 1.6% to P20.24 billion. Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.
Not far behind is Petron Corp., a subsidiary of San Miguel Corp., which recorded P274.31 billion in gross earnings (up 18.8%)and P271.12 billion in net sales (20.1%). Its net income was likewise higher by 57.1% to rake in P8.95 billion during the period.
Rounding up the companies that occupied the third to 10th places were: Toyota Motor Philippines Corp., P175.15 billion; Pilipinas Shell Petroleum Corp., P171.69 billion; TI (Philippines), Inc., P150.82 billion; Toshiba Information Equipment (Philippines), Inc., P134.88 billion; Philippine Airlines, Inc., P133.16 billion; Mercury Drug Corp., P132.73 billion; BDO Unibank, Inc., P127.42 billion and Nestlé Philippines, Inc., P125.98 billion.
The latest list of top 50 conglomerates shows San Miguel Corp. and subsidiaries on top with P854.75 billion in gross revenue in 2017, higher by 19.3% from 2016. Top Frontier Investment Holdings, Inc. — San Miguel’s top shareholder — and its subsidiaries as well as Petron Corp. and its business units occupy the second and third rungs with gross revenues of P853.22 billion and P435.22 billion, respectively, up by 19.2% and 26.4%.
The fourth to 10th placers are: SM Investments Corp. and subsidiaries, P401.17 billion; Mermac, Inc. and subsidiaries, P289.27 billion; Ayala Corp. and subsidiaries, P289.25 billion; Meralco and subsidiaries, P285.57 billion; JG Summit Holdings, Inc. and subsidiaries, P275.63 billion; GT Capital Holdings, Inc. and subsidiaries, P239.81 billion; Toyota Motor Philippines Corp. and subsidiaries, P186.31 billion.
Save for information and communication technologies, most other sectors displayed gross revenue growth, with 12 out of the 16 posting double-digit increases. Gross revenues of manufacturers, which made up 36.9% of the 2017 total, grew by 10.9%, while those in financial and insurance activities (12.7% share); as well as wholesale and retail trade (20.6% share), grew by 18.6% and 13.4%, respectively.
Multinational companies have been a permanent fixture of the country’s corporate scene throughout the years. In 2017, earnings by multinationals grew by 12% to P4.04 trillion, accounting for 35% of the Top 1000.
Meanwhile, exporting firms included in the Top 1000 recorded P2.11 trillion in revenues, nine percent more than in the previous year.

Banks improve asset quality, but profitability slips

By Marissa Mae M. Ramos
THE COUNTRY’s biggest banks saw their quality of assets improve in the third quarter even as their profitability and their capacity to absorb risky assets slipped.
BusinessWorld’s 3rd Quarter Banking Report showed the combined assets of the 43 universal and commercial banks (UK/Bs) operating in the country grew by 9.87% to P15.75 trillion in the July-September period from the P14.33 trillion in 2017’s comparable three months.
Asset growth in the third quarter was slightly faster than the 9.85% notched in the second quarter, but slower than last year’s 14.1%.
Bank loans, which comprised around half of big banks’ assets, totaled P8.7 trillion, 16.6% more than the P7.5 trillion in 2017’s third quarter.
In terms of profitability, UK/Bs’ 4.82% median return-on-equity (RoE) was less than the 6.38% in the second quarter albeit more than the 4.73% of 2017’s third quarter. RoE — the ratio of net profit to average capital — measures the amount that shareholders make on every peso invested in a company.
BDO Unibank, Inc. (BDO) remained at the top in terms of assets and loans, followed by Metropolitan Bank & Trust Co. (Metrobank) and the Bank of the Philippine Islands (BPI).
Among banks with assets of at least P100 billion, Land Bank of the Philippines (LANDBANK) topped in terms of growth, increasing 20.3% year-on-year. It was followed by Robinsons Bank Corp.’s 19.8% and China Banking Corp.’s 18.2% increases.
The same three months saw Bank of Commerce as the most aggressive lender, with a year-on-year growth of 40.3%, followed by those of LANDBANK (39%) and Robinsons Bank Corp. (33.2%).
In terms of deposits, BDO was still on top at P2.345 billion while LANDBANK came in second at P1.58 trillion, ahead of BPI’s P1.544 trillion and Metrobank’s P1.543 trillion.
ASSET QUALITY
The non-performing loans (NPL) ratio of big banks improved to 1.40% in the third quarter from 1.5% in the preceding three months.
Meanwhile, their nonperforming assets ratio — the combination of nonperforming loans, foreclosed properties and total assets — steadied at 0.66% in the third quarter.
As percent of total assets, foreclosed real and other properties dropped to 0.33% from 0.34%.
The banks’ coverage ratio — which is the ratio of the total loan loss reserves to gross NPL — was 152.27% during the quarter. This was higher than the preceding quarter’s 143.60% and more than enough to cover the entire value of bad loans held by big banks, with loan loss reserves totaling some P171.703 billion.
On the other hand, their median capital adequacy ratio also went down to 16.85% versus the 17.29% in the previous three-month period.
Still, the ratio remains above the Bangko Sentral ng Pilipinas’ safety net prescribed at a minimum of 10% and the international standard of eight percent.
BusinessWorld Research has been tracking the financial performance of the country’s U/KBs on a quarterly basis since the late 1980s using banks’ published statements of condition.

QC tax hike deferment approved on 3rd reading

THE QUEZON CITY Council on Nov. 26 approved on third and final reading a proposal to suspend a planned increase in real property fair market values (FMV) until after 2019, council Majority Floor Leader Councilor Franz S. Pumaren said in a mobile phone message when asked for an update.
“We need to have it signed (by Mayor Herbert Constantine M. Bautista), so no more delays and no corrections…” Mr. Pumaren said of proposed Ordinance No. 20CC-497.
The proponents on Oct. 26 sought the suspension of the implementation of Ordinance No. SP-2556, Series of 2016, which raises real property fair market values in the city after the Supreme Court on Sept. 18 lifted the April 2017 temporary restraining order on its implementation.
They want the 1996 schedule of FMVs to be the basis for real property tax collection next year.
They cited multiyear-high inflation rates that averaged 5.1% in the 10 months to October, which exceeded the 2-4% full year target range of the central bank for 2018, as the reason behind the proposed suspension of the realty tax hike.
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 FMV increases.
In a statement on Nov. 27, Mr. Pumaren noted that “[o]ur economic managers have agreed that the priority right now is to reduce, and not add to, the burden of taxpayers and consumers.”
“We’re following suit in the interest of Quezon City residents.”
The city’s FMVs were last adjusted in December 1995 despite the requirement of Republic Act No. 7160, or the Local Government Code of 1991, to adjust the schedule every three years.
The city government projects an additional P700-million revenues in the first year of FMV hike implementation. Latest date 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 colledtions.
Quezon City’s biggest tax source in 2017 was business tax with P9.204 billion followed by real property tax with P3.431 billion. — Vann Marlo M. Villegas

Tax reforms on financial, tobacco products gain ground in House

By Charmaine A. Tadalan
Reporter
TWO tax reforms — one simplifying levies on financial instruments and the other raising the rate for cigarettes — advanced in the House of Representatives on Tuesday.
FINANCIAL INSTRUMENTS TAXES
The chamber approved House Bill No. 8645, or the “Passive Income and Financial Intermediary Taxation Act,” on second reading.
The measure simplifies the current system, which has 80 tax bases and rate combinations, by providing, among others: a 15% unified income tax rate on interest, dividend and capital gains, which currently ranges from zero to 30%; a five percent tax rate on gross receipts from the current 0-7% and removes distinctions according type, nature and maturity; standardizes at 0.75% the documentary stamp tax (DST)rate from the current 0-1% on the sale of original issue shares of stocks, bond, debentures, certificate of stock or certificate of indebtedness issued in any foreign country; and removes DST on sales, agreement to sell, memoranda of sales, delivery or transfer of shares or certificate of stocks, among others.
ADDITIONAL TOBACCO TAX HIKE
Also on Tuesday, the House Ways and Means Committee approved in principle the measure increasing excise taxes on tobacco products by P2.50 annually until it reaches P45 in 2022, and by four percent every year thereafter.
“Ang na-approve ng committee, rates for 2019, P37.50; 2020 is P40; 2021 is P42.50; 2022 is P45; and then four percent increase every year thereafter, starting 2023, every July,” committee chairperson Estrellita B. Suansing of Nueva Ecija’s 1st district told reporters after the hearing.
Despite the committee’s decision, the Department of Finance pushed its suggestion for the chamber ti adopt the version of Rep. Jose Maria Clemente S. Salceda of Albay’s 2nd district.
“We have to register our suggestion for you to consider, maybe in the plenary, the proposal of Cong. Salceda, that sends a path towards the P60,” Finance Undersecretary Karl Kendrick T. Chua told the panel on Tuesday.
House Bill No. 4575 proposed to increase excise taxes to P40-60 per pack in the first five years of implementation and a five percent annual increase thereafter.
“The other point, if you will go through your proposal, the alcohol indexation is seven percent, tobacco is four percent, maybe aligning to the seven percent would be something you can consider,” Mr. Chua also said, referring to the alcohol tax measure that was recently approved on second reading in the chamber.
For his part, JTI Philippines Managing Director Manos Koukourakis said tobacco products had already seen taxes rise under Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act (TRAIN) that took effect in January. TRAIN increased the excise tax on tobacco products to P32.50 from P30 in January 2018 and further increased it to P35 starting July 2019. Under the same measure, taxes are expected to go up to P37.50 in January 2020.
“As it is obvious, we are not happy to be the target of taxation all the time. Since 2012, our products have been taxed by almost +1,300%,” Mr. Koukourakis told BusinessWorld in a mobile phone message on Tuesday.
“Further, I personally believe in improving collections’ efficiency, expanding the tax base, rather than applying higher taxes… punishing those who pay; inadvertently, we favor those who don’t pay properly.”
The Senate on Monday began deliberation on Senate Bill No. 1599, authored by Senator Emmanuel D. Pacquiao, and SB 1605, authored by Senator Joseph Victor G. Ejercito, which proposed to increase the cigarette tax to P60 and P90 per pack, respectively. Mr. Pacquiao’s version is the counterpart of HB 6648 of Rep. Angelina D.L. Tan of the 4th district of Quezon.

Top 1000 Corporations in the Philippines: Comparisons of Sectoral Performance in 2017

THE COUNTRY’S top 1,000 corporations continue to post strong earnings in 2017 amid a backdrop of sustained economic growth.
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Top 1000 Corporations in the Philippines: Comparisons of Sectoral Performance in 2017

Duterte government sets framework for long-term cooperation with China on infrastructure development

THE GOVERNMENT of President Rodrigo R. Duterte hopes to set the stage for long-term bilateral cooperation on infrastructure development with China, with a 10-year framework on this matter among the 29 deals signed during President Xi Jinping’s Nov. 20-21 state visit to the Philippines.
Malacañang released to reporters on Tuesday a copy of the “Infrastructure Cooperation Program between the Government of the Republic of the Philippines and the Government of the People’s Republic of China” that provides “guidelines for bilateral infrastructure cooperation for the next 10 years” as the Philippines aligns its “long-term vision” with China’s Belt and Road Initiative.
Signed on Nov. 20 by Socioeconomic Planning Secretary Ernesto M. Pernia and Chinese Commerce Minister Zhong Shan, the program is designed to run from November 2018 to November 2028, stretching after Mr. Duterte ends his six-year term at end-June 2022.
The document identifies key areas of cooperation in transportation segments like roads, bridges, intermodal terminals, airports and ferry systems; agriculture systems like infrastructure and fish ports; power; water resource management; as well as information and communications technology/telecommunications.
Specifically mentioned were projects like the Philippine National Railways South Long Haul Project, Subic-Clark Railway Project, Mindanao Railway Project, North South Harbor Bridge, Palanca-Villegas Bridge, Beata-F.Y. Manalo Bridge, Blumentritt-Antipolo Bridge, East Bank-West Bank Bridge 1, Panay-Guimaras-Negros Island Bridge, Negros-Cebu Link Bridge, Cebu-Bohol Link Bridge, Leyte-Surigao Link Bridge, Luzon-Samar Bridge, rehabilitation of all Agus-Pulangi Hydroelectric Plant units, Ambal-Simuay River and Rio Grande de Mindanao River Flood Control Projects, Bohol Northeast Basin Multipurpose Project, Tumauini River Multipurpose Project, Panay River Basin Integrated Development Project, New Centennial Water Source-Kaliwa Dam Project.
“… [B]oth sides agree to explore new cooperation modes and expand cooperation scope,” the agreement read, adding that “[b]oth sides agree to cooperate by different… procurement modes” including public-private partnerships, direct investment and technical cooperation.
While tapping concessional loans, export credit “and other means of financing to provide financial support for infrastructure projects… [b]oth sides will actively explore new means of financing and take advantage of the financial markets of both countries to establish effective means of financing for infrastructure cooperation on the basis of market-oriented financing means.”
“The Philippines,” it added, “will consider extending sovereign guarantee for the financing of key infrastructure cooperation projects, as applicable.”
The Philippine government will take responsibility for land expropriation and resettlement for projects, the document said, adding that both sides will facilitate exit and entry of equipment and personnel involved in such projects, and will improve bilateral tax treaties to avoid double taxation.
Mr. Duterte had shocked the Philippines’ partners in the West by announcing his pivot to China and Russia during his October 2016 visit to Beijing, marking a sharp departure from his predecessor’s confrontational approach to Beijing.
Mr. Duterte has since blamed the Philippines’ July 2016 arbitration victory in The Hague — which invalidated China’s basis for claiming sovereign rights over much of the South China Sea — for the increased pace of China’s reclamation and base building in disputed islets in that area.

Bicam OK’s amendments to Corporation Code

AMENDMENTS to the Corporation Code, which include allowing one-person corporations and the perpetual existence of corporations, were approved by the bicameral conference committee on Monday evening.
Senate Bill No. 1280 and House Bill No. 8374 introduces changes to the Corporation Code to simplify corporate governance standards and improve the ease of doing business in the country.
In a statement, Senate Minority Leader Franklin M. Drilon said the current law has made it difficult to start a business due to the numerous and stringent incorporation and regulatory requirements.
“One of our difficulties today is our laws have not been updated…. Suffice it to say, then, that the enactment of this measure and its immediate signing into law by the President is in order, so that we can change the atmosphere of conducting business in the country and make our economy more competitive,” Mr. Drilon, who is also principal sponsor of the bill, said.
Under the approved bill, a single shareholder, who is an individual, a trust or an estate, may form a one-person corporation (OPC). At present, there should be at least five incorporators before one can form a corporation.
The measure also allows all existing and future corporations to have perpetual existence. The current law provides for corporations to have a corporate life of only 50 years.
Other amendments to the Corporation Code include removing the minimum number of incorporators, as well as allowing the electronic filing of reportorial requirements and attendance in meetings using remote communication or in absentia.
Corporations, which have public interest, will also be required to have independent directors. — CAA

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