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Filipino film centennial marked

TO COMMEMORATE the centennial of Filipino films, the Filipinas Heritage Library has partnered with Samsung Electronics Philippines to present Hidden Cinema: The Virtual Experience of Philippine Cinema’s Centenary. The exhibit showcases the country’s rich yet unfamiliar movie heritage. “The Hidden Cinema reveals an exciting dimension in our art history. It offers refreshing perspectives and an alternative experience to mainstream movies,” said Jun Guevarra, Samsung Product Marketing Head for AV/TV in a press release. The event puts the spotlight on genres such as the short film, documentary, and propaganda. Samsung TVs take center stage in the exhibit. Curated by Nick Deocampo, the exhibit also coincides with the celebrated film artist, historian, and professor’s 35th year as a documentarist. Hidden Cinema is on view until Sept. 9 at the Ayala Museum in Makati. For details, visit the Ayala Museum’s official website and Facebook page.

Acudeen to list tokens on bitcoin exchange

FINTECH FIRM Acudeen Technologies Pte. Ltd. will be listing its tokens at the BTCEXA exchange this Friday, the first of exchange listings it looks to conduct in the following months.
In a statement issued Tuesday, the Filipino-led start-up based in Singapore said it will list its ACU tokens which serve as the native utility token for Acudeen’s blockchain network for movable assets, AssetChain Platform.
The company last May conducted a public sale of its ACU tokens at $1 per 100 coins in a bid to raise $35 million to finance its expansion in the Southeast Asian region.
The BTCEXA exchange is a digital asset trading platform that was launched last July, and is an accredited member of the Exchange Alliance. The platform features a clearing system that ensures all transactions are secured and encrypted.
Acudeen said the listing will serve as the “catalyst to create a regional ecosystem that invoice sellers and funders can fully trust and rely on.” It is also working with development partners at IBM Singapore to deliver more products by the third quarter of 2019.
Founded in 2016, the financial technology firm has so far facilitated more than $6 million worth of invoice receivable transactions in less than two years. The company’s goal is to address the US dollar credit gap for micro, small and medium enterprises (MSMEs) in Southeast Asia by providing a marketplace that will allow them to list, sell, and liquidate their pending invoices.
With this, MSMEs can invite investors to purchase their invoices ahead of maturity date.
Acudeen has recently expanded to Myanmar under the KyoPay brand with its joint venture partner Anthem Asia. It looks to further expand to Vietnam and Indonesia within the year.
The company has since integrated blockchain capabilities into its current model to further serve the needs of the global market, making use of blockhain-based ledger database Stellar, which facilitates transactions while charging minimal fees.
“This means that movable assets such as inventory, trademark, warehouse receipts, physical products and the like-not just invoices, upon completion of the whole blockchain network development, can now be listed and sold on the Acudeen Platform,” the company said. — Arra B. Francia

Reserve Bank of Australia lends stability amid turmoil

SYDNEY — Australia’s central bank is seeking to be “a source of stability and confidence” by keeping rates at record lows as the future of Prime Minister Malcolm Turnbull was put in doubt by a leadership spill and sliding voter support.
The Reserve Bank of Australia (RBA) Board agreed the next move in the cash rate would more likely be an increase, Tuesday’s minutes of its Aug. 7 policy meeting showed.
But the RBA stressed that keeping rates at 1.50% would help reduce the jobless rate and lift wage growth over time.
“Since progress on unemployment and inflation was likely to be gradual, (members) agreed there was no strong case for a near-term adjustment in monetary policy,” the minutes stated.
“Rather, members assessed it would be appropriate to hold the cash rate steady and for the Bank to be a source of stability and confidence while this progress unfolds.”
The RBA generally sounded more upbeat about the economy, citing recent strength in the labor market and strong business confidence.
A source of stability is greatly needed as growing political uncertainty takes its toll. A gauge of consumer confidence fell sharply for a third straight week, with falls across all sub-indices.
“The decline…may reflect the impact of the messy political debate locally and the associated slump in support for the current Turnbull government,” said ANZ Head of Australian Economics David Plank.
Turnbull survived a leadership challenge by Home Affairs Minister Peter Dutton on Tuesday morning but the narrow margin of the win has sparked speculation about his future. Turnbull must return to the polls by May 2019 and could break the impasse by calling an early election.
No Australian prime minister has completed a full three-year term in the past decade.
“This type of political instability impacts business investment decisions and in turn hiring decisions. And that then has an impact on consumption,” said Greg McKenna, market strategist at AxiTrader.
“If this intensifies, if it becomes real, then it will definitely weigh.”
DROUGHT A DANGER
The RBA last cut rates to 1.5% in August 2016, notching up the longest period without a change in modern history. Financial markets are wagering this steady period could extend into 2020.
The bank spent some time discussing the effects of a severe drought that has stricken vast tracts of grazing and crop land in eastern Australia, the country’s main food bowl.
“Members noted that the probability of an El Nino event, which would typically be associated with low rainfall in eastern Australia, had increased over 2018, implying downside risks to the forecasts for farm output and exports,” it said.
Droughts are not uncommon in Australia, with one every eight to nine years, according to a research by the Commonwealth Bank of Australia.
Farming produces about 2% of Australia’s A$1.8 trillion gross domestic product and economists generally expect a 0.2-0.5 percentage point hit to growth from a drop in farm output.
“While the impact can be significant, falls in farm output have never been large enough to derail an economy traveling at a decent pace,” CBA chief economist Michael Blythe said in the note. — Reuters

PSE index to consolidate as market looks for leads

By Arra B. Francia, Reporter
THE MAIN INDEX is seen to continue consolidating in the week ahead as investors look for catalysts that could sustain an upward trend in the long run.
The 30-company Philippine Stock Exchange index (PSEi) slumped 1.09% or 82.99 points to close at 7,500.53 on Monday, bucking the positive performance of international markets as investors decided to take profit ahead of trading break due to the Islam holiday Eid’l Adha on Tuesday.
Net foreign outflows persisted for the seventh straight day, amounting to P670 million on Monday, albeit lower than the previous session’s P900.63 million in net sales. Value turnover was also flat at P5.40 billion.
In contrast, markets overseas logged gains as they looked to the upcoming negotiations between United States President Donald J. Trump and Chinese President Xi Jinping to iron out trade tensions this week.
Analysts expect the local bourse to continue trading sideways in the coming days, given the lack of catalysts and the need for the government to institute reforms that would place them on track to reach economic targets.
“The market will continue to be on consolidation. The index will be hovering around 7,400 to 7,600, I think that will go on for until the early part of October because the market seems to be illiquid starting from the month of August to October,” Diversified Securities, Inc. trader Aniceto K. Pangan said in a phone interview on Monday.
“It’s illiquid until probably the much needed reforms and inflationary pressures have been reined upon to the tune of the government’s target of 2-4%, then the market can sustain going up,” Mr. Pangan added.
Online brokerage 2TradeAsia.com also noted the private sector’s contribution to help contain inflation.
“Effective supply chain management, production efficiencies are considered important elements to keep goods/service prices in check. Purchase order renegotiations might be in store, & financing arrangements may be re-tooled, to ensure working capital needs are supported,” the company said in a weekly market note.
“Unless the private sector fulfils its part on these items, pressure might run high on monetary authorities to re-check on policies (again and again),” it added.
The online brokerage added companies must follow through on their employment initiatives, as more projects are rolled out in key provincial sites.
“Expediting the [infrastructure] drive should be supported by labor measures attuned to project-based undertakings, especially if the gestation to complete is long-term,” 2TradeAsia.com said.
Regina Capital Development Corp. Managing Director Luis A. Limlingan said the PSEi’s 7,500 support level remains intact, noting in a mobile message that there may be “a possible drive come Wednesday from the returning participants.”

How much have average wages risen among economic sectors?

How much have average wages risen among economic sectors?

DoF projects P61.3B in collections from higher sin taxes in 2020

THE DEPARTMENT of Finance (DoF) said that the government may raise an additional P61.3 billion worth of revenue in the second round of increased “sin” taxes proposed under its comprehensive tax reform program.
“For 2020, estimated revenues from cigarettes and alcohol are P61.3 billion, and by 2021, P77.6 billion and increasing for the future,” Finance Assistant Secretary Antonio Joselito G. Lambino II told reporters last week.
Higher excise tax rates for alcohol and tobacco products are part of the government’s comprehensive tax reform package under “Package 2+.”
The DoF seeks to gradually raise excise tax rates for alcohol and tobacco beginning 2020 and until 2023, according to Mr. Lambino.
The DoF proposes to increase the ad valorem tax on distilled spirits to 25% from the current 20%, and increase its specific tax to P40 per proof liter in 2020 from the current P20 per proof liter, and hiking it gradually until P55 by 2023.
For sparkling wine selling for less than P500, the DoF proposed to raise the excise tax to P334.59 per 750 ml bottle in 2020, from P250 currently, further increasing annually to P445.33 by 2023
Sparkling wine selling for P500 or above meanwhile will be taxed P936.92 per 750 ml., with annual increases bringing it to P1,247 by 2023, from P700 currently.
Still and carbonated wines below 14% alcohol content will carry an excise tax of P40.15 in 2020, rising to P53.45 by 2023, from P30 currently.
Wines above 14% but below 25% alcohol content on the other hand will be taxed P80.31 in 2020, and rising to P106.89 by 2023, from P60 currently.
Still and carbonated wines with alcohol content above 25% meanwhile will be taxed at the same rate as distilled spirits.
The DoF also wants a wants a P40 excise tax per liter on fermented liquors in 2020, rising to P55 in 2023, from P23.5 per liter currently.
For tobacco products, the DoF said it will support Senator Emmanuel D. Pacquiao’s bill that seeks to increase the excise tax to P60 per pack from P35 currently, along with an annual increase of 9%, from the current 4% increase in excise tax per year.
Under the Tax Reform for Acceleration and Inclusion law, the tobacco excise tax will rise to P40 per pack by 2022.
The DoF earlier reported that taxes collected from tobacco and alcohol products hit P112.46 billion in the first six months of the year, up 41.38% from a year earlier and beating the P77.54 billion target by 45.03%.
The tax package also includes the comprehensive mining reform act that will harmonize the mining sector’s fiscal regime, while imposing royalties on all mining operations. — Elijah Joseph C. Tubayan

More airport dev’t needed after NAIA closure

THE Department of Transportation (DoTr) said the disruption to air travel caused by the airport closure caused by the botched landing of a XiamenAir jet last week highlights the need to develop alternative gateways and upgrade systems at existing airports.
The department said in a statement on Tuesday that it is “aggressively pushing for the implementation of the DoTr aviation roadmap,” which calls for the improvement of current airports, the construction of new primary gateways such as Bulacan or Sangley, the development of provincial airports and upgrades to air traffic control and management systems.
The jet’s hard landing and off-runway excursion at the Ninoy Aquino International Airport (NAIA) also brings up the need to review airline service arrangements with their passengers and coordination with the authorities in the event of emergencies, it said.
“[T]he Xiamen incident is an eye opener — a reminder for us to revisit the Air Passengers Bill of Rights (APBR), review the intervention protocols between the airlines and the airport authorities, recast our equipment inventory, enhance the training modules we do at the airport in cases of emergencies,” it added.
Late Thursday night, the Xiamen Airlines aircraft skidded off the tarmac on landing and shut down NAIA runway 06/24 until midday Saturday. Thousands of passengers were stranded at the airport due to multiple flight delays and cancellations after difficulties in extracting the aircraft.
In an interview on ABS-CBN News Channel, Manila International Airport Authority (MIAA) General Manager Ed V. Monreal said the initial estimate of expenses directly incurred during the operation to hoist the XiamenAir aircraft were about P15 million.
“Right now, we have calculated cost of damages to be in the range of P15 million. It only covers the rental for the crane, manpower and use of our equipment. We still have a lot of things to consider,” he said.
The general manager said in a briefing on Monday XiamenAir will be asked to reimburse the cost.
The government is currently reviewing a 15-year unsolicited proposal from a consortium of seven conglomerates to expand NAIA’s capacity. The proposal is now with the National Economic and Development Authority’s Investment Coordination Committee (NEDA-ICC) for evaluation.
The consortium is composed of Aboitiz InfraCapital, Inc.; AC Infrastructure Holdings Corp.; Alliance Global Group, Inc.; Asia’s Emerging Dragon Corp.; Filinvest Development Corp.; JG Summit Holdings, Inc. and Metro Pacific Investments Corp.
The Clark International Airport is also being upgraded by concession holders Megawide Construction Corp. and GMR Infrastructure Ltd.
San Miguel Corp. (SMC) has also submitted a P735-billion unsolicited proposal to build Bulacan International Airport, which is still under review by the NEDA-ICC.
The Cavite government is meanwhile proposing a P552.018-billion Sangley International Airport, which has so far earned a no-objection clearance from the DoTr.
Aside from the four airports being considered as primary gateways, the government is also reviewing unsolicited proposals from Chelsea Logistics Holdings Corp. (CLC), Aboitiz InfraCapital, Inc. and Mega7 Construction Corp. for regional airports in Davao, Bohol and Kalibo, respectively.
Transportation Undersecretary for Aviation Manuel Antonio L. Tamayo told reporters last month the DoTr is looking to issue its decision on whether to grant original proponent status for the regional airports by third quarter of the year. — Denise A. Valdez

PSA preparing terms for national ID auction process

THE implementing agency for the Philippine Identification System Act said it is preparing the terms to auction the design contract for the infrastructure underlying the national identification (ID) system.
The Philippine Statistics Authority (PSA) told BusinessWorld in an e-mail on Sunday that it has received initial proposals from private companies for partnerships to implement the national ID, but added that it is working on a Request for Proposals (RFPs) for an open bid.
“The NIDS-PMO (National ID System-Project Management Office) has met Aboitiz InfraCapital, Inc. and Unisys Philippines and other service providers and has listened to the technology updates they can offer for the development of the Philippine Identification System,” it said.
“However, the Request for Proposals (RFPs) to be provided to service providers for designing the functional architecture… is still being finalized for public bidding.”
A consortium of three companies submitted a 17-year unsolicited proposal to the PSA on Aug. 13 seeking to design and develop the infrastructure to be used in implementing the national ID system.
Conglomerates Ayala Corp. (AC) through AC Infrastructure Holdings Corp. and Aboitiz Equity Ventures, Inc. through Aboitiz InfraCapital, Inc. teamed up with information technology company Unisys Philippines for the project.
AC told the stock exchange last week its infrastructure solution is meant to “collect, store, maintain, manage, and authenticate identity information of individuals.”
“The 17-year proposal provides an expedient, comprehensive and long-term solution that will enable the government to realize the full potential of its strategic programs by providing a safe and secure identification and benefits payment mechanism for individuals transacting with the government,” it added.
The government is seeking to implement a national ID system to simplify transactions by providing a single proof of identity.
Its full implementation is scheduled for next year.
Digital research company Research and Tech Lab (RTL) said a large majority of online interactions it observed are positive on the national ID system.
“Out of 333 publicly shared sentiments and 28,070 total reactions, comments, and shares, 81.49% see the upcoming ID system as a good move from the government,” it said in a statement on Monday.
It said 14% of the those who held positive views on the national ID noted how it will make the country “comparable with other countries that already implement the all-in-one identification system.”
For those who do not favor the national ID system, RTL said the main reasons cited are possible data breaches. — Denise A. Valdez

BoI preparing province-level push for inclusive business models

THE Board of Investments (BoI) is preparing a national development plan that will accommodate inclusive business (IB) models at the provincial level.
“We are in the process of developing a national IB framework to integrate it with the programs of the DTI (Department of Trade and Industry),” BoI’s IB Division Director Melanie L. Moleño said in an interview with BusinessWorld last week in Makati City.
“The idea is for us to have a solid document to show that we can implement IB in the provincial level, because until we [don’t] have such framework, it will be hard to push,” she added.
The government conducts livelihood training and dialogues on IB to prepare local government units to work with investors establishing projects in their jurisdictions.
However, Ms. Moleño said public awareness of the concept remains low.
Citing a 2017 report, Business+ Philippines, jointly produced by the BoI, the United Nations Development Programme Philippines and the UNDP Istanbul International Center for Private Sector in Development, she said 1.51 out of 7 companies interviewed for the study still had very low levels of awareness of the IB concept.
Some also tend to confuse IB with corporate social responsibility activities.
Ms. Moleno said IB models aim to ensure that the poor members of the community make an impact on the company’s financial performance. This is achieved through directly employing them and procuring their goods and services.
The Philippines has standards to evaluate the IB friendliness of investments. Under the 2017 to 2019 Investments Priority Plan, at least 25% of total cost of services must be accounted for by micro and small enterprises for a venture to qualify as an IB.
Tourism projects are required to generate at least 25 direct jobs within target communities while agri-modernization projects should engage at least 300 marginalized individuals.
Of these quotas, about 30% must be women.
Income for those employed should be minimum wage or an alternative baseline income plus 20%, whichever is higher.
IB firms are also required to provide technical assistance and capacity-building to small enterprises, and facilitate access to finance.
Those who qualify are offered a five-year income tax holiday incentive.
However, the BoI said gaining eligibility is difficult for some firms.
“It’s not easy for companies to actually say they will engage 300 farmers… many change business models in the long run. What we want is long-term sustainability,” she added.
Since early this year when it started accepting applications, the BoI-IB has approved two projects for IB incentives. These are the Ayala Group’s P1.7 billion Seda LioResort in El Nido, Palawan and the Bulacan-based poultry processing plant of the Cargill Joy Poultry Meats Production, Inc., a joint venture between Cargill and Jollibee Foods Corp.
Asked if the BoI will review the policy guidelines to make applications easier, Ms. Moleño said the criteria are under review.
She said the BoI is looking for ways to recognize existing projects that employ IB practices but are no longer eligible for perks on offer. The current law prevents existing investors to apply for another set of incentives and be granted more than one incentive package.
As such, the BoI-IB is looking at establishing an accreditation system that will recognize existing and future projects as implementing IB practices
“That will at least acknowledge that a project is practicing inclusive business and they can add that to their portfolio,” she added. — Janina C. Lim

Tax appeals court partially grants Pilipinas Shell excise tax refund petition

THE Court of Tax Appeals (CTA) has partially granted the petition of Pilipinas Shell Petroleum Corp. for a refund on excise tax erroneously collected on its jet fuel imports by the Bureau of Internal Revenue (BIR).
In a decision promulgated by the tax court on July 27, it ordered the internal revenue commissioner “to refund or provide a tax credit certificate in favor of the Pilipinas Shell Petroleum Corp. the amount of P56,762,554.12, representing excise taxes erroneously collected on its imported Jet A-1 fuel sold to international carriers for the period Aug. 12, 2013 to Dec. 31, 2013.”
Pilipinas Shell in its Petition for Review sought a refund of P61.47 million worth of tax it paid on the sale of 16.75 million liters of aviation jet turbo fuel (Jet A-1).
The court found that only P56.76 million in claimed payments were supported by proper documentation.
The decision to refund the excise tax was pursuant to the Section 135 of the National Internal Revenue Code (NIRC) of 1997, also cited by Pilipinas Shell, which states that petroleum products sold to “international carriers… of foreign registry (for) their use or consumption outside the Philippines” are exempted from excise tax.
“Very clearly, petitioner as the statutory taxpayer, who paid the excise taxes on petroleum products sold to international carriers for their use or consumption outside the Philippines, is entitled to claim refund of the subject excise taxes paid based on Section 135 of the NIRC, as amended, as the payment thereof is deemed illegal or erroneous,” the court said. The ruling also noted that Shell also filed its claim for refund within two years from the date of payment in compliance with Sections 204 (C) and 229 of the NIRC. Pilipinas Shell initially filed the petition for refund on Aug. 18, 2014 to the BIR but directed the petition for review to the CTA. — Vann Marlo M. Villegas

Gov’t debt service bill rises 10%

THE GOVERNMENT debt service bill in the first half was P415 billion, up 9.92%, the Bureau of the Treasury (BTr) said.
The payments represent 56.68% of the debt service allocated for 2018, based on the Budget of Expenditures and Sources of Financing (BESF).
Of the total debt payments made in the first half, 60.2% of the total or P250.39 billion, went to settle principal obligations, up 10.41% year-on-year.
Interest payments amounted to P165.51 billion, up 9.19%.
Some 68% or P170.39 billion worth of principal payments went to domestic creditors for maturing bonds, while P80 billion went to foreign creditors.
Some 70% or P114.57 billion worth of interest payments went to domestic creditors while P50.94 billion went to foreign holders of government debt.
In June, the government paid out P30.76 billion, up 22.81% from a year earlier, including P24.07 billion worth of interest, up 24.85% higher from a year earlier.
Of the June interest payments, P19.5 billion went to domestic creditors.
June amortization payments on the other hand totaled P6.69 billion, up 15.96%, with P6.51 billion going to foreign creditors. — Elijah Joseph C. Tubayan

Environmental issues, instability may undermine labor — ILO

THE International Labor Organization (ILO) has found that 93% of the poor in the Asia-Pacific are exposed to environmental degradation and political instability, creating difficulties for the labor sector.
“Conflicts have had a negative impact on fundamental rights at work, as there are many instances when freedom of association and collective bargaining, may be restricted by states during conflicts and disasters,” ILO Philippines Director Khalid Hassan said in the Trade Regional Forum on Decent Work for Peace and Resilience held at Crown Plaza on Tuesday.
In the Asia-Pacific, ILO reported in a statement on Tuesday that “about 93% of people in extreme poverty live in countries that are environmentally vulnerable, politically fragile or both.”
They also estimated that 1.5 billion live in countries going through “fragility and armed violence” and an additional 200 million people are affected by all kinds of onset disasters.
“Fragility, conflict, and disaster undermine people’s livelihoods and create decent-work deficits. If not addressed, these problems can lead to increased poverty, inequality, and social unrest,” ILO said.
Mr. Hassan said that both conflicts and disasters make countries experience “untold hardships including destruction of workplaces, increase in unemployment, separation of families, and displacement of people.”
He added that such crises in vulnerable countries experience also “dislocate” their labor markets.
“This leads to decreased protections against discrimination and increases in the use of forced labor and child labor,” he said.
ILO said that its Recommendation 205 on Employment, Decent Work for Peace and Resilience emphasize “prevention, recovery, peace, and resilience” by creating more employment and decent jobs.” — Gillian M. Cortez

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