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Philippine agents arrest 162 foreigners at Cebu POGO

PHILSTAR FILE PHOTO

PHILIPPINE authorities arrested more than 160 foreign nationals at an illegal offshore gaming hub in the central city of Lapu-Lapu at the weekend, according to a presidential task force.

The Presidential Anti-Organized Crime Commission (PAOCC) said its raid of a property of Tourist Garden Hotel in Lapu-Lapu City, Cebu province stemmed from the request of the Indonesian Embassy to rescue eight of their nationals who were being held against their will by the POGO operator.

Authorities arrested 162 foreign nationals working at the alleged scam farm, including 83 Chinese, 70 Indonesian, two Taiwanese, six Burmese and a Malaysian, during the raid on Saturday, the PAOCC said in a statement.

It said five Filipino workers engaged in scamming activities were also found.

“Six of the said [Indonesian] human trafficking victims were rescued, while 162 foreign nationals were caught in the act of engaging in scamming activities,” PAOCC said.

It said the POGO hub had three different scam work areas upon inspection.

“The different operating units are currently conducting an inventory of the place in preparation for the application of a warrant to search and examine computer data,” it said.

The arrested foreigners were brought to Manila “to face inquest proceedings for violation of immigration laws,” it added.

POGOs, which mainly cater to Chinese markets, have been a major headache for the government, so much so that President Ferdinand R. Marcos, Jr. ordered their ban in July.

Congress under his predecessor Rodrigo R. Duterte passed a law taxing POGOs to legalize them, despite concerns about their social costs. Chinese President Xi Jinping had asked him to ban them.

Mr. Marcos said in his third address to Congress POGOs have been “disguising” as “legitimate entities,” but their operations have ventured into illicit areas, linking them to financial scams, money laundering, prostitution, human trafficking, kidnapping, brutal torture and “even murder.” — Kyle Aristophere T. Atienza

VP’s secret fund use not sufficient for impeachment

PNA PHOTO BY ALFRED FRIAS

By Kenneth Christiane L. Basilio and Chloe Mari A. Hufana, Reporters

THE UNACCOUNTED P73-million spending of the Office of the Vice-President’s (OVP) 2022 confidential and intelligence funds (CIF), flagged by the Commission on Audit (CoA), is not yet sufficient as grounds for impeachment, a constitutional law expert said.

It, however, potentially opens Vice-President (VP) Sara Duterte-Carpio to litigation, according to Michael Henry Ll. Yusingco, a senior research fellow at the Ateneo Policy Center, noting that vice presidents are not immune from legal action.

“[It is] not yet a ground for impeachment,” he told BusinessWorld in a Facebook Messenger chat at the weekend.

In a CoA report made public last week, state auditors said they cannot account for the P73.3 million expenditure of the OVP’s P125-million secret fund in 2022, citing lack of documentation supporting the spending. The OVP reportedly spent the P125 million within 11 days, generating controversy among the public.

Party-list Rep. France L. Castro said last week that the OVP’s utilization of CIF could be grounds for impeachment. Talks of the Vice-President’s impeachment also started to surface after Ms. Duterte-Carpio revealed in her opening statement that there were ongoing efforts to plot her ouster.

Edmund Tayao, president of Political Economic Elemental Researchers and Strategists, said in a separate Viber message that the Constitution provides for many possible grounds for impeachment, and that “the CoA findings, especially when not addressed, is a considerable ground.”

The OVP’s proposed 2025 budget snag at the House of Representatives shows a “complete breakdown of relations between the vice president and the administration,” he added.

The OVP has proposed a P2-billion budget for next year, according to the 2025 National Expenditure Program, 7% lower than the OVP budget in the previous year.

“The increases in the budget of OVP since 2022 is largely due to various programs that duplicate existing programs and projects of other departments,” Zy-za Nadine M. Suzara, a public budget analyst and former executive director of policy think tank Institute for Leadership, Empowerment, and Democracy, said in a Viber message. 

The OVP did not immediately reply to an e-mail seeking comment.

LACKS RESPECT
Ms. Duterte-Carpio made headlines last week for not answering intelligently in the same budget hearing, repeating a script that avoided answering the inquiries of congressmen on her over P2-billion 2025 budget.

Federation of Free Workers (FFW) President Jose Sonny G. Matula sounded the alarm over the Vice President’s refusal to defend her office’s 2025 spending plan, which could reflect her lack of respect to the public.

He said failure to prepare for a budget hearing sends a message that may be interpreted as a lack of respect for taxpayers and their hard-earned contributions to the nation’s coffers.

“As a lawyer, the Vice-President should be well aware of the importance of preparation, much like preparing for a court case,” he told BusinessWorld in a Viber message at the weekend.

“A congressional budget hearing is no different… These hearings are not just routine bureaucratic procedures but critical platforms for ensuring that the people’s money is appropriated wisely and transparently,” he added.

Mr. Matula said every peso should be accounted for in public funds, citing that public money should be allocated to projects or activities that serve Filipinos.

He likened Ms. Duterte-Carpio to a “bird parroting lines than a prepared and thoughtful leader, raising concerns about her readiness and dedication to the role.”

In a separate interview, Leonardo A. Lanzona, Jr., an economics professor at the Ateneo de Manila University, said the OVP must answer two questions to the public.

“What are these public goods and how are they going to help society in general? It is up to Congress and the Department of Finance (DoF) to explain to the public how these [will be] financed,” he told BusinessWorld in a Facebook Messenger chat.

“Hence, the OVP has to help Congress in identifying what these public goods [are] and why these are worth funding.”

He added that if public goods do not produce what is expected of them, the DoF will scrap and replace them with more effective programs.

“The issue here is the sustainability of public goods which the government produces.  These are not going to be funded by the private sector, and the financing of these goods [has] to come from taxes paid by the public.”

Tropical depression forms in Samar

PAGASA.DOST.GOV.PH

THE LOW-PRESSURE AREA (LPA) near Eastern Visayas has intensified into a tropical depression (TD), the state weather bureau reported on Sunday.

In a bulletin, the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) said that TD Enteng was packing maximum sustained winds of 45 kilometers per hour (kph) near the center and gustiness of up to 55 kph.

The weather bureau said that Enteng may reach tropical storm category by Monday, Sept. 2.

“On the forecast track, a landfall and passage over the localities in Bicol Region and Eastern Visayas area is not ruled out within the next 48 hours,” PAGASA said.

As of 11 am the TD was last seen 120 kilometers (km) north northeast of Borongan City, Eastern Samar or 150 km east of Catarman, Northern Samar.

PAGASA had hoisted Tropical Wind Signal no. 1 over the eastern portion of Camarines Sur, Catanduanes, Albay, Sorsogon, Burias Island, and Ticao Island.

Signal no. 1 was also issued in Northern Samar, Samar, Eastern Samar, Biliran, and the northeastern portion of Leyte. — Adrian H. Halili

PHL active mpox now at 8

REUTERS

THE PHILIPPINES on Sunday posted three more monkeypox (mpox) cases, bringing the total number of active cases in the country to eight, according to its health agency.

Two of the three new cases were from Metro Manila, while one was from Calabarzon, the Department of Health (DoH) said in a statement.

All the new patients were infected with a mild Clade II variant and not the potentially more deadly variant that sparked global concern.

“Findings indicate that the transmission dynamics of Clade II still hold true: close, intimate, and skin-to-skin contact,” DoH said.

It said the two patients from Metro Manila had “anonymous sexual encounters with more than one partner,” while the patient from Calabarzon “had close, skin to skin sexual contact with another person who had skin symptoms.”

An outbreak in African countries prompted the World Health Organization (WHO) to declare a global health emergency in mid-August, and launch a $135-million response.

The Philippine health department last month said it had already signified intent to the WHO to get access to smallpox vaccines. — Kyle Aristophere T. Atienza

Multibillion Sulu airport mulled

FREEPIK

COTABATO CITY — Provincial officials in Sulu and experts in the Bangsamoro government will be drafting a feasibility plan for a multibillion Sulu airport to drive up investments in the province.

Sulu Gov. Hadji Abdusakur M. Tan, Sr. and two representatives of the Bangsamoro government, lawyer Ranibai D. Dilangalen and Engineer Amil J. Abubakar, signed on Thursday, Aug. 29, a Memorandum of Understanding binding their offices to jointly plan the setting up of a large new airport in the island province.

Ms. Dilangalen is a senior official of the Bangsamoro Airport Authority under the region’s Ministry of Transportation and Communications while Mr. Abubakar is deputy director of the Bangsamoro Planning and Development Authority.

Bangsamoro Transportation and Communications Minister Paisalin P. Tago told reporters on Sunday that they aim to establish a new airport, based on international standards, at the border of Talipao and Maimbung towns in the province, long cleared from presence of the Abu Sayyaf via joint peacebuilding programs of local executives, the local communities, the police and the military.

The regional government of the Bangsamoro Autonomous Region in Muslim Mindanao shall bankroll the project, according to Tago. — John Felix M. Unson

Australia, PBEd train principals

THE AUSTRALIAN Government and the Philippine Business for Education (PBEd) enhanced the professional development of 67 Baguio school principals.

The training, aimed at improving student outcomes and enhancing school performance, was conducted through the Generate Opportunities & Lead in Education to Accelerate Development (GO & LEAD) program.

Under the program, 67 school chiefs went through comprehensive training, focused on data-driven school management, leadership strategies, and educational technology integration.

“Education has always been central to the strategic partnership between Australia and the Philippines,” Australian Embassy in the Philippines First Secretary for Education Vivienne Sykes said in a statement over the weekend.

“Australia will continue supporting long-term policy and institutional reforms that improve the quality of Philippine human capital through education,” she added.

Education Secretary Juan Edgardo M. Angara had earlier emphasized principals’ roles in implementing the MATATAG curriculum, specifically in customizing education strategies based on local contexts. PBEd noted the GO & LEAD program supports the MATATAG curriculum by strengthening the leadership skills of school principals. — Chloe Mari A. Hufana

Maharlika to be active in 2025 in all priority investment areas

By Beatriz Marie D. Cruz, Reporter

THE Maharlika Investment Corp. (MIC) said it expects to be committing “significant” funds next year to all its priority investment areas, led by energy security.

“I think next year will be, well, it’ll be a full-blown operation. I expect that we should be able to deploy a significant amount of our allocated capital,” MIC President and Chief Executive Officer Rafael D. Consing, Jr. said on the sidelines of a Senate hearing on Aug. 27.

“We basically identified the sectors where we’re going to be deploying them. Energy security sits on top of that list. Digital connectivity will be another one. Resource development will be another one. Healthcare will be another one. So hence, we expect to be able to deploy (funds to) all these,” he said.

During the Senate Finance Committee hearing, Mr. Consing said the MIC is expected to make its initial investments within 90 days.

Energy is expected to take up the bulk of the sovereign wealth fund’s initial investments, he said.

In the absence of investment activity, the fund has earned about P1.5 billion in interest income, Mr. Consing said.

In an Aug. 14 Senate hearing, Finance Secretary Ralph G. Recto said no funds have been allocated to the MIC next year as it is “taking time to identify investments.”

Earlier this year, the MIC signed agreements with the electric cooperatives of Palawan and Mindoro to potentially fund the power infrastructure of both islands.

“That’s ongoing. But we have to go through a process,” he said. “In terms of announcements… maybe Mindoro ahead of Palawan.”

The MIC has also yet to fill in the last seat on its board, Mr. Consing said.

John Paolo R. Rivera, senior research fellow at the Philippine Institute for Development Studies, said the corporation must take up the best practices of the private sector.

“As this involves fund management, profit generation, value creation, the MIC must be run like a private-sector entity where checks and balances are strict, responsibilities and accountabilities are defined, and penalties are imposed to those who do not meet targets,” he said in a Viber message.

The MIC must also expand its investment portfolio in real estate, technology, and renewable energy, he added.

“These yield relatively higher returns but may require greater capital outlays. Investments should be made in assets and securities that have higher returns for a given level of risk. That’s why expertise (in these fields) is a must,” he said.

Leonardo A. Lanzona, an economics professor at the Ateneo De Manila, said the corporation must differentiate its investment mandate against those of other government agencies while aligning its activities with development goals.

“MIC must justify its existence by showing results that are not usually expected from the government… Yet, it must define a well-articulated investment mandate that aligns with national development goals and seeks diversified returns across various asset classes,” he said in via Messenger chat.

It must also develop a robust risk management system to mitigate financial, operational, and market risks, he added.

The MIC in July obtained membership in the International Forum of Sovereign Wealth Funds. It also completed its investment and risk management framework.

The fund has an authorized capital stock of P500 billion. Government banks Land Bank of the Philippines and Development Bank of the Philippines contributed P50 billion and P25 billion, respectively, to its initial capital. The National Government also provided P50 billion.

‘Bay Area’ plan seen possibly complementing Luzon Corridor

REUTERS

By Justine Irish D. Tabile, Reporter

THE Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) said the government is studying how the “Greater Manila Bay Area” plan proposed by China Ambassador Huang Xilian could complement the US-backed Luzon Economic Corridor economic integration project.

“The development or the concept of a Greater Manila Bay Area … I think it’s an idea. It’s something that can be looked at a little deeper,” Special Assistant to the President Frederick D. Go, who head OSAPIEA, told reporters on the sidelines of the National Retail Conference and Expo.

He said that the proposal could coexist with the Luzon Economic Corridor, which overlaps with areas eyed for the Greater Manila Bay Area.

“I think the idea is to bring about the model of Hong Kong, Macau, Shenzhen, and Guangzhou, and if you look at the Luzon Economic Corridor and the rail that’s being considered, it traverses exactly that corridor — the Manila Bay Area,” he added.

He said that the Chinese proposal came out of a meeting two weeks ago, with another meeting set in two or three months to talk about development of the project.

“The idea will find its roots there in the dialogues between the local federation and the Hong Kong and Macau business associations,” he added.

Asked about the funding, he said that the proposal is still in its very early stages.

“But if they will fund such a study, I think we should welcome it. I think when you have these huge projects, it starts with funding for a study, and then you will do a real masterplan, and then you do the actual implementation,” he said.

The Chinese ambassador proposed the concept of replicating the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) in the cities and provinces around Manila Bay during the Manila Forum for Philippines-China Relations on Aug. 22.

The GBA refers to a cluster of cities in and around the Pearl River Delta being positioned by China for greater economic integration. It consists of Guangzhou, Shenzhen, Zhuhai, Foshan, Dongguan, Zhongshan, Jiangmen, Huizhou, and Zhaoqing.

The cluster recorded $1.98 trillion in gross domestic product last year, making it among the fastest-growing regions in China.

Filipino-Chinese Chambers of Commerce and Industry President Cecilio K. Pedro has said that replicating China’s Greater Bay Area in the Philippines could help attract Chinese investments to the Philippines.

UAE deal to help PHL close gap with ASEAN neighbors in Mideast trade

REUTERS

THE Department of Trade and Industry (DTI) said it is pinning its hopes on a Philippines-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (CEPA) to help close the gap with the rest of region in developing trade links with the Middle East.

“Despite the UAE being a small market, they import about $420 billion from the rest of the world, while imports from ASEAN are about $22.91 billion,” Biance Pearl R. Sykimte, director of the DTI Export Marketing Bureau, said at a public hearing on Friday.

“And if you look at our competitors (in Southeast Asia), they export two to five or six times what the Philippines exports to the UAE,” she added.

The Philippines exported around $1.5 billion of products to the UAE in 2022, according to Ms. Sykimte, against the $2.06 billion by Myanmar, $3.27 by Indonesia, $4.91 billion by Thailand, and $7.47 by Vietnam.

“There’s still a lot of unrealized export potential in the UAE market, about $380 billion. And based on the study done by the International Trade Center, $211 billion of this unrealized export potential is growth-based,” she said.

“Meaning, this is based on the projected growth of the UAE market and the growth of the Philippine exports to the UAE,” she added.

The Philippines exports around $130 million worth of agricultural products to the UAE, she said.

“The UAE imports nearly $2 billion in farm goods, and if you look at how much our ASEAN neighbors are exporting to the market, it is significantly higher,” she said.

Indonesia exported $390 million in agricultural goods to the UAE, Myanmar $370 million, Thailand $320 million, and Vietnam $260 million.

In negotiating the CEPA, the Philippines is interested in the liberalization of trade in products it currently exports to the UAE.

“We also look at what the UAE is importing in large quantities that the Philippines can potentially supply,” she said.

“We also included in our export interest the products that may not be currently being imported by the UAE in large quantities, but there’s export opportunities for the Philippines for these product lines,” she added.

She said the Philippines is focused on easing trade terms for about 98-99% of the products it exports to the UAE market.

The government is targeting to conclude negotiations for the PH-UAE CEPA as early as October.

The third round of negotiations is set for the third week of September.

If realized, this will be the fourth bilateral FTA (free trade agreement) of the Philippines, next to those concluded with Japan, the European Free Trade Association, and South Korea, which is still awaiting ratification. — Justine Irish D. Tabile

Rice imports hit 2.72 MMT in late Aug. as global prices rise

BW FILE PHOTO

PHILIPPINE rice imports amounted to 2.72 million metric tons (MMT) as of late August, according to the Bureau of Plant Industry (BPI).

The BPI reported that rice shipments in August, as of Aug. 22, totaled 208,949 MT, behind the year-earlier pace of 332,892 MT.

University of Asia and the Pacific Center for Food and Agribusiness Executive Director Marie Annette Galvez-Dacul said high global rice prices during the first half may have slowed orders for foreign rice.

“Higher world prices (may have caused) importers to see not much gain even with the lower Philippine import tariffs,” Ms. Dacul said via Viber.

President Ferdinand R. Marcos, Jr. signed Executive Order No. 62, which reduced rice tariffs to 15% until 2028, as an inflation-containment measure. The new tariff regime is subject to review every four months.

“The lower 15% tariff was intended to bring in rice and lower retail prices. However, it is not happening. Thus, bringing it back to 35% will just slow down shipments more,” she said.

Agriculture Secretary Francisco P. Tiu Laurel, Jr. said last week that the Department of Agriculture does not plan to recommend raising tariffs at the upcoming review, as retail prices have not dropped in the face of slower import shipments.

“It seems that the tariff cut has not worked. In the meantime, we are losing tariff revenue,” Federation of Free Farmers National Manager Raul Q. Montemayor said via Viber.

The BPI said Vietnam remained the top supplier of rice as of late June, accounting for 76.8% of all imports in the year to date. Shipments totaled 2.09 MMT.

In January, the Philippines and Vietnam signed an agreement giving the Philippines a quota of 1.5 MMT to 2 MMT of rice annually for five years.

“Reports indicate that Vietnam has raised its prices, which means they have been the beneficiaries of the tariff cuts, not our consumers,” Mr. Montemayor added.

Thailand supplied 368,530 MT during the period, or 13.5% of the total, followed by Pakistan with 5.7% or 156,121 MT.

Rounding out the top five were Myanmar and India which shipped 66,910 MT and 21,890 MT of rice, respectively.

The Philippines imports about 20% of its rice requirement amid inadequate domestic production, but also to tame high rice prices. — Adrian H. Halili

Retailers see share of GDP growing despite lack of tax on online sellers

PHILIPPINE STAR/MICHAEL VARCAS

THE Philippine Retailers Association (PRA) said it expects the retail industry’s contribution to the economy to grow by at least one percentage point this year even in the absence of a tax regime for its online competitors.

PRA President Roberto S. Claudio told reporters on the sidelines of the National Retail Conference and Expo that the retail industry accounted for 18.6% of gross domestic product (GDP) in 2022.

“It will keep growing. The GDP contribution of retail has been going up at least 1-2 percentage points a year. So we feel that by the end of 2024, that should move up to about 20%,” Mr. Claudio said.

Citing data from between 2017 and 2022, he said that taxes paid by retailers in the Philippines averaged P750 billion over the five-year period.

“These are a mix of value-added tax (VAT), income tax, municipal tax, excise tax, and whatever taxes that are being paid,” he said.

However, he said that the government’s revenue from retailers could decrease over time if it does not create a level playing field with online merchants.

“Since online transactions are not charged VAT and duties, we feel that what is happening is business is being taken away from brick-and-mortar stores because (and) moving online,” he added.

He said that the government is missing out on the opportunity to benefit from the growth of online e-commerce, on which no taxes and duties are imposed.

“We cannot compete with the prices online because the online sellers are not paying VAT and duties,” he said.

“We pay 12% for VAT, and other products even have 5% duties, so easily (online is) 17% cheaper,” he added.

A measure that seeks to impose a 12% VAT on foreign digital service providers was approved by the bicameral conference committee on June 27 and is now awaiting the signature of President Ferdinand R. Marcos, Jr.

Mr. Claudio said the measure could result in a pushback from consumers, though the government must address the revenue it has been forgoing.

“It deprives the government of the revenue. And, because the traditional retailers are losing out to online, over time, our sales will fall. And, when our sales fall, our tax declarations will also go down,” he said.

“Our appeal is for leveling the playing field. It’s up to the government whether they want to earn revenue or not. Because you can just imagine how much revenue the government is losing out on simply because it cannot impose VAT on foreign merchants,” he added. — Justine Irish D. Tabile

NGCP fined P3.5M over delayed transmission projects

ANDREY METELEV-UNSPLASH

THE Energy Regulatory Commission (ERC) has imposed a fine of P3.5 million on the National Grid Corp. of the Philippines (NGCP) over its failure to meet the timelines set for 10 transmission projects.

The regulator cited “unjustified delays in implementing CAPEX (capital expenditure) projects,” according to a statement issued on Saturday, detailing a decision made on June 25 and promulgated on Aug. 31.

The ERC said that the NGCP failed to meet the approved project timelines of the Baloi-Kauswagan-Aurora 230-kilovolt (kV) Transmission Line Project (Phase 2) – (Kauswagan-Lala 230-kV T/L Project), the Pagbilao EHV (extra high voltage) Substation Project, the Antipolo EHV Substation Project, the Tuy (Calaca) – Dasmariñas 500-kV T/L Project, the Cebu-Lapu-Lapu Transmission Project, the Cebu-Negros-Panay 230-kV Backbone Project Stage 3, and the Tacurong-Kalamansig 69-kV Line.

The ERC said that a separate decision covering 27 more CAPEX projects covered by the investigation will be issued separately.

In its decision, the ERC cited the grid operator’s obligation to adhere to the project timelines approved by the ERC when it applied for the CAPEX projects.

“It must be emphasized that this is not an issue of whether or not these CAPEX projects have a rate impact to the consumers because any delay and unrealized CAPEX project is prejudicial to the public,” the regulator said.

“This is especially true for NGCP’s CAPEX projects since (NGCP) serves as the sole concessionaire for the operation of the transmission system. Any inexcusable delay on these projects will have a far-reaching impact on our nation’s electric power quality, reliability, security and affordability,” it added.

The ERC said that the delays to the CAPEX projects could affect the grid’s ability to absorb new capacity, “ultimately affecting public interest.”

Asked to comment, NGCP Spokesperson Cynthia P. Alabanza said: “We confirm receipt of the ERC’s Decision dated June 25, 2024 yesterday, Aug. 30, 2024.”

“We are studying the issuance and our legal options under applicable laws, rules and regulations,” she said via Viber.

The ERC said that “any motion for reconsideration of the decision will not prevent the said decision from becoming executory, unless otherwise ordered by the commission.” — Sheldeen Joy Talavera

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