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DTI recruiting major retailers to sell P38/kilo imported rice

THE Department of Trade and Industry (DTI) will invite major retailers to import 350,000 metric tons (MT) of rice to supply supermarkets by the end of October, noting that two such groups have expressed their willingness to import the staple.
“We are writing now to the retailers, and even the traders, who will guarantee to sell at [P38 per kilogram],” Trade Secretary Ramon M. Lopez told reporters on Tuesday on the sidelines of the Inclusive Innovation Conference 2018 held in Pasay City.
“While prices remain high, we will apply pressure by encouraging sales at P38,” Mr. Lopez added, referring to the suggested retail price for regular-milled rice, which is the variety typically purchased from the National Food Authority (NFA) by low-income families.
He added that the DTI will propose 350,000 MT in rice imports to the interagency NFA Council (NFAC) which assesses the domestic rice supply and demand before approving importation.
A member of the NFAC, the DTI said the 350,000 MT is estimated to fill the “immediate needs” of the B, C, D and E market segments.
Said he has discussed the scheme with retailers that he declined to identify, adding that they are “willing” to sell P38 rice in their stores.
“They are major retailers who can guarantee selling rice at this price. They are also trusted by the public and have systems we can audit.”
He said the import scheme is open to all parties that commit to sell at P38, but threatened unspecified sanctions against any parties that violate these terms. Those who violate the proposed conditional rice importation scheme.
Mr. Lopez expects the availability of the volume in supermarkets by the end of the month after President Rodrigo R. Duterte signed Administrative Order 13 to ease the rice importation process. — Janina C. Lim

DoF: TRABAHO Bill targets abuse of investment perks

TRANSFER pricing schemes employed by companies have resulted in annual revenue losses of at least P43 billion in 2015, the Department of Finance (DoF) said.
Finance Undersecretary Karl Kendrick T. Chua said some businesses abuse transfer pricing arrangements, whereby profit is maximized in low-tax jurisdictions.
Mr. Chua added that the lost revenue comes on top of the projected P301 billion in foregone revenue that year as a result of tax incentives.
Apart from international transfer pricing, Mr. Chua said there are also instances of domestic transfer pricing where profits are recognized in units located in economic zones or to units enjoying tax breaks.
“A firm can also pad its direct costs with indirect costs to pay even lower taxes under a regime where it only gets to pay the 5% GIE (gross income earned) tax,” Mr. Chua said in a statement yesterday.
“Certain favored companies, particularly those in SEZs (special economic zones), get to enjoy this special 5% forever under the current tax-incentives system.
Transfer pricing abuse has also been cited by the DoF as one of the “top 10 abuses” of the country’s tax incentive regime, and called upon the Senate Committee on Ways and Means to pass the second tax reform package meant to address the issue.
By booking sales, loans, royalties, and management contracts under related entities enjoying lower tax rates, a company can significantly reduce its tax payments to the government.
Estimates made by the DoF and the Bureau of Internal Revenue show that the government lost some P25.9 billion in 2011, P36.5 billion in 2012, P35.1 billion in 2013, and P40 billion in 2014 from such practices.
Other schemes currently under scrutiny are investment incentives from regional enterprise and export zones, the disguise of unqualified activities as worthy of tax breaks, the overvaluation of assets, and “fictitious employees” and fake training programs to enjoy employment and training credits, the DoF has said.
The House of Representatives approved House Bill 8083 or the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) Act last month. The measure seeks to gradually reduce the corporate income tax rate to 20% from the current 30% by two percentage points every other year starting 2021. This will accompanied by a new one-size-fits-all scheme for tax incentives, which will replace various types granted by investment promotion agencies and likewise cap the number of years a company can enjoy such perks.
Under the proposal, incentives will include a three-year income tax holiday (ITH) as well as allowable deductions up to five years for “labor, training, infrastructure building, and research and development expenditures.” This compares with the current regime which grants an ITH for up to nine years, with a 5% tax on gross income.
The measure is now pending at committee level in the Senate. — Melissa Luz T. Lopez

Central Luzon dev’t bill passes on 3rd reading

THE SENATE on Monday passed on third and final reading a bill creating the Regional Investment and Infrastructure Coordinating Hub (RICH) of Central Luzon, which seeks to generate jobs and attract capital to the region.
Senate Bill No. 1997 was approved with 18 affirmative votes, no negative votes, and zero abstentions. It was authored and sponsored by Senator Richard J. Gordon, chairman of the committee on government corporations and public enterprises. It was co-authored by Majority Leader Juan Miguel F. Zubiri and Minority Leader Franklin M. Drilon.
“The name of the bill reflects its aim to enrich the people by encouraging and promoting investments and infrastructure in Central Luzon, as well as addressing bottlenecks, laying the foundation for long-term growth in the region, creating jobs and improving the quality of life of Filipinos,” Mr. Gordon said in a statement.
Under the proposed measure, RICH will replace the Subic-Clark Alliance for Development Council (SCAD). It was SCAD’s task to harmonize business and economic policy as well as to attract investment to the region.
The proposed hub’s board of directors will have nine members, including the heads of economic zones based in the region.
Mr. Gordon said the bill also seeks to maximize the infrastructure of Central Luzon, such as the Subic and Mariveles seaports, North Luzon Expressway, Tarlac-Pangasinan-La Union Expressway (TPLEx), and Subic-Clark-Tarlac Expressway (SCTEX).
One of the goals of the bill is to help decongest Metro Manila by “dispersing industries and population to Central Luzon,” he added.
Its counterparts measure in the House of Representatives remained pending in the committee on government enterprises and privatization. — Camille A. Aguinaldo

European chamber considering SME partnering project extension

THE European Chamber of Commerce of the Philippines said that it plans to extend its five-year project, known as the EU-Philippines Business Network, which partners small and medium enterprises from Europe with domestic companies.
In a chance interview on the sidelines of the 2018 Sustainable Agriculture Forum, ECCP Executive Director Florian Gottein said that “with the European Union, we have the EU-Philippines Business Network. It is a five-year project which is aimed to bring European SMEs to the Philippines to set up shop here, to produce here, to team up with local partners and we’re now at the end of this project and we are looking to extending it.”
The EPBN started in December 2013 and is set to end on Dec. 16, 2018.
Asked about plans to extend the program, Mr. Gottein replied, “That depends on the new delegation of business… but in other countries, that has been extended for 1 and a half to 2 years so we’re looking at the same.”
Mr. Gottein said that ECCP member-companies have started investing in high-value crops in the Philippines such as coffee and cacao.
“If you look at the Philippines, the average age is 23 years while the average age of the Filipino farmer is 57 years. That’s a huge gap… A couple of our member companies are investing in high-value crops (like) coffee (and) cacao and that’s a huge market in Europe… I think there are a lot of things we can do together in order to produce more at more competitive price for the domestic market and the export market,” Mr. Gottein said.
Nestle Philippines Vice-President and Corporate Affairs Executive Ruth P. Novales meanwhile said that the company is pushing the practice of intercropping among coffee farmers to give them alternative sources of income in other parts of the year, thereby improving he productivity of their land.
Intercropping is the practice of growing a crop in the space between rows of plants of a different kind.
“There is a shift to other crops. Coffee is harvested only once a year…so we now advocate intercropping,” Ms. Novales said.
Agriculture Undersecretary Evelyn G. Laviña in a speech projected global cacao demand at 4 million metric tons by 2020, and estimated but the Philippines’ ability to service domestic demand at only 20%.
She, however, explained that the DA has a positive attitude toward the development of high value crops with the help of the private and academic sectors.
“It is the private sector that can mobilize the capital, and academic institutions that can provide the research,” Ms. Laviña said.
Former agriculture secretary William D. Dar, meanwhile, also backed a shift in focus from planting rice to growing high-value crops.
“We have to reinvent Philippine agriculture,” Mr. Dar said. — Reicelene Joy N. Ignacio

Sun Life cuts 2018 GDP estimate to 6.4% from 7%

SUN LIFE of Canada (Philippines), Inc. (Sun Life Financial) has downgraded its economic growth forecast for 2018, driven by lower consumption due to elevated inflation.
In a news conference in Makati City, Sun Life Financial Chief Investment Officer Michael Gerard D. Enriquez said the group expects gross domestic product (GDP) growth of 6.4% in 2018, against the 7% previous estimate.
If realized, the inflation forecast will be below the 7-8% target set by the government for this year until 2022.
“Higher inflation has really been slowing down expectations of GDP growth, and this has been evident in the second-quarter GDP,” Mr. Enriquez said.
Growth was 6% in the three months to June, well below the revised 6.6% from a year earlier. The second quarter reading was the lowest in three years and below market expectations of 6.8% in a BusinessWorld poll.
He called the 6% result “way disappointing” because the consensus was 6.4-6.5%. “Clearly one of the culprits was consumption. It went down a bit. And it comprises two-thirds of our GDP,” Mr. Enriquez said.
“Clearly the threat from inflation remains brought about by higher global oil prices and the high price of rice,” he added.
Inflation was 6.4% in August, the highest level in nearly a decade. The September resulted is also expected to reflect the impact of typhoon Ompong (international name: Mangkhut) which affected key agricultural areas in Northern and Central Luzon.
Contrary to the estimates of economic managers that inflation will peak in the third quarter, Mr. Enriquez said “it should peak some time in the first quarter in 2019.”
“I think the typhoon effect will not be captured in September. It will probably be captured in October or November,” he said, noting that transportation and wage hikes “have been factored in as well.”
Despite the inflationary pressures, Mr. Enriquez said ramped-up government spending as well as investment from the private sector will provide tailwinds to economic growth.
“The long tailwind that we are expecting is the infrastructure push of the government. If you believe the government will deliver, that’s something that can spur growth for the economy down the road,” he said.
“We will probably see more negatives before positives in terms of the economy. That will be translated in financial markets as well.” — Karl Angelo N. Vidal

PSA seeks restoration of original budget for national ID registration

THE Philippine Statistics Authority (PSA) is appealing to Congress to restore its P6.2 billion proposed budget for the implementation of the Philippine ID system (PhilSys) to ensure it hits its initial target of signing up 25 million Filipinos.
During the Senate budget hearing of the National Economic and Development Authority (NEDA) and its attached agencies, PSA National Statistician Lisa Grace S. Bersales said the Department of Budget and Management (DBM) only approved P2 billion under the National Expenditure Program (NEP), which she estimates will fund the registration of 5-6 million Filipinos.
“If we would just have P2 billion next year, we will be able to enroll… five million to six million but the vision is 25 million to be enrolled next year,” Ms. Bersales said.
“We actually already wrote to Secretary (Benjamin E.) Diokno, Senator (Loren B.) Legarda and Representative (Karlo Alexei B.) Nograles requesting the additional P4.2 billion given to PSA in the GAA (General Appropriations Act), even if in the NEP, it’s just P2 billion,” she added.
Ms. Bersales said the agency plans to conduct a pilot registration run for one million unconditional cash transfer beneficiaries by the end of the year and to start the official registration by September next year.
She also said the National ID Council may approve and publish the implementing rules and regulation of the PhilSys this week.
Republic Act No. 1105 creates a central identification platform for all citizens and resident foreigners in the Philippines, which will incorporate data from all government agencies.
Senator Sherwin T. Gatchalian told NEDA and PSA officials in the hearing that he will inquire with the Senate committee on finance on reinstating the P6.2 billion budget.
“I really think that a lot of our problems can be solved by this national ID especially when it comes to the delivery of social services. We have so many leakages in social services and this is actually one tool that can reduce the leakage and improve the targeting mechanism of the government. We’ll try to talk to the Finance committee and see if we can reinstate the budget,” he said.
Sought for comment, Senator Panfilo M. Lacson, a vice chair of the Senate committee on finance who also pushed for the law, said in a text message, “We’re doing the math now and whatever shortfall there is will be compensated by restoring the required budget to accomplish the targeted number of registrants.”
Mr. Gatchalian also raised privacy concerns centering on the companies that will partner with PSA in implementing the program.
Ms. Bersales assured that PSA will ensure the security of information of the citizens. She maintained that the purpose of the Philsys registry was for identity and means of verification of identity only. — Camille A. Aguinaldo

PSALM declares South Korean firm sole bidder for Malaya O&M contract

POWER SECTOR Assets and Liabilities Management Corp. (PSALM) said it declared Soosan ENS Co., Ltd. the lone bidder for Malaya thermal power plant’s operation and maintenance service contract.
“Last week there was a bidding, and there was a winning bidder, but of course it’s subject to post qualification requirements,” Irene Joy B. Garcia, PSALM president and chief executive, told reporters on the sidelines of a Senate energy meeting.
The South Korean company bid for the one-year service contract for the 650-megawatt (MW) power plant with an offer of P208.74 million.
PSALM said in a statement that the bid is within the approved budget amounting to P213 million.
The agency, which handles the privatization of the government’s energy assets, said based on the Implementing Rules and Regulations of Republic Act 9184, also known as Government Procurement Reform Act, Soosan ENS needs to undergo post-qualification evaluation before the contract can be awarded.
“We’re doing the post-qualification now,” Ms. Garcia said.
PSALM is managing the Malaya thermal power plant through an operations and maintenance service contract.
The plant, which is located in Pililla, Rizal, is a must-run facility. A must-run plant is compelled to run and provide the needed power as deemed necessary to ensure reliability of supply in the Luzon grid, especially in times of power shortfall, system security and voltage support. — Victor V. Saulon

SC allows PCSO to auction Luzon online lottery system

THE SUPREME COURT (SC) has allowed the Philippine Charity Sweepstakes Office (PCSO) to proceed with the auction of the Luzon component of the Nationwide On-line Lottery System.
In a 20-page decision dated Aug. 15 and written by Associate Justice Marvic M.V.F. Leonen, the court said proceeding with the bid will not inflict injury on Philippine Gaming and Management Corp, which claims exclusive supplier rights.
“It cannot claim that it has alleged exclusive rights to be protected and that it will suffer irreparable injury if petitioner continued with the Nationwide On-line Lottery System bidding process. This is precisely because the bidding was for the next supplier of the Nationwide On-line Lottery System for a period of five (5) years after August 21, 2018 or commencing on August 22, 2018,” the decision read.
PCSO and Philippine Gaming and Management Corp. entered an Equipment Lease Agreement in 1995 under which PCSO will lease lottery equipment and accessories for its online lottery in Luzon. The agreement commenced in 1999 and ended in 2007.
In 2004, both parties amended the lease agreement and decided to extend the term for another eight years commencing on Aug. 23, 2007 and ending in 2015. On Aug. 13, 2015, they both executed a Supplemental and Status Quo Agreement extending the term for another three years ending on Aug. 21, 2018.
However while the lease agreement was still in effect in 2012, the gaming corporation filed a petition before the Makati City Regional Trial Court seeking a temporary restraining order and/or writ of preliminary injunction against PCSO as it violated its exclusive rights, which was granted by then-acting Presiding Judge Rommel Baybay.
The gaming corporation also brought the issue to International Chamber of Commerce in 2014 for arbitration.
On July 11, 2017 it also sought a temporary restraining order and/or writ of preliminary injunction seeking the cessation of the bidding. This was granted by Presiding Judge Maximo M. de Leon
The SC said the RTC committed grave abuse of discretion for granting Philippine Gaming and Management Corp.’s application for injunctive relief.
“A Writ of Preliminary Injunction is issued ‘to prevent threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly studied and adjudicated,’” the court said.
“Regional Trial Court’s confirmation of the arbitral tribunal’s Final Award, the Writ of Preliminary Injunction is deemed lifted and petitioner may now proceed with the bidding process of the Nationwide Online Lottery System for Luzon,” it added affirming an RTC resolution which upheld an arbitration court decision in favor of PCSO. — Vann Marlo M. Villegas

SRA authorizes sugar imports of 150,000 MT

THE Sugar Regulatory Administration has ordered the importation of 150,000 metric tons of raw or refined sugar to address rising prices for the commodity, with delivery expected not later than Dec. 31.
The decision to import was derived from a preliminary report by the National Economic and Development Authority, which found inflation of 9.1% in August for products using sugar, including jam, honey, chocolate, and confectionaries, from 7.4% in July.
The SRA cited President Rodrigo R. Duterte’s Administrative Order No. 13, citing the “urgent need to tame price spikes of basic agricultural commodities by adopting measures to streamline administrative procedures to allow importation that will address supply shortfalls and ensure stable prices of agricultural products in the domestic market.”
The SRA also said that various planters and millers associations have submitted to the DA or to SRA their proposals and position papers supporting the importation of sugar.
The SRA will start accepting bids by Oct. 8. Eligible importers may apply for SRA Clearance for Release of Imported Sugar at a minimum allocation of 2,500 metric tons or raw or refined sugar per application, but not more than 15,000 metric tons as the maximum.
According to SRA, an importer that fails to ship by Dec. 31 will have its registration as an international sugar trader revoked or suspended.
Imported sugar in excess of 150,000 MT shall be classified as “C” Reserve Sugar indefinitely and subject to fines, and will not be considered part of the import program. — Reicelene Joy N. Ignacio

Our loving neighbor

The recent earthquake and tsunami disasters in Pula, Sulawesi, have brought to my foremind the special regard of Indonesians for Filipinos, which I observed during my many teaching trips to Indonesia in the late ‘80s. Many of the highly paid expat executives in Indonesian firms then were Filipinos whom the Indonesians were said to prefer to “white people” because of unpleasant memories from their colonial past. Some expats had been brought there by our first multinational: SGV, the accounting and management consultancy. The biggest ad agency which handled the Unilever account was headed by a Filipino, and its creative director, Eleanor Modesto, was a Filipina. A young Filipino was liabilities marketing director of the fastest growing bank in Jakarta. The Filipino executives were paid in expat level US dollars with perks such as housing and country-club memberships.
And our team of professors from AIM were treated with respect by both government and business organizations that contracted us to conduct degree and non-degree courses in Jakarta, Bandung, Pontiak and other areas. We were flown in on business class airfare and housed in five star hotels, and paid expat rates!
Meanwhile, unknown to most, an Indonesian NGO founded by an Indonesian woman has been quietly providing technical and funding support to several individual and community developmental and disaster-relief initiatives in our country.
Wadah Foundation was established in Jakarta in 2008 by Anie Djojohadikusumo, daughter-in-law of Dr. Sumitro Djojohadikusumo, the economic adviser to then President Suharto. “Ibu Anie” (mother Anie) as she is known, came from a large family of modest means in a small town in East Java. Although she married wealthy businessman Hashim, one of the sons of Dr. Sumitro, she had absorbed the values of sharing from her mother who managed to share their meals with their poorer neighbors, despite her having 16 children.
Wadah, meaning “woman” first got involved in the Philippines by working with the Rotary Club of Cebu to provide some support to the community initiatives of Fr. Ned Disu on the island of Jao in Bohol following the earthquake in 2013. Shortly after that, the tsunami Yolanda struck Leyte.
CNN hero Robin Lim, half-Filipina midwife born in Baguio who has been resident of Bali for many, many years, lost no time and was in Leyte two days after the disaster struck, initially moving from one devastated area to another, helping to deliver babies in make-shift facilities with no electricity, fetching water from wells, and sleeping on packing cardboard.
Wadah Foundation Indonesia promptly sent funding for immediate disaster relief including tarps for roofing, medicines, knives and other survival tools through the endemic debris. Wadah founder Ibu Anie coordinated with her old friend Tina Ferreros, a long-time Bahasa-speaking resident of Indonesia who happened to be back in Cebu to care for her ailing father until he died just before the Yolanda disaster struck.
Two months after the disaster struck, Robin Lim had settled her maternity efforts in Dulag, where she hired midwives who had worked with the NGO Mercy-in-Action which turned over their birthing facilities to her. The clinic project was initially largely funded by her personal resources and contacts. Soon enough, from focusing on general disaster relief, Wadah Foundation provided logistics and management support to the clinic, including mobilizing support from the LGUs around Dulag, the local Department of Health offices, PhilHealth, and the Armed Forces in the area.
Robin Lim had focused on training the local midwives on “gentle birth” which meant no anesthesia unless absolutely necessary, immediate skin-to-skin contact with mother of the newborn child, no cutting of the umbilical cord but allowing it instead to fall on its own, and of course, breastfeeding. Sustainability became a reality because the birthing facility was soon accredited by the DoH and PhilHealth. Wadah Foundation provided scholarships for the midwives enabling them to obtain college degrees, thus making them eligible for access to the DoH-PhilHealth funding support for maternity benefits for their patients.
By 2017, or four years later, the midwives having obtained college degrees, Wadah Foundation phased itself out from the Dulag project.
Wadah Foundation has developed a strategic approach to the assistance it provides. It invests its resources in promising initiatives mainly to “women helping women to help themselves,” thus ensuring sustainability. In the 10 years since its founding, Wadah has expanded all over Indonesia and is now also working in other countries. One of its expansion policies is working with CNN Heroes, including Robin Lim of Baguio and Bali, Efren Peñaflorida of Dynamic Teen Company in Cavite, and Anuradha Koirala of Nepal who was recognized for her campaign to end human trafficking of women and children from Nepal to India. Wadah Foundation has also begun to work in Malaysia. Wadah International has a Filipino, Alfredo “Al” Torno as its Secretary-General.
Wadah provided some support to Dynamic Teen Company, but notably, arranged for Peñaflorida to do technology transfer of his “Kariton classrooms” in urban poor communities in Indonesia where Wadah supported literacy projects.
From being ad hoc and project-oriented, Wadah has institutionalized itself in the Philippines with the establishment of Wadah Philippines, with headquarters in Cebu City. Sparkplug Tina Ferreros is on its Board of Trustees. Wadah Philippines is now mobilizing disaster relief for the typhoon Ompong victims in North Luzon and is doing spadework to put up a birthing facility for indigenous women in the middle of Palawan and for building 200 toilets for families in an upland barangay in Cebu City. It has provided computers for the Cebu Rotary-supported E-learning school on the island of Jao in Bohol. It also provided some support to Tuloy Foundation of Fr. Rocky Evangelista. Wadah has also provided equipment support to alternative learning systems in various places in Cebu. Space does not allow us to include many other Wadah initiatives in this column.
Wadah’s initiatives now include a broad range of development concerns, from literacy and education, to health, to women empowerment, to urban renewal, disaster relief, culture and history, including reconstruction of remnants of the 13th Century Madjapahit Empire which included the Sulu Archipelago.
I liked teaching in Indonesia because I felt valued as a Filipino professional there. I know that Indonesia, the largest Muslim country, helped us with the Organization of Islamic States (OIC) which it then chaired, in our effort to neutralize Nur Misuari’s rebellion. And they have always cooperated with our peace and anti-terrorism efforts. It is really sad that we identify more with China and the United States when the Indonesians are virtually our family.
Today, Indonesia could certainly use our help in disaster relief operations in earthquake and tsunami-ravaged South Sulawesi which is so close to our southern borders. My students used to tell me that the people of Sulawesi are more like the Filipinos. They look more like us; and they even dance the Tinikling!
It is therefore good to read that our Department of Foreign Affairs is working on plans to provide such assistance to our loving neighbors in Sulawesi. It is certainly the least we can do to reciprocate their kindnesses.
 
Teresa S. Abesamis is a former professor at the Asian Institute of Management and an independent development management consultant.
tsabesamis0114@yahoo.com

Business-minded or business-hindered?

“A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.” — Nolan Bushnell, Entrepreneur
The art of growing a country’s economy is akin to solving a difficult jigsaw puzzle. Every piece of it should be assembled and interlocked in order to complete the picture. In the Philippines, one of the pieces is the empowerment of micro, small and medium-sized enterprises (MSMEs), which account for thirty-five percent (35%) of the Gross Domestic Product.
As early as 1991, the Congress enacted Republic Act No. (RA) 6977, also known as the Magna Carta for Micro, Small and Medium Enterprises (MSMEs), as amended by RA 8289, and as further amended by RA 9501 (Magna Carta for MSMEs), to recognize and strengthen MSMEs’ potential contribution for economic growth.
The Magna Carta for MSMEs provides for a framework on how to start up an MSME in the Philippines. MSMEs are any business activity or enterprise, whether single proprietorship, cooperative, partnership or corporation engaged in industry, agribusiness, trade, and services. They are categorized based on their total assets, inclusive of loans, but exclusive of the land on which the particular business entity’s office, plant and equipment are situated.
The total assets of the MSME will be valued and determined as follows: not more than PhP3,000,000.00 for micro enterprises; PhP3,000,001.00 to PhP15,000,000.00 for small enterprises; and PhP15,000,001.00 to PhP100,000,000.00 for medium enterprises.
If one wants to put up a single proprietorship or a partnership, the business should be wholly-owned (100%) by Filipino citizens. On the other hand, if one wants to put up a corporation, at least sixty percent (60%) of the capital or outstanding stocks should be owned by Filipino citizens. In any case, the business should be engaged in any activity within the major sectors of the economy and must not be a branch, subsidiary or division of a large scale enterprise (total assets are more than PhP100,000,000.00).
Once registered, eligible MSMEs are entitled to a number of incentives, mostly facilitated by the Department of Trade and Industry (DTI).
Through the establishment of Negosyo Centers by local government units and MSME Centers by the DTI, there is ease in registration, renewals of applications, establishing local support networks and market linkages, and facilitating access to grants and financial assistance for MSMEs. All government agencies are required to pursue the principle of minimum regulation and see to it that procedural requirements are minimized.
As to financial assistance, all lending institutions were mandated to set aside at least eight percent (8%) for micro and small enterprises and for medium enterprises, at least two percent (2%) of their total loan portfolio for the past decade. While this mandate has expired, it is an advantageous facet of the Magna Carta for MSMEs which our lawmakers may want to continue.
Additionally, MSMEs may apply for financial assistance and guarantee of loans from the Small Business Guarantee and Finance Corporation (SB Corporation), which is an agency attached to the DTI. Its funds are allotted especially for technology-oriented industries and collateral-free fixed and working capital loans to micro and small enterprises.
Interestingly, on August 17, 2018, the President approved RA 11057 also known as the Personal Property Security Act, which promotes economic activity by increasing access to least cost credit, particularly for MSMEs. Through this law, MSMEs will be able to secure obligations with personal properties as their collaterals. This shows how our government continuously supports and empowers MSMEs’ financial assistance.
Aside from enjoying minimized requirements and easy access to loans from lending institutions, there are projects launched by the DTI with the private sector to support MSMEs’ thrive for success: Project KAPATID, a coaching and mentoring approach where large scale corporations teach micro and small enterprises on different aspects of business operations; Shared Service Facilities (SSF), which is aimed at providing MSMEs with machinery, equipment, tools, systems, skills and knowledge under a shared system, which includes the One-Town One-Product (OTOP) Project; SME Roving Academy (SMERA), an on-site learning institute which integrates business development services, including business modules in the early stages of an enterprise’s journey; and Tradeline Philippines, an online business intelligence platform that aims to deliver timely and relevant information and assistance to exporters and relay information on trade statistics, business matching, export intelligence, export news, and directory.
With these opportunities, an entrepreneur’s guide on how to start a micro, small, or medium-sized business is at his fingertips. However, while there is an initial support system, the entire operations of MSMEs will depend on sustainable growth and business market. One of the obstacles faced by MSMEs in the Philippines is the infiltration of products imported from other countries.
Therefore, our government’s efforts should be directed to arming MSMEs to withstand and even compete with domestic and international market once the businesses have been set up. The remaining pieces of the puzzle include strict execution of other policies, such as exportation and importation rules and taxes, promotion of MSMEs products and services, encouragement of the public (especially large scale enterprises) to favor Filipino products and services, which must coincide with the incentives under the Magna Carta for MSMEs and projects of the DTI.
Even if our government succeeds in igniting entrepreneurs to act on their ideas now, the foregoing programs will become futile in light of the missing pieces of the Philippine economy puzzle still left unsolved.
This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.
 
Maria Mykeana C. Naval is an Associate of the Litigation and Dispute Resolution (LDRD) of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).
mcnaval@accralaw.com

Political Railroading

We’ve seen how politicians in power get the things they want and to hell with the law or due process. The arrest of Senator Antonio Trillanes IV is what is called in Tagalog, santong paspasan or barasuhan. It’s also called railroading.
President Rodrigo Duterte “voided” the amnesty granted to Trillanes by then President Benigno Aquino III and ordered Trillanes’ arrest, the Makati court issued an arrest warrant that forced Trillanes out of his Senate sanctuary, he filed an urgent appeal with the Supreme Court for a temporary restraining order to prevent the serving of the warrant, the high court demurred, stating that, anyway, the senator would have his day in court. Thus Trillanes was arrested and booked. He then posted a P200,000 bail and was released.
That was “due process,” as defined by the Supreme Court. But that only cosmeticized the raw use of power that Duterte resorted to in order to punish a political pain in the neck. That defied the concept of due process. It was railroading.
I sympathize with Trillanes and I stand with him in his campaign to unmask the corruption in the Duterte government. I must point out, however, that Trillanes wasn’t exactly inclined to accord due process to people that he bullied and bamboozled in Senate inquiries that he conducted when he was still on the side of the folks in power.
Recall how Trillanes, while accusing former Defense Secretary Angelo Reyes of corruption at a Senate inquiry, arrogantly told the latter that he “had no reputation to protect” and how, while accusing then Vice-President Jejomar Binay of owning a hacienda and an airconditioned piggery in the province, Trillanes refused to take back his allegations despite their being proven false.
Reyes subsequently committed suicide. Binay lost his presidential bid.
What has happened to Trillanes may be described in American idiom as “what goes around comes around.” The Buddhists call it karma.
Duterte and Solicitor-General Jose Calida, who did most of the dirty work against Trillanes, may experience karma too when their time comes. To repeat: what goes around comes around.
This is a lesson that President Donald Trump and the leaders of the Republican Party may soon learn in the forthcoming mid-term elections in the US.
In the Senate and the House of Representatives, both controlled by the Republicans, railroading is the name of the game. The most obvious wielding of raw political power has been in the nomination of Judge Brett Kavanaugh for the Supreme Court and the clearly farcical confirmation process imposed by the Republican-controlled Senate Judiciary Committee.
Kavanaugh is said to be the choice of Trump because of the judge’s conservative ideological leanings and his written opinions that indicate a willingness to allow a sitting president a lot of leniency in the face of possible impeachment or even just being issued a subpoena to appear before a grand jury.
Trump is said to desperately need this in the face of the investigation by Special Counsel Robert Mueller of allegations of conspiracy with the Russians in connection with Trump’s presidential campaign. Corollarily, there are allegations of obstruction of justice and corruption involving Trump, campaign associates and members of his family. It is said that a rope is slowly and inexorably tightening around Trump’s neck, and an ally in the Supreme Court, like Kavanaugh, could be his lifeline.
The Kavanaugh confirmation railroad express was chug-chugging along at a brisk pace, despite the objections of the outgunned Democrats in the Judiciary Committee over procedural short-cuts applied by the Republicans (such as withholding substantial and potentially significant background information on Kavanaugh).
But as if ties on the tracks had unexpectedly become askew, the GOP train rumbled to a stop when allegations of an attempted rape during Kavanaugh’s high school days, some 36 years ago, were slapped on the judge by his alleged intended victim. The Republicans and Trump would have dismissed the accusation outright had it not been for the national uproar that this has caused, particularly among women who make up a major voting bloc. Besides, the accuser wasn’t just an ordinary person but a professor of Psychology at Stanford University, Dr. Christine Blasey-Ford.
Furthermore, two other women, emboldened by Ford, also revealed similar sexual incidents involving Kavanaugh when he was a Yale law student. One of the women alleged that, at a drinking party, Kavanaugh thrust his penis at her, causing her to push him away and to inadvertently touch his organ. The other woman alleged that Yale students had spiked the drinks of girls at drinking parties and had raped them. She said that Kavanaugh was among the students.
The GOP train was not exactly derailed by these. After pretending to allow Dr. Ford an “opportunity” to recount her ordeal to the Judiciary Committee, and allowing Kavanaugh to vehemently declare his denial, the Republican majority prepared to vote on Kavanaugh’s nomination, as expected.
But what was not expected was the entry of two women who confronted maverick Republican Senator Jeff Flake (a Trump critic) in a Senate elevator. Flake had earlier been iffy on his vote for Kavanaugh but had subsequently acceded to party pressure and had announced his decision to vote aye. But at that elevator confrontation with the women, who had also experienced sexual abuse, Flake did a U-turn.
Flake announced that he would only vote for Kavanaugh if the allegations against the judge were investigated by the FBI. This was a virtual derailment of the Republican express train.
The involvement of the FBI had been demanded by the Democrats and by the public but had been rejected by Trump and the committee. But with the prospect of losing Flake’s pivotal vote staring them in the face, the committee chairman had no choice but to agree to an FBI inquiry. Similarly Trump also had to do an about-face.
An FBI investigation, limited to one week, has been ordered by Trump and is underway.
You can almost hear Trump and the Republicans mutter, “Curses. Foiled again!”
But, apparently, they don’t intend to be foiled for long. Trump and the Republicans have reportedly conspired to limit the scope of the FBI inquiry and will not even allow questions about Kavanaugh’s heavy drinking and tendency to become belligerent or to pass out. Throughout the proceedings before the Judiciary committee, Kavanaugh had ducked questions about his heavy drinking in high school and in college, which could have supported allegations of belligerency and aggressiveness towards women.
There are no high expectations about the FBI investigation. It will likely be superficial and inconclusive.
It is generally conceded that, at the end of this farcical exercise, Kavanaugh will be confirmed for the Supreme Court by the Republican-controlled Senate. As expected.
But what may not be expected are the possible nay votes of two Republican women senators who may be so scandalized or conscience-stricken by the farce that they will not toe the party line. Flake may also vote nay if he is not satisfied that a credible investigation has been conducted.
But that may not be the end of this political railroading. The Republican express train may end up being derailed in the mid-term elections. Early polling indicates that the Democrats could wrest control of the House. The Senate contest is still too close to call. But the Democrats could win.
When — and if — that happens, karma will befall the GOP. What goes around comes around.
 
Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.
gregmacabenta@hotmail.com

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