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World Bank bats for cash transfer expansion in 2019

THE WORLD Bank is recommending an expansion in the coverage of the government’s cash transfers, known as the Pantawid Pamilyang Pilipino Program, due to their effectivity in reducing poverty.
“The Bank considers that there are enough arguments to expand coverage of Pantawid to cover additional families in 2019, taking into account the large number of poor families with children that have not yet been covered (about 2 million),” the bank said in an implementation and status report dated July 17.
The World Bank is helping fund the payouts to CCT beneficiaries from 2016 to 2019 under the Philippines Social Welfare Development and Reform Project.
The bank provided $450 million worth of financing for the government, which covers 7% of the CCT payout.
“Considering the ambitious national goal of reducing poverty from 21% to 14% in 2022, Pantawid has already demonstrated important poverty reduction impacts,” it noted.
“The Bank continues to note with concern the diminishing number of children covered by the program over the years, especially those who are below the age of five and at high risk of malnutrition. This highlights the unrealized potential for Pantawid to play a leading role in addressing the Philippines undernutrition crisis,” the bank said.
The World Bank noted that a third of Filipino children under five are stunted, indicating undernutrition.
“Following the example of Peru, which cut its stunting rate in half in less than a decade, the Bank team has recommended that DSWD establish an interagency committee to enhance the impact of Pantawid on nutrition,” it said, referring to the Department of Social Welfare and Development.
However, it also flagged some delayed payouts due to logistical issues with the Land Bank of the Philippines, which it noted as a “critical aspect that has not been solved yet.”
“Many beneficiaries and DSWD local personnel express frustration over payouts being canceled at the last minute, ATMs without sufficient funds to disburse money to beneficiaries, and perennial delays in issuing and replacing cash cards,” the bank said.
“The Bank has recommended exploring additional/alternative payment providers to achieve more efficiency in the download of grants to the beneficiaries and, in the long-term, achieve 100% use of cash cards or point of sale terminals,” he added.
“DSWD should prioritize completing Listahanan 2015 with the missing Pantawid families that were not assessed,” it added, referring to the database of targeted beneficiary households. “For the Listahanan to stay relevant, the Bank has recommended DSWD to consider the need for a more dynamic registry, which is reflected by the requirements of its biggest users.”
It also noted that the national ID system will help plug leakages to the conditional cash transfer program.
It said the progress made towards reaching the project’s objectives as well as the implementation progress are “moderately satisfactory.” — Elijah Joseph C. Tubayan

NGCP seeks approval for contingency reserve power deals

PRIVATELY OWNED National Grid Corp. of the Philippines (NGCP) has asked the Energy Regulatory Commission (ERC) for provisional authority to implement its ancillary services procurement agreement (ASPA) with a power plant in Luzon and another in the Visayas.
In a joint application filed with the ERC, the power grid operator and Therma Luzon, Inc. (TLI) have sought approval for the 60 megawatts (MW) that NGCP will buy from the power plant’s units 1 and 2 in Pagbilao, Quezon province on a firm basis, and another 60 MW on a non-firm, or as needed, basis.
Separately, NGCP and Palm Concepcion Power Corp. (PCPC) are asking approval for an ASPA for 15 MW on a firm basis, and 15 MW on a non-firm basis. Both applications sought provisional authority ahead of the ERC’s final approval.
NGCP forges agreements to procure “ancillary services” — in this case power supply — to ensure reliability in the operation of the transmission system and consequently, in the reliability of the electricity supply in the Luzon, Visayas and Mindanao grids.
Ancillary services are necessary to support the transmission of capacity and energy from energy resources to electricity load centers, while maintaining the reliable operation of the transmission system.
NGCP said the ancillary services to be sourced from TLI and PCPC are to be used as contingency reserve, or power that will be allocated to immediately answer any reduction in supply when the largest power generating unit online fails to deliver.
“In view of the need for NGCP to procure ancillary services from PCPC, the Applicants on 23 December 2017, executed the ASPA. NGCP agreed to procure and PCPC agreed to supply Ancillary Services in the form of CR for a period of two (2) years under firm and non-firm arrangements,” the joint NGCP-PCPC application stated.
The agreement with TLI, meanwhile, is an extension of a previous ASPA forged in March 2013 with a term of five years. The past deal was granted provisional authority by the ERC. The commission oversees power supply deals to regulate future cost recovery.
“In view of TLI’s proposal to continue providing ancillary services, NGCP agreed to procure and TLI agreed to supply Ancillary Services in the form of Contingency Reserve… under firm and non-firm arrangements,” the companies said.
During the period of negotiation, NGCP conducted several tests on the TLI power plant, and certified that it had met and complied with the standard ancillary services technical requirements as capable of providing contingency reserve. The new procurement agreement between the two was forged on May 29, 2018.
TLI is the independent power producer administrator of the 700-MW coal-fired power generation plant in Pagbilao. PCPC is the owner and operator of the 135-MW coal-fired power plant in Barangay Nipa, Concepcion, Iloilo province. The ERC is set to hear both applications next month.
Separately, NGCP said on Wednesday that it had energized the newly constructed Aurora-Polanco 138-kiloVolt (kV) transmission line 1 on June 20, and line 2 on July 22, 2018 as part of its efforts to continuously upgrade its facilities and to address the recent voltage fluctuations in Northern Mindanao.
The company said it has started several projects to mitigate congestion and voltage issues in the area and ensure the integrity of the entire grid arising from Mindanao’s rapid load growth in recent years.
The Aurora-Polanco 138-kV project is one of NGCP’s initiatives to reinforce power transmission services in the Zamboanga del Norte area.
Dipolog City, Dapitan City, and the Municipality of Polanco are three important load centers in the Zamboanga del Norte area, which have been growing in power consumption year after year, it said. — Victor V. Saulon

Meralco seeks permission to recover new Biñan franchise tax

MANILA ELECTRIC CO. (Meralco) has asked the Energy Regulatory Commission (ERC) to factor in the new local franchise tax rate imposed by Biñan City in Laguna province, and reflected in its customers’ electricity bills in the area.
Meralco said the city government imposed a higher tax on businesses enjoying a franchise as computed based on their gross annual receipts, which include both cash sales and sales on account realized during the preceding calendar year within Biñan.
The distribution utility is also asking that it be able to recover the differential local franchise tax for 2017 from customers in the said city.
The company said on Nov. 22, 2016 that the city enacted an ordinance that imposed a local franchise tax (LFT) on businesses enjoying a franchise at a rate of 75% of 1% of the gross annual receipts. The previous rate was 50% of 1%, which took effect on Aug. 12, 2010.
“Subsequently, the Office of the City Treasurer of Biñan, Province of Laguna issued a Notice of Assessment to the Applicant in the amount of P32,560,202.99. As [Meralco] was already able to pay the amount of P16,280,101.49 for LFT for the 1st to 3rd Quarter of 2017 based on the old rate at the time of the assessment, [it] only needs to settle/pay the balance… of (P16,280,101.50),” the company said.
It said the balance is broken down as P5,426,700.50 for the LFT due for the fourth quarter of 2017 using the old rate; and the amount of P10,853,401 representing the differential LFT or the difference between the old and the new rate, on or before Oct. 20, 2017 to avoid the imposition of surcharges and penalties.
Meralco is seeking authority to recover the differential LFT at a rate of P0.0117 per kilowatt-hour (kWh) and carrying cost in the amount of P352,781 at a rate of P0.0004/kWh or the total amount of P11,206,182 at a rate of P0.0121/kWh from the customers of Biñan for a period of 12 months.
Meralco has a legislative franchise to operate and maintain a distribution system in the cities and municipalities of Metro Manila, Bulacan, Cavite and Rizal, and certain cities, municipalities and barangays in Batangas, Quezon, Pampanga and Laguna.
As such it is authorized to charge all its customers for their electric consumption at the rates approved by the ERC.
Meralco is not authorized to unilaterally change the franchise fee rate component on customer’s bills. If it needs to change the rate due to any changes in franchise fee obligations, it is required to petition the ERC for such authority and include in its filing all documentation necessary to verify the changes.
Under ERC regulations, a distribution utility is to await the commission’s clearance before the inclusion and imposition of local government taxes in its customer’s retail rates. — Victor V. Saulon

ISOC proposes cell tower building program to DICT

ISOC INFRASTRUCTURES, Inc., a unit of ISOC Holdings, Inc., has submitted an unsolicited proposal to the Department of Information and Communications Technology (DICT) to build 25,000 common cellular towers over seven years.
In a briefing at the DICT office on Wednesday, Acting Secretary Eliseo M. Rio, Jr. said it is the first time the agency has received an unsolicited proposal to accredit a common tower provider, and needs to consult its legal department for a thorough review.
“Remember the government will not spend anything here. It will just give permission for the proponent to put up common towers. It will be up to them to convince telcos (to use them),” he said.
Mr. Rio also noted the DICT may accommodate up to two common tower companies, which would also have to submit a proposal and go through the process to which it will subject ISOC Infra.
“Basically, this will be considered initially as a public-private partnership (PPP). The PPP rules set up by our laws will be applicable. This will be subject to a public hearing, and then a Swiss challenge will then be conducted,” the DICT Legal Office said.
Under a Swiss challenge, other companies may submit counter-proposals but ISOC Infra, as original proponent, has the option to match any counter-offers.
Mr. Rio also said unlike other PPP, ISOC Infra will be allowed to operate, maintain and lease its towers should it be accredited by the DICT.
ISOC Infra is chaired by Megawide cofounder Michael C. Cosiquien. During the briefing, he said the company is investing P100 billion over seven years at an estimated P3.5 million to P6 million per tower.
Mr. Rio said the department encourages the sharing of towers, as opposed to the practice of Globe Telecom, Inc. and PLDT, Inc. of building towers for their exclusive use.
Mr. Rio said sharing of towers will be more economical, and hopes a common tower policy will make telecommunications services more affordable.
“This is what we are trying to do — bring down the costs. Because right now, the cost of Globe and Smart is (such) because they are not sharing towers. They are passing on to the consumers the cost of putting up a tower,” he said.
But he added that the two companies are still allowed to build their own tower should they want to, as their franchises from the National Telecommunications Commission (NTC) allow for it. — Denise A. Valdez

Getting the most out of TRAIN

Over the past few months, two “trains” have been in the news. One of them is a literal train, Metro Manila’s poorly-maintained commuter rail line. The other is TRAIN, or the Tax Reform for Acceleration and Inclusion Law, which promises to raise take-home pay of most Filipinos.
The tax law appears to enjoy the better prospects as it aims to simplify the tax system. The reduction in income tax for individuals and simplified compliance procedures, as implemented by Revenue Regulations (RR) No. 8-2018 and 11-2018, as amended by RRs 14-2018 and 15-2018, were among its notable provisions.
MAXIMIZING TRAIN’S INCENTIVES
Apart from the adjusted graduated income tax rates for individuals, the following features must also be considered for tax planning purposes:

1. The annual exemption for 13th month pay, bonuses and other benefits has been increased from P82,000 to P90,000.

2. There are increased thresholds for de minimis benefits, such as monthly medical cash allowance provided to employees’ dependents from P125 to P250, monthly rice subsidy from P1,500 to P2,000, and uniform allowance from P5,000 to P6,000 per year. These benefits are not subject to both income tax and fringe benefits tax (FBT).

3. Fringe benefits given to non-rank and file employees are subject to 35% FBT, up from the previous rate of 32%. Hence, the grossed-up monetary value is now determined by dividing the actual monetary value by 65%, resulting in an effective FBT rate of 54%. With this effect, companies may need to review their existing fringe benefits to plan what type of fringe benefit they plan to provide so they may take into consideration the non-taxable provisions of the FBT rules for cost planning purposes.

4. Purely self-employed individuals and professionals earning P3 million and below may opt to be taxed under the graduated rates of 0% to 35% or a flat rate of 8% based on gross sales or gross receipts and other non-operating income in excess of P250,000 in lieu of the graduated tax rates and percentage tax.

With this option, taxpayers can plan the tax rate they may apply to their business income based on their prior year’s business performance. Note though, that the tax rate should be elected on the first or initial quarter tax return to be filed for the year. Such election is irrevocable for the whole taxable year.
LEVERAGING THE NEW TAX COMPLIANCE PROCEDURES
The law also introduced certain compliance requirements to simplify the tax filing procedures with the Bureau of Internal Revenue (BIR).
1. Annual income tax returns shall be limited to a maximum of four pages for both paper and electronic form, effective tax year 2018.
2. Certain deadlines were also revised, such as the filing of the first quarter BIR Form 1701Q (Quarterly Income Tax Return for Individuals, Estates and Trusts) which was updated to every 15th day of May, including the deadline for the second installment filing which was moved to the 15th day of October.
Quarterly deadline for the filing and payment of creditable and final withholding taxes (WHT) were also moved to the last day of the month, following the close of the taxable quarter.
3. Required submission to income payors of a sworn declaration of gross sales/receipts by payees whose gross sales/receipts in a taxable year do not exceed P3 million (for individual payees to avail of the 5% WHT) or P720,000 (for non-individual payees to avail of the 10% WHT), as well as those whose income is sourced from a lone income payor and the total income payment is P250,000 or less. The purpose of this is to guide the payor that the lower WHT rate should be used.
Consequently, the income payor shall be required to execute a sworn declaration stating the number of payees who have submitted the sworn declarations as mentioned above, with the accompanying copies of their Certificate of Registration (CoR), including the sworn declaration submitted by the payees.
4. Inclusion of identified top 5,000 individuals and taxpayers identified as Medium Taxpayers, and those under the Taxpayer Account Management Program (TAMP) within the coverage of “top withholding agents,” who are required to withhold 1% and 2% WHT (other than those covered by other withholding tax rates) on purchases of goods and services, respectively.
AREAS OF CLARIFICATION
Like a physical train, some parts of the TRAIN law implementation need to be oiled to work efficiently. There remain certain items which need to be addressed for effective implementation, one of which is a certain section on Revenue Memorandum Circular (RMC) No. 50-2018. Under the circular, premiums paid by the employer under a group insurance policy for all its employees, regardless of position and rank, shall form part of the “other benefits,” subject to the P90,000 exemption ceiling. However, premiums (not part of the group insurance) paid for selected employees holding managerial or supervisory positions are considered fringe benefits subject to fringe benefits tax.
This interpretation seems to run contrary to Section 2.33 (B)(10)(b) of RR No. 3-98 (or the FBT regulations), which treats premiums for managerial/supervisory employees as non-taxable fringe benefits without qualifications. Moreover, if the group insurance premium exceeds the P90,000 exemption threshold, it is unclear who will shoulder the tax on the excess amount — the employer who paid the premium or the employee who enjoyed the benefit?
While regulations and circulars are issued to effectively enforce or amplify the law, how should RR No. 3-98 and RMC No. 50-2018 be read to reconcile both provisions on the taxation of group insurance?
While there is merit in the additional take-home pay from the restructured income tax rates and the simplified, yet comprehensive, tax compliance procedures under the first phase of the tax reform program, there are, however, a few policy lapses, apart from the impact on consumer purchasing power of the consumers (which by the way is another topic). So unless it intends to outperform the railway transport system, the TRAIN Law may need to be revisited and “re-oiled” to live up to its objectives.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.
 
John Klein R. Santos is a Consultant at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.
+63 (2) 845-2728
john.klein.santos@ph.pwc.com

Peso climbs vs dollar

peso dollar bills
THE PESO rose as players looked ahead to the central bank’s meeting.

THE PESO strengthened to hit three-week high against the dollar on Wednesday as the market continued to wait for the central bank’s policy decision amid hints on a fresh hike.
The peso ended at P53.37 versus the greenback, five centavos stronger than the P53.42-per-dollar finish on Tuesday.
This was the peso’s best showing in three weeks or since it closed at P53.36 against the dollar on July 4.
Dollars traded declined to $557.1 million from the $668.1 million that switched hands on Tuesday.
A foreign exchange trader said the peso gained versus the US currency on Wednesday amid two-way flows from investors.
“We are still seeing two-way flows. There’s still demand to buy dollars from oil companies and importers, the trader said in a phone interview, adding that there are also sellers that came out. “I think that’s why we’re seeing stronger against the dollar recently.”
The trader also noted that the market is still waiting for the next inflation figure as well as the monetary policy decision of the Bangko Sentral ng Pilipinas (BSP) at their August meeting.
“The expectation for the BSP is to hike interest rates. The question now is will they hike 25 basis points or 50 basis points.”
On Friday, the monetary authority said it is considering another hike in benchmark rates to temper inflation expectations.
The monetary authority has already raised rates twice this year. Rates now stand at a 3-4% range.
Meanwhile, another trader said the peso appreciated “ahead of possible hawkish cues from the European Central Bank policy meeting which would be less favorable to the dollar.”
For Thursday, the first trader expects the peso to move between P53.35 and P53.55, while the other sees the local unit to trade within a P53.25-P53.45 range. — K.A.N. Vidal

Foreign buying propels PSEi to highest in a month

By Arra B. Francia, Reporter
THE MAIN INDEX climbed past 7,500 on Wednesday to finish at a peak in 28 trading sessions as foreign buying returned.
The Philippine Stock Exchange index (PSEi) rallied to as high as 7,620.39 in midday trading, before paring down gains to 66.98 points or 0.89% to finish at 7,514, the benchmark’s highest point since June 14’s 7,529.54 finish. The all-shares index went up 30.30 points or 0.67% to 4,535.53.
“A net foreign buying figure of P246.3M led the index to skyrocket by as much as 173 points to break above 7,600 for its intraday high. Profit taking at the close however, erased more than half of the PSEi’s gains as it dropped 100 points to end at 7,514,” Papa Securities Corp. Trader Gabriel Jose F. Perez said in an e-mail.
Timson Securities, Inc. Trader and Marketing Head Mark Levinson Koa also noted that the increase was due to inflows from foreign investors, saying the net foreign buying amount of more than P200 million was “pretty much in existent for the past few months.”
Wednesday ended with P246.30-million net buying that compared to Tuesday’s P47.96-million net sales.
In addition, Mr. Koa attributed the PSEi’s positive performance to the anticipation of good second-quarter earnings.
“Almost abruptly, investors’ sentiment reversed to positive today…,” RCBC Securities, Inc said in a note prepared by research analyst John Paolo D. Ayson.
“The Philippine market joined other Asian markets in cheering the stimulus measures that China recently announced to support its flagging economy.”
Japan’s Nikkei 225 and TOPIX Index were up 0.46% and 0.38%, respectively, while Hong Kong’s Hang Seng Index went up 0.90%.
On the other hand, the Shanghai SE Composite index and the blue-chip Shanghai-Shenzhen CSI 300 shed 0.04% and 0.11%, respectively.
Back home, four of the six sectors indices gained: financials by 2.37% or 43.49 points to 1,874.67, services by 1.11% or 16.24 points to 1,472.43, holding firms by 1.02% or 74.67 points to 7,350.45 and property by 0.57% or 21.18 points to 3,687.40.
The remaining two counters slumped: mining and oil by 0.74% or 74 points to 9,885.82 and industrials by 0.43% or 46.19 points to 10,604.23.
Turnover accelerated to P6.90 billion after some 1.40 billion issues switched hands, compared to Tuesday’s 2.65 billion shares worth P4.43 billion.
Stocks that gained were nearly double those that lost at 125 to 72, while 46 others ended flat.
The list of Wednesday’s 20 most active stocks showed 16 that gained, including integrated resort and casino operators Melco Resorts and Entertainment (Philippines) Corp. and Bloomberry Resorts Corp. that jumped 11.2% to P7.05 and 10.6% to P11.06, respectively. Ayala Land, Inc. surged 3.58% to P40.50, SM Investments Corp. rose 2.3% to P933, while BDO Unibank, Inc. added 4.65% to P135.

Sotto: Charter change not in Senate’s agenda

By Camille A. Aguinaldo and
Arjay L. Balinbin, Reporters
CHARTER CHANGE is no longer in the Senate’s legislative agenda after none of the senators included this priority of Malacañang in their priority bills.
But Malacañang also on Wednesday said it expects lawmakers to act on President Rodrigo R. Duterte’s priority legislation, including federalism, as he identified in his State of the Nation Address last Monday.
Asked by reporters before Wednesday’s Senate session, Senate President Vicente C. Sotto III said none of the senators submitted Charter change as among their priority measures to be tackled in the 3rd regular session.
The Senate leader said: “Well, we have asked the members of the Senate to submit a maximum of three priority bills so that we may be able to consolidate them and sit down with the House and the Executive department to keep it together. None of the submissions contained the Cha-cha (charter change).”
“You take it from that,” he said when asked if charter change is no longer in the Senate’s agenda.
In contrast, newly installed Speaker Gloria Macapagal-Arroyo told reporters on Wednesday that charter change will be a priority of the House of Representatives.
“It’s a priority, of course. But right now, we’re also done with the House resolution to call a constituent assembly so it requires two Houses, so the ball is in the Senate,” Ms. Arroyo said.
Mr. Sotto also said the Senate has agreed to allow its committee on constitutional amendments and revision of codes, chaired by Senator Francis N. Pangilinan, to complete its committee report on charter change. Only when the report is submitted to the Senate will the chamber take up this matter, the Senate leader said.
Asked about charter change being tackled this year as earlier targeted by the Consultative Committee (ConCom) to review the 1987 Constitution, Mr. Sotto said, “Let me say that perhaps the chances are very slim.”
The Senate panel has been conducting public hearings since early this year to determine if there is a need to amend the 1987 Constitution and to discuss the best mode of charter change. The ConCom has also submitted its draft federal constitution to both chambers of Congress early July.
For his part, Presidential Spokesperson Harry L. Roque, Jr. said in a radio interview on Wednesday regarding Malacañang’s legislative priorities: “Well, dalawa po iyan: pederalismo, tapos BOL. Pero iyong BOL yata ay nai-ratify na, so ang Malacañang po ay mag-i-schedule na ng signing. Pero napakataas ng expectation ng Presidente, BOL at iyong iba pang mga administration bill(s) kagaya ng Universal Health Care, ng rice tariffication, ng pagbubuo ng Department of Disaster Relief Resiliency….”
(Well, there are two: federalism, then BOL [Bangsamoro Organic Law]. But the BOL has been ratified, perhaps. Hence, Malacañang will have to schedule its signing. The President has a very high expectation that the BOL and the other priority bills of the administration such as universal health care, rice tariffication, and the creation of the Department of Disaster Relief Resiliency….)
Mr. Duterte, in his report to the nation, also urged Congress to pass the security of tenure bill, the coconut levy trust fund bill, the proposed national land use act, the proposed Department of Disaster Relief Resiliency, the rice tariffication bill, the universal health-care bill, and all five packages of his tax reform initiative.
Mr. Zubiri said the universal health-care bill and security of tenure bill are set to be sponsored in plenary next week.
A bicameral conference committee will begin deliberations on Aug. 1 to reconcile the provisions on the coconut levy trust fund bill, the senator from Bukidnon also said.

Alvarez concedes to new speaker but allies question her election

OUSTED House speaker Pantaleon D. Alvarez in a statement on Wednesday conceded to his newly installed successor Gloria Macapagal-Arroyo, whom Mr. Alvarez also met that day at the House of Representatives.
But Mr. Alvarez’s allies continued to challenge Ms. Arroyo’s election last Monday at Wednesday’s plenary session.
Mr. Alvarez said in his statement: “We cannot undo the past, but we can certainly shape our future. The House of Representatives has chosen a new Speaker in the person of former President Gloria Macapagal Arroyo. Alang-alang sa bayan (For the sake of the country), let us get back to work and move on.”
Ms. Arroyo said she discussed with Mr. Alvarez the legislative agenda of the President Rodrigo R. Duterte.
She later told reporters: “Looking at the legislative agenda that he (President Rodrigo R. Duterte) talked about in his SONA (State of the Nation Address), number one was the Coconut Farmers Fund, we’re done with that, it’s in the Senate. Number two, the Land Use Act, we’re done with that, it’s in the Senate. Number three is the Disaster Management Department. I’ve looked through where it is, it is still in the technical working group.”
For his part, Rep. Rodolfo C. Fariñas of the 1st District of Ilocos Norte, now deemed the former majority leader by Ms. Arroyo’s allies, questioned Wednesday’s plenary proceedings after a resolution was entered into the House records upholding Ms. Arroyo’s election as Speaker.
The House was in the course of adopting the said resolution, No. 2025, when Mr. Fariñas questioned on the floor that it should have passed the committee on rules, which he heads.
“As of the last session the other day, I am the Majority Leader and chair of Committee on Rules. May I know if this resolution passed the Committee on Rules?” he said. “I am chair and I do not know of this.” But Mr. Fariñas was told there was an “interim” committee head, at which point, despite his objections on the floor, the House voted to adopt the resolution.
Interim Majority Leader Fredenil H. Castro said his appointment by Ms. Arroyo “implicitly” removed Mr. Fariñas from the post.
“When I was designated by the duly elected speaker of the House as interim majority (leader), I had the authority to take over the position of the Majority Leader,” Mr. Castro later told reporters.
For its part, the House Minority said it will remain the minority despite objections by independent groups also seeking that designation.
“We still maintain that we are the duly constituted minority. You know what was declared vacant was the position of the Speakership, all other else, status quo ‘yon,” Deputy Minority Leader Alfredo A. Garbin, Jr. said in a press briefing on Wednesday with members of that minority.
Minority Leader Danilo E. Suarez, who voted for Ms. Arroyo, said on Tuesday he was eyeing the post of Majority Leader, but later withdrew, saying he had a “change of heart.”
Albay Rep. Edcel C. Lagman, however, argued that Mr. Suarez and the rest of the Minority bloc “ousted themselves from the minority” after voting for Ms. Arroyo.
Marikina City Rep. Romero S. Quimbo of the Liberal Party said House Rules dictate that members who voted for the winning candidate shall be part of the Majority.
He also said Mr. Suarez not only voted for Ms. Arroyo, but also campaigned for her. Mr. Suarez was also the first to sign the manifesto that sought support for Ms. Arroyo and was circulated in Monday’s session.
“I did my part. I informed the Minority about this possible scenario of a possible change of leadership, I asked my friends to spread to the… lahat naman sila may mga kaibigan (all of them have friends),” Mr. Suarez said in his defense.
The Makabayan bloc also criticized the new Speaker in its press conference on Wednesday.
“Patunay ito na talagang batikang magnanakaw ng kapangyarihan si Arroyo. Siya na ang ‘Cheater for All Seasons’,” Gabriela Rep. Emmi A. de Jesus of Makabayan said. — Charmaine A. Tadalan

Anti-dynasty bill sponsored in Senate

A BILL against political dynasties was sponsored at the Senate on Wednesday by Senator Francis N. Pangilinan, chairperson of the Senate committee on constitutional amendments and revision of codes.
Before this body, the Committee on Electoral Reforms and People’s Participation (headed by Koko) and the Committee on Constitutional Amendments and Revision of Codes are submitting Committee Report No. 367 on Senate Bill No. 1765, in substitution of Senate Bills No. 49, 230, 897, 1137, 1258, and 1668,” Mr. Pangilinan said in his sponsorship speech.
He said in his speech that the “Anti-Political Dynasty bill proposes to define and prohibit political dynasties, and provide penalties therefor as again mandated by the Constitution.”
The senator added: “The bill defines political dynasty as the ‘concentration, consolidation, and/or perpetuation of public office and political powers by persons related to one another within the second degree of consanguinity or affinity.’”
Mr. Pangilinan also noted that “the question of whether or not dynasties are good for the country is immaterial because the Constitution mandates that the Congress must define by law political dynasty that it should be, ought to be prohibited.”
“It has been more than 30 years since the people, ratifying the 1987 Constitution in a plebiscite, directed us, lawmakers, to define by law political dynasties,” Mr. Pangilinan said.
He cited a study by the Ateneo School of Government, conducted “over a short nine-year period from 2007 to 2016,” that showed an increase of 58% to almost 70% among mayors from political dynasties; 70% to 81% among governors; 75% to almost 78% among members of the House of Representatives.”
Mr. Pangilinan cited further a study by the University of the Philippines showing that “19 of…23 sitting Senators (in 2013) came from families with political ties.”
“Furthermore, we here at the Senate, all products of Philippine political realities, have ourselves encountered and engaged with political dynasties, whether occupying government positions successively or simultaneously,” Mr. Pangilinan said.
Even the party-list system, the senator said, citing the UP study, “(which is) designed to democratize representation in Congress, has been hijacked, with one of every four sectoral representatives, or 14 of 56, now also from dynastic backgrounds.”
Mr. Pangilinan said further: “We’ve seen the ill effects of political dynasties, not just during the Marcos dictatorship, but in its resurgence post-EDSA. The Maguindanao Massacre comes to mind. The political system that promotes political dynasties, in a way, promotes bullying, allowing powerful blood relations to get away with one petty crime after another, and gaining more swagger every time they get away with it, until the crime becomes murder, plunder, and the like.”
“Dynastic clans control not just government positions but also resources. The evidence presented by the academicians in our hearing — evidence also presented and peer-reviewed by experts at the Oxford Development Studies — have shown, among others, that political dynasties are pervasive in the 10 poorest provinces in the country, and that the more severe the poverty, the higher the prevalence of political dynasties.”
In March, the Consultative Committee reviewing the 1987 Constitution voted to regulate rather than impose a total ban on political dynasties, extending this regulation up to the second degree of consanguinity and affinity.
But for its part, the bicameral conference committee which came up with the draft Bangsamoro Organic Law removed the ban on political dynasties, noting that no ban is in effect outside the Bangsamoro region.

Labor chief fires back at detractors

LABOR Secretary Silvestre H. Bello III on Wednesday said he will pursue legal charges in connection with recent controversies thrown at him.
“I am left with no recourse but to do what is legal and proper under the circumstances. All of you detractors, I’ll see you in court,” Mr. Bello said in a press briefing on Wednesday.
Also present in Mr. Bello’s press briefing were Labor Undersecretaries Joel B. Maglunsod, Claro A. Arellano, and Renato L. Ebarle, recently appointed to his post. Labor Undersecretary Jacinto V. Paras, who’s reported to have a rift with the labor chief, was not among them.
On Wednesday, recruitment agency owner Amanda Lalic-Araneta claimed in an interview with reporters that she gave Mr. Bello P100,000 and an iPhone as a gift. She also claimed that he demanded P10-15 million pesos to approve the license for MMML Recruitment Services, Inc. of which she is president.
Ms. Lalic-Araneta has brought her allegations against Mr. Bello to the Presidential Anti-Corruption Commission (PACC), soon after after Monalie Dizon of the Kilusang Pagbabago National Movement for Change filed graft charges against the labor chief also before the PACC.
Mr. Bello said the license for Ms. Lalic-Araneta’s firm “was cancelled not by me but by the POEA (Philippine Overseas Employment Administration),” adding that he had nothing to do with the cancellation.
He said she sought him “to ask me to reconsider the cancellation of her license and I promised a case, provided if she files a motion for consideration. According to her, she filed a motion for consideration pero di ko pa nakikita ang motion for consideration na yun (but I haven’t seen that motion for consideration yet).”
Mr. Bello said that “(b)efore her motion could come to me,” he received “a report from NICA (National Intelligence Coordinating Agency)” that her agency was “involved in recruiting underaged women.”
“I asked NICA to submit additional facts to support their allegation,” Mr. Bello said, adding that the intelligence agency gave him another report which he forwarded to the POEA.
“Hindi totoo na iniipit ko lisensya niya (It’s not true that I’m keeping her license on hold),” Mr. Bello said.
Mr. Bello declined for now who he will charge in court. “As soon as I confer with my lawyer and (collect) the evidence,” he said.
“Go to court and sue me if you have any evidence against me,” he added. “You are clearly engaged (in) trial by publicity.”
Regarding his Ombudsman application, Mr. Bello said his case with the Department of Justice, which was cited in his disqualification by the Judicial and Bar Council (JBC), has been pending for seven years.
“There was a case filed against me as early as 2012. Seven years ago, I was charged (with) syndicated estafa as a chairman of the board of an alleged corporation,” the labor chief said.
“I filed my counter-affidavit,” he said, on which he wrote, “Wala akong alam na korporasyon na ako ay(I don’t know any corporation that I am a) member (of) board of directors, at lalong lalo na wala akong alam na korporasyon na ako ay (and most especially I don’t know a corporation of which I am) chairman of the board. To support my allegation, I presented the articles of incorporation of the said corporation at wala po akong pangalan sa (my name is not on the) board.”
“If they had that case against me, why did they not (ask) me about the case?” Mr. Bello said of his interview with the JBC.
“In fairness to the JBC, hindi ko kinikwestyon ang pagpili nila ng nominees (I do not question their choices for nominees). That is their privilege,” he added.
“But the process, I think, was very unfair. They denied me due process,” Mr. Bello also said. — G. M. Cortez

Palace: Duterte to visit Israel and Kuwait

By Arjay L. Balinbin, Reporter
Malacañang on Wednesday, July 25, announced that President Rodrigo R. Duterte is set to visit Israel in September this year.
In a text message to Palace reporters, Special Assistant to the President (SAP) Christopher “Bong” T. Go said, “There will still be a joint official announcement on the dates in September.”
In another text message, Mr. Go said that in October, the President may also visit Kuwait.
“October pa Kuwait depende sa availability ng Emir,” he said.
(The President’s visit to Kuwait will be in October, depending on the availability of the Emir of Kuwait Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah.)
The Times of Israel reported last Tuesday that “an Israeli official” has confirmed “the Philippines’ controversial president, Rodrigo Duterte, is due in Israel in early September.”
The Israeli news site also quoted the Yedioth Ahronoth, a national daily newspaper, as saying that Mr. Duterte “will sign agreements about Philippine nationals who provide long-term care in the Jewish state and combating drug trafficking.”
“He and his Israeli interlocutors are expected to discuss establishing a direct flight route between Israel and the Philippines, agricultural cooperation and security deals,” The Times of Israel also said.
Last month, Mr. Duterte hinted that he might visit Kuwait because all of his demands have been granted. “I think I’ll go there. I’d like to thank the Kuwaiti government for understanding us, keeping their faith in us, and practically giving all of my demands,” he said in his speech during his meeting with the Filipino community in South Korea on June 3.
He also said the Filipino workers in Kuwait will now be allowed to enjoy a day off, keep their passports, and cook their own food, among others.

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