Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 12276

Refs missed fouls

On Christmas Day last year, the Warriors lost to the Cavaliers by a point after Kevin Durant failed to get a good last-second shot up off an inbounds play gone awry. In the aftermath, he noted that defender Richard Jefferson should have been called for a foul as he curled from the baseline to accept the pass, with the ensuing trip forcing him to stumble to the floor. “I was trying to make a move,” he argued. “I didn’t fall on my own.” And, as things turned out, he was right; in its Last Two Minute Report, then issued whenever scores are within five points of each other at the specific point of a given match, the National Basketball Association disclosed that the “foot-to-foot contact” he illegally absorbed affected his “SQBR,” defined as “Speed, Quickness, Balance, Rhythm.”

On Christmas Day this year, the Cavaliers lost to the Warriors by nine after LeBron James twice failed to score on Durant after drives gone awry in the crunch. In the aftermath, he noted that the reigning Finals Most Valuable Player should have been called for fouls as he made his way to the rim. With a minute and 12 seconds left in the match, he lost the ball as he was being hip-checked. And with a 25 and six-tenths seconds left, he again turned the ball over after an attempted dunk was foiled by an armbar. In both situations, the deficit was three points. The second case, though, was far more damaging; with time running out, the wine and gold were forced to foul and essentially gift Klay Thompson, an 88% free-throw shooter, with two points in order to regain possession.

Needless to say, Durant contended that he simply played great defense. “It felt clean,” he insisted. “That ain’t no foul.” Well, the NBA has begged to disagree. In its Last Two Minute Report, issued under a revised rule that now requires scores to be within three points of each other anytime inside the specific point of a given match, it acknowledged that he committed personals in both plays, and twice in the pivotal instance. Not that the admission of the mistakes will change the outcome; on the contrary, all it does for the Cavaliers, and particularly for James, is rub salt on open wounds.

Parenthetically, the Warriors will say, with reason, that referees will not always get calls — or non-calls — right. They will add, again with reason, that other more important factors contributed to the final tally. Nonetheless, there can be no disputing the value of continuous improvement, thus underscoring the very purpose of the Last Two Minute report. There can also be no underestimating the motivational worth of seemingly undeserved turns of events. And for fans, the good news is that the wait for the rematch won’t be long; how much the Cavaliers are amped will be seen in two weeks. The Q will be rocking, and the rivalry that keeps on giving should prove its generosity anew.

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is the Senior Vice-President and General Manager of Basic Energy Corp.

EM assets’ dream run may see bumpier ride next year

BULLS will retain the upper hand in  emerging markets (EM) next year, though some assets may face a bumpier ride than in 2017.

Bonds and equities in developing countries will continue to streak ahead, outpacing their developed-nation peers into next year, according to a Bloomberg survey of 20 investors, traders and strategists. Currencies, however, may struggle to stay in front. The survey was conducted Dec. 5-14.

And while the Federal Reserve’s actions will remain key in determining the fate of what has been the strongest equity rally for emerging-market stocks in eight years, geopolitical risks will be less of a focus as investors zero in on Donald Trump and the outlook for the world’s second-largest economy: China.

“The environment for emerging markets was great in 2017 with the Goldilocks factors of economic growth and low inflation in industrialized countries,” said Hideo Shimomura, chief fund manager in Tokyo at Mitsubishi UFJ Kokusai Asset Management Co., which oversees the equivalent of $114 billion. “The EM rally we saw this year will probably extend into 2018, but after a period of strong growth and low inflation, some adjustment will be inevitable.”

Investor darlings in 2017 thanks to their high yields and buoyant growth prospects, emerging markets have weathered Trump’s protectionist rhetoric and a swathe of geopolitical brush fires — from the Middle East to the Korean peninsula.

But while stocks and currencies in developing nations are on track for their best year since 2009, investors may become more selective in 2018 as headwinds like Fed tightening weaken the appeal of emerging markets.

Consistent with a survey in October, market watchers continue to see the Fed and President Trump’s policy moves to be key for developing-country assets in the new year.

What happens with China — where authorities are waging a battle against debt and President Xi Jinping is cementing his power — has edged up in the rankings.

Going forward, Mexico’s peso and bond market as well as Brazilian equities are among the most-favored emerging-market assets, while Turkey’s assets ranked low given the country’s persistent political uncertainty.

The lira, on track to become one of the worst emerging-market currency performers this year, will remain in the doldrums in 2018. The currency plunged to a record low as President Recep Tayyip Erdogan criticized the central bank in November, saying it was on the “wrong path” in tackling soaring inflation.

But in general, the stars will continue to align from a macroeconomic perspective, with global growth expected to be steady and inflation subdued, said Colin Harte, a London-based fund manager and strategist for multi-asset solutions at BNP Paribas Asset Management, which oversaw the equivalent of $673 billion at the end of September. — Bloomberg

Catch a wave

By Menchu Aquino Sarmiento

Movie review
Siargao
Directed by Paul Soriano

THERE ARE several love stories going on among the attractive bunch of young people populating this light romantic romp, but the main object of director Paul Soriano’s affections is the island of Siargao, best known for its amazing surfing. Surfing celebs Luke Landrigan and Wilmar Melindo appear in the film as themselves. After the end credits, the stars do a public service announcement on preserving Siargao’s beauty by caring for the environment. There are scenic drone shots of its natural wonders — lush jungle foliage, fiery sunsets, golden sand, and aquamarine surf — and also an abundance of tight shots of trim, tanned human physiques, sleek abs, for both male and female, and tons of cleavage for the latter. After all, being at the beach is a good enough reason to get nearly naked.

The film’s protagonist Diego “Jig” Punzalan (Jericho Rosales) has a sister, Karen, who runs clean-up campaigns on Cloud 9 Beach. Jig joins her in picking up plastic litter but he is actually a rock star. After a public falling out during a concert with his band mates which streamed live on social media, he decides to temporarily retreat to his family home in Siargao. His mother (Suzette Ranillo) is ecstatic at having him back although she worries he won’t stay long since he brought such a small bag. There’s a nice Pinoy touch with her showering kisses on her favorite son’s shoulders and arms.

The older son Kuya Step calls Jig their parents’ Golden Boy. No resentment simmering beneath the surface there. Kuya Step is so laid back that he doesn’t begrudge their late father’s leaving a commercial lot solely to Jig, even if Kuya Step himself has a young son to raise, while Jig is a carefree bachelor. Their mother is eager to use Jig’s inherited property to expand her resort business, but he is in no hurry to decide what he wants to do with it and keeps her in limbo.

Like a godling, Jig’s bedroom has been preserved in his absence while Step and his young son sleep on the living room floor. Jig throws out the boxes of childhood memorabilia which his father had kept for him, ordering his mother not to retrieve these from the rubbish heap because they just clutter up his bedroom. All that notwithstanding, he’s supposed to be a really nice guy.

While Jig sees Siargao as a refuge from an intrusive press and multitudes of fans (he has almost 2 million followers), Laura Molina (Erich Gonzales) is out to exploit the island’s many attractions to boost her social media presence. She is a vlogger who unabashedly uses her personal life, mainly her relationship with her devoted boy friend Mikey, to stoke her 22,000 followers. However, Laura has commitment issues, and Mikey’s surprise marriage proposal falls flat, to the disappointment of many of their followers. The solo trip to Siargao might establish her as a social media personality in her own right.

Gonzales plays it perkily straight and cute. She never delves into the gold mine of rich comic possibilities of her character’s clueless narcissism which would have been a more interesting path. Instead she seems like an overly eager-to-please tour guide or children’s party hostess, boringly brimful with earnest sincerity and with no mitigating sense of self-irony.

Early on, Jig lazily makes a move on Laura but she knows he still has feelings for Abi (Jasmin Curtis-Smith) who admittedly inspired all his songs. Yes, Kuya J sings and plays the guitar here. Jig and Abi used to be the LTNB (Love Team ng Bayan) till he moved to Manila to further his career and she got another boy friend, making her TOTGA (The One That Got Away). Curtis-Smith is one of our finest young actresses and one wishes that she were given more to do.

Anyway, there is no high drama at any point. Without giving away any spoilers, rest assured that everything and everyone ends up fine. Just like riding the waves, the characters stay pretty much on the surface. When they fall, they get back up, catch the next wave and try to stand again. If only real life were always that way.

MTRCB Rating: PG

This will be the year when the Internet collides with reality

By Tyler Cowen

THE onset of a new year brings plenty of predictions, and so I will hazard one: Many of the biggest events of 2018 will be bound together by a common theme, namely the collision of the virtual Internet with the real “flesh and blood” world. This integration is likely to steer our daily lives, our economy, and maybe even politics to an unprecedented degree.

For instance, the coming year will see a major expansion of the “Internet of things,” especially home and other smart devices subject to our commands. So much of our time with information technology has been taken up by texting and Facebook, pure communications of symbols and photos and videos. The next steps will be controlling our doors, heating systems, lights, stoves and refrigerators, and moving toward driverless cars. The virtual world will be managing our older physical processes more and more.

“Augmented reality” will become a better-known phrase, as a superior version of Google Glass arrives. Imagine walking into a store and putting on some techie glasses, and learning immediately about product bargains, quality ratings, and items you might want to buy, as you do now on the web with Amazon. That kind of useful information will seep into our public spaces, and you will be able to speak a command and have your favorite cheese waiting for you at the grocery checkout, at a discount of course.

Integration will shape the financial world too. Bitcoin has been an online sensation since its origin in 2009, but it has existed as a kind of closed universe, both intellectually and in terms of its impact on other financial markets. Late in 2017, futures contracts for bitcoin started on both the Chicago Board Options Exchange and the Chicago Mercantile Exchange, which means bitcoin now intersects with a world of collateral, margin requirements, potentially insolvent traders, and publicly verifiable values for contract settlement. So far this process has gone fine. But whatever your prediction for the future, this integration of real and virtual worlds will either make or break bitcoin and other crypto-assets.

As for American foreign policy, so far it has been proceeding along two very separate lines. There is the process-oriented, expertise-based approach emanating from some of Trump’s advisers, such as National Security Adviser H.R. McMaster, and also from the State department. Then there is Trump, who conducts much of his personalized, individualized foreign policy on Twitter, including threats to North Korea and insults to various allies. So far the process-oriented and Twitter-oriented foreign policies have coexisted, however uneasily. I see 2018 as the year where these two foreign policies converge in some manner. Either Trump’s tweets end up driving actual foreign policy and its concrete, “boots on the ground” realization, or the real-world policy prevails and the tweets become far less relevant.

As for conflict, cyberwar will escalate to the point where it is seen like an act of physical aggression, comparable to bombing civilians, rather than existing in its own separate sphere.

Yet more of the advances on the tech side are troubling, such as how artificial intelligence is being used for facial surveillance in China, and how Chinese social credit rating systems are assessing the suitability of individuals as both credit risks and loyal citizens. I expect many other autocracies to adopt similar technologies, and so “control of information” will mean “control of people” more and more.

One under-discussed feature of the Internet to date has been its role as an “add-on” in human affairs. Internet use brings extra benefits, but if you don’t want to use the Internet, you still can get most things done, in the physical world at least, though you probably are relying on other people to use the Internet for you. People therefore can partake in the Internet to varying degrees, while still intersecting broadly through the same common public institutions. Even without using e-mail you can vote, buy groceries, drive your car, and send your kids to school.

But the possibility of independence from Internet use is diminishing rapidly. The bright side, which is very bright indeed, is that the integration of the physical and the virtual will spread productivity gains throughout the American economy. The downside is that skill in virtual worlds will determine a person’s financial success and enjoyment of life more and more, to the disadvantage of those on the dwindling side of the digital divide.

I am struck by the recent decision of the French government to ban smartphones in schools for children 15 and younger. The government has said it wishes to subordinate information technology to face-to-face play time. I doubt if such a retrograde policy can swing the cultural tide, but again it’s a sign that the integration of the real and virtual will be a big theme for the year to come. In America, for better or worse, it’s likely to be full speed ahead.

 

BLOOMBERG

Russia eyes Saudi wheat market dominated by European suppliers

MOSCOW is lobbying Saudi Arabia to open its rapidly growing market to Russian wheat, giving it another destination to offload a record harvest and compete with supplies from the European Union (EU).

Russian wheat has largely been barred from entering the kingdom for the past decade due to strict bug-damage rules, but the two nations have begun talks on starting up trade. It’s the latest sign of increased collaboration between the two in global commodities markets — the nations are leading a group of 24 nations that have cut oil production to lift energy prices.

Already a superpower in oil and natural gas, Russia sees itself as a growing player in global crop markets. While now the world’s top wheat exporter after taking market share away from key suppliers such as the US, markets such as Saudi Arabia and Algeria have remained elusive due to quality rules. If Russia can access Saudi demand, that could pose significant competition to sales from the EU, the largest shipper to the Middle Eastern nation.

“There is huge potential for Russian wheat to be exported into Saudi Arabia,” said Swithun Still, director of grain trader Solaris Commodities SA in Morges, Switzerland.

Russian Deputy Agriculture Minister Sergei Levin has told Saudi officials that Russian firms want to start shipments. The Saudi agency that runs grain imports has also invited more Russian companies to register for the tenders, although it has yet to change the wheat import rules.

Germany, Canada, Poland and Lithuania are among the top shippers to Saudi Arabia, according to the nation’s state grains importer. While it only accepts wheat with zero bug damage, Russian cargoes typically contain 0.50% of grain damaged by insects, the Institute for Agriculture Market Studies said. That may mean a compromise needs to be reached.

“We need to solve this problem,” said Dmitry Rylko, director general at IKAR in Moscow. “They would have to lower their bar for bug damage. In the foreseeable future, Russia will hardly be able to guarantee no bug damage in exports from the Black Sea.”

Saudi Arabia, the world’s largest importer of barley, ranks in the top 20 for wheat. It initially didn’t impose bug damage limits when starting wheat imports a decade ago, but quickly became wary of Russian cargoes after a now-defunct trading house supplied grain spoiled by weevils, according to traders who participate in Saudi deals. That prompted strict rules that have largely sidelined Russian wheat.

The current grain talks also come after Brazil decided to open its market to Russian wheat, potentially increasing competition with US grain exports to the South American country.

Saudi Arabia has been increasing overseas wheat purchases after it halted growing the crop in the desert using water from fossil aquifers. Its imports are expected to total 3.8 million metric tons this season, up from just 75,000 tons a decade ago, US Department of Agriculture data show.

Saudi officials agreed on exchanging visits with Russia’s representatives “as soon as possible” to discuss grain trade, Saudi Grains Organization Governor Ahmad Al Fares, who attended the talks with Russia’s Mr. Levin, said by e-mail. Two Russian companies are now registered for competition in Saudi wheat and barley tenders, he said. — Bloomberg

Autonomous cars need tougher batteries, pioneer of lithium-ion says

BATTERY makers must rethink their technology if predictions for a wave of self-driving vehicles pan out, according to one of the inventors of the lithium-ion battery.

In addition to focusing on making batteries more powerful to extend the driving range of single-owner cars, manufacturers will also need to develop devices that can withstand the rigors of near-constant driving and short-range trips from the shared use expected of autonomous vehicles, said Akira Yoshino, who invented a prototype of the lithium-ion battery in 1985.

“A car shared by 10 people means it will be running 10 times more,” Yoshino, an honorary fellow at Asahi Kasei Corp., the world’s biggest maker of separators used in batteries, said in an interview at the company headquarters in Tokyo. “Durability will become very important.”

While producers should still focus on improving energy density and lowering costs, they will also need to create batteries using materials that can better withstand constant expansion and contraction, Yoshino said. The task becomes easier if there’s less need to simultaneously boost energy density, which is the biggest factor for driving range, he said. Lithium titanate, for example, can be used in the anode of the battery, where carbon is used commonly now.

“Cars are a completely new application, and we’ll have to wait until we find out what kind of batteries will really be needed,” Yoshino said. “The future of batteries depends on what will happen to the future of the automobile society.”

At Asahi Kasei’s laboratory in the early 1980s, Yoshino began researching polyacetylene, a conducting polymer discovered by the Japanese chemist and Nobel Prize winner Hideki Shirakawa. Although the material could be used in solar panels and semiconductors, Yoshino focused on batteries as a wave of small electronic devices requiring powerful, rechargeable energy sources began hitting the market.

He succeeded in building a lithium-ion battery using polyacetylene as the anode, later switching to carbon. But Sony Corp. beat Asahi Kasei in the race to commercialize it for mobile phones in 1991. The following year, Asahi Kasei formed a venture with Toshiba Corp. to make and sell their own batteries.

8-MM VIDEO
“I thought it would be a boon to tap into the 8 millimeter-video camera market,” Yoshino said, referring to an outdated format. “Mobile phones, laptops, and computers just kept multiplying, but no one was thinking about cars” at that time, he said.

That’s since changed. Bloomberg New Energy Finance projects electric vehicles will account for 54% of new car sales by 2040. Highly autonomous cars are expected around 2020, but technical and legal challenges to mass-market use of fully autonomous cars won’t be solved before 2030, BNEF said in a Dec. 1 report.

Yoshino was a recipient with three others of the 2014 Charles Stark Draper Prize for engineering for their contribution in the development of lithium-ion battery. — Bloomberg

Local stocks extend climb on window dressing

By Arra B. Francia, Reporter

LOCAL EQUITIES firmed up on the last trading week of 2017 on window dressing despite thinner trading volume.

The 30-member Philippine Stock Exchange index (PSEi) gained 58.6 points or 0.69% to 8,490.91.

The broader all-shares index also increased by 0.40% or 20.1 points to 4,941.51.

“Today we were up by 58 points because start na ng window dressing for the closing of the books of the listed firms. Ganyan talaga ang mangyayari ngayon (That is really what’s going to happen now), the index is now expected to go up and maintain its 8,400 level,” A&A Securities, Inc. Analyst Jeng T. Calma said in a phone interview on Wednesday.

Wednesday’s gains come amid a value turnover of only P3.6 billion after 1.23 billion issues changed hands, significantly lower than the P10.15-billion turnover the market recorded last Friday.

“In a holiday shortened week, with most global markets closed on Monday, volumes stayed low given many traders will be away until after New Year,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

Mr. Limlingan added that there was little market moving news to boost the bourse until the end of the year.

Meanwhile, A&A’s Ms. Calma noted that with the continued window dressing among investors, the bellwether index could close within the 8,500 to 8,600 level by the end of 2017.

All sectoral indices moved to positive territory by the end of the trading day, with the property sector leading the charge with a 1.19% increase or 46.44 points to 3,950.50. Financials climbed 0.72% or 15.64 points to 2,174.59; services rose 0.59% or 9.51 points to 1,613.82; while industrials increased 0.56% or 62.70 points to 11,189.06.

The holding firms counter increased 0.37% or 32.32 points to 8,620.46, while mining and oil saw a 0.09% uptick or 10.31 points to 11,385.27.

Decliners and advancers were almost equally split, 104 to 103, while 43 names were flat.

Net foreign buying widened to P349.46 million on Wednesday, up from the P185.23-million net inflow recorded last Friday. Markets were closed on Monday and Tuesday for the Christmas holidays.

The local market defied the movement of US stocks, which declined on Tuesday as Apple and shares of its parts suppliers weakened on a report of soft iPhone X demand, which pulled technology shares lower.

According to Taiwan’s Economic Daily, citing unidentified sources, Apple will slash its sales forecast for its flagship phone in the current quarter to 30 million units, down from what it said was an initial plan of 50 million units.

The Dow Jones Industrial Average fell 7.85 points or 0.03% to 24,746.21; the S&P 500 lost 2.84 points or 0.11% to 2,680.50; and the Nasdaq Composite dropped 23.71 points or 0.34% to 6,936.25. — with Reuters

CSC resets exam in Iligan City on March 18, 2018

THE Civil Service Commission (CSC) has announced the resetting of the suspended Aug. 6 Career Service Examination-Pen and Paper Test (CSE-PPT) in Iligan City Testing Center to March 18, 2018, simultaneous with the first schedule of CSE-PPT next year, the agency said in a statement. Affected examinees need not register for the March 18, 2018 exam, and shall only be given one chance to take the reset examination free of charge. Those who would not be able to take the March 18 exam shall have their examination fee and slot forfeited. CSC ARMM shall send notifications to the affected examinees through the contact numbers and/or e-mail addresses appearing on the examinees’ application forms that were submitted for the suspended Aug. 6, 2017 CSE-PPT. Affected examinees may also directly coordinate with the CSC ARMM regarding changes in school assignments through telephone nos. (064) 552-0512, 552-0327, and 552-1855. Otherwise, they may access the Online Notice of School Assignment (ONSA) on CSC’s Web site. Meanwhile, the CSC reminds all other interested exam applicants that the deadline for application is on Jan. 31, 2018. The commission said this is on a first-come, first-served basis, meaning, that the CSC Regional/Field Office may cease accepting applications once it has reached its target number of registered examinees. Applications must be personally submitted at the CSC Regional Office (CSC RO), or at any of the CSC RO’s field offices where applicants intend to take the examination. Interested parties may access CSC Examination Announcement No. 04, s. 2017 now posted on the CSC Web site, www.csc.gov.ph. Examination fee is P500.

Nonstop Manila-Toronto flights to give PAL an advantage — CAPA

LAUNCHING of direct Manila-Toronto flights gives Philippine Airlines (PAL) a competitive advantage, an aviation market intelligence provider said.

Flag carrier Philippine Airlines launched this month its direct Manila-Toronto flights, replacing previous flights operated via Vancouver. Its return flight was the first ultra-long polar flight from Toronto nonstop to Manila, the first crossing of the Polar region by a Filipino airline.

“By introducing a nonstop option in the Toronto-Manila market, PAL has gained a competitive advantage over the nine airlines that offer a one-stop product. Several of these airlines offered similar, or shorter, total transit times than PAL before PAL introduced a nonstop service,” CAPA-Centre for Aviation said on its Web site.

For the Manila-Toronto flight, PAL used a Boeing 777-300ER that crossed Canada, Greenland, the Arctic Circle, Russia, Mongolia and parts of China.

The Manila-Toronto route is now one of the 20 longest routes in the world, with a block time of 16 hours and 30 minutes on the westbound leg, and 14 hours and 40 minutes on the eastbound leg. The nonstop flight is 4.5 hours shorter than PAL’s previous one-stop service, which had a total transit time of 21 hours on the westbound sector.

Other airlines which offer the Manila-Toronto route are Cathay Pacific Airways Limited (via Hong Kong), and China Eastern Airlines Corporation Limited (via Shanghai).

PAL plans to follow up with another polar crossing service on a longer nonstop route, over 17 hours, within the second half of 2018, from Manila to New York (JFK Airport) and from New York to Manila, using the A350. — P.P.C. Marcelo

US sanctions two North Koreans over ballistic missile program

WASHINGTON — The United States sanctioned two North Korean officials on Tuesday over the development of ballistic missiles, as Russia and America’s top diplomats held talks on Pyongyang’s nuclear program.

Tensions have escalated after the isolated but nuclear-armed regime staged a series of atomic and intercontinental ballistic missile (ICBM) tests, most recently on November 28. US President Donald J. Trump and North Korean leader Kim Jong-Un have also traded personal insults.

“Treasury is targeting leaders of North Korea’s ballistic missile programs, as part of our maximum pressure campaign to isolate the DPRK and achieve a fully denuclearized Korean Peninsula,” Treasury Secretary Steven Mnuchin said in a statement, referring to North Korea by the abbreviation of its formal name.

The two officials were listed last Friday in a new United Nations Security Council resolution sanctioning North Korea, it said.

“Kim Jong-Sik reportedly is a key figure in North Korea’s ballistic missile development, including efforts to switch from liquid to solid fuel, and Ri Pyong-Chol is reported to be a key official involved in North Korea’s intercontinental ballistic missile development,” the Treasury statement said.

Solid-fuel missiles can be fired on shorter notice, as they do not have to be filled with liquid fuel prior to launch.

“As a result of today’s actions, any property or interests in property of those designated by OFAC within US jurisdiction are blocked, and transactions by US persons involving the designated person are generally prohibited,” Treasury said, referring to its Office of Foreign Assets Control.

The sanctions announcement came as Russian Foreign Minister Sergei Lavrov and US Secretary of State Rex Tillerson held talks by phone in which they discussed North Korea’s nuclear program.

“The sides were united in the opinion that nuclear missile projects in North Korea violate the demands of the UN Security Council,” the Russian foreign ministry said after the call.

Mr. Lavrov “once again highlighted that it is unacceptable to exacerbate tensions around the Korean peninsula with Washington’s aggressive rhetoric toward Pyongyang and increasing military preparations in the region,” it said.

Mr. Trump habitually refers to Kim as “Little Rocket Man” and has threatened to utterly destroy his regime with “fire and fury.” North Korea has branded Mr. Trump a mentally disturbed “dotard.”

“It was underlined that it is necessary to move from the language of sanctions to the negotiating process as soon as possible,” the statement said, adding that it was Mr. Tillerson who initiated the call.

On Friday, the UN Security Council unanimously passed new, US-drafted sanctions that will restrict oil supplies vital for North Korea’s missile and nuclear programs.

The third raft of sanctions imposed on the North this year, sparked by last month’s ICBM test, also received the backing of China — the North’s sole major ally and economic lifeline.

The sanctions also order the repatriation of North Korean workers sent abroad to earn much-needed revenue for Mr. Kim’s regime.

North Korea slammed the fresh UN sanctions as an “act of war.”

“We fully reject the latest UN sanctions… as a violent breach of our republic’s sovereignty and an act of war that destroys the peace and stability of the Korean peninsula and a wider region,” Pyongyang’s foreign ministry said in a statement carried by the state-run KCNA news agency.

The latest launch of the Hwasong-15 ICBM, theoretically capable of hitting all major US cities, further heightened global alarm over the rapid advance in North Korea’s weapons technology, which has made significant progress since Mr. Kim took power in 2011. — AFP

How PSEi member stocks performed — December 27, 2017

Here’s a quick glance at how PSEi stocks fared on Wednesday, December 27, 2017.

Finally, the TRAIN passes

On Dec. 19, President Rodrigo Duterte signed into law Republic Act 10963, also known as the Tax Reform for Acceleration and Inclusion (TRAIN), to promote a simpler, more equitable and efficient tax system. Said law will become effective beginning Jan. 1 after fulfilling the publication requirement.

This first tax reform package (out of five total) contains amendments to several provisions of the National Internal Revenue Code of 1997, specifically on individual income tax, donor’s and estate tax, value added tax (VAT)/ percentage tax, excise tax on certain products and services, documentary stamp tax (DST) and certain administrative procedures.

The revisions contained in TRAIN include:

PERSONAL INCOME TAXATION
Personal income tax exemption for individuals deriving purely compensation income and/or self-employed and professionals is increased to P250,000, regardless of civil status or qualified dependents. The threshold amount for tax-exempt 13th month pay and other benefits is increased to P90,000 (previously P82,000).

The foregone tax collection as the result of the increased exemption will be passed on to high income earners who will be taxed at a maximum rate of 35% (previously 32%) for taxable income in excess of P8 million.

Moreover, under TRAIN, purely self-employed and professional individuals (e.g., independent agents/distributors, freelancers) whose total income (i.e., gross sales/receipts and other non-operating income) does not exceed P3 million will have the option to be taxed at 8% of gross sales/receipts and other income in excess of P250,000 in lieu of the graduated rates and percentage tax.

INCREASE IN CERTAIN PASSIVE INCOME TAX RATES
Capital gains tax on sale of unlisted shares of stock and interest income from foreign currency bank deposits derived by citizens, resident aliens and domestic corporations are subject to an increased final tax of 15%.

Moreover, beginning 2018, PCSO and lotto winnings exceeding P10,000 will be subject to 20% final tax.

INCREASED FRINGE BENEFIT TAX (FBT)
Effective Jan. 1, fringe benefits given to non-rank and file employees are subject to 35% FBT (previously 32%). The grossed-up monetary value is determined by dividing the actual monetary value by 65%.

ESTATE TAX REVISIONS
Estate taxation was changed from graduated rates to a flat rate of 6% based on the value of the net estate. The net estate is derived by deducting the allowable expenses from the gross estate of the decedent. To simplify, certain allowable deductions were removed under the revised law. For a citizen or resident decedent, funeral expenses, judicial expenses, and medical expenses are no longer deductible, but the amount of standard deduction and deduction for the family home is increased to P5 million and P10 million, respectively.

Meanwhile, for non-resident decedents, allowance for deduction of expenses, losses, indebtedness and taxes were removed but additional provisions were included allowing a standard deduction of P500,000 and claims against the estate and insolvent persons, and unpaid mortgages as deductions from the estate.

DECREASED DONOR’S TAX
Donors shall be subject to a fixed rate of 6% (previously at graduated rates) based on total gifts in excess of P250,000 during the calendar year, whether or not the donee is a stranger. Moreover, dowries or gifts made on account of marriage of P10,000 are no longer exempted from donor’s tax.

The sale, exchange or transfer of property made in the ordinary course of business (i.e., a bona fide transaction conducted at arm’s length and free from any donative intent) shall be considered as made for adequate and full consideration. Thus, no donor’s tax should be imposed.

VAT REVISIONS
Certain provisions on VAT zero-rating of sale of goods and services and VAT exempt sales were adjusted. The definition of sale or exchange of services was expanded to include the sale of electricity by generation companies, transmission by any entity, and distribution companies, including electric cooperatives.

In terms of creditable input VAT on the purchase of local or imported capital goods, amortization of the input VAT shall only be allowed until Dec. 31, 2021, after which, taxpayers with unutilized input VAT on capital goods shall be allowed to apply the same as scheduled until fully utilized.

Moreover, the VAT refund period for excess creditable input VAT is shortened to 90 days (previously 120 days) from the date of submission of the relevant documents supporting the claim. Penalties shall be imposed on BIR officials who fail to act on the application within the 90-day period.

In case of denial of the refund claim by the Commissioner, the legal and factual basis for the denial must be stated in writing. In case of full or partial denial of the VAT refund claim, the taxpayer may file an appeal with the Court of Tax Appeals (CTA) within 30 days from receipt of the BIR denial.

As regards sales to the government, the VAT withholding system shall shift from final to creditable effective Jan. 1, 2021.

INCREASE IN PERCENTAGE TAX ON SALE OF LISTED/TRADED SHARES
Disposal of listed shares through the Philippine Stock Exchange or through Initial Public Offering is subject to percentage of 6/10 of 1% based on the gross selling price or gross value in money of the shares of stock.

ADJUSTMENTS TO EXCISE TAXATION
Under the new tax law, the excise tax coverage is expanded to include services performed in the Philippines. Moreover, the excise tax rates for certain products such as cigarettes, automobiles, petroleum and mineral products among others, are increased.

Specifically, the excise tax on cigarettes both packed by hand and machines will be taxed at P32.5 per pack starting Jan. 1 which will gradually increase to P40 per pack by Jan. 1, 2022. Beginning Jan. 1, 2024, the tax rate imposed shall be increased by 4% every year thereafter.

The excise tax on automobiles, on the other hand, is adjusted to 4%; 10%; 20%; 50% depending on the value of the vehicle. However, hybrid vehicles will only be taxed at 50% of the applicable excise tax rates. Moreover, exemptions from excise tax are given to purely electric vehicles and pick-up trucks.

Sweetened beverages which use purely caloric sweeteners and purely non-caloric sweeteners, or a mixture of both, are subject to excise tax of P6 per liter. Meanwhile, beverages which use purely high-fructose corn syrup or in combination with any caloric or non-caloric sweetener, are taxed at P12 per liter. Tax exemptions are given to beverages using purely coconut sap sugar/purely steviol glycosides as sweetener.

The following products, however, are not considered excisable products under this new provision: (1) All milk products; (2) 100% natural fruit and vegetable juices; (3) Meal replacement and medically indicated beverages; and (4) Ground coffee, instant soluble coffee, and pre-packaged powdered coffee products.

Non-essential services, specifically the performance of cosmetic surgeries, procedures, and body enhancements for aesthetic purposes, shall generally be subjected to 5% tax on gross receipts.

DOUBLING OF DST
Almost all DST rates were doubled except for certain insurance policies and sale of real property.

SIMPLIFIED TAX RETURNS
Income tax returns for individuals and corporations shall be limited to a maximum of four pages for both paper and electronic form. Taxpayers will have to wait until their 2018 tax filings to avail of this benefit. To be clear, the income tax return to be filed for taxable year 2017 should still be the existing tax forms, even if filed in 2018.

AMENDMENTS TO COMPLIANCE REQUIREMENTS
There are also revisions to certain compliance requirements such as keeping of books of account, registration requirements, and issuance of receipts or sales invoices. For example, taxpayers with gross annual sales/earnings/receipts exceeding P3 million must have their books audited by a certified public accountant.

The threshold for taxpayers to mandatorily register for VAT was increased from P1.9 million to P3 million. Moreover, persons who elect to pay the 8% tax on gross sales/receipts, in lieu of the graduated income tax rates, shall not be allowed to avail of the option of registering for VAT.

IMPLEMENTING REGULATIONS
With so many changes, questions may arise in terms of the interpretation of some provisions and the intention of our lawmakers. The tax authorities will have to provide implementing guidelines to minimize confusion in the interpretation of the new tax provisions.

One example is the taxation on employees of regional or area headquarters (RHQs), regional operating headquarters (ROHQs) of multinational companies, offshore banking units (OBUs) and petroleum service contractors and subcontractors. Under the current rules, alien individuals and qualified Filipinos employed by such entities are subject to a final withholding tax of 15% on their gross compensation income.

Based on the bicameral report that was sent to the President for approval, an additional paragraph was inserted into the Tax Code stating that the 15% tax rate will no longer be available to employees of ROHQs/RHQs/OBUs etc. that will be registered with the Securities and Exchange Commission beginning Jan. 1 2018. However, present and future qualified employees of such entities existing as of Dec. 31, 2017 shall continue to enjoy the preferential tax treatment.

On Dec. 22, the Office of the President issued a veto statement removing the proposed sunset provision since it violates the Equal Protection Clause under the 1987 Constitution. It said the removal of such incentives will promote fairness and equity of tax system for individuals performing similar nature of work.

While it would appear that the intention is to totally eliminate the 15% preferential tax rate, the provisions under Sections 25 (C), (D) and (E) of the Tax Code were not repealed since such repeal has to come from the legislature. Thus, the Tax Code provision providing for the 15% employee tax rate appears to remain intact as of this writing.

The passing of the TRAIN law surely has its benefits. Indeed, this is good way to start the year 2018.

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.

Wendy Go is a manager at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of PwC global network.

845 2728

wendy.c.go@ph.pwc.com

1...12,27512,27612,277...13,267Page 12,276 of 13,267
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube