HTC to slash jobs in Taiwan

July 5, 2018 | 12:01 am

Smartphone maker HTC plans to slash 1,500 jobs or around a quarter of its global work force at its manufacturing unit in Taiwan, in a bid to better manage resources as the company continues to battle dwindling sales. — AFP

Holiday Inn Express opens in Manila

July 5, 2018 | 12:01 am

OFFICIALS of Resorts World Manila (RWM) and InterContinental Hotels Group (IHG) unveiled the logo for Holiday Inn Express Manila Newport City (HIEx Manila), the global brand’s first Philippine location.
In photo (left to right): Martin Paz, chief integrated marketing officer for RWM; Kathy Mercado, senior director for international marketing and sales for RWM; Stephen Reilly, chief operating officer for RWM; HT Cheah, general manager for HIEx Manila; Christopher McGonnell, chief hotel operations officer for RWM; and Christian Pirodon, IHG regional general manager for the Philippines.

Restaurant Row (07/05/18)

July 5, 2018 | 12:01 am

Pantry’s promotion

THE PANTRY at Dusit Thani is offering a Back To School Treat: students with up to a maximum of three companions get a 50% discount on the lunch or dinner buffet. To avail of the promotion, they have to present a school ID. The Dusit Thani is located at the Ayala Center in Makati. For details visit www.DUSIT.com.

Anya’s Best of Spain

RAMBLA’s squid ink *paella* is a highlight at Anya Resort Tagaytay’ “*Hola*!” dinner.

THERE’S NO need to fly to Spain to experience its food as Anya Resort Tagaytay celebrates its first anniversary on July 14 with a one-night only “Hola!” dinner prepared by chef Ruben Beltran, Executive Chef at Rambla. With over 20 years of experience, Mr. Beltran is known for the unique twists he puts on Spanish food. After working as a sous chef in Les Pres d’Eugenie Restaurant, a three-star Michelin star restaurant in France, then sous chef at Vincci Estrella del Mar Hotel in Malaga, Spain, earlier this year he made his way to Rambla Rockwell. The menu he prepared for this special celebration will feature his signature infusion style of cooking where he blends spices and flavors. From tasty tapas to seafood and traditional roasts, this Spanish feast is all about making the most of the best local produce found in Tagaytay. Guests will start with a buffet selection of tapas, from jamon iberico al corte, anchovy air-baguette with piparras cream and grilled vegetables, to parmesan croquetas in truffle sauce. Then comes the traditional taste of Spain with a juicy pork jowl and chipotley dressing, paired with the chef’s specialty, paella negra, made with fresh mussels and clams, and flavorful saffron aioli. For dessert, one can choose refreshing sangria-soaked watermelon cubes, or milk and ginger ice cream, or torta de santiago — a light cake made with almonds and lemon zest — with white chocolate matcha. A variety of fine Spanish wines and bottomless sangria will be available. Limited slots for the “Hola!” dinner at Anya Resort and Residences Tagaytay are available for P1,995 net per person on July 14. For details, visit Anya Resort Tagaytay’s Facebook page or the website at www.anyaresorts.com, or call 657-1640 or 0998-577-9999, or e-mail resv.tagaytay@anyaresorts.com.

Football Season Pass

WHAT BETTER way is there to watch the “beautiful game” of football than viewing it live with great company paired with premium drinks and savory bar chow at Marco Polo Ortigas’ Vu’s Sky Bar and Lounge? The Quarter Round begin on July 6, with the Final scheduled on July 15 (Philippine time). Guests enjoying the games at Vu’s Sky Bar and Lounge can enjoy two complimentary bottles of Heineken beer for a door charge of P499. The games air live until 1:30 a.m. Vu’s Sky Bar and Lounge offers a large selection of spirits to pair with a curated line-up of dishes from the Philippines and Spain, and other Mediterranean favorites. For details visit www.marcopolohotels.com.

Sizzle at Silogue

RESORTS WORLD MANILA warms taste buds this rainy season with a trio of sizzling dishes at its Pinoy comfort dining outlet, Silogue. The burger patties in the Salisbury Steak Sizzler are made from premium ground beef cuts and covered in savory gravy. Grilled to perfect doneness, the juicy beef patties are given a lightly crisp layer on a sizzling plate for an added dimension of texture. The Mixed Seafood Sizzler gives diners a solid beach vibe with a fresh assortment of squid, shellfish, and fish which are balanced by the earthy flavors of a rich peanut sauce. Summer barbecues are given an upgrade with the Crispy Ribs Sizzler. Generous servings of tender beef ribs are coated in a sweet barbecue sauce. All Silogue Sizzlers are served on a sizzling hot plate with a cup of yellow rice and a side of buttered vegetables. The three dishes are available until July 31. Silogue is located at the GF Gaming Area of RWM and is open to guests 21 years old and above only. For details visit www.rwmanila.com or call the Tourist/Visitor hot line at 908-8833 for inquiries and reservations.

How PSEi member stocks performed — July 4, 2018

July 5, 2018 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Wednesday, July 4, 2018.

Domestic market capitalization of select stock exchanges in Asia Pacific

July 5, 2018 | 12:00 am

Palace: Peace talks to resume if Reds meet Duterte’s conditions

July 4, 2018 | 9:45 pm

By Arjay L. Balinbin, Reporter
Malacañang on Wednesday, July 4, said President Rodrigo R. Duterte’s administration is still open to negotiations with communist rebels provided that his “conditions are met.”
“The door for peace talks remains open provided that PRRD’s conditions are met,” Presidential Spokesperson Harry L. Roque, Jr. said in a social media post on Wednesday evening.
According to the spokesman, the President wants the peace talks to take place “in the country.”
He added: “[There should be] no collection of revolutionary tax and no hostilities.”
Mr. Duterte also wants the fighters of the New People’s Army (NPA) “to remain encamped,” and that there will be “no [formation of a] coalition government.”
“Meanwhile, localized peace talks may be pursued by local government units (LGUs) provided they do not concede any aspect of governance and pursuant to guidelines to be agreed upon by the Cabinet cluster on security,” Mr. Roque also said.
In a press release, the Communist Party of the Philippines (CPP) said that the “local[ized] peace talks” will not prosper, because “(a)ll units of the NPA and committees of the CPP are united under the central leadership of the Party.”
The CPP added that “the Party and NPA fully support the Negotiating Panel of the National Democratic Front of the Philippines (NDFP) in its representation of all revolutionary forces in negotiations with the Government of the Republic of the Philippines.”
“[The] So-called localized peace talks only seek to obscure the ruthlessness and brutality of the all-out military offensives of the Armed Forces of the Philippines (AFP). Under Oplan Kapayapaan, the AFP is mounting all-out offensives and laying siege on hundreds of barrios, carrying out aerial bombardments and perpetrating extrajudicial killings ala Tokhang, and other grave abuses against the peasants, national minorities and other oppressed peoples,” the CPP also said.

Boracay’s White Beach declared clean; water quality ‘almost there’

July 4, 2018 | 9:36 pm

THE government is on track in its efforts to rehabilitate Boracay island, the Department of Environment and Natural Resources (DENR) said as it declared White Beach clean and the effort to improve water quality on the island “almost there.”
Environment Secretary Roy A. Cimatu said in a statement that daily and weekly monitoring results are showing improvement for Boracay’s main beach area, though the cleanup of the sea frontage in barangay Balabag on the opposite side of the island will take time.
“[White beach] is already clean, you can see the pictures and it’s already clean. It’s only the Balabag where some fine-tuning is happening right now,” he added.
“We are only waiting for the finishing of the roads. In terms of water quality, we are almost there. If we can open the island before the deadline, we will.”
President Rodrigo R. Duterte ordered the resort island to be closed on April 26 to allow for a six-month rehabilitation.
The DENR has ordered water concessionaires to collaborate in dealing with untreated wastewater and increase the capacity of their sewage treatment plants in the island.
National Solid Waste Management Commission Executive Director Eligio T. Ildefonso said that the local government will be implementing a policy of solid waste segregation
“As far as solid waste management is concerned, we are on track,” he added.
“If you go to Boracay you can see that there isn’t much trash. If you do, it will be only because of a few violators but we are strictly implementing the right garbage disposal in Boracay.”
As for plans for a waste-to-energy (WTE) plant, Mr. Ildefonso clarified that a facility will not be built on Boracay itself.
“It will be built in (on Panay). If we segregate properly, then it will be manageable even before we need to put up a waste to energy plant,” he added.
Mr. Ildefonso said that the WTE plant is a “long-term” project with a timeline of about 10 years.
“Based on the projection, the garbage generated will keep on increasing in volume in Boracay and Malay,” he said, referring to the municipality on Panay which has jurisdiction over Boracay.
Boracay Island Water Co., Inc. proposed to Malay to set up a WTE plant through Manila Water Total Solutions. — Anna Gabriela A. Mogato

SC rules LGUs’ IRA funding includes BoC collections

July 4, 2018 | 9:35 pm

PH coins — LOCAL GOVERNMENT UNITS shall have a share in the national internal revenue taxes. — *BW FILE PHOTO*

THE SUPREME COURT (SC) has ruled that the local government unit (LGU) “just share” of the national government’s tax revenue should factor in Customs collections.
The Court, sitting en banc, issued the ruling in favor of a petition filed six years ago by Batangas governor Hermilando I. Mandanas, at the time a member of the House of Representatives for the province’s second district, which claimed that Internal Revenue Allotments (IRA), through which the national government funds LGUs, was short by about P500 billion from 1992 to 2012.
Voting 10-3 on Tuesday, the high court “interpreted the basis for the ‘just share’ of local government units… as being based on all national taxes and not only national internal revenue taxes,” according to a statement released by the SC Public Information on Wednesday.
Section 284 of Republic Act No. 7160, or the Local Government Code of 1991, states: “Local government units shall have a share in the national internal revenue taxes,” which are the taxes collected by the Bureau of Internal Revenue (BIR), according to the National Internal Revenue Code (NIRC) of 1997.
These include income tax, value-added tax, excise tax, and other taxes collected by the BIR.
National taxes were also ruled to include the remaining taxes collected by the government like those brought in by the Bureau of Customs (BoC), the LGUs’ share of which Mr. Mandanas alleged was not being forwarded.
LGUs, based on the Local Government Code, are entitled to 40% of national internal revenue taxes, but Mr. Mandanas claimed it should include taxes not collected by the BIR.
Mr. Mandanas was asked for comment but his office did not respond to calls.
Those who voted in favor of the decision were Acting Chief Justice Antonio T. Carpio, Associate Justices Teresita L. De Castro, Presbitero J. Velasco, Diosdado M. Peralta, Lucas P. Bersamin, Mariano C. Del Castillo, Estella M. Perlas-Bernabe, Noel G. Tijam, Samuel R. Martires, and Alexander G. Gesmundo.
Meanwhile, those who dissented were Associate Justices Mario Victor F. Leonen, Benjamin S. Caguioa, and Andres B. Reyes, Jr. Associate Justice Francis H. Jardeleza did not take part in the voting. — Dane Angelo M. Enerio

Supreme Court rules government allowances, benefits subject to tax

July 4, 2018 | 9:33 pm

THE Supreme Court, sitting en banc, has upheld a Bureau of Internal Revenue (BIR) memorandum which held that allowances, bonuses, and other benefits given to government employees are subject to tax.
The court had partially granted a 2014 petition which claimed these were nontaxable fringe and de minimis benefits.
According to a statement released by the SC’s Public Information Office on Wednesday, the petition challenged the Bureau of Internal Revenue’s (BIR) Revenue Memorandum Order (RMO) No. 23-2014 “which classified as taxable compensation income allowances, bonuses, compensation for services granted to government employees.”
The memorandum, which took effect on July 7, 2014, stated all fringe benefits received by government employees are subject to fringe benefits tax.
In a unanimous vote made on Tuesday, the high court “struck down Section VI of RMO 23-2014 but upheld the validity of Sections III, IV, and VII which subject the claimed non-taxable fringe and de minimis benefits to tax and requires the government, as employer, to withhold the amount corresponding to the tax,” the statement said.
“[A]ll income received by an employee from his/her employer is presumptively taxable and subject to withholding,” the court ruled.
The statement said, “[i]n upholding Sections III and IV, the Court ruled that no additional tax is imposed as the two sections merely mirror the relevant provisions of the National Internal Revenue Code (NIRC) of 1997 on withholding tax on compensation income.”
Section III of the RMO states that government offices, including government-owned or controlled corporations (GOCC) are constituted as withholding agents of the creditable tax required to be withheld from compensation paid to employees while Section IV listed benefits such as the 13^th month pay are not subject to income tax and withholding tax. Section VII lists the penalties for not complying with the RMO.
The statement added: “The Court declared null and void Section IV of RMO 23-2014 only where it names the Governor, City Mayor, Municipal Mayor, Barangay Captain, and Heads of Office in government agencies, government-owned or controlled corporations, and other government offices, as persons required to withhold and remit withholding taxes.”
The high court found that the BIR “overstepped the boundaries of its authority to interpret existing provisions of the NIRC (National Internal Revenue Code) of 1997 in issuing Section VI as the NIRC of 1997 does not require any of these officers to deduct, withhold, and remit the correct amount of withholding taxes.”
According to the SC, the BIR “acted in grave abuse of discretion in issuing Section VI” of the memorandum as “imposing upon these officials an obligation not found in law or in Implementing Rules, the (BIR) did not merely issue an interpretative rule designed to provide guidelines for enforcement of the law but supplanted details — a power vested by law only on the Secretary of Finance.”
The SC statement noted the decision is to be applied prospectively. — Dane Angelo M. Enerio

Frequency auction could deter ‘third player’ bids

July 4, 2018 | 9:31 pm

THE proposed auction of frequency for the new entrant to the telecommunications industry, the so-called “third player,” might reduce the number of bidders and raise costs for consumers, analysts said.
The analysts and an Internet advocacy group said that an auction of frequency with a minimum bid price of P36.58 billion, could be a barrier to improving service, rather than an incentive for those wanting to be the third player.
The government is deciding whether to allot frequency to the third player through an awarding without a fee or through an auction. The Department of Information and Communications Technology (DICT) supports an awarding of frequency, while the Department of Finance (DoF), a member of the oversight committee for third player selection, is pushing for an auction of frequency.
“The selection process based on HCLOS [highest committed level of service] is clearly more consumer-centric than the one based on the auction for frequency. The second model has several variables that could potentially be counterintuitive to the main purpose of the third telco’s entry (i.e., improve and lower the cost of telco services) and simply just invite controversy,” Sean Agapito, market analyst at IDC Philippines, said in an e-mail interview.
“For instance, the auction of frequency would force applicants to pay out huge capital unrelated to the development of telco services or establishment of new ICT [information and communications technology] infrastructure. This expense could be easily passed on to consumers.”
Jervin S. de Celis, equities trader at Timson Securities, Inc. said that interested parties may be discouraged by the auction requirement and will leave the field to cash-rich companies, or those with a foreign partner.
“I think [that the companies may be turned off by the auction price]. The price of P36 billion is too hefty… so it might become a little difficult for the new entrants to raise cash just to acquire the frequency that the DoF plans to auction, unless the entrant is already cash-rich or has a foreign partner to shell out the needed funds to acquire the frequencies.”
Mary Grace Mirandilla-Santos, independent researcher and lead convener of Internet advocacy group Better Broadband Alliance (BBA) said the higher cost to be shouldered by the new player, which can be passed on to consumers, will be contrary to the aim of getting a new competitor to the incumbents, PLDT, Inc. and Globe Telecom, Inc.
“The objectives of the third telco selection process should be clear: (1) ease of entry for a new player and (2) better and more affordable telecom services for the consumer. In line with this, the BBA is in favor of the (terms of reference) that awards a license and assigns spectrum based on the HCLOS plus highest committed investment (HCI),” Ms. Santos said in a mobile message.
“…If the auction results in a high bid price, it is highly likely that the selected third telco would work to recover the cost by passing it on to the consumer. That would defeat the purpose of putting a new player in place who will compete with the duopoly,” she added.
DICT Acting Secretary Eliseo M. Rio, Jr. has expressed opposition to the DoF’s plan, saying that an auction will be anti-competitive because the incumbents did not have to undergo an auction, only a “beauty contest,” thereby placing a big burden on the new player by forcing it to pay out a large amount that has nothing to do with improving infrastructure and services.
DoF Secretary Carlos G. Dominguez III said the new entrant must pay for the frequency to make it “fair” to the public.
Around 300 megahertz (MHz) of frequency is assignable to a third player. The DICT has said this is sufficient to compete with the incumbents.
Two draft terms of reference (ToR) with the differing approaches to the awarding of frequency are set to be discussed in a public hearing on July 6.
Current requirements for the third player include paid-in capital of at least P10 billion; experience in providing, delivering, and operating of telecommunications services for the last five years; a congressional franchise not related to either PLDT or Globe.; and no uncontested liabilities with the NTC as of Jan. 31, 2018.
The government aims to choose the third player within the year.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

DENR’s internal mining review expected this month

July 4, 2018 | 9:29 pm

THE Department of Environment and Natural Resources (DENR) said it hopes to complete its own mining review “within the month.”
“We have not yet brought out the results,” Environment Secretary Roy A. Cimatu told reporters on Wednesday.
“There are several versions so we’ll have to harmonize them first,” he said, adding that the study by the Mining Industry Coordinating Council (MICC) “will be a very big factor in my decision.”
In June, the MICC cleared 23 out of 27 mines based on legal, technical, economic, social and environmental compliance, around four months after the interagency council began its review.
However, Finance Undersecretary Bayani H. Agabin was quoted last month that this is still subject to change.
The MICC audit, which Mr. Cimatu has said will be merged with DENR’s own review, will be submitted to the Office of the President and the DENR. Mr. Cimatu will ultimately decide whether the mines are shut down.
On Wednesday, President Rodrigo R. Duterte in his speech during DENR’s 31^st anniversary reiterated that he is still for banning open-pit mining because it “really destroys the land.”
“[Mr.] Duterte said he wants it closed. Open pit mines will be closed if they don’t shape up,” Mr. Cimatu said,
“And we have to reinvent mining: find a way to extract minerals by not using open-pit mining.”
The Philippines is the second-largest nickel supplier in the world, though the mining and quarrying industry accounts for only 3.7% of gross domestic product.
The DENR plans to enforce a department administrative order (DAO) on progressive rehabilitation which will limit mining operations to 100 hectares (ha) a year.
Prior to the DAO, miners were allowed to conduct operations on 4,000 ha. before rehabilitating the site, Mr. Cimatu said.
“Progressive rehabilitation [is] different now, because you can only extract minerals for only 100 hectares for one year,” Mr. Cimatu said.
“Just disturb the 100 hectares; after you have extracted for one year, then close it, rehabilitate that and you go on to the next 100 [hectares].” — Anna Gabriela A. Mogato

The ERM Agenda: 2018 and beyond

July 4, 2018 | 9:26 pm

The release of the updated Enterprise Risk Management (ERM) Framework by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2017 formally heralded the evolution of the traditional risk management mindset, wherein risks are managed as a consequence of business operations, towards a more proactive stance for managing risks. Entitled “Enterprise Risk Management — Integrating with Strategy and Performance,” the updated Framework highlights the importance of considering risks even at the onset of strategy setting, as well as throughout the process of driving organizational performance.
RESHAPING THE ERM LANDSCAPE
It is now close to a year since the publication was released and the Framework has been gradually reshaping how business leaders talk about risk. There is greater awareness among these leaders of the relationship between risk and value — that there is more to it beyond mere value protection. In fact, risk management, when properly embedded into the organizational DNA, can potentially result in value creation.
It must also be said that there has been a renewed effort by Philippine regulators to further promote the importance of enterprise risk management as a tool for the continued sustainable growth of the Philippine business environment. Financial institutions falling under the supervision of the Bangko Sentral ng Pilipinas (BSP) would most likely think of BSP Circular 971: Guidelines on Risk Governance, which requires banks and nonbank financial institutions alike to establish their own enterprise-wide risk governance framework with the ultimate goal of ensuring that these institutions possess risk management capabilities that are commensurate with their size, complexity, risk profile and systemic importance. Publicly listed companies, on the other hand, may be more familiar with Principle 12 of the 2016 Code of Corporate Governance for Publicly-Listed Companies issued by the Securities and Exchange Commission (SEC), which similarly requires these companies to have an enterprise risk management framework to help sustain safe and sound operations as well as implement management policies to attain corporate goals.
ANTICIPATING THE FUTURE OF ERM
As the understanding of risk continues to grow deeper and the practice of risk management becomes even more widespread, we can naturally expect the future to bring along even more changes to the field of ERM.
• Business leaders, having realized the potential that comes with unlocking the value of risk and supporting this with appropriate risk management practices, will seek to maximize the value that they can reap from their business strategy by crafting carefully calibrated risk and reward objectives. To this end, they will look into employing more sophisticated tools and technology to generate accurate information in a timelier manner.
• Shareholders and investors, on the other hand, will continue to hold these leaders accountable for the protection of their investments, as well as demand a reasonable amount of return on their invested funds. To allow for more informed decision making, an increasingly educated investing public will further drive demand for quality information, thereby requiring management to provide more comprehensive disclosures on how it manages risks.
• Regulators and standard-setters are expected to follow suit with even more detailed and comprehensive guidelines on risk management to ensure and promote market stability.
• People/employees comprise one of the largest key stakeholder groups of the organization who will be greatly affected by changes in existing processes owing to the deeper integration of core risk management principles into the corporate strategy and day-to-day operations. Consequently, they will require more comprehensive and detailed guidance on how to best execute their duties and functions whilst maintaining the proper risk mindset.
Considering the link between risk management, strategy and performance, as well as looking at these anticipated developments, we can clearly see that risk management holds a very important place in the organizational agenda for 2018 and even beyond.
So now, the key question is: how should your organization go about implementing ERM?
FORGING AHEAD WITH ERM
Having helped organizations with their ERM implementation, I can say with conviction that there really is no single way to implement ERM across organizations that are all inherently unique. For ERM implementation to be successful, it needs to be tailor-fit to the specific needs and circumstances of a specific organization.
As Dennis Chesley (PwC Global Risk and Regulatory Consulting Leader) aptly put it: “Risk management is as much an art as a science — in many ways it’s the nuances that are the most critical factors in both success and risk management.” This is also precisely why rather than creating a checklist or template that would restrict how organizations apply the various ERM principles and concepts, COSO and PwC decided to create what is called the Compendium of Examples. The Compendium contains nine illustrative case studies that show how organizations across various industries and of varying types and sizes, might choose to apply the principles and concepts of ERM. Each of these examples were developed from research into real-world industry practices, as well as interviews and conversations with risk professionals, C-suites and boards on enterprise risk management.
While having a good reference on hand is especially helpful, the key to unlocking the full benefits of ERM implementation lies in people. Organizations must appoint competent people to key management positions and must be aware of how they can leverage the vast wealth of knowledge and experience held by these individuals. In addition to competence, the value of creativity and innovation should also not be discounted.
The leaders of the organization need to be able to apply the principles of the ERM Framework in a manner that best complements the strategies, business, risks and opportunities of the entity. Beyond that, I think we can all agree that there is nothing more important to any implementation initiative than the support of management. At the same time, the proper risk management mindset should be instilled into employees. The process of implementing risk management, after all, is a collaborative effort that requires both the capability and willingness of all members of any organization to be successful.
The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd. The content is for general information purposes only, and should not be used as a substitute for specific advice.

Rochelle C. Dichaves is a senior associate with the Risk & Regulations Consulting practice of PricewaterhouseCoopers Consulting Services Philippines Co. Ltd., a Philippine member firm of the PwC network.
+63 (2) 845-2728
rochelle.dichaves@ph.pwc.com