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Customs collections in April rise over 50%

REVENUE collected by the Bureau of Customs (BoC) in April rose over 50% year on year after the imposition of higher excise tax rates in 2018, with the result also reflecting the peso’s depreciation.
The BoC said in a statement yesterday that it collected P47.39 billion in April, up 50.4%. The April outcome beat the BoC’s P46.46-billion target.
The bureau met its target for a third month, with targets exceeded by P3 billion.
Commissioner Isidro S. Lapeña said collections rose due to the “improved and correct valuation and tariff classification being implemented on the ground,” as well as the “higher excise tax this month due to the effective implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law.”
The law imposed higher excise taxes on fuel, automobiles, minerals, coal, and a new tax on sugar-sweetened beverages, among others.
The BoC added that the “volume and value of imports are comparably higher than the same period last year.”
“The increase in oil prices and the peso-dollar exchange rate also contributed to the increased April revenue of the BoC,” Mr. Lapeña said.
Fourteen Customs collection districts exceeded their targets while three did not.
The three are the Manila International Container Port, Ninoy Aquino International Airport, and the Port of Legazpi.
“I always tell the bureau officials and employees, we can hit the target every month. We only just have to apply the correct valuation and collect what is due the government. I think we can continue this trend until December,” he said.
The BoC’s 2018 collection target is P637.1 billion, up 39.05% from actual collections in 2017. — Elijah Joseph C. Tubayan

BSP says PHL could be ‘collateral damage’ in US-China trade war

A TRADE war between the United States and China will result in “collateral damage” around Asia, the Bangko Sentral ng Pilipinas (BSP) said, as it recommended a strategy of diversified trade to cushion any impact.
“We will be directly hit in case trade tensions actually escalate,” Diwa C. Guinigundo, deputy governor of the BSP said during a session on trade imbalances at the Asian Development Bank 2018 meetings.
China serves as a “transshipment point” for Southeast Asian semi-finished products which China, in turn, processes further and sells to other markets like the United States.
ADB Manila 2018 logo
“To the extent that Chinese products (with Southeast Asian content) will suffer, we will also suffer… Their propensity to import from us will be affected in the process,” Mr. Guinigundo told reporters after the session.
He added that the impact of a trade war between the two economies may also trickle down to the country’s direct and portfolio investments.
“That is something we need to look out for,” Mr. Guinigundo said.
Malaysia’s RHB Bank Bhd said last month that the Philippines had much to lose in a trade war because 16.9% of its total exports are processed further in China and enter that country’s export value chain. — Janina C. Lim

Energy projects top BoI-approved investment list

ENERGY was the top sector for investment proposals approved by Board of Investments (BoI) in the four months to April, the agency said.
In a statement Thursday, the BoI said the four months to April generated P195.7 billion worth of approved investments, up 28% from a year earlier.
About P104.3 billion is to be invested in power projects, including renewables, up from P20.8 billion a year earlier.
The transportation and storage sector generated P37.5 billion in approved investment proposals, up from P2.25 billion a year earlier.
Approved manufacturing investment proposals totaled P15.9 billion, up 3% from a year earlier. The water supply, sewerage and waste management sector and the real estate sector accounted for P13.9 billion and P12.7 billion, respectively.
Trade Secretary and BoI Chairman Ramon M. Lopez attributed the growth in approved investment proposals to “strong macroeconomic fundamentals and the continuous policy reforms.”
Describing approvals in April as “moderate,” Mr. Lopez expressed confidence that more investors will arrive and eventually “make up for the shortfall.”
“We also expect that Foreign Direct Investments (FDI) will pick up as the outlook of foreign investors is always long term, generating more jobs and business opportunities,” he added.
April approvals were dominated by the P19.05 billion to be invested by Philippine Airlines, Inc. (PAL) in six projects.
Meanwhile, the biggest single approval was a P5.2-billion proposal by MWM Terminals, Inc., a public-private partnership (PPP) to build the Parañaque Integrated Terminal Exchange along Coastal Road.
“These six projects by PAL alone indicate there is strong passenger traffic demand and once operational, it will re-energize the tourism industry especially when Boracay reopens before the end of the year,” Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo said. — Janina C. Lim

PPP to stay relevant for infrastructure, experts say

THE public-private partnership (PPP) financing model will continue to play a role in any ambitious infrastructure program, officials said at the Asian Development Bank (ADB) meetings.
Syed Afsor H. Uddin, chief executive officer of the PPP Authority in Bangladesh, said at the ADB annual meeting yesterday that some parts of an infrastructure program are suitable for PPP.
“Yes, there are challenges. PPP is, I would say, one of the most difficult structures to implement in any mechanism. Because you have just so many stakeholders they need to address. That’s why it takes time,” Mr. Syed said during the Private Sector Participation in Asian Infrastructure Development seminar held at the ADB headquarters.
“But I think it’s one of the best solutions we have to meet that huge [demand] in infrastructure,” he added.
He said some of Bangladesh’s PPP health clinics were built using the Philippine PPP system as a model.
The Philippine government has decided to limit its use of PPP, financing the early stages of many projects with its own funds or official development assistance, citing the need to get projects off the ground quickly.
Harold Tjiptadjaja, managing director of PT Indonesia Infrastructure Finance, who was a member of the panel at the seminar, said PPP is “one of the most transparent procurement processes.”
“We have to make sure that all government resources are applied properly and in cost-efficient ways toward the development of the whole projects in Indonesia,” Mr. Tjiptadjaja said.
He added that PPPs in Indonesia have “special privileges” because they are supported by certain government guarantees. This makes the PPP scheme “one of the best ways” to reduce the private sector’s risks, making participation in such projects attractive.
“So I think, at the end of the day, PPP will be still one of the drivers, especially when you look later on at Indonesia,” Mr. Tjiptadjaja added.
Joseph Bevash, managing partner of Latham & Watkins LLP’s Tokyo and Seoul offices said the Philippines is enjoying “a golden age” of infrastructure, sparking creativity in the structuring of projects.
He noted that the “Philippine solution” has helped the government avoid “multilaterals telling them how to do things or foreign investors coming in and telling them how to do things.”
“What you’re seeing is lots of domestic creativity which is again a sign of a developing market,” Mr. Bevash told reporters yesterday. — Janina C. Lim

DA asking for 19% of DBM’s Tier-2 budget

THE Department of Agriculture (DA) said it will ask for P69 billion in Tier-2 budget funding for 2019, after the Budget department called on government agencies last month to make proposals to tap the P362.3-billion Tier-2 budget for new projects in 2019.
Agriculture Secretary Emmanuel F. Piñol, who will meet with the Department of Budget and Management (DBM) to defend his proposal, expressed confidence that the DA’s improved utilization of funds will help it achieve its budget goals, even though its proposal, if granted, will take up more than a sixth of the available money.
Budget Secretary Benjamin E. Diokno has said “funding pressures” from military pension reform, among others, will need to be addressed in 2019, and also suggested that the DBM will be selective in approving Tier-2 as a result of those pressures.
“The first thing that we will have to justify when we meet with DBM [is] our capability to absorb [a large budget]. I’m happy to report that the Department of Agriculture was able to [absorb] 94.6% of its budget allocation,” he added, referring to the department’s utilization rate for 2017.
Mr. Piñol, in a social media post, said the failure to use 100% of its P45.9-billion budget in 2017 was due to failed bids and the non-implementation of some foreign-funded projects.
“[The higher utilization rate in 2018] was mainly because of our quarterly review of our budget utilization and cash utilization,” he added.
“So, the first-quarter budget utilization seems to indicate that we are capable of absorbing a huge budget because our budget utilization almost hit 100% in the first quarter.”
Under its Tier-2 proposal, Mr. Piñol said that P10 billion will be allotted to an easy-access credit program to help wean farmers away from outright subsidies.
Other Tier-2 funding proposals are P4.88 billion for the rice program and P1.7 billion for corn, with fisheries to be allocated P16 billion to support procurement by the Bureau of Fisheries and Aquatic Resources. — Anna Gabriela A. Mogato

Philippines moves to attract research and technology expertise

New legislation approved by Congress in March aims to incentivize scientists and researchers based overseas to return home to deepen the research and development (R&D) talent pool.
The Balik Scientist Act, approved by the Senate in early March, is expected to be ratified by President Rodrigo R. Duterte and come into force by the end of the first half of 2018, according to Senator Paolo Benigno A. Aquino IV, one of the bill’s sponsors.
The act expands upon the Balik Scientist Program, introduced in the mid-1970s to encourage researchers to repatriate their skills through economic incentives and assistance programmes administered by the Department of Science and Technology (DoST).
According to Representative Jose Maria C. Salceda, one of the legislation’s principal authors, the act aims to, “strengthen the scientific and technological human resources of the academe, public institutions and domestic corporations to promote knowledge sharing and accelerate the flow of new technologies into the country.”
The reforms should help address the current shortfall of scientific personnel: the country has 189 scientists per million people, according to data filed with Congress, far behind other economies in the region like South Korea and Malaysia, which have 5,300 and 2,000 per million, respectively.
PRIORITIZING RESEARCH AND INCENTIVIZING PERSONNEL
Within the range of changes to be implemented following the act’s ratification, approved researchers returning to the Philippines for a short period of time will be allowed tax and duty exemptions on imported professional equipment and materials, free medical and accident insurance while in-country, and reimbursement of baggage expenses related to scientific projects.
For those making a long-term or permanent move, benefits include support in securing job opportunities for the scientist’s spouse, schooling allowances for children, a relocation subsidy, a monthly housing or accommodation stipend, and funding for the establishment and development of a facility or laboratory.
The legislation specifically targets industries that are priorities for the government, including artificial intelligence, biomedical engineering, energy, agriculture and food technology, ICT, pharmaceuticals, electronics, genomics, health, nanotechnology and cybersecurity.
CONNECTING HIGHER EDUCATION AND INDUSTRY
If the scheme succeeds, it is likely to both serve as a template for universities to develop new education and research programs in the fields prioritized by the government, as well as attract the teaching expertise necessary to deliver them.
While the Commission on Higher Education currently provides funding for the retraining of teachers in fields prioritized by the government, the approach has not been enough, according to Fr. Dionisio M. Miranda, president of the University of San Carlos, a private research university based in Cebu.
“They poured in money for research and the development of faculties, but the process has dragged on for a long time without many results,” Mr. Miranda told Oxford Business Group (OBG). “San Carlos and other universities are working hard to create new partnerships, but we find ourselves overstretched.”
INNOVATION AND ENTREPRENEURSHIP
In addition to the Balik Scientist Act, another initiative funded by the DoST is under way to enhance collaboration between academia and businesses.
Launched in mid-February, the Filipinnovation Entrepreneurship Corps embeds researchers in teams of private sector entrepreneurs and experts in a month-long training exercise.
Principally taught by experts from George Washington University and Johns Hopkins University, the program aims to enable researchers to rapidly define the commercial and societal value of their research, and equip researchers and members of the business community with the skills to attract funding and strategic partners to implement their ideas.
Collaborating with the business sector in R&D is increasingly a priority for private higher education providers in particular, as they shift their focus to industry-oriented programs to offset falls in enrolment stemming from the recent introduction of free tuition at state universities, according to Wilfred U. Tiu, president of Trinity University of Asia.
“Private universities are losing a lot of students. Some private universities are reacting by becoming more niche-focused and rebranding themselves as specialists in specific fields,” Mr. Tiu told OBG, adding that universities like Trinity are becoming “feeder” institutes to relevant industries with shortages of graduates.
 
This Philippines economic update was produced by Oxford Business Group

Diplomat flags ‘caution’ on PHL among US firms

By Camille A. Aguinaldo
UNITED STATES Ambassador Sung Y. Kim said strong competition between the Philippines and its Southeast Asian neighbors and the country’s security perception were among the many factors why American companies remained “cautious” on bringing new investments or expanding its operations in the country.
“I would like to see more US companies either expand existing operations or bring new investments and I think at the moment we’re not seeing that. I think there’s still some caution, for a variety of reasons,” he said during a media forum at the US Embassy in Manila on Thursday.
Mr. Kim noted that the Philippines’ Southeast Asian neighbors were also competitive and eager as well to attract foreign investments, citing Vietnam as being “accommodating” in its requirements to draw investments.
He also took into consideration the security situation in the country, highlighting the siege last year in Marawi City in Mindanao where government forces clashed with the Islamic State-inspired Maute group.
“I think when something like the Marawi siege happens, corporate headquarters become a bit more cautious about new investments in the Philippines or expanding existing operations,” he said.
Mr. Kim also identified US President Donald J. Trump’s “America First” trade policy of bringing back jobs overseas to the Western country.
Despite these concerns, Mr. Kim said the Philippines was still a “very attractive destination for US investments,” especially with the upgrade of the country’s credit outlook to “positive” by S&P Global Ratings.
“The largest exporter from the Philippines is a US company, Texas Instruments. The largest private employer in the Philippines is a US company, Convergy’s, in the BPO industry. Two of the largest, highest taxpayers in the Philippines are US companies, Philip Morris and Chevron,” he said.
“That gives you an indication of the depth of the economic partnership between two countries. And I remain quite positive about the economic prospects here in the Philippines,” he added.
Mr. Kim said further the overall atmosphere and tone in Philippines-US relations has improved. He also described his meetings with President Rodrigo R. Duterte as “frank, honest, direct but always cordial and professional.”
“(The Philippines and US) work together on so many fronts,… making concrete progress in so many areas…. I think it’s more important to pay more attention to what’s actually happening on the ground with actions and policies and substance rather than occasions of political rhetoric,” said the US diplomat.

Cayetano to ‘go happily’ if asked to resign over Kuwait

FOREIGN AFFAIRS Secretary Alan Peter S. Cayetano said he would step down if President Rodrigo R. Duterte asks him to and if personnel under his agency lose faith in him.
Mr. Cayetano also disclosed that some embassy personnel in Kuwait were facing kidnapping charges over their rescue efforts in behalf of overseas Filipino workers (OFWs) there. But he maintained that no crime was committed on their part.
“If the President wants me to go, I will go happily and I will continue to support him. If a majority in the Department of Foreign Affairs says, ‘We cannot follow you,’ I have no business being here,” he told reporters at the airport in Pasay City after the arrival of expelled Philippine Ambassador to Kuwait Renato O. Villa Wednesday evening.
Mr. Cayetano was responding to news reports that DFA career diplomats allegedly sent a letter to Malacañang calling for his resignation and that of his appointees over the diplomatic conflict with Kuwait. He confirmed that there were resignation calls but said this did not come from career officials as reported.
“Now, if there are people making calls, it’s their privilege and I respect that. But don’t use the name of the Department, of the career officials unless they really made the calls. There was a senator, an ex-congressman who did call for my resignation. But if you’re going to use the career officials, let them speak for themselves,” Mr. Cayetano said.
In his meetings with the DFA personnel, Mr. Cayetano said they understood his decisions over the developments with Kuwait, even if they disagreed with his direction on the matter.
He also welcomed Mr. Villa who arrived in Manila Wednesday evening after being expelled by the Kuwaiti government due to the rescue efforts of the Philippine Embassy in the Persian Gulf state.
“I feel with pride and honor that I have been given the opportunity to serve our country, and most especially our kababayan (countrymen), fellow Filipinos, in Kuwait for almost three years,” Mr. Villa said.
IMMUNITY
On the kidnapping charges against Filipino embassy personnel in Kuwait, Mr. Cayetano said, “In layman’s terms, they were charged with kidnapping. (Kuwait) is saying that it’s like they kidnapped the OFW who was inside the house. We are explaining that we don’t respond unless, first, we coordinate with them.”
“They’re covered by diplomatic immunity, and even if they’re not, there was no crime. But they said, we have to sort it out, they have to investigate. We’re getting near to understanding each other,” he added.
Mr. Cayetano noted that 35 of 38 rescue efforts were coordinated with Kuwaiti authorities.
He reiterated the Philippines’ appreciation of Kuwait’s desire to “move forward” from the diplomatic row between the two countries.
“The positive response we have received from Kuwait now provides us with an excellent opportunity to write a new chapter that should allow us to overcome any and all future challenges between our two countries,” he said.
Mr. Cayetano also appealed to the public to remain calm as recent developments on this issue were “part of the misunderstanding.”
For his part, Presidential Spokesperson Harry L. Roque, Jr. said Mr. Cayetano has “no reason” to resign.
“I think he still has the full trust and confidence of the President, and I think what we have in Kuwait is something that can be overcome eventually, sooner or later,” Mr. Roque said in his press briefing on Thursday.
On whether Mr. Duterte intends to hold anyone accountable for the current diplomatic crisis, Mr. Roque said: “We are deferring to Secretary Cayetano for the time being. It is his subordinates.”
Regarding a planned meeting between the Philippines and Kuwait, Mr. Roque said, “Nothing is etched in stone. We [do] not [have] tickets…. We are hoping, not sure yet.”
He added that Malacañang is “hoping to normalize” the country’s relation with Kuwait “soon.”
In his forum on Thursday, US Ambassador Sung Y. Kim said when asked about a suggestion for the United States to act as third-party mediator: “We extend our best wishes to both countries to resolve this difficult situation and if we can be helpful, I’m sure my colleagues in Washington would consider any such requests seriously.”
Mr. Kim also emphasized it was hard for him to comment further since the US was not yet approached on the matter. — Camille A. Aguinaldo with Arjay L. Balinbin

Senate leaders clarify change of leadership claimed by colleague

SENATOR Panfilo M. Lacson on Thursday disclosed a possible change of leadership at the Senate within the year with Senate Majority Leader Vicente C. Sotto III assuming the post of Senate President Aquilino L. Pimentel III, with the latter focusing on his reelection bid in next year’s midterm polls.
“I understand there’s already an understanding between Senator Sotto and Senator Pimentel. But as to when it will be executed or implemented, we do not know. Knowing Senate President Pimentel, he won’t change his mind with that kind of discussion,” he said at the Kapihan sa Senado media forum.
But when sought for comment, both Senate leaders denied having such discussions on who would be Senate president in the coming months.
“No agreement. But will talk to Senator Sotto immediately upon arrival. Then (we will) hold major caucus,” said Mr. Pimentel, who is currently in Vienna, Austria, in a mobile phone message to reporters.
“There is no direct agreement between Koko and I. No two senators can merely (agree) on any position of leadership. It is a consensus of majority of all the members if a leadership position is vested,” Mr. Sotto said in his text message to reporters.
In the same forum last week, Mr. Sotto said he was open to the Senate president post if it was given to him.
Mr. Lacson said the change in leadership would likely happen either in June or July when Congress resumes session after the sine die adjournment or around October at the latest as Mr. Pimentel files his certificate of candidacy.
He added that senators from the majority bloc would support the leadership change, especially if there was already an agreement between the two Senate leaders.
“We will all respect the agreement and vote according to what has been agreed upon,” Mr. Lacson said.
Mr. Lacson later issued an apology on Twitter after the Senate leaders denied having an agreement. “An apology is in order and is therefore offered to SP Pimentel. It was my understanding that a leadership change in the Senate between him and Sen. Sotto does exist,” he said in his tweet. — Camille A. Aguinaldo

DoJ chief: Witness protection for Napoles to end May 26

By Dane Angelo M. Enerio
JUSTICE Secretary Menardo I. Guevarra on Thursday said alleged pork barrel-scam mastermind Janet L. Napoles’s provisional coverage under the Department of Justice’s (DoJ) Witness Protection Program (WPP) will end “around May 26,” three months after she was accepted into the program on Feb. 27 by Mr. Guevarra’s predecessor, Vitaliano N. Aguirre II.
“She will lose her security protection for witness duty, which was the only thing granted her under her provisional coverage,” Mr. Guevarra said.
He also told reporters: “After that, we will re-evaluate whether her admission in the WPP should be extended or terminated.”
When asked if Ms. Napoles has applied for an extension, Mr. Guevarra said “no she has not.”
Ms. Napoles, who surrendered to former president Benigno S.C. Aquino III in 2013 over graft and plunder charges for the alleged misappropriation of government funds amounting to P10 billion, was placed under provision admission of the WPP after she submitted an affidavit, the contents of which the DoJ classified as confidential.
The Sandiganbayan in a resolution on April 5 denied for lack of merit Ms. Napoles’s motion to be transferred to the custody of the DoJ’s WPP.
She is currently under the custody of the Bureau of Jail Management and Penology (BJMP) after her request to be transferred to a housing facility maintained under the WPP was denied by the anti-graft court.

ConCom introduces presidential power to declare war

By Charmaine A. Tadalan
A Sub-panel of the Consultative Committee (ConCom) on Charter Change has introduced a provision allowing Congress to grant the president of the proposed federal government the power to declare war.
The provision to be added in the Article on the Legislative Branch states that “in the event Congress is unable to convene, the President, as Commander-in-chief, has the power to declare the existence of the state of war, and shall exercise all powers necessary.”
This power, however, is still subject to limits as prescribed by Congress. It was also noted there are no provisions specifying this situation in the 1987 Constitution.
Retired associate justice Antonio Eduardo B. Nachura explained that if circumstances render Congress unable to pass measures necessary to cope in a state of war, the president will have to take over. “If Congress can no longer do that because they cannot meet because precisely of (the war) then the president will have to come in, and declare the state of war and perform such functions as (it) will be performed by Congress,” Mr. Nachura, who chairs the Subcommittee on the Structure of the Federal Government, said in a press briefing on Thursday.
Mr. Nachura clarified the existence of state of war means there is rebellion, invasion or any kind of hostilities of “such magnitude (that) threatens the very existence of our country, (and) the safety of our people.”
He added: “The annotation here precisely will speak of war within the context of international law.”
The Subcommittee arrived at the proposal on grounds that the president as commander-in-chief has access to information with regards to military activities and war reports. Mr. Nachura assured that Congress can safeguard the country from abuse of power.
“If Congress can meet at any time after that (declaration of a state of war), they can of course (decide) to undo what the President has done,” he said.
On another matter, the Subcommittee also revised the ruling that vests in the Senate and House Electoral Tribunals the authority to judge electoral contests of congressional members.
The provision instead proposed to create a five-member special division under the Court of Appeals (CA) to function as “sole judge of all contests relating to the election, returns and qualifications of Senators and Members of the House of Representatives.” The special division will be constituted by a majority vote of all members of the CA.
The Subcommittee also opted to require those vying for a congressional post to be registered and “domiciled,” which means the candidate is an “actual permanent resident.” This is in addition to the new educational requirement, absent in the present Constitution.
According to ConCom spokesperson Ding I. Generoso, most of these provisions have been approved in principle in the subcommittee level. Under deliberation, however, is the provision on the composition of the House of Representatives as the panel is still discussing the mechanism to use in the system of proportional party representation.
The Subcommittee proposed that the House be composed of not more than 400 members, with 60% elected from the districts and the remaining 40% coming from political parties.

Dela Rosa to BuCor, Guerrero to MARINA

Malacañang announced on Thursday, May 3, President Rodrigo R. Duterte’s formal appointments of retired Philippine National Police (PNP) chief Ronald M. Dela Rosa as director-general of the Bureau of Corrections (BuCor) and retired Armed Forces of the Philippines (AFP) chief-of-staff Rey Leonardo B. Guerrero as administrator of the Maritime Industry Authority (MARINA).
Mr. Dela Rosa is taking over the position of Valfrie G. Tabian who has been appointed the agency’s deputy director.
Mr. Guerrero replaces Marcial Quirico C. Amaro III whom Mr. Duterte fired last January due to what he claimed to be Mr. Amaro’s “excessive travels abroad.”
The President signed their appointment papers on Monday, April 30.
Mr. Duterte also signed the appointment papers of the following new prosecutors:
Roderick R. Aquino, Prosecutor I, Office of the City Prosecutor, San Fernando City, La Union.
Wallad Abdani J. Padate, Prosecutor II, Office of the Regional Prosecutor, SOCCSKSARGEN.
Jennifer Angeles B. Cahig, Prosecutor III, Office of the City Prosecutor, Baybay City.
Nikki Rose D. Esperanza, Prosecutor III, Office of the City Prosecutor, Bacoor City.
Edgar A. Ambagan, Prosecutor IV, Office of the City Prosecutor, Tagaytay City.
Ma. Victoria D. Cabrera, Prosecutor IV, Office of the City Prosecutor, Dagupan City. — Arjay L. Balinbin

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