Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 12651

Davao-Kaua’i sisterhood deal focuses on agri, tourism, trade

DAVAO CITY Mayor Sara Duterte-Carpio signed on Monday, Feb. 5, two agreements — a sisterhood with Kaua’i, Hawaii and a Letter of Intent (LOI) with Jinjiang City, China — to strengthen direct international relations with focus on economic partnerships.

“Davao City always welcomes opportunities to establish and push linkages that would strengthen our relations with different cities,” Ms. Carpio said during the signing of the sisterhood agreement with Kaua’i City.

“It is our responsibility to make sure we become open to different cultures so we have a wider perspective on how we can improve our services to the community,” she added.

Kawaii Mayor Bernard P. Carvalho, Jr. was in the city last year as part of the 26th Trade Mission of the Filipino Chamber of Commerce of Hawaii.

“Agriculture, tourism, culture, trade and commerce. I believe these are areas where both Davao and Kaua’i can mutually benefit since both parties take pride in these fields,” Mr. Carvalho said at the signing.

Mr. Carvalho said there will be an exchange of ideas on agricultural enhancement systems and programs, as well as promote best practices in trade and commerce.

For tourism and culture, the two cities will look into improving mutual access for tourists.

“As both cities gather a vast number of tourists, it is deemed favorable to exchange tourism practices and cultural preservation techniques,” he said.

JINJIANG
Meanwhile, the LOI with Jinjiang City is geared towards a similar sisterhood agreement.

“The city welcomes the creation of a new tie with Jinjiang City, which will hopefully pave the way for an exchange in various fields mutually beneficial to both our cities,” Ms. Carpio told the Chinese delegation headed by Jinjiang City Deputy Mayor Li Zili. — Carmencita A. Carillo

Customs destroys P61.63M worth of smuggled luxury cars

THE BUREAU of Customs (BoC), celebrating its 116th founding anniversary on Tuesday, Feb. 6, destroyed an initial P61.63 million worth of luxury cars as ordered by President Rodrigo R. Duterte.

Twenty smuggled vehicles were condemned in the Port of Manila, while seven cars were simultaneously destroyed in the Port of Davao, and three in the Port of Cebu.

These included used units of Lexus, BMW, Mercedez Benz, Audi, Jaguar, and Corvette Stringray.

Finance Secretary Carlos G. Dominguez III said that it is better to condemn the cars than to auction them off as practiced before.

“When you auction it out, there’s a good chance that the people who smuggled will participate,” he said.

The BoC apprehended a total of P44.52 billion worth of smuggled goods in 2017, with agricultural products taking the largest share at P30.2 billion, followed by P6.8 billion counterfeit goods, P6.63 billion illegal drugs, P599 million in sea and air vessels, P159.47 million automobiles, P43 million in electronic equipment, P15.5 million in general merchandise, P11 million steel products, P4 million in cement, P3.2 million in chemical products, and P61.4 million in other goods.

The bureau collected P456.91 billion in taxes last year, representing 98% of its P467.9-billion target. — Elijah Joseph C. Tubayan with a video report by Santiago Jose J. Arnaiz

LGUs to keep up to 85% of own revenues under federal system

HOUSE SPEAKER Pantaleon D. Alvarez yesterday said there may be no need for an internal revenue allotment (IRA) under the proposed federal system as 80% to 85% of public income will be left to the local government units (LGUs). Based on data from the Department of Finance, eight out of 16 regions in the present setup are 80% dependent on IRA, the annual budget coming from the national government. However, four of these eight regions only receive 3% to 4% of the national total. To balance this, Mr. Alvarez said poor regions could merge with the rich ones to form a single state and help each other. In any case, Mr. Alvarez added, poorer regions could still receive from the federal government a “special fund” to subsidize their operations until they can stand on their own. “Pero siyempre (But of course), we have to encourage the local government officials to be creative enough how to generate income do’n sa region nila (in their respective regions),” he said. — Minde Nyl R. dela Cruz

Palawan-Sabah sea route eyed by March

A ROLL-ON, roll-off (Ro-Ro) ship is planned for launching by March between Palawan and Sabah as part of initiatives to boost trade within the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA). Romeo M. Montenegro, deputy executive director of the Mindanao Development Authority, the Philippine Coordinating Office for the BIMP-EAGA, said the new shipping service will cover the ports in Buliluyan, Bataraza in Palawan, and Kudat in the northern part of Sabah. “It can very well promote economic activity across Palawan and Malaysia,” Mr. Montenegro said in an interview. A vessel owned by Philippine-based Archipelago Shipping, with a capacity of 275 passengers and 35 vehicles, will initially be used, he added. Palawan and Mindanao are the Philippine focus areas for the BIMP-EAGA.

DAVAO-GENSAN-BITUNG ROUTE
Meanwhile, Mr. Montenegro said they have created an interagency task force for the Davao-General Santos-Bitung route to support and facilitate the shipping service that has been bogged down by lack of cargo load. “You have to look in that context (where) some airlines in some parts of the world, when they start smaller routes, smaller operations, you don’t expect that to be 100% load factor in its initial run, but eventually, later on, it will pick up,” he said. “That’s the nature of this specific investment. It will eventually pick up so long as there is a consistent support from the government and the integration of all other members of the business community and sector that are part of that particular project,” he added. The Davao-GenSan-Bitung route was launched in April last year by President Rodrigo R. Duterte and Indonesian President Joko Widodo. — Maya M. Padillo

Quezon-Bicol Expressway study starts

THE FEASIBILITY study (FS) for the Quezon-Bicol Expressway (QBEx), to be undertaken by the Department of Public Works and Highways (DPWH), is planned for completion this year, with project implementation set to start by 2022. “By fourth quarter this year, we plan to begin the Tender Process of QBEx, then by fourth quarter of 2019 the Detailed Engineering Design, followed by Right-of-way Acquisition starting fourth quarter of 2020 so we will be able to proceed with the construction by first quarter of 2022,” DPWH Public-Private Partnership (PPP) Director Alex G. Bote said in a statement. The QBEx, which will be implemented under the PPP scheme, will span about 180 kilometers from Pagbilao, Quezon to the existing Maharlika Highway in San Fernando, Camarines Sur. The indicative project cost will be determined upon completion of the FS. “For the longest time, Daang Maharlika Highway also known as Pan-Philippine Highway is the only route of motorists heading and coming from Bicol Region to Manila. With QBEx, traveling will not only be faster but also safer since motorists can avoid traversing through mountainside and other fragmentary roads of Maharlika Highway,” Mr. Bote said.

LTFRB-6 okays P10 jeepney fare in Iloilo but subject to national approval

THE LAND Transportation Franchising and Regulatory Board (LTFRB-6) approved on Monday, Feb 5, a P10 minimum fare for public utility jeepneys (PUJ) in Iloilo, up from the current P6.50. The decision, however, is subject to the final approval of the LTFRB central office. Transport groups in Iloilo City and Iloilo province sought the fare hike amid the looming higher fuel prices due to the tax reform law. LTFRB-6 Director Richard Z. Osmeña said they approved the petition based on the recommendations of the National Economic and Development Authority and the Department of Trade and Industry. The fare hike petition was filed by the Iloilo City Loop Alliance of Jeepney Owners and Drivers Association (ICLAJODA), Iloilo City Alliance of Drivers’ Associations (ICADA), and Confederation of Iloilo Provincial Jeepney Owners and Drivers Association (CIPJODA). Mr. Osmeña noted that officials of the LTFRB national headquarters have recently announced that there will be no fare increase until March. “The approval may still come after March,” he said. — Louine Hope U. Conserva

Nation at a Glance — (02/07/18)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

Duterte won’t extend selection deadline for telco ‘third player’

PRESIDENT Rodrigo R. Duterte has rejected a request by the Department of Communications and Information Technology (DICT) for more time beyond March to select a “third player” for the telecommunications industry, Palace Spokesperson Herminio L. Roque, Jr. said.

“There was a request from DICT Officer-in-Charge Secretary [Eliseo M.] Rio, Jr. that they be given two additional months or until May to award and to ensure that the third telecoms carrier is up and about. This was not approved at yesterday’s Cabinet meeting,” Mr. Roque told reporters at a briefing on Tuesday, Feb. 6.

He added, “So we stick it out with the original time frame of a third telecoms player by March of this year.”

Sought for comment, Mr. Rio told BusinessWorld in a text message that “[a]s much as possible, the President wants the end of March schedule followed. But due to the Chinese New Year and the Holy Week falling in the first quarter of 2018, maybe the middle part of April will be more reasonable.”

According to Mr. Roque, the President was “emphatic and issued a warning to the detractors of the entry of the third telecoms player not to test the will of the government.”

The spokesman also said the President was particularly displeased with the new entrant having to find new frequency in order to operate.

“He was displeased with the fact that the frequency given to a shell company CURE (Connectivity Unlimited Resources Enterprises) which apparently was given for free would have to be bought back by government in order that the third player could be given these frequencies.”

“The President rejected that proposal, that we pay for frequencies that we gave out for free and he warned everyone involved not to test the resolve of the President in allowing a third telecoms carrier to enter the country.”

CURE, a unit of PLDT, Inc., surrendered third-generation (3G) frequency to the government to the National Telecommunications Commission (NTC) as a condition of its acquisition of Sun Cellular.

The NTC was due to auction the 3G frequency but failed to do so.

Mr. Roque explained that frequency is owned by the state. “They were given for free, and [the President] will not allow the holders to benefit from a free privilege by charging us anything to enable the third telecoms carrier to operate.”

A third player will need 300 mHz. “Three hundred will be given to the third telecoms carrier which would have been enough and that this would be sourced from various sources, including frequency from a shell company that has since been bought by a very big telecoms company now,” Mr. Roque said.

He pointed out as well that the National Transmission Corp. (TransCo), which has its own fiber optic network and right-of-way assets, could become a platform for the third player.

“There was also talk about using TransCo and the President said, we will use TransCo because that is ours — the facilities of TransCo.”

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin 

House panel expects corporate tax cut bill within two weeks

A HOUSE BILL providing for a corporate income tax cut and the rationalizing of incentives is expected to be filed later this month, its chair said.

“Give me two weeks… before two weeks definitely,” Ways and Means Committee Chairman Dakila Carlo E. Cua told reporters on Monday.

However Mr. Cua said that he has no details on the bill, as he is awaiting more data from the Finance department.

The Department of Finance (DoF) submitted the second tax reform package to Congress on Jan. 16, and hopes to have the bill approved by mid-year ahead of its implementation in 2019.

The measure seeks to gradually cut corporate income tax rates to 25% from 30% currently to match those of the Philippines’ Southeast Asian competitors, while withdrawing fiscal incentives from firms that do not need them.

Package 2 is not the only reform measure to be discussed this year under the DoF’s comprehensive tax reform program.

The committee is currently discussing Package 1B — the follow-up package for Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion Act (TRAIN) — which includes the general and estate tax amnesty, a relaxation of the bank secrecy law, and a hike in the motor vehicle user charge.

Mr. Cua said that the committee does not need to approve Package 1B first before filing the succeeding reform proposal.

“Obviously package 1B comes before Package 2. But we don’t need to do that, we can do simultaneous consultations,” he said.

The constitution requires that all tax laws originate from the House of Representatives, although the Senate can hold parallel public hearings without formally approving such measures until after the House does so.

The DoF also plans to submit this month another follow-up to the second tax reform package called Package 2+, which raises tobacco, alcohol, and mining taxes further while removing value-added tax exemptions for coal and casinos.

The department also said that it wants to submit to Congress its proposal for the third and fourth reform packages that involve rationalizing property and passive income taxes, respectively.

Mr. Cua said that it will be “very challenging” to take on the measures altogether under his committee.

“It’s very challenging. We have to take up many things at the same time,” he said, but responded in the affirmative when asked if the DoF’s timetable is doable. — Elijah Joseph C. Tubayan

Dominguez says digital push will wait on infrastructure dev’t

MODERNIZING infrastructure is a necessary first step to digitizing the economy, the Finance department said.

Speaking during Alibaba Business School’s New Economy Workshop in Hangzhou, China last week, Finance Secretary Carlos G. Dominguez III said the Philippines has a lot of catching up to do before going into the digital space.

“The Philippines has to catch up first like China. You invested a lot in infrastructure. After the catch-up, we go beyond certain steps… but first we have to raise money and convince people, encourage new industries,” Mr. Dominguez was quoted as saying in a statement issued by the Department of Finance (DoF).

Brian Wong, the Alibaba Group’s vice-president and head of the company’s Globalization Initiatives, said the Philippines can start by cultivating entrepreneurship in e-commerce and coming out with regulations supportive of digital trade and electronic payment systems. 

Mr. Wong said that electronic transactions were nonexistent in 1999 when China was still testing the waters of digital commerce.

In 2016, Chinese electronic transactions were worth $790 billion, Mr. Wong noted.

“That is the type of change that can happen in the country. In the Philippines with a hundred-plus million population, it has a massive market that can be developed. Like the secretary said, you can catch up and leapfrog,” Mr. Wong said during the workshop.

Lecturers from Chinese universities and e-commerce firms discussed innovations that paved the way for digitalization, such as favorable state policies, the role of digital finance in eliminating poverty, a smart logistics network that can keep up with growing demand generated by e-commerce, and cashless payment systems.

Dr. Long Chen, chief strategy officer of Alibaba Group’s Ant Financial, also discussed the firm’s Green Digital Finance Alliance, which was set up in partnership with the United Nations (UN) Environment Program that seeks to reduce the world’s carbon footprint through the use of digital technology. 

Participants in the initiative are encouraged to encourage low-carbon behaviors in their daily life, such as walking instead of driving to work, from which users earn “green energy credits” on their mobile phones. The UN will then plant a tree if users amass a certain level of credits. 

“As of the end of 2017, more than 280 million users have joined Ant Forest initiative and planted 13.14 million trees in Gansu Province, Inner Mongolia Autonomous Region and other areas in China, reducing carbon emission by 2.05 million tons,” Mr. Chen said.  

Alibaba’s workshop was the first overseas government training program organized by the Alibaba Business School. The program will be expanded to more countries in Southeast Asia to promote the digital economy, and its role for a more inclusive trade and development system.

“Our experience here in China is very important to look at what the future would be. It is helpful for us to be consulting with (Alibaba founder) Jack Ma and his group because they are visionary and they have actual field experience in bringing the future to reality using the power of cloud computing, the Internet, and computers to analyze big data,” Mr. Dominguez said.

Aside from Mr. Dominguez, those that participated in the workshop include Foreign Affairs Secretary Alan Peter S. Cayetano, Budget Secretary Benjamin E. Diokno, Bangko Sentral ng Pilipinas Deputy Governor Maria Almasara Cyd N. Tuaño-Amador, and Bases Conversion and Development Authority President Vivencio B. Dizon. — Elijah Joseph C. Tubayan

Biodiesel industry bats for more coconut in diesel

HIGH DIESEL prices might provide an opportunity to add more coconut-based biodiesel into the blended-diesel fuel mix, the head of the biodiesel lobby said.

Dean A. Lao, Jr., president of The Philippine Biodiesel Association, said rising diesel prices coupled with a decline in coconut prices make this a good time to use ore coconut-based biodiesel, known as coconut methyl ester (CME).

“You can see that petroleum prices are on the way up while coconut prices are on the way down. The two will meet,” Mr. Lao said in an interview on the sidelines of a Senate hearing.

He said the latest Philippine Energy Plan (PEP) drafted by the Department of Energy (DoE) calls for the increase in the percentage of biodiesel in blended diesel to 5% from 2% by 2020, giving ample time for the industry to gradually adjust.

“If the coconut oil supply continues to increase — and that’s caused by favorable weather, fertilization and better production — the price will continue to fall, so the timing is getting better,” said Mr. Lao, who is also managing director of biodiesel processor Chemrez Technologies, Inc.

Aside from the rising prices of fuel on the international market, local diesel pump prices were further pulled up by the excise tax on fuel because of Republic Act 10963 or Tax Reform for Acceleration and Inclusion (TRAIN).

Mr. Lao said that using a reference price of P35 per liter for diesel and P90 for biodiesel, which he said has recently dropped to P80, every percentage increase in the contribution of biodiesel to the blended fuel would add about P0.40-P0.45 per liter to pump prices.

A yearly increase of P0.40-P45 per liter until 2020 might be the “smoothest way” implementing the PEP requirement, he said.

“It can also be 5% in a sudden jump and they can be ahead of the Philippine Energy Plan,” he added.

He said official figures from the Philippine Coconut Authority (PCA) show the country’s production of coconut oil at a little over 1 million tons, which means a shift to 5% would translate to 490,000 or 45% to 49% of supply can be covered by existing production.

“(If there is a further increase in) production then it would be even easier,” he said.

However, Teddy M. Reyes, executive director of Philippine Institute of Petroleum, said an increase to 5% should be carefully studied, suggesting a review of whether Republic Act No. 9367 of the Biofuels Act of 2006 has achieved its goal.

He said his calculation of the increase in diesel pump prices if the biodiesel component is raised to 5% is about the same as Mr. Lao’s — at P0.30 to P0.40 per percentage point increase. But he disagrees on the availability of coconut oil supply.

“There are two schools of thought. One sector says, there’s not enough. Even DoE said that. The reason why they cannot go 5% at once is because there is not enough feedstock, meaning to say, the raw material,” he said in an interview.

“The other side, PCA says there is enough supply because the production of coconut significantly increased,” he added.

During the hearing on biofuels on Tuesday, Sen. Sherwin T. Gatchalian urged the National Biofuels Board, an advisory body to the DoE, to take into consideration whether an increase to 5% is warranted.

Marissa P. Cerezo, director of the DoE’s renewable energy management bureau, said the increase will be on the board’s agenda when it meets this quarter. The DoE chairs the board. — Victor V. Saulon

US tax reform seen cutting MNCs’ appetite for FDI

THE US TAX reform program could reduce the supply of funds available for foreign direct investment (FDI) as companies confine their investment activity to the US and repatriate as much as $2 trillion in profits held overseas, according to the United Nations Conference on Trade and Development (UNCTAD).

UNCTAD said in a report released on Tuesday that the reforms affect US multinationals that account for up to 50% of global FDI.

UNCTAD said in Issue 29 of its Investment Trends Monitor that tax reform could cause US multinationals to reduce retained earnings held in overseas units and may ultimately lead to a “re-shoring of manufacturing activity” previously outsourced to low-wage countries.

American Chamber of Commerce of the Philippines executive director Ebb Hinchcliff told BusinessWorld in a text message that it may be too early to tell what the impact of the reform may be on FDI.

“My guess is the tax bill is too recent to have an impact,” he added.

When asked to discuss the ultimate impact of US tax reform, Mr. Hinchcliff said he is unsure if the effects will be noticeable.

The US under President Donald J. Trump has adopted an “America First” stance, and adopted the tax reform program in December with a view to incentivizing companies through the tax code to fund more economic activity within the United States, boosting domestic jobs.

UNCTAD said the reforms are particularly directed at stimulating activity in companies with high capital investment requirements, by making capital expenditures (capex) on equipment fully deductible.

“A few large firms, including AT&T, Boeing and Apple, announced significant new investments in the United States shortly after the adoption of the bill,” UNCTAD said.

“If such funds do flow out [from the Philippines] they should begin to be reported in BSP (Bangko Sentral ng Pilipinas) monthly data several months from now,” American Chamber of Commerce senior adviser John D. Forbes told BusinessWorld in a text message.

The Philippines received $7.98 billion worth of FDI in 2016, up from $5.64 billion in 2015.

Trade Secretary Ramon M. Lopez did not comment on the possibility of reduced FDI, though he remained confident that the Philippines will remain an attractive destination overall.

“We are bullish on Japan’s FDI this year. [This is] following through on the investment cooperation agreement signed,” he said in a text message. — Anna Gabriela A. Mogato

1...12,65012,65112,652...13,811Page 12,651 of 13,811
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube