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Senate hearing on PCSO: bizarre and intriguing

In response to Senator Leila de Lima’s resolution calling for an inquiry in aid of legislation into how government agencies can perform their mandate and their officers to discharge their functions without the improper influence and interference of parties with vested interests and dubious reputations as revealed by the internal squabble at the Philippine Charity Sweepstakes Office, Senate Committee on Games and Amusement Chair Panfilo Lacson conducted an inquiry into PCSO’s charter and other issues pertaining to its operations the other week.

The Senate hearing however took a bizarre turn when resource persons transformed it into a forum by which they expressed their personal grievances against PCSO officers and hit back at their offenders. Subsequently, the resource persons practically took control of the proceedings, asking other resource persons to testify under oath and even warning them not to lie, and naming other people who should testify. On the second day of the hearing, Senator Lacson seemed to have turned over the hearing to members of the House of Representatives as they did most of the questioning,

The proceedings opened with Camarines Sur Rep. Luis Villafuerte, Jr. accusing the PCSO of failing to stop a gaming firm from engaging in “illegal gambling in the guise of operating a lawful STL.” In reaction, Senator Lacson raised the possibility of ending the operations of small town lottery (STL) throughout the country if the PCSO cannot take on the job.

PCSO General Manager Alexander Balutan said they are not tolerating any violation. “We summoned the PNP and asked them to investigate such violations. We do not have police power,” Balutan explained. To which Lacson said the PCSO, not the Philippine National Police, is still “ultimately responsible” since they give gaming firms authority to operate. In the province alone, STL operations have a gross collection of P5 million daily, but these are not properly remitted, Lacson said.

After Balutan had used up the three minutes allotted him, Lacson asked resource person Charlie “Atong” Ang to speak. Ang introduced himself as a businessman, consultant to PAGCOR, Jai Alai, and Meridian where he is also operations manager. He said his appearance in the hearing is to serve as resource person and to expose the stink in PCSO.

Atong Ang then launched a monologue denying the accusations of then PCSO chair Jose Jorge Corpus and General Manager Balutan that he is a gambling lord and that his operations are illegal, narrating that he met with President Duterte twice at the instance of the latter and not because he was applying for STL, describing in great detail how the two PCSO officers treated him rudely and referred to Sandra Cam disrespectfully, and lecturing on the charter of PCSO and on what charity really means.

All the time he was talking he was looking at Balutan angrily, his right hand pointed at him in a castigating manner. He referred to Corpus and Balutan by their surnames, even referring to them as “loko-lokong” generals.

When Lacson told him that his three minutes had expired (actually Ang had talked for ten minutes) and for him to go direct to the point, Ang said he was just answering the accusations levelled against him. When Lacson told him to refrain from maligning the PCSO officers, Ang said he was just retaliating because they maligned him. Lacson admonished him not to do it in the Senate hearing.

Then Ang asked Balutan to explain some operational matters like PCSO giving donations to some local governments and to Congress where there are no sick people, spending lavishly for a Christmas party, and sending to Europe a lady consultant frequently seen with Balutan. At that point Lacson cut him off and told him to address the chair, not resource persons, and that he wanted to hear other resource persons, Ang’s three minutes having turned over three times. Ang used about 11 minutes to tell his story.

Next resource person to speak was PCSO board member Sandra Cam. She said, her voice cracking and her eyes shedding tears, that her loyalty is to the country and to the President only and that all she wants is to expose corruption in PCSO under Balutan and recently resigned Jose Jorge Corpuz as part of her responsibility to ensure that charity funds are spent on the poor.

So that the public may know, she brought up the extravagant PCSO Christmas party, the policy of doling out charity funds to both rich and poor patients, the anomalous contracts, and the control of STLs by gambling lords. She was about to go into the details of the corruption in PCSO, holding up high a picture of a woman with the Eiffel Tower in the background when Lacson told her to focus on the PCSO charter first. Still, she managed to identify the woman as Balutan’s consultant who “lords over” PCSO procurements below P1 million, including the purchase of expensive corporate giveaways and the large food baskets distributed during the Christmas party.

On the second day of the hearing, on Feb. 12, resource person took on a more prominent role. She suggested that Dante Ang, owner of the Manila Times, and who Cam claims to be the public relations man of Balutan, be invited to the hearing to shed light on a full-page ad supposed to have been placed in his paper by united STL operators but suspected by Cam to have been placed by Balutan. When PCSO Assistant Manager Cabuyo answered a question posed to her by Lacson, Cam butted in and said she was lying. She demanded that all this lying must be stopped. She later on suggested that Cabuyo be cited for contempt for “lying through her teeth.”

When STL operator Aguilar was asked to testify, Cam told Lacson Aguilar has not yet taken the oath. She also told Cabuyo to tell the body if Aguilar had posted the cash bond required to be an STL operator. When Lacson asked Aguilar if there was a board resolution granting him a franchise, Cam said, “Don’t lie Mr. Aguilar.”

Towards the end of the day’s proceedings, Cam asked to be placed on record Balutan’s threat to her so that if something happened to her, they know who to investigate. Before the hearing was suspended, she asked that Bong Pineda be invited to testify as he is suspected to be the financier of many STL operators.

The hearing was intriguing in that the squabbling PCSO officers — Balutan and Cam — were appointed to their PCSO positions by President Duterte. The President exonerated Balutan of any malfeasance with regard to the “lavish” Christmas party. “That doesn’t matter to me,” said the President hours after Cam slammed Balutan. The day after, Presidential Spokesperson Harry Roque revealed that the infighting among Social Security System officials prompted the President not to reappoint Amado Valdez and Jose Gabriel La Vina to the SSS. Would the President make a similar decision with regard to the PCSO officials?

The active participation of members of the House in a Senate committee hearing is intriguing enough. But when Lacson, Congressmen Romeo Acop and Amado Espino, all former high-ranking officers of the Philippine National Police and alumni of the Philippine Military Academy formed the hearing panel and Balutan, a retired Marine general and also a PMA graduate being the principal resource person, not to mention the presence of 14 active senior police officers, the hearing caused many to wonder if there is any significance to the involvement of many PMA graduates.

There is something common among Lacson, Balutan, and Cam. They all have hostile feeling towards former president Gloria Arroyo. Even Congressman Villafuerte may be considered unfriendly to Arroyo.

Lacson ran against President Arroyo in the 2004 presidential elections. He was ordered arrested for the murder of Bubby Dacer during the presidency of Arroyo. Balutan, then a Marine colonel assigned in Central Mindanao in 2004, testified in the Senate that Arroyo had committed election fraud in the 2004 presidential elections. Cam testified in the Senate in 2005 that Arroyo’s son Mikey and brother-in-law Iggy were receiving payola from gambling lords. Villafuerte is estranged son of Luis Villafuerte, a staunch political ally of Arroyo.

Does the mention of Bong Pineda, known funder of Arroyo in all the elections she ran in, in the Senate hearing as the financier of illegal gambling in many provinces suggest a hidden agenda on the part of any of the principal characters in the on-going inquiry into PCSO?

 

Oscar P. Lagman, Jr. is a member of Manindigan! a cause-oriented group of businessmen, professionals, and academics.

oplagman@yahoo.com

Again, the political dynasties issue

Again we listen, learn, and then wait for something to come out of those televised goings-on in the Legislature.

At the Senate hearing last week on the proposed anti-political dynasty law called by Sen. Francis Pangilinan, chair of the Senate committee on constitutional amendments and revision of codes and laws, the three resource-persons were from academe: Amado “Bong” M. Mendoza, Ph.D., and Professor Political Science and International Studies, University of the Philippines; Ronald U. Mendoza, Ph.D. in Economics and Dean, Ateneo de Manila School of Government; and Jose Ramon Albert, Ph.D. (Statistics) and Senior Research Fellow, Philippine Institute for Development Studies (PIDS).

Dr. Ronald Mendoza co-authored with Edsel L. Beja, Jr., Victor S. Venida, and David B. Yap, a paper titled “Political Dynasties and Poverty: Evidence from the Philippines.” Yes, Dean Mendoza affirmed at the Senate hearing: “studies show that fat political dynasties are behind the worsening poverty in the poorest areas of the country (Philippine Daily Inquirer (PDI), Feb 16, 2018).”

“Fat political dynasties have more than two family members occupying government offices (‘sabay-sabay,’)” according to Dean Mendoza. “On the other hand, thin political dynasties are content with having members succeed each other in office (‘sunod-sunod,’)” he said (Ibid.).

Based on the study from 2007 to 2016, Mendoza said the dynastic share or the number of powerful clans per position rose from 75% to 78% among district representatives; from 70% to 81% among governors; from 58% to 70% among mayors (ABS-CBN News, Feb 15, 2018). He also noted a correlation between the poorest areas in the country and the concentration of dynasties there, with Maguindanao, the Ampatuan clan hometown (more than 20 relatives in local government, Mendoza said at the Senate hearing) and 2nd poorest province in the country, having the highest concentration of fat dynasties (Ibid.).

Senator Pangilinan asked: “Is there poverty because of the political dynasties, or are there political dynasties because of poverty?”

Dean Mendoza and his AIM-Ateneo group studied the “chicken or egg” question, or in technical research lingo, the dominant direction of causation. The empirical findings suggest that poverty entrenches political dynasties, while there is less evidence that political dynasties exacerbate poverty (Mendoza, et. al, 2015). Correlation, not causation was established by the study.

In response to a request by the senators for the Ph.D.-resource speakers not to use technical language but more understandable language, Prof. Amado Mendoza (UP) described the more down-to-earth situation: “the Poor need a ‘padron’ (patron).” That is why dynasties thrive. When the poor farmers need land to till, who do they run to? When they need funding, who doles out the money to them? In times of calamities, who do the poor look to? Who are the reliable choices for godparents for weddings, baptisms — those dynastic, traditional politicians who will surely still be around term after term, listening to the needs of the less-privileged, mourning with them at wakes and funerals. That is the never-paid debt of gratitude (utang na loob), Prof. Mendoza expounded at the Senate hearing.

It is a vicious cycle, he said. The political dynasties “collect” on this “utang na loob” come election time. “If you are the poor, will you not think of anything else but to protect your position? Without your tried and tested padron saying it, you will think — without him/her you will not have water, no small personal “funding,” no support. This cultivated dependency of the poor is what entrenches the political dynasties, according to Prof. Mendoza. Poverty and political dynasties feed upon each other and grow.

Dean (Ronald) Mendoza said: “We are slowly becoming less democratic over time, particularly in the poorest areas of the country and if we don’t stop this, democracy will slowly die” (gmanewsonline, Feb. 15, 2018). Many of our people do not really have the power to choose our leaders and vote freely because of the entrenched political dynasties.

Furthermore, he said: “checks-and-balances does not work in fat dynasties. How will the checks and balances work if the governor is related to two to three provincial members? How will the checks and balances work if the children of the governor is mayor in two to three towns?” (Ibid.) The result is impunity and corruption in governance.

“According to our data, the worst features are those with [fat dynasties]. It’s there that you can find the Ampatuan massacre, the kickbacks in road projects, black holes in terms of missing [internal revenue allotments], poverty,” Dean Mendoza said (PDI, op. cit.). He said violence, intimidation, and corruption happen in areas where fat dynasties are present because the officials tend to collude with each other. End result is that there is impunity and no accountability (Ibid.).

Dean Mendoza pointed out that the five poorest provinces in the land have the highest percentage of local government positions held by the fattest political dynasties. Lanao del Sur, Maguindanao and Sulu are in the Autonomous Region of Muslim Mindanao (ARRM). How is this going to affect the pending Bangsamoro Basic Law (BBL), Senator Franklin Drilon asked him? Should an anti-dynasty provision be in the BBL?

Senator Miguel Zubiri, chair of the Senate subcommittee on the Bangsamoro Basic Law (BBL), said the provision may be perceived as discriminatory because the proposal in the Constitution prohibiting political dynasties has not yet been passed (ABS-CBN News, Feb 12, 2018). Dean Mendoza said the fear of some people in Mindanao that they will no longer have any leaders once the anti-political dynasty provision is included in the BBL has no basis. “The resistance is not really coming from the people but the leaders. The people cannot speak because of their leaders. So let us help them (GMA News op. cit.).”

The (current) 1987 Constitution bans political dynasties but Congress, which is dominated by political dynasties, has failed to pass an enabling law defining a political dynasty. Dean Mendoza said: “more than 50%” of the members of Congress were made up of ‘thin dynasty’ members (PDI, op. cit.).” The practical compromise would be to “allow dynasties to have their members succeed each other in political office but bar them from running for and securing different government posts all at the same time (Ibid.).” In other words, ban fat political dynasties but allow thin political dynasties.

Pangilinan said the Senate will first tightly define what is a political dynasty, and go by the Sangguniang Kabataan (SK) law, which states that SK officials should not be related “within the second civil degree of consanguinity or affinity to any incumbent elected national official or any elected regional, provincial, city, municipal or barangay official in the locality where he or she is seeking election (Ibid.).”

“I think two degrees is OK. That would include spouses, siblings, parents, children, grandparents and grandchildren in the prohibition. That seems like a reasonable definition,” Sen. Juan Edgardo Angara said (Ibid.).

Now let’s see something happen.

 

Amelia H. C. Ylagan is a Doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

The swimsuit competition

Nothing lasts forever, or even five years. It’s not just a change of management but simple boredom (can’t they come up with something new?) that nudges a company to review its relationships with long-time suppliers. Also, there are always new players, friends of friends, and suggestions from high places (just hear them out) that puts a company in play for a new relationship.

What banks, management consultants, financial advisers, security contractors, or ad agencies bidding for an account call a “pitch”, their clients refer to internally as a “beauty contest,” or a swimsuit competition.

The hopeful bidder trots out its credentials and awards it has won, what it has done for other clients (with some semblance of confidentiality maintained) and what it intends to do for its prospect. There is an earnest attempt to show a deep understanding of the target’s industry and the problems facing it. The latter has to be carefully treaded, as it may sound too offensive — your competitor is having you for breakfast.

Beauty contestants would never set out to deflate the egos of the judges. But this is what pitchers for business do right away. In the guise of research from focus groups selected for their animosity to the target company, the bidder weaves findings that can be summarized in one sentence — “Your company needs help, and there’s no time to waste.”

Radical solutions are advanced to address the symptoms. Seeming to diagnose terminal illness, the bidder offers a cure if only the patient can accept the equivalent of chemotherapy… and pay for it? The panic scenario is invoked — your corporate life is ticking away.

But can the diagnosis turn off the patient? There is a possibility of that. Clue: The panel is already jotting down negative scores after such a situation analysis. (Who let these morons in?)

Presenters are able to read faces. Just because the “big idea” is flopping around, and overturning furniture like a wounded elephant doesn’t mean it is possible to change gears and be a little daintier. The different creative treatments are variations on the focus-group theme. The hole is dug deeper and deeper. The scenarios get darker. The panel members are texting away and looking at the distance. (This stand-up routine isn’t getting any applause.)

Beauty contestants move through their paces on stage with metronomic precision, not allowed dawdling and wasting time. Not so for bidders. While they are given a time limit of an hour for presentation, they go slide after slide presuming the same enthusiasm from their audience as they themselves try to project. After all, presenters worked on these slides for three days without sleeping. Let this smirking panel be inflicted a fraction of their ordeal.

Bidders do not trot out on stage simultaneously as regular beauty contestants do to facilitate comparison and rating. Corporate contestants go in one after the other as similarities of the slides (and even the jokes) are inflicted on an increasingly bored and testy panel. (Can we go straight to the swimsuit portion?)

Because of the serial presentation, comparisons and judging can only be made at the end when the early entries fade in a hazy soup. Rating is often done against some personal abstract standard — the first team’s blazers looked newly bought.

The evaluation panel is studied to find out which of the supposedly equal votes have more weight. The Fence Sitter’s Rule on evaluation committees state that, “number of questions asked and the loudness of their delivery are inversely proportional to the decision making weight of the panelist.” Thus, the quiet one asking not a single question needs to be watched — is he smiling or smirking?

Here are some distress signals to watch out for: Shifting in the seats, constant checking of the watch, texting of the man in the middle seat (the one facing the screen), and loud conversations at the fringes while the hot stuff is trotted out (Do you really think our women’s volleyball team is competitive?) and long toilet breaks.

It is a rule that the losers get the verdict first — I liked your effort but your ideas are too abstract. Your slides show the influence of Kandinsky’s early works. Anyway, the swimsuit was not designed for a beauty contest. It was intended for diving into the water to find out… if you sink or swim.

 

A. R. Samson is chair and CEO of Touch DDB.

ar.samson@yahoo.com

Nation at a Glance — (02/20/18)

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

Economy on verge of rapid expansion — DoF’s Dominguez

By Melissa Luz T. Lopez,
Senior Reporter

THE ECONOMY is poised to sustain its momentum this year with tax reform and steady dollar inflows providing broad-based and resilient drivers of growth, Finance Secretary Carlos G. Dominguez III said.

He also invited American businesses to keep investing in the Philippines, with the promise of robust domestic economic activity to be sustained over the coming years.

“We are on the cusp of rapid expansion and ready to evolve our economy towards investments-led growth,” Mr. Dominguez said in a speech during the US-Philippines Society Business Forum yesterday.

“With increased investment flows, tax reform and massive investments in modernizing our infrastructure, we will definitely do better this year and the next.”

Mr. Dominguez remained confident that the Philippines will remain among the fastest-growing economies in Asia.

Gross domestic product (GDP) expanded by 6.7% in 2017, well within the government’s 6.5-7.5% target. The growth was driven by a 14.3% surge in public spending, largely on the back of infrastructure investments.

On the supply side, the industrial, services, and even farm sector posted increases year on year.

“All these numbers indicate the economy is gathering steam. We are confident the revenue reforms, sustained fiscal discipline, better spending efficiency and massive investments in infrastructure will enable us to escalate growth to between 7% and 8% in the near term,” Mr. Dominguez said.

“Infrastructure investments will likewise act as the stimulus for greater economic activity.”

The government will spend P1.1 trillion this year on priority infrastructure projects, representing one-fourth of the full-year national budget and equivalent to 6.3% of GDP. This forms part of the P8.44-trillion infrastructure spending plan until 2022.

Much relies on the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law which took effect on Jan. 1, from which the state is hoping to raise P82.3 billion in additional revenue despite lower tax rates for individuals.

Of this amount, 70% will be used to fund new infrastructure projects, while the remainder will be spent on social protection programs.

Preliminary data from Commissioner Caesar R. Dulay show that the Bureau of Internal Revenue was able to raise tax collections by 15% in January, with the additional tax on soda and sugary drinks raising about P2 billion in less than a month.

Despite this, Mr. Dominguez said inflation will likely find its way within the 2-4% target set by the central bank, even as commodity prices picked up by four percent last month. Central bank officials view the price spike as “temporary,” as they believe that the one-off impact of inflation will eventually normalize.

Finance dep’t pitches Mexican manufacturers to make PHL their ASEAN base

FINANCE Secretary Carlos G. Dominguez III has called on technology and manufacturing companies based in Mexico to make the Philippines their entry point to the Association of Southeast Asian Nations (ASEAN) market.

Meeting with Mexican Ambassador Gerardo Lozano Arredondo, Mr. Dominguez said Mexican firms can take advantage of the country’s young and talented work force and reasonable labor costs.

“We’d like to go with Mexican companies, particularly with your high-technology companies… We would like to invite you to come and invest here — probably for the Mexican companies to use Philippines as a base to enter the ASEAN market,” Mr. Dominguez was quoted as saying in a statement issued by the Department of Finance (DoF).

“As you know, the tariff rates among ASEAN countries are now quite low, In fact zero in most cases and this is an opportunity for your companies to come and set up manufacturing here,” Mr. Dominguez told Mr. Arredondo.

Mr. Arredondo cited the “excellent historical relations” between the two countries, and acknowledged that “the Philippines can be the door for Mexico to the ASEAN.”

“We are trying to diversify our relations and we consider Asian countries as a very important option,” the ambassador said.

Data from the World Bank showed that Mexico is now one of Latin America’s top exporters of high-technology goods with $46.81 billion worth of outbound goods in 2016.

Mr. Arredondo added that the series of consultations between Philippine and Mexican officials scheduled for March would be a good avenue to foster political and economic ties between the two countries.

“We are planning to invite some Philippine businessmen to join the delegation in order to meet Mexican businessmen and discuss opportunities for new business,” Mr. Arredondo said.

Last year, the Finance department sent a team to Mexico to study its tax on sweetened beverages.

“They brought back a lot of ideas [from Mexico]. As a result of the tax team’s consultation, we were able to pass a (sugar-sweetened beverage) tax law last month,” Mr. Dominguez noted, referring to the Tax Reform for Acceleration and Inclusion Act that took effect in January. — Karl Angelo N. Vidal

DoE sees adequate summer power supply

By Victor V. Saulon,
Sub-Editor

POWER SUPPLY will be adequate during the dry months when demand spikes as long as three new power plants will come online as scheduled and assuming no forced outages.

Distribution utilities will also be given more specific guidelines on their power procurement in line with the recent issuance of a circular on competitive selection process (CSP), which requires price challengers to all supply contracts.

These are the among the assurances given by the Department of Energy (DoE) to consumers in a briefing at its headquarters in Taguig City on Monday.

“On the summer months, as projected, we will not have any problem as long as the new power plants will come in and run,” said Redentor E. Delola, DoE assistant secretary.

“And we still have Malaya,” he added, referring to the 650-megawatt (MW) thermal plant in Rizal province that is run when needed to supplement power reserves.

Mr. Delola said the DoE is expecting the 150-MW second unit of SMC Consolidated Power Corp.’s power plant in Limay, Bataan to be online in the second quarter, followed by Pagbilao Energy Corp.’s 420-MW plant in Quezon.

In the Visayas, he said the department expects Therma Visayas, Inc.’s 300-MW power plant to be running by the dry season. The three are coal-fired power facilities.

“In Mindanao, we really don’t have a problem,” Mr. Delola said.

He said based on the DoE’s projection for the summer months, demand in Luzon could peak at 10,500 MW from the second to third week of May.

“But we have enough reserves… [at] 1,500 MW,” he said.

DoE’s projection mirrors that of National Grid Corp. of the Philippines (NGCP), which estimated power demand in Luzon to peak this year at 10,561 MW, up 5.04% year on year when the main island breached for the first time the 10,000-MW mark.

Luzon is the biggest power user with its peak demand more than five times that of the Visayas and Mindanao.

Grid operator NGCP also said it is adequately covered for its regulating reserve, which is tapped during small variations in normal operations, at 4% of peak demand. It also expects the contingency reserve requirement to be adequate in responding to any reduction in supply when the largest power generating unit online — the 647-MW coal-fired power plant in Sual, Pangasinan — fails to deliver.

“Same as other times during the year, what we are avoiding is forced outage. It won’t lead to outages but we might have a yellow alert,” Mr. Delola said.

NGCP issues a “yellow alert” notice when the total of all reserves is less than the capacity of the largest plant online, which for the Luzon grid, is 647 MW. It issues a “red alert” notice when the contingency reserve is zero or a generation deficiency exists.

Separately, Senator Sherwin T. Gatchalian has given his assurance to the public that no “massive” brownouts will take place during the dry season after the Court of Appeals issued a temporary restraining order (TRO) against the suspension of the four commissioners of the Energy Regulatory Commission (ERC).

“It’s a blessing that the four commissioners have been seated, at least for the next 60 days, to resolve pending cases, and the Court of Appeals took note of the importance of the power industry because all of us need electricity,” he said.

In December, the Office of the Ombudsman served a one-year suspension on four ERC commissioners for not implementing the CSP as originally scheduled, unduly favoring some distribution utilities.

Mr. Delola also said the DoE would issue this week an advisory on whether those with a pending CSP are covered by the recently issued rules.

The guidelines will include a provision that will allow consumer groups to be part of the CSP as observers, along with three representatives from the distribution utility, he added.

PRDP review outlines gains from farm-to-market roads

DAVAO CITY — A recent assessment of the World Bank (WB)-funded Philippine Rural Development Project (PRDP) indicates economic and social gains from the construction of farm-to-market roads, which make up the bulk of approved projects in Mindanao.

“The newly constructed farm-to-market roads also create a huge impact in the lives of its beneficiaries where average household income increases of 64% accompanied with the increase in school attendance and higher enrollment numbers, improved peace and order, faster response to medical emergencies, improved supplies available at small local stores, and increased crop areas,” Frauke Jungbluth, WB senior economist and task team leader for PRDP, was quoted in a statement issued by the PRDP-Mindanao office.

Ms. Jungbluth was part of the WB team that visited Mindanao in early February to assess the implementation of the program.

Out of Mindanao’s P6.14-billion share from the initial P27-billion PRDP funding, about P5.77 billion has been allocated for infrastructure development, mainly farm-to-market roads. Enterprise development projects covered the remaining P365.07 million.

The infrastructure component of the project, based on the assessment report, completed 148.4 kilometers of farm-to-market roads, helping farmers reduce their travel time by half, cost of logistics by a third and increase production by half.

These roads have benefitted a total of 77,000 households, PRDP said.

PRPD-Mindanao cited South Cotabato as an example for the success of the project, where cassava production increased by 31%, selling prices by 9%, and average income by 47%.

“This is the result of the strong partnership of the DA (Department of Agriculture), local government units (LGUs), our farmer-beneficiaries and the strong support of our private sector,” said Ricardo M. Oñate, Jr., PRDP-Mindanao director.

Mr. Oñate also said that there have been “positive effects of mainstreaming PRDP innovations to provincial planning process.”

The WB also noted that the PRDP has led the government implementing agency, the DA, to institutionalize reforms that have allowed LGUs to improve efficiency in project implementation.

Among the mechanisms institutionalized are geo-tagging, which allows the monitoring and management of projects in real time.— Carmelito Q. Francisco

Work safety bill hurdles Senate on third reading

THE SENATE on Monday approved on third and final reading a bill which would require stricter compliance by employers with Occupational Safety and Health Standards (OSHS).

Senate Bill No. 1317 or the “Act Strengthening Compliance with Occupational Safety and Health Standard,” passed the chamber with 20 votes. If enacted, it would amend the Labor Code to impose administrative penalties with fines of up to P100,000 “for every day of non-correction of violations” under the OSHS.

It also guaranteed the payment of workers’ wages and income during work stoppages or suspensions of operation “due to imminent danger as a result of the employer’s violation or fault.”

Senator Emmanuel Joel J. Villanueva, author and sponsor of the bill, said the proposed measure would increase productivity in workplaces by ensuring maximum safety and health at work.

“This is to reiterate that violation of OSH standards is deliberate disrespect for the well-being of our workers and a derogation of the right to humane conditions of work,” he said in a statement.

The bill was prompted by a series of workplace accidents last year, one of which was a fire at a mall in Davao City, killing 38 call center and mall workers.

Mr. Villanueva also cited a survey conducted by the Philippine Statistics Authority (PSA) in October 2015, which showed that occupational diseases in establishments employing 20 or more workers increased from 85,583 in 2011 to 171,787 in 2013.

The Department of Labor and Employment (DoLE) also reported 199 fatal workplace accidents and 232 non-fatal accidents from January 2014 to October 2016.

“Despite the fact that workplace accidents would always prompt tighter regulations, compliance by all industries continues to be an issue. Let us now make safety and health in the workplace work for all,” he said.

Implemented in 1978 by DoLE, the OSHS lays out safety and health rules in workplaces. — Camille A. Aguinaldo

Dealing with tax filing advisories

Since Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law took effect on Jan. 1, the implementation of certain provisions of the law has become an endless topic in various fora especially amongst taxpayers who are greatly affected. To ensure that the TRAIN will smoothly reach its destination, the Bureau of Internal Revenue (BIR) has been very proactive in addressing the concerns of bewildered taxpayers through public consultations, seminars, and various issuances. In fact, five revenue regulations (RRs) and a number of revenue memorandum circulars (RMCs) have been issued since January to implement certain provisions of this new law. This notwithstanding, taxpayers still find themselves in the dark in the absence of formal implementing rules and regulations, especially on income tax and value-added tax (VAT).

One of the recent and most common concerns raised by most taxpayers is the manner of carrying out the changes in filing of tax returns considering the new tax rates and modifications on the frequency of filing certain tax returns introduced under the TRAIN law. Although there were already issuances on the workaround procedures issued by the BIR, taxpayers still can’t help but feel anxious as the other provisions of the law remain unclear and lack sufficient guidance.

In response to this growing anticipation for additional and more detailed guidelines, the BIR began releasing tax advisories before the deadlines for filing and payment of the January tax returns. Surprisingly though, the contents of certain advisories are notably not consistent to some extent with those of the provisions under the TRAIN law. An example is the advisory issued on Jan. 31, which provides that the remittance of creditable and final taxes withheld shall be made on or before the 10th day following the month of withholding through BIR Form No. 0605 or payment form for the first two months of the quarter. The said advisory was further clarified in a subsequent issuance dated Feb. 6, stating that the remittance of taxes withheld on the 10th day following the month of withholding shall apply for manual or over-the-counter tax filers while, for those filing and paying via the electronic filing and payment system (EFPS), the due date for remittance is extended until the 15th day following the close of the taxable month. It can be noted, however, that one of the major changes introduced by the TRAIN law is the quarterly filing and remittance of creditable withholding taxes, which used to be filed and paid on a monthly basis. With the issuance of the said tax advisories, many taxpayers were confused since, in effect, the tax advisories only somewhat restored the old manner of remittance of creditable and final withholding taxes. The only difference is the use of a different form, i.e., payment form.

There are also concerns on whether those who do not have any withholding tax due payable for the month are still required to file a NIL monthly withholding tax return or the payment form. I believe they are not required, but since the advisories did not tackle the issue, then, taxpayers are at a loss on what should they do. In fact, a number of taxpayers are asking if it would be safe to assume that filing a NIL return is optional, since there were no explicit guidelines provided by the BIR regarding the matter. Further, since there are no penalty clauses included in the tax advisories, can the taxpayers remain placid that no open cases would result in case of non-filing of a NIL monthly withholding tax remittance return?

The BIR issued another tax advisory on Feb. 8 that tackles the guidelines on the quarterly filing and payment of percentage taxes pursuant to the TRAIN law. Previously, percentage tax returns are filed and paid on a monthly basis by certain taxpayers’ subject to percentage tax. However, it is worth noting that the advisory specifically mentioned only those taxpayers subject to percentage tax pursuant to Section 116 of the Tax Code (VAT-exempt taxpayers with annual revenues not exceeding P3,000,000) and those who will be subject thereto due to change of registration from VAT to Non-VAT. How about other percentage taxpayers, such as banks, who were also filing their percentage tax returns on a monthly basis prior to the TRAIN law? Should they also follow the guidelines set forth in the tax advisory, or should they stick to the old manner of filing their percentage tax returns?

Undoubtedly, the transition period to fully implement the changes under the TRAIN law have a long way to go. Hopefully, the present administration’s promise of a less complicated and more taxpayer-friendly administration of taxes will soon be felt by the taxpayers. I sincerely hope that the BIR will soon be able to release the appropriate revenue issuances that would comprehensively address all concerns and clarifications sought by the taxpayers.

Marvin K. Villarama is a senior of the Tax Advisory and Compliance of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory, and outsourcing services firms in the Philippines.

Maynilad sets aside P9 billion capex this year

Maynilad Water Services, Inc. is setting aside P9 billion this year as capital expenditure for its water and wastewater infrastructure projects, the west zone concessionaire said on Monday, Feb. 19.

“Our record investments have contributed significantly to the government’s job generation efforts while also improving water services for our over 9 million customers. We will continue on this track so we can sustain service level improvements in the West Zone,” said Ramoncito S. Fernandez, Maynilad president and chief executive officer.

Of the P9 billion, two-third or about P6.5 billion will be spent on the company’s infrastructure projects, Maynilad said.

 

Around P1.7 billion of the P9 billion budget this year will be used for wastewater management projects to increase sewerage coverage and maintain network reliability. It will be spent for the construction of a sewer network for the sewage treatment plants in Las Piñas and Muntinlupa, installation of new sewer service connections, and maintenance of the existing sewer network.

“The rest of the budget will go to the company’s customer service and information program, which covers the modernization of data management and information systems that will help to improve service delivery,” the company said. — Victor V. Saulon

Indonesia blocks more than 70,000 ‘negative,’ porn sites

JAKARTA — Indonesia has blocked more than 70,000 Web sites displaying “negative” content such as pornography or extremist ideology in the first month of using a new system to help purge the Internet of harmful material, the communications minister told Reuters.

The world’s most populous Muslim-majority country has stepped up efforts to control online content after a rise in hoax stories and hate speech, and amid controversial anti-pornography laws pushed by Islamic parties.

The so-called “crawling system” developed by a unit of state-run Telekomunikasi Indonesia Tbk (Telkom) was launched in January, using 44 servers to search Internet content and issue alerts when inappropriate material is found.

“We just put some sort of key words there, most of them are pornographic,” said Minister of Communication and Information Rudiantara, who uses one name.

“Because after 2017 we have blocked almost 800,000 sites and more than 90% (of these were) pornographic,” said the minister.

According to ministry data, the system, installed at a cost of around $15 million, helped block 72,407 pornography sites in January.

The ministry also acts to get content removed from social media platforms if there are complaints from the public.

Indonesia threatened last year to block Facebook, Inc’s WhatsApp Messenger, which is widely used in the country, unless obscene Graphics Interchange Format (GIF) images provided by third parties were removed.

Authorities also blocked access to some channels on encrypted messaging service Telegram last year, saying it had several forums that were “full of radical and terrorist propaganda.”

Google, which is owned by Alphabet, Inc, removed 73 LGBT-related apps from its Play Store last month, including the world’s largest gay dating app, Blued, on a request by Indonesia, a communications ministry official said.

The lesbian, gay, bisexual, and transgender community has faced a crackdown in Indonesia and the official said the contents of the apps contradicted cultural norms and contained pornographic content. Google declined to comment.

Mr. Rudiantara said the relationship with social media companies and tech giants was improving and put some disagreements down to differences over what, for example, constitutes pornography.

“To us probably it is pornographic, because we refer to the laws of pornography in Indonesia. But for other parts of the world, they say it is not pornography, it is art,” he said.

“But now it’s getting better, particularly when we consider content associated with radicalism, terrorism… On that content, I think they respond very fast,” he said.

The minister also said that nine tech companies, including Google and Facebook, had recently pledged to help authorities fight fake news and hate speech during upcoming elections in the world’s third-biggest democracy. — Reuters

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