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IP soldiers

MAJOR General Noel S. Clement, commander of the 10th Infantry Division and an adopted member of the local indigenous people (IP) community through a resolution by the Supreme Tribal Council for Peace and Development, congratulates the 300 IPs who graduated on Dec. 17 from their eight-week basic military training and are now part of the Philippine army. “These IP companies will be augmented by officers and enlisted personnel preferably IP or at least from the same province who know the customs and tradition in the area. For purposes of distinction, the companies will be called SMART companies. It means that an IP SMART Company is capable of multi-role such as doing civil-military work while very much ready to use force when necessary,” Mr. Clement said.

Method to the madness

Nowadays President Rodrigo Duterte is wont to take every opportunity to accuse the Communist Party of the Philippines-New People’s Army (CPP-NPA) of the vilest atrocities he can think of (or invent) as his regime goes into high gear in its counterinsurgency war, perversely codenamed Oplan Kapayapaan. The latest is at a speech he gave to the annual gathering of LGBT in Davao City where he accused the NPA of going around “molesting or sexually abusing” women in the countryside and even “stealing” the women from their husbands.

But how can a home-grown revolutionary movement comprised mainly of peasants, waging guerrilla warfare in the rural areas, survive for close to five decades if there is any truth to this outrageous accusation? One might conclude that Mr. Duterte has lost it. (Some say too much Fentanyl). Then again, there seems to be method to the madness: the terror tagging of the CPP-NPA is a glaring example.

Mr. Duterte has flip-flopped more than once but this is major. From an avowed fellow socialist and Leftist who understood the social roots of rebellion; who considered a renowned NPA commander murdered by the military as his close friend; who gave support and succor to beleaguered NPA fighters; and who promised to end the longest running armed conflict in Asia through peace negotiations — Mr. Duterte now has nothing good to say about the CPP-NPA.

It is as if all he has to do is change his mind, or his rhetoric, to change the highly political, in fact revolutionary, character of the CPP-NPA overnight.

Thus upon his declaration that he was scuttling peace talks with the revolutionary umbrella formation, the National Democratic Front of the Philippines (NDFP), Mr. Duterte announced he would deny the CPP-NPA any political legitimacy by following the US lead in labelling the movement as “terrorist.” He issued Proclamation 374 declaring the CPP-NPA a “designated, identified terrorist organization under Republic Act (RA) No. 10168.”

Since the “terrorist” label has been attached of late to the likes of the dreaded ISIS, successor to the infamous al Qaeda that presumably had been degraded by the US commando killing of Osama Bin Laden, and with supposed ISIS-inspired counterparts most recently defeated in the Marawi siege, Proclamation 374 effectively demonizes the CPP-NPA to the politically uninitiated and conservative sectors of the public, not least of which are Mr. Duterte’s rabid followers.

It serves to terrify them and bids them follow blindly Mr. Duterte’s admonitions about crushing alleged “terrorists.” The “terrorist” tag is once more used as a convenient, if worn out, justification for pursuing the failed policy of using armed might exclusively or primarily in dealing with rebellion.

It didn’t take long for Mr. Duterte to issue a shoot-to-kill order to the AFP against suspected NPA “so long as they are armed.” This is eerily similar to his order to the PNP to kill drug suspects “so long as they fight it out” or “manlaban.” The order amounts to instructing the military to plant guns and explosives against anyone they kill in the counterinsurgency war to take away accountability for extrajudicial killings carried out in the name of counterterrorism. This Duterte order gives license to inflict mass murder on indigenous people and peasants fighting against land grabbing and other forms of exploitation and oppression rampant in the countryside.

From hereon Duterte is poised to have the CPP-NPA proscribed by a Regional Trial Court as a “terrorist” organization so that he can go about using a dormant 10-year-old anti-terrorism law, the Human Security Act of 2007, as well as the Terrorism Financing Prevention and Suppression Act of 2012 (RA 10168) to undertake a massive crackdown on legal progressive organizations specially those who espouse a similar program of socioeconomic and political reforms as the CPP-NPA-NDFP. (It would not be a surprise for the regime to also use these draconian laws to terrorize ordinary citizens pining for his promised “pagbabago” and shake down businesses in the guise of going after “terrorism financiers”).

What this portends is mass arrests and the wholesale filing of trumped-up terrorism and other criminal charges against social activists, critics in the academe, mass media or the arts, human rights advocates, grassroots organizers and any and all who the Duterte regime labels as “enemies of the state” and/or “destabilizers.”

Duterte didn’t skip a beat when he asked Congress for approval of another extension of martial law and suspension of the writ of habeas corpus in Mindanao by a year. Even as the magnified threat from remnants of the Maute, Dawlah Islamiyah and Abu Sayyaf Group as well as the Bangsamoro Islamic Freedom Fighters was cited as reason enough to extend martial law, this time it is clear that the target is the CPP-NPA and its mass base of support among the landless peasants and indigenous people of Mindanao called Lumad.

Malacañang and the AFP want the public to believe that martial law under Duterte is benign in so far as non-rebels are concerned.

But numerous incidents involving civilians tagged by the military as NPA have resulted in grave human rights violations among the most vulnerable sectors of society.

Take the case of the massacre of eight Lumad in Barangay Ned, Lake Sebu. Aldina Ambag, sister of slain Lumad leader Datu Victor Dayan, says a sniper killed her brother and that seven other slain men were farmers harvesting and planting corps when soldiers entered the village. They are filing complaints with the Commission of Human Rights, the UN Special Rapporteur on the Rights of Indigenous Peoples and Special Rapporteur on Extrajudicial Killings, as well as the Joint Monitoring Committee for the implementation of the human rights agreement in the derailed GRP-NDFP peace negotiations.

The AFP knows that the NPA draws support from rural folk thus their solution is to deny the NPA this support by militarizing communities.

In the process the thousands of civilians are displaced and rendered victims of grievous human rights violations such as EJKs, enforced disappearances, illegal arrests and detention and torture. These civilian communities’ legitimate struggles are branded as NPA-instigated and their leaders themselves branded as NPA, ergo “terrorist” and deserving of “neutralization,” military-speak for physical elimination.

Those who come to their rescue — human rights defenders, church workers, land reform advocates, or even plain humanitarian organizations — are also immediately branded as NPA supporters deserving of the harshest measures available under martial law. When they invoke their civil and political rights such as the right to due process or their right to avail of the services of legal counsel, the military simply answers, “It is martial law and therefore what we say goes.”

Those who think that curtailing the rights of suspected NPA and their alleged supporters is justified in the fight against rebellion better think again. Marcos became the number one NPA recruiter when he declared martial law to keep himself and his clique in power indefinitely. The closure of all legal and peaceful avenues for the people to seek redress of grievances from government and to pursue much-needed reforms became the clarion call for the youth of the land to join the NPA or establish it where it did not yet exist.

 

Carol Pagaduan-Araullo is a medical doctor by training, social activist by choice, columnist by accident, happy partner to a liberated spouse and proud mother of two.

carol_araullo@yahoo.com

DA eyes March timetable to declare Luzon bird flu-free

THE Department of Agriculture (DA) said it may declare Luzon free of avian influenza, or bird flu, by March following the culling of 42,000 chickens in Candaba, Pampanga in late November.

Animal Health and Welfare Development officer-in-charge Dr. Arlyn Asteria V. Vytiaco said at a news conference that the DA is in the process of checking infected areas through the introduction of sentinel birds.

Ms. Vytiaco said the protocol of the World Organization for Animal Health (OIE) is to count 90 days before the Philippines is declared free from avian influenza.

“When we are applying OIE, there should be a series of surveillance activities. We’ve had our second surveillance in Nov. 27 in Pampanga, covering 11 towns. In Dec. 4, we also had a surveillance activity in Candaba. I’m happy to announce that all the tests came out negative,” she added.

In August, the DA detected bird flu in San Luis, Pampanga and began the process of culling 200,000 birds after it spread to five neighboring farms.

Ms. Vytiaco said yakitori exports to Japan are at risk if the country is not declared bird flu-free sooner but added that the DA is in constant communication with its counterparts in Japan.

“Actually, Japan is communicating with us, asking for our status so we said what is happening [in our bird flu situation and] when it happened,” she added.

“Japan is very strict when it comes to requirements but actually, I think that Japan is stricter than OIE.”

As a backup plan, the DA is considering encouraging the chicken processing companies to move to the Visayas or Mindanao. — Anna Gabriela A. Mogato

Pats thwart Steelers

It’s a testament to the players’ collective level of talent, determination, and desire to win that the Patriots-Steelers match yesterday managed to live up to hype. Heading into the meeting of the best of the best in the American Football Conference, just about all quarters employed hyperbole to describe the gravity of the situation; at stake was homefield advantage in the playoffs, to be disputed by perennial favorites featuring noted marquee names. And, as things turned out, a single possession was what separated the scores.

To be fair, both the Patriots and the Steelers displayed efforts that merited triumph. Uncharacteristically off for most of the game, Tom Brady came alive late in the fourth quarter, engineering a drive that starred fresh-off-suspension Rob Gronkowski and resulted in the decisive touchdown. Still, Ben Roethlisberger was five seconds from stamping his class, only to be felled by an ill-advised decision to go for the end zone instead of the goal post. The play he called absent a timeout had Eli Rogers running a slant route and receiving his pass at the end zone; unfortunately, his fake spike deceived no one, leading to a pick that sealed the outcome.

To be sure, the set-to provided other ingredients for a classic. There was Gronkowski’s sterling showing coming off a ban. There was Brady’s solid stand in the crunch. There was league-leading receiver Antonio Brown’s injury. There was official Tony Corrente’s overturn of a Jesse James TD catch upon review. Despite all these, though, Roethlisberger had the contest in his hands. He could have gone to overtime armed with the confidence of a superior outing and the support of an overflow crowd of 68,574 at Heinz Field. Instead, he went for the high-risk, high-reward option, to disastrous results.

In the aftermath, the Patriots were justifiably jubilant and the Steelers alternately disappointed and disgusted. “It was a tight game,” Brady pointed out in understated fashion. “We just made one more play than they did.” “We lost a game, and I threw a pick in the end zone to lose it,” Roethlisberger noted. “I guess I don’t know a lot of things about football,” James said. If it’s any consolation, countless others felt the same way about Corrente and the league office. Certainly, the “survive the ground” rule will be the subject of discussion in football circles for the foreseeable term.

In any case, the Patriots stand to claim the right to host their set-tos throughout the AFC postseason. Up next: Holiday Eve encounters against the eight-and-six Bills and the five-and-nine Jets. In the meantime, they get to celebrate snatching victory from the throes of defeat yet again.

 

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

Merkel to meet bereaved a year after Christmas market attack

BERLIN — A year after an Islamic jihadist ploughed a truck into a Christmas market crowd, killing 12, Chancellor Angela Merkel will meet Monday with the victims’ families for the first time.

The private gathering on the eve of the anniversary of the atrocity comes against the backdrop of angry recriminations by many of the bereaved, who say official incompetence and neglect since the assault have inflicted fresh wounds.

Last December 19 at 8:02 p.m., Anis Amri, a 24-year-old Tunisian who had failed to obtain asylum, rammed a stolen truck into crowds at the market on the Breitscheidplatz, a popular destination for Berliners and tourists alike.

The victims came from Germany as well as countries including Israel, Italy, the Czech Republic and Ukraine.

More than 70 people were injured in the attack, the deadliest ever carried out in Germany.

The Islamic State group claimed responsibility the next day, and Amri was shot and killed four days later by police in Italy, where he had previously lived.

Although Ms. Merkel has visited the scene of the attack at least four times, including once to the reopened Christmas market last week, it will be her first face-to-face talks with relatives of the victims, some of whom have accused her of ignoring their needs and concerns.

In a wrenching open letter to the chancellor this month, before the meeting was announced, several family members condemned her “political inaction” and accused her of failing to reach out to them.

“Almost a year after the attack, we note that you have not shared your condolences with us either in person or in writing,” the letter said.

“In our opinion, this means that you are not living up to the responsibilities of your office.”

‘BILLS FOR AUTOPSIES’
A government-commissioned report released last week identified a litany of shortcomings in the response to the tragedy.

Some relatives desperately searching for their loved ones were told only three days after the attack that a family member had perished, even though they could have been given early warning through facial identification.

Others were sent “bills for autopsies — including warnings for late payment, I didn’t want to believe it, but I had such a letter in hand,” said the author of the report, Kurt Beck.

“Such experiences should never be repeated,” he said, adding that Germany “was not prepared” to deal with the attack’s aftermath.

The government has paid out €1.6 million ($1.9 million) in compensation to the wounded and victims’ families.

Justice Minister Heiko Maas pledged that Berlin would take action “to ensure that when something so terrible happens that the relatives of victims are taken care of as well as possible.”

“We have learned from our mistakes,” he said.

Another factor keeping the wounds raw has been steady leaks in the press about administrative gaffes and missteps leading up to the attack.

Amri, who arrived in Germany in the summer of 2015, at the height of the refugee influx, registered under several different identities. Media reports citing the investigation have said that he plotted the attack from the start. Authorities knew him to be an Islamist extremist and drug dealer whose asylum claim had been rejected and who was being intermittently monitored by police.

But Amri was never deported or arrested.

Israeli tourist Rami Elyakim, 64, who lost Dalia, his wife of four decades, in the attack, said he remembered only drinking mulled wine together at the market.

Mr. Elyakim, who sustained broken bones throughout his body and still has difficulty moving, said that living in Israel he and his family had grown used to attacks, but they did not expect terror would strike them in Berlin.

“We thought Germany was safe,” he told the Bild newspaper. “In Israel no one who was planning something like this would walk around free. Maybe the Germans are naive.”

On the anniversary itself Tuesday, the Christmas market will be closed for the day so the families and first responders who tended to victims can attend a memorial ceremony in the church on the same square.

Ms. Merkel, President Frank-Walter Steinmeier and Berlin Mayor Michael Mueller will inaugurate a memorial — a 14-meter (46-foot) golden crack in the ground engraved with the victims’ names.

In the afternoon, the site will open to the public for those wishing to pay their respects and join in a prayer for peace at dusk. — AFP

In Kashmir, Pakistan and India race to tap the Himalayas for fresh water

MUZAFFARABAD — Several hundred meters underground, thousands of laborers grind away day and night on a mammoth hydroelectric project in contested Kashmir, where India and Pakistan are racing to tap the subcontinent’s diminishing freshwater supplies.

The arch rivals have been building dueling power plants along the banks of the turquoise Neelum River for years.

The two projects, located on opposite sides of the Line of Control — the de facto border in Kashmir — are now close to completion, fueling tensions between the neighbors with Pakistan particularly worried their downstream project will be deprived of much-needed water by India.

The Himalayan region of Kashmir is at the heart of a 70-year conflict between the nuclear-armed foes, with both sides laying claim to the conflict-riven territory.

The rivalry on the Neelum is underlined by both countries’ unquenchable need for freshwater, as their surging populations and developing economies continue to stress already diminished waters’ tables.

This situation represents a serious challenge to Pakistan’s food security and long-term growth, its central bank recently warned in a report.

The geography of the wider region only exacerbates the problem.

The Indus River — into which the waters of the Neelum ultimately flow — is one of the longest on the continent, cutting through ultra-sensitive borders in the region.

It rises in Tibet, crosses Kashmir and waters 65% of Pakistan’s territory, including the vast, fertile plains of Punjab province — the country’s bread basket — before flowing into the Indian Ocean.

The Indus Water Treaty, painfully ratified in 1960 under the auspices of the World Bank, theoretically regulates water allocation between the countries and is considered a rare diplomatic success story amid a bitter history.

It provides India with access to three eastern rivers (the Beas, Ravi and Sutlej) and Pakistan with three in the west (the Indus, Chenab and Jhelum), while setting the conditions for water usage.

UNDERGROUND CATHEDRAL
As a tributary of the Jhelum River, the Neelum theoretically falls into Pakistan’s sphere, which launched the Neelum-Jhelum power plant project a quarter of a century ago to counter the legal, but competing Kishanganga project in Indian Kashmir.

At the confluence of the Neelum and Jhelum, the gigantic underground cathedral of concrete and steel is near completion — the four generators are in place, waiting for the transformers and the network to be connected.

More than 6,000 Pakistani and Chinese workers busy themselves in the 28 kilometers (17 miles) of underground tunnels or in the power station itself, buried under 400 meters of rock in the heart of the Himalayas.

After completion, the dam is expected to churn out 969 megawatts of electricity by mid-2018.

“It is a fantastic feeling to see the outcome of such a historic project,” enthused Arif Shah, an engineer working on the site for eight years.

“We hope to finish our hydroelectric plant before the Indians,” he smiles, while acknowledging that the real pressure comes from Islamabad, which has promised to end the debilitating power cuts nationwide ahead of the 2018 elections.

On the Indian side, the Kishanganga power station is also in its final phase, but has delayed its late 2017 completion date, according to an official, in part because of ongoing unrest in the Kashmir valley.

Pakistan has filed cases at the World Bank against India and the Neelum dam, which it says will unfairly restrict the amount of water headed downstream.

According to the plant’s director Nayyar Aluddin, the production of electricity could shrink by 10-13% because of the Indian project.

But the hydroelectric projects on the Neelum River are only one of several points of friction between the two countries as the Indus Treaty faces increasingly pressing disputes.

Beyond the technical bickering, Islamabad is especially afraid of India cutting into its precious water supplies during strategic agricultural seasons that are key to feeding the country’s 207 million residents.

The possibility of hitting Pakistan’s food supply is regularly amped up by both Indian and Pakistani media, stretching perennially taut relations.

India’s Prime Minister Narendra Modi hinted at such reprisals following an attack in Indian Kashmir blamed on Pakistani insurgents in September 2016.

“Blood and water can’t flow together,” he said.

However, a blockade of any significant magnitude is not really technically feasible, while neither party has seriously sought to challenge the Treaty of the Indus.

“The disputes over the barrages are mostly symptoms of poor bilateral relationships,” said Gareth Price, a researcher at Chatham House.

The problem is that the rival countries conceive water as a zero-sum game — if one taps the resource, it means they are lost to the other.

But Islamabad must do its part, wrote Neil Buhne, UN coordinator in Pakistan, in an op-ed calling for the country to diversify “its water resources” while reigning in inefficiencies that waste water. — AFP

Short films for the shortest day of the year

INSTITUTO CERVANTES de Manila, the cultural center of the Embassy of Spain, and Ayala Museum will show four multi-awarded Spanish short films — Consulta 16, Elena Asins-Génesis, Luchadoras and Pulse — for free on Dec. 21, the winter solstice and shortest day of the year.

The free screening is part of El Día Más Corto/The Shortest Day, a short film festival celebrated simultaneously in more than 300 places worldwide.

The Shortest Day is an idea that was first set in motion by the French Short Film Agency in 2011, in which more than two million people from all over the world participated. In 2012 the initiative was emulated by other countries and in 2013 it grew into a truly international event, with the affiliation of a total of 12 European countries, as well as Canada.

El Día Más Corto took place in Spain for the first time in 2013. It was organized by the Spanish Association for short films, coordinadoradelcorto.org, with 100 selected short films distributed in 20 recommended programs.

The main goal was that everyone can organize a film festival for friends and neighbors in order to celebrate short films everywhere: schools, hospitals, streets, bars — every place is welcome to screen.

Several television channels (TVE and Canal+) aired special short film programs, and Instituto Cervantes created a playlist of short films for its centers worldwide. The National Film Board and all regional film boards and cinematheques also joined the event.

Instituto Cervantes joined this Festival in 2015, with the aim of showcasing the creativity of Spanish and Filipino short film productions.

As an indicator of the vitality of the medium in Spain, the short film Timecode, directed by Juanjo Giménez Peña, was chosen Best European Short Film at the European Film Awards 2017, celebrated last Dec. 8 at Dublin. It previously bagged the Palme d’Or in the short film category of the Cannes Film Festival.

By joining the worldwide screenings, Instituto Cervantes and Ayala Museum will help put the Philippines in the map of the said film festival. In 2017, the Philippines will be one of almost 50 countries worldwide that will celebrate together the love for short films.

The screenings will take place at Ayala Museum on Dec. 21, 5 p.m. Admission is free on a first-come, first-served basis. For those who register at http://bit.ly/AMlectureRegistration, there will be free popcorn courtesy of Instituto Cervantes. For more information, please check out their Facebook page (www.facebook.com/InstitutoCervantesManila) or the El Día Más Corto Web site (http://eldiamascorto.com/internacional).

PHL stocks rebound as investors pick up bargains

By Arra B. Francia, Reporter

SHARES jumped on Monday as investors went on bargain-hunting mode as the year comes to a close.

The 30-member Philippine Stock Exchange index (PSEi) gained 1.02% or 85.78 points to close at 8,422.82 on Monday, bouncing back from negative territory.

The all-shares index likewise rose 0.80% or 39.36 points to 4,909.79.

“Most of the blue chips led the rally for today. And may nalalapit na (there could be) window dressing as analysts see the index reaching the 9,000 level for 2018,” A&A Securities, Inc. analyst Jeng T. Calma said in a phone interview on Monday.

“It was back to bargain hunting after the last minute sell-off across-the-board… This was in tandem with US indices closing at records Friday, as investor expectations grew for the passage of the Republican-backed tax-cut legislations,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

US firms are expected to bring home larger earnings with the tax bill under US President Donald J. Trump due to proposals to reduce federal corporate taxes to 21% from the current 35%.

With investors cheering this development, the Dow Jones Industrial Average picked up 0.58% or 143.08 points to close at 24,651.74 last Friday, while the Nasdaq Composite Index also added 1.17% or 80.06 points to 6,936.58. The S&P 500 index meanwhile jumped 0.90% or 23.80 points to 2,675.81.

All local sectoral indices closed in positive territory, with the mining and oil sector leading the surge at 1.55% or 173.35 points to 11,355.21, along with the property counter that likewise added 1.55% or 59.45 points to end at 3,892.73.

The services sub-index was up 1.25% or 20.07 points to 1,624.10; holding firms saw a 0.91% uptick or 77.47 points to 8,508.79; industrials rose 0.70% or 77.89 points to 11,205.31; while financials added 0.08% or 1.82 points to 2,169.21.

A total of 853.22 million issues changed hands valued at P5.66 billion. This is significantly lower than the P10.73-billion value turnover logged last Friday.

Advancers narrowly beat decliners, 103 to 100, while 46 issues were unchanged.

Net foreign selling continued on Monday at P196.2 million, albeit lower than the P1.1-billion outflow recorded last Friday.

Asked if this trend is expected to continue until the end of the year, A&A’s Ms. Calma said this would depend on how investors view the implementation of the Tax Reform for Acceleration and Inclusion program in 2018.

“We will see kung ganyan pa rin kalakas (if it will remain this strong), given that there are additional taxes next year, they will be increasing documentary stamp. So the implementation of the tax reform program could [potentially make investors shy away] from investing in the market,” Ms. Calma said.

Central bank net profit down at end-October

By Melissa Luz T. Lopez, Senior Reporter

THE CENTRAL BANK remained in the black as of end-October as a drop in gross revenues from a year ago due to lower fee-based incomes was offset by bigger trading gains.

The Bangko Sentral ng Pilipinas (BSP) posted a P12.38-billion net profit for the first 10 months, registering an 18.9% drop from the P15.26 billion it made during the same period in 2016.

Still, the amount improved from the P9.97 billion net income reported at end-September, according to data posted on the BSP’s web site.

Gains from currency trading propped up the central bank’s balance sheet during the period, as revenues declined by 14.4% from the prior year.

Interest income grew to P47.7 billion, up 22.8% from the P38.83 billion booked as of October 2016.

Meanwhile, collections from miscellaneous sources plummeted to P5.65 billion, barely a fourth of the P23.5 billion raised during the prior year.

Miscellaneous income is drawn from fees and penalties imposed on banks and other supervised financial firms who fail to meet certain standards and reporting deadlines imposed by the regulator.

On the other hand, the central bank kept its operating expenses lower at P55.82 billion, down 4.6% from the P58.49 billion it spent a year ago. However, this surpassed the amount the BSP raised from its core income sources.

Currency trading gains offset these losses as the central bank generated P14.92 billion from foreign exchange fluctuations, higher than the P11.43 billion it booked the previous year.

The peso traded above P51 versus the dollar during the first two weeks of November before returning to the P50 level to average at P51.0384 that month.

The BSP, as the country’s monetary authority, conducts “tactical intervention” during daily foreign exchange trading sessions in order to temper any sharp swings that may cause a sudden appreciation or depreciation of the peso.

Central bank officials have said that a weaker peso spells gains for the BSP as it has a lot of investments expressed in dollars.

The BSP is poised to maintain a second straight year in profit, following a P17.81 billion net income posted by the end of 2016. Last year’s recovery has been fuelled by trading gains worth P19.12 billion, which offset P1.2 billion in operational losses.

The 2016 performance also ended six straight years of losses for the central bank.

A proposal to infuse P150 billion as additional capital for the BSP remains pending before Congress, but has not been taken up by lawmakers since.

How PSEi member stocks performed — December 18, 2017

Here’s a quick glance at how PSEi stocks fared on Monday, December 18, 2017.

The TRAIN passes the bicam — what’s in and what’s out?

In the Philippines, the last major overhaul of the tax system came 20 years ago. But Filipinos may need not wait any longer. A few days ago, the Senate and the House of Representatives ratified the bicameral conference committee report harmonizing the two chambers’ versions of the Tax Reform for Acceleration and Inclusion (TRAIN) bill. The final bill is now up for signing into law by the President and, once signed, is set to be implemented by next year. True enough, the TRAIN bill is now heading towards the finish line and appears to be the government’s signature legislative achievement so far.

What’s in and what’s out in the bicameral committee-approved TRAIN bill? Below are some of them.

Personal income tax. The most popular component of the bill is the part that changes the personal income tax system. Under the bicameral committee-approved bill, individual earnings of P250,000 or below per year are to be exempt from taxes. The excess over P250,000 will be subject to graduated tax rates of 20% to 35% percent until 2022, and 15% to 35% from 2023 onwards. The personal and additional exemptions are taken out, though. On the other hand, the non-taxable portion of 13th-month pay and other bonuses has been increased from P82,000 to P90,000.

On the part of employees, the above change will result in an increase in take-home pay, as the taxes that will be withheld by the employers will consequently reduce.

Passive income and other taxes. On cash and property dividend income, the good news on the part of affected individual stockholders is that the bicameral committee-approved bill retains the 10% tax rate. The previous proposal to double this tax rate was scrapped, lifting the anxiety among concerned individual stockholders and individual prospective investors.

For interest income on bank deposits, however, the taxes to be withheld on interest on foreign currency deposits doubled from 7.5% to 15%. Meanwhile, as regards the capital gains tax rate on capital gains from the sale of shares of stock not traded on the stock exchange, the rate will be a flat 15% on the net capital gain. The tax rate on capital gains from the sale of shares of stock not traded on the exchange is currently 5% (for the amount of gain not over P100,000) plus 10% (on the amount of gain in excess of P100,000). Interestingly, this could be a significant factor in considering future share sales, particularly for those involving millions or billions worth of capital gains.

Value-added tax (VAT). The VAT threshold was increased from P1,919,500 to P3,000,000 to provide relief to small and medium enterprises. There were also additions and subtractions from the list of VAT-exempt transactions.

A provision in the bill of which many are skeptical whether it will be implemented is the portion enhancing the VAT refund system. Under the bicam-approved measure, input VAT refunds shall be granted within 90 days from the submission of official receipts, invoices, and other documents. This appears to be promising. The bill further provides that a failure on the part of any official, agent, or employee of the Bureau of Internal Revenue to act on the application within the 90-day period shall be punishable under the law. Taxpayers are hopeful that the implementation side would really give life to the VAT refund provisions of the bill.

Compliance requirements. There will also be reforms in tax administration and compliance. One of the most welcome changes is the proposed simplification of income tax returns (ITRs). The bicam version provides that the income tax return shall consist a maximum of four pages in paper or electronic form. This can be a huge relief on the part of the taxpayers. Taxpayers currently fill out 12- or eight-page returns when filing and paying for income tax.  What a welcome development, indeed!

The above are just some of the many provisions in the bicam measure, and the bill is still subject to the approval of the President. While there are still some contentious provisions in the bill that many may not approve of, it is hoped the above measures on tax reform will generally improve the taxpayers’ trust in the Philippine tax system. Tax reform involves many trade-offs, as two interests should always be considered — the taxpayers’ and the government’s. As such, only the taxpayers and the government, in a give and take relationship, can make this tax reform work. This could be something that we can look forward to next year and in years to come.

Welcome aboard the TRAIN!

John Paulo D. Garcia 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.

Growth, inflation outlook of select Asia-Pacific economies

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