Nueva Ecija bird flu outbreak not seen affecting demand

December 5, 2017 | 12:01 am

THE POULTRY INDUSTRY said it has seen little impact on demand arising from the bird flu outbreak in Cabiao, Nueva Ecija.

“So far, no impact on prices and demand,” said lawyer Jose Elias M. Inciong, President of the United Broilers Association of the Philippines in a mobile message on Monday.

“The pattern set in other countries has been that after the first incident, people no longer panic and it’s just part of life as [is the case in] other animal diseases.”

Prices of chicken across the country dropped by an average of P5 to P10 per kilogram in the aftermath of the avian influenza outbreak in August.

The Philippines was expecting to declare itself bird-flu free by Dec. 20 under the 90-day international protocol counting from the last day of cleaning and disinfection of affected farms.

But a recent cull of 42,000 birds in Cabiao, which the Department of Agriculture confirmed is linked to bird flu, will likely set back the declaration.

Though the industry does not expect any disruption of the domestic market, exporters will see more of an impact.

“It would have an impact on exporters although very few companies are into it and the volume involved is insignificant relative to local production,” Mr. Inciong added.

Bureau of Animal Industry (BAI) officer-in-charge Ronnie D. Domingo said “we have very limited foreign markets for poultry products because of the cheaper products from other countries.”

In an e-mail interview on Monday, the BAI said total chicken meat exports for 2016 totaled 5.001 million kilograms (kg), of which 4.96 million were delivered to Japan, which has imposed a temporary ban on Philippine chicken meat.

“As of July 2017 (based on available data), Jan. to July 2016 export of chicken meat is 2,973,065 kg with 2,932,964 kg exported to Japan,” BAI said. — Janina C. Lim

Ejections

December 5, 2017 | 12:01 am

The 2017-2018 season of the National Basketball Association is a fourth done, and it’s clearly developing like no other before it. To date, 10 marquee names have earned ejections from games, a ridiculously high number given the league’s longtime — if unspoken — edict allowing stars a longer leash when it comes to reactions to calls or non-calls. In this regard, it must be noted that the official rules give referees considerable leeway when it comes to sending players to the showers — which is to say they have the discretion to exercise, or not exercise, patience.

Significantly, the arbiters’ relatively quick whistles came to the fore during the Cavaliers-Heat set-to last week, when LeBron James was banished for the first time in a 15-year career spanning 1,299 games. In the words of Kane Fitzgerald, the four-time Most Valuable Player’s penalty “was a culmination of a couple different acts… Immediately after the no-call, he turned and threw an air punch directly at me, and then he aggressively charged at me, and then he used vulgarity in my ear a few times.”

Which, for James, simply meant he did what he had hitherto been accustomed to doing without sanction. It didn’t look particularly egregious in real time, and he was probably surprised it elicited a strong reaction from Fitzgerald. To his credit, though, he accepted his fate without question both immediately and in retrospect — unlike, say, Stephen Curry or Anthony Davis, who went into fits and had to be restrained, or Kevin Durant, who continued spewing expletives and resorted to sarcasm when asked about it in the aftermath.

The point, to be sure, isn’t that referees are wrong to crack down on excessive complaining. Given the players’ athleticism and all the action it engenders, the men in gray are hard-pressed to see all the illegal contact, and being scolded constantly can’t be helping things any. On the other hand, there’s a reason stars are supposed to be given much leeway; above all else, they put backsides in seats. A middle ground is the ideal, but absent that, a spirited effort to strike it would go a long, long way.

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.

Citi moves to new PHL hub

December 5, 2017 | 12:01 am

CITI PHILIPPINES has inaugurated its new corporate headquarters in the upscale Bonifacio Global City, a move it said affirms its “confidence in the future economic development of the Philippines.”

In a statement sent late last week, Citi said the new 24-storey HQ will be home to 6,500 of its 7,700 staff, as well as to its country management team, institutional clients group, and groups that have regional and business process operations.

The bank called its new home Citi Plaza, whose opening ceremonies saw Bangko Sentral ng Pilipinas Governor Nestor Espenilla, Jr. and US Ambassador to the Philippines Sung Kim among the attendees.

“Citi Plaza underlines the importance of the Philippines to Citi,” Citi Asia Pacific Chief Executive Officer Francisco Aristeguieta was quoted as saying in the statement.

The bank first began its Philippine operations in 1902, “providing financial services that enable growth and economic progress,” the statement read.

The “opening builds on that legacy and affirms our confidence in the future economic development of the Philippines and providing the best possible work environment for our employees to serve our clients with distinction,” Mr. Aristeguieta said.

The Philippine headquarters is strategic for the bank given “the increasing demand of processing and service requirements being handled by the Philippine Service Center across 90 countries,” the lender said.

Five men and a lady

December 5, 2017 | 12:01 am

ONE NIGHT STAND: Mad Men is the latest in the monthly cabaret series held at 12 Monkeys El Pueblo, Ortigas Center. It will be held tonight at 9 p.m. The show features Raymund Concepcion, Juliene Mendoza, Raul Montesa, June Ofrasio, Chino Veguillas, and Yanah Laurel. The show is directed by Luna Griño-Inocian with musical direction by Rony Fortich. Tickets are P400. For table reservations, call 0917-570-3222.

PSEi extends drop on Wall Street’s performance

December 5, 2017 | 12:01 am

STOCKS continued to fall on Monday as the bellwether index took its cue from Wall Street’s weaker performance over the weekend.

The 30-member Philippine Stock Exchange index (PSEi) lost 0.73% or 59.57 points to close at 8,084.45 on Monday. The broader all-shares index likewise declined by 0.56% or 27.21 points to 4,758.65.

“Investors are still reeling in from last week’s rather poor performance… And there wasn’t much positive hints coming from the United States (US) over the weekend, except for the tax bill now. But before that, Friday, US markets were down. So from there we started off weak as well,” Philstocks Financials, Inc. Senior Analyst Justino B. Calaycay, Jr. said in a phone interview yesterday.

Wall Street fell on Friday, whipsawed by developments with a probe into Russia’s alleged involvement in the US election as well as with progress on a tax bill in Congress, according to a Reuters report.

The Dow Jones Industrial Average fell 40.76 points or 0.17% to 24,231.59; the S&P 500 lost 5.36 points or 0.20% to 2,642.22; and the Nasdaq Composite dropped 26.39 points or 0.38% to 6,847.59.

Regina Capital Development Corp. Managing Director Luis A. Limlingan said the decline in US stocks was due to concerns over the tax reform bill there.

“Philippine stocks began the Monday session on a cautious note following a decline in US stocks on Friday. There was added concern because Senate Republicans narrowly passed a bill to overhaul the US tax system,” Mr. Limlingan said in a mobile phone message yesterday.

The industrial index was the lone sectoral counter that managed to stay in positive territory, albeit gaining a minimal 0.04% or 4.45 points to end at 10,645.57.

The services counter booked the largest decline at 1.3% or 20.87 points to 1,576.91, followed by financials that closed 0.77% lower or 16.05 points at 2,060.20. Mining and oil slipped 0.75% or 85.64 points to 11,306.20; holding firms dipped 0.69% or 57.10 points to 8,221.56; and property went down 0.60% or 22.99 points to 3,785.93.

“At this point if you’ll go by the market’s history, you’ll usually find the market going up in the final two to three weeks of the year, we call this the Santa Claus Rally. There’s a lot of window dressing and of course the usual optimism that accompanies the Christmas cheer,” Philstocks’ Mr. Calaycay said.

A total of 1 billion issues changed hands on Monday, valued at P7.55 billion, down from Friday’s P9.74 billion.

Decliners outpaced advancers, 119 to 68, while 55 stocks were unchanged.

The market stood at a net foreign selling position of P474.20 million on Monday, higher than the P190.46 million logged on Friday last week. — Arra B. Francia with Reuters

Royal Mandaya Hotel plans to add 3rd tower

December 5, 2017 | 12:01 am

DAVAO CITY — The Royal Mandaya Hotel, one of the oldest and biggest in the city, is planning to build a third tower with a three-level parking area and a helipad for VIP guests.

The new 25-storey building will occupy the hotel’s existing parking area and commercial space.

“We are now preparing the third tower… We are already doing the initials,” Royal Mandaya General Manager Benjamin J. Banzon, Jr. said in an interview, adding there is no target date yet for the start of construction.

“No timeline yet as we are still studying the project,” he said.

“It would be the place that will address one of the weaknesses of the hotel, which is the parking area because we will be putting three floors depending on the requirements of having the numbers of rooms against the available slot for the parking,” Mr. Banzon said.

The Royal Mandaya currently has 181 rooms, and the third building is being considered to have about 120. Its facilities include a ballroom and a recently renovated cafe-restaurant.

“The vision of putting this (restaurant) extension is already in our blueprint way back then and has now became a reality… The coffee shop has been rundown already and outdated and with the increased number of guests and revenue, they finally invested for the expansion and renovation,” said architect James Jao.

Royal Mandaya is also planning to upgrade the poolside restaurant.

“For 19 years, it’s the only area that we considered untouched. That would be our next physical area for development,” he said.

In July this year, the Escandor Group of Companies that owns the hotel acquired another establishment in the downtown area, the Royal House Travel Inn and Suites owned by the Nograles family.

The property, which has been renamed Davao Royal Suites and Residences, has undergone a P14.5-million refurbishment, but is being eyed for conversion into a mixed-use high-rise building.

Mr. Banzon said they plan to maximize the height limit in the area and, if given approval by the city government, will go for a 35-floor building.

“We are still on our time frame for three years. Now we are reviewing and analyzing. The original plan is a mixed-use development, a combination of hotel, commercial and condo. Since we already agreed on that particular project, now we are now defining on how much space are we giving for the condo, space for the hotel, and space for the commercial,” he said. — Maya M. Padillo

Air crew saw North Korea missile reenter atmosphere

December 5, 2017 | 12:01 am

SEOUL — An airplane crew flying over Japan saw North Korea’s missile as it plunged back through the atmosphere last week, their airline said Monday, as South Korea and the US kicked off their largest ever joint air exercise.

Hong Kong carrier Cathay Pacific released a statement saying the crew of flight CX893 spotted “what is suspected to be the reentry” of the missile as they flew from San Francisco to the southern Chinese city.

In a separate message to staff, Cathay general manager Mark Hoey said the crew described seeing the missile “blow up and fall apart,” the South China Morning Post reported.

Pyongyang sent tensions soaring on the Korean Peninsula five days ago when it announced it had successfully test fired a new intercontinental ballistic missile (ICBM), which it says brings the whole of the continental United States within range.

Analysts say it is unclear whether the missile survived reentry into the earth’s atmosphere or could successfully deliver a warhead to its target — key technological hurdles for Pyongyang.

The isolated and impoverished North has staged six increasingly powerful atomic tests since 2006 — most recently in September — which have rattled Washington and its key regional allies South Korea and Japan.

On Monday the US and South Korea started their largest ever joint air exercise, an operation Pyongyang has labeled an “all-out provocation.”

The five-day Vigilant Ace drill involves 230 aircraft, including F-22 Raptor stealth jet fighters, and tens of thousands of troops, Seoul’s air force said.

Pyongyang over the weekend blasted the drill, accusing US President Donald J. Trump’s administration of “begging for nuclear war.”

As tensions surged, US Senator Lindsey Graham, an influential Republican and foreign policy hawk, warned that the US was moving closer to “preemptive war” with the North.

“If there’s an underground nuclear test (by the North), then you need to get ready for a very serious response by the United States,” Mr. Graham told the CBS show Face the Nation.

In recent years Pyongyang has accelerated its drive to develop nuclear and missile technology capable of threatening the US, which it accuses of hostility.

“The preemption is becoming more likely as their technology matures,” Mr. Graham said.

His remarks echoed those of Mr. Trump’s National Security Adviser HR McMaster, who told a security forum on Saturday that the potential for war with the North “is increasing every day.”

As well as featuring the latest generation of stealth fighters, this year’s wargames involve simulated precision attacks on the North’s military installations, including its missile launch sites and artillery units, Yonhap news agency said, citing unnamed Seoul sources.

RISKS OF WAR
The North has boasted that the Hwasong 15 ICBM tested on Wednesday is capable of delivering a “super-large” nuclear warhead anywhere in the US mainland.

Analysts agree the latest test showed a big improvement in potential range, but say it was likely achieved using a dummy warhead that would have been quite light.

They say a missile carrying a much heavier nuclear warhead would struggle to travel as far.

They are also skeptical that Pyongyang has mastered the sophisticated technology required to protect such a warhead from the extreme temperatures and stresses encountered as the missile hurtles back to Earth.

The latest launch, which saw the missile drop into Japan’s economic waters, was condemned by Tokyo’s parliament Monday, which slammed the North’s rogue weapons program as an “imminent threat.”

Washington has called on China, the North’s major ally, to do more to rein in Pyongyang’s nuclear ambitions.

On Monday China’s foreign ministry on Monday warned that the Korean peninsula remained “highly sensitive” and called on all sides to “do more things to ease the tension and avoid provoking each other.”

The North’s leader Kim Jong-Un has presided over significant progress in the country’s widely-condemned nuclear and missile programs since taking power in 2011.

A nuclear standoff between Messrs. Kim and Trump in recent months has seen the pair trade personal insults.

The tensions have fueled concerns of another conflict, more than six decades after the 1950-53 Korean War that left much of the peninsula in ruins.

But even some Trump advisers say US military options are limited when Pyongyang could launch an artillery barrage on the South Korean capital Seoul — only around 50 kilometers (30 miles) from the heavily-fortified border and home to 10 million people.

Estimates on the potential casualties from another war vary widely.

The North has thousands of conventional artillery units along the border with the South that analysts say could kill tens of thousands.

In one of the latest estimates, Scott Sagan, senior fellow at the Centre for International Security and Cooperation at Stanford University, said the toll could be as high as one million people from just the first day of a conflict. — AFP

Palace defends 8888 hot line

December 5, 2017 | 12:01 am

MALACAÑANG HAS defended its 8888 Complaint Hot line after detained Senator Leila M. de Lima on Monday asked the Senate to investigate its implementation to ensure its effectiveness and accessibility to ordinary citizens. “Ano bang gusto niyo pa ano? Nakita niyo naman na walang tigil ang pagsisibak ni Presidente sa mga taong gobyerno na may alegasyon ng korapsyon (What else do you want? You have seen that the President has not stopped in firing corrupt government officials),” Presidential Spokesperson Harry L. Roque Jr., said. Ms. De Lima filed Senate Resolution No. 550 urging the Senate to look into the purported failure of the hot line in accommodating concerns and complaints about corruption in government offices. The hot line manned by “live agents,” created in 2016 through Executive Order no. 6, is intended to take in reports of corrupt officials and other complaints. However, Ms. De Lima, pointed out that most of the calls have not been about corruption and that some 1.4 million calls were not accommodated because the unit was “undermanned.” — Rosemarie A. Zamora

ASEAN manufacturing purchasing managers’ index, November

December 5, 2017 | 12:00 am

THE PHILIPPINE manufacturing sector led peers in the Association of Southeast Asian Nations (ASEAN) in terms of improved business conditions for the second straight month in November, according to a survey conducted by IHS Markit for Nikkei, Inc. Read the full story.

How PSEi member stocks performed — December 4, 2017

December 5, 2017 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Monday, December 4, 2017.

Nation at a Glance — (12/05/17)

December 5, 2017 | 12:00 am

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

New Year reminders

December 5, 2017 | 12:00 am

The holidays are upon us! Homes, offices, shopping centers, and places of worship are adorned with sparkling decorations. Gifts for family, friends, and colleagues are being wrapped in red and green. The traditional nine-day dawn mass or Simbang Gabi to usher in the birth of Christ is about to start in eleven days. Preparations are being made for Noche Buena (Christmas Eve dinner) and Christmas Day get-togethers. After Christmas, it is straight on to the New Year celebrations that will be filled with much eating, drinking, gift-giving, partying, and setting off fireworks.

As the smoke from the fireworks clears and our hangovers settle when we wake up on Jan. 2, let us be reminded of the filing deadlines and renewals that have to be complied with during the first half of the new year.

Renewal of mayor’s permit and payment of local business tax (LBT) and real property tax (RPT) with the Local Government Unit (LGU):
All corporate entities — whether single proprietorships, partnerships, corporations, branches, representative offices, or non-stock, non-profits (NSNPs) — are required to renew their business or mayor’s permit with the LGU where they operate on or before Jan. 20 each year. Regional operating headquarters (ROHQs), as well as enterprises registered with the Philippine Economic Zone Authority (PEZA), are generally exempt from a mayor’s permit, but some LGUs require them to secure a business/mayor’s permit and pay certain regulatory fees that are based on the size of the office premises. Enterprises registered with the Board of Investments (BoI), on the other hand, are not exempt from securing a business/mayor’s permit and paying regulatory fees.

Income-generating corporate entities are also required to pay LBT, which may be paid annually or quarterly on or before the 20^th day of the first month of the quarter. The LBT will depend on the LGU’s local tax code/ordinance, but most local tax codes prescribe the annual LBT as a fixed amount up to a certain level of gross sales or receipts for the preceding calendar year, plus a percentage of the excess sales or receipts. If there were new or additional activities undertaken in 2017, there is a need to confirm what LBT rate will be applicable, as different rates apply to different activities (i.e., sale of goods vs. sale of services; exports vs. domestic sales; sale of essential vs. non-essential goods, etc.)

The LBT for 2018 will be based on the gross sales or receipts for 2017. In this case, the taxpayer will be required to execute a certification of its estimated gross sales or receipts for 2017, since its audited financial statements (AFS) are still being prepared.

While some LGUs require an ROHQ and PEZA-registered enterprise to secure a mayor’s permit, they are exempt from paying LBT. During its income tax holiday (ITH), a BoI-registered enterprise is exempt from paying LBT. However, if the PEZA or BoI-registered enterprise has income from unregistered activities, it is required to pay LBT on the said income.

Real property owners, whether individual or corporate, are also liable to pay RPT on real property such as land, buildings, machinery deemed real property, and other improvements. If there were newly acquired real properties, machinery, or additional improvements, there is a need to file a sworn declaration on the value within 60 days from the acquisition, installation, or completion for RPT purposes.

RPT starts to accrue on Jan. 1 of each year and may be paid annually on or before March 31, or in quarterly installments on or before the last of day of each quarter. The LBT will be fixed by the particular local tax code/ordinance, but the rate will not exceed 1% of the assessed value in the case of provinces and 2% of the assessed value for cities or municipalities in Metro Manila. Depending on the use/classification (i.e., residential, commercial, industrial, and agricultural) of the property, as well as its fair market value (FMV), there are prescribed assessment levels which are multiplied to the FMV to arrive at the assessed value. The RPT rates are then multiplied by the assessed value to arrive at the RPT due. If the LGU concerned revised the assessment levels and/or the FMVs, the RPT payments for 2018 will be based on these revised figures.

In addition to the basic RPT on land, there will be levied a Special Education Fund of 1% of the assessed value.

A BoI-registered enterprise is not exempt from RPT. A PEZA-registered enterprise under ITH is not exempt from RPT on land and/or buildings but is exempt from RPT on machinery (considered real property) for three years from acquisition. A PEZA-registered enterprise opting for the 5% gross income tax (GIT), in lieu of all national and local taxes, is exempt from RPT on land, buildings, or machinery deemed real property, except for RPT on land owned by an ecozone developer.

Filing of the annual General Information Sheet (GIS) with the Securities and Exchange Commission (SEC):
In addition to submitting its AFS, stock, as well as non-stock corporations, are required to submit a GIS containing, among others, certain company information as well as information about its officers, directors, and stockholders within 30 calendar days from the date of its annual stockholders’ meeting (ASM). If no meeting is held, the corporation shall submit the GIS not later than Jan. 30 of the year following. Should an ASM be held thereafter, a new GIS shall be filed.

Foreign corporations with an SEC license to do business — such as branches, representative offices, ROHQs or RHQs — also required to submit their GIS within 30 calendar days from the issuance of their license and, thereafter, within 30 calendar days from the anniversary date of the issuance of the said SEC license.

Non- or late filing of the GIS (as well as AFS) will subject the entity to monetary penalties. Corporate entities need to ensure that they file accurate reports in a timely manner because updated compliance is a prerequisite for the SEC to even accept any applications filed with it. Filing timely reports is also a condition precedent before the SEC can issue a Certificate of Good Standing. This certificate, in turn, is one of the requirements in applying for an Importer’s Accreditation with the Bureau of Internal Revenue and the Bureau of Customs.

Submission of branch securities deposit to the SEC:
Within 60 days from issuance of its SEC license to do business, a branch of a foreign corporation is required to deposit with the SEC securities with an actual market value of at least P100,000, for the benefit of its creditors. Moreover, within six months from the close of the accounting period (fiscal or calendar) of the Philippine branch, it will be required to deposit additional securities equivalent to 2% of the amount by which the branch’s gross income for the said year exceeds P5 million.

The most common securities deposited with the SEC are in the form of government-issued treasury bills (T-bills), which can be purchased from banks. The bank will purchase T-bills and issue a Confirmation of Sale to the Philippine Branch. The bank will also write to the Bureau of Treasury (BoT) to request that the T-bills be earmarked in favor of the SEC for the account of the Philippine branch. The Confirmation of Sale of T-Bills and letter of earmarking will then be submitted to the SEC in compliance with the branch securities requirement.

As with the GIS and AFS filing, there are monetary penalties for non-compliance with branch securities deposit. Updated compliance is, likewise, a condition for the SEC to accept any application that the Philippine branch may file, as well as for the issuance of a Certificate of Good Standing.

Submission of PEZA Reports:
The timely and complete submission of PEZA reports is required for PEZA to process and issue certificates of VAT zero-rating, available incentives, and entitlement to 5% GIT. The Certificate of VAT Zero-rating is particularly required by most suppliers of goods and services in order not to pass on input VAT to the PEZA-registered enterprise.

These year-end PEZA reports include:
a. Economic Zone Monthly Performance Report (EZMPR) for December — on or before Jan. 20 of the following year

b. Annual ITR and AFS with attachments — 30 days after filing with the BIR

c. Annual Report — 90 days after the end of the accounting period

d. Income-Based Tax Incentives under TIMTA — 30 days from the filing of final ITR

e. VAT, Excise Tax and Duty-Based Incentives under TIMTA — on or before March 15 of the following year

f. Other Data for Cost-Benefit Analysis — 90 days from filing of final ITR

BoI Certificate of Entitlement and submission of annual reports:

In the case of BoI-registered enterprises, there is a need to secure a Certificate of ITH Entitlement (CoE) prior to filing the ITR. In addition, with one month from the filing of the final ITR, an application to validate income tax exemption should be filed. BoI-registered 100% exporters of goods are also required to secure their annual VAT zero-rating certification to present to suppliers.

In a 2017 issuance, the BoI recently streamlined the submission of reports by doing away with the semestral report. Instead, only the annual report (BoI Form S-1) will be submitted starting 2016 reporting and onwards, together with the AFS and ITR (saved on CD) on or before April 30, for enterprises with a calendar year, and four months after the close, for those on the fiscal year.

As we get into the full swing of holiday celebrations, let us keep a watchful eye on the renewals and filings that need to be complied with as we start the New Year with hope and good tidings.

Tata Panlilio-Ong is a director of the Tax Advisory and Compliance of P&A Grant Thornton.