Cambodia changes election law ahead of 2018 vote

July 11, 2017 | 6:01 pm

PHNOM PENH — Cambodia’s parliament on Monday amended the law to ban people from associating with anyone convicted of a criminal offense, a move the opposition says aims to hobble rivals of Prime Minister Hun Sen ahead of a general election next year.

Hun Sen’s ruling Cambodian People’s Party (CPP) voted to change the election law to ban political parties from engaging with such individuals, who also face bans on participating in politics through images, audio recordings and writing.

Political parties which violate the law face a five-year suspension or could be dissolved.

The amendment effectively bans former opposition leader Sam Rainsy, who lives in exile in France to avoid arrest in a number of convictions, from campaigning from abroad for the Cambodia National Rescue Party (CNRP).

The opposition CNRP boycotted Monday’s National Assembly vote, calling the changes illegal.

“The proposed law is politically motivated and is a political pressure on individual rights, the party and on rivals,” the CNRP said in a statement.

The ruling CPP denied the changes were a bid to rein in the opposition.

“These amendments are aimed at promoting the rule of law … and strongly respect multi-party democracy,” CPP lawmaker Cheam Yeap told parliament before all 66 lawmakers present voted to back the changes.

KEM SOKHA
Hun Sen has ruled Cambodia for more than three decades and has shown no signs of wanting to relinquish power.

His party won local elections last month.

The opposition CNRP did not fare badly in the vote, which many saw as a litmus test of its position ahead of the all-important national poll, winning about 43% of the vote.

Commenting on the change to the law, ASEAN Parliamentarians for Human Rights said the CPP was expanding its harassment of the opposition.

Hun Sen proposed the amendments last month with the aim of removing Sam Rainsy from the political equation, one analyst said.

“This is the CPP’s way of consigning Rainsy to an early retirement, but expect him to continue his campaign against Hun Sen from abroad,” said Sebastian Strangio, author of the book Hun Sen’s Cambodia.

Strangio said the impact on the CNRP remains to be seen as current opposition leader Kem Sokha has shown that he is able to lead the party on his own.

Sam Rainsy resigned from the CNRP in February before a law was adopted to bar those convicted of an offense from seeking office.

He continues to be an active voice in Cambodia’s politics, however, posting comments on social media platforms. — Reuters

Filling Spaces (07/11/17)

July 11, 2017 | 6:01 pm

Parkway Corporate’s top-off

THE FILINVEST group said it is on track to completing its office condominium Parkway Corporate Center by 2019 after a top-off ceremony set for June.

“Parkway Corporate Center… is set for completion in 2019,” it said in a recent press release.

The office condominium is located within the company’s flagship master planned township project, Filinvest City, in Alabang.

Designed by H1 Architecture and Design, the tower will have units averaging 36 square meters in size and targeted at boutique companies as well as small enterprises “averaging six to 30 employees,” the statement read.

“For investors, Parkway Corporate Center presents a unique opportunity to own an office unit and is an excellent investment,” it added.

More awards for Daiichi

GRADE-A HIGH RISE office builder Daiichi Properties, Inc. is adding another feather in its cap after already bagging three international real estate awards in the past four years.

Daiichi said its Web site http://daiichiproperties.com earned it the five-star best developer Web site Philippines award at the recently concluded 2017 Asia-Pacific Property Awards held in Bangkok, Thailand.

“We are proud of the fact that Daiichi Properties’ culture of excellence is not only limited to our office developments, which are at the core of our business, but also in other aspects of our operations,” Charmaine Uy, the company’s senior vice-president, said in a statement.

Three of the builder’s office developments are internationally acclaimed: the 32-storey One World Place, the 27-storey World Plaza and The Finance Centre.

All three are designed by architectural firm Gensler and located with the upscale business district Bonifacio Global City. They are all LEED (Leadership in Energy and Environmental Design) — certified too.

Toothless penalty?

July 11, 2017 | 6:01 pm

Let’s Talk Tax
Francis B. Rebuldela

On Aug. 19, 2013, the Supreme Court (SC) decided in the case of Deutsche Bank AG Manila Branch vs. Commissioner of Internal Revenue (G.R. No. 188550) and made the emphasis that the BIR must not impose additional requirements that would negate the availment of the reliefs provided for under international agreements. The SC was referring to the BIR requirement to file a tax treaty relief application (TTRA) within a specified period to avail of the treaty rates.

The SC highlighted in the case that tax treaties are entered into to minimize, if not to eliminate, the acerbity of international juridical double taxation. This is why tax treaties are also known as double tax treaties or double tax agreements. The SC goes on to say that tax conventions are drafted with a view towards the elimination of international juridical double taxation. A state that has contracted valid international obligations is bound to make in its legislations those modifications that may be necessary to ensure the fulfilment of the obligations undertaken. Laws and issuances must ensure that the reliefs granted under tax treaties are accorded to the parties entitled thereto.

However, for the BIR, filing of TTRA is still required not for the approval of privileges but only for regulatory purposes and compliance checking.

Flash forward to 2017 when the BIR issued Revenue Memorandum Order (RMO) 8-2017 that simplified the filing of TTRA.

The RMO provides that non-residents claiming tax treaty relief shall submit a duly accomplished Certificate of Residence for Tax Treaty Relief (CORTT) form (Part I and II) or the prescribed certificate of residency with Part I (A, B and C) and II of the CORTT form to their withholding agents/income payors before income is paid or credited. Upon compliance with the CORTT requirements, the preferential treaty rates for interest, dividends and royalties shall be applied outright.

The withholding agent/income payor shall file BIR form 1601-F and BIR Form 1604-CF and shall pay the withholding taxes due, based on the treaty provisions, in accordance with the Tax Code and existing revenue issuances.

The withholding agent shall submit the CORTT form to the BIR International Tax Affairs Division (ITAD) and Revenue Division Office 39 within 30 days after the payment of withholding taxes.

But what is eyebrow-raising in this new RMO is Section 7 stating the penalties for non-compliance. The BIR severely penalizes non-compliance, resulting in the denial of the use of the preferential treatment rate or even the disallowance of the exemption. Hence, although the BIR has announced that the filing of TTRA with ITAD has been waived, non-compliance with the new RMO would still amount to a denial of the use of preferential rates. Bottom line, a taxpayer is still required to comply before reaping the benefits of tax treaties.

Failure to supply and complete the CORTT Form will render the non-resident and withholding agent non-compliant, similar to that of non-filing of TTRA. The RMO provides that the discrepancy between the information contained in the CORTT Form and the information on the 1601-F is also a ground for disqualification.

There is a discrepancy when the pieces of information provided in the CORTT Form and 1601-F are inconsistent. Note that the CORTT form is filed prior to payment of the income and submitted after remitting the withholding tax. For recurring payment of interest and royalties, discrepancies may arise as a result of movements in foreign exchange rate and other instances during the effectivity of the loan or royalty agreement. It is possible that the amount indicated in the CORTT form will differ from the amounts in the 1601-F. Hence, is there a risk that the validity of the treaty rate will be questioned, especially during audit?

Furthermore, the RMO still provides a deadline for submission of the CORTT form which is 30 days from payment of the withholding tax. According to the RMO, failure to beat this deadline will make the income payee liable to the regular income tax.

But the highlight of the SC decision in 2013 stated that the failure to strictly comply with the domestic law requirement under RMO No. 1-2000 to file a TTRA 15 days prior to a transaction should not deprive a taxpayer of a benefit of a tax treaty.

Or will the taxpayer who failed to file the CORTT be deprived of the remedy to refund the excessively withheld tax if, as has happened in previous cases, the taxpayer was only made aware of their tax treaty privilege and the CORTT requirement after the regular tax has been withheld and remitted?

On my point, did the BIR amend the Supreme Court Decision in 2013? Or to be more blatant about it, is the BIR courting contempt? A more cerebral reading will point to the fact that the penalty is toothless. Before the provision existed in a regulation, no less than the Chief Justice Maria Lourdes P. A. Sereno has spoken.

Did the Supreme Court preempt the effectivity of the RMO?

Francis B. Rebuldela is an associate with the Tax Advisory and Compliance division of P&A Grant Thornton.

How PSEi member stocks performed — July 10, 2017

July 11, 2017 | 6:01 pm

Here’s a quick glance at how PSEi stocks fared on Monday, July 10, 2017.

071117PSEi1024

First meeting

July 11, 2017 | 1:33 pm

This handout taken on July 7, 2017 released by the German government shows US President Donald Trump (L) shaking hands with his Russian counterpart Vladimir Putin during a G20 summit in Hamburg, northern Germany, on July 7, 2017.

Continue

Philippine trade year-on-year performance

July 11, 2017 | 1:25 pm

MERCHANDISE EXPORTS grew by double-digit pace for the third straight month, while factory output increased at a faster clip in May, the Philippine Statistics Authority (PSA) reported yesterday, supporting hopes for robust economic growth this quarter. Read the full story.

Resistance

July 11, 2017 | 1:25 pm

Venezuelan opposition activists remain behind a shield as they clash with riot police during a protest against Venezuelan President Nicolas Maduro in Caracas on July 10, 2017.

Venezuela hit its 100th day of anti-government protests amid uncertainty over whether the release from prison a day earlier of prominent political prisoner Leopoldo Lopez might open the way to negotiations to defuse the profound crisis gripping the country.

Raging bull

July 11, 2017 | 1:11 pm

FRANCE — A man vaults over a bull on June 26, 2017 at the Jean Barrere Arean in Escalans.

A horror video game is born (thanks to crowdfunding)

July 11, 2017 | 2:11 am

For a lot of gamers, creating an original video game is “the dream.” Discussions between gamers sometimes revolve around how to make current games better or how to make something completely original. But successfully launching a game requires time, skills, talent, and, of course, money.

A company of millennial game developers (their “oldest” employee is 27 years old), took to Kickstarter to fund their horror video game, The Letter. The company, called Yangyang Mobile, launched their Kickstarter campaign in October 2015, hoping to raise $30,000, and ending up raising more than that. By November 2015, they had $33,946—enough money to complete their game. But that’s not all. They opened a subsequent campaign on IndieGoGo, which helped them raise an additional $5,000, and allowed them to hire voice actors to breathe life to their game. The game will be released on July 24.

Even if the days before game release could be considered the most hectic time in a game developer’s career—with all the fine‑tuning that must be done to ensure that the game is running perfectly and the additional advertising to remind the market that, hey, we still exist—Yangyang Mobile co‑founder Danni Ann Taylan took the time to talk to SparkUp about the ups and downs that their company experienced in completing their first PC game.

Art Erka Capili Inciong

“At first we were making mobile games then we decided to switch to desktop,” said Ms. Taylan, who named the company after her child. “Supposedly our company’s goal was to create small mobile games and then see if one of them clicks. But then the mobile market is very saturated, so many games are released every day. So that’s why we decided to find a niche and decided to make a visual novel game.”

Visual novel is a type of video game that is, indeed, notable for being story‑driven, with players making choices that would affect how the game ends. Playing a visual novel often entails a lot of reading, and much pause, literally, when you have to make a game‑changing choice or are rewarded with more character development and art. (Think of it as the video game version of the Choose Your Own Adventure books that were so popular in the ’80s and ’90s.) This style of video game is often used for romance games, but popular examples of visual novels also include the courtroom drama series of Ace Attorney and the horror game Corpse Party (which is one of the inspirations behind The Letter, along with several Japanese horror movies—the people at Yangyang being huge fans of Japanese horror and pizza).

“We needed to find that certain market that we can hit: it’s not that big, but it’s enough for us to have a following for our future games,” explained Ms. Taylan. “Right now we’re targeting the visual novel market, gamers who enjoy how to read. It’s not a very popular genre but it’s big enough for us to make a market out of it.”

Art Erka Capili Inciong

Despite being overshadowed by other game genres such as fighting games, action‑adventures and platformers, visual novels have a huge following on Kickstarter, which is why Yangyang games chose the American‑based crowdfunding platform to raise funds for their game. “There’s a strong support for visual novels on Kickstarter compared to IndieGoGo. I think it’s because even if it’s a niche market, the players are supportive. They really help developers get their games started in order to play something new,” said Ms. Taylan.

“Majority of our Kickstarter backers pledged $10 for the game, but we’ve also had some whales (large supporters) that paid around $1,000‑$2,000 for the game.” In fact, one whale in particular pledged $3,000, an amount that came with the power to design a new playable major character for the game. From its original six, the game now has one more playable character. The Kickstarter supporters who pledged $80 or more to the game were given the chance to test the game, having their input on design and story changes (such as the main monster design and when to throw in jump scares) considered throughout the game development.

Putting the game up on Steam, a popular gaming platform where players can buy games and communicate not just with each other but also with game developers as well, also helped Yangyang Mobile get the word out about The Letter. Steam Greenlight, a service once offered by the platform that allowed game developers to get feedback on their developing game, showed there were enough people on Steam who were willing to buy The Letter upon its release. “Just putting the game up on Steam Greenlight helped in publicity because there are a lot of eyes on Steam. When our game was on Greenlight, a lot of players—our target market is in the US—discovered the game just by browsing through Steam,” Ms. Taylan said. “We even have a Steam store page up now. The organic traffic in Steam is high, so we get 5,000 to 10,000 unique views on the game even if it hasn’t been released yet.”

For added publicity, Yangyang mobile also sent copies of the game’s demo to Youtubers who have Let’s Play channels. “We emailed a lot of them—of course, a lot of them ignored us. But we also got the interest of some of them like The Anime Man who has a lot of subscribers who found our Kickstarter campaign because of his video,” said Ms. Taylan.

The story of The Letter follows seven playable characters as they explore the haunted Ermengarde Mansion. (Yes, they named it after the character from Princess Sarah/A Little Princess.) The cast of playable characters includes a Filipina real estate agent, a Scottish history teacher, an American photographer, an American detective, a British couple and an Irish interior designer. Their relationships with each other and the choices of the player determine if they and their friendship can survive the curse of the Ermengarde mansion. (“As much as possible we want the characters to be relatable, everyday people that you can encounter in real life,” said Ms. Taylan.) The game also has quick-time events which can add tension.

As the game nears its release, Ms. Taylan said Yangyang has another game in the works. “We’re trying to make a girl‑on‑girl romance game next,” she said. “That’s also a popular type of visual novel game. We’re also thinking of making a hack‑and‑slash type game.” Art and previews of “Project Yuri” (working title), the girl‑on‑girl romance visual novel can be seen by supporters of Yangyang mobile on Patreon.

The Letter will be released on July 24. Visit www.yangyangmobile.com to stay posted.

Saving the world through energy preservation

July 11, 2017 | 1:06 am

The future generation is probably more dependent on electricity than their predecessors, but these students are out to save the world one energy issue at a time.

During the final competition of Go Green in the City 2017, a national intercollegiate contest organized by Schneider Electric Philippines at Ascott Hotel BGC, Taguig City in June, students from three universities presented projects aimed at addressing different issues in energy consumption around the world.

The winning team from the De La Salle University (DLSU), led by Aaron Jules de Guzman and Iliana Bernice Tan, pitched that preserving energy can begin from corporate buildings in smart cities all over the world.

According to these green archers, more high‑rise buildings that bring about continuous urbanization contributes to the booming usage of energy around the world. High-rise buildings account for 40% of the total energy consumption and 30% of the carbon dioxide emissions globally. The main contributor to this are the cooling systems that amount to 48% of a building’s total energy consumption.

While there are currently cooling solutions and building technologies available in the market, these products usually have downsides. The duo seeks to address this issue through their project called Radiative-heat-recovering (RHR) glass.

RHR glass serves as an energy-absorbing insulation system, which reduces the total heat gain of a building while supplying energy for its cooling system.

The project has four parts: a typical window glass, a spacer that provides structural support for the glass, vacuum insulation that prevents conductive and convective heat transfer to the building, and solar tube collector integrated that absorbs the radiative heat from the sun to be utilized by the cooling system of the building.

Smart, right?

This wining team from DLSU will represent the Philippines in the Asia Pacific finals of the competition in July.

Meanwhile, Carmelle Pallilo and Jon Michael Mendoza from the University of the Philippines‑Diliman won second prize for their project called SMART Open Window (OW), which seeks to help cities around the world in meeting growing energy and functional demands while reducing negative environmental, health and safety impacts.

SMART OW creates a system using specialized window panels that can control, renews power generation and monitor. It works in three modes: OW‑Control that uses real-time environmental evaluations and preset user configuration to regulate and automate opening of windows, OW‑Charge that channels solar energy for in-house lighting, and OW‑Check that monitor functions for air quality and temperature.

These modes also work to decrease carbon footprints, use renewable energy for artificial lighting, and generate substantial data on air quality and urban temperature patterns that can be used for research and development.

The tandem of Meave Eilinger and Rowel Facunla from the Technological University of the Philippines-Quezon City proposed a way to lessen urban heating by converting thermal heat energy to electrical energy with the use of fiber‑reinforced tiles.

The team applies the flywheel effect, a concept that follows that materials having high thermal mass can store thermal energy and release it back when the ambient is cooler. The project, which utilizes cement mixed with carbon and steel fiber, aims to convert the stored heat to usable energy.

What can you do to conserve energy?

What will give birth to a Filipino unicorn?

July 11, 2017 | 1:00 am

The existence of unicorns—mythical creatures depicted in medieval folklore as horse‑like animals with a single horn on their forehead—remains a big question until now. But in business, these whimsical creatures certainly exist. They are startups that have reached a valuation of $1 billion or more.

Famous young companies that have gained the title are Uber, Grab, Airbnb, Xiaomi, and Spotify, to name a few.

In the Philippines, however, a unicorn is yet to emerge.

Art Samantha Gonzales

For Manuel Ayala, managing editor and chief operating officer of investment banking company IRG, mentorship is the key for a Filipino startup to flourish in the global business scene.

“Mentorship is highly important. It is the secret weapon to success,” he said.

Mr. Ayala is also the co‑founder and chairman of Hatchd Digital, an accelerator for tech‑related startups in the country. Among the young companies that the group has supported are online pawnshop PawnHero and digital news website Rappler.

Hatchd Digital provides selected tech startups with six‑to‑nine month feedback sessions and an access to more than 3,000 mentors worldwide, on top of a financial assistance.

“Personally I don’t want to focus on the word unicorn or on a particular number. Our endeavor is to help companies accelerate and scale up from where they are,“ he said.

If you ask Jomari Mercado, national technology officer of Microsoft Philippines, local startups should know how to utilize technology effectively.

“They should find the real business reason behind investing in technology. It’s the same concern we have in a major organization,” he said. “Same thing with startups, if they just buy technology just for the sake of technology it’s not gonna get them anywhere. They should invest in right technology because there is a use for it in their business process.”

According to Mr. Mercado, a Filipino unicorn is “just around the corner.” It’s just a matter of “how well they can leverage on what it takes.”

“Microsoft is very firm in supporting startups, as well as in encouraging the proper use of technology and all the latest development in technology that will turn out to be beneficial to companies whether large, small, or startup, ” he said.

Like Mr. Mercado, Donald Lim—CEO of global media and digital marketing firm Dentsu Aegis Network Philippines—is also confident that a Filipino unicorn will exist.

“There is no way for the Philippines not to have a unicorn because we’re the most creative people in the world,” he said.

According to him, startups in the country have strong ideas, but selling their products to the market remains to be a big challenge.

Aside from the right funding, effective marketing strategy, and clear target audience, Mr. Lim said local startups needs “a bit of humility.”

“They have a good idea, but when people give them new ideas, they think their idea is already the best,” he explained. “I think they need to be more open. They need to get the help from the venture side, marketing side, and even the government.”

For Francis Simisim, CEO of technology products and services provider Social Light, Inc., the government has a huge role in developing a startup that could become a unicorn. He said the government should establsih a friendly environment for investors.

“It will come down to the government and their policies on pushing for more investors and having a more investor‑friendly environment,” he said.

“With the government’s support, we can expect the private sector to follow on supporting these disruptive startups. For unicorns to exists, the environment must be investor friendly.”

PHL credit information system on track to go live by January

July 11, 2017 | 12:03 am

STATE-RUN Credit Information Corp. (CIC) is on track to get the country’s centralized credit information system up and running by January next year, albeit noting that several system issues may delay the process.

CIC_071117 — CIC President and Chief Executive Officer Jaime P. Garchitorena

The CIC said its January 2018 target for the database to go live may be pushed back should the firm experience issues in the system primarily involving security measures.

“I think so, the only thing that might possibly delay it is if we encounter any major connectivity issue or any security issues,” CIC President and Chief Executive Officer Jaime P. Garchitorena told BusinessWorld in an interview when asked if they are on track to make the database live by January.

Mr. Garchitorena added CIC could face these types of issues amid constant reports of hacking, but noted the firm remains keen on keeping to its schedule.

To recall, in June, technology troubles hit some of the country’s biggest banks, namely Bank of the Philippine Islands (BPI) and BDO Unibank, Inc. (BDO), which the central bank said likely dealt a “reputational” blow to these lenders.

BPI said the incorrect account balances that occurred early last month due to human error after a programmer made a mistake in posting debit and credit transactions that doubled amounts deposited or withdrawn. Some 1.5 million BPI clients were affected by the data processing error that saw about P46 million mistakenly withdrawn from bank accounts.

Meanwhile, Sy-led BDO Unibank, Inc. in June said it recorded at least 95 cases of card fraud after seven automated teller machines were reportedly tapped into using skimming devices that stole client data and passwords.

“So we’re committed to the January or early 2018 live launch but we’re constantly monitoring the environment for any changes in the security [or] any changes in connectivity,” Mr. Garchitorena noted.

Early this year, the CIC said it expects the country’s centralized national credit information system to go live by January or even earlier should the database’s nine-month pilot phase — which began on May 8 — run smoothly.

Republic Act No. 9510 or the Credit Information System Act mandates the establishment of a comprehensive and centralized credit information system, with CIC tasked to consolidate the data.

The law also states that submitting entities, which are the lenders, are required to submit and provide all credit data of their borrowers in their database to the CIC.

“Of course, this is not a ‘launch or die’ kind of thing. If you recall, the thing that we protect the most is the data… The National Privacy Commission also has some influence on how the data is used,” Mr. Garchitorena said.

“I can guarantee that the system will be ready but if the environment is not ready for whatever reason, then we’ll delay,” he said. “So let’s just say the probability of us launching in January is very high, but…what we’re saying is that we would never sacrifice the integrity of the data if there is a circumstance that will require us not to launch in January.”

To date, the CIC has recruited 104 financial entities to join the testing phase of its database. The system has two current users: the special accessing entities (SAEs) or credit bureaus and the submitting financial institutions, such as banks, cooperatives, lending firms, to name some.

The CIC has said the pilot database will be used by financial firms and SAEs solely for review purposes and not meant for any decision-making involving credit.

Currently, there are four official SAEs namely local firm CIBI Information, Inc., South Africa’s Compuscan, Italy’s CRIF S.p.A, and United State’s TransUnion Information Solutions, Inc.

The law has defined an SAE as a duly accredited private corporation engaged primarily in the business of providing credit reports, ratings and other similar credit information products and services. — Janine Marie D. Soliman