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BIR urged to boost info drive on new invoicing rule to avoid fines

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By John Victor D. Ordoñez, Reporter

A PHILIPPINE senator is urging the Bureau of Internal Revenue (BIR) to double up on efforts to inform taxpayers of a new rule requiring invoices instead of official receipts when filing taxes, to spare companies from unnecessary penalties. Under the new Ease of Paying Taxes Act, signed by President Ferdinand R. Marcos, Jr. in January, taxpayers must start issuing valid invoices instead of official receipts in declaring output taxes and claiming input taxes for both sales of goods and services.

If a sale is exempt from value-added tax (VAT) the term “VAT-exempt sale” must be written or printed on the invoice.

“I urge the BIR to enhance its information dissemination campaign on the changes brought about by the Ease of Paying Taxes Act, particularly on the issuance of invoices in place of official receipts to ensure that taxpayers are well-informed on the said changes,” Senator Sherwin T. Gatchalian, who sponsored the Senate bill of the measure, said in a statement.

“All applications and communications with the BIR should be conducted through online channels and taxpayers should not be required to visit BIR branches in person,” he added.

Taxpayers who fail to file any return with proper documents and pay the taxes due would be liable to a 25% penalty of the amount due under the new law.

The new law allows returns to be filed electronically and manually with any authorized agent bank, Revenue District Office, tax software provider.

The invoicing regulation took effect on April 27 while the deadline for companies to report unused receipts was on May 27.

“The BIR should ensure that the implementation of this particular provision of the law, intended to streamline issuance of proof of transactions, will not entail additional cost and burden on enterprises, especially those belonging to the micro, small and medium sector,” Mr. Gatchalian said.

13 Pinoys safe after Houthi strike

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THE 13 FILIPINOS aboard a bulk carrier hit by four missiles launched by Houthi rebels in the middle of the Yemeni coast last Tuesday are all safe, the Department of Migrant Workers (DMW) said Wednesday.

In a statement, the DMW said the assurance was relayed by the shipping company’s local manning agency even as the vessel sustained “some damage” from the attack.

“The vessel is continuing its voyage to its next port of call,” it said. “The DMW is communicating with the shipping and manning agencies, monitoring the safety and condition of our Filipino seafarers.”

The Iran-backed Houthi militants have launched more than 50 attacks in the Red Sea since November in what they say is “in solidarity with Palestinians,” Reuters reported on May 29. — John Victor D. Ordoñez

It’s rainy season, says PAGASA

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THE STATE weather service on Wednesday declared the start of the rainy season, after signification rains showers from the recent typhoon and the Southwest Monsoon.

In a statement, the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) said that the occurrence of “scattered rainshowers, frequent thunderstorms, the passage of Typhoon “Aghon,” and the Southwest Monsoon (Habagat) “had met its criteria in declaring the start of the country’s rainy season.

It added that that increased likelihood of the La Niña event increases the likelihood of above-normal rainfall conditions in some areas of the country, especially towards the end of the year.

PAGASA said earlier that there was a 60% chance of La Niña occurring between June and August.

“There may be breaks in rainfall that extend over a few days or weeks, also referred to as monsoon breaks,” it added.

PAGASA said that it would continue to monitor the weather and climate situation of the country.

“The public and all concerned agencies are advised to take precautionary measures against the adverse impacts of the rainy season, Habagat, and the impending La Niña such as floods and rain-induced landslides,” it added. — Adrian H. Halili

PSEi falls to 6,400 level on weak growth outlook

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THE BENCHMARK INDEX retreated to the 6,400 level for the first time in over a month on Wednesday on expectations that economic growth would miss the government’s target for this and next year.

The Philippine Stock Exchange index (PSEi) fell by 1.38% or 89.93 points to finish at 6,411.41 on Wednesday, while the broader all shares index dropped by 0.94% or 33 points to end at 3,451.74.

This was the PSEi’s worst finish since it closed at 6,404.97 on April 16. This was also below the market’s end-2023 close of 6,450.04.

“The local bourse dropped as the sentiment was dampened by the latest Monetary Policy Report, which stated that the Bangko Sentral ng Pilipinas (BSP) sees the Philippines’ economic growth to miss the government’s target in 2024 and 2025 due to the impact of high interest rates,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“Overseas, most Asian markets also traded lower as investors assessed inflation rates in the region,” she added.

The BSP’s report said the Philippine economy could operate “slightly below potential,” with gross domestic product (GDP) expansion seen settling below the government’s growth targets of 6-7% for 2024 and 6.5-7.5% for 2025.

Philippine GDP grew by 5.7% in the first quarter, faster than 5.5% in the previous quarter but slower than 6.4% a year ago, latest data showed.

“Philippine shares succumbed to more profit taking as the index sank to 6,400 as concerns over inflation, weak demand at a Treasury auction, and cautious statements from policy makers dampened sentiment,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Geopolitical tensions, like US-China issues impacting Boeing, and fluctuations in vaccine stocks due to bird flu concerns, added to volatility,” Mr. Limlingan added.

All sectoral indices ended lower on Wednesday. Financials lost 2.35% or 47.14 points to close at 1,952.41; services declined by 1.67% or 32.78 points to 1,928.35; property went down by 1.23% or 30.17 points to 2,404.75; mining and oil dropped by 0.67% or 62.39 points to 9,226.56; industrials retreated by 0.5% or 45.69 points to 9,076.12; and holding firms decreased by 0.45% or 26.4 points to 5,761.80.

“Among the index members, BDO Unibank, Inc. and Metropolitan Bank & Trust Co. weighed down not just their sector but the entire PSEi, losing 3.7% and 3.32%, respectively. Meanwhile, four stocks were able to post gains, with Manila Electric Co. gaining the most, up by 0.87%,” Ms. Alviar said.

Value turnover went up to P5.41 billion on Wednesday with 685.45 million shares changing hands from the P5.27 billion with 583.14 million issues traded on Tuesday.

Decliners overwhelmed advancers, 127 versus 70, while 40 names closed unchanged.

Net foreign selling went down to P763 million on Wednesday from P784.38 million on Tuesday. — RMDO

Peso falls to new 18-month low as US Treasury yields increase

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THE PESO fell to a new 18-month low against the dollar on Wednesday amid hawkish comments from a US Federal Reserve official, which pushed up Treasury yields.

The local unit closed at P58.42 per dollar on Wednesday, weakening by 45 centavos from its P57.97 finish on Tuesday, Bankers Association of the Philippines data showed.

This was the peso’s worst finish in over 18 months or since its P58.58-per-dollar close on Nov. 7, 2022.

The local unit is now down by P3.05 from its end-2023 close of P55.37 versus the greenback.

The peso opened Wednesday’s session weaker at P58.07 against the dollar, which was already its best showing for the day. It dropped to as low as P58.51 versus the greenback.

Dollars exchanged increased to $1.4 billion on Wednesday from $1.24 billion on Tuesday.

The peso weakened versus the dollar as hawkish statements from Minneapolis Fed President Neel Kashkari caused US Treasury yields to go up, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Stronger-than-expected US consumer confidence data pushed up US Treasuries, causing the peso to depreciate, Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

“The Philippine peso experienced the most significant drop among emerging Asian currencies,” Mr. Roces said.

US government bond yields pushed to a near four-week peak on Wednesday, lifting their global counterparts and pressuring stocks, as data sowed new doubts about the timing and extent of Federal Reserve rate cuts, Reuters reported.

US yields climbed after consumer confidence data came in stronger than expected on Tuesday, Mr. Kashkari said further rate hikes were still a possibility, and two Treasury auctions were poorly received by investors.

The benchmark 10-year US Treasury yield rose as high as 4.576%, a level not seen since May 3, and was last up 2 basis points at 4.566%.

Mr. Kashkari said Tuesday he is still not ruling out an interest rate hike, but it’s more likely the central bank could hold rates steady for an “extended” time as it waits for inflation to drop.

“We could sit here for as long as necessary until we get convinced that inflation is sustainably going back down to our 2% target,” the Fed policy maker said.

While holding rates at their current 23-year high “for an extended period of time is a more likely outcome,” Mr. Kashkari made it clear that other options are on the table if inflation doesn’t fall.

For Thursday, Mr. Ricafort expects the peso to range from P58.30 to P58.50 per dollar. — A.M.C. Sy with Reuters

Make annulments free — Garin

A CONGRESSWOMAN called on the Senate on Wednesday to work to make annulment in the Philippines free should it reject the divorce bill already passed by the House of Representatives.

Referring to annulment as the “compromised” version of the divorce bill, Iloilo Rep. Janette L. Garin said it would only be fair for married Filipinos seeking to break off their union to have it free of charge.

“In case the (divorce) measure won’t pass in the Senate, what we can do is make annulment free instead,” Ms. Garin said in a statement in Filipino. “The charge for annulment shouldn’t be expensive. Life is already difficult that people won’t spend on annulment… Because of the [annulment] fees, they just choose to endure [their dysfunctional union].” 

The Philippines is the only country in the world besides the Vatican City outlawing divorce.

The House of Representatives last week approved House Bill (HB) No. 9349, a measure seeking to reinstitute divorce as another mode for terminating marriage in a 131-109-20 vote.

Its Senate counterpart, Senate Bill No. 2443, meanwhile is pending for second reading since September last year.

The Senate’s version of divorce bill remains uncertain as five senators have said they don’t support the measure, according to an informal survey conducted by Senate President Pro-Tempore Jose “Jinggoy” P. Estrada.

Those reportedly in favor of divorce are Senators Ana Theresia N. Hontiveros-Baraquel, Mary Grace N. Poe-Llamanzares, Maria Imelda “Imee” R. Marcos, Pia Juliana S. Cayetano, and Ferdinand “Robin” C. Padilla.

There is no need to wait for plenary affirmation of the corrected tally of votes on HB No. 9349 as it would not change the outcome of the bill’s approval, Albay Rep. Edcel C. Lagman, Sr. said in a letter made available to reporters on Wednesday.

“Our legal department is studying Cong. Lagman’s letter,” Mr. Velasco told BusinessWorld in a Viber message.

“The purported reason for the delay is that there is need to report for the Plenary’s action the corrected affirmative votes from 126 to 131,” Mr. Lagman stated in a letter to House Secretary General Reginald S. Velasco.

Mr. Velasco issued a correction of the tally Thursday last week, a day after the proposed measure hurdled the House on final reading. The initial vote tallied by House secretariats showed 126 affirmative votes for the bill, 109 against, and 20 who abstained.

The correction was due to “administrative error,” he told the media last week.

“The rectification in the Records of the House will be done when Session resumes this July 2024,” he said in a statement. — Kenneth Christiane L. Basilio

Escudero eyes Czech partnerships

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NEW SENATE President Francis “Chiz” G. Escudero and Czech Ambassador to the Philippines Karel Hejc on Tuesday discussed boosting ties in agriculture, energy and defense following President Ferdinand R. Marcos, Jr.’s visit to the Czech Republic in March.

In a statement on Wednesday, the Senate Public Relations and Information Bureau said Mr. Escudero told the envoy that Manila is also seeking more ties in science and technology.

“Some of the agreements reached during President Ferdinand R. Marcos, Jr.’s visit have already taken off,” Mr. Hejc said, citing new tie-ups in agriculture, energy, and defense between both countries. 

The Czech ambassador also expressed concern over the tensions between Manila and Beijing in the South China Sea, saying it could spill over to other countries if they continue to worsen.

Mr. Marcos met with Czech Republic Prime Minister Petr Fiala in the Czech Republic to discuss posting labor ties and establishing a labor consultation mechanism between the Philippine Department of Migrant Workers and the Czech Ministry of Labor and Social Affairs.

“As you know, we rely on our friends from the international community to help us as we strive to give our people a better country and a better future,” Mr. Escudero said. John Victor D. Ordoñez

DoJ inspects largest drug haul

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THE DEPARTMENT of Justice (DoJ) started Wednesday its three-day ocular inspection of the largest drug haul in the Philippines in Catanduanes.

The Makati City Regional Trial Court in an Order last January granted the prosecution panel to inspect from May 28 to May 30 and ordered law enforcement officers to destroy the illegal drug laboratory evidence and equipment confiscated.

Authorities from the DoJ, the Philippine Drug Enforcement Agency (PDEA), and the Philippine National Police (PNP) are executing the order at the laboratory the size of two basketball courts, which was uncovered in Virac, Catanduanes in 2016.

Found in the lab were 22.51 kilos of methamphetamine hydrochloride (shabu), 200 ml in liquid form, and 359.75 kilos of Ephedrine. — Chloe Mari A. Hufana

More charity hospital beds pushed

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PRIVATE hospitals should look to increase their charity bed allocations to at least 30% of their total capacity from the current 10% to give indigent patients access to quality healthcare, a congressman said Wednesday.

“We want to increase the current allocation of private hospitals at 10% bed capacity for indigent patients… to 30%,” Party-list Rep. Wilbert T. Lee said in a statement in Filipino. “This would increase the bed capacity for patients [in need of medical aid].”

A 2007 Department of Health order outlined that all private hospitals should allocate at least 10% of their bed capacity for indigent patients.

Increasing the charity bed capacity would enable more indigent Filipinos to receive quality healthcare from private hospitals at affordable costs, Mr. Lee said.

Hospitals should also publicly state the number of charity wards available for poor patients.

“This is one of the shortfalls,” he said in Filipino. “This is because hospitals often tell [indigent patients] that there are no more available wards for them.”

Indicating the number of available charity beds and wards would help patients to know their healthcare options, allowing them to decide whether to stay or transfer to other hospitals, said Mr. Lee.

Filed in early May, House Resolution No. 1716 seeks to ensure that hospitals publicly declare the number of available wards for indigent patients at their entrances.

“The availability of… charity beds in accredited hospitals are essential information for beneficiaries to make informed decisions about their healthcare options,” the bill stated. “The lack of clear and visible information regarding the availability of PhilHealth wards may lead to confusion and hinder beneficiaries from utilizing their… benefits.” — Kenneth Christiane L. Basilio

SC allows fallen military pilot’s heir to settle housing loan

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THE PHILIPPINE Supreme Court (SC) allowed the sole heir of a fallen Air Force pilot to settle an outstanding housing loan to avoid foreclosure.

The SC Third Division ruled that the brother and only heir of the Philippine Air Force (PAF) pilot, who died in Mindanao in the line of duty, may apply for a restructuring of the soldier’s outstanding housing loan with the Government Service Insurance System (GSIS).

“The socialized guarantee of security is most required by Filipinos who serve in the military and allied forces — they who stand in uniform, daily put their lives on the line and protect our lives and liberties, often at the cost of theirs,” read a portion of the 18-page decision written by Justice Alfredo Benjamin S. Caguioa.

The Court of Appeals (CA) and GSIS Board of Trustees earlier denied the brother of his claims to consolidate the property acquired by his brother in 1979 and settle the remaining balance.

The GSIS was unaware of the pilot’s death in 1980, prompting it to order the foreclosure the property.

“The assurance of dignity of a shelter to come home to is earned, even deserved, by those who all too often have to leave their lives behind and march towards the threat of their early graves at a moment’s notice,” read the decision. — Chloe Mari A. Hufana

Visa-free entry seen driving travel growth in Asia-Pacific

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By Justine Irish D. Tabile, Reporter

SHANGHAI — Visa-free entry is driving the growth of inbound travel to the Asia-Pacific (APAC) region, according to Singapore travel booking service Trip.com Group.

At the Airline Global Conference 2024 at the Pudong Shangri-La, Trip.com Chief Operating Officer Schubert Lou said visa-free policies are yielding results within the region.

In particular, he said that visa-free policy announcements, which started in Malaysia last year, are now becoming a trend in the region and are triggering the growth of travel to and from the region.

“More and more countries are getting into that, and Indonesia is the next in the line,” Mr. Lou said, adding that Singapore and Thailand have already joined the trend.

“And that has triggered tremendous growth. One example of that is the China outbound market. What that has created is what we call the ‘just pack your bag and go’ era of China outbound,” he added.

He said that since some countries went visa-free, China outbound travel increased 20% as of May 1, outpacing pre-pandemic levels, while the Southeast Asia outbound market exceeded pre-pandemic levels by 60%.

“What we are seeing is a tremendous momentum of people wanting to go (out)… and convenience matters,” he added.

He said the region was the “engine of growth” for global air passenger demand in the first quarter, partly driven by the visa-free policies.

Demand was also stoked by promotions offered by tourism boards and governments, the recovery in flight capacity, and weak currencies in the destination countries, he added.

Citing the International Air Transport Association (IATA), Mr. Lou said that average international demand growth in the region grew 45% in the first quarter, outpacing average international demand growth of 16%.

However, IATA Head of Project and Innovation Stephan Copart said that a survey last year showed that passengers still cite pre-flight procedures and immigration as pain points when traveling.

“Pre-flight and immigration processes, including visa requirements, are still very big pain points,” Mr. Copart said.

The survey showed that 36% of the respondents were discouraged from traveling due to immigration requirements, while 49% said that they consider the complexity of the process as a main deterrent to traveling.

He said that this is why programs such as the visa waiver on Trip.com have positively impacted demand for spontaneous trips.

“Passengers are really asking for a better way to manage those immigration and visa requirements. And that’s where data becomes a key element,” he added.

He said that passengers are now more inclined to share data to facilitate their trip and speed up the process.

“87% are willing to share immigration information before departure to speed up the arrival process. This has been a constant increase over the past few years. Two out of three prefer online applications ahead of traveling to obtain the visa,” he added.

In the Philippines, inbound travel by tourists from China has yet to recover to pre-pandemic levels. China was the country’s second-largest source of international visitors in 2019. China ranked fifth among source markets for international arrivals last year.

South Korea remained the Philippines’ top source of international visitors last year, accounting for 26.4% of foreign arrivals, or 1.44 million, while tourist arrivals from China made up 4.8% or 263,863.

In the first quarter, China was the third-largest source market for the Philippines, accounting for 130,574 or 6.49% of visitor arrivals.

Multiple red, yellow alerts declared over Luzon grid

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THE National Grid Corp. of the Philippines (NGCP) placed the Luzon grid under red and yellow alerts on Wednesday, while a yellow alert was also raised for the Visayas grid.

The NGCP declared red alerts over Luzon between 1 p.m. and 4 p.m. and 6 p.m. and 10 p.m., according to its advisory.

Yellow alerts were also declared between 12 p.m. and 1 p.m., 4 p.m. and 6 p.m., and 10 p.m. and 12 a.m. (May 30).

During the period, peak demand hit 12,749 MW, against available capacity of 12,950 MW.

A total of 16 power plants have been on forced outage, while six plants are running derated, bringing the capacity unavailable to the grid to 3,177.3 MW.

Yellow alerts are issued when the supply available to the grid falls below a designated safety threshold. If the supply-demand balance deteriorates further, a red alert is declared.

Meanwhile, the NGCP declared yellow alerts over the Visayas grid between 2 p.m. and 4 p.m. and 6 p.m. and 7 p.m.

Available capacity was 2,890 MW while peak demand hit 2,538 MW.

A total of 567.4 MW were unavailable to the grid as 18 power plants have been on forced outage and 10 derated.

“The yellow alert is due to unavailability of Luzon to export to Visayas and high forecast demand,” the NGCP said.

The yellow alert was lifted at 1 p.m. “due to decrease in forecasted demand,” the grid operator said.

In a statement on Wednesday morning, Manila Electric Co. (Meralco) said it did not resort to any manual load dropping or rotational power interruptions the previous day despite the red alert over the Luzon grid.

The power distributor said that its commercial and industrial customers participating in the Interruptible Load Program (ILP) collectively de-loaded around 270 MW, helping avert service disruptions.

“We thank our ILP partners who have been beneficial in ensuring continuity of electricity service particularly when Luzon grid supply is insufficient,” Meralco Spokesperson and Head of Corporate Communications Joe R. Zaldarriaga said.

TYPHOON AGHON
Early Monday, the Department of Energy (DoE) reported that 34 power plants were either on forced outage or operating derated. 

Of the total, nine power plants connected to the grid and 11 power plants that are off-grid were out due to Typhoon Aghon (international name: Ewiniar).

“The typhoon has caused a substantial decrease in available power supply in the grid at a time when the hydro power plants have not yet recovered from their low water levels,” Energy Secretary Raphael P.M. Lotilla said in a briefing.

Tropical Depression Aghon intensified into a typhoon on Sunday, the first storm of the year. The typhoon had been expected to exit the Philippine area of responsibility on Wednesday.

Separately, the operator of the Malampaya gas field touted its reliability and resilience amid the outages at multiple power plants.

“Malampaya will always be ready to provide reliable natural gas. This situation demonstrates the critical role Malampaya plays in the nation’s energy security,” Donnabel Kuizon Cruz, managing director and general manager of Prime Energy Resources Development B.V., said in a statement.

Ms. Cruz said that Prime Energy and its partners in the Malampaya consortium remain committed to supporting the DoE’s “drive to keep the grid stable by ensuring uninterrupted operations and fuel supply to power generators during extreme weather.”

During the red and yellow alerts last month, Prime Energy said Malampaya exceeded its normal capacity to enable maximum power generation from its customers.

Prime Energy, a subsidiary of Prime Infrastructure Capital, Inc., holds a 40% operating stake in the Malampaya consortium.

The Malampaya gas field, the country’s sole commercial natural gas provider powering 20% of Luzon’s demand, is expected to be depleted by 2027.

Meanwhile, Meralco said in a statement that power service in areas affected by Typhoon Aghon has returned to normal following the restoration of all of its circuits and primary lines.

The company said power services were restored at 10 p.m. on Tuesday. The interruptions had affected around 1.7 million customers.

Most of the affected customers are in Quezon province and Laguna, with others in Batangas, Cavite, Metro Manila, Rizal, and Bulacan.

“With almost 100% service back in all affected areas, we are now down to the last mile as we work on restoring power to almost all the remaining households in far-flung areas,” Mr. Zaldarriaga said.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera