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13 burned to death in Cotabato road accident

FIVE people were burned in a commuter van that collided with a dump truck and caught fire on a highway in Barangay Luhong in Antipas, Cotabato. — PHILIPPINE STAR/JOHN FELIX M. UNSON

COTABATO CITY — Thirteen passengers of a commuter van were burned to death after their vehicle went up in flames after a high-speed collision with a dump truck in Cotabato province, southern Philippines on Monday.

Witnesses said the impact of the collision in Barangay Luhong, Antipas town, was so forceful that the passenger van first flipped, rolled over and then plunged into a flood control ditch before bursting into flames.

The dump truck turned-turtle and landed on its side some six meters away from the van and also caught fire.

Policemen and municipal officials have identified only six of the 13 fatalities by 4 p.m. Monday.

Col. Gilbert Balneg Tuzon, Cotabato provincial police director, said on Monday afternoon that probers from the Antipas Municipal Police Station and personnel of the Antipas Municipal Disaster Risk Reduction and Management Office are still trying to determine which vehicle was at fault. — John Felix M. Unson

Soldiers foil communist rebels’ attempt to regain bases in Aurora, Nueva Vizcaya

UNSPLASH

BAGUIO CITY — An attempt by communist guerrillas to recover their lost rebel bases and mass support in villages along the borders of Aurora and Nueva Vizcaya provinces in northern Luzon was foiled by government forces.

Following a tip-off from residents, soldiers from the Philippine Army’s 91st Infantry Battalion supported by the Tactical Control Unit from the Philippine Army’s 84th Infantry Battalion reportedly fought with remnants of the rebels last Friday in Barangay Galintuja, Maria Aurora, in Aurora province.

Major General Andrew D. Costelo, commander of the Philippine Army’s 7th Infantry Division said, communist rebels were attempting to recover in the boundary Barangays of Maria Aurora and Nueva Vizcaya when the tip off was received.

Acting swiftly on the information, soldiers led by 2Lt. Karl Angelou A. Buquida engaged the rebels in a 30-minute gunbattle sending the outmaneuvered rebels scampering away.

No one was reported hurt from the government side while Costelo said they believed rebels suffered casualties though could still not account for it.

After the gunbattle, two short magazines of M16 rifle, 24 rounds of ammunition for M203 grenade launcher, 143 rounds of M16 ammunition, 110 rounds of ammunition for M14 rifle, 1 pair of rifle handguard, a rifle dust cover of M16 were seized at the encounter site including personal belongings, medical items, and rebel documents.

Mr. Costelo believed the rebels are trying to regain support from the populace through extortion and exploitation, but they were tipped off signifying “the community’s rejection of their deceptive tactics.” — Artemio A. Dumlao

Recto proposal for 6% growth seen less likely to expand deficit

FINANCE SECRETARY RALPH G. RECTO — DEPARTMENT OF FINANCE FACEBOOK PAGE

THE Development Budget Coordination Committee (DBCC) needs to adjust its growth and fiscal targets to lower the risk of a revenue shortfall that would widen the deficit, analysts said.

Finance Secretary Ralph G. Recto had earlier called on the DBCC to adjust its growth targets this year and in the medium term to be “more realistic.”

He said the economy could aim for 6% gross domestic product (GDP) growth, but keep 6.5% as an aspirational target.

“If you project a very high GDP, then you’re projecting a very high revenue, and if you miss it, your deficit will increase and your debt to GDP will also increase,” he told reporters on the sidelines of an Economic Journalists Association of the Philippines event last week.

“Underpromise but overdeliver, that’s what I believe,” he said.

Last year, the DBCC narrowed its GDP growth target range to 6.5-7.5% from 6.5-8% previously. The economy grew 5.6% in 2023, falling short of the DBCC goal for the year and underperforming the 7.6% expansion in 2022.

The DBCC is also projecting 6.5-8% economic growth from 2025 until 2028.

Economic managers have yet to release a decision on whether they will maintain or revise targets.

To achieve GDP targets, the government should bolster revenue collection and asset privatization, Mr. Recto said.

“We will push not only the BIR [Bureau of Internal Revenue], not only the BoC (Bureau of Customs), the GoCCs (government-owned and -controlled corporations) to pay more dividends… [we are looking] to collect more effectively fees and charges, not only taxes, [and] do some privatization.”

Last week, the Finance Secretary proposed the idea to sell and develop the Ninoy Aquino International Airport’s 600-hectare property to generate revenues for the government.

Security Bank Corp. Chief Economist Robert Dan J. Roces welcomed the more realistic fiscal targets, citing global and domestic uncertainties.

“The Finance Secretary’s adjusted expectations of 6-6.5% reflect a nuanced approach, considering potential shifts in policy to support economic stability and growth, and the potential volatility to markets that these shifts may cause,” Mr. Roces said in a Viber message.

Key industries like manufacturing, construction, and services are expected to lead the drive to hit the growth targets, Mr. Roces said. 

However, enhanced regulation and ease of doing business should also help stimulate investment and ensure growth, he added.

On the other hand, agriculture and external trade could pose a drag on GDP growth, Mr. Roces said.

“Agriculture and external trade face headwinds that could temper growth, so this will highlight the importance of targeted policy measures to mitigate risks and capitalize on opportunities for sustainable economic advancement.”

Agriculture sector has suffered P1.75 billion worth of damage from El Niño, the Agriculture department said last week, with the dry conditions expected to last until the second quarter.

Key exports that suffered negative year-on-year growth in January included wearables, electronic telecommunication products, cathodes and refined copper, and other mineral products.

Albay Rep. Jose Ma. Clemente S. Salceda, who heads the House Committee on Ways and Means, said the government should manage rice prices — which account for one fifth of poor households’ spending — to help meet growth targets.

“The more expensive the rice, the less the budget is for other things, the slower economic activity becomes,” he said in a Viber chat.

Rice inflation accelerated to 23.7% in February from 22.6% in January and 2.2% a year earlier, according to the Philippine Statistics Authority. — Beatriz Marie D. Cruz

Single-use plastics tax seen generating up to P34 billion

PHILSTAR FILE PHOTO

THE Department of Finance (DoF) said its proposal to impose excise taxes on single-use plastic bags could yield up to P33.856 billion in the first five years of implementation.

In a statement on Monday, the DoF said that the tax measure will reduce pollution, promote sustainable practices and generate revenue to support growth.

“When a good has some negative externalities, meaning the consumption or use of a product causes some social cost, we try to regulate that through taxation,” DoF Fiscal Policy and Monitoring Group Officer-in-Charge Undersecretary Karlo Fermin S. Adriano was quoted as saying in a statement.

“In the case of single-use plastics, the social cost is mismanaged waste,” he added.

The revenue generated by this measure will be used to fund solid waste management programs for local governments.

The DoF estimates that the proposal will generate P2.334 billion in its first year of implementation, followed by P6.96 billion in the second year, P7.412 billion in the third year; P8.162 billion in the fourth year; and P8.988 billion in the fifth year.

It also noted these revenue estimates assume that the measure will be implemented as early as the third quarter with 50% tax compliance and assuming 70% tax compliance between 2025 and 2028.

For the 2025 to 2028 period, the measure is expected to yield P31.52 billion in revenue.

The DoF’s proposal imposes an excise tax of P100 per kilogram of single-use plastic bags. It is also proposing 4% annual indexation on the third year of the measure’s implementation or beginning Jan. 1, 2026.

“The proposal covers single-use plastic bags that are not recyclable, such as ‘ice’, ‘labo’, or ‘sando’ bags (with or without handles),” it said.

“Under the DoF’s proposal, the price of labo bags per piece will slightly increase from P0.47 to P0.82 while sando bags will be priced at P0.51 to P0.91 each,” it added.

The DoF said that the Philippines has one of the cheapest tax rates for single-use plastic bags compared to other countries at P0.40 per bag.

Citing World Bank data, the Philippines was found to be the third-largest contributor of mismanaged plastic in the ocean each year.

“This is a low-hanging fruit that has been on the table for more than a decade. I am confident that our legislators will support this measure,” Finance Secretary Ralph G. Recto added.

A bill seeking to impose an excise tax on plastic bags was approved by the House of Representatives in November 2022. A similar measure is pending at the Senate committee level.

The House and Senate versions likewise impose an excise tax of P100 for every kilogram of single-use plastic bags. The rate of tax is due to increase by 4% every year, effective Jan. 1, 2026.

Meanwhile, another bill pending at the Senate proposes to charge a P20 excise tax on single-use plastic bags, but also proposes 4% annual indexation. — Luisa Maria Jacinta C. Jocson

Vietnam ride-sharing firm eyes Philippine operations using EVs

REUTERS

A VIETNAM ride-sharing company, Green and Smart Mobility Joint Stock Co. (GSM) has expressed interest in entering the Philippine market this year, according to the Board of Investments (BoI).

In a statement, the BoI said GSM is a private company within the Pham Nhat Vuong group, which also owns conglomerate Vingroup Co.

“The company aims to provide eco-friendly taxi services utilizing VinFast electric cars exclusively in 2024. This electric taxi service underscores GSM’s commitment to promote sustainable EV transportation in the region,” the BoI said.

According to the investment promotion agency, BoI Executive Director Evariste M. Cagatan and GSM Global Chief Executive Officer Thanh Nguyuen met on March 20.

“The company will be applying for BoI registration and will also apply for green lane (expedited permit processing). The company is still preparing documents for the Securities and Exchange Commission registration application,” the BoI said.

The company’s planned expansion in the Philippines is expected to be governed by the Energy Efficiency Conservation Act, apart from the various incentive-granting laws.

“The company’s planned project is aligned with the government’s direction in attracting sustainability-driven investments, particularly in our transition towards electric mobility,” the BoI said.

Early this year, officials of VinFast met with Trade Secretary Alfredo E. Pascual on its plan to sell electric vehicles (EVs) through a dealership network targeted to begin operations next month.

Aside from encouraging the Vietnamese company to invest in the EV sector Mr. Pascual also invited the company to look into the country’s tourism and healthcare sectors. — Justine Irish D. Tabile

BoI pitches green metals investments to US, Canadian, Australian companies

REUTERS

THE Board of Investments (BoI) said on Monday that it has invited US, Canadian, and Australian firms to invest in Philippine green metals and mineral processing operations.

In a statement, the BoI said that the Philippine business delegation made the pitch on the sidelines of the Prospectors & Developers Association of Canada 2024 conference. The conference highlighted the Philippines as a hub for innovation and sustainability-driven industries.

“With its strategic location and abundant human and natural resources, the country aims to emerge as the preferred destination for priority sectors such as electric vehicles (EVs), smart manufacturing, semiconductors and electronics, green metals, high-tech agriculture, renewable energy (RE), and data centers or telecommunications,” the BoI said.

It added that the country’s abundant mineral resources — approximately 9 million hectares of land with potential for copper, nickel, iron, chromite, cobalt, gold, and rare earth elements — will be needed for the global energy transition.

“Our intention right now is to have our minerals processed locally to supply local industry needs or export higher-value materials,” said Ma. Corazon Halili-Dichosa, BoI executive director for industry development services.

The BoI said that the companies the Philippine delegation presented to are from the mining, mineral processing, battery materials, consultancy, and academic sectors. 

No commitments were received during the event.

“However, several follow-through meetings are being arranged for companies seeking partnerships in mineral processing. Notably, one company expressed interest in visiting the Philippines in the third quarter,” it added.

Also, part of the Philippine business delegation were the Chamber of Mines of the Philippines and the Philippine Nickel Industry Association, which highlighted three major copper-gold projects: King-king, Tampakan, and Silangan.

On March 15, the Philippines, through the Department of Environment and Natural Resources, granted a mineral production sharing agreement to Makilala Mining Co., Inc., which is a subsidiary of Australian exchange-listed exploration and development company Celsius Resources.

The project, called Malinao-Caiguna-Biyog Mining Project, is located in the Cordillera Administrative Region and is the first copper project to be approved in the Philippines in 15 years.

The permit allows the company to undertake exploration for 25 years within the contract area, which covers approximately 2,500 hectares, and is renewable for another 25 years. — Justine Irish D. Tabile

Warning on rate increases issued if wage hike measures cause inflation to accelerate

PHILIPPINE STAR/BOY SANTOS

A LEGISLATED wage increase could delay interest rate cuts by the central bank and even force it to raise rates if it results in a price spiral, economists said.

“A legislated wage increase would be very damaging to the economy,” Calixto V. Chikiamco, Foundation for Economic Freedom president, said in a Viber message at the weekend. “It will… force the Bangko Sentral ng Pilipinas (BSP) to hike interest rates, further slowing down the economy.”

The proposed wage hike could cause price growth to accelerate. “It might compel the BSP not to cut rates when inflation spikes up again,” John Paolo R. Rivera, president and chief economist at Oikonomia Advisory & Research, Inc., told BusinessWorld via Viber.

This would result in slowing economic growth as consumers “will reduce spending” and companies “will not borrow much to finance productive activities.”

Mr. Rivera also said that the inflation resulting from the proposed legislated across-the-board wage hike may offset any benefits of putting more money in workers’ pockets. “This (wage hike) may lead to a wage spiral, driving faster inflation which would offset the increases in wages.”

Both chambers of Congress started deliberating bills last month that would impose across-the-board minimum wage increases for private-sector workers. 

The Senate approved its version seeking a P100 wage increase on final reading in February. Conversely, House bills seeking to increase daily wages from P150 to P750 remain pending at committee level.

Wage hikes often lead to an inflation uptick due to a wage-price spiral. “That’s the normal course of things when wages are increased,” Mr. Rivera said, referring to how wage hikes trigger price increases on goods from increased demand.

However, Federation of Free Workers President Jose G. Matula said the proposed legislated wage hike will help the economy, especially those involved in the informal sector. “Increasing wages would boost the purchasing power of workers, who are also consumers,” he told BusinessWorld via Viber.

“This boost in purchasing power will benefit not only large corporations but also small-scale businesses, as workers would have more disposable income to spend on goods and services,” Secretary General Josua T. Mata of labor group SENTRO told BusinessWorld via Viber.

Commenting on inflationary concerns, think-tank IBON Foundation Executive Director Sonny Jose Enrique A. Africa said that the wage increase would not be inflationary if companies do not pass on the additional wage expenses to consumers.

“The wage hikes on the table will not be inflationary if they are taken from employers’ profits instead of being passed on to consumers,” he said.

Aside from inflationary concerns, the proposed wage hikes could lead to small businesses cutting jobs to ensure survival due to the increased wage bill. “It will cause MSMEs (micro, small and medium enterprises), who account for 90% of employment, to cut jobs,” Mr. Chikiamco said. 

“(A) wage hike is good for workers but might be detrimental for business,” Mr. Rivera said, warning of possible disruptions in business operations should the proposed wage increases be approved.

Approving a legislated wage increase would also “scare off” both “foreign and local investors” from investing in the country, Mr. Chikiamco said.

“Contrary to fears propagated by some, a wage increase would not be detrimental to businesses,” Mr. Mata said, referring to concerns by businesses on the proposed wage hikes. “Historical evidence indicates no widespread closures resulting from such increases.”

Mr. Africa said that employee compensation for MSMEs and large businesses only accounts for 10.9% of total expenses, on average. “The wage hikes on the table now are affordable.”

“The government should be… the first to think that higher wages are a key measure for making economic growth more inclusive,” Mr. Africa added. — Kenneth Christiane L. Basilio

Senate seeks probe of VAT refund delays

PHILIPPINE STAR/RUSSELL PALMA

A SENATOR has filed a resolution seeking to investigate delays associated with value-added tax (VAT) refunds after complaints by foreign companies.

Senate Resolution No. 978, which Senator and Ways and Means Committee Chairman Sherwin T. Gatchalian filed on March 19, seeks an inquiry in aid of legislation into the large volume of denied VAT refunds and to make it easier for companies to apply for refunds.

He cited complaints from Japanese companies that threatened to leave the Philippines after finding it difficult to secure timely VAT refunds.

“The failure of the VAT refund system to timely refund the money of the taxpayers threatens businesses, investments and local employment thus leading to a significant negative impact on the economy as a whole,” according to a copy of the Senate resolution.

The American Chamber of Commerce of the Philippines, Inc. has said VAT refunds for jet fuel take as long as five years to resolve.

Mr. Gatchalian also cited the case of agricultural multinational Dole Sunshine Co. Philippines, which exports bananas from the Philippines, and has not received a VAT refund amounting to $67 million (P3.78 billion).

At a Senate hearing in November, Japanese Chamber of Commerce and Industry of the Philippines, Inc. President Shigeru Shimoda pushed for more tax incentives to attract more Japanese companies to expand their operations to the Philippines.

The House of Representatives on March 18 passed on final reading amendments to the law designed to revive the post-pandemic economy through tax incentives.

The CREATE MORE (CREATE to Maximize Opportunities for Reinvigorating the Economy) measure cuts corporate income tax to 20% from 25%. It also provides duty exemptions and VAT exemptions on imports. — John Victor D. Ordoñez

More than P6B in fishport funding released

Buckets of fish are sold at the Navotas fish port in this file photo. — PHILIPPINE STAR/MICHAEL VARCAS

THE Department of Budget and Management (DBM) said it has approved the release of P6.037 billion to finance fishport infrastructure improvements.

In a statement on Monday, the DBM said it signed the special allotment release order to support the Philippine Fisheries Development Authority’s (PFDA) Fisheries Infrastructure Development Program.

Budget Secretary Amenah F. Pangandaman said in a statement that the development program helps enhance operations at Navotas, Iloilo, Zamboanga, Camaligan, Camarines Sur, Lucena, Sual, Pangasinan, Davao, General Santos, and Bulan, Sorsogon Fish Ports.

The DBM said Congress earmarked P1.1 billion for the construction, rehabilitation, and improvement of fishports and other fishery post-harvest facilities.

“Enhancing and maintaining strategic and globally competitive fishports would allow our ships and crews access to essential supplies and services, and for vessel operators to successfully bring in their catches, safeguarding the livelihood of our fishermen,” Ms. Pangandaman said.

The PFDA is an arm of the Department of Agriculture (DA), tasked with building post-harvest infrastructure and other services that streamline the handling and distribution of fish and fishery products.

The fisheries sector accounted for 1.3% of the country’s economic growth in 2023 and around 1.6 million jobs or about 4% of the labor force, according to 2023 data from the World Bank.

Fish and fishery products make up 11.68% of the country’s food intake, according to the DA’s 2022 Philippine Fisheries profile. — Beatriz Marie D. Cruz

PHL keen on Norwegian RE tie-ups — envoy

REUTERS

THE PHILIPPINES has expressed interest in working with Norwegian energy companies in developing renewable energy (RE) sources, the Philippine Embassy in Oslo said on Monday.

At a forum on the Norwegian RE industry earlier this month in Oslo, Philippine Ambassador to Norway Enrico T. Fos pitched Southeast Asia as rich in untapped renewable energy sources that can provide affordable alternatives to fossil fuels.

The Philippines aims to raise RE’s share in the power generation mix to 35% by 2030 and 50% by 2040. Renewables currently account for 22% of the mix.

More than a dozen Norwegian RE companies participated in the networking event.

Mr. Fos cited the Philippines’ recent opening up of RE to full foreign ownership, allowing such companies to explore for and develop solar, wind, biomass, ocean or tidal energy.

Norway’s electricity grid is 98% powered by renewable resources, with 92% consisting of hydropower, according to the International Energy Agency.

President Ferdinand R. Marcos, Jr. has said that his administration aims to attract more investment in RE to fast-track the Philippines’ green transition.

“The forum was an auspicious occasion for dialogue and networking on the renewable energy prospects in the Philippines and in the ASEAN region given Norway’s global leadership in the energy sector,” the Philippine Embassy in Oslo said. — John Victor D. Ordoñez

Land use bill to expedite conflict resolution, address need for resources, PIDS says

PHILSTAR FILE PHOTO

LEGISLATORS should fast-track the passage of a measure that lays down the policy for land use, according to the Philippine Institute for Development Studies (PIDS).

It said the creation of an objective plan to utilize the land will address the scarcity of land resources as well as penalize illegal and damaging uses of land.

“Land use conflicts stem from competing demands of land resources including food production, water security, housing, industry and ecological services,” PIDS President Ancieto C. Orbeta, Jr. said during the government think tank’s “State of Land Use Policy and Governance in the Philippines” forum on Monday.

Proposals for a national land use plan, which seeks to establish parameters for land use to address the unequal distribution of economic resources, have been stuck in Congress for nearly three decades.

“This legislative gap has a wide-reaching impact beyond just land use conflicts. It adversely affects watershed management, leading to environmental degradation that exacerbates soil erosion, flooding, and affects water resources and quality,” Mr. Orbeta said.

The National Economic and Development Authority (NEDA) Board-National Land Use Committee, which is the main policy-making body on land use, does not have the power to penalize public officials and private parties that misuse land.

Rex Victor O. Cruz, professor emeritus at the University of the Philippines Los Baños College of Forestry and Natural Resources, said vested interests hinder the passage of a national land use policy.

“It’s an issue of power distribution among stakeholders… that’s a barrier I think that has been there for a very long time,” Mr. Cruz said.

House Bill No. 8162, which the House of Representatives passed last year, details how land can be distributed among key sectors as well as protect critical areas.

The bill proposes the creation of a National Land Use Commission, which will be tasked to formulate the National Physical Framework Plan. The plan would have a 30-year timeline and must be updated every 10 years.

Three land use measures remain pending at the Senate environment, natural resources, and climate change committee, headed by Senator Cynthia A. Villar.

“The irony is that the sub-optimal utilization of land is happening alongside stark manifestations of unmet basic need for land such as socialized housing for the homeless,” PIDS senior research fellow Adoracion M. Navarro told the forum.

Rafael Vicente Dimalanta, research analyst at the University of the Philippines Center for Integrative and Development Studies, said pushing for a national land use plan would include inputs to urban planning and housing especially from the poor and marginalized.

He cited how residents of the urban poor community Sitio San Roque were “subjected to divisive tactics” for eviction to give way to nearby urban development plans.

As of November 2022, only 311 out of 1,634 local government units (LGUs) have shelter plans, according to the Department of Human Settlements and Urban Development.

The Philippine Statistics Authority has called land use in the Philippines between 2015 and 2020 “non-optimal.”

Ms. Navarro said passing a national land use policy will not weaken the powers of LGUs in land planning.

“We need to lay down a proposal for upgrading the technical capacity of LGUs in formulating, updating, and implementing comprehensive land use plans and provincial development and physical framework plans,” she said. — Beatriz Marie D. Cruz

LANDBANK to launch online lending channels for MSMEs, LGUs

BW FILE PHOTO

LAND BANK of the Philippines (LANDBANK) said it is planning to launch online lending platforms for local government units (LGUs) and micro, small and medium enterprises (MSMEs).

“We are heavily investing in enhancing our digital infrastructure to ensure seamless service delivery across our online banking channels and traditional touchpoints,” LANDBANK President and Chief Executive officer Lynette V. Ortiz said in a statement on Monday.

LANDBANK said this will enable more customers to make direct online payments.

The bank will also encourage customers to use the LANDBANK Mobile Banking App, the iAccess online retail banking channel, and the Link.BizPortal web-based payment channel to reduce in-branch transactions.

The bank will likewise intensify marketing efforts to institutional clients to use the LBCS electronic bulk disbursement facility, and the weAccess corporate internet banking platform.

LANDBANK’s branches will also implement an automated queuing management system with a teller interface to reduce processing time for over-the-counter transactions.

Customers will also soon be able to set appointments through an online pre-booking facility before visiting a branch.

Starting April, customers will be able to open a LANDBANK account without visiting a branch through the LANDBANK Mobile Banking App.

“This will provide customers instant access to the bank’s digital services, such as fund transfers, bills payment, e-commerce transactions, and cardless withdrawals,” LANDBANK said. — Aaron Michael C. Sy

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