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Local stocks decline on PMI data, profit taking

REUTERS

STOCKS dropped on Wednesday amid data showing slower Philippine manufacturing activity growth, profit taking after Tuesday’s rally and amid a trading halt that was lifted before noon.

The Philippine Stock Exchange index (PSEi) declined by 55.16 points or 0.84% to end at 6,498.88 on Wednesday, while the broader all shares index fell by 15.73 points or 0.45% to close at 3,450.24.

Market sentiment soured following the slowdown in the S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) in December, Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message. 

The S&P Global Philippines Manufacturing PMI stood at 51.5 in December, lower than the nine-month high of 52.7 in November. A PMI reading above 50 denotes better operating conditions than in the preceding month, while a reading below 50 shows a deterioration.

The December figure was the weakest in three months or since the 50.6 reading in September.

“Trading in the market was halted by the exchange in the morning, then it resumed before the market recess and continued in the afternoon,” Ms. Alviar added. 

The PSE halted trading on Wednesday morning. Trading resumed at 11:56 am.

“The Philippine Stock Exchange, Inc. encountered a technical issue that prompted it to halt trading at 9:32 a.m. on Jan. 3, 2024, Wednesday… PSE and its third-party front-end system provider continue to investigate the matter to identify the root cause,” the bourse operator said in a statement.

While the trading break did not necessarily cause Philippine shares to drop, activity was still disrupted, China Bank Capital Corp. Managing Director Juan Paolo E. Colet said.

“A market glitch for more than two hours is a terrible way to greet the new year. If we aim to boost trading volumes in the local stock market, then we need to ensure the reliability of the PSE’s infrastructure,” Mr. Colet said.

Profit taking after Tuesday’s climb caused the PSEi to drop on Wednesday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

All sectoral indices finished lower on Wednesday. Financials declined by 22.90 points or 1.31% to 1,723.71; services went down by 16.67 points or 1.01% to 1,625.77; industrials retreated by 57.13 points or 0.62% to 9,104.49; holding firms dropped by 34.35 points or 0.54% to 6,289.02; mining and oil decreased by 30.64 points or 0.31% to 9,855.29; and property inched down by 6.66 points or 0.23% to 2,828.95. 

Value turnover went down to P3.11 billion on Wednesday with 182.7 million shares changing hands, from P3.66 billion with 379.8 million issues the previous day.

Advancers edged out decliners, 74 against 71, while 49 names ended unchanged.

Net foreign selling stood at P260.5 million on Wednesday versus the P443.11 million in net buying seen the previous session.

Mr. Ricafort put the PSEi’s immediate support at 6,320-6,410. — RMDO

‘Improved planning’ needed after Panay outages — NGCP

THE National Grid Corp. of the Philippines (NGCP) has called for improved energy resource planning following the outages on Tuesday at multiple power plants on Panay Island.

“The unscheduled maintenance shutdowns of the largest power plants in Panay Island were the primary cause of the power interruption. We emphasize the need for improved planning to ensure sufficient generation per island, with a well-balanced mix of fuels and technology,” NGCP said in a statement on Wednesday.

On Tuesday, the NGCP issued a yellow alert for the Visayas grid after multiple power plants tripped, including units of Panay Energy Development Corp. and Palm Concepcion Power Corp. (PCPC).

Due to the plant outages, some 452 megawatts (MW) were unavailable to the grid.

As of 5 p.m. on Wednesday, about 203 MW of power is being produced on Panay, augmented by 24.6 MW from “sources elsewhere in the Visayas.”

“We reiterate that load restoration will be done conservatively, by matching loads to restored generation, to prevent repeated voltage failure. NGCP is ready to transmit power once it is available,” the grid operator said.

The Visayas grid needs about 300 MW to stabilize and is awaiting a PCPC facility, which has a 135-MW capacity, to synchronize back onto the grid.

In a statement, the Department of Energy (DoE) reminded the NGCP to “adhere to its responsibilities as system operator in ensuring supply security and reliability of the grid.”

“NGCP is in a position to anticipate system disturbance such as what happened yesterday, which unfortunately resulted in the isolation of Panay from the rest of the Visayas grid due to the simultaneous tripping of power plants that caused multiple power interruption affecting other power plants and distribution utilities (DUs),” Energy Undersecretary Rowena Cristina L. Guevara said.

Meanwhile, the Energy Regulatory Commission (ERC) said it requested additional data from the NGCP and the generation companies to assist in its review of the incidents.

“The ERC understands the inconvenience this situation has caused to the consumers of Panay, and we assure the public that every effort is being made to restore power as quickly as possible,” ERC Chairman Monalisa C. Dimalanta said.

Overall, the plant outage has affected a distribution utility and seven electric cooperatives, according to the NGCP.

These are MORE Electric and Power Corp., Guimaras Electric Cooperative, Inc., Iloilo Electric Cooperative, Inc. (ILECO I), ILECO II, ILECO III, Capiz Electric Cooperative, Inc., Antique Electric Cooperative, Inc., Aklan Electric Cooperative, Inc., and Guimaras Electric Cooperative, Inc. — Sheldeen Joy Talavera

Market for AS power enters pilot operations

BW FILE PHOTO

THE pilot stage of the market for reserve power has been launched, with full commercial operations targeted for later in the month, the Independent Electricity Market Operator of the Philippines (IEMOP) said.

In a statement on Wednesday, the IEMOP said pilot operations began on Dec. 26, 2023.

The pilot stage will allow the optimization of the market operator and system operator interfaces and automated real-time dispatch of committed ancillary services (AS). AS contracts are entered into in order to ensure that the grid will have sufficient power should supply be disrupted unexpectedly.

The pilot stage will trial central scheduling and dispatch of contracted ancillary services using enhanced systems of the market operator and system operator, or the National Grid Corp. of the Philippines.

IEMOP operates the Wholesale Electricity Spot Market (WESM), the trading floor for electricity.

With the set integration of the reserve market for AS power into the WESM on Jan. 26, the system operator will be able to procure reserves from the spot market to meet the reserve requirements of the system.

The IEMOP said that the reserve market provides a venue for generators to offer reserve capacities competitively. “These reserve offers are co-optimized with energy offers to determine the best mix of energy and reserve supply that will result in the most competitive prices for electricity.”

“Ultimately, the co-optimization of the scheduling of reserves and energy has the objective of reducing the overall cost of both energy and reserves,” the IEMOP said.

“The operation of the Reserve Market in the Philippine WESM is a testament to our shared commitment to the growth of the Philippine Energy Sector; a growth that ensures reliability, embraces innovation, and promotes competition, all leading to transparency and reasonableness of our power rates,” Energy Regulatory Commission (ERC) Chairperson Monalisa C. Dimalanta said.

Asked to comment, Bienvenido S. Oplas, Jr., president of Minimal Government Thinkers said that the reserve market will expand power supply by encouraging generation companies (gencos) to build more power plants.

“Most of new generation capacity will be contracted by DUs (distribution utilities), RES (retail electricity suppliers) and ECs (electric cooperatives). But some generation capacity will be for reserves by the system operator or embedded with DUs themselves,” Mr. Oplas said in a Viber message.

“The market for new capacity has expanded so more gencos will be encouraged to put up more new power plants,” he added.

In an advisory last week, the Department of Energy said that the WESM Governance Arm has yet to issue a certification on the completeness of the preparations.

The software certification by the independent auditor is still pending while the ERC is still reviewing the simulation results for additional constraints submitted by the IEMOP for the approval of the price determination methodology. 

Meanwhile, the Philippine Electricity Market Corp. (PEMC) said in a statement that it will assess and monitor the co-optimized market once fully operational to ensure the delivery of its commitment and intent of the enhanced WESM design.

“Our commitment to fulfill PEMC’s responsibility to facilitate the readiness certification for the full commercial operations of the co-optimized Energy and Reserve Market have remained steadfast,” PEMC President Elvin Hayes E. Nidea said. — Sheldeen Joy Talavera

Exportable agri commodities focus of new DA dev’t plan

REUTERS

THE Department of Agriculture (DA) said it is seeking to expand agricultural and fisheries exports and has set into motion the drafting of the Philippine Agricultural Export Development Plan (PAEDP).

According to a special order signed by Agriculture Secretary Francisco Tiu Laurel, Jr., the DA will create a national steering committee and technical working group to prepare the plan.

The DA said the national steering committee will set the policy direction that the plan will then flesh out.

It added that a technical working group will help create the mechanisms to facilitate exports and ensure that activities and programs are aligned with the Philippine Export Development Plan (2023-2028).

“Member agencies shall create their respective core group that will (assist in) the creation of the PAEDP and provide technical assistance on matters related to export development,” the DA said.

The DA added that the technical working group will seek to identify priority commodities with the strongest export potential.

The steering committee will be headed by Mr. Laurel with all DA undersecretaries as members, while Assistant Secretary for Policy Research and Development Noel A. Padre will head the technical working group.

Agricultural exports declined 13.3% to $1.61 billion during the third quarter of 2023, accounting for 8.2% of total exports, according to the Philippine Statistics Authority.

Leading exports were edible fruit and nuts as well as peel of citrus fruit melons, valued at $492.09 million or 30.5% of the total.

Among the top five exported commodities were animal and vegetable fats; preparations of vegetables, fruit, nuts or other parts of plants; tobacco and manufactured substitutes; and preparations of meat of fish, crustacean, mollusks and other aquatic invertebrates.

President Ferdinand R. Marcos, Jr. has said that the government is focusing on increasing exports of agricultural products to make the economy more competitive. — Adrian H. Halili

‘Only’ 19 LGUs declared compliant with business one-stop shop rules

THE Anti-Red Tape Authority (ARTA) said only 19 local government units (LGUs) out of 1,637 are fully compliant with the electronic business one-stop shop (eBOSS) requirement of the Ease of Doing Business (EODB) law.

“Out of 1,637 LGUs, 630 have reported that they are now (implementing the law). But validation by the ARTA Compliance Monitoring and Evaluation Office showed that only 19 LGUs are fully compliant, which means that they are fully automated, while 611 LGUs are only partially automated,” ARTA Secretary Ernesto Perez said in an interview with government network PTV.

“We are continuously doing our compliance audit together with the Department of Interior and Local Government (DILG) and Department of Information and Communications Technology (DICT),” he added.

eBOSS is one of the flagship programs of ARTA. It aims to streamline procedures for applications and issuance of local business licenses and permits via a single digital portal accessible on demand.

Mr. Perez said the President has tasked ARTA and other government agencies to implement a nationwide rollout of the eBOSS platform to help non-compliant LGUs.

“President Marcos himself ordered us together with the Presidential Management Staff, DILG and DICT to hold a nationwide rollout tentatively in the last week of January,” he said.

Mr. Perez said that ARTA will be helping the LGUs by donating hardware and providing technical assistance.

“This is so our LGUs will not have any reason to not comply with the requirements,” he added.

Aside from eBOSS, ARTA also wants to hasten the issuance of permits and licenses for telecommunications towers.

“Through this, more than 36,000 permits have been issued just for one year of implementation,” Mr. Perez said.

ARTA, through its Compliance Monitoring and Evaluation Office, is also implementing Report Card Surveys which evaluate the compliance of covered agencies and LGUs with the requirements of the EoDB law.

“Based on our report, 94.72% of the covered agencies have submitted their updated citizen’s charter,” he said. — Justine Irish D. Tabile

DBM allots P550 million for kidney institute

EN.WIKIPEDIA.ORG

THE Department of Budget and Management (DBM) said it approved the release of P550 million for an outpatient department (OPD) building at the National Kidney and Transplant Institute (NKTI). 

Budget Secretary Amenah F. Pangandaman in a statement on Wednesday said the issuance of Special Allotment Release Orders will support efforts to enhance the healthcare system.

“President Ferdinand R. Marcos, Jr. has always said no Filipino should be deprived of quality healthcare. That’s why we continuously give high regard to our healthcare facilities, more importantly, our specialty hospitals like NKTI,” Ms. Pangandaman said.

The funds will finance the construction and expansion of an eight-storey OPD building for NKTI, the DBM said.

The building is designed to house services like diagnostic and surgical facilities, it added.

The proposed building will help the NKTI achieve its mission of treating and preventing kidney and allied diseases, the DBM said.

The OPD building will ultimately cost P1.331 billion, the DBM noted. — Aaron Michael C. Sy

BIR’s road to digitalization

The Bureau of Internal Revenue (BIR) has recognize the need to adapt to take advantage of fast-evolving technology to ensure it collects its rightful share of taxes from the digital economy. To do this, it has mapped out a 10-year digital roadmap. The roadmap incorporates the tools necessary to maximize resources at the BIR and ensure maximum value for the organization. It is anchored on three principles — (i) adopting a people-first approach; (ii) instituting a process perspective; and (iii) embracing digital technology, with the digital transformation mindset as its foundation. In addition, the roadmap consists of various digitalization projects that would modernize and digitalize tax administration, consistent with the objectives of Republic Act No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, to reduce red tape. As it applies to the BIR, the law means making tax compliance more convenient for taxpayers.

One of the notable projects under the BIR’s Digital Transformation initiative is the launch of the Online Registration and Update System (ORUS), a web-based system that provides an end-to-end process for registering taxpayers and updating their information. With the implementation of ORUS, taxpayers may skip the long queues and register and update their information with the BIR from the comfort of their homes.

Under Executive Order No. 98, series of 1999, all persons whether natural or juridical, dealing with all government agencies and instrumentalities, are required to provide their tax identification numbers (TIN) on all forms, permits, licenses, clearances, official papers and documents which they secure from and file with government agencies. This directive was issued as TINs are essential for our tax authorities to trace taxable transactions of persons and monitor their tax compliance.

In line with the Executive Order, BIR Revenue Regulations No. 7-2012 directs non-resident aliens not engaged in trade or business in the Philippines or non-resident foreign corporations to obtain TINs for the purpose of withholding taxes on their income from sources in the Philippines. The withholding agent is required to apply for the TIN on their behalf prior to or at the time of the filing of their withholding tax returns.

Moreover, Securities and Exchange Commission (SEC) Memorandum Circular No. 1, series of 2013, requires the inclusion of TINs of foreign investors (natural and juridical persons) in all forms, papers and documents filed with the SEC. In this regard, corporations filing their general information sheets (GIS) with the SEC are required to first secure TINs for their investors and stockholders, whether natural or juridical persons. If the TIN is missing, the SEC is to return the GIS.

With the launch of ORUS and the issuance of BIR Revenue Memorandum Circular (RMC) No. 120-2023, Filipino citizens and foreign nationals may now apply for TIN online without lining up at their respective Revenue District Offices (RDOs) and physically submitting hard copies of their application documents. Individuals and corporations may create an account in ORUS by filling out the necessary information and uploading the relevant documents in order to secure their TINs. Although the TIN application is now done online, the documentary requirements are still the same as in the previous practice (physical filing).

RMC 120-2023 is the BIR’s announcement of the availability of digital TINs through ORUS. With this new feature, individual taxpayers may secure their digital TIN identification document (ID) through the website starting Nov. 21, 2023, by creating an account and registering as a taxpayer. Those with previously issued TINs, whether or not they have been issued a physical TIN ID, may also still register with ORUS. It is worth noting that taxpayers who will be applying for a digital TIN ID are required to update their e-mail address at the RDO where they are registered by accomplishing and submitting BIR Form S1905 (Registration Update Sheet) via e-mail to their respective RDOs or through BIR’s eServices — Taxpayer Registration Related Application portal. Should there be any changes or updates that must be made after securing the digital TIN ID, taxpayers may re-generate their ID through the same website after 30 days from the first or last digital TIN ID generation, whichever is applicable.

Digital TIN IDs are to be honored and accepted as a valid government-issued ID for taxpayers to transact with government agencies and institutions, local government units, employers, banks, financial institutions and other relying parties. While digital TIN IDs do not have signatures, the authenticity of this ID may quickly be verified through ORUS as well by scanning the Quick Response (QR) code that may be found on the digital ID.

We have seen a number of the BIR’s Digital Transformation projects go live, making tax administration more efficient. Taxpayers remain hopeful that the BIR launches the remaining Digital Transformation projects to make tax compliance more convenient.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Jerimae Celine N. Galope is a senior associate at the Tax Services department of Isla Lipana & Co., the Philippine member firm of PricewaterhouseCoopers global network.

jerimae.celine.n.galope@pwc.com

Where’s the Philippine Energy Plan?

Senator Gatchalian nudges DoE for a sense of urgency

By John Victor D. Ordoñez, Reporter

A SENATOR is seeking an explanation from the Department of Energy (DoE) on why it has been delayed in submitting the new Philippine energy roadmap, which Congress has been waiting to act on since Sept. 15, last year.

“The submission of the Philippine Energy Plan (PEP) is already more than three months overdue. The DoE needs to comply with this requirement immediately,” Senator Sherwin T. Gatchalian said in a statement on Wednesday.

The government is aiming to increase the share of renewable energy (RE) in the country’s power generation mix to 35% by 2030 and to 50% by 2040. RE currently accounts for 22% of the country’s energy mix.

As of June, the DoE had awarded 1,087 renewable energy service contracts with a total potential capacity of 113.5 gigawatts.

Mr. Gatchalian stressed that the DoE is supposed to submit to Congress an updated energy roadmap each year as mandated under Republic Act 9136, the Electric Power Industry Reform Act (EPIRA).

Speaking to BusinessWorld over the telephone, Energy Bureau Director Michael O. Sinocruz said: “The delay is because we are waiting for the completion of the National Strategic Transmission Plan and consultation and UP College of Engineering, which will be completed this month.”

The DoE official said the PEP would cover the country’s energy goals from 2023 to 2050, with the country’s energy department focusing on boosting offshore wind projects.

The National Strategic Transmission Plan, which will be incorporated into the PEP, will include a smart and green grid plan that would tackle the efficient transmission of power to accommodate more renewable energy sources, Mr. Sinocruz said.

The Energy official noted that the PEP is expected to be almost 500 pages long and will come in three volumes.

Last Dec. 21, the Board of Investments (BoI) issued a certificate of endorsement to Ivisan Windkraft Corp. for its 450-megawatt Frontera Bay Wind Power Project off Cavite, which will be the Philippines’ first offshore wind project.

The project is expected to help the government achieve its target of producing 15.3 gigawatts of clean energy by 2030 under the Philippine Development Plan.

The Philippines has potential offshore wind resources of 178 gigawatts, with large parts of the coast having wind that can power turbines, the BoI said.

Earlier, the DoE said the PEP would include the expected share of nuclear power in the country’s energy mix.

The House of Representatives had approved a bill seeking to establish an agency that would regulate the nascent nuclear industry.

Mr. Gatchalian had filed a similar measure before the Senate, which is set to be tackled at the committee level.

The Philippines and the United States on Nov. 17 signed a deal that would allow Washington to export nuclear technology to Manila so it can develop a civilian nuclear energy infrastructure.

Experts have called on the government to diversify its RE mix instead of pushing nuclear energy, which could end up costing more than reliable power sources.

“The Philippine Energy Plan will be the foundation for achieving cleaner energy, promoting economic growth, and enhancing the well-being of our people,” Mr. Gatchalian said.

Manila to deploy more floating assets at sea, expects Indian missiles

FISHERMEN from Masinloc, Zambales province in northern Philippines released on Monday an 18-foot-tall buoy on which it is written: “Atin ang Pinas” (The Philippines is ours). Fisherfolk in Zambales, whose coast faces the South China Sea, are protesting China’s “continued harassment” of Filipino fishermen at the Scarborough Shoal. — PHILIPPINE STAR/MICHAEL VARCAS

By Kyle Aristophere T. Atienza, Reporter

THE PHILIPPINE government will deploy additional floating assets for Filipino fishermen operating within Manila’s exclusive economic zone (EEZ) in the South China Sea, the Bureau of Fisheries and Aquatic Resources (BFAR) said on Wednesday.

The move is among the significant efforts that the Philippines is taking in order to protect its legal claims in one of the world’s most important waterways, with the government reportedly set to receive a cruise missile from India within the month.

“We will have additional floating assets in the West Philippine Sea (the maritime territory of the South China Sea nearest the Philippine archipelago),” BFAR spokesman Nazario Briguera said in Filipino at a news briefing. “And, if I am not mistaken, we have a scheduled trip to Scarborough Shoal, so we can have an onboard livelihood training for fishermen [there].”

Mr. Briguera was referring to the livelihood program named Layag WPS (Livelihood Activities to Enhance Fisheries Yield and Economic Gains from the West Philippine Sea), which the BFAR launched in June last year to expand fishing activities in the area.

The BFAR official said the government has allotted P80 million for the project as there are 385,000 Filipino fishermen who are benefitting from the West Philippine Sea.

Part of the project is distributing fuel subsidies, new fishing tools, and postharvest equipment to Filipino fishermen who frequent the fishing grounds.

The Philippines seeks to shift its focus to external defense from internal security amid China’s incursions into its EEZ in the South China Sea, allocating more funds for agencies on the frontlines of protecting the maritime territory over which Manila has asserted sovereign rights based on internationally accepted laws.

MISSILES FOR THE PHILIPPINES
Meanwhile, defense news site EurAsian Times reported on Wednesday that the Philippines is set to receive an Indian-made supersonic cruise missile this month.

The BrahMos missile, the deal for it was signed in 2022, will be delivered to the Philippine Navy “in a week,” it said.

Don Mclain Gill, an international relations lecturer at the De La Salle University, noted that the expected delivery of the Indian-made supersonic cruise missile underlines the Philippines’ growing diplomatic network in the face of an increasingly belligerent China.

It “comes at a time when China has been ramping up its provocative maneuvers in the West Philippine Sea,” he said in a Facebook Messenger chat.

“The procurement of the supersonic cruise missile system will be an important stepping stone for the Philippines to improve its sea control, anti-access/area-denial (A2/AD), and coastal and island defense operations,” he added.

He said acquisition of the BrahMos missile sends a signal to Beijing that “Manila is serious about pursuing its national interest based on international law.”

“The delivery of the BrahMos to the Philippines will add more momentum to the growing Philippines-India security partnership,” Mr. Gill said.

Lawmaker defends increasing unprogrammed funds

PHILIPPINE STAR/EDD GUMBAN

A LEADER in the House of Representatives has said Congress had the authority to increase the unprogrammed funds in the P5.768 trillion national budget for this year by P450 billion, adding it did not violate the Constitution.

“Only the programmed appropriations are subject to Article VI, Section 25 (1) of the Constitution, or the prohibition against increasing appropriations recommended by the President,” House Ways and Means Chairman and Albay Rep. Jose Ma. Clemente “Joey” S. Salceda said in a statement late Tuesday, citing a letter from the Department of Budget and Management (DBM).

“In short, the DBM said Congress can increase the unprogrammed appropriations as proposed.”

His comments were made public after Albay Rep. Edcel C. Lagman said that President Ferdinand R. Marcos. Jr. should have vetoed the P450-billion increase on the pretext that it is illegal after the DBM only recommended the P281.9 billion total amount in these funds.

Unprogrammed appropriations are funds on standby in case of additional priority programs or projects when revenue collection exceeds targets.

Under the Constitution, the lawmakers are barred from boosting appropriations recommended by the President “for the operation of the government as specified in the budget.”

Mr. Lagman said the unprogrammed funds could be used as a “sanctuary of partisan and pet projects.”

Citing Christian S. Monsod, one of the framers of the 1987 Constitution, Mr. Salceda said the provision was meant to ensure that the budget does not “put the government in debt or in deficit.”

“The very conditions placed on the Unprogrammed Appropriations are designed in such a manner that no additional deficit will be incurred,” he said.

Budget Secretary Amenah F. Pangandaman earlier said she did not see a problem with the increase, noting that unprogrammed funds may only be used in particular cases of excess revenue.

Senate Minority Leader Aquilino Martin “Koko” D. Pimentel, III has said he would challenge the boosted funds before the Supreme Court.

“Ultimately, once a case is filed in the Supreme Court, the court will decide on the matter,” Mr. Salceda said. “I expect it to decide as it has always done so: with the maximum liberality and presumption of regularity granted to Congress in the exercise of its exclusive powers.” — John Victor D. Ordoñez

Gov’t allocates P31B to improve rice production

PHILIPPINE STAR/KRIZ JOHN ROSALES

By John Victor D. Ordoñez, Reporter

THE PHILIPPINE government has allocated about P31 billion in the 2024 national budget to aid farmers in implementing projects to boost rice production, ahead of expected episodes of drought and dry spells from El Niño, a congressman said on Wednesday.

“We are confident that not only the agriculture department, but other agencies across all other concerned sectors would be fully prepared for this prolonged dry spell to ensure that our rice farmers get all the support they need to continue improving their productivity and incomes amid this challenge,” Party-List Rep. Brian Raymund S. Yamsuan said in a statement.

He added that the budget would include more than P15 billion in cash aid for small rice producers from tariff collections from rice imports last year.

Rice import tariffs collected that go over P10 billion go directly to farmers tilling two hectares of land and below in the form of cash grants.

Mr. Yamsuan noted that the Bureau of Customs (BoC) had already collected P25.55 billion in rice tariff imports.

Production of palay or unmilled rice is expected to come in at 7.32 million metric tons (MT) during the fourth quarter, according to the Philippine Statistics Authority (PSA).

The Department of Agriculture (DA) has projected palay production for the entirety of last year to be at 20 million MT.

Part-list Rep. Elizaldy S. Co earlier said lawmakers increased the allocation for irrigation projects under the National Irrigation Administration by at least P40 billion.

An additional P25 billion had also been granted to boost agriculture subsectors, with at least P10 billion to be used for free irrigation, seeds, fertilizer and other agricultural products for farmers.

Meanwhile, the government allotted about P7.5 billion to upgrade at least 22 airports this year, including the Ninoy Aquino International Airport (NAIA) and the Pag-asa Island New Manila International Airport, according to Makati City Rep. Luis Campos, Jr.

Mr. Campos said NAIA would receive the biggest funding for upgrades with P1.64 billion for a new communications, navigation, and surveillance-air traffic management system.

This year’s budget will also include P1.5 billion to upgrade and expand an airport in Thitu Island, which the Philippines calls Pag-Asa Island.

The Kalibo International Airport in Boracay will see P581 million in upgrades, while the Laoag International Airport will have P500 million.

The budget has P320 million earmarked for infrastructure upgrades for the Bukidnon Airport and P300 million for the Puerto Princesa Airport.

The New Manila International Airport is set to receive P200 million in new infrastructure spending,

“The spending is meant to sustain the modernization and expansion of the country’s aviation hubs in time for the projected full recovery of global air traffic in 2025,” Mr. Campos said.

“Of course, we are also counting on the spending to enhance the overall travel experience of passengers.”

The Philippines logged 5.45 million international arrivals in 2023, breaching the country’s 4.8 million target in arrivals for the year, the Department of Tourism reported on Tuesday.

CTA to PAGCOR: Pay P375.31M

CTA.JUDICIARY.GOV.PH

THE COURT of Tax Appeals (CTA) has ordered the Philippine Amusement and Gaming Corporation (PAGCOR) to pay its basic deficiency income tax for taxable years 2005 and 2006, amounting to P375.31 million, inclusive of surcharge and penalty rates.

In a 22-page ruling dated Dec. 22, 2023, the CTA En Banc determined the amount of tax deficiency of PAGCOR following the Supreme Court’s (SC) directive to probe its income taxes (IT) for the said two-year period.

The CTA amended its previous decision, following the SC’s Nov. 22, 2017 ruling which ordered the consolidated cases between the Commissioner of Internal Revenue (CIR) and PAGCOR to be remanded to the tax court for the determination of the final amount to be paid by the government-owned corporation. The CTA ruling was penned by Associate Justice Lanee S. Cui-David. 

The High Court had reasoned that PAGCOR is entitled to the tax privilege granted for income from gaming operations. However, it cited Republic Act No. 9337, which amended the National Internal Revenue Code (NIRC) of 1997, which withdrew PAGCOR’s exemption from corporate income tax on income derived from other related services.

Hence, the SC determined that PAGCOR should only pay deficiency income tax on income derived from other related services, and not from its gaming operations, for 2005 and 2006. Likewise, the High Court said that PAGCOR is liable to fringe benefit tax (FBT) as it is not covered by tax exemptions, echoing a previous ruling.

“As ruled by the Supreme Court, PAGCOR is only liable to pay the deficiency IT, including surcharges and interests, on its income derived from other related activities for taxable years 2005 and 2006, and the assessed deficiency FBT, including surcharges and interests, for the same taxable years,” read part of the CTA ruling.

The appellate court determined that the basic deficiency income tax amounted to P6.2 million and P115.24 million for taxable years 2005 and 2006 respectively. However, adding up the surcharge, deficiency, and delinquency interest acquired in succeeding years, the total amount due as of Dec. 31, 2017, reached P8.36 million for 2005 and P366.95 million for 2006, summing up to P375.31 million.

In its ruling, the CTA explained that the surcharge and interest were only computed until the end of 2017 which is prior to the amendment of the NIRC under the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

The CTA said PAGCOR is required to additionally pay a 12% per annum delinquency interest on the unpaid deficiency income tax for the taxable year 2006, as required by tax laws. The court said the total outstanding amount for the said year stands at P79.39 million as of the end of 2008. — Jomel R. Paguian

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