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PHL Aug. inflation seen rising but remaining below 5% 

PHILIPPINE STAR/MIGUEL DE GUZMAN

INFLATION will likely stop falling for the first time in six months in August, but will remain below 5%, regional economists said.

DBS Bank said in a note that it expects Philippine inflation to rise 4.9% year on year in August, up from the 4.7% reported in July.

“Concerns over a supply shortage and dependency on imports had driven rice (weighted at 9.6%) prices sharply higher in recent weeks, prompting the government to impose price ceilings starting Sept. 1,” the bank said.

President Ferdinand R. Marcos, Jr. on Friday issued an executive order which imposes a price ceiling of P41 per kilogram for regular-milled rice and P45 per kilogram for well-milled rice.

As of Aug. 31, the retail price of a kilogram of domestic well-milled rice was between P47 and P56, against P42 a year earlier, according to the Department of Agriculture.

Regular-milled rice prices rose to P42-P55 from P38 a year earlier.

“Concurrently, the economy is also dependent on imported energy, leaving domestic prices vulnerable to swings in international costs, apart from transport fares which had been partly responsible for the sharp rise last year,” DBS Bank added.

In August, oil firms raised pump prices by P5.90 per liter for gasoline, P9.90 per liter for diesel and P10 per liter for kerosene.

Separately, Nomura Global Markets Research said it expects inflation to reflect “a sequential pick-up to 0.5% (month on month) seasonally adjusted from 0.0%, reflecting the significant rise in rice prices and retail fuel prices, consistent with increasing international prices.”

August inflation likely settled at 4.9%, according to a BusinessWorld poll of 18 analysts last week.

If realized, this would be below the year-earlier level of 6.3%. It would also mark the 17th straight month of inflation breaching the Bangko Sentral ng Pilipinas’ (BSP) 2-4% target.

The BSP expects August inflation to settle between 4.8% and 5.6%.

Nomura Global also expects core inflation to further ease to 5.5% in August, in line with weakening economic activity.

Core inflation, which excludes volatile items like food and fuel prices, slowed to 6.7% in July from 7.4% in June. In the first half, core inflation averaged 7.6%.

“We expect the goods trade deficit to widen to $4.9 billion in July from $3.9 billion in June, as export growth turned negative again due to weak external demand from China, Korea, and Singapore. Import growth also contracted by less, driven in part by higher oil import costs,” Nomura added.

The trade deficit narrowed to $3.92 billion in June from a $4.45 billion May deficit and the year-earlier $5.88 billion deficit.

For 2023, DBS sees inflation at 5.4% before easing to 3.2% in 2024. Nomura Global expects inflation to average 5.3% this year and 3.1% next year.

Both full-year projections for 2023 are below the BSP’s 5.6% forecast for 2023. — Keisha B. Ta-asan

Agrarian debt condonation IRR due this week

THE Department of Agrarian Reform (DAR) said it expects to complete the implementing rules and regulations (IRR) for the New Agrarian Emancipation Act by Sept. 7.

In a statement, the DAR said that it has concluded consultations with agrarian reform beneficiaries (ARBs) and farmers’ groups in the process of putting together the IRR draft.

The IRR will address matters like the process of obtaining condonation and the compensation for landowners.

Republic Act No. 11953, signed in July, provides for the condonation of loans, interest, penalties, and surcharges incurred by ARBs.

The debt to be forgiven is projected at about P57.57 billion, covering 610,054 beneficiaries holding 1.17 million hectares.

The law also terminates payments to landlords who are part of a voluntary land transfer and direct payment scheme, benefiting 10,201 ARBs tilling 11,531.24 hectares.

“The summary of discussions (from the consultations) will be submitted to the IRR drafting committee for inclusion in the draft IRR which will be finalized during the full committee meeting on Sept. 7,” it said.

The DAR Technical Working Group’s deadline for submitting the draft to the Office of the President is Sept. 22. — Adrian H. Halili

Natural gas policy not expected to lower energy costs

The ISH floating storage unit berths at the AG&P’s Philippines LNG terminal in Batangas. — COMPANY HANDOUT

THE greater use of liquefied natural gas (LNG) will not help achieve the policy goal of lowering power prices, the Institute for Energy Economics and Financial Analysis (IEEFA) said on Monday.

“While some natural gas may be necessary to continue operating the country’s existing fleet of gas plants, a rapid expansion of LNG-to-power facilities is not aligned with energy security and affordability goals,” Sam Reynolds, an energy finance analyst with IEEFA, said in a statement.

“Promoting a wholesale expansion of LNG terminals and power plants sends the wrong signal to investors and risks binding the country to a costly, volatile energy future,” he added.

The Department of Energy (DoE) had issued a draft circular that will require distribution utilities (DUs) to procure a yet-to-be-determined percentage of their power from natural gas-fired power generators.

The DoE considers natural gas to be a “suitable transition fuel” that will keep the supply of power stable as the energy grid transitions to renewable energy.

“With the eventual reduction of capacity from coal-fired power plants, natural gas will be the immediate option for the DUs either for baseload, midrange, and peaking requirements because of its flexibility, and with much less harm to environment,” the DoE said.

The cost of the Philippines’ first LNG shipment from the United Arab Emirates (UAE) in April was $51.77 million, while the second delivery from Indonesia was valued at $35.87 million, the IEEFA said.

It added that the price the Philippines paid was equivalent of $15 per million British thermal unit (MMBtu) for the UAE shipment and $12 per MMBtu for the Indonesian shipment.

Mr. Reynolds said the Philippines could need 3.5 million tons of LNG to operate its five gas-fired power plants.

He said that this translates to an annual LNG bill of more than $2.5 billion, compared to the LNG cost incurred by Pakistan of about $5 billion and the cost paid by Thailand of about $9 billion.

“Importantly, LNG is significantly more expensive than other energy sources. Since January 2021, monthly coal prices have averaged $8.39/MMBtu — nearly three times lower than average JKM (Japan/Korea Marker) LNG price of $22.79/MMBtu,” Mr. Reynolds said.

“IEEFA estimates that LNG costs of $15/MMBtu will likely result in a final generation price of nearly P8 per kilowatt-hour (kWh). As LNG costs fluctuate wildly, so do the prices that Filipino end-users pay for electricity,” he added.

Mr. Reynolds said that domestic gas sources are not immune to global market volatility as Malampaya gas is tied to international fuel prices.

In 2021, gas prices from Malampaya averaged nearly $8 per MMBtu, up from $6.4 per MMBtu in 2016, he said. “Farther offshore, harder-to-extract domestic gas could increase prices further.”

The Malampaya gas field is the country’s only indigenous source of natural gas. It is expected to be commercially depleted by 2027, with supply expected to dwindle starting in 2024. — Sheldeen Joy Talavera

Poland poultry import ban lifted

PHILSTAR FILE PHOTO

THE Department of Agriculture (DA) said it has lifted a temporary ban on poultry products imported from Poland.

In a memorandum order signed by Undersecretary Domingo F. Panganiban, the DA will now allow imports of domestic and wild birds and their products from Poland, including poultry meat, day-old chicks, eggs and semen.

“This order is hereby issued to lift the temporary ban on the importation of domestic and wild birds and their products including poultry meat, day-old chicks, eggs and semen originating from Poland. All import transactions of the commodities shall be in accordance with existing rules and regulations of the (DA),” it said.

The DA had barred Polish poultry last year due to an outbreak of H5N1 Highly Pathogenic Avian Influenza.

“Based on the evaluation of the DA, the risk of contamination from importing poultry meat, day-old chicks, eggs and semen is negligible,” according to the memorandum, which cited a report from the World Organisation for Animal Health, which found that the outbreak had been “resolved.”

The Philippines imported 249.37 million kilograms of chicken, 197.76 million kilos of duck meat, and 114.42 million kilos of turkey in the seven months to July, according to the Bureau of Animal Industry. — Adrian H. Halili

Third-party information and the tax assessment process

The Bureau of Internal Revenue (BIR) is actively conducting taxpayer audits. Recently, we have been seeing astronomical deficiency tax assessments from the BIR. One finding that the taxpayers always have trouble understanding is the deficiency assessment coming from third-party information (TPI).

The BIR uses the Reconciliation of Listings for Enforcement (RELIEF) System for TPI audits.

The RELIEF System cross-references third-party information from the taxpayers’ Summary Lists of Sales and Purchases. The BIR also uses the Third-Party Matching-Bureau of Customs (TPM-BoC) Data Program to validate the volume of imports declared by the taxpayer.

Inconsistencies uncovered in the TPI matching are assumed by the BIR as an indication of under-declaration of revenue or over-declaration of cost and expenses, thus resulting in deficiency tax assessments for income tax, VAT and withholding taxes.

In this kind of assessment, we would assist the taxpayer in combing through voluminous records to reconcile the discrepancies. Armed with tax returns, accounting records and a Sworn Statement, we will inform the BIR that the third-party information is incorrect and that the amount declared by the taxpayer tallies with his books and other supporting documents. Unfortunately, this becomes a tax assessment version of “he said, she said” and thus, begins the arduous calvary of refuting the TPI findings.

In such situations, I cannot help but wonder why the BIR would often assume that the third-party information is correct while the taxpayer being audited is misdeclaring his income and expenses. Fortunately, jurisprudence is replete with cases explaining when assessments from TPI are not reliable and thus, void.

Revenue Memorandum Order (RMO) No. 46-2004 requires that in the event that the taxpayer protests the accuracy of the data provided by third-party sources, the BIR shall require the TPI provider to execute a Sworn Statement attesting to the correctness of the data provided. RMO 13-2012, states that if no response from the TPI source is received after the lapse of five days from service or ten days from mailing of the Confirmation Request, the revenue officer may consider the data to be true and correct.

In a CTA case, the BIR disclosed that it was not able to secure the confirmation from the TPI source. Instead, it relied on the portion of the BIR letter addressed to the third party stating that “(I)f this office does not receive any response from you within five days from receipt of this letter, we will consider the above purchase/amounts to be true and correct.”

The CTA cancelled the assessment and ruled in favor of the taxpayer. In failing to fully validate the TPI, the assessment was not based on facts but merely on presumption. In another case, the CTA cancelled an assessment over the failure of the BIR to offer in evidence the confirmation request letters and registry return receipts from the TPI sources.

In one case of alleged undeclared imports arising from matching with BoC data, the BIR used the Cost Ratio Method and grossed up value of the undeclared imports. This resulted in a corresponding undeclared sale which was subjected to 12% output VAT, thus resulting in a deficiency VAT assessment.

The CTA cancelled the assessment and emphasized that for VAT to be imposed, there must be an actual or deemed sale of goods or services. Hence, no imposition or assessment of output VAT can arise from an alleged undeclared sales arising from under-declaration of imports.

In the same manner, a mere discrepancy arising from BoC TPI cannot translate to the taxpayer’s undeclared gain and sales subject to income tax. The CTA emphasized that for income to be taxable, there must be a gain or income realized or received by the taxpayer. Without proof of receipt of taxable income, the obligation to pay taxes does not arise. The CTA further goes to explain that “in importation, money is disbursed, rather than received; and goods or properties are purchased, rather than sold by the taxpayer. These concepts are anathema to the nature of income tax as a tax imposed on income received by the taxpayer; and VAT, as a tax imposed on the sale of goods or property, among others.”

In various cases, the Supreme Court emphasized that tax assessments are presumed correct, made in good faith and based on sufficient evidence. However, the prima facie correctness of a tax assessment does not apply upon proof that an assessment is without foundation, meaning it is arbitrary and capricious. Paramount is the rule that the presumption of the correctness of an assessment, being a mere presumption, cannot be made to rest on another presumption.

Admittedly, the RELIEF system is a valuable source of information that the BIR can use in identifying taxpayers that may be subject to audit. However, the courts have been consistent in ruling that the BIR must support its assessments with verified factual information.

While the courts offer relief in canceling assessments based on unverified TPI, this process is cumbersome and costly to taxpayers. Reconciliations and documentation submitted to the BIR should be thoroughly assessed by the BIR to ensure that the right of the taxpayers to due process is observed even at the administrative process level. Resort to the courts should be a last-ditch scenario in view of the cost and effort needed. Taxpayers and the BIR should work hand in hand to ensure that correct taxes are paid, no more, no less.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Eleanor Lucas Roque is a principal of the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Philippines, US navies hold South China Sea sail

NAVY.MIL

By Kyle Aristophere T. Atienza, Reporter

NAVAL VESSELS from the Philippines and United States conducted a joint sail through areas of the South China Sea within the Southeast Asian nation’s exclusive economic zone, the Philippine military said on Monday.

It was the first time Manila and Washington carried out a joint sail in waters west of Palawan island, the Armed Forces of the Philippines’ Western Command said in a statement.

The display of cooperation between the US and Philippines comes at a time of heightened tension between the Philippines and China, which claims more than 80% of the South China Sea. 

The Philippine Navy’s guided-missile frigate BRP Jose Rizal and the US Navy Arleigh Burke-class guided missile-destroyer USS Ralph Johnson participated in the joint sail, during which ships practiced maneuvering near other vessels.

“This event aims to provide an opportunity for the Philippine Navy and the US Indo-Pacific Navy to test and refine existing maritime doctrine,” the Western Command said.

The Philippines has repeatedly complained against what it described as China’s “aggressive” actions in the South China Sea, including the use of a water cannon by its coast guard against a Philippines vessel engaged in a resupply mission on Aug. 5.

China has built militarized, man-made islands in the South China Sea and its claim of historic sovereignty overlaps with the exclusive economic zones of the Philippines, Vietnam, Malaysia, Brunei and Indonesia.

The Philippines won an international arbitration award against China in 2016, after a tribunal said Beijing’s sweeping claim to sovereignty over most of the South China Sea had no legal basis.

Philippine President Ferdinand R. Marcos, Jr. vowed to promote an international rules-based order during the summit of Southeast Asian leaders in Indonesia this week.

“My participation will highlight our advocacies in promoting a rules-based international order, including in the South China Sea,” he said in a departure speech before flying to Jakarta.  

The Philippines and other Southeast Asian nations have been seeking to finish a code of conduct in the South China Sea.

Meanwhile, the US bid to get closer to Vietnam amid an increasingly belligerent China bodes well for Philippine efforts to expand trade and security ties with allies, according to foreign policy experts.

US President Joseph R. Biden will visit Hanoi next week, a move that observers say is driven by shared concerns on China’s increasing aggression in the Indo-Pacific region, where 60% of global maritime trade passes through.

US efforts to boost relations with its former foe could create an enabling environment for Manila-Hanoi ties to improve, said Don Mclain Gill, who teaches foreign relations at De La Salle University in Manila.

“Closer Vietnam-US ties are also beneficial for the Philippines, given that both Southeast Asian countries are increasing their perceptual convergence towards the need to strengthen ties with Washington, thus creating more avenues for engagements,” he said in a Facebook Messenger chat.

As a middle power, the Philippines can draw lessons from Vietnam’s hedging strategy with China and the US “amid the latter’s increasing assertiveness and direct challenges towards Vietnam’s national interest,” he said.

The US and Vietnam “shared nothing but mistrust and antipathy toward one another” in the aftermath of the Vietnam war, according to the Journal of Indo-Pacific Affairs.

The former foes’ relationship has improved in the past three decades driven by business, with Vietnam now the US’ 10-largest trade partner.

As in the case of the Philippines, China is also Vietnam’s largest trade partner, with Hanoi heavily relying on Beijing for the materials and equipment needed by its manufacturing sector.

Vietnam has stood up to China’s aggression at sea. In 2014, the two countries quarreled after China moved its oil platform to waters near the disputed Paracel Islands.

Mr. Gill said Vietnamese foreign policy should be understood with utmost prudence, noting that strengthening ties between Hanoi and Washington does not mean that Vietnam would be willing to let go of its ties with China.

“Rather, it means that Vietnam is trying to address China’s growing belligerence.”

Philippine President Ferdinand R. Marcos, Jr. has vowed to make the country a “friend to all and enemy to none.”

‘SHARED CHALLENGES’

This is an important similarity between the Philippines and Vietnam, said Manila-based International Development and Security Cooperation founder Chester B. Cabalza, noting that the Southeast Asian nations are considered “middle powers.”

“Mapping out growing US-Vietnam ties is a good precedent for Manila to increase its bilateral ties with Vietnam,” he said in a Messenger chat.

Vietnam conducted major expansion activities such as dredging and landfill work at most of its South China Sea outposts in the second half of 2022, according to a December report by Washington’s Center for Strategic and International Studies.

Mr. Cabalza said Vietnam was the “last man standing” in the South China Sea conundrum when the Philippines pivoted to China under ex-President Rodrigo R. Duterte.

Vietnam’s stronghold at Paracel Islands and some maritime features in the Spratly Islands, over which the Philippines has claims, are “manifestations of Hanoi’s continuous resistance to China’s dominant presence in the contested waterways.”

He said Vietnam could share its military modernization experiences and maritime security operations with the Philippines.

“Vietnam has been adamant in negating China’s imaginative and illustrative maps,” Mr. Cabalza said. “It has banned a few movies that are critical to the U-shaped and broken-lines map of China. It has also gone to war with China to negotiate its maritime claims.”

He noted that the growing ties between the US and Vietnam, a growing manufacturing hub in the region, “hits the core of collective resistance against China’s expansionist regime while Beijing’s leadership morale is at rock bottom in the region.”

Vietnam is set to elevate its ties with the US to a “comprehensive strategic partnership” that it has only given to a handful of countries such as China, Russia, India and South Korea, according to reports.

Lucio B. Pitlo III, a research fellow at the Asia-Pacific Pathways to Progress Foundation, said upgrading US-Vietnam relations could improve security cooperation including on the maritime front.

He said Vietnam might warm up to more joint activities in the South China Sea, including US-led regional naval and coast guard drills.

“Washington may encourage and support other coastal states to work together to address shared challenges in the contested sea,” he said via Messenger chat.

He added that the US would likely provide them with diplomatic support and maritime capacity building to “expose Beijing’s gray zone actions and protest against its efforts to disrupt the marine economic activities of its Southeast Asian neighbors within their maritime entitlements defined by the United Nations Convention on the Law of the Sea.”

But Enrico Cau, chief advisor for geopolitical affairs at the Taiwan Business Leaders’ Forum, said the hedging strategy of Vietnam, which is unlikely to join any western-led bloc in case of conflict, “suggests that the Philippines’ best course of action revolves on its capability to engage Vietnam independently, rather than as a US ally.”

“This will allow Manila to make use of US influence as a multiplier to boost relationships with Hanoi, while retaining the capability to engage Vietnam autonomously, should the current momentum in US-Vietnam relations fail to consolidate in the long term,” he said via Messenger chat.

He noted that Vietnam’s hedging posture aims to achieve “maximum gains with minimal involvement in activities that put at stake its political stability and relations with neighboring countries.” — with Reuters

Senators swiftly approve VP’s P2.39-billion budget

PNA PHOTO BY ALFRED FRIAS

By John Victor D. Ordoñez, Reporter

SENATORS on Monday swiftly approved Vice-President’s Sara Duterte-Carpio’s P2.39-billion budget for next year amid questions whether her office really needs P500 million in confidential funds.

Senator Ramon “Bong” B. Revilla, Jr. moved for the budget approval after a few pleasantries at a hearing, in line with a Senate “tradition.”

Senators Ana “Risa” Hontiveros-Barquel and Aquilino Martin  “Koko” D. Pimentel III asked Ms. Carpio why her office needed P500 million in confidential funds.

This is larger than the proposed confidential funds of Defense department, which is asking for P87 million, and P1 million for the National Intelligence Coordinating Agency. 

“There is no good reason why the Office of the Vice President should have confidential fund allocations that are larger than the combined confidential budgets of our top security agencies,” Ms. Hontiveros-Baraquel said at the hearing.

Ms. Carpio said the funds would be used for the “safe, secure and successful implementation” of her office’s socioeconomic projects and in intelligence gathering and projects supporting the Office of the President.

“We can only propose but we’re not insisting,” she told the hearing. “We can live without confidential funds. But of course, our work will be much easier if we have the flexibility of confidential funds.”

Last week, the Office of the Vice President’s budget breezed through the House committee on appropriations after her congressional allies voted to end the hearing on “parliamentary courtesy.”

Opposition congressmen led by Party-list Rep. Raoul Danniel A. Manuel opposed the termination of the House hearing, saying parliamentary courtesy stops Congress from exercising its power of the purse.

They cited the lack of transparency on how the government spends the people’s money.

The Commission on Audit (CoA) has flagged the OVP for spending confidential funds worth P125 million last year.

Party-list Rep. France L. Castro said the money could have built 50 classrooms, adding that these were not part of the 2022 General Appropriations Act.

Meanwhile, the Department of Education (DepEd), which Ms. Caprio heads, wants P150 million in confidence and intelligence funds.

At a separate hearing on the agency’s budget, Ms. Carpio said the P150 million in confidence and intelligence funds would be used for the agency’s initiatives against child pornography, youth drug use and programs against extremism.

“These programs would provide a safe and enabling learning environment for our students and teaching personnel,” she told senators.

She said the agency’s intelligence-gathering efforts would also include programs against crimes, insurgency and gangsterism.

Ms. Hontiveros-Baraquel asked the vice president how DepEd’s efforts differ from similar programs being implemented by the Philippine National Police, Armed Forces of the Philippines and the country’s task force against communism.

Ms. Carpio said DepEd’s initiatives would benefit students and teachers, compared with the broad mandate of other agencies.

“I would still aver that in terms of intelligence collection and analysis, even in the education sector, the mandate should still remain with our security agencies and experts,” the senator said.

DepEd was allotted P758.6 billion in the proposed P5.76-trillion national budget for next year.

Ms. Duterte told reporters last month the Education department needed the confidential and intelligence funds because “education is intertwined with national security and it is important to mold children who are patriotic, who will love and defend our country.”

The budget for confidential and intelligence funds next year increased by P120 million to P10.14 billion — P5.28 billion in intelligence and P4.86 billion in confidential funds.

Under the 2024 National Expenditure Program, the Office of the President was given P4.5 billion in intelligence funds, while the Department of Information and Communications Technology got confidential funds worth P300 million.

Chinese loan for P142-B Philippine rail left hanging

FACEBOOK/PHILIPPINE RAILWAYS INSTITUTE

THE EXPORT-IMPORT Bank of China  (China Eximbank) has yet to confirm whether it would approve a P142-billion loan for the Philippines’ Bicol railway project, Transportation officials told congressmen on Monday.

The Department of Transportation and Finance department met with Chinese Embassy officials in Manila earlier this year to discuss the loan, Transportation Undersecretary Cesar B. Chavez told the House committee on appropriations. “We were given no clear direction on this.”

The Duterte government in February 2022 awarded to China Railway Design Corp. a contract to build the Philippine National Railways (PNR) South Long-Haul project. The state-owned bank, however, had yet to confirm whether it would approve the loan.

The Chinese Embassy in Manila did not reply to an e-mail seeking comment.

Tensions between the Philippines and China have worsened after the Chinese Coast Guard fired water cannons to block Manila’s attempt to deliver food and other supplies to a grounded ship at Second Thomas Shoal on Aug. 5.

The government has a contract with China Railway for a project management consultancy worth P14 billion, Mr. Chavez said. “But there’s no contract and loan approved or granted to the Philippine government from China.”

The Philippines has spent almost P2 billion for the project management consultancy with the Chinese state company, he added.

Former Finance Secretary Carlos G. Dominguez III withdrew the Philippines’ loan application last year due to China Eximbank’s inaction.

The Transportation department would consult the National Economic and Development Authority by yearend on whether the loan should proceed.

If the loan does not proceed, the Philippines could get funding for the rail project through public-private partnerships or loans from the Asian Development Bank or Japan International Cooperation Agency, Mr. Chavez said.

The PNR South Long-Haul project was allotted a P3.1-billion budget for next year. Construction is expected to finish next year, with operations expected to begin in 2025.

Also called the PNR Bicol, the project is expected to cut travel time from Manila to Bicol province to four from 12 hours. The 368-kilometer rail will run from Calamba, Laguna in Central Luzon to Daraga, Albay — Beatriz Marie D. Cruz

PUV modernization program will push through despite zero budget

DOTR PHOTO

By Beatriz Marie D. Cruz, Reporter

THE DEPARTMENT of Transportation (DoTr) said it would implement its modernization program for public utility vehicles (PUV) despite receiving zero funding for next year, Transportation Secretary Jaime J. Bautista told congressmen on Monday.

“We requested from the DBM (Department of Budget and Management) a budget of P1.8 billion. Unfortunately, we were not given any budget in the NEP (National Expenditure Program), but we will continue the modernization program,” Mr. Bautista told a House appropriations committee budget hearing.

Since the PUV modernization program was also left out of the Department of Transportation’s (DoTr) 2023 budget, he said they would just move for the consolidation of the PUV industry.

A Dec. 31 deadline has been set for single operators and drivers to be brought together as one legal entity to help facilitate the transition to modern transport units. Mr. Bautista said they would stick to it.

Earlier, he said traditional jeepneys could keep operating if these were properly maintained.

“We really encourage them to avail [themselves of] new units but if they really can’t, we’d just see to it that their equipment are roadworthy,” he told reporters in April.

The PUV sector conducted a transport strike in March to protest the looming phase out of traditional jeepneys.

Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Teofilo E. Guadiz III told lawmakers no PUV franchise was canceled as requested by the DoTr secretary after the strike.

Party-list Rep. Raoul Danniel A. Manuel said PUV drivers and operators have the right to protest against the modernization program.

“We should not threaten [canceling their franchise] because that is part of their rights especially if they think that this modernization program will leave them disadvantaged,” Mr. Manuel told the committee.

The DoTr is seeking a P214.3-billion budget for next year, 76.5% higher than this year’s allocation and the fifth-biggest budget among departments.

Kerwin Espinosa acquitted anew

PHILIPPINE STAR/EDD GUMBAN

A MANILA court has cleared self-confessed drug dealer, Kerwin Espinosa (real name: Rolan E. Espinosa), of illegal firearms and explosives charges due to lack of evidence and a key witness’s recanting of his testimony that the supposed guns seized in a 2016 raid belonged to the accused.

In a ruling dated Sept. 4, a Manila Regional Trial Court said government prosecutors failed to present evidence that proved Mr. Espinosa’s guilt beyond reasonable doubt, noting that his family and he were abroad when their house in Albuera, Leyte was raided in August 2016.

Moreover, a key witness in the case — Marcelo Adorco, bodyguard of the late Albuera Mayor R. Espinosa who is the accused’s father — testified that the guns police claimed they found during the raid allegedly belonged to the mayor and were just hauled off to the house of the accused by police.

Mr. Espinosa was previously acquitted of two separate drug trafficking charges by courts in Makati City. — John Victor D. Ordoñez

Reelectionist village chief killed

COTABATO CITY — A drive-by shooting in Zamboanga City ended the lives of a Tausug barangay chairman and his brother at a roadside eatery last Sunday afternoon.

Col. Alexander A. Lorenzo, Zamboanga City police director, reported on Monday that two other companions of Jul-Asmad Mawajil Anjawang, a reelectionist in Barangay Pamansaan, Mabuhay town, Zamboanga Sibugay, and his brother, Jamar Mawajil Anjawang, were wounded in the attack.

Major Albin T. Cabayacruz, chief of the city’s Police Precinct 11, told reporters they were validating assertions by the victims’ relatives that the attackers related to the village chief’s rival in the upcoming elections.

Barangay Pamansaan has a mixed population of Muslims and Christians, with some families engaged in deadly clan wars involving Tausug settlers, Mr. Cabayacruz said. In 2021, the vice mayor of Mabuhay, Resituto Calonge, was gunned down just outside of the municipal hall. — John Felix M. Unson

2 Dutch tourists missing

BAGUIO CITY — Two Dutch tourists who went on a mountain trek in Banaue, Ifugao last weekend are now the subject of a search after one of them called the police hotline on Saturday to say they were lost then lost contact.

Brig. Gen. David K. Peredo, Jr., Cordillera police director, said police received a “911” call from a man who introduced himself as Dutch national, Roy Schouten, at 5:18 p.m. Saturday and his brother and he had lost their way to Barangay Pula in Banaue.

However, the brothers lost their cellular phone signal before their exact location could be determined by police.

A guesthouse lodge in Barangay Campulo, Banaue confirmed that two Dutch tourists had stayed for the night then hiked to Barangay Pula, refusing services of a guide. Another villager told police he offered to guide them along the right path, but the two insisted they go in the direction of Barlig town, Mountain Province, Mr. Peredo said. — Artemio A. Dumlao

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