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British Museum seeks recovery of some 2,000 stolen items

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LONDON — Around 2,000 artefacts including gold jewellery and gems had been stolen from the British Museum over a long period of time, but recovery efforts were already under way, the museum’s chair George Osborne said on Saturday.

The museum, one of London’s most popular attractions whose treasures include the Rosetta Stone, an ancient Egyptian relic inscribed with hieroglyphs and other texts, said last week a member of staff had been dismissed after items dating from the 15th century BC to the 19th century AD, including gold jewelry and gems, had been taken from a storeroom.

Museum director Hartwig Fischer said on Friday he would step down after admitting to failings in its investigation into the theft of items from its collection.

Mr. Osborne, a former British finance minister, told BBC radio that not all of the museum’s collection was properly catalogued or registered, a situation not unique among large institutions whose collections had been amassed over hundreds of years.

A “forensic” inquiry was being conducted to find out what had been stolen, Mr. Osborne said. “We think it’s around 2,000 items,” he said. “But I have to say that’s a very provisional figure and we’re still actively looking.”

“We’ve already started to recover some of the stolen items,” he added, without giving any details of what had been recovered or how.

Mr. Osborne said he did not believe there had been any deliberate cover-up after the museum previously rejected a warning in 2021 that the thefts were happening.

But there could have been some “potential group think” at the top of the institution that could not believe an insider was stealing, he said.

He said the thefts had “certainly been damaging” to the reputation of the museum, which casts itself as a trusted custodian of priceless artefacts from cultures around the world.

“That’s why I’m apologizing on behalf of the museum,” he said.

Police said on Thursday said they had interviewed but not charged an unnamed man over the stolen artefacts.

MUSEUM DIRECTOR QUITS
The director of the British Museum said on Friday he would step down after admitting to failings in its investigation into the theft of items from its collection.

Hartwig Fischer, a German art historian who had led the museum since 2016, said there could have been a better response to warnings that an employee may have been stealing items and the failings “must ultimately” rest with him.

“It is evident that the British Museum did not respond as comprehensively as it should have,” he said in a statement.

The British Museum initially said in the statement that Mr. Fischer would step down “with immediate effect,” but later removed those words and said he would resign once an interim leader had been found.

Mr. Fischer said that he withdrew remarks made about the art dealer who first alerted museum bosses to the stolen items. He expressed “sincere regret” over the “misjudged” comments.

Earlier last week, Mr. Fischer said Ittai Gradel, an antiquities dealer, withheld information about the scale of the stolen items when he contacted the museum.

The museum’s board of trustees accepted Mr. Fischer’s resignation.

“We are going to fix what has gone wrong,” Mr. Osborne said. “The museum has a mission that lasts across generations. We will learn, restore confidence and deserve to be admired once again.” — Reuters

The OFW as a permanent phenomenon: Nurses needed everywhere

MEDICALERT-UK-UNSPLASH

(Part 5)

Assuming that we attain the National Economic and Development Authority’s (NEDA) Ambisyon Natin 2040 goal — that within the next 20 years we shall progress from being a low-middle income country to high-middle income and finally to high-income (First World) — will there still be millions of Filipinos seeking employment abroad as OFWs? My answer is “yes.” The only difference is that by then, the driving force for Filipinos to work abroad will no longer be their dire poverty at home but their free choice to live in a foreign land and, if they still have close relatives left at home to support financially, to be able to earn substantially more than what they would receive if they stayed at home, even if not at poverty levels.

As we shall see in greater detail below, a nurse who is already receiving P50,000 monthly today is definitely not living in dire poverty. She and her family, if any, already belong to the high-middle income households as do millions of other families. In fact, it is expected that two to three years from now, the entire Philippines will be categorized as a high-middle income country. Why would such a nurse still want to go to work abroad? The answer is economic in nature. If she makes the extra effort to learn Japanese, German, or Finnish, she can earn anywhere from $1,500 to $2,000 monthly (equivalent to about P84,000 to P112,000 at today’s foreign exchange rate). In the United States, the going rate is already $5,000 monthly. It is obvious that there is an economic incentive to work abroad for a nurse, especially if she is still young and unmarried.

Because of very serious labor shortages in more developed countries all over the world, what Filipino workers and professionals can earn if they go to these countries will always be substantially more than what they will be able to earn in the Philippines, even if they are already compensated at home at levels commensurate to a First World economy. The reason is that the Philippines will still have a relatively young and growing population 20 years from now, thus keeping wages and salaries at relatively lower levels as compared to the other developed countries that will be suffering from acute labor shortages because of the problem of demographic decline and ageing.

This is especially true in the healthcare and hospitality sectors. It is estimated that by 2030, the world could be short of 12 million nurses. The problem, though, is even now it is estimated that the Philippines has a shortage of nurses to the tune of 127,000, which is expected to more than double to 250,000 by 2030 if the Government, working in tandem with the business sector and the academe, are not able to implement measures today that will significantly increase the supply of nurses.

As enumerated in an editorial of one of the dailies entitled “Solving the shortage of nurses,” some such measures are: helping those who failed the nursing board exams meet the standards established to officially become healthcare workers; adopting an updated curriculum that will allow nursing students to enter the workforce and take on more responsibilities even while still pursuing their nursing degree; inviting nonpracticing nurses to take up their profession; conducting exchange programs with other countries (especially the US, the UK and Australia where there is no language problem for Filipinos) to improve the quality of teaching and facilitate skills transfer; and implement a flexible short-term masteral program to increase the roster of qualified instructors in nursing and medical schools.

The editorial cited also complimented private initiatives to address the shortage: “Also worth encouraging are partnerships between academic institutions and medical networks, such as one recently forged between the Ayala Groups’ AC Health and the Yuchengco family’s Mapua University. Under the partnership, qualified students of Mapua will be allowed to train in the facilities of AC Health’s Healthway Medical Network, one of the country’s largest private operators of clinics and hospitals. The partnership is seen to help build up a medical workforce that is more resilient and better-trained in the latest hospital technology.”

On July 11, the Commission on Higher Education (CHED) announced that it would create new healthcare positions in order to help ease the nursing shortage in the Philippines. Together with the Technical Education and Skills Development Authority (TESDA), CHED plans to create certificate programs that will produce healthcare assistants and associates who need not have college degrees. These skilled health workers will relieve nurses of the tasks they perform such as checking on the blood pressure and temperature of the patients. There are functions that can be performed by what can be called healthcare associates and healthcare assistants who can acquire the appropriate skills in much less time than the five years required for a nurse to acquire a bachelor’s degree. The Marcos Jr. government is currently working with the Private Sector Advisory Council and the Department of Health to identify the tasks that nurses should not perform anymore.

CHED Chairman Prospero de Vera also said that the long-term solution to the nurse shortage is the lifting of the 10-year moratorium on the creation of new nursing programs, which took effect last year. There are already 54 universities that have applied to open nursing programs. For immediate action, the government will help unlicensed nurses pass their licensure exams. Only 50% of those who take these exams pass. Some of these unlicensed nurses who have spent five years studying to obtain their license could also be reskilled to become healthcare associates or assistants. A positive twist was given by Chairman De Vera to the exodus of Filipino nurses. He said that this means that we are producing world-class nurses. Echoing this observation, President Ferdinand Marcos, Jr. said that the Philippines has become a victim of its own success as the world has sought the help of Filipino health workers, resulting in a shortage of local health professionals in the Philippines.

What is true in the nursing profession can also be applied to other occupations in which there is a serious shortage of skilled workers. For example, Japan is making an extra effort to promote international tourism as a major engine of growth, but many hotels cannot operate at full capacity because of the shortage of workers. Through the upskilling of underemployed Filipino high school graduates, or even college graduates, through TESDA-type short courses, the Philippines can supply Japan with the skilled workers they need. As Japan is expected to lose some 800,000 people yearly because of population decline, the shortage of workers in their hospitality industry will only get worse and the wage differentials between the two countries in this sector will only widen, making it even more attractive for Filipinos already working in the hospitality sector to seek job opportunities in Japan.

What is true of Japan as regards acute shortages of service workers because of the rapid ageing of the population is true for many other countries like South Korea, Japan, Spain, Germany, and the UK. It is therefore easy to explain why the phenomenon of OFWs will not disappear for as long as we want to forecast the future.

(To be continued.)

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

SEC clears Pacerm-1 Energy Corp. direct public offering   

THE Securities and Exchange Commission (SEC) has cleared the direct public offering of Pacerm-1 Energy Corp., which will use the proceeds to pay long-term loans.

In a statement on Tuesday, the SEC said the approved registration statement of Pacerm-1 Energy covers 250,000 common shares, subject to the company’s compliance with certain remaining requirements.

“The company expects proceeds to amount to P15.89 million, which will be used for the payment of its long-term loans,” the SEC said.

According to the commission, Pacerm-1 Energy will offer 26,891 common shares priced at P2,100 apiece. The offering will be from Sept. 1 to Nov. 30.

It added that the shares may be sold to any person, partnership, cooperative, corporation, or trust account.

Pacerm-1 Energy, based in Misamis Oriental, is engaged in power generation via the use of diesel power or other nonrenewable and renewable energy (RE) resources such as wind, solar, ocean and biomass energy.

“The offering is being made in compliance with an order by the Energy Regulatory Commission (ERC) to offer not less than 15% of its outstanding capital stock to the public,” the SEC said.

Under Section 43 (t) of Republic No. 9136 or the Electric Power Industry Reform Act (EPIRA), generation companies are mandated to publicly offer and sell not less than 15% of their common shares of stocks.

ERC Chairperson Monalisa C. Dimalanta previously urged the Joint Congressional Energy Commission to suspend the mandatory listing to assist small RE companies.

The ERC previously said that 118 out of 143 generation companies, or 51%, have not complied with the public offering provision under EPIRA. It added that 65 out of the 118 companies are RE enterprises, of which 24 are classified as small RE firms. — Revin Mikhael D. Ochave

Archaeologists unearth 3,000-year-old priestly tomb in northern Peru

WWW.GOB.PE/ MINISTRY OF CULTURE

CAJAMARCA, Peru — Archaeologists in northern Peru have unearthed a 3,000-year-old tomb which they believe might have honored an elite religious leader in the Andean country some three millennia ago.

Dubbed the “Priest of Pacopampa,” referring to the highland archaeological zone where the tomb was found, the priest was buried under six layers of ash mixed with black earth, with decorated ceramic bowls and seals indicating ancient ritual body paint used for people of elite standing, Peru’s Culture Ministry said in a statement on Saturday.

Two seals were also found along the upper edges of the tomb, one with an anthropomorphic face looking east and another with a jaguar design facing west.

Project leader Yuji Seki said the large size of the tomb, nearly two meters in diameter and one meter deep, was “very peculiar,” as was the position of the body lying face down with one half of his body extended and feet crossed.

The body was also found with a bone shaped into a tupu, a large pin used by Andean Amerindians to hold cloaks and ponchos, which would have been used to hold a woman’s blanket, he added.

“Though this person is a man, the associations are very peculiar,” said Mr. Seki. “I think this was a leader in his time.”

The Pacopampa Archaeological Project has been working in the area since 2005, the ministry said, adding that rock layers indicate the priest, who would have been buried around 1,200 B.C., was some five centuries older than the tombs of the “Lady of Pacopampa” and the “Priests of the Serpent Jaguar of Pacopampa,” discovered in 2009 and 2015 respectively.

Last year’s find of the “Priest of the Pututos,” however, is believed to be older. — Reuters

Like-mindedness, shared values, and a common commitment to the rules-based order in the Indo-Pacific

MULTILATERAL EXERCISE (Talisman Sabre 23) hosted by the US Forces and the Royal Australian Forces. — MOD.GO.JP

Last week, significant developments involving other countries took place and reaffirmed our common commitment to the rules-based international order in the Indo-Pacific region.

On Friday, Aug. 25, two Japanese navy vessels — the JS Izumo (DDH-183) and JS Samidare (DD-106) — arrived in Manila for ongoing maritime exercises here, dubbed the Indo-Pacific Deployment (IPD) Exercises 2023.

According to the Japanese Embassy in Manila, the visit is in line with Japan’s commitment to work with regional partners and to demonstrate our interoperability and combined capabilities to ultimately achieve the vision of a “Free and Open Indo-Pacific” (FOIP).

On the same day, the Armed Forces of the Philippines (AFP) and the Australian Defence Force conducted their first combined amphibious assault exercise in San Antonio, Zambales. The exercise simulated combined operations between the two countries’ militaries: they retook an island supposedly occupied by enemy forces.

The exercise showcased the two countries’ military interoperability. No less than President Ferdinand Marcos, Jr. witnessed it, which was part of the Exercise Alon 2023.

This week, we commemorate the 72nd anniversary of the ratification of the Philippines’ 1951 Mutual Defense Treaty (MDT) with the United States of America. This agreement was no doubt conceived of under vastly different circumstances at the time, when the world was just learning the lessons from a war that killed millions, set back development, and redefined alliances, and when new tensions were brewing between two superpowers.

Over the years, there have been calls to review the MDT to assess its continuing relevance. The fact that it is still here, albeit supplemented by subsequent agreements such as the Visiting Forces Agreement of 1998 and the Enhanced Defense Cooperation Agreement of 2014, is a testament to its longevity and the fundamental value of its premise.

Today we view the MDT in the light of the actions of our giant neighbor to the West, China. Incident upon incident in the West Philippine Sea has convinced us that even “peacetime” does not translate to an absence of threat and risk. In fact, the risks have taken on many forms: they could be traditional, they could be non-traditional, they could be evolving. The world itself has changed since 1951 when two superpowers were dominant. Thus, the manner in which we address these risks has to be different.

On Aug. 5, China used water cannons against Philippine boats on a resupply mission off Ayungin Shoal, established as part of our Exclusive Economic Zone. When our officials tried to reach out to China at the height of the crisis, our calls went unanswered.

We were agitated by the audacity of the water cannon incident, and yet we realized this is hardly new nor surprising. After all, in February, China used a military-grade laser on a Philippine boat that was also on a resupply mission, causing the temporary blindness of a crew member.

There are no indications that China will stop anytime soon, much less acknowledge that what it is doing is contrary to international law and basic decency.

For Filipinos, the salient point in the MDT is Article V: “An armed attack on either of the Parties is deemed to include an armed attack on the metropolitan territory of either of the Parties, or on the island territories under its jurisdiction in the Pacific Ocean, its armed forces, public vessels, or aircraft in the Pacific.” It gives us comfort that we will not be left on our own in case we are attacked by anyone.

But while China’s acts are provocative and coercive, they have been calculated such that they are not quite provocative and coercive enough to be deemed an armed attack on the Philippines. They are almost the textbook definition of “gray zone operations.”

This is the reality in which we live. And this is also why we choose to think of the traditional, nontraditional, and evolving risks of our current world as also an opportunity for nations of the world to come together for a common cause. The critical landscape in the Indo-Pacific region pushes states to cooperate in order to maintain peace and stability and to discourage attempts by some nations to disturb the world order.

Certainly, the MDT remains valuable to the Philippines, and we will always take heart in the friendship and support offered by the Americans. Our alliance goes back many years. At the same time, we have expanded our circle such that we are now anchored on a broader alliance — that which we have with other like-minded states that share our values and commitment to peace and stability in the Indo-Pacific region.

The US, being the country that the highest number of Filipinos continue to trust, is in that circle, as are our friends Japan, Australia, the European Union, and India, among others. With these countries, we work toward maintaining the established order that is based on the rule of law.

We are stronger together.

Last year, President Marcos said that only the national interest will drive our foreign policy. More than ever, the country is convinced that it is in the national interest to assert our rights in the West Philippine Sea, as evidenced by a Pulse Asia survey last year showing that 89% of respondents agreed. This year, another Stratbase-commissioned Pulse Asia poll showed that 72% of Filipinos believe the Marcos administration should strengthen our military capability, 64% believe we should conduct joint military patrols and exercises with allied countries, and 61% say we should shift the focus of our defense institutions to external threats.

In these precarious times, it is good to know that we can rely on our friends to defend what is ours and keep coercive states from destabilizing the rules-based international order. Indeed, peace and stability are in the interest of the nation, the region, and, ultimately, the world.

 

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.

Gov’t makes full award of T-bill offering at mostly lower rates

RJ JOQUICO-UNSPLASH

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Tuesday at mostly lower rates as the Bangko Sentral ng Pilipinas (BSP) is expected to keep borrowing costs steady despite hawkish signals from the US Federal Reserve.

The Bureau of the Treasury (BTr) raised P15 billion as planned via the T-bills it auctioned off on Tuesday as total bids reached P49.125 billion or more than thrice the amount on offer.

Broken down, the Treasury made a full P5-billion award of the 91-day T-bills as tenders for the tenor reached P18.625 billion. The three-month paper was quoted at an average rate of 5.573%, 9.8 basis points (bps) below the 5.671% seen last week, with accepted rates ranging from 5.56% to 5.62%.

The government also raised P5 billion as planned from the 182-day securities as bids for the tenor reached P13.46 billion. The average rate for the six-month T-bill was at 5.993%, inching up by 0.7 bp from the 5.986% seen last week, with accepted rates at 5.95% to 6.038%.

Lastly, the BTr borrowed the programmed P5 billion via the 364-day debt papers as demand stood at P17.04 billion. The average rate of the one-year T-bill went down by 3.7 bp to 6.297% from the 6.334% quoted last week. Accepted yields were from 6.25% to 6.325%.

At the secondary market before Tuesday’s auction, the 91-, 182- and 364-day T-bills were quoted at 5.7522%, 5.9993%, and 6.3043%, respectively, based on PHP Bloomberg Valuation Reference Rates data provided by the Treasury.

“The Auction Committee fully awarded bids for Treasury bills (T-bills) at today’s auction. The 91-, 182-, and 364-day T-bills fetched average rates of 5.573%, 5.993% and 6.297%, respectively, all lower than the prevailing secondary market rates,” the BTr said in a statement on Tuesday.

“The auction was 3.3 times oversubscribed with total bids reaching P49.1 billion. With its decision, the Committee raised the full program of P15 billion for the auction,” it added.

The T-bills fetched lower rates amid “local views that the BSP will likely continue holding domestic policy rates despite views of more Fed rate hikes,” a trader said in an e-mail.

BSP Governor Eli M. Remolona, Jr. last week said the central bank’s stance remains hawkish, with rate cuts not on its radar, as inflation is still elevated.

The Monetary Board kept benchmark interest rates steady for a third straight meeting this month, but said it is prepared to resume tightening if needed amid risks to inflation.

The BSP this month left its overnight reverse repurchase rate unchanged at a near 16-year high of 6.25%. Interest rates on the overnight deposit and lending facilities were maintained at 5.75% and 6.75%, respectively.

The central bank raised borrowing costs by 425 bps from May 2022 to March 2023 to tame inflation.

The Monetary Board will hold its next policy meeting on Sept. 21.

Meanwhile, the US central bank may need to hike interest rates further to bring inflation down, Fed Chair Jerome H. Powell said on Friday.

The Fed raised borrowing costs by 25 bps last month, bringing its target interest rate to a range between 5.25% and 5.5%.

It has hiked rates by a cumulative 525 bps since it began its tightening cycle in March last year.

The Federal Open Market Committee will meet on Sept. 19-20 to review policy.

“T-bill auction yields also eased after global crude oil prices [were] still among one-month lows recently,”  Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Brent crude settled six cents lower at $84.42 a barrel, after touching a session high of over $85 earlier in the day. US West Texas Intermediate crude was 27 cents, or 0.3%, higher at $80.10, Reuters reported.

On Friday, crude posted a second week of losses after Mr. Powell said the US central bank may need to raise rates further to cool stubborn inflation.

Tuesday’s T-bill offering was the last for the month. The BTr has raised P53.935 billion out of the P75-billion program for the short-tenored papers.

On Wednesday, the BTr will offer P30 billion in reissued 10-year Treasury bonds with a remaining life of five years and four months.

The Treasury wants to raise P225 billion from the domestic market this month.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — A.M.C. Sy with Reuters

BoJ’s outlook does not reflect reality, price expert says

THE BANK of Japan (BoJ) should stop trying to keep policy normalization speculation at bay by offering an inflation outlook that doesn’t reflect reality, according to one of the country’s leading experts on prices.

While the central bank sharply raised its price outlook last month, it was still kept too low, said Tsutomu Watanabe, an economics professor at the University of Tokyo. That move was likely due to concerns over fueling speculation that the BoJ will change its negative interest rate, he said in an interview Monday.

“You’re going to deviate hugely from the right course of action if you try to justify policy with projections that aren’t true,” Mr. Watanabe said. “The correct path is to explain properly, if you want to prevent the figures from misguiding the policy outlook.”

Mr. Watanabe, who was a potential candidate to become BoJ governor earlier this year according to some reports, said that the BoJ’s upgraded July forecast for this fiscal year could have been as high as 2.9%, instead of 2.5%. The bank mostly reflected the stronger momentum up until then, and didn’t adjust its view for the future, he said.

The level of revision that was actually needed in the projection probably would have forced upward shifts for the other two fiscal years through 2025, bringing them above the central bank’s target of 2%, Mr. Watanabe said. That would have put the bank in an awkward position, if it wants to keep stimulus unchanged.

“My view is that there is a bias at the BoJ that means it can’t show strong inflation outlook figures,” the inflation expert said. That’s due to the BoJ’s stance that it’s far from changing its negative rate, said Mr. Watanabe, who is also a member of a special economic panel for Prime Minister Fumio Kishida.

In the latest Bloomberg survey, private economists saw core inflation rising 2.8% this year, before slowing to below the BoJ’s target level in subsequent years.

The professor spoke days after BoJ chief Kazuo Ueda reiterated the need to continue with monetary stimulus at the annual Jackson Hole symposium, citing underlying inflation that’s still below the bank’s 2% target. Mr. Watanabe said he disagrees with Mr. Ueda’s price assessment.

Watanabe has written books with titles such as The mystery of global inflation, What are prices? and Japan’s inflation and asset prices: decoding price dynamics. He has also created his own alternative price index through a company he founded.

The BoJ loosened its grip on yield curve control (YCC) last month, with Mr. Ueda saying the bank must be prepared for upside price risks. While that move was largely welcomed by market participants as a measure that enhances market functioning, Watanabe said the bank should have scrapped it in one go.

“YCC is nothing but a nuisance now,” Mr. Watanabe said. “All the BoJ managed to do was an adjustment. That’s a sore point.”

For the future path of monetary policy, the annual spring wage negotiations that start later this year is extremely important, Mr. Watanabe said. It’s likely to decide whether Ueda can raise rates during his five-year term ending in April 2028, he said.

That’s why it’s vital for the BoJ to provide the right picture of the cost of living, as its view is often referred to during wage talks between labor unions and businesses, Mr. Watanabe said.

The smoothest path for BoJ policy would be for signs of continued robust wage talks to emerge by the end of the year, allowing the bank to ditch YCC, Mr. Watanabe said. Then, with more signs of wage increases later on, the BoJ can announce its plan to change the negative rate early next year, Mr. Watanabe said.

That timeline is a tad earlier compared to with the views of other BoJ watchers. April is the most popular month for the next policy shift, and most don’t expect any change this year, according to a Bloomberg survey last month.

“A prerequisite for raising the short-term rate is the end of YCC,” Mr. Watanabe said. “I’m almost certain that the BoJ wants to scrap it before a rate hike.” — Bloomberg

PAL Holdings says airline unit’s board reinstates two key roles

PHILIPPINE STAR/EDD GUMBAN

PAL Holdings, Inc. said on Tuesday that the board of its unit had approved the reinstatement of two key roles in the operating company.

In a regulatory filing, PAL Holdings said the directors of Philippine Airlines, Inc. (PAL) had approved the reinstatement of the chief commercial officer position, appointing Eric David Anderson to the post with the rank of senior vice-president.

Mr. Anderson had served as vice-president for revenue management and strategy.

The approval was made during a board meeting on Aug. 29. 

The company also said that in the same meeting, the board had greenlit the reinstatement of the executive vice-president position, who will report to the company’s president and chief operating officer. 

The reinstatement is aimed at ensuring “that the PAL operations are carried out in accordance with the business plan of the Company.”

In May, PAL Holdings announced the appointment of Lucio C. Tan III as its president, taking over the post of Lucio C. Tan, who retained his role as chairman and chief executive officer.

For the April-to-June period, PAL Holdings reported an attributable net income of P6.23 billion, more than double the P2.47 billion in the same period last year, driven by higher revenue for the period, the company’s financial report showed.

The company’s gross revenue for the second quarter expanded by 34.1% to P45.24 billion from P33.74 billion in the same period last year.

At the local bourse on Tuesday, shares in the company gained four centavos or 0.78% to end at P5.15 apiece. — Ashley Erika O. Jose

Tight budgets no barrier for SMEs’ cybersecurity — expert

TOWFIQU BARBHUIYA-UNSPLASH

By Miguel Hanz L. Antivola

SMALL- and medium-sized enterprises (SMEs) are attractive targets for cybercriminals due to their potentially limited security measures, according to an expert.

A cyberattack can be disastrous for enterprises, often leading to not only monetary losses but also reputational damage that can erode customer trust, Yeo Siang Tiong, general manager for Southeast Asia at Kaspersky, said in an interview with BusinessWorld on the sidelines of the company’s Asia-Pacific Cyber Security Weekend in Bali, Indonesia last week.

“Having that security stance ahead of time is important,” Mr. Yeo said on prioritizing cybersecurity in response to the increasing number of data breaches.

The Philippines ranked fourth globally in the number of cyberattacks and second as the most attacked country by web threats worldwide last year, data from Kaspersky and the Department of Information and Communications Technology showed.

Kaspersky reported that SMEs in the Philippines saw 658,874 web attacks in the first half of 2022 alone, with 17,786 detections of Trojan-password stealing ware attempting to infiltrate the corporate network and steal sensitive information.

Mr. Yeo noted that small business owners must invest in their people and technology as their first key steps to protecting their enterprise. “Your devices and central resources are protected, and you encrypt the channel going in — that is when your company is fully protected.”

“A simple firewall was enough before, but now on top of that, you need to have a VPN (virtual private network),” Mr. Yeo said on the perimeter of wireless connections of a business network getting more difficult to defend.

Devices such as personal computers, laptops, and even mobile phones brought into the workplace must each have an encrypted channel to prevent open invitations for hackers, he noted. “The very virtue that [employees] bring a compromised device into the company’s environment, the company is affected as well.”

Although investment in software is more manageable than that in hardware, Mr. Yeo noted the need for expertise to handle threats and attacks when they actually occur in the business.

“If there’s an alert or warning, you should know how to respond to it,” he said. “We have seen a lot of SMEs who cannot handle and come to a point in time when they seek expertise.”

Mr. Yeo said that a lot of SMEs work with a close system integrator or IT provider, but some also outsource and pay a fixed sum to a dedicated provider who can monitor and respond to their security. “It makes sense to get someone to handle everything for them.”

However, an investment in employee awareness is a key aspect in cybersecurity solutions as criminals are targeting anyone with a device, according to Mr. Yeo.

Kaspersky has said that it currently receives an average of 400,000 new unique malicious samples every day, from one new virus every second in 2011 and one every minute in 2006.

With limited resources, Kaspersky recommends that SMEs create a cybersecurity handbook, grant employees minimum access rights, use a secure password manager, and install antivirus software on corporate devices.

“Small business owners may think their companies are too insignificant to become a target for cybercriminals. There is a certain logic in that because attackers usually look for maximum profit with minimum effort,” Mr. Yeo said.

“This sector is part of a bigger chain and like dominoes, if a single password stealer can enter a small enterprise’s systems, consider the entire chain compromised,” he added.

“As they grow up in their journey, there would be more investment you put in central resources to protect the company and monitor suspicious activity in real time.”

“It still remains the same. It’s a catch up game. Stay aware and ahead of it.”

TYPES OF CYBERATTACKS
Mr. Yeo noted that phishing, ransomware, cryptojacking, and drive-by download attacks are common threats faced by SMEs, similar to those encountered by large enterprises.

Phishing involves the deceptive process of obtaining a user’s credentials and confidential information. Through the use of social engineering techniques, fraudsters present themselves as legitimate providers or organizations, sometimes resorting to intimidation to coerce recipients into revealing personal data.

Ransomware has taken a new form with the emergence of ransomware-as-a-service (RaaS), wherein criminal groups rent out the program to encrypt or block access to data and then demand ransom from the victim, as explained by Mr. Yeo.

According to Kaspersky’s report, from 2015 to 2022, 58% of malware families offered as a service are ransomware. Notable families include Conti, REvil, LockBit, Cl0p, and DarkSide.

Moreover, cryptojacking uses phishing or malware to gain hidden unauthorized access to a user’s cryptowallet. “It compromises your devices and hijacks its bandwidth to do cryptomining,” Mr. Yeo said.

In 2022, Kaspersky research found cryptojacking accounted for over 5% of attacks on internet-connected computers. In the same year, Kaspersky software detected nearly 30 million cryptojacking attempts aimed at business systems.

SMEs also contend with drive-by download attacks, which involve unintentionally downloading malicious programs onto a user’s device. These attacks typically occur on seemingly safe websites and exploit security vulnerabilities within a system. A common tactic involves inserting a flash drive loaded with malware into the company’s PC, according to Mr. Yeo.

“Employees need to be aware of these, in company or personal devices,” he said. “The two key steps a company needs to do are invest in its people and invest in the technology.”

Eminem asks Republican Ramaswamy to not use his music in presidential campaign

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WASHINGTON — US rapper Eminem has asked Republican presidential candidate Vivek Ramaswamy, a multimillionaire former biotech executive, to not use his music during his presidential campaign, according to a letter disclosed on Monday.

In the letter dated Aug. 23, which was reported first by the Daily Mail, BMI, a performing rights organization, informed Mr. Ramaswamy’s campaign at the rapper’s request that it will no longer license Eminem’s music for use by Mr. Ramaswamy’s campaign.

“BMI has received a communication from Marshall B. Mathers, III, professionally known as Eminem, objecting to the Vivek Ramaswamy campaign’s use of Eminem’s musical composition (the “Eminem Works”) and requesting that BMI remove all Eminem Works from the Agreement,” BMI says in the letter.

Mr. Ramaswamy’s campaign told CNN it will comply with the request to stop using Eminem’s music.

Mr. Ramaswamy, a businessman with no political experience, has been rising in some opinion polls and has branded his rivals as “bought and paid for.”

The 38-year-old tech entrepreneur was at the center of many of last week’s first Republican primary debate’s most dramatic moments.

Mr. Ramaswamy, a fierce defender of former US President Donald Trump, faced plenty of incoming fire from his more experienced rivals, who appeared to view him as more of a threat than Florida Governor Ron DeSantis, who has been trailing Mr. Trump as a distant second for a long time in the Republican primary polls.

Mr. Trump, the overwhelming front runner in the primary contest, skipped the first debate last week. He gave an interview to former Fox News host Tucker Carlson, which was released on X, formerly called Twitter, at the same time as the Republican debate. — Reuters

Taxation in the digital age: Where are we now?

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The problems brought by the digital economy are faced not just by our country but are shared globally and are said to undermine the fairness and integrity of tax systems around the world. Bilateral and multilateral treaties are being considered to prevent these tax leakages, while other countries have decided to impose unilateral measures.

The tax erosion and leakages caused by the digital economy have been magnified more recently due to the COVID-19 pandemic. Currently, House Bill No. 7425, which aims to impose a value-added tax (VAT) on the sale of goods and services through electronic means, is pending before the Senate. Congressman Joey Salceda, one of the authors of the Bill, estimated that imposing VAT on electronic transactions will result in an incremental revenue for the government in the amount of P29.1 billion.

In parallel, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 60-2020 compelling businesses which earn income through electronic means to register their businesses and correspondingly, to file and pay their tax returns.

Even with these developments, the basic legal issue that needs to be clarified is this: when is a digital transaction taxable and when is it not, more particularly its situs. The answer to this is especially challenging in an electronic set-up which blurred the concept of territorial borders, physical presence, and permanent establishment.

The case of Commissioner of Internal Revenue vs. Baier-Nickel provides that the “situs of the activity xxx determines whether such income is taxable in the Philippines” regardless of the actual physical source of the money [G.R. No. 153793, Aug. 29, 2006]. In the case of Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branch), the Supreme Court held that the State must have a “substantial connection,” stating that “place where the output of the service will be further or ultimately used” is immaterial [G.R. No. 152609, June 29, 2005]. Just recently, the Supreme Court, in the case of Saint Wealth Ltd. v. Bureau of Internal Revenue, took a conservative stance, saying that unless there are laws and treaties allowing taxation of the digital economy, the same should remain beyond the jurisdiction of the taxing authority [G.R. Nos. 252965 & 254102, Dec. 7, 2021].

The BIR has also issued an opinion supporting the non-taxability of online transactions. The BIR held that domain services rendered abroad through the internet by a non-resident foreign corporation to a Philippine domain name holder located in the Philippines is not subject to tax. The BIR noted that since the registration and maintenance of Philippine domain names, which are the activities that produce the income, are performed outside the Philippines, the income derived therefrom is not taxable in the Philippines [BIR Ruling No. 009-05, Aug. 2, 2005].

There are also cases which may support the taxability of electronic and online transactions. In the case of Aces Philippines Cellular Satellite Corp. v. Commissioner of Internal Revenue, the Supreme Court ruled that despite the activity being performed through satellites located in outer space, the services are consummated by delivering the services through gateways located in the Philippines [G.R. No. 226680, Aug. 30, 2022]. The Supreme Court also pointed out that the provision of satellite communication is state regulated and thus, creates a sufficient nexus to enable the Philippines to tax the same. It will be noted, however, in this case that there are “gateways,” which in a sense provide for a physical presence in the Philippines.

Another case which may support the taxability of online transactions is W Land Holdings, Inc. vs. Starwood Hotels and Resorts Worldwide, Inc. [G.R. No. 222366, Dec. 4, 2017]. Although the case involves trademark infringement, the concept may be used as a starting point in establishing what constitutes doing business in the Philippines and hence, creating a nexus to the income. The Supreme Court, cognizant of infinite transactions that transpire through the internet, held that “representing the owner’s goods or services through an interactive website may constitute proof of actual use that is sufficient to maintain the registration of the same.” The Supreme Court stated that actual existence or presence is not required before one may be considered as doing business in the Philippines. The presence of an interactive website, through which it actively seeks business from residents of a particular country, is sufficient to establish trade or business in that country.

To date, there is still no law or categorical ruling settling the issue of whether transactions conducted online should be subject to tax. Even with legislation in the pipeline, it still begs the question of how far Congress can tax digital transactions given that it will also result in externalities and conflict of interest between and among countries which may call for international consensus.

(The views and opinions expressed in this article are those of the author. This article is for general information and educational purposes, and is not offered as, and does not constitute, legal advice or legal opinion.)

 

Evangeline R. Villajuan is an associate of the Tax department of the Angara Abello Concepcion Regala Cruz Law Offices.

GCash to partly subsidize partners’ costs

ELECTRONIC wallet platform GCash said it will continue to subsidize a portion of the operating costs of its partners to sustain lower cash-in fees, the company said on Tuesday.

Earlier this month, mobile wallet GCash announced that it is about to impose a P5 convenience fee for cash-in transactions through its two major bank partners Bank of Philippine Islands and Union Bank of the Philippines.

“Even with this fee, we will continue to subsidize part of the operating cost for cash-ins as we remain committed to keeping our services accessible to many Filipinos,” GCash President and Chief Executive Martha Sazon said in a statement.

Ms. Sazon said the cash-in charge will begin by the fourth quarter although she noted that it is still much lower than the transaction fees usually charged by other financial institutions.

“This also ensures that our operations will remain seamless for all customers,” she said. “Even with this fee, we will continue to subsidize part of the operating cost for cash-ins as we remain committed to keeping our services accessible.”

Last week, the financial super app announced that it had decided to waive the QR Ph transaction fees for micro-merchants until the end of this year.

The move is to allow small businesses to boost their income while still using its scan-to-pay services, GCash said.

GCash said micro-merchants will also have an increased wallet limit of up to P500,000 per month while the 1.5% transaction fee is waived for up to P100,000 in gross sales. — Ashley Erika O. Jose

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