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Banks, electronic money issuers reviewing zero transaction fees on small transfers

STOCK PHOTO | Image by David Dvořáček from Unsplash

By Keisha B. Ta-asan, Reporter

BANKS and electronic money issuers (EMIs) are still reviewing the removal of transaction fees for small online fund transfers, an official from the Bangko Sentral ng Pilipinas (BSP) said.   

BSP Deputy Governor Mamerto E. Tangonan said talks between the central bank and the payments industry to remove or lower transaction charges for small e-payments have been productive.   

“Many banks have waived their fees on e-payments (for) P1,000 and below. Others are continuing their review of their financials to see how they can make it possible,” he told BusinessWorld in a Viber message.   

Mr. Tangonan said banks that have waived fees on small fund transfers are assessing the value gained from having zero fee transactions such as an increase in customers and higher client loyalty.   

As of Nov. 7, nine banks have waived PESONet charges until further notice while two lenders are implementing zero fee transactions until Dec. 31, 2023.    

For fund transfers through InstaPay, seven banks have removed transaction charges until further notice, while five lenders have waived their fees until end-December 2023.   

PESONet caters to high-value transactions and is considered as an electronic alternative to paper-based checks while InstaPay is a real-time electronic fund transfer facility for low-value transactions of up to P50,000.

To boost the usage of digital payments among Filipinos, the BSP has been encouraging BSP-supervised financial institutions (BSFIs) to waive or lower rates on small e-payments since last year. But banks and non-banks have not yet reached an agreement with the central bank.

Last week, the BSP released Memorandum No. M-2023-037, which states that the moratorium on transfer fee increases remains in effect. It was first imposed in 2021.   

“The moratorium is in effect until the banks and EMIs waive their fees on small e-payments and subject to our review,” Mr. Tangonan said.   

Based on the memorandum, a transfer fee that is currently waived may only be restored up to the amount reported to the BSP before the waiver. 

BSFIs who are also planning to introduce fees for new fund transfer services will need to apply for prior BSP approval. These fees must also be reported to the BSP 60 days before implementation.   

BSP Governor Eli M. Remolona, Jr. earlier said the central bank is actively working on lowering and ultimately eliminating fees on small electronic payments.

“The reduction or removal of transfer fees for small e-payments supports our vision of digitalization and inclusivity. We are engaging the industry through dialogue to explore ways to reduce or completely eliminate fees for small-value transactions,” he said.   

Last week, lawmakers filed a bill that seeks to waive additional fees in small electronic wallet (e-wallet) transactions at the House of Representatives.   

Under the proposed law, all electronic fund transfer service providers will be required to waive all fees associated with small-value transactions.

The fee waiver will be applied when sending money to another e-wallet user, cashing in or cashing out to an e-wallet account, and transferring funds to a bank account.

The BSP will have the authority to adjust the transaction amount subject to waived fees based on the daily cost of living, current exchange rate, and inflation rate.

Based on BSP data, the combined value of transactions done through the BSP’s automated clearing houses InstaPay and PESONet rose by 30.6% to P10.39 trillion as of October from P7.95 trillion in the same period last year.   

In terms of volume, transactions coursed through the clearing houses grew by 43.7% to 733 million as of end-October from 510 million in the comparable year-ago period.

The BSP is targeting to digitalize 50% of total retail transactions and onboard at least 70% of Filipino adults to the financial system by the end of this year. 

BSP’s policy easing expected to support economy in 2024

AN AERIAL VIEW shows the Ortigas business district in Pasig City, Philippines, June 10, 2022. — REUTERS/ADRIAN PORTUGAL

By Keisha B. Ta-asan, Reporter

THE WIDELY expected monetary policy easing from the Bangko Sentral ng Pilipinas (BSP) next year will likely spur economic activity especially if inflation is kept in check.

However, the BSP and the banking industry should remain vigilant against risks  amid a prolonged period of volatility and uncertainty, analysts said.

Security Bank Corp. Chief Economist and Senior Assistant Vice-President Robert Dan J. Roces said the BSP is expected to start monetary policy easing by mid-2024.

“It’s expected that there might be a shift towards policy easing, potentially starting in mid to late 2024. Such rate cuts could stimulate economic growth by encouraging consumer spending and business investments, provided that inflation is kept under control,” he said in an e-mail. 

At its last meeting for the year, the Monetary Board maintained its target reverse repurchase rate at a 16-year high of 6.5%. The BSP has raised borrowing costs by a cumulative 450 basis points from May 2022 to October 2023 to curb inflation.

Bank of America Country Executive for the Philippines Vincent Valdepeñas said he expects the BSP to start rate cuts by the second quarter. 

“A moderate acceleration of rate cuts can further increase economic activity and can help boost growth. We view a 100-basis-point (bps) cut in 2024 starting second quarter next year, which will bring down the key policy rate to 5.5%,” he said in an e-mail interview. 

Mr. Valdepeñas said Philippine gross domestic product (GDP) will likely expand by 5.5% in 2024, lower than the revised 6.5-7% government target for next year.

Krisjanis Krustins, director for Asia Pacific sovereigns at Fitch Ratings, also see a 100-bp worth of rate cuts from the BSP next year. 

“We assume BSP will cut rates to 5.5% by end-2024 and 4.5% by end-2025, under our forecast of consumer price inflation moderating to an average of 3.5% by 2025 on lower commodity prices, base effects and monetary tightening up to 2023,” he said in an e-mail. 

Headline inflation slowed to 4.1% in November, which marked the 20th straight month that inflation breached the central bank’s 2-4% target range.

Year to date, inflation averaged 6.2%.    

RISING RISKS

However, Fitch’s Mr. Krustins said risks remain despite the slowdown in November inflation, citing elevated inflation expectations, supply-side price pressures, and potential second- round effects from higher minimum wages and transport fares. 

The BSP’s risk-adjusted inflation forecast for 2023 stood at 6% this year, 4.2% for 2024 and 3.4% for 2025.

The BSP also maintained its average inflation baseline forecasts at 6% for 2023, 3.7% for 2024, and 3.2% for 2025.    

Mr. Valdepeñas said some of the key risks to the Philippine economy next year would be geopolitical uncertainties, higher interest rates that may lead to sluggish growth, and climate-environment worries.

“A key challenge for the (banking) industry in 2024 would be maintaining profitability with a prolonged higher rates environment and market volatility while navigating through the credit cycle,” he said. 

He said the Philippine banking industry has so far done well in an environment of higher interest rates.

Banks have seen increased revenues and profits this year due to higher net interest margins, while also better managing their credit portfolios. 

The banking industry’s cumulative net income rose by 10.4% to P270.352 billion as of end-September from P244.876 billion last year, based on the latest central bank data. 

As of end-September, banks’ net interest income jumped by 20.4% to P663.24 billion from P550.666 billion last year.

The Philippine banking industry wrote off P457.88 million worth of bad debts in the nine-month period, 80.1% lower than P2.3 billion a year ago.

Banks have also spent a lot of resource on digitization and technology to remain competitive, Mr. Valdepeñas said. 

“A competitive landscape is always good as it leads to better outcomes for clients, for the business community and for the broader economy,” he said. 

Meanwhile, Mr. Roces said banks had to adapt when the BSP aggressively tightened monetary policy to tame inflation.

“High interest rates typically lead to more expensive loans, dampening borrowing enthusiasm, and slowing down loan growth. However, this also provides an opportunity for banks to achieve higher net interest margins,” he said.

“The industry has had to enhance its risk management practices, with a more prudent credit risk assessment to mitigate the risks. In addition, banks have been adjusting their investment portfolios,” he said.

However, stubborn inflation remains a significant concern as it could prompt the BSP to keep interest rates higher for longer, which could continue to hurt consumer spending and investments.

“The global economic environment also poses a risk, especially if a slowdown affects sectors reliant on exports and foreign investments. Domestic and regional political stability is crucial for maintaining investor confidence and economic stability,” Mr. Roces said.

DIGITAL TRANSFORMATION

The increased adoption of digital technology in the banking sector also requires a “substantial investment” in cybersecurity and digital infrastructure. 

The BSP has been proactive in promoting digital transformation in the financial sector. The BSP aims to convert 50% of retail payments into digital form and expand financial inclusion.

The BSP has said it is working closely with the industry to introduce new digital payment streams and facilitate the growth of financial technology (fintech) businesses engaged in e-commerce. 

“Overall, the banking industry faces evolution in 2024, primarily centered around adapting to the digital revolution. This involves enhancing digital platforms and services, offering innovative products, and focusing on personalized customer services,” Mr. Roces said.

Banks and financial institutions need to manage market volatility and enhance strategies such as asset diversification and strengthened liquidity management, he said. 

“The prolonged period of volatility and uncertainty has also changed the competitive landscape, with increased competition from fintech and digital banking platforms. Banks are now more focused than ever on improving customer experience and service efficiency,” he added.

Remembering Shaz

DANCING as Albrecht in Giselle and as Siegfried with Lisa Macuja-Elizalde in Swan Lake.

BM’s Osias Barroso was married to ballet, and dancers were his children

By Giselle P. Kasilag

THERE was a hush that descended every time Ballet Manila (BM) co-artistic director Osias “Shaz” Barroso Jr. entered the studio. Suddenly, all the dancers were standing straighter. Everyone appeared to be intent on warming up. Those who were caught unprepared were hustling to find their place, hoping he would not notice. But Shaz would see all. With one look, he could tell who was properly warm and stretched, who spent the night studying, and who was out partying.

This wisdom stemmed from decades of dancing, choreographing, and teaching ballet. A career that spanned almost four decades yielded a wealth of experience that he passed on to students that number in the thousands.

He was a formidable danseur, partnering prima ballerina Lisa Macuja Elizalde since the late 1980s. He danced all the principal roles of all the important classical ballets with ease and gained for himself a reputation for his exceptional partnering skills.

“I think that the number one duty of the male classical dancer is to present the ballerina well. I want my ballerinas to look good,” he once said. And present them well, he did. So well, in fact, that it earned him the title the “Ballerina’s Prince.”

Principal dancer Romeo Peralta, Jr. remembered a time when Shaz asked him to act as a spotter when he was preparing to dance Don Jose in Eric V. Cruz’s Carmen. He felt unworthy to critique his mentor, but Shaz was adamant, saying that no one is perfect, and he needed Romeo to check his work and correct his mistakes. It was a valuable lesson to learn from the premier danseur.

It wasn’t only in dancing that his meticulous nature could be observed. Principal dancer Jessica Pearl Dames noted how carefully he planned his company classes.

“Iyun talaga iyung nami-miss namin, iyung class ni Sir Shaz (We really miss the class of Sir Shaz),” said Pearl. “Iyung combinations niya, may dahilan. Talagang hinahanda kami mula class hanggang rehearsal, at sa show (His combinations have logic. He’d prepare us from class to rehearsals, and the show).”

He was extremely strict. With just one look, dancers were known to stop whatever shenanigans they were up to and give him their full attention. His temper was legendary. But everyone knew that it came from a place of love. He wanted everyone to become better. Just like his ballerinas, he wanted all his students to look good.

When the news of Shaz’s passing was announced early last week, members of the ballet community from all over the world began posting their memories of the man they fondly call Teacher Shaz. Indeed, that was the title he cherished the most.

“I remember after this rehearsal I struggled at, you said — ‘Remember, you are not the same dancer you were 2 years ago. You’re stronger and you’ve grown — give yourself credit.’ And now whenever I’m down, I replay that memory of you in my head. Up to now when I dance, I check myself and think, ‘What would teacher Shaz say?’,” wrote Joan Emery Sia, a former Ballet Manila principal dancer now with the Florida Ballet in the United States.

“His passing is a significant personal loss to me, as I have lost not just a mentor and teacher, but also a cherished friend. Both my students and I have benefited greatly from Sir Shaz’s visits to India and from my visits to Ballet Manila in the Philippines. I will forever cherish the wisdom and inspiration he imparted to us, and his legacy will continue to live on in our hearts,” posted Deepika Ravindran on her social media account.

His students from Taiwan, Indonesia, Malaysia, and the United States all paid tribute to their mentor.

At Ballet Manila, the company he built together with Ms. Macuja-Elizalde, a hush has descended once more but due to his absence this time.

Principal dancer Mark Sumaylo said that on the weekend their beloved Sir Shaz passed away, the company was performing in multiple sites: a contingent had shows at Roxas City and Kalibo, another was in Baguio, and a team was in Hong Kong for the Asian Grand Prix competition. It was a weekend of triumph, marking the successful return of BM to live performance. Then a phone call was received. After all the shows were completed, Lisa made a call to inform the dancers of the loss.

In their own ways, the dancers recalled the most important lessons they had learned. For co-artistic associate Gerardo Francisco, Jr., it was the intellectual approach in mastering technique. For principal dancer Shaira Comeros, it was the partnering classes. For principal dancer Joshua Enciso, it was the passion he poured into ballet. For soloist Jessa Balote, it was the discipline he instilled in everyone. He was the ballet parent who shaped their careers and changed their lives.

His sister, Icet Barroso, summed it beautifully: “Ballet ang asawa niya, iyung mga dancers ang mga anak niya (Ballet was his spouse, and the dancers were his children).”

But his lessons applied not only in ballet. I met Shaz for the first time as a newbie reporter for BusinessWorld in 1997. He was playing the lead in David Campos’ Petrushka and I sat with him for an interview.

“Ang bata mo pa (You’re so young)!” he told me. But he answered all my questions in detail with no hint of the condescension or superiority complex that I experienced from other artists dealing with younger reporters.

He told me that he was never the first choice for roles. Sometimes, he wasn’t even the second choice, or a choice at all. But he was always prepared. He learned all the roles he wanted to perform someday, on top of what was assigned to him. So when the first or second choices could not deliver, he was there, ready to step in at a moment’s notice.

He said that it did not matter that he was not the first choice. What was important was that he was the one who performed it on stage. He was the one the audience saw. He was the one people remembered.

It was a beautiful lesson to learn at the beginning of my career in journalism — a time when I was most impressionable. I began a habit of over-preparing, viewing issues from different sides, and presenting my stories in a more elegant fashion. While I could not dance to save my life, I joined the many dancers from all over the world who benefitted from his wisdom.

But despite his passing, Shaz continues to be an inspiration for the company. In a tribute article written about her partner in 2014, Lisa shone the spotlight on her prince saying, “Shaz is the force behind Ballet Manila. People think it’s me. But he is.”

Giselle P. Kasilag co-owns Project Art, Inc., which handles the archives of Ballet Manila. She is also involved with Ballet Manila founder Lisa Macuja-Elizalde’s radio show, Art 2 Art, under the Manila Broadcasting Company. Ms. Kasilag is a former reporter in the Arts & Leisure section of BusinessWorld.

Meralco’s ‘fair’ rates rank below global average

MANILA ELECTRIC Co. (Meralco) said it has “fair and reasonable rates” as its business scale enables it to source the cheapest cost of electricity.

“Meralco, because ang laki niya (it is big), has the ability to source the cheapest cost of power,” Jose Ronald V. Valles, Meralco’s first vice-president and head of its regulatory management in a media briefing last week.

“A big distribution utility has better capability for the cheapest cost of electricity if the demand is big,” he added.

Citing its commissioned study with Australia-based International Energy Consultants (IEC), Mr. Valles said Meralco has fair and reasonable rates because it is huge.

In the study, the IEC said Meralco’s average tariff ranks 21st out of 46 energy markets in the world and 3% below the global average.

“If subsidized markets are excluded, then Meralco’s tariff is 13% lower than the world average,” the IEC said.

The study said that electricity tariffs in the Philippines’ neighboring countries — particularly Thailand, Indonesia, Malaysia, Korea, Taiwan, and Vietnam — are more than 50% subsidized.

“Notwithstanding this increase, all of the components of the regulated tariff are judged fair and reasonable by IEC, based on comparisons with other markets and versus the underlying cost of electricity supply in Luzon,” the consultancy firm said.

For December, Meralco imposed a decrease of P0.7961 per kilowatt-hour (kWh) in electricity rates to P11.2584 per kWh from P12.0545 per kWh in November.

The lower rate was due to the reduction in generation charge of P0.6606 per kWh to P6.5332 per kWh.

“Kasi kapag mas malaki ’yung demand mo, mas malaki yung ni-re-require mo. Parang kapag pumunta ka sa Divisoria, bumili ka, by bulk, ’di ba mas makakatipid ka kaysa sa bumili ka ng tingi-tingi. Parang ganun din ’yung power (If you have a huge demand, you will require a bigger supply. Just like if you go to Divisoria, you buy in bulk, wouldn’t you save more instead of buying in retail?),” Mr. Valles said.

Mr. Valles said authorities should focus on “other utilities that do not deliver basic services.”

He said many local government units want Meralco to take over in their areas.

“So bakit hindi ’yun ang focus ng mga kinauukulan? Pag-aralan nila kung papaano natin ma-i-improve ’yun, hindi ’yung distribution utility na nag-pe-perform, nag-de-deliver ng basic services (So why don’t the authorities focus on nonperforming distribution utilities? They should study how we will be able to improve them, not the distribution utility that performs and delivers basic services), Mr. Valles said.

“The very basic reason why we maintain a high level of power reliability and quality is because Meralco has been infusing some of the capex (capital expenditure) every year. We put up new substations, we replace dilapidated facilities, we install cutting edge technologies — smart grid and all that,” Meralco Executive Vice-President and Chief Operating Officer Ronnie L. Aperocho said.

As of September, the power distributor said it had spent P21.1 billion for capex, of which P14.2 billion was used for network capex consisting of new connections, asset renewals, and load growth projects, among others.

Currently, Meralco is conducting the rebidding process for the procurement of its 1,800-megawatt (MW) and 1,200-MW power supply requirements.

Meralco is the main power distributor for Metro Manila and nearby areas, covering 39 cities and 72 municipalities.

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

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

Why market players are optimistic about equities in 2024

REUTERS

By Revin Mikhael D. Ochave, Reporter

THE PHILIPPINE stock market is expected to improve in 2024 amid more opportunities for capital raising and growth, according to industry players and analysts.

Ramon S. Monzon, president and chief executive officer of local bourse operator the Philippine Stock Exchange, Inc. (PSE), said in an interview that about P160 billion worth of capital-raising activities is expected next year, higher than the expected P120 billion this year.

“Next year, we’re going to ramp it up to P150 billion to P160 billion worth of capital raising,” Mr. Monzon said.

“I projected a capital raising of P160 billion [in 2023]. We’re only going to hit about P120 billion,” he added.

As of end-September, the PSE said that total capital raised was at P91.88 billion, of which 58.4% were from follow-on offerings, followed by private placements at 21.9%, stock rights offerings at 15%, and initial public offerings (IPOs) at 4.7%.   

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message that the PSE’s main index could hit the 7,000 level next year on the back of a better interest rate environment.

“There are reasons to be optimistic about the equity market next year, and I see a reasonable chance that the index will reach the 7,000 level,” Mr. Colet said.

“There are potentially three major drivers of better market performance: first, a dovish shift in monetary policy that creates a more favorable interest rate environment; second, higher economic growth on the back of improved domestic and external demand; and third, implementation of capital markets reforms, such as the proposed reduction of the stock transaction tax to 0.10%,” he added.

As of the Dec. 15 close, the PSE index rose 67.96 points or 1.06% to 6,478.44 while the broader all shares index improved by 14.59 points or 0.43% to 3,409.55.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that there is a good chance for market conditions to improve next year and hit the 7,000 level.

“There is a good chance for market conditions to improve so some local listed companies could revive share sale and IPO plans in 2024 as they can sell shares at the highest possible price especially if the Fed starts cutting rates in 2024, [which] would reduce borrowing costs, spur more investments, increase profits and boost stock market valuations, on top of the further recovery of the economy,” Mr. Ricafort said.

Mr. Ricafort added that higher investment valuations for the local stock market are expected following the government’s move in July to lift the state of public health emergency due to the coronavirus disease 2019 (COVID-19) pandemic.   

“This boosted employment and generated more business opportunities, all of which would help support higher investment valuations,” Mr. Ricafort said.

He warned that although the lifting improved revenues, “these could be offset by still relatively higher prices and still relatively higher interest rates.”   

Alvin D. Lao, president and chief executive officer of listed oleochemicals and specialty food ingredients manufacturer D&L Industries, Inc., said that next year is expected to be better as interest rates are seen to ease. 

“It is possible that next year would be quite different because one thing that happened this year is that interest rates went up by a lot. When interest rates rapidly change, definitely it’s disruptive. In this case, when interest rates go up so much, financing becomes very expensive,” Mr. Lao said in an interview. 

“For next year, even though the conditions are similar to where we are now, the increase in rates is not as bad anymore because we’re starting at a higher level. So for next year, I don’t think there’s a chance that interest rates will go up even more. From that perspective, next year would be better than this year,” he added.

The Bangko Sentral ng Pilipinas (BSP) on Dec. 14 decided to keep its key rate unchanged at 6.5% for a second straight meeting but signaled a “tighter-for-longer” policy until inflation expectations have become more firmly anchored.    

“The Monetary Board continues to see the need to keep monetary policy settings sufficiently tight to allow inflation expectations to settle more firmly within the target range,” BSP Governor Eli M. Remolona, Jr. said in a statement.

The country’s headline inflation slowed to 4.1% in November compared with 4.9% in October. The inflation figure for November signaled the 20th consecutive month that inflation exceeded the central bank’s 2-4% target range. Inflation averaged 6.2% during the January-to-November period. 

Henry D. Antonio, president and chief executive officer of listed construction firm EEI Corp., said that 2024 would be a different year for listed companies, citing the resurgence of the US economy.

“I think next year would be different for listed companies because the US has already started to get on this run. The US always has a significant impact on the equities market. If the rates start easing, confidence will return,” Mr. Antonio said in an interview.

The US Federal Reserve opted to maintain its benchmark overnight borrowing rate at the 5.25% to 5.5% range on the back of easing inflation. It also announced that there would be at least three rate cuts next year. 

In terms of IPOs, analysts and stakeholders predict about four stock launches next year.

PSE’s Mr. Monzon said the possible listings consist of Sy-led SM Prime Holdings, Inc.’s real estate investment trust (REIT) IPO, as well as companies in the mining, industrial, and food sectors.

“As of now, we have about four big IPOs in line [for next year],” Mr. Monzon said.

For 2023, the PSE saw three conducted IPOs, namely: Alternergy Holdings Corp. in March, Upson International Corp. in April, and Repower Energy Development Corp. in July.

Eduardo V. Francisco, president of top investment house BDO Capital and Investment Corp., projected that the PSE could see two to three IPOs next year. 

“Realistically, I see about two to three IPOs,” Mr. Francisco said in an interview.   

“Five IPOs are already optimistic because [the] first half [of next year] will be muted if rates are still high. If the rates don’t go down, no one would do an IPO because the yield is too high. Those (IPOs) might all come in the second half of next year,” he added. 

EEI’s Mr. Antonio projected that IPOs could come by the latter part of 2024, adding that the local bourse has been “very resilient.” 

“We will see more IPOs coming in. Probably not in the beginning of next year, maybe towards the end of next year is what I would expect. But the nice thing is that the Philippines is very resilient in terms of the market,” Mr. Antonio said. 

Meanwhile, Mr. Colet said that more IPOs and equity deals are projected in 2024 but warned that risks such as hawkish monetary policy and geopolitical tensions could hamper the projection. 

“Given this backdrop, we can expect IPOs and equity deals next year, especially as interest rates start to move down. Delistings are not out of the picture, but hopefully, we see more listings,” Mr. Colet said. 

“As always, there are risks. Among those we should watch out for are a hawkish monetary policy overshoot that stuns economic growth, a failure by China to shore up the world’s second-largest economy, and geopolitical flareups or natural calamities that severely destabilize supply chains and financial markets,” he added.

Metro Manila Film Festival 2023: Meticulous, striking, well-acted

Movie Review
GomBurZa
Directed by Pepe Diokno
MTRCB Rating: PG

By Brontë H. Lacsamana, Reporter

IT’S pleasantly surprising that a Filipino film can successfully shed light on an oft-misunderstood part of history and have the intensity to move people to tears. Though pacing can be an issue given the weight of dialogue that sounds almost like it came out of a history textbook, it more than makes up for it in its powerful and soul-stirring final act.

GomBurZa centers on the lives of three priests whose deaths sparked the Philippine revolution. What makes it different from many historical dramas that came before it is that it doesn’t glorify or romanticize its titular trio of Mariano Gomez, Jose Burgos, and Jacinto Zamora. It is more about their actions prior to their martyrdom and the prevailing realities and ideas of the time that informed their fate.

The film even goes beyond the “GomBurZa” portmanteau. It shows the rising tensions between half-Spanish secular priests and full-blooded Spanish friars, and how this conflict related to the larger reformation movement.

A beautifully written plot line is the conception of Filipino identity: how various peoples in the Philippines, separated by land, sea, and creed, began to consider themselves a nation.

Padre Jose Burgos (played by Cedrick Juan in a stunning breakout role that should definitely land him more roles) is at the heart of that emerging drive that advocated for all Philippine-born citizens to be recognized as equal to the Spanish. Intelligent, passionate, and armed with doctorates in canon law, theology, and civil law, he is portrayed as having the beginning embers of national consciousness burning inside him.

He leads a phenomenal ensemble cast, which includes Dante Rivero as the respected, elderly Padre Mariano Gomez and Enchong Dee as the young, apolitical gambler Padre Jacinto Zamora. The former is wise and calm in the face of all the chaos while the latter is an unfortunate casualty who never intended to get involved at all.

In a minor role is Piolo Pascual, who left an impact as the noble and defiant Padre Pedro Pelaez, the very man that inspired Burgos in the first place. Representing the youth are Elijah Canlas and Tommy Alejandrino, who play Paciano Mercado (in history, Jose Rizal’s older brother) and Felipe Buencamino, respectively, starting off on an idealistic journey together as Burgos’ students.

Director Pepe Diokno, known for truthful yet sometimes impressionistic films such as Engkwentro and Above the Clouds, this time captures the moral essence of this piece of Philippine history.

It is incredibly well-shot, thanks to cinematography by Carlo C. Mendoza, and meticulously written, thanks to Mr. Diokno’s screenplay with Rody Vera. While a big part of the movie is expository conversations in various chambers filled with priests, politicians, and/or intelligentsia, it is all still easy to follow. How interesting it is will depend on a given audience’s appetite for historical detail.

The score by Teresa Barrozo is subtle and, in key moments, riveting — which brings us to the final act of the film. (I would say spoiler alert, but this is history and everyone knows the three priests are ultimately executed.)

When Gomez, Burgos, and Zamora are finally arrested, the film quickly approaches its peak, showing the inner struggle to have faith in the future of Filipinos reach a boiling point for Burgos. It becomes a question of fate and the acceptance (or not) of an outright lack of justice.

Being based on the historical writings of Jesuit priest Fr. John Schumacher and co-produced by Jesuit Communications, of course there are themes about God’s will and finding purpose in suffering. The religious organizations themselves are never explicitly tied to any revolutionary movement. The crux of the film is simply to bring history to light in a modern world.

By the time the garrote is shown, GomBurZa is done grappling with questions about the seemingly chronic bad luck that has befallen the nation and moves on to getting the audience to feel it. For Filipinos who only memorized the word “garrote” to pass a history quiz in school (including this writer), never before has it made such a horrific impact as when viewed in this exact scene.

Set just before sunset and pushed forth by steady drums in the score, the priests are shown in doleful orange light amid the howling wind. As their brainstems are screwed one by one underneath ominous sacks over their heads, each twitching to their last breath, the film presents the very sight witnessed by a large crowd who would later start a revolution.

Any Filipino viewer would feel the tremendous lurching of the soul that young Jose Rizal (who appears in a small part) must have felt since the public execution. Indeed, a most powerful ending.

No reason to be complacent

PHILIPPINE STAR/EDD GUMBAN

(Part 2)

From the experiences during the 10 years preceding the coronavirus pandemic and the two years after, there is a very high probability that a 6-7% gross domestic product (GDP) growth year can be maintained annually during the remaining years of the BBM administration, mainly because of what the multilateral lenders called “the structural drivers that are very favorable,” which make them optimistic about the Philippine economy. As I have described in my own forecasts, over the last thirty years, during which the best and the brightest of our professional economists and financial experts have always been appointed to head key economic departments and agencies in government, there have been enough institutional building and economic policy reforms (the last being the amendment of the Public Services Act, allowing foreigners to own 100% of vital infrastructures and renewable energy) so that private consumption, government spending, and to a lesser extent, private investment, can be the engines of growth of the economy.

As mentioned in the first article of this series, even if a GDP growth of 6-7% may be among the highest in the Indo-Pacific region, there is no reason for us to be complacent because we still have the highest poverty incidence in East Asia. In fact, if we have to bring down this rate to single digits by 2028, we may have to accelerate our GDP growth rate to 6-8% to generate enough resources to combat mass poverty through increased investments in food security, education and health. Here again, we in the private sector cannot just expect the state to do the job alone in eradicating poverty in our country.

To quote from the message of Pope Francis for the 2023 World Day of the Poor, he wrote: “Let us thank the Lord that so many men and women are devoted to caring for the poor and the excluded; they are persons of every age and social status who show understanding and readiness to assist the marginalized and those who suffer. They are not superheroes but ‘next door neighbors’, ordinary people who quietly make themselves poor among the poor. They do more than give alms: they listen, they engage, they try to understand and deal with difficult situations and their causes. They consider not only material but also spiritual needs; and they work for the integral promotion of individuals. The Kingdom of God becomes present and visible in their generous and selfless service; like the seed that falls on good soil, it takes root in their lives and bears rich fruit. Our gratitude to these many volunteers needs to find expression in prayer that their testimony will increasingly prove fruitful.”

Let us try to “deal with difficult situations and their causes.” Why is it so hard to redeem the people in the rural areas from poverty? Let us listen to the experts. Someone who devoted practically all of his professional life to researching on Philippine poverty was the late Dr. Rolando Dy, a leading light in the field of agribusiness. In the last book he wrote before he passed away in October 2023, he said: “Poverty is dominant in the agriculture sector in the Philippines. Rural poverty is 30%. About three-quarters of the poor are rural. Obviously, poverty in the country is an agricultural phenomenon. Poverty in the cities is only 10%.” He then puts the blame on the very small sizes of Philippine farms that militate against increased incomes of the farmers, especially the poorest of the poor, the coconut farmers.

Clearly, one of these “difficult situations” was created by a failed agrarian reform program. As Dr. Dy wrote, “Agrarian reform has not promoted investments. If it did, farm productivity should have increased since 1986. The five-hectare retention limit is too small for private investors. Too small for mechanization. The gross profits barely return the investments if overhead such as manager’s salaries are considered. Small farms can be consolidated but there is a crying need for management and resources. It is time to raise retention limits to a viable size.”

Those who can help in farm consolidation are among those who can respond to Pope Francis in dealing with the difficult situations that have led to mass poverty among the small farmers. What are the various means of attaining more economic sizes of farms in the Philippines? The first is through farmers’ cooperatives that can organize clustering of farms to reach economies of scale. It is true that numerous cooperatives have failed in the Philippines. There are, however, exceptions that can be singled out as role models for success in the organization and operation of cooperatives in the Philippines. There are the Soro-soro Cooperative in Batangas and CARD in Laguna. There is also a cooperative for land consolidation that was organized in Rizal, Palawan by Lionheart Farm. Any effort to consolidate farms for more productive farming is a real contribution to addressing poverty. If Malaysia has reached zero poverty incidence, a major reason was the ability of the government to consolidate hundreds of thousands of hectares through the so-called “nucleus estate” system under which individual small farmers lease their small farms to a large public or private corporation. Large corporate groups like the First Pacific group, the Benguet Corp. and the DMCI group that are investing heavily in corporate farming in sectors such as coconut, palm oil and dairy are to be complimented for applying one of the solutions to rural poverty. As Dr. Dy also reported in his book, a local government unit that has helped in farm consolidation is Piddig, Ilocos Norte, which has succeeded in rice farm consolidation, coffee estates and processing small farm reservoirs and farm tourism, thus reducing poverty incidence significantly. Ilocos Norte has an admirable poverty incidence of only four percent.

In the area of food security, even private citizens can make small contributions to “feeding the hungry.” One of the positive trends during the two years of lockdown made necessary by the COVID-19 pandemic was the appearance of “plantitos” and “plantitas” among numerous middle-income households who had enough resources to go into small-scale gardening of vegetables and other high-value food crops in their backyards or small garden plots. With seeds and technology made available by companies like East West Seed or Harbest, these garden hobbyists started producing cabbage, lettuce, papaya, pepper and other food crops. Part of the produce went to home consumption, but a good number of these “master gardeners” donated their products to low-income households in their respective neighborhoods. These should be continued even after the pandemic is over. In some of the gated subdivisions within the National Capital Region, a committee should be organized to take charge of the collection and distribution of the products of these urban gardens to needy households in nearby depressed areas or institutions like orphanages, feeding clinics in public schools, government hospitals and prisons.

Another initiative that should be replicated in many municipalities is that of the Philippine Food Bank Foundation established in 2014 to collect from food manufacturing enterprises like Alaska, Century Pacific, and Monde Nissin, Arla Milk, Anchor Milk, Del Monte Philippines and URC, as well as restaurants as Starbucks, Krispy Kreme, Dunkin Donuts, Jollibee, Gardenia Bakeries, Coffee Project, and Mary Grace, their soon-to-expire or surplus food and distribute them as quickly as possible to beneficiaries like orphanages, feeding clinics, public schools and prisons. It only takes convincing these sources of donated food items that one’s group has the necessary logistical resources to make the delivery as soon as possible to the beneficiaries, without danger of spoilage, to be able to start a food bank operation. Individuals or small groups who want to start a similar operation in localities outside Metro Manila or Metro Cebu can get in touch with Mr. Danny Navarro at ndanilo91@gmail.com to get advice on what legal and business steps are needed to start such an operation. These food donations are especially crucial if they are made to children in orphanages and schools since the ability of children to learn is often directly correlated to how they are obtaining sufficient nutrients needed to develop their brains. It is scientifically proven that children who were undernourished in their early years of existence have their brains permanently damaged which makes it difficult for them to learn as they grow older. The very low scores Filipino pupils obtain in international achievement tests can be partially attributed to their low learning capacity because of brain damage due to undernourishment or malnutrition. In this regard, provinces like Quezon and Bataan are well known for what is called the 1,000 days program for pregnant mothers and their children. This involves providing sufficient nutrition to pregnant mothers and the children to whom they give birth during the 1,000 days from the womb to the age of two.

(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

Leechiu expects retail and residential sectors to do better next year

THE residential property sector is seen to improve next year with expansion expected outside Metro Manila, while the retail sector will continue to recover, a real estate adviser said.

David Leechiu, founder and chief executive officer of Leechiu Property Consultants, Inc. (LPC), said “the residential sector still has room for growth in 2024, but it will be a more decentralized growth” as locations outside Metro Manila have become more attractive.

The attractiveness comes from the desire for more space, higher affordability of the projects, improvement in connectivity in the areas outside Metro Manila, and the holistic lifestyle offered by township developments.

“The attributing factors would be infrastructure, the appetite of developers for developing outside core areas, the appetite of buyers and tenants to move their operations and livelihood outside Metro Manila,” Mr. Leechiu said in an e-mail interview.

The residential condominium market has sold 40,555 units during the fourth quarter, LPC said in a statement last week.

“The ensuing market decline prompted developers to offer buyer-friendly payment terms to stimulate demand. However, these measures also increased backout risk. In 2023, developers reassessed their sales strategies to balance between increasing sales and mitigating buyer attrition,” the company said.

With the expected growth, Mr. Leechiu said residential demand is likely to be driven by the information technology and business process management sector, remittances from overseas Filipino workers, and the overall Philippine economy.

In a statement last week, the World Bank projected that remittance flows to the Philippines would grow by around 5% to $42 billion next year as the demand for Filipino migrant workers remains strong.

“On the supply side, launches in Metro Manila will likely pick up again after developers reach a manageable inventory level from previously launched projects. For now, developers may be giving more attention to projects outside Metro Manila,” Mr. Leechiu said.

Meanwhile, the retail property sector is expected to continue to recover as mall owners and operators incorporate “a more experiential space for mall-goers,” which makes it a venue for therapy, entertaining, and socializing.

“Currently, we still see a lot of vacant retail space, and it looks like more developments are coming by next year that will add on to that. So, we foresee a significant level of competition in making space more attractive to mall patrons — to, in turn, encourage tenants to open shops,” Mr. Leechiu said.

Amid the projected growth and recovery, he said that looming geopolitical uncertainties, possible rise in inflation, and increases in interest rates might pose potential risks.

Mr. Leechiu, meanwhile, is looking forward to the reform of the property valuation system as it will facilitate more efficiency and will establish a single valuation base for property-related taxes.

In July, Congress said it was aiming to pass 20 priority bills by the yearend, which include reforms to real property valuation. 

The Real Property Valuation and Assessment Reform Act seeks to reform the real property valuation system to allow local government units (LGUs) to better sustain themselves via property taxes.

The proposed law mandates the Bureau of Local Government Finance of the Department of Finance to develop, adopt, maintain, and implement uniform valuation standards, which are to be used by appraisers and assessors in the LGUs and other concerned parties in the appraisal or valuation of land, buildings, machinery and other real properties for taxation and other purposes.

“This will expedite transactions, promote more efficient exchange of properties, and support the growth of the real estate industry,” Mr. Leechiu said.

Real property taxes in the Philippines are independently determined and collected by LGUs, particularly cities and municipalities.

“We think next year will be a year of substantial expansion outside Metro Manila, ushered by the heavy mobilization of infrastructure projects,” Mr. Leechiu said.

“Developers are seeing a lot of interest from residential buyers as well as commercial locators establish their homes in more cost-effective spaces — that are also less congested,” he added. — Sheldeen Joy Talavera

MSMEs prioritize digital adoption to tackle economic challenges — experts

BW FILE PHOTO

By Miguel Hanz L. Antivola, Reporter

PHILIPPINE MICRO, small, and medium enterprises (MSMEs) demonstrate resilience in addressing economic uncertainties through swift digital adoption, leveraging platforms such as e-commerce and social media, according to industry experts.

Digital transformation is now crucial for MSMEs, arising from the necessity for lean and efficient operational alternatives to recover from crises,  Armando “Butz” O. Bartolome, founder and president of GMB Franchise Developers, said in an interview with BusinessWorld.

“MSMEs have started to recover gradually but not really skyrocket,” he said.

  “We are not really there yet, but I can see a lot of entrepreneurs are gung ho about how things are going,” he added. “They know the past is past. It’s a hard lesson to accept, but they really have to move forward and adapt.”

  “If they’re not online, they’re not going to be in business.”

MSMEs are the backbone of the economy, accounting for 99.59% of all business establishments and employing 65.10% of the workforce, according to the Philippine Statistics Authority. Small businesses created 5,607,748 jobs last year.

“In 2023, it was more of a ‘rebasing era’ for us,” noted Rosemarie B. Ong, chairwoman of the Philippine Retailers Association (PRA), referring to the persistent economic uncertainties marked by price fluctuations, high inflation, and supply chain disruptions from the Russia-Ukraine and Israel-Palestine wars.

Mr. Bartolome said that MSMEs have to stay informed to navigate through such challenges with limited resources. “We are not the decision-makers, but find out how much these situations will affect you.”

“The growth will depend on how you innovate. It’s high time to realign the types of services you can now provide to adapt and consider the investments you can make to lower costs,” he added, emphasizing continuous recalibration as a sign of the times.

In terms of consumer behavior, he observed a stronger ‘sachet mentality,’ with Filipinos increasingly preferring layaways, segmented payment schemes, and installments when accessing products and services.

This also means exploring emerging technologies such as artificial intelligence (AI) and automation to improve efficiency, which Jose Ma. “Joey” A. Concepcion III, founder of the Philippine Center for Entrepreneurship-Go Negosyo, noted as an inclusive opportunity, which entrepreneurs are bound to embrace in the face of risks.

“We tell them that you have to ride. It’s never a straight flight,” he said. “There will be bumps, and that’s part of business.”

E-COMMERCE
The Philippines’ digital economy is projected to grow by 13% this year, reaching $24 billion in gross merchandise value, according to the e-Conomy report by Google, Temasek Holdings, and Bain & Co.

This growth will be primarily driven by e-commerce, expected to expand by 21% annually and reach $24 billion by 2025.

According to the GoDaddy 2023 Data Observatory report, around 95% of Philippine small business have planned investments in online sales and marketing spending this year. It also found that 62% reported generating up to half of their annual revenue from online sales channels.

E-commerce platforms have become an avenue for MSMEs to participate in growing digital opportunities such as shoppertainment, which aims to attract consumers with content to help drive sales. It is projected to expand to a market value of over $1 trillion by 2025, according to the Boston Consulting Group.

Danecia Reverie Fojas, senior account manager at TikTok Shop, noted how MSMEs often find it challenging to compete with established brands in traditional retail spaces, and how a creative digital storefront democratizes the scene and helps entrepreneurs grow.

  “There is a fundamental shift in consumer-based brand interactions, and consumers now seek engaging, exciting, educational, and entertaining experiences with brands,” said Life Dawn Cervero, vertical head for food and beverage at TikTok Philippines.

“Advertising their brands is now very inclusive with the shift to social platforms. The dynamics have changed,” Mr. Concepcion said. “We’re teaching them how to become nano-influencers able to market themselves and their product.”

Shopee reported a fiftyfold increase in orders on Shopee Live, an interactive live-streaming feature on the e-commerce platform, during its 12.12 mega sale, which resulted to 12 million items sold across markets in just the first two minutes.

  The surge in livestream shopping led to a forty-sixfold increase in new buyers locally, emphasizing the trend’s popularity, it added.

  “I’m very bullish and optimistic that the whole digitalization move is helping more entrepreneurs next year,” Mr. Concepcion said.   

DIGITAL TRANSFORMATION
But more than sales, digital platforms have also allowed small businesses to unlock efficiency from the backend, improving their access to suppliers and distributors.

  “We have found that an information gap in product selection, stocking, and marketing prevents digital empowerment for MSMEs, especially those in rural areas and from disadvantaged groups,” Ms. Fojas said as the industry’s top risks, which can be alleviated by empowering everyone to seize the opportunities of the digital economy.

  Mr. Concepcion noted that digital transformation is increasingly being pushed for sari-sari stores, as they are significant players among retail MSMEs, which are often easy to overlook.

There are about 1.3 million sari-sari stores in the Philippines, which 94% of consumers depend on for daily needs, according to the Asian Preparedness Partnership. Excluding those without paid employees, there are 40,549 sari-sari stores in the country, according to the local statistics agency.

Ibrahim R. Bernardo, co-founder and chief marketing officer at Packworks, said that providing enterprise resource planning solutions and tech support for sari-sari stores has begun opening up possibilities for both their present and future.

This includes inventory management, insights dashboards, and a customer relationship management system, which collectively elevate sari-sari store owners as key opinion leaders in their respective communities, he added.

“Access to brands, helping their businesses with tools specific to them, margin protection — there are many ways we’re helping the stores, but the challenges are still there,” he noted. The majority of stores aided by Packworks have increased sales, “doing better with the app than without it.”

  “We amplify and put those super sari-sari stores on a podium and give them tools so that the smaller stores are inspired and emulated,” he said on directing efforts to maximize the potential of small community retailers.

  “There are so many possibilities once you get them connected and provide value,” he added, envisioning sari-sari stores soon becoming an affordable internet provider, job placement hub, and dark warehouse, with a committed vision and support for a high-tech future for them.

ARTIFICIAL INTELLIGENCE
However, with the rapid emergence of sophisticated technologies such as AI, entrepreneurs are faced with the challenge of balancing technology costs with efficiency gains.

The Trade department earlier said that AI could contribute as much as $90 billion to the Philippine economy by 2030.

However, only 17% of Philippine organizations are ready to utilize and deploy AI, with the majority of them raising concerns about the impact of not adopting these advances, according to a recent report by technology company Cisco.

It said that 44% of Philippine organizations are chasers or moderately prepared, 35% are followers with limited preparedness, and 4% are laggards with no readiness to leverage AI.

“While tech adaptation is crucial, affordability remains a key factor,” PRA’s Ms. Ong said regarding MSMEs’ limited financial capacity for tech advancement. “In any technology, there’s always a cost associated with it, especially since [AI] is still a work in progress.”

  “If you introduce AI solutions, it should align with the basic needs and affordability of MSMEs, not just because it’s a trend,” she added, emphasizing the importance of identifying specific pain points that AI can address, which vary for each business.

“[AI] is not a one-stop solution. It is about how you use it,” Mr. Bartolome said. “Learn and understand how AI can be productive for you. It’s something that cannot just sit down and work for you. You have to ensure you can control and modify it to meet your needs.”

Metro Manila Film Festival 2023: Perfect for Holy Week tv

Movie Review
Rewind
Directed by: Mae Czarina Cruz
MTRCB Rating: PG

By Zsarlene B. Chua

REWIND has a very simple premise: what would you do differently if you went back in time? For John Nuñez (Dingdong Dantes), he would try to make things right with everyone, especially with his family, after spending many years being a selfish cad.

A well-respected executive in a whiskey company, John, has always been on a mission to prove that he deserves to be the top dog even if it means putting female co-workers like Vivian (Sue Ramirez), or his family on the back burner. Meanwhile, his long-suffering wife, Mary (played by his real-life wife Marian Rivera), picks up the slack and raises their child Austin (Alonzo Muhlach) alone as John continues to neglect them.

After the owner of the whiskey company and John’s father figure passes him over for a promotion and favors Vivian, John goes on a bender which eventually results in (spoiler!) Mary’s death (Ms. Rivera is found launched through the family sedan’s windshield after a car crash). In his grief, he meets Lods (Pepe Herrera) or God, who gives him a chance to go back to the day before and correct his mistakes (an actual deus ex machina). The catch is that someone else needs to die that day and John has to choose who does.

Rewind is a movie that is very upfront about its religious influences. The names of the couple–John and Mary–are biblical, and even Mary’s death at 3 p.m. bore religious significance (this was supposedly the time when Jesus died on the cross). This film would be a perfect choice for Holy Week.

It’s also a film that’s very big on how actions have consequences and that everything comes at a price. This film has a dash of magic realism and a world where God roams around freely like God in Joan of Arcadia (2003), the fantasy drama series that popularized the song “One of Us” by Joan Osborne.

It’s a very simple story but the beauty of the film was in how everything was tied together in the end. It’s a masterclass of using Chekhov’s gun to show–not tell–how the story is going.

It’s also a film that balanced out humor and dramatic scenes — with the main comedic acts being Joross Gamboa as John’s assistant Lucio and Pepe Herrera as Jess or Lods (imagine Jesus as comic relief!). The entire cinema was in tears in turns from both sadness and laughter at the same time. It was a very Filipino approach, where even the most dramatic scenes deserve a bit of levity.

Both Mr. Dantes and Ms. Rivera pulled all the stops in showing off their dramatic acting chops. Be it by virtue of them being a long-time married couple or because they’ve been a love team for even longer, the pair convincingly showed the ups and downs of marriage. It was very easy to imagine that they really were John and Mary especially during the most heart-wrenching scenes.

The film also made very clever use of endorsements. Admittedly, this writer, who used to count how many in-your-face endorsements were in a Vice Ganda or Vic Sotto movie, became nostalgic seeing pretty blatant endorsements from Shield bath soap and Ensure. I did appreciate how the endorsements were folded into the narrative somewhat — like the time when John kept looking at the time on his Police wristwatch or when Ensure was in the background of John’s father’s store, or when the soap was used in a homegrown ritual of washing hands before dinner.

Is it a good film? Yes. There’s beauty in its simplicity and tight storytelling; the ending is very satisfying and convincing. There’s a lot of rewatch value in Rewind, especially during the holidays or Holy Week, as mentioned. It also makes a case for the benefit of therapy, because had John gone to therapy to address his childhood traumas (discussed in the film by “Jesus” himself), he would’ve been better equipped as a father and husband for his family. And the most important lesson in the film? The symptoms of heartburn or indigestion are eerily similar to a heart attack.

An investment and economic czar to push fast forward

TRAVELSCAPE-FREEPIK

This administration is ending the year with a pivotal move on the economic front.

On Dec. 15, President Ferdinand Marcos, Jr. issued Executive Order 49 that created the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA).

The new office will advise the President on economic concerns based on the most recent economic data, market trends and economic developments as well as help identify priority programs, activities, and projects in coordination with the economic development group.

The OSAPIEA will supervise and monitor, on behalf of the President, the economic agencies of the government including the Department of Finance, the National Economic and Development Authority (NEDA), the Department of Budget and Management, the Department of Trade and Industry, as well as their respective agencies.

The secretary of the OSAPIEA will head the economic team, in effect functioning at a higher post than the secretaries of Finance and of NEDA.

Needless to say, the choice of who becomes the head of the OSAPIEA is at once prominent and crucial, imbued with crafting policy and setting a strategic direction for the Philippine economy.

The first secretary of the office, Robinsons Land President and CEO Frederick D. Go, is an excellent choice. His talent and impeccable record as an industry leader is a valuable infusion to what was once dubbed as the economic “dream team” of the administration.

Under Mr. Go’s leadership, Robinsons Land significantly grew in asset size and expanded its portfolio such that it now includes a mix of shopping malls, office buildings, hotels and resorts, industrial facilities, and mixed-use developments.

Mr. Go in fact has been serving since the start of this year, the personal choice of President Marcos as the Presidential Adviser on Investment and Economic Affairs. In this advisory capacity, he vigorously worked on boost the country’s economy and create more job opportunities by pushing for investments in a diverse range of industries, including agriculture, renewable energy, infrastructure, manufacturing, digitalization, tourism, mining and the electronics sector. He also emphasized the importance of positioning the electronics sector to capture the growing exodus of foreign manufacturers out of China.

As the new czar of the economic team, Mr. Go faces a daunting task ahead. We wish to convey our support for and confidence in him.

***

The Philippines has been a consumer-driven economy for a long time. This has its merits, but as we have seen over the years, it also has its adverse consequences. It has exposed our vulnerability to external developments, specifically to geopolitical tensions and unforeseen risks. Disruptions of the global supply chain could paralyze the mobility of goods and drive prices higher.

And while the volume of our trade with the rest of the world has been robust, we have been incurring a trade deficit for years, and the countries from where we import derive more economic benefits from our importation. Meanwhile, local industries suffer from the deluge of cheap consumer goods from other countries.

The Stratbase ADR Institute has been advocating a pivot to investment-led growth for quite some time now. Investments have a great multiplier effect — think infrastructure, jobs, income — and allow the economy to grow resiliently and sustainably. Specifically, the manufacturing sector has a lot of room to grow, and it can potentially usher in the kind of growth that the Philippines needs in order to take its rightful place in the world market.

The challenge, then, is to encourage and keep investments. Good governance is the central thrust. Our rules have to be consistent, their application fair and even, the regulatory environment predictable. Transparency and advocacy must be the norm, with red tape, graft and corruption eliminated. Technology must be employed as an ally to achieve efficiency and minimize human discretion that could open opportunities for irregularity.

There have been some initiatives to this end. For example, the Philippines has implemented “green lanes” for strategic investments, expediting the permit and license acquisition process. There is also Executive Order 32, which streamlines the permitting process for the establishment of telecommunication infrastructure.

Secretary Go, having spent at least three decades in the private sector, is aware of the realities and struggles of the private sector on the ground, especially in how they deal with the national and local government to see their projects through. He knows firsthand how important multisectoral collaboration and partnerships are — and how to effectively navigate the dynamics of competing interests to achieve the strategic objective.

We laud the President’s decision to appoint Mr. Go at the OSAPIEA. He is no stranger to the mutually reinforcing relationship between the government and the private sector, which is recognized by Filipinos to have a pivotal role in national development, serving as a dynamic engine for economic growth, innovation, and employment generation.

The times ahead are challenging, but also exciting. We already know the destination: to have a resilient, sustainable economy powered by investments, toward a prosperity that is felt by all. With a wise appointment and a policy strategy backed by actual experience, we are a little more hopeful that our economic team would be in a better position to steer us in that direction.

Let make a Philippine economic boom happen in 2024.

 

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

CTA partially grants Ayala Corp.’s tax refund claim

CTA.JUDICIARY.GOV.PH

THE Court of Tax Appeals (CTA) partially granted Ayala Corp. its tax refund claim of P212.93 million for its total excess and unutilized creditable taxes for 2016 and 2017.

In a 33-page ruling dated Dec. 11, the CTA Special First Division determined that only P209.3 million can be refunded from the company’s requested sum covering its two-year creditable withholding taxes (CWTs).

For the CWTs in 2016, the appellate court granted a P93.61-million refund from the company’s requested sum of P95.99 million.

For 2017, a refund of P115.69 million was determined from the requested amount of P116.94 million.

The tax court ruled that income payments, exclusive of value-added tax (VAT), were accurately reported in the company’s general ledgers (GLs) and income tax returns (ITRs). It noted that the computation of CWTs was incorrect, as it was based on income payments inclusive of VAT instead of exclusive of VAT.

The Ayala Corp. “has sufficiently proven its entitlement to the issuance of TCC (tax credit certificate) in the total amount of P209,295,557.96 representing its excess and unutilized CWTs for calendar year 2016 and 2017,” read part of the ruling penned by CTA Presiding Judge Roman G. Del Rosario.

The corporation argued that it is entitled to a tax refund as its two-year unutilized CWTs were not carried over to 2018, citing that the tax court has previously granted similar claims in the past.

On the other hand, the commissioner of internal revenue (CIR) contended that Ayala Corp. did not provide sufficient time to verify the validity of its claim, citing that only six days were given from filing to take action on the claim.

Ayala Corp. filed a claim for the issuance of a TCC on March 28, 2019. Without waiting for the CIR’s action on its claim, the corporation filed a petition for review before the CTA on April 3, 2019. — Jomel R. Paguian

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