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Entertainment News (11/15/22)

FILIPINO alternative soul/rock Of Mercury

Disney+ to stream celebratory showcase

DISNEY+ will present A Night of Wonder with Disney+ to celebrate the streaming service’s arrival in the Philippines. To mark the occasion, a star-studded showcase will be streamed on the service on Nov. 17, 8 p.m., featuring the company’s creative excellence and celebrating Filipinos’ passion for music and song. Hosted by Catriona Gray and Robi Domingo, the special will feature highlights from movies and shows that viewers can watch on Disney+. Local landmarks will be transformed into stages for Filipino singers including Morissette, Christian Bautista, Janella Salvador, Stell of SB19, Zack Tabudlo, and Zephanie. Disney+ is the dedicated streaming home for movies and shows from Disney, Pixar, Marvel, Star Wars, National Geographic, and Star. The service offers a growing collection of exclusive originals, including feature-length films, documentaries, live-action and animated series, and short-form content. Disney+ is also the exclusive streaming home for the newest releases from The Walt Disney Studios. For more information, visit disneyplus.com, or find the Disney+ app on select compatible mobile and connected TV devices.

Lea Salonga joins Pentatonix on Christmas song

AMERICAN pop group Pentatonix has released their 6th album, Holidays Around The World, via RCA Records. The a cappella ensemble collaborates with some of the biggest stars from around the world on the album, including singer and actress Lea Salonga on the Philippine holiday classic “Christmas In Our Hearts,” which was originally written and performed by Jose Mari Chan. “I had the most wonderful time recording this classic Filipino Christmas song with Pentatonix,” Ms. Salonga posted on Instagram. “And, yes, this is the ‘Christmas In Our Hearts’ you think it is.” Pentatonix also collaborated with Chinese pianist  Lang Lang, Congolese gospel singer Grace Lokwa, Lebanese singer  Hiba Tawaji, Latin band La Santa Cecilia, Indian superstar Shreya Ghoshal, Japanese YouTubers HIKAKIN and SEIKIN, British a cappella ensemble The King’s Singers, and American star Meghan Trainor on tracks in the album. Following the album’s release, Pentatonix is set to embark on a multi-city tour in North America and Asia to promote it. Holidays Around The World is now available on all digital music platforms via RCA Records/Sony Music Entertainment.

16th International Silent Film Festival Manila

AFTER TWO years of online film screenings and activities, the annual International Silent Film Festival Manila (ISFFM) is going in-person. Live scored by selected Filipino bands and musicians, silent films will be screened from Nov. 24 to 27 at the Red Carpet, Shangri-La Mall, Mandaluyong City. This year’s festival will be joined by Instituto Cervantes de Manila, the Embassy of France to the Philippines, Goethe-Institut Philippines, Embassy of Italy in Manila with the Philippine Italian Association, The Japan Foundation, Manila, Film Development Council of the Philippines, and the British Council in the Philippines. The festival’s invitational opening on Nov. 24 will feature the British film Piccadilly, which will be live scored by Filipino band Anahata in collaboration with Sensoria. The festival’s second day will feature a Zoom webinar (open to the public) spotlighting the representative films, with discussions on restoration, curation, and the continuing impact of the films in their countries’ cinema history. Other films to be shown during the festival are 1922 German film Nosferatu: A Symphony of Horror, scored by The Brockas; Charles Burguet and René Le Somptier’s 1919 French piece La sultane de l’amour (The Sultan of Love – A Thousand and One Nuits), scored by Bras Pas Pas Pas; Spain’s 1926 film Malvaloca, scored by Talahib People’s Music; 1931 Japanese film The Lady and the Beard, with musical score by Bullet Dumas; Italy’s 1921 film I Figli Di Nessuno (Nobody’s children), directed by Ubaldo Maria Del Colle. Other festival highlights are a round table discussion led by musicians sharing their expertise, tips and experiences in scoring their assigned films; a roundtable discussion on the challenges in the restoration of Philippine films led by local film archivists; and the official closing ceremonies which will be filled with colors and music, and the screening of three of the best short silent films from the 2021 Mit Out Sound (MOS): International Silent Film Competition organized by the Film Development Council of the Philippines: Ing Tianak, Alingasngas ng mga Kuliglig, and Dikit, with music played by the BConcept and Vincent Del Rosario.  For more information on the schedule, visit this Facebook page: www.facebook.com/InternationalSilentFilmFestivalManila.

Of Mercury releases debut studio album

FILIPINO alternative soul/rock outfit of Mercury released its debut studio album CHANGIN’  via Sony Music Entertainment. According to the band, the 12-track release serves as an exploration of the different experiences that “we face as humans.” CHANGIN’ was co-produced by of Mercury with former bandmate knōwmaad. Its focus track, “I KEEP FALLING,” is a love song that doesn’t deny its sense of earnestness. Written during the pandemic, the song articulates the idea of inseparable love that lasts. CHANGIN’ is available on all digital music platforms worldwide.

GOMO opens skate park at Circuit Makati

On Nov. 12, GOMO, the country’s first fully digital telco, launched the GOMO Skate Park at Circuit Makati in partnership with Ayala Land and Make It Makati. The skate park, which is now open for every kind of skater, is part of GOMO’s second anniversary celebrations. “With GOMO Skate Park, we want our subscribers to have a safe space they can call their own, where they can nurture their creativity and love for the sport. Throughout our second year since launch, and in succeeding years to come, we aim to equip the GOMO Fam with the freedom and flexibility that will allow them to experience the world no holds barred – all made possible by ‘Mo Creds,” said GOMO Marketing Director Don Laudencia. Subscribers can experience the latest skating attraction by converting 8GB of their data through ‘Mo Creds to get a One-Day Access pass to the GOMO Skate Park. For more information, visit www.gomo.ph.

1st Dolby Atmos Certified Studio in PHL

WAXIFIED Sound Production was awarded the Home Entertainment Studio Certification, the highest certification sound pioneer Dolby Atmos issues to their partners. The production company also introduced the Dolby Atmos Sound Mastering Service, a solution to quality control and master audio for music, audio visual clips, reels, TV shows, TV series, and movies without having to go abroad. Behind this venture are acoustic and audio mastering engineers, event DJs, and sound consultants. The endeavor is headed by Waxie G. Joaquin, founder of Waxiefied Sound Productions and Executive Mastering Engineer. “With the track record and expertise of our team, we are confident to produce top-notch and immersive quality audio that will give a multidimensional approach to storytelling,” said Mr. Joaquin. The Dolby Atmos Mastering Suite facilities spell the end of multiple back-and-forth accession of local content to mastering studios abroad just to have it certified by Dolby, as well as do quality control and certify high resolution lossless files and Apple Digital Masters sound for Apple Music. Waxiefied Sound Production clients include Massiah, Nadine Lustre, Jay Ortega, J. Mara, and Morobeats.  For more information, visit their website www.waxiefiedsoundproduction.com.

Xdinary Heroes releases new mini album

K-POP boy band Xdinary Heroes has released a mini album, Overload, and has shared a video of the focus track “Hair Cut” via JYP Entertainment/The Orchard – listen/stream + watch/share. The seven-track mini-album’s songs are Hair Cut,” “Zzz…,” “LUNATIC,” “Crack in the mirror,” “Ghost,” “X-MAS,” and the instrumental version of “Hair Cut.”  The band consists of Gun-il (band leader, drummer), Jungsu ( main vocalist, keyboardist), Gaon (electric guitar, lead rapper), O.de (synthesizer, rapper), Jun Han (electric guitar), and Jooyeon (main vocalist, bassist). For more information, follow Xdinary Heroes at www.xdinaryheroes.jype.com.

Viber partners with BINI for fan challenge

P-POP girl group BINI has partnered with Viber, to connect with their fans in chats. The group recently concluded a takeover of the Backstage Pass Channel that allowed BINI members Aiah, Colet, Maloi, Gwen, Stacey, Mikha, Jhoanna, and Sheena share a slice of their P-pop idol life and interact with fans through photos, videos, and uplifting messages. With over 1 million subscribers, Backstage Pass is a space where artists and their fans come together. It’s meant to give music enthusiasts access to never-before-seen content about their favorite stars. Viber is also launching a first-of-its-kind Viber Lens, making BINI the first Filipino music artist to have their own augmented reality (AR) lenses that Viber users can use to enliven their chats. BINI and Viber are inviting fans to join the #BINIxViberLens Challenge for a chance to win a video shoutout, signed merch, and more surprises from Star Music’s pioneering P-pop girl group.  To join the challenge, fans must record an impression of BINI’s song “I Feel Good” from their sophomore album, Feel Good, while using the Viber Lens, while doing the BINI infinity sign. The video should then be downloaded from Viber and onto TikTok, with “I Feel Good” as the background music. Add in-video text by completing this sentence: “I Feel Good because ________.” The caption must include the hashtags #BINIxViberLens and #BINI_IFeelGood. All posts must be public and shown on one’s feed, and the video should also be downloadable. Deadline for submission of entries is Nov. 17.

How PSEi member stocks performed — November 14, 2022

Here’s a quick glance at how PSEi stocks fared on Monday, November 14, 2022.

Peso weakens on hawkish Fed comments

BW FILE PHOTO

THE PESO dropped versus the dollar on Monday amid hawkish signals from a US Federal Reserve official that dampened hopes of smaller rate hikes after US inflation slowed in October.

The local unit closed at P57.28 on Monday, losing five centavos from its P57.23 finish on Friday, Bankers Association of the Philippines data showed.

The peso opened Monday’s session at P57.30 versus the dollar. Its lowest showing for the day was at P57.39 against the greenback, while the peso’s intraday best was at P57.22.

Dollars traded declined to $720.63 million on Monday from $820.15 million on Friday.

“The peso depreciated after Fed official Waller dismissed market views of a policy shift from the US central bank following the better-than-expected US consumer inflation report,” a trader said in an e-mail.

Fed Governor Christopher J. Waller on Sunday said the US central bank may consider slowing down the pace of rate increases at its next meetings but needs more signs of improving inflation.

US inflation eased to 7.7% in October from the 8.2% print in September. Month on month, the consumer price index rose 0.4% after climbing by the same margin in September.

The Fed has raised rates by 375 basis points (bps) since March.

Even as the peso slightly depreciated on Monday, its close was still among the lowest in nearly two months, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Global crude oil prices still lingering among nine-month lows recently still partly supported sentiment on the peso and the rest of the local financial markets,” he added.

Brent crude futures were down 32 cents or 0.3% to $95.67 a barrel by 0725 GMT after settling up 1.1% on Friday, while US West Texas Intermediate crude futures fell 39 cents or 0.4% to $88.57 a barrel after closing 2.9% higher on Friday.

Mr. Ricafort said the stock market’s gains also boosted sentiment.

The benchmark Philippine Stock Exchange index gained 67.99 points or 1.08% to close at 6,354.76 on Monday, while the broader all shares index went up by 23.70 points or 0.71% to 3,352.59.

The trader said the peso may strengthen on Tuesday on the back of potentially weaker US producer inflation.

The trader gave a forecast range of P57.20 to P57.40 per dollar, while Mr. Ricafort said the peso could move from P57.15 to P57.35 on Tuesday. — KBT

Philippine shares climb on improved sentiment

PHILIPPINE STOCKS went up on Monday on improved market sentiment following positive data and tracking Wall Street’s rise on Friday.

The benchmark Philippine Stock Exchange index (PSEi) gained 67.99 points or 1.08% to close at 6,354.76 on Monday, while the broader all shares index went up by 23.70 points or 0.71% to 3,352.59. 

“The PSEi sustained its upward momentum as sentiment continued to improve following the positive news last week (faster gross domestic product growth, cooler-than-expected US inflation and China’s easing of COVID restrictions), outweighing some of the uncertainties in the upcoming BSP (Bangko Sentral ng Pilipinas) meeting,” AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message.

“Philippine shares picked up from last week, continuing their ascent, after stellar corporate earnings and growth data encouraged investors to buy into the market,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said.

Philippine gross domestic product (GDP) expanded by 7.6% in the third quarter, slightly faster than the revised 7.5% growth in the preceding three-month period and 7% a year earlier. In the nine months to September, GDP growth averaged 7.7%.

The strong growth print cemented expectations of an aggressive rate increase from the BSP at its Thursday meeting.

Meanwhile, US consumer inflation increased by 7.7% annually in October, slower than the 8.2% logged in September, raising hopes of smaller rate hikes by the US Federal Reserve starting next month.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the PSEi tracked the rise of US shares last week.

On Friday, the Dow Jones Industrial Average went up by 0.1%; the S&P 500 gained 0.92%; and the Nasdaq Composite went up by 1.88%.

The majority of sectoral indices rose on Monday. Holding firms went up 83.98 points or 1.41% to 6,036.56; industrials rose by 113.57 points or 1.24% to 9,228.54; property gained 33.51 points or 1.2% to end at 2,816.24; financials added 9.45 points or 0.58% to close at 1,623.80; and services climbed by 4.50 points or 0.28% to 1,612.30. 

Meanwhile, mining and oil declined by 44.59 points or 0.46% to 9,613.96.

Value turnover went up to P5.65 billion on Monday with 634.86 million shares changing hands from P4.92 billion with 441.04 million issues traded on Friday.

Advancers outnumbered decliners on Monday, 103 versus 85, while 39 names closed unchanged.

Net foreign buying went up to P681.67 million on Monday from P432.73 million on Friday.

AP Securities’ Mr. Temporal placed PSEi’s immediate support at 6,200 and immediate resistance at 6,500. — A.E.O. Jose

Malolos-Tutuban rail contract bagged by Japan’s Hitachi Rail

HIGHLIGHTS.HITACHI.COM

By Arjay L. Balinbin, Senior Reporter

HITACHI RAIL has bagged the contract for the electrical and mechanical systems and track works of the Manila-Bulacan segment of the North-South Commuter Railway (NSCR) project, according to the Transportation department.

The Philippines, through the Department of Transportation (DoTr), issued the notice of award to Hitachi Rail S.T.S. SpA representative Jorma Johannes Oksanen on Nov. 8, according to a copy of the document obtained by BusinessWorld.

The contract is worth P13.13 billion plus €361.96 million, $153.88 million, and ¥7.89 billion, equivalent to P46.6 billion according to exchange rates prevailing on Nov. 14.

The Tutuban (Manila)-Malolos (Bulacan) rail project is part of the 163-kilometer NSCR urban rail transit system from Calamba in South Luzon to Clark in Central Luzon. It is co-financed by the Japan International Cooperation Agency (JICA) and the Asian Development Bank.

Undersecretary for Administration and Finance Kim Robert C. de Leon said Hitachi should submit a “performance security” or financial guarantee within 28 days of receiving the notice of award. 

On its website, Hitachi Rail describes itself as a “fully integrated, global provider of rail solutions across rolling stock, signaling, operation, service and maintenance, digital technology, and turnkey solutions.”

The DoTr instructed Hitachi Rail, as the prospective supplier, to submit its offer in September 2021.

In 2018, the company launched an autonomous train servicing Australian mines, and signed a contract in the Middle East for the operation and maintenance services of lines 3-6 of the Riyadh Metro. It won a contract in Italy in 2020 to deliver a new tram platform. 

The 38-kilometer Malolos-Tutuban segment has a projected cost of P149.13 billion, according to the National Economic and Development Authority.  It is expected to carry more than 200,000 commuters daily. The travel time from Malolos to Tutuban is estimated to be 35 minutes once the project is finished.

The Malolos to Clark segment is expected to be completed in 2024. According to JICA, the NSCR project is designed to strengthen the mass transport network servicing growing demand in Metro Manila and surrounding provinces.

House measures taxing plastics, digital services pass on third reading

PHILIPPINE STAR/ MICHAEL VARCAS

PRIORITY legislation taxing single-use plastics, foreign digital service providers, as well as a bill reforming the tax regime on passive income, were approved on third reading at the House of Representatives on Monday.

Voting 255-3, the House approved House Bill (HB) 4102, which seeks to impose an excise tax of P100 per kilogram on single-use plastic bags.

The bill calls for the tax to increase 4% every year starting Jan. 1, 2026. Incremental revenue from the tax will fund programs of the Department of Environment and Natural Resources.

Albay Rep. Jose Ma. Clemente S. Salceda said the measure is expected to raise P9.3 billion in revenue.

Party-list Reps. Arlene D. Brosas of Gabriela, France L. Castro of ACT-Teachers and Raoul Danniel A. Manuel of Kabataan voted against the measure, calling it a burden to consumers.

“While we want to regulate the use of plastic bags for environmental concerns such as reducing pollution, this proposed measure will just be an additional burden to consumers, sellers, and retailers,” Ms. Brosas said during plenary.

In a vote of 253-4 with one abstention, the House also approved HB 4122 on third reading. The measure seeks to impose the 12% value-added tax (VAT) on nonresident digital service providers such as Spotify and Netflix.

If signed into law, the 12% VAT will be imposed on the digital sale of services like online advertising, video on demand subscriptions, and the supply of other services which are delivered through online marketplaces, webcasts and mobile applications, among others. 

Mr. Salceda, who also chairs the House ways and means committee, said the measure is expected to generate P19 billion in revenue.

“While it is true that the playing field must be fair especially to local online digital service providers who are already imposing VAT on digital goods and services, we believe levying a new tax in the form of digital tax on other streaming services and digital transactions is not the way forward,” Ms. Brosas, who voted no, said.

The House, voting 258-3, also approved on final reading HB 4339 which seeks to simplify taxation of passive income by harmonizing most rates at 15%. 

Mr. Salceda said the measure is expected to generate P20 billion, mainly by raising the tax rate on foreign currency deposits to 20%.

The measure also proposes gross receipts tax on bank, quasi-bank and other nonbank financial intermediary income of 5%, a premium tax of 2% and a stock transaction tax of 0.1%. — Matthew Carl L. Montecillo

Upgrades to ASEAN trade deal with Australia, New Zealand expected to benefit MSMEs

PHILIPPINES.AUSTAL.COM

THE recently agreed updates to the ASEAN, Australia and New Zealand Free Trade Area (AANZFTA) deal are expected to accelerate the growth of micro, small, and medium enterprises (MSMEs) in the country, the Department of Trade and Industry (DTI) said.

“The substantial conclusion of the upgrade negotiations marks another milestone for both ASEAN and Australia-New Zealand, as we gain another high-quality free trade agreement (FTA),” Trade Secretary Alfredo E. Pascual said in a statement on Monday.

“The inclusion of a Chapter on Trade and Sustainable Development and MSMEs is expected to fuel inclusive growth and integration of businesses into the global value chain,” he added.

The DTI said the changes to the FTA modernize trade practices which level the playing field for small businesses.

The DTI said signatories plan to sign the second protocol amending the AANZFTA in 2023. Negotiations to update the FTA started in September 2020.

“ASEAN, Australia, and New Zealand introduced the inclusion of new Chapters on Government Procurement, MSMEs, and Trade and Sustainable Development to facilitate growth anchored on an inclusive and sustainable regional economy. With the inclusion of the new chapters, the upgraded AANZFTA is viewed to benefit both regions in a broad spectrum of areas,” the DTI said.

“Among others, the agreement will accelerate supply chain integration and resilience; ensure a smooth flow of essential goods during crises; deepen services and investment liberalization; and support electronic commerce and digital transformation,” it added.

The AANZFTA took effect for the Philippines in 2010. It is the first region-to-region trade agreement involving the ASEAN, Australia, and New Zealand.

According to the DTI, Australia and New Zealand were the 16th and 28th largest trading partners of the Philippines in 2021, with a combined trade value worth P2.64 billion.

It added that Australia was the 14th largest source of investment last year with P664.32 million. — Revin Mikhael D. Ochave

Aquaculture industry says easing of import ban on fish feed ingredient to aid food security goals

BRUCE WARRINGTON-UNSPLASH

THE aquaculture industry said easing the import ban on processed animal proteins (PAP), a key ingredient in fish feed, will help the Philippines achieve food security.

In a statement on Monday, food advocacy group Tugon Kabuhayan said the industry, represented by 270 fishpond operators, non-government organizations, feed manufacturers, commercial fishing companies, fisherfolk, and regulators, wrote to President Ferdinand R. Marcos, Jr. welcoming the resumption of PAP imports, which they said will help improve food production.

PAP imports had been suspended as a precautionary measure because of fears animals affected by African Swine Fever (ASF) could find their way into the supply chain for fish feed.

“This decision will grant Filipinos an inexpensive and ample fish supply and provide the population with their daily allowance of required protein,” Tugon Kabuhayan said.

Tugon Kabuhayan said aquaculture feed mills obtain their PAP from European suppliers that only use Category 3 materials, which are parts of animals from accredited slaughterhouses and were determined to be safe for human consumption.

“The safety of PAP is based on science. The World Organisation for Animal Health Terrestrial Animal Health Code Article 15.1.23 stipulates that the ASF virus is inactivated if the meat is heated at 70°C for 30 minutes. Even assuming that ASF is present, the process used for rendering PAP is more than enough to kill or inactivate any virus or pathogen,” Tugon Kabuhayan said.

“Countries like the US, Canada, and the members of the European Union continue to import PAP even from ASF-affected countries. The shipment period of at least 45 days from Italy is more than enough time for any such contamination to be inactivated,” it added.

The Department of Agriculture (DA) in January issued a temporary ban on imported pork products from Italy due to an ASF outbreak. Italy accounts for around 70% of the Philippines’ annual imports of 150,000 metric tons of PAP.

In August, the DA issued Memorandum Order No. 59 that approved PAP imports even from ASF-affected countries for sole use in fish feed production following lobbying from the industry.

Recently, the Bureau of Animal Industry issued guidelines governing the import of PAP, requiring suppliers to provide a veterinary certificate from the country of origin.

The organizations that signed the letter to the President include the Bureau of Fisheries and Aquatic Resources, National Fisheries and Aquatic Resources Management Council, Philippine Association of Fish Producers, Inc., Alliance of Philippine Fishing Federations, Inc., Malalag Bay Fishcage Operators, Taal Lake Aquaculture Alliance, Inc., and Inter-Island Deep Sea Fishing Association, Inc. 

Other signatories were Feedmix Specialist, Inc. II, Dobe Export International, Oversea Feeds Corp., CDT Farm, Finfish Hatcheries, Inc., Frabelle Group, and various fishpond and fish cage owners and operators from Luzon, the Visayas, and Mindanao. — Revin Mikhael D. Ochave

CTA rejects P38.68-million VAT refund appeal over late filing

CTA.JUDICIARY.GOV.PH

THE Court of Tax Appeals (CTA) has rejected an appeal by Pilipinas Kyohritsu, Inc.  to review its claim for P38.68 million in excess value-added tax (VAT) for 2012, citing late filing of the petition.

The 11-page CTA First Division decision was dated Nov. 8 and made public on Nov. 11 filed on time.

“Prescription has set in at the time of its filing, thus, depriving the court of any jurisdiction to act on the case,” according to the ruling written by Associate Justice Catherine T. Manahan.

“In order for the court or an adjudicative body to have authority to dispose of the case on the merits, it must acquire, among others, jurisdiction over the subject matter,” she added.

The company filed the petition for review on April 21, 2017, which was more than 30 days after receiving the Bureau of Internal Revenue’s denial letter on March 23 that year.

According to the tax code, a taxpayer has 30 days from receipt of an adverse decision to file an appeal for review with the CTA. 

The commissioner of internal revenue has 120 days to act on a disputed tax assessment; otherwise, the decision would be final. 

The company manufactures wiring harnesses for cars and is a unit of the Sumitomo Electric group. — John Victor D. Ordoñez

HSBC touts expansion in green project financing channels

REUTERS

THE channels for financing green projects are expanding, just as the Philippines seeks to make sustainability a key feature of its infrastructure, the head of HSBC Philippines said.

“The good news is that in recent years, the number of financing options have increased tremendously, ranging from bank loans to capital markets. Globally, green deposits and investments are increasing. It’s a good time to go into this market to raise funding. At the moment, the demand for these assets is more than the supply,” the bank’s Philippine Chief Executive Sandeep Uppal said at a conference on Monday.

“Sustainability is a growth driver. A lot of consumers are paying for products and services which are environmentally friendly. The brands who live (up to their) environmental standards do stand out,” he added.

Mr. Uppal called for more transparency in financing flows and facilitated access to developing countries. “Without that, you cannot move from pledge to execution.”

He said that the Philippines’ regulatory environment has been conducive for sustainability.

“We’ve been watching closely the Bangko Sentral ng Pilipinas (BSP). They did well to come up with a framework for sustainability. They’ve also come with a risk management framework and we expect something more on stress testing,” he said.

“Fiscal space is limited. The silver lining is that the Philippines is not alone. Most markets (have reduced fiscal space) space due to the pandemic. That creates a level playing field,” he added.

Mr. Uppal also noted the need for private sector investment, both sourced domestically and from overseas.

“To highlight the potential for the sector, the Philippines is one of the smaller markets in Asia but it creates an opportunity to partner with the right countries,” he added. — Luisa Maria Jacinta C. Jocson

Guidelines for the transfer of PEZA-registered IT-BPM firms to the BoI

Philippine Economic Zone Authority (PEZA) registered companies are required to operate within economic zones in order to be entitled to tax incentives. However, due to the pandemic, the Fiscal Incentives Review Board (FIRB) temporarily allowed PEZA companies to adopt work-from-home (WFH) arrangements for a certain percentage of the workforce, while still enjoying tax incentives.

With the slow transition back to normal, the FIRB issued several extensions allowing Information Technology and Business Process Management (IT-BPM) firms registered with PEZA to continue offering their employees WFH. Despite extending the WFH setup on the basis of 70%-30% of headcount until Sept. 12, PEZA warned of the risk of losing skilled employees due to the overwhelming preference in the industry for flexible work arrangements. There is also the risk of companies cancelling their registrations and establishing operations outside the Philippines.

To finally resolve the issue, the FIRB issued Resolution No. 026-2022 on Sept. 14, which not only extended the 70-30 WFH arrangement until Dec. 31, but also provided an option for PEZA companies in the IT-BPM industry to transfer their registration to the BoI to operate on a 100% WFH basis without penalty or the loss of tax incentives.

As such, the Department of Trade and Industry (DTI) issued Memorandum Circular No. 22-19 on Oct. 18, which provided the final guidelines on the transfer of registration to the BoI of IT-BPM Registered Business Enterprises (RBEs). To disseminate the guidelines, the FIRB and the Bureau of Internal Revenue (BIR) issued FIRB Advisory 008-2022 (dated Oct. 19) and Revenue Memorandum Circular No. 142-2022 (issued on Nov. 2), respectively. In addition, PEZA also issued MC No. 2022-067 (dated Oct. 21) and MC No. 2022-070 (dated Oct. 24) which provided supplemental guidelines to the DTI-issued memorandum.

The guidelines cover PEZA-registered IT-BPM firms that have remaining tax incentives under Section 311 of the 1997 Tax Code, as amended, or those with approved incentives on or before Sept. 14, 2022, under the CREATE Act with the concerned IPA. They have until Dec. 31 to process their registration with the BoI.

Listed below are the consolidated procedures for the transfer of registration to the BoI:

1. The covered RBEs must file their request with PEZA using the prescribed Request to Register with BoI Form (Annex A of PEZA MC No. 2022-067) together with the scanned copies of their PEZA Certificate of Registration (CoR) and Registration and Supplemental Agreements, to be sent to itbpm.transfer@peza.gov.ph on or before Dec. 16. The highest ranking official of the RBE must sign the certification of Annex A and the same need not be notarized.

The e-mail address itbpm.transfer@peza.com.ph will no longer be accessible after Dec. 16, and PEZA will not accept hard copies of the applications and attachments.

RBEs that have already submitted their applications to the Office of the Director General (ODG) are required to re-submit their applications using the e-mail address.

2. PEZA is to endorse the request to the BoI Infrastructure and Services Industries Service (ISIS) using the prescribed template IPA List of Endorsed RBEs (Annex B of PEZA MC No. 2022-067) under the condition that the RBEs are compliant with the terms and conditions of their registration with PEZA and are in good standing. This will be conducted via e-mail with PEZA furnishing the RBEs with the endorsement.

3. Once the RBEs receive the e-mail from PEZA, the RBEs are to pay a fee of P2,250.00 to the BoI. The date indicated in the official receipt is to be the date of the effectivity of registration with the BoI.

4. Upon issuance of the BoI CoR, RBEs must provide PEZA a copy of the same for annotation in their PEZA CoR, to be sent to obs@peza.gov.ph. The BoI Certificate of Registration will likewise include annotation of the Certificate of Registration issued by PEZA.

5. Within 30 days from issuance of the BoI CoR, the RBEs must submit to PEZA the following:

a. List of all equipment and/or other assets containing the following information: (i) those brought out of the IT Centers/Park and those that remain in the registered facility of the RBE; (ii) quantity; (iii) year of acquisition; (iv) acquisition costs; and (v) book value; and

b. Total number of employees and number of employees under the WFH arrangement.

Despite the transfer, PEZA is to continue administering the fiscal incentives and maintain administrative supervision and monitoring of the RBEs. The transferee RBEs will also continue to comply with PEZA’s rules and regulations in relation to the availment of fiscal incentives. They are required to maintain an office inside PEZA-registered IT Centers/Buildings to avoid cancellation of their registration with PEZA as IT enterprises and subsequently, their registration with BoI.

The detailed guidelines are described as a “paper transfer” not involving any physical relocation of operations. It is hoped that the process is truly seamless for affected RBEs as we are only a little over a month away from the deadline of Dec. 31. It is also worth noting that even with such a deadline, PEZA will only accept application forms until Dec. 16. Hence, all covered RBEs that wish to apply should submit as early as possible their application forms to PEZA to ensure that the agency will have sufficient time to endorse them to the BoI.

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

 

Juvy De Jesus-Tibay is a senior manager from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

No progress made on ‘code of conduct’ at summits — Marcos

LEADERS at the Association of Southeast Asian Nations (ASEAN) Summits last week in Cambodia. — OFFICE OF THE PRESS SECRETARY

By Kyle Aristophere T. Atienza, Reporter

LEADERS at the Association of Southeast Asian Nations (ASEAN) Summits last week made no progress on a proposed code of conduct in the South China Sea, Philippine President Ferdinand R. Marcos, Jr. said at the weekend.

“Nothing new actually has happened in terms of the code of conduct,” he told a news briefing after attending the summits in Cambodia, based on a transcript sent by the presidential palace. “We all just restated over and over again.”

Mr. Marcos again cited the need for the code of conduct to keep the peace in the disputed sea, which is subject to overlapping claims involving the Philippines, China, Brunei, Malaysia, Taiwan and Vietnam. Each year, trillions of dollars of trade flow through the global shipping route, which is also rich in fish and gas.

The Philippine leader sought an “immediate conclusion” of the code of conduct.

In 2002, ASEAN and China signed a nonbinding agreement where 11 countries agreed that a South China Sea code of conduct was needed.

“There’s been some progress in the past year but we really need to have the actual code of conduct already finalized and already in place as soon as possible,” Mr. Marcos said.

In his remarks at the related East Asia Summit in Phnom Penh on Nov. 13, Mr. Marcos said there’s a need to maintain peace in the South China Sea.

“We must ensure that the South China Sea remains a sea of peace, a sea of security and stability and of prosperity,” he said. “With the United Nations Convention on the Law of the Sea (UNCLOS) and international law as our basis, the South China Sea will be a nexus of vibrant economic engagements and interactions, not an epicenter of armed conflict or geopolitical maneuverings.”

The Philippine leader had also sought an “immediate conclusion” of the code on conduct in his remarks at the related ASEAN-China Summit on Nov. 11.

“It shall be an example of how states manage their differences — through reason and through right,” Mr. Marcos told delegates on Friday. “I, therefore, welcome the progress on textual negotiations on the code of conduct this past year and hopefully an approved code of conduct in the very near future.” 

He also said the 1982 sea convention, which the Philippines has been a party to since 1984, is important.

In 2016, a United Nations-backed arbitral tribunal favored the Philippines by voiding China’s claim to more than 80% of the sea based on a 1940s map. China has largely ignored the ruling.

The government of the late President Benigno S.C. Aquino III started the lawsuit at the Hague in January 2013.

Meanwhile, Mr. Marcos said ASEAN leaders had agreed to enforce UNCLOS and uphold international law.

“Everybody, including the Chinese, says we follow UNCLOS and international law,” he told reporters. “At least, that position of ASEAN is clear.”

Leaders had also reached a consensus to abide by the One-China policy, which holds that Taiwan is part of China, Mr. Marcos said. Tensions between China and Taiwan must be resolved peacefully, he added.

“We believe that Taiwan is part of China but you must resolve those issues peacefully. That’s what ASEAN is asking for.”

The Philippine president was in Cambodia on Nov. 9 to 13 for the summits.

MYANMAR
Meanwhile, Mr. Marcos said the Philippines was among ASEAN countries that called for an engagement between parties in Myanmar, including the military leadership and opposition forces, Mr. Marcos said.

“Some countries say just remove Myanmar from ASEAN or just don’t invite them at all,” he said at the same media briefing. “Others say we need to talk to the people, including those at the bottom. That’s our stand. I said we should talk to all of them.”

“All of us came down on different, slightly different positions along the entire spectrum of completely kicking out Myanmar from ASEAN and for engaging them fully,” he added. “Nobody wanted to engage the generals. Nobody wanted to engage the high-level officials.”

Mr. Marcos said different levels of engagement had been proposed.

The political unrest in Myanmar was the main concern of leaders during the ASEAN summits, he said. “The five-point consensus that Myanmar had agreed with ASEAN wasn’t being followed. So what do we do? And that was a little contentious.”

In a statement, ASEAN reaffirmed that Myanmar is an “integral part” of the regional group.

ASEAN said a five-point consensus it issued last year “shall remain our valid reference and should be implemented in its entirety.”

“We reaffirmed that the ASEAN Summit is the supreme decision-making body and will make the final decision on the implementation of the five-point consensus, including when consensus cannot be achieved, in line with the ASEAN charter,” it added. 

The consensus called for an immediate end to violence in Myanmar, dialogues among all involved parties, humanitarian assistance from ASEAN, and a visit to the country by a special envoy. 

“In the year since, Min Aung Hlaing has defied each point while overseeing a brutal nationwide crackdown aimed at suppressing the millions of people opposed to military rule,” Human Rights Watch said in a statement in April.

Myanmar had “nonpolitical representation” at the ASEAN Summits in Cambodia.

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