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Film industry bats for reduced taxes in Congress

PHILSTAR FILE PHOTO

THE film industry told Congress it is too heavily taxed, and added that reducing the tax burden would encourage filmmakers to produce more movies of higher quality.

At a hearing of the House committee on creative industry and performing arts, producer Josabeth V. Alonso proposed a reduction in the amusement tax on movies to 5% from 10% as well as tax holidays for the industry.

Ms. Alonso also cited a 2010 decision by the Supreme Court (SC), which found that entities charged an amusement tax are not obliged to pay value-added tax.

According to Ms. Alonso, film producers pay both.

She said that incorporating the ruling into an amendment to the tax code would clarify enforcement and “be a big help to the producers because that would reduce the breakeven target by 12%.”

In 2019 the SC ultimately decided in an en banc resolution to reject the Film Development Council of the Philippines’ motion to grant films amusement tax privileges, saying this violated “the principle of local fiscal autonomy,” with the denial of amusement taxes to local government units (LGUs) could be detrimental to LGUs. 

Dennis N. Marasigan, artistic director of the Cultural Center of the Philippines, told the panel, “If we are able to take out a lot of the taxation that filmmakers and producers (are subject to), then that would encourage producers to produce more quality films rather than to cater to the (mass market).”

In her presentation, Ms. Alonso noted that a film with P100 million in box office revenue and production costs of P50 million will generate net revenue of P37.62 million after 10% amusement tax, 12% value-added tax, and a 5% distribution fee, resulting in a P12.38 million net loss.

“Just because a film grosses a hundred million and above, doesn’t necessarily equate to profit,” Ms. Alonso said.

Ms. Alonso noted that none of the locally-produced films released in 2022 hit P10 million in gross sales. She estimated that films need to gross roughly 270% of production cost to break even.

Currently, only the city governments of Las Piñas and Quezon City do not charge amusement taxes, while Pasay reduced its rate to 5%. Other LGUs still collect a 10% amusement tax. — Beatriz Marie D. Cruz

SRA calls for sale of smuggled sugar at Kadiwa stores

A MAN repacks sugar in packets at a public market in Taguig City, Aug. 27, 2008. — REUTERS/CHERYL RAVELO

THE Sugar Regulatory Administration (SRA) said sugar seized from smugglers should be sold to the public via the Department of Agriculture’s (DA’s) Kadiwa stores.

In a statement on Tuesday, SRA Administrator David John Thaddeus P. Alba said the SRA will recommend to President Ferdinand R. Marcos, Jr., the sale of 80,000 bags of sugar seized at the Port of Batangas.

Last week, the Bureau of Customs seized about 4,000 metric tons (MT) of refined sugar valued at P240 million shipped from Thailand on the MV Sunward.

In December, the DA said it is expediting the import of 64,050 MT of refined sugar to address high sugar prices allegedly caused by tight supply.

The DA said it is convening the minimum access volume (MAV) advisory council to facilitate imports via the MAV mechanism.

In a virtual media briefing on Monday, Food security and livelihood advocacy group Tugon Kabuhayan offered to help the government with its anti-smuggling efforts, blaming the ready availability of smuggled goods for depressing farm incomes.

Association of Fresh Fish Traders of the Philippines President Roderic C. Santos said food producers are the main victims of food smuggling and must be involved in the enforcement of anti-smuggling laws.

Asis G. Perez, convenor of Tugon Kabuhayan, said that the DA is scheduled to file charges against smugglers within this week.

He added that while the group supports the creation of a DA inspectorate and enforcement group, he noted that the problem with the government’s anti-smuggling campaign is that “the group that goes after smuggling is ad hoc, without personnel.”

Mr. Perez said the continued smuggling of onions, rice, corn, sugar, fish, and pork continues to be a burden to farmers.

 “The persistent entry of these undocumented products is also threatening our economy in terms of revenue loss and untaxable commodities,” he said.

United Broiler Raisers Association President Elias Jose M. Inciong said the Agriculture and Fisheries Modernization Act of 1997, especially its provisions on data and quarantine, must be enforced.

Meanwhile, Leonardo Q. Montemayor, chairman of the Federation of Free Farmers, said that the DA should distribute the P5,000 cash transfer to all rice farmers, not only for those farming two hectares or less.

“When prices of palay (unmilled rice) go down due to imports, it affects all farmers, not only those that farm two hectares of land or less. For the sake of those affected by imports, all should benefit from the P5,000 income transfer,” he said.

The government’s rice farmer financial assistance program grants preference to rice farmers tilling between 0.5 hectares and two hectares. — Ashley Erika O. Jose

Government generates P681M in procurement savings

BW FILE PHOTO

THE GOVERNMENT generated savings of P681.2 million from procurement efficiencies in 2022, up 21.8% from a year earlier, the Department of Budget and Management (DBM) said.

“For the past three years, the government has attained significant cost savings through bulk procurement and market price monitoring and validation,” the DBM said in a statement on Tuesday.

Savings are defined as the difference between the market price of common-use supplies and equipment (CSE) and the acquisition price obtained by the DBM.

The DBM Procurement Service (PS) is the government’s central procurement office. It recently decided to focus on CSE following a backlash against the prices it obtained for an order of laptops for the Department of Education.

“We look forward to achieving ‘procurement transformation,’ not only in processes, procedures and products that we procure, but the overall transformation of PS-DBM relative to its structure, system and human resources,” Procurement Service Executive Director Dennis S. Santiago added. — Luisa Maria Jacinta C. Jocson

BSP notes improvement in accuracy of household inflation views

A supermarket is seen in Quezon City, March 4 2022. — PHILIPPINE STAR/MICHAEL VARCAS

THE Bangko Sentral ng Pilipinas (BSP) said household estimates of inflation have been improving in accuracy since 2014, possibly influencing monetary policy because household expectations are a factor in policy decisions.

In an economic newsletter written by Alan Chester T. Arcin and Michael Lawrence G. Castañares, the BSP’s Department of Economic Research said household views on inflation have been demonstrating a narrower upside bias, first noted during the 2008 financial crisis, when high inflation may have conditioned their expectations.

According to the study, inflation was high between 2005 and 2008, possibly skewing households’ inflation expectations upwards.  

Inflation peaked at 9.1% in November 2008, at the height of the Global Financial Crisis.

“However, from 2014 onwards, this bias was considerably reduced, coinciding with more favorable inflation outturns,” the study found, adding that inflation was mostly within target in 2014 to 2020.

Household inflation expectations are tracked in the central bank’s Consumer Expectations Survey (CES). The BSP also conducts a Business Expectations Survey (BES), and Survey of Professional Forecasters (SPF). The survey findings ultimately serve as inputs for monetary policy setting.

“This improvement may be due to the inclusion of reference inflation rates in the CES questionnaire, some gains in the BSP’s advocacy for economic and financial literacy, improved inflation environment, and better anchoring of inflation expectations with increased credibility of the BSP,” according to the study.

According to the central bank, inflation expectations of businesses also tend to exhibit a bias to the upside, possibly reflecting companies’ sensitivity to changes in production costs.

Meanwhile, private-sector economists produce more accurate inflation forecasts compared with households and businesses, with a margin of error closer to zero. 

The data analyzed in the study is from the CES surveys between the first quarter of 2020 and the first quarter of 2022. BES surveys studied were from the fourth quarter of 2018 to the second quarter of 2022.

The SPF results are from between January 2014 and August 2022.

“Expectations of future inflation can influence the consumption and savings decisions of households as well as the price-setting behavior of firms,” the study added.  

“For instance, expectations that future prices would increase could entice households to purchase sooner rather than later, translating to stronger current demand. In turn, firms could raise prices in response to the observed pick-up in sales,” it said.

“Moreover, if households continue to anticipate faster inflation in the future, clamor for wage hikes could emerge and further fuel the inflationary process. Inflation expectations, therefore, are an important determinant of actual inflation as they shape the decisions of economic agents,” it added.  

In the central bank’s latest CES and BES survey, consumer and business sentiment declined in the fourth quarter due to elevated prices of goods, higher interest rates, and a weakening of the peso.

The consumer confidence index slipped to -14.6% from -12.9% in the third quarter, the 10th straight quarter when the survey returned a pessimistic view. The business confidence index fell to 23.9% from 26.1% in the prior quarter, marking a second straight decline. 

Last week, BSP Governor Felipe M. Medalla said the central bank is likely to raise benchmark interest rates by 25 or 50 basis points (bps) next month, citing the need to anchor inflation expectations. 

The Monetary Board has raised rates by a total of 350 bps last year to tame inflation and slow the peso’s decline. This brought the policy rate to a 14-year high of 5.5%.

Monetary authorities are scheduled to meet on Feb. 16 for their first policy meeting this year. — Keisha B. Ta-asan

PHL mangrove losses second worst in region

THE PHILIPPINES lost 10.5% of its mangrove trees between 1990 and 2010, trailing only Myanmar’s losses of 27.6%, which are reckoned for the separate period of 2000 and 2014, the University of the Philippines said in a study.

The study surveyed 300 mangrove sites across Southeast Asia with the goal of filling “large gaps in our understanding of the current and future state of these already dwindling natural resources.”

The study recommended priority action on mangrove restoration as a climate change adaptation and mitigation measure; monitoring the recovery of biodiversity and ecosystem services; and strengthening of the ASEAN network.

The research also highlighted the need for new technology and innovation to effect a sustainable recolonization of mangrove areas. 

“As a region vulnerable to natural disasters such as typhoons and tsunamis, restoration programs should be designed to adapt to and mitigate climate change impacts. Technological innovation for science-based green-gray coastal engineering are critical for facing changing climatic conditions,” the study concluded. — Ashley Erika O. Jose

PHL looks to US, Japanese tech to improve connectivity

REUTERS

THE Department of Information and Communications Technology (DICT) said on Tuesday that it hopes to tap US and Japanese technology to improve connectivity in the Philippines.

The department will work to bring in “low-orbit satellites from the US and high-altitude platform stations from Japan, among others,” DICT Undersecretary for Public Affairs and Foreign Relations Anna Mae Y. Lamentillo told reporters via chat. 

Ms. Lamentillo has yet to confirm whether the department is in talks with other US satellite companies. Starlink Internet Services Philippines, Inc., a unit of Elon Musk’s Space Exploration Technologies Corp. is expected to start serving remote communities in the Philippines by the middle of 2023.

About 65% of the country still has no access to the internet, according to Ms. Lamentillo.

Separately, the DICT announced that it hopes to collaborate with Singapore’s Ministry of Communications and Information on e-governance and cybersecurity.

Ms. Lamentillo met with Singapore’s Ambassador to the Philippines Gerard Ho Wei Hong on Monday to discuss further the areas of cooperation in relation to the recently signed memorandum of understanding (MoU) on digital cooperation.

“We discussed with Ambassador Ho how we can implement this MoU and which areas we should focus on. Singapore has so much experience in the area of e-governance and cybersecurity and they can share with us their best practices in these areas,” Ms. Lamentillo said.

The department said that the MoU on digital cooperation was signed on Sept. 7 during the state visit to Singapore of President Ferdinand R. Marcos, Jr.

“The MoU covers digital cooperation, including digital connectivity, particularly in inter-operable systems and frameworks that enable electronic documentation; cybersecurity, such as organizing training courses and technical programs through the ASEAN-Singapore Cybersecurity Centre of Excellence to develop and enhance skills related to cybersecurity; and digital government/e-governance, such as in the areas of digital government strategy, digital government services, and digital identity,” the DICT said. — Arjay L. Balinbin

Marcos: Asia-Pacific region won’t take sides amid political tensions

OFFICE OF THE PRESS SECRETARY

COUNTRIES in the Asia-Pacific region should avoid taking sides amid intensifying geopolitical tensions, Philippine President Ferdinand R. Marcos, Jr. said on Monday.

During a luncheon hosted by his economic managers in Davos, Switzerland, the president said nations in the region are being pressured to take sides, without naming a country.

But members of the Association of Southeast Asian Nations (ASEAN) and Asia-Pacific Economic Cooperation (APEC) do not want to return to a “Cold War scenario,” which he said puts the Philippines in a precarious position because it is on the frontline.

He was referring to a period of geopolitical tensions between the United States and Soviet Union and their allies — the Western and Eastern blocs — in the 20th century. There was no large-scale fighting between the two superpowers, but they each supported sides in major regional conflicts known as proxy wars.

“We are determined as a group in ASEAN and in the Indo-Pacific, despite all of this conflict… to stay away from that,” Mr. Marcos said, based on a transcript sent by the presidential palace.

“We are anchored in the idea that the future of the Indo-Pacific, the future of Asia-Pacific, for example cannot be determined by anyone but the countries of the Asia-Pacific,” he said.

“That removes us immediately from that idea that you must choose. We choose our friends, we choose our neighbors. That’s the choice that we will make.”

Mr. Marcos this month said Chinese President Xi Jinping had vowed to “find a compromise” to avoid tensions between Filipino fishermen and Chinese authorities in the disputed waterway.

The Philippine leader said they had discussed during his state visit to China “what we can do to move forward” and avoid any possible mistakes “that could trigger a bigger problem than what we already have.”

Mr. Marcos also said that he and his Chinese counterpart had discussed the resumption of oil and gas talks between the two countries.

Last week, the Supreme Court voided the Philippines’ 2005 energy exploration deal with China and Vietnam for being illegal.

Mr. Marcos took office in June amid tensions in the Indo-Pacific region, with the US leading allies including the Philippines to maintain freedom of navigation in the South China Sea.

China claims more than 80% of the sea, which is believed to contain massive oil and gas deposits and through which billions of dollars in trade passes each year. It has ignored a 2016 ruling by a United Nations-backed arbitration court that voided its claim based on a 1940s map.

The Philippines has been unable to enforce the ruling and has since filed hundreds of protests over what it calls encroachment and harassment by China’s coast guard and its vast fishing fleet.

‘GLOBALIZATION’
Mr. Marcos cited the importance of ASEAN centrality, which considers the bloc as the institutional hub of country members in terms of regional cooperation and dispute in the wider Asia-Pacific region.

“That has become a very important concept,” he said.

Meanwhile, Mr. Marcos said the pandemic and war between Russia and Ukraine have forced state leaders to pursue protectionist agenda.

He said the coronavirus pandemic had forced the Philippines to strengthen its own economy so it could withstand shocks. Russia’s invasion of Ukraine was also a factor, he said.

“There is a tendency of protectionism because we take care first of our own businesses, we take care first of our own industries, we take care first of our own economy,” he added.

Mr. Marcos, who has vowed to limit imports as much as possible, noted that while there are some disruptions that he described as “a very big bump on the road,” the world will find itself on the path of globalization.

Once the dust settles and countries like the Philippines put in place policies that will help them adjust to the emerging global economy, “globalization will start,” the Philippine leader said. “We will start to return to… globalization. I think it is inevitable.”

Mr. Marcos will speak at the World Economic Forum in Davos on Jan. 18. He is expected to deliver a piece on increased global cooperation.

The forum has been held yearly since 1971 to connect leaders from businesses, politics, academia and society and help them search for better solutions to global problems.

This year, discussion topics include new technologies, global trade and digital platforms. — Kyle Aristophere T. Atienza

Senate bill to revive 2007 law on ‘holiday economics’

PHILIPPINE STAR/KRIZ JOHN ROSALES

A SENATOR has filed a bill that seeks to boost local tourism by setting national holidays that fall on a weekend to the following Monday.

“The increase in the number of long weekends can help reduce stress, prevent burnout and promote work-life balance for both employees and students by allowing them to decompress and spend time with their family and friends,” Senator Rafael “Raffy” T. Tulfo said in the explanatory note of Senate Bill 1651.

The measure will amend Republic Act 9492 or the Holiday Economics Law, which was enacted in 2007 under then President Gloria Macapagal Arroyo to boost tourism by moving regular and special holidays to the nearest Monday. Her successor, the late President Benigno “Noynoy” S.C. Aquino III changed this under Proclamation 84.

Under the bill, the president will issue a proclamation on the first Monday of December setting the holidays for the following year.

“The Philippines celebrates 18 national holidays yearly, four of which are considered special nonworking holidays,” Mr. Tulfo said. “Holidays are integral in order to honor and commemorate special events or traditions with cultural or religious significance.”

President Ferdinand R. Marcos, Jr. earlier declared more long weekends for 2023 to ensure the recovery of the tourism industry.

Holiday economics “will help encourage domestic travel and increase tourism expenditures in the country,” he said in Proclamation 90, which declared Jan. 2 a special nonworking holiday in lieu of New Year’s Day, which fell on a Sunday.

The Department of Tourism (DoT) is confident that more long weekends in 2023 will boost local tourism and benefit micro, small, and medium enterprises (MSMEs), especially in tourism hotspots.

The Tourism department in November said more holidays and long weekends would benefit entrepreneurs because the longer Filipino tourists stay in a particular destination, the more they would spend on local products.

Long weekends would help spur economic activities, sustain tourism-related employment opportunities and aid communities that depend on tourism, it said. — Alyssa Nicole O. Tan

Local onion farmers can meet demand with adequate gov’t support

AN ONION farm in Magsaysay, Occidental Mindoro. — REGION4B.NIA.GOV.PH

THE SENATE minority leader slammed government decision makersfor pursuing policies in the agriculture industry that choke onion farmers, who can readily meet the countrys demand given ample support.   

Our onion farmers have never been tested because they have never been fully supported in maximizing their output potential,Senate Minority Floor Leader Aquilino Martin KokoD. Pimentel III said in a statement on Tuesday.  

We have to trust them and place our bets on them,he added.  

Ramon Silverio, chair of the provincial cooperative development council of Occidental Mindoro, said during an agriculture hearing on Monday that their province alone can supply the nationwide demand if they receive proper support from the government. 

Region 4-B or Mimaropa, where Occidental Mindoro belongs, was the second biggest onion producing region in the country, based on a 2021 onion sector investment guide published by the Department of Agriculture (DA). The top producer was Ilocos.   

However, in the current situation, Mr. Pimentel said the decisions that our decision makers have been making are all to the detriment of the Filipino onion farmer.  

Local onion farmers are complaining that in each step of their trading process, imported or traders’ onions are prioritized, including in the allocation of cold storage space,he said.  

Who can make such anti-Filipino decisions, all the time? Only a foreigner can do that to the Philippine farmer,he added. Unfortunately, those decisions were made by fellow Filipinos but prioritizing the interests of traders, importers and ultimately foreign farmers and their business representatives.  

The DA recently authorized imports of 21,060 metric tons (MT) of onions including 17,100 MT of the red variety and 3,960 MT of the yellow to stabilize onion prices.  

The retail price of onions, observed in markets at up to P750 per kilo, has far exceeded the suggested retail price of P250.  

The opposition senator said that he did not trust the supply and demand data presented by the DA, consolidated just a day before the recent Senate hearing.   

Original figures posted by the DA did not align with those from the Bureau of Plant Industry.  

As usual, we have figures on agriculture products, but I personally do not or cannot automatically believe them,he said. Hence, we have difficulty determining root causes because our research or data keeping is so unreliable.”  

Senators on Monday found that the high price of onions is disproportionate to the small shortfall in domestic production, noting that this could have easily been addressed by well-timed imports. Alyssa Nicole O. Tan

CoA orders Bacolod City government to pay cargo company for patrol boat delivery

BACOLOD CITY PIO

STATE AUDITORS have ordered the Bacolod City government to pay a cargo service firm for the shipment of a donated patrol boat that was delivered almost eight years ago.  

The city cannot evade payment and unjustly enrich itself, especially when it admitted that it is already in possession of the patrol boat through the freight services of Air-Waves Cargo Services (AWCS),the Commission on Audit (CoA) said in a decision dated May 30, 2022, but only made public recently.  

CoA ordered the Bacolod city government to settle AWCS total claim of P430,200, which covers the shipping service and the cost of the steel trailer that supports the boat.   

The 28-footer boat was donated by the Bureau of Fisheries and Aquatic Resources (BFAR) to the city government for patrolling activities under the governments Bantay Dagat program, which is intended to monitor and implement the countrys laws on fishing.   

Under the donation agreement, the city will cover the expenses of the vessels shipment from Manila to Bacolod city.  

The city government refused to pay AWCS, citing that there was no contract between the two parties.  

AWCS filed a civil case before the Regional Trial Court of Bacolod, which ruled that CoA had primary jurisdiction on the case.   

CoA, in its decision, confirmed that there was no contract between the two parties but said the city government must still pay the shipping company on the basis of quantum meruit or paying for services rendered even if amount due isnt specified in a contract. 

During an ocular inspection, the audit team leader noted that the boat was in rotten and unserviceable condition, proof that the equipment had been in the possession of the city for quite some time.Beatriz Marie D. Cruz 

Probe on abduction of activists in Cebu includes alleged cops’ involvement — PNP

AN INVESTIGATION is underway on the recent abduction of two activists in broad daylight at a Cebu port, including the possible involvement of cops in the crime, the Philippine National Police (PNP) spokesperson said on Tuesday.

“The Cebu City police office is currently coordinating with the families of the missing activists,” PNP Spokesperson Jean S. Fajardo told a televised briefing in Filipino. 

The two, Dyan Gumanao and Armand Dayoha, were reported missing on Jan. 10 and their families announced on Monday that they have returned home. 

Authorities are also looking into the possibility of cops being involved in the incident, Ms. Fajardo noted. 

“However, it remains difficult to gather evidence on the incident since the two individuals did not talk to many witnesses during the time of their abduction,Ms. Fajardo said.

On Monday, a video of the alleged abduction incident at the port taken from an overhead view was shared on social media, and rights groups had raised concerns about the safety of the two activists. 

Family members of the two activists said in a news briefing that the captors introduced themselves as policemen. 

“Why did this happen to them? They dont deserve this,” Danilo Gumanao, Ms. Gumanao’s father said. “If my daughter and Armand violated some laws, then why not arrest them and file charges against them.” 

Dennis Abarrientos, spokesperson of human rights group Karapatan, told the same briefing that the activists were blindfolded after being forcibly taken and possibly tortured.  

“The abduction of Gumanao and Dahoya is an emblematic case that is testament to the gross violations that union organizers experience in the country,” Cristina E. Palabay, secretary general of Karapatan, said in a tweet on Monday.  

She said the International Labor Organization should look into the abduction as a team of its official are set to visit the country this month.  

The government should not stay silent on the cases of violence against activists as it adds to the culture of impunity in the Philippines, Renato M. Reyes, Jr., secretary general of Bagong Alyansang Makabayan (Bayan), an alliance of left-wing organizations, said in a tweet.  

He also called on the Cebu Port Authority and the Philippine Coast Guard to look into the incident.  

“We call on our countrymen to continue providing local police with information on these criminal activities and we hope to continue our campaign against criminality to ensure the safety of the country,” Ms. Fajardo said. John Victor D. Ordoñez

DTI seizes almost P.5-M worth of uncertified consumer items in QC

QC-DTI PHOTO

THE DEPARTMENT of Trade and Industry (DTI) seized almost P500,000 worth of uncertified consumer products during a recent enforcement operations in Quezon City. 

The DTI, through its Fair Trade Enforcement Bureau, inspected 19 retail firms in Balintawak on Jan. 12, wherein 2,152 units of assorted consumer goods worth P482,121.15 were confiscated.    

Among the confiscated products were sanitary wares, electric kettles, electric grills, electric fans, washing machines, self-ballasted LED lamps, incandescent lamps, and ceramic tiles.   

The DTI issued notices of violation for seven non-compliant firms, directing them to explain within 48 hours from the receipt of the notice.    

The uncertified household appliances, lighting devices, and ceramic products that we sealed today surely translate to risks and hazards the moment they reach the homes of Filipino families,Trade Undersecretary Ruth B. Castelo said in a statement on Tuesday.   

Ms. Castelo stressed that the DTI operations are not geared against businesses and sellers but are intended to uphold consumer safety and welfare.  

On Jan. 6, the DTI also conducted enforcement operations in Banawe Street, Quezon City, where P1.29 million worth of uncertified tires for automotive vehicles were seized.     

The nationwide campaign of DTI against uncertified items in the market underscores the enforcement of DTI technical regulations mandating compliance with Philippine Standard Certification Mark Schemes, particularly Department Administrative Order No. 02, Series of 2007,the DTI said. Revin Mikhael D. Ochave