Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 5398

Peso rebounds ahead of BSP policy meeting

THE PESO rebounded versus the greenback after the enactment of measures that could help boost economic recovery and ahead of the central bank’s policy review.

The local unit closed at P52.39 a dollar on Wednesday, stronger by five centavos from its P52.44 finish on Tuesday, based on Bankers Association of the Philippines data.

The peso opened Wednesday’s session at P52.42 per dollar, which was also its weakest showing. Meanwhile, its intraday best was at P52.33 against the greenback.

Dollars traded rose to $1.015 billion on Wednesday from $953 million on Tuesday.

The peso strengthened after the adoption of a new measure that could help support the economy’s recovery from the pandemic, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

President Rodrigo R. Duterte on Wednesday signed Executive Order 166 which is a 10-point policy agenda prepared by economic managers.

The measures include the expansion of the vaccination program, relaxation of requirements for international travel and the further reopening of the economy.

On Monday, Mr. Duterte also signed a law that allows full foreign ownership in more public services such as telecommunications and domestic shipping, a move that would further liberalize the Philippine economy.

Republic Act No. 11647, which amends the 85-year-old Public Service Act, excludes telecommunications, domestic shipping, railways and subways, airlines, expressways and tollways, and airports from the definition of a public utility. This means they will no longer be subject to the 40% foreign ownership cap for public utilities under the Constitution.

The government is hoping the measures will help the Philippine economy recover from the pandemic by creating much-needed jobs.

Meanwhile, a trader attributed the peso’s strength to profit taking ahead of the policy review of the Bangko Sentral ng Pilipinas (BSP) this Thursday.

A BusinessWorld poll last week showed 15 out of 17 analysts expect the Monetary Board to keep benchmark interest rates on hold on March 24, citing earlier signals from the BSP chief that the regulator will remain supportive of economic recovery.

However, analysts said they will be expecting more forward guidance from the BSP on its imminent tightening amid expectation of faster price increases due to the war in Ukraine and monetary policy normalization in the US.

For Thursday, Mr. Ricafort gave a forecast range of P52.30 to P52.45 versus the dollar, while the trader said he expects the local unit to move within P52.30 to 52.50. — L.W.T. Noble

PSE index barely changed amid Russia-Ukraine war

BW FILE PHOTO

THE BENCHMARK INDEX barely moved on Wednesday on last-minute bargain hunting as the war between Russia and the Ukraine continued and following hawkish remarks from the US central bank chief.

The bellwether Philippine Stock Exchange index (PSEi) rose by 0.49 point to close at 7,009.43 on Wednesday, while the broader all shares rose by 8.96 points or 0.24% to close at 3,724.75.

“The local bourse closed flat this Wednesday as a last-minute bargain hunting wiped the market’s intraday losses. The bourse was in the red territory for the most part of the day as uncertainties over the Russia-Ukraine conflict, and the aggressively hawkish outlook of the Federal Reserve dampened sentiment,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

“Philippine shares closed flat as investors shrugged off hawkish remarks from Federal Reserve Chair Jerome Powell and continued to monitor the war in Ukraine. The ongoing Ukraine war is still part of the investors’ ‘to monitor’ list,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Talks between Ukraine and Russia are confrontational but moving forward, President Volodymyr Zelenskyy said on Wednesday, as the West plans to announce more sanctions against the Kremlin amid a worsening humanitarian crisis, Reuters reported.

Intense Russian air strikes are turning besieged Mariupol into the “ashes of a dead land,” the city council said on Tuesday, as street fighting and bombardments raged in the port city.

Hundreds of thousands are believed to be trapped inside buildings, with no access to food, water, power or heat. Both civilians and Ukrainian troops were coming under Russian fire, said regional governor Pavlo Kyrylenko.

Russian forces and Russian-backed separatist units had taken about half of the port city, normally home to around 400,000 people, Russia’s RIA news agency said, citing a separatist leader.

Meanwhile, the US central bank must move “expeditiously” to bring too-high inflation to heel, Mr. Powell said on Monday, adding that it could use bigger-than-usual interest rate hikes if needed to do so.

Back home, sectoral indices were split. Industrials went up 167.88 points or 1.81% to 9,445.15; mining and oil climbed 76.65 points or 0.62% to 12,346.97; and property inched up by 3.37 points or 0.10% to 3,363.18.

Meanwhile, holding firms declined by 43.14 points or 0.64% to 6,608.48; financials fell by 3.80 points or 0.22% to 1,654.39; and services dropped 3.31 points or 0.17% to 1,877.16.

Value turnover decreased to P5.89 billion with 1.41 billion shares changing hands on Wednesday from the P6.67 billion or 1.11 billion issues seen on Tuesday.

Advancers outnumbered decliners, 91 versus 85, while 48 names closed unchanged.

Net foreign selling dropped to P734.65 million from P838.47 million seen on the previous trading day. — L.M.J.C. Jocson with Reuters

World number one Australian Ash Barty retires at age 25

MELBOURNE — World number one Ash Barty has decided to retire from professional tennis at the age of 25 and at the peak of her game, citing the fulfilment of her tennis goals and fatigue with life on the Tour.

She retires with 15 titles, less than two months after winning the Australian Open, her third Grand Slam singles triumph following the 2021 Wimbledon and 2019 French Open.

“Ash Barty the person has so many dreams she wants to chase after that don’t necessarily involve traveling the world, being away from my family, being away from my home, which is where I’ve always wanted to be,” an emotional Barty said in a video posted on her Instagram account.

“I’ll never, ever stop loving tennis, it’s been a massive part of my life, but I think it’s important that I get to enjoy the next part of my life as Ash Barty the person, not Ash Barty the athlete.”

She spent a total of 121 weeks as world number one.

It marks Barty’s second “retirement” from the sport, having walked away from the game as a teenager in late 2014 after becoming disaffected by the Tour.

She returned in 2016 and rose rapidly up the rankings. — Reuters

Late heroics by Mo Bamba, Franz Wagner lift Magic past Warriors

MO BAMBA hit a go-ahead 3-pointer with 52.2 seconds left and the host Orlando Magic handed the Golden State Warriors their third straight loss with a 94-90 comeback victory on Tuesday night.

Following the Warriors’ unsuccessful coach’s challenge for a shooting foul, Franz Wagner hit three free throws with 13.2 seconds remaining for a 92-88 lead for the Magic. The rookie out of Michigan added a dunk off an inbounds play moments later to complete the scoring. Wagner ended the game with 18 points on the night.

Wendell Carter, Jr. finished with 19 points and eight rebounds for the Magic, which won its second straight. Bamba had seven points, seven boards and three assists. His timely 3-pointer was just his second basket in 23 minutes of action.

Orlando held a 29-16 scoring edge in the fourth quarter as Golden State missed 14 of 21 field goal attempts.

A 13-0 run helped Orlando close within 79-78 as Gary Harris made a three off the right wing with 6:29 left.

Cole Anthony added 14 points, five rebounds and five assists to help Orlando go 3-3 on its season-long six-game homestand.

For the Warriors, Jordan Poole scored 12 of his game-high 26 points in the third quarter to go with six assists and Otto Porter, Jr. contributed 14 points and 15 rebounds off the bench as Golden State opened a five-game road trip.

Klay Thompson made a pair of 3-pointers and scored 15 points for the Warriors, who were playing their second game since star guard Stephen Curry sprained his left foot.

Jonathan Kuminga had a strong game off the bench with 14 points on 6-for-8 shooting. Andrew Wiggins, who scored 28 points in the first meeting between the teams on Dec. 6, had 13 points (5-for-19 shooting) and eight rebounds.

The Warriors, who trailed by as many as 13 points in the first quarter, outscored Orlando (36-19) in the third period on the strength of a 7-for-11 performance behind the arc. Golden State ended the quarter on a 22-13 run to take a 74-65 lead into the final 12 minutes.

Orlando jumped out to a 13-point lead before settling for a 25-17 advantage after the first quarter as Anthony made three triples and Wagner scored eight points.

Orlando rookie Jalen Suggs (ankle) missed his fourth straight game, while the Magic also announced on Tuesday that forward Jonathan Isaac underwent a small surgical procedure after suffering a right hamstring injury. Isaac was already set to miss the entire season as he recovers from a torn left ACL. — Reuters

Yankees, Aaron Judge fail to reach arbitration deal

THE New York Yankees failed to agree to terms with slugger Aaron Judge at the Tuesday deadline to finalize contracts and avoid the arbitration process.

Although the Yankees did agree to terms with 11 other arbitration-eligible players, the absence of an agreement with Judge means he can become a free agent at the end of the season unless an extension can be worked.

Judge, 30, had one of his best seasons in 2021, hitting .287 with 39 home runs and 98 RBIs in 148 games. The three-time All-Star has a career .276 average with a .386 on-base percentage, a .554 slugging percentage, 158 homers and 366 RBIs in 572 games.

Judge made $10.17 million last year and is asking to be awarded a $21-million salary for this year in arbitration. The Yankees offered $17 million.

According to the New York Daily News, Judge said there had been no contract talks as of Sunday. However, Yankees owner Hal Steinbrenner told the newspaper that talks would begin soon. The New York Post reported the team will make a “presentation” to Judge next week.

After a spring training workout in Tampa on Sunday, Judge said he didn’t want talks on an extension to go past the opening of the April 7 opening of the regular season.

“The last thing I want to do is be in the middle of May and, after a good series, is talking about the extension or after going 0-for-4 and people being like, ‘You should have signed that extension,’” Judge said. “We’ll try to get everything out of the way right now while we’re still prepping and getting ready for the season.

“But once it’s April 7, packed house in the Bronx, it’s gonna be time to just focus on my ballgames.”

The Yankees announced one-year agreements with 11 players. The 2022 salaries, according to multiple media reports: Miguel Andujar ($1.3 million), Joey Gallo ($10,275,000), Chad Green ($4 million), Kyle Higashioka ($935,000), Clay Holmes ($1.1 million), Isiah Kinner-Falefa ($4.7 million), Jonathan Loaisiga ($1.65 million), Jordan Montgomery ($6 million), Wandy Peralta ($2.15 million), Jameson Taillon ($5.8 million) and Gleyber Torres ($6.25 million). — Reuters

Manchester, Liverpool mayors want FA Cup semi to be moved from London

THE mayors of Greater Manchester and Liverpool have asked the Football Association (FA) to move next month’s FA Cup semifinal between Manchester City and Liverpool to be moved from Wembley due to a lack of train services to London that weekend.

City and Liverpool will meet over the Easter weekend but the mayors said the match would be difficult for fans to attend as engineering work scheduled for April 16-17 means there will be no direct trains to London from Manchester and Merseyside.

“This leaves tens of thousands of fans from all over our region in an unfair position, as supporters’ groups from both clubs have made clear today,” Mayors Andy Burnham and Steve Rotheram said in a joint letter to the FA Chair Debbie Hewitt.

“Without quick, direct trains, many people will be left with no option but to drive, fly, make overly complex rail journeys or book overnight accommodation.

“We believe the most obvious solution is to move this game to a more accessible stadium and offer to work constructively with you to make that happen,” added the letter sent on Tuesday.

The mayors added that rising fuel prices would burden fans with excessive costs while there were also “significant logistical and safety considerations” with thousands of fans converging on the M6 motorway.

“More than 64,000 traveling supporters will be forced on to the roads, which will already be overburdened with bank holiday traffic,” supporters groups for both clubs said in a joint statement.

“For the other semi between (London clubs) Chelsea and Crystal Palace, Wembley makes sense. For Liverpool and City, it makes no sense.

“City and Liverpool are less than 40 miles apart and there are plenty of grounds big enough far closer than Wembley to stage such a prestigious game.”

The FA had earlier said in a statement released to British media that it would meet Liverpool and City to discuss match arrangements and announce further details in due course.

“We are also continuing to work with both Network Rail and National Express to find a solution so that supporters of both teams are able to travel to and from the fixture, with as minimal disruption as possible,” the FA said. — Reuters

Remote work possible for BPOs that surrender perks

BW FILE PHOTO

THERE IS NOTHING to prevent the Information Technology and Business Process Management (IT-BPM) industry from continuing with remote work arrangements, but must give up their tax incentives, the Department of Finance said.

IT-BPM companies, also known as business process outsourcing (BPO) organizations, “are allowed to adopt work-from-home (WFH) arrangements,” Finance Secretary Carlos G. Dominguez III said in a statement on Tuesday. “No one is prohibiting them or impinging on their management prerogative to continue implementing their WFH setups. However, they must give up the tax incentives they currently enjoy because the law is clear on this.”

Incentives granted to IT-BPM companies located in economic zones are tied to how much work they perform onsite. The onsite work rules were eased during the pandemic, but the relaxed regime is expiring on March 31.

Under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, companies registered with investment promotion agencies (IPAs) are eligible for perks like an option to pay a 5% special corporate income tax in lieu of other taxes, an income tax holiday, and enhanced deductions.

These incentives are subject to compliance with Section 309 of the Tax Code, which requires that the company’s business must be conducted “within the geographical boundaries of the zone or freeport” in which the project or activity is registered.

Mr. Dominguez noted that extending the WFH concession would be unfair to companies outside ecozones that pay regular taxes. “Other companies such as micro, small and medium enterprises (MSMEs) pay the regular corporate income tax (CIT) rate of 20%, while big corporations pay 25%.”

Resolution No. 19-21, dated Aug. 2, 2021 issued by the Foreign Investment Review Board, which regulates incentives granted to foreign investors, allowed IT-BPM companies to perform 90% of their operations remotely while remaining eligible for incentives. This is the resolution expiring on March 31, with appeals for an extension not granted.

The Philippine Economic Zone Authority, one of the IPAs, had sought to extend the relaxed enforcement of on-site work rules to September.

Increased vaccination rates now allow companies to safely resume onsite work, Mr. Dominguez said.

As of Sunday, 65 million of the target population of 90 million is fully vaccinated, Health Secretary Francisco T. Duque III said, for a vaccination rate of 72%.

Mr. Dominguez said that under the relaxed Alert Level 1 quarantine setting, all government agencies are required to have 100% of their staff working onsite.

A return to office work for IT-BPM companies will also help the economy recover by increasing foot traffic for restaurants, services, and transportation.

“We hope that IT-BPM companies registered with the IPAs can support us in this whole-of-nation effort of helping Filipinos recover from the pandemic and easing the impact on them of the current crisis,” he added.

The IT-BPM industry generated revenue of $28.8 billion in 2021, and employed 1.4 million workers. — Tobias Jared Tomas

India, Philippines seen as good fit for healthcare tieups

REUTERS

INDIA and the Philippines stand to mutually gain from collaborating in healthcare and health technology (healthtech), the Indian ambassador to the Philippines said.

Shambhu S. Kumaran, Indian ambassador to the Philippines, said during the India-Philippines Business Conference on Healthcare and Medical Cooperation on Wednesday that Philippine firms should view their Indian counterparts as potential partners in healthcare investments.

“Why should the Philippines look at India? As two democracies, we recognize that our people need accessible healthcare. They need affordable healthcare and they need healthcare to be available. This is only possible if we look at (the) value of partnerships looking beyond the immediate value from the transaction,” Mr. Kumaran said.

“There (are) enormous untapped requirements and capabilities on both sides,” he added.

Mr. Kumaran added that India can offer advances in healthtech.

“India is a growing technological hub. (It) is manifesting in healthtech, educational technology (edutech)..,” Mr. Kumaran said.

“I urge all our Filipino friends. I don’t want you to look away from where you’ve been looking in the past. But I want you also to look, at least also look, at India as a strong front,” Mr. Kumaran said.

Lakshminarayana Neti, chief operating officer of biotech company Biological E. Ltd., said the Philippines stands to benefit from improving its regulatory regime to ease the entry of Indian drug companies.

Mr. Neti said the Philippines can accelerate the approval process to help Indian pharmaceutical firms expand in the country, noting the current long approval process.

He added that the Philippines can enter into collaborations with Indian regulators to accelerate the approvals, by gaining a prior understanding of the drugs they will evaluate for Philippine use.

“If there are accelerated pathways that we can find, then that would help us. If the countries can respect each other’s regulators and then if they can accelerate the pathways for approvals, that would help us to serve the market of the Philippines,” Mr. Neti said.

MV Ramana, Dr. Reddy’s Laboratories Ltd. chief executive officer for India & Branded Markets, said the drug industries of Russia and China are opting to localize production of pharmaceuticals in order to achieve self-sufficiency, suggesting that India can help the Philippines do the same.  

“Indian companies have done a significant number of such projects and many of them are complex in nature. If this is something that is in line with the expectations of the Philippine government, (we) have 100 or 200 molecules that we would want to localize in the Philippines that would bring in self-sufficiency in critical medications,” Mr. Ramana said. — Revin Mikhael D. Ochave 

$700-million data center being planned for Cainta

SpaceDC

A HYPERSCALER data center which promises to be the country’s largest is being planned for Cainta, Rizal by a Singapore data company, SpaceDC, involving the investment of more than $700 million, the Department of Trade and Industry (DTI) said.

In a statement on Wednesday, the DTI said Trade Secretary Ramon M. Lopez met with SpaceDC Chief Executive Officer Darren Hawkins and Chief Investment Officer Joshua Robinson on Feb. 28 to discuss the project, to be known as MNL1 Data Center.

“Hyperscalers are global technology companies providing cloud and internet-based services, which require huge amounts of space, power, and connectivity because of their massive customer base and user demand surges,” the DTI said.

The SpaceDC is investing over $700 million in its proposed 72-megawatt hyperscale data center in Cainta, Rizal. The center is projected to begin by the end of 2022 and expand by 2023. It will be powered by renewable energy.

The facility will have power demand of about 72 megawatts, servicing the growing demand for data as the Philippine digital transition gathers momentum.

Board of Investments Managing Head Ceferino S. Rodolfo said the project can spark the development of renewable energy in the Philippines.  

“This project by the SpaceDC to establish the Philippines’ biggest hyperscale data center is… a leap forward toward our goal for the country to be the next hyperscaler hub in the Asia-Pacific region. We are on the right track…,” Mr. Rodolfo said.

Mr. Lopez said the investment environment is currently favorable following the passage of amendments to the Foreign Investments Act, the Retail Trade Liberalization Act, and the Public Service Act, as well as the reform of the tax incentive system under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.  

“The hyperscaler industry cultivates the developer community and startup ecosystem and increases digital adoption of consumers and enterprises; it will also bring in faster and more reliable access to hyperscaler-hosted platforms and content for users in the Philippines,” the DTI said.

Citing Global Data estimates, the DTI said Philippine enterprise spending on cloud services is expected to grow from $1.8 billion to $2.6 billion by 2024.” — Revin Mikhael D. Ochave 

Solar developer sees possible tipping point for PHL this year

TRINA SOLAR FB PAGE

SINGAPORE’s Trina Solar Energy Development Pte. Ltd. said it expects the Philippine market for solar power to boom this year, declaring the industry capable of taking over the role played by more conventional energy sources.

“(The solar power industry) can really take over (from) traditional energy sources,” according to Todd Li, president of Trina Solar Asia Pacific, at a virtual briefing on Wednesday, citing the declining cost of generating electricity from solar.

“When I joined this industry around 2009-2010, the modules cost more than $3 a watt, and if we look at the price today, it has dramatically decreased over the last 10 years. But raw supply issues may affect (the rate at which costs decline). But if supply can be sustained, the cost of not only the solar modules, but of (the power generated) will continuously decline,” he said.

Mr. Li said that global installations of solar power last year amounted to 170-180 gigawatts (GW), with the supply chain capable of supporting around 250 GW-300 GW.

“Next year, we see (sufficient) supply,” he said.

Trina Solar launched on Wednesday its latest Vertex 670-watt module, which promises output enhancement of up to 34% compared with older systems, resulting in about 1.2% additional savings for residential solar users.

Mr. Li said over the next five years, it aims to focus on large-scale commercial and industrial projects, which it called the main driver of growth in the solar market.

Trina is also open to collaborating with more Philippine solar companies, following a current tieup with Solar Philippines Power Project Holdings, Inc.

Trina has a goal of installing 1.5 GW of solar power a year in the Philippines over the next 10-20 years.

In 2020, the Philippines’ power generation mix consisted of 57% coal-fired facilities, 21% renewable energy, 19% natural gas, and 2% oil. — Marielle C. Lucenio

British chamber pitching more UK companies to invest after legislation opens PHL markets

THE British Chamber of Commerce Philippines (BCCP) said it is encouraging UK companies to invest in the Philippines following the easing of foreign ownership limits on industries like telecommunications and retail.

BCCP Executive Director Chris Nelson said in a statement on Wednesday that the chamber “actively continues to encourage more British companies to look at business and long-term opportunities in the country.”

“The Philippines has a high potential to attract more foreign direct investment (FDI); if it increases the openness of the economy further, the right business environment (will be) in place,” he said, adding that the chamber looks forward to “the promotion of fair competition in key industries.”

On March 21, President Rodrigo R. Duterte signed Republic Act (RA) No. 11659 which amended the 85-year-old Public Service Act (PSA). The amended law now allows foreigners to fully own companies in the telecommunications, airlines, railways, and shipping businesses. Previously, these sectors were subject to a 40% foreign ownership limit.

The amended PSA completes the program of three economic liberalization measures being promoted by the government in aid of the economic recovery.

Earlier, Mr. Duterte signed RA 11595, which amended the Retail Trade Liberalization Act (RTLA), and RA 11647, which amended the Foreign Investments Act (FIA).

Under the amended FIA, foreigners are now allowed to invest 100% equity in domestic market enterprises and set up and own 100% of small and medium enterprises.

On the other hand, the amended RTLA lowered the required minimum paid-up capital of foreign retailers to P25 million from $2.5 million, while the minimum investment per store was lowered to P10 million.

The BCCP reiterated its call for the Philippines to ratify the Regional Comprehensive Economic Partnership (RCEP) treaty. The Philippines has yet to join RCEP with the Senate unable to sign on to the treaty before adjourning on Feb. 3 for the election break.

The RCEP trade agreement’s members are Australia, China, Japan, South Korea, New Zealand, and the 10 members of the Association of Southeast Asian Nations. The trade deal starting coming into force on Jan. 1 in 11 countries.

“As the Philippines welcomes new leadership in May, the chamber wishes the next administration will pursue and maintain policies aimed at further enhancing the country’s investment landscape and make the (Philippines) the gateway to Southeast Asia,” the BCCP said. — Revin Mikhael D. Ochave 

Easing back into the pre-pandemic world, tax-wise

With the COVID-19 cases in the country continuing to decline and the restrictions relaxing, we are now slowly returning to our pre-pandemic lives.

And while there may still be a lot of uncertainty about the Philippines’ post-pandemic future, there are a few tax-related certainties we know so far.

TAXATION OF PROPRIETARY EDUCATIONAL INSTITUTIONS
Schools nationwide are now urged to allow limited face-to-face classes. For students who have missed out on classroom activities and interacting with school friends and teachers, the possibility of going back to school brings hope and confidence in reverting to the status quo.

Amidst the ongoing preparations for the anticipated face-to-face classes, there’s another reason private schools are especially delighted these days. In January, Republic Act No. 11635 amended Section 27(B) of the National Internal Revenue Code of 1997 to finally end the long-standing issue on the proper income tax treatment of proprietary educational institutions.

RA 11635 confirms that the strict interpretation of the original provisions of Section 27(B) of the Tax Code and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) amendments under Revenue Regulations No. 5-2021 do not align with the objective of lawmakers to grant consideration to the education sector given the many challenges it faced during the pandemic — suspended operations and decline in enrolment, among others. With the amendment, it is now clear that for-profit educational institutions are eligible for the 10% preferential income tax rate and the 1% temporarily reduced rate between July 1, 2020 and June 30, 2023. Nonprofit educational institutions remain exempt from income tax under the Constitution.

The education sector can now breathe a sigh of relief and focus its efforts on the upcoming reopening of classes.

UPDATED LIST OF TOP WITHHOLDING AGENTS
With the relaxed health restrictions, most business establishments are now allowed to operate at full capacity as long as they comply with the minimum health protocols set forth by the Department of Health. As more establishments open, taxpayers are expected to have increased dealings with current suppliers and perhaps even gain new suppliers. Taxpayers should be mindful of withholding tax obligations on their purchases.

On that note, the Bureau of Internal Revenue issued Revenue Memorandum Circular No. 27-2022 announcing the recently updated list of withholding agents for inclusion to the list of top withholding agents (TWAs). Under the Circular, newly-added TWAs are required to deduct and remit either the 1% or 2% creditable withholding tax (CWT) from income payments to their suppliers of goods and services, respectively, starting April 1, 2022. Failure to withhold and remit the CWT on income payments is grounds for the disallowance of expenses for income tax purposes.

NO SUSPENSION OF EXCISE TAXES ON FUEL PRODUCTS
For some of us, returning to pre-pandemic life involves the daily commute as we slowly transition back from working at home to physically reporting to the office. While teleconferencing is still encouraged, some may already find themselves conducting join face-to-face meetings.

Reporting to the office comes at a critical time, when prices of fuel products continue to rise. And while pump prices are mainly dictated by the global price of crude, the excise taxes imposed on fuel products also significantly contribute to the burden on commuters.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the current excise tax rates are P10 per liter for gasoline, P6 per liter for diesel, P5 per liter for kerosene, P4 per liter for aviation fuel, and P3 per liter for liquefied petroleum gas.

The considerable increases in fuel prices have understandably made basic commodities more expensive. As such, the clamor for the suspension of excise taxes on fuel products has been resounding.

Unfortunately, no temporary relief will be provided this time. The government has rejected calls to suspend the excise tax on fuel, with the Department of Finance citing the potential hit to government revenue. Instead, the President approved a proposal to provide P200 in monthly direct aid or unconditional cash transfers to the most vulnerable sectors.

But while immediate relief for the recent price hikes may not be in sight, and we are not safely out of the woods yet with this pandemic, it is still encouraging to know that we are making progress in rediscovering our old lives. The reopening of businesses, the bustle of city life, and even the traffic are encouraging signs that we are recovering from the two-year pandemic.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Maria Jonas Yap is a senior manager at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of PricewaterhouseCoopers global network.

maria.jonas.s.yap@pwc.com

1...5,3975,3985,399...12,998Page 5,398 of 12,998
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube