Andrew Tate’s detention extended

January 3, 2023 | 12:01 am

Former professional kickboxer was detained in Bucharest

By Luiza Ilie and Octav Ganea

BUCHAREST — A Romanian court agreed late on Friday to extend the detention of Andrew Tate by 30 days, after the divisive internet personality was arrested on suspicion of human trafficking, rape and forming an organized crime group.

The former professional kickboxer and his brother Tristan were detained on Thursday for an initial 24 hours alongside two Romanian suspects, prosecutors from the anti-organized crime unit said after raiding their properties in Bucharest.

Prosecutors had then petitioned the court to extend their detention.

Commenting on the court decision, Mr. Tate’s lawyer Eugen Constantin Vidineac told reporters: “From our perspective, there are no grounds… for taking this most drastic preventive measure, but it is the judge’s prerogative.”

Prosecutors said the Tate brothers had been under criminal investigation since April.

“The four suspects … appear to have created an organized crime group with the purpose of recruiting, housing and exploiting women by forcing them to create pornographic content meant to be seen on specialized websites for a cost,” the prosecutors said in a statement late on Thursday.

“They would have gained important sums of money.”

Prosecutors said they had found six women who had been sexually exploited by the suspects.

Mr. Tate, who was born in the United States, holds US and British nationality. The US State Department confirmed that it was aware of the case. Britain’s Foreign Office said it had not been approached for consular assistance over the case.

NOTORIETY
Mr. Tate gained notoriety for misogynistic comments and hate speech. He has said women are partially responsible for being raped and that they belong to men.

His promotion on social media of an ultra-masculine, luxurious lifestyle has earned him a large online following among mostly young men. He has often appeared in videos with expensive sports cars, on private jets and on exotic holidays.

Many social media platforms banned him over his comments but his Twitter account became active again in November after Elon Musk took over the platform. In one of his tweets following his return to Twitter, Mr. Tate said he was flying to California to tell Mr. Musk he was “a legend”.

Climate activist Greta Thunberg told Mr. Tate on Twitter this week before his arrest to “get a life” after he told her he owned 33 cars with “enormous emissions”.

Mr. Tate hit back on Wednesday with a video in which he asked somebody out of shot to bring him pizza and to make sure the boxes were “not recycled”.

Following online speculation that the brand of pizza featured in the video helped police confirm Mr. Tate’s presence in Romania, Ms. Thunberg quipped on Twitter that “this is what happens when you don’t recycle your pizza boxes”.

However, the anti-organized crime unit representative said it was not the case that Tate’s arrest had been made as a result of the pizza boxes.

Mr. Tate, a former contestant on the UK reality show Big Brother, operates the ‘Hustler’s University,’ which claims to have over 160,000 users who pay a subscription to learn about topics such as cryptocurrencies, investing and business. — Reuters

Top 1000 Corporations in the Philippines: Comparison of sectoral performance in 2021

January 3, 2023 | 12:01 am

THE PHILIPPINES’ top 1,000 corporations bounced back in 2021, with their combined gross revenues hitting P13.44 trillion as the economy slowly recovered from the coronavirus pandemic. Read the full story.

Peso to move sideways ahead of data releases

January 2, 2023 | 9:00 pm

THE PESO is expected to move sideways to start 2023 as the market waits for leads.

The local currency closed at P55.755 versus the greenback on Dec. 29, up by 44.50 centavos from its P56.20 finish on Dec. 28, data from the Bankers Association of the Philippines showed.

Week on week, the peso weakened by 60.50 centavos from its P55.15-a-dollar finish on Dec. 23.

Philippine financial markets were closed on Dec. 30 and Jan. 2 due to official holidays.

For this week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the market will take its cue from economic data to be released this week.

These reports include the December 2022 manufacturing purchasing managers’ index to be released on Jan. 3, the December 2022 consumer price index (Jan. 5), the November 2022 Monthly Integrated Survey of Selected Industries (Jan. 6) and December 2022 gross international reserves data (Jan. 6), Mr. Ricafort said.

Philippine headline inflation is seen to have settled within the 7.8% to 8.6% range in December due to higher electricity rates and rising prices of agricultural goods, the Bangko Sentral ng Pilipinas (BSP) said on Thursday.

If realized, December would mark the ninth straight month that inflation surpassed the BSP’s 2-4% target range.

Mr. Ricafort added that the “tail-end of the seasonal surge in OFW (overseas Filipino workers) remittances and conversion to pesos to finance the seasonal increase in holiday spending” could also affect peso-dollar trading this week.

He said the local currency may move between P55.55 and P56.05 per dollar this week.

PHL stocks may rise on bullish economic outlook

January 2, 2023 | 9:00 pm

PHILIPPINE SHARES may climb this week amid thin trading after the holidays as investors expect a better year for corporates and the economy in 2023.

The bellwether Philippine Stock Exchange index (PSEi) inched down by 0.15 point to close at 6,566.39 on Dec. 29, while the broader all shares index rose by 12.71 points or 0.36% to 3,462.04.

Week on week, the PSEi closed higher by 25.36 points or 0.39% from 6,541.03 on Dec. 23.

Philippine financial markets were closed on Dec. 30 and Jan. 2.

“On a shortened trading week and ahead of 2023, the PSEi moved sideways, ending the week a little bit higher… Save for industrials (-0.10%) and holdings (-0.16%), most sectors rallied, primed by mining & oil (+2.36%), and property (+1.82%),” 2TradeAsia.com said in a market report.

For this week, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said the market may move with an upward bias amid market optimism.

“In the last five years, from the previous year’s close to the first trading Friday of the current year, the local market has gained by 1.46% on average… The period observed shows that investors have greeted the new year with optimism attributed to positive economic and corporate outlooks. For the same reasons, we may see the market move with an upward bias in its first week this 2023,” he said.

“However, a strong rally may not be seen yet as investors also deal with risks that tempers growth prospects. This includes the country’s inflation situation, rising interest rates, and a possible global economic slowdown amid lingering headwinds from the US’ monetary tightening, to the Russia-Ukraine war, to China’s COVID-19 (coronavirus disease 2019) situation,” Mr. Tantiangco added.

The Philippine Statistics Authority will release December and full-year 2022 inflation data on Jan. 5.

The BSP has raised benchmark interest rates by 350 basis points (bps) since May in its fight against rising inflation. Meanwhile, the US Federal Reserve has raised borrowing costs by 425 bps since March.

Both are expected to continue tightening this year as inflation remains elevated amid supply constraints.

2TradeAsia.com said the main catalyst for trading this week will be the December inflation report.

“This information dump early in the year may usher broad-based volatility, but also forces monitoring of other key inputs, such as labor data, forex (foreign exchange) and crude oil, both of which can complicate stories for 2023,” 2TradeAsia.com added.

2TradeAsia.com put the PSEi’s support at 6,350 to 6,400 and resistance at 6,600, while Philstocks Financial’s Mr. Tantiangco placed the PSEi’s immediate resistance at 6,600. — J.I.D. Tabile

Rice, pork shortages expected in 2023

January 2, 2023 | 7:58 pm

Rice-farmer — PHILIPPINE STAR/MICHAEL VARCAS

By Ashley Erika O. Jose, Reporter

THE PHILIPPINES will likely experience shortages of rice and pork this year, with growers impacted by high costs for key inputs as well as climate change, analysts said.

“We will be in short supply of rice by more than three million metric tons this year due to the high fertilizer and fuel costs and the continuing threat of climate change,” former Agriculture Undersecretary Fermin D. Adriano said in a Viber message last week.

According to the United States Department of Agriculture’s (USDA) Foreign Agricultural Service, the Philippines is expected to import up to 3.8 million metric tons (MT) of rice this year to meet an expected shortfall.

The USDA added that Philippine milled rice production was estimated at 11.98 million MT in 2022, well short of the initial forecast of 12.41 million MT.

“Fertilizer imports showed a decline from April to July 2022, periods when it is most needed for growing crops,” it said.

According to the Fertilizer and Pesticide Authority (FPA), the average price of urea, the most commonly used fertilizer, was between P2,861.64 and 2,759.92 per 50-kilogram bag in the April to July period.

According to the latest FPA data, the price of urea has since eased to P2,538.27.

Last week, oil companies cut the pump price of diesel by P0.20 per liter while gasoline and kerosene prices increased by P0.95 and P0.50, respectively.

Year-to-date total adjustments to fuel prices are net increases of P14.90 per liter for gasoline, P27.30 for diesel, and P21.30 for kerosene.

Aside from rice, Mr. Adriano warned that there will also be a shortage of pork due to the continuing disruptions to grower operations posed by African Swine Fever (ASF).

“We lost three million head of swine to ASF from our hog population of 12 million. Assuming repopulation 400,000 hogs per year, it will take more than five years to repopulate our stock to pre-ASF levels,” he said.

Mr. Adriano added that avian flu is also a concern for the poultry industry as it continues to spread in Europe and US. He added that “we are not very sure how far our anti-avian flu campaign has gone.”

United Broiler Raisers Association President Elias Jose M. Inciong said in a Viber message to BusinessWorld that climate change, supply chain disruptions and geopolitical tensions will continue to affect agricultural commodities.

“The basic assumption is that there may be a global recession next year so there is less pressure on the demand side. It is expected that prices will remain high and may even increase,” he said.

Philippine international arrivals hit 2.65M in 2022

January 2, 2023 | 7:57 pm

THE Department of Tourism (DoT) said the Philippines logged 2.65 million international arrivals in 2022, beating the 1.7 million target and raising hopes for the arrivals goal to be met in 2023.

In a statement on Monday, the DoT said that of the 2.65 million international arrivals in 2022, 2.02 million were foreigners while 628,445 were returning Filipinos.

Of the foreigner arrivals, the US accounted for 505,089, South Korea 428,014, Australia 137,974, Canada 121,413, the UK 101,034, Japan 99,557, Singapore 53,448, India 51,542, Malaysia 46,805, and China 39,627.

The data cover arrivals between February and December. The Philippines reopened its borders with easier quarantine requirements on Feb. 10.

“The holidays have delivered further gains for the Philippine tourism industry as it breached its 1.7 million target by year-end with 2.65 million international visitor arrivals as of Dec. 31,” the DoT said.

The DoT added that tourism-related jobs in 2022 numbered 5.23 million. The department tallied 11,989 DoT-accredited tourism enterprises as of Dec. 29.

It added that some 25,770 tourism stakeholders were also trained last year. Revenue generated from tourism in 2022 hit P208.96 billion, up 2,465.75% from a year earlier.

“We have overcome a global pandemic, survived various calamities, and thrived through a host of many other challenges. Yet, the Philippine tourism industry has managed to exceed expectations and our tourism partners and frontliners continue to offer the best of Filipino grace and hospitality to the world,” Tourism Secretary Maria Esperanza Christina G. Frasco said.

For 2023, Ms. Frasco has said that the DoT target is 4.8 million international visitors, which she said the department is confident of hitting.

“We welcome 2023 with gratitude and excitement for Philippine tourism to bounce back stronger than ever,” Ms. Frasco said.

“We look forward to the continued convergence and collaboration of our tourism stakeholders — travelers, tourism players, national agencies, local government units, and host communities —in propelling our industry to the heights of becoming a tourism powerhouse in Asia,” she added. — Revin Mikhael D. Ochave

Energy dep’t designates RE, nuclear as 2023 priorities

January 2, 2023 | 7:56 pm

THE Department of Energy (DoE) said its priority areas for 2023 are to develop renewable energy (RE) resources and draft a nuclear power roadmap, apart from dealing with an expected power shortage during the dry season.

In a yearend report on Monday, the DoE said it will have various contingency plans in place to ensure adequate power supply for the critical periods of 2023.

“The Department… will ensure that committed power projects, transmission line facilities, and liquefied natural gas infrastructure are completed and delivered on time,” the DoE said.

It said it is also working to ensure the timely completion of transmission projects to support the entry of an additional 711.54 megawatts (MW) of RE capacity and supporting facilities that will enable more RE use such as battery energy storage systems for the Luzon power grid.

The transmission lines are the Mindanao-Visayas Interconnection Project (MVIP), the Cebu-Negros-Panay project and the Hermosa-San Jose Transmission line.

MVIP aims to connect the three main grids to ensure the sharing of energy across the network. It was initially expected to be completed in 2020, but was postponed due to the pandemic.

The Cebu-Negros-Panay Interconnection Project will enable the transmission of up to 85 MW in surplus power from the Western Visayas, while the Hermosa-San Jose Transmission line in Bataan is expected to support stranded power capacity.

The DoE said it will continue to develop the policy framework for emerging RE technologies.

The impending nuclear power roadmap will be prepared in collaboration with experts, the private sector, and the International Atomic Agency.

The DoE said it will study the possible inclusion of nuclear power to the power mix by developing small-scale nuclear power plants.

The nuclear power roadmap will guide the Nuclear Energy Program Implementing Organization and the Nuclear Energy Program Inter-Agency Committee in rolling the nuclear power program.

The DoE is also hoping to formulate a national total electrification roadmap through the implementation of the Microgrid Systems Act to accelerate the electrification of off-grid areas.

As of June, the household electrification rate was 95.8%.

The DoE said it also hopes to launch the Mindanao Wholesale Electricity Spot Market by Jan. 26. — Ashley Erika O. Jose

Consumption unlikely to remain resilient as inflation bites

January 2, 2023 | 7:56 pm

By Luisa Maria Jacinta C. Jocson, Reporter

HOUSEHOLD consumption is not likely to sustain its growth in 2023 amid rising inflation and signs of further policy tightening by the Bangko Sentral ng Pilipinas (BSP), analysts said.

“The overly aggressive tightening of the BSP this year is a big headwind for growth in 2023. We also continue to believe that the resilience in consumption this year will eventually buckle, as there’s been little progress towards the rebuild in household savings post-pandemic,” Pantheon Chief Emerging Asia Economist Miguel Chanco said in an e-mail.

“We believe that the Philippine economy ‘cashed in its chips early,’ front-loading growth to 2022 with revenge spending powering growth well past target to 7.8% full-year growth. (2023), however, could see households rebuilding savings even after the tax break from the Tax Reform for Acceleration and Inclusion (TRAIN) as inflation stays above target and the negative fallout from multi-year high interest rates finally surfaces,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

In the third quarter, household consumption was one of the main drivers of gross domestic product (GDP) growth.

The Philippine Statistics Authority reported that household consumption rose 8% year on year, accelerating from 7.1% a year earlier. Quarter on quarter, household final consumption grew by 5.7%.

This was mainly due to “revenge spending” in restaurants, travel, and tourism amid eased mobility, according to the National Economic and Development Authority.

“Much of the household consumption increases we have seen this year is part of the effects coming from the reduced restrictions from the pandemic. This is particularly true when classes were opened. In fact, the increases in GDP growth as well as employment rates can be attributed solely to the resumption of face-to-face classes (and the easing of restrictions on) other sectors like transportation and construction… none of this growth or so-called recovery can be traced to government programs,” Leonardo A. Lanzona, who teaches Economics at the Ateneo de Manila, said in an e-mail.

Mr. Mapa said according to a BSP study, consumers initially dipped into savings to fund the recent pickup in expenditure but have since diverted funds to rebuild decimated savings, citing a BSP study.

“The survey also indicates that households are postponing big-ticket purchases and taking on less debt, possibly showcasing the initial fallout from the lagging impact of rate hikes carried out this year,” he said.

Mr. Chanco added that the boost in spending this year was mainly temporary, citing the boost in remittances due to the peso’s decline.

John Paolo R. Rivera, an economist at the Asian Institute of Management, said that inflation and the weakening of the peso could lead to further losses in purchasing power.

Earlier this month, BSP Governor Felipe M. Medalla signaled further tightening in 2023 to contain inflation.

The central bank has raised borrowing costs by 50 basis points (bps) to 5.5%, bringing the policy rate to the highest level since November 2008.

Since May, the BSP has raised rates by 350 bps.

Headline inflation accelerated to a 14-year high of 8% in November, breaching the BSP’s target range for an eighth straight month.

In the first 11 months of the year, inflation averaged 5.6%, against the 4% posted a year earlier. The average was still below the BSP’s full-year forecast of 5.8%.

“As a result of these discombobulations, including revenge consumption, the effects of inflation have not been felt. Nonetheless, the high rate of invisible underemployment is a clear manifestation that inflation is clearly affecting the economy,” Mr. Lanzona said.

“But it has been known all over the world that these discombobulations dissipate over time. Eventually, the negative impact of inflation will be greater than the positive effects brought about by the so-called ‘economic recovery,’” he added.

Mr. Mapa said that most consumers have been willing to look past high prices this year, but this may constrain consumption next year.

“Inflation, unlike previous surge episodes, will not likely drop off quickly and face only a steady grind lower. The saying that inflation will be sticky downward should hold sway next year given how pervasive price pressures have become. Some would tie this to vibrant domestic demand but the true reason for the proliferation of second order effects would be the protracted supply side shocks emanating from the ongoing war in Ukraine,” he said.

Mr. Rivera added that instead of relying on revenge spending, the government should focus on ramping up investment, prioritizing manufacturing and services, and increasing agricultural production to drive growth.

Rural women denied opportunity due to connectivity shortcomings

January 2, 2023 | 7:55 pm

LACK of access to technology is holding back rural women from pursuing job opportunities, according to a study by the Philippine Institute for Development Studies (PIDS).

“Limited access to devices, erratic power supply, connectivity issues, and digital anxiety among users hound efforts to make rural areas and their residents digitally ready for online jobs. Some respondents admitted being hesitant about learning and using computers even if they knew how to use a smartphone,” PIDS said in a statement.

While digital platforms are intended to “democratize access to opportunities,” the study found that cultural barriers, including misconceptions about perceived innate strengths, skills, and appropriate jobs for women, led women to take on less complex and lower-paying jobs.

“They were more likely to perform tasks related to business services, sales, and marketing, not technology and data analytics tasks,” it added.

Women also earn 18.4% less than men in digital jobs, according to the study.

PIDs said online platforms allow more women to enter the labor force, especially mothers who prefer online work’s “flexibility in terms of time management” over full-time employment.

“However, women have less time spent on platform work and their careers because of the unequal gender division of labor: working women are still expected to perform house chores and care work, and many women have given up on their jobs because they cannot do both. Even among male and female entrepreneurs with the same responsibilities, women still face more care work,” it added.

According to the study, the demand for information technology and business process management related onsite jobs is also low in rural areas.

“Those who found online freelance projects start as general virtual assistants, some of whom work for below-market rates to undercut competitors. Freelance workers from rural areas may be tempted to set even lower rates just to secure a project. Others are subjected to dubious offers or fraudulent jobs that leave them unpaid for completed work,” it added.

The study recommended policies such as the full implementation of the Free Internet Access in Public Places Act, the passage of the Freelance Workers Protection Act, and a review of policies on competitive pricing for contracting work.

“Policy actions must be supported by efforts to digitize essential public services, especially in rural areas, which will boost confidence in digital technologies, develop local government-led plans for ICT infrastructure development and upskilling that prioritize women from low-income households, and ensure that the supply meets the demand for internet connectivity,” the think tank said. — Luisa Maria Jacinta C. Jocson

What taxpayers can expect in 2023

January 2, 2023 | 7:55 pm

With 2022 in our rearview mirrors, let us now face 2023 with full optimism and determination to succeed. To help us realize our aspirations for this new year, let us examine what 2023 has in store for us — taxpayers and tax practitioners alike.

CHANGES IN TAX RATES
By now, taxpayers should be aware of the good news that the new year ushers in, including decreases in tax rates for certain individual taxpayers especially middle-income earners. Individual taxpayers with annual taxable income amounting to P250,000 or below will continue to be exempt from income tax. For taxpayers earning more than P250,000 but not over P8 million who were subject to the graduated rates of 20% to 32%, they will have a little bit more take-home pay this year.

Starting Jan. 1, their tax rate will fall to between 15% and 30%. However, taxable income in excess of P8 million will continue to be subject to a 35% rate.

For the not-so-good news, tax rates which were lowered due to the pandemic as a temporary respite will revert to their regular rates starting July 1. These include the minimum corporate income tax which will revert to 2%, the percentage tax for non-VAT taxpayers back to 3%, and the special income tax rate for non-profit proprietary educational institutions and hospitals which will return to 10%.

E-RECEIPTING AND E-INVOICING
Another provision of the TRAIN Law which will be implemented this year is the electronic invoicing requirement.

Under Section 237-A of the Tax Code, as amended, certain taxpayers must, within five years from the effectivity of the TRAIN Law and upon establishment of a system capable of storing and processing the data required, issue electronic receipts or sales or commercial invoices in lieu of manual receipts or sales or commercial invoices and to electronically report sales data to the BIR.

We remember that the TRAIN Law took effect on Jan. 1, 2018. As it has been five years since TRAIN Law took effect, taxpayers are now eagerly anticipating how this provision will affect their businesses.

The BIR, through Revenue Regulations (RR) No. 08-2022, announced the establishment of the Electronic Invoicing/Receipting System (EIS) capable of storing and processing the data required to be transmitted by covered taxpayers using their sales data transmission system. The EIS can be accessed online and hosts three portals: EIS Taxpayer Portal, EIS Certification Portal, and EIS Portal for Revenue Officers. Taxpayers may access the portal at https://eis-cert.bir.gov.ph/#/introduction/overview.

Not all taxpayers are expected to comply with e-receipting/e-invoicing. Only the following taxpayers are required to issue e-receipts/e-invoices:

(a) Those who are engaged in the export of goods and services

(b) Those who are engaged in e-commerce, and

Taxpayers who are not required to comply may continue to issue manual receipts/invoices in lieu of e-receipts/e-invoices. However, if these taxpayers opt to issue e-receipts/e-invoices, they must enroll and submit their sales data to the EIS.

As a reminder, taxpayers are required to secure certification and permits to be allowed to transmit data to the EIS. Qualified taxpayers are required to submit applications for EIS certification, or “EIS CERT,” and to secure a Permit to Transmit, or “PTT,” to be allowed to transmit sales data using the EIS.

EIS Certification is the online verification of the BIR in determining whether the system to be used by the taxpayer is compliant with requirements, while securing a PTT allows the transmission of sales data to the EIS. The EIS Certification is separate from the accreditation of the system to be used by the taxpayer or from any arrangement the taxpayer has with the software provider of the system.

It must be noted that under RR No. 08-2022, only receipts/invoices issued by accredited Computerized Accounting System (CAS) and/or Cash Register Machines (CRM)/ Point-of-Sale (POS) will be recognized as compliant with the EIS requirements.

While the EIS certification process and the CAS/CRM/POS accreditation will allow the BIR to notify the taxpayer of any non-compliant features, persistent non-compliance may result in jail time for issuing unaccredited receipts or invoices, either just to comply with e-receipting or e-invoicing or for other business reasons.

For some taxpayers, the EIS may be a welcome development as it is supposed to simplify tax reporting and compliance. It is also envisioned to simplify the refund process as the important documents to support refund claims are already in the EIS.

However, small taxpayers who are required to shift to e-invoicing are having problems educating themselves on using the system. Some taxpayers have complained that the cost of the middleware to connect to the EIS is simply too expensive for them.

Right now, taxpayers are waiting for more training and issuances from the BIR so they can better assess how they can comply with this new requirement.

ONLINE REGISTRATION AND UPDATE SYSTEM
The BIR also launched the ORUS, or Online Registration and Update System, last year, which allows taxpayers to register, update, and perform registration-related transactions online.

Starting in 2023, taxpayers and tax practitioners alike can expect to have certain services performed online. Services such as the issuance of Tax Identification Numbers (TIN) to foreign individuals, business registration, and the issuance of Certificates of Registration, securing authority to print receipts or invoices or use of BIR-printed receipts/invoices, and the registration of books of account will be available in the ORUS.

Under Revenue Memorandum Circular (RMC) 153-2022, the BIR laid down the gradual rollout of features in the ORUS to various Revenue Regions (RRs) and Revenue District Offices (RDOs) starting December. Two weeks from now, or on Jan. 16, taxpayers can expect full implementation of the ORUS in all RDOs and RRs.

Taxpayers who will use the online registration facility of the BIR are required to enroll or create an account in ORUS. Only valid and permanent official e-mail addresses, as submitted and updated by the taxpayer and as prescribed in RMC No. 122-2022, may be used to enroll in the ORUS.

RESUMPTION OF FIELD AUDITS
While not related to digitalization, taxpayers should take note that the BIR will resume its field audits on Jan. 8. Taxpayers may recall that the BIR issued a “cease fire,” through Revenue Memorandum Order (RMO) No. 55-2022, on field audits and other field operations between Dec. 16, and Jan. 8. Taxpayers should be ready for examination and verification of their books of account, records, and other transactions once the “cessation of hostilities” ends on Jan. 8.

So, there you have it. Same as last year, the start of 2023 will surely be full of excitement for taxpayers and practitioners alike. Taxpayers should fully apprise themselves of developments in tax compliance requirements to avoid surprises as, in the words of Benjamin Franklin, “nothing is certain except death and taxes.”

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.

John Patrick L. Paumig is a senior associate from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Marcos state visit to China to give hint of ties against backdrop of sea row

January 2, 2023 | 7:34 pm

PBBM-Marcos — PHILIPPINE STAR/KRIZ JOHN ROSALES

By Kyle Aristophere T. Atienza, Reporter

PHILIPPINE President Ferdinand R. Marcos, Jr.’s meeting with his Chinese counterpart would set the tone of relations with China against the backdrop of their sea dispute, according to foreign policy experts.

His state visit on Jan. 3 to 5 would also determine whether China is committed to repairing its damaged relations with the Southeast Asian nation, they said.

“The mood and agenda of the state visit to China — his first this year and the first outside Southeast Asia — could give us an idea about the foreign policy priorities of the administration,” said Enrico V. Gloria, who teaches international relations at the University of the Philippines.

“This visit can complete the puzzle for Philippine foreign policy under Marcos Jr. in terms of where we are exactly headed with respect to our position between China and the United States,” he said in a Facebook Messenger chat.

Mr. Gloria noted that the Philippine leader’s working visit to the US in September and the visit of US Vice President Kamala Harris to the Philippines in November “made it clear to us that there is a commitment to remedy the damage done to US-Philippine relations in the past six years.”

“Whether that will be made at the expense of our good relations with China remains to be seen.”

China claims more than 80% of the South China 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.

Mr. Gloria said Filipinos would closely monitor how Mr. Marcos would “choose to position of the country vis-à-vis Beijing in terms of the territorial dispute — a move that has not really been salient as far as his predecessor was concerned.”

Observers would also watch out for the Philippine leader’s potential comments on China’s activities within the Philippines’ exclusive economic zone.

Last month, a Chinese Coast Guard vessel allegedly took by force a rocket debris that was being towed by a Philippine Navy ship in the South China Sea. After the incident, Mr. Marcos questioned why the Chinese account was different from the Philippine Navy report.

Mr. Marcos earlier said his visit to China this month could be an opportunity to find a way to avoid further incidents.

“This has been brought up in Congress, and people will expect Marcos to respond,” Mr. Gloria said. “The anticipation also stems from the bold promises of protection and assertion that the Department of Foreign Affairs and his administration has made since coming into office in June — again, a high contrast from ex-President Rodrigo R. Duterte’s stance,” he added.

During his state visit, the Philippines and China would sign an accord that aims “to avoid miscalculation and miscommunication in the West Philippine Sea,” Foreign Affairs Assistant Secretary Nathaniel G. Imperial said last week, referring to areas of the sea within the Philippines’ exclusive economic zone.

The agreement, which will be signed by Philippine Foreign Affairs Secretary Jose Enrique A. Manalo and Chinese Foreign Minister Wang Yi, would establish direct communication between their offices at various levels, he added.

A group of Filipino-Chinese businessmen and some economists last week said the public should expect more partnerships with China in trade, tourism, agriculture, public housing and security after the state visit.

Some critics view the meeting between Mr. Marcos and Chinese President Xi Jinping with skepticism, citing China’s failure to deliver on its investment promises to Mr. Duterte.

“It is hard for me to see any direct benefits from the China trip of President Marcos given the failed promises and unfulfilled commitments of President Xi and his government to then President Duterte worth $26 billion of projects and investments,” Victor Andres C. Manhit, president of local think tank Stratbase ADR, said in a Messenger chat.

In July, the Transportation department said the Philippines had scrapped its loan applications with state-owned China Eximbank for three multibillion-peso railway projects undertaken under the previous government.

“Obviously, it will be hard to see any immediate gains from the visit,” said Michael Henry Ll. Yusingco, a policy analyst. “But the fact is, the visit can be an opportunity for the administration to show its resolve to defend our territorial sovereignty not just to China but to other nations keenly watching the state visit.”

The Marcos leadership should raise the issue “without being disrespectful to the host nation,” he said in a Messenger chat. “This is a challenge that must be met by the president and his foreign policy team.”

“If the president appears to be too deferential to President Xi, as the previous administration was, then it will be a huge disappointment for millions of Filipinos,” Mr. Yusingco said. “While we don’t want to be at war or to be unfriendly with China, or any other country for that matter, we also do not want to appear weak and subservient in the eyes of the international community.”

Mr. Yusingco does not expect anything significant to happen after the China visit

“I don’t expect much to be gained from this visit in terms of new investments and the like,” he said. Nor do I expect more aid and assistance coming from China. Best case scenario is really the status quo.”

Mr. Duterte led a foreign policy pivot toward China and away from the US, the Philippines’ oldest security ally.

Mr. Marcos, who took office in June, has vowed the Philippines would be a “friend to all” and “an enemy to none.”

“The state visit to Beijing is a pivotal journey for Mr. Marcos on whether or not he will pursue bilateralism or foster multilateralism in forging an independent foreign policy,” Chester B. Cablaza, a national security expert, said in a Messenger chat. “It will round off a holistic foreign policy he intends for the Philippines.”

Tighter rules for travelers from virus hotspots sought

January 2, 2023 | 7:34 pm

NAIA-airport-passengers — PASSENGERS crowd the departure lobby of Manila’s international airport on Monday midnight. — PHILIPPINE STAR/MIGUEL ANTONIO DE GUZMAN

THE PHILIPPINE government should enforce more travel restrictions on inbound travelers from countries with an alarming coronavirus situation, including China, which has been accused of hiding its pandemic data, according to health experts.

“The Philippines should enforce travel restrictions and add requirements from travelers, but not just those coming from China but also those from other countries that are experiencing a surge,” Gene A. Nisperos, a board member of the Community Medicine Development Foundation, Inc. said in a Facebook Messenger chat.

He said the government might have to review its mask mandate after making it voluntary except in public transportation and medical facilities.

“Mask wearing is the basic minimum so we may need to review policies on masking,” he said. “Testing also needs to be more readily available and free.”

“Ensuring better conditions in public places like having air filters or better air flow is needed to make the country safer,” Mr. Nisperos said. “Broader vaccine coverage is another measure.”

The government should also improve its coronavirus surveillance and data management, he said, noting that the Philippine health system would be “pushed to its limits if we have another surge in severe COVID cases.”

The Philippines plans to welcome more tourists from China, which is expected to further ease restrictions on inbound and outbound travel in a move that will put its battered economy on course for a complete reopening this year.

Due to domestic pressure, China has begun dismantling its zero-COVID-19 strategy since December after it was faulted for its economic downturn.

Meanwhile, the United States, the world’s largest economy, is now confronting threats from the XBB.1.5 super variant, which has accounted for more than 40% of its cases.

The US, Japan, Taiwan, South Korea and Italy have imposed coronavirus tests for passengers arriving from China, which has been accused of not being transparent with its pandemic data.

At a recent meeting with Chinese officials, World Health Organizations officials asked Beijing to “formulate accurate risk assessments and to inform [them of] effective response,” according to a report by The Guardian.

There are worries that China might not be sharing data on new virus strains, which could lead to fresh outbreaks across the world. Chinese authorities have said the current outbreak is driven by versions of the Omicron variant, which has also been detected in the Philippines.

Beijing has always been “publishing information on coronavirus disease 2019 (COVID-19) deaths and severe cases in the spirit of openness and transparency,” a top health chief said at a press briefing held by China’s state council, based on a report by the state-run Xinhua News Agency.

“I feel testing mechanisms should still be in place as a prerequisite to arrival in the Philippines, especially during holidays when there is greater inbound and outbound travel,” Joey Francis Hernandez, an official of the Philippine Society of Public Health Physicians, said in a Messenger chat.

“But we have grown to push COVID-19 testing and contact-tracing out of the picture. It happened since most countries have lifted testing requirements for COVID,” he said.

Rontgene M. Solante, a member of the Health department’s technical advisory group, said travel restrictions on Chinese travelers is not scientific.

“The requirement of the US for a test-negative Chinese traveler is more of a political decision and not anchored much on science,” he said in a Messenger chat. “It is more a speculation that the new variant is driving the increase in cases.”

“They knew the limitations of an RT-PCR negative as a requirement for travelers entering the US,” he added. “It’s more about sending a message to China to give accurate data and the status of their COVID surge.”

“No country will always be ready for a new surge,” Mr. Solante said. “But we can more or less mitigate those events in the future.”

He urged the Philippine government to vaccinate more people with a focus on vulnerable sectors and aim for the availability vaccines that are effective against future strains.

The government should make antiviral agents accessible and readily available, he added.

Mr. Solante, an infectious disease expert, also called on the government to boost its surveillance and hold regular genome sequencing to ensure that new variants are being monitored.

“For next year, we will continue to be threatened by COVID-19 because of the possible emergence of new variants and waning population immunity,” Mr. Solante said.

President Ferdinand R. Marcos, Jr. should urge Congress to fast-track the passage of a bill that would create a Center for Disease Control and Prevention, he added.

“Learning to live with the coronavirus entails concrete policies and plans to make us resilient against any potential surge.” — Kyle Aristophere T. Atienza

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