Singapore home prices surge to highest in more than a decade

January 4, 2022 | 12:01 am

SINGAPORE home prices rose in the fourth quarter at the fastest pace in more than a decade, the latest marker of a surge that prompted the government to introduce cooling measures last month.

Private property values climbed 5% from the previous quarter, according to Urban Redevelopment Authority flash estimates released on Monday. That’s the highest quarterly growth since the second quarter of 2010 when prices jumped 5.3%. For 2021, prices increased by 10.6%, also the highest since 2010.

Singapore’s price spike underpins the government’s move to impose a fresh round of property curbs, which included raising additional stamp duties for second-home buyers and on foreigners purchasing private residences. If left unchecked, prices are likely to run ahead of economic fundamentals, the government cautioned at the time.

The rebound fed a property frenzy that generated S$32.9 billion ($24 billion) in home sales in the first half of last year, double the amount in Manhattan over the same period, driven by demand from the ultra-rich flocking to the Southeast Asian business hub. Singapore’s central bank last month warned that household debt is higher than pre-pandemic levels, driven by property loans.

“Looking at price surge in the fourth quarter, it explains why the government introduced the property curbs because they had already seen the data and saw this coming,” Nicholas Mak, the Singapore-based head of research and consultancy at APAC Realty Ltd. unit ERA. “If they had not acted earlier, people would have been speculating that cooling measures are on the cards.”

Buyers have been capitalizing on low interest rates and expectations that prices will climb further as the economy recovers. An acceleration in the final quarter helped propel overall growth for the full year to 7.2%, the fastest since 2010.

The property cooling measures will test the market’s resilience. Singapore’s property market has held up well in the last two years despite suffering from the worst recession on record in 2020 and enduring several start-stop virus restrictions last year.

Analysts previously said that the property curbs may be a short-term fix in a market with an insatiable appetite for homes. While the measures may damp prices and sales in the next quarter or two, they may rebound as early as the second half of this year.

Demand may pick up slightly after the Lunar New Year in February though the level of transactions may be lower than in recent months, said Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.

“Prices may stabilize and rise at a much slower pace in the next few quarters. But values are not likely to fall because developers have bought the land parcels at quite high prices,” she said. — Bloomberg

Thai Bundit will return as Cool Smashers head coach

January 4, 2022 | 12:01 am

MULTI-TITLED Thai coach Tai Bundit will remain as head coach of Premier Volleyball League (PVL) powerhouse Creamline.

The Cool Smashers management is already arranging the return of Bundit from Thailand in time for the 2022 PVL Open Conference tentatively slated either next month or in March.

“It’s still Coach Tai (Bundit). Creamline is now fixing his working visa to enable him to enter the Philippines,” a source on Monday told The STAR.

Under Mr. Bundit, Creamline has hauled three PVL championships and a pair of runner-up finishes.

But Mr. Bundit and the Cool Smashers will come out on a mission as they aim to reclaim the crown from Jaja Santiago and the Chery Tiggo Crossovers, who topped last year’s Open Conference or the league’s first season as a pro in the Bacarra bubble in Ilocos Norte.

Creamline, along with the rest of PVL teams, are expected to return to practice soon as they prepare for the forthcoming conference.

The Cool Smashers will be bannered by many-time league MVP Alyssa Valdez, who was fresh from her stint in popular online reality show Pinoy Big Brother, two-time Finals MVP Jia Morado, Michele Gumabao, Jema Galanza, Diana Mae Carlos and Risa Sato among others.

Apart from Creamline Cool Smashers and Chery Tiggo, Petro Gazz, Choco Mucho, Sta. Lucia Realty, F2 Logistics, Black Mamba Army, PLDT Home Fibr, Bali Pure, Perlas and Cignal HD are the other teams also joining. — Joey Villar

Rural banks to work with gov’t to help MSMEs, farmers

January 4, 2022 | 12:01 am

THE agriculture sector, which is among the industries that rural banks mostly cater to, was badly hit by Typhoon Odette last month. — PHILIPPINE STAR/ KRIZ JOHN ROSALES

RURAL BANKS will work with the government to support small businesses and the agriculture sector amid the ongoing coronavirus crisis and the impact of Typhoon Odette, an industry leader said.

“We are seeing the negative effects of climate change to the agricultural sector and to the banks as a whole,” Rural Bankers Association of the Philippines President Albert T. Concha, Jr. said in a Viber message.

“We will continue to work with the BSP and other government agencies like the Department of Agriculture and Philippine Guarantee Corp. to come up with various risk mitigants and allow rural banks to continue lending to farmers and MSMEs (micro-, small-, and medium-sized enterprises),” Mr. Concha said.

The agriculture sector, which is among the industries that rural banks mostly cater to, was badly hit by Typhoon Odette last month.

Agricultural damage caused by the typhoon hit P9 billion in 12 regions, based on data from the Agriculture department as of Dec. 31.

Meanwhile, Mr. Concha called on players in the electricity and telecommunications sectors to craft measures to ensure continued services despite calamities.

“Total blackout of internet and electrical services merely due to fallen poles is no longer acceptable. They must find ways simply because typhoons and other calamities will always happen again and again,” he said.

Rural banks posted a cumulative net income of P3.204 billion as of September 2021, up by 33.5% from the P2.399 billion seen in the same period of 2020.

Their assets stood at P280.918 billion as of September 2021, increasing by 11.4% from the P252.084 billion a year earlier.

The central bank has urged lenders to include environmental and social risks in their credit underwriting processes.

The BSP told banks to assess the possible impact of climate-related disturbances on their operations and their capability to withstand disruptions.

The Philippines incurred about P506.1 billion in damage caused by climate-related hazards from 2010 to 2020. — L.W.T. Noble

Entertainment News (01/04/22)

January 4, 2022 | 12:01 am

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NCR cinemas remain open under Alert Level 3

CINEMAS in the National Capital Region (NCR) will remain operational under Alert Level 3 until Jan. 15, said the Movie and Television Review and Classification Board (MTRCB) in a post on its Facebook page on Jan. 2. Under Alert Level 3, movie theaters are allowed to operate at 30% capacity for fully vaccinated individuals for indoor cinemas, and 50% capacity for outdoor cinemas provided that all on-site employees of the establishment are fully vaccinated. “We appeal to the viewing public to be a responsableng manonood (responsible viewers) by observing minimum public health standards, likewise, we encourage all to get vaccinated against the COVID-19 through your Local Government Units,” the statement said.

Voltes V: Legacy produced in PHL

GMA NETWORK has released a new two-minute featurette of Voltes V: Legacy, the live-action series adaptation of the Japanese animé. The series is directed by Mark Reyes and written by Suzette Doctolero. In an Instagram post, Mr. Reyes said the show’s Japanese producer Toei Company wrote, “We are excited to the news that Voltes V: Legacy is being produced in the Philippines. Production may be tough under this COVID situation, but this time we wanted to inform you that we are so excited to see the latest promo-reel of the show.” The live-action version stars Miguel Tanfelix, Matt Lozano, Raphael Landicho, Ysabel Ortega, and Radson Flores as the Armstrong brothers — Steve, Big Bert, Little Jon, and Jamie Robinson and Mark Gordon, respectively — of the Voltes: V team. Martin del Rosario and Liezel Lopez play Prince Zardoz and Princess Zandra, Epy Quizon plays Zuhl, Carlo Gonzalez plays Draco, Gabby Eigenmann plays Commander Robinson, and Neil Ryan Sese plays Dr. Hook. Voltes V: Legacy’s release date is yet to be announced. Watch the featurette at https://www.youtube.com/watch?v=gmAz0BB0x5w&t=151s.

Netflix releasing Korean zombie show

NETFLIX will soon release the original series All of Us Are Dead, based on a popular webtoon by webtoon creator Joo Dong-geun, touted as a “Korean-style zombie graphic novel.” The series follows a group of students trapped in a high school who find themselves in dire situations as they seek to be rescued from a zombie invasion of their school. Written by Chung Sung-il, and directed by Lee Jae-kyoo and Kim Nam-su, the cast include Park Ji-hu, Yoon Chan-young, Cho Yi-hyun, Lomon, Yoo In-soo, Lee You-Mi and Lim Jae-hyeok. All of Us are Dead premiers on Jan. 28.

Warner Bros. releases 2022 film lineup

IN 2022, Neo gets resurrected, Bruce Wayne returns with a vengeance, Newt Scamander unravels the secrets of Dumbledore, and Black Adam unleashes his unique form of justice in the modern world. Warner Bros. has released its line-up of films for year, starting with The Matrix: Resurrections which opens on Jan. 12. Filmmaker Lana Wachowski helms the long-awaited next chapter in the groundbreaking franchise that redefined a genre. The new film reunites original stars Keanu Reeves and Carrie-Anne Moss in the roles they made famous, Neo and Trinity. Opening on Feb. 16 is King Richard. Based on the true story, it follows the journey of Richard Williams (played by Will Smith), the father who raised two of the most extraordinarily gifted athletes of all time, Venus and Serena Williams. March will see Robert Pattinson starring in The Batman. The film also features Zoe Kravitz as Selina Kyle/aka Catwoman, Paul Dano as Edward Nashton/aka the Riddler, Jeffrey Wright as Lt. James Gordon, John Turturro as Carmine Falcone, Peter Sarsgaard as Gotham D.A. Gil Colson; with Andy Serkis as Alfred Pennyworth and Colin Farrell as Oswald Cobblepot/aka the Penguin. In April comes the latest in the Fantastic Beasts franchise, Fantastic Beasts: the Secrets Of Dumbledore. Professor Albus Dumbledore (Jude Law) knows the powerful Dark wizard Gellert Grindelwald (Mads Mikkelson) is moving to seize control of the wizarding world. Unable to stop him alone, he entrusts Magizoologist Newt Scamander (Eddie Redmayne) to lead an intrepid team of wizards, witches, and one brave Muggle baker on a dangerous mission. The animated adventure DC League of Super-pets opens in May. Other films opening this year are Baz Luhrmann’s Elvis (with Austin Butler as Elvis Presley and Tom Hanks as Colonel Tom Parker); Black Adam starring Dwayne Johnson; the horror film Salem’s Lot, based on the book by Stephen King; psychological thriller Don’t Worry Darling; and the DC superhero films The Flash starring Ezra Miller and Aquaman and The Lost Kingdom.

How PSEi member stocks performed — January 3, 2022

January 4, 2022 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Monday, January 3, 2022.

Manufacturing Purchasing Managers’ Index (PMI) of select ASEAN Economies, December 2021

January 4, 2022 | 12:00 am

PHILIPPINE MANUFACTURING activity inched up to a nine-month high in December on increased orders, IHS Markit said on Monday. Read the full story.

Customs 2021 collections exceed pre-pandemic levels

January 3, 2022 | 10:30 pm

THE Bureau of Customs (BoC) collected P645.77 billion in 2021, exceeding the P630.31 billion generated in 2019, the last year before the pandemic, as international trade rebounded after the 2020 economic downturn.

Collections last year were about 20% higher than the P537 billion logged in 2020 and 4.7% above the bureau’s target, the bureau said in a statement on Monday.

“The BoC’s positive revenue collection performance is attributed to the improved valuation, intensified enforcement operations against illegal importations, and improved compliance by traders with customs laws,” the bureau said.

Gradually improving import volumes and efforts to improve goods transport during the pandemic also contributed to higher collections, the BoC added.

Customs collections declined by 14% in 2020.

In December 2021, the bureau collected P62.48 billion, which exceeded its target for the month by more than 20%.

Of the 17 collection districts, 13 exceeded their targets for the year.

These include the Port of San Fernando, Port of Manila, Manila International Container Port, Ninoy Aquino International Airport, Port of Batangas, Port of Legaspi, and Port of Iloilo.

The Ports of Surigao, Zamboanga, Davao, Subic, Clark and Limay, Bataan also surpassed their 2021 targets. — Jenina P. Ibañez

Lost manufacturing, construction jobs seen dampening Q4 growth

January 3, 2022 | 10:29 pm

JOBS shed by the manufacturing and construction industries will likely temper fourth quarter economic activity, to bring the full-year growth estimate to 5-6%, offsetting gains from a pickup in business activity, First Metro Investment Corp. and University of Asia and the Pacific said in a joint report on Monday.

“We remain sanguine over the growth prospects for Q4-2021, as more firms have reopened, and consumers headed back to malls and restaurants,” the institutions said.

“We should end with a full year 2021 gross domestic product (GDP) growth of 5%-6%, and improving further in 2022, due to heavy election spending.”

The government recently raised its GDP projection for 2021 to 5.5% after the economy grew faster than expected in the third quarter even with lockdowns imposed to contain the coronavirus disease 2019 (COVID-19) outbreaks.

According to the report, the manufacturing sector appears to have led economic activity in the fourth quarter, as employment levels improved.

“However, we caution against over-optimism on account of the job losses in construction and manufacturing industries, tepid employment gains in the services sector in October, as well as uninspiring export expansion.”

The institutions are mostly optimistic, noting the expansion in manufacturing.

The Philippine Manufacturing Purchasing Managers’ Index, which measures factory activity, rose to 51.8 last month from 51.7 in November, the highest since the 52.2 reading in March.

The report’s authors also said that the inflation rate in December will likely fall below 4% with the decline in oil prices.

This aligns with Bangko Sentral ng Pilipinas projections, which noted headline inflation likely ranged between 3.5% to 4.3% in December.

However, the institutions noted that the employment situation is mixed, with construction jobs falling 7% and manufacturing jobs slipping 1.2% month on month in October.

Services jobs in transportation, insurance, retail, and public administration also fell.

“While employment rose in October, other facets of the labor situation paint a more mixed picture,” the institutions said.

“But we expect good prints for November and December, with increased economic activity, and Q1-2022 with national and local elections in sight.” — Jenina P. Ibañez

Fish imports approved to fill supply gap in typhoon zone

January 3, 2022 | 10:29 pm

THE Department of Agriculture (DA) said it approved a plan to import 11,015 metric tons (MT) of frozen fish for wet markets in typhoon-hit areas to ensure adequate supply.

In a statement, the DA said on Monday that the imports will be distributed to the parts of the Visayas and Mindanao affected by Typhoon Odette (international name: Rai) in order to stabilize food prices.

The designated ports of entry are Davao City and Cebu City.

As of Jan. 3, agricultural damage caused by Odette was estimated at P10.7 billion, with 163,760 farmers and fisherfolk affected across 370,142-hectares of agricultural land, the DA said.

Lost production volume was 244,924 MT.

The fisheries sector was most affected with losses valued at P3 billion or 28.2% to the total, affecting 50,256 fisherfolk.

The DA said it will “ensure that the fish for wet markets to be imported will not compete with local catch,” with Sanitary and Phytosanitary Import Clearances covering these imports due to expire on Jan. 31.

Eligible importers need to have shipped in at least 70% of the volume applied for in the last importing round, with no pending cases. They must also sell imported fish at a wholesale price of P75 per kilogram.

“We are also giving notice to the National Fisheries and Aquatic Resources Management Council (NFARMC) to convene soonest to consider a proposal to import additional volumes of fish in 2022 under Fisheries Administrative Order (FAO) 259 for distribution in public wet markets, as most of the fish cages and mariculture parks in Visayas and Mindanao, (and some) in Calabarzon and Mimaropa, were badly damaged and need immediate repair or re-establishment,” Agriculture Secretary William D. Dar said in a statement.

In August, a certificate of necessity was issued to import 60,000 MT of frozen small pelagic fish, in order to ensure adequate supply and keep prices in check. — Luisa Maria Jacinta C. Jocson

Davao quarry raid results in arrests, equipment seizures

January 3, 2022 | 10:28 pm

THE Department of Environment and Natural Resources (DENR) said it apprehended 14 illegal miners in Barangay Waan, Davao City on Dec. 11.

In a statement on Monday, the DENR said the operation was carried out by its Environmental Law Enforcement and Protection Service (ELEPS), which seized unlicensed equipment apart from arresting the persons engaged in unauthorized quarrying.

Environment Secretary Roy A. Cimatu said the operation was designed to “deter potential culprits and discourage them from violating existing environmental laws.”

In March, Davao City Mayor Sara Z. Duterte-Carpio had issued a cease-and-desist order (CDO) after the quarry operators ignored previous CDOs issued between 2018 and 2020.

Environment Undersecretary Benito T. de Leon said the “continual success of the ELEPS operations proves that the DENR needs an enforcement bureau.”

ELEPS handles illegal quarrying cases, including unauthorized operations inside the Taal Volcano Protected Area Landscape.

The miners are charged with violating the Philippine Mining Act of 1995.

On Dec. 23, the government lifted the four-year ban on open-pit mining. The DENR said on Dec. 29 that the removal of the ban is not expected to hinder enforcement efforts against illegal miners.

“The lifting of the open-pit ban does not… result in more illegal miners because their areas are separate from that of the large-scale miners,” Mines and Geosciences Bureau Director Wilfredo G. Moncano said. — Luisa Maria Jacinta C. Jocson

DoE backs power industry system audit after typhoon damage

January 3, 2022 | 10:28 pm

THE Department of Energy (DoE) said on Monday that it is seeking a system audit of the power sector after Typhoon Odette (international name: Rai) did extensive damage to the industry.

“We have been pushing for the system audit, but we are looking into the action to be taken by the National Grid Corp. of the Philippines (NGCP) and the Energy Regulatory Commission (ERC),” Energy Undersecretary Felix William B. Fuentebella said in a news conference.

Last week, a group of electricity consumers said they wrote to Energy Secretary Alfonso G. Cusi on Dec. 21, urging the department to investigate the grid operator’s alleged shortcomings in providing sufficient power to areas affected by the typhoon.

In its letter, the group said it wants an audit of the grid operator’s transmission system to allow the Energy department to pinpoint areas where upgrades may be needed to make the transmission system more resilient.

The ERC was also asked to carry out a financial audit of the NGCP’s capital expenditures for rehabilitating and upgrading the transmission system.

“(The system audit) is not only about the Build Back Better (plans) for the transmission network or the distribution system, it also comes with system operations, better pre-positioning and stockpiling of (electricity) posts,” Mr. Fuentebella added.

President Rodrigo R. Duterte signed on Nov. 18, 2020, Executive Order No. 120 creating the Build Back Better Task Force to oversee post-disaster rehabilitation and recovery efforts.

The Energy undersecretary also added that the National Transmission Corp., a government agency operating and managing power transmission system that links power plants to the electric distribution utilities, must also perform an inventory.

The grid operator has restored 87 of the 95 transmission lines toppled by the typhoon.

Meanwhile, NGCP Head of System Operations Reynaldo B. Abadilla said that while full power has not been restored to Bohol still, it has sought to prepare Bohol power companies for energization.

Bohol 1 Electric Cooperative and Bohol 2 Electric Cooperative are targeted for power restoration on Jan. 31. — Marielle C. Lucenio

2022 Tax Trends and Ends

January 3, 2022 | 10:27 pm

The new year has officially started, and it would be prudent to start the year right by getting to know the trends that taxpayers may want to look forward to. This year, there are new tax rules that are bound to begin and end, some of which are described below.

OUTRIGHT RECOGNITION OF INPUT VALUE-ADDED TAX (VAT) ON CAPITAL GOODS
The introduction of the Tax Reform for Acceleration and Inclusion (TRAIN) Act in 2018 brought with it an amendment that provides that the “amortization of input VAT” on purchased or imported capital goods will no longer be allowed beginning Jan. 1, 2022. Therefore, the related input VAT on capital goods acquired in 2022 may be fully recognized outright and be claimed as input tax credits against output tax during the month when the capital goods are purchased or imported, regardless of whether the aggregate acquisition cost in a calendar month exceeds P1 million.

Prior to the effectivity of the TRAIN Act, the Tax Code, as amended, provided that the input VAT on capital goods purchased or imported in a calendar month for use in a trade or business be spread evenly over 60 months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds P1 million; provided, however, that if the estimated useful life of the capital goods is less than five years, the input VAT be spread over such a period.

On the above development, what will happen to the unutilized input VAT as of Dec. 31, 2021?

Under the TRAIN Act, the unutilized input VAT may still be amortized as scheduled until fully utilized. Thus, it is essential for taxpayers to separately monitor the input VAT on the purchases or imports made starting Jan. 1, 2022, and those that were acquired on or before Dec. 31, 2021.

CHANGE IN REGIONAL OPERATING HEADQUARTERS (ROHQ) INCOME TAX RATE
This year’s tax trends will also affect the ROHQs. Beginning Jan. 1, 2022, ROHQs will no longer be considered special corporations subject to the preferential tax rate. They will now be subjected to Regular Corporate Income Tax (RCIT) just like regulars Resident Foreign Corporations (RFC).

Previously, under the TRAIN Act, ROHQs were subject to a preferential tax rate of 10% on their taxable income. However, due to the effectivity of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, and as per Revenue Regulations (RR) No. 5-2021, the tax rate has increased to 25% RCIT. With the change, the Minimum Corporate Income Tax (MCIT) of 1% is also now applicable provided the ROHQ is on its fourth taxable year in 2022. The MCIT rate is effective for ROHQs starting Jan. 1, 2022 to June 30, 2023. The MCIT rate will revert to 2% starting July 1, 2023.

Considering the changes, ROHQs are expected to transition from using BIR Form No. 1702-MX to BIR Form No. 1702-RT in the preparation of their income tax returns.

NEW EXCISE TAX RATES
Further adjustments to the excise tax rates on certain excisable products are also to be expected. The adjustment process started with the implementation of the TRAIN Act, with updates issued under subsequent regulations. These include Republic Act (RA) No. 11346, also known as the Tobacco Law of 2019, which increases the excise tax from P50.00 to P55.00 per pack of cigarettes that are packed by hand or by machine.

On the other hand, RA No. 11467 increased certain excise taxes on alcohol, tobacco products, and e-cigarettes. For fermented liquors, the increase is from P37.00 to P39.00 per liter. For heated tobacco products, the increase is from P27.50 to P30.00 per pack of 20 units or packaging combinations of not more than 20 units. There are other upward adjustments on excise taxes, and the effectivity of such adjustments is Jan. 1, 2022.

REVERSION TO 3 YEARS FOR NET OPERATING LOSS CARRY-OVER (NOLCO)
The period for NOLCO carry-over had been adjusted to provide some relief for the impact of COVID-19 on businesses. Under RR No. 25-2020 (implementing certain provisions of Bayanihan to Recover as One Act), the net operating loss (NOL) for taxable years 2020 and 2021 was to be carried over as a deduction from gross income for the next five consecutive taxable years, immediately following the year of such loss.

For 2022, the NOLCO period will revert to three years. Hence, for taxpayers using calendar years, their NOL for the year ending Dec. 31, 2022 will be allowed to be carried for three consecutive taxable years. On the other hand, for taxpayers using fiscal years, as per Revenue Memorandum Circular (RMC) No. 138-2020, those who have fiscal years ending after June 30, 2022 will revert to the three consecutive taxable years for their NOL incurred in fiscal years ending after June 30, 2022.

Starting the new year right means that taxpayers ought to know the new trends in taxation in aid of compliance and decision-making. It is necessary to know the newest trends, what’s in and what’s out, in order to deal with the changes. Doing so will help ensure that taxpayers have the necessary tools to begin the year right.

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.

Mary Grace G. Lualhati is a senior in charge from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com