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Marcos party says he spent P272M for 2022 campaign

REUTERS

PRESIDENT-ELECT Ferdinand R. Marcos, Jr.’s party spent P272 million for his presidential campaign, well below the ceiling, the party’s lawyer said in a statement on Monday.

The Partido Federal ng Pilipinas submitted its statement of contributions and expenditures to the Commission on Elections (Comelec).

Under the law, the spending ceiling is P5 for each of the 67.4 million Filipino voters, or a total of P337 million. Mr. Marcos must still file a separate spending statement by June 8.

The Philippine Center for Investigative Journalism (PCIJ) in May said Mr. Marcos and his main rival, Vice-President Maria Leonor G. Robredo topped ad spending on mainstream media from January 2021 to March 2022, at P1.4 billion each.

Mr. Marcos did not record any ad spending on Facebook, the PCIJ said in a January report. “But this is not surprising because Marcos prefers meme wars over ads,” it said, citing Jonathan Ong, an associate professor at the University of Massachusetts Amherst who has studied disinformation networks in the region.

Facebook’s Ad Library is a public database of ads that ran on the social media platform. It provides details such as the content of the ads, how much was spent to boost the ads, and who were targeted. 

But it does not detail how much candidates spent to produce the ads and payments to social media experts who managed their accounts, PCIJ said. “It also does not cover payments to influencers tapped to endorse candidates on Facebook.

Political ads were banned in Philippine elections until 2000, when the ban was lifted based on the view that ads would level the playing field by allowing newcomers to compete with more famous politicians.

But critics have since complained how political ads have been accessible only to rich candidates, PCIJ said.

The Supreme Court has rejected a Comelec attempt to limit political ads on radio and TV to 180 minutes and 120 minutes per station. — Kyle Aristophere T. Atienza

Anti-graft court rejects pleas to junk ‘pork’ case 

PHILSTAR FILE PHOTO

THE PHILIPPINES’ anti-graft court has rejected several pleas seeking to dismiss corruption charges against the so-called pork barrel queen scam and her accomplices.  

In an eight-page resolution dated June 2 and released on Monday, the Sandiganbayan Second Division said the petitioners had failed to prove that the Justice department lacked evidence to prosecute businesswoman Janet Lim-Napoles and her alleged co-conspirators.  

She is being tried for facilitating the release of P15 million worth of congressional funds for a livelihood project in the district of former Nueva Ecija Rep. Aurelio M. Umali that allegedly did not exist. 

“The grounds raised in the instant motions were mere general allegations that the prosecution’s pieces of evidence are insufficient to prove beyond reasonable doubt the elements of a violation of the Anti-Graft and Corrupt Practices Act as well as their conspiracy in the commission,” according to a copy of the decision penned by Associate Justice Arthur O. Malabaguio. 

“They have not provided any reason or explanation on how they arrived at such a conclusion.”   

The court also junked Ms. Napoles’s pleading to have the case dismissed, as well as that of Mr. Umali.  

“It must be emphasized that at this point, the court is not yet passing upon the merits of the case,” the Sandiganbayan said. “The incident before us is merely a determination of whether the evidence on record is sufficient to sustain the indictment or support a verdict of guilt and does not lead to a conclusion of the guilt or innocence of the accused.”  

The pork barrel allowed legislators to fund small-scale projects in their districts that fell outside the national infrastructure program and was voided by the Supreme Court in 2013 for being illegal. — John Victor D. Ordoñez 

Duterte’s health chief stands by controversial pandemic fund transfer

PHILIPPINE STAR/ MICHAEL VARCAS

OUTGOING Health Secretary Francisco T. Duque III on Monday stood by a decision to pass on coronavirus response funds to the Budget department’s procurement service at the start of the pandemic, a transfer that became controversial due to questionable supply contracts awarded to a company owned by personalities with links to the President.  

“No regrets,” Mr. Duque told ABS-CBN News Channel. “There’s no evidence of wrongdoing.”  

The deals with Pharmally Pharmaceutical Corp. were the subject of a Senate committee investigation, but the final report that implicated President Rodrigo R. Duterte did not get majority support from the chamber.   

“I would not have done that differently,” Mr. Duque said. “I trusted the institution. I did not trust personalities,” said Mr. Duque, who had faced resignation calls over his handling of the pandemic response.   

The Senate last week released the top executives of Pharmally Pharmaceutical  who were detained for months after being cited in contempt for failing to provide documents relating to their supply contracts with the government.   

A Senate committee responsible for probing graft and corruption began its investigation into the government’s pandemic transactions after state auditors found deficiencies in the Health department’s handling of COVID-19 funds.  

In hearings, senators had repeatedly questioned the Health department for transferring about P42 billion to the procurement service agency under the Budget department for the purchase of pandemic supplies. Pharmally secured more than P8.6 billion worth of contracts in 2020.  

Senator Franklin M. Drilon, one of the senators who backed the inquiry, said the outgoing health official “should hire a good lawyer” because he is a “principal by indispensable cooperation.” 

“The Procurement Service- Department of Budget and Management (PS-DBM) could not have committed the plunder without the P42 billion Health funds being illegally transferred, without any documentation, to PS-DBM,” he said in a statement.    

Another legislator, Senator Aquilino Martin “Koko” L. Pimentel III, said the committee’s 113-page report speaks for itself when asked to comment on Mr. Duque’s remarks. — Kyle Aristophere T. Atienza

De Lima asks DoJ to ‘dig deeper’ in their review of her drug cases 

PHILIPPINE STAR/ GEREMY PINTOLO

DETAINED Senator Leila M. de Lima on Monday asked the Department of Justice (DoJ) to “dig deeper” in their review of her drug cases, after four witnesses retracted their allegations relating to her supposed crime. 

“In assessing or re-assessing the rest of the evidence against me, the SoJ (Secretary of Justice) or DoJ must go beyond a superficial review of the cold statements or affidavits of the witnesses and inquire into the very circumstances by which these were extracted,” the senator, one of the staunchest critics of outgoing President Rodrigo R. Duterte, said in a statement.  

Justice Secretary Menardo I. Guevarra, a Duterte appointee, at the weekend said the review would only take a few days.  

“The prosecution needs to reassess the strength of its overall evidence in the light of the retractions of certain witnesses,” he said. “If the prosecution believes that such recantations do not affect its case, then the prosecution will maintain its course.”  

Ms. De Lima said DoJ should ensure “no injustice is done to anyone.” 

The drug charges against Ms. De Lima started after she led a Senate investigation of Mr. Duterte’s war on drugs that has killed thousands.  

In her previous post as head of the Commission on Human Rights, she also probed the assassination of suspected drug pushers by the so-called Davao Death Squad, allegedly upon the orders of Mr. Duterte when he was still the city mayor.  

In her five years in detention, Ms. De Lima has repeatedly asserted her innocence, saying she was being prosecuted for criticizing Mr. Duterte’s drug war. — Alyssa Nicole O. Tan 

Residents continue to evacuate as Mt. Bulusan remains restive 

RESIDENTS of Barangay Puting Sapa in Juban, Sorsogon are assisted by members of the Philippine Coast Guard as they move to the town’s evacuation center amid continued threat from Mt. Bulusan, which erupted on Sunday morning and spewed ash that covered several surrounding towns. — PHILIPPINE COAST GUARD

EVACUATION continued on Monday for over 8,000 residents in a town affected by ashfall from Mt. Bulusan’s eruption on Sunday, according to emergency response agencies.   

At least 75 families composed of 278 individuals have been moved to the evacuation center in Juban town as of Monday noon, according to the Department of Social Welfare and Development Bicol Region office.  

A total of 1,850 families or over 9,250 individuals have been affected, it said.   

No house was reported to have been damaged but local authorities warned against the health threat from ash.   

The Sorsogon provincial government said police and firefighters have completed clearing operations along the main highway and were assisting residents wash out ash from their properties.   

The mountain volcano in Sorsogon province, located about 565 kilometers southeast of the capital Manila, erupted Sunday morning and spewed ash. Sunday’s eruption was recorded at 10:37 a.m. and lasted for about 17 minutes.      

The Philippine Institute of Volcanology and Seismology (Phivolcs) recorded 29 volcanic eruptions in the 24-hour period from 5 a.m. Sunday, according to the agency’s bulletin as of Monday morning.   

An alert level 1, which means a low-level unrest, remains in place.  

Phivolcs Director Renato U. Solidum, Jr. said another “phreatic or steam-driven explosion” at Mt. Bulusan is still possible in the coming days or weeks.   

“In past eruptions, sometimes the interval between eruptions was days, weeks, sometimes months,” he said in Filipino during Monday’s Laging Handa briefing.   

The volcano’s edifice was still inflated and sudden steam-driven or phreatic eruptions may occur, according to Phivolcs.  

Meanwhile, the Civil Aviation Authority of the Philippines (CAAP) said no damage was reported in the seven airports it operates in Bicol Region, including the new Bicol International Airport in Daraga, Albay.   

The six other airports are in Bulan, Sorsogon, Daet, Masbate, Naga, and Virac.  

“We remain vigilant and alert for the volcano’s next activities,” CAAP Area V Manager Cynthia Tumanut said in a statement. “As of now, our airports have been safe from the wrath of Mt. Bulusan’s eruption. Operations in our airports with commercial flights have remained unhampered as well,” she said. — MSJ 

Italy, Philippines to explore infra cooperation 

ITALY will explore potential cooperation in infrastructure with the Philippines, the camp of President-elect Ferdinand R. Marcos, Jr. said following a courtesy call on Monday by the former’s top envoy.     

Italian Ambassador Marco Clemente and Mr. Marcos “talked about possible cooperation in infra projects” during their meeting, incoming press secretary Trixie Cruz-Angeles told a news briefing.   

“[They] also talked about COVID-19 (coronavirus disease 2019) and cooperation on learning about COVID-19 responses and opening up the economy,” she added. 

Mr. Clemente, the fourth European diplomat to pay a courtesy call on Mr. Marcos, also committed to bring the Inter Milan Football Club in the Philippines “through intercampus projects to benefit children in need and to promote football locally,” Ms. Angeles said.   

“On the political aspect, the ambassador noted that this is the 75th year of Italian-Philippine relations,” Ms. Angeles said, noting that the two officials tackled the diplomatic relations between the two countries. — Kyle Aristophere T. Atienza 

Poe urges LTFRB to hasten action vs ride-hailing priority booking fees  

A SENATOR on Monday called on the Land Transportation Franchising and Regulatory Board (LTFRB) to act fast against ride-hailing companies that implement a priority booking fee scheme, an illegal practice. 

“Our people deserve equal access to public transportation services without discrimination,” Senator Mary Grace S. Poe-Llamanzares, who chairs the Senate Public Services Committee, said in a statement.  

She said the LTFRB “must stand its ground against any illegal priority booking fee that can unduly select a passenger who can pay extra over another.”  

LTFRB Executive Director Maria Kristina E. Cassion last week said they are already evaluating the sanctions that could be imposed against JoyRide Ecommerce Technologies Corp. (JoyRide), which was reported to be imposing extra fees for priority booking through their app.    

“We expect the agency to expeditiously address all challenges to ensure that no such mechanism can victimize our hapless commuters,” the senator said.  

JoyRide has explained that the priority charge is an “optional fee” that customers can pay.  

“It is an industry practice in case a customer would like to tip or incentivize a driver-partner in advance,” JoyRide Senior Vice-President for Corporate Affairs Jose Emmanuel M. Eala had said, assuring that they are “compliant with the fare structure set by the LTFRB guidelines.” — Alyssa Nicole O. Tan 

Pharmally case closed?

On Feb. 1, Senator Richard Gordon, chairman of the Senate Blue Ribbon Committee, released the 113-page draft report on the months-long investigation into the government’s use of pandemic funds and its transactions with Pharmally Pharmaceutical. The report recommended the filing of plunder, graft, and other criminal charges against Health Secretary Francisco Duque, former Budget Undersecretary Christopher Lao, Overall Deputy Ombudsman Rex Warren Liong, Chinese businessman Michael Yang, and Pharmally executives.

The report also said that at some point after his term of office, charges must be considered against Pres. Duterte because he “betrayed the public trust” when he appointed Yang as his economic adviser and allowed him to help Pharmally, a newly created undercapitalized firm, bag a P10-billion contract with the government. The report further said Duterte betrayed public trust when he sought to discredit not just the Senate but also the Commission on Audit whose state auditors first reported on the anomalies in the Pharmally deals.

The report required the signatures of at least 11 of the 20 members of the endorsing committee to be accepted as an official committee report before it could be submitted for plenary deliberation. But as of June 3, only eight senators other than Gordon had signed the report. They were Senate President Pro-Tempore Ralph Recto, Senate Minority Leader Frank Drilon, Senators Leila de Lima, Risa Hontiveros, Ping Lacson, Manny Pacquiao, Kiko Pangilinan, and Koko Pimentel.

The other members of the Senate Blue Ribbon Committee who did not affix their signature were Senate Majority Leader Migz Zubiri, Senators Sonny Angara, Pia Cayetano, Sherwin Gatchalian, Bong Go, Lito Lapid, Imee Marcos, Grace Poe, Bong Revilla, Francis Tolentino, and Cynthia Villar.

Zubiri and Gatchalian said they would have signed the report if it did not include the name of President Duterte. But the report did not accuse the President of plunder, graft, or any criminal charge. What it said was charges must be considered against him because he “betrayed the public trust.”

De Lima expressed disappointment at the failure of the Blue Ribbon Committee to get the required 11 signatures on the report. She said, “To let these people get away with plunder and corruption smacks of gross dereliction of duty on the part of the Senate. The report would now have to be archived, as if no anomaly happened.” She considers it tantamount to letting culpable parties go scot-free.

Considering that all the 18 hearings of the committee were televised, exposing to the public the apparent anomalous transactions of Pharmally and the obvious attempts of the President to disrupt the investigation and to shield certain officials from being interrogated, a senator not signing the report can be taken to mean he or she would dismiss the Blue Ribbon Committee’s report of massive graft and corruption in order not to alienate the President.

Hontiveros, who was re-elected to the Senate, said she was open to sponsoring a resolution calling for an inquiry into the Pharmally controversy. She is hopeful of getting the support of President Duterte’s allies in the Senate and those incoming senators who ran under the Marcos-Duterte ticket. I think it is wishful thinking on her part. Allies of President Duterte rarely attended the hearings on the Pharmally case.

Of those who signed the report, only Hontiveros and Pimentel will still be in the Senate. Of the seven other signatories, two ran for re-election to the Senate and four for higher office. All lost. One ran for a seat in the Lower House and another decided to retire. Four of their replacements — Robin Padilla, Loren Legarda, Mark Villar, and Jinggoy Estrada ran under the Marcos-Duterte banner.

Senate President Tito Sotto in his valedictory address had the gall to appeal to the incoming Senate to “Maintain the integrity and independence of the Senate” when he himself kowtowed to President Duterte’s directives and policies.

His subservience to the President was markedly manifested in 2019. When Chinese fishermen were seen catching fish in Philippine waters, President Duterte remarked that Chinese fishermen can fish in the West Philippine Sea. Sotto echoed the President’s deferential statement. In true Iskul Bukul fashion, Sotto said “It’s very difficult to say that there is exclusivity if it is underwater. The fish could be coming from China.”

Some people point out that charges against the Pharmally executives need not be filed by the Senate. The Secretary of Justice has the discretion to investigate through the National Bureau of Investigation (NBI), a government agency directly under him, even without a complaint. In fact, the Secretary has used that power for much lower thresholds before. The last time NBI investigated motu proprio (on its own) was to hunt down peddlers of the fake “no vaccine, no aid” rumors. But the attitude of Secretary Menardo Guevara with regard to Pharmally had been passive. He is perceived as compliant to the directives of the President.

Prior to his government stint, Guevarra was in private litigation practice. He was also a member of the faculty of the Ateneo Law School, teaching a broad range of subjects. Most of the past secretaries of Justice had a similar background — long years of private law practice and teaching Law in the most prestigious schools of Law.

The incoming Secretary of Justice is of a different mold. Jesus Crispin Remulla, better known as Boying Remulla, comes from a political dynasty. He is one of the sons of Johnny Remulla, who was governor of the Province of Cavite for 14 years. Boying himself has been governor of Cavite and representative of the 3rd and 7th districts of the province.

He was one of the most vocal congressmen opposed to the renewal of the franchise of ABS-CBN. He and 69 other congressmen accused the broadcast network of tax avoidance and of selling shares through depository receipts to foreigners, a violation of the Constitutional provision that prohibits aliens from owning Philippine mass media. But political pundits say they were just following the promptings of President Duterte who had an axe to grind against the broadcast network. It was as if they said, “Thy will be done, Mr. President.” In short, Boying Remulla is a traditional politician, a “trapo” in the language of the street.

While President-elect Ferdinand Marcos, Jr. had said his administration will run after corrupt officials, he was quick to stress that his administration will not focus on investigating corruption issues from previous administrations. “Let’s forget about the past. It was not under my watch,” he quipped. Will Justice Secretary Remulla say “As you wish, Mr. President”?

So, the final resolution of the Pharmally case depends on whether Justice Secretary Jesus Crispin Remulla acts as a traditional politician or as a man of the law.

 

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, and management professor. He has been a politicized citizen since his college days in the late 1950s.

Tolerating graft and corrupt practices

FREEPIK

Under Section 168 of the Revised Corporation Code (RCC), a director, trustee, or officer shall be punished with a fine ranging from P500,000 to P1 million, who knowingly:

a.) Fails to sanction, report, or file the appropriate action with the proper agencies; or,

b.) Allows or tolerates the graft and corrupt practices or fraudulent acts committed by a corporation’s directors, trustees, officers, or employees.

Section 168 properly limits its application only to directors, trustees, or officers liable for the offense defined therein. There is therefore no legal basis to hold employees and consultants of the corporation liable for participating in the offense defined therein.

In consonance with principles of corporate governance, Section 168 sends a clear message that it is not enough for directors, trustees, and officers to not directly engage in fraudulent acts or graft and corrupt practices, but they are obliged, under pain of criminal penalty, to not tolerate it or turn a blind eye when such acts are committed by their colleagues in the name of the corporation, and even go to the extent of reporting the same to the proper authorities.

THE ‘PREJUDICIAL QUESTION’ RELATING TO SECTION 167
Section 168 of the RCC, as it seeks to penalize directors, trustees, or officers criminally liable for their acts of tolerance, should be treated as the counterpart to Sections 165 to 167 that penalize directly the corporation as the medium by which fraudulent acts are committed, and graft and corrupt practices perpetrated.

Consequently, the allegedly “tolerating” directors, trustees, or officers cannot be convicted under Section 167 unless and until there has been a formal conviction of the corporation under Sections 165, 166, or 167.

RETALIATION AGAINST WHISTLEBLOWERS
Section 169 of the RCC defines a “whistleblower” as “any person who provides truthful information relating to the commission or possible commission of any offense or violation under the” RCC.

Under Section 169 of the RCC, any person who, knowingly and with intent to retaliate, commits acts detrimental to a whistleblower, such as interfering with the lawful employment or livelihood of the whistleblower, shall, at the discretion of the court, be punished with a fine ranging from P100,000 to P1 million.

The essence of the offense punished under Section 169 is to “commit acts detrimental to a whistleblower,” although illustrated by examples of “interfering with the lawful employment or livelihood of the whistleblower,” remains such a broad description that can be limited by the element that it is “with intent to retaliate.” In other words, however detrimental an act committed against a whistleblower may be, the prosecution must show that essential element of having been done “with intent to retaliate.”

LIABILITY OF DIRECTORS, TRUSTEES, OFFICERS, OR OTHER EMPLOYEES
Section 171 of the RCC provides that “If the offender is a corporation, the penalty may, at the discretion of the court, be imposed upon such corporation and/or upon its directors, trustees, stockholders, members, or officers, or employees responsible for the violation or indispensable to its commission.”

THE LIMITED APPLICATION OF SECTION 171
Strictly speaking, only Sections 165, 166, 167, and 170 (in the rare instances when it can be applied) of the RCC specifically define offenses where it is the corporation that is held criminally liable. In all other criminal offenses provided by the RCC, the corporation itself cannot be held liable as the accused. The general rule prevailing in this jurisdiction is that when a criminal act is done on behalf of the corporation, the corporation cannot be held criminally liable since being an amoral being, it cannot fulfill the requirement of “malicious or criminal intent,” and therefore the crime committed is ascribed as the direct criminal act of the directors or trustees, officers and/or agent of the corporation who actually performed the criminal act.

Therefore, when Section 171 refers to a situation when “the offender is a corporation,” it could only cover the offenses under Sections 165, 166, 167, and 170, and that Section 171 is the legal basis by which the courts may include the offending directors, trustees, shareholders, members, or officers, or employees who are directly responsible for the violation or indispensable to its commission.

WHY IS DISCRETION GRANTED TO THE COURTS UNDER SECTION 171?
Under Section 171 of the RCC, if the offender is a corporation, “the penalty may, at the discretion of the court, be imposed upon such corporation and/or upon its directors, trustees, stockholders, members, officers, or employees responsible for the violation or indispensable to its commission.”

Since a corporation is a juridical person, it can commit crimes only through acting directors or trustees, stockholders or members, officers, and/or employees, and therefore such natural persons are always responsible for the violation (having been the actors for the criminal act) and are indispensable for the corporation’s commission of the crime. Therefore, not only should the responsible directors or trustees, officers, shareholders or members, and/or employees be included as accused in the charge sheet against the corporation, but that the penalties under Sections 165, 166, 167, and 170 should be applied upon the accused natural persons separately from the imposition against the corporation.

LIABILITY OF AIDERS AND ABETTORS AND OTHER SECONDARILY LIABLE
Under Section 172 of the RCC, “anyone who shall aid, abet, counsel, command, induce, or cause any violation” of (i) the RCC, or (ii) any rule, regulation, or order of the SEC, “shall be punished with a fine not exceeding that imposed on the principal offenders, at the discretion of the court, after taking into account their participation in the offense.”

The broad language of Section 172 may be employed as the legal basis to hold legal counsel, accountants, financial advisers, and other consultants liable for advising or counseling the corporate officers into actions and projects that would be construed as “any violation of the” RCC, whether such violation would constitute a criminal offense or merely a commercial non-criminal infraction.

Be that as it may, no criminal conviction can be imposed upon an aider, abettor, or counselor unless and until the principal offender is convicted since Section 172 imposes the punishment “with a fine not exceeding that imposed on the principal offender.”

CONCLUSION
A former Chair of the Securities and Exchange Commission (SEC), who shepherded the amendments to the old Corporation Code in Congress, posited in a forum that investors, directors, trustees, officers, and corporate practitioners should not be too wary of the administrative and criminal sanctions provided in the RCC for they all cover the imposition of fines, with no imprisonment involved. We find little professional and commercial relief in such a backhanded assurance.

The fact that only fines are imposed as administrative and/or criminal sanctions under the RCC misses the point that the operations of companies, especially those vested with public interest, must be undertaken under an aura of public confidence and trust. When administrative and/or criminal sanctions are imposed on a publicly-held company, its losses are not limited only to the fines imposed, but it suffers a loss in its goodwill which is the most important resource as a going concern. In the instances when it is the company that is itself convicted as the offender, the loss in value of its business enterprise is sustained directly by the investors who actually become innocent victims.

When it comes to the directors, trustees, or officers on whom administrative or criminal fines are imposed, they are for that reason disqualified from being elected or appointed as such in all other corporations. They suffer therefore an immeasurable loss in their livelihood that goes beyond the amounts of the fines they pay. The worst is that they can be sanctioned on the basis of provisions in the RCC that are general in scope and coverage. In fact, they need not be convicted to suffer reputational loss, as the use of such broadly worded violations to establish a prima facie case, and the need to exhaust personal time and resources from such confusing provisions would destroy their reputations in the market.

The worst effect of the criminalization of corporate governance (CG) principles and best practices under the RCC is that it sets into statutory stance a hard-handed approach to corporate governance. Placing CG reforms under a criminal framework misses the very essence of CG which seeks to upend management practice to go beyond complying with the letter of the laws relating to the promotion and protection of the interests of shareholders and other stakeholders. When CG principles and best practices are subjected to both administrative and criminal sanctions then, out of a sense of self-preservation, directors, trustees, and officers who are not well-versed in criminal matters would not dare exercise their business judgment to forge ahead, but in fact, will be conservative and refer such matters to legal counsel for the determination of what criminal or administrative risk they are venturing on. CG reform therefore no longer constitutes asking the best of what business management may put forth but becomes primarily the resolution of legal issues revolving around the overly broad and sometimes confusing letter of the law that is best left to the lawyers to ponder upon and give well-considered recommendations.

Finally, it should be noted that among the major reforms undertaken in the RCC is to grant “fiscal autonomy” to the SEC. Section 175 of the RCC expressly empowers the SEC to collect, retain, and use fees, fines, and other charges it imposes pursuant to the Code and its rules and regulations, instead of the practice in the past when it had to remit such amounts to the National Treasury. “For a more effective implementation of this Code, the Commission is hereby authorized to collect, retain, and use fees, fines, and other charges pursuant to this Code and its rules and regulations. The amount collected shall be deposited and maintained in a separate account which shall form a fund for its modernization and to augment its operational expenses such as, but not limited to, capital outlay, increase in compensation and benefits comparable with prevailing rates in the private sector, reasonable employee allowance, employee healthcare services, and other insurance, employee career advancement and professionalization, legal assistance, seminars, and other professional fees.”

We really cannot judge at this point whether the fiscal autonomy granted to the SEC under Section 175 of the RCC would actually benefit the Philippine corporate sector. However, we should expect Congress to diminish the budget allocations of the SEC, which in turn may compel the SEC to raise its own working funds through the powers granted under Section 175. In all likelihood, in order to support its plantilla, and the high-salary and benefits standards granted to the SEC officers and rank-and-file, as well as to invest on the improvement of its facilities, more so its IT infrastructure, the SEC would not be gun-shy in imposing ever bigger fines and penalties on corporate stakeholders to continue to uphold and upgrade its operations in the face of limited budgetary allocations from Congress.

The worst scenario would be the day when the SEC can continue to boast that it has remained one of the top agencies in maintaining its high revenue-earning profile. That would actually be bad news for the Philippine corporate sector as that would indicate that the SEC has really abandoned its “complain or explain approach,” and has wielded its “administrative sanction powers” to boost it revenues under the mantra of pursuing, ever so forcefully, the CG agenda under the RCC.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.

 

Attorney Cesar L. Villanueva is co-chair for Governance of the MAP ESG Committee, the chair of the Institute of Corporate Directors, the first chair of the Governance Commission for GOCCs, a former dean of the Ateneo Law School, and a founding partner of Villanueva Gabionza & Dy Law Offices.

map@map.org.ph

cvillanueva@vgslaw.com

http://map.org.ph

Public finance and UPSE’s PDE batch 33

The Philippines’ public debt stock continues to increase big time, from P8.22 trillion (actual + guaranteed) in 2019 to P10.25 trillion in 2020, P12.15 trillion in 2021, and P13.18 trillion in April 2022. This is due to huge borrowings — from a monthly average of P73 billion in 2019 to P208 billion in 2020, P188 billion in 2021, and P291 billion in January-April 2022. (See last week’s column: https://bit.ly/Oplas053122.)

There are many elephants in the room when it comes to public spending, big issues and problems that people try to avoid discussing as they can cause discomfort to many other people. The article last week identified one — that while millions of people in the private sector lost their businesses and jobs during the lockdowns 2020-2021, the number of government personnel, from national down to barangay levels, stayed intact and their salaries, allowances, and bonuses continued to be given.

THREE ELEPHANTS IN THE ROOM
This piece will briefly discuss three other elephants in the room — the rising pensions of military and uniformed personnel (MUP), climate expenditures, and endless subsidies to government corporations.

From the Department of Budget and Management (DBM), Budget of Expenditures and Sources of Financing (BESF) 2022 report, the special purpose funds have trillions, with four of these comprising 38% to 41% of the annual total budget from 2020-2022 (Table 1).

The first elephant in the room (ER) is the huge, monstrous pensions given to MUP — P153 billion this year or 21.5 times higher than the pensions of all civilian personnel combined (government teachers and doctors, engineers and agriculturists, diplomats, and so on).

The burden to taxpayers of MUP pensions is so huge that either it should be cut, or the MUP should also contribute a huge amount to the fund.

The second ER is the rising and bottomless spending on the climate because hundreds of billions of pesos yearly from taxpayers will fight less rain and more rain, fewer floods and more floods, fewer storms and more storms, etc. Climate spending by the National Government was P184 billion in 2020 and P284 billion in 2022. This is excluding climate spending by local governments from their own local funds.

The “Global Tropical Cyclone Frequency” and “Global Tropical Cycle Accumulated Cyclone Energy” (ACE) from 1970 to 2022 are not steadily rising but simply fluctuating. Good data from Dr. Ryan Maue can be found here: https://climatlas.com/tropical/.

The volume of annual Arctic and Antarctic Sea ice from 1981 to 2022 is not steadily declining but simply fluctuating. Check the official data from the Japan Aerospace Exploration Agency (JAXA), the Danish Meteorological Institute (DMI), Norway’s Nansen Environmental and Remote Sensing Center (NERSC), the US’ National Snow & Ice Data Center (NSIDC), and more (see https://wattsupwiththat.com/reference-pages/sea-ice-page/).

There is no “climate crisis” to justify huge climate spending from taxpayers and energy consumers.

The third ER is the bottomless subsidies to government corporations and financial institutions. These are supposed to be earning and not subsidies-dependent agencies. And many of them should be in the hands of the private sector, subject to competition, expansion, or bankruptcy. Like the SSS (Social Security System) that gets annual contributions from members then got P51 billion more from taxpayers in 2020 (Table 2).

One way to reduce the public debt is to privatize many government corporations and spare the taxpayers from any tax hikes, or have tax cuts in commodities that are necessary for households and industries like energy products.

PDE BATCH 33 OF UPSE
In the same column last week, I mentioned that incoming Finance Secretary Benjamin Diokno and returning National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan were both my former teachers at the Program in Development Economics (PDE) of the UP School of Economics (UPSE) batch 33, school year 1997-1998. The Dean of the school at that time was former NEDA Secretary and incoming Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla.

The PDE Director that time was Prof. Ruperto Alonzo (RIP), a very kind and warm teacher for 45 years who became UP Professor Emeritus, and was NEDA Undersecretary in 1998-2000 under the Estrada administration. He also became a godfather at my wedding.

PDE is a graduate program designed for mid-level government officers and junior technocrats, so the course content is applied economics with deep theoretical background. Many of my classmates have stayed in government and excelled in their fields. Among them are the following:

Marilou Mendoza is now Chair of the Tariff Commission (TC). Two classmates pursued PhDs — Florante Victor Balatico, PhD Agricultural Economics from UP Los Baños (UPLB) and now the Campus Executive Officer (CEO) of Cagayan State University (CSU) Lasam campus; and Joselito Basilio, PhD Economics at the University of Illinois at Chicago, now Principal Researcher at the BSP Research Academy.

Three classmates became academics. Joey Sescon and Malou Perez are teaching at the Ateneo Economics Department, and Raymund Addun is teaching at the Ateneo Environmental Science Department (he finished his MS in Ecology in Spain).

Maliz Guan-Aragon pursued law and is now the presiding judge in Magallanes, Sorsogon. Other classmates are working at the Department of Agriculture, the Bureau of Internal Revenue, and the Philippine Statistics Authority (PSA). Others have retired already — from the PSA, the Supreme Court, the Department of Education, and the Technical Education and Skills Development Authority (TESDA).

Two classmates went to the private sector. Cynthia Hernandez is now the Deal Advisory Principal Sector Head for Infrastructure, Sector Head for Energy and Natural Resources, KPMG. And Mark Agaloos is now Vice-President for Middle East, LBC.

But the most prominent among us is Amenah “Mina” Pangandaman, the incoming Secretary of the Department of Budget and Management (DBM). Back then we would occasionally make fun of her because she was the youngest in our batch at 21 years old, a fresh graduate of BS Economics from Far Eastern University. She has a good sense of humor.

Working her way in government, she became the Chief-of-Staff (COS) of former Senate President Edgardo Angara, then COS to the Chairperson of the Senate Committee on Finance, Senator Loren Legarda.

Then she moved to DBM when Sir Ben Diokno was Secretary under the Duterte administration. Sir Ben promoted her to DBM Undersecretary, supervising the Department Liaison Office and Budget Technical Bureau.

When Sir Ben became BSP Governor, he brought Mina along and she became Assistant Governor for Strategic Communication and Advocacy and Executive Offices Coordinator. And when Sir Ben was appointed as the incoming Finance Secretary of the Marcos Jr. administration, I thought that Mina would be one of the Finance Under Secretaries. But Mina has matured enough to be a Cabinet Secretary.

The Development Budget Coordination Committee (DBCC) is composed of four agencies — the DBM, the Department of Finance, NEDA, and BSP. The Council prepares the yearly budget, the revenues to fund it, and the macroeconomic assumptions that justify the spending-funding-borrowings outlook. And the heads of these four agencies are all from UPSE, all are non-politicians and plain technocrats with decades of experience in government.

I am hopeful that more market-oriented economic reforms and growth-enhancing policies that are non-burdensome to taxpayers can be fast tracked. I did not expect this under the Ferdinand Marcos, Jr. administration but it is there, a really good start. Looking towards more social and economic prosperity for the country and the Filipinos.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

Read: SSS clarifies: Not a subsidy for operations, Replying to SSS: Demonopolize social security

Why do SMEs hesitate to digitalize?

TIRACHARDZ-FREEPIK

Digitalization is applying digital technologies to improve business processes, and to provide new ways of producing value for customers. It must not be confused with digitization, which is the conversion of analog data into digital form (e.g., scanning documents to transform them into electronic files). Digitalization is using digital data to make better decisions and to enable new business models.

Business owners and managers can utilize digital technologies in various aspects of the business. In the area of marketing and sales, a business can set up a company website to provide the public with information about its products and services. The website can also incorporate features that will allow customers to order and/or pay online. Without having to set up a physical store, a business effectively expands its potential market. A business can also interact with its customers by utilizing social media platforms such as Facebook, Instagram, Twitter, and YouTube.

Snug Home & Lifestyle, an entrepreneurial business that offers affordable and stylish furniture, home decor and accessories, operates primarily online. It seeks to help small-time furniture and home decor makers and independent carpenters from Rizal and Albay reach wider markets. Snug Home’s website contains its product catalogue and provides delivery and payment options for customers. The company also has Facebook and Instagram accounts, through which it promotes its products and responds to inquiries of potential buyers.

Entrepreneurial businesses can also utilize digital technologies to enhance their various internal activities including accounting, human resource management, inventory management, logistics, and product development.

Ninja Van “is a tech-enabled express logistics company providing hassle-free delivery services for business of all sizes across Southeast Asia.” Launched in 2014, Ninja Van is a fast-growing last-mile logistics company with a network covering six countries in the region — Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.

Ninja Van provides a variety of delivery options — same day, next day, express, and standard — to social media sellers, small businesses, and large enterprises. It also provides different pickup options, whether customers want to have their parcels picked up, or to drop them off themselves at any of Ninja Van’s network of drop-off points. Customers can easily track the status of their parcels by entering their parcel-tracking ID in the Ninja Van website. The company also offers free redelivery attempts, one-click delivery rescheduling, and self-collection services, which are enabled by a complete logistics management system.

Despite the supposed benefits of digital technologies, many small- and medium-sized enterprises (SMEs) hesitate to adopt these technologies. This can be partly explained by what is known as the digital divide, which is the gap between the level of sophistication in information technology and e-business usage of SMEs compared with that of large companies, and of businesses in rural areas compared with those of urban areas.

According to the Organization for Economic Co-operation and Development (OECD), structural barriers to digital adoption include: internal skills gap, which prevents business managers and workers from identifying the digital solutions they need and from adapting business models and processes; financing gap, which prevents business owners from accessing finance for intangible digital investments that cannot be easily used as collateral; and infrastructure gap, or the lack of access to high-speed broadband, which is needed to maximize the benefits of digital technology.

Also coming into play is how SME owners and managers perceive risks and benefits associated with investing in digital technology. For businesses that have limited resources, the expected costs of investing in technology (including the cost of training workers in its use) must not exceed the expected benefits that they can derive from it.

While digitalization offers many opportunities for businesses, the adoption of digital technology depends on a variety of factors including the nature of the business, the ability of the entrepreneur to pinpoint the digital solutions his or her business needs, and the fit of digital technology into the overall strategy of the business.

Given their limited resources, small businesses can adopt digitalization in various phases, focusing on areas that are most relevant to their business models and that have more tangible returns. It is not a matter of digitalizing for the sake of digitalization. Neither is it about doing what others are doing, but about being judicious in one’s use of scarce resources and being clear about how digitalization contributes to business goals.

 

Raymund B. Habaradas is a full professor at the Department of Management and Organization of the Ramon V. Del Rosario College of Business of De La Salle University. He wrote the Philippines’ Country Report for a multi-country study entitled  Digital Entrepreneurship in Asia for Economic Resilience and Post-Pandemic Recovery,” which was supported by the Asian Development Bank.

One day focused on hiring nurses as St. Luke’s marks Nurses Week 

St. Luke’s Medical Center (SLMC) in Bonifacio Global City dedicated the first day of its 2022 Nurses Week celebration to hiring nurse applicants  

Nurses Week runs from June 6 to 9.  

Successful applicants from the provinces will get six months’ free accommodation at a condotel. All successful applicants get a P10,000 signing bonus, groceries, and a pair of shoes by Japanese sports brand ASICS.  

“These are things that will make them feel welcome,” Ma. Martina Geraldine Q. Dimalibot, SLMC’s chief nursing officer, told BusinessWorld on the sidelines of the event. “The free accommodation …we came up with because it was something that made applicants think twice [about accepting the job offer].”  

Started in 2010, Nurses Week is celebrated every year in SLMC’s Bonifacio Global City and Quezon City locations to recognize the dedication and hard work of its nurses.  

“Our nurses always play a critical role in patient care,” Dr. Arturo S. De La Peña, president and CEO of SLMC, said in a press statement. “Celebrating Nurses Week is one way for us to express our gratitude and give back to our nurses who tirelessly give their time and effort to the hospital and the patients they take care of.”  

Each of the hospital’s about 2,000-strong nursing staff will receive P5,000 shopping vouchers from ASICS, a gift of steak and wine, and a limited edition “I am a St. Luke’s Nurse” AquaFlask tumbler during the celebration.  

They will also recieve free hair treatments and body massages during the celebration. 

Apart from Nurses Week, the hospital also gives its nursing staff year-round perks — including pay for work exceeding 12 hours in addition to overtime pay, Ms. Dimalibot said. 

At the height of COVID-19, SLMC’s management likewise provided free transportation, free meals, free vitamins, and complete protective equipment for all its associates.  

“We also have the ongoing Cope lines, which is [a channel] nurses can turn to when they feel down,” Ms. Dimalibot told BusinessWorld. “They can call, and someone will help them process their feelings.”  

It’s caring for the caregivers, she added. 

“They stuck with us and never turned their backs from our patients…,” said Ms. Dimalibot, herself a fellow nurse. “Everyone understands that nurses are the backbone of the hospital.” 

SLMC is the first hospital in the Philippines to receive the Pathway to Excellence designation from the American Nurses and Credentialing Center (ANCC). The designation is awarded to hospitals that meet ANCC’s six key practice standards in shared decision-making, leadership, safety, quality, well-being, and professional development. — Patricia Mirasol

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