Facebook Instagram Linkedin X Youtube
Home Blog Page 5949

Removal of the 5-year validity period for receipts and invoices

The Philippine tax system is mostly driven by supporting documents. The deductibility of allowable expenses and claiming of input value-added tax (VAT) rely heavily on valid official receipts and sales invoices. Hence, it is paramount for every business to ensure that the documents they issue are free from error.

For a receipt/invoice to be valid, the taxpayer should first secure an Authority to Print (ATP) or Permit to Use (PTU) a computerized accounting system (CAS), cash register machines (CRM), point-of-sale (POS) machines, and other sales receipting software from the Bureau of Internal Revenue (BIR). Based on previous revenue issuances, official receipts and invoices have a five-year validity from date of ATP or PTU.

Revenue Regulations (RR) No. 18-2012 provides that a taxpayer with expiring ATP for its receipts/invoices must apply for a new ATP not later than 60 days prior to the expiry date. The use of receipts and invoices beyond the five-year validity renders the receipts/invoices invalid; hence, the issuing party is imposed a penalty and the expense of the party claiming such deduction is disallowed. However, not all taxpayers know this and are issuing receipts/invoices even beyond their validity, making it one of the most common issues faced by taxpayers.

Fortunately, the BIR revisited its policies and removed the five-year validity period for receipts and invoices, which is also in line with Republic Act (RA) No. 11032 otherwise known as the Ease of Doing Business and Efficient Government Service Delivery Act of 2018. This new revenue issuance relieves taxpayers of the burden of continuously incurring costs of reproducing their receipts/invoices every five years. This move also promotes sustainability as it reduces paper consumption caused by destruction of expired invoices and receipts and repeated reprinting.

PERPETUAL VALIDITY OF RECEIPTS AND INVOICES
The removal of the five-year validity of receipts and invoices took effect on July 16, which is 15 days from the date of publication of RR No. 6-2022 on July 1.

As a result, all taxpayers with unused manual principal and supplementary receipts/invoices with ATP may continue to use such until fully exhausted. The phrases “THIS INVOICE/RECEIPT SHALL BE VALID FOR FIVE (5) YEARS FROM THE DATE OF THE ATP” and “VALID UNTIL (MM/DD/YYYY),” printed at the bottom of the receipt/invoices shall be disregarded. Subsequent production of manual receipts/invoices will no longer require a validity date printed on the bottom portion.

Taxpayers with PTU or Acknowledgment Certificate (AC), as applicable to CRMs, POS machines, and CAS, may continue to use the previously approved receipts/invoices. Like manual receipts/invoices, the five-year validity may also be disregarded. In addition, the system/software generating receipts/invoices from CAS, component of CAS and CRMs and POS machines must be reconfigured to omit the phrases on validity period.

Unlike manual receipts/invoices, computer-generated receipts/invoices are not “exhausted” because these are not printed or bound by booklets. Hence, all PTUs become perpetually valid unless revoked by the BIR based on the following grounds:

• Tampering of sales data/integrity of the data and/or software specification/features to alter/avoid the recording of sale transaction;

• Any major repair, upgrade, integration, and modification/alteration without prior notification and approval by the BIR office concerned, including the items enumerated in Section V, Item No. 8 of Revenue Memorandum Order (RMO) No. 9-2021, to wit:

– Change in the functionalities of the system, particularly enhancements that will have a direct effect on the financial aspect of the system that includes modified computations and other financial-related issues that were considered;

– Addition or removal of modules or submodules within the system that will have a direct impact on the financial aspect of the system;

– Change in the system/software version or release number that will have enhancements on the financial aspect of the system; and

– All other enhancements that will be deemed major system enhancements based on the recommendation of the technical evaluators of the BIR; and

• Any violation(s) on the policies and procedures for registration under RMO No. 10-2005 and RMO No. 9-2021, and other related revenue issuances.

RECEIPTS/INVOICES PRINTED PRIOR TO RR NO. 6-2022
Since perpetual validity of the receipts/invoices took effect on July 16, all receipts/invoices expiring on or before July 15 are no longer valid. However, worry not because it was clarified that upon the issuance of RR No. 6-2022, taxpayers with ATP expiring on or before July 15 who failed to apply for subsequent ATP not later than the sixty-day mandatory period prior to expiration are not liable to pay the penalty for late application of ATP.

The receipts/invoices which are unused and expiring on or before July 15 must be surrendered together with an inventory to the BIR Revenue District Office (RDO) where the Head Office or Branch is registered on or before the 10th day after the validity period of the ATP for the destruction of such receipts/invoices.

MODIFICATION OF THE SYSTEM/SOFTWARE GENERATING THE RECEIPTS/INVOICES
Due to the perpetual validity of receipts/invoices which is now in effect, the system/software generating the receipts/invoices for taxpayers employing CRMs, POS machines, and CAS shall be modified to remove the phrase indicating the five-year validity. This modification is considered a minor enhancement because such was mandated upon the effectivity of RR No. 6-2022. Only major modifications require prior written notification before such modifications are made.

Doing business is no easy feat — you must consider, among others, the profitability of your products/services, your target consumers, the way you will market your business, and most especially how you will take care of your clientele. Thanks to the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 and the efforts of government agencies in helping improve business processes, ministerial tasks like renewing your receipts/invoices every five years are now removed. Taxpayers and entrepreneurs can devote more of their energy and resources on their core businesses. Here’s to a big win towards total ease of doing business and promoting environmental sustainability.

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.

 

Runell Alvyn V. Sarmiento 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

Embiggen launches corporate venture builder focused on strategy execution

UNSPLASH

The Embiggen Group, a Filipino-led innovation consulting agency, recently launched a venture builder to help clients execute their strategies.

“Employees are not comfortable with the process and speed of execution that startups usually have to go through every day. You can outsource that to us, an organization that already has the expertise of scaling a startup or venture from an idea,” said Embiggen co-founder Rolan Marco U. Garcia, at the virtual launch on Sept. 8. 

Embiggen, which partnered with the Asian Institute of Management (AIM) and the innovation standard certification body Global Innovation Management Institute (GIMI) in 2021, counts among its clients Telstra Philippines, Aboitiz Equity Ventures, Inc., and Insular Life Assurance Co., Ltd. 

“We started as a consulting company, then more and more companies asked help with how they can actually execute, more than just giving them strategies,” said Mr. Garcia. 

Embiggen’s ongoing corporate venture building projects include a Philippine insurance company creating a platform for mental health, work-life balance, and financial literacy for millennials and Gen Zs; and a food and manufacturing company that wants to solve logistics problems for Filipino micro, small, and medium enterprises (MSMEs). 

“This is a call to action for conglomerates who want to go into innovation because maybe the pandemic gave them an existential crisis that ‘we need to have other options than what we are currently doing,’” said Embiggen co-founder Paul A. Pajo, who also pointed out that the Philippines ranked 51st out of 132 economies in the 2021 Global Innovation Index, dropping one spot from its ranking the year prior. 

In its own 2021 study “The Future of Corporate Innovation in the Philippines,” Embiggen highlighted that support and investments from government, incubators, and venture capitalists can further enrich the startup economy. 

“Beyond strategy, we’ve seen some conglomerate lines really asking for help with execution,” Mr. Pajo said. — Brontë H. Lacsamana

Alcaraz, 19, wins US Open and becomes world No. 1

CARLOS Alcaraz of Spain poses with the victor’s trophy after beating Casper Ruud of Norway in the men’s singles final at the US Open tennis tournament in New York on Sept. 11, 2022. — REUTERS
CARLOS Alcaraz of Spain poses with the victor’s trophy after beating Casper Ruud of Norway in the men’s singles final at the US Open tennis tournament in New York on Sept. 11, 2022. — REUTERS

NEW YORK — Spanish teenager Carlos Alcaraz completed his rapid rise to the top of the tennis world on Sunday, claiming his first Grand Slam title and taking the number one ranking with a 6-4 2-6 7-6(1) 6-3 win over Norway’s Casper Ruud in the US Open final.

Mr. Alcaraz, 19, fell to his back and cupped his hands to his face before jumping up to embrace Mr. Ruud at the net. He then climbed past photographers and into the stands to celebrate in his box with his team.

“This is something I dreamed of since I was a kid, to be number one in the world, to be the champion at a Grand Slam,” Mr. Alcaraz said in an on-court interview.

“All the hard work that I did with my team, with my family. I’m just 19-years-old so all of the tough decisions are with my parents and my team as well.

“This is something that is really, really special for me.”

“Bravo Carlitos!” was displayed on a banner inside the stadium for the tennis prodigy from El Palmar.

The electrifying Alcaraz, who thrilled fans over the two-week tournament in New York with his explosive speed, booming forehand and acrobatic shotmaking, replaced Russian Daniil Medvedev at the top of the rankings.

He is the youngest world number one since the ATP rankings began in 1973, breaking the mark set by Lleyton Hewitt, who was 20 when he became number one in 2001.

Mr. Alcaraz had a difficult path to the title.  He battled from a break down in the fifth set to beat Marin Cilic in the fourth round, played the latest finishing match in tournament history to defeat Italy’s Jannik Sinner in the quarters, and faced down American Frances Tiafoe in the semis.

“I always say that there is no time to be tired in the final round of a Grand Slam or any tournament,” said Mr. Alcaraz, who spent 23 hours and 40 minutes on court over his seven matches.

“You have to give everything you have inside.”

Rafa Nadal, the winner of men’s record 22 Grand Slam titles, took to Twitter to offer his congratulations to his countryman and predicted more success was on the way.

“Well, I have one. He has 22,” a beaming Alcaraz told reporters. “I’m in the row.”

NOT TOO BAD
Mr. Ruud was trying to become the first Norwegian to capture the top spot but was unable to match Mr. Alcaraz’s firepower under the closed roof at Arthur Ashe Stadium.

French Open finalist Mr. Ruud will rise to second in the world from number seven.

Sunday’s final was the first featuring two men competing for both their first Grand Slam title and the world number one ranking.

“We knew what we were playing for, we knew what was at stake,” said Mr. Ruud. “Number two is not too bad either. I will continue to chase for my first Grand Slam and the number one world ranking.”

Fan favorite Mr. Alcaraz rode an early break to take the first set but his serve began to falter in the second and Mr. Ruud found the range with his forehand to level the contest.

The Norwegian did not have the momentum for long as Mr. Alcaraz broke in the first game of the third with a deft drop shot but Mr. Ruud responded again, saving a break point on his serve and breaking back on a backhand error by Mr. Alcaraz for 2-2.

Mr. Alcaraz saved two set points in the final game of the third set and fans jumped from their seats when he smashed an overhead to force a tiebreak.

Mr. Ruud, who had been solid in the second and third sets, blinked in the tiebreak, shanking a couple shots and struggling to make returns as Alcaraz reeled off seven straight points to move a set away from the trophy.

Mr. Alcaraz, who bellowed “Vamos!” and pumped his fist after big points, continued to crush forehands and aces in the fourth set to wear down Mr. Ruud and he sealed the win with a mighty serve on match point.

THE FUTURE
Before the match, a moment of silence was held to honor the nearly 3,000 people who were killed in the attacks for Sept. 11, 2001. The date of the attack was written on the court and both players began their on-court remarks by acknowledging the sombre anniversary.

This year’s US Open broke the event’s attendance record and marked the first time that every session at the 23,859-capacity Arthur Ashe Stadium sold out, tournament organizers said.

The two-week main draw attendance was 776,120, surpassing the previous record of 737,872 set in 2019.

While for many years the Flushing Meadows spotlight has shone on the ‘Big Three’ of Nadal, Novak Djokovic and Roger Federer, it was the future of the men’s game — Alcaraz, Ruud, Sinner and Tiafoe — thrilling the crowds this time around.

Mr. Alcaraz said he is hungry for more after getting his first taste of Grand Slam glory.

“I want to be in the top for many, many weeks. I hope many years,” he said.

“I’m going to work hard again after this amazing two weeks. I’m going to fight to have more of this.” — Reuters

Philippines rules the 2022 Predator World 10-ball Team Championship

PREDATOR PRO BILLIARD SERIES’ FACEBOOK PAGE

THE PHILIPPINES’ Rubilen Amit, Carlo Biado and Johann Chua turned back Great Britain’s Kelly Fisher, Jayson Shaw and Darren Appleton to rule the 2022 Predator World 10-ball Team Championship in Klagenfurt, Austria over the weekend.

Ms. Amit bested Ms. Fisher, 4-3, and Mr. Biado outlasted Mr. Shaw in the singles and Ms. Amit and Mr. Chua routed Ms. Fisher and Mr. Appleton, 4-1, in the mixed doubles to claim the country’s first crown after a pair of runners up finishes in 2010 and 2014.

For their feat, the troika pocketed the €40,000 top purse, or a cool purse worth P2.3 million.

On their way there, the Filipinos waylaid the Germans, 4-2, in the shootout victory and bested the Swedes, 3-1, Brits, 3-2 in the elimination round and then the Poles, 3-1, in the quarters.

They ran into Great Britain again in the finale after the latter made it through that far via the loser’s bracket.

But there was just no stopping Ms. Amit, Messrs. Biado and Chua, who just overpowered Ms. Fisher, Messrs. Shaw and Appleton.

It was redemption of sort for Ms. Amit, who had a forgettable performance in the women’s side while avenging countrywomen Chezka Centeno’s quarterfinal defeat to Ms. Fisher. — Joey Villar

EJ Obiena tops the Golden Fly event in Liechtenstein

KNOWING this would be his last attempt in his final competition in the second outdoor season of the year, Filipino pole-vault dynamo EJ Obiena courageously went for the one plateau he had a hard time breaching — six meters.

It wasn’t his night though.

But the World Championship bronze medalist came eerily close to eclipsing his Mount Everest of clearances if not for his right knee barely hitting the bar on the turn.

It was, however, a sign that he’s slowly but surely getting there.

The World No. 3 though didn’t go home empty-handed as he topped the Golden Fly in Schaan, Liechtenstein Sunday after he cleared 5.71m and bested American Olen Tray Oates (5.61m) and Austrian Riccardo Klotz (5.51m).

It was the Asian record-holder’s fifth gold medal and seventh straight podium in the past three weeks.

It included a memorable triumph in the Memorial Van Damme in Brussels, Belgium a week ago when he shocked for the first time Olympic and world champion and world record-holder Armand Duplantis of Sweden.

Interestingly, the recent effort came exactly a year when Mr. Obiena first broke the 29-year-old Asian record by vaulting ton 5.93m in the Golden Roof Challenge in Innsbruck, Austria a year ago.

He later smashed it with a 5.94m in the Worlds in Eugene, Oregan last July.

“Exactly one year ago today, I broke the 29-year-old Asian record in outdoor pole vault by jumping 5.93m. A lot has happened since then, and just a few hours ago, almost did 6m. As usual, we keep on trying and keep on fighting, for the country,” said Mr. Obiena. — Joey Villar

San Sebastian faces first day winner Arellano

Games today
(Filoil EcoOil Centre)
12 p.m. — SSC-R vs AU
3 p.m. — San Beda vs EAC

ARELLANO University (AU) tries to show its opening day win over host Emilio Aguinaldo College (EAC) was no fluke while San Sebastian eyes to set in motion to its Final Four bid as the two collide today in the 98th NCAA basketball tournament at the Filoil EcoOil Centre.

Given little chance after playing with eight rookies on their roster, the Chiefs proved their doubters wrong and pulled the rug from the Generals, one of the pre-season favorites, in a 63-58 win Saturday at the Big Dome.

Journeyman Darrel Menina, who played for Mapua, National University and University of Cebu before ending up at AU for a “one-and-done” stint, led his team to victory with a clutch 15-point effort.

A win over the Stags in their 12 p.m. duel would put the Chiefs on top, which would be a shocker to most since a lot of experts belittled the latter entering the season.

“We just want to play with pride each game,” said AU coach Cholo Martin.

AU though will have its hands full against San Sebastian, which is out to make a big dent and improve on its eight-place finish a season ago.

Surprisingly though, the Stags are tipped to finish big this season after solid performances in pre-season tournament.

“Our goal is always to win every year. Hopefully we could finish big this season,” said SSC mentor Egay Macaraya.

Meanwhile, EAC and San Beda aim to bounced back from their stinging losses as they tackle each other at 3 p.m.

The Lions, brandishing their rookie coach Yuri Escueta, succumbed to the Mapua Cardinals, last year’s runners up, in a 66-55 result Saturday.

Meanwhile, San Beda has secured the commitment for talented high school recruit James Payosing to play for the team next year, according to team manager Jude Roque.

Mr. Payosing is a 6-1 shooting guard from Bislig, Surigao and should be a great add for the Lions. — Joey Villar

Own goal sends Union Berlin to top of Bundesliga

COLOGNE, Germany — Union Berlin moved to the top of the Bundesliga standings for the first time in the German club’s history after they came away from Cologne with a 1-0 win on Sunday thanks to an own goal early in the game.

In a whirlwind opening to the match, Union were fortunate to take the lead in the third minute when Cologne defender Timo Huebers’s attempted block on a low cross was deflected past his goalkeeper at the near post.

Cologne were unlucky to concede a penalty five minutes later when a header came off the back of Luca Kilian’s elbow but goalkeeper Marvin Schwaebe saved Jordan Siebatcheu’s tame spot kick to deny Union a two-goal cushion.

Union had their opportunities to double the lead, with Bundesliga top scorer Sheraldo Becker’s smart finish from an acute angle ruled out for offside by VAR while Christopher Trimmel saw his chipped effort come off the crossbar.

Kilian’s afternoon got worse when he was sent off for a second yellow card trying to stop a Union counter-attack and 10-man Cologne could not find a way past the visitors who held on for the win.

Freiburg could have spoiled Union’s party later on Sunday by going top with a win over Borussia Moenchengladbach in the weekend’s final game, but they were held to a 0-0 draw to leave them second in the standings after six rounds.

With 14 points, Union are a point ahead of Freiburg and two clear of champions Bayern Munich, who slipped to third. — Reuters

Real continue perfect start with 4-1 win over Mallorca

MADRID — Real Madrid came from behind to beat Mallorca 4-1 at the Bernabeu in La Liga on Sunday and continue their perfect start to the season.

A solo effort from Federico Valverde on the stroke of halftime levelled the scores after Vedat Muqiri had stunned the home crowd by nodding the visitors ahead. Vinicius put the hosts in front before Mr. Rodrygo and Antonio Rudiger completed the rout.

Real returned to the top of the table, two points ahead of second-placed Barcelona.

“We knew they’d cause us issues, they defended well and scored from a set piece and it was difficult for us to gain a foothold,” Real coach Carlo Ancelotti said.

“But we kept cool heads and had enough quality to go ahead in the game. We didn’t play in the best way that we could’ve in the first half, but we were much better in the second.”

A much-changed Real initially struggled to gain a foothold and sorely missed injured talisman Karim Benzema in attack throughout a below-par first half.

Muqiri, who was denied by Thibaut Courtois inside the opening 40 seconds, headed in unmarked at the back post after 35 minutes and it appeared the champions would go in trailing at the break for the first time this campaign.

That changed, however, in added time at the end of the half when Mr. Valverde ran the length of the pitch before firing home a left-footed shot from the edge of the box.

After the break the hosts monopolized the ball, but were fortunate when Antonio Sanchez fired wide from six yards out with the goal gaping on a rare foray forward from the Balearic Islanders.

Mr. Rodrygo’s mazy run fed Vinicius 18 minutes from time and the Brazilian forward netted for a fifth consecutive game to put Ancelotti’s side in front, before Mr. Rodrygo, who capped off a delightful run with a perfect finish, and a first goal in Madrid colors for Mr. Rudiger added late gloss to the scoreline. — Reuters

Dodgers clinch postseason berth for 10th straight season

THERE are 23 games remaining in the regular season for the Los Angeles Dodgers and they have already clinched their 10th consecutive National League playoff spot.

The Dodgers (96-43) clinched their latest berth with Sunday’s 11-2 romp over the host San Diego Padres. They are just the third team in the division era to make at least 10 straight playoff appearances, joining the Atlanta Braves (14 from 1991-2005) and New York Yankees (13 from 1995-2007).

“It’s a big accomplishment,” Los Angeles manager Dave Roberts said after Sunday’s game. “For me, it’s just making sure guys appreciate that it’s not a right of passage to get into the postseason every year and there’s still a lot of work to be done. I feel our best baseball is yet to be played and just continue to stay focused.”

The Dodgers lead the Padres in the NL West by 20 games and are also on verge of clinching the division crown.

Justin Turner, who had two homers and five RBIs on Sunday, certainly appreciates clinching. This season will mark his ninth straight playoff appearance.

“I don’t think it’s anything you can take for granted,” Turner said. “I’ve been on some teams early in my career that didn’t have this opportunity, so I definitely feel fortunate to be a part of an organization that cares about winning and puts winning first.”

Freddie Freeman is in his first season with the Dodgers after being a key cog on Atlanta’s World Series-winning team last year. He is amazed that the clinching occurred on Sept. 11.

“To do it this quick is pretty amazing,” Freeman said. “Just all around, just been playing really good baseball for a long time now as a group and hopefully we can get this division wrapped up here shortly, too.”

Los Angeles has won just one World Series title during the streak and it came in the COVID-19 shortened 60-game season of 2020 when they beat the Tampa Bay Rays in six games. The Dodgers last won a title in a full season in 1988. — Reuters

Canary in the coal mine

Wally Gobetz/Flickr/CC BY-NC-ND 2.0

I am pleased to share with readers, our post last Sept. 11 to GlobalSource Partners subscribers. GSP (globalsourcepartners.com) is a New York-based network of independent analysts in emerging market countries. Its subscribers are mostly global banks and fund managers. Christine Tang and I serve as their Philippine Advisers.

Last week, the Senate Blue Ribbon Committee investigating the controversy surrounding the Aug. 9 order of the Sugar Regulatory Administration (SRA) to import 300,000 metric tons of sugar concluded its public hearings. It recommended the filing of administrative and criminal charges against the four officials who signed the importation order, one of whom, an undersecretary in the agriculture department, is the chief of staff of the agriculture secretary, President Ferdinand Marcos, Jr. himself. The President was insulated from the heated arguments.

To recall, the controversy broke when the President, through his spokesperson, denied approving the importation order after it was issued, called it illegal, and rescinded it. The agriculture undersecretary, his chief of staff Leocado Sebastian, promptly asked to be relieved of his duties and the senate probe began soon after. During the hearings, Undersecretary Sebastian testified that he signed the order in good faith, believing that he had authority from the President based on a memorandum from the President’s executive secretary, and that the decision to import the specific volume of sugar is based on data showing the shortage at hand of raw and refined sugar in the domestic market which had been discussed in earlier meetings with the President.

Those in the agriculture community following the whole affair, who know Undersecretary Sebastian to be an honorable man, left it with a bitter taste in the mouth. The sentiment seems to be that not only was the man thrown under the bus, he was demonized, then fed to the wolves. And all for signing off on an importation order that the President himself had since said would be necessary but perhaps at only half the quantity. Seemingly belatedly, the President on Aug. 25 instructed his economic managers, i.e., the secretaries of finance, trade and industry, and socio-economic planning, as well as agriculture officials, to determine the status of domestic sugar supply and the volume of imports needed as well as to find measures to stabilize domestic sugar prices. The findings and recommendations, supposed to be completed in seven working days, have yet to be released to the public. In the meantime, latest data as of August show that the price of sugar and sugar products in consumers’ food basket has surged by 26% year on year.

For many outside observers who are inclined to take Undersecretary Sebastian at his word, the instinct is simply to conclude that cabinet appointees serve at the pleasure of the President. Presidents have multiple political and economic objectives to balance and over the course of history, not a few good men have taken a bullet for their leaders.

However, we cannot help but wonder about this canary in the coal mine, what it says about the President’s leadership/management skills and what signals it sends to the other technocrats in his team, the economic managers included. 

Early on, we had warned of a looming first fumble in the President’s decision to assume the agriculture portfolio,1 and it took less than two months for it to happen. But now, with the unnecessarily shabby treatment of a seemingly well-intentioned, professional civil servant in full public view, what hope is there of the President finding a suitable candidate to head this important department?

As it is, there is the risk, pointed out by the sole dissenter in the senate’s committee report, that the treatment of Undersecretary Sebastian “discourages government officials from acting with urgency on matters that affect consumers, like tight supply, high prices and inflation,” and that agriculture “officials are now gun-shy about signing any importation documents… further exacerbating the food shortage.”2

Those with a broader outlook fear the incident’s chilling effect on other professional managers in the President’s newly formed cabinet that, at a minimum, could dampen enthusiasm and performance.

Coincidentally, a rumor appeared last week in the country’s leading newspaper of a “reluctant” finance secretary who would prefer to return to the BSP (Bangko Sentral ng Pilipinas) next year.3 True? Hard to say. But we wonder whether this is one technocrat’s way of signaling to the President that whatever difficulties political considerations bring, the professionals who are bringing much-needed credibility to his administration, deserve better treatment.

1 See GS Brief, “Bold or ill-advised?,” June 22, 2022

2 https://www.einnews.com/pr_news/589931967/statement-of-senator-risa-hontiveros-on-the-blue-ribboncommittee-report-on-sugar-fiasco

3 https://business.inquirer.net/360744/biz-buzz-reluctant-economic-manager

 

Romeo L. Bernardo was finance undersecretary from 1990-96. He is a trustee/director of the Foundation for Economic Freedom, Management Association of the Philippines, and FINEX Foundation.

globalsourcepartners.com

romeo.lopez.bernard@gmail.com

Marcos’ economic team: Learned and accomplished but meek and muted

TIRACHARDZ-FREEPIK

When President-elect Ferdinand Marcos, Jr. announced that his economic team would be composed of Benjamin Diokno as Secretary of Finance, Felipe Medalla as Governor of the Bangko Sentral ng Pilipinas (BSP), and Arsenio Balisacan as Director-General of the National Economic and Development Authority (NEDA), the Philippine Stock Exchange Index (PSEi) gained 47.76 points, to 6,645.52 while the broader All-Shares Index went up by 14.61 points to 3,568.65.

Local business groups expressed elation at the appointment of technocrats as the economic managers of the Marcos II administration. George Barcelon, president of the Philippine Chamber of Commerce and Industry said, “They are all seasoned and competent economic leaders. We believe they would do good in managing our fiscal affairs.” Coco Alcuaz, executive director of the Makati Business Club, said the appointment of “experienced, well-known leaders” would boost the confidence of big businesses as well as MSMEs.

Indeed, the new economic managers are learned and accomplished. Diokno graduated with a bachelor’s degree in Public Administration in 1968 and completed a master’s programs in Public Administration in 1970 and in Economics in 1974, all in the University of the Philippines (UP), Diliman. He has a master’s degree in Political Economy from Johns Hopkins University, and a Ph.D. in Economics from Syracuse University. He is a Professor Emeritus of the School of Economics of UP, He previously served as undersecretary for Budget Operations of the Department of Budget and Management from 1986 to 1991 under President Corazon Aquino, Secretary of Budget and Management under President Joseph Estrada from 1998 until the latter’s resignation in January 2001, and under President Rodrigo Duterte from 2016 to 2019. He also served as the governor of the (BSP) from 2019 under President Duterte to the end of the latter’s term in June 2022.

Medalla earned bachelor’s degrees in Economics and in Accounting from De La Salle University in 1970, a master’s degree in Economics from UP Diliman, and a Ph.D. in Economics from Northwestern University in Evanston, Illinois in 1983. He served as dean of the UP School of Economics for four years starting in 1994. He served as secretary of Socio-Economic Planning and director-general of NEDA under President Joseph Estrada, a member of the Monetary Board during the terms of President Benigno Aquino III and of President Duterte.

Balisacan earned a bachelor’s degree in Agriculture from the Mariano Marcos State University, a master’s degree in Agricultural Economics from the UP Los Baños, and a Ph.D. in Economics from the University of Hawaii at Manoa. He served as an economist for the World Bank in Washington, DC in 1986. He came back to the Philippines in 1987 and joined the faculty of UP Los Baños as assistant professor of Economics. In 1988 he moved to the School of Economics of UP Diliman where he eventually became a full professor in 1995.

Seconded from UP, he served as undersecretary for Policy and Planning at the Department of Agriculture from 2000 to 2001 and then again in 2003. In 2010, he was appointed dean of the School of Economics of UP Diliman. Concurrent to his role as secretary of Socio-Economic Planning and director-general of NEDA, he served as Board Chairman of the Philippine Institute for Development Studies and the Philippine Center for Economic Development.

I was not as elated as the captains of industry were when Bongbong Marcos announced the names of the members of his economic team, though experienced and competent, learned and accomplished they are. I have misgivings about Diokno. He has been in the high echelons of government for too long such that I believe he has been infected with the kind of politics the top government officials he has been dealing with practice.

On the very first working day of 2017, then Budget Secretary Benjamin Diokno made this statement: “The candidate Duterte is different from President Duterte. You make campaign promises but when you see the data you realize it’s impossible to fulfill.” He supported the candidacy of Davao City Mayor Duterte for president when he knew all along that what he was promising during the campaign could not be fulfilled. It raised for me the question of what his motive was for supporting candidate Duterte.

In 2018, he declared, “The budget is a political tool to reward administration allies and punish political enemies. If you’re with us, then you get something. If you’re not with us, then you don’t get something.” When he was a private citizen and a BusinessWorld columnist during the presidency of Noynoy Aquino, he wrote that the pork barrel was bad for the economy. But when he was in power, he practiced what he considered was bad for the economy.

The Philippine Daily Inquirer says there is persistent talk that Diokno plans to return to his position of governor of BSP by the second half of next year. Sources told the Inquirer that Diokno was initially hesitant to accept his appointment as secretary of Finance as it meant leaving the central bank where he had fewer headaches and got better pay. That suggests that Diokno is either submissive to the powers that be as the BSP governor cannot be removed without cause, or that he is an astute dealer for having struck up a deal by which he accepts his appointment as Finance secretary on condition he is appointed again as BSP governor.

The governor of the BSP serves a term of six years and can be re-appointed for another term of six years. President Duterte appointed Nestor Espenilla, Jr. as BSP governor on July 4, 2017. When Espenilla died in office on Feb. 23, 2019, President Duterte appointed Department of Budget and Management Secretary Diokno as BSP governor to complete the term of Espenilla. When Diokno was named secretary of Finance by President Marcos Jr. on June 30, 2022, before he could serve out the unexpired term of Espenilla, the President chose Monetary Board member Medalla to replace Diokno as BSP governor for the remainder of Espenilla’s original six-year term.

If Diokno is appointed BSP governor again in July 2023, he would be 81 years old by the time he completes the six-year term. At the purported salary of P3 million a month for six years, he can retire in 2029 and live fabulously thereafter.

Now what about Medalla, who had been a member of the Monetary Board for 11 years before his appointment as BSP governor, is his re-appointment in July 2023 as BSP governor for a six-year term not in consideration at all? Or will he meekly go by whatever the President wants to do with him?

That brings to mind the meekness of the economic team towards the issue of the country’s supply of sugar. The President says we need not import as we have enough sugar. The top officers of the Sugar Regulatory Board say otherwise. The impressive academic credentials and long experience as government economists suggest the President’s economic managers, particularly Arsenio Balisacan, who has a master’s degree in Agricultural Economics, know what the real situation is with regard to the country’s sugar supply. But they have not been heard from with regard to the raging issue.

I tend to think that if they agree with the President, they would have called a press conference and asked the Malacañang Press officer to tell the National Telecommunications Commission and the Kapisanan ng mga Brodkaster ng Pilipinas to order all broadcast stations to telecast and broadcast live the press conference so that the entire nation would hear them say the President is absolutely right. But no, they have been meek — meek in the sense of being easily imposed on — because, I conclude, they disagree with the President.

Blessed are the meek for they shall keep their job.

 

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.

PEB Singapore, the PPP Center, transport liberalization, and IPRI 2022

Four important economic and business developments occurred last week that I want to comment on.

1. Philippine Economic Briefing, Singapore

Last Wednesday, Sept. 7, President Ferdinand Marcos, Jr. and his economic and infrastructure teams held the Philippine Economic Briefing (PEB) in Singapore, which was attended by many investors.

In Panel 1, the speakers were Finance Secretary Benjamin Diokno, Socio-Economic Secretary Arsenio Balisacan, Budget Secretary Amenah Pangandaman, Central Bank Governor Felipe Medalla, and SM Investment Corp. (SMIC) Vice-Chair Teresita Sy-Coson. The four officials spoke clearly about the macroeconomic and fiscal stability of the country. And it was a brilliant idea to have another speaker from Philippine business. Singapore businessmen know the Sy and SM conglomerate, and Ms. Coson spoke positively about the economic team and economic outlook of the Philippines. When the panel ended, there was loud applause in the conference room.

Panel 2 had Trade Secretary Alfredo Pascual, Public Works Secretary Manuel Bonoan, Transportation Secretary Jaime Bautista, Tourism Secretary Maria Esperanza Christina Garcia Frasco, and Information and Communications Technology Secretary Ivan John Uy. I would say it was another slam dunk — with “come and invest in the Philippines” messaging that was clearly and convincingly delivered. And since Singapore is the Regional Headquarters of many multinationals from the west, the message must have been echoed well.

A report in BusinessWorld about the Singapore event noted that, “Electric tricycle, floating solar projects top Singapore investment deals from Marcos visit” (Sept. 8).

Investment pledges after the PEB Singapore came to $6.5 billion. Of this, $5 billion would be for the manufacturing of electric tricycles and $1.2 billion for floating solar. This does not seem right. More e-tricycles mean more power demand and our power generation is low — only 108 terawatt-hours (TWH) in 2021, less than half of Vietnam’s 245 TWH. Solar or wind are not baseload power sources, their output and storage are intermittent and very unstable.

The Philippines should aim for an increase of at least 7 TWH/year in power generation from 2023-2025 versus an increase of only 3.5 TWH/year in 2016-2021, then at least 10 TWH/year more from 2026-2028, to avoid the frequent yellow-red alerts that we experienced until this year. Vietnam has increased its power generation over the last 10 years by 14-15 TWH/year. Big commercial and industrial projects will not come in if they see that they will face occasional blackouts and that they must buy and regularly run huge expensive gensets.

Big industrial countries like Germany, the UK, France and Japan have entered a deindustrialization and low growth phase as they shut down many of their fossil fuel and nuclear plants and rely more on intermittent wind-solar. In contrast, South East Asian countries keep humming with their conventional energy sources and experience fast growth (see Table 1).

2. The BOT law and new PPP Center head

Last week, the Public Private Partnership (PPP) Center announced a “Public Consultation on the Amendments to the 2022 Implementing Rules and Regulations (IRR) of the Build-Operate-Transfer (BOT) Law (RA 7718).” People can submit their comments in writing or they can also attend the face-to-face consultation tomorrow, Sept. 13.

President Ferdinand Marcos, Jr. has appointed a new PPP Center Executive Director, Cynthia Hernandez. The lady is very cerebral: she graduated from the Philippine Science High School, took the UP College Admissions Test (UPCAT) and landed in the top 50 out of about 80,000+ examinees nationwide, graduated BS Metallurgical Engineering from UP as an Oblation scholar, finished a Masters in Development Economics (MDE) from the UP School of Economics (UPSE), ongoing MSc Business Management at Berlin Professional School. She has worked in some big energy, infrastructure, and consulting companies in the country: Meralco, the Philippine National Oil Company (PNOC), the Power Sector Assets and Liabilities Management Corp. (PSALM), AES, Aboitiz Power, SGV/EY, and KPMG.

Meanwhile, Marilou “Louie” Mendoza was re-appointed as Chairperson of the Tariff Commission (TC). Louie is another cerebral official: she graduated AB Economics (cum laude) then MDE (university scholar) from UPSE, and with a Master in Development Management (with honors), and the National Government Career Executive Service Development Program.

Cynthia, Louie, Department of Budget and Management (DBM) Secretary Pangandaman, and DBM Undersecretary for Budget Policy and Strategy Joselito Basilio were classmates in MDE at the Program in Development Economics (PDE) batch 33 of UPSE. Mr. Basilio has another MS in Applied Economics from University of Michigan-Ann Arbor, then a PhD Economics from University of Illinois at Chicago, USA.

The PDE Program Director back then and a teacher for two semesters was Prof. Ruperto “Ruping” Alonzo. Prof. Ruping (RIP) molded these four bright minds plus their other batchmates.

3. Transport inflation and Grab-MOVE IT partnership

Last week, the Philippine Statistics Authority (PSA) said that August inflation was 6.3%, flat from July’s inflation rate of 6.4%. Among the commodity groups, Transport inflation was 14.6% in August, of which “Operation of personal transport equipment” was 34.7%. Inflation in the first eight months of 2022 is now 4.9% and transport inflation is 12.9% (see Table 2).

With continued high prices for gasoline and diesel, driving personal cars remains costly and people would wish to find alternative cheaper but safe transportation. Motorcycle taxis (MCT) should fall in this category — fast, cheap, no need for parking. But MCT remains a virtual duopoly by Angkas and Joyride. So, when Grab partnered with the smallest and weakest third player, MOVE IT, the duopoly was unhinged. See this report in BusinessWorld: “Grab Philippines’ acquisition of MOVE IT challenged by 4 groups” (Sept. 9).

Commuters and the public have one “vested” interest — more choices, more options. Transport companies, especially if they are a duopoly or oligopoly, have the opposite vested interest — reduce the options for commuters, get more money and power for themselves. This is exactly what the four transport groups and the duopoly are lobbying for.

Real commuter and consumer groups call for more options and competition. Fake commuter groups call for more bureaucratization and less competition. Last month this column’s piece, “Motorcycle taxis, illicit tobacco, and electric cooperatives” (Aug. 8), said “Transportation Secretary Jaime J. Bautista and LTFRB (Land Transportation Franchising and Regulatory Board) Chair Cheloy Velicaria-Garafil should consider removing two caps — remove the maximum number of MCT players from only three, and remove the maximum 15,000 drivers per player. At a maximum of 45,000 legal drivers, it is very likely that the number of unregistered “habal habal” drivers may be twice or more than that number nationwide. Since they are already existing, they should be onboarded via legal MCT companies, for better regulatory transparency and better passenger safety.”

At the PEB Singapore, Secretary Bautista discussed the planned big railway projects that will transport people and goods much faster. These should proceed. But many people do not live near train stations, they reside many kilometers away. More MCTs will transport people from their houses to train stations then to their destinations, and back.

Grab-MOVE IT as third player is a good move. A better move is to have four, five or more players. And no maximum number of riders per player. More competition, more options, and more protection for the riding public. The LTFRB should junk the lobby of the four groups and think of the needs of the riding public.

4. IPRI 2022

Finally, the International Property Rights Index (IPRI) 2022 was launched on Sept. 7 by the Property Rights Alliance (PRA, Washington DC).

The IPRI index is a composite for three sub-indices: legal and political environment, physical property, and intellectual property protection. The Philippines showed deterioration in the global ranking, from 70th in 2018 to 83rd in 2022, pulled down by low scores in legal and political sections due to poor performance in rule of law and control of corruption (see Table 3).

The Marcos Jr. administration must do more to strengthen the rule of law and control corruption in the country.

 

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

minimalgovernment@gmail.com

1...5,9485,9495,950...14,287Page 5,949 of 14,287
ADVERTISEMENT
ADVERTISEMENT
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin X Youtube