Well-milled rice retail prices rise in six regional trading centers

October 4, 2021 | 7:59 pm

THE average retail price of well-milled rice increased in six regional trading centers in early September, according to the Philippine Statistics Authority (PSA).

The PSA said in a report that the Sept. 1-5 period, which it calls the “first phase” of the month, were higher than the levels recorded in mid-August.

Prices in Legazpi City rose P4.42 to P40.42 per kilogram (/kg) from mid-August, those in Tuguegarao City were up P1.55 at P35.50, in Kidapawan City up 87 centavos at P39.75, in Iloilo City up 46 centavos at P38.58, in the National Capital Region (NCR) up 23 centavos at P43, and in Butuan City up four centavos at P42.24.

Declines were recorded in Calapan City, of P1.41 to P43.27. Average prices in Baguio City fell P1.30 to P38.27, in Pagadian City 76 centavos to P38.99, in Digos City 49 centavos to P43.20, and San Fernando City 48 centavos to P38.64.

The PSA said the average retail price of bone-in pork rose in five trading centers during the period.

Cebu City prices rose P21.67 to P205.83/kg. In Baguio City they rose P12.73 to P292.73, in Digos City P2.55 to P280.61, in Legazpi City P2.25 to P342.61, and in Cagayan de Oro City 50 centavos to P180.

Prices fell in San Fernando City by P80 to P230. In Calapan City they declined P34.53 to P285.47, in Butuan City P20.24 to P234.76, in Cabanatuan City P15 to P330, in the NCR P9.22 to P309.89, and in Iloilo City P5 to P245.

The PSA said the average retail price of galunggong (round scad) rose in five areas during the period.

San Fernando City prices rose P35 to P180/kg. In Legazpi City they were up P12.08 at P166.75, in Calapan City P11.11 at P233.33, in the NCR P5.23 at P231.67, and in Baguio City P2.43 at P170.

Prices decreased in Butuan City by P80.77 to P158.91. In Cabanatuan City they were down P50 at P170, in Tacloban City P33.48 at P133.91, in Digos City P25 at P110, and in Kidapawan City P3.72 at P152.56.

The PSA said the average retail price of red onion rose in nine trading centers during the period.

In Cabanatuan City prices rose P30 to P120/kg. In Pagadian City they were down P17.70 at P121.97, in Tuguegarao City P15 at P105, in Legazpi City P13.95 at P150.70, in Tacloban City P6.10 at P126.10, in Digos City P5.50 at P134, in Butuan City P3 at P132.50, in Baguio City P1.96 at P107.84, and in the NCR P1.34 at P111.78.

Prices fell in Calapan City by P5 to P125. — Revin Mikhael D. Ochave

Let’s go tax the POGOs

October 4, 2021 | 7:57 pm

In recent years, Philippine Offshore Gaming Operators or POGOs have become a household name mainly due to the noticeable rise of Chinese establishments and influx of Chinese workers. According to the Philippine Amusement and Gaming Corp. (PAGCOR), POGOs have been discovered to be operating here as early as 2003, but it was not until 2016 when the PAGCOR clearly defined the concepts, components, operations, and regulation, among others, of offshore gaming. A POGO is defined as an entity that offers and participates in offshore gaming services by providing games to players, taking bets, and paying the winners. The gaming activities refer to online games of chance, using a network and software, exclusively for offshore-authorized players who have registered and established an online gaming account with PAGCOR-licensed POGOs. Gambling activities are considered illegal in mainland China and thus, Chinese nationals resort to playing online casino and other virtual betting games operated by the aforementioned POGOs. This is a major contributing factor to the boom in the gambling industry in the Philippines.

On Sept. 22, President Rodrigo R. Duterte signed into law Republic Act (RA) No. 11590 or an “Act Taxing Philippine Offshore Gaming Operations.” The law amends certain provisions in the National Internal Revenue Code (NIRC) to clarify taxes imposed on POGOs. The amendments to the NIRC provide clearer taxation guidelines and will strengthen the power of the Bureau of Internal Revenue (BIR) to collect taxes from POGOs.

RA No. 11590 provides that “offshore gaming licensee” refers to offshore gaming operators, whether organized overseas or in the Philippines, duly licensed and authorized by PAGCOR or any economic zone authority to conduct offshore gaming operations. Meanwhile, an “accredited service provider” to an offshore gaming licensee is a juridical person which provides ancillary services to such.

The law prescribes that alien individuals employed and assigned to the Philippines by an offshore gaming licensee or its service providers must pay a final withholding tax of 25% on gross income. Provided, however, that the minimum final withholding tax due from any taxable month from such persons is not lower than P12,500. Interestingly, the minimum monthly withholding tax is specifically imposed to POGO employees and is not applicable to other alien individuals. The 25% final tax rate, on the other hand, is the same rate applicable to non-resident alien individuals not engaged in trade or business in the Philippines. The law also requires that the employees secure a Tax Identification Number (TIN). All offshore gaming licensees and service providers that employ foreign nationals without registered TIN are liable for penalties of P20,000 for every foreign national without a TIN. In proper instances, revocation of licenses obtained from government agencies and banning from engaging foreign nationals for their operations may also be imposed. These rules allow the BIR to closely monitor whether income earned by POGO employees is properly subjected to income tax.

A new section in the NIRC under Other Percentage Taxes is also intended to clarify the amusement or business tax liabilities of POGOs. The amendment prescribes that with respect to POGOs’ gaming income, the entire gross gaming revenue or receipts are subject to a percentage tax of 5%, in lieu of all other direct and indirect internal revenue and local taxes. The law defines “gross gaming revenue or receipts” as the gross wagers received less payouts made. It also prescribes that PAGCOR engage the services of a third-party audit platform to determine the amount of gross gaming revenue or receipts that will be subject to tax. Periodic reports on the results of the operations showing the gross gaming revenue or receipts of each offshore gaming licensee must also be submitted by the third-party auditor to the BIR and PAGCOR. It is also stipulated that taking of wagers made in the Philippines and failure to cooperate with the third-party auditor will lead to the revocation of their offshore gaming license.

The non-gaming revenue of Philippine-based POGOs is subject to 25% regular income tax, as implemented by the CREATE Law. POGOs are also considered tax withholding agents. Hence, in addition to the abovementioned taxes, they are required to withhold and remit expanded withholding tax on their payments to domestic service providers, as well as withholding tax on compensation on remuneration to their employees. It is also worth noting that the sale of goods to POGOs and the sale of services rendered in the Philippines by VAT-registered taxpayers to POGOs and their accredited service providers are included in the list of transactions subject to VAT zero-rating.

The law includes provisions for the disposition of taxes collected from POGOs. Of this, 60% is allocated for the implementation of the Universal Health Care Act and 20% for the Health Facilities Enhancement Program of the Department of Health, while the remaining 20% will be used to help attain Sustainable Development Goals determined by the National Economic and Development Authority.

In line with the stricter and refined taxation rules for POGOs, it is evident that the government is continuing to seek and exhaust measures to collect taxes from various sources of income — from the recent BIR issuance clarifying the income tax obligations of social media influencers, to the House Bill proposing to add VAT on Netflix, Spotify and other digital transactions, and the recent chatter about possible imposition of tax on cryptocurrency earnings. POGOs and other taxpayers alike may perceive these as added burdens. But taxpayers should bear in mind that taxes are part of the cost of doing business.

The government has upped the ante to collect a bigger pot. Taxpayers have no choice but to comply and raise their wagers. Let’s just hope the payout will be big and beneficial for all in the end.

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.

Patrick Manuel R. Olarte is a senior in charge of Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Tax reform in progress

October 4, 2021 | 6:47 pm

calculator-pen-accounting — STEVE BUISSINNE-PIXABAY

(First of two parts)

For more than two decades, we have been paying first-world taxes with the highest rate among ASEAN member countries regarding personal and corporate income taxes, even value-added taxes.

While some sectors enjoyed tax incentives and exemptions, regular employees and micro-entrepreneurs suffered financially due to the overly burdensome and complicated tax system.

Not fully understanding the nitty-gritty and complexity of our tax regulations will leave you dumbfounded, frustrated, and helpless, paying more penalties than your essential tax obligations. Even those who decided to stop operations and continuously incurred losses will have to do basic tax compliance. Otherwise, they will pay the penalty from a minimum of P1,000 per tax return per month up to a P10-million fine with six to 10 years imprisonment if found guilty of tax evasion.

The bureaucracy in the Bureau of Internal Revenue (BIR) made it too hard to pay the right taxes, which resulted in more taxpayers dealing with fixers and paying under-the-table compromises. However, most of us simply blame the BIR and its infamous examiners, making them one of the most corrupt government agencies for the longest time without really addressing the problem.

While the past administrations made paying taxes too hard for practically everyone, the current administration made tax reform one of its top socio-economic agendas, starting with the immediate passage of the Tax Reform for Acceleration and Inclusion (TRAIN) law on Dec. 19, 2017.

The TRAIN law is designed to lower personal income tax by allowing the self-employed and professionals earning P3 million and below to avail themselves of the optional 8% tax in lieu of the graduated personal income tax and percentage tax. It also exempted the first P250,000 income of individual taxpayers from paying income tax. Further, both Donor’s and Estate Taxes were reduced to a fixed rate of 6%.

The TRAIN law (or Package 1A) is part of the Comprehensive Tax Reform Program of the Duterte administration, which is composed of:

• Package 1 – TRAIN

• Package 1B – tax amnesty

• Package 2 – Corporate Recovery and Tax Incentives for Enterprises (CREATE) law

• Package 2+ – sin taxes

• Package 2+ – mining taxes

• Package 3 – Real property valuation reform

• Package 4 – Passive Income and Financial Intermediary Taxation Act (PIFITA)

MOTOR VEHICLE USERS CHARGE
Although some provisions of the Tax Amnesty Act (or Package 1B) were vetoed by the President, it granted tax amnesty on estate taxes and delinquent accounts.

While its implementation was interrupted following the series of lockdowns due to COVID-19 pandemic, the June 14, 2021 deadline for the availment of the estate tax amnesty was extended to June 14, 2023 pursuant to Republic Act 11569.

In the midst of the pandemic, the CREATE or Package 2 of the Comprehensive Tax Reform Program was enacted and became effective on April 11. The CREATE Law reduced corporate tax from 30% to 20% for small businesses who have a taxable income not exceeding P5 million AND total assets excluding land not exceeding P100 million, and 25% for all other corporations — both domestic and foreign. It also provides tax relief measures to help businesses recover from the losses they incurred during this pandemic, and a more rationalized incentive package for targeted investors.

As the Co-Chair of the Ease of Doing Business on Paying Taxes, I witnessed firsthand the immediate and long-term administrative reforms implemented by the Bureau of Internal Revenue (BIR), from the streamlining of processes and reducing documentary requirements, to providing eServices which led to its digital transformation helping taxpayers comply without having to leave the comforts of their homes, especially during ECQ or MECQ (the strictest COVID-19 quarantine levels).

The improved electronic platforms of the BIR paved the way for almost 100% online filing of the annual income tax returns (ITRs) in April 2021, from 10% in 2015 to 90% in 2020.

From the P1.95-trillion collection in 2020, the BIR is targeting to collect P2.08 trillion, or a 6.7% increase, as set by the Development Budget Coordination Committee (DBCC). In spite of the economic downturn, P1.032-trillion taxes were collected in the first half of 2021, exceeding its midyear goal of P1.018 trillion.

Under the leadership of Commissioner of Internal Revenue Caesar Dulay, the tax effort ratio pre-COVID peaked at 14.49% in 2019. This is the highest in the last two decades according to the Department of Finance.

The improvement in tax collections even during the pandemic is attributed to ongoing tax reforms, digital transformation, and enforcement programs of the BIR including the Run After Tax Evaders (RATE) and Oplan Kandado.

With all these accomplishments amid the COVID-19 pandemic, we thank all the hardworking and honest BIR officials and examiners. To further improve tax collections, Congress must allocate a higher budget for the BIR to fund the full automation of the tax administration, offer more competitive compensation and incentives to attract technocrats and experts especially in the field of law, IT, and digital assets including blockchain and cryptocurrency.

This, however, does not mean we should rest on our laurels. The mission to make our tax system simpler, fairer, and more efficient continues. In fact, it became more challenging now more than ever with the influx of various digital platforms, digital assets, and more advanced technology.

Beyond the headcount, the tax administration must be able to monitor the inflow of income and assets from all sources, in all forms and platforms. Legislation must be more progressive and proactive. Otherwise, it will adversely affect or regulate small taxpayers while inadvertently allowing tax evasion and smuggling by the rich, powerful, and tech-savvy.

At the very least, tax administration must invest and integrate blockchain technology in its system to prevent tax leakages from transforming into unverified and untraceable transactions. Thus, evading taxes.

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.

Raymond “Mon” A. Abrea is a member of the MAP Ease of Doing Business Committee, the Founding Chair and Senior Tax Advisor of the Asian Consulting Group and the Co-Chair of Paying Taxes — EODB Task Force. He is Trustee of the Center for Strategic Reforms of the Philippines — the advocacy partner of the BIR, Department of Trade and Industry, and Anti-Red Tape Authority on ease of doing business and tax reform.

map@map.org.ph

mon@acg.ph

map.org.ph

Caterpillars and butterflies

October 4, 2021 | 6:47 pm

“Butterflies are not called butterflies overnight. They have to undergo tons of changes in order to acquire that name.”

— Michael Bassey Johnson,
Song of a Nature Lover

The 2021 annual meeting of the Academy of Management, the preeminent professional association for management and organization scholars, took place virtually from July 29 to Aug. 4. It was attended by professors, academics, Ph.D. students, and practitioners worldwide. This year’s conference, with its theme, “Bringing the Manager Back in Management,” had over 9,500 attendees and 1,662 sessions.

One of these sessions was our team’s presentation. Twelve educators from the UN PRME Sustainability Mindset Working Group narrated their stories in a workshop entitled, “The Caterpillar and the Butterfly: Stories of Real Transformation.” Our group, led by Dr. Isabel Rimanoczy, shared their unique experiences of intentionally developing those imaginal cells that create the most profound mindset shifts in their students, the future managers. Imaginal cells allow the incredible process of metamorphosis that occurs when a caterpillar changes into a butterfly (Winn, 2015). I am happy to share four of our stories.

Dr. Ekaterina Ivanova of the Graduate School of Business, HSE University (Moscow, Russia) shared her experience of having her students listen to an episode of a podcast, Outrage and Optimism. This podcast is recognized as one of the most informative and inspirational sources on the issues and politics of the climate crisis. The students were asked to reflect on their experiences. Dr. Ivanova wanted to engage students in a provocative conversation on climate action that most people are not comfortable participating in. As she read her students’ reflections and listened to their presentations, she recognized how many of them had started to change their attitudes and to shift their mindsets toward greater acceptance of a different public discourse on sustainability, circular economy, and net-zero transition, which is not yet the norm in Russia.

Dr. Amelia Naim Indrajaya of the IPMI International Business School (Indonesia) challenged her students to “Express Your Eco-Literacy Findings in the Most Out of the Box Approach Showing Threats and Opportunities.” Her students surprised her with how inspiring, innovative, and creative their performances were. Using videos and live theater, the students presented how a calamity in the jungle occurred when investors started to open up new businesses that caused a disaster in the communities’ beloved forest and how the disaster impacted everyone’s well-being. As a final output, the students wrote a commitment letter based on what they had learned and all the inspiration they had received from the day’s performance, and how they would respond to it and leave a legacy.

Dr. Aleandra Scafati of the Pontificia Universidad Católica Argentina (Ciudad de Buenos Aires, Argentina) shared an exercise to teach students to self-regulate and manage their thoughts, and therefore their feelings and perceptions. The students were asked to track the number of breaths they take in one minute and then, after a short, guided meditation, to count again. They realized that after meditation, their breaths became longer and fewer. Consequently, they became more mindful of their responsibilities, changing how they relate to others, including the environment. Through this experience, students learned control and can now respond consciously instead of reacting instinctively to internal and external stimuli.

I shared my experience of how I had started my students on their journey to wholeness. Using experiential learning as the primary teaching pedagogy, I invited speakers to explore the different dimensions of integral human development (IHD). IHD centers on the idea that the dignity of a person is expressed not only in work and economic activity, but also in cultural richness, artistic creativity, religious belonging, and spiritual practice. The students had the opportunity to interact with our guest speakers, discuss relevant issues, and reflect and act on the insights gained from their experiences. Before the pandemic, I was able to bring my students to view the works of our national artists at the National Museum, experience a Chinatown food trip, watch Binondo, an original Filipino musical, and visit the GK Enchanted Farm. These experiences challenged them to create a life worth living — becoming more mindful, sustainable, learned, creative, caring, ethical, resilient, engaged, and deeply well.

These stories show how we are prompting our students to shape a new worldview, one of a world that works for all, in sync with their highest selves, values, purpose, and the ecosystem, to morph from being caterpillars to butterflies. As one of the presenters, Dr. Morgane Fritz, remarked, these exercises reminded her of Nelson Mandela’s quote, “Education is the most powerful weapon you can use to change the world.”

Pia T. Manalastas is an assistant professor of the Management and Organization Department of the Ramon V. Del Rosario College of Business. She will be teaching Integral Human Development virtually in the coming term. She would be happy to share with fellow educators the hand-out of her team’s presentations.

pia.manalastas@dlsu.edu.ph

Social media is reducing climate change debates to your views on veganism

October 4, 2021 | 6:45 pm

Ten years ago, when we ranked the most controversial articles on Wikipedia, George W. Bush was at the top of the list with global warming at number five. The article on global warming has now been re-titled as climate change, but this remains among the most polarizing issues of our time — and one frequently debated on social media.

This might seem like it’s due to the way climate change is often presented primarily as a political issue: something you can choose whether or not to support. But perhaps it’s as much a result of the way social media works. Our recent research shows that polarization on social media is mathematically inevitable.

What’s more, this polarization is allowing online discussions about climate change to be overridden by culturally focused arguments about things like diet. This appears to be further cementing the idea that climate change is a matter of ideology, making it harder to convince people to support action to tackle it.

The fact that it’s so easy to unfriend or unfollow people you disagree with on social media has accelerated the formation of online echo chambers to the extent that even an algorithmic tool designed to break the bubbles won’t be able to help.

Don’t get us wrong: we’re big fans of social media and most likely have already tweeted this article by the time you read it. Social media can be seen as a marketplace of ideas, providing an open forum to exchange facts and opinions, and, importantly for scientists, to inform the public about their research. But polarization can ruin it for everyone.

An example of this relates to the UK bakery chain Greggs’ vegan sausage roll, which ignited days of social media turmoil when it was introduced to the UK in January 2019 to coincide with Veganuary, a month-long UK-based charity campaign designed to encourage veganism. Veganuary-oriented social media discussions that year were dominated by arguments over the sausage roll’s relative merits.

To understand the extent of this interference, we analyzed about half a million tweets posted between Dec. 28, 2018 and Jan. 28, 2019 containing any of the hashtags “#vegan”, “#veganuary” and “#veganuary2019” to map out the prevalence of extreme opinions among the tweets.

Around 30% of the tweets we analyzed were firmly pro-vegan, while 20% of tweets used Veganuary-related hashtags to express their protest against veganism. More importantly, many Twitter users who tweeted about Veganuary explicitly said if it wasn’t for the Greggs story, they wouldn’t have gotten involved.

On one hand, bringing extra attention to the campaign might be considered a blessing. On the other, the polarized nature of online arguments disproportionately focused on the issue of the vegan sausage roll.

This shifted what could have been a fruitful and logical discussion around the pros and cons of veganism towards unproductive fights centered around perceived threats to people’s identities tied up with what they do or don’t eat and what that means. Many quickly took sides, refusing to engage in conversation and instead attacking the personal qualities or intelligence of the “other side.”

This conflict surfaced again on social media a few months later, when the Intergovernmental Panel on Climate Change (IPCC), a UN-endorsed organization, published its “Special Report on Climate Change and Land” in August 2019. In order to gauge the level of public engagement with the report, we collected all tweets sent in August 2019 which contained the phrase “IPCC.” We then used software to analyze the content of some 6,000 tweets in English in order to extract the main topics of discussion.

We found that not only were a large portion of the tweets in response to the IPCC report specifically about diet, but these tweets contained the most toxic and polarized language in the sample. This is even more surprising when considering that diet was only mentioned briefly in the original IPCC report, without any explicit recommendations about meat or dairy consumption.

Evidence like this suggests that diet and cooking are now forming the core of a new culture war around climate.

This could be catastrophic for climate action. Politicians and policy makers traditionally tend to avoid issues that are culturally controversial, and polarization of public opinion has been shown to weaken politicians’ accountability when it comes to making major decisions.

Our work recently published in Climatic Change shows how tools such as computational topic modelling and sentiment analysis can be used to monitor public discourse about topics like climate events, diet and climate policies. This could help policymakers plan more engaging communication strategies: in other words, to help them read the room.

Both scientists and science communicators who discuss reports like that produced by the IPCC must understand, and anticipate, the likelihood of emotionally charged, potentially negative responses to such polarizing issues as climate change — as well as specific areas of polarization, such as diet, that are currently more popular. This way, they can work to communicate key information in ways that allow readers to focus on what really matters.

Taha Yasseri is an associate professor, School of Sociology; Geary fellow, Geary Institute for Public Policy, University College Dublin. Mary Sanford is a PhD candidate in Social Data Science, University of Oxford.

Facebook’s Instagram research isn’t anything like science

October 4, 2021 | 6:41 pm

AS FACEBOOK weathers yet another scandal, this time fueled by its internal research on the effects of Instagram, I’d like to focus on something slightly different that should be a scandal, too: the quality of that internal research.

Facebook has been pushing back against a story in the Wall Street Journal, which cited a leaked internal report suggesting that Instagram harms teenagers by fostering insecurities around “social comparison” and sometimes even suicidal thoughts. In its public-facing blog, the company featured an article titled “What Our Research Really Says About Teen Well-Being and Instagram.” It pointed out ways in which the app was found to be benign or mildly positive, and also sought to downplay the significance of the research, noting that it “did not measure causal relationships between Instagram and real-world issues,” and sometimes “relied on input from only 40 teens.”

Facebook is right on one point: Its internal research doesn’t demonstrate much of anything. This just isn’t how science is done. One never relies on a single study to determine a relationship, in part because any single experiment entails too many choices that limit its applicability. Do you study teenagers or young adults? Men or women? How do you reach them? What questions do you ask? Do you follow up after six months or 12? And that’s just for design, let alone analysis. Only when multiple studies with different approaches get the same answer can one start to draw strong conclusions.

That said, one can reach a pretty strong conclusion by observing the way Facebook has done research over the years: It’s afraid to know the truth. After all, why not do more studies? If it’s possible that your product is leading young women to kill themselves, wouldn’t you want to explore further, at least to clear your name? Why not let outside researchers use your data, to get a better answer faster? Instead, Facebook allows only tiny internal studies and tries to keep them under lock and key. Even if they leak, the company maintains deniability: The results are far from conclusive.

Facebook is not alone in its aversion to self-knowledge. Something similar happened at Google not so long ago, when internal researchers had the audacity to think they were able to do critical work, writing a paper on how large language models like those used at the company can be environmentally damaging and even racist. In that case, Google fired two of the founders of its Ethical Artificial Intelligence team, Timnit Gebru and Meg Mitchell.

I’m not so naïve as to think that public embarrassment will compel the big tech companies to allow access for real science on the impact of their products. Making that happen is a job for Congress or the Federal Trade Commission. In the meantime, as the likes of Facebook and Google sweep through academic departments with job offers for newly minted Ph.Ds and even seasoned professors, those who choose to take the money should recognize that what they’re getting into isn’t scientific inquiry — and still leak whatever they can.

BLOOMBERG OPINION

Tobacco taxes and smuggling in the Philippines

October 4, 2021 | 6:41 pm

Keeping taxes of tobacco products high and raising them is a favorite policy measure of governments, health NGOs, and other sectors. The twin goals are: a.) to reduce smoking incidence by making cigarette prices higher, and, b.) raise revenues for government’s universal healthcare (UHC) program.

TOBACCO TAX RATES UNDER FOUR LAWS
Even two decades ago tobacco tax rates were already high. Under Republic Act (RA) 9334 of 2004, cigarettes with retail prices of P6.50 to P10/pack were taxed at P11-P12/pack.

RA 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law of 2017 was implemented in 2018 but by July 2019, Congress created another law, RA 11346, that further raised the tax rates. The P37.50/pack by 2020 under RA 10963 became P45/pack under RA 11346. The P40/pack by 2022 became P55/pack (see Table 1).

RA 9334 has four tiers of taxes, RA 10351 has two tiers, and many smokers shift to lower-taxed tiers affecting government revenues. So, under RA 10963 and 11346, there is only one tier.

I checked cigarette prices in a 7-Eleven store today: the cheapest brand is P100/pack, the most expensive is P145/pack. Since the tax is P50/pack, then the NRP of these products are perhaps only P30 to P75/pack. Government earns more than the tobacco companies and retailers.

Tobacco excise tax collections were P125.9 billion in 2017, P136.0 billion in 2018, P147.6 billion in 2019, P149.6 billion in 2020, and a projection of P172.3 billion in 2021, and a projection of P199.6 billion in 2022.

TOBACCO SMUGGLING REPORTS
The Property Rights Alliance (PRA, Washington DC), an old free market ally of Minimal Government Thinkers, granted me a modest funding to make a study on tobacco taxes and smuggling in the Philippines and it is due this week. The paper will have a 40-page Annex, newspaper reports about illicit cigarettes over the past four years. Table 2 is a summary of those reports and only reported combined values of P300 million and above were included here.

The World Bank has estimated that global trade in illegal tobacco is already worth $40 billion to $50 billion a year.

LESSONS, CONCLUSIONS
The higher the taxes, the higher the tendency for criminal groups to go into tobacco smuggling and smokers are attracted to cheaper, untaxed illegal cigarettes. Laws that over-tax, even prohibit, legal tobacco will encourage and generate illegal tobacco.

In this situation, the losers are: a.) government finance department or ministry with lower than potential revenues, b.) legal tobacco companies with lower revenues, and, c.) consumers who are tempted to patronize cheaper but illegal cigarettes.

The winners are: a.) corrupt government officials who allow and protect smuggling in exchange for high monetary rewards, and, b.) criminal gangs and terrorist groups engaged in this and related activities. And overall corruption in government increases, not decreases.

If Congressman Joey Salceda’s estimate of P30 billion/year in illegal tobacco in the country is correct, then the reported estimate of P16 billion to P20 billion/year in foregone taxes is also correct. That is equivalent to the full year budget of the Departments of Trade or Foreign Affairs in 2020.

So, instead of introducing another round of tobacco taxes, Congress and the Executive should focus on strictly implementing the existing tax laws and plugging loopholes, like controlling the proliferation of smuggled illicit products. This will achieve three goals: a.) increasing government revenues, b.) decreasing corruption in government, and, c.) depriving funding for criminals and terrorist groups.

FDA RECEIVING FUNDING FROM PRIVATE LOBBY GROUPS
On a related note, the Food and Drugs Administration (FDA) has been warned by the House Committee on Good Government and Public Accountability for receiving money and perks from a US anti-tobacco group to draft policies regulating vaping in the country.

In earlier Committee hearings, an FDA official initially denied the agency’s receipt of foreign private money to fund the development of regulations for vapes and heated tobacco products (HTPs). The agency eventually admitted to have solicited and received a grant from The Union, an anti-tobacco organization financed by the Bloomberg Initiative.

The Committee has adopted House Resolution 1396 that directed Congress to conduct an investigation on the FDA’s questionable acceptance of money from Bloomberg and donations from private local and international sources. See “House calls for tighter measures against foreign interference in local policy making” (Manila Bulletin, Aug. 22) and “FDA admits getting over $150,000 from anti-tobacco NGO to regulate vapes” (Manila Standard, March 17).

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

minimalgovernment@gmail.com

TnT Tropang Giga look to sustain momentum gained in Game One

October 4, 2021 | 6:33 pm

Erram — THE TNT Tropang Giga expect to be challenged further in their best-of-seven PBA Philippine Cup semifinal series with the San Miguel Beermen. — PBA IMAGES

By Michael Angelo S. Murillo, Senior Reporter

THE TnT Tropang Giga took Game One of their best-of-seven Philippine Basketball Association (PBA) Philippine Cup semifinal series with the San Miguel Beermen, 89-88, on Sunday to gain early traction and are now looking to build on the momentum they have built.

While they did a good job in keeping the powerhouse Beermen at bay throughout the contest, it did not come easy for the Tropang Giga as they had to dig deeper than usual, something they expect to continue as the series progresses.

“The only way we can beat this team is for us to put in a stronger effort. They are so strong. If we give a little more effort, then we have a chance,” said TnT coach Chot Reyes following their win in the series-opener. “All we’ve done is give us a 1-0 lead and we need three more wins. Hopefully, we can sustain it,” he added.

The contest got off to a very competitive start with both teams hardly budging and allowing one another much headway.

They fought to a 42-41 count by the halfway point and the Tropang Giga enjoying a slim advantage.

In the third period, the teams continued to fight it out until TnT made a late surge to create some distance.

With the score knotted at 57-all with 3:05 left in the frame, the Tropang Giga went on to outscore the Beermen, 14-3, after to build a 71-60 lead heading into the final quarter.

But San Miguel was not to go down without a fight, continuously charging back in the fourth period to crowd TnT.

It came to within a point, 88-89, with 36 seconds to play after a made layup by CJ Perez.

The Tropang Giga tried to put the game away with a Roger Pogoy triple with 18 seconds to go, but it failed to connect, leaving the Beermen enough time to salvage the win.

Off a time out, San Miguel got the ball to Marcio Lassiter, who managed to put up a shot against the TNT defense as time expired, but did not go through, preserving the victory for the Tropang Giga.

For Mr. Reyes, that San Miguel still had a chance to win in the end speaks volumes of the kind of challenge they are dealing with in the semifinals of the ongoing Philippine Basketball Association tournament and that much is needed from the Tropang Giga if they are to survive it.

“San Miguel can beat you in so many ways. It can be a ball screen, last-second shot, and then isolation, and the post,” the returning PBA coach said.

“This is the deepest, most talented team in the league. We will just play our best,” added Mr. Reyes, whose wards played without veteran Kelly Williams, who entered the league’s health and safety protocols.

Mr. Pogoy seconded his coach, saying, “It’s very tough. You have to bring your A-game each time to be able to beat San Miguel.”

The gunner out of Far Eastern University led the Tropang Giga in Game One, finishing with 23 points, three rebounds, two assists and two steals to win player of the game honors.

Jayson Castro had 16 points, six rebounds and six assists while JP Erram and Troy Rosario added 15 and 14 points, respectively.

Leading scorer Mikey Williams only had seven points, but had eight rebounds and six assists.

For San Miguel, it was Mr. Perez who top-scored with 23 points, followed by June Mar Fajardo with 13 and Arwind Santos 12 points.

The rest of the PBA Philippine Cup semifinal schedule will be released by the league on Tuesday.

Rebisco falls to Thai squad Nakhon in quarterfinals

October 4, 2021 | 6:32 pm

Rebisco2 — THE REBISCO women’s team fell to hometown bet Nakhon Ratchasima in straight sets, 25-11, 25-19, 25-18, in the quarterfinals of the 2021 Asian Women’s Club Volleyball Championship on Monday in Thailand. — SMM VOLLEYBALL FB PAGE

THE REBISCO women’s team fell to hometown bet Nakhon Ratchasima in straight sets, 25-11, 25-19, 25-18, in the quarterfinals of the 2021 Asian Women’s Club Volleyball Championship on Monday in Thailand.

The Thais were not to be denied a spot in the next round, making quick work of the Philippine side in the first two sets. They were better challenged by Rebisco in the third frame but eventually were able to extricate themselves midway en route to the victory.

Karina Krause, Chatchu-on Moksri and Kuttika Kaewpin led the way for Nakhon, which is to face the winner of the other quarterfinal match between Supreme Chonburi also of Thailand and Choco Mucho of the Philippines later on Monday.

The semifinals is set for Wednesday at the Terminal 21 Hall.

The loss was the fourth straight in as many matches for Rebisco, composed of national team pool members and handled by Brazilian consultant-coach Jorge Edson Souza de Brito. It is now relegated to the classification matches.

The team is composed of Aby Maraño, Eya Laure, Jema Galanza, Faith Nisperos, Dindin Santiago-Manabat, Majoy Baron, Kim Kianna Dy, Mhicaela Belen, Imee Hernandez, Ivy Lacsina, Rhea Dimaculangan, Kamille Cal, Jennifer Nierva, and Bernadette Pepito.

The Rebisco and Choco Mucho teams were assembled by the Philippine National Volleyball Federation (PNVF), which is using the tournament as part of its push to shore up its national team program. — Michael Angelo S. Murillo

Japan repeats as FIBA Women’s Asian champions

October 4, 2021 | 6:32 pm

PHL national women’s basketball team keeps Division A standing

JAPAN repeated as International Basketball Federation (FIBA) Women’s Asia Cup champion after defeating China, 78-73, in the finals on Sunday in Amman, Jordan.

A rematch of the 2019 edition of the tournament, the outcome ended up the same with the Japanese hoisting the trophy, the fifth consecutive time they have done so.

The Philippines, for its part, finished seventh in the eight-team field and averted being relegated to Division B of FIBA Asia.

In the finals, Japan was led by the brilliant play of point guard Saori Miyazaki who finished with a double-double of 26 points and 11 assists.

The Japanese were greatly challenged by the Chinese, but hung tough all the way to the end to keep their supremacy in the biennial continental women’s basketball tournament.

For her outstanding showing throughout the tournament where Japan went 5-0, Himawari Akaho was named tournament most valuable player. Teammate Miyazaki was also part of the All-Star Five.

Also in the mythical selection were Yueru Li and Sijing Huang of China and Sami Whitcomb of Australia.

The Aussies bagged third place after defeating Korea, 88-58.

For making the Final Four, Japan, China and Korea booked a spot in the FIBA Women’s Basketball World Cup 2022 Qualifying Tournament, joining host Australia.

IN DIVISION A STILL
Meanwhile, the Philippine national women’s basketball team had it rough in the FIBA Asia Cup for the second straight time, but did just enough to keep its standing in Division A play and compete with the best in the continent.

Gilas Pilipinas Women defeated India, 74-70, in the relegation game on Friday to finish seventh place in this year’s edition of the tournament.

Janine Pontejos and Khate Castillo towed the nationals to the gutsy win where they had to buck early struggles.

The two finished with 22 points apiece with Afril Bernardino ending up with all-around numbers of nine points, 11 rebounds, seven assists, four steals and four blocks.

The Philippines lost all of its matches in Group B of preliminary play and ended up with a 1-3 card in the tournament held from Sept. 27 to Oct. 3 at the Prince Hamza Hall in Amman.

“I know for the past three games we struggled, but today they played together and as a team. It was a good victory for us,” said Gilas Women coach Patrick Aquino as they ended their campaign on a high note.

Prior to leaving for Jordan, the Gilas team had to deal with the limitations presented by the pandemic. — Michael Angelo S. Murillo

New York Yankees clinch playoff spot with dramatic win over Tampa Bay Rays

October 4, 2021 | 6:31 pm

AARON Judge singled with one out in the ninth inning to drive in the winning run, and the New York Yankees clinched a playoff spot with a dramatic 1-0 victory over the visiting Tampa Bay Rays in Sunday afternoon’s regular-season finale.

The Yankees (92-70) will face the Boston Red Sox (92-70) on the road at Fenway Park Tuesday in a one-game wild card matchup after Boston’s 7-5 comeback victory against the Washington Nationals. Boston will host after winning the regular season series with the Yankees, 10-9.

Rougned Odor opened the ninth by flaring a single off Josh Fleming (10-8) into center field. Pinch runner Tyler Wade tagged up on a warning track flyball by Gleyber Torres. Wade was held up at third when Anthony Rizzo lined a single into right field past shifting second baseman Brandon Lowe and Fleming was replaced by Andrew Kittredge.

Judge won it when he lined a single that was deflected by Kittredge to Lowe. Lowe made a diving stop and Wade beat the throw home with a headfirst slide.

After Wade scored the game-winning run, the scoreboard blared “Next Stop Postseason” and the Yankees began celebrating their fifth straight postseason appearance in center field.

New York’s only hit until the ninth was a leadoff single in the fourth by Torres against Tampa Bay starter Michael Wacha.

After Jameson Taillon allowed two hits in 3 1/3 innings, the Yankees used five relievers. Aroldis Chapman (6-4) worked around a two-out walk to Joey Wendle and escaped the ninth by fanning pinch hitter Manuel Margot.

Wacha allowed one hit in five innings after pitching five hitless innings last week in Houston. He struck out two, walked one and induced Judge into a double play in the first and Gio Urshela into a double play in the fifth.

The Yankees had one baserunner against Tampa Bay’s trio of J.T. Chargois, Colin McHugh and David Robertson until pulling off their 11^th walkoff win.

Judge’s hit capped a regular season where the Yankees were streaky all year. They were 42-41 on July 4, won 13 straight from Aug. 14-27 and lost 15 of 22 before getting back into a wild-card spot. They dropped the first two games of the weekend series with the Rays (100-62), who set a franchise record for wins this season, before winning on Sunday. — Reuters

Yuka Saso ends up joint 19^th in LPGA New Jersey tourney

October 4, 2021 | 6:31 pm

FILIPINO-Japanese golfer Yuka Saso finished with a two-under 69 in the third round of the ShopRite Ladies Professional Golf Association (LPGA) Classic in New Jersey on Monday (Manila time) to wind up at joint 19^th place in the tournament.

Twenty-year-old Ms. Saso, the reigning US Women’s Open champion, had a three-round total of seven-under 206, tied with seven other players, landing inside the top 20.

Celine Boutier of France emerged as the winner in the tournament held at the Stockton Seaview Hotel and Golf Club-Bay Course in Galloway with a total of 14-under 199.

Ms. Saso, who represented the Philippines in this year’s Olympic Games in Tokyo, opened her campaign with a 67 and 70 in the first two rounds to stay in contention.

She tried to make her way up in the final round with an eagle on the third and two birdies (eighth and 14^th), but just could not progress deeper as hoped.

For her efforts, she bagged $18,615, or around P930,750.

Another Philippine bet, Bianca Pagdanganan, meanwhile, carded a three-under 68 in the final round to finish with a three-round total of six-under 207, good for joint 27^th place.

Another Filipino, Dottie Ardina, finished with an aggregate 209 to end up at 44^th place with five other players. — Michael Angelo S. Murillo

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