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Tax assessments suspensions and extensions under quarantine

Even as life moves on under the new normal, lots of anxiety remains amidst the uncertainty. The rollout of vaccines has provided a measure of relief, but the pandemic is far from over as more infectious variants emerge. Our neighbors in Southeast Asian as well as other parts of the world have experienced the devastation these variants are capable of causing to communities, healthcare systems, and economies.

As our country seeks to avoid the alarming surge of infections experienced by our neighbors, the government reverted to the strictest quarantine setting, enhanced community quarantine (ECQ), between Aug. 6 and 20 for Metro Manila and various other regions.  Once more, ECQ restricts the mobility of the citizenry and the operations of organizations, not excepting the Bureau of Internal Revenue (BIR).

As in the past, the ECQ again prohibits the BIR from conducting assessments and tax collection due to the stay-at-home orders. 

STATUTE OF LIMITATIONS
As a brief background on the statute of limitations, under the law, the BIR has three years to assess deficiency taxes by issuing a Formal Assessment Notice (FAN).  The three- year period is counted from the last day prescribed by the law to file the return or the day when the tax return was actually filed, including any amendment filed after, whichever comes later.  Therefore, any deficiency tax assessment arising from a FAN issued beyond this three-year prescriptive period is considered void.

You may recall that during the two and a half-month ECQ last year, the BIR immediately issued Revenue Memorandum Circular (RMC) 34-2020, suspending the running time of the statute of limitations for tax assessments until 60 days from the lifting of the state of national emergency. With the extended quarantine, this directive was echoed by Revenue Regulations Nos. (RR) 7-2020 and 10-2020, as amended by RR 11-2020, and subsequently by RR 12-2020.

Such suspensions are allowed under Section 223 of the Tax Code. In cases where the Commissioner of the Internal Revenue (CIR) is prohibited from making any assessment and collection of deficiency taxes, the running of the statute of limitations may be suspended for a specified period plus 60 days after. 

COUNTING OF THE SUSPENSION
Parallel with the changing community quarantine directives, in December, the BIR clarified the counting of the suspension through RMC No. 136-2020.  Under the RMC, the three-year prescriptive period for tax assessments and the five-year period for tax collections was extended for 137 days, reckoned from the suspension of the statute of limitations on March 16, 2020 to May 31, 2020, plus 60 days.

When Metro Manila, Bulacan, Cavite, Laguna, and Rizal, or the so-called “NCR Plus,” entered ECQ on March 29 to April 11 earlier this year, the BIR issued RMC No. 52-2021, further suspending the running of the statute of limitations during the period, and up to 60 days after.

Next, RMC No. 80-2021 was issued extending the suspension while NCR Plus was under the modified enhanced community quarantine (MECQ) between April 12 and May 14 this year. Citing the definition of “quarantine” under RR No. 12-2020, which includes MECQ, the BIR maintained the suspension for a total of 107 days inclusive of all the extensions.

It is worth noting that RMC 52-2021 and RMC 80-2021 did not consider the two-week period when Metro Manila and its immediate surrounding entered MECQ between Aug. 4 and Aug. 18 last year.

With the latest ECQ/ MECQ, the BIR has just issued RMC No. 93-2021, extending the suspension, once again, by the number of days in the ECQ/MECQ period plus 60 days.  Further, the BIR clarified that this suspension will continue to be extended for any future reimplementation of ECQ/ MECQ.  Consequently, it prevents taxpayers from raising the defense of prescription on tax assessments. 

FILING EXTENSION
For taxpayers, the BIR also issued RMC 92-2021 extending the deadline of submission of the letters and correspondence in relation to ongoing BIR audits in light of the ECQ and MECQ currently in effect.

As with RMC 45-2021, it extended the deadline for submission of the following documents related to tax investigations for a period of 30 days upon lifting of the ECQ and MECQ:

• Position papers and supporting documents in response to notice of discrepancy;

• Protest letters in response of FAN/Formal Letter of Demand (FLD);

• Transmittal letter and supporting documents in relation to request for reinvestigation;

• Request for reconsideration to the CIR on Final Decision on Disputed Assessment (FDDA); and

• Other similar letters and correspondences.

Meanwhile, a 15-day extension applies to the submission of the following upon lifting of the ECQ and MECQ:

• Reply and supporting documents in response to FAN; and

• Submission of documents in response to Subpoena Duces Tecum.

Finally 10 days has been given for the submission of documents in relation to first, second, and final notices, upon lifting of the ECQ and MECQ.

One may note that the extension of the statute of limitations and filing deadlines are not given the same consideration. The BIR was given a 60-day extension while the taxpayers, on the other hand, have only been granted 30 days, at most, from the lifting of the quarantine.

As taxpayers and the government are both in need of funds in these times, one would hope for a more equitable extension to be afforded to taxpayers once the quarantine has been lifted.  After all, tax has always been founded on the principle of reciprocity.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Ian Renzo Galicia is an Associate at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.

ian.renzo.galicia@pwc.com

Allies key to PHL’s claim in South China Sea

AUSTRALIA DEPT. OF DEFENCE

By Kyle Aristophere T. Atienza, Reporter

THE PHILIPPINES under the next administration should enhance its alliances with nations that value international rules to strengthen its claim in the South China Sea, analysts said, noting that Beijing’s continued expansive activities in the disputed waterway indicate that President Rodrigo R. Duterte’s appeasement policy does not work.

The country should “cooperate with like-minded nations” in enforcing an international ruling that rejected China’s claim to more than 80% of the sea based on a 1940s map, Henry S. Bensurto Jr., former Philippine Consul General to San Francisco, said at a BusinessWorld Insights forum on Wednesday.

Mr. Bensurto said it has been “unfortunate” that the focus of the debate on the country’s sea dispute with China has been “whether the arbitration ruling is enforceable or not” instead of “how.”

Government officials and concerned domestic parties “should focus the debate into how do we enforce it, implement it” with the help of like-minded states, he said.

Mr. Bensurto said inconsistencies in the Philippine government’s handling of the sea dispute has enabled Beijing to be a step ahead in terms of planning.

The Philippines has failed to craft a long-term solution for the South China Sea dispute due to its fast-changing political landscape, he said, noting that a Philippine President only has a term of six years.

“One inherent weakness, why, why do we say that China has the ability to be strategic and long term in terms of its policy, because the leaders there lead for life and so a necessary consequence of that is the consistency of policy,” he said. “In a democratic state like the Philippines, where administrations are normally limited by a definite term of six or four years, you will tend to focus on what can be achieved in your six years.”

Mr. Bensurto said the institutional problem can be addressed by freeing several government agencies from the influence of politics or political pressure.

The Department of Foreign Affairs and the Department of National Defense, among other agencies “that provide non-political objective analysis of certain situations, are supposed to be objective and professional in their analysis because of their historical understanding,” he said.

“They will have the ability to think strategically, and so there has to be an effort to strengthen these institutions and insulate them from any politics.”

MULTIPLE POWERS
Last month, China had warned the United Kingdom’s Carrier Strike Group, led by the aircraft carrier HMS Queen Elizabeth, not to commit “improper acts” as it entered the contested South China Sea, according to the BBC.

Britain was also set to participate in multinational exercises with the US, Australia, France, Japan, New Zealand and South Korea in the Philippine Sea.

“The cumulative effect of multiple powers coming in and telling China to care about international law could be positive if it is coupled with good diplomacy,”  said Richard H. Heydarian, a professorial chairholder on geopolitics at the Polytechnic University of the Philippines.

“It’s important for the quad power, such as the US, UK, Germany, France, and other countries, to come up with a strategy to tell China that if you want to be a respectable leader in this part of the world, you have to regain our trust and confidence and one way to do that is to tone down some of your excesses in the South China Sea and move towards a rules-based order in that area,” he said at the same forum.

Mr. Heyderian said the latest moves of the UK and its allies against China indicate that Southeast Asian countries, including the Philippines, have failed to challenge Beijing’s aggression in the waterway.

“ASEAN (Association of Southeast Asian Nations) is not stepping up to the plate that’s why the quad powers are stepping in and saying that, well, if you’re not going to do your job, we’re gonna do that job for you,” he said.

“They are not happy about some of the excessive and coercive behavior of China.”

“Our appeasement foreign policy has weakened our position and there is no way but to reverse this policy by alliances and harnessing the international community that values the rule of international law to govern relations among responsible global stakeholders,” Victor C. Manhit, president of think tank Albert del Rosario Institute for Strategic and International Studies, said in a Facebook Messenger chat.

Mr. Manhit echoed the calls of several legislators to let Philippine forces conduct joint maritime patrols and military exercises in the waterway, in the face of China’s continued aggression.

Mr. Duterte, who led a foreign policy pivot toward China and away from the Philippines’ western allies, last month recalled a plan to end the visiting forces agreement with the US after meeting with US Defense Secretary Lloyd Austin.

Henry Ll. Yusingco, a research fellow at the Ateneo Policy Center, said the next administration should consider a return to the multilateral approach in crafting a foreign policy.

“As far as matters in our region are concerned, promoting and upholding ASEAN centrality will have to be the main strategic approach,” he said.

RESOURCES
The Philippine Energy department recently said the proposed joint exploration for oil and gas between the Philippines and China in the disputed area can still move forward.

Food security and marine conservation should be “the primary consideration” as far as the utilization of the resource-rich waterway is concerned, Mr. Yusingco said.

“Any exploration partnership, apart from meeting constitutional requirements, must respect these two considerations,” he said. “It behoves the next administration to formulate a coherent and comprehensive marine policy first before embarking on any joint effort to exploit our seas.”

New COVID cases at 12,021, highest in over four months

THE Labor department has declared COVID-19 as a compensable disease through ECC Board Resolution 21-04-14. — PHILIPPINE STAR/ MICHAEL VARCAS

HEALTH AUTHORITIES reported 12,021 coronavirus infections on Wednesday, the highest in more than four months, bringing the country’s total to 1.69 million.

The Health department placed more areas under the highest alert classification due to their increasing number of coronavirus cases and hospital utilization rates.

The death toll rose to 29,374 after 154 more patients died, while recoveries increased by 9,591 to 1.58 million, it said in a bulletin.

There were 81,399 active cases, 94.8% of which were mild, 1.5% were asymptomatic, 1.6% were severe, 1.15% were moderate and 1% were critical.

The agency said 137 duplicates were removed from the tally, 129 of which were recoveries. Three recoveries were reclassified as active cases, while 122 recoveries were reclassified as deaths. The agency said three laboratories failed to submit data on Aug. 9.

Health Undersecretary Maria Rosario S. Vergeire said Las Piñas, Muntinlupa, Pateros, Quezon City, Taguig, Malabon, Makati, San Juan, Valenzuela, Marikina and Navotas in Metro Manila were placed under alert level four, the health department’s highest level based on the acuteness of coronavirus cases and health utilization rates.

Several areas in Cordillera Administrative Region, Ilocos, Cagayan Valley, Central Luzon, Southern Tagalog, Bicol region, Western Visayas, Central Visayas, Eastern Visayas, Northern Mindanao, Davao, and Soccsksargen were also placed under the same alert level.

“While their case trends are not that high, their health care utilization are at more than 70%,” Ms. Vergeire said in mixed English and Filipino.

The Health official said 58.3% of the 37,000 beds dedicated to coronavirus patients nationwide were already occupied.

The utilization of intensive care units (ICUs) in Metro Manila may reach 70% or may be put in the high-risk classification before Aug. 15, the OCTA Research said in its latest monitoring report, noting that “ICU utilization increased by an average of 22 occupied ICUs per day” over the past seven days.

Meanwhile, OCTA said the reproduction rate in the capital region has decreased to 1.74 as of Aug. 10 from 1.80 two days ago.

“While this is a welcome development, it is too early to determine if this is the start of a new trend,” it said. “A change in the direction of the reproduction number always carries the most uncertainty, and the trend should be clearer within the next few days.”

The Health department earlier this week said ICUs in some hospitals in Metro Manila were “at high risk category.” More than 200 healthcare facilities, including 25 hospitals in Metro Manila, were classified as “critical risk” in terms of use, it said.

The Philippines did not learn from the previous coronavirus surge, which had severely crippled the country’s healthcare system, said Gene A. Nisperos, a board member of the Community Medicine Development Foundation.

Mr. Nisperos said the government has failed to boost the country’s healthcare personnel despite warnings that the country might face a Delta-fueled coronavirus surge.

“Putting more beds without the needed health personnel is just theater, with no real impact,” he said in a Facebook Messenger chat. “In an ICU setting, there should at least be one nurse per patient.”

“The government continues to fail in attracting more nurses to join because it is shortsighted, refusing to provide better packages and working conditions,” he said.

Mr. Nisperos also said the government should “head off” the disease at the community level with a focus on contact tracing and testing.

Also on Wednesday, an inter-agency task force adopted a resolution requiring individuals who are fully vaccinated but have direct contact with a probable or confirmed coronavirus case to undergo a mandatory 14-day quarantine period. — Kyle Aristophere T. Atienza

Local governments in best position to distribute aid — Recto 

MANILA PIO

SENATE President Pro Tempore Ralph G. Recto found it irrational for the central government to nationalize an activity, such as the distribution of cash assistance, that can be better delivered by local government units. 

“Big cities like Manila have the boots on the ground and the muscle memory to conduct large scale distribution of aid, whether in cash or in kind, complex operations which understaffed national agencies may find hard to do on their own,’” said Mr. Recto in a press release on Wednesday.  

The statement comes after President Rodrigo R. Duterte, in a late Monday night televised address, threatened to strip one city of the authority to distribute the cash aid for the two-week lockdown in Metro Manila.  

“The big cities and provinces have division size personnel. Then you’ll replace them with one platoon of clueless people who don’t know the terrain,” he said. 

The senator said maintaining a partnership with local governments “saves the national government from embarrassment if the job it has assumed to do on its own will end up a flop.”  

The cash aid distribution started Wednesday with all local governments in charge.  

Police officers were deployed at the distribution sites to help ensure the observance of health protocols.  

“What happened last week at various vaccination centers where people swarmed should not happen with the cash aid distributions,” police chief Guillermo T. Eleazar said in a news release on Wednesday. — Alyssa Nicole O. Tan and Bianca Angelica D. Añago  

Sara Duterte to run as an independent if she joins presidential race, says HNP party spokesperson 

DAVAO CIO

PRESIDENTIAL daughter and Davao City Mayor Sara Duterte-Carpio will not be running under the banner of a national party if she decides to join the presidential race in 2022, according to the spokesperson of her regional party.  

“Mayor Sara may run as independent in the 2022 election…  Mayor Sara has already said that she will not join any national party and she remain to be member of HNP, which is regional party,” Anthony del Rosario, spokesperson of the Davao-based Hukbong ng Pagbabago (HNP) party, told BusinessWorld.   

He also explained that under the HNP’s policies, no member can use the party when running for any national position.  

Ms. Carpio said in June over the city-run radio that she has no intention of joining any national party.    

“I have no plans of joining a national political party. As I said, I will stay with Hugpong ng Pagbabago in Davao Region and Hugpong sa Tawong Lungsod of Davao City,” she said.   

Meanwhile, Mr. Del Rosario said the planned agreements with seven national parties have yet to be signed. Under the agreement, each national party will submit at least one senatorial candidate who will be endorsed by HNP.    

“As of the moment, we have not been given the names since we have not signed the Memorandum of Agreement between HNP and the seven national parties,” he said. — Maya M. Padillo

Century Pacific to plant a million coconut trees in South Cotabato, Sarangani 

CENTURYPACIFIC.COM.PH

CENTURY Pacific Food, Inc. (CNPF) has partnered with mobile wallet GCash and non-profit organization HOPE on a project that will plant one million coconut trees in two provinces in Mindanao.   

The listed food company said in a stock exchange disclosure on Wednesday that it launched “GForest,” which aims to plant the trees across South Cotabato and Sarangani within two years.  

Under the project, users of the GCash mobile application can help the environment by collecting enough green energy to plant virtual trees.    

For every virtual tree planted, CNPF, GCash, and HOPE will plant a real coconut tree, which users may select on the application.   

“GForest users earn green energy points by using various cashless services of GCash. This marks the first time that a GForest tree-planting initiative will be implemented in Mindanao, helping thousands of farmers in the region,” CNPF said in the disclosure.    

According to CNPF, the project will cover areas in Banga, Surallah, Norala, Koronadal, General Santos City, Malungon, Glan, Alabel, Malapatan, Maasim, Kiamba, Maitum, Polomolok, Tampakan, and Tupi.    

Noel M. Tempongko, Jr., CNPF Vice President and coconut division general manager, said the project fast-tracks the company’s efforts towards carbon neutrality.   

“The program enables us to boost the livelihoods of the coconut farming community in Mindanao and at the same time improve coconut farming productivity and quality of supply, which are all beneficial to our growing coconut business,” Mr. Tempongko said.    

Further, CNPF said the GForest program accelerates its initial commitment to provide coconut seedlings and introduces new partners to increase the number of new coconut trees to be planted in Mindanao.    

In 2020, CNPF forged a partnership with HOPE to provide coconut farmers with 100,000 coconut seedlings annually for the next five years.   

“Through this (GForest) initiative, we are able to reach out to millions of GCash users, encouraging them to preserve the environment while helping to support smallholder farmers,” HOPE Chairperson and President Nanette Medved-Po said.    

In the first six months of the year, CNPF posted a 21% increase in its net income to P2.7 billion on the back of strong export sales, favorable tax rates, and resilient local demand. The company’s consolidated revenues also rose 8% to P27 billion.   

On Wednesday, shares of CNPF at the stock exchange rose 0.20% or five centavos to end at P25.50 a piece. — Revin Mikhael D. Ochave   

‘Senate should’ve stood its ground’ on ICC withdrawal — Carpio  

PHILSTAR

RETIRED Supreme Court Justice Antonio C. Carpio said the Senate should have insisted that President Rodrigo R. Duterte cannot unilaterally withdraw from the International Criminal Court (ICC) under the Roman Statute.    

“The Senate should have stood its ground at the very start,” Mr. Carpio said in an online forum on Wednesday organized by the University of the Philippines (UP) College of Law, UP Law Center’s Institute of International Legal Studies, and the Justice George Malcolm Foundation, Inc.  

Under Philippine law, concurrence of two-thirds of the Senate’s members is needed in international treaties.   

However, the Supreme Court ruled in a case filed by senators that the Senate “never sought to enforce what would have been its prerogative to require its concurrence for withdrawal.” A resolution filed seeking the Senate’s position on the need for concurrence with Mr. Duterte’s decision to withdraw was not prioritized by the legislative body.   

“The moment you wobble, you will lose it. This is exactly what happened here,” Mr. Carpio said.   

He added that the country’s Highest Court could take the opportunity to clarify issues related to its ruling on the ICC withdrawal when it decides on a pending case on the Philippines’ withdrawal from the Visiting Forces Agreement with the United States, even though Mr. Duterte had revoked his decision to withdraw.   

UP law professor Dante B. Gatmaytan further explained in the same forum that the High Court was wrong to rule that it cannot reverse Mr. Duterte’s decision on grounds that the Senate did not act on the resolution on the ICC withdrawal.   

In the case of the ICC withdrawal, Mr. Gatmayan said there was a violation of the Constitution, and the “exceptional character” and “public interest” are evident. — Bianca Angelica D. Añago  

Bonus for World Teachers’ Day a hard-fought ‘consolation’

A TEACHER holds an online class in this August 2021 photo. — THE PHILIPPINE STAR/MICHAEL VARCAS

A HOUSE lawmaker representing teachers said on Wednesday that the P1,000 bonus to be given in commemoration of World Teacher’s Day should be given to educators themselves who called for its inclusion in the 2021 national budget instead of to President Rodrigo R. Duterte.    

This comes after the Department of Education (DepEd) announced on Tuesday that Mr. Duterte has approved the release of P910 million for the benefit.    

“There would not even be a World Teachers’ Day incentive if not for the loud clamor of public school teachers in last year’s budget deliberations,” ACT Teachers Party-list Rep. France L. Castro said in a statement.   

She added that Mr. Duterte cannot use the P1,000 bonus to “save face” as teachers continue to demand for a substantial salary increase, adding that the incentive is just a “consolation” for the sector.    

Ms. Castro also stressed that the current P5,000 cash allowance given to public school teachers for School Year 2021-2022 by DepEd is not enough. ACT Teachers is pushing for a P5,000 teaching supplies allowance, P10,000 internet allowance for the whole school year, and P500 medical check-up for every teacher.   

“We continue to fight for a substantial salary increase for our teachers and other government employees, adequate benefits, sufficient support in the implementation of the blended distance learning and ample aid amid the continuing worsening economic and health crisis in the country,” she said. —  Russell Louis C. Ku  

Rethinking Finance: Are banks doing enough in the time of COVID?

PCH.VECTOR-FREEPIK

The title of this column, “Rethinking Finance,” was born out of my obsession during the 2008 financial crisis with trying to make sense of how and why the financial industry became so greedy that it led to hundreds of thousands of people losing their jobs. From banks being institutions where trust is supposed to be paramount, they became the representation of deception. From bankers being the persons whose qualifications and expertise we believed surpassed our own, they became demonized as people who tore apart homes and families. It has taken very long for financial institutions to gain back the reputations they once had, as pillars of an economy, as lifelines for people, instead of as over-charging, hidden-fee laden, money-making institutions. Indeed, just ask anyone in the Philippines and they will easily complain about this bank or that having profited from their ignorance, or at the very least, having caused them some form of hassle and stress instead of reprieving them or assisting them in times of need. It’s just like customer service: we tend to be so used to bad service that when a good company answers the phone promptly, or gives a solution to an actual question, we laud this firm, even if that should not be best practice, but simply the norm. Such is the case with banks: “no hidden fees” seems like something to be praised, instead of status quo. I say this as a former investment banker, by the way.

It is hard for me to reconcile the banking sector that I deal with very closely, whether as guests I feature on my show, or close friends I have known my whole life, often coming from the most elite schools, with the on-the-ground, daily struggles of people simply trying to have access to finance. We talk about fintech, access to finance this, access to finance that, but it is so evident that people are intimidated and still do not have access. Despite my high amount of financial literacy and education, even I find it intimidating to ask questions about banking products and fees or dare to negotiate loan terms for fear of being rejected assistance or being charged even higher. I can only imagine how difficult it is for any given person with less understanding that I, to be part of this financial world. I got my household staff bank accounts at a certain bank, assisted them through the entire process; none of them could maintain the balance needed of P10,000. They were charged in perpetuity for having less than that amount, until we all gave up trying to be financially savvy and went back to cash.

The loan moratoriums and extensions on payments provided by Bayanihan I and II have since expired and the only help banks are now doing either come from their own initiative or are accommodating what the Bangko Sentral ng Pilipinas (BSP) is requesting which is to be helpful and reasonable. But this does not seem to be translating into loan growth, with people more willing to sell and save their cash for a rainy day (and by rainy day, we mean sickness with the threat of death) rather than invest in a dream via a mortgage they will be beholden to. As such, the banking sector, though managing to stay resilient with its lower-than-expected loan default rate and higher-than-Asian-average capital ratios, specifically during COVID, has not been rewarded when it comes to share price performance. Why? Because valuations are based on the future cash flows of the firm, and in this case, it is not harnessing the massive potential of financial inclusivity, that is, banking on those who to them are unbankable; because that is the true story of growth, unlocking this is unlocking the future of the economy. We will not have growth in the economy for as long as more than 60% of the population have no access to formal finance.

In times of COVID, banks are once again put in the spotlight, as they were in 2008. Could finance serve society, as it once did? Could the industry that brought people to their knees, help them back up?

Indeed, the past decade or so following the global financial crisis consisted of a massive overhaul of the industry, which was a long time coming. Bonuses were capped, governance was improved, regulation was put in place, and there was a big push towards sustainable investing, which in a way gave hope to people that the industry was taking steps towards becoming a partner in a more equitable distribution of wealth. Today, banks in the Philippines have the unique opportunity of having strong enough balance sheets to squeeze their margins just enough to accommodate the struggling cashflows of their patrons; they have the possibility to illustrate to the nation that they can operate below target-profit for a short time if this allows the general economy to get its gears up and running; they can trust the people whose documentation and whose assets and credit standing do not check out, provide reprieve to those who need it, understanding that for a very long time, these institutions had operated with our hard-earned money allowing them their incredible growth, they had benefitted from the ignorance and difficulties of people with low levels of financial literacy, and they had acted largely disconnected from a country who has needed more grassroots help than sophisticated investment products.

We need to rethink the purpose of financial institutions. They are not a place to park our money. They are not a place to simply keep our money safe to avoid theft. They are not places to beg for cash and cash advances for emergencies with the expectation of high interest rates. And they are definitely not services for only those who can illustrate they can afford them. No, they are the gatekeepers of the economy, they are tasked to — with best effort and highest efficiency (i.e., what we pay management fees for), not simply hold onto our money, but place it in instruments that will allow us to benefit from economic growth. They are tasked to be a place that connects people with money with people who can provide skills. They are tasked to be collective; to gather funds from different people, to invest in the real economy, to fund employment and create jobs, to form capital, to ease burdens in times of emergencies, and, above all, to make money enough on in the good time to help the hardest hit in these, the hardest of times.

 

Daniela “Danie” Luz Laurel is a business journalist and anchor-producer of BusinessWorld Live on One News, formerly Bloomberg TV Philippines. Prior to this, she was a permanent professor of Finance at IÉSEG School of Management in Paris and maintains teaching affiliations at IÉSEG and the Ateneo School of Government. She has also worked as an investment banker in The Netherlands. Ms. Laurel holds a Ph.D. in Management Engineering with concentrations in Finance and Accounting from the Politecnico di Milano in Italy and an MBA from the Universidad Carlos III de Madrid.

The worst is yet to come?

PHILIPPINE STAR/ MICHAEL VARCAS
A HEALTH WORKER at St. Luke’s in Quezon City gestures in a photo taken Aug. 10. St. Luke’s Hospital posted on social media that the emergency rooms at its branches in Quezon City and Global City, Taguig were fully occupied with people experiencing COVID-19 symptoms. — PHILIPPINE STAR/ MICHAEL VARCAS

Just as our economy was showing signs of recovery, with GDP growing 11.8% in the second quarter, COVID’s Delta variant started hitting us hard. As of Aug. 10, the total number of active COVID-19 cases nationwide was over 79,000. Just a month before, July 10, we were at around 49,000 cases. The big rise in numbers seems linked to the highly transmissible Delta variant.

The last time we were in this situation was during the March-April 2021 “surge.” On April 25, the government reported over 77,000 active cases nationwide. The peak was actually over 203,000 cases, as reported on April 17. But, given the rate of increase in the last 30 days or so, we may hit 200,000 yet again. It may just be a matter of time.

Hospitals are getting full, again. Even field hospitals put up by the Philippine National Red Cross to temporarily boost bed capacity, are overflowing. And the Philippine General Hospital has reported more pediatric cases, with younger children getting sick with COVID. And while the ECQ lever was pulled for the fourth time on Aug. 6, we may not see any positive effect maybe until a month from now. ECQ1 was in March 2020, ECQ2 in August 2020, and ECQ3 in late March 2021.

Take the case of Makati City, where I reside. During the March-April 2021 “surge,” the number of active cases climbed from 435 on March 1 to peak at 1,544 by April 22. This was despite imposing the third ECQ (enhanced community quarantine, the strictest quarantine level) or ECQ3 starting March 29, and then shifting to MECQ (modified enhanced community quarantine, the 2nd strictest level) by April 16. From April 23, cases began to slide down very slowly, hitting a low of 419 by July 11. At that point, the March-April 2021 surge could be deemed over.

Note that the peak of 1,544 was hit 25 days from the start of ECQ3 on March 9. Then, it took another four weeks of MECQ, and seven weeks of GCQ (general community quarantine, the third of four quarantine levels) — with restrictions — before the numbers dropped to 419 on July 11, lower than 435 reported on March 1. In short, it took almost 15 weeks or almost four months for the numbers to drop back to the more manageable 400-level.

Since then, however, Makati City cases have been climbing again. From 419 on July 11, Makati City reported 1,477 active COVID cases as of Aug. 10. More than 1,000 cases were added in a month’s time or an average of 33 cases daily. The fourth ECQ or ECQ4 started on Aug. 6. At this rate, the previous peak of 1,544 cases will surely be topped soon. We are just 67 cases short of that at this point.

But while the city survived a peak of 1,544 cases previously, it remains uncertain whether it can still manage with numbers hitting 1,600 active cases or more. We are just on the sixth day of ECQ4 today, and with vaccines seemingly not as effective in keeping Delta at bay compared to other variants, I fear that Makati might peak at anywhere between 2,100 to 2,500 active cases by early September.

And going by our experience with ECQ3, the numbers will slide down very slowly. Perhaps by December, we can expect them to drop back to the more manageable 400-level. Best case scenario is around 200 active cases by Christmas time. But, seeing how Delta wreaked havoc in India, Indonesia, and now the United States and other countries, a “managed” pandemic by December will truly be a Christmas “miracle.”

Economics-wise, perhaps 2021 may have to be written off pretty much like 2020, with 2022 being the target year for a more realistic starting line for recovery. The May 2022 elections may yet bring a fresh breeze, and based on a previous research I did, the economy usually starts putting on a good show the year after a presidential election year.

Our healthcare system barely coped when we hit 7,000 new cases nationwide daily in August 2020, when we imposed ECQ2. Then we hit an average of about 15,000 cases daily in April 2021, overwhelming our hospitals. On Aug. 10, we recorded 8,560 new cases. Over 11,000 cases reported on Aug. 7, and over 10,000 cases on Aug. 6, a major jump from only 3,600 new cases on July 13. Are we going to hit 15,000-level again? Most likely. We may even go higher.

I fear that the worst is yet to come. While I hope to be proved wrong, and that the light of the end of the tunnel is actually already in sight, I already anticipate this not to be the case. As we grapple with this new “surge,” we are using the same tools we used during ECQ1 in March 2020, ECQ2 in August 2020, and ECQ3 in March 2021. So, after Aug. 20, I am already expecting another two weeks of ECQ or perhaps a month of MECQ, and then two months or longer of GCQ with restrictions.

Just note that with these tools, it took us about four months for the cases numbers to come down to manageable levels during ECQ3. With no new tools to use, and despite the continuous vaccination of individuals, I still expect a similar timeline for “recovery” if not longer this time around. Again, everything depends on when this new “surge” will peak, and it doesn’t seem we have reached that point yet.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com

More complicated Olympics ahead

ALEX SMITH-UNSPLASH

The Tokyo Olympics are over, after a year’s delay. The Olympic flame has been extinguished. Athletes, officials, and other people whose participation in any Olympic-type event is essential have also packed their bags and have left. Volunteers, medical and security personnel have also vacated their posts and have moved on to more low-profile and conventional surroundings.

However, even before the last gold medals were awarded to Kenya’s Eliud Kipchoge for the men’s marathon and compatriot Peres Jepchirchir for the women’s 42.195 km race under sweltering heat, analyses have come thick and fast about the Philippines’ and other countries’ overall performance.

Incidentally, the silver medal in women’s marathon was won by another Kenyan, Brigid Kosgei, who timed 2:27:36, some 16 seconds behind Jepchirchir. The individual times of the two Kenyans indicate that the silver medalist ran a competitive race. The bronze medal was won by Molly Seider of the US. The victory by Kenya in both the men’s and women’s marathon races serve to underscore the strategy employed by Kenya both in its grassroots and high-level performance sports development program.

Over the years, Kenya has concentrated on two sports at the Olympics: athletics, mainly middle distance and marathon or road races, and boxing. A review of Kenya’s Olympics gold medal haul shows that all these top spots were in boxing and athletics. This so-called business model says a great deal about Kenya’s synchronized mass based and elite sports development program. At the recreational sports level, however, the most popular sports in Kenya are basketball, volleyball, and soccer. Kenya is nowhere near the top internationally in any of these three sports.

Kenya is ranked 44th in basketball while the Philippines is number 31. Kenya is ranked 32nd in women’s volleyball while the Philippines is at 117 together with several other nations. In men’s football, Kenya was ranked 103 as of May 2017, as against the Philippine ranking of 125, up from near the bottom at 195 in 2006. The comparison shows that in at least three team sports, the Philippines and Kenya are almost at the same level of competitiveness. An exception is a most popular sport in the country, women’s volleyball.

As stated earlier, analyses are being presented about the Philippines’ performance compared to other nations.

One comparative table shows that in Tokyo, the Philippines was the most successful ASEAN country. The Philippines won one gold, two silvers, and one bronze. Close behind are Indonesia (which has seven gold medals in several years of Olympics participation, all from badminton), and Thailand (also with seven golds in prior years’ competitions, most of which came from boxing in the 2004 Athens Olympics). Absent from this ASEAN honor roll was Vietnam which has always been very competitive in the SEA Games and the Asian Games. Word coming out of Vietnam is that athletes have “grievances” about the country’s elite sports policies. Vietnam has one Olympic gold, from shooting.

Back home, it may be instructive to examine the progress of our elite sports program by looking at the performance of athletes in certain key running, throwing, and jumping events in athletics/track and field.

Rather than compare ourselves with other nations in terms of gold or other medals won, it may be more practical to look at how fast we are able to catch up with world standards. One could also consider the rate of improvement of an athlete over a period of time. In effect, we look at the athlete as really competing with himself.

Let us take a look at a field event, the high jump, of which I have a bit of personal knowledge. Around 1958-60, American John Thomas, then a 17-year-old freshman at Boston University, set a new world high jump record of seven feet (2.13 meters). It was only in 1987, or 27-29 years later, that Fil-Am Luis (Chopoy) Juico, a nephew based in San Jose, California, cleared 2.16 meters at a meet in Sacramento, California.

It can be said that at the time Juico set a new Philippine record that equaled Thomas’s world record, we could consider Philippine high jump to have been almost 30 years behind the US. To sort of make up for the delay, in 2005, Sean Guevara, cleared 2.17 meters to break Juico’s 17-year-old record.

In the sprints, some 33 years elapsed before Fil-American Kristina Knott shattered the 100 meters record of 11.28 secs of Asia’s fastest woman in the 1986 Seoul Asian Games, Lydia de Vega. De Vega had clocked 11.28 seconds in the 1987 SEA Games while Knott was timed at 11.27 at the Drake Blue Oval meet in August 2020, while the pandemic was still raging in the US.

These are just a few examples of the rather slow progress in establishing new Philippine records. Additional examples simply heighten the fact that we are most vulnerable in women’s events, particularly the throwing events of shot put, javelin, and, until recently, hammer throw. A number of records in these women’s events have remained untouched since the early 1970s.

The records reveal that we have yet to establish a viable system of talent identification at the grassroots that is followed, like a seamless plan, by a dynamic program at the high school and collegiate levels. The bedrock of all these is a Physical Education (PE) program that could really use a long period of stability and continuity — PE policies change as new secretaries of education take over the leadership of the department.

Outside our shores, many changes are taking place in the area of athlete-college, athlete-national sports association (NSA) relationships. In the US, courts have ruled that college athletes should be compensated. How that will impact the Philippines remains to be seen although some changes in the status quo are anticipated. In the Olympics, there is talk that athletes, especially from Europe, are now demanding payment direct to them for competing in the Olympics. Simplistically, this translates to “pay me to play in the Olympics.”

The impact on Olympism of this play-for-pay concept will certainly have massive consequences. For one, it will complicate our situation in the Philippines as we figure out what are the ingredients needed to exceed our performance in Tokyo and to institutionalize best practices and policies.

We need a period of stability and this is hard to come by during a time of radical change.

 

Philip Ella Juico’s areas of interest include the protection and promotion of democracy, free markets, sustainable development, social responsibility and sports as a tool for social development. He obtained his doctorate in business at De La Salle University. Dr. Juico served as Secretary of Agrarian Reform during the Corazon C. Aquino administration.

Our duty to vote wisely

PIKISUPERSTAR-FREEPIK

OUR CIVIC DUTY, aside from obeying traffic rules, celebrating Olympic victories, and paying taxes, is to vote wisely. Advocacy groups for getting the vote out through the registration of new or lapsed voters may also set up forums to evaluate the qualifications of candidates.

One TV non-debate format has been used before. This can feature paired candidates, with well-known ones partnered with fringe hopefuls to be given equal time in answering questions from the public. These can cover qualifications as well as policy statements on such subjects as extra-judicial killings and economic recovery after the pandemic.

Maybe the format will be a virtual setting, making it even more challenging keeping the audience awake.

Anchors keep the program rolling. Questions are asked from the floor, including those from professorial types who are not clocked for the time they take with their mini-speeches seeking a reaction from the candidate. The viewing of such public-interest (although there is little that is interesting) exchanges can be painful to watch, not unlike a visit to the dentist for prophylaxis.

This exchange of views can also follow a debate format, which some major candidates shun for obvious reasons.

With the ubiquity of polls and the ranking of candidates, “electability” has become a distracting attribute. Why waste a vote for someone with no chance of winning? Here is a clear case of a “self-fulfilling prophecy,” or mind-conditioning. If everyone votes not for the deserving candidate but the one less desirable but with a supposedly higher probability of getting the votes, does the citizen not abandon the better candidate for a compromise choice?

Except for candidates who were classmates or neighbors of ours and therefore well-known enough to us, we have to rely only on an artificially enhanced public persona.

The really ardent voter can still do research on the public record.

In his or her chosen career up to this point, does the candidate exhibit good managerial skills and a track record of well-considered decisions without a hidden agenda for self-enrichment?

What if he used to be an actor, even if presently unemployed — did his roles portray villains or action scenes requiring doubles? (Okay, acting seems to set a difficult standard for gauging suitability in an elected post.) This does not bar movie celebrities and has-beens to line up for a senatorial position.

The voting record for the re-electionist should delve on more than just one piece of legislation. After all, a record on this singled-out subject does not define her other attributes, or lack of them. Was this legislator one of the killers of the freedom of the press in denying the renewal of the franchise of a broadcast company? There is a list of these 70 villains available.

If a candidate comes from a field unrelated to governance and the law, is this a point against him? Does boxing constitute valid work experience in staying in the ring and fighting for the oppressed?

The argument for “name recall” as justification for not taking further efforts in knowing candidates seems acceptable to some. Notoriety too figures in instant recognition of a name or face. Previous elections showed that mere fame did not always ensure victory. Too many TV game hosts, action stars, and a surname shared with an incumbent can get dumped by voters. Sometimes, star power equates with cluelessness and lightweight credentials.

The positive aspects of celebrity can be driven by accomplishments that are well known. True, trolls can enhance and even misrepresent selfish deeds with the patina of public service. Photogenic shots of wind-blown hair in a typhoon, clutching a baby tightly to one’s chest is considered a good image to project a champion of the poor and displaced.

Is it the voter’s responsibility to be informed or a candidate’s challenge to inform?

Advocates of intelligent voting (is that an oxymoron?) prescribe the model of a candidate as a job applicant. And yet, this paradigm is flawed. After all, the candidate is not really a future subordinate being interviewed. He could turn out to be one’s oppressor afterwards.

It’s a serious business picking the right candidate who will faithfully serve his country… and not somebody else’s.

 

Tony Samson is Chairman and CEO of TOUCH xda

ar.samson@yahoo.com

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