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No damage from magnitude 6.4 earthquake off Luzon, over 60 aftershocks recorded

NO MAJOR damage was expected or immediately reported from a magnitude 6.4 earthquake that struck off the western side of Luzon, the Philippine’s northern mainland, at 5:05 a.m. on March 14, according to state seismologists.  

The Philippine Institute of Volcanology and Seismology (Phivolcs) recorded the offshore tremor at 110 kilometers west of Lubang in Occidental Mindoro province with a depth of 28 kilometers.  

More than 60 aftershocks were recorded as of early Monday afternoon, with the strongest at magnitude 4.8 at 1:35 p.m. 

Lubang recorded an intensity 4 tremor while intensity 3 was felt in several provinces and cities in mainland Luzon, including Cavite, Batangas, Bulacan, Quezon City, Taguig City, Mandaluyong City, Makati City, Navotas City, and Pasig City. 

Under the Phivolcs intensity scale, 4 is considered “moderately strong” and generally felt by people indoors while 3 is described as “weak” but still felt indoors, especially in upper floors of buildings.  

The Philippines is one of the countries located along the Pacific Ring of Fire, an area where most of the world’s earthquakes and volcanic eruptions occur. — MSJ

University of Perpetual Help partners with Malaysian, Thai universities for satellite project

PHILIPPINE-based University of Perpetual Help System DALTA (UPHSD) has partnered with academic institutions in Malaysia and Thailand for a nanosatellite project that will gather data on marine traffic and greenhouse gases, among others.  

UPHSD, in a press release on Monday, said its partners are the Universiti Teknologi MARA (UiTM) in Shah Alam, Malaysia and the King Mongkut’s University of Technology North Bangkok (KMUTNB) in Thailand. 

Their project, the ASEANSAT1, is targeted to launch in the first quarter of 2023 to the International Space Station, “after which the satellite will go into a low earth orbit to gather data on earth imaging, marine traffic and greenhouse gases and testing of equipment like commercial off-the-shelf global positioning system and the Anistropic Magneto Resistance Magnetometer.” 

“Certainly, this project is a milestone not only for the University of Perpetual Help System DALTA but for the development of science and technology in the country and in the ASEAN region,” University of Perpetual Help President Anthony Jose M. Tamayo said in the statement.  

ASEAN refers to the 10-member Association of Southeast Asian Nations. 

UiTM’s Mohamad Hazaimy Jusoh, speaking during the project’s kick-off ceremony on March 11, said the project contributes to the advancement of space technology, satellite images for advanced research of academic institutions, and advanced engineering expertise for students.  

UPHSD’s Lorena Ilagan, head of the project, underscored the important role of satellites in day-to-day life.  

“Some of us might not be aware of the importance of satellites in our lives. The usual everyday things we rely on… have become increasingly dependent on space technology like satellite TV, GPS systems used by smartphones, instruments and equipment for military operations, air traffic and the weather,” Ms. Ilagan said. 

“Without space technology like satellites, the world would be very different from what it is today.”

CA upholds trial court’s decision favoring BDO vs client

PHILSTAR FILE PHOTO

THE COURT of Appeals (CA) has denied an appeal of a client of BDO Unibank, Inc. to dismiss a trial court’s decision ordering the payment of P2.8 million plus 6% interest of unpaid credit card bills. 

In a 16-page resolution dated Mar. 10, the appellate court affirmed a Regional Trial Court’s (RTC) decision promulgated in 2020, which ruled that the bank was able to submit sufficient evidence to prove it issued two credit cards to the client, which accumulated unpaid transactions. 

The client argued that she was never presented by the bank a copy of the application forms for the two credit cards in question, noting she was only instructed to sign application forms without any explanation of the terms and conditions. 

The trial court cited in its decision that the client was absent on several of the pre-trial conferences. The court then allowed BDO to present evidence despite the absence of the defendant. 

In the CA filing, the petitioner claimed that the lower court made an error in allowing the bank to present evidence and denying her motion to cross-examine the bank’s witness. She added that the prior ruling was based on a technicality and a violation of due process. 

The appeals court upheld the trial court’s ruling, saying the client was given more than enough considerations. 

“After having been granted liberality by the trial court, the records show that the defendant reciprocated the RTC’s generosity by not attending the next four rescheduled pre-trial conferences,” the CA said in its ruling. “The court finds that the latter is clearly not entitled to any further relaxation of the procedural rules,” it added. — John Victor D. Ordoñez 

Cayetano suggests mandated 5% savings from agencies for financial aid 

SEN. ALAN PETER CAYETANO FACEBOOK PAGE

TAGUIG-PATEROS Rep. Alan Peter S. Cayetano called on the Duterte administration to order government agencies to save 5% of their budgets this year, and use the fund for financial aid to households as part of recovery measures from the coronavirus pandemic.  

“Now, if we make it 5% (savings), that’s already P250 billion, right? You can give P10,000 to each Filipino family and there will still be an excess of P50 billion,” Mr. Cayetano, who is running for the Senate in the May elections, said in Filipino in a interview over DZRH radio.  

He also said President Rodrigo R. Duterte could ask Congress to hold a special session to make a law on how to spend the savings. 

“It’s not true that we need to campaign and win first in order to act. We’re in a crisis. So, if we need to hold a special session for the 5% savings, why not do it, right?” Mr. Cayetano said. — Jaspearl Emerald G. Tan

Communist leader faces rape charges 

PHILSTAR

THE DEPARTMENT of Justice (DoJ) has endorsed the indictment of a known leader of the communist movement for alleged rape.  

In a statement dated March 11, the DoJ said a leader of the New People’s Army, the armed wing of the Communist Party of the Philippines, faces nine counts of rape committed against former members in 2018. 

Three counts of rape will be filed at a Nueva Ecija regional trial court, and six counts will be filed at a trial court in Pangasinan. 

A complainant said that the suspect took advantage of his authority as a vice platoon commanding officer and sexually abused her multiple times in 2018. 

“The Respondent’s alibis, denials of rape, and imputing blame on the complainant are self-serving and deserve no weight in law,” the Justice Department said. 

“Instead, the unequivocal statements of the complainant and the fact that she was able to positively identify the respondent as the culprit are given more credence,” it added. 

The DoJ previously found probable cause for two counts of rape under the Revised Penal Code committed against one of the complainants by another officer of the group. These cases were filed with trial courts in Nueva Vizcaya and Nueva Ecija. — John Victor D. Ordoñez 

Voting machines

PHILIPPINE STAR/ RUSSEL PALMA

VOTE counting machines that will be used in the May 9 national and local polls are checked by workers at the Commission on Elections (Comelec) warehouse in Sta. Rosa, Laguna on March 14. Newly-appointed Comelec Chairman Saidamen Balt Pangarungan and Commissioner George Erwin M. Garcia visited the facility on Monday.

SMEs hard-pressed to meet wage hike demands

PHILSTAR FILE PHOTO

SMALL and medium enterprises (SMEs) are expected to find it difficult to meet wage demands being made as prices rise, because they have yet to recover from the coronavirus disease 2019 (COVID-19) pandemic, a Palace adviser said.  

Presidential Adviser for Entrepreneurship Jose Ma. A. Concepcion III said at a Laging Handa briefing on Monday that small and medium businesses will be unable to raise wages to the extent being demanded by labor leaders.  

“’Yung mas malaking korporasyon, mas may kaya pero ’yung small to medium enterprises, iyon ang mahihirapan kasi sila talaga ang tinamaan (larger corporations will be more able to raise wages, but SMEs will find it difficult because they took much of the hit from the pandemic,” Mr. Concepcion said.

Mr. Concepcion said the tourism sector in particular will be challenged in meeting any wage demands as they are still recouping their losses.

“Kababangon lang niyan. Halos two years na walang negosyo. So, bumabangon pa lang sila. We have to give them time. At this point, hindi pa bumabalik ’yung tourism (industry) natin (They have just made it through the crisis, when they endured nearly two years with no business. They are still recovering from the pandemic. We have to give them time. At this point, tourism has not yet recovered)” Mr. Concepcion said.  

The Trade Union Congress of the Philippines and Partido Manggagawa have called for wage hikes to address rising fuel and commodities prices.

According to the National Wages and Productivity Commission, the daily minimum wage in Metro Manila is between P500 and P537.   

Mr. Concepcion called for more talks between the government and the private sector on wage hike proposals.

“Hindi pa rin tayo sigurado rito sa mga presyo kasi biglaan ang pagtaas dahil sa (Russia-Ukraine) conflict. Kung mawala ’yung conflict, then bababa lahat ng commodities. (We are not sure on prices since there was sudden increase due to the Russia-Ukraine conflict). If the conflict is resolved, then commodity prices may go down. This might be a temporary situation. I think the government and the private sector will need to have more discussions here,” he added. — Revin Mikhael D. Ochave

Nomura cuts PHL growth forecast to 6.3% due to inflation

PHILIPPINE STAR/ MICHAEL VARCAS

NOMURA Global Markets Research said it downgraded its growth forecast for the Philippines to 6.3% from 6.8% due to the expected impact of inflation caused by the Russian invasion of Ukraine.

The projection was made in a note issued by analysts Sonal Varma, Ting Lu, Euben Paracuelles, and Jeong Woo Park.

The official government target for 2022 growth is 7-9%.

“In Asia, India, Thailand and the Philippines are the biggest losers, while Indonesia would be relative beneficiaries from higher commodity prices,” the report said.

Amid surging oil prices, Nomura raised its inflation projection for the Philippines this year to 4.6% from 2.9% previously. If realized, this will be higher than the 3.7% estimate of the Bangko Sentral ng Pilipinas (BSP) and beyond its 2-4% target band.

For now, Nomura said base effect from the high food prices last year is still keeping inflation muted.

“Surging inflation is also likely to dampen consumer spending when the unemployment rate is still high,” it said.

Headline inflation was at 3% for a second straight month in February. However, central bank Governor Benjamin E. Diokno has warned that rising oil prices could push inflation beyond the target band by the second quarter, before slowing in the second half of the year.

Nomura warned that the country’s high dependence on fuel imports could have an immediate pass-through impact on consumers and widen the current-account deficit.

Relatively low vaccination rates and the possibility of further outbreaks due to election-related activities could also impede growth by delaying the economy’s full reopening, it added.

The Department of Health tallied full vaccinations at over 63 million as of March 9. The Johns Hopkins University vaccine tracker estimates the fully vaccinated rate at 58.36% of the population.

The government hopes to fully vaccinate 77 million people by the end of March.

Nomura said it expects the central bank to continue focusing on growth and only start increasing rates by 25 basis points in the fourth quarter of 2021.

The BSP last week said it will continue to prioritize supporting economic growth, but will be ready to move in case there is need to respond to second-round effects of inflation manifested through fare hikes or wage increases.

Last year, the economy rebounded with a 5.6% growth following a record 9.6% contraction, which was the worst in Southeast Asia. — Luz Wendy T. Noble

BIR collects P44.6 billion from online retail sales, content creators in 2021

THE Bureau of Internal Revenue (BIR) said it collected P44.6 billion worth of tax from online content creators and retail sales by the end of 2021, BIR Assistant Commissioner Larry M. Barcelo said in a presentation at the House Ways and Means Committee hearing. 

“As early as 2013, the BIR issued a Revenue Memorandum Circular reiterating the taxpayer’s obligations for online business transactions,” Mr. Barcelo, who heads the bureau’s legal service, said.

The obligations include “registration, keeping the books of account, invoices, receipts, filing of tax returns and payment of taxes,” he added.

Other memorandum circulars outlined the rules for the registration of online businesses and the filing and paying of taxes, he added.

Mr. Barcelo said 43 tax treaties currently govern the tax treatment of the Philippine operations of non-resident foreign corporations.

During the hearing, House Ways and Means Chairman and Albay Rep. Jose Ma. Clemente S. Salceda pushed the BIR to offer an online portal to allow overseas Filipino workers (OFWs) to more easily apply for Taxpayer Identification Number (TIN).

“The committee would like to seek the expedition or the action of the BIR on the online portal for the OFW TIN application and issuance,” Mr. Salceda said. “Even the PSA can issue a birth certificate online. That’s even more critical (than the TIN).”

“We will consider the digital portal for the OFWs. It will be part of our digital transformation program,” Mr. Barcelo said. — Jaspearl Emerald G. Tan

Complaints against online sellers decline in 2021

COMPLAINTS against online businesses have declined after the easing of quarantine restrictions, which allowed sellers to normalize their operations, the Department of Trade and Industry (DTI) said.

Trade Undersecretary Ruth B. Castelo said in a virtual briefing on Monday that the DTI received around 12,000 complaints involving online transactions in 2021, lower than the 16,000 complaints logged in 2020.

In the first two months of 2022, the DTI received 2,059 complaints involving online transactions, she said.

Ms. Castelo said the top three online platforms were Lazada, Shopee, and Zalora.

“In 2020, the online platforms couldn’t deliver because of the lockdowns. They didn’t have personnel going to work. The consumer complaints really rose in 2020. For 2021, the complaints declined. The online platforms were able to normalize operations especially because we also considered, in DTI, that online platforms are also selling essential goods. They also sell food, clothing, and grocery items,” Ms. Castelo said.  

Ms. Castelo said more employees of online platforms returned to work, which allowed for the faster resolution of complaints. She added that consumers have also grown more knowledgeable about e-commerce since the start of the pandemic.

“We hope the number of complaints goes down in 2022 from 12,000 last year. We will continue to provide consumer education,” Ms. Castelo said.

The DTI also warned online businesses against selling prohibited and unlicensed products over digital platforms.

Ms. Castelo said Joint Administrative Order (JAO) No. 22-01 was signed on March 4, directing online platforms to verify whether products sold by their merchants are licensed and regulated.

Under the JAO, all digital platforms are provided a three-day “safe harbor” period, during which they may take down an online post that has been flagged for violating the law.

“In case of a prima facie violation of any pertinent laws or regulations committed in an online post by the online seller or merchant, e-retailer, e-commerce platform, e-marketplace, and the like, the concerned authorized agency shall issue a notice giving the violator a maximum period of three calendar days from receipt thereof, within which to take down such post, without prejudice to the filing of appropriate administrative actions all violators,” the JAO said.

“Failure to enact, or strictly enforce, such internal mechanisms or rules shall be construed as an intentional and overt act that shall aggravate the offense charged,” it added.

Ms. Castelo said laws applicable to brick-and-mortar stores also cover online businesses.

“A price tag required to be pasted on items you buy in stores are also required to be pasted on the products that you buy online or through published price list. Buyers no longer have to ask for the price from the seller, who will almost always say that a private message is sent. This is a clear violation of the Price Tag law,” Ms. Castelo said.

Signatories to the JAO include the DTI, the Departments of Health (DoH), Agriculture (DA), Environment and Natural Resources (DENR), the Intellectual Property Office of the Philippines (IPOPHL), and the National Privacy Commission (NPC). — Revin Mikhael D. Ochave

Shaking up the cross-border doctrine

Nothing lasts forever. Things can change for better or for worse. Right now various entities enjoying tax incentives might be left wondering about the state of Philippine tax law. Among the questions taxpayers may be asking is — Can we still enjoy what we are enjoying now?

One such change was heralded by Bureau of Internal Revenue (BIR) Revenue Memorandum Circular (RMC) No. 024-2022, particularly regarding the application of the cross-border doctrine for value-added tax (VAT) purposes.

CROSS-BORDER DOCTRINE
The Supreme Court has recognized that the sale and consumption of goods or services within a given freeport or ecozone shall be deemed constructive exportation and technical importation. This is because freeports and ecozones, as provided under the law, are to be managed as separate customs territories from the rest of the Philippines and, thus, for tax purposes, are effectively considered foreign territory.

The cross-border doctrine is rooted in the Omnibus Investments Code of 1987, which recognizes the existence of “constructive exportation,” wherein sales to export processing zones are also considered constructive importation. The cross-border doctrine mandates that no VAT be imposed to form part of the cost of the goods destined for consumption outside the territorial border of the taxing authority, which includes the constructive exportation pertaining to sales to export processing zones.

BASED ON RMC 024-2022
In RMC 24-2022, the cross-border doctrine was rendered ineffectual as applied to freeports and ecozones for VAT purposes. Only those goods and services that are directly and exclusively used in the registered project or activity of Registered Business Enterprises (RBEs) qualify as VAT zero-rated on local purchases.

Under the RMC, direct and exclusive use in the registered project or activity refers to those expenditures directly attributable to the registered project or activity without which the registered project or activity cannot be carried out. This excludes purchases used for administrative purposes. Activities for administrative purposes, including legal, accounting, and other similar services, are not considered expenses directly attributable to, and exclusively used in the registered project or activity. If goods and services used in both the registered activity and for administrative purposes cannot be determined, then the purchase of goods and services is subject to 12% VAT.

An example provided under RMC 24-2022 is the telecommunication expenses of registered enterprises in IT/BPO services, which may be treated as expenses covered by VAT zero-rating since they are directly and exclusively incurred due to the nature of the industry. However, if the telecommunication expense is for administration purposes, it will be subject to 12% VAT.

Since only goods and services that are directly and exclusively used in the registered project or activity are allowed for zero-rating, not all goods coming into, or services rendered within freeports and ecozones may be accorded VAT zero-rating. In addition, the sale of goods or services to a registered domestic market enterprise is subject to 12% VAT.

Mere registration as an RBE will not automatically make its local purchases of goods and services qualify for VAT zero-rating following the cross-border doctrine. Thus, ecozone entities, such as RBEs, should classify their purchases from local suppliers, or determine whether the transaction is directly and exclusively used in the registered project or activity.

WHAT CAN TAXPAYERS DO?
In the meantime, it is highly recommended that taxpayers, especially RBEs, read RMC 024-2022 in its entirety. By understanding the RMC, the taxpayers can anticipate how the BIR would react and proceed. More importantly, taxpayers must take special note of the transitory provisions under the RMC.

In the discussion of the transitory provisions, for example, RMC 024-2022 took note of the retroactivity of Revenue Regulations (RR) 21-2021. Under RR 21-2021, taxpayers will be able to reclassify their sales to registered export enterprises, from being subject to 12% VAT to being considered zero-rated by virtue of the retroactive application of the issuance. The BIR considered the retroactivity to be justified as it is beneficial to the taxpayers affected.

Another clarification discussed by RMC 024-2022 is the treatment of VAT which had already been billed and/or collected that transpired during the effectivity of RR 09-2021, which is affected by the retroactivity of RR 21-2021. RMC 024-2022 holds that the seller can still opt to declare the sales to registered export enterprises as subject to 12% VAT. In this case, the VAT-registered buyer may utilize the passed-on VAT as input tax which may be credited against the output tax, or if the buyer is engaged in VAT zero-rated sales, the same can be recovered through VAT refund. If the buyer is not VAT-registered, then the VAT paid may be claimed as part of the cost of sales or expenses.

The seller can also revert the transaction from being subject to 12% VAT to VAT zero-rated by amending the filed VAT return after reimbursing/returning the VAT paid by the registered export enterprise buyer. If there is a resulting overpayment due to unutilized input tax credits, it may be recovered through VAT refund inasmuch as the corresponding sale is reverted to VAT zero-rated.

The above are just some of the rules to be observed in the application of RMC 024-2022.

While time-tested rules and procedures, such as the cross-border doctrine, are affected by RMC 024-2022, it is worth noting again that nothing is permanent. Given the tumultuous situation everyone is facing due to the two-year pandemic, the increase in gas prices, or even the threat of a nuclear war between global superpowers, a change in tax rules and principles may seem minor by comparison, but make no mistake, such a change is undoubtedly significant for many businesses.

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.

 

John Patrick L. Paumig is a senior associate from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Brady ends retirement, says he will play for Tampa next season

TOM BRADY — REUTERS

SEVEN-TIME Super Bowl winning quarterback Tom Brady abruptly said he would end his brief retirement on Sunday, announcing his return to the Tampa Bay Buccaneers for a 23rd National Football League (NFL) season just six weeks after hanging up his cleats.

Brady, who had established himself as one of the greatest players in league history, stunned the sporting world with the unexpected about face.

“These past two months, I’ve realized my place is still on the field and not in the stands,” said Brady on his official Twitter account. “That time will come. But it’s not now. I love my teammates, and I love my supportive family.

“They make it all possible. I’m coming back for my 23rd season in Tampa. Unfinished business LFG.”

Shortly after Brady made his announcement the Buccaneers reacted with their own message on Twitter: “He’s baaackkkk,” the team said with a video of the quarterback taking the field.

The NFL echoed that sentiment, tweeting a photo of a smiling Brady with the caption “He’s back.”

Tampa head coach Bruce Arians said he was “ecstatic” about the development.

“As Tom said, his place right now is on the football field,” Arians said. “He is still playing at a championship level and was as productive as anyone in the league last season.”

Perhaps Brady was inspired to make a comeback after watching another sporting great, Cristiano Ronaldo, score a hat trick in Manchester United’s 3-2 Premier League win on Saturday over Tottenham Hotspur at Old Trafford.

Brady walked onto the pitch to greet 37-year-old Ronaldo after the match, and a day later announced his return to the gridiron.

The 44-year-old Brady spent 20 seasons with the New England Patriots, winning six Super Bowls before moving to Tampa Bay and leading the Bucs to a championship in his first season with the team. — Reuters

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