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Vietnam reaches deals on tech transfers for Russian, US COVID-19 vaccines

HANOI — Vietnam has reached agreements on technology transfers for Russian and US coronavirus vaccines, the government said in a statement, without elaborating.

The Southeast Asian country is keen to boost its vaccine capacity and the World Health Organization said in May it was reviewing a proposal by an unidentified manufacturer in Vietnam to become an mRNA-based COVID-19 vac-cine technology hub.

Vietnam’s health ministry was also in talks with Russia to produce the Sputnik V COVID-19 vaccine, media has reported.

Tuesday’s statement also said Vietnam will receive 20 million more doses of the mRNA shot co-developed by US company Pfizer and Germany’s BioNTech, raising the total to 51 million doses.

After successfully containing the virus for much of the pandemic, Vietnam is facing its worst outbreak so far, with a surge in daily infections to record levels adding to pressure on the government to shore up supplies and accel-erate inoculations.

Up to now, Vietnam has secured deals for 105 million doses of vaccines and is in talks with other manufacturers on deals for a further 70 million shots, the government said, adding it hoped to receive the shots in 2021 and early 2022.

The Southeast Asian country has received around 10.6 million doses of vaccines, and is due to receive supplies of Moderna’s vaccine from the United States via the COVAX facility.

Vietnam has also asked China for doses of the Sinopharm vaccine, the government statement added.

Vietnam’s health ministry said the country’s home-grown vaccine, NanoCovax, was expected to be widely administered by the end of 2021.

To date around 4.3 million doses have been administered, but only about 310,000 people have been fully vaccinated out of a population of 98 million. — Reuters

Hong Kong’s first trial under national security hears closing arguments

HONG KONG – The trial of the first person charged under Hong Kong’s national security law is set to wrap up on Tuesday, with the defendant denied bail and a jury in a landmark case that critics say is a departure from common law.

Former waiter Tong Ying-kit, 24, has pleaded not guilty to charges of terrorism, inciting secession as well as an alternative charge of dangerous driving causing grievous bodily harm on July 1 last year, shortly after the law was enacted.

Hong Kong’s common law has traditionally allowed defendants to seek release unless prosecutors can show lawful grounds for their detention.

Under the new law, which some Western governments and rights groups say is being used to crush dissent in the global financial hub, the burden rests with the defendant to prove they will not break the law if released on bail.

The governments in Beijing and Hong Kong have said repeatedly the new law was necessary to bring stability to the former British colony after anti-government protests in 2019.

Tong’s trial is being presided over by three judges handpicked by Hong Kong’s pro-Beijing leader, Carrie Lam, to hear national security cases: Esther Toh, Anthea Pang and Wilson Chan. There is no jury.

Hong Kong’s Judiciary describes trial by jury as one of the most important features of the city’s legal system, a common law tradition designed to offer defendants additional protection against authorities’ overreaching their power.

Article 46 of the security law – drafted by Beijing, where courts are controlled by the Communist Party and conviction rates are close to 100% – states three instances in which juries can be scrapped: protecting state secrets, cases involving foreign forces and protecting jurors’ safety.

Tong, the first of more than 120 people arrested under the security law, is accused of driving his motorbike into officers at a rally while carrying a flag with the protest slogan “Liberate Hong Kong, Revolution of our times.”

The interpretation of the protest slogan is a key element of the trial. The government has said it suggests a call for independence, which would violate the security law. Defence lawyers argue it is a phrase with diverse meanings, including the desire for freedom and democracy.

Tong’s fate could signal how the courts will handle scores of other national security cases. – Reuters

Caught between China and the US, Asian countries stockpile powerful new missiles

SEOUL – Asia is sliding into a dangerous arms race as smaller nations that once stayed on the sidelines build arsenals of advanced long-range missiles, following in the footsteps of powerhouses China and the United States, analysts say.

China is mass producing its DF-26 – a multipurpose weapon with a range of up to 4,000 kilometers – while the United States is developing new weapons aimed at countering Beijing in the Pacific.

Other countries in the region are buying or developing their own new missiles, driven by security concerns over China and a desire to reduce their reliance on the United States.

Before the decade is out, Asia will be bristling with conventional missiles that fly farther and faster, hit harder, and are more sophisticated than ever before – a stark and dangerous change from recent years, analysts, diplomats, and military officials say.

“The missile landscape is changing in Asia, and it’s changing fast,” said David Santoro, president of the Pacific Forum.

Such weapons are increasingly affordable and accurate, and as some countries acquire them, their neighbors don’t want to be left behind, analysts said. Missiles provide strategic benefits such as deterring enemies and boosting leverage with allies, and can be a lucrative export.

The long-term implications are uncertain, and there is a slim chance that the new weapons could balance tensions and help maintain peace, Santoro said.

“More likely is that missile proliferation will fuel suspicions, trigger arms races, increase tensions, and ultimately cause crises and even wars,” he said.

HOMEGROWN MISSILES

According to unreleased 2021 military briefing documents reviewed by Reuters, U.S. Indo-Pacific Command (INDOPACOM) plans to deploy its new long-range weapons in “highly survivable, precision-strike networks along the First Island Chain,” which includes Japan, Taiwan, and other Pacific islands ringing the east coasts of China and Russia.

The new weapons include the Long-range Hypersonic Weapon (LRHW), a missile that can deliver a highly maneuverable warhead at more than five times the speed of sound to targets more than 2,775 kilometers (1,724 miles) away.

An INDOPACOM spokesman told Reuters that no decisions had been made as to where to deploy these weapons. So far, most American allies in the region have been hesitant to commit to hosting them. If based in Guam, a U.S. territory, the LRHW would be unable to hit mainland China.

Japan, home to more than 54,000 U.S. troops, could host some of the new missile batteries on its Okinawan islands, but the United States would probably have to withdraw other forces, a source familiar with Japanese government thinking said, speaking anonymously because of the sensitivity of the issue.

Allowing in American missiles – which the U.S. military will control – will also most likely bring an angry response from China, analysts said.

Some of America’s allies are developing their own arsenals. Australia recently announced it would spend $100 billion over 20 years developing advanced missiles.

“COVID and China have shown that depending on such extended global supply chains in times of crisis for key items – and in war, that includes advanced missiles – is a mistake, so it is sensible strategic thinking to have production capacity in Australia,” said Michael Shoebridge of the Australian Strategic Policy Institute.

Japan has spent millions on long range air-launched weapons, and is developing a new version of a truck-mounted anti-ship missile, the Type 12, with an expected range of 1,000 kilometres.

Among U.S. allies, South Korea fields the most robust domestic ballistic missile program, which got a boost from a recent agreement with Washington to drop bilateral limits on its capabilities. Its Hyunmoo-4 has an 800-kilometer range, giving it a reach well inside China.

“When the U.S. allies’ conventional long-range-strike capabilities grow, the chances of their employment in the event of a regional conflict also increase,” Zhao Tong, a strategic security expert in Beijing, wrote in a recent report.

Despite the concerns, Washington “will continue to encourage its allies and partners to invest in defence capabilities that are compatible with coordinated operations,” U.S. Representative Mike Rogers, ranking member of the House Armed Services Committee, told Reuters.

BLURRED LINES

Taiwan has not publicly announced a ballistic missile program, but in December the U.S. State Department approved its request to buy dozens of American short-range ballistic missiles. Officials say Taipei is mass producing weapons and developing cruise missiles such as the Yun Feng, which could strike as far as Beijing.

All this is aimed at “making the spines of (Taiwan’s) porcupine longer as the abilities of China’s military improve”, Wang Ting-yu, a senior lawmaker from the ruling Democratic Progressive Party, told Reuters, while insisting that the island’s missiles were not meant to strike deep in China.

One diplomatic source in Taipei said Taiwan’s armed forces, traditionally focused on defending the island and warding off a Chinese invasion, are beginning to look more offensive.

“The line between defensive and offensive nature of the weapons is getting thinner and thinner,” the diplomat added.

South Korea has been in a heated missile race with North Korea. The North recently tested what appeared to be an improved version of its proven KN-23 missile with a 2.5-ton warhead that analysts say is aimed at besting the 2-ton warhead on the Hyunmoo-4.

“While North Korea still appears to be the primary driver behind South Korea’s missile expansion, Seoul is pursuing systems with ranges beyond what is necessary to counter North Korea,” said Kelsey Davenport, director for nonproliferation policy at the Arms Control Association in Washington.

As proliferation accelerates, analysts say the most worrisome missiles are those that can carry either conventional or nuclear warheads. China, North Korea and the United States all field such weapons.

“It is difficult, if not impossible, to determine if a ballistic missile is armed with a conventional or nuclear warhead until it reaches the target,” Davenport said. As the number of such weapons increases, “there is an increased risk of inadvertent escalation to a nuclear strike.” — Reuters

Taiwan to open representative office in China sceptic Lithuania

TAIPEI – Taiwan announced on Tuesday that it will open a de facto embassy in the Baltic country of Lithuania, which risks further straining ties with Beijing by deepening diplomatic engagement with an island that China considers its own territory.

Lithuania said earlier this year it plans to open its own representative office in Taiwan, a decision that angered Beijing. The country announced last month it would also donate 20,000 COVID-19 vaccine doses to Taiwan.

Taiwan Foreign Minister Joseph Wu told reporters in Taipei the new mission in Vilnius would be called the Taiwanese Representative Office in Lithuania, though he did not say when it would open.

“Taiwan and Lithuania are both at the strategic forefront of defending democratic institutions,” Wu said.

“I believe that through the close connection of shared values, the two countries’ peoples can work together to play a positive role in the international community and contribute to world peace, stability and prosperity.”

The United States welcomed the move, with its de facto embassy in Taiwan saying: “All countries should be free to pursue closer ties and greater cooperation with Taiwan, a leading democracy​, a major economy, and a force for good in the world”.

Only 15 countries have formal diplomatic ties with Taiwan, but many others have de facto embassies which are often termed trade offices, as is the case for the European Union, of which Lithuania is a member state.

China has ramped up pressure on countries not to engage with Taiwan.

In February, the South American country of Guyana revoked a deal for Taiwan to open a representative office there only a day after Taipei had announced it. Taiwan blamed Chinese “bullying” for the decision.

Lithuania has been sceptical of other aspects of Beijing’s policies, and appeared to signal its concerns by only sending its transport minister, rather than a government leader, to a summit with Chinese President Xi Jinping and central and eastern European countries in February. – Reuters

U.S. and allies accuse China of global hacking spree

WASHINGTON – The United States and its allies accused China on Monday of a global cyberespionage campaign, mustering an unusually broad coalition of countries to publicly call out Beijing for hacking.

The United States was joined by NATO, the European Union, Australia, Britain, Canada, Japan and New Zealand in condemning the spying, which U.S. Secretary of State Antony Blinken said posed “a major threat to our economic and national security.”

Simultaneously, the U.S. Department of Justice charged four Chinese nationals – three security officials and one contract hacker – with targeting dozens of companies, universities and government agencies in the United States and abroad.

A spokesperson for the Chinese Embassy in Washington, Liu Pengyu, called the accusations against China “irresponsible.”

“The Chinese government and relevant personnel never engage in cyber attacks or cyber theft,” Liu said in a statement.

At an event about the administration’s infrastructure plan, U.S. President Joe Biden told reporters: “My understanding is that the Chinese government, not unlike the Russian government, is not doing this themselves, but are protecting those who are doing it. And maybe even accommodating them being able to do it.”

White House spokeswoman Jen Psaki was later asked at her daily briefing why Biden did not directly blame the Chinese government in his response to a reporter’s question.

“That was not the intention he was trying to project. He takes malicious cyber activity incredibly seriously,” Psaki said.

Psaki also said the White House does not differentiate between Russia and China when it comes to cyber attacks.

“We are not holding back, we are not allowing any economic circumstance or consideration to prevent us from taking actions … also we reserve the option to take additional action,” she said.

While a flurry of statements from Western powers represents a broad alliance, cyber experts said the lack of consequences for China beyond the U.S. indictment was conspicuous. Just a month ago, summit statements by G7 and NATO warned China and said it posed threats to the international order.

Adam Segal, a cybersecurity expert at the Council on Foreign Relations in New York, called Monday’s announcement a “successful effort to get friends and allies to attribute the action to Beijing, but not very useful without any concrete follow-up.”

 

SOME CIRCUMSPECT STATEMENTS

Some of Monday’s statements even seemed to pull punches. While Washington and its close allies such as the United Kingdom and Canada held the Chinese state directly responsible for the hacking, others were more circumspect.

NATO merely said that its members “acknowledge” the allegations being leveled against Beijing by the U.S., Canada, and the UK. The European Union said it was urging Chinese officials to rein in “malicious cyber activities undertaken from its territory” – a statement that left open the possibility that the Chinese government was itself innocent of directing the espionage.

The United States was much more specific, formally attributing intrusions such as the one that affected servers running Microsoft Exchange earlier this year to hackers affiliated with China’s Ministry of State Security. Microsoft had already blamed China.

U.S. officials said the scope and scale of hacking attributed to China had surprised them, along with China’s use of “criminal contract hackers” who Blinken said carry out both state-sponsored activities and cybercrime for their own financial gain.

U.S. security and intelligence agencies outlined more than 50 techniques and procedures that “China state-sponsored actors” use against U.S. networks, a senior administration official said.

Washington in recent months have accused Russian hackers of a string of ransomware attacks in the United States.

The senior administration official said U.S. concerns about Chinese cyber activities have been raised with senior Chinese officials, and further action to hold China accountable was not being ruled out.

The United States and China have already been at loggerheads over trade, China’s military buildup, disputes about the South China Sea, a crackdown on democracy activists in Hong Kong and treatment of the Uyghurs in the Xinjiang region.

Blinken cited the Justice Department indictments as an example of how the United States will impose consequences.

The defendants and officials in the Hainan State Security Department, a regional state security office, tried to hide the Chinese government’s role in the information theft by using a front company, according to the indictment.

The campaign targeted trade secrets in industries including aviation, defense, education, government, healthcare, biopharmaceutical and maritime industries, the Justice Department said.

Victims were in Austria, Cambodia, Canada, Germany, Indonesia, Malaysia, Norway, Saudi Arabia, South Africa, Switzerland, the United Kingdom and the United States.

“These criminal charges once again highlight that China continues to use cyber-enabled attacks to steal what other countries make, in flagrant disregard of its bilateral and multilateral commitments,” Deputy U.S. Attorney General Lisa Monaco said in the statement. – Reuters

Caught between China and the US, Asian countries stockpile powerful new missiles

SEOUL – Asia is sliding into a dangerous arms race as smaller nations that once stayed on the sidelines build arsenals of advanced long-range missiles, following in the footsteps of powerhouses China and the United States, analysts say.

China is mass producing its DF-26 – a multipurpose weapon with a range of up to 4,000 kilometers – while the United States is developing new weapons aimed at countering Beijing in the Pacific.

Other countries in the region are buying or developing their own new missiles, driven by security concerns over China and a desire to reduce their reliance on the United States.

Before the decade is out, Asia will be bristling with conventional missiles that fly farther and faster, hit harder, and are more sophisticated than ever before – a stark and dangerous change from recent years, analysts, diplomats, and military officials say.

“The missile landscape is changing in Asia, and it’s changing fast,” said David Santoro, president of the Pacific Forum.

Such weapons are increasingly affordable and accurate, and as some countries acquire them, their neighbors don’t want to be left behind, analysts said. Missiles provide strategic benefits such as deterring enemies and boosting leverage with allies, and can be a lucrative export.

The long-term implications are uncertain, and there is a slim chance that the new weapons could balance tensions and help maintain peace, Santoro said.

“More likely is that missile proliferation will fuel suspicions, trigger arms races, increase tensions, and ultimately cause crises and even wars,” he said.

 

HOMEGROWN MISSILES

According to unreleased 2021 military briefing documents reviewed by Reuters, U.S. Indo-Pacific Command (INDOPACOM) plans to deploy its new long-range weapons in “highly survivable, precision-strike networks along the First Island Chain,” which includes Japan, Taiwan, and other Pacific islands ringing the east coasts of China and Russia.

The new weapons include the Long-range Hypersonic Weapon (LRHW), a missile that can deliver a highly maneuverable warhead at more than five times the speed of sound to targets more than 2,775 kilometers (1,724 miles) away.

An INDOPACOM spokesman told Reuters that no decisions had been made as to where to deploy these weapons. So far, most American allies in the region have been hesitant to commit to hosting them. If based in Guam, a U.S. territory, the LRHW would be unable to hit mainland China.

Japan, home to more than 54,000 U.S. troops, could host some of the new missile batteries on its Okinawan islands, but the United States would probably have to withdraw other forces, a source familiar with Japanese government thinking said, speaking anonymously because of the sensitivity of the issue.

Allowing in American missiles – which the U.S. military will control – will also most likely bring an angry response from China, analysts said.

Some of America’s allies are developing their own arsenals. Australia recently announced it would spend $100 billion over 20 years developing advanced missiles.

“COVID and China have shown that depending on such extended global supply chains in times of crisis for key items – and in war, that includes advanced missiles – is a mistake, so it is sensible strategic thinking to have production capacity in Australia,” said Michael Shoebridge of the Australian Strategic Policy Institute.

Japan has spent millions on long range air-launched weapons, and is developing a new version of a truck-mounted anti-ship missile, the Type 12, with an expected range of 1,000 kilometres.

Among U.S. allies, South Korea fields the most robust domestic ballistic missile program, which got a boost from a recent agreement with Washington to drop bilateral limits on its capabilities. Its Hyunmoo-4 has an 800-kilometer range, giving it a reach well inside China.

“When the U.S. allies’ conventional long-range-strike capabilities grow, the chances of their employment in the event of a regional conflict also increase,” Zhao Tong, a strategic security expert in Beijing, wrote in a recent report.

Despite the concerns, Washington “will continue to encourage its allies and partners to invest in defence capabilities that are compatible with coordinated operations,” U.S. Representative Mike Rogers, ranking member of the House Armed Services Committee, told Reuters.

 

BLURRED LINES

Taiwan has not publicly announced a ballistic missile program, but in December the U.S. State Department approved its request to buy dozens of American short-range ballistic missiles. Officials say Taipei is mass producing weapons and developing cruise missiles such as the Yun Feng, which could strike as far as Beijing.

All this is aimed at “making the spines of (Taiwan’s) porcupine longer as the abilities of China’s military improve”, Wang Ting-yu, a senior lawmaker from the ruling Democratic Progressive Party, told Reuters, while insisting that the island’s missiles were not meant to strike deep in China.

One diplomatic source in Taipei said Taiwan’s armed forces, traditionally focused on defending the island and warding off a Chinese invasion, are beginning to look more offensive.

“The line between defensive and offensive nature of the weapons is getting thinner and thinner,” the diplomat added.

South Korea has been in a heated missile race with North Korea. The North recently tested what appeared to be an improved version of its proven KN-23 missile with a 2.5-ton warhead that analysts say is aimed at besting the 2-ton warhead on the Hyunmoo-4.

“While North Korea still appears to be the primary driver behind South Korea’s missile expansion, Seoul is pursuing systems with ranges beyond what is necessary to counter North Korea,” said Kelsey Davenport, director for nonproliferation policy at the Arms Control Association in Washington.

As proliferation accelerates, analysts say the most worrisome missiles are those that can carry either conventional or nuclear warheads. China, North Korea and the United States all field such weapons.

“It is difficult, if not impossible, to determine if a ballistic missile is armed with a conventional or nuclear warhead until it reaches the target,” Davenport said. As the number of such weapons increases, “there is an increased risk of inadvertent escalation to a nuclear strike.” – Reuters

US Defense secretary to visit Philippines, Singapore, Vietnam

PIXABAY

WASHINGTON – U.S. Defense Secretary Lloyd Austin will visit Southeast Asia later this month, the Pentagon said, a trip that will include stops in the Philippines, Singapore and Vietnam, according to the U.S. embassy in Hanoi.

“Secretary Austin’s visit will demonstrate the importance the Biden-Harris Administration places on Southeast Asia and on ASEAN as an essential part of the Indo-Pacific’s architecture,” Pentagon spokesman John Kirby said, referring to the Association of Southeast Asian Nations bloc.

The U.S. embassy in Hanoi said on Tuesday that Austin’s trip would start on July 23.

“This trip will underscore the enduring U.S. commitment to the region, and our interest in upholding the rules-based international order in the region and promoting ASEAN centrality,” the embassy said in a Facebook post.

The United States under President Joe Biden is looking to reinforce the need for a U.S. role in a region where China has sizeable influence as the dominant trade partner, but testy relationships as a result of its military activities in the South China Sea.

Austin has been to preserve decades-old military ties with the Philippines, a defense treaty partner, after repeated threats to downgrade the alliance by its largely pro-China President Rodrigo Duterte, whose term ends next year. — Reuters

Driven by fear, Filipinos saving more to prepare for COVID-19 risks — survey

Driven mostly by fear and insecurity, 77% of Filipino survey respondents said they plan to save more because of the coronavirus disease 2019 (COVID-19) pandemic. A majority of these (or 94% of 800 respondents) prefer low-interest bank deposits — prompting AIA Group Limited, the parent company of insurer AIA Philam Life, to say that Filipinos “could be saving smarter.”

The Save Smarter Study 2021, conducted by AIA Group Limited, showed that 53% of Filipinos increased their savings by up to 50% in 2021; and 29% have said that they list out their savings goals and put aside savings to meet them, higher than the 25% average of other markets. 

According to AIA, this discipline in saving isn’t optimized as the “low bank interest environment threatens to depreciate savings with by far the most popular place to save being the bank with 91% using demand deposits and a massive 40% having no other form of savings at all.”

For Filipinos, the main motivation for saving is to manage uncertainties due to COVID-19, with 72% of respondents saying they put aside money for emergency spending; 65%, for financial security in case of misfortune; and 62%, for medical expenses 

“With the valuable insights we’ve gathered on Filipinos’ views on savings during the pandemic, we have very clear indications on what our customers need,” said AIA Philam Life Chief Executive Officer Kelvin Ang in a press release. “This ensures we are able to provide them the best product options that will help them live healthier, longer, better lives.” 

The pandemic has also led to a stronger interest in insurance, with three-fourths of Filipinos surveyed agreeing that insurance is needed for protection in case of unexpected incidents. Of those planning to raise spending on insurance, 80% intend to spend more on life insurance and 60% said they plan to spend more on medical and health insurance. 

The AIA Future Builder plan, the latest addition to AIA Philam Life’s portfolio, addresses the concerns revealed by the study. 

It comes with basic insurance protection for life, total permanent disability, and personal accidents as well as additional benefits through riders. It also allows the diversification of investments through either locally or globally managed funds. 

The Save Smarter Study 2021 surveyed 7,400 insurance consumers over 25 years old across eight Asian markets including the Philippines. In the region, preparing for emergency spending emerged as the top savings goal (64%), followed by guaranteeing financial security (60%), and coverage for medical expenses (54%). — Brontë H. Lacsamana

Synergy Grid & Development Phils., Inc. announces schedule of stockholders’ meeting

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DBCC keeps economic growth target

PHILIPPINE STAR/ MICHAEL VARCAS

By Beatrice M. Laforga, Reporter

THE GOVERNMENT retained its economic growth projection for this year, citing the drop in the number of new coronavirus disease 2019 (COVID-19) cases and the gradual reopening of the economy.

In a special meeting on Monday, the interagency Development Budget Coordination Committee (DBCC) maintained its gross domestic product (GDP) growth targets of 6-7% for 2021. The GDP targets for the next three years were also left unchanged at 7-9% for 2022, and 6-7% for 2023 to 2024.

“The DBCC is optimistic that the country’s GDP may return to its pre-pandemic levels as early as 2022,” the economic team said, adding the growth projections will be reviewed after the release of the second quarter economic data in August.

The government will continue to push for the “gradual and safe” reopening of the economy, alongside the full vaccination of residents in high-risk areas, the DBCC said.

It also emphasized the need to boost health capacity and prevent community transmission of the more contagious Delta variant.

The Health department on Monday reported 5,651 new COVID-19 cases, bringing active cases to 47,561.

“The relaxation of quarantine restrictions in high-risk areas must be complemented with an accelerated vaccination rollout, in order to allow more businesses to operate and consumers to participate in socioeconomic activities,” the DBCC said.

At the same time, the DBCC raised its export growth projection on the faster-than-expected global recovery, while lowering the budget deficit ceiling for the medium term as part of its fiscal consolidation program.

The DBCC increased the growth target for goods exports to 10% this year from the 8% it projected during the previous May 18 meeting, and maintained the 6% annual growth forecasts for 2022-2024.

Services exports are also expected to grow by 7% in 2022, higher than the previous 6% annual increase from 2021 to 2024.

“The projection was adjusted [for goods exports] following the expected recovery in external demand. Meanwhile, the outlook for the growth of services exports in 2022 was revised in line with the projected improvements in travel and BPO (business process outsourcing) receipts due to the gradual reopening of the economy,” the DBCC said.

The DBCC maintained its revenue projections for 2021-2024 and the estimated spending plans for 2021-2022. It lowered the spending forecast for 2023-2024 due to the revised estimates on the share of local government units from national taxes.

The economic team also reduced the projected spending for 2023 to P5.02 trillion from P5.11 trillion previously, while the forecast for the 2024 disbursements was also trimmed to P5.3 trillion from P5.4 trillion.

The infrastructure spending program was increased to P1.29 trillion for 2022, from P1.25 trillion penciled in last May.

The spending plan for infrastructure was also hiked to P1.28 trillion in 2023 and P1.35 trillion in 2024, from the previous estimates worth P1.28 trillion and P1.32 trillion, respectively.

“The infrastructure program will average 5.4% of GDP over the next three years,” it said.

Lowered spending targets will result in narrower budget deficits for the medium term, but the 9.3% of GDP cap set for 2021 was kept.

The DBCC cut its deficit ceiling to 7.5% of GDP in 2022 from the 7.7% ratio it adopted in May. It also lowered the threshold to 5.9% (from 6.4%) in 2023 and 4.9% (from 5.4%) in 2024.

“This fiscal consolidation strategy will continuously be adopted by the government to ensure fiscal sustainability over the medium-term and to bring back the country’s deficit to pre-pandemic levels,” it said.

Economic bills move to front burner in Senate

PHILIPPINE STAR/ MIGUEL DE GUZMAN

By Kyle Aristophere T. Atienza, Reporter

THREE MEASURES aimed at relaxing foreign investment restrictions in the country are expected to be approved by the Senate next month.

Senate Majority Leader Juan Miguel F. Zubiri told a televised news briefing that the proposals amending the Public Service Act, Foreign Investments Act and the Retail Trade Liberalization Act would be prioritized when Congress’ third and final session opens on July 26.

The three measures have all been certified by President Rodrigo R. Duterte as urgent, and are part of a list of priority bills being pushed by business groups and foreign chambers.

“’Yan ay aming matatapos by next month. ’Yan ay ang aming pangako sa ating mahal na Pangulo (Those are what we will finish by next month. That is our promise to the President),” he said.

The bill amending Commonwealth Act No. 146, otherwise known as the Public Service Act, is still up for second reading at the Senate.

Also, up for second reading is the measure seeking to amend the country’s foreign investment law to relax restrictions on foreign companies.

The bill lowering the required paid-up capital for foreign retail enterprises was already approved on third and final reading at the Senate. This measure has yet to be finalized by the Bicameral Conference Committee, Mr. Zubiri said separately in a Viber message.

The Senate is also committed to approving the bill creating a separate department for migrant Filipino workers “by August or September,” Mr. Zubiri added.

However, the Senate has yet to decide on whether or not it will push for the third stimulus package, which was earlier approved by the House of Representatives.

Tinitignan lang po namin ang fiscal capacity ng bansa at pag-uusapan naman ito (Bayanihan III) next week, right after the State of the Nation Address (SONA) of the President,” Mr. Zubiri said, who personally expressed support for the measure.

Bayanihan III will be discussed in a Senate caucus on July 27, Mr. Zubiri said.

Presidential Spokesperson Herminio “Harry” L. Roque, Jr. maintained that the government needs to know first whether or not the funds under the previous Bayanihan measures were fully utilized.

Ang atin lang gustong malaman ay kung sapat na ba ’yung pondo na nasa 2021 budget at 2020 budget, at ’yung isyu na kung mayroon ba talagang di nagasta sa Bayanihan II,” he told a televised news briefing. “Kung mayroon po, that would show na baka hindi kailangan ng Bayanihan III (If there are unused funds, that would show that maybe there is no need for Bayanihan III),” he told a televised news briefing.

At the same briefing, Mr. Roque said the proposed law seeking to end the end of contract (endo) schemes in the country remains a legislative priority and has been certified urgent by the President.

“We leave it to Congress, because unfortunately, no amount of certification can lead to an enactment of a law if the wisdom of Congress is otherwise,” Mr. Roque said. “We continue to appeal to the Congress to pass this anti-endo bill as the term of the President ends.”

In 2019, Mr. Duterte vetoed a similar bill that would have protected workers from labor contracting practices, saying the measure does not strike a balance between the welfare of employees and the interest of employers.

REQUESTS
In a statement sent to BusinessWorld, Mr. Zubiri said the proposed law postponing the Bangsamoro regular elections is also set to be approved by the Senate in the next two months.

Civic group One Bangsamoro Movement asked the Congress to ensure the passage of the bill “before the filing of certification of candidacy for 2022 national elections.”

“While we respect its legislative plenary power, we strongly urge the both houses of Congress to pass the said bill that is faithful and consistent with the Comprehensive Agreement on the Bangsamoro,” it said in a statement. “Giving extra to the Bangsamoro Transition will fully address the historical injustices and will give meaning to genuine peace in Mindanao.”

Mr. Zubiri said the proposed Bureau of Fire Protection Modernization Act, Rural Agricultural and Fisheries Development Financing Systems Act, Increasing Statutory Rape Age Act, Military and Uniformed Personnel Insurance Fund Act, Philippine Center for Disease Control and Prevention Act, among others, will be prioritized for approval.

“The Senators will listen intently to the President’s remaining legislative requests and discuss it amongst ourselves in a Caucus that we traditionally call for the day after the SONA,” Mr. Zubiri said.

Albay Rep. and House Ways and Means Chair Jose Maria Clemente S. Salceda, meanwhile, urged the Congress to ensure the quick passage of the 2022 national budget.

“If we are to legislate the rest of President Duterte’s fiscal and economic reforms, we also need to enact the 2022 budget early,” he said separately. “That gives us time to discuss and approve other measures.”

Mr. Salceda said the Ways and Means Committee still has to tackle measures such as the creation of a fiscal regime for the mining industry, proposed Ease of Paying Taxes Act, proposed motor vehicle taxes and proposed excise tax on single-use plastics.

Tax perks for ‘favored’ firms hit P482 billion before the pandemic

REUTERS

AROUND P481.7 billion in fiscal incentives were granted by the government in 2019 to “favored” firms, majority of which are in the manufacturing sector, the Finance department said on Monday.

While the amount is 7% lower than the P518.7 billion in tax perks given in 2018, the foregone revenues are expected to further drop as fiscal and non-fiscal incentives have been rationalized after the enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law.

“Under CREATE, the grant and administration of incentives have been rationalized to ensure that the perks received by registered enterprises are benefiting the economy,” the Department of Finance (DoF) said in a statement.

The DoF-Domestic Finance Group report showed 58.8% or P283.45 billion were foregone revenues from incentives for value-added tax (VAT), while 31% or P149.28 billion were in the form of income tax perks.

The government also granted P47.59 billion worth of exemptions from customs duties and P1.38 billion in percentage tax incentives to cooperatives.

Based on the type of incentives, the income tax perks given in 2019 included P68.4 billion in income tax holiday, P66.4 billion in special income tax for companies registered with investment promotion agencies (IPAs), and P14.47 billion in fiscal perks for cooperatives.

The DoF study covered tax returns of 11,431 companies, of which 5,749 are firms registered with IPA while 5,682 were cooperatives.

There were 4,371 cooperatives and 3,083 IPA-registered firms that received income tax incentives.

Manufacturing firms received P321.3 billion or 66.7% of the total tax perks extended in 2019, followed by services sector with P114.8 billion, and power companies with P26.4 billion.

Tax perks to companies in other sectors such as agriculture reached P19.24 billion.

DoF has long argued that the government was giving away tax perks to companies “indiscriminately and indefinitely,” which resulted in massive revenue losses for the state.

President Rodrigo R. Duterte signed Republic Act No. 11534 or CREATE Act on March 26 which lowered the corporate income tax and modernized the country’s tax incentive system. Economic managers said the law now makes fiscal perks time-bound, performance-based and transparent.

The law’s immediate impact will be coming from the lower corporate income tax rate, not fiscal incentives, Finance Assistant Secretary Maria Teresa S. Habitan said in a Viber message.

CREATE slashed the corporate income tax to 25% from 30% starting July 2020, to be followed by a one-percentage-point cut annually from 2023 until it reaches 20% in 2027. An outright reduction to 20% was implemented for local small companies.

The DoF had estimated CREATE will result in P1 trillion worth of tax relief for the next 10 years. Tax savings enjoyed by firms are expected to be reinvested in order to create jobs.

The law also strengthened the oversight power of the Fiscal Incentives Review Board (FIRB) to monitor if the fiscal perks are given to deserving companies.

The law forms part of the comprehensive tax reform program of the Duterte administration. — Beatrice M. Laforga