Musk faces reckoning over old tweet in labor violation dispute

February 4, 2022 | 12:02 am

ONE of Elon Musk’s freewheeling tweets from the past came back to haunt him as a three-judge panel questioned whether the Tesla, Inc. chief threatened workers with the loss of stock options if they formed a union.

Tesla in March appealed an order by the National Labor Relations Board (NLRB) that Musk delete his May 2018 tweet that said: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues and give up stock options for nothing?”

It’s not Musk’s first court fight over whether he crossed a line on social media. A showdown with the US Securities and Exchange Commission following other controversial tweets in 2018 got him and Tesla socked with $40 million in fines and led to an agreement that Musk wouldn’t communicate about specific topics without advance approval from a Tesla lawyer.

One judge said during a hearing Wednesday in a New Orleans-based federal appeals court that the Labor board wasn’t “completely out of line,” as Musk’s tweet could be interpreted as a message that “the price you will have to pay if you unionize, is you’ll give up your stock options.”

Tesla attorney David Salmons argued that the constitutional right to free speech under the First Amendment “protects an employer’s robust speech about the downsides to unionization.” Taken in context, the tweet is really a “statement about what the union, not the company, will or will not do,” Salmons said.

There was also debate about Musk’s response on May 22, 2018, two days after his original post, when a Twitter user asked if he was threatening to take away stock options.

Salmons said Musk’s follow-up tweet “disclaimed any unilateral company actions that could constitute a threat.”

But another judge suggested that Musk’s later tweet may have been too slow to walk back his original message. “That one tweet is out there on its own, it went out instantly, right?”

Musk’s tweet was “a threat of retaliation, not a lawful expression of opinion,” Daniel Curry, a lawyer representing United Auto Workers, argued to the panel. The CEO’s subsequent message only sowed further confusion, Curry said. “The idea they’re putting out there that a union could take away an employee’s stock options just doesn’t fit with reality,” he said.

Micah Jost, who represents the NLRB, said the board “reasonably found” Musk’s tweet was unlawful. Tesla “tries to get around that by conflating all the statements together,” he told the judges.

The board’s ruling, issued by two Republican members and one Democratic member of the agency, addressed more than just Musk’s tweet.

The agency also ordered the company to offer to reinstate a union activist who was fired, and concluded Tesla broke the law by retaliating against another union activist, “coercively interrogating” union supporters and restricting employees from talking to reporters.

Tesla has denied wrongdoing and is also appealing those decisions.

The judges didn’t say when they’ll issue a ruling. Two of the three judges were appointed by Republican presidents. — Bloomberg

Entertainment News (02/04/22)

February 4, 2022 | 12:02 am

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Julius Babao joins Frontline Pilipinas on TV5

SEASONED news anchor and journalist Julius Babao has formally joined Frontline Pilipinas, a news program on TV5. A broadcast personality for over three decades, mostly with ABS-CBN, Mr. Babao will deliver the day’s top stories with fellow veteran anchor Cheryl Cosim. Mr. Babao will join the daily broadcast of Frontline Pilipinas on Feb. 7. The show airs daily at 5:30 p.m., live on TV5 and via livestream at the News 5 Facebook and YouTube pages.

Dexter Doria tackles fake news

AWARD-WINNING veteran actress Dexter Doria has ventured into vlogging as part of her efforts to tackle fake news and misinformation on social media. For the vlog called Didi Serye, Ms. Doria created the character “Nana Didi,” who worked as a public-school teacher for 43 years before retiring to take care of her grandchildren. Nana Didi decides to create a vlog after seeing the prevalence of misinformation on social media, including posts by her former students regarding topics such as the so-called Tallano gold and the “golden years of Martial Law.” Nana Didi also tackles confirmation bias and tells the public not to believe everything they read online, saying they first need to verify its veracity. Various artists have lauded and expressed support for Nana Didi by sharing her Didi Serye vlogs on their respective social media pages, including actresses Pinky Amador and Rita Avila, Arman Ferrer, Mark Escueta of Rivermaya, and actor Bart Guingona.

The Penthouse Season 3 airs on GMA

GMA Network brings back the top-rating K-drama, The Penthouse, which focuses on the lives of three women in a luxury high-rise apartment. Season 3 of the show will start airing on Feb. 7, 9:35 p.m., on GMA Telebabad. The final season — starring Lee Ji-ah, Kim So-yeon, and Eugene — continues to tell the story of wealthy families living in Hera Palace and their children at Cheong-ah Arts School. The final lap of greed, corruption, justice, and redemption is just beginning in Season 3.

Cinema One names first ‘Kusina Kween’

HOME COOK Irene Rose Ortega was hailed as the first “Kusina Kween” as her leveled-up mechado dish emerged as the winning entry in Cinema One’s cooking challenge last Christmas. Ms. Ortega made the dish special by incorporating cheesy white sauce and rice, calling it Cheesy Mechadito Rice Bake. “The Noche Buena Challenge’s” winning recipe is now up on the Cinema One YouTube channel. Meanwhile, Marie Reyes emerged as the first runner-up with her Seafood Paella con Bagnet; Maribeth Saporas won second runner-up with her Christmas EmBundtido Wreath with Orange Marmalade Sauce; and third runner-up was Christine Cruz who gave an English twist to the classic Pinoy dish caldereta with her Chicken Caldereta Shepherd’s Pie. Ms. Ortega took home P50,000 and a Kyowa air fryer oven for her win. Aside from having all their recipes aired on Cinema One on Jan. 30, the three runners up won Kyowa air fryer ovens as their consolation prize. Judges of Cinema One’s Kusina Kween: The Noche Buena Challenge included restaurateur and author chef Tatung Sarthou and recipe developer and food blogger Vanjo Merano of Panlasang Pinoy.

All of Us are Dead makes the Netflix TOP 10 list

AFTER its release on Netflix on Jan. 28, The Korean zombie adventure All of Us Are Dead soared to the Netflix Top 10 list (Non-English TV List) in 91 countries worldwide. Before its release, All of Us Are Dead received great interest from global audiences for the trailer, recording more than 16 million views in English-speaking countries. All of Us Are Dead is a Netflix Series about students trapped at a school overrun by a zombie virus. According to Netflix’s website www.top10.netflix.com, as of Feb. 2, All of Us Are Dead recorded approximately 124.79 million hours viewed within three days of its release and seized 1^st place on the Top 10 (Non-English TV) list in 29 countries, and was ranked in the Top 10 in succeeding days in an additional 62 countries, including the USA, Canada, Brazil, Greece, Russia, Spain, and Italy. All of Us Are Dead is streaming exclusively on Netflix.

Globe ties up with Soundcloud

GLOBE is opening the door to a larger and more diverse music library as it ties up with SoundCloud as its first exclusive telco partner in the Philippines. With this partnership, Globe customers can stream music from Soundcloud, the world’s largest catalogue of over 300 million tracks from emerging creators to global superstars. Customers can directly connect to SoundCloud through Globe’s prepaid promo Go+99 with GoLISTEN. For P99, prepaid subscribers can enjoy 8GB of data on SoundCloud and 8GB more on all other music streaming services. Creators can upload and share their audio on the platform. Registered creators without a paid subscription can upload up to 180 minutes of audio to their profile at no cost, while paying subscribers can enjoy 360 minutes of unlimited upload time. Postpaid subscribers and prepaid WiFi customers can have seamless and uninterrupted music sessions on SoundCloud through GPlan and HomeSURF, which have bigger data allocations for the app.

Love the focus for discovery+ February shows

DISCOVERY+ focuses on love this February with everything from a wedding to sexual mishaps. The 12 singles in the Korean reality show Strangers in Love each take their shot at romance as they go through seven rounds of missions in the hopes of finding the one. Meanwhile, home renovation show host Tarek El Moussa and fiancée Heather Rae Young plan for their wedding on Tarek and Heather: The Big I Do. Catch Sex Sent Me to the ER, now available on discovery+, for stories of sexual escapades gone wrong resulting in medical emergencies. Dive into the case of husband and wife Paul Bernardo and Karla Homolka in the Ken and Barbie Killers: The Lost Murder Tapes. Anni: The Honeymoon Murder delves into murder of the newlywed bride Anni Dewani in one of South Africa’s most infamous and mysterious crimes.

Noel Cabangon releases new EP

SINGER-songwriter Noel Cabangon has unveiled his latest four-track EP, Para Sa’yo on Spotify. The veteran singer-songwriter offers a collection of original songs that explore warmth and love. Mr. Cabangon rose to popularity with his breakout single “Kanlungan,” along with singles like “Kahit Maputi Na Ang Buhok Ko,” and “Di Na Natuto,” among many others. He has also collaborated with other OPM artists such as Aikee on the song “Pag-Ibig,” Leanne & Naara on “Habangbuhay,” and Moonstar88 on “Paasa.” Listen to Para Sa’yo at https://open.spotify.com/artist/2fonBGBLc7lUoikMqms5Zl?si=TewrP8WoQBiu7AgxPQ5z9w.

Shanti Dope releases new single

RAPPER Shanti Dope collaborated with Pricetagg on his new single, “Amen.” Alongside the single’s launch, Shanti Dope released its official music video, out now on the Universal Records Philippines’ YouTube channel (www.youtube.com/watch?v=–P3tfNwdEY). Directed by Jeremy Lim, the music video sees the two rappers as two Ilustrados from the Spanish colonial period. While performing their verses, they mingle with generals, along with fellow high-profile and educated Filipinos in a 19^th century-style banquet. “Amen” is available to stream on all digital streaming platforms.

Garrett Bolden releases new single

BALLADEER Garrett Bolden has released his self-penned single under GMA Music entitled “Pwede Pa Ba?,” which is now available on various digital platforms. The single immediately climbed to the third spot of iTunes PH when it was released on Jan. 28. “Pwede Pa Ba?” is Mr. Bolden’s first attempt to write a Filipino song. The Clash Season 1 alumnus has been tapped to sing the theme songs of various GMA dramas such as Agimat ng Agila, The World Between Us, and Stories from the Heart: Love on Air. “Pwede Na Ba?” is available to stream on Spotify, YouTube Music, iTunes, and other digital platforms worldwide.

The Chainsmokers releases new single

FOLLOWING a two-year break from touring and releasing music, Grammy Award-winning and Billboard Chart topping artist/producer duo The Chainsmokers have returned with a new single, “High.” The song, which was co-written and co-produced by band members Alex and Drew, is the first from their upcoming fourth full-length album. Over the last couple of years, the band took their time to write and record their fourth album, while also focusing on philanthropy and other entrepreneurial endeavors such as their venture fund, Mantis, and their TV/Film production company, Kick The Habit. “High” is available on all digital music platforms worldwide via Sony Music.

Inspire Sports Academy launches The Athletic Club

February 4, 2022 | 12:02 am

THE Inspire Sports Academy in Calamba, Laguna, which served as a bubble training hub for national and professional teams amid the pandemic, has opened up its facility for individual athletes with the launch of “The Athletic Club.”

Considered as one of the country’s all-around sports centers, INSPIRE boasts an array of premier facilities and high-end equipment fit for conditioning, skill training and all-out competition of budding athletes.

On top of those is the High-Performance Gym with in-house coaches to guide the athletes and a Hoops Center featuring two full-size FIBA-standard basketball courts and a 3×3 court.

An indoor running track, multi-sport facility and football pitch are also accessible and can be configured for different sports like volleyball, futsal, badminton and combat sports.

INSPIRE, which is set to open tennis courts, swimming pool and wellness center soon, also has a Dormitel for lodging amenities with 28 quad-sharing and 32 twin rooms.

The academy housed a series of bubble training camps for Gilas Pilipinas and PBA team TnT Tropang Giga aside from hosting competitions of the Chooks-to-Go Pilipinas 3×3.

It also served as home to the preparation of national athletes from different sports led by Tokyo Olympics silver medalist Nesthy A. Petecio of boxing.

Interested athletes and fitness enthusiasts may apply for The Athletic Club membership at ask@inspire-sportsacademy.com. — John Bryan Ulanday

DBP approves P2.5-B loan for mall project

February 4, 2022 | 12:02 am

DEVELOPMENT Bank of the Philippines (DBP) has approved P2.5 billion in credit for a company building a lifestyle and commercial mall in Caloocan City.

The loan will be extended to the Innov Block Development Corp. to help build The Limketkai Podium.

The shopping center will have space for 1,300 stalls run by micro, small-, and medium-sized enterprises (MSMEs).

Innov Block Development Corp. mostly works in real estate leasing. The company is a subsidiary of the Alfonso de Oro Corp.

“We have been continually supporting infrastructure projects that can help MSMEs join the mainstream of major economic activity in order to help them recover from the ill-effects of the pandemic,” DBP President and Chief Executive Officer Emmanuel G. Herbosa said.

He said the three-level shopping center will also provide jobs in the north Caloocan area.

The state-run bank provides credit in infrastructure and logistics, MSMEs, environment, and social services and community development.

Last month, DBP said that it extended a P700-million loan to an industrial park developer, Science Park of the Philippines, Inc., to finance projects as the manufacturing sector recovers.

The Science Park loan will partially finance land development, road construction, and water utilities projects, the bank had said.

The bank’s net income in the first quarter of 2021 fell by 62% year on year to P547.83 million as its operating expenses increased, a previous report showed. — J.P. Ibañez

Spectrum to install Ajinomoto’s solar power system

February 4, 2022 | 12:01 am

MSPECTRUM, Inc. said on Thursday it is set to install a 1,015.56 kilowatt-peak (kWp) solar photovoltaic (PV) system in Ajinomoto Philippines Corp.’s (APC) plant in Guiguinto, Bulacan.

“On February 3, Spectrum and APC Group held a ceremonial contract signing for this sustainability initiative that is expected to help APC Group achieve its goal to reduce its environmental impact by 50% while improving its business operations,” the unit of Manila Electric Co. said in a media release.

Renewable energy solutions provider MSpectrum, also known as Spectrum, said the solar PV system will allow APC to save P700,000 annually with its 1,331,500 kilowatt-hour generation capacity per year.

Once installed, APC will be able to reduce its carbon footprint by an estimated of 865 metric tons, which is equivalent to planting 1,950,523 trees or reducing 2,352,456 miles in vehicle travel per year, Spectrum said.

“APC Group considers this venture as a good investment in establishing a win-win solution as both our company and the Filipino society would benefit greatly from this endeavor. This is only the beginning of more developments in this area as we continue to expand our sustainability efforts,” APC President Tsutomu Nara said in a statement.

Spectrum said it offers “tailor-fit solutions for industrial, commercial, and residential customers through an in-depth understanding of energy consumption behaviors and strategic partnerships with world-class technology partners.” — Marielle C. Lucenio

How HR can counter ‘The Great Resignation’

February 4, 2022 | 12:01 am

I’m the human resource (HR) manager of a family-owned business. Management is alarmed at the extraordinary number of employee resignations beginning this year. The exit interviews gave us varied responses but most of the time, we’ve heard people talking about the pandemic and the poor response of our government. Some said they plan to put up a business while others are planning to work in other countries. How do we stem the tide of “The Great Resignation?” — Banana Sundae.

Decades back, a group of university researchers studied the perceptions of people of various academic backgrounds and experiences. They devised a simple, one-question test for all the professions. The first to be tested was an engineer. The researchers asked him: “What’s two plus two?”

The engineer said: “In absolute terms, it’s four.” The researchers made their notes then thanked the engineer for his participation. Next in line was a doctor who was asked the same question. His answer was conditional: “There are several possibilities. Two plus two is equal to four, but it could be one plus three is equal to four.

“Or two and one-half and one and one-half also make four. So it is all in the matter of choosing the right option.” The researchers thanked him and made their notes.

Next up was a lawyer. The researchers repeated the same question. The lawyer looked around and asked if he could close the door for privacy.

Then, he leaned toward the researchers and said: “What would you like it to be?”

MANAGE, NOT CONTROL
This story suggests many options that could lead to the answer, which in your case is, how to reduce the number of resignations. In other words, you can do many things, either simultaneously or one after the other, depending on the circumstances. More important, it is best to understand that you can only manage the situation but not control it.

Don’t delay. Explore the following options and make you and your HR team busy by doing the following:

One, validate the result of the exit interview. You may have read in this space that I’m against the exit interview because of its reactive nature compared to the annual employee opinion survey. However, in times like these when employees are reeling from the adverse effects of the pandemic, it is best to verify the real reason for their resignation and act, within the company’s means.

Two, allow flexible working arrangements. If applicable, establish a hybrid work schedule that allows work from home and require them to work in-person at the office for say, once or twice a week. Then offer a cash allowance to pay for their internet and electricity costs out of whatever savings you can put together from the reduced office operating expenses.

Three, allow resigned workers to come back. Make exceptions for “boomerang” workers who have shown consistent high performance to return to work within one year from their resignation. Or, allow some key people with “hot skills” and excellent track records to take a leave of absence without pay for one to three months so they can reflect on their final decision.

Four, review and strengthen the succession plan. It is a basic policy that can’t be ignored as it is an integral part of the business continuity plan. This allows you to be ready at any time in case of sudden resignation, illness, incapacity or even death. It’s the only way to test the readiness of workers and can be trialed when some key personnel have to go on emergency leave.

Five, improve the employee healthcare package. The pandemic has given us extraordinary awareness of the importance of health and safety issues. We can’t predict what will happen to us. And that alone is your cue to spend on a health maintenance program that will surely be appreciated by the workers.

Last, improve the line supervision strategies. More than ever, this is the best time to require supervisors and managers to improve their work relationships. You can start by focusing on the sections, functional units or departments with the most number of resignations. The objective is to predict resignations and prepare for them at any time.

DRAMATIC CHANGES
Not all resignations are bad. It’s an opportunity for an organization to inject new blood into the system. However, an extraordinary exodus of workers is disastrous and should be managed correctly.

Closely monitor the attrition rate. My rule of thumb is that if it’s in the single digits, then accept it as part of the normal course of business. When there’s a dramatic increase, say from 2% to 15% in a single month. This is worrisome, especially if it continues in the succeeding months.

The pandemic has led to enormous and dramatic changes that we can’t afford to be reactive to. All businesses, with the proactive help of HR, must continue to guide all managers and workers to face extraordinary levels of complexity and interdependency between labor and management.

Have a chat with Rey Elbo via Facebook, LinkedIn or Twitter or send your workplace questions to elbonomics@gmail.com or via https://reyelbo.consulting.

What to See this Week (02/04/22)

February 4, 2022 | 12:01 am

Scream

TWENTY-FIVE years after a streak of brutal murders shocked the quiet town of Woodsboro in California, a new killer dons the Ghostface mask and begins targeting a group of teenagers to resurrect secrets from the town’s deadly past. Directed by Matt Bettinelli-Olpin and Tyler Gillett, the latest installment of the Scream franchise stars Courteney Cox, David Arquette, and Neve Campbell. The Guardian’s Wendy Ide writes, “…this installment revamps for a new generation of genre fans the tried and tested Scream formula of knowing movie references and horror tropes. While this is the smartest, funniest and stabbiest film since the 1996 original, it does feel as though Scream has come full circle, an ouroboros serpent of a franchise that is destined to endlessly devour itself until those testy toxic fans finally lose patience.” Rotten Tomatoes’ Tomatometer gives the film a score of 78%, while its audience rating is 82%.

MTRCB Rating: R-16

Caperal renews ties with Ginebra

February 4, 2022 | 12:01 am

caperal_pba — PRINCE CAPERAL — PBA IMAGES

BARANGAY Ginebra has re-signed big man Prince Caperal, who chose to stay with his team instead of exercising his unrestricted free agency option.

Mr. Caperal, the backup center who stepped up big-time and played a vital role in the Gin Kings’ PBA Philippine Cup triumph in 2020, agreed to a fresh two-year deal after his contract expired last Jan. 31.

The 2020 Most Improved Player awardee and Ginebra management had actually already started negotiation for a new contract last month but it was stalled by the pandemic-forced play suspension.

A member of the 2014 Rookie Draft Class, Mr. Caperal would have been eligible to be a UFA and test his value in the market under the pro league’s new seven-year rule.

Mr. Caperal’s renewal of ties with Ginebra came after 2014 batchmates Nards Pinto, Rodney Brondial, Matt Ganuelas Rosser and Chris Banchero bolted their respective mother clubs to head elsewhere.

Mr. Pinto joined the Gin Kings while Mr. Brondial went to San Miguel Beer and Mr. Rosser took a second tour of duty with the squad that originally drafted him, TnT. Mr. Banchero, who entered free agency just last Feb. 1, signed up with Meralco. — Olmin Leyba

Protecting the integrity of elections

February 4, 2022 | 12:01 am

TWO significant events happened last Feb. 2 involving the Commission on Elections (Comelec). First was the turnover ceremony at the Bangko Sentral ng Pilipinas (BSP) where ranking Comelec officials deposited the source codes of the automated election system for the May 9 national and local polls. Second was the retirement ceremony for three Comelec commissioners at the Sofitel Philippine Plaza.

These ceremonies were preceded by the signing of an escrow agreement last Jan. 31 between the BSP and the Comelec guaranteeing that the BSP’s vault assigned to the two security boxes containing the source codes is secured by a series of metal locks and combination codes. Meanwhile, the keys to the locks as well as the combination codes are under the sole custody of Comelec officials.

BSP Governor Benjamin Diokno said this is the fifth election since 2010 that the source codes are being kept by the central bank. Comelec spokesperson James Jimenez explained that the turnover was a key element in protecting the integrity and credibility of the 2022 elections, which are being questioned amid a bitter feud between two Comelec commissioners that exploded last week.

I’m referring to the intramurals within the Comelec’s First Division regarding the disqualification cases against presidential candidate Ferdinand Marcos, Jr. A week before her retirement, then presiding Commissioner Rowena Guanzon disclosed that she voted to approve the petitions seeking to disqualify Mr. Marcos. She alleged that a Senator has been interfering with the release of Commissioner Aimee Ferolino’s resolution of the consolidated Marcos cases.

Ms. Guanzon is now retired along with Comelec Chairman Sheriff Abas and Commissioner Antonio Kho, Jr. There were no fireworks during the solemn ceremony despite the presence of both feuding officials. In her speech, Ms. Ferolino reportedly thanked the three senior commissioners for their service to the public.

But the electorate is uneasy over the unresolved cases that pose doubts on the outcome of the most crucial presidential contest since the snap election of 1986. Over the past few days, this has been the subject of speculation in the business community as gleaned from conversations in Viber chat groups and during Zoom meetings. Next week will be the start of the official campaign period for all national elective positions and the political temperature is expected to heat up further.

On the local front, another disqualification case was filed against former Pasig City Mayor Maria Belen Andaya-Eusebio, who is running again for a congressional post in Camarines Sur (CamSur) even though she is not a resident of that province. In 2019, the Comelec rejected her request for the transfer of her voter registration from Pasig to the municipality of Libmanan on the ground of misrepresentation, thus preventing her candidacy for CamSur’s third legislative district.

This time, she wants to represent the first legislative district of CamSur by transferring her registration record from Pasig City to the municipality of Ragay. It was granted by the Comelec’s Election Registration Board, which enabled her to file a certificate of candidacy (COC) last Nov. 15 – way beyond the COC filing deadline on Oct. 8.

One of her relatives, Anthony Horibata, petitioned the Comelec to cancel Ms. Eusebio’s COC in which she declared that she has been a resident of Ragay in the last 27 years. Given the indisputable fact that she held the mayoralty post in Pasig from 2013 to 2016, this was clearly not possible unless she possesses the gift of teleportation.

Under the Constitution, one of the provisions pertaining to eligibility for congressional district representatives is that the candidate must be a resident of such district for a period of not less than one year immediately preceding the day of the elections.

Mr. Horibata pointed out that Ms. Eusebio has been living in Pasig City with her husband, former Mayor Robert Eusebio, through all these years. He even cited her recent social media posts showing her being administered COVID-19 vaccines in Pasig as well as her relief operations and gift-giving programs in that city. How was she able to register as a voter in CamSur?

As with the Marcos cases, such a disqualification issue must be resolved immediately by the Comelec if it is truly committed to its mandate of ensuring fair and credible elections. So much is at stake in the May 2022 polls, and with three months to go, businessmen are anxiously waiting for the results that will definitely make a great impact on the economy in the next six years.

J. Albert Gamboa is the chief finance officer of Asian Center for Legal Excellence and chairman of the FINEX Media Affairs Committee. The opinion expressed herein does not necessarily reflect the views of these institutions and BusinessWorld. #FinexPhils www.finex.org.ph

How PSEi member stocks performed — February 3, 2022

February 4, 2022 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Thursday, February 3, 2022.

Philippine peso 52.1% undervalued against us dollar

February 4, 2022 | 12:00 am

Dominguez flags tax advisers’ role in raising gov’t borrowing

February 3, 2022 | 10:54 pm

Carlos-Dominguez-III — FINANCE SECRETARY CARLOS G. DOMINGUEZ III

THE effective tax rate for value-added tax (VAT) in 2021 was significantly lower than the posted rate of 12%, reflecting the tax avoidance strategies provided by tax advisers, Finance Secretary Carlos G. Dominguez III said.

He said in a statement on Thursday that the reduced tax collections caused the government to borrow more to fund its pandemic response.

He was addressing his remarks to the Tax Management Association of the Philippines, and called on them to behave in a more “patriotic” manner, according to the statement.

He said the effective rate for VAT last year was 5%.

Tax avoidance is legal, while tax evasion is not. Avoidance makes use of various techniques to reduce tax bills, such as investing in tax-free instruments or structuring deals to make use of tax havens.

Before the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law took effect last year, the effective corporate income tax rate was 9%, against the posted rate of 30%.

The discrepancies between the rates were a result of advice given by tax professionals to their clients, he said.

“Had the government been able to collect all taxes due, we would have had more funds to cover our economic investments, debt service, and COVID-19 response expenditures,” he said.

“We would have borrowed less. The government would have been better able to invest in building the prosperous future our people deserve.”

Government revenue collections in 2021 rose 9%, he said. In 2020, government revenue declined due to the economic downturn caused by the coronavirus disease 2019 (COVID-19) pandemic.

The government has ramped up borrowing to finance its pandemic response, which included the purchase of vaccines.

At the end of 2021, the government had P11.73 trillion in outstanding debt, up 19.7%.

The Finance department as of Jan. 14 raised about $25.8 billion from borrowing and grants for the government’s COVID-19 response from multilateral lenders, development partners, and following the issue of foreign currency-denominated global bonds.

Mr. Dominguez said that tax advice “is probably the more lucrative side of your profession. But it is not the most patriotic.”

“Our experts in tax management should encourage our businesses to pay the right taxes and keep with the intent of our tax laws, instead of spending so much intellectual energy in finding every loophole there is.”

He added that the government needs revenue to strengthen its public health system after the pandemic.

“We need to invest more in infrastructure and human capital development projects. The rehabilitation of communities devastated by extreme weather events will impose added costs to the government. We have to spend more to make our communities more resilient to climate change.” — Jenina P. Ibañez