Central banks, wealth funds going greener and more activist — survey

July 21, 2021 | 3:11 pm

LONDON — The coronavirus disease 2019 (COVID-19) pandemic is accelerating a shift by central banks and sovereign wealth and public pension funds to greener and more activist investment strategies, one of the largest annual surveys of their behaviors showed.

The Global Public Investor survey by think-tank Official Monetary and Financial Institutions Forum (OMFIF) sampled 102 institutions overseeing a combined $7 trillion this year to track how the pandemic and other long-term trends are affecting them.

The findings of the survey, seen by Reuters ahead of its publication on Wednesday, showed the scale and speed at which environmental, social and governance (ESG) factors were now driving investment decisions.

“There has definitely been an acceleration due to COVID,” OMFIF’s Chief Economist Danae Kyriakopoulou said.

“At the beginning [of the pandemic], we thought there would be a focus on the short-term, the quick boosts to recoveries. But actually there has been this realization that our financial systems are so vulnerable to things outside the financial world.”

As well as a store of wealth for future generations, sovereign wealth funds are often used by countries during periods of upheaval.

For the first time since OMFIF started asking about ESG, the majority in all three categories of global public investors (GPIs) said that they now implement it in some way.

This differed widely between types of institution, with all pension funds implementing ESG criteria, compared with around two-thirds of sovereign funds and just over half of central banks.

Central banks made up around 60% of OMFIF’s survey sample this year and while many don’t invest in equities or infrastructure projects, green bonds remain their most popular ESG option.

Over a third of the banks asked in the survey now hold them, although some also said that liquidity and lack of supply of green bonds, especially in dollars, can be a headache.

TIPPING POINT
The survey also showed a trend for more active ownership, especially among sovereign wealth and public pension funds. Rather than just excluding polluters, many funds are now specifically buying companies or projects that transition to more sustainable practices from dirtier or less responsible ones.

There are still clear gaps though. The survey found that around 60% of GPIs didn’t use ESG benchmarks — a kind of shopping list of assets that they can and can’t own — and only 8% had their own bespoke benchmarks.

An Invesco survey earlier this month found the majority of sovereign funds think financial markets are fully pricing in the long-term implications of climate change.

Nevertheless, Ms. Kyriakopoulou pointed to one day in May when a Dutch court ordered Shell to lower its emissions faster, Exxon Mobil’s shareholders defied management to elect two new climate-conscious board members and Chevron’s shareholders went against its management to back emissions cuts.

“Policy makers and investors should not be surprised by such rulings or decisions. Even though they are radical and mark a ‘tipping point’, it is clear that momentum for change has been building.” — Marc Jones/Reuters

Australia, under lockdown, sees jump in COVID-19 cases

July 21, 2021 | 2:43 pm

SYDNEY — Australia’s two largest states reported sharp increases in new coronavirus disease 2019 (COVID-19) cases on Wednesday, a blow to hopes that lockdown restrictions would be lifted with more than half the country’s population under stay-at-home orders.

New South Wales (NSW) state, home to the country’s most populous city Sydney, logged 110 new cases, up from 78 the day before, nearly four weeks into a lockdown of the city and surrounding areas to contain an outbreak of the virulent Delta variant.

Victoria state clocked 22 new cases, from nine the day before, its biggest increase since the outbreak began this month, as it nears its second week of statewide lockdown.

“Had we not gone into the lockdown a few weeks ago, the 110 number today would undoubtedly have been thousands and thousands,” said NSW Premier Gladys Berejiklian at a televised news conference.

“But we need to work harder and, of course, all of us need to be on guard,” she added.

Health leaders have said their greatest concern is the number of people active in the community before receiving their coronavirus diagnosis, and that the number should be near zero before lifting lockdown.

Ms. Berejiklian said that number jumped to 43 on Wednesday, double the previous day, and that she could not say until the following week whether the city would exit lockdown by a July 30 target.

Overnight, NSW added three regional centres some 250 km (150 miles) from Sydney to the list of areas under lockdown after a pet food delivery driver tested positive there, raising fears of local transmission.

“We know every day who’s going to walk through the door, but even the locals that do come in, they’re buying for like four days, rather than buying for every single day,” said Cameron Cassel, a butcher in Blayney, population 3,000.

Victorian authorities, meanwhile, said 16 of its 22 new cases were in quarantine during their infectious period, while exposure sites for the remaining six were “reasonably low.”

“That is something that should give us all a degree of confidence and hope that this response… is working,” said Victorian Health Minister Martin Foley.

A third state, South Australia, went into its first full day of a weeklong lockdown on Wednesday, and reported one additional case.

‘MORE PFIZER’

A year and a half into the pandemic, some 13 million Australians are under hard lockdown, raising pressure on the federal government which has seen its polling at its lowest in a year due to a sluggish immunization program. Just over 11% of the population is fully vaccinated.

The main vaccine in the government’s arsenal, developed by AstraZeneca Plc, has been recommended for use only for people aged over 60 by the country’s drug regulator due to a remote risk of blood clotting, while a vaccine made by Pfizer Inc has been restricted to over-40s due to limited supply.

“We have done as much as is humanly possible but the issue is we need more vaccines, we need more Pfizer,” said NSW Health Minister Brad Hazzard.

The restrictions have also hit some economic indicators which had roared back to pre-pandemic levels after the initial upheaval of early 2020. Retail sales in June dipped 1.8% from a month earlier, according to government figures, nearly four times the drop foreshadowed by economists.

Prime Minister Scott Morrison, who has been criticized for saying last year that the vaccine rollout was “not a race,” went on local radio to defend the program, but acknowledged it was about two months behind plan.

“I understand there is great frustration … but this latest Delta variant has thrown a completely new curveball on this issue, which every single country in the world is wrestling with,” Mr. Morrison told one radio station.

Still, Australia has fared better than many other developed economies in keeping COVID-19 numbers relatively low, with just over 32,100 cases and 915 deaths. — Renju Jose and Byron Kaye/Reuters

Central China’s Henan province swamped after heaviest rain in 1,000 years

July 21, 2021 | 2:42 pm

Residents wade through floodwaters amid heavy rainfall in Zhengzhou, Henan province, China July 20, 2021. — CHINA DAILY VIA REUTERS

BEIJING — Large swathes of China’s central Henan province were under water on Wednesday, with at least a dozen people dead in its capital Zhengzhou after the city was drenched by what weather watchers said was the heaviest rain in 1,000 years.

With more rain forecast across Henan for the next three days, the government of Zhengzhou, a city of over 12 million on the banks of the Yellow River, said 12 people were reported to have died in a flooded subway line, while more than 500 were pulled to safety.

Video on social media on Tuesday showed commuters chest-deep in murky floodwaters on a train in the dark and an underground station turned into a large, churning pool.

“The water reached my chest,” a survivor wrote on social media. “I was really scared, but the most terrifying thing was not the water, but the diminishing air supply in the carriage.”

Due to the rain, the authorities halted bus services, as the vehicles are powered by electricity, said a Zhengzhou resident surnamed Guo, who spent the night at his office.

“That’s why many people took the subway, and the tragedy happened,” Guo told Reuters.

From the evening of Saturday until late Tuesday, 617.1 millimeters (mm) of rain fell in Zhengzhou, about 650 km southwest of Beijing. That’s almost on par with Zhengzhou’s annual average of 640.8 mm.

The amount of rainfall in Zhengzhou witnessed over the three days was one seen only “once in a thousand years,” local media cited meteorologists as saying.

‘FLOOD PREVENTION DIFFICULT’
The lives of millions of people in Henan, a province with a population of around 100 million, have been upended in an unusually active rainy season that has led to the rapid rise of a number of rivers in the vast Yellow River basin.

Many train services across Henan, a major logistics hub in central China, have been suspended. Many highways have also been closed and flights delayed or cancelled.

Roads in a dozen cities have been severely flooded.

“Flood prevention efforts have become very difficult,” President Xi Jinping said on Wednesday, addressing the situation in a statement broadcast by state television.

Dozens of reservoirs and dams also breached warning levels.

Local authorities said the rainfall had caused a 20-meter breach in the Yihetan dam in Luoyang city west of Zhengzhou, and that the dam “could collapse at any time.”

In Zhengzhou, the local flood control headquarters said the city’s Guojiazui reservoir had been breached but there was no dam failure yet.

About 100,000 people in the city have been evacuated to safe zones.

SCHOOLS, HOSPITALS CUT OFF
Taiwanese technology giant Foxconn operates a plant on the outskirts of Zhengzhou, next to the city’s airport, that assembles iPhones for Apple. It said there was no direct impact on its facility, but had activated an emergency response plan.

SAIC Motor, China’s largest automaker, said logistics at its Zhengzhou plant would see some short-term impact, while Japan’s Nissan said production at its Zhengzhou factory had been temporarily suspended.

Zhengzhou’s transportation system remained paralysed, with schools and hospitals cut off by waterlogging. Some children have been trapped in their kindergartens since Tuesday.

Residents caught in the flood had taken shelter in libraries, cinemas and even museums.

“We’ve up to 200 people of all ages seeking temporary shelter,” said a staffer surnamed Wang at the Zhengzhou Science and Technology Museum.

“We’ve provided them with instant noodles and hot water. They spent the night in a huge meeting room.”

About 3 km away, the First Affiliated Hospital of Zhengzhou University — the city’s largest with over 7,000 beds — has lost all power, and even backup supplies were down.

The hospital was racing to find transport to relocate about 600 critically ill patients. — Ryan Woo and Stella Qiu/Reuters

Britain to permanently deploy two warships in Asian waters

July 21, 2021 | 2:05 pm

HMS QUEEN ELIZABETH ARRIVES IN GIBRALTAR FOR FIRST OVERSEAS VISIT — Dave Jenkins - InfoGibraltar/CC BY 2.0/Wikimedia Commons

TOKYO — Britain said on Tuesday it would permanently deploy two warships in Asian waters after its Queen Elizabeth aircraft carrier and escort ships sail to Japan in September through seas where China is vying for influence with the United States and Japan.

Plans for the high-profile visit by the carrier strike group come as London deepens security ties with Tokyo, which has expressed growing alarm in recent months over China’s territorial ambitions in the region, including Taiwan.

“Following on from the strike group’s inaugural deployment, the United Kingdom will permanently assign two ships in the region from later this year,” Britain’s defense minister, Ben Wallace, said in a joint announcement in Tokyo with his Japanese counterpart, Nobuo Kishi.

After their arrival in Japan, Mr. Kishi said, the Queen Elizabeth and its escort ships would split up for separate port calls to US and Japanese naval bases along the Japanese archipelago.

In a statement on the deployment, a Pentagon spokesperson congratulated Britain for its “commitment to an interconnected network of allies and partners, who mutually cooperate and support freedom of navigation and a rules-based order in the Indo-Pacific region.”

A close US ally, Japan hosts the biggest concentration of US military forces outside the United States, including ships, aircraft and thousands of Marines.

The British carrier, which is carrying F-35B stealth jets on its maiden voyage, will dock at Yokosuka, the home of Japan’s fleet command and the USS Ronald Reagan, the only forward deployed US aircraft carrier.

The British ships will not have a permanent base, a spokesperson at the British Embassy in Tokyo said when asked which ports the Royal Navy ships would operate from.

The Queen Elizabeth is being escorted by two destroyers, two frigates, two support vessels and ships from the United States and the Netherlands.

It will come to Japan through the South China Sea, parts of which are claimed by China and Southeast Asian countries, with stops in India, Singapore and South Korea.

In a further sign of Britain’s growing regional engagement, Wallace, who traveled to Japan with a delegation of military commanders, said the UK would also eventually deploy a Littoral Response Group, a unit of marines trained to undertake missions including evacuations and anti-terrorism operations. — Reuters

Multisectoral program aims to end PH malnutrition by 2030

July 21, 2021 | 1:23 pm

hunger-poverty-011819 — PHLSTAR FILE PHOTO

Pilipinas Kontra Gutom, an anti-hunger coalition, launched a program that aims to feed children and educate mothers on proper nourishment. Called Kain Tayo Pilipinas, the multisectoral initiative hopes to end child malnutrition by 2030, in line with Sustainable Development Goals set up by the United Nations.

“Companies and non-government organizations (NGOs) have attempted to feed children, but it’s not sustainable,” said Kristine Alvarez-Go, project lead of Kain Tayo Pilipinas, at the virtual launch. “When they go home, they go home to families that can’t sustain nutrition due to lack of education and resources.”

Educating a mother and teaching her to provide nourishment on a budget, said Ms. Alvarez-Go, automatically reaches at least three children. The initiative will focus on children in the first 1,000 days of their life (and not just schoolchildren as previous feeding programs did).

“A child’s brain is 80% developed by age three. Between age zero to five is the important period where we can make the biggest impact,” she said.

Cabinet Secretary and Task Force Zero Hunger Chairman Karlo Alexei B. Nograles highlighted the importance of ending involuntary hunger and malnutrition in the Philippines once and for all, citing a Social Weather Stations (SWS) survey that revealed 4.2 million Filipinos went hungry in 2020.

He also emphasized that the multisectoral approach would be best for this initiative, with Pilipinas Kontra Gutom growing to almost 80 member companies from just six in November.

Echoing Mr. Nograles’s call for collaboration, Ms. Alvarez-Go said: “In the past, each private, public, or government agency or foundation would operate in isolation. We each do our own program, mostly feeding, some education, some reaching kids, some reaching mothers too, but the programs we all work on separately have a high chance of duplication.”

By tracking each organization’s programs, she reported that Kain Tayo Pilipinas had identified 49 critical areas across the Philippines, with 22 of them already serviced by member companies. The remaining 27 areas can be moved or allocated to members.

“The essence and beauty of this project is the fact we are all coming together. We have 80 members now but we can always use more,” Ms. Alvarez-Go said. “And we’re not asking you to change your existing program. We are accepting all programs already out there. We just want to make it even stronger.” — Brontë H. Lacsamana

Countries make COVID-19 vaccines mandatory

July 21, 2021 | 12:51 pm

Vaccine-reuters-e1612782756832 — REUTERS

A sharp upturn in new coronavirus infections due to the highly contagious Delta variant and a slowdown in vaccination rates have pushed governments to make coronavirus disease 2019 (COVID-19) jabs mandatory for health workers and other high-risk groups.

A growing number of countries also stipulate that a jab, or a negative test, will be needed for dining out, among others.

Here are some countries’ vaccine mandates:

AUSTRALIA

Australia decided in late June to make COVID-19 vaccinations mandatory for high-risk aged-care workers and employees in quarantine hotels.

It has also made vaccinations obligatory for Paralympic athletes heading to Tokyo because unvaccinated members on the team could pose a health risk.

BRITAIN

It will be mandatory for care home workers in England to have coronavirus vaccinations from October.

English nightclubs and other venues with large crowds will require patrons to present proof of full vaccination from the end of September.

CANADA

Canadian Treasury Board Secretariat said on July 20 it was considering whether COVID-19 vaccines should be required for certain roles and positions in the federal government, according to CBC.

FRANCE

All health workers in France must get COVID-19 jabs and anyone wanting to get into a cinema or board a train will need to show proof of vaccination or a negative test under new rules announced by President Emmanuel Macron on July 12.

The government said on July 19 that the planned 45,000 euro fine for businesses that do not check that clients have a health pass will be much lower, starting at up to 1,500 euros and increasing progressively for repeat offenders. Fines will not be imposed immediately.

GREECE

Greece on July 12 made vaccinations mandatory for nursing home staff with immediate effect and healthcare workers from September. As part of new measures, only vaccinated customers are allowed indoors in bars, cinemas, theatres and other closed spaces.

INDONESIA

Indonesia made COVID-19 inoculations mandatory in February, with capital Jakarta threatening fines of up to 5 million rupiah ($357) for refusing the vaccine.

ITALY

A decree approved by the Italian government in March mandates that health workers, including pharmacists, get vaccinated. Those who refuse could be suspended without pay for the rest of the year.

KAZAKHSTAN

Kazakhstan will introduce mandatory COVID-19 vaccinations or weekly testing for people working in groups of more than 20, the health ministry said on June 23.

POLAND

Poland could make vaccinations obligatory for some people at high risk from COVID-19 from August.

RUSSIA

The Russian capital has unveiled a plan requiring 60% of all service sector workers to be fully vaccinated by Aug. 15, according to the Moscow Times.

Moscow residents no longer have to present a QR code demonstrating they have been vaccinated or have immunity in order to sit inside cafes, restaurants and bars from July 19.

SAUDI ARABIA

In May, Saudi Arabia mandated all public and private sector workers wishing to attend a workplace get vaccinated, without specifying when this would be implemented.

Vaccination will also be required to enter any governmental, private, or educational establishments and to use public transportation as of Aug. 1.

Saudi citizens will need two COVID-19 vaccine doses before they can travel outside the kingdom from Aug. 9, state news agency SPA reported on July 19, citing the ministry of interior.

TURKMENISTAN

Turkmenistan’s healthcare ministry said on July 7 it was making COVID-19 vaccination mandatory for all residents aged 18 and over. — Reuters

Paranaque City taps MultiSys to deliver more online services for Paranaque residents, businesses

July 21, 2021 | 10:10 am

PQ-119 — Paranaque City Mayor Edwin Olivarez (left) and MultiSys CEO & Founder David Almirol (right) during the recent Memorandum of Agreement signing and courtesy call at the Paranaque City Hall.

The City of Paranaque has tapped leading software solutions company Multisys Technologies Corporation to give a boost to its online services amid the Covid-19 pandemic.

The initiative is in fulfillment of the City Ordinance Number 2020-05 or the Electronic and Online Payment Collection System, which seeks to provide Paranaque residents and businesses cashless, contactless and paperless transactions with the city local government unit (LGU).

Paranaque citizens and enterprises can now settle their business taxes online, at the comfort of their homes or offices, through the Paranaque Business Permits and Licensing System. In the coming months, the payments for Real Property Tax, Local Civil Registry, Community Tax Certificate (CEDULA), Clearances, Health Certificates, and other government pre-requisites will also be available in the system.

Further, the City has also fortified its No Contact Apprehension Site, which will soon include various online payment options for motorists with Notice of Violation (NOV). Motorists only need to type in their plate number or conduction sticker to verify or check for any possible traffic violations. The actual NOV will be delivered and once received, the violator have the option to pay online the said violation fees through the “Multipay” E-payment facility.

Paranaque City Mayor Edwin Olivarez said that the LGU is also planning to setup kiosk machines in designated areas at the city hall, various government offices such as barangay halls and private establishments.

Olivarez added that the LGU is undertaking this initiative to make payment transactions safer, more convenient and accessible.

“One of our top priorities this 2021 is to transition citizen and government transactions online, not only because of the imminent dangers out there due to the pandemic, but because we believe that we must adapt to the changing times—to do things efficiently, save money and provide convenience. We hope that our constituents will make use of these technologies that we’re now offering and we’re confident that we will receive their usual support,” Olivarez said.

In the past years, Paranaque’s newest technology partner for this initiative, MultiSys, has shown expertise in advancing the transformation of various cities and municipalities into a Smart City. Its Smart City project is a flagship program launched in 2019 to help LGUs and government agencies provide convenient and efficient online services to everyone. It is set to roll out similar technologies to over 50 LGUs nationwide.

North-South rail, subway trains to start arriving in December

July 21, 2021 | 1:06 am

THE TRAIN sets for the North-South Commuter Railway (NSCR), which will also be used for the section of the Metro Manila Subway Project (MMSP) that will be initially operational, will start arriving in the Philippines in December.

“NSCR trains will start arriving in December 2021, and it will be the NSCR trains that are intended to be initially used in MMSP’s partial operability section,” Transportation Undersecretary Timothy John R. Batan said in a statement to BusinessWorld on July 19.

He said the Metro Manila Subway and the North-South Commuter Railway are designed to be “physically interoperable.”

The Transportation department started seeking bidders for the tunneling works contract connecting the North-South Commuter Railway Project to the Metro Manila Subway Project via a station in Taguig City in April. The deadline for submission of bids was set for July 8.

The package covers the construction of the commuter railway’s FTI Station in Taguig and tunneling works to connect the project to the Senate Station, which is also in Taguig, of the Metro Manila Subway Project.

The 148-kilometer North-South Commuter Railway Project is financed by the Asian Development Bank. It will run from Clark in Central Luzon to Calamba, Laguna. 

The NSCR will have 37 stations and 464 train cars. It is expected to accommodate about 830,000 passengers per day once fully operational.

The Transportation department said the NSCR “encompasses three railway projects, including the PNR (Philippine National Railways) Clark Phase 1 (Tutuban – Malolos), which is a 38-kilometer rail line that will connect Tutuban, Manila to Malolos, Bulacan, and is projected to reduce travel time from approximately one hour and 30 minutes to just 35 minutes.”

As for the subway project, Transportation Secretary Arthur P. Tugade has said he will continue to press the government’s private partners to finish the portion of the subway due to open for partial operations by December.

The Metro Manila Subway will have 17 stations: East Valenzuela, Quirino Highway, Tandang Sora, North Avenue, Quezon Avenue, East Avenue, Anonas, Katipunan, Ortigas, Shaw, Kalayaan Avenue, Bonifacio Global City, Lawton, Senate, FTI, NAIA Terminal 3, and Bicutan.

The government broke ground on the first three stations in February 2019 after the Transportation department signed a P51-billion deal with the Shimizu joint venture, which consists of Shimizu Corp., Fujita Corp., Takenaka Civil Engineering Co. Ltd., and EEI Corp.

The Philippines and Japan signed in March 2018 the first tranche of the P355.6-billion loan for the subway project. 

PSA expects to meet ID registration goal of 50-70 million this year

July 21, 2021 | 1:05 am

Robinsons-Malls-Philsys-1 — ROBINSONS/BW FILE PHOTO

THE PHILIPPINE Statistics Authority (PSA) said it is on track to meet its national ID registration target of 50–70 million by year’s end.

“The PSA is on track to hit the 50-70 million registration for 2021. The PSA registration teams, all over the country, are registering about 250,000 registrants per day in 81 provinces and the five provincial offices of the NCR (National Capital Region),” PSA Undersecretary Dennis Clare S. Mapa said in a text message Tuesday.

He said the target is to complete both the demographic and biometric registration processes within the year for the program, which is known as the Philippine Identification System (PhilSys).

As of July 16, the agency was able to complete 38.157 million step 1 registrations through house-to-house visits and visits online platform.

The first step captures demographic data on registrants. They are then scheduled for the next step, which is biometrics collection at designated sites.

The PSA has recorded the biometrics of 19.257 million registrants.

A parallel effort to get more citizens to open bank accounts saw the opening of 4.87 million accounts with Land Bank of the Philippines, which maintains a presence at the registration centers.

Mr. Mapa said the PSA and the central bank have completed printing 2.1 million national ID cards so far and released 1.82 million to the Philippine Postal Corp. for delivery.

Republic Act 1105, signed in 2018, established PhilSys as the national ID, with the intent of serving as the single ID in lieu of the multiple other forms of ID deemed acceptable for transactions like opening bank accounts.

The government also hopes to broaden financial inclusion by making opening bank accounts easier.

The Bangko Sentral ng Pilipinas last month ordered banks to accept the national ID as a sole proof of identity for those wanting to open accounts.

The national ID is also expected to help the government with its social programs. The lack of a centralized identification system was blamed for the slow distribution of cash aid to poor households last year. — Beatrice M. Laforga

Foreign chambers back urgent certification for Open Access bill

July 21, 2021 | 1:04 am

FOREIGN BUSINESS groups are recommending that the Open Access bill be certified as urgent when Congress reconvenes for its third and final regular session next week.

The seven members of the Joint Foreign Chambers (JFC) said the bill that would ease the entry of internet service providers into the market will “bridge critical gaps in broadband infrastructure by attracting more firms to invest in the data transmission and broadband sector.”

The chambers expect the House to approve House Bill No. 8910 on third reading, while a counterpart bill is pending at the Senate Science and Technology Committee.

“The JFC looks forward to any mention of the Open Access bill in the (State of the Nation Address) and recommends that the measure be certified as urgent by the President to emphasize its importance to economic recovery and more competition and investment in broadband, especially in underserved areas throughout the Philippines,” the groups said in a statement Tuesday.

They said digital infrastructure in the Philippines lags the rest of Southeast Asia.

“One major lesson of the ongoing pandemic is that developing competitive digital infrastructure is essential for better lives for everyone in the Philippines and certainly critical for investment, particularly foreign investment,” the chambers said.

The Open Access bill is included in the list of 17 priority reform bills sent to Congress by 15 business groups. The foreign chambers said that the lower barriers to enter the data transmission market will significantly improve data transmission services. 

“Without substantial new investment and competition in each of the four ‘miles’ of the broadband sector, recovery from the pandemic will be slower and Filipinos will be less well served than their counterparts in ASEAN.” 

The statement was signed by the American, Australia-New Zealand, Canadian, European, Japanese, and Korean chambers, along with the Philippine Association of Multinational Companies Regional Headquarters, Inc. — Jenina P. Ibañez

Private schools seeking priority legislation to clarify tax treatment

July 21, 2021 | 1:03 am

PRIVATE SCHOOLS are asking President Rodrigo R. Duterte to endorse as a priority bill the measure that will clarify the industry’s tax treatment following a dispute with the tax authorities over such schools’ eligibility for the reduced corporate tax rate.

In a statement Tuesday, the Coordinating Council of Private Educational Associations (COCOPEA) said it hopes Mr. Duterte will ask legislators to prioritize House Bill (HB) No. 9596 and Senate Bill (SB) No. 2272 in his sixth and last State of the Nation Address on July 26.

The bills aim to clarify the taxability of proprietary educational institutions, after a recent memorandum by the Bureau of Internal Revenue (BIR) excluded for-profit private schools from availing of the preferential corporate income tax rate, which had been lowered to 1% from 10% as a temporary relief measure authorized by the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE).

Without official clarification through legislation, the BIR will continue to impose the regular 25% corporate income tax rate on for-profit private schools and only apply the 1% tax rate to non-profit institutions.

“The evolution of the country’s education system has now reached a critical point. We are deeply concerned that the continued decline in the private sector’s share of enrollment and the persistent inability to optimize public-private complementarity would mean lost opportunities for faster achievement of an adaptive, innovative, and inclusive economy,” COCOPEA Managing Director Joseph Noel M. Estrada said.

“The President’s influence over the lawmakers is therefore crucial in pushing for these measures in the remainder of the 18th Congress,” Mr. Estrada added.

The association of over 2,500 private schools has been disputing the “erroneous interpretation” of the BIR on the applicable tax rate for proprietary educational institutions.

CREATE lowered the preferential tax rate to 1% until June 30, 2023 to help the hard-hit sector recover from the impact of the coronavirus pandemic.

However, the BIR in Revenue Regulations (RR) No. 5-2021 stated that only non-profit institutions can avail of the lower tax rate while the rest will be subject to the regular 25% tax.

The bureau stood by its RR in its reply to COCOPEA.

HB 9596 has yet to undergo first reading while its counterpart SB 2272 is awaiting committee approval.

COCOPEA warned that if the bills are not passed, the high tax rate will harm the sector already weakened by the pandemic.

Expansion plans as well as programmed salary increases for teachers will have to be delayed if institutions need to cut costs to deal with the taxes.

Schools may also be forced to partially pass on the cost burden to parents through higher tuition, Mr. Estrada said.

He said nearly 900 private elementary schools have shut down since the pandemic started last year, while a number of private higher education establishments suspended their operations.

Enrollment in elementary schools dropped by 900,000 while half of colleges and universities reported a 10-50% decline in enrollment for the 2020-2021 school year, he said citing official data.

“We note that the Department of Finance through Secretary Carlos G. Dominguez III has expressed several times that it fully supports the passage of the proposed bills in order to clarify this urgent matter once and for all,” Mr. Estrada said.

“We therefore reiterate our call for expedient corrective action, through administrative or legislative enactment, as the private education sector is now,” he added.

The Education department said classes for the upcoming school year will start on Sept. 13. — Beatrice M. Laforga

Launch of energy labeling platform for appliances set for Aug. 12

July 21, 2021 | 1:02 am

THE DEPARTMENT of Energy (DoE) said it will be launching its energy labeling program registration platform covering energy-intensive appliances on Aug. 12.

In a statement, the Energy department urged all importers, manufacturers and distributors of energy-consuming products (ECPs) covered by the Philippine Energy Labeling Program (PELP) to register through the portal.

ECPs include air conditioning units, refrigerators, television sets and lighting products.

The “PELP Online Company Registration Platform” is an “all-in-one” system for PELP applications, and a means to expedite the monitoring of compliance with the energy labeling program, according to the Energy Efficiency & Conservation Performance Regulation and Enforcement Division (EPRED) of the DoE’s Energy Utilization Management Bureau.

“The platform is composed of the company registration, product registration and label issuance modules for PELP applications… The PELP system also features a dashboard for registered companies that will allow them to view the status of their ongoing applications and access their product’s registered data, as well, for ease in updating information,” the EPRED told BusinessWorld in an e-mail Monday.

It said registration for companies will typically take three days. Meanwhile, product registration will have a wait time of a week, while the issuance of labels will take three days, depending on the accuracy and completeness of the information provided.

EPRED said that the online portal aims to deter “fly-by-night” enterprises by only allowing approved companies to register their products and request for the official energy labels.

Once the online portal is launched, all sellers of PELP-covered products are required to register through the platform.

According to the EPRED, entities that do not register their products online cannot request the required energy labels. Only registered products sporting the DoE’s official energy label can be sold.

“If during market monitoring activities a product is found to be sold without an energy label, then the DoE team will trace the product to its manufacturer, importer or distributor, who will be held liable and be penalized with the corresponding fines and penalties,” it added.

Last month, the Energy department released the rules governing the labeling of ECPs. The guidelines require sellers to label their cooling products, refrigerators, TVs and lighting products with their respective energy efficiency ratings. — Angelica Y. Yang