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The cold, hard barriers to getting vaccinated

DOCTORS, NURSES and other essential workers are getting vaccinated against COVID-19 in the US and UK. Yet in Asia, where several countries led the way in reining in the viral outbreak, there are few signs that detailed distribution plans are ready to be implemented. Supplies are limited and unknowns plentiful. Governments need to jump-start the process to get shots into arms. In most cases, however, their capacity to distribute the vaccine is a constraint or simply doesn’t exist.

Some nations have signed on to procurement and advanced purchasing plans from vaccine manufacturers. Others are working on collaborations and homegrown options. But everywhere, the need to maintain optimal temperatures for certain vaccines raises hard issues, such as cold-storage warehouses and adequate last-mile delivery.

McKinsey & Co. has said that just 1% of existing vaccine distribution networks is set up for cold-chain requirements that keep the new COVID-19 serums viable — temperatures at the frozen or deep frozen* levels. Most low- and middle-income countries can’t afford the infrastructure investment in a short period. Many may have to borrow from multilateral organizations like the World Bank. That means limited funding and one shot at getting it right.

So how do governments in their second, third, or even fourth waves prepare? Most are using immunization plans from previous vaccine rollouts. These were typically targeted at pregnant women and children, which are not the populations at the top of the list in this pandemic. India’s universal immunization program covers 26 million infants and 29 million mothers annually and is the largest of its kind in the world. Yet experts say it won’t be sufficient.

Andrea Taylor of Duke University’s Global Health Institute says distribution plans will be based on four scenarios, rooted in refrigeration temperatures. Most mid-income and poorer countries have ruled out vaccines that need deep freezing, she says, and are preparing for the standard refrigeration scenario. Eventually, heat-stable vaccines and nasal spray formats could be the way. 

None of this is easy, but vaccine rollouts have always been more problematic in non-wealthy countries. Almost two decades after the hepatitis B vaccine came out, the population covered was estimated at around 90% in the Americas and just 28% in Southeast Asia, where the disease is a far larger problem.

South Korea’s concurrent experience with a campaign to inoculate 30 million people against influenza shows that there’s always room for error, even in countries with well-established plans. The government recalled more than 1 million doses, to be on the safe side, after photos circulated online of boxes of vaccines stacked in parking lots. Health authorities said that they found no direct causal links between the flu vaccine and the deaths of more than 100 people who died after getting it. But the panic means that only 19 million people have so far taken the shots. Singapore suspended its use.

South Korea was an early global model for tracking, tracing, and testing the rapid spread of COVID-19, but it’s facing another surge in cases. Prime Minister Chung Sye-kyun says authorities will come up with a plan allowing pre-purchased vaccines to be acquired in the first quarter of 2021; the country has said it’s in the process of securing doses from companies including AstraZeneca Plc, Moderna, Inc., Pfizer, Inc., and Johnson & Johnson’s Janssen Pharmaceuticals, Inc. But the health minister has said there’s no hurry “when the risks have not been verified yet.”

That’s a fair concern. However, COVID-19 doesn’t allow the luxury of time of the typical manufacturing supply chain. “We cannot afford a sequential process,” David Simchi-Levi, director of the MIT Data Science Lab, told Supply Chain Dive. “We need to start the manufacturing capacity today, and the problem is it requires significant investment.”

Then there’s the more mundane but crucial matter of trade facilitation: how to get vaccines across national borders. Think of this as the software of trade – approvals, customs, tariffs, rules and regulations on inspection services, certification, permissions, how packages are handled, and the intellectual property rules. An Asian Development Bank study in 2017 found that getting it right increases immunization rates, especially in low-income countries.

A look at the trade of medicines, totaling almost $50 billion globally, shows why the process isn’t so straightforward. Some regulations seem absurd in a time of global pandemic. For instance, the average applied tariff for hand soap is 17%, while some World Trade Organization members put it as high as 65%. The average tariff on protective supplies is 11.5%.

In May, Canada invested more than $40 million to upgrade a vaccine production facility in Montreal “to ensure readiness for Canadian bioprocessing of potential vaccine candidates as they become available.” It was supposed to produce 250,000 doses by November. Then a partnership with China’s CanSino Biologics, Inc. fell apart because Chinese customs authorities held up the first shipment of trial doses to Canada.

Without a timely and straightforward way to get a vaccine, COVID-19 won’t be eradicated. And the economic recovery that we see signs of won’t really take off.

*Frozen: -15to -25 degrees celsius. Deep frozen: -60 to -80 degrees celsius.

BLOOMBERG OPINION

Your network is your net worth

What’s in it for me? This — more often than not — is a question we frequently ask before we get involved in any project or even join an organization. This is not a judgment. In fact, I think it is understandable for people to sometimes make decisions based on what we may or may not gain from any undertaking.

Many individuals view networking as such. Truth be told, many people do not like it, while others enjoy it and even thrive on it. But wherever you stand on the concept of networking, I think we can all agree that networking has evolved to be a fundamental individual and business strategy.

While reflecting on MAP’s 2020 battlecry of “LEAD for a Competitive Tomorrow,” this brought me to the realization that now more than ever, it is important to strengthen networks to create support systems for those affected most by the pandemic — and I believe it to be women in this case. As business leaders, we have the responsibility to ensure that our businesses — and these include MSMEs — will be able to not just survive, but thrive in our new “competitive tomorrow.”

On Nov. 9, I had the privilege of speaking at the ASEAN Women CEOs Summit. I joined other women business leaders from Southeast Asian countries who shared important insights about the benefits of networks in the ASEAN.

As a person who meticulously ensures that nothing falls through the cracks (and those I work with can attest to this), I shared my own list — a list of “Cs” — of how networks can support women entrepreneurs in the region. In the same vein, I also took the opportunity to emphasize that networks should be supported, not just by the private sector, but governments, institutions, and other stakeholders. Allow me to share you this list:

1. Clarity of goals and objectives. Setting what the network hopes to achieve should be clear at the outset to the potential members. In the case of women entrepreneurship networks in particular, this is the point where we ask: What is the goal? Is it just networking to meet contemporaries in the same field? Will the network be about partnerships and collaborations? Will the network seek to provide access to markets, to finance? Will it be about skills and capacity building? These have to be clear from the start.

2. Comprehensive and Inclusive. Time and again, we must ensure that no one must be left behind. And when applying this to women entrepreneurship networks, these are the things to consider as well: Should it include women in the workplace and in the marketplace? How about those in Micro, Small, and Medium enterprises? How about the more vulnerable sectors such as marginalized women, women in the rural areas, and women in the informal economy? Leaders of these networks should always bear in mind that not everyone has the same situation, access, and resources at hand.

3. Common interest. The vision for the network as well as the decisions made should always be based on what is beneficial to, and in the best interest of, the members. All actions and results should transcend both collective and individual interests.

4. Communication and Interaction. As in any organization or situation, there should always be open and constant communication within the network so that all concerned will be informed. Given the technologically advanced and creative platforms we have available, there are many effective ways to communicate and stay connected: virtual meetings, social media, and live broadcasts, as well as the traditional route of regular newsletters or bulletins. Networks should find inclusive ways to communicate and interact with members.

5. Commitment. A true mark of success is very much anchored on the long term view. It is vital that members or participants of our networks are here for good and for the long run. Having their commitment to grow in and with the organization will be the bloodline of the network.

In the course of the discussion with the remarkable women from my panel, one panelist contributed another “C” and a very important one at that:

6. Connect. This goes to the very heart of networks and their ability to provide members the access and privilege to be connected to people, opportunities, mentorship, and knowledge. Networks must be able to connect people to one another, especially during this “age of social distancing.” It is the way networks connect us to one another that also keep all of us tethered to the real world.

I cannot overemphasize the importance of being part of a network, especially during these difficult times when working together is of much importance. When we say “Your network is your net worth,” this speaks volumes of what one can gain by being part of a network. This includes the unique advantage of access to the wealth of mentors, advisors, and lessons from experienced and knowledgeable professionals, as well as access to growth and business opportunities. Furthermore, from networks you can achieve growth in many areas and gain new perspectives and expand perceptions, especially in business.

The lessons, benefits, and possibilities are limitless. One day, we will look back at this time and realize that networks paved the way for the business sector’s continued growth and ultimately kept the world running.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

 

Ma. Aurora “Boots” Geotina-Garcia is President of Mageo Consulting, Inc., which provides corporate finance advisory services. She is a member of the MAP Shared Prosperity Committee and MAP Corporate Governance Committee. She is the Chair of the Philippine Women’s Economic Network (PhilWEN) and Co-Chair of the Philippine Business Coalition for Women Empowerment (PBCWE).

map@map.org.ph

magg@mageo.net

http://map.org.ph

Electricity supply-demand and climate

MACROVECTOR / FREEPIK

The indefinite, no timetable lockdown policy of the government continues to pummel many businesses, and restrictions in economic activities are reflected in the continued decline in the country’s electricity demand.

Data from the Independent Electricity Market Operator of the Philippines (IEMOP) shows that average demand in the Luzon-Visayas grids this year grew moderately at 4.3% in the first quarter (Q1) compared to the same quarter in 2019, then contracted -14.6% in Q2, -2.6% in Q3, and -6.8% in Q4. In comparison, the Philippines’ GDP contracted -0.7% in Q1, -16.9% in Q2, and -11.5% in Q3.

With a decrease in demand while the supply remains high, prices at the Wholesale Electricity Spot Market (WESM) also decreased. The effective spot settlement price (ESSP) this year contracted from -21% to -71% while the load weighted average price (LWAP) contracted from -13% to -64% (see Table 1).

The decline in prices though cannot be fully reflected in the generation charge in our monthly electricity bills because spot quantity is only about 10% of all WESM electricity trading this year and 90% via bilateral contract where prices have been set for many years between gencos and distribution utilities (DUs) and electric cooperatives (ECs) as the distributors want insurance that they will get the power when they need it.

There are four stories and Opinion pieces in BusinessWorld that I want to comment on:

1. “PHL coal-fired power capacity seen increasing by 135% despite moratorium on new projects” (Dec. 2).

2. “Worst case for continuing with PHL coal projects seen at P372B in long-term costs” (Dec. 12).

3. “Forging collaborative pathways for a decarbonized and regenerative future,” Part 1 (Dec. 1) and Part 2 (Dec. 8) by Federico “Piki” R. Lopez, Chair and CEO of First Philippine Holdings Corp.

4. “ERC to enforce new rules on allowable outages of power plants” (Dec. 19).

Reports 1 and 2 cite the studies by Clean Air Asia (CAA) and Center for Research on Energy and Clean Air (CREA), respectively. Both studies complain about more coal power, CREA even goes wild and irrational in projecting 26,000 premature deaths in the Philippines because of those coal plants.

The rise in coal share to total power generation in the country especially in 2018 and 2019 (see Table 2) coincided with high GDP growth of 6.2% and 6% respectively. It also coincided with the rising life expectancy of Filipinos to 71.1 years in 2018 from 69.8 years in 2010.

When there is a rising supply of cheap, stable, reliable electricity, there is also rising potential for the economy and people live wealthier, healthier, and longer, not shorter. The anti-coal NGOs are peddling the usual energy disinformation and fake news.

On #3, Mr. Lopez wrote in his Acceptance Speech as “MAP Management Man of the Year” award on Nov. 23:

“Today our way of life has set us on a trajectory of 3 to 4 degrees C of warming by 2100… this year travel and transport reductions and the economic slowdown from COVID-19 is expected to reduce carbon emissions by 7-8%. In other words, we need a COVID-scale crisis every year till 2050 just to keep the planet livable!”

With this kind of alarmist projections and statements, it may help to remind people that all gloom-doom projections in the past of climate catastrophe did not happen, all were false. See these four reports for instance:

1. “UN Predicts Disaster (by 2000) if Global Warming Not Checked,” June 30, 1989, https://apnews.com/article/bd45c372caf118ec99964ea547880cd0.

2. “Last chance to save the planet?” May 30, 1992, https://www.newscientist.com/article/mg13418235-100-last-chance-to-save-the-planet/.

3. “Arctic summers ice-free by 2013,” Dec. 12, 2007, http://news.bbc.co.uk/2/hi/science/nature/7139797.stm.

4. “Gore: Polar ice cap may disappear by summer 2014,” Dec. 14, 2009, https://usatoday30.usatoday.com/communities/ondeadline/post/2009/12/gore-new-study-sees-nearly-ice-free-arctic-summer-ice-cap-as-early-as-2014/1/.

On report number 4, this is problematic for three reasons: One, the generation sector continues to be very competitive with 135 gencos in Luzon-Visayas alone as of September 2020 from only 114 in 2018, so why harass these players? Two, ERC could be making arbitrary values on what is allowable and not allowable and hence to be penalized. Three, gencos would lose money, not gain, if they have frequent or prolonged shutdowns, scheduled or unscheduled: they cannot sell at WESM, they must buy replacement power normally at higher price to fulfil their supply contracts with DUs and ECs.

The ERC should stay away from additional regulations that can discourage more gencos coming in, and existing ones to further expand. The environmental NGOs should be more truthful, be more factual and not emotional.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers

minimalgovernment@gmail.com

Hail Mary

“It’s a Hail Mary attempt, with due respect to the Virgin Mary,” said University of Texas School of Law Professor Steve Vladeck when asked by CNN’s Erin Burnett what he thought of the Donald Trump-backed lawsuit filed by the state of Texas to invalidate the ballots mailed in Pennsylvania. The term “Hail Mary” is generally used to describe a desperate effort to reverse an imminent but unwanted consequence.

The term is a common expression in American football and basketball, two sports which are played within a certain period of time. The losing team can attempt in the last seconds a desperation play with very little chance of success in the hope it will snatch victory from the jaws of defeat. A 65-yard field goal attempt in American football and a long shot from the backcourt in basketball are examples of Hail Mary plays.

The term traces its origin to the 1922 football team of the University of Notre Dame, a Catholic school run by the priests of the Congregation of the Holy Cross. A member of that team, Jim Crowley, told the story of a game between Notre Dame and Georgia Tech in which the Fighting Irish, as Notre Dame players are known, said Hail Mary prayers together before each touchdown attempt.

They must have been taught by the Holy Cross Fathers that Holy Mary is a powerful intercessor for God’s blessings. After all, the school is named after the Mother of Jesus. As they scored their first touchdown after saying the Hail Mary, they decided to pray before every crucial play. Thus, they beat Georgia Tech.

After the game, teammate Noble Kizer, who suggested the idea of praying, told Crowley, “Say, that Hail Mary is the best play we’ve got.” Crowley told the story repeatedly in public speeches beginning in the 1930s.

The term gained widespread usage in 1975. In a crucial game televised nationwide by NBC, the Dallas Cowboys, down by four points with just 24 seconds left in the game and 85 yards away from the goal line, beat the Minnesota Vikings on a desperation touchdown pass by Dallas Quarterback Roger Staubach to his teammate Drew Pearson at the goal line. Asked about the game-winning pass during the post-game interview, Staubach said, “I closed my eyes and said a Hail Mary.”

Roger Staubach, as a member of the football team of the US Naval Academy at Annapolis, won the Heisman Trophy, the award given to the best football player in the nation for the collegiate football season of 1965. After graduating from the Academy and serving a tour of duty in Vietnam, he joined the Dallas Cowboys of the National Football League. He led the team to five Super Bowls, the Cowboys winning two of them. He is in Football’s Hall of Fame. He is considered one of the best quarterbacks of all time. In 2010, Staubach was named the No. 1 Dallas Cowboy of all time by the Dallas Morning News.

One would think that Roger Staubach saying the Hail Mary is just another luck-invoking but empty ritual by a super athlete. Basketball superstar LeBron James tosses chalk into the air before a game. Tennis Grand Slam champion Rafael Nadal drinks his water and energy drinks in the same order and puts back the bottles in the same position and on the same exact spot every time.

But we can assume Staubach says Hail Mary not as a mechanical ritual but with fervor as he is a devout Catholic. He attended St. John the Evangelist Catholic School and graduated from Purcell High School in Cincinnati. He must have heard the Gospel read at Mass last Sunday many times.

“Hail Mary, the Lord is with you,” said the Archangel Gabriel to the virgin girl named Mary.” “How can this be since I am a virgin?” asked Mary. “The Holy Spirit will come upon you,” the angel answered. “Be it done unto me according to thy word,” declared Mary in submission to God’s will.

Mary consented out of love to accept God’s will. Staubach must have been taught by the priests and nuns in school that acceptance made Mother Mary a powerful intercessor. That is why Staubach asks her to intercede for him when challenged.

The gospel yesterday was about the time when Mary went to visit her cousin Elizabeth. When Elizabeth heard Mary’s greeting, she exclaimed with a loud cry, “Blessed are you among women and blessed is the fruit of your womb. And why has this happened to me that the mother of my Lord comes to me?”

Both Mary and Elizabeth were going through difficult times, Mary bearing a child when she was not married and Elizabeth bearing a child at an advanced age. But they used their faith in God and the joy of being together as a source of energy for carrying out their missions. Like Mary and Elizabeth, we, too, can turn our troubles into blessings and joys.

Today’s gospel is Mary’s song of praise to God, the “Magnificat.” It calls us to be like Mary, a willing and humble handmaid of the Lord. We are called to be God’s servants, serving Him and others for His glory.

Because of the pandemic and its impact on the economy, many of our country men and women are starving, some are very sick, and still others are tormented by the thought of a very dark future. Let us who have more in life share with them whatever blessings we have. Let us also say the “Hail Mary” on their behalf, so that the Lord will snatch them from the jaws of despair.

Hail Mary!

 

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, and management professor. He has been a politicized citizen since his college days in the late 1950s.

No foreign interest yet in geothermal projects

THE Energy department has yet to receive applications from foreign investors interested in geothermal and biomass projects, officials said Monday, two months after geothermal was opened up to 100% full foreign ownership.

Energy Secretary Alfonso G. Cusi had liberalized investment in the geothermal industry for the third open and competitive selection process (OCSP3).

In a briefing Monday, Mr. Cusi said “Wala pa (none yet)” in reference to foreign interest in geothermal.

Biomass projects have also drawn no foreign inquiries, according to the director of the Renewable Energy Management Bureau, Mylene C. Capongcol.

“(Ang) pagkakaalam ko wala pa rin na pumasok na foreign (No foreign investments have come in)… but there are a lot (local) of biomass projects that were applied for,” she said.

Last year, the DoE (Department of Energy) opened the biomass sector to foreign firms, according to its omnibus guidelines for the award and administration of renewable energy contract services.

AREAS IDENTIFIED FOR FOREIGN PARTICIPATION
Ms. Capongcol said three out of five predetermined geothermal areas are open to full foreign ownership. These are the Mt. Labo, Daklan, and Puting Lupa Geothermal Projects, which had a total potential capacity of 74 megawatts.

Mount Labo is in Camarines Norte, Daklan in Benguet and Puting Lupa in Laguna.

Ms. Capongcol said that two Filipino companies have submitted letters of intent to the department.

“We expect na by April, ma-identify na kung sino ‘yung ‘tong mga willing bidders and… by May, mapirmahan po din ni Secretary. (We expect that, by April, we would be able to identify the willing bidders. I hope that by May, the list will be signed by the Secretary),” she said.

She added that the updated OCSP3 guidelines are expected by Dec. 30.

Asked about whether the agency is seeking to modify the project terms to attract more foreign interest, Ms. Capongcol said she believed the current incentive scheme is “quite good.”

“We keep promoting and facilitating (the) entry (of the) private sector or RE developers in all aspects of renewable energy technologies,” she added.

At the briefing, Mr. Cusi also gave updates on the status of the nuclear policy recommendation submitted last week to President Rodrigo R. Duterte last week.

“We submitted that last Friday (Dec. 18)… We have (a) positive expectation. We hope that it will be included… in our energy mix,” he said. Five months earlier, Mr. Duterte created an interagency body to conduct a study on a national policy regarding the use of nuclear energy. — Angelica Y. Yang

Philippines, France in talks to cooperate in nuclear energy, disaster management

THE Trade department said it is in talks with France for potential partnerships in nuclear energy and disaster management.

Trade Undersecretary Ceferino S. Rodolfo met virtually with French Ministry of Economy and Finance Head of Bilateral Trade Relations Denis Le Fers on Dec. 17 to discuss areas of cooperation, which also included infrastructure, transportation, electronics, aerospace, renewable energy and agriculture, the Trade department said in a statement Monday.

No details of the talks were provided. France has a significant nuclear power industry, generating about 75% of its electricity from nuclear power plants, according to the World Nuclear Association, though the goal is to reduce this to 50% by 2035. The Philippines is close to making a decision on whether to include nuclear power into its energy mix.

The two economies have public and private sector partnerships for manufacturing in the electronics, aerospace and shipbuilding sectors.

“We have existing cooperation in key sectors in manufacturing and this enhances the trade relationship of Philippine suppliers with major French companies in the electronics and aerospace industries,” Mr. Rodolfo said.

“Equally important is that we also have cooperation that has led to the entry of French investment. The economic reforms we have put in place will further foster these synergies between our governments and businesses.”

The meeting, the department said, serves as a follow-up to the 8th Philippines-France Joint Economic Commission held last year. Both sides agreed to hold the 9th meeting next year.

Trade Secretary Ramon M. Lopez also held talks with French business association Mouvement des Entreprises de France in September.

France is one of 17 target markets for the government’s recently launched investment promotion campaign, which will focus on the automotive, aerospace, electronics, outsourcing, and copper/nickel sectors.

France is the second-largest source of approved foreign investment from the European Union this year, the Trade department said. Projects include the HyStar hydrogen optimization facility partnership between Air Liquide Philippines and Pilipinas Shell Corp.

France was the Philippines’ 18th largest source of imports last year, with goods valued at $1.3 billion, according to the Philippine Statistics Authority. France was also the 14th biggest destination of Philippine products last year, with exports valued at $798 million. —  Jenina P. Ibañez

ARTA says validity of electronic signatures cleared by CoA

THE Anti-Red Tape Authority (ARTA) has confirmed that electronic signatures may be used for government permits and licenses.

In a statement Monday, ARTA said it arrived at this determination after consulting with the Commission on Audit (CoA).

ARTA said it is seeking to address reluctance expressed by government agencies after the authority rolled out its guidelines on the use of digital signatures through the Philippine National Public Key Infrastructure.

CoA told ARTA that the digital signatures may be used as long as they comply with government rules and regulations, including requirements under Republic Act 8792 or the Electronic Commerce Act.

CoA has said that agencies planning to use digital signatures must hold users accountable and penalize improper use.

“At a minimum, the controls should ensure authentication of documents, non-repudiation of the signatures, and integrity of documents,” ARTA said.

The commission added that state auditors have been instructed to allow the use of such signatures in procurement-related documents.

ARTA said that although government agencies must provide digital payment options, no one should be banned from paying in cash or through check.

“Digital payments and digital signatures are two of the critical aspects that government offices should learn to embrace and adopt to enable the complete online performance of government services in their agencies,” ARTA Director General Jeremiah B. Belgica said.

“CoA’s affirmation on the validity and acceptability of these digital solutions for government services would allow agencies to decisively proceed with their automation programs.”

The Electronic Commerce Act requires electronic signatures users to have a reliable procedure in which the signing party is identified and shown to have access to the document.

“Electronic signatures shall be authenticated by demonstrating, substantiating and validating a claimed identity of a user, device, or another entity in an information or communication system, among other ways,” according to the law. — Jenina P. Ibañez

BIR sets lower, P5M threshold for withholding agents in some RDOs

THE Bureau of Internal Revenue (BIR) said Friday that its withholding rates for major suppliers of goods and services are at 1% and 2% respectively, but the qualifying threshold for serving as an agent has been lowered in some districts to P5 million worth of gross sales or receipts of gross purchases.

The rates are outlined in Revenue Regulations No. 31-2020, and apply to all suppliers meeting the minimum thresholds for serving as withholding agents in force at the various Revenue District Offices (RDOs).

The eligibility cutoff is at least P12 million worth of gross sales or receipts of gross purchases for RDOs under Groups A and B. The new P5 million cutoff applies to RDOs in Groups C, D, and E.

The old rule was for a blanket threshold of P12 million regardless of RDO classification.

“This is a revenue enhancement measure as this will allow the BIR to increase its collection of withholding tax from tax withholding agents under groups C, D, and E as the threshold amount is lowered to P5 million,” said Maria Lourdes P. Lim, the tax managing partner of Isla Lipana & Co., PwC Philippines, in a text message on Monday.

However, Ms. Lim said that the new scheme could be “confusing” for taxpayers and they still need to verify whether they belong to the top withholding agents based on the published list. — Luz Wendy T. Noble

Master plan launched for Leyte industrial zone

THE Board of Investments (BoI) said Monday that it launched the master plan for the Philippines’ first ecological industrial zone, targeted at copper producers.

Trade Secretary Ramon M. Lopez in an online event Monday said that the Leyte Ecological Industrial Zone (LEIZ) will have three clusters: a main manufacturing hub, a commercial and agro-industrial area, and agro-industrial development and training facilities.

“These three sites will complement each other and provide the needed raw materials, products, services, and manpower that the other development cluster needs,” he said.

The government engaged architecture firm Palafox Associates in developing the plan. An eco-industrial park is a group of businesses on one site that efficiently use and share resources to minimize waste and pollution.

According to the government’s copper industry roadmap, the BoI plans to develop a “fully integrated” copper industry by 2030, by establishing a wire rod casting facility and the manufacture of higher-value copper products.

Mr. Lopez said the copper industry’s main opportunities lie in supplying electric vehicles, 5G network, and solar power manufacturers.

“At present, the electric vehicles industry makes up just 1% of copper demand. By 2030, many analysts expect that figure to reach 10%,” he said.

“Likewise, clean energy and digitalization programs are expected to push average annual growth demand for copper up by 2.5% this decade. This would likely drive consumption toward 30 million tons by 2030.” — Jenina P. Ibañez

ERC sets hearing on NGCP network charge to pay for 2019 damage

THE Energy Regulatory Commission (ERC) will hold a virtual hearing next year to assess the National Grid Corp. of the Philippines’ (NGCP) request to collect Force Majeure (FM) Pass-Through charges to compensate it for damage caused by typhoons and earthquakes last year.

The first part of the virtual hearing is scheduled on Jan. 19, in which the ERC will determine the NGCP’s legal compliance after hearing the grid company’s presentation.

The ERC also solicited comment from stakeholders with a deadline of one day before the hearing. “The Commission shall give priority to the stakeholders who have duly submitted their respective comments and/or clarifications, to discuss the questions during the course of the presentation,” the ERC said in a statement.

The second part of the hearing is scheduled for Jan. 27, and will consist of a pre-trial conference and presentation of evidence.

In October, the NGCP asked the ERC to approve the collection of FM Pass-Through charges to recover costs in rehabilitating transmission assets and facilities that were damaged by typhoons Tisoy (international name: Kammuri) and Ursula (international name: Phanfone), and various earthquakes in Mindanao in 2019.

“The proposed charge will be reflected as additional network charges for end-users from January 2021 up to December 2025, or until such time that the amounts incurred are fully recovered,” the NGCP said.

The prospective charge will start at P0.35 kilowatt per month (kW-mo) in 2021 for consumers in Luzon. Meanwhile, the suggested amounts for Visayas and Mindanao consumers will start at P0.8742 and P0.2178 kW-mo, respectively next year. — Angelica Y. Yang

Last-minute reminders before the holidays

 

As a young professional working and living away from my family, I look forward to December. Booking a flight, buying gifts, and planning a vacation give me a rush. December is also usually when I re-evaluate the goals I have set for myself, look back on the decisions I made, and assess whether I still get fulfillment from the things I do. However, this year was different. I have to remind myself that surviving difficult times is a success in itself, that taking a break does not necessarily mean abandoning your dreams. That it is fine to rest, keep the faith, and just strike later.

Just as this year changed our lives and forced us to recalibrate our mindsets, several regulations were also issued by the Bureau of Internal Revenue (BIR) to help taxpayers cope with the difficult times. Listed below are the deadlines that we need to look out for as they come due after getting extended.

RELATED PARTY TRANSACTIONS RETURN (BIR FORM 1709)
The first deadline for the submission of Information Return on Related Party Transactions (BIR Form 1709) and supporting documents as attachments to Annual Income Tax Return is on Dec. 29, 2020. This deadline is for companies with accounting periods ended Fiscal Year (FY) March 31, 2020 and April 30, 2020. Deadlines for submission by companies with periods ending on other than the above dates are as follows:

These deadlines were a further extension pursuant to Revenue Memorandum Circular (RMC) No. 98-2020 to give taxpayers ample time to prepare and file. This is considering that the effectivity of the submission requirement was only on July 25, 2020 pursuant to Revenue Regulations (RR) No. 19-2020.

As clarified in RMC No. 76-2020, BIR Form 1709 shall be manually filed at the Large Taxpayers (LT) Division/ Revenue District Office (RDO) where the taxpayer is registered. A penalty of between P1,000 and P25,000 will be imposed for failure to file BIR Form 1709 and its required attachments due to reasonable cause and not willful neglect. In case of repeated offenses, the maximum penalty of P25,000 will be imposed. If after receiving valid summons and the taxpayer still fails and neglects to produce the form and attachments, the responsible officer is liable for a fine of between P5,000 and P10,000 and imprisonment of between one and two years*.

FILING FOR VAT REFUND CLAIMS
The application for VAT (value-added tax) refund claims covering the quarter ended Sept. 30, 2018 will be due on Dec. 31, 2020. Deadlines for the application for VAT refund claims covering other taxable quarters are shown above.

Pursuant to RR No. 28-2020, areas with enforced Enhanced Community Quarantine (ECQ) or the Modified Enhanced Community Quarantine (MECQ) after Dec. 29, 2020 will be given an additional 30 days after the lifting of the ECQ or MECQ to apply for VAT refund claims. The 90-day period for processing of VAT refund claims is likewise suspended and will resume after 30 days from the lifting of ECQ or MECQ.

VOLUNTARY ASSESSMENT AND PAYMENT PROGRAM (VAPP)
To gain additional revenue to fund government expenditure during the pandemic, the BIR implemented VAPP for the 2018 calendar year and fiscal years ending between July 2018 and June 2019. The last day to avail of the program, which started on Sept. 21, 2020, is on Dec. 31, 2020**.

Covered taxpayers may either be individual or juridical entities, including estates and trusts which erroneously paid or failed to pay the covered taxes for the covered periods due to inadvertence or otherwise.

An availing taxpayer may file personally or through a courier service. Payments may be made in cash to any BIR Authorized Agent Bank (AAB) under the LT office/RDO having jurisdiction over the taxpayer, except for one-time transactions (ONETTs) involving the sale of property which must be filed or paid with AABs/Revenue Collection Officers (RCOs) under the RDO covering the location of the property.

AVAILMENT OF TAX AMNESTY ON DELINQUENCIES (TAD)
TAD can only be availed of until Dec, 31, 2020*** by those taxpayers with internal revenue liabilities for taxable year 2017 and prior years. Any person, whether natural or juridical, may avail of TAD.

The TAD will be considered fully complied with upon completion of all the steps provided in RR No. 15-2020 on or before Dec. 31, 2020. The December deadline is a further extension provided under RMC No. 61-2020 pursuant to Republic Act (RA) No. 11213 or the Bayanihan to Heal as One Act, which directed government offices to suspend deadlines for the duration of the community quarantine.

SUSPENSION OF BIR AUDIT AND FIELD OPERATIONS
Between Dec. 15, 2020 and Jan. 27, 2021, no field audit, field operations, or any form of business visitation in execution of Letters of Authority (LoAs)/Audit Notices or Mission Orders should be conducted. During this period, taxpayers may enjoy the holidays as no written orders to audit and/or investigate their internal revenue tax liabilities shall be served, unless of course to those that are enumerated in RMC No. 127-2020 who may still be subjected to audit.

Service of notices to avail of the TAD, Estate Tax Amnesty (ETA) and VAPP are not covered by the suspension. Also, taxpayers may still voluntarily pay their known deficiency taxes without the need to secure authority from concerned revenue officials.

It is important for taxpayers to note that after Jan. 27, 2021, BIR audit and field operations will resume and preparations during the suspension will come handy.

As we prepare ourselves for the holidays by closing our year with peace of mind for a fruitful upcoming year, it is the same for our dues and obligations to the government. Before we embark on merry making and making fond memories with our loved ones, it is best that we keep abreast of what is to come since after each ending comes a new beginning. May we have a fruitful 2021.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Paul Vinces C. Leorna is a senior in-charge of Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

 

Note:
On Dec. 22, the BIR published RRs to extend deadlines and clarify issues as follows:

a. *BIR Form 1709: Preparation and submission of TPD is only required for taxpayers covered by the submission of BIR Form 1709 and who meet the threshold requirements as provided in RR No. 34-2020

b. **VAPP: Deadline to avail of the VAPP is extended to June 30, 2021. Taxpayers with a duly issued Certificate of Availment may not be audited for 2018 for the tax types covered by the availment. Hence, taxpayers who availed of the VAPP on withholding taxes will be allowed to claim deduction on the corresponding income payment pursuant to RR No. 6-2018

c. ***TAD: TAD can be availed of until June 30, 2021.

FIBA Asia Cup bubble hosting an opportunity to learn some more

Says the Samahang Basketbol ng Pilipinas

By Michael Angelo S. Murillo, Senior Reporter

WITH the countdown for the country’s hosting of the 2023 International Basketball Federation  (FIBA) Basketball World Cup now under way, the Samahang Basketbol ng Pilipinas (SBP) has also begun prepping up to have itself ready for the big event.

And while the coronavirus pandemic has rendered early preparations challenging, the local basketball federation remains undeterred and is forging ahead.

One way it is going about shaping up is by hosting one of the tournament bubbles of the FIBA Asia Cup Qualifiers set for February next year.

The Philippines joins Japan, Qatar, and Bahrain as sites for the matches of the third and final window of the pandemic-hit qualifiers.

Clark in Angeles, Pampanga, will be the site of the bubble here that will have teams from Groups A and C competing from Feb. 18-22, 2021.

For SBP President Al S. Panlilio, the February hosting bears much significance as they get the ball rolling for the 2023 FIBA World Cup preparations.

“It’s preparatory for 2023. We are trying to improve every time. Obviously, we’ve hosted a lot in the past. It’s always a learning experience for us. Today is a learning experience because of the pandemic,” said Mr. Panlilio at the virtual conference for the February hosting last Saturday.

The SBP executive went on to say that they are also using the event as an opportunity to foster further their good relationship with FIBA and champion the sport.

“We’ve always had a good relationship with FIBA, our Chairman Emeritus MVP (Manny V. Pangilinan) is at the Central Board and FIBA Asia called if we can consider hosting the February window, not only our grouping, but also Group C. We’ve always wanted to host events here around our countrymen… That’s always been MVP’s thrust. He had so many things here, the FIBA Asia Qualifier, the Olympic Qualifying Tournament, and we’ve always wanted to bring the games here, so our Filipino fans will be able to see our team play,” Mr. Panlilio said.

The Philippines earned the right to host the 2023 FIBA Basketball World Cup along with Japan and Indonesia, beating the joint bid made by Argentina and Uruguay.

The World Cup is to take place from Aug. 25 to Sept. 10, 2023 with the group phase held across all three host countries and the final phase to follow here in the country.

It will mark the first time that the Philippines will host the event after four decades.

ENSURING FEBRUARY IS A SUCCESS
Meanwhile, Mr. Panlilio said they will ensure the country’s hosting of the February Asia Cup Qualifier bubble will be a success, banking on cooperation with the different stakeholders, including the Philippine Basketball Association (PBA), and pertinent government agencies.

“It’s a different kind of hosting, and with the help of the government and the PBA’s experience, it will be a very successful one,” he said.

In offering to be host of the FIBA bubble, SBP touted the successful staging of the tournament bubble of the PBA from October to early this month also in Clark.

In turn, the PBA and the Bases Conversion and Development Authority (BCDA), also in the press conference, expressed their full cooperation in the undertaking.

Set to see action in the window here are Gilas Pilipinas (3-0), Korea (2-0), Indonesia (1-2), and Thailand (0-4) in Group A, and New Zealand (2-0), Australia (1-1), Guam (0-1), and Hong Kong (0-1) in Group C.

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