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Regional Updates (01/06/21)

Flood control for Cagayan de Oro

TWO river control projects to protect two low-lying villages in Cagayan de Oro City from flooding, with a combined cost of P120 million, have been completed by the Department of Public Works and Highways (DPWH). The city saw its worst flooding in December 2011 when typhoon Sendong, with international name Washi, swept through the northern part of Mindanao.

DoT warns hotels, tour operators offering staycation in non-accredited establishments

THE Department of Tourism warned hotels and other accommodation facilities offering staycation without the appropriate certification. “We would like to correct the misperception that all four- or five-star rated accommodation establishments can operate as staycation hotels. For such hotel to accept guests for leisure purposes, it has to apply for a Certificate of Authority to Operate as Staycation (CAOS) hotel,” Tourism Secretary Bernadette Romulo-Puyat said in a statement on Tuesday. The warning was issued after Ms. Puyat’s letter to the City Garden Hotel Makati’s management ordering an explanation why they had leisure guests on New Year’s eve when it does not have a CAOS. The hotel is an accredited quarantine facility, which also means it is prohibited from accepting guests who are not undergoing the mandatory 14-day isolation. Ms. Puyat stressed that a CAOS hotel “cannot, above all things, concurrently operate as a quarantine facility.” A 23-year old flight attendant died in one of the rooms of the City Garden Hotel following a private New Year party. The department’s warning also covers “tour operators and other entities that continue to post invitations or make false, deceptive and misleading claims or statements for the purpose of soliciting business from clients.

Nationwide round-up (01/06/21)

Senate to prioritize PhilHealth hike deferment bill

THE Senate will prioritize the bill that will defer the scheduled rate increase for Philippine Health Insurance Corp. (PhilHealth) contribution when sessions resume, a Senate leader said on Wednesday. “We will prioritize the bill filed yesterday on the deferment of the additional increase of monthly contributions during the time of the Pandemic,” Senate Majority Leader Juan Miguel F. Zubiri told reporters over phone message. He said the rules committee will immediately refer Senate Bill No. 1968 among other bills that seek to amend Republic Act No. 11223, the Universal Health Care Act, for committee action. “Once the committee report is done, we can finish in plenary within two to three weeks of debate and amendments,” he said. PhilHealth President and Chief Executive Officer Dante A. Gierran on Tuesday officially announced the deferment of the rate increase, in line with President Rodrigo R. Duterte’s directive. “We will implement the suspension until Congress passes a new law that will allow the deferment of the scheduled premium adjustment,” Mr. Gierran said  in a statement in Filipino posted on PhilHealth’s official Facebook page. The rate increase will be implemented should Congress fail to pass an amendment to the UHC law, he said. — Charmaine A. Tadalan

House resolution filed for inquiry on vaccination program

A RESOLUTION seeking to conduct an inquiry into the status of the government’s coronavirus vaccination program has been filed in the House of Representatives. Marikina Rep. Stella Luz A. Quimbo filed House Resolution No. 715 to look into the details of the use of funds allocated for coronavirus disease 2019 (COVID-19) vaccines, including procurement, and preparation of equipment and personnel. Ms. Quimbo said the inquiry is intended to provide “necessary oversight to ensure sufficient capacity for nationwide distribution, and an overall cost-effective implementation.” While there are reported negotiations ongoing with various pharmaceutical firms to acquire vaccines, Ms. Quimbo said a clear plan is needed “for how to maximize available funds across vaccine types” and to provide guidance on the amount of funds still needed. — Kyle Aristophere T. Atienza

Senate resolution filed to probe unregistered vaccine purchase

A RESOLUTION seeking to investigate the procurement of unregistered vaccines for the coronavirus disease 2019 (COVID-19) inoculated to Cabinet officials, military and Presidential Security Group (PSG) members has been filed in the Senate. Resolution No. 603 was filed to look into those behind the smuggling of the vaccine and its distribution, which detained Senator Leila M. de Lima deemed as a danger to national security. “Those who have been vaccinated are senior officials of our country who are essential to the functioning of our democracy. As such, to have them vaccinated with unregistered and unvetted vaccines constitutes endangerment not only to themselves but also to our national security,” she said in a statement on Wednesday. This comes after President Rodrigo R. Duterte ordered the PSG not to attend a Congress hearing that will investigate the use of COVID-19 vaccines not yet certified by the local Food and Drug Administration (FDA). Senator Sherwin T. Gatchalian, for his part, said he is more concerned on the smuggling issue rather than the prioritization of PSG personnel in the vaccination. — Charmaine A. Tadalan

Senator falls victim to credit card hacking

A HACKER was able to access Senator Sherwin T. Gatchalian’s credit card details on Tuesday and used it for over P1 million worth of transactions from delivery firm Food Panda, the senator said on Wednesday. “My credit card has just been hacked! May nag order ng P1M worth of food sa Food Panda in less than an hour,” Mr. Gatchalian said in a social media post. In the same post, he showed that four transactions worth P300,851, P356,517, P323,247 and P96,265 to Food Panda were charged to his credit card issued by the UnionBank of the Philippines. Mr. Gatchalian said the hackers changed his mobile number through his online account to allow them to redirect the one-time pin (OTP) sent during the transactions. He narrated during an online briefing Wednesday that notifications from the bank regarding the phone number change came through while he was at the Senate for a hearing. The senator will file the police report on the incident on Thursday at the Valenzuela Police Station. He said UnionBank immediately deactivated the credit card and is now investigating the hacking. — Charmaine A. Tadalan

Makati court judge inhibits from Ressa case

A MAKATI City trial court judge inhibited from hearing the second cyberlibel case of Rappler Chief Operating Officer Maria A. Ressa after receiving an email that contained a death threat. Judge Maria Amifaith S. Fider-Reyes, in an order, said she received an email on Dec. 4 asking her to junk the case against Ms. Ressa, including a threat to her life. She received a second email from the same sender thanking her for allowing the journalist to travel for the holidays. “To avoid the impression that the decisions of this Judge are influenced or affected by the correspondence received from this e-mail address, the judge finds just reasons to inhibit from the case,” the order read. “Whoever is responsible for this e-mail is severely reprimanded for lack of respect to the judicial process,” she added. Ms. Ressa, in a statement, said she doubts that the messages were from a supporter and she would “never condone nor tolerate attempts to manipulate the rule of law.” — Vann Marlo M. Villegas

Duterte signs bills extending budget, Bayanihan II validity

PRESIDENT Rodrigo R. Duterte signed measures extending the validity of the funds authorized by the 2020 national budget as well as those appropriated for the government’s second stimulus package.

Malacañang on Wednesday released the copies of the signed Republic Act (RA) No. 11520 and RA No. 11519, which had been passed by Congress over the last few weeks of 2020.

RA No. 11520 extends the availability of all appropriations authorized under the 2020 national spending plan, including the fiscal support for government-owned and -controlled corporations and the allocations for infrastructure capital outlays, until Dec. 31, 2021. The law aims to continue the financing of infrastructure projects that were identified for procurement last year. The projects must be completed not later than the end of 2021.

The law, however, contains no extension of the President’s powers to reprogram, reallocate, and realign savings from the 4.1-trillion national budget last year.

RA No. 11519 extends the availability of funds appropriated through RA No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II), which was passed last year to mitigate the impact of the pandemic on the economy. Bayanihan II expired on Dec. 19.

The new law allows government agencies to release the remainder of the P165.5 billion authorized under Bayanihan II, which includes the P25.5 billion in “standby” money which was contingent on the identification of funding sources.

Legislators expressed concerns about the slow disbursement of Bayanihan II in the wake of sweeping job losses and other problems that emerged during the pandemic.

On Dec. 28, Mr. Duterte signed the 4.5-trillion national budget for 2021. — Kyle Aristophere T. Atienza

PHL, India return to pre-pandemic levels by end-2022 uncertain

MOODY’S ANALYTICS said the recovery in the Philippines and India will lag the rest of the Asia-Pacific (APAC), with both countries struggling to restore their economies to pre-pandemic levels by the end of next year.

In a note issued Wednesday, “The APAC Economy: Looking Forward to 2021,” Moody’s Analytics Chief Asia-Pacific Economist Steven Cochrane said in the case of the Philippines, the coronavirus disease 2019 (COVID-19) outbreak remains uncontained, while the government’s stimulus spending is among the smallest in the region.

In the report, Moody’s Analytics downgraded its 2020 gross domestic product forecast for the Philippines to a contraction of 9.9% from the 8.2% contraction it projected in November.

It now expects the economy to grow 4.5% this year and 6.2% in 2022.

“Much of the region will have regained all of its lost output by the end of 2021, although India and the Philippines will struggle to reach this benchmark by the end of 2022,” it said.

On Wednesday, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said at a forum that the Philippines is expected to recover the economic output lost last year by mid-2022.

Mr. Cochrane said the region is poised to bounce back stronger than the rest of the world as most countries in the region have contained their outbreaks, except for the Philippines and Indonesia. He added that the region’s manufacturing supply chains are focused on goods in demand during the recovery phase, like computers, mobile phones, technology equipment, pharmaceuticals and protective gear.

Accommodative monetary policy by central banks in the region will also help fast-track the rebound, coupled with large recovery packages.

He said the Philippines and India will lag their peers because the two governments were “least committed to fiscal stimulus, even though they were the two most hard-hit economies from COVID-19 and their subsequent lengthy and strict quarantine policies.”

The note also cited the region’s relatively fast action in procuring COVID-19 vaccines.

“An important exception is the Philippines, which has made little progress so far,” it added.

Citing data from the Duke Global Health Innovation Center, Moody’s Analytics noted that only the Philippines has not yet bought any COVID-19 vaccines out of the 21 economies tracked.

“Currently, however, there remains a risk that the smaller emerging markets in APAC will be among the last to have enough vaccine doses,” Mr. Cochrane said.

He said the region could also benefit from an expected foreign policy shift when President-elect Joseph R. Biden, Jr. takes office this month.

“Yet whether still struggling to gain lost output or expanding their economies to new heights, all countries within APAC will grow in the coming year. Risks to the outlook include the perniciousness of COVID-19, which could cause deeper economic shutdowns in Europe and North America that would staunch the global trade in goods that is so important to the APAC economy.” — Beatrice M. Laforga

Peak power demand in 2021 seen exceeding pre-lockdown levels

ABOITIZ POWER CORP.

PEAK POWER demand in 2021 is expected to hit 16,333 megawatts (MW), topping the 15,282 MW high from 2020, which was recorded before the lockdowns were imposed, the Department of Energy (DoE) said.

The DoE was reporting out data compiled by its Electric Power Industry Management Bureau (EPIMB).

“Luzon is expected to reach a peak demand of 11,841 MW during the summer period, from the 2020 peak demand of 11,103 MW which occurred prior to community quarantines,” DoE Head of Public Affairs Jive Bullock told BusinessWorld via Viber Wednesday.

“Visayas, on the other hand, is anticipating a peak demand of 2,394 MW in 2021 from 2,201 MW in 2020, while Mindanao is forecast to have a peak demand of 2,098 MW, from 1,978 MW in 2020,” she added.

Ms. Bullock said the forecasts are based on the National Economic Development Authority’s (NEDA) growth projections for 2021 gross domestic product (GDP), as of May, as well as actual demand in 2020. She said that in May, NEDA had expected GDP to grow 8 to 9% this year.

Asked about the supply outlook for the three grids in 2021, she said available capacity is still being evaluated.

“(This is) due to recent developments and concerns from the generation and transmission sectors in their maintenance schedules and the limited or slow movements of foreign technical consultants  because of the pandemic,” Ms. Bullock said.

In a Dec. 21 briefing, Energy Secretary Alfonso G. Cusi said the DoE is seeking to add power capacity as the current supply “barely met demand.” He added that a surge in power demand is expected once the economy opens fully.

At the same event, he said demand for oil products will be higher this year as the transportation sector picks up after the shutdowns imposed by the public health emergency. — Angelica Y. Yang

DTI says safeguard duties to protect domestic jobs

TRADE Secretary Ramon M. Lopez disputed the auto industry’s claims of potential job losses caused by safeguard duties on car imports, countering that the duties are designed to protect manufacturing jobs rather than those of importers.

The Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI), following a pandemic-driven 41.6% sales drop as of November, said that duties would impede the sector’s recovery and pose a risk to employment in the industry.

Mr. Lopez in a mobile message to reporters on Wednesday said that CAMPI’s concern is based on the impact on import-based businesses rather than domestic manufacturers.

“Consumers have the option, and the dealers can now sell more of the locally made vehicles such as Toyota Vios and Innova and Mitsubishi Mirage and L300, the prices of which are not changing and therefore will be more attractive,” he said.

The Trade department imposed provisional safeguard duties on imported cars after an investigation found that a surge in imports hurt domestic manufacturers. The investigation was launched in response to an application from the Philippine Metalworkers Alliance (PMA), which linked the import surge to a decline in industry jobs.

Mr. Lopez said that it supported PMA’s petition after the investigation proved injury to the industry. Domestic vehicle and parts manufacturing jobs, he said, fell to 86,000 from close to 100,000 previously.

The department found that imported completely built cars rose to 274,847 last year from 88,013 in 2010.

“Safeguard duty is definitely meant to help and boost local manufacturing revival efforts and meant to protect local jobs in the manufacturing of cars and light commercial vehicles,” Mr. Lopez said.

“If we don’t impose this safeguard, after finding injury to local industry, then we are risking the remaining jobs of the Filipino workers,” he added.

PMA affiliate Sentro ng mga Nagkakaisa at Progresibong Manggagawa said that the measure will protect jobs, especially after more than a thousand car industry workers were laid off last year.

“Considering that due to the COVID-19 pandemic the Philippine economy is the worst hit in Asia if not the world, protection of Filipino jobs is vital and cannot be overemphasized,” it said in a statement.

The Association of Vehicle Importers and Distributors, Inc. said it does not believe import duties will attract investments and create more jobs in the Philippines, or improve manufacturing competitiveness in the region.

In effect for 200 days, the duties will take the form of cash bonds of P70,000 per passenger car and P110,000 per light commercial vehicle. The case will be sent to the Tariff Commission, which will conduct its own investigation and public hearings. — Jenina P. Ibañez

Quality certification ordered for two steel products

THE GOVERNMENT will require quality certifications for two more types of steel — hot-dip metallic-coated and pre-painted galvanized steel in coil and sheet form — before they are allowed for sale.

Foreign and domestic manufacturers are now required to obtain a Philippine Standard (PS) safety certification mark before being allowed to sell their products, the Department of Trade and Industry (DTI) said in a statement Wednesday.

Importers may only source products from manufacturers holding such certifications.

The rule only applies to steel products intended for roofing and “general applications.”

All other hot-dip metallic-coated and pre-painted galvanized steel in coil and sheet form, intended for use as raw material in manufacturing automotive products, appliances, furniture, and electronics, are not covered by the regulation. Hot-rolled carbon steel strips for pipes and tubing also do not need the certification.

Importers of these exempted products must apply for a certificate of exemption.

“This new technical regulation will not only level the playing field for the iron and steel industry firms but will ultimately ensure the safety and protection of the consumers,” Trade Secretary Ramon M. Lopez said.

DTI Undersecretary Ruth B. Castelo added that the certifications are intended to ensure that construction materials can withstand natural disasters.

Products manufactured by firms with PS licenses must have the PS mark before being allowed for sale.

The certification requirement is outlined in Department Administrative Order No. 20-10, issued on Dec. 28.

Plywood last year was returned to the list of products that must have the quality certification following a surge in imports since its removal from the list in 2015. — Jenina P. Ibañez

BIR to comply with SC TRO against collecting POGO franchise tax

THE Bureau of Internal Revenue (BIR) will comply with the Supreme Court’s (SC) ruling barring it from collecting the 5% franchise tax on Philippine Offshore Gaming Operators (POGOs).

“We will respect the TRO (temporary restraining order),” said Finance Secretary Carlos G. Dominguez III in a Viber message to reporters on Wednesday.

The Philippine Star reported Wednesday that the Supreme Court issued a TRO preventing the Department of Finance (DoF) and the BIR from collecting the franchise tax.

The order effectively blocks the government from implementing Section 11 of Bayanihan II, as well as the BIR’s Revenue Regulation 30-2020 and memorandum circulars 102-17 and 078-18, according to the report.

The ruling responds to a petition filed by 14 licensed POGOs that questioned the franchise tax, it added.

Republic Act 11494 or the Bayanihan to Recover as One Act (Bayanihan II) changed the basis of the five percent franchise tax to gross bets amid alleged cheating when computing their net winnings.

The DoF has also asked the Department of Justice (DoJ) and the office of the Solicitor General (SolGen) to comment on the TRO.

In a text message on Wednesday, BIR Commissioner Caesar R. Dulay said the “DoF referred the case to DoJ/SolGen.”

The Supreme Court had not released a statement on the TRO at deadline time.

Several POGOs exited the country last year, citing overly stringent tax rules. — Beatrice M. Laforga

Estrella-Pantaleon bridge seen completed in second quarter

THE Department of Public Works and Highways (DPWH) said Wednesday that the P1.46-billion Estrella-Pantaleon Bridge project connecting Makati City and Mandaluyong City is expected to be completed in the second quarter.

In a statement, Public Works and Highways Secretary Mark A. Villar said that motorists will be able to use the widened and modernized bridge in the “second quarter of 2021.”

The Chinese-funded project is now 72% complete and is 8% ahead of schedule, the department added.

The project is part of the government’s EDSA decongestion program.

“Designed to decongest Guadalupe Bridge along EDSA, the main bridge of Estrella Pantaleon is a 146.0-meter prestressed concrete girder bridge with V-shaped piers, while the approach bridge/viaduct is a 66.0-meter prestressed continuous girder bridge. The approach roads at both sides have a length of 294.46 meters,” the DPWH said.

The DPWH announced in January 2019 that it would close the old Estrella-Pantaleon Bridge for 30 months for “demolition and reconstruction.”

The project is among the 14 agreements signed during Chinese Premier Li Keqiang’s state visit to Manila in November 2017. — Arjay L. Balinbin

NIA revamp proposed following loss of irrigation revenue

THE Philippine Institute for Development Studies (PIDS) said in a study that changes are needed in the function and staffing of the National Irrigation Administration (NIA) to effectively operate in a free-irrigation environment.

In a research paper, “Assessment of the Free Irrigation Service Act,” the authors of the study said the NIA reorganization is required in order to operate in the new market conditions imposed by Republic Act No. 10969, or the Free Irrigation Service Act (FISA).

FISA, which took effect in February 2018, exempted farmers with landholdings of eight hectares or less from paying irrigation services fees (ISFs). According to the study, such landowners account for 98% of farms in the Philippines.

The study concluded that NIA should focus on its core mandate of operating and maintaining irrigation systems after the passage of the law.

“With the repeal of the collection of ISF, NIA is no longer expected to generate revenue. FISA covers budgetary requirements for operations and maintenance as well as the capital cost of irrigation systems,” according to the study.

“This implies that NIA, a government office mandated to develop all possible water sources for irrigation, is transitioning from a fee-collecting agency to one that specializes in technical assistance, contract design, and performance monitoring,” it added.

The authors urged NIA to hire staff with experience in capacity building, monitoring, and evaluating the irrigation management transfer program.

The PIDS study said the delay in the release of staff salaries under the old system will also be avoided since FISA mandates that the funding for operations and maintenance be remitted directly to the NIA.

One of the authors’ recommendations is for the government to explore water saving to qualify for subsidies for operations and maintenance.

“The current set of performance indicators provided in the implementing rules and regulations relate only to irrigation service, rather than longer-term issues of sustainability and water resource management,” according to the study.

Some of the other recommendations made by the study include a provision to increase the operations and maintenance subsidy, and a mandatory review to compare FISA with other social protection schemes.

“The aim is to evaluate whether the FISA is an effective instrument for delivering benefits for the poorest and most marginalized, relative to these other social protection schemes,” the study said.

Asked to comment, the NIA’s Office of Public Affairs and Information staff said in an e-mail that the agency is in the process of evaluating its organizational design.

“The NIA organizational strengthening is underway to meet the staff requirement of the evolving function and direction of the agency as embodied in the National Irrigation Master Plan 2020-2030,” it said.

The authors of the PIDS study are Roehlano M. Briones, Roberto S. Clemente, Arlene B. Inocencio, Roger A. Luyun, Jr., and Agnes C. Rola. — Revin Mikhael D. Ochave

Starting the year right

January, from the Latin “Ianuarius,” was named after Janus, the god of beginnings and transitions in Roman mythology. We have come to know it as the first month of the Gregorian calendar, ushering a brand new year. For accountants, especially those involved in compliance work, January is crunch time. It entails winding up year-end work, kicking off the busy season for completing the compliance requirements of various government agencies.

RENEWAL OF BUSINESS REGISTRATION
In general, all businesses are required to renew their registrations annually and pay the corresponding fees to the Local Government Unit (LGU) and the Bureau of Internal Revenue (BIR). Under the Local Government Code (LGC), LGUs can collect Local Business Tax (LBT), fees for the mayor’s permit, and other fees and charges.

Under Section 143 of the LGC, the LBT is imposed on the gross sales or receipts of an establishment depending on the nature of its business. As the basis for computing LBT, business establishments must submit a declaration or certification of gross sales or receipts for the previous year, the most recent Income Tax Return (ITR), and the Financial Statements for LGUs to validate the certification.

The deadline for the renewal of registration and payment of LBT in all cities and municipalities is on the 20th of January each year. Late payment of LBT is automatically penalized with a 25% surcharge on the base taxes, fees or charges, while an additional 2% monthly interest will be charged on the basic amount and the 25% surcharge.

On the other hand, the BIR collects an Annual Registration Fee (ARF) of P500 for every separate place of business, on or before the 31st of January each year. A compromise penalty of P1,000 plus a 25% surcharge and 12% annual interest will be imposed in case of delay or failure to pay.

REGISTRATION OF BOOKS OF ACCOUNT
There are three formats for books of account that taxpayers can maintain: manual, computerized, and loose leaf. Under Revenue Memorandum Circular (RMC) No. 82-08, manual books of account must be registered within 30 days from business registration, while a new set of books may be registered only after exhausting the leaves of the previously registered manual books.

On the other hand, taxpayers may opt to use a computerized accounting system (CAS) for efficiency. Taxpayers who obtain a permit to use a CAS will be required to submit their accounting records to the BIR in soft copy through CD-R, DVD-R, or other optical media, annually, within 30 days from the close of the taxable year. The books of account together with the required attachments must be submitted to the Revenue District Office (RDO) or to the Large Tax Assistance Division, whichever is applicable.

For loose-leaf books of account, the taxpayer shall maintain encoded details of the accounting records in the computer and shall generate copies in print using the duly approved format of the BIR. These loose-leaf forms must be bound as accounting records and submitted to the BIR within 15 days after the end of the taxable year.

In accordance with Revenue Memorandum Order (RMO) No. 7-15, a compromise penalty not exceeding P50,000 will be imposed in case of failure to keep books of account or records, depending on the level of gross sales, earnings, or receipts. On the other hand, a maximum penalty of P25,000 will be imposed in case of failure to timely submit the books of account for both CAS and loose-leaf books of accounts.

FILING OF ANNUAL INFORMATION RETURNS
Under RMC No. 73-19, there are three annual information returns which taxpayers are required to file: 1) Annual Information Return of Income Taxes Withheld on Compensation (BIR Form No. 1604-C), 2) Annual Information Return of Income Payments Subjected to Final Withholding Taxes (BIR Form No. 1604-F), and 3) Annual Information Return of Creditable Income Taxes Withheld (Expanded)/Income Payments Exempt from Income Tax (BIR Form No. 1604-E).

Details of the compensation paid or accrued in a given year must be declared in BIR Form No. 1604-C to be filed on or before Jan. 31 of the succeeding year. This information return is to be filed together with the alphabetical list of employees/payees from whom taxes were withheld and a separate alphalist schedule for minimum wage earners. On the other hand, BIR Forms 1604-F and 1604-E, together with the corresponding alphabetical list of payees, are due to be filed by Jan. 31 and March 1, respectively, of the year succeeding the calendar year in which expenses subject to final/expanded withholding taxes were paid or accrued.

A compromise penalty is imposed for each failure to file an information return, statement, or list, for neglect to keep any record, or for failure to supply any information required by the Tax Code or by the Commissioner of Internal Revenue on the prescribed date. Under RMO No. 7-15, the penalty is not to exceed P25,000 as an aggregate amount imposed for all counts of failures during a calendar year.

FILING AND SUBMISSION OF ANNUAL INCOME TAX RETURNS AND AUDITED FINANCIAL STATEMENTS
For corporations, the latest versions of the Annual Income Tax Returns (ITR) are as follows: a) BIR Form No. 1702-RT for corporations subject only to regular income tax; b) BIR Form No. 1702-EX for exempt corporations under the Tax Code and special laws, with other taxable income; and c) BIR Form No. 1702-MX for corporations with mixed-income subject to different rates or preferential rates. The deadline for the filing and payment of the annual ITR is the 15th day of the fourth month following the end of the taxable year. Failure to file and pay the corresponding tax due exposes the taxpayer to a 25% surcharge on the tax due, while 12% interest per annum will be imposed from the deadline of the payment until the time of full payment, plus a compromise penalty.

In general, a corporation with a fiscal year-end other than Dec. 31 must file audited financial statements stamped received by the BIR and Statement of Management Responsibility (SMR) to the Securities and Exchange Commission (SEC) within 120 calendar days from the end of its fiscal year. For corporations operating on a calendar year, the filing deadline depends on the last numerical digit of the company’s SEC registration number or license number. A penalty is assessed in case of late filing depending on the amount of the total assets reflected in the audited financial statements.

This compliance list is not comprehensive; hence, it is prudent to check if there are other additional requirements imposed by government agencies that apply to one’s business, especially if you have other special registrations (e.g., for tax incentives). To avoid finding yourself embroiled in a complicated situation at the start of the year, it is advisable to observe diligence in complying with annual regulatory requirements.

As author Vernon McLellan said, “What the new year brings to you will depend a great deal on what you bring to the new year.” So, let’s start the year right.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Marvin L. Madrigalejo is a senior manager at the Client Accounting Services group of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 8845-2728

marvin.l.madrigalejo@pwc.com

Standout PBA ‘bubble’ performers to be feted

By Michael Angelo S. Murillo, Senior Reporter

PLAYERS who performed well in the lone Philippine Basketball Association (PBA) tournament last season will be spotlighted in awarding ceremonies later this month.

Set for Jan. 17, the virtual awards proceedings serve to honor the players for their efforts in helping the league salvage a season, which was seemingly lost because of the coronavirus pandemic.

The awards take the place of the annual Leo Awards which happens at the beginning of every PBA season.

“The players sacrificed in the bubble, being away from their families and all, to give PBA fans what they wanted. And credit to them because they gave their all every game and did not hold back while cooperating with the league in what it wanted to accomplish,” said PBA Commissioner Willie Marcial of the significance of the awards.

The league restarted its pandemic-hit Season 45 in October in a bubble setting at Clark City in Angeles, Pampanga, which lasted until early December with the Barangay Ginebra San Miguel Kings crowned as Philippine Cup champions.

In the bubble, participants were holed up in a controlled environment in Clark for the duration of the tournament, following strict health and safety protocols to guard against the spread of the coronavirus.

It hit some rough patches, including “positive scares,” but the league was able to survive them and finish the All-Filipino tournament.

But since the PBA only had one conference instead of the traditional three last season, the league deemed it fit to not hand out a most valuable player award. In its place is the PBA Best Player of the Conference honor.

For the top individual award, six players are in the running, namely Stanley Pringle of champion Barangay Ginebra, Ray Parks Jr. and Roger Pogoy of runners-up TNT Tropang Giga, Matthew Wright and Calvin Abueva of the Phoenix Super LPG Fuel Masters, and league top-scorer CJ Perez of the Terrafirma Dyip.

Mr. Parks leads in the statistical points (SPs), a key criterion in determining the winner, with 38.2 SPs on the strength of solid averages of 22.5 points, 8.1 rebounds, 3.1 assists, and 1.3 steals per game throughout the tournament.

Mr. Abueva (37.1) is second with Mr. Perez (35.7) at third. Mr. Wright (35.65) is at fourth, while Mr. Pogoy is fifth (35.64).

While not in the top five in SPs, Mr. Pringle (34.8) got a boost after helping lead the Kings to the title.

Factoring as well in determining the winner are the votes from the media, players and the PBA office. Voting began on Jan. 5 and will last until Jan. 11.

Like the MVP award, no Rookie of the Year will be given. Instead, the Outstanding Rookie award is up for grabs.

Vying for Outstanding Rookie are Barangay Ginebra’s Arvin Tolentino, Aaron Black of the Meralco Bolts, Terrafirma’s Roosevelt Adams, Barkley Ebona of the Alaska Aces, and Magnolia Hotshots Pambansang Manok’s Aris Dionisio.

For the Most Improved Player, in contention are Phoenix’s Justine Chua and Jason Perkins, Barangay Ginebra’s Prince Caperal, Rain or Shine’s Javee Mocon, Raul Soyud of NLEX, and Meralco-veteran Reynel Hugnatan.

Meanwhile, in consideration for for the Samboy Lim Sportsmanship Award are Messrs. Abueva and Perez, Barangay Ginebra’s Scottie Thompson, Kevin Alas of NLEX, and Rain or Shine’s Gabe Norwood.

An Outstanding/Elite Five, temporarily replacing the Mythical Five selection, will also be handed out, but there will be no Mythical Second Team and All-Defensive Teams awards to be given.

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