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BSP likely to keep rates steady — poll

The Monetary Board is likely to keep policy rates steady at its meeting on Thursday, taking into account the faster inflation trend. — PHILIPPINE STAR/MICHAEL VARCAS

By Luz Wendy T. Noble, Reporter

THE CENTRAL BANK is likely to keep its key policy rates at the record low levels on Thursday, as it considers the recent uptick in the country’s inflation rate, according to analysts.

With recovery prospects remaining bleak in the fourth quarter, analysts expect the Bangko Sentral ng Pilipinas (BSP) to resume policy rate cuts as early as the first quarter of 2021 to boost a sagging economy.

A BusinessWorld poll last week showed all 15 analysts do not expect the Monetary Board to go for another rate cut at its seventh and final policy meeting for the year on Dec. 17.

“We expect BSP to leave its policy rate unchanged at 2%, as a weather-related rise in food prices led to a higher-than-expected pickup in inflation in November,” Nomura Holdings, Inc. Chief ASEAN Economist Euben Paracuelles said.

Philippine National Bank Head of Research Alvin Joseph A. Arogo said the BSP would likely keep rates untouched to allow time for the last rate cut in November to work its way through the economy.

“Moreover, the real reverse repurchase rate is now at a deeper level of -1.30%, which is one of the lowest in Asia,” he said.

This was justified by the 11.5% contraction in economic output in the third quarter, which was one of the worst in the region, he added.

Inflation in November quickened to 3.3% from 2.5% in October, the second month of a faster rise in the consumer price index. This also means real interest rate is now in negative territory as the RRP had been slashed to 2% by mid-November.

The BSP unexpectedly slashed rates by 25 basis points (bps) last month, citing the need to provide support amid continued uncertainty caused by new virus cases globally and the impact of a recent string of typhoons.

The central bank has lowered policy rates by 200 bps this year. The overnight lending and deposit facilities stand at 2.5% and 1.5%, respectively.

“A 200 bps easing in policy rate has not been able to arrest the slide in credit growth this year,” said ANZ Research Economist Khanika Batnagar, who expects the central bank to leave rates unchanged on Thursday.

Latest BSP data showed lending growth was at 1.9% year on year in October, easing further from 2.6% in September and the slowest since 1.9% in September 2006. Banks have been imposing stringent credit standards to guard against bad loans amid the economic slowdown.

Analysts, however, believe the pause will be momentary, taking cues from dovish signals from officials.

“It is suspected that the BSP will patiently wait for the fourth-quarter GDP growth rate release in February, at the same time, monitoring more forward-looking economic indicators to better ascertain the shape of the economic recovery,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said, noting the surprise cut followed the release of the third-quarter GDP data in early November.

The central bank will also keep a close eye on fiscal policy, analysts said.

“As [BSP] Governor Diokno has implied, he would like to see fiscal policy do its part in stimulating the economy, but that can come only in 2021,” University of Asia and the Pacific Economist Victor A. Abola said. “I think they will be on hold until they see inflation go back to below 2.5%,” he added.

Data from the International Monetary Fund, which keeps track of policy measures meant for the pandemic response, show fiscal packages in the Philippines are equivalent to 3.9% of the GDP. This is lower than fiscal policies of neighbors such as Thailand (at least 9.6% of GDP), Indonesia (4.4%), and Malaysia (4.9%).

“Even as BSP is prepared to implement additional policy measures, fiscal policy should play a more significant role in helping restore market confidence,” Mr. Diokno said earlier this month.

The P4.5-trillion national budget for 2021 is 9.7% higher than this year’s spending plan.

President Rodrigo R. Duterte is expected to sign it into law by yearend.

In an “extreme scenario” where fiscal measures continue to lag, the BSP may be pressured to trim rates once more by mid-2021, said ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa.

“BSP will likely still be mindful of financial system stability as well as price stability, but with the economy mired deep in recession, [Mr.] Diokno will continue to have an eye on helping out where he can in terms of monetary support,” he added.

Big banks continue to be challenged in Q3 as asset growth slows and issued loans decline

THE COUNTRY’S biggest banks became less profitable in the third quarter as they continued to boost loan loss reserves amid an increase in bad loans and tighter lending standards. Read the full story.

Big banks continue to be challenged in Q3 as asset growth slows and issued loans decline

Banks see smaller returns, more soured loans in Q3

By Jobo E. Hernandez, Researcher

THE COUNTRY’S biggest banks became less profitable in the third quarter as they continued to boost loan loss reserves amid an increase in bad loans and tighter lending standards.

The latest edition of BusinessWorld’s quarterly banking report showed the combined assets of 45 universal and commercial banks grew by 5.13% to P18.191 trillion in the third quarter, from P17.302 trillion in the same three months last year. This was slower than 7.56% growth in the second quarter and 9.89% in the third quarter of 2019.

Money lent by banks in the form of loans and receivables reached P9.434 trillion in the July to September period, 0.74% less than P9.505 trillion last year.

Big banks continue to be challenged in Q3 as asset growth slows and issued loans decline

The third-quarter result marked historical lows. For assets, this was the most sluggish growth in almost 13 years, or since the 0.56% decline in the first quarter of 2008 and the 3.78% growth in the fourth quarter of 2007.

For loans, this was the first decline in almost 11 years, or since the first quarter of 2010 when it went down by 0.15%. The last time it recorded a quicker decline was in the fourth quarter of 2003 when loans decreased by 4.17%.

In terms of profitability, the median return on equity (RoE) further slipped to 4.13% from 4.89% in the second quarter and 6.95% in the third quarter of 2019. RoE measures how well a company makes use of the funds from shareholders to generate income and is calculated as the ratio of net profit to average capital.

BDO Unibank, Inc. continued to have the most assets among big banks at P3.252 trillion, followed by Metropolitan Bank & Trust Co. (Metrobank) at P2.362 trillion. State-run Land Bank of the Philippines (LANDBANK) came in third at P2.260 trillion, surpassing Bank of the Philippine Islands’ (BPI) P2.188 trillion.

In terms of loans issued, BDO remained on top with P2.136 trillion, followed by BPI at P1.377 trillion and Metrobank at P1.198 trillion.

Among banks with assets of at least P100 billion, the Manila branch of Japan’s MUFG Bank Ltd. and government-run Development Bank of the Philippines (DBP) posted the fastest year-on-year asset growth at 48.31% and 34.74%, respectively. Robinsons Bank Corp. came in next with 29.16%.

MUFG Bank likewise had the fastest year-on-year loan growth of 70.98%, followed by DBP with 15.12% and Robinsons Bank with 13.15%.

BDO had the most deposits with P2.575 trillion, with LANDBANK and Metrobank following suit with P1.977 trillion and P1.735 trillion.

In terms of deposit growth, DBP came in first with 50.28% followed by MUFG Bank’s 45.62% and Robinsons Bank’s 30.52%.

BAD LOANS GROW
Bad loans held by banks as of the third quarter grew as nonperforming loans reached P286.877 billion. This was 35.14% more than the P212.283 billion posted at the end of the second quarter, as well as 80.8% more than the P158.671 billion posted at the end of the third quarter 2019.

The bad loan ratio — gross bad loans in proportion to total gross loans — worsened to 3.57% in the third quarter from 2.02% in the preceding three months and 1.66% last year. This was the highest since the BSP introduced a new reporting standard that took effect in the first quarter of 2013.

Before this, banks presented bad loan numbers that already excluded loans that were fully provisioned as of the last BSP examination. The current method does not allow this, and distinguishes bad loans without deductions (gross nonperforming loans, which are used in this report) and to bad loans minus specific allowance for credit losses (net nonperforming loans). 

Similarly, their nonperforming asset (NPA) ratio — or the nonperforming loans and foreclosed properties in proportion to total assets — rose to 1.24% from 0.91% in the previous quarter and 0.75% in the third quarter of last year. This was also the highest since the current reporting standard.

As a percent of total assets, foreclosed real and other properties inched down to 0.29% in the third quarter from 0.30% on the previous quarter.

Total loan loss reserves among big banks reached P294.805 billion in the third quarter, more than P261.538 billion in the second quarter and P171.316 billion in the third quarter of 2019.

The banks’ bad loan coverage ratio, which is the ratio of the total loan loss reserves to gross nonperforming loans, fell to 102.76% compared with 123.2% in the previous quarter and 107.97% last year.

On the other hand, banks’ ability to absorb losses from risk-weighted assets also improved as their median capital adequacy ratio rose to 21.02% from 20.65% in the preceding quarter.

The ratio remained well above the regulatory minimum of 10% set by the BSP as well as the international minimum standard of 8%.

Bank of China Ltd. was not included in the report because its statement of condition had not been available when the compilation of financial data was concluded on Nov. 27.

BusinessWorld Research has been tracking the financial performance of the country’s big banks on a quarterly basis since the late 1980s using banks’ published statements.

The full version of BusinessWorld’s quarterly banking report will soon be available for download on www.bworldonline.com.

Digitalization seen to boost PHL trade with key partners

DIGITALIZATION in the 15-country mega trade deal could improve trade systems with key partners, a research fellow from the Philippine Institute for Development Studies (PIDS) said.

The world’s biggest trade deal, the Regional Comprehensive Economic Partnership (RCEP), was signed by China, Australia, New Zealand, Japan, South Korea and all 10 Association of Southeast Asian Nations (ASEAN) member countries last month.

“For me, RCEP is a means of improving our systems so that we can engage in trade with key partners in the region,” PIDS Research Fellow Francis Mark Quimba said in an e-mailed reply to questions.

“With RCEP, it is imperative that we adopt digitization in trade facilitation and remove the structural barriers.”

He said that the Philippines is the last economy to implement the ASEAN Single Window, a regional initiative that connects national electronic trade platforms. The country joined the regional single window on Dec. 30, 2019.

A discussion paper published by PIDS in 2013 titled Regional Comprehensive Economic Partnership: Reform Challenges and Key Tasks for the Philippines called on policy makers to address the low utilization of free trade agreements.

The paper by PIDS President Gilberto M. Llanto and Ma. Kristina P. Ortiz said there needs to be more awareness and training on trade deals, use of electronic data to simplify certification procedures and financial support for upgrading technology and related skills.

The Philippines is currently part of ASEAN+1 trade deals among the 10 member countries and a major trading partner of Japan and South Korea.

“I think RCEP will attempt to organize all these ASEAN+1s so that utilization would be easier to implement,” Mr. Quimba said.

The Trade department has said the deal would increase Philippine market access for garments, automotive parts and agricultural products such as canned food and preserved fruit, especially since the agreement seeks to simplify trade procedures.

The agency said the deal covers intellectual property, e-commerce, small business, government procurement and competition.

Analysts see the deal either as a positive for the Philippine economy because it expands exports or a potential risk for the balance of trade.

Caesar B. Cororaton, a research fellow at the Virginia Polytechnic Institute and State University, said exports would increase every year, especially for semiconductors, fruits and vegetables.

But United Nations Conference on Trade and Development Senior Economist Rashmi Banga said that imports could increase by around $600 million a year, while exports are only projected to increase by $4.3 million.

She said the governments should prioritize saving their domestic financial resources, using tariffs to increase revenue and regulating the imports of luxury items.

The agreement will be implemented after a ratification process, which could take up to two years. — Jenina P. Ibañez

Chiming in on a Changan

 

The Alsvin is priced right and performs well. Is it designed to make the competition sweat?

HAVE YOU heard of Changan? It’s one of the latest Chinese car brands that’s been launched in the country. It is initially featuring a five-model lineup that consists of an entry-level subcompact sedan, three iterations of crossover SUVs, and an electric car.

The brand is headquartered in Chongquing, China, is state-owned, and is also a Chinese domestic top-seller. The build of its vehicles, its attractive styling, value-enhancing features, and hard-to-beat price tags all constitute a good value proposition for discerning customers who wish to squeeze the most bang out of their buck. Indeed, a lot of China-made cars have truly emancipated themselves from the stereotypes of old, and proven themselves worthy considerations for the modern, practical buyer — and this brand is one of them.

It was therefore a pleasure to test-drive one of its products — the Alsvin five-speed MT, which is the brand’s entry-level subcompact sedan — on my way to The Farm at San Benito, which is roughly an 88-km drive (per way) from Manila. To be honest, I did not choose this model and variant myself, as I may have been more inclined to opt for an automatic transmission (which would be realized via their Alsvin Platinum edition, which comes with more bells and whistles for about an additional P100,000) considering the typical holiday traffic and highway ruckus. But the unit was appointed to me, and I obliged. And boy — was I glad that I did! I did not suspect that it would be this fun and surprising.

The Alsvin 1.4-liter MT was its own little box of humble joy — the shifts were crisp and precisely locked gears into place, the clutch pedal was super soft (I did not experience any long-drive knee discomfort), and the transmission, responsive. Sure, its maximum power was at a modest 100ps, but that’s not bad for a roomy sedan currently priced at a convincing P539,000. I found the power sufficient to keep me at speed on the highway (approximately 80-100kph) although, admittedly, I would consider it primarily for my city drives. Inside the car it felt airy and roomy — with my six-foot-four-inch-tall husband telling me that his headroom was sufficient, with extra room to spare.

Unlike the Alsvin Platinum 1.5-liter variant which flaunts leather seats and a sunroof, my basic Alsvin 5MT had fabric seats, and I found them comfortable to my satisfaction. A seven-inch touchscreen display with Bluetooth and USB connectivity was nicely seated on the dash, and the audio output was via two speakers (you get four in the Platinum variant). I’d like to point out that I was especially delighted with the fact that despite its bargain of a price, this bundle of fun is already equipped with a proper reverse camera — a feature you would sometimes find lacking in more expensive competitors in the segment. This manual variant is also gifted with a handy tire-pressure monitoring system, which I also think is a feature found more often in pricier vehicles.

Oh, and did I mention that it was fun to drive? The journey to The Farm — which is nestled in the greener heart of Lipa in Batangas — involves a lot of narrow, hilly roads with tight turns and abrupt ascents. With the proper manipulation of engaged gears and wise use of the car’s momentum, navigating through these slithering roads is a walk in the park. Plus, the car is light and fun to maneuver. It was definitely more engaging (from a driver’s perspective) than say, driving an automatic where there would be less driver input involved. Of course, it all depends on your mood. But what I wanted to share is that a form of driving exhilaration is still possible, even with simple, no-frills vehicles — provided that the tuning is good and the gears properly click into place. This Alsvin 5MT also had suggestive shifting displayed within the instrument cluster.

Moreover, I found the (electric-powered) steering to be delightfully light — making it easy to maneuver into parking slots. If anything, I think the headlights could be brighter — but then again it is easy to adjust these things with aftermarket products.

And another one of the characteristics that most impressed me about this variant? It is extremely… fuel… frugal. I received this unit bearing a full tank; then drove it around Makati CBD in the morning, and then to The Farm in Lipa, which is about 88 kms away via the SLEX and StarToll as my highway route. I actually got lost en route to The Farm and this cost me an additional 30-minute detour. On the way back to Manila, I followed a convoy which also detoured for an extra 15-minute drive before heading straight back to Makati. At the end of these trips, the Alsvin’s digital fuel reading still had not been reduced even by one block/unit. Is it the car or is it the driver? Maybe it’s a bit of both! I am now excited to try driving the rest of the vehicles in Changan’s interesting product lineup!

Subaru PHL to launch 6 models over next 1.5 years

Text and photos by Kap Maceda Aguila

MOTOR IMAGE PILIPINAS (MIP), official distributor of Subaru in the Philippines, is gearing up for a busy stretch ahead as it lines up the release of six vehicles over one-and-a-half years.

This comes directly from Tan Chong International Limited (the parent company of Motor Image) Managing Director and Deputy Chairman Glenn Tan, who presided over a recent online press conference attended by Philippine media and officials of Subaru Philippines

While declaring that 2021 sales targets will be lowered in view of market difficulties, Mr. Tan reiterated how the Philippines has been a “key market (for Motor Image) in the last 14 years.” Motor Image, which oversees the Subaru brand in Asia, is eyeing to move 1,500 units in the country. “I don’t want to overstock. We want to be a little more conservative in light of the COVID situation,” Mr. Tan revealed.

The executive added that the company is prioritizing the survival of its dealers rather than looking to expand its brick-and-mortar network of showrooms and facilities. “We will not take in new dealers — unless a dealer has given up on a particular location (and someone wants to take that on).”

First in line for launch in the front half of next year is the new Evoltis seven-seater. The SUV is made in the US, where it is badged as the Ascent. Mr. Tan reported that the model has been “received well by American media.” The mid-size crossover SUV is a front-engine, all-wheel drive vehicle powered by a turbocharged 2.4-liter engine with an output of 260hp, and boasts low-end torque. Buyers can expect the Evoltis to be priced below P4 million, but the final tag might known a month before launch.

Also slated for rollout in H1 2021 are the XV (with minor changes) and the all-new Outback. Significantly, all XV models will now have the Subaru EyeSight safety suite of features. The much-awaited all-new second-generation BRZ will be unveiled in Q4 2021. For the first half of 2022, MIP is scheduled to present the all-new WRX and all-new Levorg.

The company also formally introduced its new country manager, Gerry Hernandez, who took over from Michael Ramon B. Luyun who “resigned to pursue his own interests.”

Replying to a question from “Velocity,” Mr. Tan said that the company is looking to evolve and grow its digital presence and tools amid the pandemic. Subaru will roll out a virtual reality system and augmented reality functions so that people are able to experience its portfolio of cars safely.

“We’re revamping our websites,” he continued, “(and) we’ll continue with digital marketing to drive people to them.”

Putting annus horribilis to bed

 

Wrapping up 2020 and dreaming of better days

HERE ARE two immutable things (well, okay, one immutable thing and a near certainty): We’re coming to the end of the annus horribilis that is 2020, and vehicle sales are mercifully picking up and, cross your fingers, are actually gaining momentum.

The end of the year — and that the impression that it somehow is expected to bring welcome changes to a woeful trajectory thus far — is, of course, a man-made construct just like time itself. The truth is, we do not know for certain whether we’re seeing the end of the tunnel or staring into the barrel of a gun.

For sure, with vaccines already making their way to select territories, there’s more substance to the hope we’ve been clinging to. On that blessed day we finally get clarity on a schedule, the sooner we can plan our reunions with family and friends we’ve longed to hug and kiss. Businesses can also begin to scale up targets — to say nothing about those that can finally open, period.

Before that day we’ve been praying for, we’ll still be best served by being hopeful because that shapes our disposition and even how we approach each day. We may not be able to control everything tomorrow brings, but we can sure as heck be more ready for both good and bad by keeping rein on what we can govern: ourselves.

Back in April, I wrote of how people were already writing off 2020: “It’s too untenable a year; too memorable for the wrong reasons. Heck, we barely even made it out of the first quarter alive — crawling on all fours into April after a gauntlet of crises rendered us slack-jawed in disbelief. And just when we thought we had endured and passed the worst of it, the invisible monster that is COVID-19 caught us with a haymaker.” I now look back at those words with the benefit of additional months of hindsight. Actually, things got worse after that column: More people got sick and passed on, more businesses shuttered, more people lost jobs.

Speaking of April, when that month was in the rearview mirror, the Chamber of Automotive Manufacturers of the Philippines (CAMPI) and Truck Manufacturers Association (TMA) registered its lowest-ever consolidated monthly sales output: 133 units.

That woeful figure was a blackeye from a flurry of punches from fears of the pandemic and the closing of showrooms necessitated by the enhanced community quarantine.

Last week, I reached out to CAMPI President Atty. Rommel Gutierrez via text, and he was gracious enough to share his unofficial sales projection in November (see graph). I don’t know if you’d agree with me, but anything north of 20,000 units is a win, methinks. The “recalibrated target” of CAMPI/TMA (factoring in the Association of Vehicle Importers and Distributors or AVID as well) is 240,000 units by the end of the year, and Atty. Gutierrez said this number “will most likely be reached, if not a little less.”

Looking back at last year, CAMPI/TMA’s December sales totaled 33,715, while the brands of AVID moved 8,089 units during the same month. For some context, AVID’s total in Q3 2020 is 15,471 — or an average of 5,000 a month.

Executives are projecting 2021 to be a recovery period for industries — certainly (or hopefully) much better than this year, but still bereft of the performance vigor of 2019 or 2018. I use “vigor” loosely here, of course. Remember the deleterious effects of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which effectively jacked up prices of a lot of automobiles?

Atty. Gutierrez commented, “We foresee a range of 30% to 60% growth next year.” Of course, coming from a base of 240,000, that means a peak of 300,000 units in sales. Compare that to 2019’s consolidated (CAMPI, TMA, and AVID) of 416,637.

Who would have thought we’d one day be pining to have that kind of number again? And let’s also shelve for the moment that holy grail of aspirations: to breach the 500,000 mark in sales.

But I digress. There’s always hope — and that should be enough to sustain us, keep the ardor of our humanity going, and allow us to envision things as just outside our grasp for the moment.

PLDT Global, Softbank to power Japanese firms

A UNIT of PLDT, Inc. has partnered with Japan-based SoftBank Corp. to offer internet service to Japanese enterprises.

Under its partnership with Japanese telecommunications service provider SoftBank, PLDT Global Corp. will offer SmartInternet Suite Ether to small, medium, and large enterprise clients in Japan, PLDT said in an e-mailed statement over the weekend.

SmartInternet Suite Ether, PLDT Global said, helps businesses address their needs “for a higher-grade internet environment that suits diverse work styles and evolving business areas.”

PLDT Global President and Chief Executive Officer Katrina Luna-Abelarde said the partnership is part of a broader PLDT Group initiative to “improve customer experiences in and outside of the Philippines.”

Norioki Sekiguchi, vice president of Global Business Division at SoftBank, said: “This is just the first step of our collaboration, and we look forward to creating new opportunities together.”

HIGHER CAPEX NEXT YEAR
Meanwhile, PLDT announced on Saturday it was ready to invest between P88 billion and P92 billion next year to meet the requirements of its mobile and fixed-line customers.

The company expects its capital expenditures to hit at least P70 billion this year.

PLDT noted it has spent about P260 billion in the last five years to improve its services nationwide.

“We want to benchmark ourselves, not just with local competition, but with our neighboring countries like Thailand and Vietnam, as we would want our network performance to ultimately be at par with global companies,” PLDT Chief Revenue Officer and Smart Communications President and Chief Executive Officer Alfredo S. Panlilio said in a statement.

To raise capital, PLDT recently sold its 37-storey Smart Tower in Makati City for $128 million to real estate development company DMC Urban Property Developers, Inc.

PLDT’s attributable net income in the third quarter rose 95% year-on-year to P7.41 billion, amid the rise in demand for digital or online services due to the pandemic.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

MG RX5 available with zero down payment, 3-month payment holiday

THE COVENANT Car Company, Inc. (TCCCI), exclusive importer and distributor of MG automobiles and parts in the Philippines, serves up a special promo on the MG RX5 until the end of 2020. The SUV is available for purchase with zero down payment, plus a three-month payment holiday (or a P45,000 cash discount).

Motivated by an efficient 1.5-liter turbocharged gasoline engine delivering a maximum output of 162hp and 250Nm, the MG RX5 is positioned as embodying “class, power, and functionality.” The power plant is mated to a seven-speed double clutch automatic transmission for “smooth and seamless power delivery.” An enhanced MacPherson and rear multi-link suspension system promises a comfortable ride on various terrain.

The SUV boasts a modern, spacious cabin with ample legroom and headroom — featuring dashboard and door inserts finished in high-grade materials. The RX5’s infotainment system is predicated on an eight-inch touchscreen featuring Apple CarPlay. Other features include keyless entry, push start/stop, cruise control, and electronic parking brake with auto-hold function for a stress-free, easy drive.

Tax court grants partial VAT refund to PGPCI

THE COURT OF Tax Appeals (CTA) partially granted the tax refund claim of Philippine Geothermal Production Company, Inc. (PGPCI) of excess and unutilized input value-added tax (VAT) traced to zero-rated sales for 2014.

In a 35-page ruling dated Nov. 18, the court’s second division ordered the Bureau of Internal Revenue (BIR) to refund or issue a tax credit certificate to the company in the amount of P4.2 million out of its P31.7-million initial claim.

The court said the company reported total sales of P4.9 billion but only the amount of P3.7 billion qualifies as valid zero-rated sales as some were supported by official receipts but with unreadable details.

The court said it was unable to recognize if they were actually declared in VAT returns because of absence of supporting documents on the reversal and accrual of the said zero-rated sales.

Out of the P31.7-million tax refund claim, only the amount of P29.8 million represents valid VAT but “the same is not entirely attributable to zero-rated sales since petitioner also had VATable sales.”

“Due to the BIR’s previous partial approval of petitioner’s claim up to the amount of P21,223,062.08, the excess input VAT attributable to valid zero-rated sales of P25,466,789.58 should be further reduced,” the court said.

“Hence, petitioner is entitled to a lesser input VAT claim of P4,243,727.50 after taking into consideration the partial grant of its claim,” it added.

The court also said the company did not have output liabilities in the first and fourth quarters, and the output liability for the second and third quarters did not exceed the input tax incurred or paid.

The company was claiming for a refund, anchoring on the law that states that renewable energy developers are entitled to zero-rating treatment of its sale of fuel or power generated from renewable resources of energy and its purchases of local supply of goods, properties and services related to development of its power facilities.

PGPCI for the first quarter of 2014 filed an administrative claim refund of P5.3 million for that period and then elevated it to the court after the BIR failed to act on its claim within the prescribed period.

For the second quarter, it claimed a refund of P5.1 million and was granted the amount of P559,550.49. It was then raised to the court.

It was granted P16.58 million out of its P16.91-million claim for the third quarter and appealed to the court the disallowed amount.

For the fourth quarter of 2014, it claimed a refund for the amount of P4.4 million and was granted P3.85 million. It also raised the partial grant to the court.

The BIR, on the other hand, claimed that PGPCI failed to present certain documents before the BIR for its administrative claim and the computations of its claimed amount of unutilized input VAT is erroneous.

The court cited a Supreme Court ruling saying a taxpayer “cannot cure its failure” to submit a document requested by the BIR at the administrative claim by filing it before the court but said that the BIR did not specify what documents were withheld from it. — Vann Marlo M. Villegas

South American banana growers make inroads into PHL export markets

DAVAO CITY — The collapse in global banana prices has opened the door for South American producers to sell more of their product in major markets traditionally supplied by Philippine growers and exporters.

Stephen A. Antig, executive director of the Pilipino Banana Growers and Exporters Association, Inc., said countries like China, Japan, and South Korea are now a battleground for South American growers, who are facing oversupply in their home markets.

“COVID-19 encouraged consumers to eat healthy fruits and banana normally tops the list of popular fruits. Incidentally, there is an oversupply in South America and the price per box went down. So they were able to send their bananas to our markets at lower prices,” Mr. Antig said in an email interview. 

Mr. Antig also said that volume exported by association members fell 12.4% year-on-year in September.

“The drop in total production is largely due to Panama disease as there is no concrete program implemented for its control and eradication,” he said.

Citing data from the Philippine Statistics Authority, he said fresh banana exports fell 14.04% by value in the nine months to September.

He noted that a formerly reliable market like China, the biggest buyer of Philippine bananas, is also starting to balance out its purchases by tapping producers in Cambodia, Laos, Vietnam and Myanmar as part of a broader geopolitical strategy.

He said China has also been imposing extra measures to prevent the entry of COVID-19 through food imports, including a disinfection process before shipments are released to their buyers.

“Due to exposure to heat this can affect the quality of the fruit before it reaches the supermarkets,” Mr. Antig said.

He said producers have also been affected by community quarantine protocols implemented by local government units, which have disrupted the movement of delivery vehicles and personnel from farms seeking to access the ports in Davao City and Panabo City. — Maya M. Padillo

Ford Ranger Raptor takes big bite out of pickup market with 10,000 units sold

THE TOP variant of the Ford’s Ranger pickup lineup here has reached a sales milestone of 10,000 units just two years since its launch.

“This huge success for the Ranger Raptor is a testament to its consistent and growing popularity in the Philippines,” said Ford Philippines Managing Director PK Umashankar. “We thank our over 10,000 customers for choosing the Ranger Raptor and for being part of the growing community of performance pickup enthusiasts in the country.”

The Ranger Raptor accounted for over 40% of total Ranger sales in the Philippines in 2019. Regionally, the Philippines has become the leading contributor to total Ranger Raptor sales across ASEAN markets with a 64% share and across Ford’s International Markets Group with a 37% market share over the past two years.

In gratitude for the warm reception to the model, Ford Philippines is launching its first-ever Ranger Raptor Raffle promo just in time for the holiday season. Customers who purchase any Ford vehicle until Dec. 31, 2020 from Ford dealerships nationwide earn a raffle entry that will give them a chance to win a brand-new Ranger Raptor. Meanwhile, those purchasing through an EastWest Bank auto loan transaction earn two raffle entries. Up for grabs as grand raffle prizes are five Ranger Raptor units, which the winners can enjoy tax-free.

“The Ranger Raptor Raffle promo is our way of celebrating our 10,000 Raptor owner milestone as we want more Filipino customers to own and drive the Ranger Raptor and enjoy its segment-leading features and capabilities,” added Mr. Umashankar.

Aside from the raffle, customers can also enjoy bigger cash discounts and all-in low down payment offers for Ford SUVs, pickups, and even the Transit van under the company’s “Seize the Deal” promo until the end of the year.

Customers can get bigger cash discounts of up to P190,000 for a Ford EcoSport or up to P125,000 for a Ford Ranger. A cash discount of up to P100,000 is available for a Ford Everest. All-in low down payment offers for as low as P38,000 are also available.

Ranger Raptor buyers will be entitled to the Ranger Raptor Premium Care Package, inclusive of a free five-year scheduled service plan, five-year warranty (up from three years), and five years roadside assistance.

Customers can also still avail of an offer of zero interest for 60 months at 20% down payment for a Ford Explorer or Ford Expedition, and up to P301,000 cash discount for the Ford Transit together with a free five-year scheduled service plan. The Ford Territory Trend also comes with a free five-year scheduled service plan.

For more information, visit the Ford Philippines website at www.ford.com.ph/shopping/latestoffer/christmaspromo/ or any Ford dealership.