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Expectant father Jon Rahm prepared to leave Masters for son’s birth

SPANIARD Jon Rahm said on Tuesday he would not miss the birth of his first child and was prepared to walk away from the Masters at a moment’s notice to ensure he would be by his wife’s side for the special occasion.

World number three Rahm said his wife was due to give birth between April 10 and 12, a three-day stretch that includes the final two rounds of the year’s first major at Augusta National Golf Club.

“All I can say is if anybody’s thinking of betting on me on the Masters, maybe think about it twice because there’s a chance I have to just turn around and leave that week,” Rahm said from Austin Country Club ahead of this week’s WGC-Dell Technologies Match Play event.

Rahm has five PGA Tour victories, but has yet to triumph at one of golf’s four major tournaments. His best showing at the Masters came in 2018 when he finished fourth.

The 26-year-old Spaniard said his wife and son were doing well and that he was unsure how much he could rely on the due date.

“I hear all kinds of stories, right, from people saying, oh, first one is always late, two people say, well, no, mine were early, this and that,” said Rahm.

“So I don’t know. I’m excited about it. I’m trying to take it one day at a time. And I can tell you I’m ready to go at any moment’s notice.”

Rahm will face Ryan Palmer, former British Open champion Shane Lowry and Sebastian Munoz in round-robin play this week in Austin, where the winner of each group advances to a 16-player knockout phase.

“If I have to leave this week, hopefully, it doesn’t come when I’m in the final and I just have to leave after nine holes. I mean, that would be unfortunate for the winner, but it is what it is,” said Rahm.

“Being a father is much more important than any golf event would ever be, so that’s my head right now.” — Reuters

Canned tuna brands making ‘glacial progress’ in tackling modern slavery

BANGKOK — The world’s top canned tuna firms are making “glacial progress” combating modern slavery in their supply chains, an advocacy group said on Tuesday, warning that the coronavirus pandemic had left fishers in Asia-Pacific more vulnerable to exploitation.

Of the 35 biggest tuna companies and supermarkets surveyed by the UK-based Business and Human Rights Resource Centre (BHRRC), 29 had made public pledges on workers’ human rights.

But most firms had yet to take any action to stop modern slavery by implementing human rights policies—with oversight of recruitment almost non-existent, the report said.

Six companies had policies to protect migrant workers but just one had evidence of having taken direct action, it added.

“The global fishing sector is rife with allegations of abuse—human trafficking, debt bondage … and even murder,” BHRRC’s Pacific representative Amy Sinclair told the Thomson Reuters Foundation.

“But despite continued high demand for canned tuna, our research found there had been glacial progress on action by leading brands when it comes to workers trapped in modern slavery in the Pacific,” she added.

The companies and supermarkets—representing more than 80 of the world’s largest canned tuna brands—procure much of their tuna from the Pacific region, which supplies about 60% of the world’s tuna, according to the World Bank.

The coronavirus disease 2019 (COVID-19) pandemic has led to increased demand for tuna, as consumers worldwide have stocked-up on the pantry staple, according to the United Nations Food and Agriculture Organization.

As international borders have closed to curb the pandemic, modern slavery risks have heightened, with many fishers trapped at sea for longer periods—exposing them to heightened exploitation and abuse, the BHRRC report said.

While nearly half of respondents recognized that the pandemic exacerbated modern slavery risks, only a quarter had taken any action in response, it added.

The Seafood Ethics Action Alliance and the Seafood Task Force, a group of seafood buyers and companies, were not immediately available for comment.

BHRRC said only one company—US supermarket chain Kroger Co.—disclosed forced labor in its supply chain, suggesting the others either do not have adequate practices in place to weed it out, or are not disclosing it when found.

“COVID-19 has exacerbated inequality and human misery in the seafood supply chains,” said Art Prapha, a senior advisor for anti-poverty charity Oxfam.

“Investors, workers, and activists have raised these concerns well before the pandemic, yet many companies continue to ignore these critical calls.” — Nanchanok Wongsamuth/Thomson Reuters Foundation

EU to extend vaccine export curbs to cover Britain, backloading — source

BRUSSELS — The European Commission on Wednesday will extend European Union (EU) powers to potentially block coronavirus disease 2019 (COVID-19) vaccine exports to Britain and other areas with much higher vaccination rates, and to cover instances of companies backloading contracted supplies, EU officials said.

The regulation is aimed at making vaccine trade reciprocal and proportional so that other vaccine-making countries sell to Europe and the EU does not export much more than it imports, one EU official said.

With no numerical targets, the change is unlikely to trigger mass export bans of EU-made vaccines, the official with insight into the announcement said on Wednesday.

“I just really, really don’t see that happening because we have our international obligations and we want to keep supply chains going and the global system moving and flowing,” the official said.

The regulation will be the basis for the EU’s 27 governments to decide whether to block vaccine exports or not.

“In practice, all this is, is a piece of paper that says please take this stuff into consideration when you’re looking at approving export authorizations,” the official said.

The move, which EU officials said could hit AstraZeneca and Johnson & Johnson, is designed to avoid even limited delivery shortfalls to a region whose inoculation program has been beset by delays and supply issues.

Shipments abroad could also be withheld if vaccine-producing countries, such as Britain and the United States, disallow exports to the EU, officials said, confirming comments by commission head Ursula von der Leyen last week.

As London-Brussels tensions rose on Monday over a possible export ban, Britain demanded that EU authorities allow the delivery of vaccines it has ordered.

On Tuesday, Prime Minister Boris Johnson said Britain did not believe in imposing vaccine blockades. “I’m encouraged by some of the things I’ve heard from the continent in the same sense,” he told a news briefing.

Johnson & Johnson has announced delays in its second-quarter supplies to the EU, which a second EU official said could lead to consequences under the Commission amendment covering companies backloading contracted quarterly deliveries.

All vaccine makers could be affected, added the second official, with direct knowledge of the Commission decision. Some on the EU’s list of countries exempt from any vaccine export monitoring, like Israel, are likely to be removed, because of their very high inoculation rates, the first official said.

“It doesn’t mean they won’t get vaccines. It just means they’re not automatically exempted anymore,” the first EU official said.

‘WE DON’T WANT THE SAME DELAYS IN Q2’
The EU this month used an export control mechanism, set up at the end of January, to block an AstraZeneca vaccine shipment to Australia.

That mechanism can be activated only if companies do not meet contracted quarterly delivery targets. The block followed AstraZeneca’s announcement of steep cuts in first-quarter deliveries to the EU.

With the amendments to be adopted on Wednesday, the EU will be able to block exports to cover companies that respect their quarterly contracts but backload supplies to the end of the period, said the official, who asked to remain anonymous.

Johnson & Johnson, which has committed to delivering 55 million doses to the EU between April and June, plans to start deliveries in the second half of April.

The company told EU officials production issues might make it difficult to meet its second-quarter target, but it was striving to do so.

Moderna and Pfizer/BioNTech also had delays in vaccine deliveries to the EU, though they are set to meet their overall first-quarter targets. “We don’t want the same delays to happen in the second quarter,” said the second official. — Francesco Guarascio/Reuters

Wealth managers still in crypto ‘education mode,’ Fidelity says

LONDON — Most wealth managers and financial advisors are still in “education mode” on cryptocurrencies but demand for the emerging asset class among larger investors has grown, the boss of Fidelity Investments’ institutional arm said on Tuesday.

While some advisors and investment firms managing the fortunes of wealthy people have grown “sophisticated” and “comfortable” with cryptocurrencies, most are still getting to grips with the technology, Mike Durbin said.

“They know what they are doing, and more importantly their end investor base also knows what they are doing—but the vast majority are still in the education mode,” he added in an interview at Reuters Digital Assets Week.

Mr. Durbin’s comments give a snapshot of interest in cryptocurrencies at Boston-based Fidelity, whose $9.8 trillion in customer assets as of Dec. 31 make it one of the world’s biggest investment managers, amid heightened interest in digital assets.

BOOMING BITCOIN
Bitcoin powered to an all-time high of nearly $62,000 this month, the latest in a meteoric rise fueled by bigger US investors.

The world’s biggest cryptocurrency has soared eight-fold in the last year, sparking wider interest in digital assets from investors seeking yield in a world of ultra-low interest rates.

Mainstream companies and financial firms from Tesla Inc. to Bank of New York Mellon Corp. have embraced the emerging asset, sparking predictions that bitcoin and other cryptocurrencies will become a regular part of investment portfolios.

In 2018, Fidelity became one of the first mainstream investment firms to embrace cryptocurrencies, setting up a unit that offers cryptocurrency custody and other services for financial firms and corporations.

Interest in bitcoin and other digital assets would likely grow as “alternative investments”—which often includes real estate, private equity and hedge funds—increase in popularity, Mr. Durbin said.

“I think that the growth rate of bitcoin or digital assets will follow in that wake of broader alternative investments.

“There’s still work to be done there to help advisors understand portfolio construction with these kinds of expressions.” — Tom Wilson and Anna Irrera/Reuters

North Korea fires two short-range missiles, US still open to dialogue

REUTERS

WASHINGTON/SEOUL — North Korea fired two short-range missiles at the weekend, US and South Korean officials said, but Washington played down the first such tests under President Joseph R. Biden, Jr., and said it was still open to dialogue with Pyongyang.

The North Korean activity involved weapons systems at the low end of the spectrum that were not covered by United Nations Security Council testing bans, two senior officials of the Biden administration told a briefing call on Tuesday.

South Korea’s Joint Chiefs of Staff (JCS) said two cruise missiles were fired off North Korea’s western coastal town of Onchon on Sunday morning.

Seoul had detected signs a test was imminent and was monitoring it in real time, a JCS official told reporters on Wednesday. The JCS reports North Korea’s testing of advanced weapons such as nuclear bombs and ballistic missiles nearly in real time but not some tests of lower-grade, shorter-range weapons.

The launch marks North Korea’s first publicly known weapons test since Biden took office in January.

But Mr. Biden downplayed the latest activity, saying “nothing much has changed,” while one senior official said it was “normal” testing and warned against “hyping” it.

“No, according to the Defense Department it’s business as usual. There’s no new wrinkle in what they did,” Mr. Biden told reporters upon his return from a visit to Ohio, when asked if the test was a provocation.

The Pentagon declined to comment on the test, which was first reported by the Washington Post. North Korea’s mission to the United Nations did not immediately respond to a request for comment.

POLICY REVIEW IN ‘FINAL STAGES’
The test came just days after US Secretary of State Antony Blinken vowed to work to denuclearize North Korea and criticized its “systemic and widespread” human rights abuses while in Seoul with the US Defense Secretary.

North Korea has refused to engage with repeated behind-the-scenes US diplomatic overtures since mid-February, calling it a “cheap trick.”

The senior US officials said the administration’s North Korea policy review was in its “final stages” and would host the national security advisers of allies Japan and South Korea next week to discuss that.

The officials said there had been “very little dialogue or interaction” with North Korea since a failed summit between former President Donald J. Trump and North Korean leader Kim Jong Un in Hanoi in February 2019, but they do not see the latest missile test as “closing the door” for talks.

Ha Tae-keung, a South Korean lawmaker, said Seoul and Washington had agreed not to announce their detection of the missile test, citing a briefing by intelligence officials.

Opposition lawmakers and some experts said the US confirmation indicated a coordination failure between the allies, and suggested Seoul might be trying to cover up a provocation as it seeks to improve cross-border ties.

“It could’ve indeed been a routine, pre-planned activity,” said Kim Dong-yup, a professor at Kyungnam University in Seoul. “But I can’t help asking if the government and the JCS were walking on eggshells so as not to upset North Korea.”

The JCS official said it does not disclose some North Korean activities to protect its reconnaissance assets based on consultations with the US military.

Jenny Town, director of 38 North, a US-based website that tracks North Korea, said the latest action appeared “pretty mild.”

“My guess is that it has more to do with the joint exercises than anything else,” she said.

North Korea has slammed joint US-South Korean military exercises this month even though they were scaled back in an effort to restart nuclear talks.

North Korea has continued to develop its nuclear and missile programs throughout 2020 in violation of UN sanctions dating back to 2006, helping fund them with some $300 million stolen through cyber hacks, according to independent UN sanctions monitors.

North Korea has not tested a nuclear weapon or an ICBM (intercontinental ballistic missile) since 2017, but conducted repeated tests of shorter-ranges missiles after the Hanoi summit broke down. The Trump administration also sought to play down such tests. — Phil Stewart, Idrees Ali, and Hyonhee Shin/Reuters

AstraZeneca to publish full US trial results after rare rebuke over ‘outdated’ data

LONDON/CHICAGO — AstraZeneca will publish up-to-date results from its major US coronavirus disease 2019 (COVID-19) vaccine trial within 48 hours after health officials publicly criticized the drugmaker for using “outdated information” to show how well the immunization worked.

The rare public rebuke marks the latest setback for the vaccine once hailed as a milestone in the fight against the COVID-19 pandemic that has since been dogged by questions over its effectiveness and possible side effects.

AstraZeneca said results it published on Monday in which the vaccine had demonstrated 79% efficacy were based on an interim analysis of data through Feb. 17, and it would now “immediately engage” with the independent panel monitoring the trial to share its full analysis.

The British-based drugmaker on Tuesday said it had reviewed the preliminary assessment of its full, or primary, analysis and found it to be consistent with the interim report.

But the Washington Post reported that the data monitoring panel told federal officials they had been working with the company through March, had seen data that showed the vaccine might be 69% to 74% effective, and had “strongly recommended” AstraZeneca include that information in its public statement.

AstraZeneca shares fell 1.8% in London trading.

The US National Institute of Allergy and Infectious Diseases (NIAID) said on Monday that the independent monitoring panel had expressed concern the company may have included outdated data that gave an incomplete view of the shot’s effectiveness.

NIAID Director Dr. Anthony Fauci called the whole issue a really unfortunate unforced error.

“This kind of thing does … nothing but really cast some doubt about the vaccines and may contribute to the hesitancy,” he told ABC’s “Good Morning America.”

“The data really are quite good but when they put it into the press release it wasn’t completely accurate,” he said.

In addition to the 79% efficacy in stopping symptomatic illness in the trial conducted in the United States, Chile, and Peru, the data reported on Monday also showed the shot was 100% effective against severe or critical forms of the disease and posed no increased risk of blood clots.

Dr. Larry Corey, co-leader of the US Coronavirus Vaccine Prevention Network, which helped design AstraZeneca’s US trial, said the monitoring panel’s rebuke was something he had not seen before. The virologist at Fred Hutchinson Cancer Research Center in Seattle, praised the panel for speaking up, saying it showed the system of checks and balances worked.

One US-based investigator who was not authorized to speak publicly said AstraZeneca was not wrong to publish an analysis it had described as interim and expressed concern over the public controversy.

“It’s just a little bit like shooting yourself in the foot, because the science is good,” the person said.

‘NEGATIVE REPORTS’

The new questions about the shot’s efficacy coincide with its rollout in dozens of countries and clouds the timeline for its potential emergency use authorization in the United States.

“This is indeed an extraordinary act. The negative reports about this vaccine do not stop, although my assessment is that it is well tolerated and safe, but clearly less effective than the two mRNA vaccines,” said Peter Kremsner, from the University Hospital in Tuebingen, Germany.

Vaccines from Pfizer/BioNTech and Moderna that use messenger RNA (mRNA) technology to produce an immune response both had efficacy rates of about 95% in their pivotal clinical trials, far above the 50% benchmark set by global regulators.

AstraZeneca’s COVID-19 shot has faced questions since late last year when the drugmaker and Oxford University published data from an earlier trial with two different efficacy readings as a result of a dosing error.

Confidence in the vaccine took a further hit this month, when more than a dozen countries, mostly in Europe, temporarily suspended giving out the shot after reports linked it to a rare blood clotting disorder in a very small number of people.

The European Union’s drug regulator said last week the vaccine was clearly safe, but an opinion poll on Monday showed Europeans remained skeptical about its safety.

The AstraZeneca vaccine is seen as crucial in tackling the spread of COVID-19 across the globe because it is easier and cheaper to transport than rival shots.

It has been granted conditional marketing or emergency use authorization in more than 70 countries.

Many countries are relying heavily on the shot to end the pandemic, and several state leaders have taken it publicly to boost confidence. — Kate Kelland and Julie Steenhuysen/Reuters

Hong Kong halts Pfizer/BioNTech COVID-19 vaccines, investigates defective packaging

HONG KONG — Hong Kong on Wednesday temporarily suspended coronavirus disease 2019 (COVID-19) vaccinations using two batches of the treatment developed by Pfizer and BioNTech citing defective packaging, but the government said manufacturers indicated they had no reason to believe safety was at risk, and the move was merely a preventative measure.

The government said it had received notice from Fosun Pharma Industrial (Hong Kong), the distributor of the Pfizer/BioNTech vaccine in the financial hub and in Macau, that packaging defects had been detected in a vaccine batch—numbered 210102—related to the closure of bottles.

“BioNTech and Fosun Pharma have not found any reason to believe that product safety is at risk,” the government said. It wasn’t immediately clear how many shots would be affected, but it said use of batch 210102 would be suspended, as would that of another batch, numbered 210104, until further notice.

Fosun Pharma didn’t immediately respond to requests for comment.

On Wednesday, several centers around the Asian financial hub were told by city authorities to stop using the Pfizer/BioNTech vaccine, according to notices seen by residents.

The city began vaccinating residents with doses from China’s Sinovac Biotech Ltd. in February, and began offering the Pfizer/BioNTech vaccine in March.

Macau’s Department of Health said on Wednesday it was suspending production of the BioNTech vaccine in the neighboring special administrative region after discovering a packaging flaw. — Farah Master/Reuters

Imagining a world of zero waste

Human progress has grown by leaps and bounds in the past century, owing to social, economic, and technological revolutions that have shaped the world into what it is today. Yet, all of it has been at a cost to the environment; climate change is now one of the biggest problems the world is facing, along with the constant, ever-growing issue of human waste.

According to the World Bank, waste generation is set to increase from 2.01 billion tons in 2016 to 3.40 billion tons in 2050, as more nations and cities urbanize, develop economically, and grow in terms of population. At least 33% of this waste is mismanaged globally today through open dumping or burning.

How can nations address this growing problem without compromising their social and economic goals? Is it even possible?

The latest edition of BusinessWorld Insights aimed to tackle this problem. In celebration of Global Recycling Day, the virtual forum, with the theme “Recycling and Proper Waste Management for a Sustainable Future,” gathered two of the country’s top stakeholders in solid waste management to discuss a zero-waste future and what might look like for the Philippines.

“The Philippines generates about 44 thousand tons of waste on a daily basis. In Metro Manila, that’s about 10 thousand tons. If you look at it on a per capita basis, it’s about .4 to .7 depending on where you are,” Crispian Lao, vice-chairman of the National Solid Waste Management Commission and founding president of the Philippine Alliance for Recycling and Materials Sustainability (PARMS), said.

“In a developing country like the Philippines, where we have been ranked as the third biggest contributor to marine litter, we found that the gap really is in the infrastructure,” he added.

Recycling is one of the easiest and most effective methods to reduce waste, conserve the environment, and address climate change. Dubbed as the ‘Seventh Resource’, the use of recyclables saves over 700 million tons in CO2 emissions and this is projected to increase to one billion tons by 2030.

Utilizing such a resource is key. Mr. Lao pointed out that the country already has some of the most comprehensive laws on solid waste management, yet the real challenge is in their implementation. 

“Obviously you need financing for that. And this is where the private sector can pitch in by putting up the necessary infrastructure in partnership with all stakeholders, not only government, including civil society and the general public, so we can actually address waste management and to prevent leakage to the environment,” he said.

Also a representative from the private sector, Atty. Joseph Fabul, country manager for corporate and government affairs of Mondelez Philippines, echoed this sentiment. For its part, Mondelez Philippines has emphasized its commitment to sustainability in its processes in various ways.

“First, we make snacks using sustainable ingredients. Second, we ensure that our manufacturing processes continue to evolve in order to reduce the environmental impact of our operations,” he said, adding that the company’s manufacturing plant in Parañaque is now 100% powered by renewable energy.

“Third, we also make sure that we continue to innovate in terms of packaging material. And that’s why we made a commitment to ensure that 100% of our packaging material is recycle-ready by 2025, and the good news is that to-date we are already 94% compliant with that commitment,” he added.

The problem of single-use plastics

The ban on single-use plastics has become a popular method proposed by environmentalists to curb solid waste. But is the solution really that simple?

Reality is more complicated. Atty. Fabul noted that there is a wide spectrum in the types of plastics society generates, and some of these are absolutely necessary.

“First we need to define the necessary and unnecessary types of plastics. Because there are types of plastics that we need. There are also plastics that have no viable commercial and large-scale alternatives, so how do we replace them?” he said.

As a food manufacturer, there is yet to be a viable alternative to plastic when it comes to preserving and protecting packaged food from spoilage or contamination. In addition, because of its weight making it easy to transport, Mr. Lao pointed out that plastic reduces overall greenhouse gas emissions.

According to Mr. Lao, only 30% of local government units have access to materials recovery facilities, where materials could go for recycling and composting. Only 24% to date have access to sanitary landfills at disposal facilities. This is not to mention that many of the country’s poor communities depend on plastic-packaged food for their daily needs.

“What would be the socio-economic impact of a ban that would affect those who live by the day? Sachets are designed for poor communities, the lower economic brackets. We do need to transition and look for better options. While those options are not yet here, it is important to look for solutions. That’s where we are right now, and that’s where we want to set our targets towards zero waste,” Mr. Lao said.

“There are cities that already banned plastic bags. The substitutes are still alternatives that are disposable. Given that the country lacks infrastructure to properly dispose of waste, it only causes more strain to a system that is lacking. The problem has to be viewed holistically,” he added.

Last January 2020, the Philippine Alliance for Recycling and Materials Sustainability (PARMS) and its member companies have committed to build and execute “Zero Waste to Nature Ambisyon 2030,” a strategy and a commitment to manage plastic waste, aiming to ensure that by 2030, none of the members’ plastic packaging waste will end up in nature.   

As part of this commitment, Mondelez Philippines, maker of snacks products like Eden Cheese, Cheez Whiz and Toblerone, pledged that by 2025, it will reduce its global use of virgin plastic for rigid packaging by 25% or reduce virgin plastic use in overall plastic packaging by 5% in 2025. This goes hand in hand with targeting to have 5% recycled content by weight across plastic packaging globally by the same period.

 

This session of BusinessWorld Insights is presented by Mondelez Philippines.

 

Tighter rules eyed for cigarette makers in special ecozones

THE GOVERNMENT will soon require new cigarette manufacturers located in special economic zones (SEZs) to register with the Bureau of Internal Revenue (BIR), after discovering some companies produced illegal tobacco products while enjoying tax exemptions, the Finance department said in a statement on Tuesday.

The Department of Finance (DoF), quoting a letter sent by Finance Secretary Carlos G. Dominguez III to Trade Secretary Ramon M. Lopez, said the BIR is currently drafting revised taxation rules on operations of cigarette manufacturers in SEZs.

The Philippine Economic Zone Authority (PEZA), DoF, BIR and Customs have agreed to make the BIR registration a requirement before new locators can obtain a certificate of registration from PEZA, it added.

Mr. Dominguez said the BIR will issue the revised rules soon after receiving comments from concerned parties.

“The fact that the alleged illicit activities occurred inside the PEZA ecozone is alarming. Not only did PEZA provide tax breaks to the alleged perpetrators, the government has lost billions of pesos in income taxes, excise taxes, VAT and customs duties when these illicit goods entered the local market,” Mr. Dominguez said in his letter.

Mr. Dominguez attributed the rising illegal activities in some PEZA-registered companies to lax monitoring and weak law implementation.

“We already have an agreement with BIR, BoC (Bureau of Customs), DoF to integrate our systems, processes as far as cigarettes are concerned. It’s a need to integrate our laws, recesses (of) systems, that’s where the gap is,” PEZA Director-General Charito B. Plaza said in a Viber message when asked to comment.

PEZA earlier this month said it was talking to the BIR to integrate their systems to boost tax compliance and monitoring, especially those covering PEZA-registered manufacturers of cigarettes and tobacco products who are exporting all of their products.

It is also coordinating with Customs to align systems and requirements when moving goods of companies in economic zones.

Under PEZA’s rules for registration, companies are not required to comply and obtain secondary licenses or authorization certifications from other state offices such as the BIR, if they want to produce several taxable products like cigarettes, oil and alcohol.

The DoF said this allows locators to manufacture unregistered cigarettes inside an economic zone while enjoying tax perks, and supply to the local market illegally.

House Ways and Means Committee Chairman Jose Ma. Clemente S. Salceda told the BIR in a House hearing early this month to revoke Revenue Regulation (RR) No. 9-2015 granting tax exemption on export cigarettes and ordered the agency to put tax stamps on all cigarette packs, whether for export or local market.

Mr. Salceda also asked PEZA to strengthen its police force enforcement and let other regulatory agencies implement their own rules and regulations inside SEZs.

“Keeping a close watch on those engaged in manufacturing regulated goods from the moment the raw materials enter the zones up to the removal from warehouses is consistent with best practices employed to monitor excisable products and goods,” Mr. Dominguez said.

The BIR raided several warehouses of two PEZA-registered locators recently, confiscating unregistered cigarettes and machines to produce them. The companies produce cigarettes for exports but investigations found these were being distributed in Central Luzon.

BusinessWorld reached out to local agriculture industry group Samahang Industriya ng Agrikultura (SINAG) for comment but did not get a response at the deadline time. — Beatrice M. Laforga

BIR to extend ITR filing deadline for companies

BIR taxpayers
PHILIPPINE STAR/KRIZ JOHN ROSALES

By Beatrice M. Laforga, Reporter

THE BUREAU of Internal Revenue (BIR) is extending the deadline for the filing of annual income tax returns (ITR) for corporate taxpayers, following the recent surge in coronavirus cases and the President’s delay in signing into law the measure to bring down corporate income tax.

“ITR filing for corporates will be extended due to COVID-19 and CREATE (Corporate Recovery and Tax Incentives for Enterprises Act),” Arnel SD. Guballa, deputy commissioner for operations at the BIR told BusinessWorld in a Viber message on Tuesday.

However, Mr. Guballa did not give the new deadline date. The original deadline for filing of ITRs by corporate taxpayers is on April 15.

The BIR is aiming to collect P231.57 billion in April, given the expected surge from income tax payments.

However, tighter travel restrictions in Metro Manila and nearby areas are in place until April 4 due to the spike in coronavirus cases. On Tuesday, the Health department reported 5,867 new COVID-19 cases, bringing the number of active cases to a record-high 86,200. 

CREATE is now awaiting President Rodrigo R. Duterte’s signature. If the President fails to sign this, it lapses into law on March 27. The measure will slash the corporate income tax for local small businesses to 20%, from the current 30%. The tax rate for all other companies, meanwhile, will be reduced to 25% and further cut by one percentage point each year from 2023 to 2027 until it reaches 20%.

To be applied retroactively to July 2020, CREATE is expected to result in P251 billion in foregone revenues in the next two years, and P1 trillion in 10 years.

The deadline extension for ITR filing is a must, according to Maria Lourdes P. Lim, a tax managing partner of Isla Lipana & Co., PwC Philippines.

She noted there are only three weeks left before the initial April 15 deadline, but specific rules, revised forms and other guidelines are not finalized yet.

“Both the private sector and the BIR need time to prepare for the implementation of the changes. Will the BIR come out with new ITR forms or will the old forms be used and the auto compute function for eFPs (electronic filing and payment) and eBIR systems will be disabled so taxpayers can input new rates and compute manually? There are many implementation issues so it’s just right to extend the deadline,” Ms. Lim said in a mobile phone message.

She also raised the question whether the 2020 corporate income tax will be computed based on actual operations or on a prorated basis.

Ms. Lim said the extension should also be applied both for individual and corporate taxpayers since the coronavirus pandemic has severely impacted micro-, small- and medium-sized businesses too.

BIR officials did not respond to questions at the deadline time when asked for further details.

To recall, the BIR moved the deadline for ITR filing three times in 2020 due to the pandemic and subsequent lockdown restrictions. Tax collections for April 2020 plunged by 62% to P90.5 billion, due to the delayed payment of taxes.

Also on Monday, BIR Commissioner Caesar R. Dulay issued Revenue Memorandum Circular No. 39-2021 which moved the last day of filing refund claims to April 12 from the initial March 31 deadline.

Mr. Dulay also suspended the 90-day processing period for the refund claims.

He said the BIR’s VAT Credit Audit Division will temporarily be closed until March 28 “in compliance with the existing health protocols for the mitigation of the COVID-l9 pandemic.”

“The extension of the deadline for filing VAT refund claims is a welcome news considering the challenges in preparing the documentary requirements given the current situation and alternative working arrangements being adopted not only by the private sector but also the government,” Ms. Lim said.

 Late last year, the BIR extended the deadline of the amnesty program for delinquent accounts until June 30, 2021 from the previous Dec. 31, 2020 deadline. This marked the fourth time the BIR extended the program’s deadline from the original April 23 cutoff period.

It also moved the deadline for the availment of the Voluntary Assessment and Payment Program to June 30, 2021 from the initial deadline of Dec. 31, 2020, to allow more taxpayers to voluntarily settle their tax arrears.

The BIR collected P134.27 billion in revenues in February, exceeding the monthly target by 0.07% but still 5.58% lower year on year.

The country’s biggest tax-collecting agency has been tasked to collect P2.081 trillion for 2021, up by 7% from the P1.95-trillion actual collection last year.

Retailers expect revenue slump amid new curbs

Malls remain open but tighter restrictions may discourage more people from going out.

By Jenina P. Ibañez, Reporter

SEGMENTS of the retail sector may see revenues plunge by as much as 70% over the next two weeks as restrictions are tightened in the capital region to curb the surge in coronavirus disease 2019 (COVID-19) infections.

Until April 4, some businesses will be banned from operating at full capacity or at all, while indoor dine-in at restaurants will not be allowed in the capital and its neighboring provinces, or the so-called “NCR Plus” bubble.

The Health department on Tuesday reported 5,867 new COVID-19 cases, bringing the total to 677,653. The number of active cases stood at record-high 86,200.

Roberto S. Claudio, vice-chairman of the Philippine Retailers Association, said that retailers will experience reduced patronage while restrictions are being enforced.

“Particularly, restaurants, fastfood (chains) and non-essential retailers will easily see 50% to 70% drop in revenue,” he said in an e-mail on Monday. “In fact most retailers and restaurants have already experienced 50% actual drop ever since the lockdown was announced on March 21.”

Retailers will cooperate with the authorities, he added, to help reduce the number of COVID-19 cases as soon as possible.

“The government will just have to accelerate the vaccination program and do more testing in areas that have high COVID cases,” he said.

The retail industry group at the start of the year reported that it anticipates “soft” growth for 2021, or 10% higher than last year. This potential sales improvement would still be around 20-30% lower than 2019 or pre-pandemic sales.

The sector suffered last year due to sparse foot traffic at malls and commercial centers amid the lockdown and increased public health anxiety among consumers.

Philippine Chamber of Commerce and Industry (PCCI) President Benedicto V. Yujuico on Monday said that smaller retailers would be affected by the temporary restrictions, noting that customer health fears would reduce foot traffic at restaurants despite government permission to run outdoor dining spaces.

A faster rate of inoculation, he said, will be needed to solve the crisis.

The chamber last week asked the government to allow the private sector to directly import vaccines without restrictions or conditions.

But President Rodrigo R. Duterte said the government cannot be held liable for vaccines bought by the private sector. Last month, Mr. Duterte signed a law giving indemnity to vaccine manufacturers.

The government has inoculated just over 360,000 of up to 70 million Filipinos it plans to immunize this year.

Meanwhile, PCCI is urging Filipino consumers to buy locally produced goods to help domestic businesses recover.

“In the face of losses from reduced economic activity, we are calling on all consumers and industry users to support Philippine-made products. This is to help local businesses survive, rebound and continue providing jobs for the Filipino people,” Mr. Yujuico said in a statement on Tuesday.

The chamber also encourages multinationals and local contractors, manufacturers, and enterprises to source materials within the country, unless there are no local options.

The Philippine economy contracted by a record 9.5% in 2020 due to the prolonged lockdown.

PHL loses up to $890M a year due to plastics recycling ‘failure’ — WB

THE PHILIPPINES recycled about 28% of the key plastics resins in 2019, a World Bank study showed. — THE PHILIPPINE STAR/ EDD GUMBAN

By Angelica Y. Yang

THE PHILIPPINE economy is losing up to $890 million a year due to what is described as a “market failure” in plastic waste recycling efforts, a new World Bank Group (WB) country study showed.

“Only 22% of the total material value of plastics ($246 million/year) is currently unlocked. This results in $790-890 million/year of potential material value that is lost to the Philippine economy,” the World Bank Group said in “Market Study for the Philippines: Plastics Circularity Opportunities and Barriers” released on Tuesday.

The total material value which could be unlocked from plastics recycling amounted to $1.1 billion, assuming that four of the country’s key plastics resins had 100% collected-for-recycling (CFR) rates and were sold for maximum value in the market, the World Bank said.

The four key plastics resins in the Philippines are Polyethylene Terephthalate (PET), High-Density Polyethylene (HDPE), Low-Density Polyethylene or Linear Low-Density Polyethylene (LDPE/LLDPE) and Polypropylene (PP). They accounted for up to 93% of all the plastics resins used by Filipinos in 2015.

The World Bank said the annual material value loss of $790-$890 million is the result of “various structural challenges which affected CFR rates and value yields for the four key resins.”

The World Bank cited six challenges which prevented the Philippines from maximizing the value of plastic waste. These include high logistics costs, expensive electricity bills, and the presence of low-value and hard-to-recycle packaging, which makes up 61% of the plastic packaging units in the market.

The Philippines also faced intense competition from the informal recycling industry, low tipping fees which discourage local governments from investing in waste management solutions, and small and medium enterprises who dominated the recycling industry but cannot capitalize on the growing demand for recycled resins.

In 2019, the Philippines recycled only 28% of its key plastics resins, the report showed.

The World Bank recommended six interventions, which called for an increase in waste collection and sorting of plastics, a national design for recycling standards, and the creation of industry-specific requirements in ramping up waste collection and recycling rates, among others.

In a separate press release on Tuesday, the World Bank Group said that the Philippines, Malaysia and Thailand are losing a total of $6 billion a year due to un-recycled plastic waste, based on the group’s series of country studies.

“More than 75% of the material value of the plastics is lost — the equivalent of $6 billion per year across the three countries — when single-use plastics are discarded rather than recovered and recycled, representing a significant untapped business opportunity if key market barriers can be addressed,” the multilateral lender said.

The World Bank noted that less than a quarter of plastics were available for recycling in Malaysia, Thailand and the Philippines.

World Bank Country Director for Brunei, Malaysia, the Philippines and Thailand Ndiamé Diop said that the issue of mismanaged plastics in the three countries is threatening the tourism and fisheries sectors.

“But there is strong government momentum in these countries to identify critical policies, and craft roadmaps to strengthen demand for all recycled plastics resins, level the playing field for global and domestic companies, and help drive a circular economy for plastics,” he was quoted as saying.

GA Circular, a research and strategy firm that specializes in waste management and recycling, conducted the three country studies. The GA Circular researchers consulted with workers across the plastics value chain to develop baseline data, and undertook analyses to quantify the untapped market potential for each resin.

The Korea Green Growth Trust Fund, a partnership between the World Bank Group and Republic of Korea, provided the funding for the Philippine study. Meanwhile, umbrella multi-donor trust fund PROBLUE, which is housed at the World Bank, funded the Thailand and Malaysia studies.

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