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SSS expands benefit, loan disbursement channels; urges qualified payees to enroll bank accounts at My.SSS

The Social Security System (SSS) strengthens its partnership with the Development Bank of the Philippines (DBP) to expand its benefit and short-term loan disbursement channels.

Through the said partnership, SSS-qualified employers, members, and pensioners may now receive benefits and short-term loan proceeds through the Philippine Electronic Fund Transfer System and Operations Network (PESONet) participating banks.

Qualified members and pensioners may now also receive SSS benefits through e-wallets such as PayMaya or cash pick-up arrangement via DBP Cash Padala Thru M Lhuillier, a Remittance Transfer Company/Cash Payout Outlet.

SSS President and CEO Aurora C. Ignacio said the enhanced disbursement process is already implemented for Unemployment, Funeral, Sickness, and Maternity Benefits, and Salary, Calamity, and Emergency loans, however, the said short-term loans might only be disbursed thru PESONet participating banks.

Starting in October 2020, monthly pensions will also be released through the said method.

“With our strengthened partnership with DBP on PESONet disbursements, we are hoping to expedite the releases of benefits and short-term loans. Upon its full implementation, eliminate disbursements via checks,” Ignacio said.

The SSS urges qualified payees and member-borrowers to enroll their disbursement accounts through the Bank Enrollment Module (BEM) found under the E-services tab of their respective My.SSS accounts on the SSS website (www.sss.gov.ph).

Qualified payees and member-borrowers must select their preferred PESONet participating bank, e-wallet, or RTC/CPO and supply a valid and active bank account number, or mobile number for an e-wallet or RTC/CPO.

Bank account numbers must be entered as a continuous string of numbers, while mobile numbers must be in its 11-digit format that starts with 09. Qualified payees and member-borrowers are reminded to ensure the correctness of their disbursement account information in the BEM before enrolling them.

“We are continuously transforming our services into digital processes for our members and the public to transact with us without having to go to our branches. Aside from its convenience, this also serves as a safety measure given the current pandemic situation,” Ignacio said.

The SSS has also implemented the mandatory online submission via the My.SSS portal of Maternity Notification and Sickness Notification (for employers); and filing of applications for Unemployment Benefit, Funeral Benefit of SSS-member claimants, Sickness Benefit Reimbursement Claims of employers, Salary Loans, and Calamity Loans.

The online filing of Retirement Benefit applications through the said portal is also required for all members who are at least 65 years old, and for land-based OFWs and voluntary members who are 60 to 64 years old, upon the filing of retirement claim.
For further information, members and employers may call the SSS’ hotline at 1455 and follow the SSS Facebook page at Philippine Social Security System.

In Together Apart, art community tackles themes of isolation and uncertainty

Jaime de Guzman, Self-portrait, 1968
Oil on canvas
150.2 x 141.5 cm
©National Fine Arts Collection. Photo: Bengy Toda III
On display at the 3rd Floor Northwest Hallway Gallery of the National Museum of Fine Arts

Together Apart — Art world voices that connect us now is a virtual exhibition evoking the worldwide anxiety caused by the coronavirus pandemic. 

“We want to share our view on isolation and uncertainty with those who similarly feel stressed, isolated, and worried for their future. Works of art are also powerful reminders that we have been through previous crises but we have persevered by being creative in facing changes,” wrote Ana Maria Theresa Labrador, Deputy Director-General for Museums of the National Museum of the Philippines, in her foreword. 

Audiences will discover pieces from the British Council Collection that were selected by invited art leaders, as well as works from the National Museum’s National Fine Arts Collection selected by the same institution. 

The exhibition is divided into four themes, which are, in order: isolation, crisis as metaphor, transformations, and voices of solidarity. Each image is presented alongside explanatory text written by the curator or artist who chose the piece.

Together Apart opens with Lucian Freud’s Girl with Roses (1947/8), a painting selected by Ms. Labrador for the “portrait sitter’s stark expression, gaze averted fretfully looking at something outside of the frame.” Continued Ms. Labrador: “Her mien of uncertainty about her future is parallel to the effect of coronavirus to our lives.”

“Crisis as metaphor” includes France: The Beginning of an Advance – Typhoon Orchard (1944) by Albert Richards, which makes sense of the pandemic by comparing it to another crisis and the reflections borne from that event. As Katelijn Verstraete, British Council’s Director Arts & Creative Industries East Asia, reflected, “Even though we are going through a metaphorical typhoon with many people dying, I have the hope that we can stay strong, stay interconnected like trees to support each other. Nature will always recover. Let’s be more like trees.”

Albert Richards, France: The Beginning of an Advance – Typhoon Orchard, 194
4 Watercolor, ink and gouache on paper
73.1 x 53.4 cm
Courtesy of British Council Collection

In “Transformations,” one finds Hannah Quinlan and Rosie Hastings’ Attitude (2016), a powder-coated aluminum work showing a rainbow flag engulfed in flames. “I have been thinking deeply about how the new generation has resourcefully and expertly assumed the mantle of activism within the collective consciousness, especially in a world turned upside down by COVID-19,” said John Kenneth Paranada, founder and artistic director of the Centre for Ecologies, Sustainable Transitions, and Environmental Consciousness. 

The exhibition’s final section, “Voices of Solidarity,” reminds audiences that “times of great change and loss call for cooperation and kindness.” Landscape of the Megaliths (1934) by Paul Nash was chosen by independent curator Rafael Schacter because of the “the huge cooperative endeavor it took to create” these monuments. “These were not only ritual, public, communal sites, but spaces which took an unprecedented, unimaginable level of collaboration to be produced,” added Mr. Schacter, who is also a lecturer in anthropology and material culture at the University College London.

Paul Nash, Landscape of the Megaliths, 1934
Oil on canvas
49.5 x 73.2 cm
Courtesy British Council Collection

These pieces from the British Council Collection are complemented by works in the National Museum’s National Fine Arts Collection by artists such as Jaime De Guzman, Onib Olmedo, Napoleon Abueva, and Ofelia Gelvezon-Tequi—also chosen for the relevance to the four themes. 

“This is everyone’s collection, and its narratives and contexts are continually shifting, everybody has a different perspective and personal reflection to share,” said Moira Lindsay, head of collections of the British Council.

Together Apart – Art world voices that connect us now may be viewed until November 19 on different screens (laptop, smart phones, and tablets). Allow three minutes for the exhibition to load fully. No installation is required. — PB Mirasol

Philippines in talks with 16 vaccine makers to secure supplies

The Philippines is negotiating with 16 manufacturers of potential COVID-19 vaccines to procure supplies needed to battle Southeast Asia’s largest outbreak.

The country will join human trials of 14 vaccines under the World Health Organization’s Solidarity Trial and the global Covax facility to get priority access if they’re proven effective, Health Undersecretary Maria Rosario Vergeire told ABS-CBN News Channel Monday.

“We are better positioning ourselves for this vaccine. Whatever is found to be safe and feasible for our country, that’s what we’re going to have,” Ms. Vergeire said. The US and Russia have also committed to allot doses for the Philippines, which has no vaccine manufacturing capacity of its own.

The Philippines is banking on a vaccine to help contain Southeast Asia’s worst coronavirus outbreak that has infected nearly 190,000 people despite imposing one of the region’s earliest and longest lockdowns. Singapore and Indonesia have already partnered up with foreign developers, while Thailand is making its own candidate vaccine.

The Department of Health is proposing to speed up distribution of a COVID-19 vaccine by waiving phase 4 clinical trials, which assesses its longer-term effects after FDA approval. The waiver is subject to conditions, including the conduct of safety and effectiveness surveillance and informed consent of recipients.

Meanwhile, the government stood pat on a deployment ban on health care workers, even as only 25 out of 1,000 returning Filipino nurses took on the chance to work in local hospitals and clinics, Ms. Vergeire said. The health agency is offering hazard pay, life insurance, housing and, transportation as it falls about 3,000 people short of the 10,500 it targeted for its emergency hiring program. — Bloomberg

US agency authorizes use of blood plasma to treat coronavirus

WASHINGTON — The US Food and Drug Administration (FDA) on Sunday said it authorized the use of blood plasma from patients who have recovered from COVID-19 as a treatment for the disease, a day after President Donald Trump blamed the agency for impeding the rollout of coronavirus vaccines and therapeutics for political reasons.

The announcement from the FDA of a so-called “emergency use authorization” also comes on the eve of the Republican National Convention, where Mr. Trump will be nominated to lead his party for four more years.

A day before the FDA’s announcement, Mr. Trump tagged the agency’s Commissioner Stephen Hahn in a tweet and said, “The deep state, or whoever, over at the FDA is making it very difficult for drug companies to get people in order to test the vaccines and therapeutics.” “Obviously, they are hoping to delay the answer until after November 3rd. Must focus on speed, and saving lives!”

The FDA, which appeared to rush with an announcement on Sunday, said early evidence suggests blood plasma can decrease mortality and improve the health of patients when administered in the first three days of their hospitalization. It was not immediately clear what the immediate impact of this decision would be.

“It appeared that the product is safe and we’re comfortable with that and we continue to see no concerning safety signals,” said Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research said on a conference call with reporters.

The agency also said it determined this was a safe approach in an analysis of 20,000 patients who received this treatment. So far, 70,000 patients have been treated using blood plasma, the FDA said.

Patients who benefited the most from this treatment are those under 80 years old and who were not on a respirator, the agency said. Such patients had a 35% better survival rate a month after receiving the treatment.

FDA Director Stephen Hahn said Mr. Trump had not spoken to him or the agency and did not play a role in its decision to make the announcement on Sunday. — Reuters

[B-SIDE Podcast] Moving on, moving forward: Logistics and supply chain management during the lockdown

Follow us on Spotify BusinessWorld B-Side

After several months, the coronavirus pandemic is still wreaking havoc on supply chains. Rosemarie P. Rafael, chair and president of express courier company Airspeed Philippines, tells reporter Arjay L. Balinbin what kind of commodities are moving, and what kind of technological innovations are changing the logistics industry.

TAKEAWAYS

On-demand delivery aggregators are doing well. Institutional mailers and traditional companies that depend on import/export are not.

The fate of a logistics company amid the pandemic depends on what kind of commodities they deliver. Those who deliver food and groceries have been in demand because of the lockdown while those in the traditional forwarding business have suffered due to the grounding of flights, which have limited their capacity.

The increasing number of players in the last-mile delivery space has sparked an unsustainable price war.

“It will not last,” said Ms. Rafael of the said price war among competitors. “Operational excellence has to be there. That cannot be supported if we do not price our service right.”

The logistics industry, like every other industry, is using technology to become as contactless as possible.

Ms. Rafael enumerated contactless payments, interbank transfers, and acronyms such as BOPIS (buy online, pick-up in store) and BOPUC (buy online, pick up curbside) as ways of reducing points of contact. “What we used to do is being transformed,” she said, adding that track-and-tracing of packages is intact without having to do manual work.

Online shopping is a bright spot for the logistics industry.
“One thing that I know: Online shopping will be there. And when there is online shopping, there is going to be delivery,” said Ms. Rafael.

Recorded remotely on August 13. Produced by Nina M. Diaz, Paolo L. Lopez, and Sam L. Marcelo.

Follow us on Spotify BusinessWorld B-Side

Corporate pension system reform eyed

THE corporate pension system may soon face reforms as the Capital Market Development Council (CMDC) is looking at raising the funding requirement for retirement plans of private sector employees.

Finance Secretary Carlos G. Dominguez III on Sunday said the CMDC, which he co-chairs, is studying the recommendation of the Fund Managers Association of the Philippines (FMAP) to require the partial or full funding of retirement plans for private sector workers.

“The CMDC is studying higher levels of funding for pension and retirement pay systems compared to the present situation. This is to reduce fiscal risk in the system as the country ages over the longer term and also as an ancillary measure to make pensions more portable,” he told reporters in a Viber message.

The CMDC, a group of public and private sector representatives tasked to help develop the country’s capital markets, has already consulted the Labor department on the FMAP’s proposal.

In a letter to Labor Secretary Silvestre Bello III, Mr. Dominguez said FMAP’s study showed the law does not require private firms to fund any retirement liabilities that are calculated based on the prescribed benefits.

Under Republic Act No. 7641 or the Philippine Retirement Pay Law, companies with more than 10 workers are required to provide a retirement plan or retirement pay for qualified employees.

However, companies usually provide pension benefits based on the minimum requirements under the law, which “deprives employees of sufficiently-funded retirement benefits.”

The FMAP study also showed pension benefits received by the private employees under the current system are “insufficient” to replace worker incomes. It also noted new workers are “at risk of receiving even smaller pensions later,” while the “low accumulation of pension assets limits the development of capital markets.”

“One of the conclusions in the studies is that this creates a social problem because people in their retirement may not have enough retirement savings. As to [the] economic and capital market aspects, the absence of an effective pension fund system affects the demand side for investments that could contribute to the development of the Philippine capital market,” Mr. Dominguez said.

The CMDC has already created a technical working group (TWG), headed by National Treasurer Rosalia V. de Leon, to coordinate with the Labor department regarding FMAP’s recommendation.

Mr. Dominguez said a mandatory partial or full funding of pension obligation would solve the issues on “insufficient” retirement plans faced by private sector workers, as the funds are invested to generate returns over time.

The Finance chief said promoting a wider adoption of the Personal Equity and Retirement Account (PERA) in connection with RA 7641 will also contribute to the development of the local capital market as it boosts the demand for investments.

“As a fully funded and portable product, encouraging the adoption of PERA accounts helps increase funding levels, but increased funding over the broader pension system, similar to the popularity of the 401K product in the US, is similarly desirable,” he added. — B.M.Laforga

Which commodity groups contributed the most to inflation so far?

DESPITE the change in consumption patterns brought by the coronavirus disease 2019 (COVID-19) pandemic, the need to tweak the theoretical basket of consumer goods and services used to measure inflation still remains in question. Read the full story.

Which commodity groups contributed the most to inflation so far?

Is the CPI still ‘representative’ amid a pandemic?

By Marissa Mae M. Ramos, Researcher
and Luz Wendy T. Noble, Reporter

CHANGING CONSUMPTION PATTERNS of households amid the pandemic have raised the question of whether the theoretical basket of goods and services used to measure price changes over time remains accurate.

“The pandemic has changed that basket — less dine-in consumption, more take-out food intake; less transportation; less hotel accommodation, less domestic and foreign travel; higher spending for medicine and health services; less education services; higher communications services; less clothing; and others,” said BSP Governor Benjamin E. Diokno in a Viber message.

Mr. Diokno was referring to the consumer price index (CPI), which captures the average retail prices of goods and services commonly purchased by households in an area, with each commodity given a weight value to indicate its relative importance in the consumer basket. For instance, the CPI for all income households gives a 38.3% weight on food and non-alcoholic beverages, whereas for low-income households, the same commodity group is assigned a heavier weight of 58.3%. (Refer to the infographic for the weights of other commodity groups for the bottom 30% and all income households.)

These weights are then kept constant to reflect the CPI’s purpose, which is to measure price changes over time or the inflation rate, while controlling for changes in consumption patterns.

For National Statistician Claire Dennis S. Mapa: “The CPI basket still represents the ‘typical’ bundle of goods and services consumed by households,” he said in a separate Viber message.

Mr. Mapa noted the Philippine Statistics Authority (PSA) expects to revise and rebase the basket for the bottom 30% and all income households next year according to their work program. The PSA currently measures the inflation rate using 2012 prices for the CPI adopted in 2018.

As of July, headline inflation reached 2.5%, still within the Bangko Sentral ng Pilipinas’ (BSP) 2%-4% target band, but above the 2.3% forecast for the entire 2020. This was lower compared to the 4.5% and 3.2% inflation rates recorded in the same six months of 2018 and 2019, respectively.

The stable inflation rate this year has been considered a silver lining on the Philippine economy as this has allowed the BSP’s Monetary Board to continue supporting the economy by putting interest rates at record lows, as well as decreasing the reserve requirements for banks to encourage lending activity.

The economy officially plunged into a recession after the second quarter saw an annual decline of 16.5% — the biggest contraction on record based on available government data.

Even so, it may be possible that current inflation is being underestimated considering consumers shifted their expenses towards “essential items.” According to BusinessWorld’s calculations using PSA data, household spending on essential items in the second quarter accounted for 64.9% of the average spending compared with 53.4% in the same period in 2019.

These essential items include expenditures on food and non-alcoholic beverages; housing, water, electricity, gas, and other fuels; health; and communication.

Asked whether the current developments have drastically affected the representativeness of the CPI, National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon said the only way to ascertain this is to conduct another round of the Family Income and Expenditure Survey (FIES).

“[E]ven then, we need to know if these changes are permanent. In any case, the current basket heavily favors food, which remains true, especially now,” she said in a separate Viber message.

“In addition to the headline numbers, we extensively examine the different components of the CPI,” Ms. Edillon said.

The FIES, which the PSA conducts every three years, serves as the basis for the weights of commodities in the consumer basket as it reflects a commodity’s share in the total consumption of a typical Filipino household. The latest iteration of the FIES was done in 2018.

For BSP’s Mr. Diokno, the changes in the households’ spending pattern raise an argument for modifying the consumer basket, but also expressed concern if such trend is temporary.

“I think one problem is that PSA cannot do this unilaterally. Think the adjustment, if done, has to be in conjunction with the international community,” he added.

For Security Bank Corp. Chief Economist Robert Dan J. Roces, the recent developments “validated the view that consumption may cluster towards more essential items in the meantime.”

“With this, consumer behavior may have adapted to the ongoing quarantine measures from the pandemic, but not necessarily have ‘evolved’ — this we have yet to see as the pandemic seems to be far from over,” he said.

“I think the current CPI basket provides a good baseline to the shifts in consumer preferences, as well as future evolutions once the pandemic is over, and I think only then should [we] take a look at the CPI basket and adjust inflation targeting, if at all,” Mr. Roces added.

Which commodity groups contributed the most to inflation so far?

NEDA revising goals under PHL dev’t plan

Residents of Navotas line up for a free swab test offered by the city government, Aug. 5. — PHILIPPINE STAR/MICHAEL VARCAS

THE National Economic and Development Authority (NEDA) is currently revising the government’s medium-term development targets under the Philippine Development Plan (PDP) 2017-2022 due to the impact of the coronavirus disease 2019 (COVID-19) pandemic.

In a Viber message last week, NEDA Undersecretary Rosemarie G. Edillon said revisions to the economic and development goals are “still under discussion.”

The NEDA is updating the government’s medium-term economic development blueprint to include the “new normal,” and consider the impact of COVID-19 pandemic on the economy.

The updated PDP will include a wider adoption of digitalization, more inclusive and job-generating programs and a better healthcare system.

NEDA Acting Secretary Karl Kendrick T. Chua said the government is still aiming to meet the goal of reducing poverty to 14% by 2022, despite the impact of the pandemic on the poor.

“We have brought down the poverty rate from 23.5% in 2015 to 16.7% in 2018, or lifting six million Filipinos from poverty four years ahead of the 2022 target. We will double our effort to meet this target with the recovery programs,” Mr. Chua said in a Viber message.

Under the PDP, the government is targeting to achieve the following by 2022: become an upper-middle income economy; a 7-8% annual growth rate; increase per capita income to $5,000 (from $3,850 in 2019); reduce the poverty rate to 14% (from 16.7% in 2018); keep the inflation rate within 2-4%; and lower the unemployment rate to 3-5% (from 17.7% as of April).

An Aug. 4 study by the state-run think tank Philippine Institute for Development Studies (PIDS) warned of the COVID-19 pandemic’s significant impact on the poor. Despite the cash aid program rolled out during the lockdown, PIDS said the pandemic will push 1.5 million Filipinos below the poverty line as the economic slowdown reduces their incomes.

PIDS said the goal to become a middle-class society will be affected if the country records lower growth rates as it recovers from the coronavirus crisis.

The government expects the economy to shrink by 4.5-6.6% this year, before bouncing back to 6.5-7.5% in 2021.

The country plunged into recession after gross domestic product contracted by 16.5% in the second quarter when the lockdown brought the economy to a near standstill. — Beatrice M. Laforga

Gov’t eyes deferred CARS output target

By Jenina P. Ibañez, Reporter

THE GOVERNMENT may consider extending the compliance period for automotive companies participating in its incentives program developed to support local parts production.

The Board of Investments (BoI) is asking the automotive companies to submit proposals after an industry leader pointed out that they may not be able to meet the required production volume.

Toyota Motors Philippines Corp. and Mitsubishi Motors Philippines Corp. are participating in the Comprehensive Automotive Resurgence Strategy (CARS) program, which offers fiscal support to car companies that locally produce 200,000 units of high-volume car models for six years.

But Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) President Rommel R. Gutierrez, in an online press conference last week, asked the government to review the conditions for the program after the pandemic caused an industry sales slump.

In a press conference on Friday, BoI Managing Head Ceferino S. Rodolfo said that he understands the “difficult economic environment” the industry is experiencing.

“That’s why we are willing to take a look at their proposals. So kung meron silang (If they have) specific proposals on the volume requirement, on the timeline for compliance with the volume requirement, we are willing to take a look at it,” he said.

“But currently, the policy direction is that we are willing to take a look at a longer time period to comply with the volume requirement without adjusting the volume.”

He asked car companies to submit specific recommendations backed up by data on the units enrolled in the program and overall sales during the pandemic. The interagency committee on the CARS program will convene again, he said.

Vehicles enrolled in the CARS program include the Toyota Vios and the Mitsubishi Mirage, with deadlines set at 2024 and 2023, respectively.

CAMPI’s Mr. Gutierrez had said that the industry needs to collaborate with the government to maintain local production, saying that Vios and Mirage production have also been “badly hit” during the lockdown.

Cars sales saw a 48.7% decline in the first seven months to 105,583 units compared with the same period a year ago, a joint report by CAMPI and Truck Manufacturers Association said.

Year to date, commercial vehicle sales dropped 47.6% to 75,514 units, while passenger car sales fell 51.4% to 30,069 units.

SEC says company owners may now opt for perpetual corporate existence

CORPORATIONS may amend their corporate term to be extended, shortened, or deemed to have perpetual existence after a vote from their respective board and stockholders, the Securities and Exchange Commission (SEC) said in its guidelines.

The Revised Corporation Code (RCC) signed into law by President Rodrigo R. Duterte last Feb. 20, 2019 states that firms may now exist forever instead of the previous 50-year limit that can be renewed thereafter.

SEC Memorandum Circular No. 22 released on Sunday said that corporations incorporated when the code was made effective on Feb 23, 2019 will have perpetual existence unless its articles of incorporation provide a specific corporate term.

These corporations, if they have a specific term of existence in their articles of incorporation, may amend their articles of incorporation to extend or shorten their term with the written assent or majority vote of the board of directors or trustees and the stockholders representing two-thirds of outstanding capital stock.

They may do the same to amend their specific corporate term to perpetual existence.

Corporations under the revised code whose articles of incorporation already provide for a perpetual term of existence may amend this for a specific corporate term under the same written assent or vote.

SEC last year said that perpetual existence would create a sense of longevity for corporations to implement long-term projects.

CORPORATIONS BEFORE THE RCC
Corporations that have certificates of incorporation issued before the RCC was made effective will be deemed perpetual without action from the corporation.

To reflect its perpetual corporate term in its articles of incorporation, the board of directors or trustees can vote by majority as well as stockholders representing majority of the outstanding capital stock including non-voting shares. For nonstock corporations, the vote must be cast by a majority of members.

But corporations with certificates of incorporation before the RCC took effect can continue its present corporate term by filing a notice with the SEC, certifying a decision made by vote. — Jenina P. Ibañez

Tax court affirms Air Philippines’ P74-M refund

THE Court of Tax Appeals affirmed the P73.8-million tax refund granted to Air Philippines Corp. representing the excise tax it paid for the importation of the aviation fuel.

In a 22-page decision, the court, sitting en banc, denied the petition of the Bureau of Internal Revenue (BIR) which sought to reverse the ruling of the court’s special third division which ruled in favor of the corporation.

The court said Air Philippines complied with the requirements for tax refund.

“Thus, in view of respondent’s compliance with all the requirements to be entitled to refund of excise taxes on imported Jet A-1 aviation fuel, the Court in Division in the assailed Amended Decision had correctly ordered petitioner to refund to respondent the aggregate amount of P73,769,349.40, representing specific taxes paid under protest corresponding to its importation of Jet A-1 aviation fuel for its domestic flight operations covering the period of January to July 2007,” the court ruled.

The court said the certifications from the Air Transportation Office (ATO) presented by Air Philippines to prove that the Jet A-1 aviation fuel was not locally available in reasonable quantity, quality or price during the time of importation must be given weight as it had the means to know the facts, considering its mandated functions.

It also said that Air Philippines proved that the imported fuel was used for its domestic flight operations with the Authority to Release Imported Goods (ATRIG), based on records of the case.

The court said it is precluded from entertaining the issue on the actual use of imported aviation fuel, which was only raised by the bureau on its motion for reconsideration on the court division’s decision in November 2018.

The BIR argued that the corporation’s additional evidence should not have been considered by the court’s division as the Department of Energy is mandated to monitor supply and demand of fuel and not the ATO, nor the Civil Aviation Authority of the Philippines.

The bureau also claimed that ATRIGs alone are insufficient to prove that the aviation fuel was used for its transport and non-transport operations.

Air Philippines, on the other hand, said that it had established that the imported fuel was used for its transport operations as it presented witnesses and documentary evidence.

The court’s third division in November 2018 issued an amended decision, granting Air Philippines the refund. It affirmed the decision in a resolution in April 2019, denying the appeal of the BIR and the Bureau of Customs.

In the 2018 ruling, the court’s special third division said the corporation established that it is entitled to refund the erroneously collected excise tax it paid.

The court said that for the corporation to avail of the exemption under its franchise, it must prove that it paid its basic income or franchise tax, whichever is lower, the imported materials should be used for transport and non-transport operations, and these were not locally available in reasonable quantity, quality, or price. — Vann Marlo M. Villegas

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