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BSP liquidity support for economy estimated at P1.5 trillion

LIQUIDITY INJECTED into the economy by the Bangko Sentral ng Pilipinas (BSP) via monetary policy measures has amounted to about P1.5 trillion, BSP Governor Benjamin E. Diokno said.

“The BSP has injected a total of P1.5 trillion into the financial system, equivalent to about 7.6% of gross domestic product (GDP), as part of its liquidity-easing measures to address the impact of COVID-19 pandemic,” he said in an online speech at the Iloilo Business Conference Business Webinar Series Tuesday.

Domestic liquidity or M3 — the broadest measure of money supply — rose 14.5% year on year to about P13.6 trillion in July, against the 14.9% increase in June.

The BSP has reduced benchmark rates by 175 basis points (bps) to provide support to the economy, bringing down the overnight reverse repurchase, lending, and deposit facilities to record lows of 2.25%, 2.75%, and 1.75% respectively.

It has also reduced the reserve requirement for banks by 200 bps for big banks and by 100 bps for thrift and rural lenders.

The BSP also offered banks regulatory relief by allowing them to count loans to small businesses as an alternative form of complying with reserve rules. The central bank also reduced the credit risk weight given to borrowing by small businesses.

“Because of this, we have new loans to micro-, small-, and medium-sized enterprises of around P109 billion as of August,” Mr. Diokno said in a Laging Handa Briefing on Wednesday.

The BSP has said liquidity remains ample.

The Monetary Board will conduct its fifth policy-setting review this year on Thursday. — Luz Wendy T. Noble, Gillian M. Cortez

PHL, India considering bilateral trade deal

THE PHILIPPINES and India are considering a bilateral preferential trade agreement (PTA), which the Trade department said will diversify the base of Philippine export products shipped to the region.

Both countries have agreed to a “manageable” bilateral approach, the Department of Trade and Industry said in a statement Wednesday.

India withdrew from the 15-country Regional Comprehensive Economic Partnership (RCEP), a potential trade pact between all 10 ASEAN countries and major trade partners Australia, China, New Zealand, Japan, and South Korea.

India opted out due to concerns about the deal’s potential repercussions on its farmers and small businesses.

A preferential trade agreement reduces tariffs for a particular set of products.

“A more focused approach like a PTA is more practical. (The Philippines) is eager to conclude one with India not only to improve current trade levels in terms of value and volume but also in the breadth of products to be covered as current trade is highly concentrated on a few products,” Trade Undersecretary Ceferino S. Rodolfo said during a joint trade and investment working group conference on Sept. 17.

India Ministry of Commerce Joint Secretary Anant Swarup called on both parties to engage in consultations ahead of negotiations.

India was the Philippines’ 11th largest source of imports in 2019, with imports worth $1.7 billion accounting for 1.6% of the total. It was the Philippines’ 17th largest export destination with $534 million accounting for 0.8% of the value of total Philippine exports.

Trade Assistant Secretary Allan B. Gepty said a trade agreement could address supply chain gaps by improving market access for raw materials.

The Philippines has committed to signing the RCEP by November. — Jenina P. Ibañez

BIR to offer no more extensions for registering online business

THE Bureau of Internal Revenue (BIR) said it will not extend the latest registration period for online sellers, after the deadline was moved twice.

“There will be no extension. Enough time was given to register,” BIR Deputy Commissioner for Operations Arnel SD. Guballa said in a text message Wednesday.

The original deadline was July 31. It was then moved to Aug. 31 and to Sept. 30.

Mr. Guballa said late registrants will be subject to penalties starting Thursday, Oct. 1.

The bureau issued Revenue Memorandum Circular No. 60-2020 in June to remind online sellers to register with the BIR. Some 7,262 businesses have registered so far. 

The registration period was imposed to give online vendors more time to comply without incurring penalties.

New online businesses surged due to the coronavirus pandemic.

“All those who will be found later doing business without complying with the registration/update requirements, and those who failed to declare past due taxes/unpaid taxes shall be imposed with the applicable penalties under the law, and existing revenue rules and regulations,” according to the circular.

Prior to June, the bureau did not have a specific industry code for businesses involved in digital transactions, according to Mr. Guballa. The bureau has since started monitoring the tax compliance of such businesses.

The Department of Finance (DoF) said in May that it is working with the BIR on measures that will contain the foregone value-added tax (VAT) created by the digital economy. The DoF estimates up to P17 billion in potential VAT collections from online transactions.

Officials have asserted their authority to tax under the Tax Reform for Acceleration and Inclusion Act, which sets the ceiling for tax-exempt annual income at P250,000. Other laws exempt from VAT entities with gross sales below P3 million. — Beatrice M. Laforga

DoE delays commercial launch of renewable energy market

THE Department of Energy (DoE) said it delayed the commercial launch of the renewable energy market to next year due to the impact of the coronavirus pandemic.

“Due to the effects of COVID-19 (coronavirus disease 2019) pandemic, full commercial operation of the REM (renewable energy market) is recalibrated from June 2020 to June 2021,” the department said in an advisory.

The REM allows participants to buy or sell renewable energy certificates, which can help them meet their clean power requirements under the Renewable Portfolio Standard (RPS) — a mechanism compelling them to source a portion of their power needs from renewable sources.

Despite the delay, mandated participants — distribution utilities and retail electricity suppliers — in on-grid areas are still required to comply with the RPS, according to the DoE.

Their compliance with the RPS starts this year on Dec. 26. The rules were issued in 2018.

Meanwhile, REM participants in off-grid areas, or electric cooperatives, will not have to meet the regulation’s requirements pending the creation of guidelines for competitive selection process and optimal supply mix under the Missionary Electrification Development Plan.

The DoE is still working to form a technical working group to iron out the guidelines. The group will identify technical constraints in the integration of renewable energy in distribution utilities’ systems and develop a regulatory framework to be adopted by the Energy Regulatory Commission to ensure the objectives of the Republic Act No. 9513, or the Renewable Energy law, are met.

The department still encourages market participants to take part in its activities leading to the commercial run in 2021, such as membership registration, training, and trial operations led by the Philippine Electricity Market Corp.

In July, the National Renewable Energy Board, which is a member of the RPS composite team, said it is studying a potential revision in the required annual minimum level of contracted renewables to meet the country’s target of 35% renewable energy over the next decade. Currently, power utilities are required to have at least 1% of renewable power in their annual supply.

The REM is one of the government mechanisms designed to attract renewable energy investment and bolster its development. Other non-fiscal incentive programs include the green energy auction, green energy option, net metering, and the feed-in-tariff system. — Adam J. Ang

World Bank approves $600-million loan for PHL 4Ps program

THE World Bank approved Wednesday a $600-million (P29 billion) loan to help the country fund its conditional cash transfer program for poor families.

In a statement Wednesday, the bank said the loan will support the Pantawid Pamilyang Pilipino Program (4Ps) of the Department of Social Welfare and Development (DSWD).

“We are pleased to support the government’s efforts to sustain social protection for the poor and most vulnerable families. These efforts are critical to ensure that their children can remain in school and stay healthy as the country takes measures to control this pandemic. In these difficult times, cash transfers to the poor and vulnerable indirectly support local economies and boost prospects for recovery,” Ndiame Diop, World Bank’s country director for Brunei, Malaysia, Philippines and Thailand, was quoted as saying.

The bank said the loan will also help the DSWD improve and fast-track the delivery of financial aid to beneficiaries via digital platforms.

It said the central bank will also help modernize the DSWD’s payment delivery systems and implement other programs that will promote financial inclusion.

“Global experience shows that countries that have effective government-to-persons payments systems and a coherent approach to social protection beneficiary data management have been very effective in quickly and effectively cushioning the impacts of COVID-19 pandemic,” Mr. Diop said.

The modernization program can also be used for other social protection programs of the government, according to Yoonyoung Cho, a senior economist and project task team leader at the World Bank.

She said the project is expected to help the DSWD have a greater impact on poverty alleviation through its social protection programs, set up a new unified beneficiary database for its programs, and integrate its database with the national ID system.

“Shifting to the use of digital platforms and technologies for delivery of social protection programs and services is a high priority agenda of the government that we are excited to support. Together with the PhilSys (Philippine Identification System) that the government is already expediting, activities in this project such as digital payments, robust targeting, and beneficiary data management will help make the government’s social protection programs more efficient and adaptive,” Ms. Cho said.

The World Bank has been providing financial assistance to the 4Ps over the last decade.

The conditional cash transfer program, launched in 2008, provides poor Filipino families with cash on the condition that they keep their children in school and subject themselves to health examinations.

The program has benefited more than four million families in 145 cities and 1,483 municipalities.

Excluding the recently-signed loan, the World Bank has extended $1.67 billion to the Philippines so far to help the government deal with the pandemic. — Beatrice M. Laforga

OFWs must present TIN to join PERA scheme — BIR

THE Bureau of Internal Revenue (BIR) said overseas Filipino workers (OFWs) seeking to set up personal equity and retirement accounts (PERA) are required to present a taxpayer identification number (TIN).

BIR Commissioner Caesar R. Dulay issued Revenue Memorandum Circular No. 103-2020 Tuesday stating the TIN eligibility requirement.

The bureau said OFWs can either apply for their TINs through an authorized representative at a revenue district office, or via e-mail to rdo_39css@bir.gov.ph.

For those applying via e-mail, the bureau said OFWs cannot use representatives. They are also required to submit a scanned copy of BIR Form No. 1904 and their passport’s data page.

They must also submit an overseas employment certificate or any official document serving as their proof of absence from the Philippines.

“For purposes of this registration, overseas Filipinos shall not be issued any TIN card,” the BIR said.

BIR Form No. 1904 officially stamped indicates that a TIN has been issued, which will be deemed as proof of registration, while the acknowledgement receipt or reply to the e-mail will serve as the proof of application filed via e-mail.

The digital PERA platform was launched on Sept. 8 and can be managed via mobile app.

Republic Act No. 9505 or the PERA Act, passed into law in 2008 but only implemented in late 2016, encourages Filipinos to save up for their retirement, complementing mandatory contributions made by public and private sector workers. — Beatrice M. Laforga

Gaming privatization still on the table; seen as revenue-generating measure

THE Department of Finance (DoF) is still considering privatizing government corporations involved in gaming to help raise more revenue, Finance Secretary Carlos G. Dominguez III said Wednesday, after a legislator proposed the sale of government assets as an alternative to raising taxes.

“Yes, we’re prepared to work on privatization of gambling activities,” Mr. Dominguez said in a Viber message.

Senator Franklin M. Drilon issued a statement earlier Wednesday stating his opposition to tax hikes next year.

“We will oppose it. We are still grappling with the impact of the pandemic today and we do not see our country beginning its recovery until the third quarter of 2021. (It’s too early) for them to talk about raising and imposing new taxes by next year,” Mr. Drilon said.

Mr. Drilon instead proposed the sale of government property or privatizing the gaming industry.

“Rather than talk about new taxes, the government can generate funds… through the long overdue sale of government assets and privatization of the gaming industry,” he said.

Mr. Dominguez last week told the Senate that the DoF will start drafting proposals for additional revenue sources for 2021-2022 to pay for debt incurred this year.

The government borrowed P2.47 trillion as of August to plug its deficit following rising pandemic expenses and weak tax collection. It is planning to raise P3 trillion for 2020.

Late last year, the DoF estimated that the privatization of the industry, currently regulated by the Philippine Amusement and Gaming Corp. (PAGCOR) and the Philippine Charity Sweepstakes Office (PCSO), could yield the government P300 billion in fresh revenue.

Mr. Dominguez said “a new study may be required” to arrive at a more accurate revenue projection as the pandemic has drastically affected the gaming industry.

He also confirmed that privatization may still include the operations of PAGCOR and PCSO.

Asked to comment, PAGCOR had not responded at deadline time.

“We must put more money in people’s pockets, not take their hard-earned money by raising taxes. A tax hike or a new tax will further hurt the people and businesses during this extraordinary time in our history,” Mr. Drilon said.

Among the tax bills currently pending in the Senate is the proposed Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill seeking to cut the corporate income tax to 25% from 30%, and gradually reducing it further to 20% by 2027. The measure also aims to reform the tax incentive system.

The bill, repositioned as a recovery measure, will cost the government P40 billion in foregone revenue this year, and P650 billion over the next five years. — Beatrice M. Laforga

Retirement pay exemption under Bayanihan II

The COVID-19 pandemic distressed the overall economic fitness of countries all over the world in much the same way that it has compromised the physical health and well-being of global citizens. In the Philippines, among its adverse effects is the abrupt rise in the unemployment rate, as shown in the statistics that almost 27 million Filipinos were jobless in July.

The prolonged community quarantine in Metro Manila resulted in an economic downturn (a grinding halt, for some) as the business operations of establishments across many industries continue to be restricted. With no definite cure in sight after half a year of restrictions to date, some employers are faced with tough decisions in order to keep their businesses afloat. To cut their losses, many businesses have considered offering early retirement packages, a less drastic measure than lay-offs.

TAX-EXEMPT RETIREMENT BENEFITS
To alleviate the plight of displaced retirees, Section 5 of Republic Act No. 11494, otherwise known as the Recover as One Act (Bayanihan II) provides tax exemptions for retirement benefits granted between June 5 and Dec. 31, “provided that any re-employment of such official or employee in the same firm, within the succeeding 12-month period, shall be considered as proof of non-retirement and shall subject the benefits received to appropriate taxes.”

Bayanihan II was signed by the President on Sept. 11. Even without it, current law provides tax exemptions for retirement benefits subject to conditions. Under Section 32(B)(6)(a) of the Tax Code, tax-free retirement benefits are those received under the mandatory provisions of the Labor Code (i.e., when an employee retires upon reaching 60 years old but not beyond 65 years and has served his employer for at least five years) and those received from reasonable retirement plans of private entities, provided that the  employee is at least 50 years of age, has served the same company for not less than 10 years at the time of retirement. Employees may avail of this exemption under the Tax Code only once. The tax exemption of retirement benefits is not liberally available due to these conditions which must be met.

Nonetheless, Bayanihan II broadened the income tax exemption of retirement benefits received by employees between June 5 and Dec. 31, as it does not impose any age or years of service requirement.

Certainly, this relaxed tax exemption is a welcome addition. However, there are issues and questions that need to be resolved as to its implementation and application.

TIMING OF RECEIPT VIS-A-VIS RETIREMENT DATE
One is primarily about the interpretation of the term “received” as used by the new law since the provision is explicitly time-bound. Does it include constructive receipt or only actual receipt of the retirement benefits?

The principle of constructive receipt requires, among others, that the income is available to the taxpayer without substantial limitation or restrictions. As such, if an employee’s effective retirement date falls before June 5, but the actual payout date of the retirement benefit takes place any time between June 5 and Dec. 31, would the tax exemption apply? Conversely, if an employee retired effective Dec. 31, with retirement benefits to be paid in 2021, would the tax exemption still be operative? Note that in this latter case, the effective retirement date falls within the exemption period; however, the date of the actual receipt is beyond the specified period.

RE-EMPLOYMENT
Another crucial point is the restriction on re-employment within the subsequent 12 months by the same firm. Will this condition apply if the employee is rehired as an independent consultant or contractual worker? While independent consultants are technically not considered employees, will such instances be considered “re-employment” for purposes of claiming the tax exemption of retirement benefits received as a former employee of the firm?

ONE-TIME AVAILMENT
The Tax Code provides that the exemption may only be availed of once. Given that the Bayanihan II is a special law, would this mean that an employee who previously received or subsequently receives retirement pay from another employer can still avail of the tax exemption under the Code?

SEPARATION PAY OR RETIREMENT PAY?
The tax exemption of retirement benefits under Bayanihan II is clearly meant to benefit employees who do not meet the conditions under the Tax Code. Otherwise, if the conditions are met, there is no need for this new law. For instance, exemption is also available for separation pay received by employees who are laid off due to business losses caused by the pandemic. It therefore begs the question — what additional advantage does this new law give to taxpayers?

In 2012, two rulings (BIR Ruling Nos. 455-12 and 555-12) were issued in which the BIR, in a case of involuntary separation, separately assessed the taxability of (1) separation pay and (2) the vested retirement pay (which formed part of the separation package) received by the employees. Since the subject employees did not meet the conditions under the Tax Code, the BIR ruled that the vested retirement pay was taxable.

Under Bayanihan II, in a similar case where an employee who is laid off receives his vested retirement pay as part of his separation package, the employee should be able to enjoy a tax exemption on both payments without question. The tax-free treatment of early retirement benefits should no longer be in question.

These are only some of the questions and concerns about the tax exemption of retirement benefits under Bayanihan II. The implementing rules and regulations ought to address them, and guide taxpayers on proper compliance.

Like any new law, Bayanihan II will be scrutinized and tested against enterprise and street-level experience. Regardless of some grey areas in its provisions, however, there is a reason for retirees to welcome the new tax exemption. In an economic recession driven by a pandemic, any benefit or relief goes a long way in trickling social assistance down to the roots.

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

 

Patricia Loren Roma-Carreon is a Senior Associate at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 8845-2728

patricia.lorenroma@pwc.com

Rethinking retail

The Senate Committee on Banks and Financial Intermediaries approved on Monday the bill that will let banks sell their bad loans to asset companies, to keep their balance sheets clean. At the same time, the Senate Committee on Trade, Commerce and Entrepreneurship approved the bill that will allow more foreign retailers to start doing business locally.

Offhand, based on what I have read so far, I am supportive of the first bill, but I have mixed feelings about the second one. The first bill, on banks selling soured loans, comes along with a strategy on how to keep the financial system strong. Anyway, asset companies buying bad loans eventually turn around things. Thus, a win-win for all concerned.

As for the second bill, on reducing the required capital or investment for foreign retailers to set up shop here, I am ambivalent not because I prefer to keep retailing purely local. In fact, retailing has long been opened to foreign investors. My concern is more for the smaller, local retailers and producers that have been wiped out by lockdowns related to the COVID-19 pandemic.

Under Philippine law, “retail trade” is defined as “any act, occupation or calling of habitually selling direct to the general public merchandise, commodities or goods for consumption.” But not considered “retail trade” are businesses capitalized at below P100,000 and are selling their own manufactured or assembled products; farmers selling their own products; sales in restaurants in hotels and inns; and, sales of products manufactured, processed or assembled and sold only through a single outlet.

In my opinion, perhaps we can let in more foreign retailing stores if the Department of Trade and Industry (DTI) has undisputable research and data that can prove that further liberalizing the retail industry by 2021 will surely generate more investments, more jobs, and more taxes. And that this will boost the economy but not at the expense of small local retailers and producers.

Senate Bill No. 1840 will amend Republic Act No. 8762 or the Retail Trade Liberalization Act of 2000. Under it, the minimum paid-up capital for foreign retail investors will be lowered to $300,000 from $2.5 million. It will also make retailers with more than one physical store invest at least $150,000 for each store, down from $830,000 previously. In the House version of the bill, congressmen had wanted the capital requirement cut down to only $200,000.

But the Senate bill also reportedly provides that the proposed retailing requirements can apply only to foreign retailers whose country of origin also allows the entry of Filipino retailers. While this may sound fair, and appealing, to me it makes no real difference which country the foreign retailers will come from if they will still end up wiping out small local businesses.

For the Philippine Retailers Association, the minimum investment can perhaps be cut from $2.5 million to possibly $1 million, but not $300,000 (or about P15 million). The group is concerned that smaller local businesses might be exposed to “unfair competition” if we give more foreigners greater access to our “market base.”

But the European Chamber of Commerce of the Philippines, which is reportedly among the 14 business groups pushing for the further opening of retail trade, said the House proposal of $200,000 minimum capital for foreign retailers was more in line with the requirements of the Foreign Investments Act for small- and medium-sized foreign enterprises that intend to sell to the domestic market.

And here lies the debate, really. It is only but right that we strive for consistency in our laws. And therefore, if foreign enterprises capitalized at $200,000 can actually be allowed to operate in certain industries other than retail, why then should we keep retail sacred by maintaining a higher threshold for it? Pursuing this logic, anything above the $200,000-floor or minimum capital should be unacceptable, right?

The thing with “retail” though is that it is a complex thing, and that allowing greater foreign ownership in the trade of “selling direct to the general public merchandise, commodities or goods for consumption” has direct and indirect implications. For one, it is more difficult to monitor, regulate, or control the retail distribution of goods than their manufacture or assembly.

Also, foreign retailers are more likely to bring in their own foreign products or products from other countries. They are less likely to purchase more locally manufactured goods. So, instead of widening our local goods’ access to more markets through exports, we instead lose market locally to foreign-made or imported goods. Unless foreign retailers to be let in will also be required to sell Philippine goods in their stores abroad, which is not likely.

Republic Act 8762 or the retail trade liberalization law states, “It is the policy of the State to promote consumer welfare in attracting, promoting, and welcoming productive investments that will bring down prices for the Filipino consumer, create more jobs, promote tourism, assist small manufacturers, stimulate economic growth and enable Philippine goods and services to become globally competitive through the liberalization of the retail trade sector.”

It adds: “Pursuant to this policy, the Philippine retail industry is hereby liberalized to encourage Filipino and foreign investors to forge an efficient and competitive retail trade sector in the interest of empowering the Filipino consumer through lower prices, higher quality of goods, better services, and wider choices.”

By amending this law through a bill that will lower the capital requirements for foreign retailers and remove other restrictions to their operations here, are we still certain of achieving RA 8762’s declared objectives? While we can make more choices available to consumers, through the entry of more foreign retailers and perhaps more foreign goods, and perhaps bring down prices, are we still serving the overall interest of the Philippine economy?

Retailers and service industries, tourism, and public transportation have been most affected by the lockdowns associated with the COVID-19 pandemic. Retail store closures also helped drive customers towards online sellers. Only those who have managed to invest in infrastructure for online selling continue to survive. Many others have closed. If we let in more foreign retailers by 2021, will this actually help revive the local retailing industry and the economy?

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council

matort@yahoo.com

Trump-Biden debate brawl embarrassed the US

I’VE WATCHED a lot of presidential general election debates. This was the first time that I spent much of the time hoping that the feed to foreign nations was somehow disabled, because what we saw Tuesday night — what President Donald Trump did on Tuesday night — was so deeply embarrassing to the nation. Whether it was the constant interruptions, or the refusal to condemn right-wing violence, or the false claims about the voting process and how they undermine the democracy, or the steady stream of false statements, or the habit of casting blame on anyone and everyone except for himself, or the wild conspiracy-theory rantings, Trump spent 90 minutes demonstrating how he’s not fit for the office he holds.

What he did not demonstrate is that he has any grasp of the US government or public policy. At one point, former Vice-President Joe Biden — he was there too, he did fine — said of Trump: “He has no idea what he’s talking about.” I think it was about absentee voting, but there was hardly any evidence throughout the debate that Trump has learned, well, anything. Climate? Nope. Health care? Nope. Even the stuff that he supposedly is running on. Policing? His basic message is that anything bad is the fault of Democrats and that he could easily handle it if it wasn’t for them. But not only does he have no detailed plan, he can’t even talk about crime or law-enforcement in a way that demonstrates he has any understanding of the issues.

Trump claimed, as he has many times before, that voting by mail is full of fraud. It isn’t. Once again, he made a meaningless distinction between states in which ballots are sent to everyone automatically and states in which voters must request them. And once again, all his examples of supposed fraud were from states — Pennsylvania, New York, and others — that fall into the latter category. It’s a nonsensical distinction to begin with; experts have found no problems at all, as Biden pointed out, in the handful of states that send everyone a ballot. Trump, on this topic as on everything else, never demonstrated that he knows more than what a typical viewer of a third-rate partisan talk show would know.

Debates are typically useful for two reasons. They are a ritual of democracy, and they are a high-profile venue for making promises. Debates involving Trump barely qualify on either count. The ritual part of it is undermined when one of the candidates doesn’t appear to believe in democracy. I’ll put up with debates that feature a lot of squabbling and heated rhetoric; democracy doesn’t have to always have good manners, and it’s sometimes good when it doesn’t. Indeed, Biden didn’t exactly showcase civil etiquette Tuesday night. He interrupted a fair amount (although, as moderator Chris Wallace pointed out, not nearly as often as Trump), and he certainly didn’t show the respect for the presidency that many challengers have chosen to display on similar occasions.

But it’s on the promises part where Trump undermined the whole point of having debates. Because he’s unconstrained by the truth — check the fact-checking reports for the ugly details — and because he really doesn’t discuss real-world policy, he undercuts the entire process of representation. That’s the process of making promises, governing with those promises in mind, explaining governing decisions to the voters, and then renewing and updating promises in the next election. The problem is not just that Trump will say anything. It’s that because his promises aren’t based on real policy, he apparently feels no incentive to execute policies that citizens actually like.

On the other hand, promises are also about what kind of person a politician will be. For that, Trump certainly demonstrated who he is, and it’s probably fair to say that he warned us.

Biden did fine. Going into the debate, the Trump campaign increased the volume on smears that Biden is cognitively impaired. Biden does trip over his words a fair amount (his childhood stutter has clearly come back to bother him more than it did 20 years ago), but he gave clear, coherent and occasionally clever answers when he could be heard over Trump’s interruptions. He also managed to do a pretty good job of controlling his temper, given the circumstances. Biden has never been great at debating, but he’s experienced. Unlike Trump (and like every major-party presidential candidate other than Trump) Biden does his homework, whether it’s for debates or governing, and it shows.

I won’t guess what pundits will talk about in the debate’s aftermath, or how voters will react when pollsters get to them. I can say this: For the 51% to 55% of the electorate that had previously decided against Trump, and have been giving him poor marks for his presidency, it’s hard to see what he did in this debate that might change their minds.

BLOOMBERG OPINION

No climate emergency

Among the big headlines this week is the report that President Rodrigo Duterte is considering the environmentalists’ lobby to declare a “climate emergency.” Greenpeace in particular lobbies to phase out or kill coal and other fossil fuel power, mining. They want to plunge the country in blackout-friendly intermittent, variable renewable energies (VREs) like wind, solar and biomass.

The endless lobby to demonize fossil fuels, mining, conventional vehicles running on oil, related

measures are based on a very opportunistic, corrupt, even brain-dead “analysis” that these commodities cause less rain and more rain, less flood and more flood, less storms and more storms, less cold and more cold. Whatever weather and climate, people should be scared and worried so that the VRE lobby should continue to get rich, so that governments can continue to slap carbon tax, oil tax, carbon cap and trade, create and expand climate bureaucracies.

Climate change is true, global warming and global cooling are true. They have happened since planet Earth was born some 4.6 billion years ago, warming-cooling in natural, endless cycle. Take the current La Niña – the sea surface temperature (SST) anomaly or deviation from the mean temperature is -0.5 C or lower in the Pacific Ocean Niño region 3.4. This region is the widest and center-most part of the Pacific Ocean. Australia’s Bureau of Meteorology (BOM) weekly monitoring reported on Sept. 6 that Niño region 3.4 has dipped to -0.52 C or La Niña territory already. The latest update on Sept. 27 showed -0.80 C.

I checked El Niño-La Niña cycle, 70 years data from 1950 to early 2020, data from the US National Climatic Data Center (NCDC) under the National Oceanic and Atmospheric Administration (NOAA). Then I added the chart of NOAA forecast, the 40+ models predict a big and deep La Niña from September 2020 to April 2021, the SST anomaly will see a deep -1.5 C in Nov. 2020 to January 2021 (see Figure 1).


This means that in the coming weeks and months we expect more rains and floods, more landslides, more flood/water-related killer diseases like leptospirosis and dengue. And the climate lobby will say that these are proof of “man-made warming/CC,” never proof of transition to natural global cooling.

So if the planet undergoes warming-cooling in natural cycles, like day-night cycle, winter-spring-

summer-fall cycle, El Niño-La Niña cycle, water evaporation-condensation cycle, carbon cycle in plants-animals/humans, where is the “climate emergency”?

The Philippine government has been spending hundreds of billions of pesos yearly on climate adaptation and climate mitigation programs. From 2018 to 2021 budget, the government would have spent some P878 billion or an average of P219 billion/year. This is equivalent to 7.8% of the total budget excluding appropriation for interest payment and allocation to local government units (ALGUs). While the Department of Public World and Highways, Department of Agriculture and Department of a and Natural Resources are the lead departments, other agencies also have substantial climate projects and budgets, like the National Dairy Authority, Philippine Crop Insurance Corp., Philippine Fisheries Development Authority, Philippine Rice Research Institute, and National Irrigation Administration (see Figure 2).


Note also that the budgets by LGUs, from provincial to barangay, for various climate offices, programs and meetings are not included there. Plus the various huge climate loans from the Asian Development Bank, World Bank, Asian Infrastructure Investment Bank, other multilaterals.

The President should not heed the opportunistic and corrupt lobby to declare a “climate emergency” because there is none. The President should not impose new carbon tax, higher oil tax, coal tax and vehicle tax, create a carbon cap and trade, kill mining, and so on.

To hasten economic recovery from this pandemic and indefinite lockdowns, we should have cheaper energy and more jobs creation including jobs from the mining sector.

 

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

minimalgovernment@gmail.com

Just in case

WHO can forget the Y2K bug which spawned expensive consultancies on the premise that the computers would reset all the data to 1900 when the millennium was crossed to cause plane crashes, stuck elevators, crashed bank deposits, and lost files? The biggest surprise was that nothing happened. And countries like Russia that disregarded the dire warnings racked up savings on Y2K consultancy costs and had the last laugh.

Contingency planning, or a “just in case” mindset can be costly.

Insurance companies and sellers of fire extinguishers promote the notion of over-preparedness. (City ordinances back up fire prevention measures.) Their “what-if” scenarios are powerful marketing tools to sell products or services for unlikely events taking place.

A “just-in-case” approach can be costly, meant to overcome any foreseeable contingency, including the unlikely ones. This is best illustrated in packing for a trip. The first-time traveler can be identified with her bulky luggage which includes attire for all sorts of weather, possible invitations to parties, and even food in case the airplane haul is not enough to tide her over the first night at her cousin’s place.

When moving to a new house, this just-in-case attitude pops up. While staunchly proclaiming her skepticism about Feng Shui, the housewife nonetheless scrupulously follows the prescribed layouts and orientation, placement of the stairs, hanging plants to counter design flaws on the windows. She quickly demurs when criticized for the costs she is racking up — I just want to avoid bad luck… just in case.

The cautious attitude seeps through corporate thinking as well. Layers of control are ordered in case of internal collusion. Because of this suspiciousness, Filipino corporations may have the biggest internal audit and security departments in the world. (Why do stores all have their own security guards? To take the temperature of the customers?)

The introduction of compliance rules on knowing your customer (KYC) and anti-money laundering rules has even increased the contingent of internal control. People whose only job is to watch other people to ensure they are doing their jobs are considered necessary… just in case of collusion.

In these times when on-site parties involving more than five people are no longer feasible except for the police celebrating birthdays, the just-in-case mentality of party hostesses is given a rest. Or is it? There is no need for RSVP as no one is expected to show up at the house. Does this bring down the cost of hosting?

Not at all.

There are now e-parties where up to a hundred participants can join from all over the world. And those in the environs may be sent food trays and drinks in their own homes, just in case they want to join the e-celebration from their homes. E-drinking has become fashionable. It sounds better in the vernacular as “e-numan.” Cheers.

A person who thinks of possible contingencies is good to have on one’s team. She is the one who will have the first aid kit when someone cuts his finger in the out-of-town event. She also breaks the budget for the event for ordering extension cords, stand-by generators, and a tent in case it rains.

Inventory management has introduced efficiencies and cost-reduction with “just in time” ordering to free up storage space and eliminate excess inventory. This approach has been taken a step further by retailers. They have done away with storage space altogether and expanded selling space. All the products are stacked in active shelves for the shopper so that if it’s not on the shelf, the product is simply not available. And artificial intelligence notes the emptying of shelves and re-orders items for re-stacking. The new science of supply chain management tries to bring contingent inventory levels close to zero.

“Just-in-time” dealing with crisis is a low-cost approach to risk. Being jolted out of one’s comfort zone unprepared allows us to learn life’s lessons to adjust to the new normal. And this has been going on for seven months now.

Of course, there are prayers and the consolation of friends (though not financial subsidy) that get us through life, along with a dwindling bank balance. If we get through this health and economic crisis, where can we go for a trip…. just in case we are still able to?

 

Tony Samson is Chairman and CEO, TOUCH xda

ar.samson@yahoo.com

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