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Stuff to Do (09/25/20)

CCP presents a virtual jazz festival

THE CULTURAL Center of the Philippines (CCP) presents a music festival featuring Filipino jazz talents which will be streamed live online via the Facebook pages of the CCP and the CCP Office of the President on Sept. 25-27 and Oct. 2-4, at 7:30 pm. JAZZ STAY AT HOME: Virtual Jazz Festival 2020 is free to the public, and will feature Nicole Asensio, Baihana, Tots Tolentino, Michael Guevarra, Simon Tan Trio, Pipo Cifra, Lorna Cifra, and other notable names in the Philippine jazz scene. It will be hosted by musician and CCP Trustee Stanley Seludo.

Avon Femme-Powerment Fashion Show

TO CELEBRATE women of all breast shapes and sizes, Avon Intimate Apparel will be holding a Femme-Powerment Fashion Show featuring real women with real bodies. The fashion show will also have Julie Ann San Jose providing femme-powering tunes as the models walk the runway. Wave 89.1 DJ Debbie Then will be hosting the event, and joining the fashion show are model, content creator, and entrepreneur Chelsea Robato, TV and sports reporter Roxanne Montealegre, and TV and event host Patricia Reyes. The fashion show will be held on Sept. 26, 2 p.m., on AVON PH’s Facebook Page.

Enchanted Kingdom holds a virtual party

ENCHANTED Kingdom’s mascot Eldar The Wizard is celebrating his birthday, so the theme park is marking the occasion with a virtual Eldar’s Magical Birthday Celebration on Sept. 26, 6-7 p.m., on Pinoy Box Office Channel (PBO), and Enchanted Kingdom’s official Facebook (www.facebook.com/enchantedkingdom.ph ) and YouTube (www.youtube.com/user/EKMagicVideos ) accounts. It will be an hour of fun, learning, and special performances from Eldar, Princess Victoria, Princess Madeline, and the EK characters, plus a special segment with Jose Mari Chan featuring his newest Christmas ballads. For more information, visit Enchanted Kingdom’s official website (www.enchantedkingdom.ph) and Facebook page.

Gaya Sa Pelikula premiers on YouTube

GLOBE Studios — whose roster of  award-winning films includes Birdshot, Goyo, Hintayan ng Langit, LSS and Dead Kids — presents its first ever narrative digital series, Gaya sa Pelikula (Like in The Movies). Written and created by Juan Miguel Severo and directed by JP Habac, the romantic comedy follows Karl, an introverted 19-year-old architecture student in the middle of an identity crisis and Vlad, a schoolmate on the run from his own family. As their lives become entwined by fate, they become housemates and come to learn more about each other and about themselves than they could have ever imagined. Gaya sa Pelikula is an eight-part series of 20-minute episodes that is a prequel to the unproduced teleplays on Wattpad by Severro. It will premiere on Globe Studios’ official YouTube channel starting Sept. 25. New episodes will drop every Friday at 8 p.m., from Sept. 25 to Nov. 13. Gaya sa Pelikula was also chosen to be part of YouTube’s Super Stream content line-up. Super Stream is an effort of YouTube to enable Filipino viewers to access partners’ content such as movies, TV shows and more for free for a limited time.

PETA Young Artists Playlab

AS PART of the ongoing Philippine Educational Theater Association’s (PETA) Festival of Windows, Young Artists’ Playlab will be having its first performance on Sept. 26, Paaralang Buhay, Paaralan ng Buhay, a collaborative poetry dance short film jointly undertaken by the students and teacher of the Special Program for the Arts of Tabaco National High School in Tabaco, Albay with special support by the Infanta National High School under the creative guidance of PETA Artist-Teacher-Members. The show will be streamed via the PETA Facebook page.

BGC Art Mart Online

BONIFACIO Global City (BGC) is holding its first online Art Mart on Sept. 27, 2 to 5 p.m., via the BGC Arts Center Facebook page. Watch the stream to discover and reconnect with local artists, shop for art, enjoy performances, and find inspiration for your own creativity while safe at home. Some of the artists featured in the mart are GloriAnne Rose Dairo and Fabnglam by Flor. Register at the Facebook event page.

Philippine Readers and Writers Festival goes online

THE PHILIPPINE Readers and Writers Festival, an annual event held by National Book Store together with Raffles Makati, returns for its 7th year from Sept. 28 to Oct. 4. Because of the ongoing coronavirus disease 2019 (COVID-19) pandemic, the week-long festival moves online. It will feature a series of author interviews, talks, and panel discussions with top Filipino artists and authors — all streaming for free on the NBS Facebook Page (fb.com/nbsalert) and with selected sessions simulcast on Shopee and Lazada. Books featured during the Festival can be purchased at NBS branches and online on www.nationalbookstore.com and its official stores on Shopee and Lazada. Special discounts will be available online from Sept. 25 until Oct. 4, with up to 20% off on all imported titles and 10% off on all local titles. Learn about the value of history in quarantine with author and historian Ambeth R. Ocampo. Enjoy live poetry reading by Jerico Silvers and learn about poetry’s function as social commentary from Lourd de Veyra. Join book discussions with a variety of authors including Ayris Alcachupas, Kaye Allen, and Jason Paul Laxamana. There will be discussions on a plethora of topics, including an exploration of stories in the time of COVID-19 to the behind-the-scenes of making a children’s book.  Bliss Books authors will share tips for writing during the new normal and there will be a panel discussion on teaching values through picture books. Sign up for updates by visiting bit.ly/prwf2020signup and get a chance to win a set of books. One can also join the raffle promo when shopping online. Five winners will receive a dining certificate for two at Raffles Makati. Learn more by visiting www.readersandwritersfestival.com and following National Book Store on social media — @nationalbookstore on Instagram and @nbsalert on Facebook, Twitter, and YouTube.

Singapore Writers Festival

THE 23rd edition of the Singapore Writers Festival is migrating online from Oct. 30 to  Nov. 8, with a diverse line-up of programs inspired by the theme of “Intimacy” and will be presented in a digital format for the first time. Organized  by the National Arts Council, the multilingual literary festival celebrates thoughtful discussion, a love for stories, and encourages intercultural dialogue by bringing together writers, thinkers, and participants from Singapore and overseas. Digital festival passes are available at S$20 from Sept. 21 via SISTIC Live, and will include full access to all programs by international speakers for the first time. For more information, visit the festival website https://www.singaporewritersfestival.com/

CCP screens Martial Law films

THE CULTURAL Center of the Philippines (CCP) revives its cinema program by screening select films revisiting one of the most tumultuous periods in Filipino history. Starting Sept. 25, 3 p.m., Martial Law films such as Edjop (1987), ML (2018), Sigwa (2010), and Beyond the Walls of Prison (1987) can be viewed via the CCP’s Vimeo channel. The films will be available for free for 48 hours. For more information call the CCP Film, Broadcast, and New Media Division at 8832-1125 local 1705 and 1712 or visit the CCP Facebook account and website.

Credit access in the pandemic

The Bayanihan to Recover as One Act set aside an allocation of P55 billion to provide low interest loans to sectors severely affected by the coronavirus pandemic. Of this amount, P18.4725 billion is for the Land Bank of the Philippines, P10 billion for Small Business Corp. (P4 billion for MSMEs, cooperatives, hospitals and overseas Filipino workers and P6 billion for tourism); P6 billion for the Development Bank of the Philippines; and P5 billion for the Philippine Guarantee Corp. The remaining P15.5275 billion is a standby fund to be infused into Landbank and DBP as additional capital.

While this appears to be good news, please note that only around P40 billion is intended for the lending program. As I have written in another column, is this amount sufficient given the very bad state of the economy with most small businesses at standstill? Likewise, is the delivery and distribution system solely through the government financial institutions (GFIs) operationally efficient.

SME lending is primarily a distribution problem. Constraints like transaction costs, fixed costs in intermediation, economies of scale, distance and regulatory hurdles are aplenty. A large part of funds flow is handled by intermediaries, which is dominated by private financial institutions. It is important to use existing distribution channels that are close to the customers in order to efficiently reach out.

When the US Congress passed its Coronavirus Aid, Relief and Security Act (CARES), it opened several windows for small business and eligible non-profit organizations, veterans’ organizations, tribal businesses and individuals who are self-employed and independent contractors. It had an allocation of $670 billion for the Paycheck Protection Program. But what stands out is that the Small Business Administration (SBA), mandated to implement the program, will delegate authority to SBA-certified lenders to process application. In addition, federally insured depository institutions and credit unions as well as farm credit system institutions will be available to apply as approved lenders for the program.

In other words, the SBA expands its reach by accrediting the private sector financial institutions who have excess liquidity available for loans. Funds that have been allocated by Congress will multiply because of the leverage effects and should reach beleaguered businesses in a timely manner.

The SBA-certified lenders will be given delegated authority to speedily process loans. The SBA guarantees 100% of the outstanding balance, and that guarantee is backed by the full faith and credit of the United States.

In addition, the SBA waives all guaranty fees, including the upfront and annual servicing fees. Lenders do not collect fees from applicants. SBA will pay lenders fees for processing loans in graduated levels: five percent for loans not more than $350,000 and less than $2,000,000; and one percent for loans of at least $2,000,000. This is an interest subsidy and it is higher for smaller chunks.

This is not to discredit the government financial institutions. By way of disclosure, this writer has actively worked in a few of these institutions and yes, they have dedicated people who are mission- and developmental-driven. My concern is that the carrying capacity for direct loans, especially to the core small businesses, might be compromised. The risk rules from the regulatory perspective remain unchanged. And a direct lending program is limited to the allocated amount.

Another concern about the GFIs is that they are supervised just like any other institution and there may be constraints in terms of breaching certain limits on past due, loan defaults, capital adequacy, etc. In other jurisdictions, government policy banks are subjected to more benign regulatory standards that appreciate their development mandate. We are in pandemic crisis mode and the development thrust of our GFIs must be reinforced. In the case of the top two government banks, there is an unwritten pressure of competing as part of the top banks of the country and this means closely marking the metrics of the regular banking system.

Most economies have given outright subsidies to help their small businesses. South Korea, for example, has allocated 3.2 trillion won for 2.9 million eligible small businesses or self-employed people. They will receive 2 million won each in cash payments. Japan provides cash grants of up to Y2 million for companies seeing declines of 50% or more in year-on-year monthly revenue. Sole proprietors, including freelancers, will also be eligible for a maximum of Y1 million in subsidies.

We cannot afford direct subsidies on this scale as a country. But we can expand the reach of our limited funds by multiplying it through loan guarantees. Our Asian neighbors have tested credit guarantees as it helped stove off bankruptcies during episodes of financial crisis and calamities in the past. Credit guarantees will tap the resources that may be idle in private financial institutions. It is a catalyst. Enterprises that are not able to borrow without the guarantee system are made bankable. And for the financier, the risk weight should lower because of the guarantee coverage.

This is the right time to explore a more aggressive guarantee program that takes on calculated risks and that taps into the strength of the financial system, our private institutions. The problem with past guarantee initiatives in the country is the unwillingness of policy and regulation to absorb losses. Guarantee programs are second best economic solutions that skirt direct subsidy, and its success must be measured by the economic activity generated, the jobs saved and lives supported. The program must be willing to absorb risks.

 

Benel D. Lagua was executive vice-president and chief development officer at the Development Bank of the Philippines. He is an active FINEX member and an advocate of risk-based lending for SMEs. The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX.

How PSEi member stocks performed — September 24, 2020

Here’s a quick glance at how PSEi stocks fared on Thursday, September 24, 2020.

PSEi dips over fears of choppy US recovery

LOCAL SHARES declined on Thursday to mirror the drop in Wall Street the night before as investors worried over a possible choppy economic recovery in the United States.

The benchmark Philippine Stock Exchange index (PSEi) gave up 46.92 points or 0.79% to close at 5,845.80. The broader all shares index let go of 23.19 points or 0.65% to end at 3,521.95.

“Local shares retreated… as market participants struggled to shake off worries about a lack of a coronavirus aid package and rising coronavirus disease 2019 (COVID-19) cases,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

Reuters quoted US Federal Reserve Vice Chair Richard Clarida as saying the US economy remains in a “deep hole” of joblessness and weak demand, and called for more fiscal stimulus, noting that policymakers “are not even going to begin thinking” about raising interest rates until inflation hits 2%.

Cleveland Federal Reserve Bank President Loretta Mester echoed Mr. Clarida, saying that the US remains in a “deep hole, regardless of the comeback we’ve seen.”

The COVID-19 outbreak in the US remained the worst around the world on Thursday, reaching 6.93 million cases with 201,909 deaths, based on data from Johns Hopkins University.

Statements from Fed officials spooked investors, pushing US markets lower on Wednesday: the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices fell 1.92%, 2.37% and 3.02%, respectively.

This negative sentiment spilled over to Asian markets on Thursday.

MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 1.93% in the afternoon session on broad losses across the region, putting it on track for its biggest daily drop since July 16, Reuters reported.

Rising tensions between North and South Korea influenced market trading, Philstocks Financial, Inc. Research Associate Claire T. Alviar said.

“Negative sentiments abroad continued to be watched by investors since there is a lack of catalysts at home,” Ms. Alviar said in a text message.

Most sectoral indices at the PSE ended Thursday’s session with losses. Mining and oil erased 130.56 points or 2.19% to 5,813.98; holding firms lost 104.02 points or 1.68% to 6,054.32; property slid 27.18 points or 0.99% to 2,706.63; and financials trimmed 3.95 points or 0.34% to 1,138.53.

On the other hand, services increased 9.97 points or 0.68% to 1,456.69, and industrials added 21.27 points or 0.27% to 7,893.72 at the close of trading.

Value turnover on Thursday stood at P4.05 billion with 1.07 billion issues switching hands, slightly lower from the previous day’s P4.45 billion with 1.47 billion issues.

Decliners outnumbered advancers, 120 against 76. Some 31 names ended unchanged.

Net foreign outflows jumped to P292.84 million from P95.86 million the previous day. — Denise A. Valdez with Reuters

Peso weakens as stock investors take profit

THE peso further weakened on Thursday as investors took profit in US stocks amid the rising number of cases of coronavirus disease 2019 (COVID-19) abroad.

The local currency closed at P48.56 versus the dollar on Thursday, up by nine centavos from P48.47 finish on Wednesday, data from the Bankers Association of the Philippines showed.

The peso opened Thursday’s session at P48.60 per dollar. It reached a peak at P48.51 during the session, while its weakest showing was at P48.61.

Dollars traded amounted to $585.15 million on Thursday from $580.05 million the previous day.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the peso was weaker amid increasing cases of COVID-19 in the US.

“The peso closed weaker for the third straight day amid the latest sell-off in the US stock markets that led to some demand for the US dollar as a safe haven, largely due to concerns that the spike in COVID-19 cases could lead to risk of new lockdowns,” Mr. Ricafort said in a text message.

The US Centers for Disease and Control Prevention reported COVID-19 cases have climbed to over 6 million across the states.

The US stock indices continued its decline in over a month. On Wednesday, Dow Jones closed lower by 1.92%. Nasdaq Composite slid 3.02%, while S&P 500 fell 2.37%.

A trader said profit taking in US stocks may continue as the US government delays the approval of a stimulus package to combat the effects of COVID-19.

“The peso depreciated amid increasing market caution from the dimming prospects of an approved stimulus bill before the US November 2020 presidential elections,” the trader said in an e-mail.

The White House recently agreed on a $1.3-trillion stimulus after rejecting a $2.3-trillion proposal from lawmakers in the Democratic Party.

Federal Reserve Chairman Jerome Powell said on Wednesday a bigger stimulus package is urgently needed to save the US stock market and help the US economy recover soon.

For today, Mr. Ricafort sees the peso moving from P48.50 to P48.65, while the trader expects the local currency to range from P48.45 to P48.65. — Kathryn Kristina T. Jose

Airport perks seen opening door for legislated tax breaks

THE proposed tax perks for San Miguel Aerocity, Inc., a P740-billion international airport in Bulacan, will set back the government’s tax reform program and may encourage other firms to also seek similar incentives via legislation, according to non-government organization Action for Economic Reforms (AER).

In a statement Thursday, AER Cofounder and Coordinator Filomeno S. Sta. Ana III said the proposal to give San Miguel Aerocity a 10-year exemption from direct and indirect taxes while it constructs the Bulacan airport could set a “dangerous precedent” as it may encourage other companies to go to Congress for tax incentives as well.

Senate Bill (SB) 1823, which grants a 50-year franchise to the San Miguel Aerocity along with the tax perks, cleared the Senate Committee on Public Services Wednesday while its counterpart measure House Bill No. 7241 has been approved by the House of Representatives.

Mr. Sta Ana said the bill “runs contrary to the core objectives” of the government’s plan to streamline the country’s tax incentive system under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill.

“Legislating another tax incentive such as the provision in SB 1823 undermines the goal of CREATE. It sets a dangerous precedent where individual corporations will just approach Congress for tax perks, instead of going through the systematic fiscal incentives criteria that CREATE offers,” he said.

“It opens the floodgates for more corporate lobbying for fiscal incentives,” he added.

He said the company should instead apply for tax breaks within the framework of the CREATE bill.

The CREATE bill seeks to cut the corporate income tax to 25% this year from 30% currently and reform the country’s tax incentive system to simplify it and make it time-bound.

Finance Assistant Secretary Maria Teresa S. Habitan said in August that the Department of Finance, which backs the CREATE bill, is “not okay” with the proposed grant of tax perks for the construction of Bulacan airport because it was an unsolicited bid.

Mr. Sta Ana said the attempt to gain incentives because of alleged market failure ignores the findings of a 2016 study by Japan International Cooperation Agency, which indicated that service improvements at Ninoy Aquino International Airport and Clark International Airport can accommodate future demand for air travel in the area surrounding the capital region.

“First and foremost, fiscal incentives can be justified whenever a failure in the market exists. In this issue, market failure is absent because current and future demand for air travel can be addressed by enhancing and expanding existing airports,” he said.

He said the proposed Bulacan airport “will merely be competing” with the improved and expanded airport in Clark, Pampanga for the same passengers and could “create the conditions for market failure since two airports close to each other lead to suboptimal outcomes.”

“Second, the construction of the San Miguel airport is a private good… Yet it seeks government subsidy… The service it provides, from a public good perspective, is redundant. Hence, the government and the taxpayer should not shoulder the costs of this airport’s construction,” he said.

“If the private sector decides to build a new airport, it must shoulder the entire cost, and taxpayers must be spared from the burden,” he said. — Beatrice M. Laforga

NGO opposes Bulacan airport franchise prior to completion of environmental impact study

THE proposed legislative franchise for San Miguel Aerocity, Inc. for the Bulacan airport should be put on hold prior to an environmental impact study, a non-government organization (NGO) said.

In a virtual briefing Thursday, OCEANA Vice-President Gloria Estenzo-Ramos said the Senate should hold off on granting a franchise to San Miguel Aerocity since an environmental impact assessment has yet to be conducted.

“Granting franchise to San Miguel Aerocity without an environmental impact assessment is putting the cart before the horse,” Ms. Estenzo-Ramos said.

Ms. Estenzo-Ramos said the location of the project poses risks to public safety and food security, among others.

The proposed airport, which will be established in Barangays Taliptip and Bambang in Bulakan municipality, are geohazard zones and prone to natural disasters such as flooding and storm surges.

“Land subsidence, which is already happening in large parts of Bulacan, will worsen with the rise of an airport,” Ms. Estenzo-Ramos said.

On Sept. 23, Senate Bill 1823 which proposes to grant a franchise for the P735-billion airport, was approved by the Committee on Public Services.

If the bill passes, San Miguel Aerocity will be granted a 50-year franchise, including a 10-year tax exemption during the design, planning, and construction stages.

The House of Representatives passed the counterpart legislation, House Bill 7507, on third and final reading on Sept. 7. — Revin Mikhael D. Ochave

PAGCOR reports sharp drop in fees collected from POGOs

STATE-RUN Philippine Amusement and Gaming Corp. (PAGCOR) said online gaming income has plunged due to reduced fees collected from Philippine Offshore Gaming Operators (POGOs), whose operations have been restricted by the lockdown.

In a text message to reporters Thursday, PAGCOR Assistant Vice-President for Offshore Gaming and Licensing Department Jose S. Tria, Jr. said fees collected from POGOs have been slashed by nearly half because few operators have been allowed to return to business.

Mr. Tria said only 32 POGO licensees and 111 service providers have been allowed to resume operations at limited capacity. There are 55 registered POGOs and 218 accredited POGO service providers.

“Our monthly regulatory fees of around P600-million pre-COVID are now down by almost half. This should have been lower if not for the Minimum Guaranteed Fees which allows PAGCOR to impose higher regulatory fees than the 2% of POGOs’ GGR (gross gaming revenue) following the ‘whichever is higher formula’,” he said.

PAGCOR Chairperson and Chief Executive Officer Andrea D. Domingo said in a text message Wednesday that the industry’s monthly GGR dropped 83% to P50 million a year earlier. The agency collects 2% of GGR representing the cut of the national government.

PAGCOR booked a P1.596-billion net loss in the first half, against a P3.079-billion net profit a year earlier. Gaming revenue fell 49.56% due to the ban on casino gambling during the quarantine.

According to Mr. Tria, licenses of five POGOs have been canceled, five more were suspended, and 42 service providers are in the process of having their accreditation revoked.

Finance Secretary Carlos G. Dominguez III said Wednesday the Bureau of Internal Revenue (BIR) will audit POGOs leaving the country to check on their tax compliance and collect any back taxes.

Casino and offshore gambling operations were banned when the strictest form of the lockdown was imposed in mid-March. Operations of POGOs and their service providers were allowed to resume in early May, subject to safety protocols and the submission of a tax clearance.

The BIR requires POGOs to settle their tax arrears and pay the 5% franchise tax before they can be issued a tax clearance, which the industry contests.

The BIR collected P6.42 billion in taxes from POGOs last year, up 170%.

Leechiu Property Consultants reported that demand for office space dropped 74% in the first six months of 2020 as POGOs began leaving the country due to the pandemic. — Beatrice M. Laforga

Senate bill seeks to empower Palace to expedite permits

A MEASURE authorizing President Rodrigo R. Duterte to expedite the issuance of permits and licenses at national and local levels has been filed in the Senate.

Senate Bill No. 1844 will suspend or waive requirements for securing key documents to help small businesses affected by the economic shutdown.

“While this may be a small step, it surely can create a significant impact on all enterprises,” according to the bill’s explanatory note.

The measure was filed after Mr. Duterte last week consulted Congress leaders on possible amendments to the Ease of Doing Business Law.

The Philippines rose 29 places to 95th on the World Bank’s 2020 Doing Business Report with a score of 62.8. The report measures the time required to start a business, employ workers, deal with construction permits and being connected for electricity, among others.

The bill was filed by Senate President Vicente C. Sotto III and Senators Ralph G. Recto, Juan Miguel F. Zubiri, Franklin M. Drilon and Panfilo M. Lacson.

If passed, President Duterte will also be granted the power to suspend or remove government officials or employees found non-compliant.

The measure will cover attached agencies, such as bureaus, commissions and government-owned and controlled corporations. It applies to permits, licenses, clearances, certifications or authorizations. — Charmaine A. Tadalan

Internet, incentives top agenda items at upcoming PHL business conference

PHILIPPINE businesses will ask the government to improve internet connectivity and provide longer-term incentives in some of the potential recommendations at the upcoming 46th Philippine Business Conference and Expo (PBC&E).

The conference will be held online on Oct. 7 and 8, during which the Philippine Chamber of Commerce and Industry (PCCI) will present its resolutions to the government.

Among the recommendations collected from regional meetings were longer-term fiscal and non-fiscal incentives, PBC&E Chair Eunina Mangio said.

“(This will) ensure the survival and recovery of businesses to continue providing employment,” she said.

PCCI is also asking the national government to step up the automation and digitalization of government processes, which Ms. Mangio said will reduce physical contact during the pandemic.

“The national government (should) provide incentives for companies to digitalize, automate, and undertake programs to upskill and reskill their human resources,” she said.

The PCCI will also ask the government to provide input subsidies to the agriculture and aquaculture sectors. The chamber said that these sectors must have access to research and technology.

The chamber is also asking the Information and Communications Technology Department and the National Telecommunications Commission to exercise its powers of oversight on internet providers to improve services and connectivity at affordable prices.

“(They should) allow the common use of facilities and impose punitive and timely sanctions for telcos that misrepresent,” Ms. Mangio added.

PCCI President Benedicto V. Yujuico said that he hopes conversations with policymakers during the event include the private sector’s role in science and technology investment, incentives policy, red tape, and internet connectivity.

The resolutions are still subject to approval.

Speakers at the event include Vice-President Maria Leonor G. Robredo, Finance Secretary Carlos G. Dominguez, Former President Gloria Macapagal-Arroyo, Labor Secretary Silvestre H. Bello III, and Science and Technology Secretary Fortunato T. de la Peña.

Private-sector speakers include Filinvest Development Corp. President and CEO Josephine Gotianun Yap, Kickstart Ventures President Minette Navarrete, and JG Digital Equity CEO Jojo Malolos. — Jenina P. Ibañez

DA to fund P100 million in UPLB agricultural research

THE Department of Agriculture (DA) said it has set aside P100 million to fund agricultural research at the University of the Philippines-Los Baños (UPLB).

During a recent visit to the university, Agriculture Secretary William D. Dar said that of the funds committed to UPLB’s College of Agriculture and Food Science, around P50 million will be allocated to plant disease research at the Crop Protection research center.

It said P30 million will go to crop improvement and vegetable seed production at the Institute of Plant Breeding and P20 million will help establish a packing facility at the university, which will also serve as a storage and trading area for farmers in Laguna.

Mr. Dar urged the UPLB officials to step up their research and development activity, pointing them to current problems like the fall armyworm, which affects multiple crops, and fusarium wilt, which affects bananas.

“As the country shifts amid the coronavirus disease 2019 (COVID-19) pandemic, the agriculture sector needs individuals who will lead to the development of… inclusive agribusiness anchored on value chain systems,” Mr. Dar said.

“The sector also needs… to engage the youth more in agriculture and agribusiness, digitalization of agriculture, and the development of demand-driven and market-oriented research and extension systems,” he added. — Revin Mikhael D. Ochave

Coconut oil, garments could be hit by GSP+ withdrawal

THE potential loss of tariff advantages offered by the European Union (EU) could harm crude coconut oil and garment exports, business leaders said.

The loss would have a “huge impact” on the Philippine agriculture export sector, which mostly uses indigenous materials, Philippine Food Processors & Exporters Organization, Inc. President Roberto C. Amores said at an online conference Thursday.

The European Parliament last week asked the European Commission to start the process for temporarily withdrawing GSP+ or  Generalized Scheme of Preferences Plus, privileges enjoyed by the Philippines, after the government failed to improve the human rights situation.

GSP+ is an incentive agreement under which 6,274 Philippine products enjoy zero-tariff entry to the European Union provided the country adheres to 27 core international conventions that include human and labor rights, environmental protection, and good governance.

“We are exporting a very huge chunk of our crude coconut oil to the European market, and we’re already having problems with the competitiveness of our agri-products — which includes coconut oil — on cost, because of competition from cheaper and more competitive products like palm oil and soy bean oil,” Mr. Amores said.

He added that the removal of GSP+ could impact profits in the coconut oil and canned tuna industries.

The loss of trade perks will also harm the garment industry, Philippine Chamber of Commerce and Industry President Benedicto V. Yujuico said.

“Once the subsidy or the preference is taken out, it means that the buyers will have to pay 15-20% more… and that might mean a lot of the factories might be closing. A lot of our garment workers will be out of jobs,” he said.

PCCI Industry Committee Chairman Ferdinand Ferrer said that the Philippines is one of two countries in ASEAN that enjoys GSP+.

“It is very attractive for manufacturers, especially the white goods and electronics to have that advantage. Revoking it will put us at par with the other ASEAN countries, where some have lower labor rates. So there is a lot of advantage in maintaining the GSP+” he said.

White goods are large home appliances.

European legislators in the resolution cited Philippine human rights issues, including President Rodrigo R. Duterte’s war on drugs that has killed at least 8,663 people.

They also raised concerns about the detention of opposition Senator Leila M. de Lima and the convictions of Rappler founder Maria A. Ressa and former researcher Reynaldo Santos, Jr. for cyber libel.

Trade Secretary Ramon M. Lopez had said that he is confident that the trade perks will be retained, noting that the European Parliament had raised the same concerns before.

The Management Association of the Philippines on Wednesday asked the government to take the matter seriously, noting that the removal of tariff perks would hurt various industries and worsen unemployment.

Goods exported under GSP+ preferences usually account for around a quarter of total Philippine exports to the EU each year, significantly lower than the leading beneficiary countries such as Bangladesh and Cambodia, whose utilization rates top 90%.

In 2018, Philippine use of GSP+ compared with all eligible exports was 73.1%.

“We are not even utilizing the total amount of GSP+ that we’re allocated. So it’s something that we should work together with the government — improve on the utilization,” Mr. Ferrer said. — Jenina P. Ibañez

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