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Regional Updates (09/02/20)

Wawa bulk water supply proponent improves road in Rizal

A FIVE-kilometer farm-to-market road in the town of Rodriguez, Rizal will be rehabilitated by WawaJVCo Inc., proponent of the Wawa Bulk Water Supply Project–Tayabasan Multi-Basin System. “This project is both relevant and highly symbolic because this will further improve the ability of our food producers to make their commodities readily available to the people,” Rizal Governor Rebecca A. Ynares was quoted in a statement released by the company on Wednesday. WawaJVCo said the project will upgrade the existing dirt road in Barangay San Rafael in Rodriguez, which becomes impassable during the rainy season. Prime Metroline Infrastructure Holdings Corp. (Prime Infra) water sector lead Melvin John Tan said the project is part of the company’s corporate social responsibility program. “Each project includes a specific social and environmental program that ensures we focus our attention to the area requiring the most support and foster the right culture to create a sustainable impact to the communities we serve,” Mr. Tan said. WawaJVCo is a joint venture between Prime Infra and San Lorenzo Ruiz Builders and Developers Group, Inc. The bulk supply project is intended to boost supply in Metro Manila and Rizal. — Revin Mikhael D. Ochave 

19 immigration workers, officials charged for corruption

THE NATIONAL Bureau of Investigation (NBI) has filed a corruption complaint before the Office of the Ombudsman against 19 Bureau of Immigration (BI) employees and officials allegedly involved in the money-making “pastillas” scheme. In a statement, state agents said an owner of a travel agency was also recommended to be charged of corruption for paying the immigration officers for the illegal entry of its Chinese passengers. The NBI also asked the Ombudsman to place under preventive suspension the immigration employees. The case stems from an immigration officer who blew the whistle on the scheme, which he said also involved sexual favors from trafficked women. The NBI said “the allegations of the whistle blower are meritorious” following an “exhaustive investigation,” although further probe will be undertaken for “other personalities. — Vann Marlo M. Villegas

American soldier Pemberton granted release

A LOCAL court has ordered the release of US Marine Lance Corporal Joseph Scott Pemberton, who was convicted of homicide over the killing of Filipino transgender Jennifer S. Laude in 2014, for enough time served. In a ruling dated September 1, an Olongapo City Regional Trial Court (RTC) said the actual time served by Mr. Pemberton during preventive imprisonment and after his conviction along with his time credits under the Good Conduct and Time Allowance is already more than the 10 year maximum penalty imposed by the court and affirmed by the Court of Appeals. The court also said that he has paid the family of Ms. Laude a total of P4.6 million representing award for loss of earning capacity, and actual, civil, moral, and exemplary damages. — Vann Marlo M. Villegas

Senate warned of slow recovery if bad loan relief bill is delayed

ECONOMIC MANAGERS pressed the Senate on the urgency of legislation creating asset management companies (AMCs), saying that delays in enacting such a measure hampered the economy’s recovery from the Asian Financial Crisis of 1997.

AMCs, which are designed to relieve banks of their bad loans to make them healthy enough to lend again to businesses, were authorized under the Special Purpose Vehicle (SPV) Law of 2002.

“The crisis began in 1997, but the law was enacted only five years later, when most distressed enterprises had already recovered and could already meet their financial obligations,” Finance Secretary Carlos G. Dominguez III said in his opening statement, Wednesday.

“Had the SPV been available earlier, banks could have helped businesses recover faster.”

The current legislation is known as the Financial Institutions Strategic Transfer (FIST) bill, which the House has passed. The Senate version is being evaluated by the chamber’s Committee on Banks and Financial Intermediaries.

Among the questions thrown up by the committee were the potential risks to the government of investing in AMCs.

“Why is it that we are considering the government to get involved?” Senator Ralph G. Recto said during the hearing.

“Why not let the private sector undertake the necessary risk? Why subject the government to any of this potential risk?”

AMCs acquire bad loans from banks typically at a deep discount, and hope to realize a gain when they dispose of the loan or the underlying collateral.

Senate Minority Leader Franklin M. Drilon’s concern was that the government is too cash-starved at the moment to fund such a bad-loan rescue scheme.

“The LANDBANK and the DBP (Development Bank of the Philippines) are government banks that are eligible to put up the FIST, but for the government itself to participate in the system… where will you get the capital?” he said. — Charmaine A. Tadalan

DA pitches startup capital program to potential young farmers

THE Agriculture department touted its startup loan and technical assistance programs in a pitch to potential young farmers, who are considered critical to the industry’s modernization.

“We need to harness the potential and strength of the youth in our journey to making Philippine agriculture modern, industrialized and competitive,” Agriculture Secretary William D. Dar said.

In a statement, Mr. Dar cited the Agricultural Credit and Policy Council’s Kapital Access for Young Agripreneurs (KAYA) loan program, which can provide capital to both current and startup businesses.

KAYA is targeted at borrowers who are 18 to 30 years old and provides up to P500,000 at zero interest and no collateral, payable over five years.

“KAYA targets the youth because we acknowledge that they can be key players in ensuring affordability and availability of the food supply,” Mr. Dar said.

He also cited the Business Incubation in Agriculture program, which hopes to guide micro and small enterprises, cooperatives and associations through their wup phase of operations.

“This has now become a competition among nations. We need to increase our efforts in taking care of agriculture and we need the younger generation to take the lead,” Mr. Dar said. — Revin Mikhael D. Ochave

Young, short-tenured workers face more layoff risk — JobStreet

EMPLOYEES that lost their jobs during the pandemic are mostly young and short tenured, according to a job market survey issued by online work portal JobStreet.com.

Among employees that were either permanently retrenched or temporarily not working, 76% were not full-time employees and 79% had worked for their employer for less than six months.

Most of these employees were between 18 to 24 years old and earning less than P20,000 each month.

Employees between 35 to 44 years old were the least affected by permanent and temporary lay offs. Other elements of the profile for comparatively secure jobs included organizations with more than 500 employees. The industries and job functions determined to be safest were information technology, banking, and medical professions.

Jobstreet’s COVID-19 Job Report is based on a survey of 2,569 jobseekers and 314 employers in May.

Over half of job candidates reported being affected by the pandemic, with 17% permanently retrenched and 43% temporarily losing work.

“But we fear that the inevitable will happen and that because of the growing and the extension of this pandemic, the 43% will still be affected by this crisis,” Jobstreet Country Manager Philip Gioca said in an online news conference on Wednesday.

The hardest hit sectors are tourism and travel, food and beverage, hospitality, architecture and construction, and education. Most of those who lost their jobs were working in Central Luzon.

Majority of the organizations that reorganized their workforce have been operating for more than a decade.

Workplace requirements have shifted to digital, with 74% of organizations requiring staff to work from home. Almost half of employees that work from home said that they have been working for longer hours.

More than half or 55% of employers reported that the pandemic had a negative impact on their head count, with 49% freezing hiring, 12% temporarily laying off staff, and 7% permanently firing workers.

Remuneration was also affected, with 30% of employers suspending salary increases, 15% reducing bonuses, and 11% reducing salaries.

A fifth suspended promotions, while 24% asked staff to take unpaid leave.

On the workers’ side, 22% reported reduced salaries. Among them, more than half experienced a more than 30% reduction in salary. A fifth saw reductions of more than half.

In the next six months, the most in-demand jobs will be in accounting, sales, information technology, human resources, and engineering. While a quarter of employers said they are likely to hire those who have lost their jobs due to the pandemic, 70% said they are neither more or less likely to hire them.

Mr. Gioca said there are more than 30,000 jobs advertised on the company’s website.

The unemployment rate surged to a 15-year high of 17.7% in April, according to the Philippine Statistics Authority. This translates to 7.25 million jobless Filipinos, three times more than the 2.27 million recorded in April 2019.

Jobstreet.com and the Civil Service Commission launched an online career fair offering more than 10,000 government jobs from 700 agencies. Almost 30% of available jobs are in the Calabarzon (Cavite, Laguna, Batangas, Rizal, Quezon) region. — Jenina P. Ibañez

Economist wants to tie tax cuts to solar investment

THE PROPOSED five percentage point reduction in corporate income tax should be conditional on major firms investing the savings on job-generating projects like green energy, economist and National Scientist Raul V. Fabella said.

The government could require the top 1,500 corporations to install rooftop solar panels before they can avail of the reduced 25% income tax rate, according to Raul V. Fabella, a former professor at the University of the Philippines School of Economics.

Mr. Fabella said the energy generated can be held in storage and account for 20% of the company’s daytime power use.

“This will open up a new investment avenue for large businesses and provide a new growth spark for the recovering Philippine economy. The 5% tax differential will serve as a contingent tax on idle rooftops, which tax liability disappears as soon as the condition of solar PV installation and storage is met,” he said in a note sent to journalists Wednesday.

The Corporate Recovery and Tax Incentives for Enterprises Act bill is currently pending in Congress. It seeks to lower the corporate income tax to 25% from 30% and reform the fiscal incentive system.

The measure forms part of the economic team’s recovery plan and is expected to cost the government P625 billion in foregone revenue over the next five years.

Private companies are unlikely to boost production while demand is weak, Mr. Fabella said, but they might consider investments that will reduce production costs to prepare for when the economy starts to fully recover.

He added businesses will remain risk-averse during an economic downturn and may end up parking their funds in risk-free assets such as government securities and central bank deposits.

“While this can be done in other ways, installing rooftop solar PV (photovoltaic) generation and storage ensures an investment that is socially beneficial, market guided and of short gestation,” he said.

He said similar alternatives can be offered to companies that do not have rooftop space, provided these meet the required market sustainable investment criteria.

Companies can also rent idle rooftops to install solar panels, or establish independent power storage or rooftop rental businesses that will serve the grid.

In a report last month, ING Bank NV Manila Branch said the government’s budget allocation for “green” projects in its stimulus package was zero.

“The private sector has for decades complained but left the government to solve the poor quality and high cost of power in the country. Now is the time to be part of the solution. Resilience will be best served when large corporations twin the solar PV installations with a battery storage facility,” Mr. Fabella said.

He said the bill can also expand its scope and include the condonation of loans of agrarian reform beneficiaries worth P58 billion to make the industry “fairer and more investment-inducing.”

Second-quarter gross domestic product (GDP) contracted by 16.5%. Economic managers are expecting 2020 GDP to settle between -4.5% and -6.6%. — Beatrice M. Laforga

ADB backs digital economy, carbon taxes to aid recovery

THE Asian Development Bank (ADB) said taxing the digital economy and carbon emissions hold the potential for funding a sustainable recovery.

In a forum Monday, ADB President Masatsugu Asakawa outlined four revenue-boosting measures that will help countries fund their bounce back plans focused on green, sustainable and inclusive initiatives.

“We need to rebuild our economy and society with green, resilient, and inclusive measures. Investing in infrastructure that satisfies ‘G20 quality infrastructure principles’ should be an important part of post-pandemic recovery packages,” Mr. Asakawa said in a forum hosted by the United Nations Economic and Social Commission for Asia and the Pacific.

“We also need to address worsened income inequality due to the pandemic and ensure affordable, accessible, and high quality education and health services,” he added.

Mr. Asakawa said expanding the tax base, closing the gaps created by the digital economy and introducing a tax on carbon emissions could help economies generate the revenue needed to fund green and sustainable recovery measures.

House Bill No. 07425 filed in Congress, aims to impose value-added tax (VAT) on digital transactions and establish a fiscal regime for the digital economy.

The Department of Finance (DoF) is studying how to improve the Bureau of Internal Revenue’s system to capture businesses doing transactions online.

The DoF estimated it can collect P17 billion in fresh revenue from VAT on goods and services sold online.

In 2018, it said the department is studying a carbon tax scheme. Asked for an update on the plan, the DoF had not responded at deadline time. — Beatrice M. Laforga

A most welcome return

The definition of fair market value or FMV for purposes of computing the capital gains tax on the transfer of shares has undergone numerous revisions over the years. What constitutes fair market value has long been a push-and-pull between taxpayers and the tax authority, as this affects the computation of the gain, and hence, the tax due on the transaction.

As early as 1940, Revenue Regulations (RR) No. 2-40 defined market value as “the fair value of the property in money as between one who wishes to purchase and one who wishes to sell.” It is the price at which a seller is willing to sell at a fair price, and a buyer is willing to buy at a fair price, both having reasonable knowledge of the facts and the willingness to trade.

Subsequently, RR No. 2-82 provided that the book value of unlisted shares of stock should be considered as their prima facie FMV; in case the shares are valued at lower than their book values, the deviation from the book value should be justified with supporting evidence. Years later, RR No. 6-2008 fixed the FMV at the book value of the unlisted shares of stock as shown in the financial statements duly certified by an independent certified public accountant nearest to the date of sale.

Departing radically from the previous issuances, however, RR No. 6-2013 required that in determining the FMV of the shares, the adjusted net asset (ANA) method must be used where all the underlying assets and liabilities of the company are adjusted to their FMVs. For this purpose, the appraised value (FMV) of any real property owned by the company at the time of sale shall be the FMV either as determined by the Commissioner, as shown in the schedule of values fixed by the Provincial and City Assessors, or as determined by an Independent Appraiser, whichever is higher.

The application of such a method invariably resulted in the upward adjustment of the FMV, particularly for companies owning substantial real properties, since the latest appraised values of the properties are considered in determining the value of the shares. Further, such adjusted FMV could lead to donor’s tax exposure in case the shares are actually worth less since disposal at less than the FMV under the ANA method is deemed a donation.

To address the donor’s tax issue, Congress included a provision under the TRAIN Law that any transfer of property in the ordinary course of business (i.e.,  bona fide, at arm’s length, and free from any donative intent) will be considered as done for an adequate and full consideration in money or its worth.

Notwithstanding the law, however, the BIR subsequently issued Revenue Memorandum Circular (RMC) No. 30-2019, which effectively imposed on the taxpayer the burden to prove that indeed the sale involves no irregularity between unrelated and independent parties. It required the presentation of sufficient, reasonable evidence that the sale of shares of stock at less than FMV is without intent to evade tax and defraud the government. Saddled with the burden of proof that donor’s tax should not be assessed or imposed even in case of inflated or overstated FMV of the shares under the ANA method, the directive weighed down the taxpayer unfavorably.

Perhaps due to appeals from taxpayers, the BIR issued RR No. 20-2020, which takes effect today (15 days from the publication on Aug. 19). Under the regulation, the latest audited financial statements (AFS) are deemed sufficient in determining the FMV of the shares subject of the sale, barter, exchange, or other disposition.

The FMV of common shares of stock not listed and traded in the stock exchange shall be the book value based on the latest available AFS before the date of sale, but not earlier than the immediately preceding taxable year. For preferred shares, the FMV shall be the liquidation value, which is equal to the redemption price of the preferred shares as of balance sheet date nearest to the transaction date, including any premium and cumulative preferred dividends in arrears. The book value of common shares or the liquidation value of the preferred shares need not be adjusted to include any appraisal surplus from any property of the corporation not reflected or included in the latest AFS.

The RR is a welcome reversion to the policies under RR 6-2008, which was not only reasonable but also efficient. Taxpayers can now expect no upward adjustment in the fair value of the underlying assets, little or no overstatement of the FMV, and no requirement for appraisal of properties before the sale. Still, there were cases where shares were previously sold at overstated prices under the ANA method despite the actual market price being lower, in order to avoid donor’s tax exposure. The same shares could now be sold at the actual market price due to lower prescribed valuation under the AFS, in which case the seller sustains a loss, and with the purchaser having a lower cost basis. Thereafter, any increase in the market value will be taxed as capital gain again in the hands of the last purchaser. Thus, while the reversion in policy yields higher tax collections, it was only at the expense of compliant taxpayers.

Also, the determination of the redemption price of preferred shares under the regulations could be questioned. It is unclear exactly what the regulation means when it mentions the redemption price as of balance sheet date. Notably, the Revised Corporation Code provides that the Board of Directors, where authorized in the articles of incorporation, may fix the terms and conditions of preferred shares of stock. Thus, by basing the redemption price on the balance sheet, the regulations appear to constrain the right granted to a company’s Board of Directors under the law to fix the terms and conditions of preferred shares of stock, including the redemption price thereof.

The foregoing situations only highlight the need to study and review amendments thoroughly and with the keen eyes of fairness and objectivity. Revisions have impact and should not be made hastily nor to favor short-term advantages or tax collections at the expense of long-term trust and confidence on the part of taxpayers, who bear the burden of paying taxes. Nonetheless, done properly, the return to more feasible, and well-accepted policies certainly comes a long way towards regaining the trust and confidence of taxpayers, and in return, the government might reasonably expect enhanced tax compliance and higher revenue collections which it may earmark for nation-building and national emergencies such as the current pandemic.

The views or opinions presented in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The article is for general information purposes only and should not be used as a substitute for consultation with professional advisors.

 

Jaffy Y. Azarraga is a Director at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of PricewaterhouseCoopers global network.

jaffy.y.azarraga@pwc.com

Electricity subsidies, Meralco, and the wind-solar lobby

I have been writing in this column about power and energy issues for about five years now and still the sector continues to amaze me with so many twists and surprises, good and bad for consumers. For instance, see these recent reports in BusinessWorld:

• “Meralco offers P101-M aid to power users” (Aug. 25).

• “Energy experts urge expedited transition to renewable power” (Aug. 26).

• “Five rural utilities charged more on system loss in 2019” (Aug. 26).

• “Government urged to release Murang Kuryente subsidies” (Aug. 27).

• “Meralco fined for lockdown billing woes” (Aug. 28).

• “Consumer group calls for abolition of electricity cross-subsidy for poor” (Aug. 31).

• “Electric utilities risk franchise cancellation — senator” (Aug. 31).

• “Advocacy group tells Meralco to ‘go green’” (Sept. 1).

• “Power sector wants subsidies cut off for non-poor electricity consumers” (Sept. 2).

For this piece, I want to briefly focus on three issues: subsidies to “lifeline” customers, Meralco gives aid yet is fined with threats of franchise cancellation, and the never-ending lobby to kill coal and favor wind-solar.

One, “lifeline” customers or those with monthly consumption of 100 kwh or less are subsidized by the non-lifeline users by six centavos/kwh. Many of these low-usage households are not really poor, like those living in one-bedroom condo units, they do not need subsidy. Besides, households consumed less electricity before the strict and indefinite lockdown because the members often would go out to work, school, meetings, recreation, etc. After the lockdown and endless quarantine starting March 16, many of the lifeline customers would move to non-lifeline users as they stayed home and hence, electricity consumption greatly increased. Plus there were the hot months of March to June. Those who consumed 100 kwh or less in February would be consuming 150 kwh or more during the lockdown, so why subsidize them and continue to penalize the non-lifeline users and private distribution utilities (DUs) and electric cooperatives?

Two, Meralco was pressured in a Congress hearing to sustain the subsidies to its 2.77 million lifeline customers, forking out P101 million. Then it was penalized by the Energy Regulatory Commission (ERC) with a P19-million fine because it failed “to provide accurate and timely information especially during this time of pandemic has created chaos and confusion,” and failure to allow consumers to pay in instalments. Some legislators and populist NGOs even said that Meralco continues to have “exorbitant” prices.

I think all these allegations including ERC assessments are wrong. Accurate information on unbundled electricity rates are freely available online, actual electricity consumption for three months March-May based on actual meter reading in June is higher than estimated consumption, and electricity prices are actually declining, not increasing and exorbitant.

Compared to August 2014 and 2015 total rates, August 2020 are lower and cheaper (see the table).


Three, the wind-solar lobby of certain NGOs keep spreading fake news that coal power is expensive and dirty. See the generation charge in the table which declined to P4.12/kwh in August 2020. A big portion of Meralco power comes from coal plants like Therma Luzon, San Buenaventura, and Sual Power of SMC — their prices are below the average for IPPs and PSA prices. This despite the higher coal excise tax under the TRAIN law, from only P10/ton in 2017 to P150/ton in 2020.

The real dirty energy are gensets and candles, what people use when there are frequent blackouts and power goes on and off. The rich buy gensets running on diesel that is more expensive and more polluting; the poor buy candles which are among the causes of fires. Solar panels produce zero energy at night, little when cloudy and raining. Wind turbines produce zero energy when the wind does not blow. Adding big batteries to address their intermittency also add costs to their electricity prices because those big batteries are not cheap.

See the table again — the transmission charge is starting to rise as the National Grid Corporation of the Philippines (NGCP) is forced to get more ancillary services, back up fossil fuel power plants and big batteries, as more intermittent wind-solar are added to the grid.

There should be more market-pricing, market competition in power generation and distribution. Subsidies (lifeline customers, universal charge for missionary electrification, feed in tariff/FIT for renewables, etc.) should be zero, or kept to the minimum.

 

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

minimalgovernment@gmail.com

Renewing renewables

Since the start of the Community Quarantine about six months ago, I have been hearing a lot about how a number of Metro Manila residents are waiting out the COVID-19 pandemic in their “home” provinces. Some have quit their jobs and moved back for good, while others have opted to temporarily do Work-From-Home or Online School from the comfort of their provincial abodes.

I also know of some people now looking for farm or beach lots in Central or Southern Luzon. They are in search of affordable properties, small but secured and easy to maintain, not too far from Metro Manila, and with easy access to basic goods and services. They want to build “tiny” homes, where they can also have home gardens to grow their own food.

And with the tiny home concept comes the possibility of building small but efficient environment-friendly houses with water-containment systems to catch rain, and solar panels to help generate electricity, and with focus on waste segregation, composting, vegetable gardening, and maybe organically growing some livestock. The aim is to also minimize one’s carbon “footprint.”

Moving forward, however, I think people start also looking at “renewing” or recycling “renewables.” For the fact of the matter is, anything and everything still has some form of environmental impact, and nothing is completely carbon-free. So, for anyone contemplating renewable energy systems, they should also be mindful of disposal implications.

Take the case of solar energy. Home-based solar energy systems are environment-friendly; make use of “free” energy from the sun; can be easy to set up; and can be cost-effective in the long run. More important, it can be a reliable source of energy particularly in off-grid areas, or far-flung places that lack electric service like remote mountain- or beach-communities.

However, such systems still require manufactured solar panels, and even high-capacity batteries to store energy that can be used in the evenings or during cloudy or stormy days. These batteries are recharged when the sun is out. The thing is, solar panels and solar batteries all have a specific life. In short, they will eventually reach a point of replacement — and disposal.

And this is where the unforeseen and unintended problems lie. My concern, at this point, is that the shift to renewables, whether at the home or industry level, is a potential solid waste management problem down the line. Unless, we start manufacturing and installing equipment and renewable energy systems that can actually be recycled or “renewed” later on.

According to the UK Solar Trade Association, solar farms in the UK range from anywhere between one and 100 acres (or roughly from 4,000 square meters to 40 hectares). About 25 acres or roughly 10 hectares of solar panels are required to generate five megawatts of electricity, that can power an estimated 1,500 homes annually, based on an average annual household consumption of 3,300 kWh of electricity or about 275 kWh per month.

I don’t have any estimates as to how many solar panels are required to generate five megawatts of electricity. But, one can imagine the number to run in the thousands if talking about a 10-hectare solar farm. And the average life of each panel varies, depending on care and maintenance. The good news is that panel life estimates range from anywhere between 25 and 40 years.

The bad news: Solar panels are “also complex pieces of technology that become big, bulky sheets of electronic waste at the end of their lives — and right now, most of the world doesn’t have a plan for dealing with that,” according to sustainability advocacy publication Grist, which describes itself as “and independent, irreverent news outlet and network of innovators working toward a planet that doesn’t burn and a future that doesn’t suck.”

“The solar e-waste glut is coming,” reports Grist’s Maddie Stone on Aug. 13. “By 2050, the International Renewable Energy Agency projects that up to 78 million metric tons of solar panels will have reached the end of their life, and that the world will be generating about six million metric tons of new solar e-waste annually.”

She also wrote that “while the latter number is a small fraction of the total e-waste humanity produces each year, standard electronics recycling methods don’t cut it for solar panels. Recovering the most valuable materials from one, including silver and silicon, requires bespoke recycling solutions.”

And here lies the problem. If companies do not develop proper solutions for solar panel disposal, along with government policies that support their widespread adoption, then those discarded solar panels will mostly end up in landfills. And since the panels can also contain toxic materials like lead that can leach out as they break down, dumping them in landfills is a potential environmental hazard, says Grist.

As early as 2018, Forbes contributor Michael Shellenberger, who writes on energy and the environment, already warned that “the problem of solar panel disposal ‘will explode with full force in two or three decades and wreck the environment’ because it ‘is a huge amount of waste and they are not easy to recycle’,” as he quoted a senior Chinese solar official who was a 40-year veteran of the US solar industry.

He also wrote that “researchers with the Electric Power Research Institute (EPRI) undertook a study for US  solar-owning utilities to plan for end-of-life and concluded that solar panel ‘disposal’ in ‘regular landfills was not recommended in case modules break and toxic materials leach into the soil’ and so ‘disposal is potentially a major issue’.”

Currently in operation in the Philippines is a 160-hectare solar power farm in Calatagan, Batangas generating about 64 megawatts (MW) of electricity. Also, in operation are 45-MW and 80-MW solar farms in Negros Occidental, and an 18-MW solar plant in Negros Oriental. Then there is a 10-kilowatt floating solar farm in Laguna Lake within Baras, Rizal. In the works are a 60-MW solar farm in Zambales and a 120-MW solar farm project in Alaminos, Laguna. And then, there are countless homes all over the country now making use of solar panels installed in their residences.

I am all for going renewable, and I believe solar is a good option. However, when companies and investors planned on these solar projects, and for consumers with “solar” homes, did they already consider how to dispose or recycle damaged or end-of-life solar panels in the future? Do we actually have government regulations in place regarding proper disposal? Do we have science- and data-based standards being applied as to how to dispose of old solar panels?

 

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

matort@yahoo.com

Corporate culture in the new normal

EVERY ORGANIZATION has a corporate culture. And it is not always an intended set of values driven by a mission statement and a sense of purpose, like customer primacy, honesty, respect for subordinates and peers, and teamwork. Even when these values are enshrined in posters around the office or inculcated in off-site sessions (not possible at this time) where games and songs (“Wind Beneath My Wings”) with lots of hugging (again, a no-no), the expected corporate culture can be informally enshrined by actual practice.

What is the impact of the lockdown, or semi-lockdown, environment on the corporate culture? Has the “new normal” characterized by facial cover (Do you know how your new doctor really looks?), work from home, curfews, and the social stigma of a positive testing, affected how we now work and relate to our co-workers?

Here are some behavioral and cultural changes that now define the work environment.

The climate of uncertainty is not limited to the lockdown status that can shift in three days and made to have a short-term effectivity like two weeks — wait for the next midnight announcement. The climate of uncertainty extends to customer demand, closure of businesses, and an idle labor force during a scale-back. This set of unpredictable developments makes a planning culture unrealistic. Organizations and individuals are on a survival mode with a wait-and-see mindset. Everyone is waiting for the vaccine.

The “office culture” of physical presence and the ability to get instant feedback on an idea or a request has been limited. The default mode is working from home. This is a project-based culture ideal for preparing pitches for new business, setting up a webinar, or conducting a prescribed meeting of the board. The team-building, brainstorming, and ties to the organization are frayed. Informal grapevine updates at the office pantry disappear. Now, everything becomes task-based with roles and inputs clearly defined. All activities feel like work with lessened camaraderie — please put yourself on mute.

The home-office boundary has disappeared. Working hours are not dictated by the usual 9 a.m.-5 p.m. template. Sure, it is possible to take a short nap at home during the designated lunch hour. But what about rush requests from clients? (Hope I didn’t wake you.) The internet corporate culture of being “always on” has replaced the appointment culture of regular office hours.

Client intimacy (of the appropriate kind) has also been replaced by a more business-based relationship anchored on deliverables and commitments (Have you finished the TV commercial yet?). The more socially oriented atmosphere with no-agenda lunches that makes the client servicing more collegial and pleasant is no longer available.

There are businesses that require on-site presence like bank branches, restaurants with dine-in or pick-ups, and barbershops. Even these are reduced to a skeletal force, sometimes with rotating closure of outlets. This uncertainty of regular employment can ironically be an incentive to improve customer-facing service with the fear factor. But there is still the overhang of a discontinuity of the business that has falling revenues from the restrictions on distancing and less customers per square meter of space.

There is a rise in demand for practicing psychiatrists to address anxiety, depression, and stress in the workplace. It is not just about fear of losing a job. There is the possibility in spite of precautions taken and strict adherence to health protocols that one can test positive in some random check in the community. Even those who need medical help with some unrelated illness, like a pregnancy or a fracture from slipping in the bathroom, are fearful of going to the hospital to be attended to, if there are even available slots.

Corporate culture defines the work environment. Good cultures attract and retain high-performing talents. The survey of good companies to work for is determined by existing employees as well as those aspiring to join them. This ranking is determined by a combination of good compensation and benefits programs as well as a nurturing corporate culture.

Still, in these times of high unemployment, closing businesses, and economic recession, the corporate culture of survival has become dominant…. maybe even after a working vaccine is administered to the first volunteer.

 

Tony Samson is Chairman and CEO, TOUCH xda

ar.samson@yahoo.com

Should freedom of assembly be an absolute right?

By Andreas Kluth

THE “right of the people peaceably to assemble,” as the US constitution’s first amendment calls it, is one of the pillars of liberty. That’s why all liberal democracies guarantee and protect it in some form. But is this right absolute? Could there be, in well-defined cases, a liberal case for abridging it?

This timeless question has just become newly urgent. As I warned might happen, the COVID-19 pandemic has, directly or indirectly, increased social turmoil in many countries, leading more people to assert their right to protest. But as the very different circumstances in Belarus, the US, and Germany showed again this past weekend, what counts as a primal scream for freedom in one gathering easily turns nefarious and anti-democratic in another.

In Belarus, the protesters are indeed heroes deserving the sympathies of freedom lovers all over the world. Since a fraudulent election on Aug. 9, they’ve been bravely marching as their benighted dictator, Alexander Lukashenko, stomps around carrying an automatic rifle and keeps his thugs ready to bludgeon his critics. Types like him disdain freedom of thought, speech or assembly. That’s why philosophers since John Stuart Mill have considered these rights essential.

Elsewhere the picture is more complex, even in the “sweet land of liberty.” As COVID-19 and Black Lives Matter have blown off America’s veneer of social cohesion, some US cities have of late resembled battlegrounds. Over the weekend, supporters of President Donald Trump gathered in Portland, Oregon, and drove downtown in a caravan of hundreds of banner-draped trucks. There they clashed with mobs of “anti-fascist” counter-protesters. Paintball guns were shot and fists thrown, until actual gunfire erupted and a man lay dead.

Clearly, neither side in this particular exercise of the right to assemble emphasized the first amendment’s stipulation to do so “peaceably.” The intention was to antagonize and intimidate opponents, not to air arguments for the betterment of democratic discourse. The ubiquity of guns in America makes any such confrontation potentially lethal.

And then there’s the peculiar case of Germany, a country that has been sensitized by its own Nazi history to the dangers that extremists pose. Protest movements against the various coronavirus lockdowns have swept across much of Europe, but they’ve grown particularly strong in Germany. This is surprising, given that Germany has controlled the outbreak relatively well and imposed only mild restrictions.

Nonetheless, the crowds of protesters are growing. Many are spouting outlandish conspiracy theories inspired by the QAnon movement in the US and striking anti-Semitic overtones. Increasingly, far-right extremists and even full-blown neo-Nazis are mixing into the crowds.

This Saturday, almost 40,000 demonstrators showed up in Berlin. In the evening, the protest turned violent, as several hundred rioters stormed the barriers protecting one entrance of the Reichstag, Germany’s parliament building. Many carried the black-white-red flags of Imperial Germany, a symbol that nowadays stands for the far right, since the Nazi swastika is banned. Three defiant policemen barely managed to keep them out.

Frank-Walter Steinmeier, Germany’s president, called the violence “an intolerable attack on the heart of our democracy.” The government and mainstream political parties all lined up to condemn the transgressions. As hooligans, politicians, and ordinary Germans alike are well aware, the Reichstag is where Germany’s democracy was literally and metaphorically set afire in 1933.

All of this points to an ambiguity about the freedom of assembly. In places from Belarus to Hong Kong, this right either doesn’t exist or has been trampled upon. In the US and Germany the right does exist but is in frequent tension with those who cynically abuse it.

Even in the liberal tradition, freedom of assembly was never meant as an absolute right. Mill famously argued that it can and should be abridged “to prevent harm to others.”

Berlin’s interior minister, Andreas Geisel, had tried to invoke this “harm principle” to stop Saturday’s demonstration. He argued that the protesters were likely to scorn rules about social distancing and mask use just as they had done at another event on Aug. 1. This would accelerate contagion and put at risk people not even participating. But a court overruled him, arguing that the mere possibility that rules would be broken doesn’t suffice.

This reasoning was surprising, given that the harm principle must of necessity apply in advance of injury. What probably moved the court was Geisel’s tactical mistake of also citing the likely presence of neo-Nazis at the event. As soon as politics was involved, the judges felt they had to err on the side of freedom of assembly.

As well they should. But even the distinction between political opinion and harm isn’t always clear, and different nations will draw different lines. In the US, free speech protects even Holocaust denial. In Germany and 15 other European countries, as well as Israel, it doesn’t, on the reasonable premise that it’s unbearable — and thus harmful — to the Nazis’ victims and their descendants.

Amid the worldwide rise of extremism, liberal democracies are in a bind. If they curtail their hallowed freedoms, they allow half-wits of all stripes to turn their “martyrdom” into propaganda. But if they provide the loonies a stage, they let cynics avail themselves of democratic rights to undermine the democracies that guarantee them.

Ultimately, the conundrum of liberty is not a legal question but a cultural one. As soon as there’s a threat of harm, the state must intervene. But as long as protesters merely mouth off in ways that are disgraceful, the state must stand back. In these cases, it’s up to the rest of us to speak up and reclaim our democracies from the crackpots and demagogues. Even in 1933, the ensuing disaster could only happen because ordinary Germans allowed it.

BLOOMBERG OPINION

Nuggets edge Jazz in Game 7

THE DENVER NUGGETS survived a frantic finish to complete a rally from a 3-1 postseason deficit Tuesday night, getting a go-ahead hoop from Nikola Jokic with 27.8 seconds remaining for an 80-78 victory over the Utah Jazz in Game 7 of their Western Conference first-round series in the NBA bubble near Orlando.

The 4-3 win vaults the third-seeded Nuggets, who had never previously rallied to win a series from down 3-1, into a second-round matchup with the second-seeded Los Angeles Clippers, beginning Thursday night.

After sixth-seeded Utah forged a 78-all tie on a Rudy Gobert dunk with 47.5 seconds left, the Nuggets went to Jokic inside against the Jazz’s ace defender, and the Denver big man came through with a short hook shot in the lane for the game’s final points.

The Jazz had two subsequent possessions.

First, the Nuggets stripped the ball from Donovan Mitchell with 8.4 seconds to go. But rather than try to run out the clock, Denver rushed the ball up the floor and watched Torrey Craig miss a contested layup with 4.4 seconds remaining.

Gobert rebounded and got the ball to Mike Conley, who had a good look at a potential game-winning 3-pointer just before the final horn, but had the shot rim out.

In winning for the third straight time after falling behind 3-1 in the series, the Nuggets prevailed despite getting just 17 points on seven-for-21 shooting from Jamal Murray, who suffered a bruised thigh in a collision with Utah’s Joe Ingles in the second quarter and was never the same.

Jokic paced the Nuggets with a game-high 30 points, completing a double-double with 14 rebounds.

Michael Porter Jr. chipped in with 10 points off the bench for Denver, which won despite shooting just 37.3% and scoring only 30 points in the second half.

After a slow start, Mitchell led the Jazz with 22 points, shooting nine-for-22, while Gobert had 19 to complement a game-high 18 rebounds.

Mitchell connected on a pair of 3-pointers (on eight attempts), giving him 33 treys in the seven games and allowing him to break Stephen Curry’s single-series postseason record of 32, set in 2016. Murray wound up with 32 3-pointers in the series, though he was just one-for-six from long distance on Tuesday.

Jordan Clarkson added 10 points for Utah, which had never previously lost a playoff series in which it led 3-1.

After Mitchell’s 13 third-quarter points had rallied the Jazz into contention after they had trailed by as many as 19, Conley and Gobert combined for all the points in an 8-0 run to begin the fourth period and give Utah its first lead since the first quarter at 68-65.

Denver subsequently regained a four-point lead on two consecutive hoops by Murray, the latter making it 78-74 with 1:43 to go.

But Utah made one last charge, rallying into a 78-all tie with 47.5 seconds to go on hoops by Royce O’Neal and Gobert, both assisted by Conley, setting up the wild finish.

Mitchell was held to two points in the first 22 minutes, during which the Jazz fell behind by as many as 10 in the first quarter and 19 in the second. — Reuters

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