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Digital payments for business purposes gaining traction 

Filipinos are more inclined to use digital payments for business purchases amid a broader shift to that payment channel due to the coronavirus disease 2019 (COVID-19) pandemic, according to Visa, Inc.

“They are making purchases for business services, showing a shift in small business owners making eCommerce purchases for business related services,” Visa Country Manager for the Philippines and Guam Dan Wolbert said in an e-mail to BusinessWorld.

Mr. Wolbert said this trend is likely to remain as Filipinos come to terms with the convenience of digital payments for such purchases.

In terms of personal transactions, Mr. Wolbert said one out of four active Visa cardholders that did not shop online last year made digital purchases in the first half of the year, pointing to a pandemic-driven shift in buying habits.

“Top categories that Filipino Visa cardholders were purchasing include groceries, drugs and pharmaceutical goods and making bill payments for telecommunication services,” he said.

Mr. Wolbert said digital payments will remain a preferred option as consumers minimize physical contact while making purchases.

“We think that there will be a bigger focus on health and sanitation even after the pandemic,” he said.

Mr. Wolbert also cited a recent study from Visa indicating 70% of Filipinos have said they plan to stick to cashless payments even after COVID-19 and 73% said they expect to continue or increase their online spending as well when things normalize.

The Visa study also found that 42% of Filipinos prefer to pay using cards and mobile apps rather than cash.

The central bank hopes to bring the share of digital payments to 50% of all transactions by 2023.

E-payments comprised 10% of total transactions in 2018 by terms of volume from 1% in 2013, according to a report from the United Nations-backed Better than Cash Alliance. By value, digital transactions accounted for 20% of the total, rising from 8% in 2013. — Luz Wendy T. Noble

Expedited ERC applications to unlock pending investments

THE Energy Regulation Commission (ERC) said expediting the approvals process for power projects is expected to unlock about P200 billion worth of project proposals currently pending.

The commission said at its budget hearing before the House appropriations committee that it wants more personnel to process the applications. However, its proposed budget for personnel services was slashed to P256 million.

ERC Chairperson Agnes VST Devanadera told the committee she hopes the cuts are reconsidered.

“ERC will be able to deliver P200 billion worth of investments by accelerating the processing of applications, and thereby putting into the mainstream of our national economy what is pending with the ERC,” she testified Monday.

The commission had requested P450 million for its personnel services budget next year from P247.04 million this year.

The commission is looking to hire more employees next year to get more work done, ERC Commissioner Floresinda B. Digal said in a Viber message.

Overall, the Budget department is proposing an allocation of P564.88 million for the ERC in 2021, a 48% difference from its proposed budget. Ms. Devanadera said the cut will have a “direct impact” on its approvals process.

The House of Representatives is currently deliberating the government’s P4.5-trillion budget plan for 2021. Speaker Alan Peter S. Cayetano is looking to pass the proposed budget as early as October. — Adam J. Ang

PHL partially lifts ban on Brazilian poultry imports

THE PHILIPPINES has partially lifted a ban on poultry imports from Brazil in the form of mechanically-deboned meat (MDM).

In a memorandum order Monday, Agriculture Secretary William D. Dar said poultry MDM from Brazil is now allowed after Brazilian authorities submitted documents detailing measures taken to prevent the meat from being infected with coronavirus disease 2019 (COVID-19).

Mr. Dar said that Brazilian authorities also submitted assurances on infection control and occupational safety and health procedures at its poultry plants.

The DA said only foreign meat plants with zero cases of COVID-19 infection among workers will be allowed to export MDM to the Philippines.

Further, such imports must have additional documentation in the veterinary health certificate and must have a safe handling label.

“All shipments into the country not complying with the conditions shall be confiscated by DA Veterinary Quarantine Officers/Inspectors at all major ports of entry,” according to the memorandum order.

In a statement, the Philippine Association of Meat Processors, Inc. (PAMPI) said it welcomed the lifting of the ban.

PAMPI President Felix O. Tiukinhoy, Jr. said the industry can now arrange contracts with its suppliers in Brazil.

“We recognize that the ban was lifted because the DA and the Brazil Ministry of Agriculture worked together to address issues related to food safety in the midst of COVID-19 pandemic engulfing Brazil,” Mr. Tiukinhoy said.

The ban was imposed on Aug. 14 after China claimed to have found traces of COVID-19 in chicken from Brazil.

Brazil accounts for nearly 20% of Philippine poultry meat imports. — Revin Mikhael D. Ochave

Revised BIR rules on fair market value of unlisted shares

For foreign and domestic investors, selling shares in Philippine companies have always been fraught with difficulty and uncertainty. In the past, the most complex issue has been the determination of the fair market value of the shares to be sold. The rules created various complications and requirements that sellers and buyers had to be aware of before even considering the transaction. Hence, any move to simplify the process is certainly a welcome development. One of these new developments is Revenue Regulations 20-2020 (RR 20-20) published on Aug. 19. The revenue regulations make the determination of fair market value relatively easier for shareholders selling shares.

BRIEF REFRESHER ON CAPITAL GAINS TAX OF UNLISTED SHARES
Several provisions in the Tax Code provide for capital gains tax (CGT) on the sale, barter, exchange, or other disposition of shares of stock not listed and exchanged in the stock exchange, or “unlisted shares.” The percentage of the tax rate varies by the kind of taxpayer. For individual taxpayers, both resident and non-resident, and domestic corporations, the CGT is at 15%. For foreign corporations, for gains not over P100,000, the rate is 5% while any amount in excess of P100,000 shall be at the rate of 10%.

The tax is imposed on the net capital gain derived from the sale. Gains or losses from the sale are determined by deducting the seller’s cost basis for the shares sold or disposed plus expenses of sale/disposition, if any, from the amount of consideration contracted to be paid.

Under current rules, the selling price cannot be lower than the fair market value of the shares sold. Otherwise, the difference may be subject to donor’s tax under certain circumstances. Hence, prior to agreeing on the selling price, the seller and buyer must establish the fair market value of the shares.

SUMMARY OF THE RULES UNDER RR 20-20
Prior to RR 20-2020, the BIR required the use of the “Adjusted Net Asset Method” in determining the fair market value of the unlisted shares pursuant to Revenue Regulations 06-2013. This means that all assets and liabilities are adjusted to fair market value. The net of adjusted assets minus the liability values is the indicated value of the equity.

If the company whose shares are being sold owns real property, these must be appraised and the higher value among the (a) zonal value, (b) assessed value, (c) fair market value as determined by an independent appraiser, shall be used to arrive at the adjusted net asset value of the company.

In RR 20-2020, the BIR removed the use of the adjusted net asset value. The prima facie fair market values of unlisted shares shall now be the book value based on the latest available financial statements duly certified by an independent public accountant prior to the date of sale, but not earlier than the immediately preceding taxable year.

For preferred shares of stock, the book value shall be based on the liquidation value. Liquidation value is equal to the redemption price of the preferred shares as of the balance sheet date nearest to the transaction date including any premium and cumulative preferred dividends in arrears.

In cases where the unlisted shares sold are both common and preferred shares, liquidation value of the preferred shares shall first be deducted from the total equity of the corporation. The remaining equity shall be divided by the total number of outstanding common shares to arrive at the book value per common share.

INTERIM AUDITED FINANCIAL STATEMENTS
The rule in RR 20-2020 requires the “latest available financial statement duly certified by an independent public accountant prior to the date of sale.” The phrase “prior to the date of the sale” is very important as it precludes the BIR from using audited financial statements after the date of sale.

In the case of CIR v. Sara Lee Kiwi Holdings, LLC, CTA Case No. 8741 (Feb. 13, 2017), the CTA (and later on affirmed by the Supreme Court) upheld the use of audited financial statements for fiscal year ending June 30, 2011 in determining the fair market value of shares sold on April 4, 2011. The same is true in DoF Opinion 008-19 (June 10, 2019) in which the DoF upheld the use of audited financial statements ended Dec. 31, 2015, for a sale that happened on Nov. 26, 2015.

With the latest rule that latest audited financial statement prior to the date of sale must be used, taxpayers can rely on a fixed amount at the time of sale instead of having to adjust or amend CGT returns later on when the audited financial statements become available.

However, the rules do not clarify if the taxpayer may use interim financial statements as long as they are audited by an independent public accountant to determine the fair market value of unlisted shares.

Prior to 2008, taxpayers may use a value other than the book value from the latest audited financial statements. In the old Revenue Regulations 02-82, a taxpayer may adopt a fair market value lower than book value provided a justification for the deviation from the book value is properly supported. Assuming that substantial business reverses or losses are suffered in the interim, may taxpayers present an interim audited financial statement instead of the year-end audited financial statements? Considering that the book value per latest audited financial statements is only prima facie fair market value, the taxpayers should be allowed to support a value lower than that derived from the year-end audited financial statements. Hopefully, the BIR can clarify this issue in subsequent regulations.

DONOR’S TAX INSTEAD OF CAPITAL GAINS TAX?
The amendment of the Tax Code by the TRAIN Law changed the donor’s tax rate to 6% which is a far cry from the 15% or 5-10% CGT tax rate. Under RR 06-08, in the event that the fair market value of the unlisted shares is greater than the amount of money received, then the excess shall be deemed as a gift subject to donor’s tax.

Thus, a question arises on whether it would be better for the taxpayer to sell at a “loss” and pay the 6% donor’s tax rather than the CGT. In some cases, particularly if the cost basis for the shares is minimal, the tax payable under donor’s tax may be substantially lower than the CGT. This is a matter that should be looked into by BIR as it paves the way for unscrupulous taxpayers to disregard the fair market value of unlisted shares for them to pay the lower donor’s tax rate.

Further, Section 100 of the Tax Code imposing donor’s tax on sales with inadequate consideration has been amended by the TRAIN Law. Under the amended provision and implemented by Revenue Memorandum Circular No. 30-2019, a bona fide sale made in the ordinary course of business, at arm’s length, and free from any donative intent, is no longer subject to donor’s tax even if the selling price is lower than the established fair market value.

Given the changes in the rules removing the adjusted net asset value for determining fair market value of unlisted shares, taxpayers can now look forward to easier and simplified steps in processing their sales of unlisted shares. Although there are still some unresolved issues, at least the burden has been lightened and taxpayers can look forward to more transactions in the future.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

John Patrick L. Paumig is an associate from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Gov’t cites curve flattening as coronavirus cases top 238,000

By Vann Marlo M. Villegas and Gillian M. Cortez, Reporters

LOCAL coronavirus infections have slowed, according to the chief enforcer of the government’s anti-virus efforts.

The curve has flattened, while the country’s healthcare system has improved, national task force chief implementer Carlito G. Galvez, Jr. told an online news briefing on Monday, citing a study by researchers from the University of the Philippines (UP).

The virus reproductive rate stood at 0.94 from four in March, meaning an infected patient can infect one more person, he said.

“This is good news because it means our efforts against the pandemic have borne fruit,” Mr. Galvez said in Filipino.

“But this positive development did not happen overnight,” he said, adding that it was the result of planning by the national and local governments, private sector, medical frontliners and the public.

The Department of Health (DoH) reported 1,383 coronavirus infections on Monday, bringing the total to 238,727.

The death toll rose by 15 to 3,890 while recoveries increased by 230 to 184,906, it said in a bulletin.

There were 49,931 active cases, 88.3% of which were mild, 8.3% did not show symptoms, 1.4% were severe and 2% were critical.

Of the new cases 525 came from Metro Manila, 137 from Laguna, 99 from Batangas, 77 from Negros Occidental and 69 from Cavite.

Eleven of the new deaths came from Metro Manila, two from Western Visayas, and one each from Eastern Visayas and the Calabarzon region, the agency said.

The death rate was at 1.63%, lower than the 3.23% global rate, while the infection rate was at 10.61%, which is higher than the World Health Organization’s (WHO) less than 5% benchmark.

Mr. Galvez said new cases peaked on Aug. 10 with 6,958 and gradually decreased to 2,592 on Sept. 5. There was also a downtrend in Metro Manila, the Calabarzon region and Central Visayas, he said.

There were now 117 licensed laboratories that have conducted 2.7 million tests involving 2.6 million people.

Mr. Galvez urged the public to continue practicing minimum health standards by wearing face masks and shields, washing hands and practicing social distancing to prevent local transmission.

Defense Secretary Delfin Lorenzana, the head of the national task force, on Saturday said the Philippines was seeking to flatten the curve by the end of September.

In epidemiology, the idea of slowing a virus spread so that fewer people need to seek treatment at a time is known as flattening the curve.

The curve researchers are talking about refers to the projected number of people who will get infected over time.

People should not be complacent to sustain the progress, presidential spokesman Harry L. Roque told a separate briefing on Monday.

He traced the curve flattening to President Rodrigo R. Duterte’s decision to put Metro Manila back under a two-week modified strict quarantine last month.

Metro Manila, Batangas, Bulacan, Tacloban, and Bacolod are under a general community quarantine, while the rest of the country is under a more lax modified general community quarantine. Iligan City is the sole area in the country that is under a modified enhanced community quarantine.

Duterte pardons US marine convicted for sex worker’s killing

President Rodrigo R. Duterte has pardoned a US marine whom a Philippine court convicted in 2015 for killing a transgender Filipino sex worker in a case that had ignited anti-American sentiment in the former US colony.

Joseph Scott Pemberton, whose release for good conduct was held by prison officials after an appeal by his victim’s family, had been given the absolute pardon, Foreign Affairs Secretary Teodoro M. Locsin, Jr. tweeted on Monday.

“Cutting matters short over what constitutes time served, and since where he was detained was not in the prisoner’s control — and to do justice — the President has granted an absolute pardon to Pemberton,” he said from the presidential palace.

An Olongapo trial court convicted Mr. Pemberton for homicide in 2015, sentencing him to six to 10 years in jail.

Mr. Pemberton could have faced a life sentence had the judge granted prosecutors’ request for a murder conviction. The court cited mitigating circumstances, saying Mr. Pemberton was drunk and got confused after discovering that the person he had hired for sex was male.

Jeffrey Laude, a 26-year-old male sex worker who identified as a woman, was found strangled in October 2014 in a motel.

“That means Pemberton can go free now,” presidential spokesman Harry L. Roque told GMA News in Filipino, according to a recording of the interview shared by the media network on Viber.

“The President did not erase Pemberton’s conviction,” he said. “He is still a killer but the President has erased his punishment.”

Mr. Duterte said he pardoned the American soldier because he had been treated unfairly.

In a televised speech on Monday night, the President said he had consulted Justice Secretary Menardo I. Guevarra and Executive Secretary Salvador C. Medialdea about the pardon.

The court last week ordered Mr. Pemberton’s release for good conduct. The Justice department earlier said the American soldier would remain detained pending the appeal of the victim’s family.

Mr. Guevarra had said the agency would separately appeal Mr. Pemberton’s release this week. — Gillian M. Cortez

Coast Guard to help secure train stations after blasts in Jolo

THE TRANSPORTATION department has ordered the Philippine Coast Guard to help secure the country’s rail facilities after twin blasts in Jolo in Southern Philippines killed 14 people and wounded at least 75 others.

The Coast Guard will deploy 40 K9 units at stations and facilities of the Light Rail Transit Lines 1 and 2, Metro Rail Transit (MRT) Line 3 and Philippine National Railways to augment security forces,Transportation Secretary Arthur Tugade said in a statement on Monday.

“It is vital that we protect passengers from the threat of terrorism, even as we try to maintain public transportation operations amid the pandemic,” he said. “This is where the expertise and training of the PCG K9 units will prove most effective.”

The K9 units will consist of K9 handlers, working dogs, veterinarians and bomb specialists.

“Dogs to be deployed with the PCG K9 units are highly trained to detect explosives,” the agency said.

“The PCG K9 teams are ready to assist the security forces of these rail lines to deter and/or neutralize threats through higher visibility, enhanced response time, and to make the commuter riding experience more secure,” Coast Guard Commandant Admiral George V. Ursabia, Jr. said in the same statement.

Philippine police have ordered the deployment of a Special Action Force battalion to help local security forces hunt down the bombers, believed to be linked to the Islamic State. — Arjay L. Balinbin

More than 190,000 workers displaced by COVID-19 crisis

More than 190,000 workers from 10,177 businesses have been displaced by the coronavirus pandemic, the Labor department said in its latest report.

The agency said 89% of the workers came from companies that cut their workforce, while the rest lost their jobs because of permanent closures.

It said 41, 560 displaced workers came from the administrative and support service sector. Other industry groups affected were manufacturing with 25,621, other service activities with 24,454, accomodation and food service activities with 18,419, and information and communications with 13,822.

The agency said 11,298 companies covering more than three million workers had flexible work arrangements and experienced temporary closures from March to September.

President Rodrigo R. Duterte locked down the entire Luzon island in mid-March, suspending work, classes and public transportation to contain a coronavirus pandemic. People should stay home except to buy food and other basic goods, he said.

The lockdown paralyzed a number of companies, forcing some of them to cut costs by letting go of their workers.

The Philippines entered into a recession after economic output shrank by 16.5% in the second quarter.

More than seven million Filipinos were jobless amid a coronavirus pandemic in April, driving up the country’s jobless rate to 17.7% — a 15-year record.

As lockdown restrictions loosened, the unemployment rate eased to 10% in July, according to the local statistics agency. This is equivalent to 4.6 million jobless Filipinos, lower than the 7.3 million in April but nearly double the 2.4 million a year earlier.

Underemployed Filipinos — those already working but still looking for more work — eased to 17.3% in July from 18.9% in April, but still higher than the 13.6% a year ago. This translates to 7.1 million underemployed Filipinos, slightly higher than the 6.4 million in April.

By sector, services made up the largest share of the employed population at 54.8% in July. Industry accounted for 18.8% and agriculture 26.3%. — Gillian M. Cortez

Regional Updates (09/07/20)

Health dep’t warns DENR’s ‘white sand’ project can cause respiratory ailments

INHALATION OF crushed dolomites placed along the shore of Manila Bay — a project being undertaken by the Department of Environment and Natural Resources (DENR) to create a ‘white sand’ effect — may have “adverse effects” in the respiratory system, the Health department said. Health Undersecretary Maria Rosario S. Vergeire said medical literature show that dolomite dust can cause “respiratory issues.” She added that there are other potential minor health risks such as eye irritation and discomfort in the gastrointestinal system. Nonetheless, the health official did not condemn the DENR project saying observing minimum health standards can prevent the effects of dolomite such as wearing masks to avoid inhalation. A local think tank, meanwhile, said the DENR violated local environmental laws and its own policies by having an exemption from environment compliance regulations for the Manila Bay ‘white sand’ project. In a statement, Infrawatch PH said the DENR violated Presidential Decree No. 1586, or the Environmental Impact Statement System Law, and DENR Administrative Order No. 2003-30 which contains the implementing rules and regulations on environment compliance certificates. The group also called on the Supreme Court to step in through its Manila Bay Advisory Committee (MBAC), headed by Chief Justice Diosdado M. Peralta. The MBAC allows the Supreme Court to examine the reports of government agencies involved in the Manila Bay clean-up program. — Vann Marlo M. Villegas and Revin Mikhael D. Ochave

Makati gov’t launches P2.5-B support program for businesses, workers

MICRO AND small businesses in Makati can avail of a P10,000 to P100,000 grant under the city government’s P2.5-billion economic relief program to stimulate the local economy bogged down by the coronavirus outbreak. “This is not a loan, but financial aid aimed to help some 78,000 businesses registered in Makati. We will ensure an easy, fast and automatic process for the approval of grants under the program,” Makati Mayor Abigail Binay-Campos said in a briefing Monday. The grant will be allocated for and paid directly to the establishment’s workers and Makati-based suppliers. Aside from the financial aid, the mayor also announced other economic stimulus measures such as setting “the lowest possible tax rates” for online sellers and a “travel window” during curfew hours to allow Makati residents more time to dine at restaurants. “These initiatives are intended to support businesses and ensure a safe environment for Makatizen consumers. We recognize the urgent need to help business owners recover in order to sustain their operations and retain their employees, which include city residents,” Ms. Binay said.

Magnitude 6.4 earthquake shakes south-central areas in Mindanao on  eve of Q3 earthquake drill activities

A MAGNITUDE 6.4 earthquake shook south-central areas in Mindanao at 11:23 p.m. Sunday, but no major damage was reported from the tremor with an epicenter offshore, located southeast of Don Marcelino town in Davao Occidental. The Philippine Institute of Volcanology and Seismology (Phivolcs), in its bulletin, said intensity five was reported in several towns of the neighboring provinces of Davao del Sur and Sarangani as well as the cities of General Santos, Koronadal, Kidapawan, and Mati. Phivolcs also immediately issued a no-tsunami threat advisory following the earthquake. A series of earthquakes, with magnitudes over 6, struck the south-central part of Mindanao last year from October to December.

Preparedness amid pandemic

The quarterly earthquake drills held nationwide resumes this week, with activities to be held online. “Despite our current situation, we must bear in mind the importance of keeping ourselves safe. I encourage the public to continuously engage in activities that promote earthquake safety. In our constant effort to promote disaster resilience, everyone’s involvement is necessary,” Civil Defense Administrator Ricardo B. Jalad said in a statement. Among the activities lined up are a webinar on “Earthquake preparedness and response in the new normal” on September 8 starting at 10 a.m via Zoom and Facebook live stream. The Office of Civil Defense said they are also preparing to update the national and regional continuity and contingency plans to integrate health measures in line with the coronavirus crisis. The Philippines is within the Pacific Ring of Fire, an area prone to earthquakes and volcanic eruptions.

Nationwide round-up

Palace says Bayanihan 2 bill to be signed by mid-Sept

THE SECOND law covering measures for the coronavirus disease 2019 (COVID-19) response will be signed not later than mid-September, Palace Spokesperson Harry L. Roque said on Monday.

“I don’t think the first two weeks of September will pass without the bill being signed. I think they are aiming that the bill should be signed this week, next week at the latest,” he said in an online briefing.

The Bayanihan 2, or the Bayanihan to Recover as One Act, was approved by Congress on August 24 and transmitted to the President’s office that week.

Mr. Roque said President Rodrigo R. Duterte is still consulting the different departments before he signs the bill into law. — Gillian M. Cortez 

Additional P5B budget sought for DAR’s ‘mega farms’ project

TWO SOLONS have proposed an additional P5 billion budget for the Department of Agrarian Reform (DAR) to support its “Mega Farms” project, which aims to consolidate farmers beneficiaries for more viable commercial production.

House Deputy Speaker Luis Raymund F. Villafuerte Jr., representing the Camarines Sur 2nd District, and Magsasaka Party-list Rep. Argel Joseph T. Cabatbat backed DAR’s appeal for the additional allocation during Monday’s budget deliberation by the House of Representatives committee on appropriations.

DAR officials told the committee that they proposed a P32.96 billion budget for 2021, but the Department of Budget and Management granted only P8.85 billion.

DAR Undersecretary Bernie F. Cruz highlighted the importance of developing commercial farming through the Mega Farms project, citing that beneficiaries of the Comprehensive Agrarian Reform Program (CARP) have low productivity and many end up selling the parcel of land awarded to them.

Bayan Muna Rep. Carlos Isagani T. Zarate, on the other hand, questioned DAR’s consolidation program saying this contradicts the CARP’s very policy of subdividing vast tracts of lands.

“We ask for foreign loans to parcelize (lands), then we will fund it again for consolidation?” Mr. Zarate said in Filipino.

Mr. Zarate was referring to the P24 billion loan package granted by the World Bank to help fund the Support to Parcelization of Lands to Individuals Titling (SPLIT) program.

DAR Undersecretary Luis Meinrado C. Pangulayan explained that the consolidation involves joining agri-venture arrangements.

“It will be better for them to join agri-venture arrangements in their capacity as owners with the specifics of the land they own. It will not be a legal or practical impediment for a farmer who owns land title to join mega farm activities,” he said. — Kyle Aristophere T. Atienza

Bayan Muna not backing down on budget scrutiny

HOUSE REPRESENTATIVE Ferdinand R. Gaite of the Bayan Muna Party-list said nothing would stop them from “scrutinizing every penny, every nook and cranny” of the proposed 2021 budget despite the latest red-tagging of the government’s anti-insurgency task force.

“All porks will be revealed. No public money will be wasted.This is what we swore to do as representatives of the marginalized, no matter how Badoy calls us names,” he said.

He was referring to Communications Undersecretary Lorraine Marie T. Badoy, spokesperson of the National Task Force to End Local Communist Insurgency (NTF-ELCAC).

A recent lengthy post on the NTF-ELCAC official Facebook page, shared by Ms. Badoy, alleges that lawmakers from the Makabayan Bloc are “high ranking officials” of the Communist Party of the Philippines.

The post was made after Rep. Carlos Isagani T.  Zarate, also representing Bayan Muna, questioned last Friday the proposed P16.44 billion allocation for NTF-ELCAC, which he described as “pork.”

“They will be the one to certify and distribute (the funds). This is worse than the pork barrel of lawmakers. They will dispense P20 million per barangay. Can you imagine that?” Mr. Zarate said in Filipino.

Earlier, Bayan Muna also questioned the new definition of savings in the proposed 2021 national budget, which was added in Section 67 of the General Provisions of the National Expenditure Program, saying that it gives the President a “blank cheque” and undermines Congressional oversight.

Similar to Section 4 of the Bayanihan to Heal as One Act, the new definition will allow the executive branch of government to repurpose funds in “case of a declaration of a state of national calamity” as in the coronavirus outbreak.

“It erases the concept of separation of powers as well as checks and balances,” Bayan Muna said in a Viber message to reporters on Monday

The group told BusinessWorld separately that the Makabayan Bloc, which is composed of several party-lists, will soon “reveal” big chunks of pork that some government agencies have included in their budget proposals. — Kyle Aristophere T. Atienza

Collegiate sports training may start soon, says CHEd

In areas with relaxed quarantine setups

TRAINING for collegiate student-athletes may start soon amid the coronavirus pandemic, the Commission on Higher Education (CHEd) said in a press teleconference on Monday.

After thorough discussions with other government agencies tasked to oversee the return of sports activities in the country, the CHEd had decided to allow the conduct of training of student athletes but under strict health and safety protocols, the guidelines of which the commission hopes to put out in the next two to three weeks.

The CHEd is acting on the recommendation by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID), which, as announced by Presidential Spokesperson Harry Roque, has allowed the resumption of collegiate training in areas under general community quarantine and modified general community quarantine.

In allowing the return to training, CHEd Chairman J. Prospero E. De Vera III said they considered the importance of the “mental and physical health” of student-athletes during this time of the pandemic.

To come up with the appropriate training guidelines, the CHEd is setting up a technical working group, which will include officials of the Philippine Sports Commission (PSC) and Games and Amusements Board and representatives from collegiate leagues.

Mr. De Vera admitted that coming up with the guidelines would not be easy but stressed the need to have a concrete one to ensure the success of the return of training activities.

“Producing the guidelines will not be easy. For one, we are talking about a large group of student-athletes throughout the country. And second, there are a lot of sports disciplines involved. But we are talking to different people to come up with the right process to go about it,” said the CHEd chairman.

Mr. De Vera went on to clarify some key points, namely, no training should be conducted until the CHEd guidelines are out, covering all sports; exemptions will be given to student-athletes below 21 years old for them to train; and face-to-face classes are still not allowed despite the nod for the resumption of training for student-athletes. 

ON QUARANTINE VIOLATIONS
Meanwhile, the CHEd also shared updates during the press teleconference on the alleged quarantine violations of the men’s basketball team of the University of Santo Tomas (UST)and the women’s volleyball team of National University (NU).

Mr. De Vera said they have concluded their fact-finding report on alleged violations of IATF and CHEd advisories of said schools and had submitted it to the IATF for proper action.

The CHEd chief said they are letting the IATF come up with its own decision on the matter, but as far as the violations of CHEd advisories are concerned, the agency will be sending show-cause orders to UST and NU demanding them to explain why sanctions should not be imposed on them.

The UST Growling Tigers are currently in hot water for allegedly violating government health and safety protocols when they held a training in Sorsogon beginning in June, when it was still prohibited, as part of their preparation for UAAP Season 83 and other tournaments.

The NU Lady Bulldogs were also probed after reportedly breaking protocols when they gathered to train in a sports facility in Laguna.

Mr. De Vera said they will wait for the response to their show-cause order before deciding on sanctions.

“It is too early to conclude because what has been completed is just the fact-finding. We will just wait for their response,” he said.

Also present at Monday’s teleconference were Health Undersecretary Maria Rosario Vergeire, Philippine Sports Commission Chairman William Ramirez, Games and Amusements Board Chairman Baham Mitra, and PSC Training Director Marc Velaso.

Representatives from the Philippine Basketball Association, Chooks-to-Go 3×3 Pilipinas and Philippines Football League were also on hand to share some of the procedures they have been implementing since returning to training two weeks ago. — Michael Angelo S. Murillo

Djokovic disqualified from US Open

NOVAK DJOKOVIC OF SERBIA checks on a line judge after he unintentionally hit her with a tennis ball after losing a game to Pablo Carreno Busta of Spain (not pictured) on day seven of the 2020 US Open tennis tournament at USTA Billie Jean King National Tennis Center. — REUTERS

NEW YORK — World number one Novak Djokovic was sensationally disqualified in the US Open fourth round on Sunday after striking a line judge with a ball following a point during the first set of his match against Spain’s Pablo Carreno Busta.

Djokovic was becoming frustrated after squandering three set points when Carreno Busta served at 4-5, 0-40, then suffering a fall. Having dropped serve to trail 5-6, he swatted a ball reasonably hard to the back of the court, inadvertently striking a female line judge on her throat.

With the line judge screaming out in pain as she fell to the ground, a horrified Djokovic ran over to her and apologized.

Tournament referee Soeren Friemel came out on to the Arthur Ashe Stadium and spoke to chair umpire Aurelie Tourte and Andreas Egli, the Grand Slam supervisor, before a long chat with the 33-year-old Serb, a three-time former US Open winner.

Djokovic was clearly making the point that he had not intended to hit the official and was overheard to say “she doesn’t have to go to hospital for this”.

After 12 minutes of pleading, Djokovic’s fate was sealed.

The Grand Slam rules state: “Players shall not at any time physically abuse any official, opponent, spectator or other person within the precincts of the tournament site.

“The referee, in consultation with the Grand Slam chief of supervisors may declare a default for either a single violation of this code.”

Djokovic eventually walked over to shake hands with a stunned Carreno Busta and trudged off to face the music, although he later left the grounds in a black Tesla without attending a press conference.

He later posted an apology on Instagram: “This whole situation has left me really sad and empty… I‘m extremely sorry to have caused her such stress. So unintended. So wrong.

“As for the disqualification, I need to go back within and work on my disappointment and turn this all into a lesson for my growth and evolution as a player and human being. I apologise to the @usopen tournament and everyone associated for my behavior.”

It was a shocking end to the top seed’s hopes of winning an 18th Grand Slam title and moving within two of the men’s record total won by Roger Federer — something that had looked increasingly likely as the fortnight progressed.

It also brought to an end Djokovic’s 26-0 winning run since the start of the year, albeit in bizarre circumstances.

The USTA issued a statement saying that Djokovic would lose all the ranking points earned from the event and will be fined the $250,000 — his prize money for reaching round four.

“It’s the right decision,” Tim Henman, who was disqualified from Wimbledon for a similar incident in 1995, told Amazon Prime. “He is not aiming for the line judge, but has hit the ball away and you have to be responsible for your actions.”

Former champion Mats Wilander, analysing the action for Eurosport, said it was very unlucky for Djokovic, but that it had been the correct decision.

“You are not allowed to do that,” he said. “It’s as much bad luck as you can have on a tennis court. He didn’t just roll the ball back to the ball kid, that’s the bottom line.

“He hit it harder than he intended to, obviously a complete accident. It was a sign of frustration, yes. A little bit. But it doesn’t matter, you are not allowed to do it.”

WIDE OPEN
The incredible development has blown the draw wide open, especially with defending champion Rafa Nadal and Federer absent this year. Nadal opted not to travel to New York because of concerns over the COVID-19 pandemic, while Federer is recovering from knee surgery.

A world number one being defaulted sent shockwaves around Flushing Meadows which has witnessed many crazy events down the years, including two high-profile incidents involving Serena Williams, most recently in the 2018 final against Naomi Osaka when she was docked a game near the end.

Djokovic’s humiliating exit continues what has been a turbulent few months for him. He was criticised for organising the Adria Tour exhibition event in June, in which he and several players were tested positive for COVID-19.

He then dropped a bombshell on the eve of the Open by announcing he had resigned as president of the ATP Player Council to front a new players’ association. — Reuters

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