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The saga of transfer pricing continues

Last month, I wrote an article about the saga of transfer pricing in the Philippines. The tale begins in 1939 when the Commonwealth Act 466 or the “National Internal Revenue Code was passed. This is the source of the Commissioner of Internal Revenue’s (CIR) authority to review, allocate and distribute the income and deductions of related-party transactions (RPT), both cross-border and domestic, including intra-firm transactions between related parties, to determine the appropriate revenue and taxable income.

Since the birth of this authority, the Bureau of Internal Revenue (BIR) has issued several guidelines to put this authority in effect. While there were no official transfer pricing regulations in place then, the CIR exercised this authority from the actual accounts of tax cases in which the BIR assessed taxpayers whose transactions with related parties allegedly did not conform to transfer-pricing requirements.

To catch up with other countries with more established transfer pricing regulations, the BIR formulated the following notable administrative issuances in the past seven years:

(1) Revenue Regulations (RR) No. 2-2013 (The Transfer Pricing Guidelines) — requires taxpayers to maintain contemporaneous transfer pricing documentation or TDP;

(2) Revenue Audit Memorandum Order (RAMO) 1-2019 — provides standardized audit procedures and techniques in auditing taxpayers with a related party and/or intra-firm transactions to ensure that the audit is of good quality;

(3) RR No. 19-2020 — requires taxpayers to submit their Information Return on Related Party Transactions (BIR Form No. 1709) or RPT Form and its supporting documents, including the TPD, as an attachment to their Annual Income Tax Returns (AITR); and

(4) Revenue Memorandum Circular (RMC) No. 76-2020 — clarifies certain issues and provides answers to frequently asked questions on the filing of RPT Form and its attachments.

The latest development in transfer pricing is the issuance of RMC No. 76-2020 two weeks ago.

According to the RMC, the BIR’s rationale for requiring the submission of the RPT Form and TPD is to improve and strengthen its transfer pricing risk assessment and audit. The BIR will analyze the information gathered from these submissions when selecting taxpayers to be subjected to a tax investigation and in determining whether or not to conduct a thorough review/audit of a particular entity or transaction.

The BIR implied that not all RPTs can be examined because, given its limited resources, it will only focus its audit and commit its resources to the most important transfer pricing issues.

The RMC emphasized that all Philippine taxpayers with RPTs regardless of amount and volume of transactions must file the RPT Form and its attachments every year as an attachment to their AITR. However, eFPS filers have 15 days from the statutory due date or actual date of electronic filing of the AITR within which to submit the RPT Form and attachments. Taxpayers’ failure to comply will lead to a penalty of P1,000 up to P25,000, which is subject to further penalties.

eFPS filer or not, the manner of filing of RPT Form and attachments will be manual, to the Large Taxpayer Division or Revenue District Office where the taxpayer is registered.

The first to submit the RPT Form and its attachments are supposedly taxpayers with the fiscal year ended March 30 and filing due date on July 30, but the BIR extended the deadline until Sept. 30. Because of this extension, non-eFPS taxpayers with the fiscal year ended April 30 will instead become the first filers when they file their AITR on or before Aug. 15. On the other hand, eFPS filers’ filing due date of the RPT Form and attachments is on Aug. 30.

AITRs for the 2019 calendar year and for the fiscal year ending before March 31, on the other hand, are not covered by the mandatory submissions.

While the BIR prefers local TPD, TPD prepared by the parent company or the group (master file) covering the transactions with the Philippine related company is also acceptable. This TPD must be updated yearly in case there are significant changes in the business model, factors or conditions considered in drafting the TPD, and the nature of the RPTs. If there is none, the old TPD shall suffice.

In terms of covered RPTs, the RMC stated that the enumeration of RPTs in RR No. 19-2020 is not exclusive. The intention of the RR is to include within the term RPT all transactions between related parties that result in the transfer of resources, services or obligations, irrespective of their arrangement (with cost-recovery or cost-sharing or recharging) and regardless of whether a price is charged. Even dividends and redemption of shares between and among related parties, though not usually covered by a TPD, should likewise be disclosed in the RPT Form.

RR No. 19-2020 requires full disclosure of all RPTs in the RPT Form. Taxpayers cannot rely on the related party disclosures in their audited financial statements because of some lack of tax-related information. Some of this information are the names of each related party and its Taxpayer Identification Number, amount of tax paid in a foreign country, amount of tax withheld on income payment to foreign related parties, and declaration of whether or not the taxpayer availed of benefits under tax treaties.

Additionally, the BIR claims that some cost-sharing arrangements are abusive RPTs, therefore a formal written agreement or contract to prove the legitimacy of the transaction must be maintained in addition to other documents to substantiate the transaction.

These new filing requirements are not simple tasks, because all contracts are required to be attached to the RPT Form regardless of volume. In a normal sale or purchase of goods to or from a related party, for example, the contract or any equivalent genuine documents, sales invoices, delivery receipts and proof of payment of the consideration must be submitted. Just imagine the piles of documents the taxpayer must collate just to complete the submission.

Another challenge facing taxpayers is their accounting system’s ability to capture all the required information and if it can generate reports that suit the disclosure requirements of the RPT Form. Another system investment added onto the taxpayer’s plate. Moreover, the accounting system is not the only concern, but also who is responsible for gathering the information: Will it be the accounting or tax personnel?

Just like other tales, viewers will start asking questions as the storyline progresses. If the tale of transfer pricing in the Philippines were a TV drama, the present situation would put us in the early episodes — because the plot has just unfolded. Taxpayers are invited to wait excitedly for the release of other episodes.    

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.

 

Nikkolai F. Canceran is a partner from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

The COVID reality check for business owners

Is it time to change my business model?

I have seen many Facebook support groups for restaurant owners, business owners in general, and just about every SME that has founded a business the past decades or maybe even just a few months before COVID started, and all of us, myself included, have wondered how long ECQ and MECQ, and finally GCQ, will last.

I applaud those bold enough to open for services, like beauty salons, barber shops, and wellness centers, without fear that one infected client may cause the ultimate downfall of a business. It’s the only proof or test if our business will still survive the coming months. We just will find out sooner than later.

We were about to open a café in Cavite, right by our farm. All the equipment has been set in place, and tables and chairs delivered. Soon the maintenance guys would come to install the rest of the machines and we would be on our way to opening day. Or so we thought.

We know of friends who just opened their restaurants a year ago or just a few months ago and they now have to face accelerated depreciation of equipment and maybe even closure. A café across our store just advertised their equipment for sale. Another friend is selling two refrigerated vans at a discount.

So, we come to pinch ourselves to make sure that this is NOT just a bad dream. It is real and we have to face the music. It is real and we have to make tough decisions. To face the business squarely and check what our slim chances are of still making it. Of facing our suppliers and creditors to give us six months to a year to maybe liquidate or hopefully bounce back and be able to settle our bills.

Judging from the resilience I have been observing, here are some pivots and shifts which are proving to be useful and fairly successful.

COVID TREND No. 1 — Families cocooning at home

1. A bag designer has repurposed her fashion bags as home accent pieces.

2. A textile retailer repurposing fabrics for throw pillows instead of for clothes or bags.

3. An art gallery owner is selling art for people who are investing whilst staying home to enjoy the art pieces.

COVID TREND No. 2 — Families eating meals at home

1. Food suppliers selling pre-baked or pre-cooked food for reheating at home.

2. Food chains selling frozen versions of their top sellers.

3. Do It Yourself (DIY) kits of ramen and other dishes that don’t travel well.

4. Home delivery of groceries has become the norm.

COVID TREND No. 3 — Families having more time to learn something at home

1. Children can take language lessons.

2. Parents can take music lessons with their kids.

3. Art lessons and crafts are learned from YouTube and other internet sources.

What are these trends telling us?

Our business must morph or transform into a new model of itself. We just cannot insist on the same old model for our business. Every business is changing into a COVID VERSION of its mission and vision. An adaptable version is much needed.

Even banks have to do fintech or they die.

Even advertising agencies have to break up and serve smaller clients.

Even consulting companies now have to provide services fit for MSMEs.

Travel and tour companies have to regroup.

Events companies must now use virtual places.

So, every business must transform or die. It used to be “differentiate or die.” Now, it’s transform, innovate and use all the creative juices we have to change our business model.

And if we still insist on doing the usual, and keep harping on Pre-COVID and Post-COVID (if there is such a thing), we will keep stopping ourselves from thinking out of the box.

Think positive. Yes, think: What if every one of your clients tested positive?

Think positive. What if one of your staff suddenly is tested positive?

I am an optimist but also a realist. COVID-19 is here to stay and we have to roll with the punches. Either we change now or it will change us.

THINK POSITIVE. There is another business model waiting to be discovered and it’s for you.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

 

Chit U. Juan is a member of the MAP Inclusive Growth Committee and the President of the Philippine Coffee Board Inc.

pujuan29@gmail.com

map@map.org.ph

http://map.org.ph

Terrorism, revisited

The battle against the COVID-19 pandemic has taken most of the time, resources, and energy of the government, and much has been written about the exasperation of citizens with the seeming lack of cohesion and unified action of authorities to mitigate the effects of the health emergency. In a move that is seen more as a panic reaction rather than as part of a strategic plan, the government has deployed the military and police to the frontlines, literally, to carry out its major strategy to address the health crisis: for people to practice social or physical distancing.

Utilizing the security forces, especially the military, in an erstwhile civilian concern poses several issues that I have, time and again, argued in this column. Foremost of which is that it securitizes a problem, in this case a health issue, and utilizes military-style solutions to a civilian concern. Note that military-solutions are, most often, not appropriate to civilian issues since the training and doctrine of the military are very different from that of civilians. The military is trained to defend national sovereignty and hence, their ways are focused on “mission accomplishment” rather than “process compliance” which is, on the other hand, the focus of civilian units. (‘Process compliance’ is the major reason why the Civil Service Commission and Commission on Audit have instituted numerous requirements and procedures for government employees. I am not claiming that the military bypasses the government processes; my beef is the fact that in most cases, they have a different set of requirements precisely because their focus and mission are different.)

The second issue, and the heart of this article, is the fact that using the military to handle civilian problems divert its attention from what it is supposed to focus on, that is, addressing national security issues that threaten or undermine the authority of the democratically elected government. Terrorism currently tops this list.

Terrorism is not a new issue. But there is renewed interest in it due to the recent passage of the Anti-Terrorism Law (ATL). Many have criticized the law, alleging that some provisions violate the constitution. As of this writing, a number of petitions by human rights and civil society organizations (CSOs) have been submitted to the Supreme Court. In contrast to the posturing of CSOs, the military and police institutions favor the ATL’s passage. This is not surprising since these institutions have long been lobbying for a law that would either amend or replace the 2007 Human Security Act (HSA), the country’s supposed anti-terrorism law.

The current Philippine reality with regard the issue of terrorism can be summarized in five points: 1.) The Human Security Act (2007) is inoperable and inadequate (and was hardly used since its passage); 2.) There is no comprehensive national strategy and plan dealing with terrorist groups (very few were involved in the formulation of the 2019 National Action Plan, undermining its claim to be “comprehensive and national”); 3.) The policy directives of national government and local government units (LGUs) regarding terrorist groups are conflicting; 4.) the border control in the Sulu sea is extremely weak, making it an attractive back-door channel for foreign terrorists to enter the country; and, 5.) The nature of terrorist groups have evolved — they employ both armed/ military action as well as political-ideological work to “win the hearts and minds” of their target public.

In the absence of an effective legal platform, clear guidelines, and a comprehensive security plan, short-term programming of interventions are done and ad-hoc arrangements are adopted by LGUs to address the security problem. The military and police handle the armed/military actions of terror groups, but there’s no clarity on which civilian units are supposed to manage the political-ideological battle space. Security institutions, in a way, are forced to also fill in this gap. This situation makes a military solution normalized since civilian units have unclear directives and mandates vis-a-vis dealing with terrorist organizations.

This is the context on why an effective Anti-Terrorism Law is necessary. While I concede that there are provisions in the current ATL that are dangerous and can be abused, as highlighted by critics, it should be noted, however, that the ATL likewise provides the security institutions a stronger legal platform to address terror organizations. A few of these highlights include: a.) it expands the coverage of the penal provision to include acts of terrorism outside of the Philippine territory; b.) it strengthens the legal framework for international cooperation against terrorist groups; c.) it strengthens the Anti-Money Laundering Act relative to terrorist financing; d.) It provides clarity on who is ultimately in charge of terrorism problems (i.e., the Anti-Terrorism Council or ATC); and, e.) it adopts the “whole of government/whole of nation” approach as the national government’s framework versus terrorism, thereby giving a clearer mandate to government civilian agencies to be involved in addressing issues being used by terror groups to recruit.

However, a legal platform like the ATL is only one of the many interventions needed to address the problem. Coinciding with it should be an improvement of good governance practices in areas that remain to be recruitment hotspots; as well as an improvement in the border control and management especially in the Sulu Sea.

But the biggest challenge in the country’s fight against terrorism is the necessity and urgency to improve the capacity, professionalism, and credibility of our security and justice institutions. The strong opposition to the ATL stems not just from its questionable provisions, but also due to the credibility problem of the frontline agencies tasked to implement it. Until the public is assured that the security and justice institutions are committed to democratic governance and the rule of law, opposition to the ATL and similar interventions will continue to mount.

In the end, the dilemma remains — we need a strong legal platform to address the ways of terrorist groups and individuals, but we also need equally strong safeguard provisions to ensure that these legal measures will not be used against legitimate dissent and opposition to the government.

 

Jennifer Santiago Oreta is the Director of the Ateneo Initiative on South East Asian Studies, and an Assistant Professor of the Department of Political Science of the Ateneo de Manila University. She is also the Executive Director of the civil society organization Human Security Advocates.

In 2020, commerce was forced to change — but consumer expectations will drive further transformation

By Safdar Khan

For most of us, the COVID-19 pandemic and its repercussions have been unprecedented — at least by this order of magnitude. A broad array of impacts has been felt at the most individual level, all the way through to the levels of the international community and the global economy. Anecdotally, it certainly feels like there’s been a change in how we’ve been conducting commerce in response to the pandemic — and the figures certainly back this up.

The latest set of Mastercard Impact Studies has revealed how extraordinary events influence consumers and business professionals, with major markets in Southeast Asia seeing drastic jumps in participation in digital commerce. For example, in the June edition of the study, nearly half of the respondents in Malaysia, Singapore, and Thailand had increased their use of online shopping services over the course of a single month. During the same period, 40% or more of the respondents in Malaysia, the Philippines, Singapore, and Thailand said they had increased their usage of home delivery services. The research also found that roughly 60% to 70% of the respondents had decreased their usage of physical cash, while many had increased their use of contactless payments through their cards and their smartphones — in part, it would seem, to reduce their amount of physical interactions with others. There is no doubt that the way we do business has inexorably changed, and that change will continue past the era of lockdowns and social distancing.

It’s been fortunate for the sake of a continuing sense of normalcy that we’ve had the technology to keep many aspects of our lives going. There is some irony to the fact that a crisis that drove us out of our offices, away from social gatherings, and into our homes, has in some ways actually resulted in greater connectivity than ever before and also forced many to quicken their pace of technology adoption. With shopping and payment habits now irrevocably changed, the question on everyone’s minds now is whether the world is coming up on a kind of “static” new normal, or facing a period of ongoing commercial evolution? I believe we’re looking at the latter.

For many consumers in Southeast Asian, the pandemic necessitated them having their first experiences with e-commerce, which if you think about it, is quite a big jump to make. Where once many people had to go out, perhaps get into a car or on a scooter, drive to a supermarket or mall, get cash out of their wallet, and carry everything home, they’ve transitioned into a new way of doing things — tapping a few times on their smartphone, perhaps authenticating their payment with a fingerprint scanner, and having items delivered to their door later that day. Interestingly enough, e-commerce spend growth is increasing rapidly, even among older consumers who traditionally favored traditional stores and markets.

We call this moving towards a more “frictionless” economy, and this new seamlessness is the platform on which many businesses are going to be competing and surviving moving forward. When someone has to count out cash, hand it to a cashier, and wait for change — this is an example of friction. When a customer simply pulls out their card or smart device and holds it over a POS terminal to make a contactless payment, this is an example of a more frictionless transaction. As consumers come to expect increased seamlessness in their day-to-day lives, the reduction of this friction is going to be one of the key levels on which businesses compete.

At Mastercard, we’re actively developing and implementing multi-rail infrastructure with businesses and governments that allow payments to happen in real time across any number of platforms and using any number of devices. At the moment, payments tend to involve items like physical credit and debit cards, smartphones, and smart watches — but the Internet of Things (IoT) is rapidly expanding the number of possible rails, which will in turn, reduce the amount of friction in the economy and our everyday lives, irrespective of whether we’re at home or at work.

By now, the example of the IoT-enabled refrigerator that restocks itself automatically is kind of cliché, but it is a good example of where things are headed — though it’s by no means the final destination. Multi-rail payment infrastructure will allow for totally frictionless experiences, while also enabling the possibility of “digital conversations” between merchants and consumers, where for instance, a shopper’s smartwatch might track certain behaviors and offer them discounts or rewards based on that. Of course, payments will undergird all of these experiences, but it will cease to be a significant part of the process of going shopping, commuting, traveling, and dining.

In much the same way that we don’t think about turning on a tap in our house and getting water, or flicking a switch and turning on a lightbulb, the future of commerce will be one where there is a payments infrastructure in place that allows us to meet our needs at any time, with little to no effort. At Mastercard, we’re not just thinking about what can be done at this moment to improve payments — we’re in the business of working out what the future of commerce may look like as a part of day-to-day life, and how access to innovative technology can help everyone thrive, in both good times and challenging ones.

 

Safdar Khan is Mastercard’s Division President of Southeast Asia Emerging Markets.

Revitalizing these four areas will help developing Asia cope with the new normal

By Shixin Chen

TO DATE, more than 700,000 people around the world have died from the coronavirus disease 2019 (COVID-19). The pandemic has brought despair to countless families and caused unprecedented economic damage. The response has been significant: governments halted global travel, imposed nationwide lockdowns, quarantined large swaths of the population, and scaled up medical care services. Governments have also funded the development and production of testing technology, in addition to the ongoing search for a vaccine.

Yet, it is widely accepted that even when a vaccine is ready and effective, the virus is likely to persist given challenges associated with universal vaccination. The highly contagious nature of the virus means that where there are resurgences in cases, areas that have reopened will need to reimpose restrictions. This is the pattern that we are seeing playing out in several countries including Kazakhstan, the People’s Republic of China, and, most recently the Philippines, where more than 27 million people in Manila and surrounding provinces returned to modified lockdown in early August.

So, we must learn to live with the virus. In this uncertain “new normal,” the prospects for rapid economic recovery are limited. A return to business-as-usual looks unlikely, too, and may not fully restore the economy. Focusing on high-impact segments of the economy is therefore an efficient approach to reaching a new normal.

Revitalizing four key areas can help developing Asia cope with the new normal and find a path to economic recovery.

First, revitalize the health sector. Due to the lack of long overdue investment, there is a significant gap not only in hospital infrastructure, but also at the primary care level including human resources necessary to staff effective health systems. In response to the pandemic, developing Asia has made record investments in strengthening the health sector. For example, the Indian government in April sanctioned approximately $1.9 billion to address the immediate gaps in strengthening the COVID-19 response by scaling up delivery of services. This was followed by the recent announcement of a major program to comprehensively strengthen the public health system. Bangladesh, Nepal, Pakistan, Uzbekistan, and Kazakhstan have adopted similar approaches in their pandemic response plans. There is also a sizable gap in health-related sectors such as pharmaceuticals and health insurance. Current levels of investment are insufficient to achieve Universal Health Coverage (UHC), however, countries have committed to achieving UHC by 2030. ​The health sector has huge growth potential.

  

Second, revitalize the social protection sector which remains fragile and underfunded in developing Asia. In response to COVID-19, great efforts have been made to ensure that affected populations are covered by social safety nets. For example, in the Philippines the government introduced an emergency subsidy program to provide monthly cash payments to 18 million low-income families for two months. In India the government announced a scheme to provide free food to 800 million people until November 2020, as well as direct cash transfers and free cooking gas to women, the old, and socially disadvantaged groups. The Pakistani government has allocated $1.2 billion for emergency cash transfer payments to 16.9 million poor households including daily wage workers. Yet, social protection schemes require long-term efforts to develop, including establishing disaggregated databases, registration and monitoring systems, and strong budget support. The development of the social security sector will help promote economic inclusion and sustainable growth.

Third, revitalize digital technology. The pandemic is transforming people’s behavior and social norms. Working from home has completely changed people’s mindset. Web-based collaboration and sharing platforms have been widely recognized for their effectiveness in facilitating remote collaboration and co-working, while webinars are successfully replacing physical seminars. More importantly, digital technology has been widely and effectively used to promote trade and tourism, support small and medium-sized enterprises, and boost microfinance. It is being used increasingly in government, procurement, and education. Strategically developing digital technology will have a huge impact on the quality of growth.

Fourth, revitalize the global supply chain. During the great lockdown, the global supply chain virtually came to a standstill, resulting in incalculable job losses and economic damage around the world. For example, Bangladesh’s exports of apparel products were affected due to cancellation or suspension of orders, while international contracting projects in Pakistan, Nepal, Uzbekistan, and Georgia were largely suspended due to the interruption of raw materials supply. The pandemic has highlighted the need for urgent reform of the global supply chain. We must pursue high-level multimodal transport, more effective trade facilitation, and stronger trade and supply chain financing mechanisms. In addition, further enhancing the international network of global supply chains will help to ensure that goods continue to flow in the face of disruptions. The global supply chain is the main artery of the world economy and its smooth flow is the basis of economic recovery.

Developing Asia has experienced many crises and disasters and has always bounced back. Following the Asian financial crisis, which severely hit the banking sector, the region adopted painful but necessary regulatory reforms of its systemically important financial institutions. These reforms introduced vital resilience into the Asian banking system, enabling it to survive the Global Financial Crisis a decade later. The COVID-19 pandemic should give us similar inspiration — the more severe the crisis, the greater the chances for reform and revitalization.

As we confront the new normal, a return to business as usual looks unlikely and may not fully restore the economy. Instead, a unique revitalization in these areas can offset losses and help realize developing Asia’s potential.

 

Shixin Chen is Vice-President (Operations 1) of the Asian Development Bank. He is responsible for operations in the South Asia Department and the Central and West Asia Department.

Morikawa’s late eagle secures 2-shot PGA Championship win

SAN FRANCISCO — Collin Morikawa made a stunning late eagle after the drive of his life to pull away from a jam-packed leaderboard and secure a two-shot victory at the PGA Championship on Sunday in only the second major start of his career.

The 23-year-old American, who began the day at Harding Park two shots back of overnight leader Dustin Johnson, shot a bogey-free six-under-par 64 to reach 13 under for the tournament.

Former world number one Johnson (68) and English Ryder Cup veteran Paul Casey (66) finished in a share of second place, while the wheels came off Brooks Koepka’s (74) bid for a third straight PGA Championship title early on.

Morikawa, whose only mistake of the day came when the lid fell off the Wanamaker Trophy as he lifted it up on the 18th green, said he was on “cloud nine” after the win.

“It’s hard to think about what this championship means, and obviously it’s a major, and this is what guys go for, especially at the end of the their career, and we’re just starting,” he added.

The first major of the COVID-19 era, played without fans on a cypress-lined municipal course, looked headed for a playoff as the day began with 11 players within three shots of Johnson, and at one point late in the round seven players shared the lead.

Morikawa got his nose in front at the par-four 14th where he chipped in from 54 feet for birdie.

Then, after narrowly missing a birdie at 15, Morikawa hit the shot of the tournament as his drive at the 294-yard par-four 16th settled seven feet from the cup to leave him with a putt for eagle.

“We were just hoping for a really good bounce, and we got it, hit a really good putt, and now we’re here,” said Morikawa, who collected the third win of his career and the second since the PGA Tour resumed in June.

With the win, Morikawa joins Jack Nicklaus, Tiger Woods and Rory McIlroy as the only players since World War Two to win the PGA Championship at age 23 or younger.

‘WASN’T MEANT TO BE’
Koepka began the day two shots off the lead but slid out of contention after going four over on the front nine, a stretch that included three consecutive bogeys going into the turn as he struggled with the thick rough and green speeds.

“You know … wasn’t meant to be,” said Koepka. “Three in a row, you’re not really supposed to do two in a row looking at history, but that’s all right. Got two more (majors) the rest of the season and we’ll figure it out from there.”

Koepka finished on three under for the tournament, tied for 29th.

Johnson, who was in a share of the lead late in the day, suffered a bogey at 14 shortly after Morikawa made his move. He is the first player to finish runner-up at the PGA Championship in consecutive years since Nicklaus (1964, 1965).

Casey was tied for the lead when he reached the 17th but his hopes of a maiden major championship suddenly slipped away as Morikawa, one group behind, hit the tee shot that led to an eagle and a two-stroke cushion.

“I played phenomenal golf and there’s nothing I would change,” Casey said after his best finish in a major.

“The glorious shots Collin hit like on 16 to make eagle, you have to tip your cap … He’s already sort of proved it but he’s really stamped his authority of how good he is today.”

Woods, who said he would skip next week’s PGA Tour event, finished with a three-under 67 for a share of 37th place. — Reuters

Ardina, Pagdanganan finish LPGA Marathon Classic strong

By Michael Angelo S. Murillo, Senior Reporter

FILIPINA golfers Dottie Ardina and Bianca Pagdanganan ended their respective campaigns at the LPGA Marathon Classic in Sylvania, Ohio, strong on Monday (Manila time).

Ms. Ardina carded a 4-under 67 on the final day of the tournament at the Highland Meadows Golf Club to finish at joint 20th place while Ms. Pagdanganan, playing in her second professional tournament, scored an even par 71 for joint 59th place.

Twenty-six-year-old Ardina, who turned professional in 2013, was steady throughout the tournament, improving her scores in each of the rounds.

She opened her campaign with a 1-over par 72 then improving on it in the second round with 1-under par 70. Ms. Ardina scored a 2-under par 69 in the third.

In the final round, Ms. Ardina had a bogey on the fifth hole but recovered on her way to her best output of the tournament for an overall total of 278, nine shots off champion Danielle Kang of the United States.

Ms. Ardina was joined in 20th place by Xiyu Lin of China, Stephanie Meadow of Northern Ireland, Jenny Shin of South Korea, and Peiyun Chien of Chinese-Taipei.

For her efforts in the just-concluded tournament, Ms. Ardina received $18,138.

FINDING HER FOOTING
Ms. Pagdanganan, meanwhile, continued to find her footing as a pro tour player at the LPGA Marathon Classic.

Her final round push in the tournament was hit by two double bogeys on the sixth and 16th holes, making it tougher for her to make up for lost ground after a rough third round where she had a score of six-over par 77 and fell to 62nd place.

Interestingly, Ms. Pagdanganan, who won gold medals for the Philippines in the 2018 Asian Games and 2019 Southeast Asian Games, started strong in the first two rounds, carding a 69 and 67 in the opening and second rounds, respectively, which saw her barge into the top 10.

Her second round 67 was punctuated by consecutive eagles on the 17th and 18 holes.

After four rounds, Ms. Pagdanganan had a total score of 284.

She is joined in 59th spot by Angel Yin, Cheyenne Woods and Amy Olson of the United States and In Gee Chun and Haeji Kang of South Korea. Ms. Pagdanganan received $4,125 for her efforts.

The LPGA Marathon Classic was the second tournament on the Tour by the University of Arizona graduate Pagdanganan.

She made her Tour debut at the LPGA Drive On Championship at Inverness last week where she finished at joint 28th place. Ms. Pagdanganan impressed in her debut, topping the tournament in average driving distance at 295.33.

Back in 2018 in the Asian Games in Indonesia, Ms. Pagdanganan teamed up with Yuka Saso and Lois Kay Go to win the gold in women’s team golf.

She then bagged another gold medal in individual golf for the country in last year’s SEA Games held here.

The LPGA moves to Scotland for the next two weeks with the Aberdeen Standard Investments Ladies Scottish Open (Aug. 13-16) and AIG Women’s Open (Aug. 20-23).

The Tour returns to the United States for the Walmart NW Arkansas Championship Presented by P&G (Aug. 28-30).

PUBG mobile national championship qualifiers kick off today

THE qualifying phase of the PlayerUnknown’s Battlegrounds (PUBG)Mobile Philippines National Championship (PPNC) kicks off its four-day stretch on Tuesday, Aug. 11.

Organized by the Philippine Pro Gaming League (PPGL) in partnership with Mineski Philippines and Globe Telecom, and in cooperation with Tencent, the PPNC is the first-ever PUBG Mobile tournament to be staged by the league.

PPGL said the PPNC is a continuation of its push for esports in the country and to enhance further its standing as the biggest multi-game esports league in the country.

The esports league recently concluded its season. It said the PPNC will be an all-online tournament wherein teams will be playing from the comforts and safety of their homes amid the current situation with the COVID-19 pandemic.

In the qualifiers, happening until Aug. 14, an initial field of 32 teams battle it out with 16 teams advancing after to the group stages to be held from Aug. 19 to 20. The grand finals of eight teams will have the squads slugging it out from Sept. 2 to 3.

The top four teams of the tournament will represent the Philippines in the PUBG Mobile Club Open Fall Split 2020: SEA Wildcard, seeding straight into the regional finals. The regional leg is an opportunity for top teams across Southeast Asia to advance to the world stage.

The maiden run of the PPNC will have a prize pool of P430,000.

The PlayerUnknown’s Battlegrounds is one of the most popular mobile shooting games in the country. — Michael Angelo S. Murillo

Brandon ‘The Truth’ Vera gets added motivation from becoming a father

NOT that he really needs one but ONE Championship world heavyweight champion Brandon “The Truth” Vera got added motivation after recently welcoming his son Atreyu Timothy with wife Jessica.

Always anchored his game on passion and much hard work, Mr. Vera, 42, shared that becoming a father at this stage of his life and career has added extra motor for him to continue what he does and succeed in it.

“It is easier to wake up. I can agree with this statement. I feel more motivated. I get tired less. I don’t know how and why, but that happened,” said Mr. Vera, who joined ONE in 2014 and instantly made waves, winning the inaugural world heavyweight title.

“I can’t describe how Atreyu was born just like I can’t describe what it’s like to win in the ONE Circle. It’s two peas in the same pod, no words would ever do that justice,” he added.

The veteran Filipino-American fighter, who has had memorable encounters with mixed martial arts legends like Randy Couture, Jon Jones, Mauricio Rua and Frank Mir in his career, said he does not see becoming a father intervening in what he wants to accomplish in ONE Championship as what others may be preserving.

“Everybody keeps saying priorities change, I am not of that same mindset. Family has always been number one for me. I have been waiting for a long time to change diapers, feed the baby, and train with my child in the gym. All plans are still the same. We’re the world champ, we act accordingly and we keep our title until we decide it is time for the next step,” said Mr. Vera.

Since seizing the world heavyweight title, Mr. Vera has stayed on top of the division in ONE, successfully defending his title three times already.

He competed for the light heavyweight title in his last fight in October 2019 against reigning champion Aung La N Sang but failed in his bid to become a two-division world champ, falling to the Burmese fighter by technical knockout (punches) in the second round.

ONE recently has been shoring up the heavyweight division, signing up fighters like Brazilian Marcus Almeida, India’s Arjan Bhullar and Iranian Ali Abdelaziz, giving Mr. Vera new challenges when he returns to fight.

The Truth, however, is undaunted and expressed his readiness to take on all-comers for his title.

“The level of competition has just increased exponentially. ONE Championship is making a very comfortable home for the big boys and giving me a lot of work to do. I’m looking forward to all of it. I’m going to train right now!” said Mr. Vera.

ONE Championship, meanwhile, stages its second live event on Aug. 14 after taking a long break because of the coronavirus pandemic.

Dubbed ONE: No Surrender II, the event to be held at the Impact Arena in Bangkok, Thailand, will be headlined by the bantamweight muay thai clash between Thais Saemapetch Fairtex and Rodlek PK.Saechai Muaythaigym. — Michael Angelo S. Murillo

Former NBA champion Westphal diagnosed with brain cancer

THE PHOENIX SUNS announced on Sunday that former player and coach, and basketball Hall of Famer, Paul Westphal has been diagnosed with brain cancer.

Westphal, 69, won an NBA Championship with the Boston Celtics before moving to Phoenix in 1975. He averaged 20.6 points in six seasons with the Suns and led them to their first-ever NBA Finals appearance in 1976, losing to the Celtics.

Westphal enjoyed similar success as a head coach, overseeing the Suns’ trip to the NBA Finals in 1993.

“The Phoenix Suns organizations share their unwavering support for Paul Westphal and his family during this challenging time. We are devastated to hear of his brain cancer diagnosis,” the Suns said in a statement to the NBA.

“Paul has been an iconic cornerstone of the Suns franchise for decades, both as an outstanding player and coach. His tenacity … led the franchise to two NBA Finals appearances and his impact on the community extends well beyond the hardwood.”

A five-time All-Star, Westphal was inducted into the Naismith Memorial Basketball Hall of Fame in 2019. — Reuters

LeVert, Harris lead Nets past Clippers

CARIS LEVERT had 27 points and 13 assists, leading the Brooklyn Nets to a 129-120 victory over the Los Angeles Clippers on Sunday near Orlando.

Joe Harris scored 23 of his 25 points in the first half before fouling out late in the contest. Tyler Johnson scored 21 points, Garrett Temple added 19, and Jarrett Allen finished with 16 points and 16 rebounds for the Nets (34-36).

Kawhi Leonard had 39 points, six assists and four steals for the Clippers. Lou Williams scored 18 points, while Marcus Morris Sr. contributed 15. Terance Mann chipped in 14.

The Clippers (47-23), playing the second game of back-to-back contests, rested All-Star forward Paul George. Clippers guard Patrick Beverley (calf) missed his third straight contest.

The Nets held a double-digit lead for much of the fourth quarter before a four-point play by Morris cut the advantage to 120-114 with 1:54 left. After the two teams traded scoring possessions, Johnson made two foul shots with 59.5 seconds remaining to seal the win for the Nets.

Eleven straight points by Leonard to open the third allowed Los Angeles to tie the score at 74 less than three minutes into the quarter. After the two clubs exchanged 3-pointers, Brooklyn went on a 15-6 run for a 92-83 lead after a dunk by Rodions Kurucs with 4:26 remaining in the third.

But the Clippers rallied again, cutting the deficit to 95-94 on a 3-pointer by Williams at 1:40 left before the Nets took a 98-94 lead heading into the fourth.

The Nets roared to a 45-24 by the end of the first quarter by converting 18 of 21 shots from the floor — including 8 of 10 3-pointers. LeVert (17 points) and Harris (16) combined to outscore the Clippers by nine in the quarter.

Brooklyn led 74-63 at the break.

The Nets outshot the Clippers 55.3 percent to 48.4 percent for the game. They also connected on 20 of 43 3-pointers compared to 13 of 36 for the Clippers. — Reuters

HK tycoon arrested under national security law

HONG KONG — Hong Kong media tycoon Jimmy Lai became the highest-profile arrest under a new national security law on Monday, detained over suspected collusion with foreign forces as scores of police searched the offices of his Apple Daily newspaper.

Mr. Lai, 71, has been one of the most prominent democracy activists in the Chinese-ruled city and an ardent critic of Beijing, which imposed the sweeping new law on Hong Kong on June 30, drawing condemnation from Western countries.

His arrest comes amid Beijing’s crackdown against pro-democracy opposition in the city and further stokes concerns about media and other freedoms promised to the former British colony when it returned to China in 1997.

It “bears out the worst fears that Hong Kong’s National Security Law would be used to suppress critical pro-democracy opinion and restrict press freedom,” said Steven Butler, the Committee to Protect Journalists’ Asia programme coordinator. “Jimmy Lai should be released at once and any charges dropped.”

Ryan Law, Apple Daily’s chief editor, told Reuters the paper would not be intimidated by the raid.

“Business as usual,” he said.

The new security law punishes anything China considers subversion, secession, terrorism and collusion with foreign forces with up to life in prison. Critics say it crushes freedoms, while supporters say it will bring stability after prolonged pro-democracy protests last year.

Mr. Lai had been a frequent visitor to Washington, where he has met senior officials, including Secretary of State Mike Pompeo, to rally support for Hong Kong democracy, prompting Beijing to label him a “traitor.”

Hong Kong police said they had arrested seven men, aged 39-72, on suspicion of breaching the new security law, without naming them, adding that further arrests were possible.

Apple Daily, which posted on its Facebook page a livestream of dozens of police officers entering its premises, reported Mr. Lai was taken away from his home early on Monday. The paper said one of Mr. Lai’s sons, Ian, was also arrested at his home.

In the live feed, officers were seen roaming through the newsroom, rifling through files.

Staff were asked to show identity documents. Some executive offices were sealed off with red cordons. The police later wheeled in stacks of empty plastic containers.

Mr. Lai himself was brought back to the office in handcuffs later. One Apple Daily reporter asked Mr. Lai what he thinks of his arrest, and Mr. Lai responded: “They have to arrest me, what can I think?”

Police said they had a court warrant. The law allows police to search premises without one “under exceptional circumstances,” and also allows seizing documents, equipment and financial assets.

‘THIRD-WORLD’
An Apple Daily source said that other senior executives in the company were among those targeted and that police were searching their homes.

“We are arranging lawyers and so on to defend ourselves. We see this as straight harassment,” the source said, adding that Mr. Lai was arrested on suspicion of sedition, criminal fraud and colluding with foreign forces.

Shares of media company Next Digital, which publishes Apple Daily, plunged as much as 15.5%.

Hong Kong Journalists Association Chairman Chris Yeung said the search was “horrible.”

“I think somewhere in third-world countries there has been such kind of press freedom suppression; I just didn’t expect it in Hong Kong.”

Answering questions on Mr. Lai’s arrest, Taiwan Premier Su Tseng-chang told reporters in Taipei: “China should not treat Hong Kong this way.”

“We still urge the Chinese government to keep its promise and respect Hong Kong’s democracy and freedom,” Mr. Su said.

The law has steered China further on a collision course with the West, prompting countries including Australia, Canada and Britain to suspend extradition treaties with Hong Kong.

On major cases in Hong Kong, the central government in Beijing can claim jurisdiction. The legislation allows agents to take suspects across the border for trials in Communist Party-controlled courts.

CHILLING EFFECT
Mr. Lai was also arrested this year on illegal assembly charges, along with other leading activists, relating to protests last year.

In an interview with Reuters in May, Mr. Lai pledged to stay in Hong Kong and continue to fight for democracy even though he expected to be one of the targets of the new legislation.

Before Monday, 15 people had been arrested under the law, including teenagers.

The new legislation has sent a chill through Hong Kong. Activists have disbanded their organizations, while some have fled the city altogether, prompting, in some cases, arrest warrants in their name for suspected violation of the new law.

The United States on Friday imposed sanctions on Hong Kong leader Carrie Lam and other top officials for what it says is their role in curtailing political freedoms in the territory, drawing mockery and condemnation from Beijing.

The arrest reflects that Hong Kong “wasn’t intimidated” by sanctions, Hu Xijin, editor of Global Times, said in a tweet. Global Times is published by the People’s Daily, the official newspaper of China’s ruling Communist Party. — Reuters

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