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3 drug den operators in Lanao del Sur busted

COTABATO CITY — Anti-narcotics agents clamped down three drug den operators in an entrapment operation in Barangay Western Wao in Wao town in Lanao del Sur on Monday.

Gil Cesario P. Castro, director of the Police Regional Office-Bangsamoro Autonomous Region in Muslim Mindanao (PRO-BARMM), told reporters on Wednesday that Saadudin Mitmug Bagul, who is a security guard, and his cohorts, John Mark Villasista Tolentino, and Jayson Belong Valeria are now detained, awaiting prosecution.

The operators were immediately arrested after selling P68,000 worth of crystal meth (shabu) to non-uniformed Philippine Drug Enforcement Agency-BARMM agents and personnel of units under the Lanao del Sur Provincial Police Office in a trade off right in the premises of their drug den at Purok 5 in Barangay Western Wao.  — John Felix M. Unson

Maharlika tapped to study financing options for nuclear tech introduction

HOLTEC

By Sheldeen Joy Talavera, Reporter

THE Department of Energy (DoE) said it tapped Maharlika Investment Corp. (MIC) to assist in studying how to finance the introduction of nuclear energy technology to the Philippines.

“We have asked the Maharlika to study the costing and what financing mechanisms might be available,” Energy Secretary Raphael P.M. Lotilla said on the sidelines of the Philippine International Nuclear Supply Chain Forum on Wednesday.

The DoE wants to explore how to raise financing “in such a way that the upfront cost in building nuclear power plants will not be shouldered alone by the current generation of Filipinos.”

Mr. Lotilla noted, however, that there are still no decisions on investments involving Maharlika. “We are taking advantage of the people that they have to study the financing options.”

MIC President and Chief Executive Officer Rafael D. Consing, Jr. has said that energy is one of the priority investment areas of the sovereign wealth fund, and is expected to take up the bulk of its initial investments.

MIC is looking to raise $1 billion to fund energy projects.

Mr. Lotilla said that the investment in nuclear technology will be determined once the government decides on related issues, such as the sites of the power plants.

Maharlika’s participation in nuclear-power investments remains uncertain, according to Patrick Aquino, Energy Utilization Management Bureau director. He added, though, that he would not be surprised if the fund did invest eventually.

“For a country like us and our aspirations, electric power is a big component.  We leave it up to the sound judgment of Maharlika whether it comes in at whatever stake,” he told reporters separately.

Under the Philippine Energy Plan, the government aims to have commercially operational nuclear power plants by 2032 with at least 1,200 megawatts (MW), and 2,400 MW by 2035.

Pakistan seeks PHL guarantee to buy specific volumes of rice

REUTERS

PAKISTAN is seeking to increase its exports of rice to the Philippines if the latter commits to take up a guaranteed volume, its ambassador to Manila said.

“We are the third-largest exporter of rice to Philippines next to Vietnam and Thailand…Our own share is less than 6%. We want to increase that share,” Ambassador Imtiaz Ahmad Kazi told reporters on the sidelines of a rice conference.

According to the Bureau of Plant Industry, Pakistan supplied 178,179 metric tons (MT) of rice to the Philippines as of Nov. 7. This is around 5.2% of the 3.9 million MT (MMT) in imports to date.

“That depends on a number of conditions… the Philippines should guarantee us that they want (a specific volume) of rice every year,” he said.

Mr. Kazi said the government of Pakistan has proposed a memorandum of understanding stipulating the volume of rice the Philippines proposes to buy.

“Our exporters are ready to convert their fields into rice fields… Based on your demand… We are ready to do it,” he added.

He said that the Philippines needs to impose a stable tariff regime on imported rice, noting that duties “have been fluctuating.”

“We don’t know what is going to come next because globally, prices are going to be competitive again, so our rice exporters want to have stability and certainty about the quantity,” he added.

In June, President Ferdinand R. Marcos, Jr. signed Executive Order (EO) No. 62 which lowered the tariff on imported rice to 15% from 35%, until 2028. EO 62 was meant to tame rice prices and plug gaps in domestic rice production.

Mr. Kazi said Pakistan exports about two-thirds of its 11 MMT rice surplus.

“We are increasing our productivity, and we are exporting most of it, two-thirds of it… We have other markets also, but Philippines is one of the important ones,” he added.

The Philippines is projected to remain the top rice importer in the world, according to the US Department of Agriculture. It is expected to import about 5.1 MMT of rice next year. — Adrian H. Halili

PIDS issues PHL growth estimate of 5.8%-6%, citing weaker inflation

THE Philippine Institute for Development Studies (PIDS) expects the economy to expand between 5.8% and 6% this year, citing the weakening of inflation.

Gross domestic product (GDP) expansion was 5.2% in the third quarter, due to climate disturbance and a slowdown in public spending.

The year-earlier growth rate had been 6%.

“As base effects subside and based on recent and foreseeable developments in the Philippine economy, we estimate a year-on-year GDP growth for 2024 to pick up to between 5.8% to 6.0%,” PIDS said in a report.

National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan has said that GDP must grow 6.5% in the fourth quarter to meet the lower end of the government’s 6-7% target this year.

“GDP growth’s trajectory for the fourth quarter of 2024 will be impacted by a series of scenarios following slower inflation expectation: relaxation of policy rates that will drive firms to borrow more to expand business operations contributing to the recovery of employment, thereby increasing household purchasing power and consumption,” it said.

The report said the “nexus” of slower inflation, employment gains, and renewed consumption due to the holidays and elections can stimulate GDP growth.

GDP growth for 2025 is forecast at 6.1%, PIDS said.

It said the downside risks include “geopolitical threats, deteriorating economic conditions of key partners, and the worsening of overall external conditions.”

“Headline inflation will likely slow to 3.6% on average in 2024, from the 6.0% average in 2023, then settle to within the target range (of 2-4%) in 2025,” PIDS said.

The report said food prices are the main driver of inflation due to supply-chain constraints and disruptions to agricultural production due to calamities.

Headline inflation picked up to 2.3% in October from 1.9%, bringing average inflation in the 10-month period to 3.3%, still within the BSP’s 2-4% target but above the 3.1% full-year forecast.

In its review of recent growth data, PIDS said failure to grow towards the high end of the target band means the Philippines could fail to become an upper middle-income economy by 2025.

“It is still possible although at a much later period (towards) the latter part of 2025 or early 2026,” it said, adding that the conditions for that happening include growth “of as much as 8% with the exchange rate not depreciating much beyond the P58-to-the-dollar mark,” it said. — Aubrey Rose A. Inosante

Peso up as oil prices stay near 2-week low on OPEC forecasts

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THE PESO recovered against the dollar on Wednesday as global oil prices stayed near a two-week low after the Organization of the Petroleum Exporting Countries’ (OPEC) downward revision of its global demand growth forecasts.

The local unit closed at P58.735 per dollar on Wednesday, strengthening by 9.6 centavos from its P58.831 finish on Tuesday, Bankers Association of the Philippines data showed.

The peso opened Wednesday’s session stronger at P58.75 against the dollar. Its intraday best was at P58.66, while it dropped to as low as P58.777 versus the greenback during the session.

Dollars exchanged increased to $1.43 billion on Wednesday from $1.12 billion on Tuesday.

The peso was supported by lower global crude prices after the OPEC reduced its global oil demand growth estimates for 2024 and 2025, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The peso-dollar pair traded mostly sideways on Wednesday amid market caution ahead of the release of US consumer and producer inflation data, a trader said by phone.

For Thursday, the trader sees the peso moving between P58.45 and P58.85 per dollar, while Mr. Ricafort sees it ranging from P58.70 to P58.90.

Oil prices held near a two-week low on Tuesday after dropping about 5% over the past two sessions as investors absorbed OPEC’s latest downward revision for demand growth, a stronger US dollar and disappointment over China’s latest stimulus plan, Reuters reported.

Brent futures were up 24 cents or 0.3% to $72.07 a barrel by 1:22 p.m. EST (1822 GMT), while US West Texas Intermediate crude rose 29 cents or 0.4% to $68.33.

On Monday, both crude benchmarks settled at their lowest prices since Oct. 29.

OPEC cut its forecast for global oil demand growth in 2024 and also lowered its projection for next year, marking the producer group’s fourth consecutive downward revision.

The weaker outlook highlights the challenge facing OPEC+, a group that includes the OPEC and allies such as Russia. This month, the group postponed a plan to start raising output in December against a backdrop of falling prices.

OPEC said world oil demand would rise by 1.82 million barrels per day (bpd) in 2024, down from growth forecast of 1.93 million bpd last month.

The group also cut its 2025 global demand growth estimate to 1.54 million bpd from 1.64 million bpd.

OPEC remains at the top of industry estimates and has a long way to go to match the International Energy Agency’s far lower view.

OPEC’s forecast on robust growth in China is “at odds with other forecasters, who have considerably reduced their end-2024 estimates on China’s poor macroeconomic performance and disappointing fiscal stimulus,” said Harry Tchilinguirian, head of research at Onyx Capital Group.

On Friday, Beijing unveiled a 10-trillion-yuan ($1.4-trillion) debt package to ease local government financing strains. Republican former President Donald J. Trump, who won the Nov. 5 US presidential election, has threatened more tariffs on Chinese goods.

But analysts said China’s plan fell short of the amount needed to boost economic growth.

Also weighing on oil prices, the US dollar rose to a four-month high versus a basket of currencies as investors kept piling into trades seen benefiting from Trump’s victory.

A stronger greenback makes oil more expensive in other countries, which can reduce demand. — A.M.C. Sy with Reuters

BIR asserts authority to shut down online sellers for non-compliance

STOCK PHOTO | Image by andrespradagarcia from Pixabay

THE Bureau of Internal Revenue (BIR) said it is authorized to shut down online sellers not complying with registration and tax remittance rules, alongside its authority to padlock non-compliant physical stores.

In a warning to e-marketplaces ahead of the holiday shopping season, the BIR said in a statement: “Online businesses can be blocked by the BIR, much like its Oplan Kandado program against physical stores,” the Bureau said in a statement on Wednesday.

Section 115 of the National Internal Revenue Code, as amended by Republic Act No. 12023, gives the Commissioner of Internal Revenue the authority to suspend business operations.

“If retail/physical stores are registered and paying their taxes, online stores should do the same,” Commissioner Romeo D. Lumagui, Jr. said.

He also said the BIR is expecting online businesses to post increased revenue over the holiday.

“To all consumers, ask online sellers/businesses for an official receipt. If you are spending your hard-earned income after paying taxes on their products, then online sellers/businesses should also pay their taxes,” Mr. Lumagui added. — Aubrey Rose A. Inosante

PHL shares extend slide as Wall Street rally fizzles

BW FILE PHOTO

THE MAIN INDEX slid to the 6,700 level on Wednesday, closing lower for the sixth consecutive day, as Wall Street’s weak performance and mixed corporate earnings dampened sentiment.

The Philippine Stock Exchange index (PSEi) dropped by 1.4% or 95.78 points to close at 6,714.33 on Wednesday, while the broader all shares index fell by 0.73% or 27.88 points to end at 3,792.46.

This was a fresh near three-month low for the PSEi as this was its worst finish since it ended at 6,692.91 on Aug. 15.

“Along with Asian markets, the local bourse dropped as investors continued to assess the US election results. Wall Street’s negative performance overnight also spilled over into the local market,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message. “At home, local investors were also assessing third-quarter earnings performance. So far, results have been mixed: some sectors, like banking, are still posting impressive growth, while others, such as leisure, are showing dismal results.”

Wall Street’s three major indexes closed lower on Tuesday as investors booked some profits from a post-election rally and waited anxiously for US inflation data due this week, Reuters reported.

The indexes had rallied to record highs since the Nov. 5 US election as investors bet on a boost to equities from President-elect Donald J. Trump’s proposed tax cuts and the prospect of easier regulatory policies.

But investor enthusiasm dampened on Tuesday with concerns around whether the next US administration’s policies would exacerbate inflation. On investors’ radar is consumer price inflation data, followed by producer price inflation and retail sales data, as these could provide clues about the US Federal Reserve’s policy path going forward.

The Dow Jones Industrial Average fell 382.15 points or 0.86% to 43,910.98; the S&P 500 lost 17.36 points or 0.29% to 5,983.99; and the Nasdaq Composite lost 17.36 points or 0.09% to 19,281.40.

“Philippine shares continued to nosedive following the pullback in US as the major indexes paused from their recent post-election rally. Investors are now shifting focus to key inflation data… These indicators follow the Fed’s recent decision to cut interest rates,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan added in a Viber message.

All sectoral indices closed lower on Wednesday. Financials declined by 1.83% or 41.06 points to 2,193.14; industrials dropped by 1.79% or 169.91 points to 9,295.36; holding firms retreated by 1.32% or 77.57 points to 5,759.67; services went down by 0.84% or 17.66 points to 2,071.66; property sank by 0.63% or 16.48 points to 2,573.66; and mining and oil gave up 0.34% or 27.37 points to end at 8,002.18.

Value turnover surged to P6.94 billion on Wednesday with 592.15 million shares changing hands from the P5.59 billion with 622.73 million issues traded on Tuesday.

Decliners outnumbered advancers, 140 versus 66, while 48 names were unchanged.

Net foreign selling rose to P1.2 billion on Wednesday from P1.11 billion on Tuesday. — R.M.D. Ochave with Reuters

Sugar growers call for probe of millers claiming low cane yields

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THE United Sugar Producers Federation of the Philippines (UNIFED) said on Wednesday that the Sugar Regulatory Administration (SRA) needs to inspect sugar milling equipment after claims emerged that cane processed by the mills is yielding reduced sugar.

UNIFED President Manuel R. Lamata said mills have reported low sugar extraction from the crop, which he described as “strange.”

“We have had truckloads of cane which reportedly have zero LKGTC (50-kg bag raw sugar per ton of cane) as extracted by the mills, which makes us suspect that something strange is going on,” Mr. Lamata added.

The SRA had ordered the creation of teams to conduct random inspections to sample for the sucrose content of cane.

Sugar farmers have been claiming low to no LKGTC readings for their cane since the start of the milling season.

The higher-than-average dry conditions brough by El Niño has been blamed for a likely reduction of sugar output this year.

The SRA has estimated that sugar production during the 2024 to 2025 season will fall 7.2% to 1.78 million metric tons (MMT).

The regulator added that the prolonged dry spells has produced cane that is “physiologically immature,” resulting in a 16% reduction in sugar content per MT of cane.

According to UNIFED, sugarcane extraction of 1.44 LKGTC during the start of the current milling season, against an average of 1.7 LKGTC.

He said that the SRA should ensure milling equipment is calibrated to ensure that sugar growers are not shortchanged.

“Sugar groups were allowed before to have their own chemists in the mills to check the veracity of mills’ extractions, but this practice has been discontinued,” Mr. Lamata added. — Adrian H. Halili

DoTr taps UltraPass for airport biometrics processing systems

ULTRAPASSID.COM

THE Department of Transportation (DoTr) said it entered into a partnership with UltraPass Identity Corp., a US company, to pilot-test an airport biometric passenger processing system.

The partnership was signed on the sidelines of the US Department of Commerce’s Innovative Technologies for Urban Infrastructure Development Trade Mission to Manila on Wednesday.

“This technical upgrade in passenger processing at airports will usher in more innovation that we can implement nationwide,” Transport Secretary Jaime J. Bautista said.

According to Mr. Bautista, the pilot test in Iloilo airport will come at no cost to the government. He said Iloilo was selected due to its low volume of international flights.

“We are also looking at other airports … in Tacloban, Laoag, and Bicol,” he said.

“This will be implemented fast, I think early next year, and will run for three months. We will start with Iloilo first, and then we can extend the test to the other airports after three months,” he added.

UltraPass Chief Executive Officer Eric Starr said that the project will be implemented in two phases.

“The first (phase) is just for Filipinos so they will have a better experience; the second is for everybody coming through the airport,” Mr. Starr said.

“The first phase will be completed in the first half of 2025… There’s a list of things that need to be done to go from the beginning to the end. So we start that immediately,” he added.

Mr. Starr is part of the trade mission along with representatives from AppCensus, Bechtel, Graphen, Inc., Headway PM, Holland LP, NGA 911, Resecurity, Roc.ai, SolisMatica, Trellix, and Varidx.

“This trade mission follows in the footsteps of the Presidential Trade and Investment Mission that US Secretary of Commerce Gina Raimondo led in March,” according to US Undersecretary of Commerce for International Trade Marisa Lago.

“And with this week’s Smart Cities Trade Mission, the Philippines becomes the only country in the world where the US Department of Commerce has brought two high-level trade missions in 2024,” she added.

She said that the members of the delegation are from the cybersecurity, artificial intelligence, biometrics, engineering and construction, and rail industries.

“Some of these companies already have a presence in the Philippines and are looking to expand. Others are exploring opportunities in this dynamic market for the first time,” she said.

The US delegation will be in the country until Nov. 14 before flying to Indonesia.

Ms. Lago met with officials from the Philippine government and stakeholders to explore avenues for expanding trade and investment with a focus on digital technology, infrastructure, civil nuclear cooperation, and empowering women entrepreneurs.

She is due in Clark on Thursday to promote infrastructure projects associated with the Luzon Economic Corridor. — Justine Irish D. Tabile

Industry group expresses support for Vietnam cement import probe

BW FILE PHOTO

THE Department of Trade and Industry’s (DTI) preliminary safeguard measures investigation on cement imports from Vietnam is necessary to keep the domestic cement industry from incurring undue injury, the Federation of Philippine Industries (FPI) said.

“FPI sees this action as a necessary response to the pressures and potential harm to the local industry posed by the surge of imported cement,” the FPI said in a statement on Wednesday.

“FPI recognizes the DTI’s proactive approach as an essential step toward protecting domestic manufacturers and ensuring a level playing field for Filipino businesses,” it added.

The DTI launched a preliminary safeguard measures investigation on imports of Vietnam cement classified under AHTN Codes 2523.29.90 and 2523.90.00.

In its preliminary report, the DTI said cement imports are projected to increase 4.96% year on year to 7.36 million metric tons (MT) this year.

Cement imports grew 10.34% in 2020 and 17.2% in 2021, then dropped 2.89% in 2022. They rose 4.74% in 2023.

Based on the initial findings, the DTI said that the increased imports have caused serious injury to the domestic industry, resulting in declining market share, reduced production and sales, diminished profitability, and weaker prices.

“By initiating this safeguards investigation, Trade Secretary Cristina A. Roque demonstrates the government’s commitment to the welfare of local industries, which provide employment and economic benefits to the country,” FPI Chairman Jesus L. Arranza said.

“The organization remains dedicated to working alongside the government to promote fair competition, job creation, and the long-term sustainability of Philippine industries,” he added.

In a department order dated Dec. 16, 2022, the DTI imposed anti-dumping duties on ordinary Portland cement type 1 and blended cement type 1P imports from Vietnam for five years.

This was later updated through a department order dated Feb. 14, 2023, and implemented in March 2023 after the Bureau of Customs posted Customs Memorandum Order 05-2023.

The order imposed a definitive anti-dumping duty on imports from Vietnam ranging from 2.33% to 23.33% depending on the company. — Justine Irish D. Tabile

UNDP launches SDG Investor Map for PHL; BoI cites opportunities in renewables

UN.ORG

THE United Nations Development Programme (UNDP) in the Philippines launched the Philippine edition of the Sustainable Development Goals (SDG) Investor Map, with the Board of Investments (BoI) touting SDG-compliant investment opportunities in renewable energy (RE).

The SDG Investor Maps are a market intelligence tool that aids private-sector participation in achieving the SDGs and identifying investment themes in emerging markets.

“The Philippine SDG Investor Map is envisioned as a dynamic document that will reflect country opportunities for sustainable investment. It has identified 12 investment opportunity areas, including opportunities in the climate and health sectors,” it said in a statement.

The map covers seven sectors and supports 17 SDGs.

To further expand the first edition of the map, UNDP Philippines prepared a Policy White Space Report to identify investment opportunities currently in need of either more business-enabling government policy and regulations or a more reliable business model.

UNDP Philippines Resident Representative Selva Ramachandran noted the key role of the private sector in “moving from solutions to action.”

“How to drive collective action and make progress towards common goals to address climate change and achieve more equitable and inclusive development outcomes for all,” he said.

Rose Marie Mendoza, the head of the BoI’s energy division under the agency’s Resource-Based Industries Service, said the renewable energy industry thrives on collaboration between the public and private sectors.

Ms. Mendoza said equitable financing options backed by supportive policy will allow all participants in the ecosystem to thrive and adapt to an evolving landscape.

“Only 15% of global-impact investments are channeled to Asia, and only 3% to Southeast Asia. This is too low, especially since ASEAN is set to become the fourth-largest economy globally,” Centre for Impact Investing and Practices Director Sue-Ann Huang said.

“The maps help investors and businesses identify impact business models and investment opportunity areas that contribute towards the SDGs. Building from these findings, the SDG Venture Scaler will focus on supporting growth-stage enterprises.”

The event also launched the SDG Venture Scaler, a new program to drive private investment for sustainable development in Southeast Asia.

It will focus on supporting growth-stage enterprises in Indonesia, the Philippines, and Vietnam, highlighting climate action, education, and healthcare projects that are aligned with the SDGs. — Aubrey Rose A. Inosante

APA too, APA too

As I was enjoying a rosé-flavored drink while listening to a catchy new song, I couldn’t help but think about the absence of Advance Pricing Agreements (APAs) in the Philippines. This reflection seemed quite apt, especially as I recalled insights from a regional Transfer Pricing (TP) training session I attended recently. This made me curious how our country could benefit from implementing a robust APA framework, so this void no longer mars the pursuit of tax certainty.

OVERVIEW OF APAs
Navigating the intricate world of international tax can be challenging for many of us, especially when it comes to TP— the pricing of transactions between related parties. APAs present a valuable solution by establishing pre-agreed methodologies for determining transfer prices, thereby providing predictability in tax liabilities, minimizing disputes, and ensuring compliance. They come in three forms: unilateral (involving one tax authority), bilateral (involving two tax authorities), and multilateral (involving multiple tax authorities) agreements. These agreements promote a collaborative relationship between businesses and tax authorities, creating a stable and transparent tax environment that is crucial for ensuring fair tax practices and attracting foreign investment.

While APA programs are being adopted worldwide, the Philippines currently lacks specific regulations in this area, leading to uncertainties for multinational enterprises. By examining neighboring Southeast Asian countries like Indonesia, Malaysia, Singapore, Thailand, and Vietnam, we can gain perspective ahead of the potential adoption of APAs in the Philippines.

INDONESIA: OFFERING CLARITY AND INCENTIVES
Introduced in 2010, Indonesia’s APA program has recently been updated to offer clearer directives. Last year, Indonesia consolidated previous regulations on TP documentation, Mutual Agreement Procedures (MAP), and APAs, providing comprehensive administrative guidance in one document. The framework also now allows for multilateral APAs, offering greater flexibility for companies operating in multiple jurisdictions. Another significant change is the elimination of administrative sanctions related to APA execution, such as penalties for revising corporate tax returns. These updates make the APA process more attractive for businesses.

MALAYSIA: ENHANCING EFFICIENCY
Malaysia ensures efficient use of resources by considering only APA applications that meet specific requirements or thresholds. Companies can enter into a bilateral or multilateral APAs only if the overseas party is in a jurisdiction with a double taxation agreement (DTA) with Malaysia. If no DTA exists, the Malaysia-based company can only enter into a unilateral agreement. Additionally, the term for APAs can now be extended beyond the traditional five-year maximum, making the program more cost-efficient.

SINGAPORE: LEADING THE REGION
Singapore has long been a regional leader in implementing APAs, with its first guidelines dating back to 2006. The Inland Revenue Authority of Singapore is often commended for its expertise and professionalism, which foster a business-friendly environment. Additionally, clear guidelines and accessible information online further enhance the program’s effectiveness, ensuring transparency and keeping stakeholders well-informed.

THAILAND: PIONEERING BILATERAL AGREEMENTS
Thailand stands out for being one of the first in Asia to implement Bilateral APAs (BAPAs) with key partners like Japan. Thailand’s exclusive focus on BAPAs provides certainty and predictability while reducing the risk of double taxation, as tax authorities from both countries involved in a transaction mutually agree on the TP methodology. Recently, Thailand’s APA guidelines were updated to require additional documents in applications. Complete documentation can build trust and enables more informed and effective decision-making.

VIETNAM: ADVANCING COMPLIANCE
Vietnam’s APA program is on a path of evolution. Recent updates have removed the requirement for a pre-filing consultation to ease the administrative burden. However, the application process includes mandatory phases — official submission, assessment, discussion and negotiation, and conclusion — without specified timelines for each stage.

From the above insights, the Philippines may consider the following to harness the benefits of APAs. First, we should establish clear guidelines and procedures for APA applications, ensuring transparency and accessibility to all stakeholders. Second, entering into bilateral and multilateral APAs with key trading partners can reduce double taxation risks and strengthen economic ties. Third, equipping tax authorities and businesses with the necessary knowledge and tools to navigate the APA process can ensure smooth implementation and compliance. Fourth, offering incentives such as reduced penalties and streamlined administrative processes will encourage businesses to participate in the APA program. Finally, it is important to continuously monitor the APA framework’s effectiveness and update regulations as needed to address emerging challenges and opportunities.

Implementing a robust APA framework can have several positive impacts on the economy. First, it can attract foreign investment by creating a transparent tax environment, making the Philippines a more appealing investment destination for foreign enterprises. Moreover, APAs help reduce tax disputes by pre-agreeing on transfer pricing methodologies, saving time and resources for both businesses and tax authorities. Furthermore, a well-implemented APA framework can improve overall tax compliance, ensuring that businesses adhere to fair tax practices, which in turn, can lead to increased tax revenue for the government. Ultimately, a stable and transparent tax environment can contribute to economic stability. This would allow businesses to plan their operations with greater confidence, leading to sustained economic growth and development.

We can learn from the experiences of our Southeast Asian neighbors to help us develop a robust APA framework that benefits businesses and the economy. Policymakers should prioritize creating clear guidelines and building tax authority capacity. Reportedly, our tax authorities are on the right track creating a team and training them on TP matters, including APA. Yes, APA too.

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

 

Patrick Andrew Lim is an assistant manager at the Tax Services department of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 8845-2728

patrick.s.lim@pwc.com

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