AYALA-LED AC Energy Corp. and renewable energy developer Citicore Power, Inc. began the construction of a 72-megawatt (MW) solar farm in Arayat and Mexico, Pampanga, which is scheduled for commissioning by the first quarter next year.
The P2.7-billion solar facility, a joint venture between the two companies, will produce enough power to supply clean energy to 45,000 homes per year.
On Thursday, AC Energy and Citicore held the solar farm’s groundbreaking ceremony, which was attended by government officials, including Mayor Emmanuel M. Alejandrino of the Arayat municipality, and community members.
“We are delighted to jointly develop this solar project with Citicore. Together, we will help augment the much needed grid capacity during the very tight electricity supply situation as our economy recovers from the effects of the pandemic,” AC Energy President and Chief Executive Officer Eric T. Francia said in an e-mailed statement.
AC Energy and Citicore both aspire to accelerate renewable energy development and help the country reduce its greenhouse gas emissions by 75% by 2030.
Citicore welcomed the opportunity to pursue shared goals.
“We are grateful to play a significant role in this sustainable infrastructure project, especially with respect to boosting local employment, supporting regional economies, and creating a more stable and reliable power supply. We are committed to providing our expertise through innovative renewable energy solutions to help accelerate the shift to RE in consumer’s power needs,” Citicore President Oliver Y. Tan said.
The development of the 72-MW solar farm is seen to bring in over 1,500 local job opportunities and community initiatives.
AC Energy, the listed energy platform of Ayala Corp., aspires to become the largest listed renewables platform in Southeast Asia as it hopes to reach its 5,000 MW target by 2025.
Citicore, a wholly owned unit of Citicore Holdings Inc., aims to produce 1,500 MW from its pipeline of projects over the next five years.
Shares in AC Energy inched down by 1.18% or 10 centavos to finish at P8.40 apiece on Thursday. — Angelica Y. Yang
“Innovation is the ability to see change as an opportunity — not a threat.” — Steve Jobs
THERE are two types of business leaders who respond differently to a crisis — there are those who slow down, if not stop, investments in innovation and focus on cost cutting and efficiency gains; and there are those who continuously, even increasingly, invest in R&D and innovation.
Majority of business leaders belong to the former. This had been confirmed by the 2008 financial crisis, which had substantially reduced the willingness of firms to invest in innovation as reported by several studies conducted globally. Economic crises cause companies to reduce their investment, including than in innovation where returns are uncertain.
Not surprisingly, a 2020 study by McKinsey revealed that “commitment to innovation has decreased as companies work through the COVID-19 crisis and focus on short-term issues. Furthermore, “executives have prioritized efficiency and keeping their core business secure and stable over innovation.” The study also noted that business leaders “reprioritize innovation when the crisis passes.”
This has been the behavior of most companies — hold investment in innovation during a crisis and continue after the crisis, even during this time of the pandemic. But will it be too late?
This is why some companies invest heavily during a crisis, instead of holding off, to build their capabilities while everyone else are hibernating, so that when good times come, they will be ahead of the game. This is what exactly glass manufacturer Corning did during the crisis of the dot-com bust which started in 2000.
In 2001, Corning nearly collapsed due to its heavy investment in fiber-optic cables prior to 2000. “But instead of slashing its R&D budget and concentrating on core products, Corning continued to invest in innovation, searching for ways to integrate its products into up-and-coming applications,” according to innovation Professor Gina O’Connor as reported by Fast Company.
“The company’s commitment to innovation during its toughest years paid off,” further in the report. “In 2007, Corning Gorilla Glass was reformulated to provide the screen for the first iPhone,” and “today, Gorilla Glass is found in more than 6 billion mobile devices, and Corning is worth over $28 billion.”
As the adage goes, behind every crisis is opportunity. This is the case for many companies which reaped the benefits of doubling down on innovation in the midst of a crisis. “Organizations that maintained their innovation focus through the 2009 financial crisis, for example, emerged stronger, outperforming the market average by more than 30% and continuing to deliver accelerated growth over the subsequent three to five years,” according to a McKinsey study. Businesses can gain long-term advantages by understanding such shifts and the opportunities they present.
Despite this, majority of business executives said they will reprioritize innovation after the pandemic, which may be too late. Again, historical accounts and studies show that companies which are inconsistent and vacillating in their innovation ventures during and after a crisis fail to produce results in the long run.
An example reported in MIT Sloan Review is the case of Lucent Technologies. In the aftermath after the dotcom bust in 2002, then telecom leader Lucent Technologies, sold 80% of its interest in a ventures group, intended to reap the benefits from Bell Labs technology, to Coller Capital, a British private-capital management company. Lucent was unable to catch up with telecom players then like Nokia and Ericsson to capitalize on the growth in 4G technologies.
Many executives will reason that investment in innovation is risky and uncertain, and that is true. “Innovation has a long-time horizon, and companies must invest consistently in order to see payoffs,” as O’Connor puts it. It is not easy to sift through the smokescreen of the pandemic.
One approach, which I have written about in previous articles, is called sense-making. It refers to how we structure the unknown so as to be able to act in it.“It involves coming up with a plausible understanding — a map — of a shifting world; testing this map with others through data collection, action, and conversation; and then refining, or abandoning, the map depending on how credible it is.”
“Sense-making enables leaders to have a better grasp of what is going on in their environments, thus facilitating other leadership activities such as visioning, relating, and inventing. It involves three major steps — explore the wider system, create a map of that system, and act in the system to learn from it.”
The questions business leaders need to ask is: what is the map of a post-pandemic world 5 years from now? Will working from home become the norm? Will food delivery become a regular thing? Will logistics remain as it is now? Companies need to invest in innovation in a graduated manner, to test certain hypotheses about these shifts, and evaluate what works well, then doubling down depending on the results of these innovation investments.
For example, Philippine fastfood giant Jollibee Foods announced in May 2020 that it will spend 7 billion pesos ($138 million) to build discreet “cloud kitchens” and a stronger delivery service as part of a global restructuring plan. It set up several cloud kitchens around the world with a view of the future pandemic world as about food delivery.
Cloud kitchens around the world have grown in number exponentially in the last few months, and it is estimated that the global cloud kitchen market will grow at a CAGR of 12% from 2021 to 2027; and in just six years, the market value of the industry is expected to be over $71.4 billion, according to a report of Esquire.
Indeed, we need to see change as an opportunity, or else others will.
Reynaldo C. Lugtu, Jris the Founder & CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is Chairman of the ICT Committee of the Financial Executives Institute of the Philippines (FINEX). He is Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at rey.lugtu@hungryworkhorse.com.
I’ve been in this company for 11 years after graduating from college. How long should I stay with my current employer? Is there a trend or any research that tells us the ideal number of years of employment in one company? Or, are there other things I should consider? — Little Daisy.
A little girl asked her grandmother how she felt about their family’s current state. The grandmother, not wanting to share her bad mood with the child, told her she felt fine. The young girl replied: “Well, if you’re feeling good, why don’t you show me a happy face?”
Really, it boils down to being happy. If you’re happy with your current job, then what’s the point of thinking of other things? If you’re not happy, then go someplace else. If not, create a situation where you are happy with your current employer. If the situation is beyond repair, then go elsewhere. There’s no such thing as lifetime employment. We’re not in Japan. Everyone is free to go any place where they are happy.
I’ve not seen any research on the average stay of employees in one company. The next-best data we have is the unemployment rate, which, according to the Labor Force Survey of the Philippine Statistics Authority is estimated at 8.7% as of April. It is said to be “substantially lower than the record high 17.6% in April 2020 but higher compared to the 7.1% reported in March.
“The unemployment rate in April 2021 was the same (or) about the same as the rate reported in October 2020 (8.7%), January 2021 (8.7%), and February 2021 (8.8%).” That’s the macro level. I’m not sure if this will give you enough data to think about your current situation vis-à-vis the pandemic where everyone is considering how to respond to the so-called “new normal” or “better normal” depending on where you are situated.
If there’s anything that can help you better understand the unemployment rate, it’s best to review the data in other Southeast Asian countries as reported in the November 2020 study, “ASEAN Rapid Assessment: The Impact of Covid-19 on Livelihoods across ASEAN.” For the period April 2019 to April 2020, the Philippines lost 7,991,000 jobs, compared to Singapore’s 25,600; Malaysia’s 156,400 and Thailand’s 439,300.
Among others, this is what keeps our government leaders awake at night.
THREE STAGES At your personal level, this issue may not bother you much as you’re worried about your career aspirations. But somehow, your future and that of every one of us will be affected by the pandemic and how the National Government manages the situation. This is one issue that really frightens many people.
Therefore, are you ready for the challenge? Do you feel energized and less worried about the future? Are you ready to learn new skills and new methods of working, experience different corporate cultures and working with new people? Are you ready to adjust to the management style of your prospective bosses and work colleagues?
Your answer will depend much on you. There are many important considerations you’ll have to take in before making a decision. Career management is a personal process and an individual responsibility. Your current employer can only do so much. It can help if you attending seminars or get assigned to challenging projects. Other than that, you must recognize which stage of your career is in at the moment. In doing this, try to answer the following questions:
Stage One is about taking an inventory of your knowledge, aptitude, skills, and habits. What milestones have you achieved during the past 11 years? Are they enough to be recognized by your current employer? Have you discussed the matter with your boss? How receptive is your boss in helping you achieve your career aspirations? How confident are you of securing a lucrative job elsewhere? Do you have enough experience to tackle a different work situation under a new employer?
Stage Two is about exploring many options other than employment. How about putting up a business? If that’s an option, then what kind of business would you pursue that might thrive in a pandemic? How much capital do you need? If not entrepreneurship, how about pursuing a post-graduate degree here or abroad? It may interest you to know that many foreign scholarship programs are being offered in Japan, the US, and Europe.
Stage Three is all about the safety net. Much depends on your marital status. If you’re married or have children of school age, you have to prioritize their needs over your discontent with your current job. What is your action plan should you move to another employer and became unhappy there? Are you willing to swallow your pride and ask your former employer to reinstate you, assuming that were possible?
Spend some time thinking about the pros and cons of staying in your current job and moving to other organizations. Spend time on your career plan. Choose a mentor or discuss your aspirations with your boss or a trusted work colleague. During the pandemic, it’s essential that you moderate your frustration with your current job. Understand your true value and discard everything that does not fit your career plan.
BENIGNO S.C. AQUINO III, the Philippine president who tried to send corrupt officials to jail and took China to court for its island-building activities in the South China Sea, has died. He was 61. Read the full story.
THE PHILIPPINES ranked 67th out of 151 economies in a political economy index that measures the contribution of the so-called “elites” in wealth creation and the development of society. Read the full story.
OFFICIAL GAZETTE OF THE REPUBLIC OF THE PHILIPPINES FB PAGE
By Patricia B. Mirasol
The six-year term of former President Benigno S.C. Aquino III, who served from 2010 to 2016, was marked by economic growth and accusations of elitism.
“When you look at the strength of PNoy’s administration, you have to give him credit for putting good governance [at the forefront]. That was their campaign mantra,” said Victor Andres C. Manhit, founder and managing director of the Stratbase Group and president of its policy think-tank, the Albert del Rosario Institute for Strategic and International Studies. “Good governance is good economics, and that translated to a better environment for investments.”
Where the PNoy administration had missteps was in the nagging feeling of elitism that alienated the general public. “This lack of inclusiveness became an opening for critics,” said Mr. Manhit. “There were also failures in the provision of public services like infrastructure, and this lessened his legacy.”
Among the accomplishments of the Aquino administration were the passage of the Reproductive Health bill, the implementation of the K-12 education system, and the favorable ruling of the Permanent Court of Arbitration over China’s territorial claims in the South China Sea.
“What critics focused on was how he lost Scarborough shoal. What people forgot was that we actually won it in a case. The case itself is generational. It’s legally mandated and will define maritime rights,” said Mr. Manhit in a phone call with BusinessWorld.
Prior to taking his oath of office as president of the Philippines on June 30, 2016, Mr. Aquino served as a senator of the 14th Congress from 2007 to 2010 and Tarlac Representative from 1998 to 2007.
Here is a look back at the events that shaped Mr. Aquino’s presidency:
POLITICAL
Pork barrel scam
A high-profile corruption scandal rocked the Aquino administration in 2013. Whistleblower Benhur Luy revealed that his cousin Janet Lim-Napoles partnered with several government officials in illegal deals that used public funds meant for development projects. Ms. Lim-Napoles, suspected mastermind of the multibillion-peso pork barrel scam, was detained on plunder charges, together with Senators Juan Ponce Enrile, Jose “Jinggoy” P. Estrada, and Ramon Revilla, Jr., The first two senators are now out on bail, while Revilla has been cleared.
Forty-four Special Action Forces (SAF) commandos died in an encounter with Muslim rebels and private armed groups in Mamasapano, Maguindanao, after neutralizing Malaysian terrorist Zulkifli bin Hir, alias Marwan, on Jan. 25, 2015.
In 2019, Mr. Aquino was cleared over the “botched” Mamasapano operation, as the Ombudsman described the incident. The Volunteers Against Crime and Corruption (VACC), claimed reckless imprudence and negligence on Mr. Aquino’s part in at least three instances: approving Oplan Exodus which was later found to have serious flaws; allowing a suspended officer to oversee the operation; and failing to send reinforcement and aid to the SAF 44 as they were besieged by anti-government forces.
Super typhoon Yolanda
In November 2013, the Philippines was hit by super typhoon Yolanda (international name: Haiyan), where around 6,300 people were killed and total damages were reported to be more than P95 billion. The PNoy administration was slammed for its lack of action and slow response to the plight of four million families and the 44 out of 81 provinces that were affected by the super typhoon.
During a March 2014 open forum at the Hope Christian High School in Manila, Mr. Aquino apologized to those affected because the government was not able to come to their aid sooner.
Marcos compensation bill
Mr. Aquino signed the Human Rights Victims Reparation and Recognition Act on Feb. 25, 2013, the 27th anniversary of the People Power Revolution that toppled the Marcos dictatorship in 1986. Under the legislation, P10 billion in funds from the alleged ill-gotten wealth of the Marcoses will be used to pay the victims.
The former President’s father, Senator Benigno Aquino, Jr., was himself incarcerated during Martial Law.
LEGAL
Corona impeachment
Then Chief Justice Renato C. Corona faced a 44-day impeachment trial between January to May 2012 for allegedly betraying public trust and committing culpable violation of the Constitution for failing to fully disclose his assets as required by Law. The Senate voted to remove Chief Justice Corona from office, a historic decision seen as a huge success for then Mr. Aquino’s anti-corruption campaign. Some citizens, though, remained skeptical of the motivations behind the former chief justice’s impeachment.
Laguna Lake Rehabilitation Project
A last-minute award by the Arroyo administration for the Laguna Lake Rehabilitation Project (LLRP) to a Belgian company was scrapped by Mr. Aquino, as he said it was “ill-advised.” The company, Baggerwerken Decloedt En Zoon (BDC), took the case to arbitration and won. In Jan. 23, 2017, the International Center for the Settlement of Investment Disputes ordered the Philippine government to pay P800 million to BDC for the scrapping of the aforementioned P18.7-billion LLRP project.
South China Sea arbitration
Mr. Aquino brought China before The United Nations’ Permanent Court of Arbitration in The Hague, Netherlands, in January 2013, to challenge Beijing’s push for control of the South China Sea, portions of which the Philippines claims. A standoff between vessels from the two countries in the disputed Scarborough Shoal in April 2012 initiated this challenge. After Mr. Aquino III left office, the Permanent Court of Arbitration in 2016 ruled in favor of the Philippines, saying China’s expansive territorial claims in the South China Sea breached international law. Beijing has since rejected the permanent court’s decision.
FISCAL
Debt reduction
“A key pillar of President Aquino’s enduring legacy is fiscal sustainability, having reduced debt as a percentage of gross domestic product (GDP) to historic lows of 44.8% by 2015 and having weaned the country off foreign debt, with external financing also at their lowest share in the portfolio at 34.8%,” said Cesar V. Purisima, former finance secretary, in a statement expressing his condolences on the passing of the former president.
The Philippines’ historic first ever investment grade in 2013 was also the direct result of Mr. Aquino’s leadership, added Mr. Purisima. The international community granted the country 24 positive credit ratings actions — the most in history — which made the Philippines the world’s most upgraded sovereign in that year.
Republic Act No. 10533, otherwise known as the Enhanced Basic Education Act of 2013, was signed into law by Mr. Aquino on May 15, 2013. The law’s passage formalized the K to 12 basic education program from the previous 10-year basic education curriculum. The K to 12 program mandates one year of kindergarten and 12 years of basic education, comprising of six years of primary education, four years of junior high, and two years of senior high school. According to the Department of Education, the rationale for RA 10533 is to address the poor quality of basic education provided by the current curriculum, as reflected in the low achievement scores of Filipino students and the Philippine unemployment rate.
HEALTH
Reproductive Health Bill
The Reproductive Health Bill, also known as Republic Act 10354, was signed into law by Mr. Aquino on Dec. 21, 2012. RA 10354 provides its beneficiaries with “universal access to medically safe, non-abortifacient, effective, legal, affordable and quality reproductive health care services, methods, devices, supplies which do not prevent the implantation of a fertilized ovum.”
Dengvaxia controversy
The Dengvaxia controversy, which stemmed from a 2016 vaccine campaign to inoculate nearly 1 million schoolchildren with the said anti-dengue fever vaccine, has since accelerated public distrust even to vaccines long proven to be effective on diseases like polio and measles, which have since resurfaced. Health data show that from as high as 85.6% of the child population in 2010, full immunization rates dropped to 66.2% in 2018.
TRANSPORTATION
MRT derailments
In early 2011, the Department of Transportation and Communications crafted a plan to integrate the operations of MRT-3 and LRT-1 in preparation for the eventual expansion of LRT-1 to Cavite. When the bidding for the plan’s contract was cancelled in July that year, however, it left both MRT-3 and LRT-1 without a maintenance plan, and MRT-3 without a maintenance contractor. This led to the eventual deterioration of the stocks, rails, and signaling systems, and to the derailments of trains and uncoupling of cars in 2015.
Traffic woes
Public disenchantment over transportation problems spilled over into the capital’s constant traffic gridlocks during Mr. Aquino’s term, notwithstanding his efforts. The National Economic and Development Authority Board, for instance, approved in June 19, 2014 the Road map for Transport Infrastructure Development for Metro Manila and its Surrounding Areas. The study, prepared by the Japan International Cooperation Agency, showed possible ideas, technologies, and strategies that could help the Philippines address traffic congestion and air pollution in Metro Manila.
Traffic, however, remained a fixture in the lives of the capital’s residents despite the existence of the so-called Metro Manila Dream Plan. Car volume was been blamed as part of the cause: according to the Land Transportation Office, the number of cars on Manila’s roads increased from 1.7 million in 2008 to 2.1 million in 2015, indicating an increase of 26% in seven years. Manila’s traffic gridlocks compound its poverty conundrum, said the Navarra Center for International Development in March 11, 2016, as it pointed out that the country loses P3 billion a day to traffic.
INFRASTRUCTURE
PPP
Public-Private Partnership (PPP) projects were at the heart of the Aquino administration’s infrastructure development plans. Among the projects in the pipeline were the LRT Line 1 south extension and operation and maintenance, the operation and maintenance of Laguindingan Airport, and the Automatic Fare Collection System.
Within the 10-member Association of Southeast Asian Nations (ASEAN), the Philippines fared no better. Although the country’s APII score was above Indonesia’s 0.278, Lao People’s Democratic Republic’s 0.225, Myanmar’s 0.198, and Cambodia’s 0.186, it fell below Thailand (0.418), Vietnam (0.419), Malaysia (0.502), and Singapore (0.708). Brunei was not included in the ranking.
PROJECTS that improve Philippine competitiveness as an investment destination and improve the country’s ability to produce high-end products have been declared priorities for the grant of investment, according to the implementing rules of the law that rationalized incentives.
Implementing rules and regulations (IRR) released Thursday outlined the investment perks for key industries under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
The IRR said industries and projects listed under the Strategic Industries Priorities Plan (SIPP) have first call on incentives eligibility, with the authorities granting perks based on their assessment of long-term growth potential and national interest.
Projects that meet any of a set of 10 criteria could be eligible, including those that provide a substantial amount of investment, job creation, considerable net exports, and the use of technology that is new to the Philippines.
“Processes and innovation, including urban planning and development methods, that will lead towards the attainment of the sustainable development goals, shall include, but not be limited to, adoption of adequate environmental protection systems and sustainability strategies,” it said.
Eligible projects could also address supply chain gaps, improve food security, and promote regional and global operations.
Projects may also “promote market competitiveness or enhance the country’s competitiveness as an investment destination” and improve the capabilities of Filipino enterprises and professionals to produce sophisticated products and services.
Only projects listed in the SIPP will be considered. The 2020 investment priorities plan is the provisional list for sectors qualified to receive such incentives from the government while the SIPP is being developed.
Industries eligible for incentives have been classified into three tiers, with tier III or projects for science and technology development receiving incentives with the longest terms.
The IRR classified import-substituting industries like crude oil refining as tier II. The tier includes activities for producing parts not locally made but needed in industrial development. Tier I activities include those that create jobs and take place in sectors that have experienced market failure, which has rendered domestic producers unable to provide basic goods and services.
The Philippine Economic Zone Authority (PEZA) recently raised possible problems its locators might encounter with new import tax rules under the new IRR. Investors usually expect the duty-free importation of raw materials, but the agency said that it expected new limitations on the scope of exemptions.
The IRR said that the duty exemption applies to the importation of capital equipment, raw materials, spare parts, and accessories directly and exclusively used in the registered projects. They must be items that are not manufactured domestically in sufficient quantity and at reasonable prices. — Jenina P. Ibañez
THE Department of Energy (DoE) has identified 15 sites as possible locations for nuclear power generating plants, subject to further evaluation of their potential to meet international norms for such facilities.
“We have identified 15 sites all over the country, but that’s just the first stage… they will be subjected to rigorous evaluation, in which experts, including those from the International Atomic Energy Agency and (from) all over the world will be consulted,” DoE Assistant Secretary Gerardo D. Erguiza, Jr. said during PTV4’s Laging Handa briefing Thursday.
He said the process will be “transparent and all problems will be addressed.”
“We have stated in the past that we will meticulously look at (injecting nuclear power into the energy mix),” he added.
DoE Spokesman Felix William B. Fuentebella said the department is looking at using renewable energy, nuclear, and hydrogen-based power as alternatives to conventional fuels in the event of a supply disruption affecting traditional power sources.
In July, President Rodrigo R. Duterte created an interagency body tasked with conducting a study on adopting a National Position on a Nuclear Energy Program (NEP). The committee submitted its recommendations in December.
On Thursday, Mr. Erguiza described nuclear as a “good source of stable, secure and reliable power,” which some advanced countries depend on.
Philippine Nuclear Research Institute (PNRI) Executive Director Carlo A. Arcilla has said that nuclear holds the potential to address baseload power needs. The PNRI is part of the NEP Inter-agency Committee.
Last month, the DoE and PNRI rolled out an educational campaign on nuclear science and technology to broaden public awareness and improve public perception of the power source. — Angelica Y. Yang
THE PHILIPPINES will exit a watch list maintained by developed countries next year which had flagged its preferential tax scheme for regional operating headquarters (ROHQs) of multinational companies, the Department of Finance (DoF) said.
The country will be removed from the list of “harmful tax regimes” by the Organisation for Economic Co-operation and Development (OECD) starting next year, the DoF said.
In a statement issued Thursday, Undersecretary Antonette C. Tionko said the OECD agreed to a Philippine appeal to characterize the scheme as “potentially harmful but not actually harmful” until the end of 2021.
The recently-signed Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act will effectively remove the 10% preferential tax rate next year, which persuaded the OECD to remove it from the classification, known as the Forum on Harmful Tax Practices (FHTP), beginning Jan. 1, Ms. Tionko said.
The FHTP was created in 1998 to assess preferential tax schemes and identify those that could be harmful.
The Philippines was flagged for the ROHQ preferential tax, which the OECD said gives foreign companies an advantage over domestic taxpayers. Those benefitting from the perk are not also required to provide evidence of how they are performing.
The CREATE law will require ROHQs to pay the regular 25% corporate income tax rate starting next year, in the absence of a grandfather clause.
The Bureau of Internal Revenue estimates that the number of entities availing of the ROHQ regime has been on the downtrend since 2018, with only one new applicant in 2019, she said.
Ms. Tionko said this development will contribute to the Philippines’ readiness to join the Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
“(BEPS identifies) tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity,” she said.
She added that the Asian Development Bank and the World Bank have granted technical assistance to help the Philippines meet the minimum requirements to join the BEPS. — Beatrice M. Laforga
THE National Electrification Administration (NEA) said Thursday that electric cooperatives (ECs) need to develop their own emergency generation capacity to serve as standby power when needed.
“ECs should be aggressive in as far as developing, installing, and operating their own embedded power generation, not only to meet peak electricity demand but to provide standby or emergency power during calamities,” NEA Administrator Edgardo R. Masongsong said in a statement.
Such projects can also mitigate power supply shortages in the EC coverage areas, he added.
Mr. Masongsong directed the NEA’s Total Electrification and Renewable Energy Development department to help ECs launch their own embedded power generation projects.
He added that ECs should also explore options in renewable energy (RE) to meet demand in their respective franchise areas.
In the same statement, the NEA announced it has completed feasibility studies related to the hybridization of existing diesel power plants with RE and battery energy storage systems in North and West Samar.
At present, it is studying the possibility of establishing a hybrid mini-grid system powered by RE in six off-grid areas.
The NEA earlier reported that ECs connected 148,792 new power consumers in the first quarter, up 11% from a year earlier. The agency has a target of 400,000 for the year.
As of June 16, the nationwide electrification rate was 90% with 14.45 million consumers covered within the franchise areas of 121 ECs. — Angelica Y. Yang
THE BUREAU of Internal Revenue (BIR) said it retained the maximum sanction of a P10-million fine and license revocation for those found violating the fuel marking program’s rules, but introduced criminal penalties in a new issuance that was released to highlight the new regime defined by a recent tax-reform law.
The BIR issued Revenue Regulations No. 13-2021 Thursday on fuel-related tax evasion and faking of receipts.
While the fines were not revised, BIR Deputy Commissioner Marissa O. Cabreros said the issuance is intended more to remind taxpayers of the new items introduced by the Tax Reform for Acceleration and Inclusion (TRAIN) law, particularly criminal sanctions for violations of the fuel marking program.
Republic Act No. 10963 or TRAIN law of 2018, authorized a fuel marking program involving the injection of a special dye into fuel shipments on which tax has been paid, the absence of which is deemed prima facie evidence that the fuel was smuggled.
The BIR said those who sell, trade, deliver or transport unmarked fuel are subject to a fine of P2.5 million on first offense, P5 million on second and P10 million on third plus license revocation.
Businesses found to have tampered with the official fuel marking dye by either removing the agent or diluting the volume could face similar penalties.
Producing, importing, selling and using fuel markers that are either unauthorized or fake also carry penalties of P1 million to P5 million and 4-8 years’ imprisonment.
The injection of fake additive or chemical components also entails a fine of P5 million to P10 million and imprisonment of 4-8 years.
Person involved in packaging and labeling such fake dyes and those trying to conceal unpaid tax through fraud, destruction of documents and misdeclaration, will also be subject to fines of P1 million to P5 million and 4-8 years’ imprisonment.
The BIR reiterated that tax evaders violating any item of the Tax Code are liable for up to 10 years’ imprisonment and a maximum of P10 million in fines.
Businesses using unauthorized or fake receipts or those with incomplete details on their invoices can also be fined P500,000 to P10 million and face 6-10 years’ imprisonment. — Beatrice M. Laforga
