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#COVID-19 Regional Updates (06/01/20)

Dagupan revokes eased lockdown rules as 14 frontliners test positive for COVID-19

DAGUPAN CITY, the main economic center in Pangasinan, did not shift to relaxed quarantine rules on June 1 as scheduled after 14 new COVID-19 cases were reported on Sunday, all frontliners working in the city but two are residents of other towns. The supposed reopening of restaurants, salons, hotels, and tourist spots with the required health safety standards starting Monday has been suspended. “There is a need anew to restrict the movement of people in Dagupan, given this supervening event in order to contain the spread of COVID-19,” Mayor Brian C. Lim said in a streamed briefing Sunday afternoon. The new test results for COVID-19, or coronavirus disease 2019, were part of the 728 samples taken from frontline workers such as medical staff, city government employees, and police officers on May 21–30. The city is still awaiting about 200 results from the Philippine Red Cross. “It is possible that there will be more positive cases among those who were tested,” Mr. Lim said. City Health Officer Ophelia T. Rivera, the COVID-19 focal person, said all the new patients, all asymptomatic, have been placed in isolation and given medical care. She also said contact tracing is ongoing. Prior to the May 31 results, the city’s COVID-19 count stood at 11 since April 24, with 10 recoveries and one death. — MSJ

Cebu drops PCR confirmatory testing to adapt 21-day discharge policy for COVID-19 patients

THE Cebu provincial government will no longer use PCR testing as criteria for releasing patients who have recovered from the coronavirus disease 2019 (COVID-19), Governor Gwendolyn F. Garcia announced. In a statement released Sunday evening, Ms. Garcia cited the World Health Organization’s recommendation for the adoption of a time-based discharge criterion, which is being clinically well by day 21 from the onset of illness. “Testing, testing, testing is illogical,” Ms. Garcia said, noting that Singapore is already using the 21-day discharge policy. “We will adopt the Singapore method,” she said. The Singapore Ministry of Health, in a May 28 post on its site, said, “The Multi-Ministry Taskforce has studied and evaluated the latest local and international clinical and scientific evidence which show that viable virus was not found in COVID-19 patients after the second week of illness despite the persistence of polymerase chain reaction (PCR) detection of ribonucleic acid (RNA). This means that COVID-19 patients are not likely to be infectious after Day 14 of illness and are not infectious by Day 21 of illness.” — MSJ

Mother, daughter arrested for illegal selling of rapid test kits, estafa

STATE agents arrested a mother and daughter in an entrapment operation for unauthorized selling of rapid test kits and estafa. National Bureau of Investigation Officer-in-Charge Eric B. Distor identified the two as Glorina Juliana Carandang and her daughter, Avi Siwa, who were charged for violation of the Food and Drug Administration Act of 2009 and estafa. Mr. Distor, in a statement, said the case stemmed from a complaint against Ms. Siwa, who allegedly required the complainant to pay a P4.6 million downpayment for 10,000 sacks of rice in Cebu City early this month, which was never delivered. Upon instruction of the bureau, the complainant used a different name and contacted Ms. Siwa anew, who was then selling test kits through Facebook. The entrapment took place in Manila on May 29. “Subjects were arrested upon their receipt of the payment for the 120 pieces of Rapid Test Kits,” NBI said. — Vann Marlo M. Villegas

Nationwide round-up

CHED asks colleges, universities to reconsider tuition hike


THE Commission on Higher Education (CHED) called on colleges and universities to review their proposed tuition increases amid the coronavirus disease 2019 (COVID-19) crisis.

In a briefing Monday, CHED Chairman Prospero E. De Vera said schools submitted their tuition adjustment applications to the CHED earlier this year, before the outbreak.

“Ang utos ng komisyon, i-review iyong application nila in the light of flexible learning at magkonsulta ulit sa mga magulang at sa mga estudyante at ipaliwanag iyong application ng tuition sa konteskto ng flexible learning (The Commission has directed them to review their application in light of flexible learning, and to consult with the parents and the students and explain the application of tuition fees in the context of flexible learning),” he said.

Mr. De Vera added that some universities have already announced the suspension of tuition fee hikes for this year.

Classes for tertiary education will begin August, but private universities have the option to open later. — Gillian M. Cortez

Senate president says P12B contact tracer budget better used for treatment

SENATE President Vicente C. Sotto III on Monday asked the health department to redirect its P11.7 billion budget towards the treatment of coronavirus disease 2019 (COVID-19) patients instead of employing contact tracers.

“It will be wiser and more practical to divert the P11.7 billion for the treatment of patients,” Mr. Sotto said in a statement. “We need funds to treat our sick kababayans (countrymen).”

The allocation is intended to hire 130,000 contact tracers for three months, which is among the recommendations of state economic managers to help workers displaced by the lockdown.

Mr. Sotto raised concern over using a multi-billion funding for employing people who are not trained for contact tracing, which may just delay processes.

“If the DoH (Department of Health) hires people who have no experience in investigation, then the program is practically useless,” he said.

Contact tracing efforts are currently being undertaken mainly by local governments through their health units and regional DoH offices with assistance from the police and other departments.

Finance Secretary Carlos G. Dominguez had said the mass hiring is seen to offset the estimated 1.2 million to 1.5 million job losses when Luzon was locked down since mid-March.

This comes as the government eases restrictions in Metro Manila, allowing select businesses and public transportation to partially resume operations.

Meanwhile, Senate Minority Leader Franklin M. Drilon questioned the DoH for modifying the manner of reporting confirmed COVID-19 cases.

“What is the basis for disaggregating cases and how does that affect our interpretation of flattening of the curve?” Mr. Drilon said in a statement on Monday.

The DoH on Friday started classifying cases into “fresh” and “late” cases, which Mr. Drilon asked should be justified as he suspects it is intended to point the backlog to laboratories.

“If the DoH could not provide logical explanations for this, except for putting the blame on laboratories, then there is a reason to believe that it is underreporting COVID-19 cases,” he said. — Charmaine A. Tadalan

2nd tranche of cash aid distribution awaits completion of first set

THE second round of the government’s cash aid program for poor households affected by the lockdown, originally planned for distribution in May, will start this month when the first set is fully distributed.

In a briefing on Monday, Interior Secretary Eduardo M. Año said they will be signing a joint memorandum soon on the social amelioration program’s (SAP) second tranche, with four million new household beneficiaries already validated.

He added they are waiting for the first tranche to be fully distributed before they can proceed with the second round.

“‘Yung five million na sinabi natin na di binigyan noong unang tranche uunahin natin sila. Ang naulat na samin ay four million names na ay na-validate sa ‘min (The five million we mentioned earlier who were not covered in the first tranche will be our first priority [for the second tranche]. What was reported to us is four million names are already validated),” Mr. Año said.

The five million beneficiaries are on top of the 12 million households who will again be included in the second tranche.

The SAP aims to help 18 million of the poorest households affected by the ongoing crisis due to the coronavirus disease 2019 (COVID-19).

The initial distribution started in April, but Mr. Año said this is still ongoing, particularly in remote areas.

The first round has been marred by alleged corruption and inefficiency in some local government units, which were designated to handle the distribution.

Mr. Año assured this won’t be the case for the second tranche, saying, “We will make sure mas mabilis na ito kasi combination na ito ng (this will be faster because this is a combination of) manual at e-payment.” — Gillian M. Cortez

LTO to release double plates for motorcycles by July

THE Land Transportation Office (LTO) will be able to start releasing the double plates for motorcycles by July, but the law relating to this requirement will already take effect June 6.

LTO Operations Division OIC Mercy Jane Paras-Leynes, in a briefing Monday, said the revised implementing rules and regulations for Republic Act 1235 or the Doble Plaka Law will already be effective by Saturday even without the front and back plates.

Ms. Leynes said they target to have all plates for registered motorbikes released by September. — Gillian M. Cortez

BI implements by-appointment policy at main office

THE Bureau of Immigration (BI) now requires clients to set an appointment online before transacting at its main office in Manila.

In a statement, Commissioner Jaime H. Morente said they started the online appointment system on June 1 as part of the “new normal” to observe physical distancing amid the continued risks of spreading the coronavirus.

“Henceforth, only clients with appointment code will be served during the specified date and time of their appointment,” Mr. Morente said.

Clients may still avail of the services of BI-accredited travel agencies and law offices, which will then be responsible for securing the online appointment.

Instructions and requirements are available at the bureau’s Website.

For complaints or inquiries, Mr. Morente said these can be coursed through the bureau’s social media platforms and hotlines.

Melvin P. Mabulac, BI’s officer-in-charge spokesperson, reiterated that foreigners who hold permanent resident visas are currently not allowed to enter the country based on the guidelines issued by the national task force.

Those allowed are foreign crew members of airlines, overseas Filipino workers, foreign spouses and dependents of Filipinos, and diplomats. — Vann Marlo M. Villegas

DoLE says over 24,000 OFWs sent home to their provinces

THE Department of Labor and Employment (DoLE) announced Monday it has facilitated the return home of more than the 24,000 overseas workers who have been languishing in quarantine facilities.

In a statement on Monday, DoLE said, “As of May 31, 2020, a total of 25,002 stranded OFWs (overseas Filipino workers) have been released from quarantine facilities.”

Last week, the Palace ordered DoLE, the Department of Health, and the Overseas Workers Welfare Administration (OWWA) to immediately send the OFWs to their respective hometowns after reports of thousands who were unable to leave quarantine facilities despite testing negative for the coronavirus disease 2019 (COVID-19) and completing the mandatory 14-day quarantine. — Gillian M. Cortez

Farmers get distribution help from US through online platform

THE United States government is providing assistance to Filipino farmers through a digital platform for directly selling their produce locally, its Embassy said on Monday.

The US Agency for International Development (USAID), in coordination with government agencies and technology startup Insight Supply Chain, established “DELIVER-e,” which connects farmers in Luzon to buyers.

“We are proud to work with the Philippine government and private sector to open new distribution channels for agricultural produce, which will restore farmers’ incomes and support food security,” American Ambassador to the Philippines Sung Y. Kim said in a statement.

The platform, launched in early April amid the lockdowns to contain the coronavirus spread, has helped in selling over 156,000 kilograms of fresh fruits and vegetables through its first two electronic marketplaces, Gulay ng Bayan and City Farms Philippines.

DELIVER-e is part of the United States’ P900-million initiative to support businesses affected by the coronavirus disease 2019 (COVID-19) pandemic, particularly micro, small, and medium enterprises (MSME).

The US government has so far provided a total of $15.5 million, or P780 million, financial assistance to the Philippines for the COVID-19 response.

This has helped in boosting testing capacity, training 7,000 health workers, and providing personal protective equipment to 14 health facilities across the country, among others. — Charmaine A. Tadalan

CoA flags NHA on overpayment to Smokey Mountain contractor

THE Commission on Audit (CoA) has warned the National Housing Authority (NHA) on its plan to pay P1.12-billion and transfer five hectares of government land to settle court cases with R-II Builders, Inc. (RBI), contractor of the Smokey Mountain Development and Reclamation Project.

In a May 12, 2020 audit memo addressed to NHA General Manager Marcelino P. Escalada, Jr. and his team, COA noted discrepancies between a court-approved P1.12-billion NHA-RBI compromise agreement and a 2019 NHA briefing paper submitted to Senator Juan Miguel F. Zubiri where the agency allegedly admitted that it already overpaid RBI by P301.7-million.

“While records disclose that NHA has not paid to RBI the court approved amount under the Compromise Agreement, the Management (NHA), as of to date, has not submitted to the Auditor the riposte or a copy of the comments, if any, of the OGCC (Office of the Government Corporate Counsel) to the AQM (Audit Query Memorandum) as well as the requested documents,” CoA said.

“As a consequence, evaluation of the validity of the transactions could not be had,” it added.

The state auditor also noted that a copy of the compromise agreement between NHA and RBI has yet to be submitted, which is “not in consonance with the freedom of information policy that recognizes and confirms the commitment of the Government to full public disclosure, transparency and accountability in public service.”

In a letter to Mr. Escalada dated October 16, 2018, Chief Government Corporate Counsel Elpidio J. Vega cautioned NHA about the supposed “variance” between its own computation and the proposed settlement with RBI amounting to P1.12-billion plus five hectares of government property in Vitas, Tondo.

Mr. Vega also urged NHA to defer its mediation with RBI, adding that any possible settlement should involve proper computation of interest as well as proper valuation of the properties to be given as payment to the firm.

RBI filed a complaint against NHA in September 2008 for “specific performance and damages” before the Quezon City Regional Trial Court.

In December 2011, the court ruled in favor of RBI, with the following orders: NHA to pay RBI P859 million plus legal interest until fully paid; NHA to convey ownership to RBI the five-hectare portion of Vitas Property, and additional two hectares; NHA to pay RBI P44 million in attorney’s fees and other litigation expenses, plus legal interest until fully paid; and dismissal of NHA’s compulsory counterclaims. — Genshen L. Espedido

Electronics firms still subject to supply issues despite demand

By Jenina P. Ibañez, Reporter

THE electronics industry reported continued disruption in their import supply chains, which is hindering their attempts to ramp up production to address pent-up demand as lockdown restrictions ease.

Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) President Danilo C. Lachica said in a phone interview Monday that the number of employees returning to their facilities has increased, but the industry continues to encounter problems with irregular air and sea shipments for their supplies.

“It’s a significant disruption because how can you plan normal work when the materials are not readily available?” he said.

“On one hand, there’s a lot of demand but on the other hand, the supply chain and the manpower predictability are not stable.”

Mr. Lachica said that demand for some consumer products like mobile phones fell slightly, offset by demand in other areas. He added that he is not yet able to estimate possible product demand for the rest of the year.

Multinational companies have moved some manufacturing to other countries while facilities in the Philippines were on minimal operations.

“I hope that we can recover once supply chain and manpower are normalized,” he said.

He reiterated that the electronics industry needs an additional five years to recover from the pandemic before the four to seven-year sunset provision in the new Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), which is designed to accelerate the reduction of corporate income taxes while rationalizing tax incentives.

DA seeks $200-million World Bank loan to modernize fisheries

THE Department of Agriculture (DA) said it requested a $200-million loan from the World Bank which will support the modernization of the fisheries industry.

In a statement Monday, Agriculture Secretary William D. Dar said the loan will help provide technical support and capital for the industry.

The loan will also support efforts to achieve sustainability of the resource, and address socio-economic conditions in coastal communities.

“The funds will directly contribute to achieving key outcomes in the DA’s Food Security Framework which is integral to the national goals of recovery and resiliency as we survive, reboot and grow in the wake of the pandemic,” Mr. Dar said.

Mr. Dar targets loan approval by mid-2021.

The DA tasked the Bureau of Fisheries and Aquatic Resources (BFAR) to implement the proposed fisheries project across the 12 Fisheries Management Areas nationwide.

“The management areas include the country’s major fishing grounds, lakes, bays, gulfs and other areas that may be delineated for fishery resource management purposes, approximate stock boundaries, range, distribution, and structure,” the DA said.

Mr. Dar directed the BFAR to submit a project feasibility study by November, in time for a presentation to World Bank officials in June 2021.

The fisheries project addresses fisheries and coastal-area resiliency planning, resource management, livelihood investment, and project management.

The DA said if the $200-million loan is approved, the target implementation date is October 2021. — Revin Mikhael D. Ochave

NEDA backs more investments in IT infrastructure, cashless processes

THE National Economic and Development Authority (NEDA) said it supports greater investments in the infrastructure supporting e-commerce and cashless transactions, which allowed many businesses and individuals to function during the lockdowns and beyond.

“Online shopping and marketing platforms will play a bigger role in the new normal as businesses and consumers increase the use of electronic transactions, including cashless payment systems and other financial technology platforms,” NEDA Acting Secretary Karl Kendrick T. Chua said in a statement Monday.

NEDA proposed to “revisit” Republic Act No. 8792 or the Electronic Commerce Act of 2000 in a recent report. It recommended tweaks to make it “more comprehensive in detailing transactions covered by the law, specifying the rights of consumers, and strengthening the penalties imposed on service providers.”

Mr. Chua said more investments are needed in information and communications technology infrastructure to meet the spike in online transactions and to meet heightened consumer expectations for reliable Internet access.

According to a NEDA consumer survey conducted in April, more than half of some 390,000 respondents said their incomes fell after losing their livelihoods while many reported difficulty in accessing goods and services due to business closures, curfews and the ban on public transportation.

NEDA said in its report that meeting the spike in demand for online transactions “will be a challenge” with distancing guidelines still in place and many employees working from home. More businesses are also seeking to expand their online presence as alternative, digital modes to shopping continue to emerge.

“Businesses need to innovate and make full use of technology to resume operations and cater to consumer needs and preferences while still managing risks of COVID-19 infection,” Mr. Chua said, adding that companies will also have to “make online shopping easy, affordable, and secure.”

According to NEDA, the government needs to help them by extending financial and livelihood support for online enterprises and those in the e-commerce supply chain.

Meanwhile, Mr. Chua said financial institutions will also need to improve cybersecurity measures and regulations for retail clients and other businesses as well.

“The passage of the Financial Consumer Protection bill will provide the regulatory framework to protect the interests of financial consumers and reinforce confidence in financial markets,” according to NEDA, which also supports an information and education campaign on the rights of insurance policyholders. — Beatrice M. Laforga

House panel approves e-government bill

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THE House Committee on Information and Communications Technology on Monday approved House Bill 1248, which will require electronic government services and processes in all agencies and government corporations.

The proposed E-Government Act aims to improve ease of doing business and facilitate the observance of distancing measures in the post-quarantine era.

The bill requires the Department of Information and Communications Technology (DICT) to establish and promote an E-Government Master Plan to facilitate the development of all electronic government services. This is subject to review and revision every three years.

The master plan includes a Philippine government interoperability framework to guide and govern basic technical and informational interoperability of the ICT systems of all government agencies and corporations; an archives and record management information system to digitize paper-based documents; and a government online payment system enabling citizens and businesses to remit payments electronically.

The principal author of the measure, House Deputy Speaker and Camarines Sur Representative Luis Raymund F. Villafuerte, Jr. said in a statement on May 24 that the measure “aims to prepare and educate Filipinos for life after the lifting of the restrictions imposed by the national government and local government units to contain the spread of COVID-19 (coronavirus disease 2019) through new norms of social or physical distancing and safety measures in government and private offices, schools, commercial establishments and other public spaces,” Mr. Villafuerte said.

The committee also consolidated and approved House Bills 6759 and 6786 which seek to promote and develop digital careers.

Under the consolidated bill, the DICT, Department of Education, Commission on Higher Education, and the Technical Education and Skills Development Authority (TESDA) are required to create programs to ensure access to training, markets, and other forms of support for digital careers.

The Department of Labor and Employment and Department of Trade and Industry are the primary agencies tasked to draft standards for digital workers covering minimum-wage compliance, local government registration, complaint processing, industry-specific certification or training, and tax filing.

The bill also provides incentives for digital workers including scholarships, subsidized use of facilities and services provided by the government or private institutions, and grants-in-aid for equipment acquisitions.

The DICT, Department of Budget and Management and the Department of Public Works and Highways are required to ensure universal access to high speed, quality and affordable Internet by facilitating the development of connectivity infrastructures across the country.

The measure also directs TESDA to create a skills map geared towards identifying sectors that can be “effectively and positively” benefited by digital careers training.

“Clearly, online freelancing has become a viable option for Filipinos. By establishing the necessary policies in relation to online freelancing, we hope to provide ample and profitable employment to Filipinos online benefitting their families and our country,” Bohol Rep. Kristine Alexie B. Tutor said in the explanatory note of House Bill 6786.

All measures are awaiting second reading at the chamber. — Genshen L. Espedido

WFH to require data safeguards for outsourcing clients

OUTSOURCING contracts need to be rewritten to ensure client data protection under work-from-home (WFH) arrangements, IBM Philippines Government and Regulatory Affairs Executive Princess Lou M. Ascalon said.

Ms. Ascalon made the remarks at a virtual event organized by the National Privacy Commission Thursday.

“Data privacy clauses in our client and vendor contracts were… insufficient in addressing issues in a work-from-home environment, where we had to quickly amend and negotiate our client and vendor contracts to allow work-from-home arrangements with increased commitment from a physical, technical, and organizational perspective to ensure data privacy and security,” she said.

Some clients also asked for noise-proof workspaces in employee homes to reduce interference. Ms. Ascalon said IBM Philippines had to explain to clients that it is impossible for work-from-home operations to exactly mirror the security of an office environment.

IBM Philippines also had to ensure the delivery of secure devices to homes and to secure company network connections.

At the event, the NPC announced that it is leading 134 jurisdictions in a global task force to help shape government responses in protecting citizen privacy during the pandemic.

Privacy Commissioner Raymund E. Liboro was appointed chairman of the COVID-19 task force of the Global Privacy Assembly, which will focus on protecting data during contact-tracing and ensuring privacy as COVID-19 testing expands when employees return to work after quarantine restrictions are eased.

“Our aim for this task force is to examine current privacy concerns, while finding the right balance between supporting innovation to combat the pandemic and ensuring people’s personal data and information rights are respected,” Mr. Liboro said.

The task force includes representatives from the International Committee of the Red Cross. — Jenina P. Ibañez

PSA, NEDA survey farmers, fishermen on COVID-19 impact

THE Philippine Statistics Authority (PSA) has tied up with the National Economic and Development Authority (NEDA) for a survey that hopes to assess the impact of the coronavirus disease 2019 (COVID-19) outbreak on the agriculture and fisheries industries.

In a statement, the PSA said the survey, which was conducted in May, will aid in drafting policy recommendations to help the economy adapt to the post-pandemic environment.

“On behalf of the Inter-Agency Task Force’s Technical Working Group (IATF-TWG) on Anticipatory and Forward Planning, the NEDA and the PSA will conduct the Business Rapid Assessment Survey for Agriculture and Fisheries (BRASAF),” the PSA said.

BRASAF will be a rider survey to eight other surveys that will cover agriculture and fishery activities such as palay production, corn production, crop production, commercial livestock and poultry raising, commercial fisheries, municipal fisheries, inland fisheries, and aquaculture.

The PSA will also seek to form a picture of what forms of assistance are needed from the government to ensure continued production, and the industry’s plans in the next few months after quarantines are lifted. — Revin Mikhael D. Ochave

Energy efficiency industry, angling for slice of PESA money, touts job-creation potential

ENERGY efficiency projects have the potential to generate 45% more jobs than the government’s flagship infrastructure program, assuming extensive investment from the economic stimulus package, the industry association said.

In a position paper sent to various agencies Monday, the Philippine Energy Efficiency Alliance, Inc. (PE2) is lobbying for P55 billion worth of investment in energy efficiency for inclusion in the proposed Philippine Economic Stimulus Act (PESA), saying investment will boost job generation after the economic stagnation caused by the coronavirus disease 2019 (COVID-19) pandemic.

It said that energy efficiency projects are projected to generate 10 more jobs, or 37.42, for every P50 million worth of capital invested, compared to the government’s “Build, Build, Build” (BBB) program, which creates about 25.88 jobs per P50 million invested.

“In comparison to the BBB program through the remaining term of the Duterte administration, energy

efficiency projects are estimated to be 45% more labor-intensive than BBB infrastructure development activities, creating significantly more jobs for every P50 million invested in long-term or stimulus programs,” PE2 said.

The Department of Budget and Management (DBM) estimated that 1.1 million jobs are created each year from the implementation of BBB projects, in which P8-9 trillion is due to be invested by 2022.

Under the PESA Bill, the enhanced infrastructure program will receive around P650 billion in funding.

The job-generation estimate was arrived at after a survey of energy service companies.

PE2’s investment recommendations will create around 41,200 energy efficiency-related jobs over three years starting 2021.

The proposed investment includes P40 billion in concessional loans from financial institutions such as the Development Bank of the Philippines and the Land Bank of the Philippines to local government units and small businesses for their energy efficiency projects. Another P15 billion will go to energy-efficiency improvements in public sector facilities.

On May 26, the House Defeat COVID-19 Ad-Hoc Committee approved PESA among bills aimed to help the Philippine economy recover from the pandemic . — Adam J. Ang

Proposed tax reform in a time of pandemic

The government’s plan to improve our corporate tax system and to develop a more efficient and competitive tax incentives regime has been ongoing for quite some time. In February, the proposed measure, known as the Corporate Income Tax and Incentives Reform Act (CITIRA) Bill, reached the Senate. Many hopes were raised that the CITIRA Bill would soon be enacted into law.

Unfortunately, the COVID-19 pandemic broke out. Along with it are the measures undertaken by the government such as declaring a state of public health emergency and imposing community quarantine in several areas to contain the spread of the virus. These measures halted many social and economic activities and changed various aspects of our everyday lives.

The CITIRA Bill was not spared change. Given the COVID-19 situation, several changes were proposed to the bill to recalibrate it, to be more responsive to the needs of businesses, and to aid taxpayers in their recovery.

Below are some of the proposed key changes to CITIRA Bill, now known as the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), that legislators are currently evaluating:

OUTRIGHT REDUCTION OF CORPORATE INCOME TAX RATE
Under CITIRA, the corporate income tax (CIT) rate will be reduced by 1 percentage point every year starting Jan. 1, 2020, until it eventually reaches 20% by Jan. 1, 2029. Under CREATE, businesses can enjoy earlier the benefit of paying income tax at lower rates due to an outright reduction of the CIT rate from 30% to 25% by July 1, 2020. Afterwards, starting Jan. 1, 2023, there will be a 1 percentage point decrease every year until the CIT rate reaches 20% by Jan. 1, 2027.

Businesses can use the funds saved from the cut in the CIT rate to revitalize operations and retain their workers.

EXTENDED PERIOD OF NET OPERATING LOSS CARRY-OVER
Net operating loss is the excess of deductible expenses over the gross income of a taxpayer in a given taxable year. Under the current rules, the net operating loss can be carried over as a deduction from gross income to the next three succeeding taxable years. Under the CITIRA Bill, there were no provisions amending this rule.

Under CREATE, however, the net operating loss incurred by non-large taxpayers for the taxable year 2020 can be carried over as deduction from gross income for the next five consecutive years. This provision will help taxpayers recover the losses incurred in 2020 when many businesses were forced to stop their operations or operate at limited capacity due to the COVID-19 pandemic.

LONGER SUNSETS FOR BUSINESSES CURRENTLY ENJOYING INCENTIVES
Under the reform on the tax incentives, the incentives currently being enjoyed by businesses registered with different investment promotion agencies (IPAs) are being modified to make the incentives performance-based, targeted, time-bound, and transparent. Companies currently enjoying incentives under the existing laws governing their respective IPAs, however, will still be allowed to enjoy existing incentives for a certain period.

Under CREATE, businesses currently registered with different IPAs can still enjoy 5% gross income tax for four to nine years from effectivity of new tax incentive schemes. This is an extension of two years from the two to seven years of sunset period provided under the CITIRA Bill. This will give ample time for businesses to adjust to and evaluate the new incentive schemes.

TARGETED INCENTIVES FOR BUSINESSES IN IDENTIFIED AREAS
One aspect of the new tax incentives schemes under both CITIRA and CREATE is to provide a longer period of tax incentives for businesses that will locate in less-developed areas and areas outside of metropolitan regions. This geographic targeting is in support of the government’s “Balik Probinsya, Bagong Pag-asa Program,” which aims to decongest Metro Manila.

In terms of industry targeting, activities which include highly technical manufacturing, agriculture, fishing, forestry, and service activities requiring knowledge, modern science, engineering, and research resulting in significant value-added and high-paying jobs, as well as activities that may draw in investment capital of $1 billion, will be highly prioritized.

Moreover, the President is given flexibility in granting tax incentives. Upon the recommendation of the Fiscal Incentives Review Board, the President may modify the mix, period, or manner of availing of incentives for a highly desirable project or a specific industrial activity based on defined development strategies, such as creation of high-skilled jobs and attracting significant foreign capital or investment subject to limitation that the period for availing of incentives shall not exceed 40 years.

Over the past few months, we have seen how our government dug deep into its pockets to support its people and put up the fight against the COVID-19 outbreak. With this fight came lockdowns, business shutdowns, layoffs, and disrupted supply chains, which have taken a heavy toll on our economy. Some of the proposed provisions of CREATE to help businesses recover from the pandemic may mean a reduction in government revenue, but these will also help attract a new wave of multinational businesses to invest in our country, thereby giving our economy a much-needed boost. We can only hope that the proposed measures will be passed into law as early as possible.

The pandemic and tax reform both entail change. While the changes brought about by the former may be something we wished never happened, the changes that the latter may bring would definitely be most welcome.

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

 

John Paulo D. Garcia is a manager of the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Local pro hoops league looking to ease its way back

By Michael Angelo S. Murillo, Senior Reporter

WITH Metro Manila entering a general community quarantine (GCQ) setup on Monday, the Philippine Basketball Association is hoping that it would pave the way for more opportunities for it to ease its way back to the grind.

Following nearly three months of heightened restrictions because of the coronavirus disease 2019 (COVID-19) pandemic, the Inter-Agency Task Force for Emerging Infectious Diseases (IATF) last week decided to downgrade, beginning June 1, conditions in the National Capital Region to GCQ, where certain restrictions are lowered.

These include allowing athletes and enthusiasts of individual sports to squeeze in some activities, provided certain health and safety protocols are followed.

Among the sports allowed to resume are running, biking, golf, swimming, tennis, badminton, equestrian and skateboarding.

Some forms of mass gatherings, too, are allowed as long as participants are accommodated in limited capacity to ensure that the potential to get COVID-19 would not be high, if not possible.

It is this turn of events that PBA is banking on as it angles to get back to some semblance of normalcy after shutting its activities in March when the highly contagious respiratory disease started to take further root in the country.

“This makes us optimistic that our teams can be allowed to return to the gym for individual workouts by shift,” PBA Commissioner Willie Marcial was quoted as saying in the official league Website on what they are immediately looking at with the easing of certain restrictions.

Mr. Marcial, however, said they recognize that there is still a long way to go from the league’s return to action but he expressed their readiness to comply with whatever government asks of organizations like them and do what is needed to ensure a successful restart.

“Slowly the plans of the government moving forward are being made known and the PBA is looking at that and working around it,” said Mr. Marcial.

The PBA said that it would make a final decision on the fate of Season 45 in August, believing that by that time there would be a clearer picture of the COVID-19 situation in the country.

But while the league is awaiting return to action, the PBA office has started operating after some time.

It does not have the full complement yet as it is still waiting the results of the COVID-19 testing done on its personnel at the weekend but nonetheless are bent on getting some work done in their push to resume activities.

This week the PBA Board of Governors is set to convene and craft the appropriate protocols for the league under the “new normal.”

Sunsparks wins second straight MLBB Professional League — PH title

FOR the second straight time Sunsparks is the Mobile Legends: Bang Bang Professional League – Philippines (MPL-PH) champion after topping ONIC PH in the finals of season 5 at the weekend.

Allen “Greed_” Baloy lifted Sunsparks to the title, leading his team to the 3-1 victory in their best-of-five battle with ONIC PH, which he was once part of.

With the title-clinching Game Four heading into a fever pitch, both teams figured in a crucial clash near the lord pit. Greed_ (Natalia) — who was donning the ONIC PH jersey just last season — found his former teammate Danerie “Wise” James (Hanzo) placed just beside the throne in his pinnacle form and erased him off the map right away.

With members of ONIC PH still far off, Greed_ immediately attacked the throne to seal the crown.

Having had the opportunity to contribute that way he did, Greed_ said he was very happy to finally lay his hands on the title with Sunsparks just as he shared he felt for his former team.

“I can say that I am more happy that we won than because we beat them (ONIC PH),” said Greed_ , who finished with seven kills and five assists in Game Four, while also providing the vision for his team through Natalia’s assassin instinct.

Teammate Kiel VJ “Kielvj” Cruzem (Kimmy), backstopped Greed_ with four kills and eight assists while the supporting cast of Jaypee “Jaypee” Dela Cruz (Jawhead), Ashley Marco “Killuash” Cruz (Thamuz), and Christian “Rafflesia” Fajura (Khufra) combined for eight kills and 17 assists.

For his consistent finals brilliance, however, Kielvj was named finals most valuable player.

ONIC PH was paced by Christian “Iy4knu” Manaog (Chou) with eight kills, four kills, and three deaths in Game Four with Wise adding five kills, seven assists, along with five deaths.

For winning the tournament, Sunsparks secured the $25,000 top prize with ONIC PH settling for $13,000.

Third place went to Bren Esports while Execration finished fourth.

Other teams that competed in the tournament were SGD Omega, Blacklist International, BSB and ULVL.

The Mobile Legends: Bang Bang Professional League — Philippines (MPL-PH) was powered by Smart Communications Inc. — Michael Angelo S. Murillo

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