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Review of Barbaresco 2017 and Barbaresco Riserva 2015

BARBARESCO and Barolo wines are often inseparable — both being Piedmont’s most renowned wine regions, and both proudly made from 100% nebbiolo grapes. Both Borolo and Barbaresco were also established as DOC at the same year in 1966, and both were promoted together to DOCG status in 1980. The difference geographically is that Barolo is located in the southwest of Langhe, the province of Cuneo in Piedmont, while Barbaresco is located in the northeast. Barbaresco also lies closer to the river Tanaro and the Ligurian Sea. These twin maritime influences plus the lower altitude vineyards make the nebbiolo grapes grown in Barbaresco ripe faster than those nebbiolos planted in Barolo. The resulting wines are often more approachable, softer, have fewer tannins, and are fresher. For this same reason, the Barbarescos are allowed to be commercially released earlier than Barolos. In the last Nebbiolo Prima, we previewed the Barbaresco DOCG 2107 and the Barbaresco Riserva 2015.

BARBARESCO DOCG PARTICULARS
For the 2017 vintage, the total production of Barbaresco was around 4.2 million bottles, from its 750 hectares of vineyards. Barbaresco aging requirements are higher than those of the Roero region which I covered in my previous column, but less than those of Barolo, which I will cover in my next column. For Barbaresco DOCG, ageing a minimum of 26 months, of which minimum of nine months should be in barrel, is required before earliest commercial release, and this is basically pegged at Jan. 1 of the third year from vintage. For Barbaresco Riserva DOCG, a minimum of 50 months, of which minimum of nine months should be in barrel, are required before earliest commercial release, equating to Jan. 1 of the fifth year from vintage. These lower aging requirements make Barbaresco slightly lower in price than their Barolo counterparts.

MIX FEEDBACK FROM 2017 VINTAGE
I love my Barbarescos as much as I love my Barolos, and this year’s newly released vintage of 2017 was a bit of a mix batch. From this relatively big sample size, the Barbaresco’s typical freshness, racy raspberry and strawberry flavors were still noticeable in this vintage, but I did detect more wines with very perfumed nose that exuded lavender, violets, red roses, and all the other fragrances I typically call “detergent scents,” which I actually like for its elegance and sophistication. The difference was in the consistency of the vintage as some wines tasted green and unripe, and others were a bit too thin. This was not the case for the Barbaresco 2016 vintage I reviewed last year, which I found to be a lot more consistent in quality across the batch.

This year, we had slightly more to blind-taste of both Barbaresco DOCG and Barbaresco Riserva wines compared to last year: a total of 59 Barbaresco 2017 and 15 Barbaresco Riserva 2015 vs last year’s 55 Barbaresco 2016 and eight Barbaresco Riserva 2015 entries respectively. Coincidentally same as last year, I gave 22 wines 90 points or over for the Barbaresco 2017. But this was relatively lower in percentage compared with the 2017 with 37.3% getting 90 points or above, against 40% of the 2016 scores in the same range.

For the Barbaresco Riserva 2015, the blind tasting result was astounding as I gave seven of the 15 wines (46.7%) 90 points and above, with every wine (with one exception) scoring 88 points or over. In recent memory, this 2015 is one of the best Barbaresco Riserva vintages for me by far. In contrast, at last year’s Nebbiolo Prima, I only liked one out of the eight Barbaresco Riserva 2014 I blind tasted.

Sadly though, not many Barbaresco Riservas come our way here in the Philippines. So if you come across a Barbaresco Riserva when traveling abroad, in particular the 2015 vintage, grab a few bottles quickly before it runs out.

MY RATINGS

Please note these wines were tasted blind, and each wine was tasted for only a few minutes, given the huge quantity being tasted at any given morning during the entire Nebbiolo Prima event. Also understand that judgment on these wines was purely based on my personal biases and experience drinking, appreciating, and enjoying wines.

BEST BARBARESCO DOCG 2017
My top 22 wines from this lot of 55 wines are the following:

1-2. Castello Di Neive Barbaresco 2017: 93 points. “lavender, red petal, yet deep and intense, cherry fruit, long and very flavorful”

Voghera Luigi Barbaresco 2017: “vanilla, pie crust, lavender, violets, so much happening in the nose, voluminous, extremely round and delicious all the way”

3-6. Adriano Marco E Vittorio Barbaresco 2017: 92 points. “very succulent and juicy on the nose, stewed tomatoes, meaty, supple and long finish”

Cascina Saria Barbaresco 2017: “cassis, figs, cherries, alluring nose, long, deep and jammy”

Montaribaldi Barbaresco 2017: “tangy, fruit cocktail nose, juicy acids, very sweet and ripe at the end”

Poderi Colla Barbaresco 2017: “black currant, fresh, soft tannins, satin-like texture, crisp and delectable finish”

7-13. All with 91 points. Cascina Alberta Barbaresco 2017; Cascina Luisin Barbaresco 2017; Cascina Morassino Barbaresco 2017; Grasso Fratelli Barbaresco 2017; Il Bricco Barbaresco 2017; Prinsi Barbaresco 2017; Taverna Barbaresco 2017

14-22. All with 90 points. Collina Serragrilli Barbaresco 2017; Figli Luigi Oddero Barbaresco 2017; Giuseppe Cortese Barbaresco 2017; Icardi Barbaresco 2017;

Moccagatta Barbaresco 2017; Pelissero Barbaresco 2017; Pertinace Barbaresco 2017; Rattalino Massimo Barbaresco 2017; Tenuta Barac Barbaresco 2017

Three of my top six wines in this list — namely Castello Di Neive, Adriano Marco E Vittoro, and Cascina Saria — were also in my top 22 wines with score of 90 points and above on my vintage 2016 review last year. Seven other brands were also in this same list of 90 points and above on both vintages 2017 and 2016, namely: Pertinace (tied for No. 1 in my 2016 vintage preview), Cascina Saria, Collina Serragrilli, Rattalino Massimo, Cascina Morassino, Giuseppe Cortese and Moccagatta.

BEST BARBARESCO RISERVA DOCG 2015
My top seven with scores of 90 points and over from a group of 15 wines:

1. Punset Barbaresco Riserva 2015: 95 points. “luscious nose, long, deep and intense, supple texture, juicy acids, lovely taste with intertwined flavors of vanilla and plums, delicious bitter-sweet finish”

2. Piazzo Comm. Armando Barbaresco Riserva 2015: 93 points. “a fruit bomb from first whiff onwards, lovely bouquet with nice acacia and vanilla, juicy and plummy all the way”

3-4. Both with 92 points. La Bioca Barbaresco Riserva 2015: “black currant nose, leafy, herbal, dark fruits, nicely structured, crisp with peppery notes, complex, dry at the end” Massimo Rivetti Barbaresco Riserva 2015: “mentholated nose, pine tree, very fresh, but tannins are soft, balanced acids, round finish”

5. Castello Di Verduno Barbaresco Riserva 2015: 91 points.

6-7. Both with 90 points. Francone Barbaresco Riserva 2015; Molina Barbaresco Riserva 2015

Last year, the Francone Barbaresco Riserva 2014 was the only Barbaresco Riserva I gave 90 points to, and by coincidence once more (after the blind tasted wines were revealed), this same wine on its Riserva 2015 vintage got the same 90 points score from me.

In my next column, I will tackle the Barolo 2016 vintage.

Postscript: Let us all pray for the containment and eventual end of this COVID-19 pandemic that has reached almost 100 countries. Italy is one of the most severely hit countries. I was in Northern Italy just over a month ago before the first recorded case of coronavirus in Italy. It is in the northern part of Italy where the virus has the most cases, and also were several wine regions are in fact located. As of this writing, Italy is closing in on 4,000 cases, with the second highest number of deaths recorded (after China) and has one of the scariest increments of COVID-19 cases on daily basis.

The author is a member of the UK-based Circle of Wine Writers (CWW). For comments, inquiries, wine event coverage, wine consultancy and other wine related concerns, send an e-mail to protegeinc@yahoo.com.

How PSEi member stocks performed — March 11, 2020

Here’s a quick glance at how PSEi stocks fared on Wednesday, March 11, 2020.

OFW dep’t, road user tax bills approved on final reading

THE House of Representatives passed on third reading a priority measure seeking to create the Department of Filipinos Overseas and Foreign Employment.

With 173 affirmative votes, 11 negative and zero abstention, the chamber passed House Bill 5832 three days before its seven-week Easter break starting March 14.

The Department of Filipinos Overseas was declared a priority measure by President Rodrigo R. Duterte during his 2019 State of the Nation Address.

The department is tasked to “formulate, plan, coordinate, promote, administer, implement policies, and undertake systematic national development programs for managing and monitoring the overseas or foreign employment of Filipino Workers.”

Under the bill, it must also take into consideration “domestic manpower requirements and the need to protect the rights to decent work and fair and ethical recruitment practices.”

Several agencies and their functions are to be transferred to the new department, including the Office of the Undersecretary for Migrant Workers’ Affairs (OUMWA) of the Department of Foreign Affairs (DFA), the Commission on Filipinos Overseas (CFO), all Philippine Overseas Labor Offices (POLOs), which are currently under the Department of Labor and Employment (DoLE), the Philippine Overseas Employment Administration (POEA), and the Social Welfare Attaches Office (SWATO) of the Department of Social Welfare and Development (DWSD).

The department is required to “build a strong and harmonious partnership” with other countries and to assess policies and labor conditions where OFWs are deployed.

Representative Edcel C. Lagman of Albay said he voted against the measure because the bill “will uselessly balloon the bureaucracy… without addressing the enormous and escalating social costs of labor migration.”

“The projected department does not also address the overriding reasons why Filipinos work overseas like the following: (a) unstable economic situation in the Philippines; (b) high unemployment and underemployment rates; (c) low salary offered by local companies; (d) contractualization of labor arrangement; (e) poor workers benefits; and (f) discrimination in job hiring,” he said in a statement on Wednesday.

“The essence and purpose of the bill are manifestly to convert a hitherto stopgap strategy to a permanent policy encouraging and promoting the export of Filipino manpower, notwithstanding a proffered ‘sunset’ provision which was included to mitigate opposition to the measure even as the so-called ‘sunset’ provision envisions a ‘sunrise’ perpetuation of the Department,” he added.

The bill’s counterpart measure in the Senate is in committee.

Separately, a measure which will increase the road users’ tax and expand funding for the government modernization program for public utility vehicles was also approved on third and final reading in the House of Representatives Tuesday.

With 239 affirmative votes, five negative and one abstention, the chamber passed House Bill 6136 or the Motor Vehicle Road User’s Tax (MVRUT) Act.

The measure calls for a 30% annual rate increase for passenger cars, both public and private, over three years.

The rates for utility vehicles, sport utility vehicles, buses, trucks and trailers will be based on gross vehicle weight (GVW): P1.40/kilo of GVW in the first year, P2.50/kilo in the second year, and P3.40/kilo in the third year.

The measure also seeks to cut the road user’s tax on vehicles for hire to 50% of the tax for private and government vehicles.

According to the bill’s principal author, Rep. Jose Maria Clemente S. Salceda of Albay, “50% of incremental revenues will finance modernization of public utility vehicles and government programs to be undertaken for the prevention of death due to road accidents and accident victims’ assistance” while the other 50% will go to “a more safe Build, Build, Build” program.

“Ito pong tax na ito, napaka-progressive. Mayaman ang magbabayad. Mahirap ang makikinabang. (This tax is very progressive. The rich will pay while the poor will benefit.) And we expect it to help ease transport conditions for everyone by contributing to safer road infrastructure, and by expanding the PUV modernization,” Mr. Salceda said in a statement on March 5.

No similar bill has been filed in the Senate.

A measure which requires banks to ease the lending process for agricultural and rural development projects was also approved on third and final reading Tuesday.

With 240 affirmative votes, five negative and zero abstentions, the chamber passed House Bill 6134 or the Rural Agricultural and Fisheries Development Financing System Act.

According to Rep. Junie E. Cua of Quirino, the principal author of the bill and the chairman of the House committee on banks and financial intermediaries:

“The cost of lending to small farmers and fisheries… kasi maliliit na pautang ito eh so masyadong expensive (is too high relative to the amounts lent). You can just imagine, to be able for them to lend P25 million with 1,000 farmers borrowing P25,000 only. That’s a lot of processing,” he told BusinessWorld by phone on March 5.

Mr. Cua said that banks would rather pay the penalty for not lending to small farmers and fishermen, which they are required to set aside funds for under the Agri-Agra Law (Republic Act 10000).

“They would rather pay the penalty which is one half of one percent (of non-compliance or under-compliance), than to lose the whole amount. So those are the reasons why they shy away from lending,” he said.

To address these issues, Mr. Cua said that the bill proposes to organize farmers into cooperatives or organizations to provide “ready, low-interest, and flexible financing” for the needs of rural and agricultural households.

He added that the funds to implement the measure will be partly generated by banks and by penalties for non-compliance.

The funds will be managed by a council which will be dominated by the private sector, Mr. Cua noted.

“Since pera nila ’yung papautangin sa farmer, mas sisiguraduhin nila na yung papautangin nila ay maayos. So sisiguraduhin nila ma-o-organize ’yung farmers (The private sector can be counted on to better ensure that the loans are above board and the farmers are properly organized),” he said.

The bill’s counterpart measures in the Senate are still in committee. — Genshen L. Espedido

Retailers call for rationing of rubbing alcohol, hand sanitizer

A SUPERMARKET association official said its members need to consider capping individual purchases of rubbing alcohol, hand sanitizers and face masks, in order to stem panic-buying following a rise in domestic cases of coronavirus (Covid-19).

Philippine Amalgamated Supermarkets Association (Pagasa) President Steven T. Cua specifically proposed caps of two bottles of rubbing alcohol per customer.

“I am suggesting to our members to limit their sale of (rubbing) alcohol to two per person because we don’t want everyone running out of it,” Mr. Cua said in a phone interview.

He also proposed to limit sales to individual buyers of sanitary wipes and soap.

Mr. Cua, who is also the president of the Quezon City-based Welcome Supermart chain, noted increased purchases of rubbing alcohol in the past two days.

The Department of Health (DoH) ordered a price freeze on drugs and medical supplies, including ethyl alcohol and N95 disposable face masks on Jan. 31.

Mr. Cua said the sale of other commodities, like canned goods and bathroom tissue, should not yet be restricted.

“It will be a signal [for people to start panic-buying], dahil nagkakaubusan na (because stocks will run out),” he said. “It will be counter-productive.”

“We should give everyone access to soaps, disinfectant sprays, and other cleaning materials,” he added.

In a separate advisory, Mr. Cua told its 48-member association with 383 supermarket branches nationwide to order sufficient supplies of goods, as well as diversify sourcing, including carrying other brands, should their regular suppliers could not be able to meet their demand.

“Let us order enough supplies to assure the buying public that supplies are not about to run out when customers need them,” he said.

“Better to have any brand of rubbing alcohol or face mask or hand sanitizer than none at all to allay the fear of customers that stocks are running out,” he added.

The national government issued a statement Wednesday warning the public to avoid panic-buying.

The President’s Spokesman Salvador S. Panelo said the Palace “appeals to our people to buy only what they need.”

“There are reports of panic-buying in some supermarkets, groceries or pharmacies. This would only result in undue hoarding and price increases,” Mr. Panelo said.

Domestic cases of Covid-19 infection hit 33 as of Tuesday, with some patients having no travel history, stirring fears of local transmission.

“Our officials from the Department of Trade and Industry (DTI) gave assurances that we have ample stock of essential items,” he said.

Trade Secretary Ramon M. Lopez told reporters Wednesday that inventories of key goods are ample.

“We advised consumers not to panic buy. So many stocks in the country,” Mr. Lopez told reporters in a mobile message Tuesday.

“Many areas in China (are) getting back to normal so (there is) less pressure on having supply chain disruptions.”

The Department of Agriculture said Tuesday that Metro Manila’s food supply is sufficient in case a lockdown is ordered for the National Capital Region.

Agriculture Secretary William D. Dar said that Metro Manila has rice stocks equivalent to five or six months of demand, while other foods will continue to be available as they are harvested in March and April.

The sole domestic manufacturer of face masks, Medtecs International Corp. Ltd., committed to the DTI a weekly supply of 400,000 masks. The Philippine International Trading Corp. is also in talks to order face masks from suppliers in India and Thailand.

President Rodrigo R. Duterte declared a state of public emergency on Sunday, but stopped short of ordering a lockdown for Metro Manila, where most of the cases have emerged. — Adam J. Ang, Jenina P. Ibañez, Gillian M. Cortez

‘Precursor’ service to Cebu Bus Rapid Transit launching next week

THE Department of Transportation (DoTr) said Wednesday that a bus service meant to serve as an interim form of transport ahead of the completion of the Cebu Bus Rapid Transit (BRT) system will begin operations next week.

“The Cebu Interim Bus Service (CIBUS), a trunk service that will be used to augment the transport system in Cebu City until the completion of the Cebu Bus Rapid Transit (BRT), will start operations on March 16,” the department said in a statement.

It said the service will be the “precursor project” intended to “mimic the BRT System, so as to allow Cebu commuters to readily adapt to the new culture of instilling predictability in their daily commute.”

The interim bus service will initially operate in southern Cebu City in preparation for the BRT, which is scheduled for completion by the last quarter of 2021.

The interim bus service will have 17 bus stops, connecting the Fuente Osmeña rotonda to the SRP (South Road Properties) area.

Transportation Secretary Arthur P. Tugade said: “After a long wait, the CIBUS will be operational. It will serve for the convenience of Cebu commuters until the Cebu BRT, which is designed to accommodate a larger passenger volume is established and is up and running.”

The department said the P17-billion World Bank-funded BRT system is part of its integrated intermodal transport system for Metro Cebu.

The DoTr said the BRT project is currently undergoing “review and validation” of documents and detailed engineering design by the on-board technical support consultant.

It said 250 buses will be deployed upon the completion of the BRT, which will have at least 21 stations.

“Timelines of the project include Phase 1 (Cebu South Bus Terminal to Capitol) for partial operations by December 2021 and Phase 2 (Bulacao/Talisay to Talamban) for partial operations by March 2022,” it said. — Arjay L. Balinbin

Rice inventory increases 10.9% in February

THE NATIONAL rice inventory rose 10.9% year-on-year to 2.375 million metric tons (MT) in February, the Philippine Statistics Authority (PSA) said, following a substantial increase in holdings by the National Food Authority (NFA).

In its Rice and Corn Stocks Inventory report, the PSA said rice held by households rose 1.3% to 1.045 million MT while those of commercial warehouses rose 3.7% to 841.15 thousand MT.

NFA inventories rose 64.2% to 488.68 thousand MT.

On a month-on-month basis, the national rice inventory was down 11.2%, with household stocks falling 12.7%, those of commercial warehouses down 11.6%, and NFA stocks declining 6.9%.

Meanwhile, corn inventories in February fell 16.3% year-on-year to 654.52 thousand MT.

Stocks of corn held by households rose 4.9% year-on-year to 153.10 thousand MT, while commercial warehouses held 501.42 thousand MT, down 21.1%.

The NFA has not stocked corn in the past two years.

Month-on-month, the household corn inventory declined 27.1% while commercial stocks fell 16.7%.

Separately, the United States Department of Agriculture (USDA) said the Philippines’ milled rice production is projected to be stable at 12 million metric tons (MT) in March.

In its Grain: World Markets and Trade report, the USDA added that rice imports for the month will also be steady at 2.5 million MT, as will estimated consumption at 14.4 million MT.

It said demand for feed-quality wheat in the Philippines has increased, with Russia as one of the major suppliers.

“Improvements in Russian wheat quality have also stimulated recent discussions with the Philippines, a market that has generally purchased most of its milling wheat from the United States,” the report said. — Revin Mikhael D. Ochave

One-hour test to detect ASF hurdles pilot evaluation

THE Bureau of Animal Industry (BAI) said a test kit for African Swine Fever (ASF) co-developed with Central Luzon State University has become available, promising more rapid detection of the disease in hogs suspected of being ill.

BAI Director Ronnie D. Domingo told reporters previous efforts to identify ASF cases had been hampered by bottlenecks at government laboratories, adding that the new test kit was developed over six to 10 months, costs P300, a tenth of the price of the old one, and can return a result in under an hour.

The new kit was pilot-tested two weeks ago and “have been accurate and very satisfactory,” Mr. Domingo said.

The rapid confirmation and low cost means the kits can be widely distributed to other government agencies and hog traders, providing earlier warning of disease detection.

“We have conducted pilot tests in areas in Cebu; with Davao and Bicol regions to follow,” Mr. Domingo said.

The Department of Agriculture released P10 million to BAI for production, distribution, and training to use the test kits.

Secretary William D. Dar told a House committee recently that as of March 2, ASF has been confirmed in 625 barangays across eight regions. As a precaution, 237,406 animals have been culled.

He called for local government units to take the lead as “first responders” in efforts to contain ASF and to prevent further spread of the disease. — Revin Mikhael D. Ochave

‘Modest’ oil price decline impact on emerging markets

PLUNGING global oil prices could boost oil-dependent emerging economies like the Philippines and possibly serve as a “modest global offset” to the adverse impact of the coronavirus disease 2019 (Covid-19) outbreak, according to Oxford Economics.

“Under the current period of extreme uncertainty, the economic boost from a decline in oil prices will be modest,” the think tank said in a research note dated March 10.

Its simulations showed that the Philippines, along with China, India and Indonesia, are the economies expected to benefit the most if global oil prices drop to $30 per barrel in the second quarter and remain at these levels for the rest of the year, before recovery to $65 by end-2021.

“Of the larger economies considered here, those that benefit the most from the oil price decline are mainly Emerging Market oil-consumers such as China, India, and Indonesia. Advanced economies tend to use oil less intensively and so are less positively affected,” the report read.

According to its analysis, this scenario will likely boost the Philippine economy by less than 1% from baseline gross domestic product (GDP) levels in 2020-2021.

To assess the impact of oil price drop in selected economies, it conducted simulations of price changes across global transmission channels, taking into account “cross-country differences in fuel use, elasticity of demand, exchange rate changes and fuel taxes.”

“Predictably, the most adversely affected economies are oil exporters: Russia, Saudi Arabia, and UAE,” it added.

For global economic growth, Oxford Economics said the impact “averages +0.3% over 2020 and 2021, with a peak impact in 2021 of +0.4%,” “while global inflation would ease significantly, dipping 1.1 percentage point below baseline” this year.

The think tank said lower global oil prices could dampen prices but the $30 scenario would result in negative inflation for “14 out of 44 economies” this year.

“This prompts concerns that low inflation expectations could become entrenched,” it said.

Reuters reported that the price of Brent crude fell to $36.81 per barrel Wednesday, continuing a downtrend following a nearly 25% plunge on Monday to record lows.

Finance Undersecretary Gil S. Beltran has said that cheaper oil prices could pull down inflation moving forward.

Inflation eased to 2.6% in February on softer price increases of food, transport and utilities, from 2.9% in January. This brought year-to-date inflation to 2.8%, well within the central bank’s 2-4% target for the year.

Oxford Economics noted that “monetary authorities will find it difficult to respond to the negative demand shock as deflationary pressures mount” given that monetary policy easing is being eyed by many economies to offset the adverse impact of the outbreak.

The Bangko Sentral ng Pilipinas Monetary Board (MB) will meet for the second time this year on March 19,and is widely expected to deliver a 25-basis point (bps) reduction in policy rates.

On Feb. 6, the MB slashed benchmark interest rates by 25 bps.

Oxford Economics added: “A difficult global financial environment may undermine investment. Downgrades and defaults may lead energy producers to slash investment, which could spill over to other vulnerable pockets of the economy.” — Beatrice M. Laforga

House passes amendments to retail trade law on 3rd reading

THE House of Representatives approved on third and final reading a priority measure that aims to further open up the retail sector to foreign companies on Wednesday.

With 156 affirmative votes, 30 negative and three abstentions, the lower chamber passed House Bill (HB) 59 which seeks to amend Republic Act (RA) No. 8762 or the Retail Trade Liberalization Act (RTLA) of 2000.

The measure lowers the required minimum paid-up capital for foreign retail investors to $200,000 (around P10 million). Under the present law, enterprises with a minimum capital of $2.5 million or more may be fully owned by foreigners.

HB 59 also reduced the required locally manufactured products of foreign retailers to 10% of the aggregate cost of their stock inventory, from the current 30%.

The approved measure also removes the requirements under RA 8762 for foreign investors to acquire shares of stock of local retailers and for a public stock offering to be conducted by foreign-owned retail companies.

HB 59 also eased qualifications for foreign retailers to enter the Philippines. It removed the current law’s required net worth, number of retailing branches and five-year retailing track record conditions for foreign firms to enter the country’s retail industry.

At the same time, the bill allows only nationals “from/or judicial entities formed or incorporated in countries which allow the entry of Filipino retailers, to engage in retail trade in the Philippines.”

The Joint Foreign Chambers of the Philippines (JFC) have expressed their support for the bill, saying that “this will increase competition, create jobs, support tourism, and improve consumer choice, to the benefit of the economy and the Filipino consumer.”

“The amendments proposed by HB 59, such as lowering of the minimum paid-up capital requirement to $200,000 from $2.5 million, will attract new foreign investment in the retail sector on par with that received by our ASEAN neighbors. The $200,000 minimum investment required will protect the over 400,000 micro and small retail and wholesale businesses comprising more than 90% of all Philippine-owned retail and wholesale businesses in the country,” the JFC said in a statement.

However, House Minority Leader and Manila Rep. Bienvenido M. Abante, Jr. said that the amendments to the RTLA is “a drastic approach” which will have “unintended consequences.”

“The slide from $2.5 million to a measly $200,000 or a reduction equivalent to 92%… a very big number, is not a mere cause for concern. It’s not a cut above the knee, it’s cutting the head off! Why would we want to do this? Coupled with the 20% reduction on required locally manufactured products, and whatever Filipino retailers we have will fall to the ground,” he said in a speech during the plenary session.

Mr. Abante further argued that HB 59 will not follow the “Filipino First” policy which was designed for the “collaboration and establishment of special foreign relations, all the while promoting Filipino participation in our own national economy.”

“Instead, whatever Filipino participation we have, will most likely be marginalized and left unprotected. Instead of passing HB 59, we should pass a law that will protect our own, one that will help our Filipinos,” he said.

Counterpart measures in the Senate are still pending at the committee level. — Genshen L. Espedido

VAT refunds: Is the government unjustly enriched?

One of the well-known and time-honored principles in the Law on Obligations and Contracts is solutio indebiti. The rule is that no person shall unjustly enrich himself at the expense of another. Accordingly, if something is received when there is no right to demand it, and it was unduly delivered by mistake, the obligation to return it arises. In such a situation, a creditor-debtor relationship is created under a quasi-contract. The payor becomes the creditor with the right to demand the return of payment made by mistake while the payee, who has no right to receive the payment, is obligated to return it.

As decisional law teaches, even the government is not exempt from the application of this doctrine. If a person has unduly delivered payment to the government by mistake, the government is obligated to return it. Arguably, if a tax payment was made erroneously, a refund must be granted following the principle of solutio indebiti.

There are two common types of tax refunds in the Philippines. The first one is for erroneously or illegally assessed and collected taxes under Section 229 of the Tax Code. The second one is for unutilized input value-added tax (VAT) regarding zero-rated sales under Section 112 of the Code. These two types of refunds are different in a lot of ways, such as in the procedure and the prescriptive periods for filing the refund application, among others.

To differentiate, both the administrative claim and judicial claim for refund under Section 229 of the Tax Code must be made within two years from the date of the erroneous payment of the tax. On the other hand, the administrative claim for refund of unutilized input VAT must be filed within two years after the close of the taxable quarter when the sales were made. In case of denial of the claim, the tax authorities must state in writing the legal and factual basis for the denial within 90 days from the submission of the application. Upon receipt of the denial, the taxpayer has 30 days to institute the judicial claim for refund.

One of the most significant distinctions between these two types of refunds, according to the Supreme Court, is the application of the principle of solutio indebiti. Under the law, there is solutio indebiti when: (1) there is absence of a right to collect the payment, and (2) the payment was made by mistake, and not through liberality or some other cause. In one case, the taxpayer erroneously paid VAT to the government, without any obligation on its part, on the mistaken belief that it is not exempt from the payment of the VAT. Since both the elements of solutio indebiti were present, the taxpayer’s application for erroneously paid VAT was granted.

However, such is not the case for refunds of unutilized input VAT related to a taxpayer’s zero-rated sales. In another decision, the Supreme Court ruled that the elements of solutio indebiti were absent to be entitled to the refund of unutilized input taxes. The first element was unsatisfied since a binding relationship between the taxpayer and the local tax authorities existed arising from the legal obligation of the taxpayer to pay the VAT. For the second element, the payment of the input taxes was not a mistake, since the taxpayer was legally obligated to pay for such liability. The entitlement to a refund of excess input tax is solely based on the nature of the VAT system; however, in this case, the amount paid as input tax was correct and proper.

Nonetheless, in both cases, the Supreme Court said reliance on the principle alone is not sufficient. Apart from proving their entitlement to the refund, claimants must also comply with the procedural due process, which includes the observance of the prescriptive period for filing the administrative claim, and if necessary, the judicial claim for refund. Since a tax refund partakes the nature of an exemption, which cannot be allowed unless granted in the most explicit and categorical language, it is strictly construed against the claimant who must discharge such burden convincingly. In case of failure to observe the procedures, particularly the deadline for filing the refund application, the claim may be barred by prescription.

In the words of Supreme Court Justice Sandoval-Gutierrez, substantial justice, equity, and fair play are on the side of the taxpayers who erroneously paid the tax. Mere technicalities and legalisms, however exalted, should not be misused by the government to keep money not belonging to it, thereby enriching itself at the expense of its law-abiding citizens.

However, considering that the principle of solutio indebiti does not apply to refunds of unutilized input VAT, the leniency recognized by the High Court may not be applied in this instance. Instead, the claimants must ensure that they comply with the requirements set forth by the law. More so, because of the Enhanced VAT Refund System implemented last year where refund claims are decided within a 90-day processing period, it is best to plan and prepare before bringing about any claims against the government.

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.

 

Abigael S. Demdam is a Manager at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.

(02) 8845-27 28

abigael.demdam@pwc.com

Only the lonely

It is perhaps the loneliest and not the fittest, that are most likely to avoid COVID-19. “Lockdowns,” social distancing, and “independent” living are nothing new to people who live isolated, hermit-like lives. They live off-grid, away from crowds, and keep to themselves. They put a premium on privacy, and rarely use the internet or social media accounts.

Their neighbors barely know them as they are uninclined to socialize. They see relatives only occasionally, if ever, and maintain only a small group of friends. They probably grow some of their own food in a small garden, and maintain a compost pit for their garbage. A bi-monthly drive to the bank and the grocery is enough to sustain them, for they are usually well-stocked.

They have no interest in shopping malls, the movies, or dining in restaurants. They do not like crowds and noisy gatherings. They are more comfortable with a book and soft music, and maybe a glass of wine or two. Even at work, if at all they are still in the race, they practically keep to themselves. They avoid company social functions and skip after-work drinks. And their work areas are almost always “clinically clean and clear,” and lack personal effects.

We scoff at their strict standards for personal hygiene. They wash too often, we say. We also note that they spend a lot of time cleaning and clearing and straightening their work station, and are easily bothered even by hints of dust or strong smells. We refer to some of them as “Obsessive-Compulsive.” Often, however, we simply call them weird or “eccentric.”

But with what is happening now around the world, it seems they knew something most of us did not. Apparently, isolation — or getting used to being alone for long periods of time — and the obsession with cleanliness have their merits. Being “generally clean” is no longer enough nowadays, obviously. The present situation calls for extra measures, and perhaps not only in the short term.

Even the wealthiest are not expected to fare any better than the loneliest in living in the time of corona. That at least one private hospital, the expensive kind, is rumored to already be turning away COVID-19 patients is enough indication to me that our healthcare system is about to be overwhelmed. And that access to medical care is no longer just a matter of cost and having money.

They way we live our lives is surely going to change. Some initiatives will have to give way to the needs of the present. For instance, we may have to reverse or temporarily halt the initiative to do away with disposable cups and throw-away cutlery as measures to address environmental concerns, particularly the negative impact of widespread plastic use and the shortage in landfill space.

Lucky for those with weekend homes outside the capital region, or those with relatives in nearby provinces and residences in the mountains or by the beach, away from madding crowds. If they can afford to be away meantime, that is. I reckon those in densely populated urban areas are at most risk of getting sick with COVID-19.

But for the most of us stuck in the metropolis, pretty much like those stranded in the capital every time a calamity hits, then we just need to make the best of the situation. If the situation worsens, and it probably will, then a lockdown of the National Capital Region is a possibility. And, if that happens, I am certain even the government will have difficulty containing civil unrest. There may be dire consequences for both the government and the public.

To avoid that possibility, and to help curtail the spread of COVID-19, perhaps there is merit in taking “social distancing” to the next level. It will take a lot of discipline, and will require much sacrifice, but people should just avoid other people, meantime. Staying home, if possible, especially for children while school is out, should be encouraged if not strictly observed.

It has been said about guns that it is better to have them and not need them, than to need them and not have them. In the same line, taking hygiene precaution to an extreme is perhaps called for in our present situation. Cancel events, miss gatherings, and put off unnecessary travel, even locally. Washing hands, disinfecting, and avoiding physical contact should be the norm, meantime.

The use of disposable cups, plates, and cutlery — even those made of plastic — should be tolerated meantime in restaurants, coffee shops, and other food service establishments. Or, at the very least, temporarily go back to the old practice of wrapping clean utensils in napkins, or leaving them submerged in hot water, prior to taking them out for use by diners.

In schools and offices with cafeterias, students and workers should be required to bring their own food containers and utensils, even disposable ones, just to avoid the sharing of contaminated wares. Coffee shops should temporarily suspend the use of washable cups and mugs, and all food service personnel should use gloves.

The other day, I was pleasantly surprised to find a parking cashier donning rubber gloves, but was disappointed to hear that her employer supplied her with only one pair. I think all cashiers, even in supermarkets, and all bank tellers, should be regularly supplied with rubber gloves and masks by their employers if they are expected to continue manning service front lines.

And, for companies that can operate with employees working from home, this should be the norm while the public health emergency remains. Meantime, all corporate travel, branch and site visits, gatherings and functions, meetings and conferences should be postponed to later dates. The same goes for schools, and perhaps even for churches.

My greatest concern, however, is with public transportation. I am at a loss as to how we can effectively curtail COVID-19 transmission particularly in jampacked trains, jeepneys, buses, and even tricycles. At best, people can wear masks and keep their hands clean, as they also refrain from touching their faces. The secondary approach is to limit travel itself by allowing people to work from home and children to do home study meantime.

In my opinion, social distancing, or temporarily keeping away from other people, is the most effective way of limiting transmission of COVID-19. But it is also among the most difficult initiatives to take. People, by nature, are social beings. However, extreme situations call for extreme measures. This is one step that we should all be ready to undertake, unless we wish to leave the metropolis to only the lonely.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.

matort@yahoo.com

A TV network for the common good (Part Two)

ABS-CBN’s franchise says that it should “provide at all times sound and balanced programming; …assist in the functions of public information and education; [and] conform to the ethics of honest enterprise…” In line with this, I believe the network needs to provide more balanced and independent reporting and analysis of important social issues to help Filipinos become critically engaged citizens.

Informing and educating the citizens of a republican democracy is a sacred function of media. Democracy can work for the common good of citizens only when the latter understand how their society works and their role in it. Moreover, because the Constitution states that “sovereignty resides in the people and all government authority emanates from them,” media must help in making the powerful accountable to the public.

Because of its influential and independent role in society, media is often referred to as The Fourth Estate, or even the fourth branch of government.

Filipinos who want to be critically engaged need good news information and analysis. This is where sound media institutions and a broadcast network like ABS-CBN become vital. Citizens should not merely criticize problematic social structures and people in power for its own sake; they must know and deeply understand the truth behind important social issues.

Issues that need more critical reporting and analysis from ABS-CBN include corruption, child pornography, human trafficking, poor utility services, the plight of workers in the cities and countryside and, of course, the mother of all issues, which is inequality and poverty. In reporting on such issues, the network must help people know what is happening and why this is happening. Importantly, citizens need help in understanding who are responsible for addressing these issues and whether they’re doing their jobs.

The network’s reporting and analysis on these issues have been disappointing. On the Metro Manila water supply issue, for example, reportage has focused on the opposing views of the government and the water companies on the terms of the concessions. However, the causes of the water shortage and how they can be addressed have hardly been explained. Fights between the government and the concessionaires make for colorful news, but is this more important than water supply itself?

I am most disappointed in the reportage on inequality and poverty in our country. International organizations have long pointed out that we have one of the slowest rates of poverty reduction in the region despite our strong economic growth. Yet, the network accepts the government’s official stance that poverty has gone down, based on the P10,727 monthly poverty line for a family of five, without any critical comment. This is a superficial approach to this devilish problem. Tough questions need to be asked: Where has the growth been going, and why isn’t it being shared more?

To answer such questions, the network needs news and current affairs professionals whose highest goals are to report the truth and to help the public in understanding these truths. Competent broadcast journalists, such as the late American broadcaster Edward Murrow, can separate facts from hearsay or opinion. They can reveal and analyze the cause-effect relationships among actors, structures, resources, rules, culture, and beliefs that are behind complex social problems. I often think that the network’s news anchors weigh in with more opinion than analysis and don’t do a good job of getting all sides. Given their influence on the public mind, this is not responsible journalism.

Beyond competence, the network needs to work on its news ethics, especially its independence. The commercialization of news has naturally led to conflicts of interest. This all started when news programs changed their formats to go after ratings. The action-oriented and bombastic style of news delivery has replaced the more rational and analytic styles of decades past. News anchors have become popular not because of the quality of their reportage but because of their image and style of reporting: a triumph of form over substance. The worst part is that some of these anchors leveraged on the popularity they gained from delivering popular news programs to win public office! How can news anchors be credible independent critics of government when they can choose to become public servants and then return to newscasting?

News commercialization also takes other annoying forms. For example, the network promotes its shows and talents under the guise of impartial “news” and juicy tidbits about its talents in revealing swimwear.

I am still kapamilya and want the network’s franchise to be renewed. But I hope that ABS-CBN will take its duties under the law more seriously by helping restore our socio-cultural fabric and educating citizens to be informed and critically engaged.

 

Dr. Benito L. Teehankee is the Jose E. Cuisia Professor of Business Ethics and Head of the Business for Human Development Network at De La Salle University.

benito.teehankee@dlsu.edu.ph

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