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Dealing with climate change remains ‘top priority’ for gov’t

CLIMATE CHANGE remains a top priority for the national government even as it deals with the coronavirus disease 2019 (COVID-19) outbreak, Environment Secretary Roy A. Cimatu said.

At a virtual briefing Wednesday, Mr. Cimatu, head of the Cabinet Cluster on Climate Change Adaptation, Mitigation, and Disaster Risk Reduction, said climate change poses bigger problems than the pandemic because of the existential risk for future generations.

“The climate emergency remains as urgent as ever.  It is like the COVID-19 emergency, just in slow motion and much graver,” Mr. Cimatu said during the Pre-SONA (State of the Nation Address) forum of the Security, Justice, and Peace Cluster, and the Climate Change Adaptation and Mitigation and Disaster Risk Reduction Cluster.

Mr. Cimatu, who currently heads the task force trying to contain the outbreak in Cebu, said changing climate has a “domino effect” which can lead to other serious risks such as ecosystem instability, food insecurity, and conflict.

Further, Mr. Cimatu said that ecosystem and biodiversity loss resulting from climate change can also threaten the planet’s ability to produce goods and services.

Despite the spread of COVID-19, Mr. Cimatu said the national government will use the public health emergency as an opportunity to accelerate climate-change mitigation measures.

“The government, through the Cabinet Cluster on Climate Change, will prioritize action and investment that will reduce long-term health impacts and increase our resilience and adaptive capacity to both the coronavirus pandemic and climate change,” Mr. Cimatu said.

Mr. Cimatu said the government will continue to ensure clean air, water and access to natural resources, while strengthening the resilience of critical infrastructure.

In addition, Mr. Cimatu said that environmental protection programs such as solid waste management, reforestation and biodiversity preservation must stay consistent with the national government’s COVID-19 response.

The cluster was created by Executive Order No. 24, series of 2017. — Revin Mikhael D. Ochave

Duterte departing from renewables pledge, NGO says

PRESIDENT Rodrigo R. Duterte is not fulfilling his pledge to encourage the development of renewables after making a push for coal-fired energy in his home region of the southern Philippines, a non-government organization (NGO) said.

Last week, Mr. Duterte addressed troops in Jolo, Sulu, saying that he is “ready to open” borders to spur development in Mindanao, which will require, among others, investment in coal energy.

The Philippine Movement for Climate Justice (PMCJ) said he is backing off from a promise made in his fourth State of the Nation Address (SONA), where he ordered the Department of Energy (DoE) to expedite the development of renewables and reduce the Philippines’ dependence on coal.

“There was a significant turnaround sa kanyang (in his) policy statement (on renewables development), at ang turnaround na ‘yan ay ang pag-pursue ng government ng coal mining (And that turnaround is the government’s pursuit of coal mining),” Ian Rivera, national coordinator of PMCJ, said during a recent online pre-SONA briefing hosted by the Power for People Coalition.

“Patitingkarin ng pamahalaan ni Duterte ang coal mining sa pamamagitan ng [pag-ayos ng] daanan ng coal dito sa (Mindanao),” he added. (The Duterte government is making coal mining a centerpiece by clearing pathways for coal in Mindanao).

Mr. Duterte said in his address to the troops that “coal will be used for the next 30 years,” unlike solar energy, which he claimed is currently limited by underdeveloped storage technology. “Parang baterya, iilan lang ang makarga niyan (Solar capacity is limited by battery storage),” he said.

Solar can only generate during good weather in daylight hours and needs efficient storage to deliver power when it is not absorbing energy from the sun.

Mr. Rivera said the President is also backing off on a promise to reduce the impact of climate change, which is a consequence of burning fossil fuels, such as coal.

“Ang binabanggit ni Duterte ay pagtalikod sa kanyang pagpirma sa (His remarks also go against the spirit of the) Paris Agreement,” he said, citing the landmark treaty signed during the 21st Conference of Parties of the United Nations Framework Convention on Climate Change in 2015.

The DoE led by Secretary Alfonso G. Cusi has adopted a technology-neutral policy which welcomes all forms of power to ensure energy security. Coal remains the biggest source of electricity in the country’s generation mix. Over the next decade, the DoE expects its share to increase to 30%.

The Philippine National Oil Company-Exploration Corp. is developing coal projects like the mines within coal-operating contract 41 in Zamboanga Sibugay, where coal reserves are deemed high quality. Extraction of the resource from underground mines is expected by 2025. — Adam J. Ang

WESM ethics code nearing effectivity date

A CODE of ethics for electricity spot market participants is weeks away from completing the period for soliciting public comment on the draft rules.

The end of the comment period on Aug. 24 will be another milestone in the implementation of the code, which was proposed to the Department of Energy (DoE) in March by the market surveillance committee of the Philippine Electricity Market Corp. The code will govern activity at the Wholesale Electricity Spot Market (WESM).

According to the draft code, ”WESM members and participants shall not propose or implement schemes or arrangements that frustrate the objective of free and fair competition and level playing field.”

It imposes a duty on market participants to “immediately” report to the DoE “any and all unlawful and unethical activities committed or about to be committed by other WESM participants and members,” in order to avoid the abuse of market power, which in WESM’s early days led to unusually high and unreasonable market prices.

The DoE, which started its review of the code on June 15, prepared a draft circular on the code which is currently subject to a round of stakeholder consultation.

Violators are subject to penalties prescribed by the WESM rules, which are currently being revised.

The WESM is transitioning to a 5-minute market trading interval, which is expected to increase its efficiency and attractiveness to investors. Its operator, the Independent Electricity Market Operator of the Philippines, hopes to launch the new market configuration in December. — Adam J. Ang

DICT proposes bigger budget for national broadband program

THE Department of Information and Communications Technology (DICT) said it is proposing a P13.49-billion budget to implement the national broadband program next year, much bigger than this year’s budget of P296.46 million.

The DICT said the funds will support improvements to digital connectivity.

The department is proposing a P46.65-billion budget overall for next year to fund expanded digital connectivity and access, digital government, digital education and workforce, digital cities and provinces, and cybersecurity.

“The call for faster and more accessible internet connectivity has never been more immediate as we aim to mitigate the effects of the coronavirus disease 2019 (COVID-19) crisis while preparing for the demands of the new normal,” DICT Secretary Gregorio B. Honasan II was quoted as saying in a statement Wednesday.

The national broadband program has six components: the national fiber optic cable backbone, cable landing stations, accelerated tower build, accelerated fiber build, satellite overlay, and broadband delivery management service.

“The P13.4 billion earmarked for the national broadband program in 2021 envisions increased public reach of connectivity services by developing and enhancing our digital infrastructures,” Mr. Honasan said.

“The establishment of a national fiber optic backbone is a very pressing matter, not just in light of the public health emergency, but for the sake of national competitiveness. We are putting in place these strategies to reinvigorate the country’s participation in the global digital economy to achieve our vision of a Digital Philippines,” he added.

The department released last month rules governing the shared use of telecommunications towers.

The common-tower policy means more than one telco can use a single tower, thereby increasing the number of subscribers being served by each tower.

The DICT had pushed the concept of tower sharing to improve tower density, which is said to be one of the lowest in the region at 4,000 subscribers per tower. — Arjay L. Balinbin

Transforming the tax landscape of condominiums

Since the issuance of Revenue Memorandum Circular (RMC) 65-2012 eight years ago, the additional tax burden on condominium corporations and unit owners has often been the subject of much controversy. This is in no small part due to the shift in the position of the Bureau of Internal Revenue (BIR). Prior to 2012, the BIR had consistently confirmed in several rulings that dues, membership fees and other fees collected by condominium corporations are exempt from tax. The RMC, however, declared that the dues and fees paid by the members and tenants form part of the gross income of the condominium corporation as they constitute compensation for services rendered, hence, subject to income tax, value-added tax (VAT), and withholding tax.

RMC 65-2012 is akin to RMC 35-2012, which imposes income tax and VAT on membership fees, dues, and other charges collected by recreational clubs. The only difference lies in the subject matter — the former applies to a condominium corporation while the latter covers recreational clubs.

Under the previous 1977 Tax Code, specifically Section 26(H), clubs organized and operated exclusively for pleasure, recreation, and other non-profitable purposes were exempt from income tax provided that no part of the net income inures to the benefit of any private stockholder or member. However, Republic Act 8424 or the 1997 Tax Code, subsequently omitted the provision granting this tax exemption to recreational clubs. The BIR interpreted this to mean that all income of recreational clubs from whatever source is subject to income tax starting 1998. Nonetheless, in June 2019, the Supreme Court declared RMC 35-2012 as invalid for erroneously foisting a sweeping interpretation that membership fees and assessment dues are sources of income from which recreational clubs could accrue income tax liability.

Exactly one year later, the Supreme Court issued a similar decision, ruling in favor of condominium corporations and invalidating RMC 65-2012. According to the High Court, association dues, membership fees, and other assessments/charges collected by condominium corporations are not subject to income tax, VAT or withholding tax.

COLLECTION OF CONDOMINIUM DUES AND FEES IS NOT FOR PROFIT
Under Republic Act No. 4726 or the Condominium Act, a condominium corporation can collect association dues, membership fees, and other assessment charges to effectively perform its function of maintaining or improving the common areas of the condominium, as well as its governance.  In its decision, the Supreme Court affirmed that a condominium corporation is not engaged in a trade or business even though it is empowered to levy assessment dues from the unit owners. The amounts collected are not intended for profit but solely to shoulder the multitude of necessary expenses that arise from the maintenance of the condominium project.

CONDOMINIUM DUES AND OTHER CHARGES ARE HELD IN TRUST AS PART OF CAPITAL, NOT INCOME
As one of its bases, the Supreme Court relied on its 2019 ruling in the case of ANPC v. BIR covering recreational clubs. In that case, the court ruled that the fees paid by the members represent funds held in trust by the recreational clubs to defray for the cost of maintenance, preservation, and upkeep of its general operations and facilities. The amounts cannot be classified as the income of recreational clubs from whatever source that are subject to income tax. Instead, they only form part of the capital from which no income tax may be collected or imposed. In drawing the distinction, capital refers to wealth as opposed to income being the service of wealth. Similarly, the fees and dues collected by condominium corporations are only capital/funds held in trust, therefore not income subject to tax and subsequently to withholding tax.

CONDOMINIUM DUES ARE EXEMPT FROM VAT
Further, the mere collection of fees is not subject to 12% VAT since they do not arise from the sale, barter, or exchange of goods or property nor generated by the performance of services.  When a condominium corporation manages, maintains, and preserves the common areas in the building, it does so only for the benefit of the condominium owners. The collection of dues and fees is not a result of the regular conduct or pursuit of commercial or economic activities, or any transactions incidental to it. Neither can it be said that a condominium corporation is rendering services to the unit owners for a fee, consideration, or remuneration.

Also, the Tax Reform for Acceleration and Inclusion (TRAIN) Law specifically identified association dues, membership fees, and other assessments/charges collected by homeowners’ associations and condominium corporations as exempt transactions. Thus, RMC 65-2012 runs contrary to the TRAIN Law.

THE RMC IS VOID AS IT EXPANDED ON THE TAX CODE
According to the Supreme Court, RMC 65-2012 transgresses jurisprudence and the Condominium Act because it invalidly declares that the dues and other fees paid by its members and tenants form part of the gross income of the condominium corporation. In doing so, the BIR expanded, if not altered, the list of taxable items under the Tax Code, and is therefore void.

Well-settled is the rule that in case of conflict between statutory law and administrative rules or regulations, the law should always prevail. While the BIR is empowered to interpret tax laws, it cannot, in the exercise of such power, issue administrative rulings or circulars inconsistent with the law.

WHAT NEXT?
Given this pronouncement, what happens then to the taxes erroneously paid to the BIR? Legally, a claim for refund can be filed with the BIR. However, affected parties cannot indefinitely recover all the erroneous payments made over the last eight years while the RMC was presumed valid. This is because the law limits the recovery to two years from the date of the erroneous tax payment.

Nevertheless, from a practical perspective, even if the option to refund is available, there may be nothing substantial that needs recovery in terms of the last two years. For one, the TRAIN Law removed the VAT starting 2018. As for the income tax, since membership dues and fees are mostly utilized for the operating expenses of the condominium, such collections are normally fully used up at the end of the year and are not likely to have led to substantial income tax payments. Consideration should also be given to the procedures and cost that will be incurred in pursuing a refund.

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.

 

Charilyn R. Caliwag is a senior consultant at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network.

+63 (2) 8845-2728

charilyn.caliwag@pwc.com

Paying for COVID-19 vaccines

The Philippines may not be in a position to take immediate advantage of any vaccine to be developed in the near future against COVID-19. And this situation seems to require a review of Republic Act No. 11223 or the Universal Healthcare Act of 2018, which appears to pose a “limitation” as to when any new vaccine can be paid for by universal health insurance.

The issue has less to do with Philhealth’s financial viability or its capacity to buy. The concern is over some restriction in RA 11223 with respect to what new medicine, vaccine, or health technology can be bought or reimbursed by Philhealth. And this restriction may hinder Philhealth from urgently accessing newly developed COVID-19 vaccine and drug treatment.

Section 34 of RA 11223 provides for a “Health Technology Assessment” or HTA process for policies, programs, and regulations to be set by the Department of Health and Philhealth for a “range of entitlements such as drugs, medicines, pharmaceutical products, and other devices, procedures and services as provided for” under the universal healthcare law.

And among the criteria of the HTA process is “safety and effectiveness,” which requires that “interventions [drugs or medicines, etc.] must have undergone Phase IV clinical trial,” and that “systematic review and meta-analysis [for these drugs] must be readily available. The interventions must also not pose any harm to the users and healthcare providers.”

Moreover, the “interventions must reduce out-of-pocket expenses” of Philhealth beneficiaries, and their makers must have “economic studies and cost-of-illness studies to satisfy this criterion.” Also, the “interventions,” which include vaccines, “must be affordable and the cost thereof must be viable to the financing agents,” or those paying for them.

If Philhealth is to strictly adhere to these requirements under RA 11223, it is doubtful if newly developed COVID-19 vaccines and drugs can be immediately made available to Philhealth members. Even a vaccine or medicine already approved by the Food and Drug Administration (FDA) may not necessarily comply with these Philhealth requirements.

Cost is one thing. The vaccine must be “affordable,” and its cost “viable to the financing agents.” This is not likely to happen as newly developed medicines tend to be more expensive during introduction. And, given the urgent global demand for a COVID-19 vaccine and medicine, and the effort put into developing them, for sure they will be far from affordable not just to Philhealth but for most people as well.

As for new drugs reducing “out-of-pocket expenses” of Philhealth beneficiaries, and their makers having “economic studies and cost-of-illness studies to satisfy this criterion,” well, good luck with that. It appears doubtful that drug makers will still be concerned with such things as they aim for market advantages in launching new products.

A report in The New York Times dated June 30 detailed how a new drug to treat COVID-19 patients, called Remdesivir, will be sold at $520 per vial, or $3,120 per treatment course, to US hospitals for treatment of patients with private insurance. The drug is available only in the US until September.

The report also noted that the drug’s price will be set at a lower $390 per vial, or $2,340 per treatment course, for patients on government-sponsored insurance and for those in countries with national health care systems. But, even at this lower price, Remdesivir will still be too expensive for Philhealth, and thus for most Filipinos.

But the most difficult hurdle for Philhealth, it seems, is the RA 11223 requirement for “Phase IV clinical trial” for drugs and medicines to be bought or paid for by Philhealth, as well as the availability of “systematic review and meta-analysis [for these drugs]” even before they get to Philhealth’s hands. By the time these two requirements are actually met, it may already be too late for the Philippines.

Phase 4 clinical trial begins only after a drug has already been approved for general use. In short, after Phases 1 to 3. Thus, a new drug or vaccine may already be approved by the FDA after Phase 3, but this doesn’t mean that Philhealth can already buy the new drug for distribution, or that Philhealth will pay for it every time it is dispensed by doctors or hospitals.

In Phase 1, the drug is tested only on a small number of volunteers. In Phase 2, the drug is further tested, and its use and dosing adjusted, to improve its efficacy. Phase 3 is the last phase of testing before drug information and clinical trial results are submitted to regulators for approval of the drug or medicine for use by the general population.

Phase 4 is already post marketing surveillance, and starts only after FDA approval and the drug is already being marketed and made available to the general public. Phase 4 trial checks on the drug’s performance in real life scenarios, to study the long-term risks and benefits of using the drug and to discover side effects. In this line, some Phase 4 trials can actually take years to complete.

But in our case today, how long can we afford to wait? Should Philhealth still require a Phase 4 trial specifically for COVID-19 vaccines and drugs? I support the “Phase 4 clinical trial” requirement in general, since it helps protect people and ensure their safety. It is always best that a drug is fully tested, and enjoys a good record, before it is made widely available at government’s expense. Phase 4 can prevent another Dengvaxia controversy from happening again.

However, the universal healthcare law should also give Philhealth some flexibility in dealing with pandemic situations. COVID-19 is extraordinary. We now find ourselves in a unique but complicated situation. We urgently need drugs and vaccines to deal with a virus that has caused a global health emergency. But, even if the FDA approves any of these vaccines or drugs soon, if Philhealth will not pay for them without Phase 4 trial, then how can most of our people afford them?

 

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

matort@yahoo.com

The contours of future cooperation

By Børge Brende, President of the World Economic Forum

THERE is a great global misalignment: at the very moment cooperation is more vital than ever to address urgent challenges, it is in decline.

In late June, referencing the fractured response to the COVID-19 crisis, UN Secretary-General Antonio Guterres warned “there is total lack of coordination among countries.” Some have gone further, drawing on examples from history and comparing the global quest for a COVID-19 vaccine to the space race between the United States and the Soviet Union, where each side was looking to “win” at the expense of the other.

Though lamentable, it should not come as a surprise that the coronavirus is showcasing a lack of global cooperation, and even opening a new frontline for competition. After all, the pandemic struck an already unsettled world — one in which profound shifts in power were underway and causing competitive instincts to overtake cooperative mindsets. But the virus can also serve to reset these instincts by reminding global actors that coordination is the key to advancing not just shared priorities, but also self-interests.

The economic system is perhaps the most salient example of how frictions were increasing prior to the outbreak of the coronavirus. Between 1990 and 2015, extreme poverty declined from close to 40% of the global population to 10%. This result was largely possible because of a more integrated global economy and global value chains — the effect of comparative advantages between countries in action. Unwinding this system would come at a high cost and would lead to lower growth and fewer jobs. Let’s not forget that almost 50% of global trade involves the global value chains.

Yet, this system for advancing joint prosperity — albeit a system that was imperfect — was used in recent years as a mechanism for enacting punishment on rivals. Trade has become less about creating win-win agreements and more about gaining advantage at the expense of a global competitor. In late 2019, the International Monetary Fund warned that rising trade tensions would pose a drag on economic growth of approximately $700 billion in 2020.

The same increase in friction was manifesting in the area of technology. After years in which the United States and China had identified areas for science and technology cooperation, a  “tech race” is now quickly unfolding. This competition is high-stakes: the number of internet users has gone up from 1.6 billion during the 2008 financial crisis to 4.1 billion today. And, artificial intelligence could increase economic growth by as much as 30% over the coming 15 years in those countries that master the technology. This is why there is a sense that controlling — rather than cooperating on — frontier technologies is a path toward material and geopolitical gain.

Amid today’s polarized context, many have pointed to the coordination that took place in the wake of the 2008 financial crisis as an example of parties uniting to address a common and urgent challenge. Only weeks after the collapse of Lehman Brothers, central banks around the world coordinated in cutting interest rates. Shortly after, members of the G20 met in Washington, DC and issued a joint declaration that they were “determined to enhance our cooperation and work together to restore global growth and achieve needed reforms in the world’s financial systems.”

The key lesson from the 2008 financial crisis was that coordination stemmed not from selflessness among parties, but precisely because it was in the interest of each party to work together. The global economy was so interconnected that a financial crisis in one country affected markets not just in another but in all those around the world.

Today, the world is even more intertwined than it was 12 years ago. The coronavirus — the effects of which have spanned borders and industries — makes this clear. And just as the coronavirus respects no line on a map, neither do cyberattacks nor greenhouse gas emissions nor economic challenges.

Only through coordinated action can the world climb out of a deeper-than-expected recession in 2020 as projected by the International Monetary Fund, with global output declining by 4.9%.

This moment of crisis can serve as a stark reminder to leaders that global coordination is in fact in each country’s national interest. While the $9 trillion worth of combined stimulus measures G20 governments are injecting into their economies are vital to each country’s recovery, the OECD has said that not only would coordination among countries make the stimulus measures “considerably more effective” but “uncoordinated or unilateral action would exacerbate the overall social and economic costs.”

In other words, at a time when global leaders are looking to maximize the benefit of stimulus responses to their own citizens and businesses, they would do well to cooperate with one another.

By generating positive outcomes in the immediate term, aligning responses to the economic crisis could serve as the spark that resets global postures away from rivalry and toward cooperation over the long term.

 

Børge Brende is the President of the World Economic Forum.

Virtue signaling in energy

Virtue signaling is the process and habit of taking a conspicuous but generally unproductive action supposedly to advance a good cause but actually to show off the “moral supremacy” of the person or group  compared to the rest of the population.

In the energy sector, it is the habit of some people and groups to tell others that they are anti-environment and anti-planet if they do not demonize fossil fuels, especially oil and coal, and embrace variable renewables like wind and solar.

While this behavior may be understandable in industrialized and rich economies which have ample power capacity, this behavior is counter-productive for poor economies with thin power capacity. The Philippines is a classic example of this and yet it is constantly and endlessly bombarded by many virtue-signaling groups and multilaterals that it must “decarbonize” as soon as possible.

Let us review some hard data. Some definitions and conversion factors: One Exajoule (EJ) = 23.88 million tons oil equivalent (mtoe), or 277.78 tera-watt hours (TWH). And one Gigajoule (GJ) = 23.88 kilos oil equivalent (koe), or = 277.78 kwh.

Of the countries and economies listed in the table on a per capita or per person basis, the Philippines has the smallest CO2 emissions, the smallest primary energy consumption (PEC), and among the smallest coal consumption. PEC includes all energy use from power and electricity to transportation, household and commercial cooking (see the table).


So what is the point in endlessly bombarding the Philippines public and government energy officials to hasten decarbonisation and quitting oil-coal usage, and push the country towards more energy poverty and economic underdevelopment?

Take these two stories in BusinessWorld of lobbying by groups for more decarbonisation:

1. “Renewables board studying changes in power contracting rules” (July 14, NREB planning to target 35% share of renewables to total power needs by 2030).

2. “Asia-Pacific must set loftier electrification goals — ADB expert” (July 20, talking primarily about solar).

I have also read and heard in some public lectures some officials of a big gas power company here demonizing oil-coal for their high greenhouse gas (GHG) emissions of CO2, without admitting that gas as fossil fuel is also a significant GHG emitter of methane. Even anti-coal campaigner Greenpeace also turned anti-gas, arguing that gas has high methane emission.

Meanwhile, I attended the Market Participants Update (MPU) organized by the Independent Electricity Market Operator Philippines (IEMOP) on July 3. The market participants are the various private players in the sector, the 279 members of the Wholesale Electricity Spot Market (WESM) like the transmission system operator, generating companies (gencos), distribution utilities, and electric cooperatives. Plus 1,581 participants of the Retail Competition and Open Access (RCOA) like retail electricity suppliers (RES) and contestable customers.

WESM and RCOA are two of the most beautiful provisions of the EPIRA law of 2001 that directly benefit electricity consumers. WESM ensures fierce competition among gencos and RCOA ensures competition in electricity retail and distribution. And that is why the EPIRA law should not be junked or tinkered with as proposed by some groups that irrationally advocate re-nationalization and state re-monopolization of the power sector.

I requested updated data from the IEMOP and here are some interesting trends in the Luzon-Visayas grids as a result of ECQ-GCQ policies.

One, the average electricity demand from April-June 2020 has changed by an average of -1,578 MW or -14.7% over April-June 2019. I see this figure as an indicator of a -10% to -12% GDP contraction by second quarter 2020.

Two, average prices (ESSP) over the same quarters have changed or declined by P5.59/kwh.

Three, for July 1-20, 2020 vs July 1-20, 2019, the decline in electricity average demand has tapered to -366 MW or -3.5% while prices (LWAP) have declined by P2.64/kwh.

The main lesson here is that if people want cheaper electricity and stable power supply, we should strengthen the spot market system, expand WESM to Mindanao soon, maintain the “energy-agnostic” policy of Secretary Alfonso Cusi and not promote energy favoritism and cronyism for variable renewables.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers

minimalgovernment@gmail.com

In search of blandness

IN THE MIDST of our current pandemic crisis, there are already moves by some to raise profiles of wannabes for… ahem, bigger things. Is it too early to be thinking of the big marketing event in May of 2022? Brand consultants are tasked with transforming vanilla into an exotic flavor for the masses — bring it to the provinces. Never mind if they have enough hospital beds.

Blandness is promoted as a virtue. A case can be made for packaging a personality who is always in the news, albeit off to the side like an uninvited guest, and having no speaking part, except to move close to the masked man in the spotlight for a whisper — Sir, this is the page you should sign.

Exuding dullness is not an acquired skill. Some people are just born with it. There is a reassuring banality in a dolt that exciting alternatives (sometimes called charismatic) cannot provide. In a crisis, blandness exudes calm, which is sometimes mistaken for cluelessness. Life after all is not about fireworks and snare drums. The “new normal,” say working from home, can involve sleeping, eating, wearing shorts, and popping up at webinars to invite yawns.

The search for blandness also works in the corporate setting.

The boring CEO of a listed company can be more comforting than a flamboyant one who owns a seldom-used yacht and wears designer face masks. Would you trust the proceeds of an IPO to someone whose new home displays 20 of his portraits by well-known artists? He may be dissipating retained earnings in personal pursuits that get featured in the company’s annual report.

What’s wrong with projecting boredom? Many love watching boring basketball games. So what if the contest is lopsided, with the outcome assured, and no lead changes from start to finish?

Advocates of unexciting games come to the sports arena prepared to be well… bored. (Please pass the popcorn.) A steady pulse rate is guaranteed. Why not embrace the lack of thrills to quickly get a chance to sing, three minutes before the game is officially over, a seldom-used victory song? Dozing, monotony, the opportunity at any point to go to the washroom without missing much, and the desire to get to the alma mater song quickly with no prospect of overtime are outcomes devoutly to be wished.

Boring games are like TV cooking shows. We see the chef/host announce the dish she will cook up, a list of ingredients featuring the sponsored products. She then narrates the process that transforms raw items into a mouth-watering dish. We are shown the ground beef, carrots, potatoes, and green stuff being cubed or chopped, mixed together and thrown into the chafing dish with some soup stock and a pastry covering slid into the oven. Without waiting for the prescribed 45 minutes cooking time, the chef after the commercial break shows the finished product which she admits has been pre-cooked. She spares us the long wait and the sight of mashed potato turning brown. The dish is then promptly served to the studio audience as the credits roll up.

We are creatures of routine. And it shouldn’t be too disturbing to have monotony, like a Gregorian chant, be the music of our lives. Those who offer excitement as a desirable goal, as in bungee-jumping or adventure trips, even play up the risks involved. The house with a scenic view of the ocean is not an ideal shelter from the typhoon. The picture windows can easily shatter.

Who cares for the excitement of a pandemic where the contagion count is full of harrowing twists and turns? Give me a boring traffic jam instead.

There are not too many PR firms that boast of turning a candidate’s cluelessness into a selling proposition. Still, there are products born to the role of Juan Tamad, waiting for the guava (or the endorsement) to drop into the open mouth. (It’s always open in awe.) If this generic candidate does not bother jumping through hoops of fire to attract attention, it is intentional. He just wants to be there and let the game come to him.

Dullness trumps charisma. We don’t need fiery denunciations of critics to make our hearts race. A little less excitement from leaders allows us to get on with dining in restaurants that promote physical distancing, and allow rambling conversations… about boring people.

 

Tony Samson is Chairman and CEO, TOUCH xda

ar.samson@yahoo.com

BW One-on-One with Emmanuel P. Maceda

Over four months after being declared as a pandemic, COVID-19 has put economies on the brink, negatively affecting businesses across the world.

What needs to change in the way businesses approach current operating conditions? How do companies emerge from this crisis in a better competitive position?

Listen to the Bain & Company’s Worldwide Managing Partner Emmanuel P. Maceda as he shares his outlook on the business landscape across the globe in the time of COVID-19 during this BusinessWorld One-on-One exclusive online interview which premiered last July 21 on BusinessWorld’s and The Philippine STAR’s Facebook pages.

PSC setting house in order in wake of payroll fraud

RECENTLY rocked by a payroll scam, the Philippine Sports Commission announced on Wednesday that it would employ an organizational revamp.

PSC Chairman William Ramirez, who was back at the PSC helm after a month-long leave to attend to personal matters, said the revamp was just the start of “a plan to re-stabilize the organization.”

Part of the revamp is the appointment of Atty. Guillermo Iroy, Jr. as acting Executive Director in place of Merlita Ibay, who resumes her position as Deputy Executive Director for Finance and Administrative Services, her original appointment before being tapped to take on the acting executive director role. Queenie Evangelista, meanwhile, will lead the Bureau of Coordinating Secretariat and Support Services as its acting deputy executive director.

The setting of order comes on the heels of the uncovering of fraudulent actions of one of its employees, Paul Michael Padua Ignacio of the PSC’s Personnel Department, who was arrested last week for allegedly engaging, the sports agency said, in a payroll padding scam.  

According to the PSC’s letter to the National Bureau of Investigation (NBI), Mr. Ignacio, who is in charge of preparing the payroll register of national athletes and coaches, included in the list even the names of athletes and coaches who were no longer qualified to receive their monthly allowances and channelling the allowance money to his account.

The modus was reportedly being done for the last five years and cost the government P14 million.

Mr. Ignacio is now in the custody of the NBI and said to be cooperating with authorities in the investigation.

The Land Bank of the Philippines-Century Park Hotel branch reported the questionable transactions to the PSC, prompting the latter to take action and seek the help of pertinent government agencies in the investigation.

In a statement, Mr. Ramirez said they are taking the matter seriously as it goes against everything they envision the PSC would be under their watch.

“As the highest accountable official of the agency, I take responsibility to effect changes, to make sure that there are no gaps in the organization. I feel sad, frustrated, and hurt but we all have to have composure,” said Ramirez, adding that he hopes all stakeholders and partners “are at peace with these decisions and continue to support us through this.”

The PSC is working closely with the NBI, Department of Justice and the Office of the Solicitor General to bring those accountable to justice and possibly return the money lost. – Michael Angelo S. Murillo

Minnesota Timberwolves for sale; Garnett interested

THE Minnesota Timberwolves are for sale, and franchise icon Kevin Garnett is part of a group of investors that is “seriously interested” in buying the team, according to multiple reports Tuesday.

Sportico reported owner Glen Taylor had retained the Raine Group to sell the franchise, adding that several parties have bid on the team.

Taylor confirmed to The Athletic that he has received inquiries, including from groups who want to relocate the franchise, which is a nonstarter.

“People have inquired who are interested, but they want to move the team,” Taylor told The Athletic, adding that the WNBA’s Lynx would likely be included in any deal. “They are not a candidate. We’ve made that very clear. … Everybody’s been told it has to stay in Minnesota.”

Taylor, 79, bought the franchise in 1994 for just under $90 million and has sold off a few minority stakes in recent years. Sportico reported he is seeking at least $1.2 billion to sell the team and that a deal could be reached within a month.

Forbes pegged the franchise’s value at $1.38 billion. Taylor has a net worth of around $3 billion.

In a separate report, The Athletic detailed Garnett’s interest, saying his group is preparing a bid to submit to Taylor.

Garnett, 44, said in December 2017 that he would like to own part of the team he played for from 1995-2007 and in 2014-15 and 2015-16, but only if Taylor were to sell his stake, after the two had a falling out. According to Garnett, Taylor backed out of an arrangement with former coach Flip Saunders — in which Garnett would join the team’s front office and/or ownership group following retirement — after Saunders’ death in 2015. 

In April, Garnett told The Athletic, “At this point, I don’t want any dealings with Glen Taylor or Taylor Corp. or anything that has to do with him. I’ll always have a special place for the city of Minneapolis and the state of Minnesota in my heart. But I don’t do business with snakes.

“I don’t do business with snake (expletive). I try not to do business with openly snakes or people who are snake-like.”

Garnett was named for enshrinement in the Basketball Hall of Fame this spring, and he’ll be officially enshrined when the postponed event happens in 2021.

A 15-time All-Star, Garnett earned 10 of those selections while with the Wolves and drew MVP honors after the 2003-04 season. He averaged 19.8 points, 11 rebounds and 4.3 assists during 14 seasons in Minnesota, and 17.8 points, 10 rebounds and 3.7 assists for his career.

Garnett played for the Boston Celtics from 2007-08 to 2012-13, winning his lone championship ring in 2008. He also spent 2013-14 and part of the 2014-15 season with the Brooklyn Nets.

DRAFT LOTTERY
Meanwhile, the National Basketball Association moved up its draft lottery by five days next month, according to multiple reports Tuesday.

The lottery will now be held Aug. 20 instead of Aug. 25, per reports. The draft date has not moved, as it still will be held Oct. 16.

While the NBA season’s structure has been overhauled for its return from the coronavirus pandemic, the lottery will essentially be the same, apart from being delayed more than three months.

Eight teams were not included in the restart near Orlando, already putting them in the lottery. The six teams eliminated from the restart will also join the lottery, and odds will then be assigned based on teams’ records in games before the season was paused March 11.

The lottery was originally scheduled for May 19 before being postponed. — Reuters

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