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Grab resumes taxi service in Baguio and Naga

GRAB Philippines has resumed its taxi services in Baguio and Naga on Friday, implementing the cashless payment mandated by the Land Transportation Franchising and Regulatory Board (LTFRB).

“Starting May 22, around 400 taxi drivers from Baguio and Naga Cities will resume plying the roads, implementing cashless transactions during rides,” Grab said in a statement on Friday.

Grab said it had trained about 7,000 taxi drivers to carry out cashless transactions in preparation for the resumption of public transportation nationwide.

According to the Transportation department, the LTFRB has issued Memorandum Circular No. 2020-018 mandating the collection of fares in taxi units and transportation network vehicle services (TNVS) as “strictly through cashless payment or through online payment facility only.”

“Aside from mitigating the spread of infection brought about by the exchange of cash, adapting cashless payments coupled with the Grab platform’s robust contact-tracing system with the Department of Health will also allow for improved contact-tracing capabilities especially in public transportation such as taxis,” Grab said further.

Grab Philippines President Brian P. Cu was quoted as saying: “As we move towards the new reality, we would need to make significant adjustments in many aspects of our lives so that we can protect both the lives and livelihoods of our kababayans. Over a short period of time, we were able to help our taxi drivers — who are previously cash-based and meter-based, embrace digitalization, and adapt to cashless.”

“We believe that by adopting cashless payment for public transportation, we will reduce the risk of spreading the infection through cash, but likewise improve our contact tracing capability,” he added. — Arjay L. Balinbin

Gov’t, GCash partner for cashless payment in taxis and TNVS

THE government has partnered with Globe Telecom, Inc.’s mobile wallet arm GCash to carry out cashless transactions in taxis and transportation network vehicle services (TNVS), the Department of Transportation (DoTr) said.

The Transportation department made the announcement on Friday as taxi operators and transport network companies are now allowed to resume operations in areas placed under the more relaxed general community quarantine (GCQ).

The Land Transportation Franchising and Regulatory Board (LTFRB) has been pushing for the use of digital payments to limit or prevent the spread of the coronavirus disease 2019 (COVID-19).

“The agency has been in talks with various cashless payment providers. One of the first to tie-up with the government for this purpose is GCash,” the DoTr said.

Under the partnership, “GCash will enable taxi drivers to accept digital payments through the revolutionary Scan to Pay (STP) app via the QR technology of GCash. Using this app, GCash users only need to scan the unique QR code of the taxi unit they are riding in paying for their metered fares,” the department added.

GCash also offers GCash PowerPay+, a fund disbursement platform that allows taxi operators to send salaries, allowances, and commissions to their drivers.

“Cashless and contactless payment scheme will now be part of the ‘new normal’ in the public transportation system. This should not be treated by taxi operators as another transaction cost. Rather, this move intends to limit direct physical contact between drivers and their passengers and help stop the spread of COVID-19. I am very grateful to GCash for making this new arrangement happen,” Transportation Secretary Arthur P. Tugade was quoted as saying.

For his part, GCash Head of Payments Jovit Bajar said: “GCash strongly supports the government’s call for the use of mobile payments to lessen the risk of spreading COVID-19 through surfaces such as paper money. We laud the strong and wise decision of [the DoTr and the LTFRB] in implementing the cashless payments program, as we move forward to the new normal.”

The DoTr said the LTFRB is in talks with other electronic payment providers such as Squidpay, Paymaya, and Beep, among others. — Arjay L. Balinbin

Newport Mall to partially open shops, restaurants

RESORTS World Manila (RWM) will partially open Newport Mall, as a number of retail shops and restaurants will resume operations on Friday, with the implementation of the modified enhanced community quarantine in Metro Manila.

In a statement, RWM said that retail shops such as Pacsafe, Planet Sports, Orogold, Reservalife, Hush Puppies, and Coalition will begin operating for the first time in two months.

In addition, restaurants like Uncle Mao, Macao Imperial, Barcino Wine Resto Bar, and Peri-Peri Charcoal Chicken and Sauce Bar will also resume operations, but will not allow dine-in. The food establishments will accept take-out, pick-up, and delivery orders.

RWM said that customers aged 21 to 59 years old will be the only ones allowed to enter the mall and are encouraged to bring proper identification, in compliance with the guidelines from the Inter-Agency Task Force for the Management of Emerging Infectious Diseases.

Alongside typical safety guidelines such as wearing masks, mandatory thermal scanning, and hand sanitizer stations, RWM and Newport Mall employed an “Anti-Virus Patrol” that will conduct hygiene surveillance within the premises.

Additional sanitation and disinfection technologies like a smart disinfection and temperature chamber and escalator handrail sanitizers were also installed inside the mall property.

Contactless purchase with designated pick-up counters and drive through stations is also introduced during the re-opening of the establishment.

Newport Mall’s new mall hours are from 11 a.m. to 7 p.m. daily. — Revin Mikhael D. Ochave

Toyota resumes production, reopens 66 dealer outlets

TOYOTA Motor Philippines Corp. (TMP) announced on Friday that it has resumed the operations of its manufacturing plant in Santa Rosa City, Laguna and reopened most of its dealer outlets nationwide.

“After temporarily halting production to comply with the quarantine guidelines set by the government, leading automotive manufacturer Toyota Motor Philippines (TMP) has resumed operations in its Santa Rosa, Laguna plant beginning May 18, 2020,” the automotive company said in a statement on Friday.

It added that resuming business as soon as possible would help stimulate economic activities in the country.

TMP assured the public that precautionary measures were conducted in its manufacturing plant in Santa Rosa “to ensure safety and adherence to production protocols.”

“All reporting Team Members have been briefed on the safety guidelines and measures that will be strictly followed in the plant. The overall workforce currently reporting on single-shift operation is within the 50% cap mandated by the government under the modified enhanced community quarantine (MECQ) guidelines,” it said.

The company also reported that 66 out of its 70 dealer outlets nationwide have resumed operations as of May 20.

“Due to social distancing measures implemented within the showroom, customers are encouraged to set an appointment before visiting their nearest dealers. The TMP dealers’ directory can be accessed at https://toyota.com.ph/dealer,” it said.

It said further that at least five service centers have also reopened, including Toyota Alabang Service Center, Toyota Shaw Service Center, Toyota North EDSA Service Center, Toyota Davao Body and Paint Center, and Toyota Negros Occidental Service Center. — Arjay L. Balinbin

Stocks end three-day gains, declines 1.16%

THE LOCAL market fell 1.16% on Friday, ending three consecutive days of gains as worries from investors continue while the coronavirus disease 2019 (COVID-19) pandemic remains.

At the end of the trading week, the 30-member Philippine Stock Exchange index (PSEi) declined by 65.3 points to finish at 5,539.19 while the broader all shares index went down 0.74% or 24.98 points to close at 3,349.98.

In a text message, PNB Securities, Inc. President Manuel Antonio G. Lisbona said the market had been consolidating for almost a month now because of the lack of fresh catalysts.

“Selling pressure from foreign participants seems to have eased as well with a daily average selling of P200 million versus P723 million in April. Year to date, the foreign investors have sold almost $1.2 billion worth of local equities,” Mr. Lisbona said.

In a text message, Philstocks Financial, Inc. Research Associate Claire T. Alviar said that Friday’s trade declined as investors took their profit ahead of the long weekend.

Ms. Alviar added that the the Board of Investments (BoI) report of a 71% fall in pledged inflows in the first four months due to the COVID-19 pandemic has also weighed on the investor sentiments.

“It (BoI) approved P84.1 billion from January to April, lower than P286.7 billion in the same period last year. Given this, our country can’t seek additional help from foreign investments, for more economic activities and also for recovery, so reopening of the economy could be tougher,” Ms. Alviar added.

On Friday, all sectoral indices fell. Financials declined 1.85% or 20.79 points to 1,102.5; industrials shrank 0.57% or 42.56 points to 7,304.81; holding firms retreated 0.92% or 51.68 points to 5,540.44; property lost 1.25% or 35.4 points to 2,785.9; services shed 0.67% or 8.98 points to 1,322.13; mining and oil trimmed 1.41% or 64.22 points to 4,465.27.

Mr. Lisbona said that support for next week is seen at 5,400 while resistance at 5,600.

However, Timson Securities, Inc. Head of Online Trading and Trader Darren Blaine T. Pangan disagreed and said that support may be pegged at the 5,500 area while the nearest resistance is at the critical 6,000 level.

Decliners bested advancers 125 to 49, while 44 names ended unchanged.

On Friday, net foreign selling increased to P742.14 million, about six times more than the P121.72 million recorded in the previous day.

“As the local market reopens on Tuesday next week, we look forward to the national government’s decision on whether the lockdown measures will be modified, lifted, or stay as is,” Mr. Pangan said. — Revin Mikhael D. Ochave

Investment Priorities Plan to incentivize pandemic-containment projects

THE Board of Investments (BoI) said Wednesday that it has proposed to modify the 2020 Investment Priorities Plan (IPP) to classify various pandemic-mitigating activities as eligible for incentives, with the adjustments awaiting President Rodrigo R. Duterte’s approval.

“Nagsubmit tayo early part of this year kaya lang inabutan tayo ng pandemic na hindi pa siya napipirmahan. So winithdraw natin tapos pinalitan natin. Naglagay tayo ng two items, naglagay tayo ng 2 activities that can qualify doon sa incentives (We submitted the proposed changes earlier in the year but it was overtaken by events after the pandemic. So that proposal was withdrawn and we resubmitted with two new activities eligible for incentives),” BoI Managing Head Ceferino S. Rodolfo said in a virtual news conference Wednesday.

He added: “Ang gusto natin sana mailagay ‘yung ability or ‘yung power to be able to declare activities related to the Balik Probinsya (Program) na sana pioneer para longer ITH (income tax holiday) . Kasi ngayon, di ba yung mabibigyan lang natin na pioneer yung mga LDA (less developed areas). Eh Ang hirap-hirap talaga magdeclare ng isang lugar na LDA…kasi masyadong strict yung ating guidelines for that (We wanted to add the power to declare as pioneer activities those related to Balik Probinsiya, to allow a longer ITH. Right now pioneer status is hard to come by because the qualification process for LDAs is strict).”

Balik Probinsiya is a government incentive to decongest the capital and seed the provinces with more businesses and people, after the quarantine imposed on Metro Manila crippled economic activity in the first quarter.

He said the BoI also included in the IPP an item for the production and import of medical face masks and ventilators.

The new IPP, Mr. Rodolfo said, was designed to aid the transition towards the implementation of the CREATE bill or the Corporate Recovery and Tax Incentives for Enterprises Act, a revised version of the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill which is pending at the Senate.

“Kung nagregister ka before the CREATE at di ka pa nakakakuha ng incentives (If you applied for incentives before the CREATE bill and were rejected), you can now be given the opportunity to either stick with the current regime or migrate to CREATE in case you are qualifieda,” he said.

The CREATE bill, which is part of the government’s three-phase recovery plan, proposes a reduction in the corporate income tax (CIT) rate to 25% from the current 30% starting July. — Arjay L. Balinbin

DoF, DoE rule out suspending VAT on power consumption

THE Department of Finance (DoF) and the Department of Energy (DoE) on Friday rejected a proposal to suspend value-added tax (VAT) on power consumption as a relief measure during the pandemic.

“Suspending VAT is not a good option at this time because we need funds,” Finance Undersecretary Bayani H. Agabin told Senators Friday.

“VAT is actually a progressive tax, those who use electricity more will be paying more VAT,” he added.

Mr. Agabin was participating in the Joint Congressional Energy Commission hearing on the impact of coronavirus disease 2019 (COVID-19) on the power sector.

Energy Secretary Alfonso G. Cusi said VAT collection is vital in funding government measures in response to the COVID-19.

“Mahirap kung ngayon tayo mag-su-suspend ng VAT. Paano natin mapa-fund ang ating requirements? Wala na tayong mapagkukunan ng pera (It would be difficult to suspend VAT at this time. How can we pay for our needs if we have no funding sources),” Mr. Cusi said at the same hearing.

The Senate Tax Study and Research Office (STSRO) had proposed to suspend VAT on utilities, and Senator Risa N. Hontiveros-Baraquel was seeking the two departments’ positions on the proposal.

“Tingin niyo may option ang gobyerno na i-suspend ang imposition ng VAT habang nag-re-recover pa ang bansa (Can the government suspend VAT while the economy is recovering?)?” Ms. Hontiveros-Baraquel asked.

In a May 17 memorandum, the STSRO said the suspension of VAT on utilities could provide “immediate short-term relief and ample financial breathing space.”

The STSRO said other Southeast Asian countries have also resorted to VAT relief measures to ease the burden of the COVID-19 crisis.

Indonesia granted an advance VAT refund for April to September for manufacturers and export-oriented firms, while Vietnam deferred VAT for businesses and households for five months. — Charmaine A. Tadalan

BIR cites gov’t cash crunch in rejecting further extensions

THE Bureau of Internal Revenue (BIR) said the government’s urgent need for funds rules out any further extensions of tax deadlines, though it will consider extending the availment period for the tax amnesty on delinquencies.

“The government urgently needs revenue collection to finance measures against COVID-19, so we cannot have further extensions. We want to encourage compliance and payment of taxes,” Deputy Commissioner Marissa O. Cabreros said in a mobile phone message Friday.

Commissioner Caesar R. Dulay issued Revenue Regulations (RR) No. 12-2020 on May 14, repealing the amended portion of RR No. 11-2020 which allows due dates to be pushed back “in case of quarantine extensions.”

The latest deadline extension came via RR No. 11-2020, in which the final date for filing and payment of income tax returns (ITR) was set at June 15. The deadline was moved three times from the traditional filing date of April 15.

RR No. 12-2020 was approved by Finance Secretary Carlos G. Dominguez III on May 20, and is “effective immediately”. A copy of the RR was published Friday.

The BIR is encouraging early payment due to the cash crunch, telling taxpayers that amendments are possible before due date.

BIR Deputy Commissioner for Operations Arnel S.D. Guballa told BusinessWorld that extending the cut-off period in availing of the tax amnesty on delinquent accounts beyond June 22 is “being evaluated.”

“For consideration, amnesty on delinquents,” he said in a text message yesterday when asked if the Bureau will consider making exceptions for the tax amnesty program.

According to a directive issued April 29, the cut-off period for availing of the tax amnesty on delinquencies was moved to June 22, from the intial April 23 deadline.

Republic Act No. 11213, signed into law in February, allows a one-year period for those seeking to avail of the amnesty on delinquent accounts while a longer, two-year window was given to avail of the estate tax amnesty program.

As of the end of October, the BIR collected over P1 billion from the two amnesty programs, P887.07 million from delinquent accounts and more than P360.5 million from the estate tax amnesty.

According to DoF data, 18 various tax amnesty programs have been implemented between 1972 and 2008, with the last one yielding P4.913 billion in collections. — Beatrcie M. Laforga

OFW new-hire deployments dwindle to 47 in April

NEW-HIRE deployment of Overseas Filipino Workers (OFWs) dwindled to 47 in April from more than 30,000 a year earlier, the Philippine Overseas Employment Administration (POEA) told Congress.

“For April last year, new-hire deployments reached 30,592. This year (in) April, we only had 47. This is new hires, all types of workers. So the reduction in deployment is 99.85%,” POEA Administrator Bernard P. Olalia said during the virtual hearing of the House committee on overseas worker affairs

Rehire deployments fell 99.48% to 667 in April.

“During the ECQ (enhanced community quarantine) period, there were some seafarers which had employment contracts which expired or terminated. So what we did is was to extend the employment contracts for 60 days. This is to address the issue of crew changes. We also extended the accreditation of their principals,” Mr. Olalia said.

Foreign Affairs Undersecretary Sarah Lou Y. Arriola reported that a total of 2,461 overseas Filipinos are infected by coronavirus disease 2019 (COVID-19). Of the 2,461 cases, 285 died while 861 were able to recover.

Ms. Arriola added that the agency was able to repatriate 28,589 overseas Filipinos and was able to charter 2,187 flights for their repatriation.

The Overseas Workers Welfare Administration (OWWA) reported that it has spent about P497 million to assist 5,133 OFWs with accommodation, transport and food since the start of the ECQ in Luzon.

“We don’t see mandatory quarantine ending anytime soon, therefore we expect spending to continue, especially for hotels. We are asking for money, for help. We see the OWWA fund being tapped for a post-lockdown scenario,” OWWA Administrator Hans Leo J. Cacdac said.

During a virtual briefing on May 11, OWWA asked Congress for P2.5-billion to finance assistance to returning OFWs.

AAMBIS-OWWA Party-List Rep. Sharon A. Garin, who co-chairs the House economic stimulus cluster of the Defeat COVID-19 committee, said the panel will study the proposal for inclusion in the Philippine Economic Stimulus Act (PESA) which aims to inject about P568-billion into the economy for the recovery effort.

“Kulang yung pera ngayon (money is tight) but we are proposing that OFWs should be covered with a two moth wage subsidy after the ECQ. It’s a very important industry, it delivers 10% of GDP (gross domestic product) or more even…I think we need to protect it not only for the GDP but also for their families,” she said. — Genshen L. Espedido

PHL domestic funding capacity seen favorable among emerging markets

THE Philippines’ ability to fund its pandemic spending from domestic sources gives it an edge among domestic markets, Oxford Economics said,

In a note, “Funding conditions spiraling into control for most emerging markets (EMs),” Oxford Economics said many EM governments have increased their reliance on “more reliable domestic sources of finance.”

These include the Philippines, which maintains a 72:25 borrowing mix in favor of domestic sources.

According to Oxford Economics, heavy reliance on domestic funding leaves governments less exposed to external volatility compared to those depending on international markets.

“The composition as well as the size of debt can be important in predicting which sovereigns may run into funding difficulties this year,” it said.

In 2019, the government’s total debt stock rose to P7.73 trillion, with P5.127 trillion from domestic sources. Around 33.66% or P2.603 trillion was borrowed from foreign creditors.

“Domestic residents are typically more willing to fund their governments in times of stress, whereas international investors are more likely to take capital out of the country,” it said.

Oxford Economics classified the Philippines among the EMs with large funding capacity from the domestic financial system.

“And though the expansion of sources could prompt heightened concerns over credit booms and busts, it also means numerous EMs can tap deeper domestic markets without overstretching their capacity too much,” it said.

“Thailand may have it easy: a 3% increase in total financing need in 2020 is small relative to domestic funding capacity (220% of GDP). Malaysia, the Philippines, India, and Brazil are similarly advantaged,” it said.

So far, the Philippines has rolled out P200 billion in cash aid to poor families, P51 billion in wage subsidies for employees of small businesses, and could roll out another P170 billion for its economic recovery plan.

The economic team is projecting a budget deficit equivalent to 8.1% of GDP this year largely due to plunging revenue and higher spending for its emergency response.

The government’s total debt stock is estimated to hit P9.589 trillion by the end of 2020, equivalent to 49.8% of GDP, and up about 24%. — Beatrice M. Laforga

Diokno backs health care, tech, agriculture reforms after pandemic

THE government needs to implement structural reforms in health care, technology and agriculture while upskilling the workforce to ensure recovery from the coronavirus disease 2019 (COVID-19) pandemic, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said.

The top priority, modernizing health care, “would require giving incentives for the use of science and technology in health policy decision making. It would require overhauling the health care supply chain,” Mr. Diokno said in an online forum organized by the Makati Business Club and the National Resilience Council Friday.

Mr. Diokno also supports upgrading the infrastructure for information communications technology (ICT).

“The demand for digital technology will increase, driven by companies, schools, and government agencies implementing work from home arrangements and virtual meetings,” he said.

Mr. Diokno said upgraded crop management and farm logistics will ensure that food is accessible and cheap during emergencies.

“An efficient logistics system for agriculture facilitates the transport of agricultural inputs including farm equipment and machinery to farmers to keep food production uninterrupted,” he said.

Workers, he said, must be prepared for the future via upgraded skills and the safeguarding of their health in order to maximize the so-called demographic dividend from the young workforce. — Luz Wendy T. Noble

Murang Kuryente subsidy to take effect next year

THE Power Sector Assets & Liabilities Management Corp.(PSALM) said the government’s subsidy for some universal charges will take effect next year, removing some of the cost from electricity bills.

PSALM was replying to a query from Senator Risa N. Hontiveros-Baraquel during a Joint Congressional Energy Commission hearing. Ms. Hontiveros-Baraquel brought up the government’s P208 billion subsidy which will relieve consumers from paying the universal charges for stranded contract cost (UC-SCC) and stranded debt (UC-SD).

The costs must be provided for in the General Appropriations Act (GAA), as provided in the implementing rules and regulations (IRR) of the Republic Act No. 11371, or the Murang Kuryente Act, according to PSALM President Irene B. Garcia.

“Once it is included in the GAA and funding is provided, we will no longer file for new UC applications. However, ‘yun pong current na UC na we see in our electricity bills, those are continuing po, (the current UC appearing in our electricity bills will still be charged)” she added.

In August, President Rodrigo R. Duterte signed the law which allocates P208 billion of the net proceeds of the government’s share from the Malampaya Natural Gas Project to cover the two universal charges, including as well as the anticipated shortfalls or deficits incurred from paying these obligations.

The IRR for the law was released in April, and as a result the subsidy will need to be budgeted for in 2021.

“Hindi po kasi agad nagawa ang IRR (The IRR wasn’t prepared in time), and therefore the DBM (Deparment of Budget and Management) and DoF (Department of Finance) said (the universal charges) cannot be included in the budget, so we will have to wait for next year,” Ms. Garcia explained.

PSALM is currently not collecting the UC-SCC, in compliance with the IRR, but it is still receiving the P0.0428 per kilowatt-hour UC-SD charged to consumers.

“No new UC [applications] will be approved but ‘yung mga dating na-approve po, tuloy-tuloy po (those previously approved UC applications are still in effect),” Ms. Garcia added.

Stranded contract costs are “the excess of the contracted cost of electricity under eligible IPP (independent power producer) contracts over the actual selling price of the contracted energy output of such contracts,” according to the IRR. Collections from these are remitted to PSALM.

Stranded debt, which is assumed by PSALM, are unpaid financial obligations of the National Power Corp. which have not been liquidated by the proceeds from the sals and privatization of its assets.

Should there be a remainder from the fund allocation after the payments of these costs are completed, the law states that the remaining amount must be used to finance energy resource development and exploitation programs of the Energy Development Board. — Adam J. Ang

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