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College teacher badly hurt in Basilan gun attack

COTABATO CITY — A college teacher was seriously wounded in another shooting incident in Lamitan City late Saturday, the second in the area in just three days, amid a nationwide election-related gun ban.

The 25-year-old Johnus Flores Lim, who sustained multiple bullet wounds from the attack, is a teacher in the Furigay College Incorporated in Lamitan City. He was immediately brought by barangay emergency responders to the Lamitan City District Hospital for treatment.

Lt. Col. Elmer P. Solon, Lamitan City police chief, told reporters on Sunday that Mr. Lim was seated on his motorcycle parked along a highway in Sitio Baroy in Barangay Sengal when one of two motorcycle-riding men that came close shot him repeatedly with a .45 caliber pistol.

The duo immediately drove away after Mr. Lim fell on the ground, according to witnesses.

City officials have assured the family of Mr. Lim to facilitate his transfer to a more modern hospital in Zamboanga City as recommended by the attending  physician Nurullaji A. Aguil.

Brig. Gen. Romeo J. Macapaz, director of the Police Regional Office-Bangsamoro Autonomous Region, said on Sunday that he had ordered police units in Basilan to intensify their enforcement throughout the province of the nationwide gun ban being imposed since Jan. 12 by the Commission on Elections, meant to ensure peaceful elections in May 2025.

Businessman Abduraza Saidde Madiza, was also killed in an ambush on Thursday night in Barangay Malinis in Lamitan City.

Mr. Madiza was riding his motorcycle, on his way home to Barangay Limook in the north of the city, when he was attacked by gunmen along the route, killing him instantly.

His attackers managed to escape using a getaway motorcycle before responding volunteer community watchmen and barangay officials could reach the scene. — John Felix M. Unson

Infrastructure spending up nearly 55% in Nov.

PHILIPPINE STAR/RUSSELL PALMA

INFRASTRUCTURE spending in November rose 54.6% year on year after flagship projects were expedited, the Department of Budget and Management (DBM) said.

In a disbursement report, the DBM said spending on infrastructure and other capital outlays rose by P31 billion in November to P87.6 billion.

Month on month, infrastructure spending fell 20.36% from P110.0 billion in October.

The DBM said the Department of Public Works and Highways (DPWH) drove spending with its take up of funding for flagship projects.

“Significant disbursements were also made by the DPWH for completed projects and ongoing contracts from the prior year’s budget,” it said.

The DBM also attributed the increased infrastructure spending in November to the capital outlay projects of state universities and colleges.

It also noted the P3.2-billion disbursement for DPWH’s counterpart funding to foreign-assisted projects, specifically for the Light Rail Transit (LRT) Line 1 South (Cavite) Extension Project and LRT Line 2 East Extension Project.

In the first 11 months, infrastructure spending rose 15.5% to P1.18 trillion.

The National Government is “optimistic” it will exceed the infrastructure target for 2024, which was set at P1.472 trillion, equivalent to 5.6% of gross domestic product, the DBM said.

“This should sustain the strong growth of the construction sector and related services or industries and consequently, helped buoy the economic performance last year,” the DBM said.

The National Economic and Development Authority (NEDA) has said that the government completed seven priority infrastructure projects in 2024.

For 2025, it expects 13 infrastructure flagship programs to be completed.

Terry L. Ridon, convenor of think tank InfraWatch, said the November spending increase was due to a more efficient disbursement process and cooperation between the DBM and infrastructure agencies.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the sharp year-on-year increase in infrastructure spending was influenced by the need to push spending before the midterm election spending freeze kicks in.

He said the series of typhoons in the last months of 2024 also unlocked repair or rehabilitation funding.

“In view of the election ban on some infrastructure spending (but there are those exempted) the voters would like to see results in terms of accomplishments of these infrastructure and other government projects,” Mr. Ricafort told BusinessWorld over the weekend.

Ahead of the May 12 elections, the Commission on Elections  will ban on public works spending starting March 28, with the freeze running for 45 days.

He said the “timely approval” of spending for more infrastructure projects in the next few months will help accelerate the economy, as will election-related spending by candidates.

Mr. Ridon urges the government to expedite the rollout of infrastructure projects to avoid them being disrupted by the election ban.

“Any delay in implementation means delayed road and bridge repairs and new projects pushed towards the middle or end of the year,” he said. — Aubrey Rose A. Inosante

Retailers see up to 15% revenue growth this year

PHILIPPINE STAR/RUSSELL A. PALMA

By Justine Irish D. Tabile, Reporter

RETAILERS are expected to book up to 15% in revenue growth this year to around P5.4 trillion, driven by healthy remittances and a growing population, the Philippine Retailers Association (PRA) said.

“We are forecasting a 10-15% increase for 2025 for the retail industry from both in-store and online retail transactions in the Philippines,” PRA President Roberto S. Claudio told reporters last week.

In 2024, the industry is estimated to have generated P4.7 trillion in revenue.

“People are out, shopping malls are full, and the traffic is back, which means people are shopping, so we are looking forward to 2025 to be a banner year,” he said.

“There are so many infrastructure projects that will be completed. Overseas Filipino worker (OFW) remittances continue to go up. Population continues to grow. So there are many factors that will contribute to the growth of retail, especially with the advent of online channels,” he added.

He said that the industry still wants the government to include goods sold online to be subject to value-added tax (VAT).

In October, President Ferdinand R. Marcos, Jr. signed into law Republic Act No. 12023, which amended the National Revenue Code of 1997 and imposed a 12% VAT on foreign digital service providers.

“In the implementing rules and regulations (IRR), there’s a provision that digital goods are not included but only intangible ones like Netflix and Disney (which are) services,” Mr. Claudio said.

“With the advent of e-commerce … you will not be subject to tax if the consignee is an individual and not a store. It is not covered by tax. That is what we are asking for because it is a big thing,” he added.

Sporting goods retailer Quorum International, Inc., which operates the Toby’s Sports chain, said it is budgeting P100 million to open four more stores this year.

“For Toby’s, we continue to grow. We now have 75 stores. We are planning to open three or four more stores before the end of 2025,” according to Mr. Claudio, founder and chairman of Quorum.

“Of the 75 stores, 24 are franchised. The rest are company-owned. So, we will continue with that. And then we’re growing online. Tobys.com is already contributing the equivalent of 10 stores,” he added.

The company has three formats: Toby’s Sports, Runnr, and Urban Athletics. The plan is to open three more Toby’s Sports and one Urban Athletics store.

“We don’t have locations yet… we’re planning to (open a store at) the airport. That will be our first store in an airport,” he said.

He said the plan to open an airport store is driven by the rehabilitation of the Manila International Airport and the recently signed law granting VAT refunds to non-resident tourists.

“We expect the tourist market to be a very big component, so we’re going to position ourselves then to tap the foreign tourists,” he added.

The P100-million budget “includes fit-out, inventory, and staffing. We are now focused on outside Metro Manila,” he added.

He said that the IRR for the VAT refund law is expected to be done by the end of February, with the implementation of the VAT refund scheme expected to be smooth.

“Part of the provision of the bill is to contract an international service provider that is used to giving refunds. So they already have a standard form, a standard system of collecting,” he said.

“Everything will be done electronically… So you get your refund either on a credit card or via an e-wallet. We are proposing not to issue cash refunds, which is hard and can be abused or subject to corruption,” he added.

He said the organization is proposing that services be included in the VAT refund scheme.

“We’re looking at it. We’re trying to recommend that it should be included. Because South Korea and Thailand are giving out VAT refunds for cosmetic procedures,” he added.

$500-M World Bank loan for PHL safer school infra faces delay

Students walk inside the campus of a high school in Quezon City, April 18, 2024. — REUTERS

THE Philippines’ $500-million loan to support the rehabilitation of schools affected by natural calamities has yet to take effect despite the loan deal being signed in November, the World Bank said.

“The project is yet to become effective, pending the signing of the memorandum of agreement between Department of Education and Department of Public Works and Highways, and the Legal Opinion to be issued by Department of Justice,” according to a loan document uploaded on the World Bank website on Jan. 30.

The Infrastructure for Safer and Resilient Schools project was signed on Nov. 4 following approval on June 28, 2024.

According to the bank, the loan was initially supposed to be effective on Sept. 30 and with a mid-term review due on June 1, 2027. The loan will close on Dec. 31, 2029. — Aubrey Rose A. Inosante

Tobacco exports seen growing with FTAs, removal of non-tariff barriers

BW FILE PHOTO

THE PHILIPPINES will need to leverage free trade agreements (FTAs) and address non-tariff barriers to help grow the tobacco industry, the Department of Trade and Industry (DTI) said.

At the International Tobacco Agricultural Summit, Bureau of International Trade Relations Director Marie Sherylyn D. Aquia said FTAs will play a crucial role in strengthening the industry by improving market access.

“FTAs also support legitimate trade and enhanced trade cooperation. FTAs also secure preferential tariffs and clear rules, which can improve the competitiveness of the industry,” she said last week.

“However, it is important to note that global trends are increasingly focused on public health considerations, which may impact the tobacco trade,” she added.

She also cited the need for separate international cooperation efforts to address illicit trade issues.

According to the DTI, the non-tariff barriers faced by the industry include stringent packaging and labeling requirements, import restrictions and quotas, excise taxes and price controls, as well as technical barriers to trade and environmental regulations.

“These measures, while often aimed at public health concerns, can create challenges for our Philippine tobacco exporters,” she said.

Meanwhile, she said that the markets with growth potential for Philippine tobacco exports include Japan, Switzerland, Norway, Iceland, and the South Korea.

“We do have free trade agreements with all of these countries, but of course, we aim to continue to improve market access for our exports of goods and services,” she said.

“By leveraging FTAs and addressing the non-tariff barriers through various international engagements, the Philippines can continue to enhance its tobacco industry’s position in the global market while navigating the evolving regulatory landscape,” she added.

Exports of unmanufactured tobacco declined 14.2% to 17.8 million kilograms in 2024 and fell 6.5% by value to $94.59 million, according to the National Tobacco Administration. — Justine Irish D. Tabile

Power co-ops oppose expansion of Davao Light franchise area

BW FILE PHOTO

THE Philippine Rural Electric Cooperatives Association (Philreca) expressed its opposition to legislation expanding the franchise area of Davao Light and Power Co., Inc. (DLPC).

In a statement over the weekend, Philreca said Senate Bill (SB) No. 2888 will “effectively take over” the franchise area of Northern Davao Electric Cooperative, Inc. (Nordeco).

“This blatant disregard for the contributions and sacrifices of electric cooperatives over the decades is not only unjust but is also posing a serious threat to the long-term welfare of our member-consumer-owners and the integrity of rural electrification in the Philippines,” Philreca said.

SB 2888 seeks to expand DLPC’s coverage area to include Tagum City, Samal Island, and the municipalities of Asuncion, Kapalong, New Corella, San Isidro and Talaingod, in Davao del Norte, as well as the municipality of Maco in Davao de Oro.

The group said that the bill sets a “dangerous precedent” for the industry.

“If private for-profit companies are freely granted franchises at the expense of electric cooperatives, this will accelerate the outright takeover of the entire power distribution sector, leaving consumers vulnerable to profit-driven interests,” it said.

“Electric cooperatives were established with a mission to provide service, not profit. Unlike private for-profit companies, they reinvest revenue into system improvements, expansion, and service reliability,” it added.

Philreca also questioned the absence of provisions tasking DLPC with electrifying all unserved areas and lowering system losses.

Nordeco, which serves parts of Davao de Oro and Davao del Norte, was established to provide electricity to urban and remote areas, according to its website. Its franchise area is adjacent to Davao Oriental Electric Cooperative, Inc. to the west, Agusan del Sur Electric Cooperative, Inc. to the north, and DLPC to the east.

DLPC is the country’s third largest electric distribution utility in terms of customers and annual kilowatt-hour sales. It holds a legislative franchise to build, operate and maintain a power system in Davao City, Panabo City and the municipalities of Carmen, Dujali and Santo Tomas in Davao del Norte for 25 years or until September 2025.

The franchise term was extended for another 25 years or until September 2050 by Republic Act No. 11515. — Sheldeen Joy Talavera

Int’l volleyball tourney hosting seen boosting growth in tourism, retail

REUTERS

By Beatriz Marie D. Cruz, Reporter

THE hosting of international sporting events is expected to unlock growth opportunities for the tourism and retail industries sectors, analysts said.

“Business in the Philippines should understand that sports is important for their business. It promotes their product well, and it gives them a good brand image because volleyball is a family and entertainment (sport),” Philippine National Volleyball Federation (PNVF) President Ramon Suzara said in a briefing last week.

The Philippines will be hosting the 2025 FIVB Volleyball Men’s World Championship between Sept. 12 and 28. Games will be held at the SM Mall of Asia Arena in Pasay City and the Smart Araneta Coliseum in Quezon City.

The tournament is held every two years, following the new streamlined elite calendar to identify which teams qualify for the Olympics. 

A total of 32 national teams will join the tournament — the Philippines, Iran, Egypt, Tunisia, the US, Cuba, Portugal, Colombia, Slovenia, Germany, Bulgaria, Chile, Brazil, Serbia, Czechia, China, Poland, the Netherlands, Qatar, Romania, France, Argentina, Finland, South Korea, Italy, Ukraine, Belgium, Algeria, Japan, Canada, Turkey, and Libya.

“We expect to have P500 million and up of income (from the tournament)” he told reporters.

The 2022 Volleyball World Championships attracted 426,000 spectators, with the economic impact for host countries Poland and Slovenia estimated at 39.4 million euros, including accommodations, travel, food & beverage, retail, and tourism.

Around 57% of Volleyball World Championship fans identify as high-income earners, and about 54% of tourists said they are likely to return for future tournaments.

The Philippine sports market is estimated at $158.1 million (around P9.24 billion) this year, according to German online data platform Statista.

To run the event, PNVF is looking to raise at least P1 billion from the private sector, Mr. Suzara said.

Hosting international sporting events will help increase spending in the local retail and hospitality sectors, according to property consultancy Colliers Philippines.

“The hosting should also enable the country to see a spike in foreign tourists and domestic travelers during the (third quarter),” Colliers Philippines Associate Director Joey Roi Bondoc said in an e-mail.

“With the events lasting more than two weeks, this should entice foreign tourists to stay longer in hotels and spend more,” Mr. Bondoc added.

Hotels are also expected to improve their food offerings and facilities to cater to athletes and tourists, Mr. Suzara said.

The event is expected to increase retail spending, especially with the recently implemented value-added tax refund for international tourists, said Philippine Retailers Association President Roberto S. Claudio.

Both the government and the private sector must work to ensure the seamless entry of foreign visitors. This would entice more global organizations to stage high-profile events in the Philippines, Mr. Bondoc said.

“This is crucial especially as the Philippines is being positioned as a meetings, incentives, conferences, exhibitions (MICE) hub in Asia. Eventually, more high-profile events should entice private developers to build more MICE facilities and hotels in key destinations across the Philippines.”

Leonardo A. Lanzona, an economics professor at the Ateneo De Manila, said a developing country like the Philippines must ensure sufficient funding to ensure that hosting international sporting events does not result in significant losses.

He noted that the 1976 Montreal Olympics left the hosts with $1.6 billion Canadian dollars in debt, causing long-term financial strain for the country.

“To keep this from happening, the country needs to develop detailed and realistic budgets that account for all potential costs, including infrastructure, security, and operational expenses,” Mr. Lanzona said via Messenger.

Additional funding sought for banana industry

DA

THE Department of Agriculture (DA) said that it is looking for additional funding to support banana production, which continues to be impacted by plant diseases.

Agriculture Secretary Francisco P. Tiu Laurel, Jr. said that the DA is seeking the support of Congress to obtain the funding.

“That would definitely help. That’s part of the proposal that we will give,” Mr. Laurel told reporters.

The banana industry has continued to deal with plant diseases like the Fusarium wilt or Panama disease, as well as Black Sigatoka.

He added that smallholder farmers have found it difficult to deal with the plant diseases, prompting about half to stop producing. He said small farms account for about 40% of the industry.

According to the Pilipino Banana Growers and Exporters Association, only 1,000 hectares out of the 89,000 hectares of land available for banana cultivation continued to be operational.

Fusarium wilt is a soil-borne fungal disease that blocks the banana plant’s vascular system and deprives it of minerals, nutrients, and moisture. Affected plants turn yellow and die.

The Tropical Race 4 (TR4) strain of fusarium wilt was first detected in Davao City in 2009 and continues to threaten the Cavendish banana, the main export variety.

Black Sigatoka is also a fungal disease that affects banana leaves, causing them to turn black and die.

On the other hand, he said corporate plantations have been able to cope with the fungal diseases.

“They have protocols in case of infestation. There are certain things that they do, like cutting immediately, to treating the soil, replanting, and adding tea tree oil to prevent the disease,” Mr. Laurel added.

He said smallhold farmers could receive training in disease containment from the DA’s High Value Crop office.

“We have to train the smallholder farmers, and they can apply the techniques of the corporate farmers to return to the industry,” he added.

The Philippines has recently fallen to fourth place among the top banana exporters, as the industry continues to deal with TR4, according to the Food and Agriculture Organization.

According to preliminary data, exports of Philippine bananas dropped to 2.28 million metric tons in 2024. — Adrian H. Halili

Exporters awaiting renewal of US GSP privileges

REUTERS

PHILIPPINE EXPORTS of hard goods and garments are expected to post flat growth this year to about $900 million if the US does not reauthorize its trade preference program, according to the Philippine Exporters Confederation, Inc. (Philexport).

Philexport Trustee for Textile, Yarn, and Fabric Sector Robert Young said that the industry is hoping for the reauthorization of the US Generalized System of Preferences (GSP) and starting the negotiations for a free trade agreement (FTA) with the US.

“(If the GSP is not reauthorized), we will just be flat; we will just survive. In garments, (export sales) could go even lower because we cannot supply buyers with the required quantity due to prices,” according to Mr. Young, who is also the president of the Foreign Buyers Association of the Philippines (FOBAP).

“Everything is a waiting game because of (turnover of leadership to President Donald) Trump,” he added.

According to Mr. Young, the revival of the US GSP program can increase exports, especially for hard goods, by 5-10% this year.

The Philippines was a beneficiary of the US GSP, which allowed duty-free entry of over 3,000 Philippine products into the US market. The program expired on Dec. 31, 2020.

Meanwhile, Mr. Young also considers the prospects for a Philippines-US FTA to be slim.

“That’s for us a long shot. I don’t know if the FTA can be granted by the Trump administration, although our Department of Trade and Industry is strongly lobbying right now,” he said.

“Trade Undersecretary Ceferino Rodolfo has announced that they are trying very, very hard (for a bilateral FTA), so that is good news because, you know, the orders are there,” he added.

The US accounts for 90% of the country’s total exports of hard goods and garments, while ASEAN and the European Union account for the remaining 10%.

Mr. Young said association members have received new orders for hard goods worth $2 million from retail stores in the US and Europe.

“These goods include bread baskets, hampers, fruit baskets, and houseware made from vegetable fibers like abaca, sinamay, and tikog (a native reed),” he said.

“More buyers still prefer natural fibers like abaca for their tableware (for example),” he added.

To meet demand, he said that FOBAP and Philexport tapped producers of indigenous fibers in the Eastern Visayas, who will be trained in product quality specifications to qualify them as exporter suppliers.

“This way, we can solve the skills gap and the quality problem,” he added.

The livelihood training program, which is targeted to start late this month or by next month, is expected to benefit around 250 weavers. — Justine Irish D. Tabile

Tax conversations with C-Suites

IN BRIEF:

• The recently concluded 3rd SGV Tax Symposium highlighted key developments in tax digitalization, enhancements to the Philippine tax incentive regime, and the growing role of artificial intelligence (AI) in tax compliance and strategic decision-making.

• Participants discussed the impact of key tax developments and AI integration on their businesses, and highlighted how new tax regulations can foster economic growth and development.

Amid rapid technological advancements and the evolving needs of taxpayers and businesses, the government continues to issue new tax laws, rules, and regulations. These initiatives are designed to keep pace with the evolving tax landscape, enhance Philippine tax incentive programs, modernize tax administration and services, and drive growth to achieve the national economic growth targets.

At the recently concluded 3rd SGV Tax Symposium, executives from leading corporations shared their insights on the evolving tax landscape and its implications for business operations. The symposium highlighted key developments in tax digitalization, enhancements to the Philippine tax incentive regime, and the growing role of artificial intelligence (AI) in tax compliance and strategic decision-making.

Participants shared insights on how these changes have impacted their businesses and explored opportunities to integrate AI into their tax and financial strategies. Recognizing that the new tax laws, rules, and regulations are designed to support business growth, the executives shared their views on how these frameworks can empower companies to drive economic progress and contribute to the country’s development.

EASE OF DOING BUSINESS AND UPSKILLING
Jack Madrid, president and chief executive officer (CEO) of the IT & Business Process Association of the Philippines (IBPAP), said the information technology (IT) and business process outsourcing (BPO) sectors grew as an industry by about 6-8% over the past decade and even through the pandemic, where they added 255,000 new jobs.

However, despite the steady growth of the IT and BPO industry, Mr. Madrid believes that the industry is facing major challenges today, like ease of doing business and the upskilling and reskilling of the existing and future workforce.

“In my opinion, two of the biggest challenges of the IT and BPO sectors today would be first, ease of doing business, an important topic today. After all, 80% of our investor base is multinational, so we have to allow our investors to operate their businesses without the distraction of ambiguous legislation or implementation and interpretation of rules and regulations. The second one, being a human capital-intensive industry, is the upskilling of our existing workforce and reskilling of future generations of job seekers,” Mr. Madrid said.

Sylvester Wong, vice-president, Asia lead for ESG and Sustainability Services, and country executive for infrastructure consulting firm AECOM Philippines, laid out the growth prospects of the infrastructure industry. He said that despite the geopolitical changes, significant opportunities for growth remain for the Philippines. Moreover, Mr. Wong noted that maximizing public-private partnerships (PPPs) and empowering both metropolitan areas and provinces to leverage infrastructure are key factors in enhancing economic growth.

On the other hand, Ian Mulingbayan, chief executive officer and founder of real-estate developer Pocket Communities, was optimistic on the economy, driven by population and workforce growth. As these facets improve, the economy will continue to strengthen.

Chief Operating Officer of Maynilad Water Services Randolph Estrellado, discussed how the water services business has seen growth surpass pre-pandemic levels. This is primary driven by domestic accounts, with a significant contribution from the increase in remote work.

Although Mr. Wong highlighted potential challenges, such as attracting investments and securing energy resources, he and his fellow speakers discussed how initiatives like CREATE MORE and various tax incentives can positively influence project design, benefiting not only large corporations but also small businesses, which he considers the “lifeblood of this country.” This presents opportunities for small businesses to grow, co-locate, and foster an ecosystem that strengthens their market presence.

However, Mr. Mulingbayan pointed out that while incentives are a key motivator for doing business in the Philippines, some aspects have become outdated and no longer reflect the current costs of doing business. When asked how to address this issue, he proposed that collaboration between real estate developers and government agencies, such as the Board of Investments (BoI) and the Bureau of Internal Revenue (BIR), is essential to update and better align these incentives with today’s economic conditions.

Mr. Madrid considers CREATE MORE a milestone for the IT and BPO industry. He noted the streamlining of processing refunds, lengthening of tax holidays, reduction of ambiguity, and increasing the stability of the incentives. He finds CREATE MORE to be an attractive feature for enhancing the ease of doing business with an immediate impact on industry.

THE IMPACT OF AI
Regarding the impact of AI, Mr. Mulingbayan highlighted its significant role in enhancing efficiency in areas such as design, concepts, and marketing/advertising. On a similar note, Mr. Wong emphasized the role of AI and digital technology in enabling fair competition for smaller players in the market.

In addition, Mr. Madrid said that in a recent survey of IBPAP members, a majority have deployed AI trials and use cases, with 8% of the respondents reporting job reductions and 13% job increases as a result of AI. He said AI poses a challenge, but also presents a bigger opportunity, allowing users and agents to become more efficient and productive by handling more calls, reducing call time, and improving resolutions per shift.

“I think the upskilling, reskilling and right-skilling of our workforce is very important because AI will not replace humans; they will be replaced by other humans who know how to use AI. The kind of jobs our industry wants are those that require judgement or decision-making. I don’t think the banking, financial services, or healthcare sector will want a chatbot to handle their queries. I think a human will always be central, but that human has to be comfortable in using AI tools, which is why I keep on going back to the need for reskilling and right-skilling.”

Mr. Estrellado also provided insights as to how AI is being applied in the water services sector, such as in predicting where leaks are likely to occur, for example, which saves time and effort compared to the traditional method of manually inspecting pipes street by street.

On the topic of BIR digitalization, Mr. Estrellado said the benefits that the BIR wants to generate through this initiative are appreciated. However, he emphasized that many issues must be addressed along the way, requiring coordination with other agencies.

Mr. Wong acknowledged that AI and digital advancements, combined with incentives and improved ease of doing business, could streamline opportunities in the Philippines. He encouraged viewing AI not as a threat, but as a tool that businesses can embrace to stay ahead and maximize its benefits. Finally, he underscored the importance of simplicity, predictability, and transparency in enhancing government processes, calling for even more collaboration between the private and public sectors to achieve great outcomes for the country.

THE EVOLVING TAX LANDSCAPE
The new tax reforms reinforce the principles of transparency, reliability, and predictability in the tax system, which are the critical factors in positioning the Philippines as a premier investment destination. By promoting a more investor-friendly environment, these measures contribute to sustained economic expansion and global competitiveness.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

 

Miguela R. San Juan, Joan Rouella P. Corrales, and Gerardo C. Caiga are tax senior managers of SGV & Co.

Trump launches trade war with tariffs on Mexico, Canada, China

The flags of Mexico, the United States and Canada fly in Ciudad Juarez, Mexico Feb. 1, 2025. — REUTERS

US PRESIDENT Donald J. Trump on Saturday ordered sweeping tariffs on goods from Mexico, Canada and China, demanding they stanch the flow of fentanyl —  and illegal immigrants in the case of Canada and Mexico — into the United States, kicking off a trade war that could dent global growth and reignite inflation.

Mexico and Canada, the top two US trading partners, immediately vowed retaliatory tariffs, while China said it would challenge Mr. Trump’s move at the World Trade Organization and take other “countermeasures.”

In three executive orders, Mr. Trump imposed 25% tariffs on Mexican and most Canadian imports and 10% on goods from China, starting on Tuesday.

He vowed to keep the duties in place until what he described as a national emergency over fentanyl, a deadly opioid, and illegal immigration to the US ends. The White House provided no other parameters for determining what might satisfy Mr. Trump’s demands.

Responding to concerns raised by oil refiners and Midwestern states, Mr. Trump imposed only a 10% duty on energy products from Canada, with Mexican energy imports facing the full 25% tariff.

Canadian Prime Minister Justin Trudeau said Canada would respond with 25% tariffs against $155 billion of US goods, including beer, wine, lumber and appliances, beginning with $30 billion taking effect Tuesday and $125 billion 21 days later.

Mr. Trudeau warned US citizens that Mr. Trump’s tariffs would raise their grocery and gasoline costs, potentially shutting down auto assembly plants and limiting supplies of goods such as nickel, potash, uranium, steel and aluminum. He urged his own citizens to forego travel to the US and to boycott US products.

Mexican President Claudia Sheinbaum, in a post on X, said she was instructing her Economy minister to implement retaliatory tariffs but gave no details.

Canada and Mexico said they were working together to face Mr. Trump’s tariffs.

China’s Commerce Ministry did not specify its planned countermeasures. Its statement left open the door for talks between Washington and Beijing.

“China hopes that the US will view and handle its own fentanyl and other issues in an objective and rational manner,” it said, adding that Beijing wanted to “engage in frank dialogue, strengthen cooperation and manage differences.”

A White House fact sheet said the tariffs would stay in place “until the crisis alleviated,” but gave no details on what the three countries would need to do to win a reprieve.

At nearly $100 billion in 2023, imports of crude oil accounted for roughly a quarter of all US imports from Canada, according to US Census Bureau data.

Automakers would be particularly hard hit, with new steep tariffs on vehicles built in Canada and Mexico burdening a vast regional supply chain where parts can cross borders several times before final assembly.

The tariff announcement makes good Mr. Trump’s repeated threat during the 2024 presidential campaign and since taking office, defying warnings from top economists that a new trade war with the top US trade partners would erode US and global growth, while raising prices for consumers and companies.

Republicans welcomed the news, while industry groups and Democrats issued stark warnings about the impact on prices.

National Foreign Trade Council President Jake Colvin said Mr. Trump’s move threatened to raise the costs of “everything from avocados to automobiles” and urged the US, Canada and Mexico to find a quick solution to avoid escalation.

The three countries should work together to “gain a competitive advantage and facilitate American companies’ ability to export to global markets,” Mr. Colvin said in a statement.

Provincial officials and business executives in Canada also reacted with outrage, calling for forceful tariffs on imports from the US.

Roughly 90 minutes after Mr. Trump’s announcement, the American national anthem was booed in the nation’s capital Ottawa ahead of the opening face-off at the Ottawa Senators and Minnesota Wild National Hockey League game. The Senators won 6-0.

US tariff collections are set to begin at 12:01 a.m. EST (0501 GMT) on Tuesday, according to Mr. Trump’s written order. But imports that were loaded onto a vessel or onto their final mode of transit before entering the US before 12:01 a.m. on Saturday would be exempt from the duties.

Mr. Trump declared the national emergency under the International Emergency Economic Powers Act and the National Emergencies Act to back the tariffs, which allow the president sweeping powers to impose sanctions to address crises.

Trade lawyers said Mr. Trump was once again testing the limits of US legislation and the tariffs could face legal challenges, while Democratic lawmakers Suzan DelBene and Don Beyer decried what they called “a blatant abuse of executive power.”

White House officials said there would be no exclusions from the tariffs and if Canada, Mexico or China retaliated against American exports, Mr. Trump would likely increase the US duties.

Nova Scotia’s Premier Tim Houston said he directed that all alcohol imported from the US be removed from the province’s store shelves.

The White House officials said that Canada specifically would no longer be allowed the “de minimis” US duty exemption for shipments under $800. The officials said Canada, along with Mexico, has become a conduit for shipments of fentanyl and its precursor chemicals into the US via small packages that are not often inspected by customs agents.

LONG-PROMISED TARIFFS
Mr. Trump spoke extensively about the tariffs on Friday, acknowledging they could lead to disruptions and hardships for Americans. He said additional tariffs were planned against steel, aluminum, semiconductor chips and pharmaceuticals.

The Republican president was not scheduled to speak to reporters about the tariffs after the announcement.

Mr. Trump’s tariff move was led by Deputy Chief of Staff Stephen Miller, a forceful hawk on illegal immigration, and Mr. Trump’s nominee to head the Commerce Department, Howard Lutnick, who flew to Florida with Mr. Trump on Friday, a White House official said.

A model gauging the economic impact of Mr. Trump’s tariff plan from EY Chief Economist Greg Daco suggests it would reduce US growth by 1.5 percentage points this year, throw Canada and Mexico into recession and usher in “stagflation” at home.

“Steep tariff increases against US trading partners could create a stagflationary shock — a negative economic hit combined with an inflationary impulse — while also triggering financial market volatility,” Mr. Daco wrote on Saturday. — Reuters

China denounces Trump tariff: ‘Fentanyl is America’s problem’

A MAN displays what he says is the synthetic drug fentanyl at the Tenderloin section of San Francisco, California, US on Feb. 27, 2020. — REUTERS

BEIJING — China’s government on Sunday denounced the Trump administration’s imposition of a long-threatened 10% tariff on Chinese imports while leaving the door open for talks with the US that could avoid a deepening conflict.

Beijing will challenge President Donald J. Trump’s tariff at the World Trade Organization (WTO) and take unspecified “countermeasures” in response to the levy, which takes effect on Tuesday, the Finance and Commerce ministries said.

The response stopped short of the immediate escalation that had marked China’s trade showdown with Mr. Trump in his first term as president and repeated the more measured language Beijing has used in recent weeks.

Mr. Trump on Saturday ordered 25% tariffs on Canadian and Mexican imports and 10% on goods from China, saying Beijing needed to stanch the flow of fentanyl, a deadly opioid, into the United States.

China’s Commerce ministry said in a statement that Mr. Trump’s move “seriously violates” international trade rules, urging the US to “engage in frank dialogue and strengthen cooperation.”

Filing a lawsuit with the WTO would be a largely symbolic move that Beijing has also taken against tariffs on Chinese-made electric vehicles by the European Union.

For weeks Chinese Foreign Ministry spokesperson Mao Ning has said Beijing believes there is no winner in a trade war.

China’s sharpest pushback on Sunday was over fentanyl, an area where the administration of Mr. Trump’s predecessor, Joseph R.  Biden, had also been urging Beijing to crack down on shipments of the China-made precursor chemicals needed to manufacture the drug.

“Fentanyl is America’s problem,” China’s foreign ministry said. “The Chinese side has carried out extensive anti-narcotics cooperation with the United States and achieved remarkable results.” — Reuters

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